Real Matters ((TSE:REAL)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Real Matters’ latest earnings call painted a picture of robust revenue growth across its business segments, buoyed by new client acquisitions and an expanding market presence, particularly in the US and Canada. Despite facing hurdles such as reduced margins and higher operating expenses, the company remains optimistic about its future, supported by a strong balance sheet.
Overall Revenue Growth
The company reported a consolidated revenue increase of 16% year-over-year, with net revenue climbing by 12%. This growth was attributed to strong performance across all segments, underscoring the company’s successful expansion efforts.
US Title Segment Performance
In the US title segment, revenues surged by 25%, boosted by a 53% rise in refinance origination revenues. This growth was fueled by net market share gains and higher transaction volumes, highlighting the segment’s pivotal role in the company’s overall growth strategy.
Canadian Segment Success
Real Matters’ Canadian operations demonstrated impressive growth, with revenues up by 38% year-over-year. The segment also maintained near-record net revenue margins of 18.9%, reflecting strong performance and effective market positioning.
New Client Acquisitions
The company successfully launched five new clients and introduced one new channel, particularly excelling in the US title segment. This strategic expansion is expected to further bolster the company’s growth trajectory.
Strong Balance Sheet
Real Matters boasts a robust balance sheet, with no debt and $49 million in cash as of December 31, 2024. This financial strength provides a solid foundation for the company’s future growth initiatives.
US Appraisal Segment Challenges
The US appraisal segment faced challenges, with net revenue margins dropping by 140 basis points and increased operating expenses due to non-recurring claims and higher legal fees. These issues impacted the segment’s profitability.
US Title Segment Loss
The US title segment recorded an adjusted EBITDA loss of $1.8 million, slightly higher than the $1.6 million loss from the previous year. This reflects ongoing challenges in managing expenses within the segment.
Overall Adjusted EBITDA Loss
The company reported a consolidated adjusted EBITDA loss of $1.7 million, compared to a $1.1 million loss in the first quarter of fiscal 2024. The increase in loss was primarily due to rising operating expenses.
Forward-Looking Guidance
Real Matters’ management provided optimistic guidance for fiscal 2025, highlighting significant growth prospects across its business segments. With consolidated revenue projected to increase by 16% year-over-year, the company is particularly focused on capturing additional market share in the US title business, supported by a strong balance sheet and new client acquisitions.
In conclusion, Real Matters’ earnings call conveyed a generally positive outlook, driven by revenue growth and strategic client acquisitions. While challenges persist in certain segments, the company’s strong financial position and growth trajectory offer promising prospects for the future.
