Real Matters ((TSE:REAL)) has held its Q4 earnings call. Read on for the main highlights of the call.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
The recent earnings call for Real Matters presented a mixed sentiment, reflecting both growth and challenges. While there were significant advancements in the U.S. Title and Canadian operations, the company faced hurdles in overall revenue and the U.S. Appraisal segment. Despite these challenges, the strong balance sheet and efforts to expand the client base indicate a positive outlook for future growth.
New Client and Market Expansion
Real Matters made strides in client and market expansion by launching 10 new clients and one new channel in the U.S. appraisal sector in Canada during fiscal 2025. Additionally, the U.S. Title business saw growth by adding seven new clients, including a second Tier 1 lender, showcasing the company’s strategic efforts to broaden its market presence.
U.S. Title Segment Growth
The U.S. Title segment demonstrated robust growth, with revenues increasing by 21%. This was driven by a 41% rise in refinance origination revenues and a 28% increase in home equity revenues year-over-year, highlighting the segment’s strong performance and contribution to the company’s overall growth.
Canadian Segment Growth
The Canadian segment experienced a 12% increase in revenue year-over-year, maintaining strong net revenue margins at 18.8%. This growth underscores the segment’s stability and its role in supporting the company’s financial health.
Strong Balance Sheet
Real Matters ended the fiscal year with a robust balance sheet, boasting no debt and $40 million in cash. This financial strength positions the company well to pursue future growth opportunities and navigate potential market fluctuations.
Consolidated Revenue Decline
Despite growth in certain segments, Real Matters faced a modest decline in consolidated net revenue, which decreased to $45 million from $46 million in fiscal 2024. The company also reported an adjusted EBITDA loss of $3.2 million, compared to a positive adjusted EBITDA of $1.9 million in the previous year, indicating some financial challenges.
U.S. Appraisal Segment Decline
The U.S. appraisal segment saw a 7% decline in revenue to $121.8 million, primarily due to a reduced addressable market for purchase mortgage originations. This segment’s performance highlights the challenges faced in the current market environment.
Adjusted EBITDA Decline
Real Matters reported a decline in consolidated adjusted EBITDA to $0.1 million in Q4, down from $0.6 million in the fourth quarter of 2024. This decline reflects the impact of increased operating expenses aimed at enhancing sales capabilities.
Forward-Looking Guidance
Looking ahead, Real Matters provided guidance indicating double-digit year-over-year growth in both revenue and net revenue for its U.S. Title and Canadian segments. Despite a 7% revenue decline in the U.S. Appraisal segment, the company maintained positive adjusted EBITDA and strong net revenue margins. With no debt and a focus on expanding market share, Real Matters is optimistic about capitalizing on growth opportunities as interest rates potentially ease in fiscal 2026.
In summary, Real Matters’ earnings call highlighted a mixed performance, with notable growth in the U.S. Title and Canadian segments countered by challenges in overall revenue and the U.S. Appraisal segment. The company’s strong balance sheet and strategic client expansion efforts provide a foundation for future growth, despite current financial hurdles.