Pineapple Financial Inc.

Good day and welcome to the Pineapple Financial Fourth Quarter and Full Year 2025 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Jack Perkins, Senior Vice President of Investor Relations at KCSA Strategic Communications. Please go ahead.

Thank you, Operator. Good morning and welcome everyone to the Pineapple Financial Fiscal Fourth Quarter and Full Year 2025 Financial Results Conference Call. I'm joined today by Shubha Dasgupta, Chief Executive Officer, and Sarfaraz Habib, Chief Financial Officer. Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties, and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this morning and filed with the SEC on Form 8K, as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law. In addition, during the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States, and they may be different from non-GAAP financial measures used by other companies. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure are contained in our earnings release issued this evening unless otherwise noted. At this time, I would like to turn the call over to Pineapple's Chief Executive Officer, Juba Dasgupta.

Juba?

Good morning, everyone, and thank you for joining us today. Today's call marks the start of a new chapter for Pineapple Financial. It's a chance to show how far we've come, how much we've evolved, and where we're going next. Our story today is a unified one, a scaled mortgage business a growing digital asset treasury, and an expanding on-chain platform, all working together to shape the future of finance. If there's one theme that runs through everything we do, it's innovation. Innovation that drives efficiency, strengthens profitability, and will create long-term value for our shareholders. Before we review where we're going, let's take a moment to reflect on where we came from. About 10 years ago, my co-founders and I took a close look at the mortgage industry and saw an opportunity to make it better. The industry was stuck in time, slow, paper heavy, and disconnected. And we believed technology could change that. So we built Pineapple to be something smarter, faster and more intuitive for consumers, brokers and lenders alike. Over time, our goal was simple, to build a platform that improves the entire mortgage experience for everyone involved. Today, Pineapple has become one of the fastest growing mortgage companies in Canada. We fund billions of dollars in mortgages each year and work with hundreds of brokers across the country. Every day, our platform helps thousands of people, from first-time buyers to investors, navigate one of the most important financial decisions in their lives. Through all that growth, we've stayed true to the same principles that got us here, innovation, integrity, and impact. Our platform is cloud-based and connects the entire mortgage process from start to finish, from lead generation to funding. We integrate directly with every major Canadian lender, including TD, Scotiabank, HomeTrust, and others, allowing brokers and borrowers to work together seamlessly in one place. From the beginning, our mission has been to remove friction from the mortgage process by bringing acquisition, management, retention together all under one roof. We're building something that's faster, smarter, and more transparent for everyone involved. A few years ago, we recognized that artificial intelligence was going to transform financial services. We joined one of the first AI accelerators based at the University of Toronto and quickly realized that most companies weren't ready for AI, not because they lacked ambition, but because their data simply wasn't structured for it. That insight led us to completely rebuild our data architecture from the ground up so we could be ready for the future. Today, Pineapple is one of the first mortgage companies in Canada with AI fully integrated into its workflows. Our AI reviews and cross-checks documents for accuracy, fraud, analyzes borrower profiles, and automatically matches customers with the best mortgage products for their needs. It even powers personalized broker websites and marketing content, helping our brokers reach more clients with less effort. We've partnered with Google's Gemini AI to securely run these models inside our own environment. This ensures all customer data stays private, never shared, sold, or used to train any external model. The results have been tremendous. We've reduced annual operating costs by more than $1 million while improving both scalability and efficiency across our business. As I mentioned, innovating is core to everything we do here at Pineapple. And earlier this fall, we launched something we're incredibly proud of, our $100 million injective digital asset treasury strategy project. This initiative makes Pineapple the world's largest publicly traded holder of INJ tokens and marks a major step forward as we bridge traditional finance with the on-chain economy. The goal is simple, to create a new institutional standard for how public companies hold, manage, and grow digital asset treasuries. This isn't a side project. It's a strategic move that puts Pineapple at the intersection of FinTech and blockchain-based finance. The Injective Foundation, along with its co-founders, personally invested in this program at a premium and under long-term lockups, demonstrating confidence in both our vision and execution. We also partnered with anchor investors, including FalconX, Monarch Asset Management, Canary Capital, and Kraken, all of whom bring deep expertise and institutional credibility to the table. Injective is one of the most advanced and fastest growing blockchains in the world. Its purpose built for financial applications with instant transaction finality, zero gas fees, and the ability to process over 25,000 transactions per second. So far, Injective has processed over $73 billion in transaction volume, facilitated more than 2.6 billion individual transactions, and permanently burned 6.8 million INJ tokens, an important component of its deflationary model that supports long-term value creation. It's also one of the only major tokens that's fully circulating. There's no unlock risk, no future vesting schedules, and no hidden overhang. In fact, over half of all INJ tokens are currently staked, and the entire supply is already in market, making Injective one of the most transparent and stable ecosystems in blockchain. Each week, on-chain revenue is used to buy back and burn tokens, creating natural scarcity as usage continues to rise. With staking yields averaging between 10% and 12% annually paid in stable assets like USDC and ETH, Injective offers a compelling opportunity for institutional treasuries. Network activity has grown more than 1,000% year-to-date, supported by participation from major institutions including Coinbase, Galaxy, Google Cloud, Deutsche Telekom, and Republic. This level of institutional adoption speaks volumes about the strength and staying power of the objective network. For Pineapple, this is much more than an investment. It's a strategic differentiator and a new long-term revenue channel that complements our core business. As we accumulate and stake INJ, our treasury generates a steady compounding yield stream that increases our holdings over time As I mentioned, we expect those yields to be in the 10% to 12% range driven by real network activity rather than speculation or leverage. It's a sustainable and transparent source of income that reinforces our focus on profitability. Just as important, this strategy connects directly to our operating business. Through Injective, we can now build on-chain mortgage products that operate on the same blockchain we're investing in. Our data, our treasury, and our technology all working in sync, creating a powerful flywheel of growth, transparency, and innovation. This is how we continue to stay ahead of the curve, by integrating blockchain technology into real-world financial systems. We're expanding access, improving efficiency, and driving new value for shareholders. Looking ahead, this strategy places Pineapple as the first public company in North America to combine a profitable mortgage platform with a digital asset treasury on the same balance sheet. It gives public market investors something new, direct exposure to the INJ ecosystem through a listed equity vehicle. That's something institutions have been looking for but haven't had a simple way to access until now. When you take a step back, the broader opportunity becomes even clearer. More than $130 trillion in global assets are expected to move on chain by 2030. Pineapple is positioned right at the intersection of two massive industries, mortgage finance and blockchain infrastructure. In short, we're not just watching the future of finance unfold, we're helping to build it. It's important to point out that our digital asset treasury doesn't exist separately from our core operations. It strengthens them. Our AI and on-chain systems now work together to reduce processing costs, speed up funding, and improve accuracy across the platform. The injected partnership has already raised our visibility in the market. We're seeing more inbound interest from brokers, lenders, and investors who want to be a part of what we're creating. We've also gained access to world-class blockchain engineers and product experts without the overhead cost of building those capabilities internally. All of this makes Pineapple a stronger, more efficient, and more innovative company with multiple growth levers and better operating leverage over time. I'd like to take a moment to reflect on what defines Pineapple. Over the past decade, our journey has built on consistent innovation. Our mortgage platform generates data that strengthens our treasury. Our treasury fuels innovation, and that innovation in turn accelerates our mortgage platform. It's a cycle of growth and efficiency that perfectly captures what Pineapple stands for, technology-driven finance built for the modern era. We are pioneers in digitizing mortgages. We are pioneers in bringing AI into the mortgage process. And now, we're leading the way in bringing real mortgage data and financial operations on chain. Pineapple shows that fintech can be both profitable and pioneering, balancing growth and governance and innovation with execution. We're incredibly excited about what's ahead and deeply grateful to our investors, partners, and especially our team for making it all possible. With that, I'll hand things over to Sarfraz to review our financial results.

Sarfraz.

Thank you, Subha, and thank you to today's call attendees for your continued support of Pineapple Financial. I will now walk through our financial performance for the fiscal year-end date, August 31, 2025, and discuss progress in our key performance indicators and outline the steps we are taking to position Pineapple for a long-term financial stability and growth. Fiscal year 2025 was a year marked by operational resilience, disciplined cost management, and meaningful improvement in productivity and innovation across our business. Despite elevated interest rate pressures and continued softness in the Canadian housing market, we delivered year-over-year gains across mortgage volume, gross billing, and total revenue. For fiscal year 2025, our total revenue was $3.0 million, an increase of 11% compared to 2.7 million in fiscal year 2024. Revenue growth was driven by higher mortgage funded volumes along with early traction in our insurance revenue stream and stable subscription income from our agent base. But noting, we continue to present mortgage revenue on a net basis consistent with our role as an agent under US GAAP ASC 606. Total operating expenses for fiscal year 2025 declined from $6.5 million to $5.9 million, an improvement of 8.9% year over year. Operating loss also narrowed by 11.3% to $3.6 million, compared to $4.1 million in fiscal year 2024. Several factors contributed to our improved cost structure, including a 5.4% year-over-year decline in selling, general, and administrative expenses to $2.3 million tied to streamlined operations and reduced reliance on external services. Workforce optimization and enhanced automation also aided the decrease in operating expenses. Investment in technology development totaled $944,000, consistent with our strategy to enhance Pineapple Plus and our internal infrastructure. Through August 31, 2025, cash on hand was $2.1 million, compared to $0.6 million at the end of fiscal year 2024. Net cash provided by financing activities total $3.46 million, reflecting warrant conversion, short-term funding support, and our May 2025 equity raise. This improved liquidity provides us with the foundation we need to execute on our strategic initiatives, including insurance expansion and technology development. Finally, I want to provide a few highlights in regard to our key performance indicators, including in our earnings report. Mortgage volume increased to $1.6 billion, up from $1.5 billion as of august 31st 2025 of 4.6 percent year-over-year increase driven by stronger renewal and refinance activity gross billing rose to seven point and 17.4 million dollars compared to 16.3 million dollars at fiscal year end 2024 a 7.2 percent increase reflecting increased and agent activity. Net sales revenue grew to $1.6 million, up from $1.4 million, a nearly 18% improvement, while subscription revenue remained stable at $750,000, supported by continued adoption and retention of our Pineapple Plus platform. Insurance revenue totaled $198,000 marking our first full year of activity for pineapple insurance. Underwriting revenue was $126,000 and other income total $308,000 primarily from technology setup and sponsorship fees. These results tell a clear story. Our diversified revenue model is working. Our agents are becoming more efficient on our platform and pineapple insurance is beginning to contribute incrementally as planned. Our financial discipline combined with our technology and people first strategy has positioned pineapple to capitalize on improving market conditions as interest rates stabilize and borrower confidence returns. Thank you for your time. We appreciate. the continued support of our shareholders and partners. We will now open the call for questions. Operator?

We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

One moment, please, while we pull through. Thank you. Our first question is from Jason Colbert with D. Barrel Capital.

Hi, guys. Congratulations on all the progress. I wondered if you could talk a little bit about the intersection or the outlook of interest rates and the mortgage business, and also if you could offer any sense of guidance on what we might be looking for in terms of revenues over the next year or two.

Yeah. Hi, Jason. This is Shubha Desgupta, CEO. Pleasure to connect and speak with you. And thank you so much for your question. So, to answer the first part in regards to the interest rate environment here and, you know, how that's correlating to the mortgage market, you know, we've seen a significant decrease in interest rates in Canada over the last 18 months. Currently, the Bank of Canada has reduced rates by approximately 175 basis points, bringing the rate down significantly. And with bond markets decreasing across Canada during the same period, we've seen fixed mortgage rates drop as well. This has created a much more affordable environment, allowing accessibility to the market that hadn't been seen in years previously. And we're just beginning to see the benefits of that as it's beginning to show early signs of improvement of consumer sentiment and the early stage buyers are coming off of the sidelines and reentering into the market. We're also seeing an increase in inventory across the country, which, you know, in the last few years has proven to be in a supply crisis and has shown a lot of constraint. This, again, is very appealing to us because it shows that there's going to be a lot more available opportunity and inventory on the market for acquisition and purchase. The other thing that I would just add as it relates to interest rates and kind of the evolving life cycle of mortgages here in Canada, it's estimated that approximately 60% of all Canadian mortgage will come up for maturity by the end of 2026. 2025 showed, you know, the early stages of this renewal cycle or massive renewal wave, and 2026 will be kind of the peak of it. So, we do anticipate that a lot of origination will occur just due to the short-term nature and short-term cycle of mortgages here and the maturity dates of those mortgages that are already on record and already on file. All of this combined bodes very well for opportunity in the market. And when we couple all of that together with federal government policy changes in easing mortgage rules and making mortgages more accessible to consumers through strategies like increasing amortization and adding flexibility and some benefits to those purchasing homes, we feel as though 2026 will begin to show signs of recovery in a market that has faced significant headwind over the last couple of years now additionally to that when we look to revenue and we look to you know what the potential impacts of this could be you know that there there there is expected growth across the business um continuously as we've seen um progressing over the last couple of years now the last few years have been you know trying for the organization as we faced high inflation as we faced high interest rates and we faced you know significantly depressed consumer sentiment So, as these elements begin to improve and we see early phase signs of that, we expect at the same pace revenue to increase as well. So, where we saw a 10% revenue increase this year in what was, you know, a rather challenging year, we expect to maintain that same organic growth, but also see the addition of, you know, new growth through these new channels, new opportunities, and new consumers. We also expect to continue to grow our insurance model. And now, as was mentioned on the call today, building out our vertical on on-chain development, as well as the digital asset treasury, both of which we will be working towards creating a revenue model and a revenue stream in the coming year. So all of that combined, you know, kind of the final answer is we continue to expect to see growth in the marketplace, and we'll probably have a more definitive, clear forecast to that as the first quarter progresses.

Understood, and thank you. I appreciate that. I look forward to kind of seeing the intersection of these forces play out as I understand the model and as it develops with you.

Thank you. Thank you for the question and your support. Thank you.

There are no further questions at this time. I'd like to hand the floor back over to Subha Dasgupta for any closing comments.

Well, thank you, everybody, for joining once again, and thank you for those that participated and had questions. It has been our pleasure to serve this community and we couldn't do it without the support of our shareholders and investors that continue to support and believe in this business. So we would like to extend on behalf of the board, management team and staff, our deepest gratitude and sincere thanks to all of you. We'd also like to express a thank you to those that continue to work with us in developing our tools, developing our technologies, support the business, whether as a customer, those that choose to use our platform, and those that work for us that every single day come into work with the intention of providing better services, better opportunity, and a better customer experience. It's with all of these people combined that we're able to complete our vision, and we thank you all very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.