Dominion Lending Centres Inc.

Good afternoon and thank you for standing by. Welcome to Dominion Lending Centre's second quarter 2026 results conference call. At this time, participants will be in a listen-only mode. After the speaker's presentation, there will be a question and answer period. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Please note this call is also accessible via webcast and a replay of the webcast will be available on the Corporation's website at www.dlcg.ca. During the call, management's remarks may contain forward-looking information that is based on certain assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our forward-looking information disclosure in the NDNA for the quarter ended March 31, 2026, which can be found on CDARplus and on the Corporation's website. In addition, during the call, the Corporation may refer to specific non-IFRS measures. These measures are also defined in the NDNA for the quarter ended March 31, 2026. The corporation's MD&A includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operations as they provide additional critical metrics of its performance. These non-IFRS measures are not recognized under IFRS do not have any standardized meaning prescribed under IFRS and may differ from similarly named measures reported by other issuers and accordingly may not be comparable. These measures should not be considered as a substitute for the related financial information prepared by IFRS. I would now like to turn the call over to Gary Morris, Chairman and CEO of Dominion Lending Centres.

Good afternoon, everyone, and thank you for joining us today on our second quarter 2026 earning conference call. On the call today with me is Jeff Haag, our Chief Financial Officer, Chris Tate, Executive Vice Chair and Co-Founder, Eddie Cotiolo, President, and James Bell, Executive Vice President and Chief Legal Officer. I'll provide an overview of our second quarter results, followed by a few comments on our announcement earlier this week regarding our acquisition of BiLogix, which marks an important milestone for our company. During the second quarter, we grew funded volume by 5% despite a soft housing market, reflecting the increased productivity of our brokers. This improvement is the result of our continued investment in helping our broker channel succeed. While recruiting remains a cornerstone of our strategy, in recent years, we have placed greater emphasis on helping our existing brokers and franchise partners grow their business through initiatives such as Gold Rush, Goal Setter Training Series, and most recently, the Broker Performance Lab. It's encouraging CR brokers embrace these programs and deliver strong results. Revenues increased 1% in the quarter as growth in funded mortgage volume was partially offset by revenue streams that did not move in line with funded volume, as well as quarter-to-quarter variability in partner mix. Adjusted EBITDA margins remained strong at 50%, resulting in adjusted EBITDA of $12.6 million in the quarter. While our profitability remains strong, we have launched an expense review program to identify additional cost savings opportunities. This reflects our disciplined approach to managing the business while the housing market remains soft. Our strong profitability and cash flow also contributed to continued strength in our balance sheet, with debt to adjusted EBITDA of 0.9 at the end of the second quarter. It was the strength of a balance sheet that enabled us to fund and complete the highly strategic and immediately accretive acquisition of Phylogix, which has closed as of July 31st. The acquisition marks an important milestone in the DLCG evolution. Phylogix is one of Canada's leading mortgage technology and connectivity platforms, and its addition strengthens our position in the Canadian mortgage industry. It also provides important redundancy across our critical connectivity platforms, and significantly expands our access to real-time data and insights into the Canadian residential housing market. Phylogix will operate as a stand-alone, wholly-owned subsidiary, maintaining its operational independence from Velocity and ensuring continuity for its customers and industry partners. We intend to build on Phylogix's strong foundation through continued investments in its technology, customer service and data security. Beyond the strategic importance, BiLogix adds a highly profitable and cash-generative business that is immediately accretive to adjusted earnings per share, while allowing us to maintain a strong balance sheet. For the trading 12 months ending May 31, 2026, BiLogix processed approximately $60 billion in funded mortgage volume. We expect the acquisition to contribute approximately $15 to $18 million in adjusted EBITDA, in its first full year post-closing. With that, I'll turn the call over to Jeff to walk through our second quarter financial results in more detail.

Jeff, over to you. Thanks, Gary. Good afternoon, everyone. For the second quarter of 2026, funded mortgage volumes increased 5% year-over-year to $22.1 billion, driven by higher broker productivity. Total revenue increased 1% to $24.9 million, reflecting 4% growth in franchise and brokering of mortgages revenue Partially offset by a 4% decline in Newton revenue, though this decline in Newton revenue was due primarily to a revenue reclassification recorded in Q2 of 2025, which included $0.3 million in revenue related to Q1 of 2025. Growth in franchise revenue was also impacted by $0.3 million in higher amortization of franchise rights payments, which are recorded over time and do not necessarily move in line with funded mortgage volumes. Turning to expenses. Direct costs decreased 8% compared to the same period last year due to cost savings from the realignment of our sales team structure in Q4 2025. As a percentage of revenue, direct costs decreased to 11.9% versus 13.1% in Q2 2025. General and administrative expenses increased $0.4 million compared to Q2 2025. This increase was primarily due to $0.3 million in higher personnel costs and IT-related costs and was partially offset by a $0.2 million reduction in advertising expenses due to the timing of certain events. Adjusted EBITDA of $12.6 million was consistent with Q2 of 2025, while adjusted EBITDA margins remain strong at 50% compared to 51% in the second quarter of 2025. Included in adjusted EBITDA is a $0.5 million loss from our equity-accounted investment in Hartwood compared to the $0.6 million loss in Q2 of 2025, We do expect Heartwood to reach profitability in late 2026. Net income of $7.1 million decreased by $0.6 million compared to Q2 2025, primarily due to a $0.6 million increase in share-based payment expense and higher general and administrative expenses. The increase in share-based payment expense reflects additional RSU grants under the RSU plan and the impact of great investing on previously issued awards. Adjusted diluted earnings per common share were $0.09 for the quarter compared to $0.10 in Q2 of 2025. Adjusted net income was $7.1 million, down $0.6 million year-over-year, as revenue growth was more than offset by the increase in share-based compensation expense. Cash flow from operations was $12.2 million, a 13% increase compared to $10.8 million in Q2 2025, largely driven by favorable changes in non-cash working capital and due to timing of accounts receivable collections. For the period ended June 30th, 2026, our total debt to trailing 12 months adjusted EBITDA ratio was 0.9 times compared to 0.5 times a year earlier. And as Gary mentioned, we utilized our strong balance sheet to fund the PhiLogix acquisition at a purchase price of $58.5 million subject to closing adjustments. The acquisition was financed using a new $62.3 million term facility as part of an amended and restated credit agreement entered into with TD Bank commensurate with the acquisition. Pro forma the acquisition, our total debt to adjusted pro forma trailing 12-month EBITDA is expected to be approximately 1.65 times. I will now pass it back to Gary for some concluding remarks. Thanks, Jeff.

Well, overall activity levels across our markets have been softer than we initially expected due to macroeconomic uncertainty and the geopolitical tensions. We have successfully offset these headwinds, growing funded mortgage volume while maintaining our strong profitability and a strong balance sheet. As we move to the second half of 2026, recent indicators point to a gradual improvement in housing activity. We will continue working closely with our brokers and franchise partners to grow their businesses while remaining disciplined on expenses and maintaining our focus on profitability. I would also like to take a moment to welcome the FiLogic team to the DLCG group of companies. As I mentioned previously, this is a very important milestone for our company, and we look forward to working with the FiLogic team to strengthen their market position, deliver even greater value to its partners, and create long-term value for our shareholders. With that, I will now turn the call over to the operator to open the lines for questions. Operator?

As a reminder, if you would like to ask a question at this time, simply press star followed by the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question is from Matthew Lee with Canaccord Genuity.

Hey, thanks for taking my question. Good evening. Maybe we can talk a little bit about that Newton revenue. You know, penetration was up 5% year over year, but revenue was flattish after adjusting for that one-time item last year. I would have sort of thought the increase in penetration would have been enough to offset and, you know, drive some growth in that business, particularly because of the increase in FMV. But I think you mentioned that there's some nuances there. Can you just help us understand the moving parts of it?

Sure, yeah. Thanks very much for the question. I'll jump in on the back side of this. Just so everyone knows in the call, I'm unfortunately in an area with intermittent service. So I'm going to have James Bell and Jeff Haig help me out today. James, do you want to take the first crack at that, please?

Sure. And Matt, as we mentioned, in Q2 of 2025, we had a revenue adjustment. So Q2 2026 compared to Q2 2025. 2025 has a significant amount from that readjustment. Jeff, can you touch on Matt's other part of his question?

Yeah, and that was in relation to sort of normalizing for that adjustment the movement in revenue. And yeah, you're correct that adjusting for that, it is relatively flat. That is the nature of that bucket of revenue, that it is impacted to some degree each quarter based on sort of where the volume goes, where our brokers do their deals or negotiations and changes to contracts with our lender partners. So we're not entirely surprised to see some occasional flat quarters. But yeah, it's all dependent upon where our volume goes in any given quarter.

So, I mean, I guess I'll ask another way, like if utilization or penetration remains at this level next quarter, You know, we should see growth year over year. Because if that's in the funding, some of the funding volumes are kind of growing as well. That is our expectation. Okay, and then maybe just the housekeeping one on phlogics. I think you guys mentioned 15 to 18 million of EBITDA. Just for, you know, our model's sake, how should we think about that on a revenue basis or margin basis?

Yeah, I can take that one. So, Matt, probably, you know, we're looking at this, and again, We're keeping in mind that this is about day three with this acquisition, right? So we would, and we don't give guidance, but on that, just to help you with your models, I think what would be fair is we've told the market that they're currently doing 60 billion in funded volume. So to get to 15 to 18, I would think targeting sort of that 55 to 60 billion in funded volume and using a four and a half basis points of revenue per dollar of funded volume, very similar to the Newton Velocity Framework.

Okay. That's super helpful, guys. I'll pass the line. Thanks.

Okay. Thank you. Your next question is from Gary Ho with State Jordan's Capital.

Thanks. Good afternoon. I think in prior calls, you talked about Gold Rush and Gold Getter. Can you maybe elaborate on Broker Performance Lab? How is this different than the other programs and what does it hope to achieve?

Yeah, Gary, thanks for the question. Broker Performance Lab is a new concept where we've really devoted resources and human capital to really help with our ongoing training. So, you know, we saw the results of Goalgetter last year. The feedback in the market was incredible. We expect to continue to see sort of the fruits of those labours. So what we've done is put together a more robust, long-term, extended training program, number one. And number two, in that same bucket with the Broker Performance Lab, we are building a part technology where we are allowing other smart technologies that connect and integrate well to Velocity that improve the workflows and the efficiencies of brokers. So, you know, sort of think about it as a sort of a almost a Amazon type or Apple type app store. It's just, you know, it's a program that, you know, really focuses on the efficiency and ongoing training of the distribution platform.

Okay, great. That's helpful here. My second question just on maybe the biologics acquisition, kind of what assumptions underpins that 15 to 18 million EBITDA outlook? Maybe can you talk about the investment that's required, whether that's expense or capitalized, any expected churn that's in there, and the key KPIs we should use to kind of gauge the success of that acquisition?

Yeah, I know we get much further into it, Gary. We probably can't provide much more than saying sort of top line funded volume in that $55 to $60 billion, you know, revenue targets at about four and a half to five basis points of revenue per dollar of funded volume, and then similar margins to Velocity. You know, in terms of capital expenditures, we really need to get in and better understand the technology and make some decisions on our long-term goals before we start sort of making conclusions on CapEx. The short of it is it should have a very similar economic profile to Velocity.

Okay, great. No, thanks for that. And then if I can sneak one in, Hardwood, the 0.5 million EBITDA loss I think it was bigger than the 0.3 in Q1. I was expecting that loss to narrow sequentially. So any insight into that? And do you still expect, it sounds like from Jeff's comment, breakeven on profitable in the second half, maybe give us an update on how Hartwood has progressed and maybe just total mortgages under administration currently?

Sure, sure. Yeah, Hartwood really is going as planned. In terms of loan size, it's just a little slower in terms of our initial rollout, but you'll see they're doing, you know, they're doing between 25 and 40 million a month in loans, Gary. And breakeven on the P&L should be at about 350 million of loans. And we're at, you know, call it 250, 260 today, right? So by sometime in Q4, we should be breakeven on a P&L basis.

James, I'll just sort of add to that, guys, provided you guys can hear me okay. The other thing with Hartwood, I think, James, you just mentioned it. The rollout in British Columbia has been a little slower than anticipated, but hopefully that's starting to ramp up. The other thing that we've done is we've always kept Heartwood as a DLCG exclusive product, so we haven't offered any of those loan services to any of the competitors or the rest of the market. We are going to start doing that. I've just given them the okay. We've had some chats about it recently. So inside of the next 60 days, we will make it available to all other mortgage brokers in Canada, which I think will bode really well for us. The fact that we have Phylogix, obviously we can reach a lot of those now by allowing that interface into Phylogix so that we can offer a product to the entire market. So we're excited about that and think that will really give us more power.

Okay, great. That's exciting. Okay, thanks for taking my questions. Great. Thanks, Gary.

Your next question is from Jeff Fenwick with ATB Cornmark.

Good afternoon, guys. Maybe another one on Phylogix here. Your reference is plugged into about 8,000 brokers currently. I know that a bunch of the DLC network uses it as well. Can you give us a sense of the overlap on that 8,000 between your existing broker base and that total?

Yeah, it's actually, I mean, if you look at DLC, just under 90% of all DLC brokers are on Velocity. And quite frankly, you know, just via that, you know, sort of early response, we don't think many of them will go back to 5Logix only because Velocity is a, you know, a more robust program, right? It's got things integrated like CRM and AML compliance. Things that will eventually bring to FiLogix. The overlap is probably less than 20%. So that really is a broad number in terms of a net new to us from a broker overall number counter.

Okay, thanks. That's helpful. And then any thoughts on, I know you're going to run the business separately and allow that user base to continue to run, but Are there some technology capabilities tucked inside of Phylogix that you might be able to use that knowledge inside of Newton or vice versa? And you did mention the value, Gary, up front of some of the redundancy of the systems, which makes a lot of sense. But are there some other things in there that you might be able to sort of harvest from one or the other?

Yeah, no question. Actually, you know what? That's one of the most exciting things about this acquisition. If there's things that Phylogix has done well for a very long time, I mean, like first and foremost, Phylogix has got the most robust lender pipe access in Canada. You know, Velocity is very, very good. But, you know, when you're around 34 years, you've built integration to everyone. So, you know, we think that that's going to offset us and, you know, and give us access to some small lenders and some, you know, like remote markets that maybe even Velocity, sorry, that Velocity doesn't have. Just things on products available through the Phylogix network that we didn't have available through our network. There's going to be a lot of opportunity to look at the best protocols and the best offerings from each company and then roll them out or integrate them with the other ones. There's obviously all the standard back office synergies. We're not going to need two sets of payroll and compliance and two sets of HR. So there's going to be a lot of cost savings, we think. But like anything else, it'll take a little bit of time to realize those. But we're very optimistic about it and very excited. We think actually the purchase of Phylogix was extraordinarily a creative long term for us and gives us some real positioning in terms of lender and partner relationships.

That's very helpful. And then maybe one comment here just on the state of your existing broker base today, what you're seeing in terms of the recruitment pipeline. The market's been pretty quiet. Are you seeing just some of the smaller guys sort of just maybe leaving the market if they weren't really doing it on a full-time basis? What are the dynamics there, and maybe what are the opportunities in terms of your recruitment pipeline?

Yeah, I mean, I think the recruitment pipeline is still pretty good. It might have slowed down a little bit. I mean, you know, time of year right now typically slows down anyway, obviously. But, you know, listen, this has been a longer than expected, you know, slower housing market. You know, Chris Kay was just saying to me the other day, he's been in this business 35 years, and, you know, this is about as deep as, you know, it's been in terms of, you know, longevity and just a, you know, a soft housing market. So, You know, I look at sort of us as a group and the fact that we're up, you know, on the funded volume by 5%, we actually think we're doing great. We're actually really happy about what we're doing. So, you know, I mean, I think that, you know, we're going to, we're cautiously optimistic. You know, as I said before, the back half of the year is, you know, usually always a little bit busier in the front half of the year. And, you know, I think that we're going to see some broker movement come the fall, you You know, I mean, I think there's an opportunity for us. There's a lot of brokers who maybe didn't come over to our company in the past because the major friction point was they had the chain systems. If they wanted to be with us, they had to be on Velocity. And now the fact that they're going to be able to come over and choose a system, so if they're on 5Logix, they can continue to remain on 5Logix, is going to make the ability to transfer that much easier and actually, you know, reduce the biggest pain point for most of them.

Yeah, that's great.

Okay, I appreciate that, Tyler. That's all I had.

Thanks so much, Jeff.

Your next question is from Steven Boland with Raymond James.

Hey, Steven. Thanks. Good evening. Gary, in the first quarter, you were pretty forthright about you weren't too happy with the expense number, a couple things that you mentioned. I won't go into that, but now Q2 comes in, you're doing a formal expense review, wondering if there's any targets or... and why formalize it? I'm just curious. If it's material enough, I guess you formalize it if that's what you want with the results. I'm just curious what your thoughts are on expenses.

I'll give you my comments on it and then I'll turn it over to Jeff or James if they want to make a comment on it. When I formalize it, I'm We're very hands-on in the business, and quite frankly, in Q1, you remember that I spoke to sort of getting behind or slow to respond on some events that ended up being executed sort of in multiple cities to celebrate our 20th anniversary, which, quite frankly, we probably shouldn't have been done, and we caught it late. The money was spent. So it really gave me pause to say, Just really make sure that every department in all of our business units are talking and that we are looking. And when I say formal, we're looking at every area of our business. We're looking at our HR expenses. We're looking at our technology expense. We're looking at our data expense. We're looking at our credit card expense. We're looking at our compensation expense. I just think it's a really good habit to get into to review it. I've been in business for a very, very long time and You know, I also know that early indications when expenses start to, you know, show up to a greater degree than what you anticipated or budgeted for, you know, it's very important to jump on it quickly. So, you know, I took that very serious. I didn't like it. And, you know, we're focused on improving that and making sure that, you know, I have an old saying, right? We've all heard, a fool and his money is soon part. James or Jeff, anybody want to comment on that?

And only, Stephen, the messaging, what we wanted to say to shareholders is, We're very careful with people's capital and we don't have a target for how much we want to save because I think what we really want to do is we're going through a line item. We have a long period of growth and now this is sort of a reset to say, okay, let's open up every line in the GL and go through and see where we can save money. It's more of a messaging to shareholders that when revenues are harder to come by in a tougher housing market, that we're paying attention to the little stuff in terms of some of the smaller G&A dollars. So no, we don't have a formal projection of how much we're trying to save. This is really just saying to shareholders, we respect your capital and we'll do everything it takes in order to better manage our G&A expense.

Stephen, let me just add one more point on top of that. Thank you, James. You've got to understand that when markets are soft and they're harder, expenses become that much more important. So you've got to look at it right now. So, you know, the housing market is down, obviously, so it's slower, number one. The average home price is lower, so the average mortgage volume in total is lower, which brings down revenues. There's a lot of uncertainty, you know, sort of in the global macroeconomics. So we're seeing a lot more people take three-year mortgage terms than five-year mortgage terms. So that impacts, you know, our top-line revenue. So, you know... Look at all those things and all those factors and partner that with just an overall soft market and slower market sentiment. We've got to be on top of expenses.

I think the formalization of this project is, as James mentioned, really getting all of us, especially the decision makers, presidents, VPs, that kind of thing, really kind of pouring through the general ledger level of detail, which isn't something we haven't done which is something we haven't done a lot of recently. So that's where the formal aspect of making this kind of a real initiative with measurements and outcomes is coming from. Okay. Sorry, go ahead.

No, that's good. Okay. So second question is, it's only been a few days, but you all obviously know the big brokers that exclusively, whether they're individuals or whether they're part of a team or... What's the reaction been from those brokers?

For most of the brokers, the reaction has been very positive. Most brokers look at it and they go, hey, if I go to my office in the morning and I can submit my deal to Scotiabank or TD and I don't have to change my system, If you're giving me absolute certainty that my data is my data and my customers are my customers, they've been very positive. It's kind of like I turn on my light in my house and as long as the light goes on and it works fine, I'm happy. I turn on my tap and hot water comes out and I'm satisfied. It doesn't matter necessarily who owns the infrastructure. There will be some pushback and there has been some pushback from some of our major competitors. that have let their brokers operate on any platform they want under the guise of choice, and now all of a sudden they're looking at this and they're going, okay, this is owned by a major competitor. But at the end of the day, here's what we know. We know changing mortgage brokers' habits, number one, is very hard. It took us well-owning velocity, nine years to get up to 90%. Why? Because brokers don't like change. It's just like, you know, coming off your BlackBerry many years ago. It took a very long time to migrate people to, you know, other systems. So, you know, overall, we've been very happy with the response to it. You know, the other thing that I'll mention, and I'm not going to go into too much detail, there's not a company out there in Canada, any broker, any network, that doesn't have reliance on Phylogix. Not only for the pipes right now, but also for the connection so that they can retrieve the data to actually do their own compliance and do payroll. So it's not as easy as some people would think to migrate on and off. Second thing that's really important is that we'll take this and our job is to make it a world-class platform. So if we can get people to say, hey, I'm using this already. It's been very good. I've been using it for 25 years. I'm a top broker in Canada. And we can promise them the only thing that's going to happen is if technology is going to get better, we think we're going to do a very good job on retention.

Okay, that's all I have. Thanks very much.

Again, if you'd like to ask a question, press star 1 on your telephone keypad. Your next question comes from Jamie Golan with National Bank Capital Markets.

Yeah, thanks. Just wanted to quickly follow up on a couple items. The cost savings initiative, this is a end-of-year initiative, so we expect to potentially hear some of the, I guess, the savings that you have found in going line by line through the business sort of with Q4 results. Would that be about the right time to sort of think about an update on that front?

Yeah, and, James, I'll take that one. Probably we won't have any far, you'll just see it in the results, right? Like we're not going to come back with, you know, you'll just see that as general improvements in our GNA, but I'm not sure we're committing to sort of come out with specifically how much we saved. This is sort of broad stroke savings, like everything from, you know, how do we approach reimbursing employees for cell phone use to better tighter protocols on things like dining out and marketing and things. So again, the formalization part of this is just making everyone in our company aware of every dollar we spend, us to be benefiting our shareholders.

Yeah, okay, got it. And then if I just go back to the revenue side of the business, you know, You know, franchise revenues and brokering revenues, percentage of funded volumes, you know, a little bit down sequentially, but, you know, kind of in line with what we saw at Q2. Is it a seasonal thing, or was there something else that was just flowing through there from a mixed standpoint that we should think about this quarter that might revert in Q3, Q4? Sorry, on a funded volume or on a revenue? Revenues, like on a rate basis.

Yeah, and revenues, and Jeff, feel free to tag in this one, but the revenues, it's really a collection of multiple different, like how we generate revenue is based on where's the volume going to internally and which brokerages, because sometimes we'll have a very large brokerage doing a lot of volume, but they may not have the same deal as another brokerage, right, in terms of their royalty structure. And so that creates different revenue for us. The same with lenders, right? That not all contracts are the same. So where the volume's going and who it's being done by creates different changes in revenue for us. So somewhat it's a function of where did the volume go this quarter? And this quarter was a few events happening all at the same time in terms of where did that volume go, which resulted in compression on our revenue line as it relates to the funded volume line. Does that make sense? Yep. So going forward, you may want to see the same level of compression if the volume was to go to different lenders, which may have different deals with us.

Okay, great. And then what can you add about sort of broker acquisition standpoint in terms of those incentives, any flow through in this quarter larger than what we've seen in previous quarters? And then Maybe tie that into the Phylogix transaction. Is there a potential to see more of that cash incentive strategy play out to bring those Phylogix brokers over? Or maybe you penetrate that part of the market a little bit more on the non-Newton side of the business?

I could take that one, James. Yeah. Yeah, just sort of like on my last comment that I made, you know, listen, we're always in, you know, recruitment mode. It's the nature of our business. So we're always talking to people and, you know, with the phylogenics part of the market, as I said a minute ago, it makes it much easier for a broker who's using that platform to come join one of our teams right now. You know, I wasn't exaggerating when I said it's really hard to change broker habits, and there's a lot of people that are just dug in, and it doesn't matter how much they'd like to come to one of our brands, it won't come because they'd have to change the technology. So, you know, I think it's going to absolutely help us. You know, we're in the middle of summer, so when we talk about, you know, the next quarter, are we going to see, you know, massive, you know, movement in the next quarter, the answer would be no, probably. Because when we do bring these teams over, and they do, it normally takes sort of, you know, six months to start to see that volume coming on board because they're running previous volumes through their old pipes before they can transfer any of that new business onto our books. But do I think it's going to help us long-term? Absolutely, it's going to help us in terms of recruiting. Great. Thank you. Awesome. Thanks very much, guys.

Your next question is a follow-up from Matthew Lee with Canaccord Genuity.

Just a follow-up question on the revenue rates. You sort of mentioned that it depends on which brokerage it goes to in terms of the volume. Would it be fair to say larger brokers, brokerages generally have better negotiated rates, or is there some way for us to think about the long-term trend as we look into the back half of the year in 2027?

Yeah, Matthew, just different brands have different structures, right? So each brand has a different royalty structure. They're similar, but they're not exactly the same. And each of those brands comes with a different level of support as well, right? So where the volume falls internally drives some of those variances in revenue. So on any quarter, you may have the volume fall at say DLC, which may be a higher royalty revenue rate than maybe at MCC. So it makes it very difficult to predict the rest of the year because we don't know which lenders and which brokerages are going to step up and do that volume. We would expect more of a reversion to what we were doing in the previous quarters going forward in Q3 and Q4.

Yeah, and the other thing I'd add to that, you know, just really quickly, is that on some of our, you know, lenders, there is stretch targets or stretch goals where there's, you know, additional, you know, incentives. And if you have a softer market, you're not getting some of those stretch goals. Sometimes, you know, expected revenue could come in a little bit short than what we anticipated. So, you know, it's a moving target. It's never a perfect science.

Okay, fair enough. Thanks.

At this time, there are no further questions. I'll now turn the call back over to Mr. Morse for any closing remarks.

Yeah, I would just say thanks to all of you and thanks for all the questions here. We really are excited about Phylogix. We think it's a very strategic business. And for how we got here and got through this process and ended up with this business, we are very excited about Phylogix. Thank you guys very much for your calls and questions.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect.