Information Services Corporation

Good day and thank you for standing by. Welcome to the ISC Q3 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Jonathan Hacksaw, Senior Director, Investor Relations and Capital Markets.

Thank you, Josh, and good morning to everyone joining us today. Welcome to ISC's conference call for the third quarter ended September 30th, 2023. On the call with me today are Sean Peters, President and CEO, and Bob Antichel, Chief Financial Officer. This morning, Sean will take you through some of the highlights of the quarter. Bob will then provide some financial and operating highlights for the quarter, as well as speak to some of as well as speak to some operational highlights as well. Before we begin, we would like to remind everyone that we'll only be summarizing results today. The company's financial statements and MD&A have been filed on CDOT Plus and are available on our website. We encourage you to review those reports in your entirety. I would like to remind you that any statements made today that are not historical facts are considered to be forward-looking statements within the meaning of applicable securities rules. The statements may involve a number of risks and uncertainties that are described in detail in the company's CDAR Plus filings. Those risks and uncertainties may cause actual results to differ materially from those stated. Today's comments are made as of today's date and will not be updated except as required under applicable securities laws. Today's conference call is being broadcast live over the Internet and will be archived for replay shortly after the call on the investor section of our website. With that, I would now like to turn the call over to Sean.

Thank you, Jonathan. Good morning to everyone joining us for today's call. The results for the third quarter and year to date for 2023 continue to demonstrate our consistently strong performance. News in the quarter was dominated by our milestone announcement on July 5th, 2023 regarding the extension of the term of ISC's exclusive master service agreement or MSA with the province of Saskatchewan to manage and operate the Saskatchewan registries until 2053. The extension of the MSA with the province of Saskatchewan has been an important priority for the company and is beneficial for all stakeholders. From ISC's perspective, it immediately added new revenue through certain fee adjustments, thereby enhancing the company's scale and financial profile. With respect to the performance of our three segments during the third quarter and year to date, registry operations realized the benefits of the new fee adjustments, which were implemented on July 29th, 2023, with a positive impact on both revenue and adjusted EBITDA in the Saskatchewan Registries Division. This was further enhanced by the implementation of annual CPI fee adjustments in the Saskatchewan Registries during the quarter and a full nine months of Ontario property tax assessment services in the current year compared to only four months in the prior year. Offsetting these increases were costs associated with our extension commitment to transforming the Saskatchewan Registries. Costs early in the project are largely expensed versus later costs that we expect to capitalize. Transaction volumes in the Saskatchewan registry were lower during the quarter and year to date, following successive interest rate increases by the Bank of Canada. Although Saskatchewan continues to be impacted less than other jurisdictions in Canada and remains generally in line with our expectations for our annual guidance provided in February, as well as when we updated our annual guidance in August. Consistent with our growth strategy, our services segment continues to drive organic growth, with revenue and adjusted EBITDA both growing during the quarter and year-to-date. The main driver has been the regulatory solutions division, as business from financial institutions, including auto lenders, continues to grow, as they implement enhanced and more frequent due diligence procedures in a higher interest rate environment. We also saw a positive increase in asset recovery revenue in recovery solutions compared to the same quarter in 2022, which is to be expected as recovery solutions generally benefits from tougher economic conditions. During the quarter, services also renegotiated an extension of the Ontario corporate registry contract with the province of Ontario to the end of January 2025. This agreement ensures that services can continue to access the Ontario Corporate Registry on behalf of clients while preserving preferential access rights. Technology Solutions continues to benefit from increased procurement activities through both new mandates with existing clients and new client wins. Subsequent to the end of the quarter, we announced that the state of Michigan had awarded a contract to ISC to upgrade the technology supporting the state's uniform commercial code system. This is in addition to the new work we have with clients in deploying the RegSys platform to the Department of Registrar of Companies and Intellectual Property in Cyprus in partnership with NetYou Consultants, and a project with the States of Guernsey to build and launch the online register of charities and nonprofit organizations to the public, also utilizing the RegSys platform. Many of these implementations see expenses occurring in advance of revenue recognition, And so we saw much of that as we build the teams to deliver, with revenue being recognized in subsequent quarters. Our technology solutions team is also responsible for the delivery of registry enhancements for the Saskatchewan registries in registry operations in conjunction with our commitment under our new MSA. This work is expected to result in long-term benefits for the users of the Saskatchewan registries, as well as support the company's pursuit of new registry opportunities globally. In summary, the third quarter and year to date for 2023 have been periods of sustained positive performance that reflects the company's extremely strong fundamentals, as well as its ability to perform well in challenging economic conditions and execute on strategically important initiatives. I'll now turn the call over to Bob to discuss the financial highlights before providing some closing thoughts.