Real Matters Inc.

Good day, and thank you for standing by and welcome to the Real Matters Third Quarter 2021 Conference Call. At this time, all participant lines 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, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Lynn Beauregard, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to Real Matters Financial Results Conference Call for the third quarter ended June 30th, 2021. With me today are Real Matters Chief Executive Officer Brian Lang and Chief Financial Officer Bill Herman. This morning before market opened, we issued a news release announcing our results for the three nine months ended June 30th, 2021. The release, accompanying slide presentation, as well as the financial statements and MD&A are posted in the investor relations section of our website at realmatters.com. During the call, we may make certain forward-looking statements which reflect the current expectations of management with respect to our business and the industry in which we operate. However, there are a number of risks, uncertainties, and other factors that could cause our results to differ materially from our expectations. please see the slide entitled Cautionary Note Regarding Forward-Looking Information in the accompanying slide presentation for more details. You can also find additional information about these risks in the Risk Factor section of the company's Annual Information Form for the year ended September 30, 2020, which is available on CDAR and in the Investor Relations section of our website. As a reminder, we refer to non-GAAP measures in our slide presentation, including net revenue margins, adjusted EBITDA margins, Non-GAAP measures are described in our MD&A for the three and nine months ended June 30th, 2021, where you will also find reconciliations to the nearest IFRS measures. With that, I'll now turn the call over to Brian.

Thank you, Lynn. Good morning, everyone, and thank you for joining us on the call. I will kick things off today by discussing some of the highlights of our third quarter. Bill will then take a deeper dive into our segment financials. And I'll wrap up the call with some brief remarks prior to taking questions. We posted record revenues and net revenues in our U.S. appraisal and Canadian segments in the third quarter from net margin share gains, new client launches, as well as a more robust mortgage market on both sides of the border. Consolidated revenues were up 9.6% in the third quarter, as the strong performance of our U.S. appraisal in Canadian segments was offset in part by a decline in U.S. title revenues, a third of which was related to the continued rationalization of the diversified title business. Turning to slide three, consolidated net revenue decreased 12.1% year-over-year to $38.6 million this year, and adjusted EBITDA decreased to $11.8 million from $20.9 million in the third quarter of fiscal 2020, due to the lower contribution from our U.S. title segment. After the run-up in the 10-year Treasury in March, 30-year fixed mortgage rates moved marginally lower during the quarter, which resulted in flat refinance activity year-over-year as a robust purchase season got underway. U.S. appraisal segment revenues increased 17.5% year-over-year to $85.3 million driven by higher market volumes, net market share gains, and new client additions. Origination-only revenues were up 20.6% year-over-year, which compares to an estimated increase of 17.1% in the addressable markets. which takes into account the impact of veteran affairs volumes and waivers. In the quarter, we launched three new lenders in U.S. appraisal. We also continued to rank at the top of lender scorecards, which drove market share gains in the main origination channel year over year. Operational excellence continues to be our principal focus as we drive toward achieving our fiscal 2025 objectives and doubling our U.S. appraisal purchase and refinance market share and achieving net revenue margins of 26 to 28% and adjusted EBITDA margins of 65 to 70%. In our U.S. title segment, third quarter revenues were down 28.8% year over year. Centralized title revenues were down 22.2% compared with an estimated 0.5% decrease in market volumes. As we highlighted in prior periods and during our investor day last fall, we have been transitioning our client base in US title for some time, making capacity for new franchise type clients like the tier one and tier two lenders we launched earlier this year. To put this into context, let me give you a bit more color around timing of this transition. As title volumes were surging late last year and with the launch of our first Tier 1 customer on the horizon, we capped volume with some historical customers to ensure we had ample capacity to properly service the Tier 1 and other new Tier 2 lenders. As the 10-year yield moved up earlier this year, we did not receive as much volume as we would have otherwise received due to the caps we put in place. Performance in the first quarters of a new Tier 1 launch are critical, as was the case in appraisal, and we firmly believe that we made the right decisions for the long term. We are very pleased with our performance and the market share progression we have seen thus far with our new title clients, and we also launched two new lenders in title in the third quarter. We are continuing to look at opportunities to build up share should the rate environment be less favorable in the near term. We remain confident with our strategy and long-term objectives for this business to triple our market share to six to 8% by the end of fiscal 2025 and achieve net revenue margins in the 60 to 65% range and adjusted EBITDA margins in the 50 to 55% range. Diversified title revenues were down 69% year over year in the third quarter, in line with our strategic plan to rationalize this business and better support the growth of our centralized title services. On a year-to-date basis, this represents a revenue decline of $12.9 million in our title segment. In our Canadian segment, third quarter revenues were up 149.1% year over year. Higher appraisal volumes from market share gains and a stronger mortgage origination market in Canada drove record volumes in the Canadian appraisal business during the quarter. We also benefited from foreign exchange and revenues in our insurance business increased with the relaxation of certain COVID-19 restrictions. Adjusted EBITDA more than doubled to $1.3 million from $0.6 million in the third quarter of fiscal 2020. With that, I'll hand it over to Bill. Bill?