Real Matters Inc.

Good day, and thank you for standing by. Welcome to the Real Matters second quarter 2022 conference call. 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, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Lynn Borgaard. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Real Matters Financial Results Conference Call for the second quarter ended March 31st, 2022. 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 Q2 results for the three months ended March 31st, 2022. The release, the accompanying slide presentation, as well as financial statements and MD&A are posted in the Investors 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 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 factors section of the company's annual information form for the year ended September 30th, 2021, which is available on CDAR and in the investor section of our website. As a reminder, we refer to non-GAAP measures in our slide presentation, including net revenue, net revenue margins, adjusted EBITDA, and adjusted EBITDA margins. Non-GAAP measures are described in our MD&A for the three and six months ended March 31, 2022, where you will also find reconciliations to the nearest IFRS measures. With that, I'll now hand the call over to Brian. 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 second quarter and some of the key drivers behind our numbers. 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 reported consolidated revenues of $95 million, consolidated net revenue of $24.2 million, and consolidated adjusted EBITDA of $2.5 million in the second quarter. Our U.S. appraisal business delivered solid financial results against the declining market environment, and we delivered top-ranking performance on client scorecards in U.S. appraisal, which resulted in market share gains in the quarter. U.S. Title also saw year-over-year market share gains with our recently launched client as a result of being ranked a top-performing vendor. In Canada, we had our best second quarter on record. The US mortgage market presented significant headwinds to our business in the second quarter. The US 30-year fixed rate mortgage saw its sharpest increase in 27 years in this quarter, putting pressure on both the incentive to rate refinance and affordability. Interest rates jumped more than 50 basis points in mid-March, the largest two-week increase in more than a decade. Affordability is now at its lowest point on record outside of the 2004 to 2007 period with the monthly payment for the average priced home purchased up $329 or 24% year to date and $596 or 54% since the onset of the pandemic. At current rates, the rate refi candidate pool was down more than 80% compared to the start of the year, sitting at approximately 2 million candidates. Against the backdrop of these interest rate movements, we estimate that the mortgage origination market contracted by 38.8% in the second quarter. with purchase transactions down an estimated 8% and refinance transactions down an estimated 54.1%. U.S. appraisal mortgage origination revenues, which includes purchase and refinance, were down 11.5% year-over-year compared to an estimated 23% decline in total addressable origination market volumes. as market share gains and new client additions help soften the impact of the market decline. In the quarter, we increased market share with four of our top five clients, and we launched three new lenders in U.S. appraisal. Other revenues also increased on higher home equity volumes. Our market estimate includes a year-over-year decline in the use of GSE waivers, which helped increase the size of the addressable refinance market for appraisal and partially offset the 54.1% total market decline for refinance market activity. In our U.S. title segment, second quarter centralized title revenues declined 74.7% year-over-year against an estimated market decline of 54.1%. As I mentioned earlier, our performance with newly launched title clients has earned us increased market share on a year-over-year basis. Performance remains the key driver of growth in our U.S. title business as we continue to advance the sales cycle with more franchise-type clients and convert the pipeline to new client launches. We launched one new title client in the second quarter. In our Canadian segment, second quarter revenues were up 11.2% year-over-year from increasing market share with a number of our large Canadian bank clients and modestly higher revenues from insurance inspection services. With that, I'll hand it over to Bill. Bill?