Real Matters Inc.

Good morning ladies and gentlemen and welcome to the Real Matters second quarter 2023 conference call. At this time all lines are in listen only mode. Following the presentation we will conduct a question and answer session. If at any time during this call you require immediate assistance please press star zero for the operator. This call is being recorded today Friday April the 28th 2023. I would now like to turn the conference over to Lynn Beauregard, Vice President of Investor Relations. Please go ahead, Lynn.

Thank you, Operator, and good morning, everyone. Welcome to Real Matters Financial Results Conference Call for the second quarter ended March 31, 2023. With me today are Real Matters Chief Executive Officer Brian Lang, Chief Financial Officers Bill Herman, and Rodrigo Pinto. This morning before market open, we issued a news release announcing our results for the three and six months ended March 31st, 2023. The release, accompanying slide presentation, as well as financial statements and MD&A are posted in the investor section of our website at realmatters.com. During the call, we may make certain forward-looking statements which reflect 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 Notes 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 30, 2022, 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, net revenue margins, adjusted EBITDA, and adjusted EBITDA margins. Non-GAAP measures are described in our NDNA for the three and six months ended March 31, 2023, where you will also find reconciliations to the nearest IFRS measures. With that, I'll turn the call over to Brian. Brian?

Thank you, Lynn. Good morning, everyone, and thank you for joining us on the call today. Before we get to the business of the day, as this will be his last earnings call with us, I'd like to take a moment to acknowledge our CFO, Bill Harmon, for his dedication and contributions to the business over the last six plus years. He's been an integral part of the team, and it's been a privilege to work with him. On behalf of Jason and the board, thank you, Bill. We wish you nothing but the best in your next chapter. I'd also like to extend a warm welcome to our incoming CFO, Rodrigo Pinto. We're very happy to have you on board, Rodrigo, and we look forward to continuing to grow this business together. Now, onto the business of the day. I'll start today by providing an overview of our second quarter performance 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 were very pleased with how the business performed in the second quarter, a quarter that has historically been our lowest seasonal period in our fiscal year. Consolidated net revenue increased to 9.9 million in the second quarter, up 1% sequentially. Our U.S. appraisal segment posted record net revenue margins of 27.6%, and consolidated net revenue margins increased 70 basis points sequentially to 26.4%. With an improved net revenue margin profile and a lower cost base, we improved consolidated adjusted EBITDA to a loss of $1.7 million versus the $2.9 million loss we recorded in the first quarter of 2023. U.S. mortgage market conditions continue to be challenging in the second quarter, as spreads remained wide due in part to market volatility and 30-year mortgage rates fluctuated in the 6% to 7% range. That said, home sales seem to be bottom-bouncing, and 87% of refinance originations today are cash-out transactions, which is the highest share on record in the last 30 years. On the purchase side, we are starting to see green shoots in the market and we are cautiously optimistic that a spring market will deliver sequential market volume growth in the third quarter. We continue to believe that the refinance market will return to more normalized levels in the future, and we have the capacity in place and the ability to scale the business to meet the demand of higher market or organically driven volume growth. Beyond the impact of current market conditions, We made solid progress in the second quarter as we continue to win market share and add new clients. In U.S. appraisal, net market share increased year over year, and we launched one new lender and one new channel with an existing client. In U.S. title, we launched one new lender and one new channel, and we were awarded additional market share with our Tier 1 lender at the end of the quarter. In Canada, we launched three new channels. In U.S. appraisal, purchase origination revenues were down 3% sequentially and refinance origination revenues were up 2% quarter over quarter. We set a new high for U.S. appraisal net revenue margins in the second quarter, which increased 60 basis points to 27.6% from the record 27% we posted in the first quarter this year. continuing to put us in our fiscal 2025 net revenue margin target range for the segment. Our ability to direct more work to our top performing appraisers allowed us to achieve higher margins, which supported improved quality and drove faster turn times. We continue to perform at the top of our tier one lender scorecards in the second quarter. Our performance has been key to continuing to win additional market share and our ability to advance the sales cycle for new channel expansion as well as title opportunities. U.S. title segment revenues were down 6% quarter over quarter and down 9% for centralized title. As I noted earlier, we continued to adjust our cost base in U.S. title and we narrowed our adjusted EBITDA loss to $2.3 million in the second quarter from the $2.9 million loss we posted in Q1. The team remains highly engaged with existing and potential new clients, and our focus remains on leveraging our current performance and various strategies to onboard new clients and build franchise value for the long term. In Canada, we launched three new channels, and we increased market share year over year. Canadian segment net revenue was flat sequentially. However, net revenue margins increased 80 basis points quarter over quarter to 18.7%, and we increased adjusted EBITDA margins to 69.8% from 64.2% in the first quarter of fiscal 2023. With that, I'll hand it over to Bill. Bill?