Real Matters (TSE:REAL) reported what management described as a strong start to fiscal 2026, posting double-digit year-over-year growth and a return to positive profitability in a quarter that is typically seasonally slow for the business. On the company’s fiscal first-quarter earnings call, executives pointed to market share gains, new client launches, and improved operating efficiency as key drivers of performance across its U.S. Appraisal, U.S. Title, and Canada segments.
Quarter performance highlights
Chief Executive Officer Brian Lang said consolidated revenue rose 14% year-over-year, while net revenue increased 19%, “reflecting gains across all three segments.” He added that the company delivered positive consolidated adjusted EBITDA of $0.1 million for the quarter, attributing the result to operating leverage in U.S. Appraisal and U.S. Title.
Mortgage market context and rate dynamics
Chief Financial Officer Rodrigo Pinto provided macro context, saying the average 30-year fixed mortgage rate fell from about 6.43% in early October to 6.32% at the end of December, while 10-year U.S. Treasury yields rose slightly from 4.1% to roughly 4.15%. Pinto said the spread between 30-year mortgage rates and the 10-year yield narrowed by around 20 basis points to approximately 200 basis points, which he described as progress toward the long-term historical average spread of 170 basis points.
Pinto said the modest decline in rates helped drive growth in refinance originations from a low base, while purchase market origination volume declined slightly, consistent with forecasts from the Mortgage Bankers Association (MBA) and Fannie Mae.
Segment results: U.S. Appraisal, U.S. Title, and Canada
U.S. Appraisal: Pinto said U.S. Appraisal revenue increased 12% year-over-year to $32.9 million. Purchase mortgage origination revenues declined modestly, while refinance-related revenues rose 27% due to higher addressable refinance origination volume. Home equity revenue increased 22% and represented 26% of segment revenue.
U.S. Appraisal net revenue was $8.4 million, up from $7.8 million a year earlier, while net revenue margin declined by 110 basis points, which Pinto attributed “mostly to the distribution of transaction volumes as it relates to geographies, clients, and product mix.” Operating expenses decreased 5% to $5.1 million. Adjusted EBITDA rose 36% to $3.3 million, and adjusted EBITDA margin increased to 39.1%.
U.S. Title: Pinto said U.S. Title revenue rose 76% to $4.4 million, and refinance origination revenue increased 135%, driven primarily by market share gains with new and existing clients and higher refinance origination volume. Net revenue increased 110% to $2.8 million, and net revenue margin improved to 63.9% from 53.4% due to higher refinance volumes.
U.S. Title operating expenses rose 16% year-over-year, which Pinto said was primarily due to additional hires to accelerate new client deployments. The segment posted an adjusted EBITDA loss of $0.8 million, improving from a $1.8 million loss a year ago. Pinto added that excluding investments in title sales capabilities, approximately 85% of incremental net revenue would have flowed to the bottom line. He also cautioned that based on second-quarter order flow, the company expects net revenue margins to “trend closer to the lower end” of its target operating model range in Q2.
Canada: In Canada, Pinto said revenue increased modestly to $9.2 million from $9.1 million, supported by appraisal market share gains with new and existing clients, partially offset by lower mortgage market volumes and lower insurance inspection services. Net revenue rose 3% to $1.8 million, and adjusted EBITDA was flat at $1.1 million.
Client wins, pipeline momentum, and volume cadence
During the question-and-answer session, management provided additional detail on refinance activity and client onboarding. Lang said refinance volumes in the quarter were “a little bit stronger in the front end than the back end,” referencing what he called a “month boomlet” in September and October. He added that in U.S. Title, the company benefited from the lag between volumes and revenue recognition.
Lang also said that for the company’s U.S. Title results, about two-thirds of the growth came from the Tier 1 client launch, with one-third coming from the broader market. On sales activity, Lang told analysts the company is seeing more lender urgency and more RFPs, particularly in title, as lenders plan for potential volume increases and capacity needs. He linked this activity to sales investments made in the title business and said the company is “very ambitious about the pipeline.”
Lang said the company launched with the Tier 1 title client in the origination channel and has since expanded into the home equity channel, which he characterized as “always a decent channel to be in.”
Outlook themes: cautious optimism, operating leverage, and platform investments
Lang described management as “cautiously optimistic” on U.S. mortgage fundamentals, but said the caution is tied to the near-term market outlook and seasonality. He cited industry projections indicating mortgage volumes could be down close to 10% quarter-over-quarter in Q2, while forecasts for the full year imply materially stronger activity later in the year. Pinto later said that, using MBA and Fannie Mae estimates, purchases are expected to rise in the single digits in fiscal 2026, while refinance could increase around 50% on average, based on mortgage rates hovering around 6%.
Lang also highlighted what he sees as a longer-term refinance opportunity, stating there are “13 million mortgages with interest rates above 6%,” and that there are now more mortgages above 6% than below 3%, which he said indicates a move toward a more normalized market distribution.
On profitability and scaling, management said operating efficiencies implemented over the past several years have improved leverage in the model. In response to a question about prior-cycle profitability, Pinto said that at similar volumes to 2020 and 2021, the company expects to perform better, and he referenced adjusted EBITDA “close to $100 million” under the company’s target operating model, attributing the improvement to operating efficiencies implemented over the last five to six years.
Management also discussed preparedness for the industry’s UAD (Uniform Appraisal Dataset) rollout. Lang said the company completed its first UAD transaction in the prior quarter and has invested approximately $2 million in UAD readiness, calling it a differentiator as some competitors “are struggling” with the transition.
On the balance sheet, Pinto said the company ended the quarter with no debt and cash of $43.8 million as of December 31, 2025, with the increase from the prior quarter largely driven by collections timing and working capital changes that normalized from the fourth quarter.
About Real Matters (TSE:REAL)
Real Matters Inc is a Canadian network management services provider for the mortgage lending and insurance industries. The company’s platform combines proprietary technology and network management capabilities with tens of thousands of independent qualified field agents. Its operating segment includes U.S. Appraisal; U.S. Title and Canada. The company generates maximum revenue from the U.S. Appraisal segment. Its U.S. Appraisal segment provides residential mortgage appraisals for purchase, refinance, and home equity transactions through its Solidifi brand.
