Information Services (ISC) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of CAD 67.8 million, up 27% year-over-year, and record adjusted EBITDA of CAD 27.2 million, up 53%, driven by strong Registry Operations and Services growth.

• Registry Operations, especially Saskatchewan Registries, saw significant growth due to fee adjustments and increased transaction volumes.

• Services segment experienced robust growth in both revenue and adjusted EBITDA, supported by increased due diligence and asset recovery activities.

• Renewed contract with the Government of Ontario for property tax analysis services through March 2028, with options for further renewal.

• Launched a new online self-service portal for the Bank Act Security Registry under a five-year contract with the Bank of Canada.

Financial highlights

• Q2 2024 revenue reached CAD 67.8 million, a 27% increase year-over-year.

• Net income was CAD 10.3 million (CAD 0.57 per basic share), up from CAD 8.2 million (CAD 0.47 per basic share) in Q2 2023.

• Adjusted net income was CAD 14.1 million (CAD 0.78 per basic share), compared to CAD 9.3 million (CAD 0.52 per basic share) last year.

• Adjusted EBITDA was a record CAD 27.2 million, up from CAD 17.8 million in Q2 2023, with margin improving to 40% from 33.4%.

• Net cash flow from operating activities was CAD 24.1 million, up from CAD 14.3 million year-over-year.

• Adjusted free cash flow rose 26% to CAD 15.7 million.

• Cash balance at June 30, 2024, was CAD 22.1 million; total debt reduced to CAD 163.4 million from CAD 177.3 million at year-end 2023.

Outlook and guidance

• Maintained 2024 annual guidance: revenue between CAD 240–250 million and adjusted EBITDA between CAD 83–91 million.

• Expect continued strong activity in Saskatchewan real estate due to interest rate cuts, population growth, and market confidence.

• Services segment forecasted to grow with increased transactions and customer base, especially in Regulatory Solutions.

• Recovery Solutions expected to benefit from increased assignments due to consumer financial pressures.

• Committed to five-year goal of doubling revenue and adjusted EBITDA by 2028.