Real Matters Posts Strong Q1 Growth, Returns to Profitability in Sluggish Mortgage Market

In a quarter often marked by a seasonal slowdown, Real Matters Inc. (TSE: REAL) delivered a surprisingly strong performance, reporting double-digit year-over-year revenue growth and a return to positive profitability for its first quarter of fiscal 2026. Management pointed to strategic gains in market share, successful onboarding of new clients, and enhanced operating leverage as the primary catalysts.

"We are off to a strong start," stated CEO Brian Lang on the earnings call. Consolidated revenue climbed 14%, with net revenue up 19%, reflecting broad-based strength. The company achieved a positive consolidated adjusted EBITDA of $0.1 million, a notable turnaround attributed to operational improvements in its core U.S. businesses.

The quarter saw Real Matters onboard eight new clients, including two major lenders, and expand a key relationship with a Tier 1 lender. Lang emphasized the significance of returning to Q1 profitability for the first time since early 2022, especially considering current mortgage market volumes remain approximately 70% lower than that period.

CFO Rodrigo Pinto provided context on the macroeconomic landscape, noting a modest decline in the average 30-year fixed mortgage rate to 6.32% by December's end. He highlighted a narrowing spread between mortgage rates and the 10-year Treasury yield as a positive step toward historical norms. This environment, he explained, spurred growth in refinance originations from a depressed base, while purchase volumes saw a slight, anticipated decline.

Segment Performance Breakdown

U.S. Appraisal: Revenue grew 12% to $32.9 million. A 27% surge in refinance-related revenue and a 22% increase in home equity revenue helped offset a modest dip in purchase mortgage revenue. Adjusted EBITDA for the segment jumped 36% to $3.3 million.

U.S. Title: This segment showed explosive growth, with revenue soaring 76% to $4.4 million, driven by market share gains. Net revenue margin improved significantly to 63.9%. While the segment posted an adjusted EBITDA loss of $0.8 million, this was a substantial improvement from the prior year's $1.8 million loss. Pinto cautioned that Q2 margins may trend toward the lower end of their target range based on current order flow.

Canada: Revenue saw a modest increase to $9.2 million, supported by appraisal market share gains that countered lower overall market volumes.

Strategic Outlook and Analyst Commentary

Management expressed "cautious optimism" for the U.S. mortgage market. Lang pointed to a significant long-term refinance opportunity, noting there are now more mortgages with rates above 6% than below 3%. "We are seeing more lender urgency and RFPs, particularly in title, as the industry prepares for a potential uptick," Lang told analysts, describing the sales pipeline as ambitious.

The company also highlighted its preparedness for the industry's transition to the Uniform Appraisal Dataset (UAD), a $2 million investment it believes provides a competitive edge. Financially, Real Matters remains debt-free with a cash position of $43.8 million.

Analyst & Investor Reactions:

"This is a textbook execution play," said Michael Chen, portfolio manager at Horizon Capital. "Growing revenue and returning to profit in a down market demonstrates their model's resilience and market share capture. The Title segment's growth is particularly promising."

"I'm not sold on the 'turnaround' narrative just yet," countered Sarah Jenkins, an independent market analyst known for her sharp commentary. "A $0.1 million EBITDA is barely breakeven. The Title unit is still burning cash, and their 'cautious optimism' sounds like code for 'we have no visibility.' This feels like a dead-cat bounce until we see sustained, market-outpacing profit growth."

"The operational leverage story is finally showing up," noted David Park, a veteran financial blogger. "If they can maintain discipline and rates stabilize, their scaled platform is poised to benefit enormously when volume returns. The UAD readiness is a smart, forward-looking differentiator."

Real Matters Inc. is a leading Canadian network management services provider for the mortgage and insurance sectors, operating through its Solidifi brand in the U.S. and other platforms in Canada.