Bridgemarq Real Estate Services Inc. ($BRE)

Good morning. My name is Sylvie, and I would like to welcome everyone to the Bridgemarq Real Estate Services, Inc. 2025 Fourth Quarter Results Conference Call. This call is being recorded. [Operator Instructions] And I would like to introduce Ms. Anne-Elise Allegritti, Director of Investor Relations at Bridgemarq Real Estate Services, Inc. You may now begin your conference.

Thank you, Sylvie. Good morning, everyone, and thank you for being with us on the call today. I am joined by our Chief Executive Officer, Spencer Enright; and our Chief Financial Officer, Wallace Wang. They will begin today with a brief overview of our company's 2025 financial results, followed by remarks on operational highlights, company updates and market developments. Following their remarks, Spencer and Wallace will be happy to take your questions. Please note, only analyst questions will be permitted on the dial-in line. [Operator Instructions] You can find a link to that webcast on the Events page of our website. I want to remind everyone that some of the remarks expressed during this call may contain forward-looking statements. You should not place reliance on these forward-looking statements because they involve known and unknown risks and uncertainties that may cause the actual results and performance of the company to differ materially from the anticipated future results expressed or implied by such statements. I encourage everyone to review the cautionary language found in our news release and on all of our regulatory filings. These can be found on our website and on SEDAR+. At this time, I will pass the call over to Mr. Spencer Enright to give a brief overview of our fourth quarter results.

Thank you, Anne-Elise, and good morning, everyone. In 2025, Bridgemarq continues to build on its long-standing legacy as a leader in Canadian real estate through strategic investment, strong brand positioning and our continued commitment to supporting real estate professionals across our network. While many sectors of the economy were affected by geopolitical turbulence and trade disruptions over the past year, the company remained resilient. Even as the overall real estate industry experienced an outflow of professionals, our brands continue to grow and attract top talent. This progress underscores the strength of our business model, commitment to innovation and our ability to adapt in a changing market environment. Revenue for 2025 amounted to $407 million compared to $351 million generated in 2024, which is reflective of the addition of the brokerage operations we acquired on March 31 of that year. At its meeting yesterday, our Board of Directors approved a dividend of $0.1125 per share payable on April 30 to shareholders of record on March 31. This indicates an annualized dividend of $1.35 per share, which is consistent with 2024. And with that, I'll turn the call over to Wallace for a closer look at our full year financial performance.

Thank you, Spencer, and good morning, everyone. As Spencer mentioned, revenue for 2025 was up year-over-year. In the fourth quarter, revenues amounted to $98 million compared to $101 million in the fourth quarter of 2024. The number of realtors in our network currently sits at 21,409. This includes more than 2,400 agents operating within the company's corporately owned real estate brokerages in the Greater Toronto area, Greater Vancouver and within the province of Quebec. We grew our network by more than 470 real estate professionals on a net basis, an increase of 2% compared to last year. By contrast, the total number of realtors in the country contracted by 3%. In 2025, the company generated net earnings of $7.3 million compared to a net loss of $10.3 million in 2024. The higher net earnings for the year are primarily a result of an $11.3 million gain on the valuation of the exchangeable units compared to a loss of $9.3 million in 2024. In 2025, adjusted net earnings, which considers our net operating earnings before certain noncash, nonoperating adjustments and payments to holders of Exchangeable Units amounted to $5 million, down from $7.3 million in the prior year. The reduction in adjusted net earnings is primarily due to the lower operating income generated in the year. Cash provided by operating activities decreased by $7.2 million in 2025 compared to the prior year, primarily due to lower operating income, higher interest payments and working capital changes. Finally, the company generated $10.6 million in free cash flow in 2025, down from $16.8 million in 2024. This is partly due to increased capital expenditures during the year as the company continued to invest in its agent network. Economic and geopolitical uncertainty weighed on home buying activity throughout 2025, creating softness in the country's most expensive markets as concerned consumers held back. The Canadian residential real estate market closed the year at $220 billion, a 6% decline from 2024. For the full year, the national average selling price dipped by 1%, while sales volume declined by 4%. In 2025, the Greater Toronto area real estate market contracted by 12% year-over-year, driven by a 4% decline in the average home prices and an 8% decline in unit sales. The Greater Vancouver real estate market also recorded double-digit decline in 2025 with total transaction dollar volume decreasing 14% year-over-year as selling prices and unit sales declined by 4% and 10%, respectively. By contrast, in the province of Quebec, the residential real estate market recorded a 16% increase compared to the previous year. This reflects an 8% increase in both unit sales and the average selling price. Spencer will now provide additional insights into the market and an update on our operations.

Thanks, Wallace. Homebuyer activity throughout 2025 remained below typical levels, weighed down by economic uncertainty that persisted from early in the year. As a result, market conditions varied widely across regions. With home prices continuing to soften, affordability in the Greater Toronto and Vancouver markets continue to gradually improve, which other factors being equal, does improve opportunities for first-time buyers and those otherwise in a position to act. Increased inventory levels shifted conditions in favor of buyers in these markets, which creates a favorable environment for home sale transactions once other external economic factors eventually stabilize. Meanwhile, Quebec's housing market continues to demonstrate resilience and growth. Tight supply conditions have driven home price gains in the province over the last year, similar to regions in the Prairies and Atlantic Canada. The Bank of Canada held its target rate for the -- for overnight lending rate at 2.25% since October 2025. While the Central Bank is widely expected to maintain this level at its scheduled announcement next week, it has signaled the readiness to support economic growth as conditions warrant. Inflation has largely stabilized. In January, Canada's consumer price index increased 2.3% year-over-year, down from the 2.4% recorded in December, which remains within the Central Bank's target range. Now I'd like to give you a few updates on the company's operations. 2025 was a year of meaningful progress in both market share growth and innovation. In Ontario, the acquisition of 2 major brokerages from one of our top U.S. competitors brought approximately 900 agents into the Royal LePage brand network. In Quebec, our Via Capitale branded network expanded with the addition of roughly 200 agents. Alongside these strategic additions, our brands continue to attract and retain high-performing professionals through organic growth, underscoring the strength of our value proposition. Over the past year, we reinforced our Royal LePage brand's Canadian first positioning and showcased the strength of our brands and service offerings through the launch of 2 national digital advertising campaigns. Together, these campaigns generated more than 16 million impressions and helped strengthen brand awareness among consumers across the country. In 2025, we also continued to advance our digital modernization and professional development initiatives with a focus on strengthening regulatory compliance and improving operational effectiveness. We launched a new recruiting microsite to help our franchisees grow as well. We continue to expand the adoption of practical AI tools across our network and delivered training on Google suite of AI-powered applications to help professionals integrate these technologies into their daily workflows. Within our Proprio Direct network, several initiatives were implemented to enhance the digital experience for both professionals and consumers. Updated website technology and improved internal platforms were introduced to strengthen brand consistency, enhance usability and optimize lead generation. Proprio Direct also expanded its accredited training, onboarding and continuing education programs, providing our real estate professionals with structured integration support and access to ongoing professional development resources. Together, these initiatives strengthen the foundation of our industry-leading brands, positioning the company to capture new opportunities for growth while delivering long-term value for our shareholders. As we look ahead, we are committed to building on the progress achieved in 2025, while adapting proactively within an uncertain industry sector environment. With stable cash flows and diverse opportunities for expansion, Bridgemarq's operating model remains well positioned for sustained success. With that, I'll turn the call back to our operator and open the call to questions.

[Operator Instructions] And at this time, it appears we have no questions on the phone.

There are currently no other questions on the webcast as well.

Please proceed, gentlemen.

Okay. Yes. Well, thank you, operator, and thanks, everybody, for joining us on the call. We appreciate your interest in the business and look forward to speaking to you again after our first quarter results. Thank you.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have yourselves a good weekend.