Release Date: March 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Information Services Corp (IRMTF, Financial) reported record consolidated revenue and adjusted EBITDA for 2024, aligning with their expectations.
- The Saskatchewan Registry's division saw strong performance, with increased volumes and record high-value property registration revenue.
- The Recovery Solutions division experienced growth due to an increase in individual asset recovery assignments and sales.
- The Regulatory Solutions division benefited from increased know-your-customer and due diligence activities, driven by enhanced anti-money laundering policies.
- The company achieved significant milestones, including ISO 27001:2022 certification and securing a contract extension with Ontario for property tax assessment.
Negative Points
- Net income decreased to $20.2 million in 2024 from $25 million in 2023, impacted by increased interest and amortization expenses.
- The Corporate Solutions division faced a decline due to the opening of the Ontario Business Registry Access and a government ban on Notice of Security Interests.
- Expenses increased by $30 million in 2024, driven by higher wages, information technology services, and costs of goods sold.
- Capital expenditures rose significantly to $8.3 million in 2024 from $2.4 million in 2023, primarily due to increased system development work.
- The company faces challenges in the M&A landscape, with high valuations making it difficult to find suitable acquisition opportunities.
Q & A Highlights
Q: How might the Chinese tariffs on canola affect ISC's guidance and the Saskatchewan economy?
A: Shawn Peters, President and CEO, stated that while it's early to predict the impact, ISC's business isn't directly affected. However, economic impacts could influence them indirectly. They expect continued strength in the Saskatchewan market, aided by a declining interest rate environment, and foresee transaction and price growth despite potential tariff effects.
Q: What is the expected margin profile for the registry business moving forward?
A: Robert Antochow, CFO, noted that the high margins in 2024 were driven by record high-value property registration revenue. They anticipate margins to normalize to the 54% to 56% range, as such high-value registrations are not expected to occur annually.
Q: Can you provide insights into the M&A landscape and its role in achieving ISC's growth targets?
A: Shawn Peters mentioned that M&A is crucial for reaching their 2028 growth targets. While valuations remain high, ISC is confident in finding strategically aligned opportunities. They focus on ensuring acquisitions are timely, well-priced, and add value to ISC.
Q: What investments is ISC making, and how do they impact growth and margins?
A: Shawn Peters highlighted investments in people and technology, particularly in sales, business development, and project implementation. These investments aim to drive organic growth, enhance M&A opportunities, and improve project delivery efficiency.
Q: How is the opening of the Ontario Business Registry affecting ISC's business?
A: Shawn Peters explained that most of the impact has been felt, and while they expect continued effects, ISC has diversified its business to mitigate dependency on this segment. The impact is factored into their guidance, and they will monitor developments throughout the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
