ISC Reports Financial Results for the Second Quarter of 2025

Executive Summary

• Information Services Corporation (TSX:ISC) reported financial results for the quarter ended June 30, 2025, showing stable revenue but a significant decline in reported net income compared to the prior year period.
• The company maintained strong adjusted profitability metrics, with adjusted EBITDA remaining steady at $26.7 million and adjusted net income increasing to $15.1 million, driven by lower finance expenses and steady segment performance.
• The Board declared a quarterly cash dividend of $0.23 per share, and the company continued its deleveraging strategy with $15.0 million in voluntary prepayments toward its credit facility.

Key Details

• Revenue: Total revenue was $67.3 million, a 1% decrease from $67.8 million in Q2 2024.
  • Registry Operations: Revenue increased 3% to $35.4 million, driven by higher average real estate values in the Saskatchewan Land Registry, which offset lower transaction volumes.
  • Services: Revenue decreased 4% to $29.8 million. Growth in high-margin Recovery Solutions ($4.4 million) was insufficient to offset declines in Regulatory Solutions ($22.8 million) and Corporate Solutions ($2.6 million).
  • Technology Solutions: Revenue was $7.9 million, up 6% year-over-year.
• Profitability:
  • Net Income: Reported net income was $5.9 million ($0.32 per basic and diluted share), down from $10.3 million ($0.57/$0.56 per share) in Q2 2024. The decline was attributed to increased share-based compensation and professional/consulting expenses.
  • Adjusted Net Income: Increased to $15.1 million ($0.81 per basic and diluted share) from $14.1 million ($0.78/$0.77 per share) in Q2 2024.
  • Adjusted EBITDA: Remained steady at $26.7 million (40% margin) compared to a record $27.2 million in Q2 2024.
  • Adjusted Free Cash Flow: Increased to $21.0 million from $15.7 million in Q2 2024, due to steady EBITDA and lower interest paid on long-term debt.
• Cash Flow & Balance Sheet:
  • Operating Cash Flow: Net cash flow provided by operating activities was $22.9 million, a decrease of $1.3 million from Q2 2024.
  • Debt Reduction: Voluntary prepayments of $15.0 million were made toward the Company’s Credit Facility. Total debt decreased to $154.7 million from $167.6 million at year-end 2024.
  • Cash Position: Cash on hand was $21.3 million as of June 30, 2025.
• Capital Return & Share Repurchases:
  • Dividend: The Board declared a quarterly cash dividend of $0.23 per Class A Share, payable on or before October 15, 2025, to shareholders of record as of September 30, 2025.
  • NCIB: The company has authorized a Normal Course Issuer Bid (NCIB) to purchase up to 929,007 Class A shares (approx. 5% of outstanding shares) between June 6, 2025, and June 5, 2026. No shares had been repurchased as of July 30, 2025.
• Outlook:
  • ISC expects 2025 revenue to be between $257.0 million and $267.0 million.
  • Adjusted EBITDA for 2025 is expected to be between $89.0 million and $97.0 million.
  • The company aims to achieve a long-term net leverage target of 2.0x – 2.5x.

Notable Quotes

• Shawn Peters, President and CEO: "Our results for the second quarter of 2025 showcase the strength of our diversified business model, delivering a solid performance... Despite higher share-based compensation and other unexpected costs in the quarter, our financial discipline ensures sustained performance. This balanced approach to execution positions us to continue to drive growth."