Diversified Royalty Corp. Announces Fourth Quarter and Year End 2025 Results

Executive Summary

• Diversified Royalty Corp. reported Q4 2025 revenue of $19.1 M and full‑year 2025 revenue of $70.8 M, representing year‑over‑year increases of 11.9% and 8.9%, respectively.
• Adjusted revenue rose to $20.4 M for the quarter and $76.1 M for the year; net income jumped to $11.0 M (Q4) and $36.7 M (FY), up from $4.0 M and $26.6 M in 2024.
• Key operational highlights include: weighted‑average organic royalty growth of 3.0% (Q4) / 4.1% (FY); new Cheba Hut acquisition contributing $1.4 M (Q4) and $3.0 M (FY); AIR MILES amendment delivering a fixed $3.9 M annual royalty starting Feb 2026; and a 33 % royalty relief for Sutton through end‑2026.

Key Details

• Financial Performance
• Q4 2025 revenue: $19.1 M (↑11.9% YoY)
• FY 2025 revenue: $70.8 M (↑8.9% YoY)
• Adjusted revenue Q4: $20.4 M (↑11.2% YoY); FY: $76.1 M (↑8.4% YoY)
• Distributable cash Q4: $13.6 M (↑7.9% YoY); FY: $50.5 M (↑12.7% YoY)

• Dividend payout ratio Q4: 87.1 % (dividend $0.0696/share); FY: 88.1 % (dividend $0.2634/share)

• Net Income

• Q4 2025 net income: $11.0 M vs $4.0 M in Q4 2024

• FY 2025 net income: $36.7 M vs $26.6 M in FY 2024

• Royalty Partner Performance

• Mr. Lube + Tires: SSSG 7.2% (Q4) / 9.5% (FY); royalty income $9.2 M Q4, $34.1 M FY.
• Stratus: Fixed royalty increase 5%/yr until Nov 2026, then 4%; royalty income $2.4 M Q4, $9.3 M FY.
• Nurse Next Door: Fixed 2% annual growth; royalty entitlement $1.4 M Q4, $5.4 M FY.
• Oxford: SSSG 3.7% (Q4) / 5.0% (FY); royalty income $1.24 M Q4, $4.74 M FY.
• Mr. Mikes: SSSG –1.1% (Q4) / +0.5% (FY); royalty income $1.02 M Q4, $4.21 M FY.
• BarBurrito: Fixed 4% annual increase through Mar 2030; added nine restaurants on 1 Mar 2026 adding $32,708/month ($392,496 annualized). Royalty income $2.18 M Q4, $8.68 M FY.
• Cheba Hut: New acquisition (June 17 2025); royalty income $1.40 M Q4, $3.00 M FY; fixed increase each April equal to greater of 3.5% or U.S. CPI + 1.5%.

• AIR MILES®: Decline –7.9% Q4; amendment effective 2 Feb 2026 provides fixed $3.9 M annual royalty, growing 2.42% per annum, guaranteed by BMO.

• Royalty Relief Agreements

• Sutton: 20 % deferral Oct 1 2024‑Dec 31 2025 (now forgiven); 33 % waiver Oct 2025‑Dec 2026 to support growth.

• Overall royalty relief contributed to lower Sutton income ($0.8 M Q4 vs $0.9 M prior year).

• Non‑IFRS Measures

• Adjusted revenue = royalty income + DIV Royalty Entitlement + management fees.
• Distributable cash per share Q4: $0.0799; FY: $0.2989.

Notable Quotes

“Overall, DIV is pleased with how its royalty partners performed… The amendment to the AIR MILES® agreements provides a superior economic outcome for DIV.” – Sean Morrison, CEO

All forward‑looking statements are subject to risks and uncertainties detailed in the release.