News Press Releases

Real Matters Reports Fourth Quarter and Fiscal 2019 Financial Results

T.REAL | November 21, 2019

TORONTO

(all amounts are expressed in millions of U.S. dollars, excluding per share amounts and unless otherwise stated)

Real Matters Inc. (TSX: REAL) (“Real Matters” or the “Company”), a leading network management services platform for the mortgage and insurance industries, today announced its financial results for the fourth quarter and fiscal year ended September 30, 2019.

“We closed out fiscal 2019 with a very strong fourth quarter. In Q4, U.S. Appraisal transaction volumes surpassed the record-high level we set in Q3, and U.S. Title volumes more than tripled year-over-year, which drove Adjusted EBITDA^(A)margins of 58.6% for U.S. Appraisal and 44.9% for U.S. Title,” said Real Matters Chief Executive Officer Jason Smith. “We ended the year with 10.6% market share in U.S. Appraisal, and 1.0% in U.S. Title which represents the low end of the range for our fiscal 2021 market share objective for U.S. Title. Due to the scalability of our platform, consolidated Adjusted EBITDA^(A) for fiscal 2019 increased to $29.0 million from $5.8 million in fiscal 2018. Overall, we were very pleased with how the business performed in fiscal 2019. Given our current market share and the relationships we have with our clients, we believe we have a very solid foundation from which to grow in fiscal 2020 and beyond.”

Q4 2019 Key Performance Indicators	U.S. Appraisal	U.S. Title	Consolidated
Market Adjusted Growth	18.6%	202.5%	NA
Revenues	$68.9 million	$30.1 million	$107.3 million
Revenue Growth	48.6%	107.6%	57.9%
Net Revenue^(A) Growth	66.9%	93.2%	75.8%
Adjusted EBITDA^(A) Margin	58.6%	44.9%	41.0%

Q4 2019 Highlights

Continued U.S. Appraisal market share gains with Tier 1 lenders and ranked at the top of their scorecards
Went live with seven new lenders in U.S. Title, including one Top 100 lender
Purchased 1.0 million shares under our normal course issuer bid at a cost of $6.5 million in Q4 2019

Fiscal 2019 Key Performance Indicators	U.S. Appraisal	U.S. Title	Consolidated
Market Share	10.6%	1.0%	NA
Market Adjusted Growth	17.2%	73.0%	NA
Revenues	$212.7 million	$82.6 million	$322.5 million
Revenue Growth	14.1%	26.7%	14.6%
Net Revenue^(A) Growth	30.6%	19.8%	23.3%
Adjusted EBITDA^(A) Margin	51.9%	29.2%	28.4%

Fiscal 2019 Highlights

Went live with seven new Top 100 lenders in U.S. Appraisal, including the sixth Tier 1 lender, and live in new channels with four Top 100 lenders
Increased U.S. Appraisal market share to 10.6% from 9.0%
Went live with 15 new lenders (including six Top 100 lenders) in U.S. Title
Increased U.S. Title market share to 1.0% from 0.6% - reaching the low end of fiscal 2021 target range
Purchased 4.6 million shares under our normal course issuer bid at a cost of $20.2 million for the year ended September 30, 2019

Financial and Operational Summary

(millions of dollars)	Three months ended September 30
	2019	Margin	2018	Margin	$ Change	% Change

Revenues
U.S. Appraisal	$ 68.9		$ 46.4		$ 22.5	48.6%
U.S. Title	30.1		14.5		15.6	107.6%
Canada	8.3		7.1		1.2	16.6%
Consolidated revenues	$ 107.3		$ 68.0		$ 39.3	57.9%

Net Revenue^(A)
U.S. Appraisal	$ 15.9	23.1%	$ 9.6	20.5%	$ 6.3	66.9%
U.S. Title	17.0	56.5%	8.8	60.7%	8.2	93.2%
Canada	1.5	17.8%	1.2	17.3%	0.3	20.4%
Consolidated Net Revenue^(A)	$ 34.4	32.0%	$ 19.6	28.8%	$ 14.8	75.8%

Adjusted EBITDA^(A)
U.S. Appraisal	$ 9.3	58.6%	$ 3.1	32.2%	$ 6.2	203.6%
U.S. Title	7.7	44.9%	1.9	21.3%	5.8	306.4%
Canada	0.9	60.3%	0.5	47.0%	0.4	54.6%
Corporate	(3.8)		(3.4)		(0.4)	11.1%
Consolidated Adjusted EBITDA^(A)	$ 14.1	41.0%	$ 2.1	10.9%	$ 12.0	557.7%

Net income (loss)
Net income (loss)	$ 8.0		$ (2.5)		$ 10.5
Net income (loss) per diluted share	$ 0.09		$ (0.03)		$ 0.12

Adjusted Net Income^(A)
Adjusted Net Income^(A)	$ 9.5		$ 1.6		$ 7.9
Adjusted Net Income^(A)per diluted share	$ 0.11		$ 0.02		$ 0.09

Market adjusted growth
U.S. Appraisal	18.6%
U.S. Title	202.5%

Financial and Operational Summary (continued)

(millions of dollars)	Year ended September 30
	2019	Margin	2018	Margin	$ Change	% Change

Revenues
U.S. Appraisal	$ 212.7		$ 186.5		$ 26.2	14.1%
U.S. Title	82.6		65.2		17.4	26.7%
Canada	27.2		29.8		(2.6)	-8.7%
Consolidated revenues	$ 322.5		$ 281.5		$ 41.0	14.6%

Net Revenue^(A)
U.S. Appraisal	$ 50.2	23.6%	$ 38.4	20.6%	$ 11.8	30.6%
U.S. Title	46.8	56.7%	39.1	60.0%	7.7	19.8%
Canada	5.1	18.8%	5.3	17.7%	(0.2)	-3.3%
Consolidated Net Revenue^(A)	$ 102.1	31.6%	$ 82.8	29.4%	$ 19.3	23.3%

Adjusted EBITDA^(A)
U.S. Appraisal	$ 26.0	51.9%	$ 11.7	30.4%	$ 14.3	123.2%
U.S. Title	13.7	29.2%	6.2	15.8%	7.5	121.9%
Canada	2.7	51.9%	2.5	48.5%	0.2	3.5%
Corporate	(13.4)		(14.6)		1.2	-8.3%
Consolidated Adjusted EBITDA^(A)	$ 29.0	28.4%	$ 5.8	7.0%	$ 23.2	400.2%

Net income
Net income (loss)	$ 10.1		$ (4.0)		$ 14.1
Net income (loss) per diluted share	$ 0.10		$ (0.05)		$ 0.15

Adjusted Net Income^(A)
Adjusted Net Income^(A)	$ 20.9		$ 6.7		$ 14.2
Adjusted Net Income^(A)per diluted share	$ 0.23		$ 0.07		$ 0.16

Market adjusted growth
U.S. Appraisal	17.2%
U.S. Title	73.0%

Conference Call and Webcast
A conference call to review the results will take place at 10:00 a.m. (ET) on Thursday, November 21, 2019, hosted by Chief Executive Officer Jason Smith and Chief Financial Officer Bill Herman. An accompanying slide presentation will be posted to the Investor Relations section of our website shortly before the call.

To access the call:

Participant Toll Free Dial-In Number: (833) 247-5856
Participant International Dial-In Number: (647) 689-4232
Conference ID: 6841519

To listen to the live webcast of the call:

Go to: https://event.on24.com/wcc/r/2082046/6DA061C05445B4055AC96D72A65A7661

The webcast will be archived and a transcript of the call will be available in the Investor Relations section of our website following the call.

(A) Non-GAAP Measures
The non-GAAP measures used in this Press Release, including Net Revenue, Adjusted EBITDA and Adjusted Net Income or Loss do not have a standardized meaning prescribed by International Financial Reporting Standards and are therefore unlikely to be comparable to similar measures presented by other issuers. These non-GAAP measures are more fully defined and discussed in the Company’s MD&A for the year ended September 30, 2019, available on SEDAR at www.sedar.com.

Full reports for Real Matters financial results for year ended September 30, 2019 are outlined in the annual audited consolidated financial statements and the related MD&A of the Company, which are available on SEDAR at www.sedar.com. In addition, supplemental information is available on our website at www.realmatters.com.

Forward-Looking Information
This Press Release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Words such as “could”, “forecast”, “target”, “may”, “will”, “would”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “seek”, “believe”, “likely” and “predict” and variations of such words and similar expressions are intended to identify such forward-looking information, although not all forward-looking information contains these identifying words.

The forward-looking information in this Press Release includes statements which reflect the current expectations of management with respect to our business and the industry in which we operate and is based on management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes appropriate and reasonable in the circumstances. The forward-looking information reflects management’s beliefs based on information currently available to management, including information obtained from third party sources, and should not be read as a guarantee of the occurrence or timing of any future events, performance or results.

The forward-looking information in this Press Release is subject to risks, uncertainties and other factors that are difficult to predict and that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. A comprehensive discussion of the factors which could cause results or events to differ from current expectations can be found in the “Risk Factors” section of our Annual Information Form for the year ended September 30, 2018 and under the heading “Important Factors Affecting our Results from Operations” in our MD&A for the year ended September 30, 2019, each of which is available on SEDAR at www.sedar.com.

Readers are cautioned not to place undue reliance on the forward-looking information, which reflect our expectations only as of the date of this Press Release. Except as required by law, we do not undertake to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

About Real Matters
Real Matters is a leading network management services provider for the mortgage lending and insurance industries. Real Matters’ platform combines its proprietary technology and network management capabilities with tens of thousands of independent qualified field professionals to create an efficient marketplace for the provision of mortgage lending and insurance industry services. Our clients include the majority of the top 100 mortgage lenders in the U.S. and some of the largest insurance companies in North America. We are a leading independent provider of residential real estate appraisals to the mortgage market and a leading independent provider of title and mortgage closing services in the U.S. Established in 2004, Real Matters has offices in Buffalo (NY), Denver (CO), Middletown (RI), and Markham (ON). Real Matters is listed on the Toronto Stock Exchange under the symbol REAL. For more information, visit www.realmatters.com.