Bridgemarq Real Estate (TSX:BRE) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

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Access the full call at https://app.webinar.net/2ZO6oXBj9dL

Summary

BRE reported Q1 2026 revenue of $69.9 million, down from $78 million in Q1 2025, due to market weakness and a decrease in agent numbers.

The company posted a net loss of $3.2 million, compared to net earnings of $6.0 million in the previous year, influenced by a $2.6 million loss on exchangeable unit valuations.

Strategic initiatives include AI adoption, the establishment of a National Commercial Advisory Council, and enhancements in digital strategy and training systems.

BRE declared a dividend of 11.25 cents per share, consistent with the previous year, reflecting stability despite financial challenges.

Management remains optimistic about revenue growth via franchising prospects and agent recruitment, despite current market softness in key regions like Toronto and Vancouver.

Full Transcript

OPERATOR

Good afternoon, My name is Sylvie and I would like to welcome everyone to the Bridgemark Real Estate Services Inc. 2026 First Quarter Results Conference call. Note that this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. For those of you who dialed into the conference call. If you would like to ask a question, simply press Star then the number one on your telephone keypad. If you would like to withdraw your question, press Star then two. For those of you joining us via webcast, if you would like to ask a question, simply type it into the Q and A box on your screen. We will answer these questions following the dial in questions after the presentation, time permitting. And I would like to introduce Ms. Anneliese Alegretti, Director of Investor Relations at Bridgemark Real Estate Services Inc. Ms. Alegretti, you may begin the conference.

Anneliese Alegretti (Director of Investor Relations)

Thank you, Sylvie. Good afternoon everyone and thank you for being with us today on the call. I am joined in the room by our Chief Executive Officer, Spencer Enright and our Chief Financial Officer, Wallace Wayne. They will begin with a brief overview of our company's first quarter results. Wallace will then discuss our financial results in more detail and Spencer will conclude by providing some remarks on the 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. All others who wish to submit a question are welcome to do so via the Q and A feature on the webcast. You can find a link to the 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 at Bridgemark CA and on Sedar Plus. I will now pass the call over to Spencer Enright to give a brief overview of our first quarter results.

Spencer Enright (Chief Executive Officer)

Thanks very much Anneliese and good afternoon. In the first quarter, BridgeMark continued to advance its leadership position in the Canadian real estate industry, supported by strategic investments in AI, a strong and differentiated brand presence and an ongoing commitment to empowering professionals across our network. The strength of our diverse business model paired with a clear focus on innovation and adaptability positions us to capitalize on new opportunities and drive continued growth in the months ahead, even as we navigate a dynamic and evolving macroeconomic landscape. Revenue for Q1 amounts to $69.9 million compared to 78 million generated in the first quarter of 2025, which is reflective of weakness in the Canadian real estate market and a decrease in the number of Realtors driven by the non renewal of one of our large franchises within a Royal Page network. At its meeting yesterday, our Board of Directors approved a dividend of 11.25 cents per share payable on June 30th to shareholders of record on May 29th. This indicates an annualized dividend of $1.35 per share, which is consistent with 2025. And with that, I'll turn the call over to Wallace for a closer look at our first quarter financial performance.

Wallace Wayne (Chief Financial Officer)

Thank you Spencer and good afternoon everyone. As Spencer mentioned, revenue during the first three months of the year amounted to $69.9 million, a decrease over the $78 million generated in the first quarter of 2025. This was primarily due to a lower agent count and softer real estate market conditions. The number of Realtors in our network currently sits at 20,136. This includes more than 2,300 agents operating within the company's corporately owned real estate brokerages in the Greater Toronto area, the Greater Vancouver area and within the Province of Quebec.

Wallace Wayne (Chief Financial Officer)

In the first quarter, the company generated a net loss of $3.2 million compared to net earnings of $6.0 million in 2025. The lower earnings are largely driven by a loss of 2.6 million on the valuation of the exchangeable units in Q1 compared to a gain of $5.7 million during the same quarter in 2025. In the first quarter, adjusted net earnings, which considers our operating earnings before certain non cash non operating adjustments and payments to holders of exchangeable units, amounted to $1.8 million, down from $3.1 million in the prior year.

Wallace Wayne (Chief Financial Officer)

The reduction in adjusted net earnings is primarily due to the lower revenues, partly offset by lower commission expenses. Cash provided by operating activities amounted to $0.3 million in the first quarter of 2026 compared to cash used in the operating activities of $1.6 million in the same quarter last year. This improvement was primarily due to the deferral of interest payments related to distributions on the exchangeable units and lower income taxes paid partly offset by lower revenues. Finally, the company generated $1.9 million in free cash flow during the quarter, down from $4.1 million during the same quarter last year. This is primarily due to lower operating income and higher capital expenditures during the quarter, some of which were one time in nature in terms of market data, the Canadian residential real estate market closed the first quarter of 2026 at $$60 billion, an 8% decline from 2025, driven by a 1% decline in the average selling price and a 7% decline in unit sales.

Wallace Wayne (Chief Financial Officer)

In the first quarter, the Greater Toronto area contracted by 13% year over year compared to the same period last year, driven by a 7% decline in both the average home prices and unit sales. The Greater Vancouver area also contracted during the first quarter, with total transaction dollar volume decreasing 14% year over year as selling prices and unit sales declined by 2% and 13% respectively. By contrast, in the Province of Quebec, the residential real estate market recorded a modest 3% gain in Q1 compared to the previous year.

Wallace Wayne (Chief Financial Officer)

This reflects a 6% increase in the average selling price, offset by a 3% decline in unit sales. Spencer will now provide additional insight into the market and an update on our operations.

Spencer Enright (Chief Executive Officer)

Thanks Wallace As Wallace stated, market activity was mixed across the country last quarter, with Toronto and Vancouver showing continued softness. However, we did see some notable highlights in other regions such as Quebec. Persistent consumer hesitancy, driven in part by housing affordability hurdles in large urban markets, combined with uncertainty and key economic factors such as interest rates and the economy in general, contributed to a subdued start in the 2026 spring housing market. In March, Canada's consumer price index increased 2.4% year over year, up from the 1.8% recorded in February. This increase was driven largely by higher gasoline prices. The bank of Canada's next rate decision is scheduled for June. However, it is uncertain what rate changes might take place, if any, given competing influences on the inflation index, including energy price impacts and the result of upcoming trade agreement negotiations. Now I'd like to give you a few updates on the company's operations. The first quarter marked significant progress across several strategic initiatives for us, with continued momentum across our core growth and innovation priorities. We saw meaningful progress in the adoption of AI across our network, with more than a dozen virtual training sessions delivering to approximately 1,500 professionals. This high level of engagement reflects our ongoing commitment to equipping agents with productivity enhancing tools that drive efficiency, scalability and improved client outcomes. We also established our inaugural National Commercial Advisory Council, a strategic leadership group designed to generate new business opportunities within our Royal LePage Commercial Real Estate network of professionals. This initiative enhances our ability to respond to evolving market dynamics and support growth in the commercial segment in the Propio Direct Network, we continue to advance our digital strategy with the rollout of a cloud based consumer or sorry customer experience platform integrating marketing tools, lead management and CRM capabilities. In parallel, the completion of a new learning management system has established a more structured and scalable training environment supporting consistent professional development and long term network performance. Our Via Capital brand strengthens its market presence through a comprehensive digital advertising campaign, driving significant online engagement and expanding its reach across key social media platforms. These efforts are enhancing brand visibility, supporting agent recruitment and reinforcing our competitive positioning in the province. Collectively, these initiatives are strengthening the foundation of our industry leading brands, enhancing operational efficiency and positioning the company to continue to capture new opportunities for growth while continuing to deliver long term value for our shareholders. As we look ahead for the rest of the year, I am optimistic we will realize meaningful revenue growth across our total business first through the conversion of a number of exciting franchising prospects in our sales funnel. Additionally, we continue to focus on revenue growth through agent recruiting while optimizing our brokerage operations to improve EBITDA margins. With that, I'll turn the call back to our operator and open up the call to questions.

OPERATOR

Thank you sir. Ladies and gentlemen, for those of you dialed into the conference call as stated, you will need to press star followed by one on your telephone keypad. And for those joining via the webcast, if you would like to ask a question, simply type it into the Q and A box on your screen. Thank you. And your first phone question will be from Jeff Fenwick at ATB Cormark.

Jeff Fenwick (Equity Analyst)

Hi, good afternoon everyone. I wanted to start my questioning on the tech product that you've been rolling out to the brokers there and just hoping to get a little more color on that. You mentioned AI and are these solutions that you've been developing in house and are rolling out and then maybe related to that, you mentioned Proprio had some things specific to it as well. I'm wondering if that's something that ends up getting shared across the rest of the banners within Bridgemark.

Spencer Enright (Chief Executive Officer)

Yeah, there's a couple dimensions to that. Jeff. Thanks for the call and the question. First of all, with the RLP Sphere product that we offer, which is a comprehensive CRM based solution to our network of royal pagers, we've embedded in that some intelligence that helps them be more productive with their marketing as well as their customer management and get more insights on the behavior of the clients that they're servicing. In addition to that, across all of our banners, we're doing similar things where we're empowering the agents to be more productive with the workflow that they have in a more intelligent fashion with the direct to consumer interactions we have on our multiple websites. We're also engaging with Canadians in more intelligent ways with kind of more behind the scenes AI intelligent software powering our website sites. And also looking at lead generation not just through traditional SEO SEM type of mechanisms, but also through, you know, the vehicles like ChatGPT where actually we're getting more and more leads from consumers as opposed to traditional website based search engines. So there's a, there's a whole host of things, a lot of instrument by productivity, but also revenue monetization with lead management.

Jeff Fenwick (Equity Analyst)

That's very helpful, thank you. And then you made some remarks there at the end of your comments with respect to, I guess a full recruiting funnel. I know you had the one large, excuse me, one large group that didn't renew and that created a step down. So how should we think about the prospects over the year of rebuilding that base of Realtors and continuing to push forward here? What's the recruiting environment look like?

Spencer Enright (Chief Executive Officer)

Yeah, I think when we look at any individual years or quarter by quarter, a lot of that has variability to it in terms of the number of agents we might bring into the network through new franchising. And we've talked about this in the past, Jeff. I think, you know, as you model it, you might want to base it on historical norms of what we add through franchising. But I'm optimistic with what we've got in terms of ongoing conversations with prospects all across the country. There's quite a few, you know, franchises from competing brands that are up for renewal respectively within their, their frameworks that are engaging with us and have reached out to us. And so that, that happens every year, but year, one year after another, depending on the cycles of their renewal of existing contracts, we might see more, we might see less. This year could be one of those years where we see a bit more again. Each one is a personal decision and there's probability against each one, you know, so they're not all guaranteed. But this year could shape up to be a pretty robust one. Again within kind of what you would have seen historically in the, in the, you know, the kind of variability year by year that we would have seen before.

Jeff Fenwick (Equity Analyst)

Okay, that's helpful. And maybe you could put it in the context of the larger competitive market out there. It looks like, you know, industry consolidation is continuing. We saw real brokerage announcing the acquisition of ReMax. I think in Canada. You had my Abode invest into Sutton as a fintech sort of partnership there. What's your read on what's happening in the industry here and how Bridgemark is positioned within that today?

Spencer Enright (Chief Executive Officer)

Well, I think we're positioned pretty well for a couple reasons. One, you know, competitors that are, that are undergoing significant transformational changes has uncertainty attached to it. And actually, since some of those announcements, we've, we've seen an uptick in the number of inbound, unsolicited calls to us from those competitive, competitive franchises asking for a conversation. So, you know, that uncertainty creates a lot of disturbance with, with the groups. On our end, we're as stable as we have been for over 110 years. We've been franchising models since the early 1990s and we represent a stable home for all of our proprietor operators that are part of our network. So on that end, it's created opportunity for us to have new conversations that maybe we would have been trying in the past without a lot of success. And we're not sure where that'll go in terms of short term movement, but certainly over the next balance of this year, in the next year, as people's contracts come up for renewal on their end, they're reaching out to us now, wanting to understand more about what we offer. So that's exciting and I think that that creates opportunity for us.

Jeff Fenwick (Equity Analyst)

Okay, thanks for that. And then maybe one on just the financial dynamics in the context of a market where activity has been depressed. Still deferring dividends with your largest shareholder for now. So when I look at leverage levels in the business, they are kind of steadily climbing higher here and not clear to me that the end of that deferral period, which I believe was one year, that you might not need to extend it. But then we start to get into a situation where leverage is maybe getting a little uncomfortable for you. So how do you characterize how you want to navigate the business here over the next six to 12 months in that, in that perspective?

Wallace Wayne (Chief Financial Officer)

Yeah. So, Jeff, maybe I'll answer it in two parts. One is with respect to dividends and the other one is with respect to the leverage. So I would say on the dividend front, we are obviously again, monitoring the situation very closely. We're working with the board and these decisions are made, you know, on a monthly basis by the board. So we're not able to provide any forward guidance on that. But, you know, we are watching the situation very closely from a leverage standpoint. So I'll say two things. One is, you know, I'm sure You know, as you follow our financials, Q1 typically A, you know, you know, a quarter with a lot of working capital outflows. So, you know, namely the annual employee bonus. So generally speaking, we do expect to draw on our operating lines to fund those working capitals as the, you know, the season, you know, starts, the spring market starts, we're expecting to see more cash inflows and we're expecting to pay down some of that debt. But obviously, having said that, this leverage debt reduction is to be one of our capital allocation priorities that we're going to be looking at in conjunction with everything else that's going on within the business, including dividend, including all of these additional accretive CapEx opportunities that we're looking at. So we'll manage it that way.

Jeff Fenwick (Equity Analyst)

Okay, great. Thanks for those answers. That's all I had.

Spencer Enright (Chief Executive Officer)

Great. Thanks, Jeff.

OPERATOR

And at this time, we have no other phone questions registered. There are currently also no questions on the webcast.

Spencer Enright (Chief Executive Officer)

All right, thanks, Wallace. I'd like to thank everyone once again for joining us on today's call. We look forward to speaking with you again after we release our second quarter results in August.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.