Financial Highlights for Q2 2025:

• Funded mortgage volumes ("FMV") grew 25% to $21.1 billion over Q2 2024;
• Revenue of $24.6 million increased 31%, compared to $18.8 million in the second quarter of 2024;
• Adjusted EBITDA rose 48% to $12.6 million and EBITDA margins expanded to 51% from 45% in Q2 2024;
• Net income increased 89% to $7.7 million in Q2 2025 from $4.1 million in Q2 2024;
• Adjusted net income per common share doubled to $0.10 in Q2 2025 from $0.05 last year;
• Adoption of Velocity across the DLC Group broker network continued to expand, increasing to 82% from 72% in Q2 2024; and
• Increased the quarterly dividend by 33% to $0.04 per share or $0.16 annualized from $0.12 previously.

"We are pleased to report another strong quarter as we remain focused on executing our proven growth strategy. Despite ongoing softness in the housing market, the Canadian residential mortgage origination market has been strong to date in 2025 on the back of a strong renewal market and the decline in interest rates earlier this year," commented Gary Mauris, Chairman and CEO of DLC Group. "The strong market, coupled with continued growth in our broker network and expansion of Velocity adoption, enabled the Corporation to generate 31% revenue growth, 48% EBITDA growth and a doubling of our adjusted earnings per share."

"In addition to the strong financial results, a highlight of the quarter was the launch of Heartwood Financial Group, in which the Corporation owns a 40% equity interest. Heartwood operates independently from the DLC Group and was founded by an experienced management team to fill an underserved segment of the Canadian residential market. We are pleased to report that activity levels to date have been in-line with our initial expectations and Heartwood successfully funded its first loan in early July. We are excited for the growth ahead for Heartwood and believe that our investment will generate strong profitability and shareholder value for DLC Group in the coming years," added Mr. Mauris.

"As we look forward, we remain optimistic on our growth outlook for the remainder of 2025. While we are coming up against some tougher comparable quarters, given the strong finish that we had in 2024, we continue to expect positive revenue and earnings growth in 2025. We maintain our steadfast focus on continuing to increase our market share, expand our addressable market size and create strong returns for our shareholders," concluded Mr. Mauris.

Second Quarter 2025 Financial Summary

(1) Please see the Non-IFRS Financial Performance Measures section of this document for additional information.
(2) Adjusted EBITDA and Adjusted EBITDA margin includes a loss from our equity-accounted investment in Heartwood of $0.4 million and $0.7 million for the three and six months ended June 30, 2025, respectively. Excluding the loss from Heartwood, Adjusted EBITDA margin would have been 53% and 49% for the three and six months ended June 30, 2025, respectively.

Key Performance Indicators ("KPIs")

(1) Funded mortgage volumes are presented in billions and are a key performance indicator that allows us to measure performance against our operating strategy.
(2) The number of franchises and brokers are as at the respective period end date (not in thousands).
(3) Representing the percentage of the DLC Group's funded mortgage volumes that were submitted through Velocity.

Second Quarter 2025 Financial Review:

Despite the overall macroeconomic outlook weakening early this year due to tariffs and global trade uncertainties, the Corporation has continued to generate strong results during the second quarter of 2025. Several market and internal factors drove our positive revenue and earnings growth in Q2 2025, including an active mortgage renewal market, expanded Velocity reach, greater market presence across Canada, and increased customer engagement initiatives. In addition to revenue growth, a continued focus on profitability and financial discipline resulted in strong earnings growth, free cash flow generation, and balance sheet.

• Revenue increased 31% from Q2 2024 to $24.6 million and was driven by a 25% increase in Funded Mortgage Volume from Q2 2024, as well as an increase in the adoption of Velocity across our broker network to 82% from 72% in Q2 2024. The growth in Funded Mortgage Volume resulted from several different factors, including the growth in our broker network, internal initiatives to leverage Velocity to increase broker productivity and strength in the Canadian residential mortgage renewal market.
• Revenue from Franchise and Brokering of Mortgages increased 17% while Newton revenue rose 72%. Beginning in the second quarter of 2025, revenue generated from a third-party supplier was reclassified from Franchise to Newton revenue. The second quarter impact was a $0.6 million increase in Newton revenue and a $0.6 million decrease in Franchise revenue, reflecting the year-to-date dollar impact from the reclassification.
• General and administrative expenses increased 12% or $0.9 million over Q2 2024 levels, with the increase stemming from two acquisitions completed at the end of Q2 2024, higher personnel costs, and higher IT-related costs. The additional general and administrative expenses from the two acquired brokerages was $0.5 million for the quarter. On a percent of sales basis, general and administrative revenue decreased to 35.2% from 41.2% in Q2 2024. Direct costs increased 21% over Q2 2024 from higher advertising fund expenditures due to timing of advertising initiatives and from higher costs that are tied directly to movement in royalty revenues. However, on a percent of sales basis, direct costs declined to 13.1% in second quarter from 14.2% in Q2 2024.
• Adjusted EBITDA grew 48% to $12.6 million compared to Q2 2024 while Adjusted EBITDA margins increased to 51% from 45% last year. Adjusted EBITDA for Q2 2025 includes $0.4 million loss from our equity-accounted investment in Heartwood, which began operations in Q2 2025. Adjusted EBITDA margins benefited from the strength of Newton revenue, as well as the decline in operating expenses as a percent of revenue.
• Net income of $7.7 million increased from $4.1 million in Q2 2024 due to the higher revenue and the decrease in finance expense related to the preferred share liability, partly offset by higher operating expenses and a loss on equity-accounted investments. The loss on equity-accounted investments includes a $0.4 million loss on Heartwood.
• Adjusted diluted earnings per common share increased to $0.10 in Q2 2025 up from $0.05 last year. Adjusted net income increased to $7.8 million from $2.6 million in Q2 2024 or up 198%, mainly due to higher revenue, strong margin performance, and no longer having any income being attributable to Preferred Shareholders.
• Cash flow from operating activities increased 2% to $10.8 million from Q2 2024 levels, driven by higher income from operations offset by cash used in non-cash working capital and the reduction in finance expense related to preferred shares.
• The strong cash flow from operations, coupled with no longer having any free cash flow being attributed to Preferred Shareholders, resulted in $10.6 million in free cash flow attributable to common shareholders compared to $4.3 million in Q2 2024.
• The Corporation ended the quarter with adjusted total debt-to-EBITDA (on a trailing twelve-month basis) of 0.51x compared to 0.86x at the same period last year.
• The Corporation increased its quarterly dividend by 33% in May 2025, from $0.03 per share to $0.04 per share. The Corporation paid a dividend of $0.04 per share on June 13, 2025, to shareholders of record on May 30, 2025.

2025 Year-to-Date Financial Review

Year-to-date performance was generally consistent with Q2 trends, reflecting continued revenue growth, as well as strong profitability and cash flow.

• Revenue increased 34% from year-to-date June 30, 2024, to $43.3 million, and was driven by a 33% increase in Funded Mortgage Volume from 2024, as well as an increase in the adoption of Velocity across our broker network to 81% from 71% in 2024. Consistent with our Q2 quarterly results, the strong Funded Mortgage Volume growth was the result of an increase in the number of brokers in our network, internal initiatives to leverage Velocity to increase broker productivity and growth in the Canadian mortgage renewal market.
• Revenue from Franchise and Brokering of Mortgages increased 23% while Newton revenue rose 65%. The change in classification of a third-party supplier revenue from Franchise to Newton, positively impacted Newton revenue and in turn negatively impacted Franchise revenue by $0.6 million year-to-date ended June 30, 2025.
• General and administrative expenses increased 15% or $2.2 million over 2024 levels, with the increase stemming from two acquisitions completed in Q2 2024, higher personnel costs, and higher IT-related costs. The additional general and administrative expenses from the two acquired brokerages was $1.1 million for the six months ended June 30, 2025. On a percent of revenue basis, general and administrative expense declined to 39.8% from 46.3% in 2024. Direct costs increased 16% over 2024 levels stemming from higher advertising fund expenditures due to timing of advertising initiatives and from costs that are tied directly to movement in royalty revenues.
• Adjusted EBITDA grew 53% to $20.7 million compared to 2024 while Adjusted EBITDA margins increased to 48% from 42% last year. Adjusted EBITDA for 2025 includes $0.7 million loss from our equity-accounted investment in Heartwood, which commenced operations in Q2, 2025. Adjusted EBITDA margins benefited from the strength of Newton revenue as well as the decline in operating expenses as a percent of revenue.
• Net income of $14.0 million increased from $6.7 million in 2024 due to the higher revenue, the reduction of finance expense related to the preferred share liability, and a gain on sale of an equity-accounted investment, partly offset by higher operating expenses and a loss on equity-accounted investments. The loss on equity-accounted investments includes $0.7 million loss on Heartwood.
• Adjusted net income increased to $12.7 million from $4.0 million in 2024 or up 214%, mainly due to higher revenue, strong margin performance, and no longer having any income being attributable to Preferred Shareholders.
• Cash flow from operating activities increased 19% to $18.5 million from 2024 levels, driven by higher income from operations, partly offset by cash used in changes in non-cash working capital.
• The strong cash flow from operations, coupled with a decline in maintenance capital expenditures and no longer having any free cash flow being attributed to Preferred Shareholders, resulted in $17.4 million in free cash flow attributed to common shareholders compared to $4.9 million in 2024.

Conference Call & Webcast

The Corporation will hold a conference call at 4:00pm Mountain Time (6:00pm Eastern Time) on Thursday, August 7, 2025 to discuss these results. To participate in the conference call, please dial 1-833-752-4932 or 1-647-849-3379 (International) at least 5 minutes prior to the call.

This conference call will also be webcast live and can be accessed by all interested parties at the following URL: https://www.gowebcasting.com/14112.

A webcast replay will also be available within 24 hours following the call on DLC Group's website at www.dlcg.ca, in the Investors section.

Reconciliation of Non-IFRS Financial Measures

Management presents certain non-IFRS financial performance measures which we use as supplemental indicators of our operating performance. These non-IFRS measures do not have any standardized meaning and therefore are unlikely to be comparable to the calculation of similar measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Non-IFRS measures are defined and reconciled to the most directly comparable IFRS measure. Non-IFRS financial performance measures include adjusted EBITDA, adjusted net income, adjusted earnings per share, and free cash flow. Please see the Non-IFRS Financial Performance Measures section of the Corporation's MD&A dated August 7, 2025 for further information on key performance indicators. The Corporation's MD&A is available on SEDAR+ at www.sedarplus.ca.

The following table reconciles adjusted EBITDA from income before income tax, which is the most directly-comparable measure calculated in accordance with IFRS:

(1) Other expense (income) for the three and six months ended June 30, 2025 relates to foreign exchange loss and loss on contract settlement. Other (income) expense for the three and six months ended June 30, 2024 relates to the reversal of the liquidation rights liability on the sale of Impact, a loss on the disposal of an intangible asset, foreign exchange loss, and loss on contract settlement.
(2) Amortization of franchise rights and relationships of $1.3 million and $2.6 million for the three and six months ended June 30, 2025, respectively (June 30, 2024 – $1.3 million and $2.6 million), is classified as a charge against revenue and has not been added back for adjusted EBITDA.
(3) Adjusted EBITDA includes a loss from our equity-accounted investment in Heartwood of $0.4 million for the three months ended June 30, 2025 and $0.7 million for the six months ended June 30, 2025.

The following table reconciles free cash flow from cash flow from operating activities, which is the most directly-comparable measure calculated in accordance with IFRS:

(1) Other non-cash items for the three and six months ended June 30, 2025 represent foreign exchange loss and promissory note income. The three months and six ended June 30, 2024 includes gain on disposal of an intangible asset, foreign exchange loss, and promissory note income.

The following table reconciles adjusted net income from net income, which is the most directly-comparable measure calculated in accordance with IFRS:

(1) Other expense (income) for the three and six months ended June 30, 2025 relates to foreign exchange loss and loss on contract settlement. Other expense for the three and six months June 30, 2024 relates to the reversal of the liquidation rights liability on the sale of Impact, loss on the disposal of intangible assets, loss on contract settlement, and foreign exchange loss.

Forward-Looking Information

Certain statements in this document constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate," "believe," "estimate," "will," "expect," "plan," or similar words suggesting future outcomes or outlooks. Forward-looking information in this document includes, but is not limited to: our expectation that Heartwood will generate strong profitability and shareholder value for DLC Group, our growth outlook for the remainder of 2025, our expectation of positive revenue and earnings growth in 2025, and our ability to increase our market share, expand our addressable market size and create strong returns for our shareholders.

Such forward-looking information is based on many estimates and assumptions, including material estimates and assumptions, related to the following factors below that, while considered reasonable by the Corporation as at the date of this press release considering management's experience and perception of current conditions and expected developments, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to:

• Interest rates;
• DLC Group's ability to maintain its existing number of franchisees and brokers, and to add additional franchisees and brokers;
• overall demand for Canadian real estate (via factors such as immigration);
• overall supply for Canadian real estate (via factors such as new housing-start levels);
• At what period in time the Canadian real estate market stabilizes;
• Canadian mortgage lending and mortgage brokerage laws and regulations;
• Canadian mortgage lending marketplace;
• fees paid for mortgage brokerage services in Canada; and
• demand for the Corporation's products remaining consistent with historical demand.

Many of these uncertainties and contingencies may affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made in this document are qualified by these cautionary statements. The foregoing list of risks is not exhaustive. The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities laws, we undertake no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise.

About Dominion Lending Centres Inc.

Dominion Lending Centres Inc. is Canada's leading network of mortgage professionals. DLCG operates through Dominion Lending Centres Inc. and its three main subsidiaries, MCC Mortgage Centre Canada Inc., MA Mortgage Architects Inc. and Newton Connectivity Systems Inc., and has operations across Canada. DLCG extensive network includes over 8,900 agents and over 500 locations. Headquartered in British Columbia, DLC was founded in 2006 by Gary Mauris and Chris Kayat.

DLCG can be found on X (Twitter), Facebook and Instagram and LinkedIn @DLCGmortgage and on the web at www.dlcg.ca.

Contact information for the Corporation is as follows:

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/261691