The DLC Group Announces Solid First Quarter 2026 Results with 7% Increase in Revenue; Funded Mortgage Volumes of $16.4 Billion
Rhea-AI Summary
Dominion Lending Centres (BRLGF) reported Q1 2026 results: revenue $19.95M (7% YoY), adjusted EBITDA $8.73M (9% YoY) and funded mortgage volumes $16.4B (flat vs. Q1 2025). Adjusted EBITDA margin widened to 44%. Net income was $4.8M; adjusted net income was $5.0M and adjusted EPS was $0.06. The board approved a quarterly dividend increase to $0.05 payable June 15, 2026. Velocity adoption rose to 85% of funded volumes. Adjusted total debt-to-EBITDA was 1.06x at quarter end.
Positive
- Revenue increased 7% to $19.95M in Q1 2026
- Adjusted EBITDA grew 9% to $8.73M with margin at 44%
- Newton revenue rose 20% year-over-year
- Velocity adoption increased to 85% of funded volumes
- Quarterly dividend raised to $0.05 per share
Negative
- Net income declined 23% to $4.8M versus Q1 2025
- General and administrative expenses increased 14% ($1.2M)
- Direct costs decreased 27% but timing effects impacted cash flows
- Adjusted total debt-to-EBITDA rose to 1.06x from 0.58x
Vancouver, British Columbia--(Newsfile Corp. - May 7, 2026) - Dominion Lending Centres Inc. (TSX: DLCG) (the "DLC Group" or the "Corporation") today announced financial results for the three months ended March 31, 2026 ("Q1 2026"). The DLC Group is one of Canada's leading franchisors of mortgage professionals, with a national network of over 8,500 agents. The Corporation also owns Newton Connectivity Systems Inc., a financial technology company that provides an integrated end-to-end operating platform, Velocity, designed to automate and streamline the entire mortgage application, approval, underwriting and funding process.
Financial Highlights for Q1 2026:
- Funded mortgage volumes of
$16.4 billion in Q1 2026 was consistent with Q1 2025 despite a difficult comparison quarter in which funded mortgage volumes rose46% compared to Q1 2024 and a slow start to the quarter due to heightened winter storm activity in Ontario early in the quarter. - Revenue grew
7% in the first quarter of 2026 to$20.0 million from$18.7 million in Q1 2025. - Adjusted EBITDA of
$8.7 million grew9% year-over-year, compared to$8.0 million for the same period last year. Adjusted EBITDA margins increased to44% from43% in Q1 2025. Adjusted EBITDA includes a loss from our equity-accounted investment in Heartwood of$0.3 million for both Q1 2026 and Q1 2025. - Net income in Q1 2026 was
$4.8 million compared to$6.3 million in 2025. The prior year included a$1.4 million gain on the sale of an equity-accounted investee. - Adjusted net income and adjusted earnings per share in Q1 2026 were
$5.0 million and$0.06 , consistent with Q1 2025 results as higher revenue and improved margins were offset by higher share-based payments expense and other expenses. - A quarterly dividend of
$0.04 per share was paid on March 13, 2026. - The Board of Directors approved an increase to the quarterly dividend to
$0.05 which is expected to be paid on June 15, 2026 to common shareholders of record on June 1, 2026.
"I'm pleased to report that DLC Group generated solid first quarter results despite a difficult comparison quarter and a slow start to the quarter due to winter weather," said Gary Mauris, Co-Founder and CEO of the DLC Group. "In the first quarter, we achieved
"In January, we celebrated our 20th anniversary. While we are proud of what we've achieved over the past two decades, our focus remains firmly on the future through continuing to invest in our franchise and broker partners to support their long-term success," continued Mr. Mauris. "Over the past year, our brokers have benefited from the momentum of our Gold Rush initiative, which has driven increased customer engagement and stronger mortgage origination growth. Building on this, in 2026 we launched Goal Getter, a 12-week sales program that I personally lead, working directly with approximately 600 of our brokers to equip them with new techniques to expand their customer base, improve win rates, and grow their businesses. Our sustained investment in the success of our franchise and broker partners has been a cornerstone of our performance over the past 20 years and continues to support our growth today."
"While we remain mindful of the economic uncertainty, we maintain our positive outlook for 2026 and confidence in our ability to deliver long-term profitable growth, supported by our leading broker and technology platform, disciplined capital allocation, and strong balance sheet," concluded Mr. Mauris.
First Quarter 2026 Financial Summary
| Three months ended March 31, | |||||||||
| (in thousands, except per share and KPIs) | 2026 | 2025 | Change | ||||||
| Revenues | $ | 19,954 | $ | 18,732 | |||||
| Income from operations | 7,145 | 6,885 | |||||||
| Adjusted EBITDA (1) (2) | 8,728 | 8,031 | |||||||
| Adjusted EBITDA margin (1) | |||||||||
| Net income | 4,812 | 6,267 | ( | ) | |||||
| Diluted earnings per Common Share | 0.06 | 0.08 | ( | ) | |||||
| Adjusted net income (1) | 4,999 | 4,925 | |||||||
| Adjusted diluted earnings per Common Share (1) | 0.06 | 0.06 | -% | ||||||
| Dividends declared per share | 0.04 | 0.03 | |||||||
| Cash inflows from operating activities | 5,079 | 7,743 | ( | ) | |||||
| Free cash flow attributable to common shareholders (1) | $ | 6,825 | $ | 6,797 | -% | ||||
(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
Key Performance Indicators ("KPIs")
| Three months ended March 31, | |||||||||
| (in thousands, except per share and KPIs) | 2026 | 2025 | Change | ||||||
| Funded mortgage volumes (1) | 16.4 | 16.4 | -% | ||||||
| Number of franchises (2) | 505 | 504 | -% | ||||||
| Number of brokers (2) | 8,689 | 8,544 | |||||||
| % of funded mortgage volumes submitted through Velocity (3) | |||||||||
(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.
First Quarter 2026 Financial Review
The DLC Group generated solid results in the first quarter of 2026 with a
- Revenue increased
7% from Q1 2025 to$20.0 million , driven by an increase in Velocity adoption to85% from79% in Q1 2025. Revenue from Franchise and Brokering of Mortgages increased2% year over year, while Newton revenue rose20% . Funded mortgage volumes in the current period were consistent with prior year following a strong Q1 2025 performance. - Direct costs decreased
27% over Q1 2025 primarily from lower cost of royalty revenue reflecting the cost savings following the realignment of our sales team structure in Q4 2025 and from lower advertising fund expenditures due to timing of advertising initiatives. On a percent-of-revenue basis, direct costs declined to7.8% in Q1 2026 from11.4% in Q1 2025. - General and administrative expenses increased
14% , or$1.2 million , compared to Q1 2025. The increase was driven primarily by$0.6 million in higher personnel costs, approximately$0.4 million in advertising expenses related to the Corporation's 20th anniversary marketing initiatives, and increased IT-related costs. The increase in personnel costs primarily related to higher headcount, wage inflation, and higher EBITDA-based executive incentive compensation. On a percent-of-revenue basis, general and administrative expenses increased to49.0% from45.8% in Q1 2025, driven primarily by the timing of events. - Adjusted EBITDA grew
9% to$8.7 million compared to Q1 2025, and Adjusted EBITDA margins increased to44% compared to43% last year. Adjusted EBITDA margins benefited primarily from the strength of Newton. Adjusted EBITDA and Adjusted EBITDA margin includes a loss from our equity-accounted investment in Heartwood of$0.3 million for the three months ended March 31, 2026 and the three months ended March 31, 2025. - Net income of
$4.8 million decreased$1.5 million compared to Q1 2025. The prior year included a$1.4 million gain on sale of an equity-accounted investee, which did not reoccur in 2026. - Adjusted diluted earnings per common share was consistent at
$0.06 in Q1 2026 and Q1 2025. Adjusted net income of$5.0 million in Q1 2026 was flat compared to$4.9 million in Q1 2025, mainly due to higher revenue and improved margins offset by higher share-based payments expense and other expenses. The increase in share-based payments reflects the impact of graded vesting for both April 2024 and April 2025 RSU grants, as compared to the prior year which only reflected the expense related to the April 2024 grant. - Cash flow from operating activities decreased
34% to$5.1 million from Q1 2025 levels as the increase in income from operations was more than offset by$3.2 million changes in non-cash working capital due primarily to timing of commissions payable. - Cash flow from operations, adjusted for non-cash working capital fluctuations, was offset by higher maintenance capital expenditures for renewal franchise payments which resulted in
$6.8 million in free cash flow attributable to common shareholders, which was consistent with$6.8 million in Q1 2025. - The Corporation ended the quarter with adjusted total debt-to-EBITDA (on a trailing twelve-month basis) of 1.06x compared to 0.58x at the same period last year.
- The Corporation paid a dividend of
$0.04 per share on March 13, 2026 to shareholders of record on March 2, 2026. - On March 24 2026, the Corporation announced an increase in its quarterly dividend from
$0.04 per common share to$0.05 per common share. The first quarterly dividend of$0.05 per common share is expected to be effective for the June 2026 dividend and will be paid on June 15, 2026 to common shareholders of record on June 1, 2026.
Conference Call & Webcast
The Corporation will hold a conference call at 4:00pm Mountain Time (6:00pm Eastern Time) on Thursday, May 7, 2026 to discuss these results. To participate in the conference call, please dial 1-800-715-9871 or 1-647-932-3411 (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/14667.
A webcast replay will also be available within 24 hours following the call on The 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 Accounting Standards. Non-IFRS measures are defined and reconciled to the most directly comparable IFRS Accounting Standards 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 May 7, 2026 for further information on key performance indicators. The Corporation's MD&A is available on SEDAR+ at www.sedarplus.ca.
ADJUSTED EBITDA
Adjusted EBITDA is defined as earnings before finance expense, taxes, depreciation, amortization, and any unusual, non-operating, certain non-cash, or one-time items. The Corporation considers its main operating activities to be the business of mortgage brokerage franchising and mortgage broker data connectivity services across Canada, and management of its operating subsidiaries. Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
The non-cash adjustments are expenses incurred during the period which are not the result of the main operating activities of the Corporation or are related to the financing of these activities. Other expenses are unusual, non-cash, or one-time insignificant items included within "other (expense) income" on the consolidated statements of income that are not related to the main operating activities.
While adjusted EBITDA is not a recognized measure under IFRS Accounting Standards, management believes that it is a useful supplemental measure as it provides management and investors with an insightful indication of the performance of the Corporation. Adjusted EBITDA is an assessment of its normalized results and cash generated by its main operating activities, prior to the consideration of how these activities are financed or taxed, as a facilitator for valuation and a proxy for cashflow. Management applies adjusted EBITDA in its operational decision making as an indication of the financial performance of its main operating activities.
Investors should be cautioned, however, that adjusted EBITDA should not be construed as an alternative to a statement of cash flows as a measure of liquidity and cash flows. The methodologies we use to determine adjusted EBITDA may differ from those utilized by other issuers or companies and, accordingly, adjusted EBITDA as used in this document may not be comparable to similar measures used by other issuers or companies. Readers are cautioned that adjusted EBITDA should not be construed as an alternative to net income determined in accordance with IFRS Accounting Standards as an indicator of an issuer's performance or to cash flows from operating, investing, and financing activities as measures of liquidity and cash flows.
The following table reconciles adjusted EBITDA from income before income tax, which is the most directly-comparable measure calculated in accordance with IFRS Accounting Standards:
| Three months ended March 31, | |||||||
| (in thousands) | 2026 | 2025 | |||||
| Income before tax | $ | 6,661 | $ | 7,914 | |||
| Add back: | |||||||
| Depreciation and amortization | 1,036 | 1,048 | |||||
| Finance expense | 417 | 322 | |||||
| 8,114 | 9,284 | ||||||
| Adjustments: | |||||||
| Share-based payments expense | 426 | 87 | |||||
| Gain on disposal of equity-accounted investment | - | (1,362 | ) | ||||
| Other expense (1) | 188 | 22 | |||||
| Adjusted EBITDA (2) | $ | 8,728 | $ | 8,031 | |||
(1) Other expense for the three months ended March 31, 2026 relates to a loss on disposal of an intangible asset. Other expense for the three months ended March 31, 2025, relates to foreign exchange loss and a loss on contract settlement.
(2) Amortization of franchise rights and relationships of
FREE CASH FLOW
Free cash flow represents how much cash a business generates after spending what is required to maintain or expand its current asset base. Free cash flow attributable to common shareholders represents the cash available to the Corporation for general corporate purposes, including: repayments on our credit facilities, investment in growth capital expenditures, return of capital to common shareholders through the repurchases of Common Shares and discretionary payment of dividends to common shareholders, and cash to be retained by the company. This is a useful measure that allows management and users to understand the cash available to enhance shareholder value.
The other adjustments are expenses incurred during the period which are not the result of the main operating activities of the Corporation, or are related to the financing of these activities. Other one-time items included within other expense adjustments are insignificant items included within "other (expense) income" on the condensed consolidated statements of income that are not related to the main operating activities.
While free cash flow is not a recognized measure under IFRS Accounting Standards, management believes that it is a useful supplemental measure as it provides management and investors with an insightful indication of the funds generated by the main operating activities that are available to the Corporation for use in non-operating activities. Free cash flow is determined by adjusting certain investing and financing activities. Investors should be cautioned, however, that free cash flow should not be construed as an alternative to a statement of cash flows as a measure of liquidity and cash flows. The methodologies we use to determine free cash flow may differ from those utilized by other issuers or companies and, accordingly, free cash flow as used in this document may not be comparable to similar measures used by other issuers or companies. Readers are cautioned that free cash flow should not be construed as an alternative to net income determined in accordance with IFRS Accounting Standards as indicators of an issuer's performance, or to cash flows from operating, investing, and financing activities as measures of liquidity and cash flows.
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 Accounting Standards:
| Three months ended March 31, | |||||||
| (in thousands) | 2026 | 2025 | |||||
| Cash flow from operating activities | $ | 5,079 | $ | 7,743 | |||
| Changes in non-cash working capital and other non-cash items | 3,212 | (27 | ) | ||||
| Cash provided from operations excluding changes in non-cash working capital and other non-cash items | 8,291 | 7,716 | |||||
| Adjustments: | |||||||
| Maintenance CAPEX | (1,527 | ) | (746 | ) | |||
| Lease payments | (97 | ) | (100 | ) | |||
| Loss on contract settlement | - | 13 | |||||
| NCI portion of cash provided from operations excluding changes in non-cash working capital | (30 | ) | (95 | ) | |||
| Other non-cash items (1) | 188 | 9 | |||||
| Free cash flow | $ | 6,825 | $ | 6,797 | |||
(1) Other non-cash items for the three months ended March 31, 2026, relates to a loss on disposal of an intangible asset. The three months ended March 31, 2025, represents a foreign exchange loss and promissory note income.
ADJUSTED NET INCOME AND ADJUSTED EPS
Adjusted net income and Adjusted EPS are defined as net income before any unusual or non-operating items such as foreign exchange, fair value adjustments, and one-time non-recurring items. Other one-time items included within other expense adjustments are insignificant items included within "other (expense) income" on the condensed consolidated statements of income that are not related to the main operating activities.
While adjusted net income is not a recognized measure under IFRS Accounting Standards, management believes that it is a useful supplemental measure as it provides management and investors with an insightful indication of the operational performance of the Corporation by eliminating certain non-recurring items. Management applies adjusted net income in its operational decision making as an indication of the results and cash generated by the main operating activities, after consideration of how these activities are financed and taxed. Adjusted net income is used to determine adjusted EPS (defined as adjusted net income attributable to common shareholders on a per-share basis).
Investors should be cautioned, however, that adjusted net income should not be construed as an alternative to net income determined in accordance with IFRS Accounting Standards as an indicator of an issuer's performance or to cash flows from operating, investing, and financing activities as a measure of liquidity and cash flows. The methodologies we use to determine adjusted net income may differ from those utilized by other issuers or companies and, accordingly, adjusted net income as used in this document may not be comparable to similar measures used by other issuers or companies.
The following table reconciles adjusted net income from net income, which is the most directly-comparable measure calculated in accordance with IFRS Accounting Standards:
| Three months ended March 31, | |||||||
| (in thousands) | 2026 | 2025 | |||||
| Net income | $ | 4,812 | $ | 6,267 | |||
| Adjustments: | |||||||
| Gain on disposal of equity-accounted investment | - | (1,362 | ) | ||||
| Other expense (1) | 188 | 22 | |||||
| Income tax effects of adjusting items | (1 | ) | (2 | ) | |||
| Adjusted net income | 4,999 | 4,925 | |||||
| Adjusted net income attributable to common shareholders | 4,990 | 4,892 | |||||
| Adjusted net income attributable to non-controlling interest | 9 | 33 | |||||
| Diluted adjusted earnings per Common Share | $ | 0.06 | $ | 0.06 | |||
(1) Other expense for the three months ended March 31, 2026 relates to a loss on disposal of an intangible asset. Other expense for the three months ended March 31, 2025 relates to a foreign exchange loss and a loss on contract settlement.
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 sustained investment in the success of our franchise and broker partners will continue to support our performance in today's subdued housing market, our positive outlook for 2026 and confidence in our ability to generate long-term profitable growth, supported by our leading broker and technology platform, disciplined capital allocation, and strong balance sheet.
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:
- Changes in interest rates;
- The DLC Group's ability to maintain its existing number of franchisees and brokers, and to add additional franchisees and brokers;
- Changes in overall demand for Canadian real estate (via factors such as immigration);
- Changes in 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;
- Changes in Canadian mortgage lending and mortgage brokerage laws and regulations;
- Changes in the Canadian mortgage lending marketplace;
- Changes in the 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. The DLC Group 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. The DLC Group's extensive network includes over 8,500 agents and over 500 locations. Headquartered in British Columbia, DLC was founded in 2006 by Gary Mauris and Chris Kayat.
The DLC Group 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:
| Eddy Cocciollo President 647-403-7320 eddy@dlc.ca | James Bell EVP, Corporate and Chief Legal Officer 403-560-0821 jbell@dlcg.ca |
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/296542