Earnings call transcript: Bridgemarq Real Estate Services Q2 2025 results miss forecasts

Bridgemarq Real Estate Services Inc. reported its second-quarter 2025 earnings, revealing a notable miss in earnings per share (EPS) forecasts. The company posted an EPS of $0.14, falling short of the expected $0.1824, representing a surprise of -23.25%. Revenue reached $108 million, slightly below the previous year’s $111 million for the same quarter. Following the announcement, Bridgemarq’s stock price experienced a minor decline of 0.66%, trading at $15.05. According to InvestingPro data, the stock trades at a P/E ratio of 8.26 and maintains an impressive dividend yield of 6.75%, reflecting its commitment to shareholder returns.

Key Takeaways

• Bridgemarq’s Q2 2025 EPS missed expectations by 23.25%.
• Revenue for the quarter was slightly below last year’s figures.
• The company maintained its annualized dividend at $1.35 per share.
• Bridgemarq is optimistic about market recovery and expansion.
• Stock price dropped by 0.66% following earnings release.

Company Performance

Bridgemarq Real Estate Services faced a challenging second quarter in 2025, with revenue slightly declining to $108 million from $111 million in Q2 2024. The company reported a net loss of $5.4 million compared to net earnings of $10.5 million in the previous year. Despite these setbacks, adjusted net earnings remained consistent at $2.2 million, and the company maintained a stable dividend payout.

Financial Highlights

• Revenue: $108 million in Q2 2025, down from $111 million in Q2 2024.
• EPS: $0.14, missing the forecast of $0.1824.
• Net loss: $5.4 million in Q2 2025, compared to net earnings of $10.5 million in 2024.
• Free cash flow: $3.6 million, down from $5.6 million in 2024.
• Dividend: $0.125 per share, annualized at $1.35.

Earnings vs. Forecast

Bridgemarq’s actual EPS of $0.14 was a significant miss from the forecasted $0.1824, resulting in a negative surprise of 23.25%. This deviation from expectations highlights challenges in the current market environment and contrasts with the company’s historical performance.

Market Reaction

The market responded to Bridgemarq’s earnings miss with a slight decline in stock price, down 0.66% to $15.05. This movement reflects investor concerns about the company’s ability to meet financial targets amid a contracting real estate market.

Outlook & Guidance

Looking ahead, Bridgemarq remains optimistic about market recovery, particularly in the Toronto area. The company is focusing on technological advancements, including AI integration, and exploring growth opportunities such as expanding its PropReal model beyond Quebec.

Executive Commentary

CEO Spencer Enright expressed enthusiasm for the company’s growth prospects, stating, "We’re excited to continue to grow this business." CFO Wallace Wang added, "We do expect free cash flow generation to improve," indicating a positive outlook for future financial health.

Risks and Challenges

• Market contraction: The Canadian residential real estate market shrank by 4%.
• Declining sales: Unit sales and average selling prices both decreased by 2%.
• Economic pressures: The Consumer Price Index rose by 1.9% year-over-year.
• Competitive landscape: Bridgemarq faces competition from other real estate service providers.
• Interest rates: The Bank of Canada’s lending rate remains unchanged, affecting borrowing costs.

Q&A

During the earnings call, analysts inquired about Bridgemarq’s strategies for agent network growth and the sustainability of its dividend. Executives addressed these concerns, emphasizing the importance of attracting top-performing professionals and maintaining financial stability.

Full transcript - Bridgemarq Real Estate Services Inc (BRE) Q2 2025:

Sylvie, Conference Call Operator, Bridgemarq Real Estate Services, Inc.: Good morning. My name is Sylvie, and I would like to welcome everyone to the Bridgemarq Real Estate Services, Inc. Twenty twenty five Second Quarter Results Conference Call. This call is being recorded. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question and answer session. For those of you who dialed in to the conference call, if you would like to ask a question, simply press star then number one on your telephone keypad. And if you would like to withdraw your question, press star then 2. And 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 question after the presentation, time permitting.

I would now like to introduce Mr. Spencer Enright, Chief Executive Officer of Bridgemarq Real Estate Services Inc. Please go ahead.

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Thank you, operator. Good morning, everyone, and thanks for joining us on the call today. With me today is our new Chief Financial Officer, Wallace Wang. I will begin with a brief overview of our company’s second quarter results. Wallace will then discuss our financial results in more detail, and I’ll conclude by providing some remarks on our operational highlights, company updates, and market developments.

Following our remarks, Wallace and I would be happy to take your questions. I want to remind you 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 actual results and performance of the company to differ materially from the anticipated future results expressed or implied by such forward looking statements. I encourage everyone to review the cautionary language found in our news release and on our regulatory filings. These can be found on our website and on CEDAR Plus.

We’re encouraged by the strong momentum we’ve built in the 2025, particularly in light of ongoing challenges in our most expensive housing markets and the broader uncertainty stemming from our country’s trade relations with The United States, as well as other macroeconomic factors and ongoing global geopolitical tensions. Despite today’s market headwinds, we’ve seen our business not only prove resilient, but continue to prosper as we’ve added hundreds of new agents to our brands in the second quarter. Revenue for the first six months of the year was $186,000,000 compared to $122,000,000 in 2024. As a reminder, last year’s results reflect the addition of the brokerage businesses, which were acquired on 03/31/2024. At its meeting yesterday, our Board of Directors approved a dividend of $0.01 $25 per share payable on September 30 to shareholders of record on August 29.

This indicates an annualized dividend of $1.35 per share, which is consistent with 2024. And with that, I’ll turn the call over to Wallace for a closer look at our second quarter financial performance.

Wallace Wang, Chief Financial Officer, Bridgemarq Real Estate Services, Inc.: Thank you, Spencer, and good morning, everyone. Revenue in the second quarter was $108,000,000 marginally lower than the $111,000,000 recorded in the 2024. Franchise fees increased for the quarter and for the first half of the year, driven by the fee increases implemented at the 2025, as well as an increase in the number of realtors in the network. There are currently 21,409 realtors in our network, an increase of 2% since the end of last year. This figure includes both the agents in our franchise network and 2,577 agents operating within our brokerage operations.

In the second quarter, the company generated a net loss of $5,400,000 compared to the net earnings of 10,500,000.0 in 2024. The lower earnings are largely driven by a loss of $4,900,000 on the non cash fair valuation of the exchangeable units in Q2. In Q2 last year, the company recorded a gain of $10,600,000 Our adjusted net earnings, which considers our operating earnings before certain non cash, non operating adjustments and payments to holders of exchangeable units, amounted to $2,200,000 in the second quarter, in line with last year. Cash provided by operating activities amounted to $5,900,000 rather, in the 2025 compared to $10,500,000 in the same quarter last year. The company generated $3,600,000 in free cash flow in Q2, down from the $5,600,000 generated in the same quarter of 2024.

This is primarily driven by softer brokerage earnings and higher corporate costs as a result of certain one time expenses incurred in the quarter. The Canadian residential real estate market contracted in the 2025, closing at approximately $98,000,000,000 a decrease of 4% compared to the same period in 2024, driven by a 2% decline in both unit sales and the average selling price. The Greater Toronto Area and the Greater Vancouver Area markets both contracted in the 2025 with double digit volume declines and single digit average selling price declines. By contrast, in the province of Quebec, the residential real estate market recorded an increase of 20% in the 2025 compared to the previous year, closing at nearly $16,000,000,000 This reflects an 11% increase in unit sales and an 8% increase in the average selling price. Spencer will now provide additional insights into the market and an update on our operations.

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Thanks, Wallace. In the second quarter, home buying activity continued to decline in Canada’s two most expensive real estate markets. The greater regions of Toronto and Vancouver saw softer than usual activity in the spring. However, signs of a turnaround toward the end of the quarter began to emerge in Toronto, which seems to be continuing with some additional improvement in the GTA sales activity numbers in July. Weakened consumer confidence amid ongoing trade tensions with The US and their potential impact on the economy have been key factors affecting the year to date slowdown in these two housing markets.

With inventory continuing to build in these regions, however, the eventual return of buyers is not expected to drive prices up sharply. On the other hand, Quebec’s real estate markets continue to show strength and resilience, along with major markets in The Prairies and Atlantic Canada. Yet with further gains in sales volume and price in the second quarter. The Bank of Canada left the key lending rate unchanged at its last meeting, which follows two consecutive rate holds in April and June. The overnight lending rate currently sits at 2.75%.

In June, Canada’s consumer price index increased 1.9% year over year, up from the 1.7% recorded in May and remaining within the bank’s target range. Strong economic fundamentals, including stability in the Canadian labor market, as well as improved housing affordability in parts of the country, will be important in supporting the recovery of the broader housing market. Now I’ll give you a few updates on the company’s operations. During the last quarter, we welcomed more than 600 real estate professionals to our flagship Royal LePage brand, evidence that brokers and agents from coast to coast continue to recognize and value Bridgemarq’s comprehensive suite of services and support. Our ability to attract and retain top performing professionals and provide the infrastructure they need to thrive is a core driver of long term value for our shareholders.

One of our key advantages is our ability to offer a variety of traditional and unique solutions for both realtors and consumers. Our diverse service solutions operate within our strong portfolio of agent and consumer focused brands, including Royal LePage, Vieux Capitaire, and Proprio Direct. This positions Bridgemarq not only as a market leader today, but as an organization built to continue leading our industry as consumer habits and needs rapidly evolve. We’re focused on strengthening our industry leading technology platforms, especially those that drive lead generation and client engagement, while continually delivering best in class training and coaching programs. During the second quarter, we rolled out the next phase of our proudly Canadian national advertising campaign, designed to raise awareness of the Royal LePage brand and its uniquely Canadian products and services to consumers.

The fully bilingual campaign generated more than 41,000,000 social media views and reached over 7,000,000 Canadians in Q2 alone. Proprio Direct launched a targeted digital marketing campaign designed to enhance broker recruitment efforts and allow for a more precise lead nurturing and conversion tracking. The brand also launched the initial phase of a new online learning platform to facilitate a more scalable and user friendly internal training environment. Also in the second quarter, VIA Capital increased its presence in the Montreal market with the opening of a new agency in the East End of the city. We are eagerly embracing new AI technologies in innovative ways and are equipping our network with advanced tools that enhance productivity, marketing, and client service, enabling our agents to make significant improvements in how they serve Canadians across the whole homeownership process.

As an example, in the quarter, real estate agents operating under our luxury banner Johnson and Daniel benefited from enhanced AI driven training opportunities designed to improve their productivity and lead generation. By continuing to invest in enhancing our realtors’ productivity through education and the use of AI, we’re driving the growth of our top performing brands, opening new avenues for success, and increasing our value to shareholders. With that, I’ll turn the call back to our operator and open up the call to questions.

Sylvie, Conference Call Operator, Bridgemarq Real Estate Services, Inc.: Thank you, sir. As stated earlier, for those of you who dialed in on the teleconference, please press star one on your telephone keypad should you have any questions. And for those who joined us via webcast, simply type your question in the Q and A box on your screen. And your first phone question will be from Jeff Fenwick at Cormark Securities. Please go ahead, Jeff.

Jeff Fenwick, Analyst, Cormark Securities: Hi. Good morning, everyone.

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Good morning, Jeff.

Jeff Fenwick, Analyst, Cormark Securities: Spencer, I wanted to start good morning. I wanted to start off on the growth of the agents in the franchise network. I mean, that’s a nice accomplishment in a market that otherwise is pretty pretty challenging. How much of that growth is coming from like have you stepped up your recruiting efforts or reflagging efforts? Are there aspects?

I think you spoke to some of the things you’re doing to help boost productivity that are maybe attracting these new realtors to your network. But maybe just a little color there on what you’ve been doing to help build that and can that continue over the course of this year?

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Yeah, sure. So we generally add agents to our network in one of three ways. We can sign up new franchisees, which could be new agencies that are otherwise unaffiliated previously with other brands, or in this case, having franchisees, new franchisees that used to be affiliated with competitor brands that have what we call reflagged to ours, and that is a majority of what occurred in the second quarter. In addition to that, though, we can see organic agent recruitment. So our franchisees, all 300 plus of them, are busy every day trying to attract new realtors, successful realtors, to their individual brokerages, and that happens organically.

We offer a lot of services to help them be great at that and know how to do that successfully, how to onboard people once they’re on. And then within our corporately owned brokerages, which operate within those networks as well outside of it, we’re also organically recruiting as well. But in the second quarter, the majority of what we saw in terms of actual growth was through the new franchises that were signed to the networks.

Jeff Fenwick, Analyst, Cormark Securities: Thanks for that. And then when I was looking at your own brokerage operations, it looks like maybe you had one step down in terms of the location count that was in that segment of the business and I think about one hundred one hundred and fifteen or so realtors declined there. So what happened there? That one going the other way or they went over to another operator?

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Yeah, we’ll have an ebb and flow of agents throughout the course of the year regardless. I think you know there’s always turnover even in the industry, know generally there’s at least 10 to 15% of agents that look to switch brands or switch brokerages. So that’s pretty normal course for us. In terms of facilities with our brokerages that operate with traditional offices, predominantly in the GTA and the GBA, we do have from time to time the opportunity to consolidate facilities, and so we did that and might continue to do that as we look forward as leases terminate over time. We look to be a little bit more efficient that way.

There wasn’t any one single cause of any changes in agent counts within the brokerages, and so there isn’t necessarily anything that we could point to as a single effect. But we are stepping up our recruiting efforts across the board and looking to hire some more staff and focus specifically on that. So you know I’m very optimistic about what we’ll see moving forward.

Jeff Fenwick, Analyst, Cormark Securities: Great. And then you know I guess a tough market environment and you know I think the Q2 result we’re always looking for that to be seasonally quite strong. In this case, it looks like the results when it netted out to free cash flows that your payout ratio is still pretty meaningfully above 100%. And maybe it looks like you probably drew on your debt facility to help support paying the dividend. So could you just speak to the comfort level here with maintaining the dividend in the context of a market that’s soft?

Do you feel like there’s growth initiatives to help you sort of right size that back towards about 100% payout ratio? How are you thinking about that now?

Wallace Wang, Chief Financial Officer, Bridgemarq Real Estate Services, Inc.: Yes, Jeff, it’s Wallace. Thanks for the question. So I’ll say two things. One is when you just look at this quarter, were some one time expenses. I’m sure you noticed that the corporate cost is a bit higher.

We do expect that to normalize going forward. So, that should help with our free cash flow generation. On your question around distribution, I would say, as you obviously know, we do have a history of paying a significant amount of distribution to our shareholders. And I’m sure you know that the dividends are approved on a monthly basis and determined on a monthly basis by the Board of Directors. So, I think at this point, we do think we have sufficient capacity to support that over the short term, which is also why part of the reason why the Board approved the September distribution.

But we’re also not going to speculate as to what’s going to happen in the future. We do expect free cash flow generation to improve, to your point. In July, just for example, we did see that there were signs of recovery in the Toronto market, for example, where I believe, if I’m not mistaken, the volumes were up, I think, double digit. So as the market recovers, we do expect our free cash flow generation to improve.

Jeff Fenwick, Analyst, Cormark Securities: Okay. Great. Thank you. I appreciate that color. Maybe just one last one here.

Think as you brought together the business into its current format over the last sort of eighteen months or so, there was some commentary there about looking for new growth opportunities. So any comment there on other opportunities to add product or solutions out there that could perhaps grow the business a bit beyond where it is today?

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Yeah, absolutely. We’ve got some exciting plans in the works to do exactly that. Whether all that hits the ground right now or in the next, I’d say six to twelve months is still work in progress for us. But no, no, we’re excited to continue to grow this business. I think when we take a look at the model we have, we’re excited about what we offer in the marketplace that’s differentiated and unique versus our other major competitors.

We have multiple go to market solutions that appeal to realtors for different reasons. Many realtors like that office space and they like to have the ability to work out of that space. And then there’s many realtors like, for example, our Proprio Direct business is 100% virtual, and that appeals to a different realtor that wants to do it a little bit differently. We are still keen on offering multiple solutions across the country. Today, that PropReal model exists only in the province of Quebec, but you know that’s not our long term strategy there.

Jeff Fenwick, Analyst, Cormark Securities: Okay, appreciate that color. Thanks for those answers. That’s all I have.

Sylvie, Conference Call Operator, Bridgemarq Real Estate Services, Inc.: Thank you. And at this time, we have no other questions on the conference call. Please proceed.

Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services, Inc.: Yeah. At this time, we don’t see any questions on the webcast either. Yeah. Okay. Thanks, operator.

And for everyone who’s participated on the call, I’d like to thank everyone again for joining us. I look forward to speaking to you again after we release our Q3 results in November.

Sylvie, Conference Call Operator, Bridgemarq Real Estate Services, Inc.: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.

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