Earnings call transcript: Tribe Property Tech sees strong Q1 2025 growth despite revenue miss

Tribe Property Technologies reported a robust Q1 2025 with revenue of $8 million, marking a 49% increase YoY, though slightly missing the forecast of $8.14 million. Despite this, the company achieved a significant improvement in profitability metrics, with a 77% increase in gross profit and positive EBITDA for the second consecutive quarter. The stock reacted positively, rising 2.06% to $0.50. According to InvestingPro data, the company maintains strong revenue growth momentum with a 45.75% increase over the last twelve months, though it currently operates with significant debt obligations.

Key Takeaways

• Revenue increased by 49% YoY to $8 million.
• Achieved positive EBITDA for the second consecutive quarter.
• Stock price rose by 2.06% post-earnings.
• Continued expansion in AI and digital marketplaces.
• Slight revenue miss against forecasts.

Company Performance

Tribe Property Technologies demonstrated significant growth in Q1 2025, with a 49% increase in revenue compared to the same quarter last year. The company maintained its positive EBITDA trajectory, marking a notable turnaround from the previous year’s negative EBITDA. This performance highlights the company’s resilience and ability to capitalize on market opportunities despite challenges in the real estate sector. InvestingPro analysis reveals concerning liquidity metrics, with a current ratio of 0.24 and short-term obligations exceeding liquid assets. Get access to 6 more key ProTips and comprehensive financial analysis with an InvestingPro subscription.

Financial Highlights

• Revenue: $8 million, up 49% YoY.
• Gross Profit: $3.3 million, a 77% increase YoY.
• Gross Margin: Improved to 44% from 39% last year.
• Adjusted EBITDA: $322,000, compared to -$1.4 million last year.

Earnings vs. Forecast

Tribe Property Technologies reported Q1 2025 revenue of $8 million, slightly below the forecast of $8.14 million, representing a minor miss of approximately 1.7%. Despite this, the company showed strong growth metrics and profitability improvements.

Market Reaction

The stock price of Tribe Property Technologies increased by 2.06% to $0.50 following the earnings release. This positive movement reflects investor confidence in the company’s growth trajectory and strategic initiatives, despite the slight revenue miss. Trading at a market capitalization of $12.4 million, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued. The stock has shown mixed performance, with a 21.25% gain over the past six months but remains within its 52-week range of $0.22 to $0.46.

Outlook & Guidance

Looking forward, Tribe Property Technologies is targeting 10-15% organic growth and continues to explore M&A opportunities. The company is also considering expansion into the US market and aims to enhance its operational efficiency through AI integration and process improvements. The strategic focus on improving gross margins to 50% underscores its commitment to profitability.

Executive Commentary

CEO Joseph Nakwa emphasized the company’s resilience, stating, "We are essentially bulletproof when it comes to political activities and dynamics around us." CFO Angela Bartolini highlighted the benefits of strategic efforts, noting, "We continue to see the benefits of our efforts in synergies and new product rollouts."

Risks and Challenges

• Potential softening of rental rates in specific markets.
• Slowdown in new construction could impact growth.
• Integration challenges of newly acquired Ace Agencies.
• Macroeconomic pressures and housing market dynamics.
• Competition from other property management companies.

Q&A

During the Q&A session, analysts inquired about the drivers of organic growth, the strategic approach to M&A, and the application of AI in operations. Management highlighted the focus on existing communities for growth and emphasized a selective approach to acquisitions, with AI applications enhancing efficiency in property management tasks.

Full transcript - Tribe Property Technologies Inc (TRBE) Q1 2025:

Operator: Thank you, everyone, for joining us. My name is Hittan Sany, and I will be the operator for today’s call. Welcome to Tri Property Technologies fiscal first quarter twenty twenty five financial results conference call. This call is being recorded. We will be having a question and answer session at the end of the call.

On our call today, we have Tribe CEO, Joseph Nakwa and the company’s President and CFO, Angela Bartolini. I trust that everyone has received a copy of our financial press release that was issued earlier today. Listeners are also encouraged to download a copy of our financial statements and management discussion analysis from sedarplus.ca. Please note portions of today’s call other than historical performance include statements of forward looking information within the meaning of applicable security laws. These statements are made under the safe harbor provisions of these laws.

Forward looking statements are based on management’s current views and assumptions. Please review our press release and Tribe’s reports filed on SEDAR plus for various risk factors that could cause actual results to differ materially from our projections. We use terms such as gross profit, gross margin, adjusted EBITDA, and recurring revenue on this conference call, which are non IFRS and non GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion analysis. In addition, reconciliations with any adjusted EBITDA and net income is included in the press release this morning.

Please note that all financial information is provided in Canadian dollars unless otherwise noted. With that, I will now turn the call over to Tribe CEO, Joseph Nacla.

Joseph Nakwa, CEO, Tribe Property Technologies: Thank you so much. It’s, good morning, good afternoon, everyone. It’s great to be with you. Another great quarter for the company, and I’m happy to walk you through along with, Angelo, the latest, on our organization. And, obviously, the headline is, another great revenue, quarter for us of approximately $8,000,000, representing a great 50%, almost 50% increase year over year.

We continued down the path of a positive EBITDA of 322 k, which is a big swing from, from the same quarter year over year. It is also, as you may have noticed or or have seen, we also closed a $1,100,000 nonbroker private placement. It was essentially led by us as executive management and our board of directors. We did it well above the trading average trading price at the time, and it was just a a signal to the to the market of how much we believe in our company, how we believe we’re we’re incredibly undervalued. And then you will have seen or you may have seen in the last couple of days, essentially, it was yesterday, announcement of us acquiring Ace Agencies, which is a a great, great company with great leadership.

More on that from me later. Essentially, it’s a it’s a an important piece to that strategy that we have to and I’ll explain further to continue to really own that residential market from a management point of view. With that being said, I’ll pass the baton on to Angela to walk you through the financials highlights.

Angela Bartolini, President and CFO, Tribe Property Technologies: Great. Thank you, Joseph. Once again, Tribe delivered a strong financial performance to kick off 2025. Revenue for q one was $8,000,000, an increase of 49% compared to 5,300,000.0 for q one twenty twenty four. The increase in revenue was primarily due to a 42% increase in software and service fees stemming largely from the acquisition of DMSI.

Furthermore, there was an 89% increase in transactional revenues due to the acquisition of DMSI and its associated project management revenues. Gross profit for q one was 3,300,000.0 compared to 1,800,000.0 a year ago, an increase of 77%. The increase in gross profit was due to increased revenues from the acquisition of DMSI and decreased salaries from our restructuring efforts. Gross margin percentage was 44% in the first quarter compared to gross margin percentage of thirty nine percent first quarter last year. Adjusted EBITDA was 322,000 compared to a loss of 1,400,000.0 last year, an improvement of a 24.

We are very proud of having achieved this outstanding improvement in our adjusted EBITDA for the second time in a row. Our cost cutting and restructuring measures are having an impact. Here we have a graphical representation of Tribe’s annual revenue growth. We’re proud to share that Tribe has achieved an impressive five year CAGR of 58% from 2020 to 2024, a reflection of the strength of our business model, the scalability of our platform, and the growing demand of our tech enabled property management services. In addition to organic growth, our revenue growth has also been positively impacted by our strategic acquisitions in Ontario, which have significantly expanded our footprint and service offerings.

Additionally, we’ve seen a notable increase in our financial service revenues, reflecting our success in diversifying revenue streams in capturing new business opportunities within the sector. I am pleased to highlight that in q one, we achieved positive EBITDA of 322,000, representing a 24 year over year improvement. This marks our second consecutive quarter positive adjusted EBITDA, a key milestone in our journey towards sustainable profitability. Over the past year, we’ve been fully dedicated to op optimizing our operations and implementing strategic growth initiatives. These efforts have led to significant improvements in our operational efficiencies and expense reductions, positioning the company for long term financial success.

Our unwavering commitment to profitability has driven us to daily strategic actions, ensuring that we remain on the path forward towards sustained financial performance. Over

Joseph Nakwa, CEO, Tribe Property Technologies: the

Angela Bartolini, President and CFO, Tribe Property Technologies: past year, we’ve continued to execute on key strategies, including implementing process improvements across key functions, optimizing cost to drive operational efficiencies, streaming streamlining headcount to align with our growth objectives, and consolidating back office systems to enhance scalability and reduce overhead. In addition, we’ve string we’ve seen strong increase in transactional revenues, which has very positively impacted our EBITDA. These strategies have been instrumental in delivering a 24% in improvement in adjusted EBITDA year over year. We’re also seeing the combined positive impact of our acquisitions and recently announced the agreement to acquire ACE Agencies, which will further strengthen our market position and will contribute to our financial performance for the rest of the year. Looking ahead, we remain confident about our growth prospects.

We will continue to focus on further, improving profitability, increasing revenue, and expanding our market leadership position. The progress we’ve made in q one, kicking off in 2025, along with our strong operational foundation, underscores our commitment to creating long term value for our shareholders. That concludes my financial update. Now I’ll turn it back over to you, Joseph.

Joseph Nakwa, CEO, Tribe Property Technologies: Thank you, Angel. Congratulations to you and the team for great work. The the next, the next slide, really, is just repositioning. It’s really critical for the juncture of the organization to kind of look back and see how far we’ve come in terms of our our service delivery model. For those that know the company know that we we categorize most of our revenue streams into two big buckets.

One is is is the the monthly recurring steady revenue business, and the other one is is transaction revenue. And the monthly recurring steady business essentially is our contracts directly with these types of communities, the different types of communities that we manage, and that continues to be very strong, very steady with with low churn. And then the outcome of having a tech backed services solution is a sea of data that we accumulate on behalf of our communities that really are intended to guide us towards ensuring these communities are are, you know, well managed. It’s a great place to live. In addition to that, obviously, prepare and and and and future proof these communities by way of bringing in new technology to support their needs in the future or bringing in products and services that can leverage the group buying power that we have with the scale that we’ve been able to to establish that’s on a national level.

So in this particular case, you know, what you’ll see in our transaction revenues, we just keep adding more and more products. We’ve got steady, simple products that really deliver great value for the condo communities, I e, financial services whereby we were able to generate more revenue for our buildings on any money than the other transactional revenue or operational income or money that they are saving for a rainy day. We also have multitude of products and services that we bring in into the communities. We are expanding our our lease up services for buildings that have condos that need to be rented. It’s great margin business, plus we we take a piece of of of of the revenue as well as we obviously provide a great peace of mind for those owners that live in these communities that wanna rent these units out.

Then we keep adding more to our digital marketplace. And the outcome of all that, I’ve been speaking about it now for a couple of years, is that 89% increase year over year, where whereby our our transactional revenues essentially in in q one accumulated almost 20% of our total revenue. That really indicates and speaks to that the model is essentially working. Next slide, please. We announced the acquisition of ACE agencies.

And for everybody to understand a little bit more about that market, for those that follow us know that we essentially manage big, large condo corporations and sometimes not very large, smaller, and we also manage institutional rental communities. These would be apartment buildings on behalf of pension funds, REITs, or family offices. But there’s actually quite a bit of overlap, and that is condo units that exist that are owned by individuals that whereby they would like to rent them out. So they’re either purchased as an investment, or in some cases, someone is just accumulating, moved into the unit, lived in it. It’s one bedroom.

I have enough disposable income to buy a two bedroom to move in out in it and wanna rent that that one single unit. Ace Agencies essentially is a Lower Mainland or essentially Greater Vancouver, a company that’s done a great job and manages about 900 of these specific homes. And that is a division that exists within our midst at Tribe prior to the acquisition. That’s a small division. So this acquisition alone increases our portfolio by about 275%.

And the great opportunity there is, again, you have to be under a rock to not be seeing a lot of the news about developers that are actually seeking buyers to buy into the condo development. We know that market slowed down a bit. But, really, what this opens up the door for is investors that are buying these units perhaps at a slight discount, and they’d like to rent them out. And in some cases, there’s actually some developers who, let’s say, have fifteen, twenty units left in the building, and they actually would like those to be rented out. This division that we acquired and this this essential muscle, the divisional muscle that we acquired, allows us to take advantage of these opportunities, offer an incredible solution that’s tech backed services solution to our either developers or the investors buying within their communities, and also offer that to the existing communities that we manage on the condo side, whereby one or two or three or a handful of owners in the building are actually seeking the opportunity to rent out the units that they they bought there.

Everybody you know, three two years ago, three years ago, you just put your unit on on Craigslist, and you get 30 people asking you if they’re interest if you’re if if the unit is available, things are changing. And that is actually why we believe the service that we’ve got is is perfectly timed simply because my phone personal phone has never rang as much with people, friends of mine that have investment units that are actually seeking help now because it requires a lot more due diligence in identifying the good tenant to be moving into these units. So I’m incredibly excited about that acquisition. Jason and his team Jason is the is the operator slash founder of the company. He’s been added to our executive team.

We’re gonna give them access to all of our population. We’re gonna start with BC and work our way into the remainder of of all of our markets in the country. We’re very excited to have them on board. Company did incredibly well last year, approximately $1,400,000 in revenue with a very strong adjusted EBITDA, and the deal was all shares at 55¢. And it just all it did is just illustrated the belief of of the operators of the and the founder of the company in in the direction we’re heading as an organization to be a part of us.

Next slide, please. So to reiterate our model and illustrate how it’s working, essentially, you know, we’ve other than organic growth whereby we we either work directly with developers building brand new communities or or REITs building brand new rental communities, We very much, you know, allow, obviously, transition build communities or transition buildings or buildings managed by other third party property management companies whereby the owners would or owners and or condo corporation would like to migrate our services. That’s our organic strategy in a nutshell. We continue to look for great tuck ins or acquisitions. We we acquire those companies, digitize them, put all of our technology in them, improve the gross margin, which you’ll have noticed an improvement.

We’re up to 44% in gross margin right now. We optimize the the the the service delivery in addition to, quite frankly, improving the service delivery as well, the experience of those people living in these communities, the performance of the building in in different categories whereby they don’t spend at least not an alignment with inflation, hopefully much lower than inflation in terms of your maintenance fees going up. And then we obviously introduced more services. And and going back to the slide that spoke about segmentation, we actually put more products and services that either save people that live in these communities money or improve the the operation of the building. You know, one of the big things that we’ve added this year is is a fantastic energy management solution whereby for those buildings that don’t have enough capacity for electricity for more products and services, we’ve added those, and that continues to grow that revenue stream.

And then once you’ve added it all up, we obviously just start generating cash, which is the journey we’ve been on for the last couple of quarters. And from there, we’ve been actually able to reinvest into businesses and to further businesses. For those that don’t know or don’t remember, we we do have a great, great relationship with a senior bank, bank in Nova Scotia, whereby we have a relationship to make senior debt available for us for acquisitions as we go. So the key trends and and growth drivers, obviously, this is a combination of what we’re really focused on and what we’re seeing. You know, there’s a massive buy Canadian sentiment.

As you may remember, our business, our company is essentially recession proof, pandemic proof, tariff proof. And, you know, there’s more and more of the desire for our services to be to be available. The largest two property management companies in Canada are American, and we we’re seeing a shift in in the desire to be managed by Canadian companies. So is this is not a surprise to anybody that’s been watching us. We are seeing a significant amount of increase in activity in the rental markets, whether it’s expedited activities.

I spoke almost a year ago that we’re gonna see more and more trends of condo projects that are actually shifting, either shifting the condo priority, meaning they could be building a condo and a rental, but they actually will put the priority towards the rental versus the condo. We’re seeing that. In some cases, we’re seeing developers actually shifting the the zoning from from condo to rental, so we’re seeing activity there as well. You know, we’re we’re now at a place where where when when communities come to us and ask us to either bid on a project or or give them our view on how well they’re doing. Everything we’re giving them is driven by data versus guts or relationships or or or how people feel about how the property management company is performing.

When they come to us, we literally, you know, accumulate and and consume the performance of the building. We show them how they’re doing against our population. And believe it or not, in some cases, we will tell them that their building is well managed. They may not like the property management company or the property manager conducting the work, but the truth of matter is the data doesn’t lie. And in some cases, we’ll tell them that’s the case, and they obviously appreciate that.

And then we you know, at the end of the day, and this is not gonna surprise anybody, there’s a massive housing shortage with a big long term growth driver here. Really, it’s a it’s a it’s a function of economics versus a function of supply and demand. Next slide, please. Our ’25 outlook, which we’ve shared with everybody before, we continue to increase our organic growth. Just for those that don’t know or don’t remember, when we land our tribe branded kind of activity in a market, we stabilize the company we’ve acquired in that market geographically, and then we obviously start our additional marketing tools to let the world or in that market know that we exist and and and the value proposition, and then we actually start converting our leads from there.

We’ll continue to execute on m and a strategy based on what’s available in the market, and everybody in the markets we’re in is available. We’re at all times, we’re in constant conversations with potential acquisitions, and we’ll continue to innovate. You know, we don’t talk probably too much to a detriment in some cases about the great, great products and services that we keep pushing up through the door. Everybody and their dog is talking AI. I’m telling you, I think operational AI in our market will be very, very important.

Keep an eye on us as we currently pilot and and and look at different AI solutions that can solve very little problems or really big problems in our ecosystem, and we will be very, very active and on the forefront of of all of our AI needs all industries AI’s needs AI needs. And there’s there’s more and more of those companies starting to bubble up that are just exclusively building one or two or three features specific to AI that we think can can play a role in in improving the our economics, our gross margins, but also improving the lifestyle and solving more problems for the communities that we manage. I think go ahead. Next slide, please. I think this is it for for me.

I just wanna thank you, those that have supported us in the market, those that are long term shareholders. We’re we’re glad to be able to start delivering how our model at a national footprint is actually is actually working, and we’re existing com existing communities that we’ve been able to manage that have been with us for years and years. We thank them as well, and we’re starting to backfill now in our size on the national footprint. With that said, I’m happy to take questions, myself and Angela.

Operator: You. With that, we will now open the call to questions. Just a reminder that questions will be given priority to equity analysts. The first question comes from Essay Tassafee from Stifel.

Nse Tassafee, Analyst, Stifel: Guys, can you guys hear me?

Joseph Nakwa, CEO, Tribe Property Technologies: Yes. We can.

Nse Tassafee, Analyst, Stifel: Okay. Perfect. Perfect. Yeah. Congrats on the quarter.

My first question would be on organic growth drivers and potentially if you could provide an update on how things like competitive displacements, new construction construction projects, and so forth are trending, and and maybe what you see as potential levers that could drive upside now that q one’s in the books.

Joseph Nakwa, CEO, Tribe Property Technologies: Yeah. Great question. Thanks, Nse. You know, for for for me to answer that, just high high level for for our organic business is existing communities, been around five years, ten years, twenty years, condo communities that are actually looking for a tech backed solution, whether they heard of us or or or just went out to the market and found some content about us. For those types of relationships, you know, this used to be a price driven conversation.

It’s not a surprise to anybody that watches us to know that we’re not the cheapest in the market nor do we seek to be the cheapest in the market. If anything, we we’re one of the more expensive communities. But, really, the driving force there usually is how much are you spending as a community on behalf of whether it’s it’s maintenance fees or in specific categories, how much is your insurance, how much is your admin cost, all that stuff. And in all categories, all significant categories, we beat the competition. This is just our position.

This is not our opinion. This is actually third party reporting that shows that in many, many, many large line items, capital expenditure categories, we beat the competition. So that kinda speaks for itself. So the question really becomes, at what point are you ready as a existing large condo community to come to Tribe? And we just navigate through the legal migration requirements there.

In the case of developers building communities, I kinda touched on it earlier. Nothing’s really changed. We’re seeing slight delays of completion, multitude of reasons, nothing too concerning, but we are still one of the top leaders. We work with 105 different developers that either use just, you know, two or three of our products or our suite of products that includes all of our software, all of the efficiency tools, as well as all of our warranty items in addition to our our monthly recurring services associated with managing the building. And that there’s no shortage there.

What we’re essentially seeing is a slowdown of new construction starting. That’s purely based on everybody literally putting pen down, shuffled down until some of the tariff stuff goes behind us. But anything that started in the last two or three years, we’ll have to complete. These these, these buildings will get there. It’s just a matter of exactly when, and we’re not seeing any slowing down on that, maybe just delays.

And then as you’ll have seen from that acquisition on the rental side, we’re seeing more and more activity there, whether it’s buildings being converted to that, which were obviously at the forefront of buildings that are condo that are being converted to rental or rental buildings that were in construction that were actually lighting up, which just lit up a couple of buildings last quarter. We haven’t even seen the revenue of that yet, but that we’re we’re going through a lease up. It is not a surprise that rental rates have slightly softened in specific markets. So what you’re hearing is is a true statement. It’s probably mostly a function of a lot of condos being completed going into the market, and now they’re competing with some of the rental inventory in that market, which brings me to my last point, which is why we made the acquisition of Ace because that really puts us beautifully to take advantage of the strong competition between these individual units in the market whereby we can come in and actually apply technology to really find the right tenants and obviously clip on that as we go.

So long winded answer, but, it’s it’s a good view. It’s a good question and deserve the comprehensive answer.

Nse Tassafee, Analyst, Stifel: Thank you. That was perfect. Maybe diving in more into, m and a and ace agencies. My next question is, just maybe what you think about m and a going forward and perhaps, you know, what what what the pipeline could look like and and how active you plan to be in the, say, short to medium term.

Joseph Nakwa, CEO, Tribe Property Technologies: Well, the the truth is I mean, I I don’t know. I’m I’m sure I say you do a lot of these calls, and there’s no CEO you get on the call that does not believe that his company is undervalued. In our case, it’s no different, but generally, I I believe fundamentally we’re an undervalued organization. And we’re gonna be hesitant to give a lot of our stock to to to we use a lot of our stock currently as as as as currency until, obviously, our our stock starts reacting or reflecting on on the performance of the company, and we believe that’s coming. Great companies will always rise up, so we we’re not too concerned.

That being said, kind of it’s probably my way of also giving a compliment to Jason and Ace and Ace agency of why we’d wanted to do the deal with AllShares with them simply because we really, really like the entrepreneur. We like the the DNA, and we like the company. That being said, we’re always active in m and a. We’re always speaking to different groups. We are buying well in terms of multiples.

That’s that’s pretty evident in in the last three or four acquisitions that we’ve done. It is there’s there’s a lot of companies to be purchased in the market, and, our relationship with the bank obviously helps with that. But we’re we’re certainly right now with head down. May have read in our press release, we spoke about having retired approximately 1.2 actually, not approximately. We have retired one point two five million dollars of debt in the last three quarters, and we’ll continue to do that to strengthen our our levers as well as strengthen our balance sheet.

So so, we’re gonna be active in m and a. We are gonna find ways to get great companies, added to our ecosystem, but I think the next eighteen months are gonna gonna result in some really good buying opportunities.

Nse Tassafee, Analyst, Stifel: Perfect. Perfect. Thank you so much. Just last question, maybe on margins, particularly the gross margins. Look like they continue to improve, and, was just curious to know what the drivers of this continuous improvement were.

Joseph Nakwa, CEO, Tribe Property Technologies: Yeah. I mean, Angelo, do you wanna take that? Maybe just explain a little bit more how our cost of goods are loaded here and really you know, we’ll take it from there, if you don’t mind.

Angela Bartolini, President and CFO, Tribe Property Technologies: Pretty much, we in the in the cost, we we pretty much include all direct costs associated, software people, other costs that that roll into the cost of sales. So a big chunk of it is is you know, well, there was a significant part of it in terms of of people costs. And after, you know, having, combined and rolled out, a new solution a year ago, back end solution, we’re able to realize a lot of synergies. And, and that translates into, you know, reduced head counts, higher productivity, better service. And, it just translates into gross margin, and, you know, we continue to see the benefits of of the those efforts.

And as we also roll out new products or as we grow the transactional part of the business, these sort of ancillary some of those ancillary products, you know, whether whether they’re, you know, they were organic to begin with or whether they’re just new products that we’re bringing on board through the synergies of our acquisitions, which, you know, we talked here about ACE, and we continue to see the synergies with with DMSI. We’re just really getting started in in many ways there. And what that does, it just bolsters the gross margin for us. As you bring on those high margin transactional revenues, you’ll you’ll you’ll continue to see the improvement on on gross margin.

Nse Tassafee, Analyst, Stifel: Thank you so much, and, I’ll pass the line. Thank you.

Operator: You. We have a few questions here from the listeners. The first question is, what are your plans for managing cash and spending over the next year?

Joseph Nakwa, CEO, Tribe Property Technologies: We’re gonna generally be conservative. When we speak about adding, more features on products, we’re not necessarily going out to increase our capital expenditure from a software engineering point of view. We we within our midst, we have the capability to really innovate and continue to do that, yet slightly more conservative perhaps than we were two, three years ago. But, but you’ll see us continuing down that path in terms of it’s not gonna hinder our innovation. We’re adding more products and services.

We’re we’re we’re we’re frugal when it comes to spending. We’ll continue to do to be within that lens. We’re we’re, you know, we’re we have ears, and we have eyes that we know what the world we’re living in looks like. We’re quite pleased with the position we’re in right now in terms of what how far we’ve brought the company just in in the span of twelve months. But there’s even more opportunities for us to improve our gross margin, and you’ll see improvements on that as well.

That’s you know, we’ve gone from the top thirties to almost mid forties. I still think we have a path to 50% gross margin here.

Operator: The second question here is, are there any plans to grow into the new regions like The US?

Joseph Nakwa, CEO, Tribe Property Technologies: Well, there are we’re at all times able to and and and speaking with different targets in The US. For those that don’t know, I would with with absolute educated comment, I would tell you that our condo management activities in Canada are, you know, some will argue ten years, but I would certainly say five years ahead of most markets in The US. Our laws, the way we regulate cash exchanging hands, the way we regulate the licensing requirements for people that actually do the work on the property management side, the way the financials are prepared. So needless to say, The US, it’s it’s 50 states. So this statement isn’t to apply to every single state, but to apply to the overwhelming majority of states.

So we we definitely see the demand in The US. There’s a lot of inbound that come our way from developers and others that are building their fruit. Many of the people that are probably listening to this to this call here probably don’t know that some of the largest I’d say maybe four out of the top 10 condo developers in The US are actually from Canada. So a lot of the customers that we have currently in Canada are actually building in The US. So we’re we’re being strategic.

We’re obviously gonna keep a close eye on the dynamics and what’s going on there and the sentiment around that, but it’s no surprise that The US market is monster. But don’t undervalue the condo business that we have here. For example, Toronto and Vancouver condo markets are top 10 in The US. That also gives you a perspective that we’re still playing in a monster market here. And we, as tribe, we’re just scratching the surface on on the market share despite the fact that we’ve we’ve already grown into the third largest.

Operator: You. Our final question here is, how are you using AI or automation to improve your platform and services?

Joseph Nakwa, CEO, Tribe Property Technologies: Well, how we’re using it exactly now will differ when I get asked that question again in a couple of quarters. But but right now, what we’re what we where we see AI playing a role is think of a community that has, you know, hundreds of bylaws. You live in that community or condo owner, and you wanna do something as basic as identify, am I allowed to have a barbecue? Is there a limitation on the type of barbecue? I’m just using that as a very basic example.

Well, for you to answer that, you probably have all the tools to get an answer, but it’s complicated. You need to, you know, probably get your hands on the bylaws. It’s not easy. If you live in a traditional building, you probably bought after the building was completed. How do you get an answer to theirs?

So you’re probably gonna reach out to Strata Council. They don’t have time to get back to you. You probably reach out to your property management group. And, you know, you can imagine how low or high priority that is for some of your traditional property management experiences. Or or you have a platform like ours, which we do.

You have indexed all the bylaws that are very specific to that community, which we do. And then you have an AI agent that can go out there and get you that answer really, really quickly. That’s a very basic way to identify how thousands of inbounds that come into into a property management can actually answer that. And then so it’s a simple option or example. And then you’ve got something incredibly complex, which we’re not doing right now.

Nobody’s doing right now, but this is where we’re going. I I wanna change the hardwood floors of my building of of my unit in the building. Think of it sounds like simple, straightforward thing. It isn’t because you gotta figure out what the rules are. Are you allowed to do it?

You gotta notify your condo corporation and get a permit. You also gotta make sure you work with groups that allow you. You gotta notify everybody around you as well because it’s gonna be very noisy. Plus, you gotta work with groups that are that are certified that can actually have enough insurance. As an example, it’s a true thing, but, they have enough insurance to be able to conduct the work.

Otherwise, god forbid, hit a hit a hit a pipe and cause an issue. They have to have the insured properly. So imagine that and all the workflows associated with that. AI should be able to drive a truck right through the cost and the time associated with that. That’s just another example.

There’s a suite of AI products that we’re starting to look at around rental. It could be as basic as identifying and and and walking a potential some applicant that’s interested in a unit all the way to qualifying them, yes or no, or thumbs up or thumbs down, or even setting up the appointment with them for them just to show up and does all the heavy lifting on behalf of the property manager, or could be as complicated of an AI product that actually looks at communication occurring in your 1,000 pages of notes of a community and actually recommend products and service that can lower the operating capital. For you, for example, a condo corporation could be having constant conversations about about, you know, their electricity limitation, And our AI engine would go in and say, did you get did you know that Tribe has a partnership that can bring in an energy management system? Here’s some information on it and actually show them how it could actually generate lower expenses for them or solve a problem for them. So it’s a long winded answer.

Believe me, we’ve got multiple thesis on this. This takes a lot of my brain cells in terms of conversations, in terms of TriNet. Not everything is gonna work in this space, but AI has a place to to to live operationally within property management. There’s just no doubt about it.

Operator: You, Joseph. We actually have a few questions here from the analyst Gianluca Tucci from Haywood Securities. He asked, are you seeing a slowdown in the new build market? How does your pipeline split between existing infrastructure and new build opportunities?

Joseph Nakwa, CEO, Tribe Property Technologies: Yeah. We’re Gianluca, great to hear from you. We we are seeing at least the the lens we have, we are seeing new construction breaking ground slowing down a bit. That’s not a massive part of our business, but it does and usually reflects on on when they’re completed within three to five years. And it’s just a function of of developers wanting to get a bit more stability and and understanding of where things are gonna land with the tariffs.

So we are seeing immediate changes there. Our pipeline I mean, as far as new construction is concerned, it represents organically out of our organic business, probably less than 15%. Anything that’s already broken ground in the last two, three years, we’ll have to complete. Construction loans are are are activated, and those units are are generally either completely presold or have to complete so those units can get rented out. So, really, to be honest, it’s not impacting us daily other than some leadership groups that are working with them just giving us the heads up.

By the way, we’re almost completed. We’re thirty days away with this project. This project’s gonna be another sixty days out. So we’re getting slowed down of some brand new stuff that would start generating MRR for us, but it does not represent more than, you know, 15% of our our organic growth.

Operator: Thank you. And last question is, as a whole, what type of organic growth rate are you targeting for this year?

Joseph Nakwa, CEO, Tribe Property Technologies: We always speak about 10 to 15%. There’s interesting dynamics that occur within within the industry. For those of you that do real estate or close to the real estate space, you also have will have noticed a lot of slowing down in the REIT transaction. So a REIT selling a portfolio to another REIT. Relevancy of that is, in our case, we usually get calls when a transaction is about to occur by current customer of ours because we usually go in and and price it and see if we can improve the NOI that that, you know, that was the run rate of the NOI before the acquisition.

We can actually for the new owners, we can actually improve the return on that. That’s what we’re known for. So we’re seeing more of those types of we’re seeing less of those types of activities. There’s a lot more qualified people in the organization than I am to speak about that. But, yeah, that’s that’s a rule of thumb is we’re we’re approximately targeting 10 to 15%.

Operator: Thank you, Joseph. There are currently no further questions. So with that, I’ll now pass the call back to Joseph Nakla for closing remarks.

Joseph Nakwa, CEO, Tribe Property Technologies: Well, I’ve said enough. So I just wanna thank everyone for taking interest in our organization. We’re quite pleased where where where we are in our trajectory. Just a reminder, we’re we’re, again, you know, essentially, bulletproof when it comes to a lot of activities, the political activities, dynamics around us. That being said, we all we understand we still gotta keep executing.

I’m I’m quite thankful and grateful to not only our shareholders, but also our staff that are doing an amazing job. What we do isn’t easy, which is why we believe that, you know, what we’re embarking on is quite special. Very, very few property management companies around the globe are growing, not alone achieving what we’re achieving. So with that said, I I wanna thank everyone, and we’ll hopefully see you guys all in the market.

Angela Bartolini, President and CFO, Tribe Property Technologies: Thank you.

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