Diversified Royalty (DIV) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was $15.6 million, a 3.7% increase year-over-year, with adjusted revenue at $17.0 million, up 3.6% from Q1 2024.

• Distributable cash rose 16.3% to $11.1 million, and net income increased to $8.0 million from $7.5 million year-over-year.

• Weighted average organic royalty growth was 4.9% (3.9% on a consistent currency basis), compared to 6.0% in Q1 2024.

• Payout ratio improved to 93.8% on dividends of $0.0625 per share, down from 97.2% in Q1 2024.

• Leadership update: Greg Gutmanis promoted to President and CFO effective July 1, 2025; Sean Morrison remains CEO.

Financial highlights

• Mr. Lube + Tires delivered SSSG of 9.5% in Q1 2025, though down from 14.6% in Q1 2024.

• Oxford posted SSSG of 5.5% (constant currency), up from -2.1% in Q1 2024.

• Mr. Mikes achieved SSSG of 1.5%, reversing a -5.5% decline in Q1 2024.

• AIR MILES® royalty income fell 15.2% to $0.8 million due to continued program softness.

• Sutton's royalty income was $0.9 million, reflecting a 20% royalty deferral continuing through 2025.

Outlook and guidance

• Sutton's 20% royalty deferral will continue through 2025 to support business investment, with deferred royalties due by December 31, 2027.

• Management intends to maintain stable monthly dividends and pursue accretive royalty acquisitions.