Diversified Royalty (DIV) Q1 2026 earnings summary

Executive summary

• Weighted average organic royalty growth was 2.6% in Q1 2026, down from 4.4% in Q1 2025; on a consistent currency basis, growth was 3.3% for both periods.

• Revenue rose 11.8% year-over-year to $17.5 million, with adjusted revenue up 11.0% to $18.8 million.

• Distributable cash increased 10.4% to $12.0 million, with a payout ratio of 101.1% on higher dividends per share.

• Notable developments include a 10-year fixed royalty agreement with AIR MILES, incremental royalty acquisitions from BarBurrito and Cheba Hut, and an agreement to acquire the Mr. Lube + Tires franchisor business.

Financial highlights

• Net income for Q1 2026 was $7.6 million, down from $8.0 million in Q1 2025, mainly due to higher expenses and an impairment loss related to the AIR MILES amendment.

• Distributable cash per share was $0.0705, up from $0.0652 in Q1 2025.

• Dividends declared were $0.0712 per share, up from $0.0625 per share in Q1 2025.

Outlook and guidance

• The 33.3% Sutton royalty relief will continue throughout 2026.

• AIR MILES' new 10-year fixed royalty payment began February 1, 2026, with annual growth of 2.42% starting February 2027.

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