Diversified Royalty Corp. Announces Third Quarter 2025 Results and a 1¢ Dividend Increase on an Annual Basis

Core Insights - Diversified Royalty Corp. reported strong financial results for Q3 2025, with a weighted average organic royalty growth of 5.0% and significant contributions from various royalty partners [3][5][19] Financial Performance - Revenue for Q3 2025 was $18.3 million, representing a 13.4% increase compared to Q3 2024, while revenue for the nine months ended September 30, 2025, was $51.7 million, up 7.9% year-over-year [5][19] - Adjusted revenue for Q3 2025 was $19.6 million, a 12.6% increase from Q3 2024, and $55.7 million for the nine months, up 7.5% [5][19] - Distributable cash reached $13.1 million in Q3 2025, an 18.8% increase from Q3 2024, and $36.9 million for the nine months, up 14.6% [5][19] - The payout ratio decreased to 89.3% in Q3 2025 from 94.1% in Q3 2024, reflecting higher distributable cash per share [5][18] Royalty Partner Performance - Mr. Lube + Tires led with a same-store sales growth (SSSG) of 10.3% in Q3 2025, compared to 7.7% in Q3 2024 [8][11] - Oxford Learning Centres achieved SSSG of 4.4% in Q3 2025, up from 1.8% in Q3 2024 [12] - Mr. Mikes reported SSSG of 1.0% in Q3 2025, recovering from a decline of 3.1% in Q3 2024 [11] - AIR MILES® royalty income decreased by 10.7% to $0.8 million in Q3 2025, reflecting ongoing challenges in the rewards program [13] - Sutton's royalty income was $0.9 million, including a 20% royalty deferral [14] Dividend Policy - The board approved an increase in the annualized dividend from $0.2750 to $0.2850 per share, effective December 1, 2025, marking a 3.6% increase [5][19] Company Overview - Diversified Royalty Corp. focuses on acquiring top-line royalties from multi-location businesses and franchisors in North America, aiming for predictable and growing royalty streams [20][22]