Dye & Durham TSE: DND reported lower third-quarter fiscal 2026 revenue and adjusted EBITDA, as management said weak real estate market conditions, seasonal factors and commercial changes continued to weigh on results. Executives also pointed to early progress from a transformation program aimed at product development, sales execution, operations and cost discipline.
The company did not hold a live question-and-answer session on the call, citing an active review of strategic alternatives. The call was limited to reviewing financial results and operational milestones.
Revenue and adjusted EBITDA declined year over year
Interim Chief Financial Officer Sandra Bell said revenue for the three months ended March 31, 2026, was CAD 91.2 million, down CAD 12.2 million, or 12%, from the same period a year earlier. Excluding the divestiture of Credas, revenue declined CAD 8.2 million, or 8%.
Bell said the decline was “primarily driven by a combination of the market downturn and the greater commercial flexibility we are employing” and its effect on lower volumes and pricing in practice management and data insights. That was partially offset by growth in banking technology.
Adjusted EBITDA for the quarter was CAD 42.9 million, down CAD 10 million, or 19%, from the prior-year period. Excluding the impact of the Credas divestiture, adjusted EBITDA declined CAD 8.7 million, or 17%.
Bell attributed the adjusted EBITDA decline mainly to revenue pressure, higher professional fees related to audit matters and strategic investments “necessary to stabilize the business.” She said those pressures were partially offset by cost reductions tied to operational efficiency initiatives.
For the nine months ended March 31, 2026, revenue was CAD 306.5 million, a decrease of CAD 29.1 million, or 9%, from the comparable period a year earlier. Adjusted EBITDA for the nine-month period was CAD 143.7 million, down from CAD 185.1 million a year earlier, a decrease of CAD 41.4 million, or 22%.
Management points to stabilized margins
Bell said adjusted EBITDA margins have stabilized as cost-saving efforts offset the effect of revenue declines. She said margins stood at 47% for the nine-month period.
On a sequential basis, Bell said the quarter-over-quarter decrease was driven by three factors: CAD 4.5 million from the Credas divestiture, CAD 9 million from one-time revenue recognized in December 2025 related to desktop applications for GhostPractice, Automated Civil Litigation and Unity Conveyancer, and continued softness in market conditions. She cited Canadian Real Estate Association data showing real estate volumes were down 10.7% quarter over quarter.
Bell also noted that the company’s real estate conveyancing and search businesses are seasonal, with revenue typically peaking in the spring and summer, which correspond to Dye & Durham’s fiscal fourth and first quarters, and slowing in the winter months.
Transformation program focuses on products, sales and costs
Chief Executive Officer George Tsivin said Dye & Durham made “meaningful progress in stabilizing the business” during the quarter. He said adjusted EBITDA remained resilient despite market headwinds and seasonality, supported by the durability of the company’s revenue base and operating expense savings.
Tsivin reviewed progress under the transformation program announced in February, which is built around four pillars: product innovation, commercial excellence, world-class operations and talent, and financial discipline.
On product innovation, Tsivin said Dye & Durham launched Unity in British Columbia and secured a half-million-dollar deal with a firm that selected Unity for its national coverage across Canada. He also cited integrations involving Treefort and FCT identity verification programs in Canada, Stewart Title indemnity insurance in the U.K., anti-money laundering and counter-terrorism financing checks in Unity Search in Australia, and an integration between eCore and Unity Entity Management.
The company also secured a four-year contract extension with the Ontario Business Registry for eCore, which Tsivin described as a vote of confidence in the company’s search and filing solution in Canada.
New platforms and customer activity highlighted
Tsivin said Dye & Durham recently launched new global platforms for legal workflows and legal due diligence and filing. The legal workflow platform is intended to serve as a one-stop shop for law firms, with pre-built practice area applications and infrastructure for matters, documents, time and billing, and financial management. Beta testing is underway, with broader availability expected later this summer, according to Tsivin.
The legal due diligence and filing platform brings together registry data, land and property intelligence assets, and statutory filing capabilities through a single set of interfaces. Tsivin said it is designed to allow law firms, banks and corporate enterprises to embed public records, risk assessments and filing capabilities into their own software applications, workflows and AI agents.
On commercial execution, Tsivin said the company has moved in Canada from a retention-only posture to a more proactive acquisition approach. He said bundled packages are supporting cross-sell opportunities, including a recent six-figure practice management software contract with an existing search client in the U.K. He also said the Canadian winback pipeline has grown, with several six-figure annual deals closed in the quarter.
Tsivin said new logo revenue is approaching parity with churn losses on Unity in Canada, which he called “a meaningful inflection point.” In the U.K. search business, he said retention recovered to high levels in the third quarter after migration-related disruption in prior quarters.
Cost savings plan targets CAD 17 million to CAD 19 million
Management said it has identified and is acting on CAD 17 million to CAD 19 million of run-rate cost savings to be realized over the next two years. Tsivin said CAD 11 million in run-rate savings has been actioned for realization in fiscal 2026 into fiscal 2027, with another CAD 6 million to CAD 8 million identified for execution in fiscal 2027 into fiscal 2028.
The savings initiatives include globalizing product and software engineering, offshore development work, automation and process standardization, elimination of low-return marketing and sales spending, consolidation of global service delivery teams, and office footprint optimization. Tsivin said the company currently has 22 offices across six countries and is targeting five high-cost locations for footprint reductions of 50% to 100%.
Tsivin said Dye & Durham applied proceeds from the sale of Credas to long-term borrowings during the quarter, helping reduce debt. He concluded that the company is seeing progress across its transformation plan and expects its product, commercial and cost initiatives to support scalability over time.
About Dye & Durham TSE: DND
Dye & Durham Ltd is engaged in providing cloud-based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals. The company has business operations in Canada and the United Kingdom. The customers include law firms, financial service institutions, and government organizations.
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