Diversified Royalty Corp. Announces Fourth Quarter and Year End 2025 Results

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VANCOUVER, British Columbia, March 19, 2026 (GLOBE NEWSWIRE) — Diversified Royalty Corp. (TSX: DIV, DIV.DB.A and DIV.DB.B) (the “Corporation” or “DIV”) is pleased to announce its financial results for the three months (“Q4 2025”) and year ended December 31, 2025.

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Highlights

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Fourth Quarter Commentary

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Sean Morrison, Chief Executive Officer of DIV stated, “Overall, DIV is pleased with how its royalty partners performed with weighted average organic royalty growth of 3.0% in Q4 2025 and 4.1% for the year ended December 31, 2025. As with all portfolios, there are varying degrees of performance within the portfolio, which demonstrates the advantage of DIV’s diversified approach. Mr. Lube + Tires, our largest royalty partner, continues to see strong growth, generating SSSG¹ (defined below) of 7.2% for the three-month period ended December 31, 2025, and 9.5% for the year ended December 31, 2025. DIV’s other variable royalty partners generated mixed results with Oxford generating slightly positive SSSG and Mr. Mikes generating slightly negative results in Q4. DIV’s fixed royalty partners, Nurse Next Door, Stratus, BarBurrito and newly added royalty partner Cheba Hut, made their fixed royalty payments with average annual growth of 3.8%. DIV is providing 33% relief of Sutton’s royalties to the end of 2026 to support Sutton’s continued investment in business development initiatives to increase its agent base.

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Royalty income from AIR MILES® saw a decline of 7.9% for Q4 2025; however, on January 26, 2026, DIV announced the amended terms to the two license agreements (the “Amendment”) with Air Miles Loyalty Inc. Effective February 1, 2026, the terms of the Amendment will provide a 10-year, fixed annual royalty payment of $3.9 million, paid quarterly and growing at a rate of 2.42% per annum. In addition, the fixed royalty payments are guaranteed by the Bank of Montreal. Overall, this is a superior economic outcome for DIV”.

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1. Adjusted revenue and distributable cash are non-IFRS financial measures, payout ratio is a non-IFRS ratio and weighted average organic royalty growth and Same-store-sales growth or SSSG are supplementary financial measures – see “Non-IFRS Measures” below.

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Fourth Quarter and Full Year Results

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In Q4 2025, DIV generated $19.1 million of revenue compared to $17.0 million in Q4 2024. After considering the DIV Royalty Entitlement² (defined below) related to DIV’s royalty arrangements with Nurse Next Door, DIV’s adjusted revenue² was $20.4 million in Q4 2025, compared to $18.4 million in Q4 2024. Adjusted revenue increased primarily due to incremental revenue received through the acquisition of the Cheba Hut rights on June 17, 2025, positive SSSG² at Mr. Lube + Tires and Oxford, the annual contractual royalty increases at Stratus, BarBurrito and Nurse Next Door, partially offset by negative SSSG from Mr. Mikes and lower royalty income from AIR MILES® and the 20% relief commencing in Q4 2024 followed by the 33% relief of the Sutton royalties commencing in Q4 2025, all as discussed in further detail below.

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2. Adjusted revenue and DIV Royalty Entitlement are non-IFRS financial measures and SSSG are supplementary financial measures – see “Non-IFRS Measures” below.

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Royalty Partner Business Updates

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Mr. Lube + Tires: Mr. Lube Canada Limited Partnership (“Mr. Lube + Tires”) generated SSSG³ of 7.2% for the Mr. Lube + Tires stores in the royalty pool for Q4 2025 and 9.5% for the year ended December 31, 2025, compared to SSSG of 12.0% and 10.5%, for the same respective prior periods in 2024. The increase was largely driven by incremental tire and maintenance sales.

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3. Same-store-sales growth or SSSG is a supplementary financial measure – see “Non-IFRS Measures” below.

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Stratus: Royalty income from SBS Franchising LLC (“Stratus”) was $2.4 million (US$1.7 million translated at an average foreign exchange rate of $1.3946 to US$1.00) for Q4 2025 and $9.3 million (US$6.7 million translated at an average foreign exchange rate of $1.3975 to US$1.00) for the year ended December 31, 2025. The fixed royalty payable by Stratus increases each November at a rate of 5% until and including November 2026 and 4% each November thereafter during the term of the license, with the most recent increase effective November 15, 2025.

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Nurse Next Door: The royalty entitlement to DIV (the “DIV Royalty Entitlement⁴”) from Nurse Next Door Professional Homecare Services Inc. (“Nurse Next Door”) was $1.4 million in Q4 2025 and $5.4 million for the year ended December 31, 2025. The DIV Royalty Entitlement from Nurse Next Door grows at a fixed rate of 2.0% per annum during the term of the license, with the most recent increase effective October 1, 2025.

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4. DIV Royalty Entitlement is a non-IFRS measure – see “Non-IFRS Measures” below.

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Mr. Mikes: SSSG⁵ for the Mr. Mikes Restaurants Corporation (“Mr. Mikes”) restaurants in the Mr. Mikes royalty pool was -1.1% in Q4 2025 and 0.5% for the year ended December 31, 2025, compared to SSSG of -4.7% and -3.4%, for the same respective prior periods in 2024. The negative SSSG percentage for Q4 2025 is due to lower restaurant guest traffic during the quarter. The positive SSSG percentage in the year is due to higher sales per operating locations in the royalty pool due to increased guest traffic during the earlier part of the year.

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Royalty income and management fees of $1.0 million were generated by Mr. Mikes in Q4 2025, compared to $1.0 million in Q4 2024. Royalty income and management fees of $4.2 million were generated for the year ended December 31, 2025, compared to $4.2 million generated for the year ended December 31, 2024.

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5. Same-store-sales growth or SSSG is a supplementary financial measure – see “Non-IFRS Measures” below.

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Oxford: The Oxford Learning Centres, Inc. (“Oxford”) locations in the Oxford royalty pool generated SSSG⁶ (on a constant currency basis) of 3.7% in Q4 2025 and 5.0% for the year ended December 31, 2025, compared to SSSG of 4.0% and 0.2%, for the same respective prior periods in 2024. Oxford’s positive SSSG is due to the solid performance of the Oxford system for Q4 2025 and the 2025 fiscal year.

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6. Same-store-sales growth or SSSG is a supplementary financial measure – see “Non-IFRS Measures” below.

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AIR MILES®: In Q4 2024, royalty income of $0.8 million was generated from the AIR MILES® Licenses compared to $0.9 million generated in Q4 2024, a decrease of 7.9% from the comparable quarter. For the year ended December 31, 2025, royalty income of $3.2 million was generated compared to $3.6 million generated in the comparable year, a decrease of 11.4%. The decrease is largely due to the continued softness in the AIR MILES® Rewards Program. Effective February 1, 2026, the terms of the Amendment will provide a 10-year, fixed annual royalty payment of $3.9 million, paid quarterly and growing at a rate of 2.42% per annum.

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Sutton: In Q4 2025, royalty income of $0.8 million was generated by Sutton, which is net of a 33% royalty relief, compared to $0.9 million generated in Q4 2024, which was net of a 20% royalty relief. For the year ended December 31, 2025, royalty income from Sutton was $3.5 million, compared to $4.2 million generated in the comparable year. DIV entered into an agreement with Sutton for a 20% deferral of royalties paid by Sutton for the period beginning October 1, 2024 to December 31, 2025. Subsequently, in December 2025, DIV entered into an agreement to provide among other things, that (i) the 20% deferred royalties payable by Sutton for the months of October 2024 to September 2025 are forgiven, and (ii) 33% of the royalties payable by Sutton for the months of October 2025 to December 2026 are waived. Sutton continues to invest in growing their pipeline of franchise opportunities across Canada. The royalty relief agreement is intended to support Sutton’s continued investment in business development initiatives to increase its agent base.

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BarBurrito: Royalty income from BarBurrito Restaurants Inc. (“BarBurrito”) was $2.2 million for Q4 2025 and $8.7 million for the year ended December 31, 2025. The royalty payable by BarBurrito initially grows at a fixed rate of 4% per annum each March up to and including March 2030 and, commencing on January 1, 2031, will fluctuate based on the gross sales of the BarBurrito locations in the royalty pool.

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On March 1, 2026, the BarBurrito royalty pool was adjusted to add nine eligible BarBurrito restaurants to the BarBurrito royalty pool, which will result in an increase of $32,708 ($392,496 annualized) to the monthly royalty payment payable by BarBurrito to DIV commencing with the royalty payment in respect of the month of March 2026.

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Cheba Hut: Royalty income from Cheba Hut Franchising, Inc. (“Cheba Hut”) was $1.4 million for Q4 2025 (US$1.0 million translated at an average foreign exchange rate of 1.3946 to US$1.00) and $3.0 million for the year ended December 31, 2025 (US$2.2 million translated at an average foreign exchange rate of $1.3847). The fixed royalty payable by Cheba Hut increases each April at a rate equal to the greater of 3.5% and the U.S. Consumer Price Index (“U.S. CPI”) plus 1.5%.

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Distributable Cash and Dividends Declared

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In Q4 2025 and for the year ended December 31, 2025, distributable cash⁷ increased to $13.6 million ($0.0799 per share) and $50.5 million ($0.2989 per share), respectively, compared to $12.6 million ($0.0759 per share) and $44.8 million ($0.2762 per share), in the respective periods in 2024.

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The increase in distributable cash⁷ for the quarter was primarily due to higher adjusted revenue⁷, partially offset by higher general and administration expenses, higher professional fees, and higher interest expense, and higher salaries and benefits. The increase in distributable cash⁷ for the year was primarily due to higher adjusted revenue⁷, lower professional fees, and lower interest expense, partially offset by higher general and administration expenses and higher salaries and benefits.

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The increase in distributable cash per share⁷ for the quarter and year end were primarily due to an increase in distributable cash, partially offset by a higher weighted average number of common shares outstanding.

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In Q4 2025 and for the year ended December 31, 2025, the payout ratio⁷ was 87.1% on dividends of $0.0696 per share and 88.1% on dividends of $0.2634 per share, respectively, compared to the payout ratio of 82.3% on dividends of $0.0625 per share and 90.0% on dividends of $0.2487 per share for the same respective periods in 2024. The decrease in the payout ratio for the quarter and year end was primarily due to higher distributable cash per share⁷, partially offset by higher dividends declared per share.

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7. Adjusted revenue and distributable cash are non-IFRS financial measures and distributable cash per share and payout ratio are non-IFRS ratios – see “Non-IFRS Measures” below.

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Net Income

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Net income for Q4 2025 and for the year ended December 31, 2025, was $11.0 million and $36.7 million, respectively, compared to net income of $4.0 million and $26.6 million for the same respective periods in 2024. The increase in net income in Q4 2025 was primarily due to higher adjusted revenue⁸, lower impairment loss on intangible assets, and lower share-based compensation expense, partially offset by higher general and administration expenses, higher interest expense, higher professional fees, higher salaries and benefits, and higher income tax expense. The increase in net income for the year was primarily due to higher adjusted revenue⁸, lower impairment loss on intangible assets, lower share-based compensation expense, lower professional fees, and lower interest expense, partially offset by higher salaries and benefits, higher general and administration expenses, and higher income tax expense.

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8. Adjusted revenue is a non-IFRS financial measure – see “Non-IFRS Measures” below.

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About Diversified Royalty Corp.

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DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV’s objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.

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DIV currently owns the Mr. Lube + Tires, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions, BarBurrito, Cheba Hut and AIR MILES® trademarks. Mr. Lube + Tires is the leading quick lube service business in Canada, with locations across Canada. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is a home care provider with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada’s leading franchisee supplemental education services. Stratus Building Solutions is a leading commercial cleaning service franchise company providing comprehensive janitorial, building cleaning, and office cleaning services primarily in the United States. BarBurrito is the largest quick service Mexican restaurant food chain in Canada. Cheba Hut is a fast casual toasted sub sandwich franchise with locations in the United States. AIR MILES® is a Canadian loyalty program.

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DIV’s objective is to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV intends to continue to pay a predictable and stable monthly dividend to shareholders and increase the dividend over time, in each case as cash flow per share allows.

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Forward-Looking Statements

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Certain statements contained in this news release may constitute “forward-looking information” within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “intend”, “may”, “will”, ”project”, “should”, “believe”, “confident”, “plan” and “intend” and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: Sutton continuing to invest in growing their pipeline of franchise opportunities across Canada; the royalty relief being provided to Sutton for the remainder of 2026; the royalty relief provided to Sutton is intended to support Sutton’s continued investment in business development initiatives to increase its agent base; the expected incremental royalty revenue from the addition of nine BarBurrito locations to the BarBurrito royalty pool on March 1, 2026; DIV’s intention to pay monthly dividends to shareholders; and DIV’s corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular, risks and uncertainties include: DIV’s royalty partners may not make their respective royalty payments to DIV, in whole or in part; current positive trends being experienced by certain of DIV’s royalty partners (and their respective franchisees) may not continue and may regress, and current negative trends experienced by certain of DIV’s royalty partners (including their respective franchisees) may continue and may regress; DIV and its royalty partners performance may not meet management’s expectations; DIV may not be able to make monthly dividend payments to the holders of its common shares; Sutton’s investment of the forgiven royalties may not achieve their intended effects; Sutton may require further royalty relief beyond that contemplated by the current relief agreement; dividends are not guaranteed and may be reduced, suspended or terminated at any time; or DIV may not achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release is not a guarantee of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV’s business and the businesses of its royalty partners can be found in the “Risk Factors” section of its Annual Information Form dated March 19, 2026 and in DIV’s management’s discussion and analysis for the three months and year ended December 31, 2025, copies of which are available under DIV’s profile on SEDAR+ at www.sedarplus.ca.

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In formulating the forward-looking information contained herein, management has assumed that DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; lenders will provide any necessary waivers required in order to allow DIV to continue to pay dividends; lenders will provide any other necessary covenant waivers to DIV and its royalty partners; the performance of DIV’s royalty partners will be consistent with DIV’s and its royalty partners’ respective expectations; recent positive trends for certain of DIV’s royalty partners (including their respective franchisees) will continue and not regress; current negative trends experienced by certain of DIV’s royalty partners (including their respective franchisees) will not materially regress; Sutton will not require further royalty relief; Sutton’s investment of the forgiven royalties will achieve its intended effects; the businesses of DIV’s respective royalty partners will not suffer any material adverse effect; and the business and economic conditions affecting DIV and its royalty partners will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect.

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All of the forward-looking information in this news release is qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that it will have the expected consequences to, or effects on, DIV. The forward-looking information in this news release is made as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

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Non-IFRS Measures

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Management believes that disclosing certain non-IFRS financial measures, non-IFRS ratios and supplementary financial measures provides readers with important information regarding the Corporation’s financial performance and its ability to pay dividends and the performance of its royalty partners. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about the Corporation and its royalty partners than investors would have if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures do not have standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS.

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“Adjusted revenue”, “adjusted royalty income”, “DIV Royalty Entitlement” and “distributable cash” are used as non-IFRS financial measures in this news release.

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Adjusted revenue is calculated as royalty income plus DIV Royalty Entitlement and management fees. The following table reconciles adjusted revenue and adjusted royalty income to royalty income, the most directly comparable IFRS measure disclosed in the financial statements:

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For further details with respect to adjusted revenue and adjusted royalty income, refer to the subsection “Non-IFRS Financial Measures” under “Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures” in the Corporation’s management’s discussion and analysis for the three months and year ended December 31, 2025, a copy of which is available on SEDAR+ at www.sedarplus.ca.

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The most closely comparable IFRS measure to DIV Royalty Entitlement is “distributions received from NND LP”. DIV Royalty Entitlement is calculated as distributions received from NND LP, before any deduction for expenses incurred by NND Holdings Limited Partnership (“NND LP”), which expenses include legal, audit, tax and advisory services. Note that distributions received from NND LP is derived from the royalty paid by Nurse Next Door to NND LP. The following table reconciles DIV Royalty Entitlement to distributions received from NND LP in the financial statements:

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For further details with respect to DIV Royalty Entitlement, refer to the subsection “Non-IFRS Financial Measures” under “Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures” in the Corporation’s management’s discussion and analysis for the three months and year ended December 31, 2025, a copy of which is available on SEDAR+ at www.sedarplus.ca.

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The following table reconciles distributable cash to cash flows generated from operating activities, the most directly comparable IFRS measure disclosed in the financial statements:

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For further details with respect to distributable cash, refer to the subsection “Non-IFRS Financial Measures” under “Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures” in the Corporation’s management’s discussion and analysis for the three months and year ended December 31, 2025, a copy of which is available on SEDAR+ at www.sedarplus.ca.

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“Distributable cash per share” and “payout ratio” are non-IFRS ratios that do not have a standardized meaning prescribed by IFRS, and therefore may not be comparable to similar ratios presented by other issuers.
Distributable cash per share is defined as distributable cash, a non-IFRS measure, divided by the weighted average number of common shares outstanding during the period.
The payout ratio is calculated by dividing the dividends per share during the period by the distributable cash per share, a non-IFRS measure, generated in that period. For further details, refer to the subsection entitled “Non-IFRS Ratios” under “Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures” in the Corporation’s management’s discussion and analysis for the three months and year ended December 31, 2025, a copy of which is available on SEDAR+ at www.sedarplus.ca.

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“Weighted average organic royalty growth” is the average same store royalty revenue growth percentage related to Mr. Lube + Tires, the average same store sales growth percentage related to Oxford and Mr. Mikes plus the average increase in adjusted royalty income from AIR MILES®, Sutton (less 20% deferral in Q1, Q2, and Q3, 2025 and less 33% relief in Q4 2025), Nurse Next Door, BarBurrito and Stratus over the prior comparable period taking into account the percentage weighting of each royalty partner’s adjusted royalty income in proportion of the total adjusted royalty income for the period, excluding Cheba Hut as there was no adjusted royalty income generated from Cheba Hut in the prior period. Weighted average organic royalty growth is a supplementary financial measure and does not have a standardized meaning prescribed by IFRS. However, the Corporation believes that weighted average organic royalty growth is a useful measure as it provides investors with an indication of the change in year-over-year growth of each royalty partner, taking into account the percentage weighting of royalty partner’s growth in proportion of total growth, as applicable. The Corporation’s method of calculating weighted average organic royalty growth may differ from those of other issuers or companies and, accordingly, weighted average organic royalty growth may not be comparable to similar measures used by other issuers or companies. “Weighted average organic royalty growth” was previously calculated in Q4 2024 using the average same store sales growth percentage related to Mr. Lube + Tires. The calculation has been revised to use the average same store royalty revenue growth percentage related to Mr. Lube + Tires as management believes that royalty revenue growth related to Mr. Lube + Tires more accurately reflects the average organic royalty growth of DIV.

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“Same store sales growth” or “SSSG” and “system sales” are supplementary financial measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. SSSG and system sales figures are reported to DIV by its Royalty Partners – see “Third Party Information”. For further details, refer to the subsection entitled “Supplementary Financial Measures” under “Description of Non-IFRS Financial Measures, Non-IFRS Ratios and Supplementary Financial Measures” in the Corporation’s management’s discussion and analysis for the three months and year ended December 31, 2025, a copy of which is available on SEDAR+ at www.sedarplus.ca.

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Third Party Information

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This news release includes information obtained from third party company filings and reports and other publicly available sources as well as financial statements and other reports provided to DIV by its royalty partners. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this news release nor ascertained the underlying assumptions relied upon by such sources.

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THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

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Additional Information

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The information in this news release should be read in conjunction with DIV’s consolidated financial statements and management’s discussion and analysis (“MD&A”) for the three months and year ended December 31, 2025, which are available on SEDAR+ at www.sedarplus.ca.

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Additional information relating to the Corporation and other public filings, is available on SEDAR+ at www.sedarplus.ca.

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Contact:
Sean Morrison, Chief Executive Officer and Director
Diversified Royalty Corp.
(236) 521-8470

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Greg Gutmanis, President and Chief Financial Officer
Diversified Royalty Corp.
(236) 521-8471

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