RF Capital Group (RCG) Q2 2025 earnings summary

Executive summary

• Assets under administration (AUA) rose 9% year-over-year to CAD 40.4 billion, driven by strong equity markets and advisor recruitment.

• Revenue declined 2% year-over-year to CAD 89.3 million, mainly due to a 21% drop in interest income, partially offset by a 6% increase in fee revenue.

• Announced a definitive agreement to be acquired by iA Financial Corporation for CAD 20 per share, totaling CAD 597 million, including all outstanding shares, debt, and preferred shares.

• Significant progress in onboarding teams to a new middle office model and enhancing digital platforms with tools like CapIntel, FactSet, and Salesforce.

• Net loss was CAD 2.1 million versus net income of CAD 2.7 million in Q2 2024, mainly due to lower EBITDA.

Financial highlights

• Q2 2025 revenue was CAD 89.3 million, down 2% year-over-year.

• Adjusted EBITDA was CAD 10.7 million, down from CAD 15.1 million in Q2 2024 but up 13% sequentially.

• Free cash flow available for growth was CAD 1.8 million, down from CAD 8 million last year.

• Gross margin decreased 8% to CAD 49.3 million.

• Net working capital increased 4% sequentially to CAD 89.9 million.

Outlook and guidance

• AUA growth expected to correlate with equity market returns and advisor recruitment, but remains volatile due to market and U.S. trade/tariff policies.

• Interest revenue likely to decline further as prime rates are expected to decrease.

• Operating expenses will be managed for efficiency but remain sensitive to inflation, share price movements, and share-based compensation volatility.

• Free cash flow for growth will focus on advisor recruitment and support.

• Transaction activity in corporate finance is expected to stay subdued.