Good morning, ladies and gentlemen, and welcome to the ISC Q4 2018 Earnings Conference Call and Webcast. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to introduce your host for the conference today, Mr. Jonathan Hackshaw, Director of Investor Relations and Capital Markets. Sir, you may begin.
Thank you, Bridget. Good morning, ladies and gentlemen. Welcome to ISC's Call for the Year End December 31st, 2018. With me today are Jeff Stusek, President and CEO, and Shawn Peters, Executive Vice President and Chief Financial Officer. Jeff will provide some opening comments, followed by a review of operational and financial results for the year ended December 31st, 2018 by Sean. Jeff will make some closing remarks before we open up the call for our question and answer session. Before we begin, we would like to remind everyone that we will only be summarizing results today. ISC's audited consolidated financial statements and management's discussion and analysis for the period ended December 31st, 2018 have been filed on SEDAR+ and are also available on the investor section of our website under financial reports. We encourage you to review those reports in their entirety.
I would also like to remind you that any statements made today that are not historical facts are considered to be forward-looking statements within the meaning of applicable securities laws. The statements may involve a number of risks and uncertainties that are described in detail in the company's SEDAR+ filings. In particular, in ISC's annual information form dated March 20th, 2019, and ISC's audited consolidated financial statements and notes and management's discussion and analysis for the year ended December 31st, 2018.
Those risks and uncertainties may cause actual results to differ materially from those stated. Today's comments are made as of today's date and will not be updated except as required under applicable securities legislation. Today's conference call is being broadcast live over the internet and will be archived for replay shortly after the call on the investor section of our website. With that, I'd now like to hand the call over to Jeff.
Thank you, Jonathan. Good morning to everyone joining us for today's call. Overall, 2018 was a strong year for ISC. Revenue was up 27.3% year-over-year, the company recorded CAD 119.1 million of revenue for the year compared to CAD 93.6 million in 2017. EBITDA was also up 19.5% year-over-year, coming in at CAD 35.9 million for 2018 compared to CAD 30 million in the prior period. The primary driver of our growth in 2018 came from our services segment, largely through the acquisition of AVS Systems Inc. at the end of 2017. With the integration of AVS now complete, we expect to continue to compete effectively in the know your customer and collateral management services space while increasing our market share over the course of 2019.
While our registry operations segment has felt the effects of the economy, notably increases in interest rates and the introduction of new mortgage rules, it yet again delivered solid results while generating strong free cash flow. At the start of 2018, we expanded our lines of business from two to three with the introduction of the technology solutions segment, which now complements our registry operations and services segment. The diversification of our business over the last three years has allowed us to offset the economic impact to our registry operations segment and still deliver top and bottom-line growth.
Turning to our technology solutions segment, 2018 was a successful year with a number of new business wins announced in the first quarter of 2018. As this segment's business model evolves, we expect to realize additional revenue from this segment in 2019 with a focus on profitability. With that, I'd like to now ask Shawn to summarize our financial and operating performance for the year ended December 31st, 2018.
Thank you, Jeff. Good morning, everyone. I'll provide you with some of the highlights of our full year on a consolidated basis, then provide some further commentary about each of our reporting segments and their performance for the reporting period. On a consolidated basis, revenue for the Q4 grew by 31.5% compared to the prior year to CAD 31 million. For the full year, revenue was up by 27.3% to CAD 119.1 million, compared to CAD 93.6 million last year. Our services segment, following the acquisition of AVS Systems Inc. at the end of 2017, was the main driver of our revenue growth.
EBITDA, which is earnings before interest, taxes, depreciation, and amortization expense, grew by 14.8% to CAD 7.8 million for the quarter, which resulted in an EBITDA margin of 33.2%, compared to 32.2% in the Q4 of 2017. EBITDA for the full year was CAD 30 million, compared to CAD 29.5 million in the same period last year, with an EBITDA margin of 32.1% compared to 33.4% for 2017. Adjusted EBITDA for the Q4 was CAD 7.5 million, compared to CAD 7.8 million in the same quarter last year, with an EBITDA margin of 24.3% compared to 33.2% last year. Our EBITDA margin was down as expected, as a result of the lower margin profile of our collateral management product line following the acquisition of AVS.
For the full year, EBITDA was CAD 35.9 million compared to CAD 30 million in 2017, an increase of 19.5%. While our EBITDA margin was 30.1% compared to 32.1% in 2017, again, as expected following the acquisition of AVS. Our net income for the quarter was CAD 3.2 million, or CAD 0.18 per basic and diluted share, a decrease of CAD 15.6 million compared to the Q4 of 2017, when net income was CAD 18.8 million, or CAD 1.70 per basic and diluted share. Net income for 2018 was CAD 18.7 million, or CAD 1.70 per basic and CAD 1.60 per diluted share, compared to net income of CAD 27.8 million, or CAD 1.59 per basic and CAD 1.58 per diluted share in 2017.
For both the Q4 and full year, there was a decrease year-over-year in net income because of our gain on the sale of our ownership interest in Dye & Durham Corporation in the Q4 of 2017. Free cash flow for the quarter was CAD 5.4 million, compared to CAD 2.8 million in Q4 of 2017. For the year ended December 31st, 2018, free cash flow was CAD 25.2 million, compared to CAD 22.9 million in 2017, up 9.7%. On November 6, 2018, we entered into an amended and restated credit agreement and now have up to CAD 80 million in credit available under our new facilities. During the Q4, we also finalized a new five-year service agreement with our information technology service provider. Finalizing this agreement provides stability to our operations, while updated terms provide us with more flexibility in information technology cost management.
In our registry operations segment, revenue was CAD 70.3 million for the year, a decrease of 6.2% compared to 2017. Revenue for the land registry decreased 8.7% to CAD 50 million for the year due to a slower real estate market in Saskatchewan. The volume of regular land transfers, mortgage registrations, and title searches declined by 4.9%, 10.7%, and 7.5%, respectively, compared to 2017. As we mentioned throughout 2018, new mortgage qualification guidelines introduced in January 2018, along with increases in interest rates since July of 2017, have impacted volume and revenue in 2018. We anticipate these factors will continue to influence the property market in the near term, particularly if further increases to interest rates occur in 2019. High-value property registration revenue was also lower in 2018 when compared to a record revenue of CAD 5.6 million in 2017.
Each high-value registration generated revenue of CAD 10,000 or more. Revenue from these types of registrations was CAD 3.9 million for 2018, down by CAD 1.7 million versus 2017. Revenue for the personal property registry was steady year-over-year at CAD 10.2 million compared to 2017. Registration revenue for this registry decreased by 3.7% in 2018 compared to 2017. This was offset by increased search and maintenance revenue in 2018, up 12.3% and 23.5%, respectively, as a result of pricing changes made to search transactions in July of 2018.
Revenue for the corporate registry for the year was also steady at CAD 10 million compared to 2017. Registration, search, and maintenance revenue in the corporate registry declined by 2.5%, 0.2%, and 0.6%, respectively, compared to 2017. This revenue decline was a product of lower transaction volumes. Registration, search, and maintenance volume declined by 1.8%, 0.4%, and 3.5%, respectively, as compared to 2017.
More specifically, revenue from the filing of annual returns and renewals declined by 3.8% in 2018 compared to 2017. Revenue from the incorporation and registration of new business entities dropped by 2.3% compared to 2017. Looking at the full year's results in our registry operations segment, the impact of economic conditions, including increases in interest rates and changes to the mortgage qualification rules, are evident. However, this line of business remains a strong free cash flow contributor, and even under the challenging economic conditions, has performed extremely well. Turning to our services segment, revenue for the year ended was CAD 42.4 million, up CAD 27.4 million, compared to CAD 14.9 million in 2017.
The increase in revenue year-over-year was a result of new revenue of CAD 26.4 million from our collateral management product line following the acquisition of AVS, along with organic growth within existing lines. In our legal support services, revenue increased through organic growth by 2.2% year-over-year to CAD 8.8 million. Revenue from this area of our services segment consists of nationwide searches and registration services, as well as corporate supplies provided to legal professionals. Our financial support services grew from CAD 6.3 million in 2017 to CAD 33.6 million in 2018 because of the addition of AVS, the onboarding and ramping up of new customers, and organic growth.
Finally, the first full year of our newest segment, Technology Solutions, saw revenue of CAD 21.2 million for the year ended December 31st, 2018, compared to CAD 20.4 million for the same period in 2017. As Jeff touched on, during the year, we announced the signing of solution delivery and implementation agreements with a number of jurisdictions. Revenue from external third parties increased year-to-date due to the achievement of initial contract milestones associated with agreements entered into during the year.
This revenue is expected to continue to grow as the company achieves performance-related milestones identified in the contracts. Internal related party revenue provided year-to-date decreased due to a reduction in our cost to provide the services as a result of the savings associated with the termination of our DXC Technology company contract in 2017. For the year ended December 31st, 2018, our consolidated expenses were CAD 96.7 million, an increase of 34.9%, compared to CAD 71.7 million for the same period in 2017. A summary of our changes in our expenses is as follows. Our wages and salaries were CAD 37.8 million, up CAD 5 million for the year ended December 31st, 2018, compared to the same period in 2017.
The increase was due to annual wages and salary increases and standardization of salary and incentive programs across the business, additional wages and salaries in our services segment following the acquisition of AVS in December 2017, and additional wages and salaries in our technology solution segment following successful contract awards. Our cost of goods sold was CAD 25.1 million for the year ended 2018, an increase of CAD 20.9 million compared to 2017, due to the nature of our expanded collateral management product line in our services segment, which has a higher cost of goods sold. Depreciation and amortization costs were CAD 9.9 million for the year ended December 31st, 2018, compared to CAD 7.5 million in the same period in 2017.
The increase is due to increased amortization in our services segment related to the AVS acquisition in 2017, somewhat offset by lower depreciation in our registry operations segment due to certain assets being fully depreciated. Information technology costs were CAD 8.5 million, down CAD 2.4 million compared to 2017. The decrease in 2018 reflects savings associated with the termination of our technology services contract with DXC and bringing those resources in-house. Professional and consulting services decreased for the year ended December 31st, 2018, to CAD 4.8 million, compared to CAD 6.3 million in 2017. The decrease was due to less costs incurred for acquisition and integration activities in 2018. I would note that during the Q4, we changed the presentation of project initiative expenses to reclassify them according to their nature. For more details on this, please refer to the table on page 36 of our MD&A.
We believe the revised presentation aligns with our operation of the business and provides more relevant information to readers. Capital expenditures for the year ended December 31st, 2018, were CAD 2.8 million, compared to CAD 2 million for the same period in 2017. The increase was due to continued effort on system development work across our segments and a financial system upgrade in our corporate area. With respect to our debt, as at December 31st, 2018, the company had CAD 20 million of total debt outstanding compared to CAD 21.6 million at December 31st, 2017. As mentioned previously, during the year, we also amended our credit facility and entered into a new amended and restated credit agreement with the aggregate amount available under the facilities now being CAD 80 million.
Further details on our debt and our credit facilities can be found in our MD&A and financial statements. From a liquidity perspective, as at December 31st, 2018, we held CAD 28.7 million in cash compared to CAD 31.3 million as at December 31st, 2017. As at December 31st, 2018, working capital was CAD 15 million compared to CAD 18.3 million at December 31st, 2017. The decrease in working capital is a result of the contingent liability related to our ERS subsidiary moving from a non-current to a current liability and due to increased contract liabilities within our technology services segment.
Consolidated free cash flow for the year ended December 31st, 2018, was CAD 25.2 million compared to CAD 22.9 million for the same period in 2017. The increase in 2018 was due to changes in working capital driven by increased receivables as a result of the higher sales, higher taxes due to increased results and the full consumption of our loss carryforward pool, and new contract assets related to our technology solutions segment. Finally, we also announced yesterday that our board of directors approved our quarterly cash dividend of CAD 0.20 per share. The dividend will be payable on or before April 15th, 2019, to shareholders of record as of March 31st, 2019. I'll now turn the call back over to Jeff for some concluding remarks.
Thanks, Shawn. Before we move to the Q&A session, I'd like to share a few thoughts with you about our outlook for 2019. We anticipate consolidated revenue growth to be driven by our services segment through the continuing expansion of our collateral management product line, including further automation of the fulfillment of these services, thereby reducing our cost of delivery. Our registry operations segment is expected to remain a strong free cash flow contributor and a direct beneficiary of any future upswing in economic conditions in Saskatchewan.
We will continue to monitor the economic conditions while always looking for greater operational efficiencies. Should there be further increases to interest rates in 2019, this could place further downward pressure on transaction volumes. In technology solutions, as projects for contracts the company signed in 2018 continue to move into the implementation phase in 2019, ISC expects to begin to recognize increased revenue from those contracts.
The key driver of expenses will continue to be wages and salaries, cost of goods sold, and information technology costs, as well as costs associated with the pursuit of new business opportunities. We also expect to spend between CAD 2 million and CAD 4 million on business as usual capital expenditures. Taking the preceding outlook from 2019 into account, I'd like to reiterate our guidance issued in early February, where we expect revenue of between CAD 129 million and CAD 135 million, EBITDA between CAD 31 million and CAD 35 million, and an EBITDA margin of between 24% and 27% in 2019. To conclude, our focus remains on ensuring the stability of our business while pursuing strategies for growth, including accretive acquisitions. With that, I'll hand it back to Jonathan.
Thanks, Jeff. Bridget, I'd now like to begin the question answer session.
Thank you. Ladies and gentlemen, if you have a question at this time, please press star and the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Varun Choyah with CIBC. Your line is open.
Hello. Good morning, gentlemen.
Good morning.
Good morning, Varun.
Hi. Just a couple of questions here. Can you talk about the pipeline of opportunity in your services division? Do you see more of it on the KYC side or on the collateral management side of the business?
Good question, Varun. This is Jeff. I wouldn't quantify it as more or less. I think those opportunities, they're both in our wheelhouse. I wouldn't say it's an even split either. Not one over the other. I think the acquisition that we announced of Securefact in the last quarter, the addition of that in our services business will certainly enhance our know your customer business for sure. That was the primary strategic objective of that acquisition.
Okay. In terms of winning new businesses under the services umbrella, how long does it take when you start talking to customers before they actually sign on to your solution?
I think it's very customer dependent, Varun. It can be very quick, a matter of days, and it can take a while depending on the relationship that they have with our competitors. It really depends. It depends on the magnitude and the volume of work they have and the relationship or where they are at from a contractual basis. It's hard to predict, but we are very active in growing that business organically, a customer at a time.
Okay. I guess turning on to the Technology Solutions business. In your prepared remarks, you mentioned that you expect additional revenue realization as you reach milestones in these contracts. What's the duration of these implementation contracts in your Technology Solutions business?
Yeah, Varun, it's Shawn. Most of the implementation contracts range between 12 and 18 months.
Okay. What's the pipeline in that business? How is that looking?
Back to Jeff here. We have a really strong product in the RegSys product, and we have a strong name attached with ISC and our registry expertise. The wins that we announced in 2018 are a reflection of the customer interest that's out there. We're really focused in 2019 to deliver on the contracts that we announced in 2018. That isn't stopping us from trying to continue to fill the funnel and talk to customers, and our response from our potential customers continues to be positive as well. I obviously can't speak specifically about the size and the types of opportunities, but we're confident in the business, and we like the business and the business model.
Okay. I guess, switching gears, how do you view the U.S. pipeline? I know you said that you have a beachhead into the U.S. opportunity. How is that shaping up since the last couple of quarters?
Yeah. Obviously, we haven't announced anything in the more recent quarters. Not because of anything particular. The opportunities in the United States are very specific around specific state needs and our UCC product. We'll continue to work with the states and continue to work with them. As opportunities emerge, they're typically public processes that we'll participate in. We're confident with our Ohio and Missouri implementation that they're good customer reference points for us with other states.
Okay. Just one final one for me. Your new service agreement with your technology provider. How does that affect your margins or annual your CapEx spend on your technology? Because you mentioned it's more of an agile, cost-effective agreement for the next five years. Can you talk a bit about that?
Yeah. It probably won't have a significant impact on our CapEx. Our CapEx is already fairly low as we've started to transition services to more cloud-based services. We still have more to do in that regard, but we think our CAD 2 million-CAD 4 million in CapEx is going to be required across the business anyway. I don't think you'll see a significant change in that.
Okay, great. Thanks a lot. I'll pass the line.
Thanks, Varun.
Our next question is from Steven Bain with GMP Securities. Your line is open.
Thank you. Good morning.
Good morning, Steven.
Just a question on the revenue guidance. The guidance is unchanged from the guidance released February fourth. Given that you'll be adding some revenues from the Securefact acquisition, is that implying some softness in other segments of the business?
Steven, it's Shawn. Not necessarily. As we talked about, we do think that there's still challenges with the registry operations business in Saskatchewan, and we expect that will continue. The Securefact acquisition, as Jeff outlined, is helping to position us even stronger in the KYC space. It's a fairly new product. It's a new product for us, and we'll be spending time with customers getting them to know that product. At this point, we've not changed our guidance. We think the range is sort of large enough to allow for the addition of Securefact this year. If that changes throughout the year, we'd certainly revise guidance.
Right. Okay, thanks. Just on the guidance for the EBITDA margins, are you able to provide any for adjusted EBITDA margin for 2019?
Typically, last year we did disclose that typically our adjusted EBITDA margins are within a couple of percentage points of our EBITDA margins, just depending on what activities happen throughout the year. Generally, they would be just a couple of points higher than the EBITDA margin guidance that we gave.
Right. Okay. Thanks. That's helpful. That's actually all for me. Thank you very much.
Thanks very much, Steven.
Thank you. I'm not showing any further questions. I'll now turn the call back over to Jonathan Hackshaw for closing remarks.
Thank you, Bridget. With no further questions, I'd like to thank everyone for joining us again on today's call. We look forward to speaking with you again in our next reporting period. Have a good day.
Ladies and gentlemen, this does conclude the program. You may now disconnect. Everyone, have a great day.