Constellation Software Inc. Announces Results for the First Quarter Ended March 31, 2024 and Declares Quarterly Dividend

TORONTO, May 10, 2024 (GLOBE NEWSWIRE) — Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the first quarter ended March 31, 2024 and declared a $1.00 per share dividend payable on July 11, 2024 to all common shareholders of record at close of business on June 20, 2024. This dividend has been designated as an eligible dividend for the purposes of the Income Tax Act (Canada). Please note that all dollar amounts referred to in this press release are in U.S. Dollars unless otherwise stated.

The following press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2024 and the accompanying notes, our Management Discussion and Analysis for the three months ended March 31, 2024 and with our annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and our annual Management’s Discussion and Analysis for the year ended December 31, 2023, which can be found on SEDAR+ at www.sedarplus.com and on the Company’s website www.csisoftware.com. Additional information about the Company is also available on SEDAR+ at www.sedarplus.com.

Q1 2024 Headlines:

  • Revenue increased 23% (4% organic growth, 3% after adjusting for changes in foreign exchange rates) to $2,353 million compared to $1,919 million in Q1 2023.
  • Net income attributable to common shareholders was $105 million for Q1 2024 ($4.95 on a diluted per share basis), compared to net income attributable to common shareholders of $94 million ($4.44 on a diluted per share basis) in Q1 2023.
  • A number of acquisitions were completed for aggregate cash consideration of $223 million (which includes acquired cash).  Deferred payments associated with these acquisitions have an estimated value of $65 million resulting in total consideration of $288 million.
  • Cash flows from operations (“CFO”) were $737 million, an increase of 16%, or $104 million, compared to $632 million for the comparable period in 2023.
  • Free cash flow available to shareholders1 (“FCFA2S”) decreased $7 million to $446 million compared to $453 million for the same period in 2023.

Total revenue for the quarter ended March 31, 2024 was $2,353 million, an increase of 23%, or $434 million, compared to $1,919 million for the comparable period in 2023. The increase is primarily attributable to growth from acquisitions as the Company experienced organic growth of 4% in the quarter, 3% after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business. For acquired companies, organic growth is calculated as the difference between actual revenues achieved by each company in the financial period following acquisition compared to the estimated revenues they achieved in the corresponding financial period preceding the date of acquisition by Constellation. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

The net income attributable to common shareholders of CSI for the quarter ended March 31, 2024 was $105 million compared to $94 million for the same period in 2023. On a per share basis this translated into net income per basic and diluted share of $4.95 in the quarter ended March 31, 2024 compared to $4.44 for the same period in 2023.   There was no change in the number of shares outstanding.

For the quarter ended March 31, 2024, CFO increased $104 million to $737 million compared to $632 million for the same period in 2023 representing an increase of 16%.

For the quarter ended March 31, 2024, FCFA2S decreased $7 million to $446 million compared to $453 million for the same period in 2023 representing a decrease of 2%.

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Constellation or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Constellation assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

Non-IFRS Measures

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on other facilities, credit facility transaction costs, repayments of lease obligations, the IRGA / TSS membership liability revaluation charge, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. We believe that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if we do not make any acquisitions, or investments, and do not repay any debts. While we could use the FCFA2S to pay dividends or repurchase shares, our objective is to invest all of our FCFA2S in acquisitions which meet our hurdle rate.  

FCFA2S is not a recognized measure under IFRS and, accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

    Three months ended
March 31,
 
    2024 2023  
  ($ in millions)
         
Net cash flows from operating activities   737   632    
Adjusted for:        
Interest paid on lease obligations   (3 ) (3 )  
Interest paid on other facilities   (41 ) (26 )  
Proceeds from sale of interest rate cap        
Credit facility transaction costs   (11 ) (2 )  
Payments of lease obligations   (29 ) (25 )  
IRGA / TSS membership liability revaluation charge   (81 ) (39 )  
Property and equipment purchased   (10 ) (10 )  
Interest and dividends received   6   1    
         
    568   529    
Less amount attributable to        
Non-controlling interests   (122 ) (76 )  
         
Free cash flow available to shareholders   446   453    
         
Due to rounding, certain totals may not foot.        
         

About Constellation Software Inc.

Constellation’s common shares are listed on the Toronto Stock Exchange under the symbol “CSU”. Constellation acquires, manages and builds vertical market software businesses.

For further information:

Jamal Baksh
Chief Financial Officer
(416) 861-9677
[email protected]
www.csisoftware.com

SOURCE: CONSTELLATION SOFTWARE INC.

CONSTELLATION SOFTWARE INC.      
Condensed Consolidated Interim Statements of Financial Position      
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
         
Unaudited      
    March 31, 2024   December 31, 2023   March 31, 2023  
         
Assets      
         
Current assets:      
  Cash $ 2,078   $ 1,284   $ 1,010  
  Accounts receivable   1,205     1,145     1,012  
  Unbilled revenue   360     326     282  
  Inventories   59     51     50  
  Other assets   568     542     450  
      4,270     3,348     2,803  
         
Non-current assets:      
  Property and equipment   142     143     128  
  Right of use assets   311     312     285  
  Deferred income taxes   157     110     108  
  Other assets   308     286     182  
  Intangible assets   6,734     6,682     5,324  
      7,651     7,533     6,028  
         
Total assets $ 11,921   $ 10,881   $ 8,831  
         
Liabilities and Shareholders’ Equity      
         
Current liabilities:      
  Debt with recourse to Constellation Software Inc. $ 276   $ 861   $ 480  
  Debt without recourse to Constellation Software Inc.   348     225     199  
  Redeemable preferred securities       814     409  
  Accounts payable and accrued liabilities   1,298     1,433     1,117  
  Dividends payable   21     21     21  
  Deferred revenue   2,267     1,757     1,995  
  Provisions   8     9     9  
  Acquisition holdback payables   174     173     139  
  Lease obligations   113     112     98  
  Income taxes payable   135     88     120  
      4,640     5,493     4,585  
         
Non-current liabilities:      
  Debt with recourse to Constellation Software Inc.   1,832     863     590  
  Debt without recourse to Constellation Software Inc.   1,470     1,385     793  
  Deferred income taxes   633     610     496  
  Acquisition holdback payables   105     86     68  
  Lease obligations   235     236     217  
  Other liabilities   255     246     236  
      4,530     3,426     2,400  
         
Total liabilities   9,169     8,919     6,986  
         
         
Shareholders’ equity:      
  Capital stock   99     99     99  
  Accumulated other comprehensive income (loss)   (145 )   (99 )   (128 )
  Retained earnings   2,358     1,876     1,454  
  Non-controlling interests   439     85     419  
      2,752     1,961     1,845  
         
         
         
Total liabilities and shareholders’ equity $ 11,921   $ 10,881   $ 8,831  
         
CONSTELLATION SOFTWARE INC.        
Condensed Consolidated Interim Statements of Income (loss)        
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
           
         
Unaudited        
      Three months ended March 31,
        2024       2023  
           
           
Revenue        
License   $ 88     $ 81  
Professional services     470       411  
Hardware and other     59       57  
Maintenance and other recurring     1,737       1,369  
        2,353       1,919  
           
Expenses        
Staff     1,293       1,068  
Hardware     35       35  
Third party license, maintenance and professional services     215       185  
Occupancy     14       13  
Travel, telecommunications, supplies, software and equipment     112       89  
Professional fees     38       36  
Other, net     50       38  
Depreciation     44       39  
Amortization of intangible assets     242       193  
        2,042       1,695  
           
           
Foreign exchange loss (gain)     (18 )     10  
IRGA/TSS Membership liability revaluation charge     81       39  
Finance and other expense (income)     (9 )     (7 )
Bargain purchase gain     (2 )     (1 )
Impairment of intangible and other non-financial assets     10       2  
Redeemable preferred securities expense (income)     58       188  
Finance costs     67       36  
        186       267  
           
Income (loss) before income taxes     125       (43 )
           
Current income tax expense (recovery)     127       103  
Deferred income tax expense (recovery)     (75 )     (62 )
Income tax expense (recovery)     52       40  
           
Net income (loss)     74       (83 )
           
Net income (loss) attributable to:        
Common shareholders of Constellation Software Inc.     105       94  
Non-controlling interests     (31 )     (177 )
Net income (loss)     74       (83 )
           
Earnings per common share of Constellation Software Inc.        
  Basic and diluted   $ 4.95     $ 4.44  
           
CONSTELLATION SOFTWARE INC.        
Condensed Consolidated Interim Statements of Comprehensive Income (loss)        
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
         
         
Unaudited        
    Three months ended March 31,
      2024       2023  
         
Net income (loss)   $ 74     $ (83 )
         
Items that are or may be reclassified subsequently to net income (loss):        
         
Foreign currency translation differences from foreign operations and other, net of tax     (48 )     16  
         
Other comprehensive income (loss), net of income tax     (48 )     16  
         
Total comprehensive income (loss)   $ 25     $ (67 )
         
Total other comprehensive income (loss) attributable to:        
Common shareholders of Constellation Software Inc.     (40 )     10  
Non-controlling interests     (8 )     6  
Total other comprehensive income (loss)   $ (48 )   $ 16  
         
Total comprehensive income (loss) attributable to:        
Common shareholders of Constellation Software Inc.     65       105  
Non-controlling interests     (40 )     (171 )
Total comprehensive income (loss)   $ 25     $ (67 )
CONSTELLATION SOFTWARE INC.            
Condensed Consolidated Interim Statement of Changes in Equity        
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
               
Unaudited            
Three months ended March 31, 2024            
    Equity Attributable to Common Shareholders of CSI    
    Capital stock Accumulated other comprehensive income (loss) Retained earnings Total Non-controlling interests Total equity
               
Balance at January 1, 2024 $ 99 $ (99 ) $ 1,876   $ 1,877     85   $ 1,961  
               
Total comprehensive income (loss):            
               
Net income (loss)         105     105     (31 )   74  
               
Other comprehensive income (loss)            
               
Foreign currency translation differences from            
  foreign operations and other, net of tax     (40 )       (40 )   (8 )   (48 )
               
             
Total other comprehensive income (loss)     (40 )       (40 )   (8 )   (48 )
               
Total comprehensive income (loss)     (40 )   105     65     (40 )   25  
               
Transactions with owners, recorded directly in equity            
               
Non-controlling interests arising from business combinations                 (0 )   (0 )
               
Conversion of Lumine Special Shares to subordinate voting shares of Lumine and settlement of accrued dividend on Lumine Special Shares through the issuance of subordinate voting shares of Lumine                 872     872  
               
Conversion of Lumine Preferred Shares to subordinate voting shares of Lumine and settlement of accrued dividend on Lumine Preferred Shares through the issuance of subordinate voting shares of Lumine     (6 )   400     394     (394 )    
               
Other movements in non-controlling interests         (1 )   (1 )   1     0  
               
Dividends paid to non-controlling interests                 (85 )   (85 )
               
Dividends to shareholders of the Company         (21 )   (21 )       (21 )
               
Balance at March 31, 2024 $ 99 $ (145 ) $ 2,358   $ 2,313   $ 439   $ 2,752  
               
CONSTELLATION SOFTWARE INC.            
Condensed Consolidated Interim Statement of Changes in Equity        
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
               
Unaudited            
Three months ended March 31, 2023            
               
    Equity Attributable to Common Shareholders of CSI    
    Capital stock Accumulated other comprehensive income (loss) Retained earnings Total Non-controlling interests Total equity
               
Balance at January 1, 2023 $ 99 $ (150 ) $ 1,763   $ 1,713   $ 221   $ 1,933  
               
Total comprehensive income (loss):            
               
Net income (loss)         94     94     (177 )   (83 )
               
Other comprehensive income (loss)            
               
Foreign currency translation differences from            
  foreign operations and other, net of tax     10         10     6     16  
               
Total other comprehensive income (loss)     10         10     6     16  
               
Total comprehensive income (loss)     10     94     105     (171 )   (67 )
               
Transactions with owners, recorded directly in equity            
               
Special dividend of Lumine Subordinate Voting Shares     12     (378 )   (366 )   366      
               
Acquisition of non-controlling interests                 (1 )   (1 )
               
Conversion of Lumine Special Shares to subordinate voting shares of Lumine                 1     1  
               
Other movements in non-controlling interests     0     (4 )   (4 )   4     (0 )
               
  Dividends to shareholders of the Company         (21 )   (21 )       (21 )
               
Balance at March 31, 2023 $ 99 $ (128 ) $ 1,454   $ 1,426   $ 419   $ 1,845  
               
CONSTELLATION SOFTWARE INC.        
Condensed Consolidated Interim Statements of Cash Flows        
(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
             
             
Unaudited        
        Three months ended March 31,
          2024       2023  
             
Cash flows from (used in) operating activities:        
  Net income (loss)   $ 74     $ (83 )
  Adjustments for:        
    Depreciation     44       39  
    Amortization of intangible assets     242       193  
    IRGA/TSS Membership liability revaluation charge     81       39  
    Finance and other expense (income)     (9 )     (7 )
    Bargain purchase (gain)     (2 )     (1 )
    Impairment of intangible and other non-financial assets     10       2  
    Redeemable preferred securities expense (income)     58       188  
    Finance costs     67       36  
    Income tax expense (recovery)     52       40  
    Foreign exchange loss (gain)     (18 )     10  
  Change in non-cash operating assets and liabilities        
    exclusive of effects of business combinations     208       268  
  Income taxes paid     (68 )     (91 )
  Net cash flows from (used in) operating activities     737       632  
             
Cash flows from (used in) financing activities:        
  Interest paid on lease obligations     (3 )     (3 )
  Interest paid on debt     (41 )     (26 )
  Increase (decrease) in CSI facility     (578 )     (51 )
  Increase (decrease) in Topicus revolving credit debt facility without recourse to CSI     114       (11 )
  Proceeds from issuance of Senior Notes     1,000        
  Proceeds from issuance of debt facilities without recourse to CSI     112       180  
  Repayments of debt facilities without recourse to CSI     (18 )     (86 )
  Other financing activities     (2 )     2  
  Dividends paid to non-controlling interests     (85 )      
  Debt transaction costs     (11 )     (2 )
  Payments of lease obligations     (29 )     (25 )
  Distribution to the Joday Group     (64 )      
  Principal repayments to the Joday Group pursuant to the Call Notice     (22 )      
  Dividends paid to common shareholders of the Company     (21 )     (21 )
  Net cash flows from (used in) in financing activities     351       (43 )
             
Cash flows from (used in) investing activities:        
  Acquisition of businesses     (223 )     (452 )
  Cash obtained with acquired businesses     35       45  
  Post-acquisition settlement payments, net of receipts     (76 )     (72 )
  Purchases of investments and other assets     (0 )     (31 )
  Proceeds from sales of other investments and other assets     4       119  
  Decrease (increase) in restricted cash     (11 )      
  Interest, dividends and other proceeds received     5       3  
  Property and equipment purchased     (10 )     (10 )
  Net cash flows from (used in) investing activities     (277 )     (398 )
             
Effect of foreign currency on        
  cash     (17 )     7  
             
Increase (decrease) in cash     794       199  
             
Cash, beginning of period   $ 1,284     $ 811  
             
Cash, end of period   $ 2,078     $ 1,010  
             


Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.




Readers like you help support The Tech Outlook. When you make a purchase using links on our site, we may earn an affiliate commission. We cannot guarantee the Product information shown is 100% accurate and we advise you to check the product listing on the original manufacturer website. Thetechoutlook is not responsible for price changes carried out by retailers. The discounted price or deal mentioned in this item was available at the time of writing and may be subject to time restrictions and/or limited unit availability. Amazon and the Amazon logo are trademarks of Amazon.com, Inc. or its affiliates Read More

Advertisement

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More