TORONTO, ONTARIO (November 8, 2024) — Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the third quarter ended September 30, 2024 and declared a
$1.00 per share dividend payable on January 10, 2025 to all common shareholders of record at close of business on December 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 and nine months ended September 30, 2024 and the accompanying notes, our Management Discussion and Analysis for the three and nine months ended September 30, 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.
Q3 2024 and Subsequent Headlines:
- Revenue grew 20% (2% organic growth, 1% after adjusting for changes in foreign exchange rates) to $2,541 million compared to $2,126 million in Q3 2023.
- Net income attributable to common shareholders decreased 28% to $164 million ($7.74 on a diluted per share basis) from $227 million ($10.70 on a diluted per share basis) in Q3 2023.
- A number of acquisitions were completed for aggregate cash consideration of $197 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $70 million resulting in total consideration of $267 million.
- Cash flows from operations (“CFO”) increased 1% or $3 million to $517 million compared to $513 million for the comparable period in 2023.
- Free cash flow available to shareholders1 (“FCFA2S”) decreased 2% or $6 million to $362 million compared to $367 million for the same period in 2023.
(Due to rounding certain totals may not foot.)
Total revenue for the quarter ended September 30, 2024 was $2,541 million, an increase of 20%, or $415 million, compared to $2,126 million for the comparable period in 2023. For the first nine months of 2024 total revenues were $7,363 million, an increase of 21%, or $1,279 million, compared to $6,084 million for the comparable period in 2023. The increase for both the three and nine month periods compared to the same periods in the prior year is primarily attributable to growth from acquisitions as the Company experienced organic growth of 2% and 3% respectively, 1% and 2% after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.
Net income attributable to common shareholders of CSI for the quarter ended September 30, 2024 was $164 million compared to $227 million for the same period in 2023. On a per share basis this translated into a net income per diluted share of $7.74 in the quarter ended September 30, 2024 compared to net income per diluted share of $10.70 for the same period in 2023. For the nine months ended September 30, 2024, net income attributable to common shareholders of CSI was $446 million or $21.04 per diluted share compared to $424 million or $20.02 per diluted share for the same period in 2023.
For the quarter ended September 30, 2024, CFO increased $3 million to $517 million compared to $513 million for the same period in 2023 representing an increase of 1%. For the first nine months of 2024, CFO increased $250 million to $1,518 million compared to $1,268 million during the same period in 2023, representing an increase of 20%.
For the quarter ended September 30, 2024, FCFA2S decreased $6 million to $362 million compared to $367 million for the same period in 2023 representing a decrease of 2%. For the nine months ended September 30, 2024, FCFA2S increased $155 million to $990 million compared to $835 million for the same period in 2023 representing an increase of 19%.
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 debt, debt transaction costs, payments 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.
- See Non-IFRS measures.
For the full press release including financial information, download the PDF using the link below.
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
info@csisoftware.com www.csisoftware.com
SOURCE: CONSTELLATION SOFTWARE INC.