Constellation Software Inc. Announces Results for the First Quarter Ended March 31, 2025 and Declares Quarterly Dividend

/EIN News/ -- TORONTO, May 12, 2025 (GLOBE NEWSWIRE) -- Constellation Software Inc. (TSX:CSU) (“Constellation” or the “Company”) today announced its financial results for the first quarter ended March 31, 2025 and declared a $1.00 per share dividend payable on July 11, 2025 to all common shareholders of record at close of business on June 20, 2025. 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, 2025 and the accompanying notes, our Management Discussion and Analysis for the three months ended March 31, 2025 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, 2024, 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 2025 Headlines:

• Revenue increased 13% (0.3% organic growth, 2% after adjusting for changes in foreign exchange rates) to $2,654 million compared to $2,353 million in Q1 2024.
• Net income attributable to common shareholders was $115 million for Q1 2025 ($5.44 on a diluted per share basis), compared to net income attributable to common shareholders of $105 million ($4.95 on a diluted per share basis) in Q1 2024.
• A number of acquisitions were completed for aggregate cash consideration of $94 million (which includes acquired cash).   Deferred payments associated with these acquisitions have an estimated value of $39 million resulting in total consideration of $133 million.
• On January 31, 2025, the Company purchased 8,300,029 shares in Asseco Poland S.A. (“Asseco”) representing approximately 9.99% of the issued shares in Asseco. The shares were acquired at a price of 85 PLN per share for total consideration of $174 million.   During the three months ended March 31, 2025, the Company recorded a gain of $157 million within other comprehensive income reduced by transaction costs of $2 million.
• Cash flows from operations (“CFO”) were $827 million, an increase of 12%, or $90 million, compared to $737 million for the comparable period in 2024.
• Free cash flow available to shareholders¹ (“FCFA2S”) were $510 million, an increase of 14%, or $64 million, compared to $446 million for the comparable period in 2024.

Total revenue for the quarter ended March 31, 2025 was $2,654 million, an increase of 13%, or $300 million, compared to $2,353 million for the comparable period in 2024. The increase is primarily attributable to growth from acquisitions as the Company experienced organic growth of 0.3% in the quarter, 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. 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, 2025 was $115 million compared to $105 million for the same period in 2024. On a per share basis this translated into net income per basic and diluted share of $5.44 in the quarter ended March 31, 2025 compared to $4.95 for the same period in 2024.   There was no change in the number of shares outstanding.

For the quarter ended March 31, 2025, CFO increased $90 million to $827 million compared to $737 million for the same period in 2024 representing an increase of 12%.

For the quarter ended March 31, 2025, FCFA2S increased $64 million to $510 million compared to $446 million for the same period in 2024 representing an increase of 14%.

1. See Non-IFRS measures.

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.

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

		Three months ended March 31,
		2025			2024
	($ in millions)
Net cash flows from operating activities		827			737
Adjusted for:
Interest paid on lease obligations		(4	)		(3	)
Interest paid on debt		(62	)		(41	)
Proceeds from sale of interest rate cap		-			-
Debt transaction costs		(0	)		(11	)
Payments of lease obligations		(31	)		(29	)
IRGA / TSS membership liability revaluation charge		(94	)		(81	)
Property and equipment purchased		(15	)		(10	)
Interest and dividends received		11			6
		631			568
Less amount attributable to
Non-controlling interests		(121	)		(122	)
Free cash flow available to shareholders		510			446
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
info@csisoftware.com
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, 2025				December 31, 2024				March 31, 2024
Assets
Current assets:
	Cash	$	2,477			$	1,980			$	2,078
	Accounts receivable		1,363				1,291				1,205
	Unbilled revenue		406				369				361
	Inventories		58				56				56
	Other assets		637				596				575
			4,942				4,293				4,276
Non-current assets:
	Property and equipment		222				223				142
	Right of use assets		346				328				322
	Deferred income taxes		237				219				157
	Equity securities		353				13				14
	Other assets		318				316				291
	Intangible assets		7,477				7,465				6,746
			8,954				8,565				7,671
Total assets		$	13,896			$	12,857			$	11,946
Liabilities and Shareholders' Equity
Current liabilities:
	Debt with recourse to Constellation Software Inc.	$	419			$	303			$	276
	Debt without recourse to Constellation Software Inc.		365				319				348
	Accounts payable and accrued liabilities		1,449				1,590				1,304
	Dividends payable		21				21				21
	Deferred revenue		2,511				1,967				2,272
	Provisions		23				22				8
	Acquisition holdback payables		216				219				172
	Lease obligations		119				115				115
	Income taxes payable		130				111				135
			5,254				4,667				4,653
Non-current liabilities:
	Debt with recourse to Constellation Software Inc.		1,865				1,855				1,832
	Debt without recourse to Constellation Software Inc.		1,687				1,689				1,470
	Deferred income taxes		692				673				634
	Acquisition holdback payables		145				133				105
	Lease obligations		266				252				244
	Other liabilities		346				300				257
			5,001				4,903				4,542
Total liabilities			10,255				9,569				9,195
Shareholders' equity:
	Capital stock		99				99				99
	Accumulated other comprehensive income (loss)		(63	)			(224	)			(145	)
	Retained earnings		3,010				2,919				2,358
	Non-controlling interests		595				493				439
			3,641				3,288				2,752
Total liabilities and shareholders' equity		$	13,896			$	12,857			$	11,946

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,
			2025				2024
Revenue
License		$	96			$	88
Professional services			487				470
Hardware and other			74				59
Maintenance and other recurring			1,996				1,737
			2,654				2,353
Expenses
Staff			1,412				1,293
Hardware			40				35
Third party license, maintenance and professional services			254				215
Occupancy			17				14
Travel, telecommunications, supplies, software and equipment			131				112
Professional fees			47				38
Other, net			53				50
Depreciation			46				44
Amortization of intangible assets			272				242
			2,272				2,042
Foreign exchange loss (gain)			32				(18	)
IRGA/TSS Membership liability revaluation charge			94				81
Finance and other expense (income)			(45	)			(9	)
Bargain purchase gain			-				(2	)
Impairment of intangible and other non-financial assets			3				10
Redeemable preferred securities expense (income)			-				58
Finance costs			71				67
			154				186
Income (loss) before income taxes			227				125
Current income tax expense (recovery)			136				127
Deferred income tax expense (recovery)			(49	)			(75	)
Income tax expense (recovery)			87				52
Net income (loss)			140				74
Net income (loss) attributable to:
Common shareholders of Constellation Software Inc.			115				105
Non-controlling interests			24				(31	)
Net income (loss)			140				74
Earnings per common share of Constellation Software Inc.
	Basic and diluted	$	5.44			$	4.95

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,
	2025				2024
Net income (loss)	$	140			$	74
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other, net of tax		79				(48	)
Items that will not be reclassified to net income (loss):
Changes in the fair value of equity investments at FVOCI		155				-
Other comprehensive income (loss), net of income tax		234				(48	)
Total comprehensive income (loss)	$	374			$	25
Total other comprehensive income (loss) attributable to:
Common shareholders of Constellation Software Inc.		161				(40	)
Non-controlling interests		74				(8	)
Total other comprehensive income (loss)	$	234			$	(48	)
Total comprehensive income (loss) attributable to:
Common shareholders of Constellation Software Inc.		276				65
Non-controlling interests		98				(40	)
Total comprehensive income (loss)	$	374			$	25

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, 2025
		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, 2025		$	99			$	(224	)		$	2,919			$	2,795			$	493			$	3,288
Total comprehensive income (loss):
Net income (loss)			-				-				115				115				24				140
Other comprehensive income (loss)
Foreign currency translation differences from
	foreign operations and other, net of tax and
	changes in the fair value of equity investments at FVOCI		-				161				-				161				74				234
Total other comprehensive income (loss)			-				161				-				161				74				234
Total comprehensive income (loss)			-				161				115				276				98				374
Transactions with owners, recorded directly in equity
Other movements in non-controlling interests			-				-				(4	)			(4	)			4				(0	)
Dividends paid to non-controlling interests			-				-				-				-				(0	)			(0	)
Dividends to shareholders of the Company			-				-				(21	)			(21	)			-				(21	)
Balance at March 31, 2025		$	99			$	(63	)		$	3,010			$	3,046			$	595			$	3,641

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 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,
				2025				2024
Cash flows from (used in) operating activities:
	Net income (loss)		$	140			$	74
	Adjustments for:
		Depreciation		46				44
		Amortization of intangible assets		272				242
		IRGA/TSS Membership liability revaluation charge		94				81
		Finance and other expense (income)		(45	)			(9	)
		Bargain purchase (gain)		-				(2	)
		Impairment of intangible and other non-financial assets		3				10
		Redeemable preferred securities expense (income)		-				58
		Finance costs		71				67
		Income tax expense (recovery)		87				52
		Foreign exchange loss (gain)		32				(18	)
		Depreciation of third party costs		5				-
	Change in non-cash operating assets and liabilities
		exclusive of effects of business combinations		231				208
	Transaction costs associated with equity securities classified as FVOCI			(2	)			-
	Income taxes paid			(107	)			(68	)
	Net cash flows from (used in) operating activities			827				737
Cash flows from (used in) financing activities:
	Interest paid on lease obligations			(4	)			(3	)
	Interest paid on debt			(62	)			(41	)
	Increase (decrease) in CSI facility			-				(578	)
	Increase (decrease) in Topicus revolving credit debt facility without recourse to CSI			31				114
	Proceeds from issuance of Senior Notes			-				1,000
	Proceeds from issuance of debt facilities without recourse to CSI			27				112
	Repayments of debt facilities without recourse to CSI			(30	)			(18	)
	Other financing activities			(1	)			(2	)
	Dividends paid to non-controlling interests			(0	)			(85	)
	Debt transaction costs			(0	)			(11	)
	Payments of lease obligations, net of sublease receipts			(31	)			(29	)
	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			(91	)			351
Cash flows from (used in) investing activities:
	Acquisition of businesses			(94	)			(223	)
	Cash obtained with acquired businesses			11				35
	Post-acquisition settlement payments, net of receipts			(16	)			(76	)
	Purchases of investments and other assets			(175	)			(0	)
	Proceeds from sales of other investments and other assets			-				4
	Decrease (increase) in restricted cash			7				(11	)
	Interest, dividends and other proceeds received			11				5
	Property and equipment purchased			(15	)			(10	)
	Net cash flows from (used in) investing activities			(271	)			(277	)
Effect of foreign currency on
	cash			33				(17	)
Increase (decrease) in cash				497				794
Cash, beginning of period			$	1,980			$	1,284
Cash, end of period			$	2,477			$	2,078