Altus Group reports Q2 2023 financial results and quarterly dividend
Analytics Recurring New Bookings* increased sequentially and year-over-year; successfully managed through Property Tax jurisdictional reset and delivered double-digit growth at Analytics.
Altus Group Limited (ʺAltus” or “the Company”) (TSX: AIF), a leading provider of asset and fund intelligence for commercial real estate (“CRE”), announced today its financial and operating results for the second quarter ended June 30th, 2023 and the approval by its Board of Directors of the payment of a cash dividend of $0.15 per common share for the third quarter ending September 30, 2023.
Unless otherwise indicated, all amounts are in Canadian dollars and percentages are on an as reported basis in comparison to Q2 2022.
Q2 2023 Summary
Consolidated revenues were $205.2 million, down 0.6% (4.1% on a Constant Currency* basis), reflecting the anticipated negative $33.2 million jurisdictional reset of the U.K. annuity billings in Property Tax.
Profit was $11.9 million, compared to $12.5 million.
Earnings per share (“EPS”) were $0.26 basic and diluted, compared to $0.28 basic and diluted.
Consolidated Adjusted EBITDA* was $44.7 million, down 10.1% (15.3% on a Constant Currency basis).
Adjusted EPS* was $0.53, compared to $0.77.
Analytics revenues were $99.7 million, up 21.4% (15.5% on a Constant Currency basis), of which Recurring Revenue* was $88.8 million, up 25.2% (19.0% on a Constant Currency basis), and Adjusted EBITDA was $23.8 million, up 72.8% (59.0% on a Constant Currency basis) driving an Adjusted EBITDA margin* of 23.8%, up 700 basis points.
Analytics New Bookings* totalled $24.6 million, up 4.9% (0.4% on a Constant Currency basis), of which Recurring New Bookings* were $18.4 million, up 7.9% (3.4% on a Constant Currency basis). Sequentially, Recurring New Bookings increased 30.5%.
At the end of Q2 2023, 70% of the Company’s total ARGUS Enterprise (“AE”) user base had been contracted on ARGUS Cloud (Cloud Adoption Rate*), compared to 52% at the end of Q2 2022.
Reflecting the anticipated reset of the U.K. annuity billings, Property Tax revenues were $75.1 million, down 19.7% (22.4% on a Constant Currency basis), and Adjusted EBITDA was $28.2 million, down 32.9% (35.3% on a Constant Currency basis). Excluding the $33.2 million impact of the U.K. annuity billings in 2022, revenue growth was 24.5% (20.4% on a Constant Currency basis).
Appraisals and Development Advisory revenues were $30.5 million, down 1.2% (1.0% on a Constant Currency basis) and Adjusted EBITDA was $3.3 million, down 25.9% (25.3% on a Constant Currency basis).
As at June 30, 2023, Funded debt to EBITDA ratio as defined in the Company’s credit facility agreement was 2.19 times, and Net debt to Adjusted EBITDA leverage ratio* was 2.10 times.
*Altus Group uses certain non-GAAP financial measures such as Adjusted Earnings (Loss), and Constant Currency; non-GAAP ratios such as Adjusted EPS; total of segments measures such as Adjusted EBITDA; capital management measures such as Free Cash Flow; and supplementary financial and other measures such as Adjusted EBITDA margin, Net debt to Adjusted EBITDA leverage ratio, New Bookings, Recurring New Bookings, Non-Recurring New Bookings, Organic Revenue, Recurring Revenue, Non-Recurring Revenue, AE Software Maintenance Retention Rate, and Cloud Adoption Rate. Refer to the “Non-GAAP and Other Measures” section for more information on each measure and a reconciliation of Adjusted EBITDA and Adjusted Earnings (Loss) to Profit (Loss) and Free Cash Flow to Net cash provided by (used in) operating activities.
Key contact
Camilla Bartosiewicz
Chief Communications Officer
Key contact
Camilla Bartosiewicz
Chief Communications Officer
About Altus Group
Altus Group is a leading provider of asset and fund intelligence for commercial real estate. We deliver intelligence as a service to our global client base through a connected platform of industry-leading technology, advanced analytics, and advisory services.
Trusted by the largest CRE leaders, our capabilities help commercial real estate investors, developers, proprietors, lenders, and advisors manage risks and improve performance returns throughout the asset and fund lifecycle.
Altus Group is a global company headquartered in Toronto with approximately 2,900 employees across North America, EMEA and Asia Pacific. For more information about Altus (TSX: AIF) please visit altusgroup.com.
Forward-looking Information
Certain information in this press release may constitute “forward-looking information” within the meaning of applicable securities legislation. All information contained in this press release, other than statements of current and historical fact, is forward-looking information. Forward-looking information includes, but is not limited to, the discussion of the Company’s business, strategies and expectations of future performance, including any guidance on financial expectations, and its expectations with respect to cash flows and liquidity. Generally, forward-looking information can be identified by use of words such as “may”, “will”, “expect”, “believe”, “plan”, “would”, “could”, “remain” and other similar terminology.
Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by us at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may not be known and may cause actual results, performance or achievements, industry results or events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that the Company identified and applied in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to: engagement and product pipeline opportunities in Analytics will result in associated definitive agreements; continued adoption of cloud subscriptions by the Company’s customers; retention of material clients and bookings; sustaining the Company’s software and subscription renewals; settlement volumes in the Property Tax reportable segment occurring on a timely basis and assessment authorities processing appeals in a manner consistent with expectations; successful execution of the Company’s business strategies; consistent and stable economic conditions or conditions in the financial markets; consistent and stable legislation in the various countries in which the Company operate; consistent and stable foreign exchange conditions; no disruptive changes in the technology environment; opportunity to acquire accretive businesses and the absence of negative financial and other impacts resulting from strategic investments or acquisitions on short term results; successful integration of acquired businesses; and continued availability of qualified professionals.
Inherent in the forward-looking information are known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking information. Those risks include, but are not limited to: the general state of the economy; the Company’s financial performance; the Company’s financial targets; the commercial real estate market; the Company’s international operations; acquisitions; industry competition; business interruption events; third party information; cybersecurity; professional talent; the Company’s cloud subscriptions transition; software renewals; the Company’s sales pipeline; enterprise transactions; client concentration and loss of material clients; product enhancements and new product introductions; technological strategy; intellectual property; property tax appeals and seasonality; legislative and regulatory changes; privacy and data protection; the Company’s brand and reputation; fixed-price and contingency engagements; the Canadian multi-residential market; currency fluctuations; interest rates; credit; income tax matters; health and safety hazards; the Company’s contractual obligations; legal proceedings; regulatory review; the Company’s insurance limits; the Company’s ability to meet the solvency requirements necessary to make dividend payments; the Company’s leverage and financial covenants; the Company’s share price; the Company’s capital investments; the issuance of additional common shares and debt, the Company’s internal and disclosure controls; environmental, social and governance (“ESG”) matters; and catastrophic or geo-political conditions such as the COVID-19 pandemic, as well as those described in the Company’s annual publicly filed documents, including the Annual Information Form for the year ended December 31, 2022 (which are available on SEDAR at www.sedar.com).
Investors should not place undue reliance on forward-looking information as a prediction of actual results. The forward-looking information reflects management’s current expectations and beliefs regarding future events and operating performance and is based on information currently available to management. Although The Company has attempted to identify important factors that could cause actual results to differ materially from the forward-looking information contained herein, there are other factors that could cause results not to be as anticipated, estimated or intended. The forward-looking information contained herein is current as of the date of this press release and, except as required under applicable law, we do not undertake to update or revise it to reflect new events or circumstances. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Altus Group, the Company’s financial or operating results, or the Company’s securities.
Certain information in this press release, including sections entitled “Business Outlook”, may be considered as “financial outlook” within the meaning of applicable securities legislation. The purpose of this financial outlook is to provide readers with disclosure regarding Altus Group’s reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.