Hello, welcome to the annual meeting of shareholders of Constellation Software, Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer, and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer, and use of such personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the Q&A icon. It is now my pleasure to turn today's meeting over to Mark Dennison, chairman of the annual general meeting of Constellation Software, Inc. Mr. Dennison, the floor is yours. Thank you. Good morning. My name is Mark Dennison. I'm the general counsel and the corporate secretary for Constellation Software. Mark Leonard, Constellation's President, and John Billowits, Constellation's Chair of the Board, have asked me to act as the chair of today's meeting. Jamal Baksh will act as Secretary of the Meeting. I ask Shirley Tom and Chris Cino of Computershare to act as the scrutineers and to compute the votes of any polls taken at this meeting. We are conducting today's meeting virtually via a live webcast. The meeting is being held virtually, we want to outline a few logistical items regarding the conduct of this meeting. As indicated in our press release dated April 3, 2023, shareholders of Topicus and shareholders of the company have had the opportunity to submit questions in advance of today's meeting. We have received a large number of questions. On behalf of the shareholders, our panel of questioners has collated the questions received and organized them by theme. Following the formal part of this meeting, our panel will pose those questions to our senior managers during the Q&A session of the meeting. Additional questions can also be submitted by any meeting attendee using the instant messaging service of the virtual interface. Questions which are already addressed in the questions submitted in advance of the meeting or that are redundant or repetitive will not be answered. Any questions regarding procedural matters or directly related to the motions before the meeting may be addressed during the formal part of this meeting. When asking a question, please indicate your name, which entity you represent, if any, and if applicable, confirm if you are a registered shareholder or a duly appointed proxyholder. For each question that we answer, we will summarize the question and read out loud the name of the person who asked that question and, if applicable, the entity such person represents. For the purposes of the meeting today, voting on all matters will be conducted by an electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each business item after the presentation of all of the business items. If you have not voted in advance of the meeting, you will be able to do so by choosing the vote option on the virtual interface. When voting commences, the polls will be open for three minutes. We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move and second all of the motions. The Secretary of the Meeting has filed with me proof of mailing of the meeting materials, including the notice of availability of proxy materials in the form of proxy, and where applicable, the notice of meeting and the management information circular. The consolidated financial statements of the company for the year ended December 31, 2022, and the auditor's report thereon have also been mailed to all of the shareholders of the company who have requested them. Copies of these materials are also available on the company's SEDAR profile and on the company's website. We would be pleased to deal with any questions concerning the financial statements subsequent to the completion of the formal part of this meeting. The scrutineers have reported to me that we have at least two shareholders present by electronic means and holding or representing by proxy at least 15% of the votes entitled to be cast at this meeting. As such, I declare that a quorum is present for the conduct of business, and this meeting is properly constituted for the transaction of business. Voting today will be conducted by electronic ballot. The balloting will be open to registered shareholders and appointed proxy holders who have properly logged in with their control numbers or their invite code after the presentation of all of the business items. The first item of business is the election of the directors. There are 13 directors to be elected at this meeting. The management information circular made available to shareholders contains information about the 13 nominees. Those nominees are Jeff Bender, John Billowits, Susan Gayner, Claire Kennedy, Robert Kittel, Mark Leonard, Mark Miller, Lori O'Neill, Donna Parr, Andrew Pastor, Laurie Schultz, Barry Symons, and Robin Van Poelje. The meeting is open for nominations for the election of directors for the ensuing year or until their successors are elected or appointed. I will now nominate the directors and second the nominations. I nominate each of the persons whose name appears in the Management Information Circular under the heading Election of Directors to be a director of the company until the close of the next annual meeting of shareholders or until their successors are appointed. I also second the nominations. If there are no further nominations, I declare the nominations closed. I note that as described more fully in the Management Information Circular, the company adopted a majority director election policy in May 2009. This policy enables shareholders to vote separately for each director nominee at meetings of shareholders where directors are to be elected. If a director nominee does not receive the support of a majority of the votes cast at a meeting of shareholders, that director will be expected to tender his or her resignation from the board following such meeting. The resignation will be effective upon acceptance by the board and will be disclosed via press release. For more information about our majority director election policy, please see page 21 of the Management Information Circular. I will now move and second the resolution appointing the auditors for the current year and authorizing the directors to fix their remuneration. I move that KPMG LLP Chartered Accountants are appointed auditors of the company to hold office until the close of the next annual meeting of shareholders, or until their successors are appointed at such remuneration as may be fixed by the directors, that the directors are authorized to fix such remuneration. I also second the motion. Unless there are any questions, I will move to the next item of business. The next item of business is an advisory resolution to endorse the company's approach to executive compensation, as further set out in the Management Information Circular. As the vote is advisory only, it will not be binding on the company. However, the Compensation Nominating & Human Resources Committee of the board will take into account the results when considering future executive compensation arrangements. I will now move and second the approval of the advisory resolution. I move that it be resolved on an advisory basis and not to diminish the role and responsibilities of the board of directors of the company that the approach to executive compensation disclosed in the Management Information Circular is accepted. I also second the motion. Unless there are any questions, I will move on to the voting process. As mentioned earlier, voting today will be conducted by electronic ballot. I'll now take a moment to ask that the balloting be opened to registered holders and appointed proxy holders. The polls are now open. At this point, all registered holders and appointed proxy holders who have properly logged in with their control numbers or their invite code and who wish to vote will be able to see on the screen the election of directors, the appointment of the auditors, and the advisory resolution on executive compensation motions which have been brought forward at this meeting. Please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director and next to the resolution with respect to the appointment of KPMG as the company's auditors. Please select the for or against button next to the advisory resolution on executive compensation. The voting will be open for three minutes. While you are submitting your votes, we will begin introducing the speakers for the question and answer period. Once the electronic balloting closes, the voting page will disappear, and your votes will be automatically submitted. The full voting results will be published on SEDAR following the meeting. I can report that based on the proxies received in advance of the meeting, all matters that were put to a vote today have passed. The formal items of business as set out in the notice of meeting have now been dealt with. I move that the meeting be terminated. I second the motion. I declare the resolution carried and the meeting terminated. The formal agenda for this meeting is now completed. I will now turn the meeting over to Lawrence Cunningham, who will be leading the question and answer session this morning. I ask that all attendees who would like to ask a question use the instant messaging feature of the virtual interface to do so. When asking your question, please include your name, the entity you represent, if any, and if applicable, confirm if you are a registered shareholder or a duly appointed proxy holder. Over to you, Larry. Thank you very much, Mark Dennison. I appreciate your very clear instructions and overview of the meeting. Welcome to Constellation shareholders. We have a very large crowd, about 450 so far, and that number usually rises, so it's nice to have everyone together. Within that group are included the directors and officers and panelists who will be answering your questions today. Before we dive into the questions, we'd like you to be introduced to the panel who will be answering your questions. For that purpose of making introductions, I'd like to ask John Billowits, the Chairman of the Board, to introduce everyone. John? Thanks, Larry. Contrary to prior years, we're just gonna do a intro, we're not gonna ask the panelists to provide any embarrassing facts of their bio. If you participated in prior years, you'll recognize all the panelists except for maybe one or two, 'cause they've been with CSI for well over a couple of decades. I'll skip Mark Dennison because he did the introduction for the meeting. I'm simply gonna introduce people as I see them on my screen, there's no particular order to the introduction. First is Jamal Baksh, who serves as CFO of Constellation Software, the head office. Next is Mark Miller, who serves as CEO of Volaris. We have Barry Symons, who's the CEO of Jonas Software. We have Will Pan and Howard Leung, who will act as moderators today, and I'll let them provide a short bio before they ask any of their first questions. We have Daniel Zinman, who's the Co-CEO of Perseus Operating Group. We have Robin Van Poelje dialing in from Amsterdam, who is the CEO of Topicus. We have David Nyland, who's the CEO of Lumine. I'm sure David will get some questions today. Bernie Anzarouth, who all of you will know who's been here for, I guess, employee number two, is the CIO, Chief Investment Officer of Constellation Software. We have Dexter Salna, who is the Co-CEO of Perseus. Jeff Bender, who is the CEO of Harris Computer Systems. Mark Leonard, who everyone knows is the President and Founder of Constellation, and Damian McKay, who is the CEO of Vela. I think I caught everyone, Larry, so I'll pass it back to you. Thank you very much, John. I think so, too. Thanks for noting that Will and Howard are joining us. I'd like to reintroduce them to this group. They are joining us now for the fourth year of moderating the Constellation Q&A. Howard was an equity research analyst at Veritas Investment Research from 2016 to 2022, covering Constellation. Last year, he moved over to his current position at Veritas, and his team has been a shareholder of Constellation for nearly 10 years. Will has been an analyst with Ruane Cunniff for 13 years and a shareholder of Constellation since 2014. I joined the Constellation board in 2017, became Vice Chairman of the Board in 2019. I've been a shareholder about that time. To repeat a little bit of what Mark Dennison said, because I know a lot of people joined after he outlined the structure of the meeting. We received a record number of questions from you this year from a diverse group of shareholders. We've edited those questions, trimmed them, and condensed and consolidated them to avoid asking duplicative questions. We've edited for style and efficiency. Really, we wanna deliver substantive answers. We'll try to get to all the questions. We've designed it to enable that. We have done so in the past, but we can't guarantee it. Also, if you put in a question, you hear one that rhymes with it but isn't written exactly the same way, attribute it to our effort to get to the substance and get the questions answered in the most useful way. Because of the volume of questions when we were pressed to try to trim, we may skip questions that were asked last year in the interest of time. Ideally, we'll get to all of them, but if we had to cut some, it'll be questions that were just asked last year where we don't think things have changed. As Mark Dennison said, as in previous years, you can use the Q&A function, and we'll consult that throughout the meeting and weave questions in. We have not shared as in past years, we have not shared any of the questions with the panelists, except a half dozen or so that require homework, computational numerical information that we sent to Jamal ahead of time. We collated the questions into nine categories, so we'll have nine rounds of questions. Three posed by Will, three by Howard, three by me, taking turns. Those topics are first up, operations, internal and external. Will will start with the internal. I'm sorry. Will will start with the external. Will will go to the internal. Next up will be spin-offs, which I'll lead, large acquisitions, which Will will lead. We'll turn to financials that Howard will do, followed by two segments on M&A. The M&A environment, which I'll handle, and M&A process, which Will will handle. Second to last will be governance led by Howard, and we'll close off with learning that I'll lead. Welcome again, everybody. Let's start this morning's questions with Will Pan on operations external. Thanks, Larry. It's an honor to participate in the meeting again this year. I look forward to learning a lot as always. This first set of questions is about operations, particularly with respect to external stakeholders in the external environment. The first one, just to lead off, is how does Constellation or perhaps really the groups or business units think about and/or track customer satisfaction? I can start if you want. Our preferred metric is NPS, Net Promoter Score. We typically would encourage our business units to be the ones who would obviously go out and do it. I would say we use some quarterly tracking where I would review, and then other senior executives would review the NPS scores by business unit. We don't really look to calculate a Harris overall score. I don't think that's super meaningful now running over 100 business units. Basically, we sort of push it down to the business unit. Actually, our preference will be actually at the product line level within a business unit. Again, different groups measure it differently. Some measure it sort of quarterly, some measure it annually. I would say our most preferred metric is using NPS. A few other hands. Does anybody else wanna chime in? I can throw, you know, a pitch in. I was just gonna say, really, we really leave it up to the business units to measure that. You know, each unit has sort of different perspectives on that. If you're going to enterprise customers, for example, you need to talk to many, many people inside that organization versus if you're selling to, you know, point solutions, potentially you're just sort of talking to one individual. It varies by business unit. We don't have any overall Volaris per se way of tracking customer satisfaction. Great. A somewhat related question is, how should we assess the durability of individual business units? Mark Leonard shared in past letters that the average customer relationship was about 2five years. Now, this is a live question. Is that the best indicator, the average customer relationship? How do people think about that? This is Dexter, and it varies, you know, by, you know, customer type. The bigger and, you know, software type. Obviously the bigger customers are more stable and stay longer. When you're selling to real estate agents or individuals, you tend to get a lot shorter customer lifespan. You also have more customers that you can get. There's a larger churn in those. You know, typically, if you have a mission-critical back office software and you treat your customers well, you'll have them forever. In fact, I started out with Volaris in the first acquisition. I imagine that some of those companies that were there that I had negotiated contracts with, you know, some 28 years, 30 years ago, are likely still customers. Great. Some investors fear the obsolescence of your products, that they're being bypassed by fancier new software. Most of your companies were created more than 20 years ago. Could you give us a technical or semi-technical description of how the technology stack of your acquisitions has evolved over time, going from technology from perhaps the 1980s in some instances, to something built now probably on average around 2015? How do they stack up against the competition technology-wise? It's Barry Symons. I can start with that. Obviously it's all over the map. We have within Jonas, 130 something business units, and some of them are on very modern technologies that were built in the last couple of years. Others were built, many years ago. I think what we really need to focus on is the attrition rates in the individual business units and the competitive landscape in the individual business units. In vertical market software, every vertical is different and you have to be competitive in the vertical that you're in. In some verticals it's hyper-competitive, in other verticals it's less competitive. Some of the deep enterprise software type, products that we have, where it's very, ERP-ish and covers all kinds of aspects of the customer. The features and the functions and the way it interacts is sometimes more important than the technology it's written in. It really is all over the map, but I think you really just need to focus on each individual vertical and make sure that you're competitive in that vertical. That's the way I can describe it. Anybody else on that one? How the technology stacks or the various individual units may have evolved over time. This is Mark Miller. I'll just throw in that one of the, one of the things our, you know, our better businesses are doing is even if they have an older platform, they're slowly renovating that platform over time. As was suggested earlier, you know, we have these customers for a long time in some of our verticals, and it allows you to slowly plod away at that. You know, you can sort of evolve the product over time to accommodate technology as it changes. It usually doesn't happen overnight. It's really just a question of, you know, slowly marching along like a turtle and keeping enhancing and evolving that particular technology over a long period of time. That dovetails with our next question, which is how should we think about. Maybe I could interject and talk about one of the board processes we have. Implicit in that last question was the concern that we get blindsided by new technology, that we won't see it coming. What we do each quarter is we profile a venture-backed vertical market software company that has done well. Through that process, we can get a sense of how they penetrate markets, what the economics of what they're doing are, what underlying technologies they're using, and the advantages they have versus their incumbents. I think we've done eight, nine of those so far, and we do one a quarter. We're doing AppFolio, for instance, this quarter, which is a stunningly attractive property management software company that penetrated a relatively mature market and did so in a very economic fashion. We're not blind to technology or to new approaches, and we try to learn from them. Great. A similar question is how we should think about your R&D budget and how much you spend on maintaining products like Mark Miller was saying and versus innovation. The R&D process evolves. You apply new technologies, new best practices, R&D as a percentage of sales has b een stable at around 14% since the IPO. Why is this the optimal number? I mean, I could comment on that one. Mark Miller. I would suggest that when I look at that across our businesses, I really don't extrapolate much from that number. I mean, it can vary. You can have a lower percentage and actually have a much better R&D group and better associated organic growth with what that business is doing than some that have a larger percentage of R&D. I don't find that number particularly useful. You know, I'll leave that to others to comment on. Looking at the consolidated one across all of our businesses isn't helpful at all to me. I like to look at it individually and see what's happening. It's usually a quality versus quantity thing when you're talking about R&D anyways. This is Dexter. I just wanna add to what Mark said. I think what happens, Will, is that, you know, when we went public, I forget how big we were, but the bigger you get, you know, the law of large numbers, it averages out to the same thing. I wouldn't be surprised if that stays the same forever. I really appreciate that you used the law of large numbers in the statistical sense. Next questions have to do with inflation. How is inflation impacting daily business operations in the past year and as of late? Yeah, Will, this is Robin speaking. We clearly have inflation, and I think there is especially from a European perspective, there's a huge difference per country. There are countries with high rates of inflation, there are countries with lower rates of inflation, you cannot draw one single conclusion. That's one. We think that, you know, inflation is something not caused by us, and in many of our contracts, we have clauses for it, we translate it to our customers. We need to do that because some of our suppliers do the same, and we have to pay our employees as well. It's a balancing act and it differs per country, it differs for each situation. It's definitely something which was on the radar screen for coming up last year. Yeah, Will, it's Jeff. I would say I would agree with Robin. I think you see it sort of in a couple different ways. You see it definitely in wages and compensation for employees, which obviously is the largest portion of our expense base. You also see it in travel costs. I think, as we're now sort of moving out of the pandemic and a lot of us are sort of back to much higher levels of travel, you definitely see it in that part of it. I would say, you know, we've had some challenging negotiations with some of our larger tech suppliers, I think who are also looking to push through larger increases. I would say those are, I'd say, the three main areas where we see it. I think the counter, as Robin spoke to, is really adjusting through our pricing to make sure that, you know, we understand the impact on our margins and make sure we're managing our margins going forward. This next question is about pricing. You often use the phrase mission critical to describe your products and say they make up a small portion of customers' costs. Your customers generally have low churn and use your products every day. Organic maintenance revenues in the past two years have grown less than cumulative inflation. How do you reconcile the two? Perhaps you have less pricing power than the phrase mission critical might suggest. This is Dexter again. I would say it varies by business unit and by contracts. Sometimes you'll have these very large customers that have, you know, contracts that limit the amount of increases. Also it's the managers. Sometimes the managers are on the customer side, and they don't wanna give them an increase that equals or exceeds inflation, especially since we've gone through the last decade or more at kind of, you know, 2%, 2.5% inflation. To go and all of a sudden give your customer a, you know, 10% increase or 8% increase, I think it's just a human thing that they don't wanna do it. They just have. You know, I press a lot of my managers to at least keep up with inflation, you know, try to limit. Also if they're not going out asking the customer for more money, it's hard to justify to give your employees inflationary or extra inflationary increases. I hope that answers the question. Great. Moving along. The company disclosed a cybersecurity breach recently. Last year, it was mentioned that cybersecurity was an area that had to be more centralized than others. Despite your best efforts, what internal controls were missing, and how do you deal with angry employees and/or customers that may have had their data compromised? I can talk to, at the Constellation level. It's still a very decentralized organization from a cyber perspective. The one system that was impacted, per the press release, was a financial reporting drive or network that was at head office. We're still in the process of identifying all the impacted employees, et cetera, and we're in the process of notifying them. There's not much more I can discuss other than what's on the in the press release. When it comes to customers, et cetera, like, again, each of the operating groups have their own cyber or controls, et cetera. Again, this was a limited impact on a financial report, internal financial reporting system. Thank you. Yeah, this is Robin. I think cybersecurity has been definitely on our agenda over the last year. I think we made huge steps. We got help from an expert in this field. As mentioned by Jamal, it's still decentralized. We share lots of learnings, and we monitor it very tightly. It's absolutely an important topic. I think we still do this in the way we used to do it in our decentralized model, getting step-by-step more professional. It's a process. It's for companies we acquire, and we onboard, until the more mature companies we have. I think we're making progress there, but it never stops. You have to continue doing it because there are always new things popping up in the outside world. It's a continuous process, and we spend lots of time on it. Great. Last question in operations with respect to the external environment. Some IT related companies and software companies are warning of slowing demand right now. Are the operating teams seeing reduced willingness of businesses to spend on IT? Any other feedback from the businesses on the current macroeconomic environment? It's very. I can start with that, Will. I mean, obviously, again, unfortunately, it's business by business by business because there is no one overarching theme in any of our businesses. So far, if I had to take an overarching stab, at least within the Jonas Group, we haven't seen a material decline in demand. I can point to certain businesses within Jonas where, yes, it has happened, and I can point to other businesses where it's gone the other way. I would say overarching, I wouldn't say there's been a material shift so far. We're keeping a very close eye on it. We're obviously, you know, very concerned and want to make sure that we're always watching what's going on the macro environment. That's about the best I can do without going into each individual business. Great. Howard, over to you. Thanks, Will. Like Will, I'm also happy to ask questions again this year and learn from the panel again. My questions are also on operations, but more internally and even between groups. The first question is open to the group, and it's more of a philosophical one too. Decentralization has many positives, and it's part of the Constellation model. In your experience, what are some of the negatives? I can take that one, Howard, to start off with. I think the biggest challenge with decentralization is the leaders of the businesses have to be empowered to learn because you have high expectations for them to be constantly learning from each other and gathering best practices because we sort of lay them out there. Whereas you're in a centralized environment, you're more able to force-feed people with specific processes and ways of doing things right through the system. I'd say in a decentralized environment, there's a lot of requirements for people to find their own mentors and learn from each other. I think that's one of the challenges, because sometimes you'll see some leaders just take off and they do really well and transfer that those best practices into their businesses. Others struggle, the ones who aren't willing to go out and absorb all that information. That's, you know, hard for us to control when you have so many business units all around the world. I'd say that would be my biggest concern from it. I love the, obviously, the portfolio side of it, where, you know, you don't have any single points of failure. That's a positive. Yeah, Howard, if I was to add my two cents, I think I would say cooperation and collaboration sometimes amongst the groups, the businesses can be a bit challenging. Not that they don't want to work together. I think actually in most cases, they do. When you're looking to align priorities amongst differing businesses, and you want those businesses to be accountable for their results, it's often quite challenging that my number one would be the same as Mark's number one, right? Again, then, you know, because we don't force them to do things, you know, finding an equal number one can often be challenging. I think it can be frustrating, sitting where I sit sometimes that you see an opportunity that you think could do something, but it can be challenging to get those businesses to try and work together. Again, you know, you persuade, you educate, you do those things. Fundamentally, we do leave those decisions up to the businesses. I would say that to me is one of the downsides of our decentralized model. Yeah, thanks for sharing that. Maybe this question is related to the one about learning, actually. Can you discuss how you cross-pollinate best practices across business units and verticals? Maybe I'll start with Jeff, since you discussed it. You know, how do you cajole or how do you encourage it? How do you encourage the groups to do that? Yeah, I think the best way I still think is more face-to-face communication so and interactions amongst different leaders and employees. I think obviously the pandemic slowed us down a little bit on that front. If I look at across the Harris organization over the last quarter, there were, my gosh, quite a few in-person leadership meetings. I would say, you know, the one underlying theme or foundation for all of these meetings is best practice sharing. I myself was over in the U.K. We had brought all of our U.K. employees, which you know, for us is still relatively small. Like, we had 350 people together. I think there were nine different business units. Then we basically built an agenda all based on best practice sharing. Again, the leaders from the businesses that we believe are executing and delivering on the best practice then share that with all of the other attendees from all the other different businesses. We'll also ask other Constellation employees to come over. Again, if I think Barry is doing a great job on one of the best practices, I might ask someone from his organization to come over and share that best practice and their experiences and their learnings with our leaders. I'd say that's probably the. We do that a lot. You have, you know, hundreds and across Constellation, thousands of employees partaking in these best practice sharing sessions. At Harris, and I think some of the other groups have similar systems. We have what we call the Harris Hub, which is sort of, I think of it as a SharePoint-like site that is organized and basically brings all of this content together in videos and articles and artifacts that any employee can go and access. You know, really they get two benefits. They get access to the best practice, so they can learn something about it and how it was executed. They also, more importantly, get the names of the individuals, of the people who produce the content, so they can now go and follow up with those individuals and try and sort of take that further and obviously sort of tailor the best practice to what their specific instance is. I'd say those are the sort of the two main ways that we're going about it. Any other groups? Yeah. Howard, Robin here. When we joined as TSS, now Topicus.com in 2014, I visited many of the academies of the other operating groups, and I had access to all the people here in this panel, and I worked closely with Mark Leonard, and we tried to more or less push that down on to different portfolios, to different business units, and try still to encourage what I did in 2014, that everybody's still doing that these days. You know, there's the help for the other groups. People from Topicus go to the academies of other operating groups. I think that's very stimulating and helpful, and I still consider it as one of our strongest points as a group. That learning experience, very powerful, and we continue working on that within Topicus itself, but also in the broader ecosystem of Constellation. There are many ways to do it, and we try to experiment and evolve, but, it's constantly on the agenda and I think I could just add to that. I think, one of the things that we try to do is have people kind of wear their numbers. I'm a big fan of leaderboards and making sure that, you know, when you show up at an event with your name tag, it has your numbers on it. You know, if people don't wanna strive to improve their numbers, you probably have the wrong leader inside of that business. You should then go find the people who have the good results and ask them what they're doing as well. It helps guide them to which best practices they should follow. It's one of the ways we try to approach it at Volaris. This is Dexter again. I just want to add another thing is any time you do an acquisition, you also have to look at the practices of the acquisition, sometimes you find kind of best practices there. So always your book is expanding and it's also noticing what other companies have done well. I think, you know, from my perspective, most of our best practices have come, you know, from these businesses that we've acquired, not from our intellectual superiority of, you know, trying to go and determine what is the best thing to do. That's a great comment and kind of always staying humble and open. On kind of best practices again, this one's addressed to Mark Miller. Quadrants, which was the Volaris VMS conference, happened last year. The shareholder's asking, it got participation as well from head office and other operating groups. Seems like it was a lot of fun. I also read an article about it. It seemed pretty fun. Can you quantify its benefits and, you know, talk about the in-person nature of it, this that happened last year? Yeah. It was the largest event we've ever run. We had about a little over 1,100 of our team show up in London, and we basically rented out a whole hotel for four days. We ran approximately 1,600 sessions. We had over 100 conference rooms, and each session was about 45 minutes long. People kind of pick what they'd like to attend. I call it professional speed dating in the sense it gives you a chance to meet someone, I think Jeff referred to that, who does something in one of those 12-person sessions that you'd like to learn about. One of the things we, when we surveyed the event afterwards, it was really looking at how many new people did you add to your professional network. Which is again, as Jeff was suggesting, is really the key thing here, right? In a decentralized environment, as I said earlier, you kinda gotta find your own mentors or people who can help you with specific things you'd like to learn, and Quadrants provided a terrific platform for that. Yeah, we're planning another one for next year, do it sort of every two years and kinda ramp up the size again. I think it was a fairly successful event. Very little lectures, almost no lecturing, all small 12-person meeting rooms for 45 minutes was the formula which I really do like. Yeah. It gives everybody a voice on the table, and it's easier to learn as well. The next question talks about the attrition at the PM level. CSI's long-term success seems to be driven by its ability to retain and motivate top-performing talent in a highly competitive market. Is this becoming more difficult, particularly at the PM level? Can any operating group managers share some statistics on unforced attrition across their businesses, particularly among PMs and BU managers? I can speak for Perseus. Daniel, I would say we've had virtually no attrition at that level, at the PM level. That was, you know, other than retirement-related. Would you say that's unique to Constellation's model, the incentives, structures or what do you think some of the reasons for that are? I think the portfolio managers in our group feel a strong sense of responsibility and ownership for the collection of companies. They're typically overseeing, you know, maybe three to ten smaller business units. They probably came from one of those business units. They may have a stronger affinity to that business or vertical that they came from. And they're serving as a coach and mentor for the other businesses, which ties to the last question about dissemination of best practices. I think it's one of the strong ways that we do it, is, you have a portfolio manager who's worked in a business, has now acquired and seen other businesses succeed or fail in certain areas, so he or she can share those practices. I just think with that type of role, there's a sense of ownership, accountability, responsibility, and yeah. We haven't. I see a pretty high level of satisfaction among that group, probably for those reasons. Yeah. Maybe to add to that, Howard, I see the same. I think Mark described it once in one of his shareholder letters or President's letters, they're called. You know, you run your own business unit. You start coaching the second or the third, and slowly over time, you build a portfolio. You move into different verticals. You move into different countries. You're getting involved in M&A. You're still involved in operations. You learn yourself. You can disseminate learnings. It feels like your own company. You know, I think it's pretty close to what some of the textbooks call entrepreneurship or whatever you want to call it, but I think it's getting pretty close. And we have the same, like Daniel just said, is very, very low attrition. I think one guy left out of I don't know how many portfolio managers over the last few years, within Topicus. I think that's due to the reasons Daniel mentioned. I just added to it. Yeah. I can see how that'd be pretty powerful. The next question is also about attrition, but at the M&A personnel level. This shareholder asks: Would you agree that there has been an increase in the number of M&A personnel leaving CSI, and has that increased in recent years? If I were a mid-level M&A employee at CSI who joined five, 10 years ago, would I be better off staying at CSI or moving to private equity or going out on my own, especially given that CSI stock returns are unlikely to mirror the past? Maybe a bit of a deeper one to think about. I can start, Howard, if you like. It's Jeff. I think at the Harris organization, we have definitely seen more turnover in our M&A function for sure over the last few years. I think it's a combination of a much more active market. We have been hiring a lot more people. I think those two combinations are sort of coming together. Most of our turnover actually is not on the M&A portion of our business, but I would say more on the business development portion. Again, we've been building out that part of our really professionalizing and building that out, and we've definitely had a lot more turnover there. Again, there, I think, again, it's a competitive market. I think it's taken us some time to figure out the right type of professional that we're looking to hire to match them into what it is we're trying to do. I think, you know, we need to own some of, some of the turnover in terms of we just weren't hiring some of the right people. You know, I think the second part of your question, I mean, I think you're asking the wrong audience. I think most of us at Constellation would say that you'd be much better off spending your career with us. I think, you know, the learning, the growth, the opportunity far outweighs anything you're gonna get anywhere else. I think obviously compensation needs to be part of that reality for every individual. I think obviously that becomes very different now depending on what, you know, what each individual is looking at. There's no question. You know, a financial success at Constellation is definitely time-based. I think if you're not willing to be part of what we're trying to do over the long term, and you really want quick short-term hits and short-term pops, I do think, you know, that can often be a bit more challenging for us to deal with. I think over the long term, I think people who have stayed with us have been very happy with what they've been able to do to accomplish both personally, professionally, and financially. There's probably other areas for get rich quick schemes. Maybe the next set of questions concern competition between business units or cultural differences. The first one is about asking how do you handle the cultural and management challenges associated with buying a mixture of shrinking and growing businesses? I know they're run separately, but, you know, is it, you know, when you're trying to cross-pollinate them, is it more sensitive or tougher to do when you're mixing the two, or does it not really matter? I can start there, Howard. You know, it is sometimes a challenge, but I think we spend a lot of time talking about, you know, running your businesses optimally based on where they are in their life cycle. We wanna have the candid, honest conversation about where every business is in its life cycle and making the right decision for that business unit. Unfortunately, sometimes we end up with businesses that are quote-unquote, "Past their prime," and it's difficult to justify a major rewrite of that product. We gotta have the honest conversation with the people in that business and talk about, you know, what we can do with that business on a go-forward basis. There's still tons of opportunity to do things with those businesses. For great people, there's no shortage of opportunities within our organization. We quite often will take people from, you know, one business to if they're looking for a different trajectory. You know, it's managing each individual situation, to the best of their ability. It starts with having the honest conversation about where your business is, and we try and do that. You know, I'm sure we're not perfect at it, but we try and do that with every one of our businesses, and I think it's generally well-received. Maybe one about the to Robin. This one question was posed to Robin specifically. Do any of your TSS holdings compete on the ground with any non-TSS CSI holdings in any capacity? I guess, for customers or M&A. If so, which ones? And if so, how do your companies handle that? To get it right, Howard, do you mean competition within Topicus or TSS or within Constellation? Can you rephrase? I think the competition between the TSS or Topicus entities and non-Topicus, but within CSI entities. Asking about competition between the, those, particular views. Okay. You asked that question particularly for Topicus because we did the spin-out. I think so. I think that's what the questioner was trying to get at. Okay. Yeah, that's clear. Okay, I understand your question. Thanks. Although we did a spin-out, and you could say that's maybe the most extreme form of decentralization, we're still part of the CSI ecosystem. In that perspective, related to your question, there is no difference between Topicus or one of the operating groups. I think all the other operating groups like Topicus are ambitious, want to move forward. As just mentioned before, we help each other exchanging best practices, but everybody is trying to grow. Might have different strategies, there is no unique position from that perspective related to Topicus. Did I answer your question? Yeah. Yeah, you did. Thanks, Robin. That's it for the internal operations. I'll turn it to Larry. Thank you, Will. Thanks very much. The next segment is spin-offs and related matters. We got a very large number of questions on this topic or these topics, but the number of themes was a little smaller, so I think we're able to boil it down to about a dozen questions. We'll try to sort of go from general to specific, but I can't promise exactly that linearity. Some of these questions are directed to particular people who've been involved or led these, such as David Nyland, we'll hear from Robin again, Mark Miller. We'll start with Mark, I guess. Here's the question from one shareholder: Can you comment on the trend of more vertical/geographical focused brand names, for example, Lumine for media and communications, Modaxo for transportation, and Vencora for financial services? Yeah, I mean, it's. What we're basically trying to do there is just really give the whole team inside of the companies that are within that vertical, a focus on thinking beyond thinking that the next company and how well it would fit in. It helps communicate potentially with a company we might be considering, investing or bringing in part of the into one of those particular branded verticals. I think it's been helpful from that perspective. With Constellation's growth and size and Volaris- I think it allows the team in that business to have a real focus on what they're trying to do, and I think that's extremely helpful. That's been primarily objective, Larry. Well, thank you. just more broadly about spin-offs. This question was asked quite a few times. The simplest way to restate it is: Can you share or remind us of the conditions that are necessary for a spin-off to take place at Constellation? People mentioned things like the acquisition of a high quality business, minimum revenue, minimum size, vertical offerings, further acquisition and investment opportunities. can you share the basic conditions? That's for anyone, but maybe for those who have done it might be able to speak to it. Yeah. I can speak to it, Larry. It's just what we've been doing. In our case, we had TSS and Topicus. I think Topicus was a very interesting business, growing relatively large. Due to the spin-out or the spin-off concept, we were able to make a deal with them, not just from a transaction perspective, but also to find long-term partners. I think there are a lot of elements to it. Like you mentioned, a few of them, you know, a larger sized transaction because it takes a lot of work. You're listed, requires something as well. In general, there are larger transactions, high quality businesses, and preferably where we look for partners, for the long term, because that's one of the cornerstones of our philosophy. Yeah. So far, I think it worked out. The second has been done now, but it's not for me to talk about that one. Did I answer your question, Larry? You did. There's a little bit of a follow-up, I guess, to flip it around. One of the questions was: Why not make all the operating groups or each of the operating groups a standalone public company? What are the constraints? Well, I think that's one for Constellation is to answer for Mark Leonard, I guess. You know, in theory, you could do multiple spin-outs because the concept works. As I mentioned, we're still part of the ecosystem, and it's the ultimate form of decentralization. It enables us to get partners on board to build great businesses. There are different sides to it, two sides. You know, it's for us as Constellation or in my case, Topicus, but I think also for the partners joining us. Yeah, I think there's really one plus one, you know, maybe not textbook three, but definitely more than two. I think that's definitely there. I think it's an interesting instrument, not for each situation, but you could do it more often. I still think you could end up with. We have two now, but you could end up with more. Well, another question- I think I could. Oh, go ahead. Yeah, that's it. I was gonna add to that, Larry. Just, I think it's really important that the team inside of that organization that wants to do that and understands what's required to do that as well. I think that's a very important part of it. I think that'll also be a factor that determines what actually could get spun out as well. Thank you. A very narrow question, I guess. One person asked: Can a spin-off help with managerial retention? Is it a way to keep talented people within the Constellation family? I would hope so, Larry. You'd hope so, because they're able to wave their flag in a, you know, in as Robin says, in the ultimate decentralized format inside of Constellation, so. Well, here's another question suggesting a different form of constraint on how many of these can be done. This shareholder asked: At some point, at some number of spin-offs, they suggest six, do you worry about the resulting complexity for investor understanding if spin-offs are fully consolidated into CSI's financials along with minority interests? I'll take a crack at that, Larry. The CSI financials for spin-off companies are very, very complex, and I think we can make them simpler and we could do some non-GAAP financial presentations. I've certainly talked to our internal reporting people about doing that. In investor shoes, I would anticipate that happening over the next few quarters. Thank you. This question's a little long. Couldn't really shrink it too much, so bear with me a little. It gets into the question of valuation. Bernie, you might add some value. It says Constellation has not directly used equity to make acquisitions, but at the time of the spin-outs of Topicus and Lumine, shares were issued to pay for acquisitions of Topicus and WideOrbit. When thinking about the value of consideration paid and the return on investment, do you use the nominal value assumed in the prospectuses, or do you assume a market value for the shares more in line with Constellation's public valuation? I'll take a crack at that as well. We look at the present value of the future cash streams of the business that we're selling a piece of, and value it with a similar hurdle rate to the business that we're buying. The natural step up that we get if we go public is the benefit that we then end up sharing with the vendors. One of the issues around these structured acquisitions/spin-offs is that we're also looking to invest cash at our hurdle rates in the combined entity. If we just shop the swapping shares for shares at their fundamental intrinsic value based on our hurdle rates, then there's no intrinsic benefit to ourselves. Thank you, Mark. Back to specific questions, starting with Robin. How does Robin or Topicus think about the potential use of Topicus stock to make further acquisitions? I think the benefit of being listed is that it provides optionality, and this is one of the options. I think we prefer to acquire companies, and like Mark just said with his story is, you know, we prefer to invest our cash. We generate strong cash flows, and the preference is to deploy that. But, you know, you have different options being listed. It's an option. We haven't used it. Our main focus is on deploying our cash flows. We have also access as Topicus to credit lines, which was announced end of last year, where we extended our banking facility. Our strong focus is there, Larry. Thank you, Robin. The next couple questions are for David. David Nyland, welcome to the panel. Congratulations on the investment you made, the spin-off that you're managing. The first question is the same question we just put to Robin. How would Lumine think about the possibility of using Lumine equity in its future acquisitions? Thank you. Happy to join the call. I think my answer would be very, very similar to Robin's. We're a very young spin-out. We have a lot of good free cash flow, and we ourselves will have facilities. Job number one is to deploy our free cash flow, use the resources that we have in hand. Wouldn't rule it out in the future, but it'd have to be something very strategic which would lead us in that direction. Thank you, David. Here's another nice question. A little intricate, but dovetails with that one nicely. The shareholder writes: Is Lumine's acquisition runway long enough in the communications and media end markets to continue to deploy all of your free cash flow, or would you expect to expand into adjacent areas? If you can say, which ones? Yeah. We've got a tremendous amount of runway in communications and media. Think of us as one of the younger portfolios, although we've spun out, we're really only 10 years into this. We're very, very big, lead database, a very active pipeline. If you were to take big verticals like financial services, healthcare, government, think of communications and media being in that list of the top verticals in terms of size. We're just getting started. I couldn't rule out in maybe 10 years' time, we need to look at adjacencies, but I can't see it in the foreseeable future. Well, thanks, David. Just a lot of people are curious about the background, the WideOrbit investment. How did it originate? How did it come to be? Can you share a little color on that? WideOrbit would be one of the larger assets that we would have been nurturing for a number of years. We've been somewhat active in the media space, but we haven't really bought or merged with, in this case, a very sizable platform company. WideOrbit was looking for strategic options. Going private themselves would have been difficult 'cause they really weren't diversified enough. Taking on more private equity money to create liquidity. They've been through that journey before, and it wasn't a pleasant one. Eric, who's the CEO of WideOrbit, is a student of our business community, so he's been studying CSI for a long time. He saw the Topicus spin out and how well that investment went, and it got to a point in our conversation where, you know, he wanted to see if we could get something done similar. That led into a process of ultimately valuing the businesses and Lumine readying itself, and the rest is history. One single decision maker on their side made a huge difference. That really expedited the process. Does that make sense? Yeah, it makes great sense. To what extent. He was familiar with the Topicus transaction. To what extent did learnings from the, you know, did you adapt your transaction based on learnings from the Topicus transaction? It's part of the reason why I put Robin on my board, to your southern joke, is we wanted to learn from the Topicus experience. There's a lot of great similarities between the way the Topicus transaction went down and the way the Lumine transaction went down. There was also a lot of differences. We had to basically disentangle ourselves from Volaris, from a legal entity perspective, from a business systems perspective, and we had to create audited financial statements as if we were an amalgamated business for a few years when we really weren't. That was a lot of additional challenges to work through. We weren't really a stand-alone operating group like TSS was. We were a portfolio within Volaris. There were some very unique challenges there. We took the learnings of what went well with Topicus, some of the challenges they had, tried to avoid the challenges they had, be more proactive in some of those areas. We had a whole list of stuff that was very, very unique to Lumine. A couple of questions have come in, the chat. They dovetail with some we got ahead of time. Here's putting two of them together. One says, in the press release announcing your investment with WideOrbit, Mark called it an extraordinary business. Do you agree? If so, how so? Another question related, I guess, is, this is what it says. I'm just gonna read it, David. It says, "Is Lumine a good company? It seems tied to TV advertising, which is in secular decline." How do you assess those two points? First of all, WideOrbit is an extraordinary business. To do a spin out, I think you need to find an extraordinary business because you wouldn't otherwise be able to acquire that business in a traditional sense. There needs to be the concept of a rollover for significant shareholders that have an interest in staying and going for a journey with a Constellation spin out. WideOrbit fit that profile very, very well. They're extraordinary because they have great market share, good profitability, high levels of recurring revenue, and a great management team, and a strong organic growth track record. Very low attrition, I should say. All the qualities we look for, and also low customer concentration. Advertising spend in linear over a century and a century in front of. Over a century and a decade in front of us, it's been declining, but at an extremely slow rate. Those customers are also participating in digital. They're launching over-the-top channels, patch channels, and there are large digital platforms that need ERP software as sophisticated as WideOrbit. WideOrbit won a large contract last year with Amazon to do Thursday Night Football, as an example. As you can imagine, the ad spend, the quality of the ad spend and the value of the ad spend going through that platform is very significant. Requires very sophisticated traffic management systems. I think there will be some decline. I think their customer base will move to digital, and I think there'll be large digital platforms where WideOrbit will be well-suited to gain market share. Thank you very much, David. A final question for you coming in from the chat observes that Lumine's acquisition investment size seems to be higher than the average investment or VU that other Constellation units, portfolios acquire. Is that true? Why might that be? Is that something you're looking for or just the opportunity set that you're seeing? Yeah. We see three personas. We see the owner/operator persona. A lot of our early acquisitions. We see the private equity sale, we see corporate carve-outs, and we've done a lot of corporate carve-outs. With the private equity sale, where we're quite well known now to the brokers worldwide because we're very, very focused on this vertical, we're gonna see a lot of private equity deals. With the amount of time we spend nurturing the relationships with the corporates, we will continue to see carve-out opportunities. The private equity sales and the carve-outs just tend to be larger assets. We will continue to focus on the owner/operator persona for sure, but I think we, you know, probably see more private equity and carve-out deals and that's the reason why our average deal size is a little bit higher. Excellent. Thank you very much. Unless one of the managers wants to say anything further about spins, those are the questions we had in that category. If anyone would like to round out the topic. Incidentally, we now have 650 people in the meeting, which is a record. If we've exhausted that topic more or less, we'll move along to the next segment, large acquisitions. Will, back to you. All right, thanks. First question about large acquisitions is that the CSI board lowered the hurdle rate for larger acquisitions a couple of years ago. Did this action favor or enable the latest big acquisitions like Altera from Allscripts or WideOrbit, among others? Yes, certainly it's Bernie Anzarouth. It certainly did help us get to close the larger acquisitions. We're being invited to more and more of the larger businesses so that we can at least participate in looking at them and going through diligence. Certainly at the high end of the market, we have a lot of competition, and so those prices are still very much up there. In the last year, we've seen them deteriorate a little bit, which is good, but they're still very, very high. Certainly lowering the hurdle rate for those businesses has helped us access a few of them. Great. Thanks, Bernie. The related question, which is, the shareholder, we recall hearing some time ago that the participation rate of CSI in large transactions was around 16%. Do you have an update that you could share? We're not ready to share those, that kind of data just yet. Fair enough. How would you rate at this point your success in sourcing larger acquisitions? Is one large investment annually success, or would you like to make more? You know, it's very hard to predict where we'll be able to succeed. As I said earlier, there's a whole lot of competition coming from strategics, from private equity. Just the fact that we've been able to get out there and get our name known amongst the investment bankers that broker these large transactions gives us a leg up from where we were years ago, where they wouldn't give us the light of day. Today, we're doing much better in that we're able to see more of them, for sure. Our participation rate has increased, for sure. Whether or not we close them, I'm not going to compare myself to ourselves to one a year or anything like that. It will happen when it happens. Great. Then in terms of, you know, the how they've done so far, how have the larger acquisition cohorts, and this question specifies greater than $75 million of enterprise value, performed versus other size cohorts? Is there anything notable to call out there? How have they done financially? How have they done? I'm guessing that's what the question is. Throw it out to the other guys who've done them. I don't really think we can compare the acquisitions that we've made to the cohort of large businesses outside of our company, really. I think this is internally, versus other sizes. You know, you did say that lowering the hurdle rate for larger deals did help, so that would imply that they've been a somewhat lower IRR than the smaller deals. I suppose the question is, A, specifying an enterprise value greater than $75 million. Not sure where the cutoff is there. You know, just a little bit more color on perhaps how they've performed. I'll let the other operating group managers answer those questions. Well, we track our investments small, mid-size, large. We track them all. Without going into the details, I don't see any deviations related to our hurdle rates for those sizes, which would imply that the larger ones do fine, as the small ones, as the medium-sized ones. We don't see any particular deviations there. Are you saying that, they're basically close to the hurdle rates that you set for various sizes or that, they all return about the same? We use hurdle rates for particular investments. I think that's where we rate ourselves on and if we make them or not. It looks like we make them for different types and different sizes. Okay. Does any operating group manager have a different experience across sizes? Okay. I've got a question here. Are there significant lessons from Altera or other larger acquisitions that make you more or less confident about generating attractive returns in this area, large acquisitions in the future. I would like to hear from some operating group managers other than, and then Jeff at first, because Jeff has a couple questions that are specifically asked to him in a bit. Others that have done larger acquisitions, any significant learnings or lessons on how they sort of flow through to your confidence about doing more? I mean, I could just throw something simple. Mark Miller here, just, I think, it's, you know, One of the things we've learned is just to spend more time driving best practices down because there's more levels between, your, you know, your the person who's helping bring that company, the best practices we have to drive them down through multiple levels of the organization. That's just one of the things that we're implementing. It's definitely doable. It requires more focus on that than when you're acquiring a smaller business. Makes sense. I could add a little bit if you want. It's Barry here. I guess one of the things that we've experienced is ours have been corporate carve-outs, there's always a bit of a difference with a corporate carve-out than there is with an owner-operator. It's a, you know, it's a unique situation. The transition into our group is generally a little bit harder, but if you know, focus on it, you can get the results you need. You just gotta go in knowing what needs to get accomplished and making sure you have the right team and the right people on the implementation side to get it done. That's been kind of our experience. Great. Now maybe Jeff. Yeah. I think when it comes to larger, sort of maybe not speaking to Altera specifically, although it would fit into the same category. I just think the larger the businesses are, the more opportunities there are to do things. You know, to Mark's point, whether there's more opportunities to leverage our best practices or just, there's just more levers to pull within the operations to help us get to or exceed the hurdle rates that we model. I find sometimes in smaller businesses, you have a couple, and if they don't work out exactly as you had intended, it can be a little bit more challenging to find other ways to get there. I find with the larger ones, there's just, there's a lot more, and then the magnitude of what you can do when you put the best practice through tends to give you a lot more return as well on the, on the larger transactions. Great. The next question for you is, could you discuss the expected and unexpected delights and difficulties of integrating and operating a comparatively large entity such as Altera from Allscripts? How is it progressing relative to your investment thesis when you acquired the business? That seems like a bit of a loaded question. I mean, I think there's lots of things that have gone better than we had hoped. There are quite a few things I think that, you know, we maybe we didn't understand as well as we should or that are definitely taking longer. I think, to focus on the positives, I think the leaders that we were able to move over from the Harris organization have been outstanding in terms of their ability to grasp hold of the business and start to do the things that we're doing to it. I mean, you know, basically we inherited one sort of Goliath business, we call it Altera, like the carve-out from Allscripts. You know, we now have turned it into 11 very focused business units, right, with their own, again, focus on, you know, product and customers and employees. I think, you know, that to me has been a huge effort, but I think it was the right thing to do, and I think we're now starting to see the benefits of having done that. I think, you know, the other positive is, you know, when you, when you acquire an organization with, you know, 5,000 employees, there are just some amazing talented employees in that organization, and I think helping them look at how to run a vertical market software business differently, has been again, very positive. Again, you know, they're embracing our best practices, they're engaging and again, trying to do things differently. Those have all been the positives. You know, I think some of the negatives are, you know, trying to change a globally based 5,000 person organization. Like, it just takes time. It's just, it's slow. You know, getting the message out and keeping that message going consistently is a bit more challenging. I mean, no different than, you know, the rest of our organizations, but again, you can't put all the employees in one room and lock the door and not let them leave until they've sort of you get everybody on the same page. Like, you have to do that again and again and again and again. I know our leader, Marcus Perez, is responsible for that group. You know, he just spent 22 days traveling the world, right? Just again, you know, showing up in different places, trying to make sure we get different employee groups understanding what we're trying to do and helping them sort of move forward through the, you know, the obstacles and the roadblocks. It's a lot of work. Getting out and seeing these customers, again, you know, you're not just getting on a plane and seeing four or five customers. You have to fly across the world to see these different customers. Again, it's just taking a little bit more time. Anyway, I think like anything else, you know, some of our choices I think on our, you know, still our relationship working with Allscripts. Whenever you have two very large organizations that are trying to do the things that they want each to do, you know, it can be challenging. I think we've had some challenges with them, nothing that we won't be able to figure out or work with. Again, we have good lines of communication when we have to have the right conversations, we're able to have them. I think I'm not overly concerned about that. Okay. It may be early to say, but with respect to the financials, there's a question that goes. Since you purchased the Altera business, revenue growth has underperformed Veradigm's guidance while free cash flow margins have outperformed. Is this what you expected? I think in the short term, there's just a lot of noise on the revenue side. Again, I don't get too fussed by, these monthly and quarterly variances. Again, you know, now that we've broken the business into 11 separate businesses, we're getting actual forecasts and ownership of these forecasts coming up. I think we're creating what we believe will be, you know, our revenues going forward. I think, you know, I'm waiting for those to come in, and I think that's what I'll be more focused on. I think, you know, on the cash flow side, I think you're seeing what you're gonna see with pretty much any Constellation acquisition, right? You know, we're very disciplined buyers and operators of these businesses and, you know, cash is king and, you know, we're gonna focus and make sure we understand, you know, where the cash is going and make sure that, you know, we're monitoring that, you know, from, you know, from the get-go. I'd say we might have more flexibility 'cause we own the business forever on, you know, where, you know, where the revenues are going. We, we are, you know, we pay very, very close attention to the cash flows of any business, particularly this business. Great. Last question in this section, has to do with pre-Altera acquisitions, in this arena, Constellation, I suppose specifically Harris in this instance, experienced customer loss in this area that impacted overall organic growth. Despite these headwinds, how have these acquisitions gone versus expectations, and what key ongoing learnings from your industry experience can you apply to Altera? I think healthcare in general, I think, you know, we got into it in 2013 and, you know, we've built obviously over a billion-dollar business in healthcare. Specifically, I would say that, you know, a lot of our earlier healthcare deployments were very good investments, not always great businesses. I think, you know, that to me is the reason why you would see lower organic growth or shrinkage when it comes to those businesses. I think, you know, from a learning perspective, I think we've learned two things. I think we've learned to understand the dynamics of healthcare specifically probably U.S. healthcare 'cause that's where most of the businesses are better. You know, the attrition profiles, the profit profiles, the customer profiles. you know, we're taking all of that learning into account as we continue to make investments. I think we're also quite comfortable with the life cycle and the returns that we can earn on these businesses and, you know, and we will not shy away from, again, making good investments. That again, on a piece of paper, if you wanna see, you know, 10% organic growth, you know, you may not see that from, again, many of the healthcare businesses that we buy, but we're quite comfortable they still all are very good investments. Great. Thank you. That concludes this section. Howard, over to you. Thanks, Will. Now I'm gonna move on to the financials, the questions on financials. A number of these questions, of course, are posed to Jamal, but there's also some to Mark Leonard and also the operating group heads as well. A number of these questions are, I think, from shareholders who are trying to understand some of the non-GAAP metrics, especially as Constellation's business kind of evolves. The first one is actually in the financial statements. Jamal, can you give more information on the equity securities held for trading on CSI's balance sheet? Yeah. I can't get into the details of what specifically that investment is other than it was a place to put cash in short term that would generate a better return than just holding it in a bank account. We're actually divesting some of that investment now, so there's nothing. With rates being higher now, is it easier to leave cash in the bank or still better in those investments? I mean, what's better to invest in is in acquisitions and that's what we're trying to focus on as opposed to keeping in the bank. Fair enough. This one is about disclosures of ROIC. Why did you stop disclosing CSI's ROIC in the management information circular? It mentioned in the last time was in 2021, where there was a ROIC of 29%. Because the numerator is no longer, it's a non-GAAP measure that we don't disclose. I didn't wanna go through a whole process of creating a disclosing a metric that we don't use in any of our disclosure anymore. It's a good one to jump in about adjusted net income versus free cash flows. This one is also open to the group, actually. All of you own stock in CSI. When you value the companies, and I'm assuming they mean for M&A, do you use FCF adjusted to shareholders or some measure that is more similar to the old adjusted net income for, I guess, valuation purposes? Why is FCF more useful than adjusted net income for investors? I can still talk to that. Like, the free cash flow available to shareholder metric starts with cash flow from ops. I mean, cash is what's key to us. I mean, the one argument or maybe you can talk to me about free cash flow available to shareholder metric that is, you know, it's not cash, would be the okay, the ERGA change every quarter. We need to do that because of the fact of accounting. The ERGA exists. We have to consolidate all of all of the Joday's investment in Topicus, et cetera. We're doing it to align our financial statements, but if you ignore the ERGA part, you're getting to a cash number, right? It is. We're deducting depreciation or investments in property and equipment. We're deducting interest expense, et cetera, right? All of our return on invested capital numbers when we are making investments is based on cash. That's the free cash flow available to shareholders supposed to be approximate cash. I think it's fair because that's what Constellation really cares about. There's also a few questions about free cash flow, so maybe I'll just go to there. One is about this TSS membership liability adjustment, so the IRBA adjustment. If this is a non-cash charge, why is it taken out of free cash flow? Is it just because of Constellation's conservatism, transparency or the shareholder asking, "Am I missing something? No, it really is because of IFRS, under the rules of IFRS, we are required to include Joday's 30% ownership of Topicus in ours because of the IRBA liability. If I'm going to include their cash flows in that number, then we needed to say, "Okay, well, what's the cost of including that to Constellation?" That's the additional cost each quarter of that growth in that liability. We're aligned from a financial disclosure perspective. I'll be honest, like, internally, when I calculate bonuses for CSI head office employees, we do not include the IRBA liability, but we also do not include the 30% of the cash flows of Joday, right? We're aligned from an internal reporting. That's why we put it in there because we're forced to include Joday's for external disclosure. Yeah, that makes sense. You're trying to align apples to apples. Maybe, also another one about related to Topicus cash flows, but also, I guess it would expand as other groups make more minority stake acquisitions. Have you considered disclosing the free cash flows for GeoSoftware, Signity and Subsurface so that Topicus shareholders can calculate free cash flows owned by minority interests more easily? I mean, we do disclose the portion that does not relate to the minority holders as a combined number. I mean, it's actually immaterial if you break the individual components out. I believe, yeah, I mean, I'm showing what the cash flows available to shareholders that does not belong to or that belongs to the minority holders in our disclosure. That number is there. Makes sense. I've gone a bit numbers heavy, so maybe I'll ask one, another one to take a bit of a break. This is question to everybody, all the operating group heads and people in M&A. Please provide, please provide an update on how you think CSI's financial model, or especially margins would evolve in a theoretical situation with no new deployment of capital and acquisitions. Have the operating group heads, have you looked at that? You know, what would it look like? I guess this shareholder wants to know. Yeah, Howard, it's Jeff. I mean, you know, we've talked about it conceptually. I don't think any of us have sat and built models that would contemplate doing that. Clearly, if we're not deploying capital, there's a lot of money that would be returning to the P&L that we're not spending on M&A and business development. I think at the same time, if we're not deploying capital, we're definitely probably more focused on organic growth. We're probably really digging into the businesses now and investing for future growth. I think, while I think the M&A spend would go back in as a positive, I think the investments in organic growth and higher R&D spend, perhaps that 14% that you quoted earlier might change. I think that would change. Again, I think you'd have pluses and minuses, I think, in terms of what it would be. I think, you know, theoretically speaking, we don't think that way, so I'm not really sure we could sort of say margins would go from X to Y. I think you'd have one benefit to margins, and then I think you'd have one, at least near term detractor. Obviously, over time, you would hope that organic growth would pay off with high IRRs and, you know, give you a return. Although if you're always investing, I don't know when that, you know, when that would actually settle through in improved margins. The question's kind of interesting because it assumes a steady state where there's capital. If it's not deploying acquisition, it's going to be deployed somewhere else. To your point, Jeff, it might be deployed towards organic growth, and in that case, maybe that will affect margins anyway. It is an interesting thought experiment, but maybe something that's not as relevant given that there are a lot of M&A opportunities. I'm going to have to jump back to some financialist questions. Actually have something on the chat asking Jamal this, what you feel about these questions on a scale of 1 to 10, but I'm sure that was more of a rhetorical question. There's a question about ROIC, disclosures of revenues and acquired revenues. This is just a shareholder maybe challenging the disclosure of the current disclosures. This shareholder says, "Shareholders should be able to monitor implied acquisition multiples from your financial statements because price matters. Some years you disclose revenues acquired. In 2022, you did not. Are the competitive benefits of not disclosing aggregate revenues acquired really worth sacrificing the ability of shareholders to make data-informed decisions? Do you want shareholders who think or those who are just here for the stock price momentum?" Sorry for the tone of the question. That being said, ex Altera, how much annual revenue did you acquire for $1.1 billion in 2022? I can't answer that specific answer. I mean, maybe Mark, I don't know if you wanna talk about this from a CSI disclosure perspective, but I believe we're providing the information that investors need to make informed decisions, right? Me adding what the multiple is we pay for the average number of acquisitions we made, I don't think is a key driver of the valuation of Constellation. I mean, you've also got to take into account then what amount of debt is there, how profitable was the company, what can you do with it, the shrinking growth. Like, I mean, just giving you a multiple of revenue is not a key driver, I believe. I don't know, Mark or Bernie, if you want to talk generically about disclosing multiples. We generally will not disclose those, that kind of information. There's so much competition that's out there. Any disclosure would just put us more on the defensive. There's just no upside to it. This question, kind of to Mark Leonard or John Billowits, but kind of even though I think everybody, you know, because a lot of the group managers are also on the board. What is your latest thinking about running with more CSI-level debt? I'm guessing there the question is excluding the non-recourse debt that groups take on. You know, the debentures, for example, you issued years ago, what is your thinking in terms of that level of debt? We're happy to use, debentures. We view it as very friendly financing, and so if we can raise more at attractive prices and deploy the capital intelligently, we'll do so. Yeah, that's fair. You know, another one, addressed to Mark Leonard. ROIC plus organic net revenue growth has been a relevant compensation metric for a long time, and I'm assuming they're referring to the chart that used to be in the president's letter, which added up ROIC and organic net revenue growth. Why should 1% organic growth be equivalent to 1% of ROIC? It isn't, and it depends very much on the particular economics of the business, but it's a rule of thumb, that kinda works for us. Ideally, 1% organic growth is worth more than 1% of ROIC when you're in a negative capital employed business. These are things that you can easily model for yourself, if you want to look at it. Yeah. Yeah. It just depends on how much is spent to achieve that 1% organic growth as well, which is a separate measure. That's it for the financials questions. Thank you, everybody, for bearing with those. It's over now, and I will turn it to Larry. Enjoyed that section, Will. Thank you, and thanks, Jamal. The next two segments are on M&A, mergers and acquisitions. The first segment is on the M&A environment, and the next section that Will will take up is on the M&A process. On the environment, and most of these questions seem to be offered to anybody. The first one, but maybe Bernie is the best synthesizer, but the first one is, what are you seeing in the M&A market today in terms of number of acquisitions, buyer-seller expectations, and so on, and how, in particular, does the current environment compare to last year or to, say, four years ago? Yeah. I think, despite increasing interest rates, our bread-and-butter type of acquisitions, we haven't seen any slowdown in the amount of competition that's interested in buying these targets. We know that prices have been creeping up for the last few years, and maybe in the most recent year or so, maybe they stopped going up a little bit. It's just such a huge range of pricing from bottom to top. There's still some frothiness for very high-quality businesses. People are willing to pay significant premiums, so that hasn't disappeared. On the very high end of target sizes, maybe those multiples have decreased a little bit, but they're still extremely high. There's a lot of dry powder that's out there. There are a lot of people trying to get into the buying VMS business. The competition has not gone away. Maybe some buyers have become more rational because they haven't seen the returns on their investments, but competition hasn't gone away. Any rising competition from the Constellation copycats? Several shareholders were interested in knowing, have you seen people trying to be like you, trying to emulate CSI, and are they succeeding in competing? Yeah, certainly. Over the last few years, these copycats have come up. I mean, all you need is a checkbook and a phone. If you're willing to pay more and accept lower returns, then yeah, you're able to compete with us for sure. That's not going away. I think maybe over time, some people might not see the returns that they expected going into the buying a VMS business. Maybe that'll go away, but I don't see that happening anytime soon. I remember that clip about the phone and the checkbook, but aren't there significant competitive advantages that this company possesses that a copycat simply can't replicate? Absolutely. I mean, over the years, we've learned so much about running these businesses and just the, the vastness of number of business units that we have. When we acquire these businesses and we get the management team to go around and visit other groups, other business units, to learn what we've learned over the years, it's a tremendous opportunity to learn from your peers. There's also the buy and hold mentality that we have. We, we do not sell businesses. For us, an owner operator who has spent years, 20, 25, 30 years building a business and cares about his employees, cares about his customers, they know when they sell to us that we're here for the long term. We're never gonna be reselling that business. Lots of upside of working with us for sure. Within that, well, several people also asked about what. They think you're doing a great job and expect that you'll be able to execute well on your opportunity set, but people are wondering: what is the size of that opportunity set and especially that sweet spot that you talked about, the carrying entrepreneur who wants a permanent home? We continue to add leads, new businesses that we never heard of before into our database, and that database has grown tremendously over the years. We will continue to see more and more businesses out there. Software is changing the world. I mean, there are new businesses popping up every day. Whether or not they're a bullseye for Constellation, remains to be seen. There is a tremendous opportunity still out there. Of course, with competition bearing down, it always makes it difficult. I like the way you made a reference to the world. Several people are curious about the size and direction in markets outside the United States. Are you seeing an increasing opportunity set around the world? Yeah, absolutely. I mean, we see it in Europe. We see it in Eastern Europe, across Asia. There are businesses everywhere, software businesses everywhere. The number of people that we've employed in M&A has increased globally. We're able to tap into those markets that we haven't seen in the past, and we're trying to get closer and closer to those businesses. The bulk of the software businesses that we've been interested in the past, not the bulk, let's say half of it, have come from North America. We see tremendous opportunity elsewhere for sure. Thank you, Bernie. This is a lengthy question. I'm gonna read it. As we've discussed earlier today, David Nyland at Eagle Eye is focused on carve-outs and communications vertical. Harris has acquired Allscripts, among other acquisitions undertaken by various groups. These seem like excellent opportunities to deploy capital, these carve-outs and large acquisitions. Here's the question: Could you comment on the attractiveness of these situations and the opportunity set? For example, are there verticals where such opportunities are more prevalent than in others? I think one of the benefits of working with us, maybe not on the verticals, but on the carve-outs. Carve-outs are very, very difficult to complete, to execute properly. You're dependent on the parent company for a little while. You have to set up an infrastructure, to get the carve-out going, hire all sorts of people. They're very, very difficult, and not a lot of people can do that. For the vendor, for a corporation contemplating a carve-out, they know that they can execute a business carve-out with us 'cause we have the experience, we have the capabilities, we've done it before. Very difficult for both sides to go through that kind of situation. If it's some entity that has never done it before or can't build the infrastructure in a timely fashion, it'll be more difficult for them to do so. I would say more on the corporate carve-outs rather than, vertical or industry in particular. Do you know roughly how many carve-out acquisitions the Constellation groups have made? There's lots. I don't have the number at my fingertips, but we do keep track of the carve-outs for sure, the number that we've done. Thanks, Bernie. Here's a question about debt costs. The question is, it notes that debt costs have risen significantly lately. Has this translated into less competition from private equity on larger acquisitions and/or have your borrowing costs risen so that these effects offset? The competition has not gone away. I think what's happened is with increased interest rates, the prices that they are willing to pay has moderated a bit. Now moderated is a relative term. It was extremely high. Now it's a bit less extremely high, from private equity. Those prices have gone down just slightly. Again, there's a lot of dry powder out there, and there's a lot of bank debt that's available. Some bank debt has pulled back, they're not always as forthcoming as they used to be. Maybe some of them have gotten stuck with commitments that they've done in the past, not knowing how quickly interest rates were going up. Some banks have been pulling back. Some private debt has been pulling back a little bit, and prices have been going up. Don't remember what your second part of that question was, Larry. Yeah. What about your own costs? CSI Group. Yeah. They're still within the realm of how we structured the acquisition in the first place. We don't see any issues there. Are there any particularly attractive opportunities among venture-funded SaaS companies in this environment? Opportunities. I don't know that I would actually put that in a separate category. Anyone else have anything to add on that? I would just say it's the same kind of opportunity as whether it's SaaS, whether it's on-premise, we just don't differentiate between those. Here's the last question. Thank you. Here's the last question in this segment. It strikes me as somewhat philosophical, but maybe it's really hard-headed. It says, "Can a vertical market become so large that it loses some inherent attractiveness of VMS, and that's more like a horizontal market? For example, the electronic health record market attracts more competition given its size. For the longest time, I think we were hesitant to get into the largest verticals. If you can pick your niches within those large verticals, I think there's opportunity for everyone. I don't think you can ever really call it a horizontal business. There's always a set of circumstances that make one particular acquisition attractive over others. I think very large verticals do have their own specific niches. That wouldn't change for us. Excellent. Will, over to you for questions on the M&A process. Great. Thanks, Larry. Just to start very broadly on M&A process, would love to hear from a number of you on what success looks like from a capital allocation perspective each year. What are you hoping to do? I can start there, Will, if you want. Obviously, one of our targets is to try and redeploy our free cash flow. The first thing we start with is what's our free cash flow gonna be in the year, and how can we try and achieve that. The second is to hopefully make intelligent deployments of capital. Obviously, we're not perfect. We've made mistakes in the past, but the goal is to not make mistakes, make sure we learn from our previous mistakes, and hopefully every acquisition we do, ends up being, you know, what we expect, if not better. That's really what we target, is we wanna deploy at least our free cash flow, and we wanna make sure we limit the number of mistakes we make. That's the ongoing challenge that we think about at the start of each year, I think. Yeah. Well, it's Jeff. I think obviously, exactly what Barry said, and then I think, you know, we also are always looking at are we making the right investments today to build out our acquisition pipeline and funnel to support continuing to deploy our free cash flow, which continues to grow over the next, you know, 2, 3, 4, five years. I think spending time on the front end of the process to make sure that we're well-positioned, not just to succeed in 2023, but also for the next, you know, for the foreseeable future. I think to add to what Barry and Jeff just said is to be able to do that over time to make your organization fit for the future, to make it scalable. We have to think about that as well. We have to think about things today to be successful, like Jeff said, also further down the road. To bring that all in line. It's not just about one quarter or one year. It's like Jeff said, to be successful for many years. That dovetails with a question that we've had come in live, which is, what do you think the odds are that CSI is still deploying 100% of its free cash flow on acquisitions five years from now at attractive returns, which gives you some sense of how shareholders are thinking right now. Anybody got a five-year plan they wanna share? It's very difficult to predict. Certainly, we hope our cash flow continues to increase over the next five years. It'll always be a challenge to redeploy that capital. Great. Returning to the here and now, Constellation Software is making more acquisitions and breaking its own capital deployment records lately. What are the biggest drivers? Is it coverage or conversion which has contributed more lately, would you say? Will, it's Bernie again. I think coverage has increased dramatically over the years. We've made acquisitions this year that with companies that we've been talking to for 10 years. Being in the market for such a long period of time, since 1995, we've been able to develop relationships over the years. When an owner-operator is ready to sell the business, hopefully we will be one of the first companies that they contact. Just the fact that we've had so many people out there knocking on doors, developing relationships, trying to make sure that companies think of us when they're deciding to sell, I think that's helped tremendously. Going forward, which of coverage or conversion rate would we think can be improved the most to create more opportunities? What sort of challenges stand in the way? I think what we need to do is get relationships started and maintained at all levels. We do have business development people that knock on doors, and we have M&A folks, but we really need our portfolio managers and BU managers in same markets to go out and talk to folks as well. We are doing that. It's just a matter of increasing that number. If you think of the global opportunity, we need our folks in far reaches of the world to go out and try to make contact with businesses that are or may be available for sale. Great. You know, conversion has a lot to do with hurdle rates and price. There's one question that's come in live. In a recent interview, a former CSI M&A manager, quote-unquote, complained that he could have made significantly more deals if their hurdle rates were just slightly lower. How do you make sure that you're not leaving deals on the table, acquisitions on the table with an attractive IRR? I think we have a lot to offer as Constellation. The management teams that join us get to again, learn best practices from their peers. It's not something that's common within other businesses. If, yes, somebody wants top dollar, and that's the only thing that they're concerned with, then we might not be the right buyer. Sometimes we are the top dollar. It always depends on the circumstances. You know, if you were selling computers, you're gonna have competition selling computers. Do you need to drop your prices by 10% so you get more market share? Your competition is gonna do the same thing, it's a never-ending cycle. At a certain point, we have to draw the line and say, "Well, these are our hurdle rates, and this is the way we're going to go out and make acquisitions." We have a tremendous opportunity. It's a matter of selling the opportunity to join Constellation Software. A broader philosophical question related to that. Over time, this is a live question, as acquisitions get larger, hurdle rates are likely to trend downward. What is the lowest hurdle rate for future investments that Constellation would be willing to tolerate? At what IRR would it make sense to return capital to shareholders? We generally don't discuss hurdle rates and moving the hurdle rates. I think we'll have to pass on that question. Fair enough. I suppose one more on coverage, which you mentioned earlier. Is Constellation now being invited to participate in a larger share of broker-led sales today compared to one year ago? I don't know if you keep track of that, Bernie, or if the other OGs wanna chime in. Yes, we do. We have been invited to more and more at the larger end anyway. The usual bread and butter, we're one of the first on the list amongst the brokers, and we like to keep it that way. Certainly on the larger end, yes, we've been invited to more and more. Great. here's a couple questions about how the company thinks about vertical market software. Does CSI have a broader definition of vertical market software than others? Many of CSI's businesses don't appear to be vertical software necessarily, such as, you know, put you this dk hugbúnaður in Iceland, NEXTIP srl, which seems more like a tool. Those that have substantial service and implementation components in much of ERP software, the economics of these businesses seem different from pure VMS. Can you comment on how you define VMS and how you view these different types of software businesses? I guess I could take that one as well. We have been acquiring horizontal businesses for quite some time already. The criteria that we see in these horizontals that make it attractive are very similar to VMS. They all have their own little niche, whether it's geographic protection, little competition with that, within that geography. You know, within ERP, is it one certain segment that they're more capable of selling to? There are always these different characteristics of these horizontals that we see that are attractive and very similar to VMSs, and that's what we will continue to chase down. It's not just vertical that we're looking at. We are looking at horizontals to the extent that they are similar to our VMS businesses. Thank you. Does anybody else have any thoughts on tools or, you know, amount of service? There's a follow-up, or there's a separate question that came in which asks or, you know, notes that certain recent acquisitions have a revenue mix which is skewed more towards IT services and wonders what types of IT services are good fits for your acquisition criteria. Just to open it up to other operating group managers, any thoughts on, you know, the nuances and the differences between different types of software businesses you might acquire, some of which may be things more like tools, things which may have a higher quotient of IT services? Yeah, I think, in certain markets, I have to say, in certain geographies, the markets are different as well. Where, in certain countries, people love to have lots of services around. The markets have different stage of maturity, let's say. It's not particular that we try to, say, hunt down lower recurring revenues and more services. It's simply that the characteristics of certain markets. If you want to play in those markets, you think you can find solid businesses. We're still interested, just to give you an example. I think the other things that I think, Bernie just already elaborated on it. Great. Another question actually directed to you, Robin. Has CSI or other groups ever interfered with any acquisition that Topicus wanted? Would you expect that to occur ever? For sure. We once in a while have discussions if something fits somewhere else better, but they are relatively rare on the total. You know, if within the system we use, we think we should pursue a certain acquisition, we pursue it. If we think it doesn't fit us, but it might fit another group for whatever reason better, we take that into account. I think all the groups are pretty much in the similar kind of businesses. I think lots of the companies we like to pursue, we try to pursue them. Great. Thank you. Again, we have, in the past, handed over a certain company to one of our sister groups because it was not for us, but we could find reasons why it was for them, and it happened the other way around as well. Again, there are more exceptions than that it's the whole day on my desk. Great. Some, let's see. Some operating groups seem more willing than others to acquire shrinking businesses with negative organic growth if valuations are low enough to generate an attractive IRR. Would any of the operating group managers care to comment on their willingness to do so? I mean, I can say, you know, we're really. In the end, you wanna just make sure you're making a good investment, right? Since we buy and hold forever, you just never know what ultimately outcome will be for that particular business and what opportunities you might see to expand your presence in their customer base. I, you know, I think it, you know, it makes sense to consider both. It's really giving a good return for our shareholders and some businesses that's gonna come through growth, and some it's gonna come through stopping doing some things. Eventually, you have the optionality of potentially changing the outcome of that business after it goes through that potential shrinkage portion of its short-term performance. Fair enough. Last question in this section. Has CSI considered using TSS-style non-controlling interest structure with smaller investments, either to increase your win rate or to increase seller retention? We've seen other high-performing serial acquirers do this. I can take a stab at that. You know, every acquisition's viewed individually, sometimes it makes sense. If it's a company that makes a lot of sense to add to the portfolio, the only way to get a deal done is to do something like that, absolutely. Sometimes we do structures that basically get the same economic outcome without necessarily having minority interest. Earn-outs are one thing that I can think of that, you know, you can extend an earn-out and make it feel close to something like that. There's. There's different ways to achieve the outcome, and I think what we wanna do is just, you know, analyze each opportunity individually and make what we think is the best overall decision. Sometimes it'll work, sometimes it won't. Yeah, for sure, if it's the right acquisition in the right vertical and everything else, then obviously we'd take a h ard look at it. Great. Thank you very much. Over to you, Howard. All right. Thanks, Will. Now I'm gonna move on to the governance section of questions, and it's both about board governance, but also about incentivizing employees, especially with the spin-outs as well. Maybe the first one, this is an interesting question I'll pose to both John and Mark Leonard. Could you put it in place an incentive for shareholders to hold onto their shares for multiple years, like the loyalty share program at L'Oréal, maybe giving more ownership or dividends to long-term shareholders? Maybe, I guess the tone of the question, the thrust of it is trying to ask about how do you think about trying to attract the longer term shareholders you're looking for as the partners of CSI? I think long-term and engaged shareholders are two different things. We would like to have engaged long-term shareholders. Index funds are of no particular interest to us as investors, although we understand why they're interested in us as an investment. The problem is coming up with a program that works for the kind of shareholders that we'd like to target without mistreating other shareholders. It's a challenging problem. The French system, where you can pay for loyalty in some way, shape, or form is interesting, but I don't think the evidence is in yet that it is a better system. Makes sense. On the, this is more about employee ownership. The question asks, is forced insider buying, and I'm guessing they're referring to the bonus plan, large enough to inflate valuations? Separately, they wanna know how much of the free float do employees own at CSI and also at Topicus. Yeah, I can answer that. Again, I do not believe the number of shares that we buy for the bonus are inflating values. Back in the day, when Constellation was smaller, we used to spread the purchase over about five months to avoid that, and we actually instruct the brokers not to try to move the market, and they have to follow certain rules. No on that. In terms of employee ownership, if you include Mark's family holdings, I think somewhere around 15%, excluding that, it's closer to 10% or 11%. Yeah. Pretty sizable. Is there anything different about maintaining investment discipline in spin-outs than in an internal unit of CSI? Are there any long-term risks in separating specialist talent from CSI into these new entities? I guess asking if the structure of the spin-outs causes, you know, discipline to differ or maybe not. The spin-outs all still play by the same guidelines that we have, both with respect to targeting acquisitions and using our hurdle rates and modeling. That all stays the same. Where it might differ is, just the way they make the acquisitions structure. Everything else is the same. Yeah. That's fair, and that was probably what I was expecting as well. The next few questions are about succession for Mark Leonard, so I am gonna go there. The first question asks, John, if you can disclose it, what succession plan is in place for Mark Leonard? I think the answer is no, we won't disclose it. It's obviously a topic of conversation for the HR committee, it's discussed on a regular basis, but it's not for public consumption. Yeah. Fair enough. Luckily, we have a very tenured team on this call today. I think every manager on the phone here has been with CSI for over 20 years, and there's a large amount of trust amongst them and respect amongst them. Our preference would always be internal, and there's a selection of candidates for that purpose. Yeah. I think back to that culture study that Larry did a number of years ago as well about that. On, on the succession topic, this is now to Mark Leonard directly. This person is trying to find out more. If you are willing, can you envision retiring? How long do you envision staying in your current position, and how do you envision the scenario after you retire? I guess they mean with CSI. That will depend on circumstances. Obviously, if I'm healthy and have nothing to do with my time, I'll hang out for a long time, as long as the board wants me to. The opposite is also true. Seems like you're in the board's good graces so far. The next question is, I'm just gonna throw it out there. It's an interesting question. This is in this questioner's view about cult stocks. This person asks, Secrecy reduces copycats, but increases CSI's cult status. Quote unquote. Cult stocks are unthinking, non-diverse momentum plays with extreme valuations which don't end well. What negatives could you disclose that would increase selling and show the diversity, strengthening the company long term? I guess they're trying to ask about their view of these cult stocks and how could CSI stray away from that, given that it doesn't want to at the same time, it doesn't want to have copycats. I don't think that's a useful thing on which we can comment. Apparently, markets are voting machines in the short term and weighing machines in the long term, and we've been in the market for a very long term. Presumably, the stock price is at its appropriate level according to the market. This question is about board interlocks and it's addressed to, I guess, Robin, but also John. TSS/Topicus, really, board directors also sit on the CSI board. These are called interlocking directorates and usually a red flag for bad corporate governance. Topicus pays CSI a royalty, has JVs with CSI, and even potentially competes with them for acquisitions. Do these pose conflicts of interest for a director on both boards? How are any conflicts, whether real or perceived, managed? Seeing who wants to go first, Robin or John. Oh, yeah, go ahead, Robin. Yeah, I mean, I think we touched upon this topic about competition for M&A before, I think that has been answered, I think, 2x or 3x. That wouldn't have been different if there wouldn't have been a spin out. There is no difference at all. I myself am a shareholder in Topicus, and I'm a shareholder in Constellation. Clearly, my shareholding in Topicus is a little bit larger. But, you know, I don't see really issues there. You know, if there would be conflicts, we clearly address that in the board if there would be any. So far, we haven't had that. We're since, what is it? Beginning of January 2021. We haven't had clear issues there. Yeah, I think that's true. There's been no real conflicts, Howard, and there might be some perceived conflicts. The other nuance here is CSI is a major shareholder of Topicus, and I think a lot of the situations you're referring to would be different than the situation we have here. Yeah. With the super voting share structure as well. This question also asks about the directors of Constellation and as well, you know, what they're doing outside of CSI. It says several directors of Constellation are involved in other public companies, I guess, sitting on their boards. Directors are certainly entitled to their own lives, if their skills are being applied to other businesses conducting M&A, is their opinion at what point does it become a conflict with their duties at Constellation, especially if there are acquisitions being made that are potential targets of Constellation's operating units? Do you try to make sure that any directors you're recruiting, especially external ones, maybe aren't part of boards that are in other acquirers, tech acquirers? Do you have any policy around that? Is that just, is that, you know, up to the board's judgment? I'm happy to start on this one, and then other board members on the phone are happy to jump in after me. Yes, I mean, a number of us do serve on other boards, and, I don't think it gives rises to conflict. I mean, one of the main reasons I do it, and I'm sure the other members do it, is a learning process. We're one type of serial acquirer that has a certain value proposition that's done phenomenally well and one that we thoroughly believe in. Part of our interest in other companies is they do things differently, and we can learn from that. We view it as a net positive. We have no formal policy with respect to that. It's based on judgment on each director's outside interests. This question also asks about the number of directors. I remember last year there was a resolution to increase the maximum size of the board. This year, the number of directors actually running were reduced for both on CSI and Topicus. This shareholder wants to know why they were reduced. Is there an ideal board size? I know we talked some about that a bit last year, but, if, you know, if there's any change in thoughts around that. The shareholder poses an interesting question. If CSI and Topicus were privately held instead of public, how would their board composition differ? I'm happy to start for Constellation, and then Robin or Mark can jump in after. There are a couple of questions in there, Howard. I'll try to remember them all. Specifically with respect to the number of directors for Constellation, it evolves and it changes yearly, as you know, and there's a number of priorities and criteria that the board is looking at. This year in particular, we wanted to maintain a certain level of independent directors on the board, and we had to make some changes in the number of directors to accommodate that. That was hence the reason for the change this year. The ideal board size, I think Mark has alluded to this before. I mean, the most important thing is that the directors on the board are bringing a diverse set of skills, and they're able to contribute. We think the board size over the years has definitely led to that. As you're aware of as well, there's a number of subcommittees that take on specific responsibilities on the board, and allows board members to participate that way. I think the last part of the question was, if we were private, you know, what would be the ideal board size? It's probably less, is the answer to that. That's more of my personal opinion than probably some of the other board members. I think, Robin, do you wanna now address Topicus? Yeah, sure. I think we have a dual structure in the Netherlands and Canada, and we did the listing, and we have to be compliant, and we want to have a diverse board, and we want to have competencies in all the things I think John just mentioned. Always there's the debate, as John referred to, what is better, a large board or a smaller board? Having people with ownership on the board. There are all kind of routes you can go. I mean, I was very fortunate to have great board members in the previous setup and still have in the current setup. I choose to go for a slightly smaller, given the size of our company, where we're at, so we're way smaller than Constellation is. I personally always liked a slightly smaller board, but still, of course, you need to have the competencies and the diversity in, so we take into that account. We simply try to see if we can make the right steps with a smaller board, given the structure we have as Topicus and the size we have. Do you find that the board size is also a debate about, you know, the needing the right amount of skill sets versus, you know, not being too inefficient with, you know, meetings and et cetera? What's the things that you're trying to balance when you're thinking about board size? Yeah. We try to balance a few things, like you said. You know, have efficient meetings, have effective meetings, and being able to discuss the right topics. I can mention a few pluses and minuses for a large board than I can do for a small board. I think we as Topicus, you know, given our size and given our ambition, we try to be effective and efficient. We want to be compliant and have a diverse set. I think we can do that with our current setup. We will evaluate over time. I think I always was the only operating group who had his own dedicated board because we had Jos Dik, a shareholder, so I already had the board. Then suddenly we jumped from five to larger, and now we try with a dual structure. That's why we try to end up somewhere now a little bit more in the middle. Does anybody else on the panel wanna comment on, you know, maybe their experience? I know some of you have sat on private boards or are sitting on private boards and, you know, how does it? What are your thoughts about, you know, board size and what a sitting on a private company differs from a public company? I mean, I would add really, you know, similar. A small is better. You just wanna make sure you also have people on the board who actually understand the vertical you're in, the market you're in, even if it's a horizontal, of course. I think that's very, very important. You can sort of. In our case, I think with Robin's board and Lumine's board, combination of people with, you know, good, sound investment discipline, as well as some knowledge of verticals. I think that's really key, and I think that really matters, in a private board as well. At least my experience has been. I just met I think Lumine also uses observers as well, and CSI. Yeah. Yeah. We have two really great observers. It was just, you know, they've had an event recently, I got to spend a bunch of time with them. They're wonderful. They have decades of experience in the space, they're really good sounding boards for us. A lot of acronyms in the telecom space in particular. I'd say of all of the verticals we're in, it's the most acronym-oriented one, I'd have to say. It's nice having people who can do the acronyms of acronyms and sort of say what it actually means when you're talking about something. You have the experience that are actually working, you know, inside of customers. It's terrific. I'd advise that as well for sure. Yeah, the knowledge pool is so deep, you definitely need a handbook for all the acronyms. For sure. This question is about incentives. Going back to that, do you think or wish that CSI had incentive organic growth more in the past? I know, you know, I think, the formula is still based on net revenue growth. Is there a plan to change this, and what could the opportunity be? I'm running an experiment, Howard. Mm-hmm. Within Topicus, we have three operating groups, TSS Public and TSS Blue, and we have the Topicus operating group. Topicus operating group was historically very strongly focused on organic growth. We implemented our Constellation bonus scheme for this company based on organic growth and not on net revenue growth. It's an experiment. We monitor it. We like to continue them doing what they did very well in the past. We try to implement it on organic growth for them. How are you finding that so far? Is it too early to tell, or how many years do you think it will be before it qualifies as an experiment that you can take away with learnings? Yeah. I like to follow it a little bit longer. We also see that they love to do acquisitions and, but they also like to clearly continue growing organically. I think it's too early to judge. It's just following it up and reflect upon it and then see if it worked out or not. As you know, we love to run experiments, and this was a very practical experiment when the Topicus operating group joined forces with TSS. Perseus is also looking at a program where we more heavily weight organic growth. It isn't something we're implementing right away, but it's something that we have in mind for next year. We haven't yet run it by the HR committee, but we've had lots of discussions about it. When you know, maybe just follow up on that. When you weight something more towards organic growth, is the thought as well, you know, how do we make sure that the capital spent on trying to chase that organic growth is not not too much? Or, you know, does that just get balanced out by the ROIC measure? Or do you have to put in other safeguards when you start weighting towards organic growth? If you've got ROIC in there, then you've got a counterbalance. If you focus on some sort of EBITDA margin, you've probably got a counterbalance. Ideally, you also track your major initiatives and look at the IRRs on them. There should be multiple checks and balances in the system. All right. My, my last one, in this section is, a shareholder looking to check in with the shareholder proposal last year about the racial equity audit. Last year, Constellation saw greater than majority support for this. How has the company responded? Any commitments to conduct an audit or otherwise enhance diversity program disclosure? Also, any concerns about the proposal? Which I know we spoke about before, but maybe a year after, would be interesting to hear your thoughts. I'm happy to start, then perhaps I'll pass it off to Jeff Bender, who's leading our efforts in this area. I think over the last few years, there have been a whole host of various shareholder proposals, not only to Constellation, but a lot of other companies. I think we stated in the past that we obviously take those seriously, and we're balancing those with the autonomous nature of our organization and also the global nature of our organization, which has employees in well over 100 countries. Last year's proposal, I think, was one of the proposals that led to the launch of a ESG website for CSI, which goes through all the various initiatives that are being done at CSI in this particular area. If you haven't had a chance to go there, I encourage you to go. It goes through some of the holistic, the things that are being done at CSI, but more importantly, some of the initiatives being done at our hundreds of business units globally. That's what's being done on the aggregate level for ESG. Perhaps, Jeff is leading this effort. I don't know if you have anything else you'd like to add. Thanks, John. No, I think, I mean, that was a good, a good summary. I think, you know, we continue to work with, you know, with the operating groups, with all of the businesses, sharing our best practices, sharing our learnings, collecting more data. I think, you know, we did actually a big push over the last little while on getting a better metrics around our carbon data. I think as we started getting in some of these metrics, it just definitely caused us to pause a little bit to make sure that, you know, we're measuring the right things, we're recording the right amounts before we start disclosing. I think, you know, like John said, you know, we take the proposals from everyone, including shareholders, very seriously. You know, there's a lot of activity going on behind the scenes. I think what you will continue to see, though, is we will be very cautious before we start posting the information to make sure that we're very comfortable that it is accurate and reflective of our true operations versus just trying to put something out there to tick someone's box to say we put it out there. We have not done that, and I think as long as I'm the one leading it, we will continue not to do that. Although there is a lot of pressure. So I think sometimes you have to remind yourself what we're doing and why. Like John said, I think if you I would encourage you to go to the site. There is a lot of information out there. We did update all of our gender and our ethnicity data for 2022. You can see all of our data that's there. Within the different businesses and the operating groups, there are so many programs ongoing to, you know, to again, to record, to improve things. Again, it is a business unit specific focus. I think this is the hardest part, I think, to reconcile with a lot of shareholders who I think are perhaps, you know, more used to dealing with single entities that are in control of that agenda where, you know, that is not the way we're currently moving forward. Maybe, Jeff, to follow up that, 'cause you were measuring and leading the effort. You know, when you think about, you know, the measurement from each of the business units and, again, having to get the measure and send the data, you know, how is, how is that process? You know, do they all have to get on one reporting system to send the data? Like, how did that go? Yeah. I think it's an evolution. It's a journey. I think, as we've said. I think, you know, we are gonna hire an ESG analyst, I think, to start helping us just coordinate and consolidate the data across all the different groups. 'Cause again, you know, with over 1,000 business units, you know, there is just a lot of data. Right now, I think, you know, we're using Excel to sort of record. And, you know, we have templates for all the different metrics, whether it's, you know, gender metrics or ethnicity metrics or carbon. The other ones are more story related. Again, they'll, you know, those come up from the businesses. They're less in need of auditing. But all the other data, again, we're just collecting the data and then putting it through sort of a, not an external audit filter, but an internal audit filter, just like we do with any of our information, to make sure that we understand it, that it's accurate and it's reflective of, you know, of what's actually going on. Then trying to turn it into something that actually makes sense to be consumed by our stakeholders. I think, you know, that also can be a bit challenging. You know, like, just like we learn from, you know, other big conglomerates, we learn from each other on best practices. You know, we are also spending time learning from others on how they're choosing to approach ESG and how they're disclosing things and trying to, you know, pick up best practices from others who are leading the way there as well. Great. Yeah. Thanks for fleshing that out. That's it on the governance side, and I'll turn it to Larry. Thank you, Will. Thank you very much. This is the final segment, we've called it learning, so could include just about every topic under the sun. It might. We've subdivided this into four or five areas. Big picture, smaller picture, get ready for this one, artificial intelligence. We've got a bunch of questions on that. VMS Ventures, then some final questions directly to Mark Leonard. First with the sort of big picture. One question came, in this segment, came in from the chat this morning. What was one good business idea you had for Constellation that was destroyed in the past year? The biggest great idea you had for Constellation that was destroyed. Very little destruction this year. Anybody intrigued by that probe? I'll throw this one in. Mark Miller talked at Quadrants about the dangers of hubris. Mm-hmm. Someone with this question: How can Constellation prevent hubris, given its considerable success in the past? I think, like, yes, it's a big concern. As I mentioned to you at Quadrants, Larry. I think it's really keeping yourself grounded in the sense that by the decentralized nature of the business, if you look at all of our businesses, and, you know, luckily, we've been, I guess, exponentially increasing the number of businesses, the number of people inside of Constellation, realize that there's a lot of work to be done to improve. I don't think I think our best leaders come out at the end of every year and sort of feel they could have done better. There's just more things to improve. Every business we have, even the best performing businesses, can do things better. I think it's just keeping yourself grounded and, you know, looking at where we were. In fact, if I look back, you know, back in 1995, when we were sort of the first acquisition of Constellation Software, just knew so little as to what I know now. I think people believing that there's more to learn than they already know all the time is really key. I think our best leaders do that. I think then by measuring the business at a business level, and in our case, people, you know, wear their numbers on their name tags, it's very grounding for those leaders. You can't let your ego get in the way on a consolidated basis because there's a lot of work to be done. I just say, stay grounded, look at your businesses, and there's just so much work we have to do across the board to improve. Anyone else care to comment or happy to treat that as? That's a comprehensive answer. Yeah. Well, one of our group CEOs, he displays at his academies- Different cases from the past where companies who did very well and went into the wrong direction, and he airs that on stage. Just to learn from it, where did it go wrong? What happened, and whatever. It's just something which came to mind, but to see that, you know, like Mark said, to stay grounded, lots of work to be done, you have to work each year again. Thank you, Rob. This question is, it says for each of the operating groups. One, it's a two-parter from two different people. One, what's the biggest thing you learned from the Keep Your Capital initiative? Two, how is decentralization of M&A going? This person thinks that Volaris seems to be the most advanced on that, with some operating groups issuing smaller hunting license, and this holder would love to hear about how the operating group managers are approaching that evolution. Emily, I can at least comment on the behavioral change. There's a lot of people who have been, I guess, provided the Keep Your Capital opportunity. Essentially, you know, you do see a behavioral change in those leaders who would sort of tell you they're working on M&A. It isn't with all leaders. Some leaders will do it anyways, but it changes your behavior to allocate capital, definitely. You see it in other actions because I clearly we didn't use it in the early stages of ramping up our M&A investment at Volaris. As we introduced it, and we pushed it further and further down, everybody gets it. They talk about it, they think about it. It matters. It's, it creates a joint focus from, you know, some of the goals that were mentioned earlier here to deploy all of your free cash flow. Everybody sort of shares that initiative, and I think that's something very hard to do, when you're decentralizing M&A as we have, throughout a large organization that operates in dozens of countries. It's a common tool that's worked very, very well for us. I definitely have seen, it change leaders fundamentally, in the way that they think about and approach it, and then the organization they surround themselves with because they got to solve a problem. They need to make sure they're structured in order to solve it. Whereas it isn't something that the central group is sort of having to worry about. It's really their problem. It just really hits home on that. I'll leave it at that. Larry, I think I can comment on the decentralization of M&A. I mean, clearly, again, it's a journey like everything else. You know, as you bring new people into that focus, whether it's through Keep Your Capital or some other way that you bring them in, I think learning how to deploy capital the way that we want them to deploy capital, to be this disciplined deployer of capital, it just takes time. I think we do a good job within groups and across groups of, again, sharing our best practices. I think, you know, we've spoken before about our PAR, our post-acquisition review process. We have an MPAR, mature post-acquisition review process. Fundamentally, making investments and doing transactions, this is how people really learn. They learn when they do it, and they do it well. They really learn when they do it and they do it poorly. And they, you know, they make assumptions that don't pan out. I think really it's building our structure to make sure they get as much coaching and mentoring and sharing, and then the opportunity to actually make investments, and then have to, you know, to be responsible for these businesses post to make sure that we earn our returns. I think it's just a, it's a journey. I think it's going well. I think if you look at the way that Constellation has scaled the number of people, you know, who wake up every morning, either with a capital deployment target of dollars, is quite exceptional. I just think, again, you know, we always have people at all different phases of the process, right? We have, you know, expert deployers who have been doing it for decades, and we have people who are literally just learning and just starting out. It's quite the quite the ecosystem. Excellent. Anybody else? Incidentally, we are coming to, I guess, the final 12th of the meeting. It's quarter of 12. We still have 725 people in the meeting, so, thank you for participating. That's a record number. Next question is about the how you proliferate best practices in terms of scale and reach. In particular, do the best practices that you learn from a large business unit transfer to a small one? Do the best practices in one geography translate to other geographies? I can take a shot at that one, Larry. I definitely think they transfer between geographies. I really do. I think one of the challenges we've had early on now that we've gotten a little larger is a little easier, is just, putting those in the local language as well. That's pretty key to transferring them across geographies, is communicating in their native language, I think. As far as from different sizes of businesses, it's one of the things that, I wish I'd done a better job avoiding in the past, because I think when you're sitting down with, talking to the head of a large business, or let's say they're head of, we'll just use marketing, and they happen to have, you know, 20 people in marketing just because the business is large, and they're coaching someone who has 1 or 2 people in marketing. It's just different what you do every day, how you spend your time, where you can spend your time, how much money you have to invest in sort of, you know, covering the market, what have you. I do worry that some of, some of our large businesses and smaller businesses shouldn't hang out that much together. It's something we need to be wary of, just as a comment. One of the things to try to do in the future is try to keep them separate as possible. Just different. I mean, just being coaches of coaches of coaches in a business is different when you are the person who's, you know, has three or four developers working for you running the product. I think there is, there is a difference between those two. Yeah, Larry, I believe they can be transferred to other geographies, sometimes you need to twist and turn them a little bit for the local situation. Sometimes it helps when some experience is also local, and people can address it in the same language, let's say. Let's say the best practice itself with a twist and a turn is still there, but it helps if you can, let's say, localize it a little bit. Excellent. I've been to a few annual meetings this year, I don't think any annual meeting would be complete without commenting on artificial intelligence, or artificial stupidity, as it sometimes might seem. We got a lot of questions on that topic, and they're posed in a variety of ways. We'll just be able to ask a couple of them. Let's start with the ones that came in this morning. First, do you think AI poses a structural risk to the software companies long term? Does that affect the addressable market for CSI to make acquisitions? You know, I used to be a law professor, and I'd ask a question, and I'd just call on people. I'm gonna ask John Billowits, what say you, sir? Sorry, Larry, I was daydreaming there. My AI and my other brain was going. Can you just repeat the message? Repeat the question. Yeah. There are a few of them, so I can ask several more as people cogitate on this. This one was: Do you think AI poses a structural risk to software companies long term? Does that have an effect on your funnel, your addressable market, for acquisitions? A little unfair to ask me. I think it's more of a Bernie question, but I'll start off. Yeah. I think there's been a number of these kind of, I call it structural risks, that have happened over the last 30 years. There seems to be one a decade. What tends to happen is they tend to evolve much slower than I think people think they will. Nonetheless, they do change the dynamic, particularly in the technology spaces. You know, so it probably will have some impact, but my overall remark with respect to that question is it's likely to have a less of an impact than people think it currently will. Maybe Bernie can give some perspective on what they're actually seeing on the acquisition side. Sure. There was a lot of silence there because there really isn't very much to say. We haven't seen any impact on our funnels, on businesses that we look at. Will it happen? It's possible. I'm not going to predict the future, but AI will be infused in some businesses, and it will not in other businesses. Whether or not it has an impact on us in the long term, it's possible. We know that in our verticals, customers take a very, very long time to switch off the software and go on to the next shiny thing, just because it's just so difficult to get off the software and use something that may not have all the functionality that you want. That's the attractiveness of VMS. Whether AI is gonna change that, very hard to predict, but I think we're a long way off from that. One of the other questions, try to make that delineation between, say, mission-critical software, which would survive, and the tools and other features that might be supplanted in some way. Well, good. I think that's fine. Thank you both very, very much. Let's move on. Here's a question for Robin about Topicus. The shareholder says they're seeking broad reflections on what you've learned, what's worked well and what's worked, what hasn't worked, and the most valuable lessons you've gotten since the merger and the listing. Some reflections here. What worked well and what didn't. I think the listing itself worked. The spinout, spinoff, whatever you call it, worked, I think, with the Lumine transaction now, it was the second spin out. I think the whole concept of the spinout, it worked. That's, I think, a positive. What I learned from it is, you know, it took a lot of time. When we set it up, it was studying other spinouts and trying to put the concept together. I think Mark Leonard was leading it, but I discussed it with him for a long period of time. I think the first spinout was still a lot of designing while trying to fly. I think that made the second spinout between brackets easier. I know that David referred to it, but I think that spinout worked well. I think we have been able to put Topicus.com as we planned it, with three operating companies, which all have their own history and their own ways of doing things. I think that worked out as well. You know what a learning is, it always takes time. I mean, the questions came with larger transactions, but, you know, Topicus operating group was a large part, one of our largest acquisitions, and it's a standalone part now, so that's different than normal acquisitions. Some cultural aspects. They also do things differently than TSS did. That's not necessarily good or bad, it's just trying to learn from each other. It takes some time, but I think we get there. Some of these things take a little bit longer. I think that's an important learning. I think for the rest, there's also a lot of things are just lives going on, and we do our things we did before, so you spend a lot of time. It was during COVID when we did the spinout, but now, we simply are doing what we did. I think, we have shown strong growth. The large spinout helped. But also I think what important was as well, we didn't want to distract our businesses by doing the whole process, and I think that worked out, worked out pretty well. I think managing that whole spinout and not having an effect on the operations, not having an effect on our M&A, I think that worked out pretty well. These are things, Larry, that come to mind now. I was not prepared for this question, so maybe tonight I come up with some other elements. These are my first thoughts. Thank you. I think sometimes you get the greatest value out of just the what comes to mind without the prep. I think it's very helpful. Yeah. I think, Larry, where we're chatting is, you know, what's changed? Yeah, the Topicus operating group joined. Well, I said already something about it, but we do acquisitions all the time. We might be listed now, you know, for the rest, nothing really changed to the essence of our business. We still are doing what we did, I think. You always wonder, and that might be the background of the question, did something really big, did it change? No, it didn't. We still try to buy critical market software companies. We still try to make them better. We're still trying to exchange learnings. We're still part of the Constellation ecosystem. The only difference is we're listed. Excellent. Thank you very much, Robin. We got a bunch of questions on VMS Ventures, and since we're running out of time, and they were all very similar. I'll simply put it, this is to Mark Leonard, I think. Mark, is there any update that you can provide on VMS Ventures? You seeing ideas emerge? Anything that you can share? We've made 3 investments so far. We're sort of refining our audience in terms of the people that we talk to within Constellation. We have a suspicion that recently acquired founders are a potentially verdant source of ideas and opportunities. Other than that, it's still very early days. Good. Good. Thank you. This one might be for you too, others are global operators. This is a question about cultural, you know, national cultural barriers to entry. This came in this morning, and it says, "Why is it so difficult to enter the Japanese market? Is it really that hard making a Japanese owner-operator think differently, think as CSI does? Are there other countries that present similar barriers to entry for Constellation? Larry, I think I won't specifically comment on Japan. I think Japan is probably pretty unique compared to the most geographies. Each of these geographies are different, and they're a lot different to what typical North American company is. I think you need to address each one. Some will be more fruitful for us than others. I think having local presence and now that we've got scale in a lot of these countries where we can have other local businesses, I think we've got a huge competitive advantage moving into some of these markets that we've moved into. Thank you, Damian. Listen, I think the last few are, they're directed at Mark Leonard. The first of these is that you once said that one of the few lessons that stuck with you from business school was Toy's law of constant concern. This person went out and tried to research this and came up short or empty. They wanna know, can you elaborate on this principle and why it has stuck with? It was a case, about, working capital. The Toy's law of constant concern was that, you wanted to have financial risk and business risk, equal or constant. If you jack up financial risk, you wanna have low business risk, and vice versa. That was how I remember it. I haven't, tried to look it up on the internet, but, I'm sure there was a Mr. Toy at some point. Excellent. Thank you. A Mr. Tetlock wrote a book called Superforecasting that you have recommended. It discusses the inherent difficulty of making even short-term forecasts. This person wants to know, has Constellation gotten much better at doing that, at forecasting IRRs over time? Has the growing scale of its acquisition database been helpful to improve its ability to do this? Tony has the numbers, but basically, on average, we're terrific. In particular, we're terrible, I think is the headline. Beautiful. third and second to last question of the day. You have been a keen studier of other business models. Perhaps a keen student of other business models, particularly other HPCs, high performing conglomerates, and you've discussed these in your past shareholder letters. Are there more recent lessons, good and bad, from observing and stuying other businesses that you can share? I tell you what, I'll throw out a challenge to whoever posed the question and anyone else who wants to participate. Study AppFolio and study Veeva, and send me your thoughts on them, and I'll post my responses on our website regarding those two businesses. Both great vertical market software businesses that I think have lessons for investors and software practitioners. I love that challenge, Mark, I'm sure you're gonna get some good submissions. There's still 730 people listening to that challenge. I hope you will execute on that. The final question. We've now gone one minute over, this is the last one. To Mark. Would you consider writing any more annual President's letters? Shareholders got tremendous value from them as well as enjoyment. Yeah. When I've got something to say, I for sure would create another president's letter. Okay. I think there's an implication in that person's view that you have something to say, but no pressure, Mark. With that, the Q&A is ended. I wanna thank all of the people who sent in questions and to the panel who helped address them and to my colleagues, my fellow moderators, for collating them. I now would be delighted to turn meeting back over to Mark Dennison and/or to Computershare. Okay. Thanks, thanks, Larry, thanks to all the shareholders for attending. That concludes the Q&A, it also concludes the actual general meeting for Constellation and Topicus. At this point, I'd like to turn the meeting over to Computershare so that they can conclude the meeting. This concludes the meeting. You may now disconnect.