Good morning, welcome to Constellation Software's 2025 fourth quarter results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing Star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Please note this event is being recorded. On the call today, we have Mark Miller, President and COO, Jamal Baksh, CFO, and Bernie Anzarouth, CIO. Mr. Miller, please go ahead. Thank you very much, Drew. Good morning, everyone, and thank you all for joining the call. Our press release went out earlier today, so hope you've had a chance to at least flip through it. I wanted to make a few remarks before we move into Q&A. There's real noise in the market now about AI disrupting software businesses, and we take that very seriously. We think we're well-positioned. Although we're staying very disciplined about how we approach it. We've always run a learning culture at Constellation. Best practice sharing across our operating groups is one of our genuine differentiators, and I've seen more cross-portfolio collaboration around AI in the past year than on any topic in recent memory. Over the past 12 to 24 months, we've directed our culture of best practice sharing to helping our businesses navigate the AI transition thoughtfully. We spent 2025 upskilling our development teams. Thousands of developers have built skills in AI-augmented coding across our operating groups. We're entering 2026 with AI-enabled coding becoming increasingly commonplace. The productivity returns are real. They're still growing as these skills embed more deeply in our business units across the world. A typical example of this, that last week in Denver, one of our operating groups hosted an AI accelerator program with 19 businesses and other operating groups participate alongside them. This week, a joint Volaris and Jonas event is underway in the U.K. This year, we're planning on moving hundreds of teams through similar programs. We're starting to see opportunities for small language models, AI agents, and new applications for machine learning throughout our business. We're going to find opportunities that service out of deep customer relationships and our strong vertical market expertise. We're bringing forward our technology platform partners and AI providers to create cohesive, relevant, and applied solutions for markets that we know well and that we've operated in for years. I wanna be direct about something. Building products and features faster will not be what differentiates us long term. That capability will become widely available. It's gonna be table stakes. What will matter is what our businesses have spent many years developing: deep vertical knowledge, a genuine understanding of customer workflows and processes, the data inside their solutions, and the trusted relationships they've built. I believe AI will help us do all of this better. When I look at where this leads, the opportunity I find most interesting is what I describe as knowledge networks, connecting our domain expertise, customer process knowledge, and data assets in ways AI now makes possible. That's a long-term build, and we're in early days, but the foundation is real. Our customers rely on us for mission-critical software. We believe that the trusted partner position we've earned in our verticals is now extending to guiding them on how to safely and effectively bring AI into their own businesses. Wanted to mention a little bit about capital allocation and our process is largely unchanged. We score prospects for quality as we always have. We've added an explicit AI lens, assessing each business for AI disruption risk and potential AI upside and modeling accordingly. We're also piloting AI tools to help us rank prospects by quality and readiness to transact. It's early, and the jury is still out on whether it will prove its value over time. We've also developed a new approach to deploying larger amounts of capital, what we're calling a permanent engaged minority shareholder strategy or PEMS. Our investment in Sabre is the first meaningful expression of it, and I have to thank Mark Leonard, who's helping us with this strategy and helped us explicitly on this particular investment. The logic is straightforward. Permanent, meaning we're long-term holders, not traders. We'll work to ensure these companies endure as institutions. We're engaged, which means we care about governance, management incentives, and capital allocation, and we'll actively work to have influence where we think it creates value. Minority, we're not acquiring these businesses outright. We want to partner with other shareholders, we hope many of them become engaged long-term holders alongside us.Just to wrap up here, the fundamentals haven't changed for me. It's been like three decades with Constellation. You got to know your customers, stay close to them, go deep in your verticals, develop your people, build leaders who could drive change. That's what this period calls for. The same things it's always called for. We have businesses all over the world, hundreds and hundreds of them that are doing all of those things. The technology will be new. The pace is meaningfully different, we've got the right business to respond. That's all from my opening remarks, and I wanted Drew, to allow some questions now, if you could run that for us. Thank you. Yes, sir. We will now begin the question-and-answer session. To ask a question, you may press Star one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star two. At this time, we will pause momentarily to assemble our roster. The first question comes from Kevin McVeigh with UBS. Please go ahead. Great. Thanks so much. Really thank you for the remarks. Very, very helpful. I guess, you know, with just the more focus on AI, Mark, does that involve, you know, more reinvestment back into the business, you know, a broader ecosystem of partners? Just I know there's a lot here, but just any thoughts as to monetization in terms of consumption across your clients, just broader stroke? Again, very, very helpful comments. I mean, it's really early days on that. Our businesses, like always, are, they're probably spending more time and money on this than they've spent on for a while on any specific best practice. They're looking for opportunities with inside of their customer base to use AI as well as to drive revenues as well as, of course, being able to develop products faster and quicker and provide customer solutions at a more rapid pace than we previously could. Some are taking it a little bit further, and they're talking a little bit about that. I talked about it becoming sort of a knowledge network for each of those customers. They're working a little harder on that, which means sort of doing machine learning and building AI agents. It really depends on the business. Explicitly, we don't really control that from Constellation headquarters. We allow our businesses to make that decision, and they have many coaches throughout the world to help them think through those things as well in this sort of decentralized network of companies we have. Great. Thank you. The next question comes from Thanos Moschopoulos with BMO Capital. Please go ahead. Hi. Good morning. Mark, to what extent have you started to see some of your businesses capturing incremental revenue from AI-related capabilities, so be that in the form of new modules, usage-based pricing, or customer-funded R&D? Is it very early days, or are you starting to see examples of that? Yeah, it really isn't. We haven't really seen a lot of new revenues from that, right, you know, so far. On the converse, we haven't seen really much no loss of revenues from it, you know, at this point. It's been really, really just, we're really just in the process of just bringing everybody up to speed and making sure they can use the tools and they know as much as they can across our across our businesses. Great. With respect to the PEMS strategy, is it safe to assume that all else equa l, you'd still rather own a business outright, or are you indifferent so long as you're investing in the business, with a minority stake where you trust management, you like the dynamics of the vertical and? Yeah. Well, I mean, we're happy- Yeah. We're happy to have just be a long-term shareholder in that business and work with their, with their team on trying to make that a better business over time. It's really sort of fits the Constellation way of doing things, right? We buy and hold forever, and we wanna work with these companies in a similar fashion and hope to make them better. We're really not out there to acquire them. We're out there to try to collaborate with them and their shareholders to make them better businesses. I'm pretty excited about it. I think it's a new thing, we'll keep updating you as we learn more as we continue to implement PEMS hopefully more often. Great. Thanks a lot. Thank you. The next questioner comes from, just to verify, Frank Serpico, Private Investor. Please go ahead. Okay, continuing. The next question comes from Stephanie Price with CIBC. Please go ahead. Hi. Good morning. Morning. In the cur- Go for it. In the current environment, just curious about Constellation's ability to kind of push through price increases. In the past, you know, you've been able to increase maintenance prices on acquisition and then maybe do annual price increases. Like, have customers been pushing back on this in the current environment just given AI and kind of the uncertainty out there? How do you think the strategy evolves over time? I've no feedback on that from our business, so I've seen no changes from that at all, Stephanie. Okay. Okay. Just in terms of the valuation, of Constellation right now, I assume you've run the math on putting an NCIB in place. How do you kind of think about an NCIB here and buying back Constellation shares versus going out and continuing the M&A strategy? Great question. I'll toss it over to Jamal. Yeah. We have created a subcommittee within the board to look at this, and there is a number. At this point in time, we believe there are ample opportunities to deploy capital as opposed to buying back our shares. If that were to change in the future, we'll reassess. At this point, yeah, we are not looking to put in place an NCIB. Okay. Perfect. Then maybe just one more follow-up just on, just on the PEMS strategy and, the minority position versus a outright sale or acquisition. Like, Struggling a little bit around, you know, why a minority versus a full acquisition, just similar to Thanos' question earlier? Sure. It's Bernie. Some of these businesses are so large, at this point, we wouldn't be in position to make a full acquisition, so. Our cash flow is increasing every year, we've got to find a home for it. We're continuing on our strategy for full acquisitions, we've got an extra capital to use on PEMS. We're going to use a combination of the two, to allocate our capital. Perfect. Thank you very much. I'll pass the line. The next question comes from Jérome, Jérome Dubreuil with Desjardins. Please go ahead. Morning. Hi. Good morning. Thanks for taking my question and hosting this call. Back to the AI conversation a little bit. In your M&A process, have you changed your medium or to longer term assumption on the useful life of software acquired, maybe to take into account any change in perceived risk around the impact of agentic AI could have on software? I know you mentioned that you're assessing any businesses for AI disruption risk, but I'm talking maybe more in general if there's been changes in assumptions. The assumptions are what we see on a company-by-company basis. It's not general across the board. What we do is we qualify prospects as we've always done, this time with respect to AI disruption, on the downside and upside to see what AI could do to the businesses that we're looking at, and we're modeling accordingly. This is always when we model, it's short term and long term. Really nothing has changed except that we do look at it through the lens of what AI could do to the business, and we apply what we've done internally to our own businesses to the businesses that we're looking at for acquisition. If there's upside, we apply that, and if there's downside, we apply that too. It all goes into the model. Yeah. We're obviously continuously learning from our existing businesses, and we'll apply any of the lessons we learn to anything we're looking at, any modeling we're doing for future investments. That's great. Thank you. As the market is trying to assess how robust the portfolio is, do you know or can you share what percentage of the company's revenue originates maybe from either public sector clients or maybe software requiring regulatory approvals? We don't differentiate it at that internally at that way, so I don't have that metric for you. Again, going back to what Mark said, I don't think that is gonna be what protects our companies, right? It's gonna be that customer relationship, investing in product, bringing things to market. Whether it's public or regulatory approval, that's not a key measure for us. Thank you. The next question comes from David Kwan with TD Cowen. Please go ahead. Good morning. Yeah. Good morning. Hey, Mark. Just wondering, as you look at deploying AI internally, you know, should we expect any kind of margin improvements related to the productivity gains that you're seeing, probably most notably in R&D? Are you really kind of investing these gains into accelerating the product roadmap? We're really investing into accelerating product roadmaps, where our businesses have started using AI to its full potential. I think that's our focus because when you... You know, we're buy and hold forever, we're trying to increase our position inside the customers by providing them more tools that help them run their businesses, whatever those might be. Our preference would be to continue to focus on that. Where there's not opportunity to do that, you're gonna, like, always try to focus on increasing productivity through whatever means you can. That's a great measure for an individual business. Very hard to look at overall at Constellation, though, when you're looking at that. You kind of gotta look at it on a business-by-business basis, productivity. No, that's helpful. Thanks, Mark. On the M&A front, pretty strong start to the year, over CAD 800 million in close and pending deals there. Were there many other kind of larger deals like Synchronoss, you know, that were on the larger side relative to your typical deal, but too small for you guys to press release? Yes, there were a few. Yeah. We don't get into detail, with respect to each of the businesses that we've acquired. Okay, thanks. One last question. Just want to know, I guess, to what extent you guys are spending more time looking at these public company opportunities, whether it be acquisitions or investments like you're doing here with Sabre, just comparing to what you might be seeing on the private company side as it relates to valuations. Nothing's really changed. We're looking at both, as we said earlier, private companies and public companies, both for acquisition and for PIMS. We haven't really seen on the private side any change in pricing so far, and competition for those businesses is still very strong. Nothing's changed there. There's just been a little bit of change in pricing for publicly traded companies, as you well know. There might be some opportunities there. Great. That's it. Thanks. I'll pass the line. The next question comes from Paul Treiber with RBC Capital. Please go ahead. Great. Good morning, and thanks for hosting the call. A couple of questions on PIMS. You know, do you view a single board seat as sufficient from a governance point of view when making a minority equity investment? What's the recourse if the company is well-entrenched in a suboptimal strategy, you know, what's your recourse in that scenario? Yeah, I think it's gonna be situational. We're just gonna have to determine what to do based on the situation, and I don't think they'll all be the same, and we'll just adjust accordingly based on what, yeah, what we're dealing with. A second question related to PIMS is how does the IRR on PIMS rank in general versus other capital deployment strategies? We're using the same measure to look at PIMS versus our own acquisitions. We're still maintaining that discipline and we haven't veered from that at all. Just one last question just on PIMS. I mean, you mentioned buy and hold forever, but obviously, you know, these are public investments, so there is liquidity. You know, as part of the strategy, is it contemplated that there could be an exit at some point for whatever reason? I mean, our preference would be to hold on, but Yeah, preference would be to hold on forever, but you never say never and things could change. For the time being, our expectation is to hold for forever. Yeah. Okay. Thanks for taking the questions. The next question comes from Richard Tse with National Bank. Please go ahead. Morning, Richard. Oh, hi, good morning. This is Mike Stevens on for Rich. Hello. Just wanted to touch on you. You guys have discussed style drift and the evolution of the model. Just wondering if there's any recent examples or updates that you wanted to highlight on that concept. Not really. It's really the same modeling that we've done in the past, and we're just looking at a closer view of what AI could do to these businesses that we're looking at. Really there's not much more to add. Okay. On the Altera acquisition, obviously it's faced some expected customer attrition. It's good to see the positive returning organic growth in the quarter. Just wondering, any update on how that business is going and, you know, whether organic as a whole can kind of either stop declining or turn positive at some point. Yeah. The business is running pretty close to what the investment thesis was from a returns perspective. It was never contemplated that this would be a strong organic growing business and that hasn't changed either. Again, with AI and new things to come to market, possibly. No, don't look at the current quarter as a trend. Like it's still expected that this is gonna be a tough market that this business competes in, so the thesis has not changed. Okay. Appreciate the insights. The next question comes from Samad Samana with Jefferies. Please go ahead. Hi. Good morning, and thanks for taking my question. Good morning. Maybe first just, the organic growth was healthy in the quarter. I'm just curious if you could unpack kind of what's driving that organic growth rate at the current level and just as we think more near term, if that's the right way to think about organic growth for the rest of 2026. Then I have one follow-up question. I mean, the maintenance organic growth number for the year is right in line with it's been every other year for the last X number of years, right? Adjusting for inflation and COVID. That 5% FX adjusted maintenance organic growth and recurring organic growth number, I continue to think is a good number to for future organic growth. From a total organic growth, what was it? Like 2%-3%, which again, is pretty much in line with prior years, so nothing's really changed. Understood. On the M&A strategy, I guess, you know, the word disruption and the impact of AI is come up on this call multiple times. I'm curious if you're seeing a change on the, on the sell side in terms of are you seeing private companies either more willing to sell in this environment where there are more uncertainties? I guess, how does your top of the funnel from a deal perspective look, and are they willing to take a lower multiple to account for that risk? Just help us understand how that's helping or hurting your own M&A strategy. No, to date, we haven't seen any changes. Expectations are still the same. Volume is still the same. It hasn't really changed much. I mean, we're using tools to score leads in our funnel, but really that hasn't really changed much, so far 'cause it's still early days in those tools that we're using. Other than that, expectations are still the same. They haven't dropped despite what's going on in the markets. Great. Thank you. The next question comes from Keith Lambert, a private investor. Please go ahead. Morning, Keith. Thank you. My question is on the new PEMS capital deployment strategy. Is this change in the investment universe driven by either the slowing availability of VMS, traditional VMS targets, or is it driven by, in any way, concerns that management or half of the long-term value of terminal values of VMS businesses due to AI? No, it's not driven by AI. It's driven by we, you know, we like the company, and we thought it was a good investment for our shareholders. We do, you know, need to look also at other ways to deploy capital, as Bernie suggested over time, and it's an alternative way to deploy capital in businesses that we can get our head wrapped around because we do understand vertical market software. Yeah. I guess my question though is would it not be better to focus on what you have a proven capability on, which is acquiring VMS targets and-? Well, we're doing that. We're not changing our at all. It's not a distraction at all for us. It's just incremental as you know, as time has passed, we, for example, we never really did a lot of larger transactions in VMS, and we've been able to do those as well. It's just an evolution of Constellation's long-term strategy, is really. It's another way to deploy capital, and we'll do it rationally and we won't allow it to distract us. Thank you. The next question comes from Rick Bandazian with Offsides Macro. Please go ahead. Hey, good morning. Thanks for taking my question. First, can you just give the market some color? We've talked about Sabre quite a bit here, but does this only go so far as a minority stake and board seats, or is there a larger plan here? Secondly, has there been any dialogue between the both of you since you guys filed your Schedule 13D? It's larger. The question would have been around the larger. Yeah. Yeah. No. I mean, it's really like, well, it's gonna be situational. We're gonna look at each of these companies situationally. We're really just trying to continue to focus on, you know, what makes sense. Each of the PEMS investments will work with the company to see what makes the most sense based on the situation they're in. Okay. Yeah, that, I mean, it's really gonna be situational. Each company has its own ways we can maybe add some value. We hope we can help and work with the company and the shareholders to improve the, you know, future of the company with a long-term lens and perspective here. Like, you know, we're not going in to try to do something quickly, where we wanna think about long term, like think about everything. Okay. Like, I'm not that familiar with your company, so I'm just curious- Okay. If this is a typical playbook that you guys typically take minority stakes. It's new. I mean, we did it earlier on, more in the early days, and it's gonna again, it was situational then too. It's something new. Something new in the sense that we're sort of formalizing a strategy around it. We're gonna continue to learn as we do it. I think it's again, it's just another option for us to deploy capital for our shareholders. Okay. One more, if I could. Just big picture, software SaaS companies obviously under a lot of pressure lately. There's this talk of unknown terminal value in your space. Can you just give the market, and you did this in the opening remarks, I appreciate it. Could you give the market just a little bit of a handhold on what's going on here lately? Is the market wrong on this terminal value and it's sell now, ask questions later? Is there gonna be dispersion among the players in the market? Some will win, some will lose. Just any color on that would be very helpful. I appreciate your time. Yeah, I know. You know, what you have to think about with us is we're very decentralized, and we trust each of our businesses to sort of, you know, have a strategy around this and learn from each other, and our coaches push them hard on making sure they're moving things forward. We don't look at it as it's gonna be a situation where, as always, some of our businesses do better than others, adapting to disruptions in their markets. We'll make sure that we, as a conglomerate, we will put the capital in the hands of the people who we feel will continue to invest it at good returns for our shareholders. We will sort of adapt our business as we see changes to it as we always have. We might, you know. I don't have any good solid one answer to that question, but I think we have a very well-designed organization to adjust and adapt because there isn't like one product here that's driving Constellation. There's thousands and thousands of products out there that we offer our customers that are run in multiple countries all over the world with different heads of development adjusting to it. We'll just adjust as we see fit. I mean, any comments, Jamal or Bernie on that? No, I think it's good. We can't really opine on terminal values... Yeah. Being applied to, publicly traded companies now. It's just, I mean, there's gonna be some winners, there are gonna be some losers. It's all in how you use the tools to get closer to your customers. As a good conglomerate, we wanna make sure we're putting the capital behind the people who are winning. If you're losing, we'll take your capital and put it elsewhere, which doesn't sound very nice, but it's that's what we'll do. Understood. Excuse me. Have a great day. Thanks. Thank you so much. Excuse me. I see it's the top of the hour. Is there time for any other questions? Sure. Okay. We have a question from Roy Weinert with BP Capital. Please go ahead. Hey, Mark. Congrats on a good quarter and resuming the conference call. Thank you. few of changes. How do you see your leadership style different than, Mark Leonard? Then maybe for us, related question, as you think about AI implementation, do you think this calls for perhaps a more centralized approach within the company? Like, do you see AI as a place where, you know, there's more like scale advantage to large players? Just a quick comment on the Mark situation. Like, you know, always hard to fill Mark's shoes, but he came from being an investor, and I came from being a product developer. So we came at it from two different angles, and I probably am more product-oriented, which that would be the only difference. We both have all very shared values and very belief in decentralization and buy and hold forever. None of that has changed, which is really the fundamentals of our company. As far as a large, centralizing, you know, development or centralizing AI tools, we're not really a big fan of that because it's gonna as soon as you make a decision like that, it means you're taking away the ability for that business leader who could be in some country somewhere working with a specific group of customers to move quickly to give them what they need, because then they're gonna rely on some sort of a centralized, let's say, agent or development tool. We will share the best practices. When you're sitting around... For example, last week they had an event in Denver. They're all very keen on showing up each other that they can beat them and do better. There's a competitive belief within our organizations that our business units, that they'll do better, but we're very hesitant to centrally control anything here. We really wanna measure it and share best practices fast. You know, obviously, I would talk to our leaders throughout the world about AI and what they're doing about it. Yeah, it's kind of an interesting time for me. As a developer, as a background, I kind of enjoy it because historically it would be always hard to talk to people about, well, what they're doing about products. This gives us something to poke away at. I'm enjoying it a little bit because I'm a big fan of listening to customers and developing products for them that make sense inside of our businesses. It's a real opportunity to do that here if they learn from each other as to what to do to help to use these AI tools to accelerate development or, you know, maybe expand into other areas of the customer because they're more able to do that now than they were before. Thanks. That's got it. As there are no further questions, this concludes our question and answer session. I would like to turn the conference back over to Mark Miller for any closing remarks. Yeah. Well, thank you very much. You know, I obviously wanna thank all the employees across Constellation for all they do and how hard they're working and learning and adjusting as through this, through AI and whatever else they're dealing with. Of course, thank you to all of our shareholders for, you know, continuing to invest in us. We'll continue to update you. We're looking forward to the AGM on May 15th, which looking forward to seeing whoever can come there, and it'll be also available as a hybrid online as well. Thank you very much, and thank Bernie and Jamal for helping out with this call. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.