Constellation Software Inc.

Good morning and 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 Enzeruth, 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 I hope you've had a chance to at least flip through it. And I wanted to make a few remarks before we move into Q&A. So there's a real noise in the market now about AI disrupting software businesses. And we take that very seriously. But 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 as 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 and 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 Polaris and Jonas event is underway in the UK, and 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. But I want to 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 going to 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. I wanted to mention a little bit about capital allocation. 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 large, 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. But the logic is straightforward, permanent, meaning we're long-term shareholders, 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, and we hope many of them become engaged long-term holders alongside us. So just to wrap up here, the fundamentals haven't changed for me. I've spent like three decades with Constellation. You've 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. And 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, but we've got the right business to respond. And so 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 then 1 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 then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Kevin McVeigh with UBS. Please go ahead.