Constellation Software Inc.

Good day and welcome to the Constellation Software conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Mark Miller, President of Constellation Software. Please go ahead.

Thank you. Good morning and thank you all for joining our Q2 call. Before we get to questions, two things I wanted to put on the table up front. The first is AI. It is changing two things for us. Our customers are asking our software to do more for them while our businesses are finding new ways to build better products faster. We are seeing both. What we are not doing is running an AI program out of head office. Our business unit managers understand their verticals far better than we do and they are making those calls themselves at their own pace, funded out of their own P&Ls. Some of that work will pay for itself and some of it will not. And we will find out the same way we find out about everything else we fund, which is slowly. As many of our businesses have been adopting AI, we are seeing them use the tools to rapidly move through our customer-driven product roadmaps and augment our products with AI functionality. Let me be direct about what that means to you. We are not going to give you an AI target, an AI revenue line, or an AI timeline. If we start reporting a number like that, we will start managing to it. Our software is primarily mission critical. It is embedded in how a customer runs their businesses every day. AI is something we add to make that software more valuable. The second thing we've been working on is verticalization. We have been grouping our businesses and our prospects into coherent verticals where possible. The purpose is simple. We want to be the obvious permanent owner of a niche so that when a founder starts thinking about the next 20 years and selling their business, we are the first call. That kind of reputation takes years to build. It will not show up in this quarter's results or next year's. I would ask The constraint is not structure. It is having the right leader for each vertical and leaders of that caliber take a long time to develop. We are setting the pace accordingly. The two are connected. Depth in a vertical is what lets you tell the difference between an AI product that matters to a customer and one that merely demonstrates well. We would rather have that judgment sitting close to the customer and understanding their needs. So thank you very much and I'll turn it over for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Thanos Moskopolos with BMO Capital Markets. Please go ahead.

Hi, good morning. I won't ask for an AI metric, but just qualitatively, as you look across the portfolio, are you seeing a growing number of examples of businesses that are starting to see an uptick in organic growth driven by AI product enhancements, the way we heard some of the case studies at the AGMs. Is there more and more of that happening in the portfolio that you can speak to?

What we're seeing, Thanos, is we're seeing our development processes getting much better. They're moving faster through backlogs. So we're seeing a productivity increase, I think, across the group. Not everywhere, but it's starting to adopt because we spend a lot of time working on training up all of our resources on how to use AI tools better for development. And right now they're working to talk to customers about potential add-ons or additions to their products that are using some of this functionality to develop the software. But we still haven't seen a real pickup in organic growth from it. I think that's a ways out. What I always say, you can build products fast, but selling them is a whole other thing. A customer has the budget for them, and you have to be solving a need that they're willing to put some money on the table for before it's going to impact our organic growth. So I think that's consistent with what we've seen in previous quarters. I'm just really happy to see our teams adopting the tools to develop software faster, more efficiently than ever before.

Great. and then we've seen some PE acquisitions you've done recently with Derby Soft, TouchBase, True and Imagine. Is that indicative of a broader trend with respect to valuations coming down on larger assets or kind of more of a case-by-case thing?

I think it's the latter. It's burning here. It's more on a case-by-case thing and we're finding acquisition opportunities across the spectrum from owner-managers to PE to carve-outs So those are still coming through. It just so happens that we had significant volume this past quarter and the beginning of the third quarter. So we're still seeing all of these opportunities proliferate, but it takes a lot of time and we've developed these relationships over the long term. It just so happens that some of them happened and just took place this quarter. So we're very fortunate that were the first ones that they called, and we managed to close a whole slew of them.

Great. I'll pass the line. Thank you. Thank you, Thanos.

Our next question comes from Stephanie Kreis with CIBC. Please go ahead.

Hi, Stephanie. Hi.

Good morning. Hi. I just want to circle back on your comments around grouping businesses into verticals. It's a little bit different than CSU's historical focus on kind of not integrating these acquisitions. Just curious if you could talk a little bit about what's changed in the market that's led you to evolve into a potentially more vertical market focus and whether the verticals will be between different operating groups or how you think about those verticals.

It's a good question, Stephanie. We're not integrating businesses. There's no business integration going on in it. We're just trying to make sure where there's a chance to, let's say, I like to use a constellation expression, put them in the same orbit together. Whether or not, if they're across operating groups, we'll move a few businesses in order to try to make sure that there's someone who oversees a particular vertical. And it allows us to use some of these tools that we're seeing with AI that we might be able to use across some of those Those verticals. But that's the hypothesis. Time will tell. We've had good success when we've had vertical-focused leaders inside of Constellation that have created, you know, for example, Illumin and things like that. So I really do, I'm just trying to refine that a little bit and get the businesses that should be closer together closer together, but I do not plan on, or we don't have any plans to integrate them in any way, functionally or and any other way. But if they're a little closer together, they might be able to learn a little bit more from each other in a position for them better for the next five to 10 years.

Okay, that's good color. Thank you. And then maybe on Altera. So Altera's organic maintenance and recurring growth decelerated in the quarter. Just curious if a large client decided not to renew, like how should we think about the Altera organic maintenance growth and Altera going forward?

Yeah, I tried to put it in the MD&A there, Seth, but it was a very, like in Q2 25, they had a very strong order. So they actually had a couple of new name sales. And the way IFRS makes us account for things now, if you have a large contract, you have to recognize a certain amount up front. So they actually showed, I think it was positive 1% organic growth in Q2 of 25. Yet, you know, the trend line for this business is it's going to be a slow shrinker for the next year. Okay, that's great, Culler. Thank you.

Our next question comes from David Kwan with TD Cowan. Please go ahead.

Thanks. Just echoing on that last comment on the organic growth, Jamal, so even if you exclude Altera from the maintenance of the recurring revenue growth and constant currency, you came out at 4%, which is below the historical rate of 5% to 6%. So was there other stuff that you would call out, I guess, as it relates to the organic growth?

Yeah, I mean, there's a couple of other items. Like, it's tough because we don't talk to specific BUs in the MD&A, but, you know, we have a couple of larger acquisitions like a Dark Matter. We're a similar thing. We're in Q225. They actually recorded organic growth of... It was 10%, right? And again, this is a business that we're still fixing, has negative organic growth right now, but you had this huge Q2 25, and so therefore you've got like a negative 18 in Q2 26 because of that comp. The other thing, if you look at some recent acquisitions, so Lumen is broken out. You can see that they've made some large acquisitions recently that they're pulling out. Their organic growth in the quarter was 1%. So again, a drag on CSI, but things that they're expecting to turn around. And then there was another large business that we had in South America where they lost a large customer, but this was an example of a and many more. and so on.

Maybe some larger customer attrition that we should be looking out for in the coming quarters, or does it look a little bit more normalized?

My expectation, based on what we own today, is that it's normalized. We're also making a lot of large acquisitions, and I have not analyzed those to see what their impact will be in the next quarter or so. But yeah, based on what we own today, I would say, yeah, I would expect... These anomalies, this was a revert back. I'm not expecting another large customer leaving or anything based on what we have today.

That's helpful. And maybe one question on Bernie. I think you kind of talked about some of the deal flows and more increased deal flows of, say, larger deals, you know, $100 million, a few hundred million dollars. So it sounds like you're seeing more of that. Are you actually seeing better win rates for those deals? Like, how's the competition for them?

Yeah, I think the competition is still very robust. No one's giving up on vertical software, whether it's large or small. We've seen some weaknesses at the high end in pricing, but it's still very, very competitive. So it's not like we're increasing our win rates or anything like that. It's same old, try to get as much as we can. I don't see any improvement, but we have so many people out there looking for acquisitions across the board or across the globe. And it's a matter of developing those relationships over the long term.

Can you comment? Have you seen any changes within the competitors for the businesses, whether they're copycats, strategics, financial buyers?

The copycats are still out there. I don't see any new ones that are popping up really. It's more of the ones that have popped up in the last five to ten years and those still exist and they're still competing for businesses. And I expect that to continue for still quite some time until maybe some of those portfolios decide that it's time to move on and they don't want to go public and they just want to sell because it's PE-backed. and there's a limit to their funds. So I don't see any changes there. I don't hear of new ones popping up or if there are, they're very small. And we hope to pick those up at some point in the future, if at all possible. And hopefully at some point in the future, the number of copycats starts to reduce, but we just don't, we can't predict that. We don't know.

Thanks. One last question maybe for Mark. When you were talking about the verticalization, Are you changing in terms of the M&A and the BD teams for that, and how do you see an impact on potential movements in the portfolios for these, or the companies within the pipelines for the personnel there?

Well, we've seen a lot of, when we have vertical groups that are larger inside of Constellation, we've seen a lot of success deploying capital in those vertical groups. So definitely some of the M&A resources will be better aligned to verticals than stepping outside of them in some cases. So there definitely will be some changes related to that.

Great, thanks.

Our next question comes from Paul Treber with RBC Capital Markets. Please go ahead.

Thanks very much and good morning. Could you speak to the profitability of the 2026 cohort of acquisitions? Is it fairly typical and comparable to other cohorts, or do you see a change there?

I think I called it out last quarter that it was negative margins, but there were a couple large acquisitions It's more the purchase accounting, like there was some bonuses that we couldn't put as part of the purchase equation if we had expense, etc. But that cohort in Q2 meant from being, I think it was negative 16% in Q1, and it's now positive 16% in Q2. And it's going to trend up. The 2025 cohort, similar thing. I think it started off around 16%, 17%. It's up to 20%, so it's moving up. But it's not... These businesses will continue that way. It's just taking time to improve them to the levels. But if you look at all the cohorts prior to that, they're probably in the 30s or high 20s, right? And so it's just taking longer for them to go there. But no, they're not going to be inherently lower forever.

Okay, that's helpful. Second question, just specifically on Derby Soft, I mean, there's some disclosures in the MD&A. Is it fair to annualize the disclosed revenue in the MD&A and you get to roughly $100 million and the purchase price is $400? The multiple seems high. Is there anything wrong with my math, one? And then secondly, is there any reason for the multiple being higher than typical?

It is a high multiple, but it's a very successful organization. It's growing nicely, good profitability. It could always be a bit better, but that's what our expectations are of the business. It's a very solid business.

You did use leverage as well, right? Remember, that helps us pay a little bit more.

We also have a great team at Constellation working on that one, Paul, as well.

And the punchline on the multiple is that you still expect the IRR to be in line with acquisitions of a similar size?

Absolutely. Our hurdle rates aren't changing.

Okay. Thank you for taking the questions.

Our next question comes from Douglas Ott with Ondiri Associates. Please go ahead.

Hi. Good morning, all. I've got two questions. I'd like to ask a few questions on each. First is Altera and I just want to thank you for the ongoing disclosure for that asset. It's been very helpful and I'm very appreciative of that to be able to track the progress on Altera. So we've crossed the four-year anniversary acquired it in May 2022, and since then, according to my math, it's generated a cumulative $400 million in free cash flow, all while revenues have declined from a little over $800 million to now about $646 million trailing 12 months. My first question is, do you think these results have tracked with your initial expectations?

Yeah, I mean, I'm not closely involved with the business, but I have the CEO of Harris has talked to it at the board meetings, and he has said, yes, it is aligned with sort of what they expected from the investment thesis, and it's aligned. It's actually just operating ahead of what the expected IRR was in the original investment.

Got it. And also on Altera, I was curious if anyone could share any general learnings that you've had since acquiring it. What has surprised you, good or bad, since acquiring Altera from Allscripts and have you been able to apply any of those learnings to acquisitions since then?

I would think generally just it's a very large acquisition and it's something we've been learning how to do better over the last five, six years. We've done a bunch of larger acquisitions and one of the key learnings is Driving best practices is harder to larger acquisitions. You can't drive them as fast. So the ability to maybe break the business up into, let's say, what you would call smaller business units is something that we're trying to do faster when we can, when we acquire an above average sized acquisition for us. And so that's how quickly can you do that is really defined so quickly you can improve but that's just ongoing and that will probably be the biggest focus for me when I add something to that. It's just driving best practices is harder with large practices.

The complexity of larger businesses is really the challenge and the various groupings, different product lines, you have to manage them as a portfolio and because we do that on a portfolio basis in CSI, we have that experience already. but there are cultures that are just different from what we're used to at CSI and some things have to change and it's just a little more difficult to change them.

Back when we were doing smaller acquisitions where there was sort of five million in size, four or five million in size, it was really easy for one person to wrap their head around what had to be done to, you know, to do that acquisition, how it should be improved, what best practices you could apply to it. When you're working with a much larger acquisition like an Altera or maybe even a Derby Soft or any of these, you have to really be thinking about a team of people helping you think through what to do there and implement it, which you didn't have to do in the earlier days when you're doing smaller acquisitions. One of the nice things about us is we've learned how to do that a lot better and have more people are able to think that way than we would have, let's say, 10 to 15 years ago.

Yeah. Thank you. Thank you. All right. So second topic for me is continuing on the corporate carve-outs. I guess in general, I mean, like the difference between a small acquisition and a big acquisition, you have to change how you approach things and drive best practices. But on carve-outs, is there any reason that they're a bit deal with? You talk about those reasons. Are there, when it comes to analyzing it as an investment opportunity, What sorts of financial adjustments do you have to make? What sort of qualitative adjustments do you have to make? Are there different risks? Are they greater, lesser, and other types of risks? I just appreciate some more thoughts there.

Yeah, I mean, we get better than every time we do them. I mean, Bernie might want to expand on this. They're interesting because all of their financial statements aren't clearly separated out in a lot of cases. They're interwoven together. You have to separate them from internal systems that they're on. There's a whole bunch of carve-out things that really you have to manage carefully, and plus Whoever you're buying the carve out from, they really care where their customers end up in a lot of cases, right? So you've also got to balance that as well. So there's a lot of things you do differently with a carve out that you wouldn't with a standalone acquisition.

The same goes for the way we look at businesses in terms of return on investment. And every decision that we make within our business is based on return on investment. And if we can't see that return, we just won't do it unless it's really, really strategic as it were. and a lot of the businesses that we do get from Carboats don't look at their businesses that way and so that's a bit of an infusion that we give them and we try to set their minds towards measuring that investment and there are lots of decisions that these businesses make on a regular basis and when it's a larger business with various product lines, you have to take that decision, make them more granular and infuse that kind of thinking into the people that make those decisions.

They're generally not very balance sheet driven, right? They're not thinking about their balance sheet and the balance sheet is obviously something pretty important to understand and thus figuring out what that is and getting them to think about managing their working capital is harder than it would be for a standalone business because there's usually not a separate balance sheet for that particular card out.

Awesome. Awesome. Great. And just one final part of that. Would you agree that in your universe of potential acquisition targets are carve outs typically an area where Constellation can deploy larger amounts of capital?

Yeah, we've been doing it for years. I think that the fact that we've done it with Fortune 500 companies just underlines our ability to do carve-outs appropriately and maintain that customer base as expected. And I think these larger businesses are more than happy to deal with us when it comes to taking care of the customer base and the employee base. So I think we'll see and hopefully more of those.

And we have done multiple carve-outs from individual businesses too, which is kind of nice. Your reputation is important, very important that you take care of their customers and their employees when you're taking over a business like that and that matters to them.

And can you put any kind of general number on potential carve-outs that might be out there? Are they in the hundreds or is it

Thank you so much and hey good morning thank you so much and nice results here.

It seems like the M&A, particularly the first six months of the year, have been elevated. Should we expect a similar pace in the back half of the year, or just any thoughts on the cadence, just given there's been some pretty good success in the first half of the year?

I hate to predict things. We have a very robust funnel. We're working with a lot of businesses. Whether they happen in the second half of the year or whether they happen in the future is impossible to tell. You've seen our results last year were lower. So it's just so hard to predict when these businesses will actually close with us and whether they will close. So I will not offer a prediction.

We just want to make sure on the playing field when they're available, right? We want to be out there trying to win.

Super helpful. And then the pacing of the organic growth, obviously last year, The first quarter, there was only about 94 million of acquisitions as opposed to 380 million in the second quarter. Does that 380 start to come into the base in the third quarter? Said another way, is it the third quarter where it starts to get into the organic base?

Yeah, the way I calculate organic growth is I add, I pro forma our history as if we own that business for the full year or for the prior comparable period. So if we're buying businesses that are turnarounds and we need to fix or whatever, it impacts organic growth right away. And that's why I do it that way as opposed to waiting a year or whatever before it starts showing in our numbers.

And that's – well, that's to the point earlier where it was a little bit slower because some of those ones that – Got it. No, no, that makes a lot of sense. And then two others, and I'll get back in the queue. It seems like the taxes in the second quarter were a lot higher than what we modeled. Was there anything there just relative to, you know, the income taxes paid in the second quarter relative to, it was almost double what we thought?

So if you're looking at cash tax, like, I mean, that's just timing and, you know, but I always look at the current tax expense as a percentage of, you know, like sort of this adjusted net income before tax. And that number is sort of in line in that sort of mid-20s, which it always is. and yeah, so current tax approximates cash tax. If you look at the current tax line, it's pretty stable. The cash tax will fluctuate based on payments.

Helpful. Last one for me. The commentary on the AI was super helpful. As you're thinking about implementation internally from an expense perspective, any way to think about where you are in that process and then any way to dimensionalize The tokenization side of it, you know, in terms of increasing token costs relative to productivity and how are you, you know, just managing that? And is there any way, again, is the token cost where you thought it was going to be or just any thoughts around that as well?

Yeah, we started tracking this. So we've created now GL accounts that will track sort of the token expense and any costs relating to AI. I mean, still early days. I mean, if you look at our P&L right now, you'll see third-party maintenance like slightly up and nothing material. I'll be honest with you, I don't have a great, clear number of what the total expenses are relating to AI, so this is something we'll start tracking now going forward. But I do not believe it's materially impacting us today. And it is something that, as we talk about this internally, that we will, it's something we take into consideration, even like the tools we use, making sure we're not beholden to any one provider. I agree with Jamal, those things are correct.

I think in some cases we We push people really hard to start using the AI tools to start increasing their productivity and ability to get customers what they need faster. And I think it's really interesting to see where the tools evolve. In some cases we're using, one of the expressions internally is we're using a blowtorch to light a cigarette. So we're using very powerful tools for problems that probably don't need those today, but you sort of want to I would say roll with it right now in order to make sure you're adopting technology fast so people understand what's possible. So it's going to be an interesting journey for us. The great news is we haven't banked on any one particular platform to use. So we'll learn from each other and adapt as necessary. Our businesses will have the opportunity to very quickly change course and what tools to use if they need if we're thinking things are getting too expensive.

Our next question comes from Teddy Farley with Jefferies. Please go ahead.

Hi, this is Teddy on for Samad Samana. Thank you for taking our question and congrats on another solid quarter. A handful of software companies have called out headcount this earnings season, either with plans to reduce or aim for flat headcount, including a shift away from G&A. How does that compare with the thinking across your portfolio companies for the balance of 2026?

We're not thinking really a lot about headcount reductions. Remember, we're a very decentralized organization. We don't have this big 20,000-person R&D group that works across the world. We have We have individual businesses all over the world that have development groups that in some cases have single digit number of people and in some cases have double digit numbers of people. Very rarely have hundreds of developers in any one business. And so we're really trying to get them to be able to offer their customers more faster and get through product roadmaps and fix bugs and things like that using these tools. And The head count reduction is not a focus of the county at this point.

Awesome. Thank you so much for the call.

Our next question comes from Ryan Floyd with Barca Capital. Please go ahead.

Thanks so much for doing these quarterly calls and the transparency. It's really wonderful. It's Barca Capital. Sorry, Ian. My question is not about AI. Based on public information, it seems like a lot of your IRR when you buy something comes from changes in working capital. I am just curious, is this generally the case? And if so, could you give a very rough sense maybe of what portion of the IRR The other question I have is not about AI but it's just general. It is Have you seen a change in the number and profitability of your capital I initiatives in the last, say, six months or 12 months compared to two or three years? Or is it about the same? Have you seen profitability much, much higher, much, much lower? I don't know, you're doing 5x of these or 10% more, or it's just about the same. Again, thanks for doing the call. We all appreciate it. We appreciate the tone, the transparency. and the Disclosure. Thanks very much, guys.

Okay, so just to hit the working capital question, every acquisition is different. I know back in the early days, like the very early days of Constellation, it was a big factor in our acquisitions, but it didn't mean that it detracted from the IRR of the businesses themselves or the cash flow that we could generate from those businesses. Today, again, Working capital changes make a little bit of an impact, but not a lot. The biggest impact is from running the businesses appropriately and getting the cash flows out of those businesses. It's really operating changes that we make to the businesses as opposed to working capital. And if there is an added bonus that we can find within working capital, then all the better. But I wouldn't say that it's a significant portion of our returns. Hope that helps. That does help.

Is it? Is it fair to say, or have you had an eyeball on trying to get those cash flows? I know you're very time-valued, money-oriented, but getting those cash flows earlier rather than later? Or saying, you know what, beyond four or five years, we don't think too much about it?

Sure, we always try, but sometimes these things do take time. In Europe, I think it takes maybe a bit more time than it does in North America to make changes to our businesses. But we try to get them done as quickly as possible. That is our objective, to make sure these businesses are operating appropriately, like our 1,500 plus other businesses, so that they're in line with our operating guidelines. And so we do try to get them done as early as possible, yes.

Yeah, sometimes you have to look at customer contracts, and it takes time, right? A long time, especially with large customer contracts. Those relationships are very important as well, so you have to think through how to make those. But we model that all up as we think to an investment carefully.

But operating cash flows is first and foremost, and way more than working capital, and if we find those opportunities with working capital, we definitely do take advantage of those, yes.

Measure it very closely, very closely, yeah.

We're asking about initiatives, I think, as well.

So, yeah, I mean, there's a lot of initiatives going on throughout the organization. There's sort of two types of approaches to initiatives. We really love customer-driven initiatives where the customers actually say they need something and we help them figure out what that is. And some businesses are incredibly driven by just what the customers want now. Thank you for joining us. Do you have anything you could

Give us a sense of how well those early ones have been doing.

It's too early. It really is. It's really too early. What's interesting to me, like if we're seeing someone, what we've seen I think this quarter, if we see some other outside company coming into potentially to sort of more of a horizontal play in some of our verticals, we're able to be much faster followers, which I hadn't thought a lot about. We've always had the ability to be a fast follower. but you can be a faster follower with AI especially when you have a lot of customers in that particular area. So as long as you've skilled up your team so that they're able to move fast they can move Thank you for joining us. and so on and so forth.

are less likely to prefer cloud solutions or maybe AI solutions. Have you found that country-to-country regulated industries have different preferences with respect to on-premise or AI-coded products?

It's more sector-to-sector within countries, I'd say. I mean, I wouldn't have a broad conclusion on that. I'd say it depends on the sector. If you're government, you're clearly... Thank you very much. Thanks again for your time. I'll step out. Thank you.

Thank you.

Our next question is a follow-up from Douglas Ott with Ondari Associates. Please go ahead.

Hi, Dan. I've got two more questions. I'm curious. If you guys, the management team and board, are still studying high-performing conglomerates and other successful businesses, and along with that question, I'm just curious, how did those learnings trickle down, or how far did they trickle down? Is it just the top people that are studying these other businesses, or are there hundreds of business unit managers that are also

trying to glean lessons from these case studies?

I think it's a really good question. I mean, I've been fortunate enough to be able to be involved in understanding that as well as the senior team at Constellation. It really varies by the operating group how far they drive those down with inside of Constellation. There's a lot of content that we share for people as we're onboarding them, as we're onboarding new companies on how we see the world. Larry Cunningham did a study for the group that I oversaw for many years, Volaris, and he went and he spoke to, interviewed 70 of our leaders across the world and really wanted to understand How invasive are, I guess you want to call it, our beliefs are and how people think similarly. And it was pretty interesting because we've created, I think, a common lingo and a common understanding across the world on how to approach things independent of language, business. So I do think even if it isn't explicitly going through a particular conglomerate and how they've approached things, just the general lessons of what we've learned at Constellation over the last three decades tend to be everywhere, which is surprising. It was surprising to me how far it was in the decentralized organization. It's always fascinating to see that, right? So I was pretty happy to realize that Larry came to those conclusions.

Interesting. Secondly, it's been pretty long since Mark Leonard initially floated the idea of perhaps one day Constellation having to look outside of the world of vertical market software to deploy capital. Given the level of capital you've deployed continuing in software, has that effort taken more of a backseat or is it still ongoing or how has the level or desire evolved over time with that?

I think we're mostly interested right now with our ability to get more capital out, we're interested in focusing on software, making sure we're doing software as best we possibly can. It's something we discuss occasionally, but it's not really the focus right now. And there's so much more for us to do in the software world. I wish I could say we're all done, we're finished, but there's too much stuff to do. We're constantly learning and our teams, I think our teams are able to do larger acquisitions now, which has opened up a whole new realm for us. We couldn't have done that 15, 20 years ago. It just keeps evolving.

Yeah, good. That's an interesting point because I think a good part One way people are attracted and passionate to continue working at Constellation is just, it seems like a robust amount of opportunities for career development and learning in different fields. Is that something that people are really happy about and talk to you guys?

For sure. I did something at Belarus, I remember, three or four years ago at a big event where we had like 1,200 people in London. And I interviewed five people on stage, and three of the five were interns who were overseeing portfolios. But that was 15 years later after working for us for 15 years. So there's lots of career opportunities at Constellation, and there needs to be. In a decentralized environment, you create a lot more career opportunities. When you're in a large functional organization, You hit career growth opportunities, walls, if you want to call them, aren't as possible here. Many more people in our world can run a business inside of Constellation. They can take on other roles. I think it's an interesting place to work. We're super keen on continuing to develop our people across the world. It's the single most important thing we do.

Great. Thank you so much.

Thank you. Bye-bye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.