Q4 2021 Altus Group Ltd Earnings Call
[music].
Thank you for standing by this is the conference operator, welcome to the Altice group fourth quarter and full year 2021 financial results conference call and webcast.
As a reminder, all participants are in listen only mode and the conference is being recorded.
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I would now like to turn the conference over to Camilla Bartosiewicz. Please go ahead.
Thank you Caitlin and good afternoon, everyone and welcome to <unk> fourth quarter and year end results conference call and webcast for the period ended.
Remember 31st 2021.
The news release announcing our results was issued after market close this afternoon and it's posted on our website along with our annual report.
Including the MD&A and financial statements.
Joining us today, our CEO , Mike Gordon incoming CEO , Jim Hannan, and CFO , Angelo Bartolini, who will start with some prepared remarks, and then we'll move right into the Q&A session. If we miss any questions. Please contact me directly by email.
So I'll start with Angelo beginning by covering off of our financial performance during the quarter.
Actually we'll start with Mike sent over to Angelo and then we'll finish with Jim Hatton with an operational update and our strategic priorities for 2022.
Before we get started please be advised that some of our remarks today may contain forward looking information also please be reminded that all took use of certain non-GAAP non <unk> measures as indicators of financial and operational performance forward looking information and an explanation of these measures are detailed in todays news release and in <unk>.
Our annual report all of the forward looking information discussed today is qualified by the cautionary statements included in each reports.
And with that I'll now turn the call over to Mike for some opening remarks.
Thank you Camilla and thank you for joining us this afternoon.
We're running the call a little differently today I'll start today recapturing our key accomplishments from the past year.
Turn it over to Angelo to add more color on our Q4 results and the business outlook for this year and then we'll turn it over again to Jim for an operational update and discuss the key strategic priority. He's got the team focused on in 2022.
All in 2021 was a solid year of growth acceleration and strategic progress.
Especially proud that considering the backdrop of continuing pandemic related challenges for our industry. The disruption of the summer cyber security incident, and quite frankly, managing through change as our new leadership team refocused our long term strategy and implemented a number of operational changes in support of that.
Financially, we delivered robust growth in our key financial metrics with double digit 11% top line and earnings year over year growth.
Our consolidated revenues stand at over $625 million adjusted EBITDA has now surpassed the $100 million threshold at $110 million, putting us on a path to start growing our margins. This year and we finished 2021 with adjusted EPS at $1 90.
The strong financial results set a solid foundation for continued growth in 2022, and beyond and demonstrate our ability to leverage our growth investments and acquisitions to generate strong returns.
Operationally our mouths are.
Our momentum with Undeterred.
We delivered on our 2021 plan and this leaves us exceptionally well positioned for sustained growth and innovation in 2022.
Some highlights from the year include accelerating Argus cloud adoption, surpassing our internal expectations as we finished the year with 42% of Argus enterprise users contracted on the cloud.
Executing on three highly strategic acquisitions that have expanded our capabilities into key adjacencies in that data and analytics, while speeding up our time to market and growing our international footprint.
Advancing our operational and digital transformation of property tax, which furthers our strategy to incorporate tax management solutions under our intelligence as a service model and finally driving enhanced corporate alignment across all of Altice with reverb go to market strategy.
That had been driving solid sales execution, and altus analytics and the rest of the business and Jim O'brien will give us more on that in a few minutes.
Above all we delivered incredible value to our customers through our end to end actionable intelligence solutions, helping them maximize alcohol and reduced beta during market conditions that even tested our industry's top performers.
That reason all of US as a company continues to enjoy exceptionally strong client loyalty across all of our business lines and the network effect of our platform has been strengthened.
As many of you know our long term strategy and our product roadmap is formed around the substantive market opportunity ahead of altice.
We're significantly further along today, owing to the operational achievements from 'twenty to 'twenty one.
This could not have been accomplished if not for the incredible talent on our team honestly, we have the best of the industry on our team I'm incredibly proud to have led all of this through this pivotal phase of its growth and look forward to my ongoing involvement as a director on our board for.
So what I hope will be many years to come.
And finally on a personal note as a fellow shareholder in the company I'm excited to further value creation ahead under Jim and Jorge.
The other with Angelo Alex Probyn, and our executive team they have already hit the ground running in 2022.
With that I'll turn it over to Angelo to recap the fourth quarter.
Thanks, Mike.
Given that we pre announced our results earlier this month I'll be brief and aim to provide some additional color on the quarter.
I have no doubt you saw it was a solid finish to the year with 11% topline growth in our consolidated performance and steady earnings performance.
Fotis analytics delivered terrific results.
Revenues were $72 4 million up 41% 47, 47% on a constant currency basis.
Perhaps most noteworthy our analytics organic growth sanction is going strong.
Organic revenues were up in the double digits for the second consecutive quarter up 17% or 22% again in constant currency.
We saw good growth across all our key solutions with a healthy balance of customer expansion and new customer additions to our platform.
Cross selling with newly acquired solutions is ramping up we're expanding our penetration with existing clients and steadily adding new clients by one measure we added 297, new logos for Rguest and Q4 that brings us up to approximately 1230 new logos.
In 2021, a significant increase over 2020.
Our gross retention rates remain in the industry, leading range across all of our software data and analytics solutions.
Which are considered to be mission critical by our clients.
All of this speaks to our improved operating posture under Jim's leadership.
Equally impressive our overtime revenues were 59.8 million up 38% or 41% on constant currency.
And up 8.5% sequentially over Q3.
We're also pleased with the steady progression against their cloud migration journey, which as Mike said surpassed our internal target.
With 42% of AE users contracted on the cloud at the end of 'twenty 'twenty. One we expect to maintain good momentum in 2022 with the large majority of our AE users expect it to be contracted to the cloud by end of 2023.
The enhancements to cloud enabled AE 14 launched in late 2021 are expected to be an influential consideration for larger firms. In addition to our plans to and support for AE $12, one or older by June 32022.
Adjusted EBITDA showed a good improvement in the quarter as well up 9% to $10 7 million or 19% in constant currency.
Similar to last quarter earnings were impacted by a $1 7 million purchase price accounting adjustment.
Adjustment related to finance active and we all enemies deferred revenues.
Which in turn had an approximate 1.9% impact to our margins.
Bookings growth continues to trend very strongly up 113% in Q4 in constant currency of which 91% was organic a solid precursor of growth in 2022.
Given the strong sales execution driven by our operational initiatives, we continue to expect robust bookings growth in 2022.
But keep in mind growth rates will moderate given the high comps in 'twenty one.
As we look ahead, we feel really good about the opportunities for 2022 to deliver another strong year.
At the analytics segment.
Reflecting the strength of the business in 'twenty, one and the contributions from the acquisitions. We made we are well positioned to drive sustained double digit revenue growth and 22 <unk>.
Including double digit organic and over time revenue growth.
On constant currency as well.
We expect a double digit year over year improvement in adjusted EBITDA, and we will transport, which we expect will translate to year over year improvement in margins.
Yeah.
Turning to the CRE consulting segment.
Property tax Q4 revenues were up four 5% to 60 million and earnings were up 1% to 18 point too.
We had good growth in Canada, and the U S.
That was offset by a decline in the U K, which were impacted by a decrease in settlement activity volumes overall.
Overall it was a fantastic year is characterized by healthy appeal settlement volumes strong success rates and overall higher savings for our clients.
Strong bookings growth as we continue to onboard new clients and more properties onto our platform, thus increasing our market share.
Property assessment values are expected to continue to rise and we see greater opportunities for savings, particularly in disruptive times like these.
And with the investments we've been making on our technology platforms. We expect to see the continued benefits of improving our CRM and business development capabilities, creating greater efficiencies in our workflows and capturing greater appeal savings through data and analytics.
These trends set us on very strong footing to sustained multi year growth and to deliver another record year in 'twenty two.
Our outlook is supported by a significant pipeline of cases to be settled in Canada. The U S and the U K, a healthy backlog of new sales bookings as mentioned and record annuity buildings in the U K.
Long term, we can continue to see great growth opportunity as we differentiate ourselves from our competitors through technology and data analytics growing our market share and enhance enhancing the repeatability of our revenues and our operating leverage.
And finally, our valuation and cost advisory revenues were in line with last year at $35 million in earnings while earnings were down two 2% to $5 9 million the valuation and cost advisory practices enjoy significant market share within or jurisdictions and as a result are expected to continue growing modest.
With a focus on unlocking operating efficiencies supported by technology.
Turning to our financial position, we finished the year with a cash position of $51 3 million.
And with $287 6 million in bank debt.
The funded debt to adjusted EBITDA leverage ratio as defined in our credit agreement was 2.47 times.
Well below our maximum limit of four times.
Applying our cash the net debt to adjusted EBITDA leverage ratio was 2.17 times.
Finally, adjusted EBIT levels, we are able to deleverage quickly and we apply our available capital towards growth initiatives.
With that I'll now turn it over to Jim to take us through some of the operational progress.
Alright, great. Thanks, Angela good afternoon, everyone.
Great to join this call and I look forward to Vietnam anymore.
We've definitely hit the ground running in 2022.
Our analytics business in late Q4, we internally rolled out a transformational change to how we do business a key initiative last year was to unify the business unit from a collection of Siloed point solutions and disparate teams into a ubiquitous model that we can leverage to scale more efficiently.
More importantly, we believe the changes will maximize the value we bring to our clients and to allow us to better tap into cross sell opportunities while offering our employees are far more attractive employee value prop.
We approach this by revamping our go to market strategy and updating our operating model to make to make the shift to cloud based value selling.
The bulk of the groundwork laid in 2021, and we started the year executing on the strategy, we shared with you at Investor Day.
Our new operating model took effect January 4th and we're now integrating Rihanna mean strategy analytics and finance active answer that model. Our integration activities are progressing on plan and we're making solid inroads on the cross sell with.
With the addition of these new capabilities, we gained the credibility to have the alpha and beta conversations with our clients. This is all also yielding improved account planning and improved business development activities.
The feedback so far has been quite positive both for employees, who are better equipped to connect with customers on value across the CRE asset lifecycle and from our customers who are deeply engaged in the alpha and beta conversations to put that in perspective. This is a notable shift from past conversations with clients many of which her with the.
Procurement departments about simply increasing the number of software seats.
In addition, this year, we're further realigning the way, we bring our solutions to market under intelligence as a service.
By combining our core software data analytics and advisory capabilities under the following five offerings.
This valuation office transactions.
This performance office strategy and office intelligence.
Each of these offers packages a number of our capabilities, which we believe best suits, our customers needs and addresses their pain points across the whole asset lifecycle.
This new offer structure is currently being rolled out internally with our sales training going on right now and it will be reflected on our new sales materials and our new website targeted for launch in Q2.
As some of these changes have been taking fold we've seen remarkable improvements in our sales execution. This is showing up in the strong bookings performance as well as other internal kpis and we're just getting started.
Alex program, the President of global property tax and I have discussed taking a similar approach attacks last year, we organized under a global model and began to work on go to market strategies Tech, enabling a number of workflows. Later this year property tax management will be included in the office performance offer which provides improved opportunities for cross sell.
With our analytics clients.
In 2022.
Our strategic focus builds on last year's priorities and the acquisitions, we've made to drive transformative innovation.
We've organized our priorities around three key themes focus simplification and execution.
Eliminating complexity driving operational excellence are key driving forces.
Under focus our strategy is purposeful on driving profitable revenue growth in each of our tier one geographies. That's the U S, Canada, U K, France, Germany and Australia.
And across our core customer sectors and segments.
Through our regional P&L leadership.
Proved account planning customer success and sales training initiatives, we're well on our way and set up for strong execution in 2022.
Be assured that driving the network effect by accelerating Argus cloud adoption remains a high priority for us and we remain tactically focused on this both in migrating our legacy on premise software users as well as expanding our penetration with existing customers and adding new ones as you heard from Andrew It makes today, we made solid progress.
Yes last year, and we're tracking right on plan to have a high majority of our users on the same platform by the end of 2023.
This will unlock a number of operating efficiencies and it's foundational to our intelligence as a service delivery model.
As for simplification, our focus is on the unification of our commercial data value selling intelligence as a service and expanding our platform economics.
We have a very privileged position in our industry sitting at the intersection of evaluations and transactions.
You've heard us say before all roads lead the rguest driving the large volume of assets, we touch through our service lines.
Our business collects a substantial amount of valuable data across our solutions and service lines that we intend to leverage our intelligence as a service offering to deliver analytics at scale and with greater efficiency and speed at.
The core initiative. This year is the unification of our data, including expanding our governance and optimization processes.
With our enhanced data and data analytics capabilities. We're also focused on expanding those offerings to markets within our tier one target markets.
On value selling as just discussed a minute ago two priority is launching our new product offer structure under the intelligence as a service.
We started the year executing on this and as we progress we will continue to realign our sales processes across the entire organization sales incentives and pricing to increase client value and getting more users on our platform.
So regarding platform economics.
We are transitioning our entire technology stack to a platform based approach designed for the management of our data model the transition of our client's digital experience and to reap the benefits of leverage and scale across our entire organization.
We're continuing to integrate all of our underlying technology under a common office performance platform to deliver intelligence as a service.
By design. This approach is inclusive of all of our solutions and service lines and we will include a tax management workflow solution that will contribute valuable information to our intelligence as a service model.
And finally under execution. This is about getting our house in order to deliver on our strategy not to say that we were well equipped but there are opportunities to improve.
Coming together as one off this is an important initiative that needs to be supported by common technology change management cultural alignment and HR programs that will meet our requirements for global growth.
<unk> long ball and we are organizing ourselves accordingly.
Moving towards one off this is what will position us for excellence and sustainable growth.
If this looks a lot different today than it did when the company first went public in 2005.
Keeping pace with our growth in the many acquisitions, we've made over the years. The time has come to fundamentally transform our internal systems for how we operate collaborate and go to market as a unified intelligence as a service provider.
Our goal is to simplify how we engage with our employees and customers and maximize our internal systems. So that we can efficiently and effectively scale.
This is an investment to future proof of this.
She going on.
I'm, sorry key ongoing initiatives in support of the strategic priority include upgrading finance back office systems to increase efficiency and effectiveness optimizing CRM front office systems to maximize client value through integrated account planning simplifying our solution architecture and enhancing our human resources.
<unk>, particularly in the area of performance management.
Our talent strategy is core to our long term growth and sustainability, particularly during an increasingly competitive labor market.
We are investing in our global human resource systems to better manage our talent pool strengthen employee engagement and productivity and create a best in the industry employee experience with improved organizational cohesiveness.
Equally important we're embedding a cultural transformation diversity and inclusion.
A solid starting point for the next step in our journey includes the commitment to a system of values that represent the great people at this company.
Those values are think boldly where conclusively create.
Create exceptional experiences strive to outperform and lead with integrity.
Values reflect who we are a team I'm extremely proud to be associated with.
As you can gather and we have another busy year ahead of us with a clear plan for how we'll create stakeholder value. So.
In closing I'd like to thank our customers for their continued commitment to office our employees for your dedication grit and solid execution and our shareholders for their ongoing support and the confidence and trust you place in our team our.
Our executive transition is going very smoothly and personally I couldn't be more excited about the year ahead.
So with that let's open up the line for questions operator.
Thank you well now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, well hear a tone acknowledging your request.
You're using a speakerphone please pick up your handset before pressing I'm kidding.
To withdraw your question. Please press Star then two.
The first question is from Daniel Chan with TD Securities. Please go ahead.
Well, hi, and congrats on the strong cloud migration in the quarter would you say what the strong migration was largely due to the large contracts migrating from on Prem to the cloud or was it I believe you said it was 297, new logos you added was it due to those or is it more for the large contracts.
It was a combination of clients across various segments.
So it was both okay, because the execution at the high touch and the scaling.
Okay.
And then what drove all of those new customers in the quarter or was there like some sort of promo in the quarter that was that was around.
Yeah.
Just a couple of things there's a there are the early adopters have been on and you have I T cycles that have been playing out over the years and it was just it was just time for many clients to move over and they see the.
Efficiencies and.
The enhanced capabilities of being on cloud that was part of it.
There was also some pricing actions that we've announced for next year because that moved some folks over there.
Our clients understand that the best way that we can service them is through one platform and they're making the migration with us, but it's been a.
The analytics sales teams have been.
Extremely focused on driving to that 40% number throughout the year.
And they they executed really well.
Yeah.
Okay. Thanks for that that's helpful.
And then you did mentioned that you are looking for the vast majority to be on the cloud by the end of the year.
What is your visibility into next year that gives you that kind of confidence do you have a number of late stage discussions in the pipeline and some renewals that would suggest an acceleration from here and do you have any actual numbers is well above 50% where are we getting closer to 70 any color on that would be helpful. Thank you.
Hum.
Actually we said that we're looking at the high majority by the end of 2023.
That said.
The focus and the pace of growth I expect to keep up with.
Where we were at this year.
Okay. Thanks.
The next question is from Richard Tse with National Bank Financial. Please go ahead.
Yes. Thank you. So obviously you guys are doing incredibly well in terms of the organic growth, whether it's sort of bookings or revenue I'm just trying to understand how I go about ranking where that's coming from so you did a bunch of things in the past few years to change the sales or are you. All this made some acquisitions that build scale.
You're expanding your price up but like when it comes down to your ranking all of these initiatives.
What is sort of the biggest driver of this organic growth and can get you can't sort of give us an order of ranking in terms of what's the most prominent in terms of.
Driving that growth.
Sure happy to comment on that and then maybe the menswear wants to jump in to give them more of a historical view.
It's.
There's this there's the concept of the <unk>.
Science itself and it's about just making sure that the end to end processes from.
Getting our infrastructure right through awareness consideration type bill looking at your pipe several quarters forward, making sure that you know what your.
Your marketing qualified leads to sales qualified leads metrics need to be so it's just been a team that got behind the program.
Early in the year and they've just been firing on all cylinders all year.
Yeah, and then thanks, a lot and I would add to that.
No no sorry, Jim I please finish.
One of them good good Angela Oh, Yeah, no what I was going to say it really is a you know I'd echo that.
A lot of it stems from sort of the go to market a reorganization.
Asian and initiatives that Jim launched and when you look at where it's coming from it's it's it's a collaboration of the teams and delivering solutions to clients and it really is coming from across the board. We're seeing we're seeing improved sell in on the software side.
On our multiple products and we're seeing it on the advisory side, and the especially helping our clients provide bandwidth additional insights into their performance and decision making processes and in the 111.
Services have been really firing on all cylinders as well so it's really that organic growth is coming from all of our segments.
Okay. That's super helpful. I guess, while I have you Angelo like as you guys in a position or will you be going forward and maybe give us a proportionate split in terms of the mix of this organic growth from new versus expansion accounts.
Yes.
We are we are considering what metrics are we will begin to disclose in the new year. We just we really haven't made it. We are we are looking at significant.
Improvements in our back office systems.
That will provide us with greater.
And quicker insights into into key metrics and.
We'll be sharing more as we go along but at this point I'd, just say hold on more more more will come.
And just one last yeah Angela.
Sorry go ahead Jim.
Yeah, I was going to say.
The the typical.
SaaS company metrics that you would be used to is a big driver of the infrastructure upgrades that I talked about so Angela and I are working with the teams. So that we can we're systemically produce that.
We are.
We are focused on our internal metrics on things like.
Long term value relative to customer acquisition cost net retention, so we're going there.
It'll it'll be a function of the improved infrastructure.
Okay, Great and just one last quick one for me you know no doubt you along with Mike It rolled out.
Effective strategies by the looks of it in terms of the execution. So as you move into 2022.
What part of that strategy do you think is going to require more of your attention. Here. You know things that you may have not focused on as much that you wanted to kind of direct more attention to this year.
Okay.
Hum.
Well I would say you.
My team and I and the team have developed a strategy together, so you're not going to see much pivoting away from from what we've declared.
So we attack we tackled a lot as a company last year and so as you can hear across Mike's comments Angeles comments. My comments. We are we are highly focused on execution, but there are of course, there are the close adjacencies that go with that strategy.
And we'll be keeping an eye on opportunities as they present.
And where we are chasing some opportunities there.
That expands the footprint of the strategies that we've already put in play.
Okay, I'm glad no significant pivot in strategy okay.
Okay, all the best Thanks.
The next question is from Stephen Macleod with BMO capital markets. Please go ahead.
Yeah.
Oh, great. Thank you good afternoon, and good evening guys.
Jimmy.
Jim You mentioned, you talked a little bit about in your prepared remarks, just some of the infrastructure investments that you're talking to me.
You've talked about having some.
[noise] about needing to make.
Some of those infrastructure investments will yield.
It sounds like better a better metrics and better a.
Better measurement of your execution.
But I'm just curious like how do we think about those investments as it relates to the margin and is it something that will weigh on margins for a period of time before generating returns or is it really are they really sort of margin neutral maybe they're not that material.
Fourth for this for 2022.
60.
So theres a couple of things here or there there's the.
The infrastructure investments in the platform that I talked about which serves both clients and our internal processes around service delivery.
So that is a that those will drive margin expansion later in the year. The infrastructure. There is as you guys know, there's a lot of work to put infrastructure in.
So.
That will give us better management information for drugs for decision, making going forward from a productivity per head we do absolutely.
See that we will be able with the new infrastructure will be able to scale much more efficiently. So we should be able to accommodate significant more growth without adding in the past you know without having to increase back office capacity.
Yeah.
It's going to it's going to take us.
Several quarters to get the infrastructure in place.
Okay I see so maybe something that would begin to be more apparent at the end of this year or second half of this year.
Yes.
Okay, Okay great.
And then just wanted to circle back around on some of the AE conversions.
Our expectations for this year.
Would you still expect this year to be somewhat of an inflection point.
Part of the question and then secondly, you talked about having more of your larger customers potentially converting this year on the back of AE 14 enhancements and I was just wondering if you could give a little color around what those enhancements are for those largest for those larger customers.
So.
The.
It's the combination of the offers us.
Really what drives this morning talking about the enhancements to think about that to leverage the capabilities of strategy.
We need to be a cloud you need to be on cloud.
So.
To the power of the <unk> data with strata done it's significantly more powerful than just data in and of itself.
So it's the combination of.
The various.
Assets that we've acquired this year that drives the value and two to where were specifically offering those enhancements to our cloud clients and not to on Prem.
If I if I can jump in here too Jim I'd also throw out Steve from the conversations that we had last year remember we were also going down not only in the functionality that Jim has talked about but more of an open ecosystem. So you'll you'll see as we as we talk more as we go into the year and the roadmap develops there'll be a lot.
More connectors to partners out there, making it easier for our customers to get there and as a result, you know as Jim said.
There's just more functionality is going to be out there in all new functionality is gonna be book both on the cloud. So as people are starting to like look at this you know you've got a good eight.
The pace of growth on the cloud right now.
If it maintains at the same pace as it maintained last year. You know you know we will have the preponderance of our guys over and then it's you know for lack of better terms than in the year. After it starts to be a little bit more like cleanup.
Yeah, Okay great.
I use the term.
You used the term inflection point, we saw we saw that 35% to 40% range as a key inflection point, where the early adopters were in and now you're getting broad market acceptance and with that we think.
The industry follow suit.
They see the benefit of cloud and of collaboration.
Hence the analytics that comes with it so right, yes, I think rather an inflection point.
Okay, great that all makes sense thanks for the color.
And then maybe just finally just on the tax business, maybe this one's for Angela but I was just curious if you could give them more color around what.
What's the financial impact is of the annuity billing cycle in the U K are resetting in 2023.
Yes.
Ah well, we're gonna have we definitely are going to have the impact of the annuity as we disclose.
Uh huh.
That will reset so we won't we won't see that repeat in 'twenty three and then we'll reset and scale back up in 'twenty, four and 'twenty five as we go.
But you know we we are doing a lot of work right now.
To mitigate that and and.
If you look at the well you know where we are.
As well as Jim talked about and Mike has talked about where were really.
Enhancing our go to market.
And all of our jurisdictions, we're increasing our bookings were doing more along the lines of Digitization and we have new.
Initiatives that are going that are coming to market are particularly around the technology side of things and so you know we.
We should be able to make up a lot of that ground.
Just given our bookings our expansion and market share and are you know I'd say that the pipeline that we have also going into.
23 continues to be very strong we don't we don't complete all of what we have.
And our backlog and our pipeline it doesn't get all completed by this year, there's a tail that goes into 'twenty, three and somewhat into 24 as well and so so you won't see you won't see that entire impact with the annuities going away it'll be very very muted.
And we expect that okay.
Yeah.
Angela I would add to that.
As we said in the comments by design starting back last February and March the platform.
It is as contemplated the tax business.
And that is to drive analytics better information for the analytics models on the analytics side, but also allows us to bring analytics into the tax business.
Which should drive more recurring revenues in that business.
Okay. Okay. That's great. That's very helpful. Thanks, guys appreciate it.
Our next question is from Paul steep Scotia capital. Please go ahead.
Okay great.
Jim maybe you can just comment on and it may just be some of the wording in the annual here, but you know there's some very clear wording of both acquisitions and level of activity and the fact that you think you're in a unique opportunity to remain acquisitive and actually accelerate time to market just help us balance out.
The strong organic growth and maybe how aggressively you're going to look to maybe do more acquisitions with it with an increased credit line in November .
Sure it's.
Were always keeping an eye on the organic build versus the acquiring of technologies.
<unk>.
We're going to keep it.
Within the stated strategy.
So.
Yeah.
The leveraging of the balance sheet is absolutely a consideration as we go forward.
No.
We've got a we've got a strong corp, Dev Biz Dev team keeping an eye on the on the market we've laid out the value chains of the services that surround the services we deliver today.
To understand who's playing right around us again, keeping in that close adjacency.
So while we're doing that so.
We are also laser focused on the execution implementation and expansion of the acquisitions we've made.
Great and then.
Maybe to clarify one thing from earlier I don't know what we're now calling the five offerings I know I know you've got the names of the many a but I guess what I'm wondering is most of the changes because you highlighted a few things at the start in terms of changes to the sales force change go market. The fact that they were effective Jan fourth.
Are we to think that most of those changes are fairly minor tweaks, Jim and all the groundwork in place. So we're you know we're full tilt and in 'twenty two or is there may be more of a you know there must be a ramp period just want to make sure that if we're not.
Not missing anything on that front.
FERC for analytics, the heavy lifting was absolutely in 'twenty one so we added.
We added the.
Customer success group, which changed the motions of the various folks in the sales teams of what they were focused on that allows us to put a hyper focus on renewals and net retention team.
Team focused just on that.
That was a change that the team already went through so the op model has been communicated across the.
The whole analytics team.
The changes coming in were communicated back.
In the spring specifics on it were delivered in November to the team we've had a solid change management program wrapped around it from the first from the first minute and January 4th was we were at we were basically in that model already we just made it.
The firm.
Reporting lines were firmed up on January 4th and we've done some changes to our focus on our.
Verticals and our territory alignment, which I think is going to drive a lot of again focus and productivity.
But the teams have been.
They've been designing this we brought theres been a lot of input from the field itself.
And.
It it's not it's not a major shift now the major shift from last year.
That's on the analytic side on the tax side, Alex has been driving change throughout 'twenty, one as well.
In my first week after being announced in this role.
Now its coming into the role.
Out with lots of the tax folks and they were immediately identifying cross sell opportunities that are already in play. So the tax teams are taking advantage of the new G. O P&L model that we have in analytics. So the synergies are already happening.
Great just two quick follow ups and I'll pass the line.
E.
How significant should we think of ending support for 12, one in June 30th being is that it's going to be a material accelerant to the numbers that we should think about in Q2 or Q3's people move forward or is a lot of the base already shifted and then one more quick follow up to not leave Angela.
Okay.
You want the answer to that and then youre going to Angela let's make sure that we're sure sorry, I would say.
[laughter].
So.
The I think we saw.
We saw a.
Bigger shifts with the pricing changes that we've already announced.
But then again it could go.
Back to your clients have their own budgeting processes and capital allocation processes.
I T resource allocation, so I think we'll see it steady throughout the year.
It's more of the it's more the network effect of once you're in the forties and Youre rolling out enhancements.
That that's going to be the bigger driver of growth, but I think we'll see it.
Stay steady throughout the year.
Makes sense Angela how do we think about Capex. This year, you've you've referenced investment a bunch of times. It is it sort of flattish to the current year uptick or should we actually turned down a little bit into this year. Thanks.
Yeah, I I'd say, it's going to be in the same ballpark.
Some of the.
Work that we're doing on the <unk>.
The structure of that.
That Jim's talking about you know theres, a new systems that we're implementing and there's going to be other enhancements that will be treated as capital.
But you know we're still in that.
We always kind of in the last couple of years, we tended to be in.
You know a few million dollars and they sort of catch up this past year to the $67 million range, well, well well probably see it in that range and maybe somewhat a little higher but but nothing really material.
Okay. Thank you.
The next question is from Scott <unk> with CIBC. Please go ahead.
Hey, guys.
I have a question I just wanted to ask about Rihanna me and really how it now that it's been three months since the deal since you acquired it how it is tracking towards those initial plans.
You've sort of said that from getting to that $21 million number just expectations to get to the sort of mid to high Twenty's is that still something thats in track on track and then same question on sort of on the margin side and how how its tracking towards the 2022 margin sort of you said nominally impacting the overall analytics margins.
Yeah.
Oh.
Yeah.
Jim did you want to take that or do you want yes.
Yeah, I couldn't couldn't get off mute.
Hmm.
The.
But the teams are doing great as far as.
The integration into the company.
It's that they offer structures as you can see the the reata data lands in several different places and those off restructures.
It's fundamental to the.
The entire go to market strategy going forward and the Rihanna and go to market team is slotted right into the new go to market vertical structure. Some some of the team is in the high touch some of the teams and scale business, we feel like we have a good market coverage.
Uh huh.
Five and best practices across our Canadian data solutions group.
Well as <unk> and <unk>.
So from that perspective.
It's it's baked right into everything that we're doing from an offer structure.
What do you want to comment on the margins throughout the year.
Yeah, I mean, well.
We'll see improvement as.
As we go through the year as we increase the.
The E R R and N. As we you know as we get to more of the synergies.
You know where we're on track with our plans are around that those aspects.
Will start you know we should start seeing the results of some of that work.
More than a kind of back half of Q2 early Q3, where we will we will see.
We will see.
Bigger release, so of costs and improved and they'll contribute more to the margin. So by by year end as we had talked about before we should be.
Flattish in terms of the impact of that acquisition.
Yeah.
Okay, great. Thanks, Thanks for that one.
Second question, probably for you Angelo.
Just noticed that the EBITDA margins.
Our valuation and cost advisory side.
Strong returns is there any could you just give some color on what drove that and if that's sort of maybe an expectation going forward.
It really.
Those.
Particularly on the cost side, it's a robust business. It's it's they've been really working on an execution, they've been terrific and and and on the valuation side as well I mean from an execution standpoint and.
And what we're seeing is where we've seen.
Pretty good growth.
Particularly out of the cost their bookings are increasing they continue to scale up.
And and and just the way they are operating just more efficiently we're using more technology.
And and and we.
We expect to continue to see improvement in that area.
But if I could.
Hey, Scott This is Mike I would say that a lot of the changes that Jim was driving on the sales side of the equation and also <unk> that was used on the cost side of the equation as well and so we saw robust growth just based off good old fashion focused on sales execution.
And the team executed very well on that.
Just a deliberate and I think that's gonna be highlighted even further this year as it is Jim works.
That business.
With altus analytics and taxes.
Yeah.
Alright, thanks for the color.
Yeah.
Once again, if you have a question. Please press Star then one.
Our next question is from Gavin Fairweather with Cormack. Please go ahead.
Oh, Hi, though just one for me and some Chrysler I mean, there's been a lot of changes.
Think about when he was a tier one customers maybe moving from maintenance to subscription.
It means my person model to a profit model and you've referenced the new structure and E 14 pricing increases can you help us understand maybe the lift that you would expect.
Our tier one customer moving from on Prem to cloud given all of those.
Puts and takes on that.
Sure.
The basic premise of.
The pricing needs to be we need to create more value for the clients.
No that sounds cliche, but and so we're starting every conversation so.
The cross sell opportunity.
Of.
Of the traditional software business into the global advisors, the BMS business, even combining with the Canada, our VA business.
Hum It allows us to package pricing very differently.
And that creates expansion opportunities when you're thinking about just her seat.
And then your clients start thinking well do I really need to add that had and now maybe you're in the acquisitions group.
Yep.
<unk>.
Penetration into the acquisitions group, but youre not into the planning group with the client if we think about the model differently.
We should be able to sell.
Secondly yield more price per client, but also give them the clients significant more capacity.
While lowering while lowering their cost of doing business and driving collaboration for them.
So.
So the bundling of the packaging of the B solutions together here is really what unlocks the value.
Great. Thanks, so much.
The next question is from Paul <unk> with RBC capital markets. Please go ahead.
Thanks, very much and good afternoon I just wanted to focus on the Big picture you know growth outlook for a a you're you're affirming our commitment to the aspiration.
400 million you know that that's just over $100 million of that the current run rate for a a how do we think about you know the key drivers or opportunity that will take you there.
Oh.
It's the we are you see me.
Talked about the organic growth.
Members in the revenue.
You're seeing real good realized on the P&L, you've seen the bookings numbers.
Those up I don't know if that's if you mean by market segment by type of solution, but it's.
I come back to the cross sell and the packaging of these new offers.
Is what unlocks a tremendous amount of value and the growth opportunities.
So.
The the aspirational goals that I feel are well within reach.
And with the with the assets that we have so.
The organic growth should remain very strong.
And as to the earlier question, we are keeping our eye on the market for acquisitions that are very close close adjacencies.
Expansion of the footprint that we have already.
And when you think about the growth opportunity you mentioned cross sell and packaging I mean that sounds like a lot of it is within the existing installed base and in customers. How do you think about either.
Well, either new logos within your existing markets or new market either international.
Or adjacencies.
Sure.
So there there's a lot there's a lot that attack in that question. So the.
We talked about the operating model, but we haven't we haven't.
<unk> gone into the details of the various vertical focus of the go to market teams now so.
That.
So we go back to the what we talked about Investor day, where there's the high touch which really that high touch segment really is about.
Wallet share expansion.
Think about it in terms of back to the SaaS metrics in terms of.
Net retention going up significantly because of the cross sell some things that don't end up in bookings, but because it's an existing client but grow the revenue base. So that really is about.
The opportunity to take analytics across <unk>.
Multiple.
<unk> areas in our in our client's estate.
The.
We do have the whole scale part of the go to market model that we've talked about as well.
And that's where the vertical focus combined with the the sales machine.
That supports the scale business at the appropriate cost structure is.
It is critical to growing the new market. So we think we see opportunities at both ends of the market and that's as we're talking about the traditional Argus enterprise.
Part of the business.
<unk> finance active into North America.
We've had success already bringing that product in and right now the teams are really ramping up in this new integrated model there, they're ramping that up significantly we took.
But I'd say there was the deputy CEO finance active he's now the P&L leader for the EMEA analytics business.
And again, that's that cross polymerization of the different solution sets. So.
We know Fred is gonna be.
Not only drive he has a strong software background. So that's driving the finance active expansion across Europe , but also enabling the teams in North America as well and then there's there's the.
The continued growth and our focus and excitement in the market about what we can do with that combination of strata them H E. R Advisory data.
And Rihanna me, combined which is which creates opportunities at both the high touch and the scale part of the market.
Okay. Thank you for taking my questions.
Yep.
This concludes the question and answer session I'd like to turn the conference back over to Jim Hallett for any closing remarks.
Great. Thank you so.
We thank everyone for you.
Continued our interest in an office really appreciate the turnout that we've had for this call given that we we had our announcement earlier in the month, if there's additional questions.
I think.
Most of you know to reach out to Camilla and we'd be happy to take them. So.
Thanks for your time, we appreciate the commitment to office and I look forward to talking to all of you soon thank.
Thank you.
This concludes today's conference call. Thank you for participating you may now.
Disconnect your lines.
Okay.
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