Q1 2024 Altus Group Limited Earnings Call
Operator: Good day, everyone, and welcome to Altus Group's Q1 2024 Financial Results Conference call-in webcast. This call is being recorded. At this time, I would like to hand the call over to Ms. Camilla Bartosiewicz. Please go ahead, ma'am.
Good day, everyone and welcome to all of this group's Q1, 'twenty 'twenty four financial results conference call and webcast. This call is being recorded at this time I would like to hand, the call over to MS. Camilla Bartosiewicz. Please go ahead ma'am.
Camilla Bartosiewicz: Thank you Lisa and good afternoon, everyone and welcome to the conference call and webcast discussing all this good first quarter results for the period ended March 31st 2024.
Camilla Bartosiewicz: Thank you, Lisa. Good afternoon, everyone, and welcome to the conference call and webcast discussing Altus Group's first quarter results for the period ended March 31st, 2024. Our disclosure materials, notably the press release, MD&A, and financial statements, and the slides accompanying our prepared remarks are all available on our website and, as required, have been filed to CDER Plus after market close this afternoon. I'm joined today by our CEO, Jim Hannon, and our CFO, Pawan Chhabra.
Camilla Bartosiewicz: Our disclosure materials that will be the press release, MD&A and financial statements and the slides accompanying our prepared remarks are all available on our website.
Camilla Bartosiewicz: As required have been filed with SEDAR plasma after market close this afternoon.
Camilla Bartosiewicz: I'm joined today by our CEO, Jim Hagedorn, and our CFO and treasurer.
Camilla Bartosiewicz: Some of our remarks on this call and in our disclosure may contain forward-looking information that is based on certain assumptions and, therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our forward-looking information disclaimer in today's material. Please be reminded that Altus Group uses CERN non-GAAP financial measures, ratios, total of segments measures, capital management measures, and supplementary and other financial measures as defined in National Instrument 52112.
Camilla Bartosiewicz: Some of our remarks on this call and in our disclosure may contain forward looking information that is based on certain assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected.
Camilla Bartosiewicz: Please refer to our forward looking information disclaimer in today's materials.
Camilla Bartosiewicz: Please be reminded that all of his group uses certain non-GAAP financial measures may shows total segments measures capital management measures in separate messaging and other financial measures.
Camilla Bartosiewicz: To find a national instrument 50 to one slot.
Camilla Bartosiewicz: We believe that these measures may assist investors in assessing an investment in our shares as they provide additional insight into our performance.
Camilla Bartosiewicz: We believe that these measures may assist investors in assessing an investment in our shares as they provide additional insight into our performance. However, readers and listeners are cautioned that they are not defined performance measures and do not have standardized meanings under IFRS and may differ from similar computations as reported by other entities and accordingly may not be comparable to financial measures as reported by those entities. Those measures should not be considered in isolation or as substitutes for financial measures prepared in accordance with IFRS.
Camilla Bartosiewicz: Readers and listeners are cautioned that they are not defined performance measures and do not have standardized meaning under area for us and may differ from Sidney Ho computation as reported by other entities and accordingly may not be comparable to financial measures as reported by those entities.
Camilla Bartosiewicz: You should not be considered in isolation or as substitutes for financial measures prepared in accordance with IRS and explanation of these measures as detailed in today's IR materials.
Camilla Bartosiewicz: An explanation of these measures is detailed in today's IR material. I would also like to point out that, unless otherwise specified, all the percentage and basis point growth rates we refer to on today's call will be on a constant currency basis over the same period in 2022. Okay, over to you, Pawan.
Pawan: I would also like to point out that unless otherwise specified all of the percentage and basis point of growth rates. We referred to on today's call will be on a constant currency basis over the same period in 2022.
Pawan: Okay over to you Bobby.
Pawan Chhabra: Thanks, Camilla, and thank you everyone for joining us today. Altus delivered solid results in the first quarter with improvements across our key financial metrics. Our team stayed on task, growing revenue, and expanding margins. Our results in both analytics and property tax came in ahead of our expectations. Recapping our consolidated metrics, revenue was up 4.3%, and profit improved by 93.7% on an as reported basis. Adjusted EBITDA was up 12.9%, driving a 100 basis point margin expansion on an as reported basis.
Camilla Bartosiewicz: Thanks.
Pawan Chhabra: Thank you everyone for joining us today <unk> delivered solid results in the first quarter improvements across our key financial metrics.
Pawan Chhabra: Staying on task growing revenue and expanding margins our results are across analytics and property tax came in ahead of our expectations.
Pawan Chhabra: Recapping, our consolidated metrics revenue was up four 3%.
Pawan Chhabra: Profit improved by 93, 7% on an as reported basis.
Pawan Chhabra: Adjusted EBITA was up 12, 9% driving a 100 basis point margin expansion on an as reported basis.
Pawan Chhabra: And notably, free cash flow was up 83.5% on an as-reported basis over last year, which included the impact of our ERP chain transition, or up 41.4% if we compare it to Q1 of 2022. As you're likely aware, there is some seasonality to this metric, primarily relating to the benefits of compensation with our employee bonus payout, which occurs in P1.
Pawan Chhabra: And notably free cash flow was up 83, 5% on an as reported basis over last year, which included the impact of our ERP transition were up 41, 4%, if we compare it to Q1 of 2022.
Pawan Chhabra: As you're likely aware there are some seasonality to this metric primarily relating to the benefits and compensation broker Wade bonus payout, which occurred in Q1.
Pawan Chhabra: Additionally, I'd like to highlight that in Q1, we recorded $5.4 million of restructuring costs, primarily impacting our analytics business segment, as well as some of our corporate functions. This reflects our ongoing efforts to operate more efficiently and rebalance investments towards future growth initiatives. Turning to our business segment performance, analytics continues to drive top line growth and margin expansion. Revenue growth was driven by our ongoing transition to cloud subscriptions, new sales, a higher number of assets on our valuation management solutions platform, and contribution from the former reacquisition. The combination of Forbury's innovative culture and Altus' global go-to-market reach provides us with growth opportunities with a fit-for-purpose software offering in the APAC and UK markets, and with emerging opportunities in the U.S. banking sector.
Pawan Chhabra: Additionally, I'd like to highlight that our Q in Q1, we recorded $5 4 million of restructuring costs, primarily impacting our analytics business segment as well as some of our corporate functions.
Pawan Chhabra: Reflecting our ongoing efforts to operate more efficiently and rebalance investments towards future growth initiatives.
Pawan Chhabra: Turning to our business segment performance analytics continues to drive top line growth and margin expansion.
Pawan Chhabra: Revenue growth was driven by our ongoing transition to the cloud subscription new sales a higher number of assets on our valuation management solutions platform and the contribution from the <unk> acquisition.
Pawan Chhabra: The combination of four great innovative culture, and Altice global go to market reach.
Pawan Chhabra: Right.
Pawan Chhabra: Both opportunities with a fit for purpose software offering in the APAC and U K markets.
Pawan Chhabra: And what the emerging opportunities in the U S banking sector.
Pawan Chhabra: Just to let you know that I benefited from higher revenues, operating efficiencies, and our ongoing cost optimization effort. Recurring revenue represents 93% of our analytics revenues in the quarter compared to 90% in the prior year. These revenues, comprised of solutions embedded in our customer's most critical processes, therefore represent resilient revenue streams with low churn.
Pawan Chhabra: Adjusted EBITDA benefited from higher revenues operating efficiencies and our ongoing cost optimization efforts.
Pawan Chhabra: Recurring revenue represented 93% of our analytics revenues in the quarter compared to 90% in the prior year.
Pawan Chhabra: These revenues comprised our solutions embedded in our customers' most critical processes and therefore represents a resilient revenue streams with low churn.
Pawan Chhabra: As a reminder, in Q4, PMS recurring revenue is seasonally our high point in the high volumes of annual valuations. Our T1 recurring revenue came slightly ahead of our expectations, the market environment remains consistent with Q4 of FY23 and expected to continue through the first half of the year. There are several encouraging signs emerging for a second half recovery, relatively stabilized interest rates, a growing economy, and increased activity resulting from distressed sellers and lenders.
Pawan Chhabra: As a reminder, in Q4 Vms recurring revenue is seasonally our high point, given our high volumes of annual evaluations.
Pawan Chhabra: Our Q1 recurring revenue came in slightly ahead of our expectations.
Pawan Chhabra: Market environment environment remains consistent to Q4 of FY 'twenty, three and expected to continue through the first half of the year.
Pawan Chhabra: There are several encouraging signs emerging for a second half recovery.
Pawan Chhabra: Relatively stabilized interest rates, a growing economy increased activity, resulting from distressed sellers and lenders.
Pawan Chhabra: Many of our clients have expressed their belief that markets have bottomed and volumes will begin to recover in the second half of the year. Our margins continued to expand by 210 basis points in the quarter. We initiated our cost optimization efforts midway through the first quarter, and with recurring revenue growth expected to pick up in the second half of the year, we expect margins to ramp up in subsequent quarters this year. We remain confident in our ability to drive 400 to 500 basis points of margin expansion for the full year, which we expect we can do even on the low end of our guidance revenue range. We are increasingly benefiting from higher efficiencies at our Global Service Center in India.
Pawan Chhabra: Many of our clients have expressed their belief that markets have bottomed and volumes will begin to recover in the second half of the year.
Pawan Chhabra: Our margins continued to expand up 210 basis points in the quarter.
Pawan Chhabra: We initiated our cost automation efforts midway through the first quarter and with recurring revenue growth expected to pick up in the second half of the year, we expect margins to ramp in subsequent quarters. This year.
Pawan Chhabra: We remain confident in our ability to drive 400 to 500 basis points of margin expansion for the full year.
Pawan Chhabra: We expect we can do even on the low end of our guidance revenue range.
Pawan Chhabra: We are increasingly benefiting from higher efficiencies from our global service Center in India.
Pawan Chhabra: And as you saw through our restructuring activities in the first quarter, we have taken action to further refine our operating model. We ended the quarter with 75% of our AE users contracted on the cloud. Our transition to Argus Class continues creating more revenue growth opportunities in 2024. Now with 75% of our AE users on the cloud, our churn from on-prem maintenance represents 0.15% of our annual revenue. Our maintenance gross retention rate of 89% is no longer a relevant metric, and we plan to retire that going forward. Our new bookings performance was steady and continues to be impacted by current macroeconomic conditions. Now the timing of bookings tends to fluctuate.
Pawan Chhabra: And as you saw through our restructuring activities in the first quarter.
Pawan Chhabra: You can action to further refine our operating model.
Pawan Chhabra: We ended the quarter with 75% of our AE users contracted on the cloud.
Pawan Chhabra: Our transition to Rguest class continues creating more revenue growth opportunities in 2024.
Pawan Chhabra: Now with 75% of our users on the cloud or churn from on Prem maintenance represents 0.15% of our annual revenue.
Pawan Chhabra: Our maintenance gross retention rate of 89%, it's no longer a relevant metric.
Pawan Chhabra: Turning to retire that going forward.
Pawan Chhabra: Our new bookings performance was steady and continues to be impacted by current macroeconomic conditions.
Pawan Chhabra: We're encouraged by the healthy recurring new bookings performance in the quarter, which was up 14.2%. As the market stabilizes, we are well positioned to capitalize on the recovery and convert our growing backlog into revenue. Turning the property tax team had a very strong start to the year. Revenue was up 10.2%, and adjusted EBIT out was up 24.9%, with margins up 300 basis points. The growth is driven by a strong performance in the U.S., offset by a decline in Canada and the U.K.
Pawan Chhabra: Now the timing of bookings tends to fluctuate we're encouraged by the healthy recurring bookings performance in the quarter, which was up 14, 2%.
Pawan Chhabra: As the market stabilizes, we are well positioned to capitalize on the recovery and convert our growing backlog into revenue.
Pawan Chhabra: Turning to property tax team had a very strong start to the year.
Pawan Chhabra: Revenue was up 10, 2% and adjusted EBITDA was up 24, 9% with margins up 300 basis points.
Pawan Chhabra: Rose was driven by a strong performance in the U S offset by a decline in Canada and the U K.
Pawan Chhabra: In the US, several of our large settlements were pulled forward from Q2 to Q1. In Canada, the cycle timelines in Western Canada and the impact of the ongoing Ontario cycle extension have impacted our growth. The UK continues to be constrained with slower than anticipated VOA throughput, but the backlog of opportunities is growing. The increase in adjusted EBITDA reflects higher revenues offset by higher compensation costs, as well as geographic variances in our revenue and related cost base on a year-over-year basis, going forward with the Ontario cycle extension and the VLA constraint.
Pawan Chhabra: In the U S. Several of our large settlements were pulled forward from Q2 to Q1.
Pawan Chhabra: In Canada, the cycle timelines in Western Canada, and the impact of the ongoing on carrier cycle extension.
Pawan Chhabra: Impacting our growth.
Pawan Chhabra: The UK continues to be constrained with slower than anticipated VLA throughput, but the backlog of opportunities is growing.
Pawan Chhabra: The increase in adjusted EBITDA reflects higher revenues offset by higher compensation costs as well as geographic variances of our revenue and related cost base on a year over year view.
Pawan Chhabra: Going forward with the Ontario cycle extension and the V. Airway constraints. This year's geographic mix is expected to be weighted towards the U S, which runs at a lower margin profile.
Pawan Chhabra: This year's geographic mix is expected to be weighted towards the U.S., which runs at a lower margin profile. Our outlook, however, for the year remains unchanged. I would also point out that the Ontario government's latest budget release, which was released in late March, indicates that the province-wide reassessment will continue to be deferred until the province completes its review of the property assessment and taxation system. We continue to constructively engage with the government, though it's becoming unlikely that we'll have a reassessment in 2025.
Pawan Chhabra: Our outlook however for the year remains unchanged.
Pawan Chhabra: I would also point out that the Ontario government's latest budget release, which was released in late March indicate that the Provident Provincewide reassessment.
Pawan Chhabra: We continue to be deferred until their province completes its review of the property assessment and taxation system.
Pawan Chhabra: We continue to constructively engage with the government that was just becoming unlikely that we'll have to reassess in 2025.
Pawan Chhabra: And finally, Appraisals and Development Advisory Revenue and Adjusted EBITDA were down in the quarter. The performance reflects muted market activity in the current economic environment as the business segment has some exposure to reduced transaction volumes and higher interest rates, which result in fewer appraisals and fewer new projects started. Turning to our balance sheet, we finished the quarter with a cash position of $44.3 million, and with $328.6 million in bank debt, the funded debt to EBITDA leverage ratio, as defined in our credit agreement, was 2.15 times.
Pawan Chhabra: And finally appraisals and development advisory revenue and adjusted EBITDA were down in the quarter.
Pawan Chhabra: Performance reflects muted market activity in the current economic environment as a business segment has some exposure to reduce transaction volumes and the higher interest rates, which resulted in fewer appraisals and fewer new project starts.
Pawan Chhabra: Turning to our balance sheet, we finished the quarter with a cash position of $44 3 million and with $328 6 million in bank debt.
Pawan Chhabra: <unk> debt to EBITDA leverage ratio as defined in our credit agreement was $2. One five times applying our cash the net debt to adjusted EBITDA leverage ratio was 2.06 times, our total liquidity stands at $265 7 million.
Pawan Chhabra: Applying our cash, the net debt to adjusted EBITDA leverage ratio was 2.06 times. Total liquidity stands at $265.7 million. We have a healthy balance sheet that enables continued investment and growth and opportunistically re-purchase shares. With respect to the planned REVS acquisition, the regulatory review continues, so we're limited in what we can share at this time. On that, Jim, I'll turn it over to you.
Jim: We have a healthy balance sheet that enables continued investment in growth and opportunistically repurchase shares.
Jim: With respect to the planned <unk> acquisition through regulatory review continues so we're limited in what we can share at this time.
Pawan Chhabra: Jim I'll turn it over to you okay. Thanks Pavon.
James V. Hannon: Okay, thanks, Pawan. We're pleased with the consistent execution of our long-term value creation strategy, which is built upon four pillars: delivering innovation, driving long-term profitable growth, Maximizing Our Operating Leverage, and Optimizing Our Capital Allocation. And, of course, none of that happens without having the best players in the right job with clarity in their objectives. And that is the Altus team.
James V. Hannon: We're pleased with the consistent execution of our long term value creation strategy, which is built upon four pillars, delivering innovation driving long term profitable growth.
James V. Hannon: It's amazing our operating leverage and optimizing our capital allocation.
James V. Hannon: And of course, none of that happens without having the best players in the right job with clarity in their objectives and that is the altice team.
James V. Hannon: We expect that the successful execution of this strategy will significantly enhance our cash generation and deliver attractive shareholder returns.
James V. Hannon: We expect that the successful execution of this strategy will significantly enhance our cash generation and deliver attractive shareholder returns. Meaningful cash generation affords us flexibility and capital allocation to keep growing our business and enhancing value for our clients, colleagues, and shareholders. Our first quarter results reinforce the progress against this strategy. We have new performance analytics capabilities launching this year that will help our clients drive better performance and equip our teams with faster access to information.
James V. Hannon: Meaningful cash generation affords us flexibility in capital allocation to keep growing our business and enhancing value for our clients.
James V. Hannon: Colleagues and shareholders.
James V. Hannon: Our first quarter results reinforce the progress against our strategy.
James V. Hannon: We have new performance analytics capabilities launching this year that will help our clients drive better performance and equip our teams with faster access to information.
James V. Hannon: With the technical foundation of the Altus Performance Platform, and by connecting disparate data sets under an Altus ID, we are delivering deep asset and fund-level insight, such as Pub and Discuss, to make steady progress maximizing our operating leverage.
James V. Hannon: With the technical foundation of the Altice performance platform and by connecting disparate datasets under and also Saidi weird delivering deep asset and fund level insights.
James V. Hannon: As pub and discussed we're making steady progress maximizing our operating leverage.
James V. Hannon: At Analytics, we continue to put up healthy recurring revenue growth and plan to drive 400 to 500 basis points of margin expansion this year by listening to our clients and continuing to anticipate an improved selling environment in the second half. The property tax team delivered a very strong Q1 in the U.S. We continue to invest in growing our team in the Global Service Center in India, which will fuel further growth. Additionally, our U.S. tax business is now running on ITAM Link, the core product from the Rethink acquisition. As a reminder, ITM LINC is a purpose-built property tax management software solution, enabling tax professionals to better manage their property tax liabilities and assessments across their property portfolio.
James V. Hannon: The analytics, we continue to put up healthy recurring revenue growth and plans to drive 400 to 500 basis points of margin expansion. This year.
James V. Hannon: We're listening to our clients and continue to anticipate an improved selling environment in the second half.
James V. Hannon: The property tax team delivered a very strong Q1 in the U S.
James V. Hannon: We continue to invest in growing our team in the Global service Center in India, which will fuel further growth.
James V. Hannon: Additionally, our U S tax business is now running on ITM wig, the core product from the rethink acquisition.
James V. Hannon: As a reminder, ICM Lake is a purpose built property tax management software solution.
James V. Hannon: <unk> tax professionals better manage their property tax liabilities and assessments across the property portfolio.
James V. Hannon: Turning to appraisals and development advisory as well as corporate we.
James V. Hannon: Turning to Appraisals and Development Advisory, as well as Corporate, we continue to deploy technologies and process improvements that will yield higher margins in corporate efficiency. As Pawan covered, Q1 margins for appraisals were impacted by lower than expected transaction volumes across the general market in Canada.
James V. Hannon: We continue to deploy technologies and process improvements.
James V. Hannon: That will yield higher margins and corporate efficiencies.
James V. Hannon: As public covered Q1 margins for appraisals were impacted by lower than expected transaction volumes across the general market in Canada.
James V. Hannon: Again, here, we expect an improvement in the second half. From a capital allocation perspective, our core focus is to prioritize our investments and our highest growth, highest margin opportunities. We will adapt our capital allocation strategy as required to ensure that our balance sheet is strongly positioned for the long term. In summary, at a macro level,
James V. Hannon: Again here, we expect an improvement in the second half.
James V. Hannon: Many of our clients have expressed the belief that markets have bottomed. The industry continues to raise fresh capital in anticipation of a recovery, and interest rates, if not declining in the near future, appear to have at least stabilized. New debt funds have increased the availability of capital. These factors, combined with some large portfolios beginning to transact, may indicate that we're nearing the end of the price discovery phase we witnessed over the last several quarters.
James V. Hannon: This bodes well for Altus and gives us confidence in our full-year outlook. We enable our clients to make faster, better decisions. We've worked closely with our largest clients to build their requirements into our Altus performance platform, and we've been in the market demonstrating that innovation. Our experts in tax valuation and development advisory are excited and ready to deliver what we call intelligence as a service. In other words, we're here to help our clients grow their portfolios, optimize returns, and reduce risk. And with that, let's open up the line now to questions. So back to you, Lisa. Thank you. And everyone, if you would like to ask a question, please.
Operator: Thank you, and everyone. If you would like to ask a question, please press star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute button is turned off to allow your signal to reach our equipment. Again, that's star 1 to ask a question. And we'll take the first question from Yuri Lynk at Canaccord Genuity.
Yuri Lynk: Good quarter; just wondering if, just on the guidance, can you remind me, the low end there, is that assuming that the back half pickup that you're expecting doesn't happen?
Pawan Chhabra: You're a great hearing for me. I'm assuming you're referring to the analytics guidance. Yeah. Yeah, yeah.
Pawan Chhabra: So, if you recall, we said 8 to 12%, and we had predicated the fact that Q1 and Q2 would look very similar to what we saw in Q4 of FY23. And then the higher end of the guidance range was tied to essentially seeing more assets being deployed on the DMS side, which would get us to the higher end of the range. But the lower end of the range assumes that the market environment continues the way we've been seeing it in Q1 and expect it to continue in Q2.
James V. Hannon: Okay, that's helpful. I think it was 9, 10 months ago that we heard a lot about Altus Market Insights and the benefits to the clients there in terms of risk-adjusted returns. Can you give us an update on your conversations with clients about that new product launch?
James V. Hannon: Yeah, Yuri, this is Jim. Market Insights, which we showed at Connect, proved to clients that the office performance platform was here. We have several of the largest investors in commercial real estate as our clients in Market Insights, and Market Insights is. It's a, https://www.altus.com What the capabilities of the platform were pulling together. Reonomy and Stratodem are on top of Argus Data, and we were demonstrating the power of all three.
Yuri Lynk: Got it, okay. Okay, I'll get you back on the queue. Thanks, guys.
Operator: Thank you. The next question comes from Gavin Fairweather, from Cormark.
Gavin Fairweather: Hey, good evening. Just on analytics, you've talked in the past about exploring AUM-based pricing with some of your larger clients. Curious if there's any update on that front and whether or not, perhaps, penetrating these clients with market insights or performance management would be, perhaps, a catalyst for an evolving revenue model.
James V. Hannon: Hey Gavin, absolutely. We have had many large client conversations about that as we're walking them through the new performance offers. We break pricing down into two core areas. We're always going to have price trends. Well, you know, our revenues are not transaction driven, but there's the Argus use case where Argus is used on a DCF basis to evaluate a transaction. We foresee there will be a large amount of per user requests for core Argus functionality. It's the advanced functionality where we get to a per asset, which represents an enterprise license type approach. And that is how we're engaging with all of the clients on the new offers today.
James V. Hannon: Okay, great to hear. And then, also on Argus, just around renewals, and you spoke to how the maintenance renewal rate is no longer really a relevant metric. So, I guess it begs the question, if you could speak to the subscription renewal rates you've been seeing with some of the early adopters, and whether you've seen any kind of macro impact on that KPI?
Pawan Chhabra: Yeah, as it relates to the maintenance renewal rate, it's no longer a material factor in our calculus when you look at it from what the non-renewing portion of the on-prem clients, which as you know, the majority on cloud now represents in relation to the renewing base. As I mentioned in the opening remarks, it's like 0.15% of our analytics annual revenue number. And so we didn't find it to be useful going forward, so we're deciding to retire that number. So just wanted to provide some macro context on the print that you all are seeing in the MD&A and our intentions for that metric going forward.
James V. Hannon: Let me take the second half of that question. You know that when we changed out the systems, we suggested we would be moving towards new disclosures in the future. We're still on that path.
Gavin Fairweather: I think you're effectively asking us, what does net retention look like? And for the clients who purchased the suite of products across Argus, VMS, and Market Insights, which is now those offers are now the loose term of bundles, but our net retention on those client bases is both north of 100%. But we're not ready to change our full disclosures on that at this point.
James V. Hannon: Great, appreciate the sneak preview there. And then maybe just on the appraisal and development services division, obviously saw profitability get hit in Q1 with some lower volume, but it looks like you maintained the guidance for double-digit EBITDA growth. So do you have visibility on, you know, improving billings coming out of that business? Or perhaps are you planning to take some cost actions? Maybe help us reconcile that.
James V. Hannon: Yeah, so as Pawan alluded to, he said, and I said in my comments that the general market volumes are down. Our data is demonstrating to us that transaction volumes, which does impact the appraisals business, which rolled into that number, Canada, so our appraisals business is a Canadian business only. And our transaction volumes at this point suggest that the Canadian market is down approximately 30% year over year. That is, that's steeper than we had anticipated at the beginning of the year, but we are, we have, we have multiple paths to our full-year view.
James V. Hannon: Yeah, so we said low single-digit growth for that business. So consistent with what our clients are telling us, the second half will pick up. So we do, we do need to pick up in transaction volumes. But right now, everything is telling us that we're going to see that.
Gavin Fairweather: Thanks so much. I'll pass the line.
Operator: The next question comes from Scott Fletcher of CIDC.
Scott Fletcher: Unknown Speaker Hi, good evening. Question for me on the license revenue in the analytics business. We saw that sort of pace of decline be pretty volatile quarter over quarter last year. Is there any sort of, and you know, there was another down draft this year into one. Is there any sort of visibility into how that might perform over the course of the year?
Scott Fletcher: Scott, you said the license revenue... The one-time revenue, sorry, in the analytics, yeah. One-time revenue, okay. I was like, I thought we put out a bad disclosure there for a second, because you know, fire, license, all of that is up. On the one time, this is where you do feel the change.
James V. Hannon: The pressure of the macro market because of one-time projects, things like large system deployments, which, if you recall, a big part of our one-time revenue is that we deploy OEM systems, and we like that business because it keeps us very close with the chief information officers at our largest clients, because those projects become more discretionary for them in a tough market environment. So our pipeline actually has some very large one-time opportunities in it. The clients are watching the same numbers we are, which is, are they expecting to pick up in the second and a half, and will their P&L support large system deployments?
Scott Fletcher: Okay, thanks. And then a question for Pawan. On cash flow and working capital, in particular, last year, obviously, a lot of noise with the ERP system implementation. Do you have a sort of line of sight into what the rest of the year looks like from a working capital perspective, just trying to get a sense of how the cash Yeah.
Pawan Chhabra: Yeah, Scott, it's a great question. We actually have a really good line of sight in regards to just our overall cash flow transition, just as a function of the fact that we've got a great ERP system that gives us visibility and the ability to look at multiple different scenarios associated with that. As you know, we do face pressure in Q1 as a result of the compensation and bonus payouts that we have in Q1, but we've mapped out what we're planning, what we plan for, for Q2, Q3, Q4, and we continue to remain very optimistic in regards to achieving our goal of achieving our expectations for the full year.
Pawan Chhabra: Again, just a proxy for you to think about it is to think about it from an EBITDA conversion model. We've given some reference points in regards to how we continue to try to drive that to a higher level.
Scott Fletcher: [inaudible] Thank you.
Operator: We'll go next to Christian Sgro, 8 Capital.
Christian Sgro: Hi, good evening. The recurring new bookings metric was 16 million, up 14% year on year. I'm just wondering if there's any way, for Q1, you could decompose some of the strength in there, you know, talk about VMS or software, where you saw some, you know, the growth of some of the drivers for this quarter.
James V. Hannon: Yeah, hey Christian, it's Jim. You know, we don't we don't break out that metric. I understand why you're looking for it. Each quarter you have, because it's bookings and not just our recurring routable revenue model. It looks like the old world of software where you have, You have, bookings are timed with contract renewals, so sometimes it's, it's. The timing of large Argus renewal contracts, and sometimes it's VMS. [inaudible] We're now breaking it out by quarter to quarter. Each quarter, that mix can change significantly.
Christian Sgro: And then the second question is a little bit more broad. Just wondering geographically, if you're seeing traction in international markets, maybe in Asia, what the market opportunity and strategy is in those geographies.
Christian Sgro: Just wondering geographically, where you're seeing traction in international markets, maybe in Asia, what the market opportunity and strategy is in those geographies.
James V. Hannon: Yes, so we continue to for Barry is a key part of our international strategy based on the valuation methodologies that you see in the UK and that you see in the APAC region. And ForBerry is, as Pawan said, fit for purpose for those markets.
Christian Sgro: Yes, so we continue.
James V. Hannon: For Berry is at.
James V. Hannon: A key part of our international strategy based on the valuation methodologies.
James V. Hannon: That you see in the U K.
James V. Hannon: You've seen the the APAC region.
James V. Hannon: And for Berry as Kevin said fit for purpose for those markets. So thats key it's a key element of our strategy.
James V. Hannon: So that's a key element of our strategy. And then we are following our largest clients as they expand their portfolios. In Asia, they are pulling us in there as many of those portfolios are US VMS clients, and they want that same level of transparency on their APAC portfolios.
James V. Hannon: Then we are following our largest clients as they expand their portfolios.
James V. Hannon: In Asia.
James V. Hannon: They are pulling us in there as many of those portfolios are our U S. Vms clients and they want that same level of transparency on their APAC portfolios.
James V. Hannon: Yes.
Christian Sgro: That's all. Thanks for taking my questions.
Speaker Change: That's helpful. Thanks for taking my questions.
Speaker Change: Thank you.
Operator: Next up, we'll hear from Nevon Yochim of EMO Capital Market.
Christian Sgro: Next up we'll hear from Navan Yocum BMO capital market.
Nevon Yochim: Thanks. Hi Guys. Hopefully, we can start on the property tax, where you called out some pull-forward of U.S. appeals. Are you able to talk about what led to the change in expected timing and then what this could mean for property tax growth in Q2 and then the rest of the year?
Nevan A. Yochim: Thanks, Hi, guys.
Nevon Yochim: Hopefully we can start on the property tax where you called out some pulp board of U S Appeals.
Nevon Yochim: We're able to talk about what led to the change and expected timing and then what this could mean for property tax growth in Q2, and then the rest of the year.
Pawan Chhabra: Yeah, so, you know, the settlement appeals are largely dictated by the various different jurisdictions and the regulators. So, it becomes difficult to ultimately understand if something is going to close in March or April. The team worked very aggressively to try to have a strong finish, and so they were able to pull in some of these large settlement appeals in the US from Q2 into Q1. I guess we're being purposeful here in regards to calling it a pull forward in the sense that it was a pull forward from Q2 into Q1, so we will see some degree of offset in Q2 as a result of that.
Speaker Change: Yes, Joe.
Nevon Yochim: The settlement Npls at our <unk>.
Pawan Chhabra: Largely dictated by <unk>.
Pawan Chhabra: The various different jurisdictions and the regulator so it becomes difficult to scale ultimately understand if something is going to close in March or April. The team worked very aggressively to try to have a strong finish and so they were able to pull in some of these large settlement of pls.
Pawan Chhabra: In the U S from Q2 into Q1.
Pawan Chhabra: I guess, we are being purposeful here in regards to calling it a pull forward.
Pawan Chhabra: Well it was a pull forward from Q2 into Q1 assay. So we will see some degree of offset in Q2 as a result of that again. These large these large appeals are something that we have visibility to that we track very carefully when it swings from one quarter to the next it becomes difficult.
Pawan Chhabra: Again, these large appeals are something that we have visibility into that we track very carefully, and when it swings from one quarter to the next, it becomes difficult to replace those large appeals in the following quarter. With that said, we're seeing great momentum in the business. The teams are leveraging the technology.
Pawan Chhabra: To replace those large appeals in the following quarters with that said we're seeing.
Pawan Chhabra: Hey.
Pawan Chhabra: Great momentum in the business.
Pawan Chhabra: The teams are leveraging the technology and they are being able to work faster and smarter.
Pawan Chhabra: And we're very bullish in regards to our ability to continue to maintain our full year outlook for that so this is really just.
Pawan Chhabra: They're being able to work faster and smarter, and we're very bullish in regards to our ability to continue to maintain our full year outlook for that. So, this is really just a degree of a shift between Q1 and Q2 in terms of revenue. And I'd also like to underscore the fact that we are seeing a lot of strength in the US. And as I mentioned in the opening remarks, we in the US continue to drive greater operating efficiencies.
Pawan Chhabra: A degree of a shift between Q1 and Q2 in terms of revenue and I also like to underscore. The fact that we are seeing a lot of strength in the U S.
Pawan Chhabra: We're pushing more of that business to India, and so it's a growing margin profile business. But in the current year, it does represent a lower mix. It does represent a lower mix of revenue for us. And so, you know, that's just something to be cognizant of as you model the number.
Pawan Chhabra: I mentioned in the opening remarks.
Pawan Chhabra: We continue to drive greater operating efficiencies were pushing more of that business to Indiana insurance.
Pawan Chhabra: It does represent a lower mix of.
Pawan Chhabra: Margin for us and so that's just something to be cognizant.
Pawan Chhabra: As you model the number.
Pawan Chhabra: So, you know, we're, again, the strength in Q1 is great news. We're extremely pleased about it. It gives us a lot of confidence for the FLIR, but we're not in a position to call it the FLIR.
Pawan Chhabra: So we're.
Pawan Chhabra: Again, the strength in Q1 of this great news, we're extremely pleased about it gives us a lot of confidence.
Pawan Chhabra: But we're not in a position to call up the full year.
Nevon Yochim: Okay, that's great to hear. And then just on the restructuring program that you guys put in place this quarter, are you able to provide an estimate on what the magnitude of potential benefits might be, either as a dollar amount or maybe as margin points? And then, as an extension, is that all going to be in the analytics and corporate costs segment? Or would it fall into some of the other segments as well?
Speaker Change: Uh-huh, Okay, that's great to hear and then just on the restructuring program that you guys put in this quarter are you able to provide an estimate on what the magnitude of potential benefits might be either as a dollar amount or maybe as margin points.
Nevon Yochim: And then as an extension is that all going to be in the analytics and corporate costs or would it fall into some of the other segments as well.
Pawan Chhabra: Yeah, so again, when we gave guidance on the 400 to 500 basis point margin expansion, that does include the fact that we were planning on doing restructuring. And again, keep in mind, this restructuring is really moving us from one phase of the Altus journey to another. We spent a lot of time on the development of our APP platform.
Speaker Change: Yes, so again just.
Pawan Chhabra: When we when we gave guidance on the 400 to 500 basis point margin expansion.
Pawan Chhabra: Does it include the fact that we were planning on doing restructuring again keep in mind. This restructuring is really new the hash brown from one phase of the Altice journey to another we spent a lot of time on the development of our APB platform. We're now focused on on data science and data analytics.
Pawan Chhabra: We're now focused on data science and data analytics, so it gives us an opportunity to rebalance our resources and our investments. And so, you know, as you think about the lift, it's part of the calculus in terms of how it gets us to the 400 to 500 basis points margin expansion. Even in the lower end of the guidance range scenario, we feel confident in regards to the margin expansion as well.
Pawan Chhabra: As you think about the lift it's part of the calculus in terms of how it gets us to that four to 500 basis points margin expansion.
Pawan Chhabra: Even.
Pawan Chhabra: Even in them.
Pawan Chhabra: In the.
Pawan Chhabra: <unk> added in a guidance range scenario, we feel confident in regards to that to the margin expansion as well too there is a little bit.
Pawan Chhabra: There is a little bit of other BU's that it does impact, but, you know, there is some that flows into corporate as well, too, as we continue to design our target operating model, as we've referred. And, you know, there is an expectation that we'll continue to potentially do a bit more restructuring to come that'll help us get to that 400 to 500 basis point margin. But again, this is really about rebalancing investments to make sure that we're not losing money.
Pawan Chhabra: Either the use that it does impact that that there is time that flows into corporate as well to you.
Pawan Chhabra: As we continue to.
Pawan Chhabra: As we continue.
Pawan Chhabra: Designed to our target operating model as we referred and there is an expectation that that will continue to potentially do more restructuring.
Pawan Chhabra: Debt to come down almost kept it at four or 500 basis point margin and again. This is really about rebalancing investments to make sure that we're well positioned.
Nevon Yochim: Okay, I understand. Thank you.
Speaker Change: Okay understood. Thank you.
Pawan Chhabra: The other point to keep in mind, again, as you guys are modeling this out, is that we planned these actions to happen in the middle of the quarter. So you're only getting a partial quarter benefit in Q1 as a result of that. So, you know, it was designed exactly as we had planned it out.
Nevon Yochim: We're going to keep in mind again as you guys are modeling this out.
Pawan Chhabra: We plan these actions to happen in the middle of the quarter. So you are only getting a partial quarter benefit in Q1 as a result of that so it was designed exactly as we had planned it out.
Pawan Chhabra: But so in terms of your modeling, you know, just think about the fact that we didn't get a full quarter's benefit of the actions that we've already taken. Okay, and so is it fair to say then that you'll be at the full run rate beginning in Q2? Like would it ramp up in Q3 and Q4 as well, or sort of is Q2 the full run rate? Now, that would be your monitor.
Pawan Chhabra: In terms of your modeling.
Pawan Chhabra: Just thinking about the fact that we didn't get a full quarters benefit of the actions that we've already taken.
Speaker Change: Mhm, Okay, and so is it fair to say then that you'll be at the full run rate beginning in Q2.
Pawan Chhabra: Like what it ramp up in Q3, and Q4 as well or sort of as Q Q2, the full run rate.
Pawan Chhabra: Now, so it would be your latter comment. As I mentioned, there were, you know, there are additional opportunities that we're exploring as we continue to rebalance our resources to get us more geared towards the commercialization of our offers away from the development of our platform.
Speaker Change: So it would be your latter comment as I mentioned, there where.
Pawan Chhabra: There are additional opportunities that we're exploring as we continue to rebalance our resources.
Pawan Chhabra: It's more geared towards the commercialization of our offers away from the development of our platform.
Pawan Chhabra: Okay.
Speaker Change: Got it thank you.
Pawan Chhabra: Just a reminder, everyone, it is star number one to ask a question. We'll go next to Richard Tse, National Bank Financial. Yes, thank you.
Richard Tse: Yes, thank you. Can you maybe talk about any operational investments you're currently making beyond acquisitions to open up those markets, you know, given that you've brought in the portfolio, and I guess related, how do you see the geographic mix of this business sort of changing over the next two to three years out from kind of, let's say, a North American versus, you know, I don't know if you want to say Europe or international, just kind of trying to understand how that's going to roll out.
Richard Tse: Yes. Thank you.
Richard Tse: Can you maybe talk about any operational investments you're currently making beyond acquisitions to open up those markets. You know given that you brought in the portfolio and I guess related how do you see the geographic mix of this business are changing over the next Oh two to three years out from kind of let's say North America.
Richard Tse: Can versus I don't know if you want.
Richard Tse: Kind of trying to understand how that's going to rollout.
Richard Tse: And so.
James V. Hannon: And so, Richard, our operations focus has been, so when you're in this type of market, and you know, we plan our cost and expense to the lower end of the guidance range. Right, so we'll release investment as we see pipeline build and conversion of bookings to revenue. Our operating focus has been on taking many of our processes across both the analytics business and the tax business and taking our best-in-class processes from our teams and concentrating them into one team in our Global Service Center. So not only do we get wage arbitrage, but we're getting really talented folks in that organization who are also bringing process discipline to the whole business.
Richard Tse: Richard R. Our operations focus.
James V. Hannon: Has been.
James V. Hannon: When you are in this type of market.
James V. Hannon: And we.
James V. Hannon: We plan, our cost and expense so the lower end of the guidance range.
James V. Hannon: And we will release investment as we see.
James V. Hannon: Pipeline build and conversion of.
James V. Hannon: Bookings to revenue.
James V. Hannon: Our operating focus has been on taking many of our processes across both the analytics business as well as the tax business and taking our best in class processes from our teams.
James V. Hannon: Okay, concentrating them into one team and our global service Center, so not only do we get.
James V. Hannon: Wage arbitrage, but we're getting.
James V. Hannon: We're getting really talented folks and that organization, who are also bringing process discipline to the whole business.
James V. Hannon: As we do that, it also gives us data synergies across all of our business units, so we get operating efficiencies, and we expand our data sets as they all land on the common platform of the Altus Performance Platform. So that has been our focus, and it will pay dividends in the quality of the advanced analytics, and it improves the operations and the service delivery of both the analytics as well as the tax business.
James V. Hannon: As we do that also.
James V. Hannon: It is us data synergies across all of our business units. So we get operating efficiencies and we expand our data sets as they all landed too.
James V. Hannon: The common platform of the <unk> performance platform. So that has been our focus that will pay dividends in the quality of the advanced analytics and it improves the operations in the service delivery.
James V. Hannon: As far as North American International, we expect our international growth to pick up again with Forbery at the center of our strategy there. From a VMS perspective, we're following our clients. [inaudible] However, we expect that our Booking's backlog in VMS is going to be deployed. We think that assets are when portfolio transactions come back to speed, that assets are going to accrue to our client base at a faster pace than any other buyers, and that is going to drive significant growth in the U.S. So the U.S. or North America versus international mix may not change even though we're driving growth strategies internationally predicated on forbearance.
James V. Hannon: Both analytics as well as the tax business as far as North American International we expect our international growth.
James V. Hannon: To pick up again with four very at the center of our strategy there.
James V. Hannon: Vms perspective, we're following our clients.
James V. Hannon: However.
James V. Hannon: We expect.
James V. Hannon: Our.
James V. Hannon: Bookings backlog in Vms is going to deploy we think that assets or portfolios transactions come back to Steve that assets are going to accrue to our client base at a faster pace than any other buyers.
James V. Hannon: That is going to drive significant growth in the U S. So the U S or North America versus international mix may not change, even though we're driving growth strategies internationally predicated on for Barry.
Richard Tse: Okay, great. Thanks. That's helpful. And I guess this is maybe a development question. How do you make a decision as to when you go out and acquire this technology versus developing it internally?
Speaker Change: Okay, great. Thanks, that's helpful.
Speaker Change: And I guess this is maybe a development question.
Richard Tse: How do you.
Richard Tse: Make a decision as to when you go out and acquire this technology versus develop it internally.
James V. Hannon: That's a fantastic question. Forberry is a great example of that. So, as we looked at the UK market and the Australian market, in particular, for several years, we teed up the investment to bring the Alternative Valuation Methodology into Argus. And each time I went through that with the team, we determined that the development investment combined with the go-to-market, the branding, and the displacement of a really great company like ForBerry didn't lend itself to organic growth.
Speaker Change: That's a fantastic question for Barry is a great example of that so as we looked at the UK market and the Australian market in particular.
James V. Hannon: For several years, we teed up the investment to bring the.
James V. Hannon: And each time I went through that with the team.
James V. Hannon: We determine that the development investment combined with the go to market and the branding and the displacement of a really great company like for Barry.
James V. Hannon: Didn't lend itself to organic.
James V. Hannon: Organic Pursuit led us to the acquisition. So speed to market, Reonomy and Stratatum are both great examples of that. We had our data strategy and our benchmarking, indexing, and scoring strategies in place, and those two acquisitions accelerated the development in both cases. And then at the heart of it, we look at this from a time to cash flow breakeven and an IRR analysis. So putting all of those together is how we get to that decision. And then, of course, there's the target, our target leverage on the balance sheet, which is a giant factor in our decision making.
James V. Hannon: <unk> is another strategy are both great examples of that we had our data strategy.
James V. Hannon: And our benchmarking indexing and scoring strategies in place and those two acquisitions accelerated the development in both cases and there is a third of it is.
James V. Hannon: We look at this from a.
James V. Hannon: Time to cash flow breakeven and an IRR analysis.
James V. Hannon: So putting all of those together is how we get to that decision and then of course there is the <unk>.
James V. Hannon: Our target leverage on the balance sheet, which is.
Richard Tse: Okay, great. Thank you.
Speaker Change: Okay, great. Thank you.
Operator: We'll take the next question from John Shuter, RBC Capital Markets.
Richard Tse: We'll take the next question from Jon <unk> RBC capital market.
John Shuter: Hi, this is John on behalf of Paul Treiber. Just firstly on the UK annuity billings, we're in Q2 now and wondering if you could just remind us again and set expectations regarding the additional revenue to be expected from that in Q2. Thanks.
John Shuter: Firstly on the U K annuity billings were in Q2, now and wondering if you could just remind us again and set expectations regarding.
John Shuter: The additional revenue to be expected from that in Q2.
Pawan Chhabra: Yeah, we don't, we don't necessarily disclose the specific annuity revenue, but as you know, our progress on the 2023 list as compared to the 2017 list is pretty robust. And so just from an absolute dollar perspective, we would expect that the 2023 lists would generate more annuity revenue than we did in 2017. With that said, we continue to watch the throughput from the VOA as it relates to the UK in general, and if the VOA had a very heavy influx.
Pawan Chhabra: <unk> robust.
Pawan Chhabra: And so just from an absolute dollar perspective, we would expect that 2023 months would generate more need than we did in 2017 with that said we.
Pawan Chhabra: We continue to watch the throughput from the DLA as it relates to U K in general.
Pawan Chhabra: Dan.
Pawan Chhabra: <unk> had a very heavy influx of 2017.
Pawan Chhabra: 2017 list items. Now, most of our 2017 settlements have already been approved because they were high-quality appeals, but the DOA still has a very heavy backlog of 2017 appeals that they're still processing through, which is impacting their ability to appropriately work their way through the 2023 list. And so again, that is something that we're staying in very close contact with the DOA agency to make sure in regards to just their general progress.
Pawan Chhabra: I understand most of our 2017 settlements has already been approved because they are high quality.
Pawan Chhabra: Appeals.
Pawan Chhabra: The DIY still has a very heavy backlog at 2017 at <unk>, they're still processing through which is impacting their ability to appropriately.
Pawan Chhabra: Work their way through the 2023 less so.
Pawan Chhabra: So again, that's that is something that that we're staying very close contact with them.
Pawan Chhabra: In regard to standard general progress so that is a gaining factor for us as we think about the UK performance in general, but I would say in.
Pawan Chhabra: So that is a gating factor for us as we think about the UK performance in general, but I would say, in general, we're seeing great pipeline bill, we're seeing great backlog building for the 2023 list, and we're going to continue to see the DOA work their way through the Q3, Q4 2017 settlements that they've received a heavy influx for.
Pawan Chhabra: In general.
Pawan Chhabra: They all were seeing great backlog building for the 2023 less.
Pawan Chhabra: C U E.
Pawan Chhabra: Work their way through the Q3 Q4 2017.
Pawan Chhabra: Settlements.
Pawan Chhabra: Received a heavy influx for.
Pawan Chhabra: So the normal Q2 seasonality will push more into Q3 and Q4, so we're
John Shuter: Okay, I got it. Thank you.
Speaker Change: Okay got it. Thank you and maybe just switching to analytics can you speak Tuesday, and John that we will also again remember the geo margin mix that goes with that.
James V. Hannon: And maybe just switching to analytics. Can you speak to John? And John, that will also again remember the geo margin mix that goes with that. So the U.K. 23 list pushes out to Q3, Q4, that's the higher margin revenue.
James V. Hannon: So as the UK.
James V. Hannon: So we have to factor that into our planning as well. Okay, so Q2 revenue came into Q1, and then the UK Q2 is pushing Q3, Q4, so the revenue moves out, and the margin makes changes for Q2.
James V. Hannon: <unk>.
James V. Hannon: So.
James V. Hannon: We have to factor that into our planning as well.
Speaker Change: Okay. Thanks, So our Q2 revenue came into Q1 and then the U K Q2 was pushed into Q3 Q4, so the revenue moves out and the margin mix changes for Q2.
John Shuter: Okay, and then just on analytics, can you speak to the upsell opportunities for customers that have migrated to the cloud and specifically what proportion of those you're seeing deploy additional offerings?
James V. Hannon: Then just on on analytics.
John Shuter: Okay.
James V. Hannon: It's the new offerings that are part of AE Cloud, and you're going to see those offers when they go GA come even closer together.
Speaker Change: It's deep.
James V. Hannon: Our.
James V. Hannon: <unk> cloud and Youre going to see those offers when they go gea come even closer together. So if clients are on cloud.
James V. Hannon: So if clients are on the cloud, then their purchasing motion will have new functionality on top of it. But as clients are migrating, they're going to be seeing that more as one inclusive offer price. Again, if they're using Argus for transactional purposes, they will have that option to stay in kind of that basic or standard Argus license at a per user cost. But what the largest clients are working with us on is one price that includes Argus, Market Insights, Reonomy, and or ADS data depending on which market they're in and looking at it more on an enterprise level, which typically manifests itself as asset level pricing.
James V. Hannon: On a per user, but what the largest clients.
James V. Hannon: <unk> me <unk>, ABS data, depending on which market they're in.
James V. Hannon: And looking at it more on an enterprise level pricing, which typically manifests itself is asset level pricing.
John Shuter: Okay, I got it. Thanks for taking my questions.
Speaker Change: Thank you.
Operator: Everyone, at this time, there are no further questions. I'll hand the conference back to Jim Hannon for any additional or closing remarks.
John Shuter: Everyone. At this time there are no further questions I'll hand, the conference back to Jim Hansen for any additional or closing remarks.
Operator: Yes.
James V. Hannon: No, we thank everyone for the time. It was a good quarter for the Altus team.
James V. Hannon: Nope, we thank everyone for the time it was it was a good quarter for the <unk> team.
James V. Hannon: We continue to.
James V. Hannon: We continue to, I think the team is very successfully navigating turbulent markets. We keep putting up recurring revenue growth. We're putting up margin expansion. We're comfortable with our outlook for the year. [inaudible] We appreciate your time here.
James V. Hannon: I think the team has is very successfully navigating turbulent markets.
James V. Hannon: We keep putting up the recurring revenue growth, we're putting up the margin expansion, we're comfortable with our outlook for the year.
James V. Hannon: And.
James V. Hannon: We.
James V. Hannon: We appreciate your time here.
Operator: And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
Speaker Change: And once again, everyone that does conclude today's conference I would like to thank you all for your participation you may now disconnect.
Operator: Okay.
Operator: [music].