Canada's Constellation Software Q2 net income up on foreign exchange gains, liability revaluation impacts
Canada's Constellation Software Q2 net income up on foreign exchange gains, liability revaluation impacts
Overview
Canada vertical market software firm's Q2 revenue grew 17% yr/yr, slightly missing analyst expectations
Net income for Q2 surged, mostly due to FX and liability revaluation impacts
Company completed acquisitions totaling $893 mln during Q2
Subsequent to quarter the company completed or has open commitments to acquire a number of businesses for aggregate cash consideration of $669 mln
Outlook
Company did not provide specific guidance or outlook for future periods
Result Drivers
ACQUISITIONS - Co said revenue growth was primarily driven by acquisitions as the company experienced organic growth after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business
MODEST ORGANIC GROWTH - Organic growth was 3% yr/yr (1% after FX adjustment), per company
FX AND LIABILITY REVALUATION - Net income increase mainly reflected foreign exchange gains and IRGA liability revaluation
Company press release: ID:nGNX4DMHzT
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Slight Miss* | $3.34 bln | $3.36 bln (8 Analysts) |
Q2 EPS |
| $12.93 |
|
Q2 Free Cash Flow |
| $345 mln |
|
Q2 Net Income |
| $274 mln |
|
Q2 Operating Cash Flow |
| $477 mln |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Constellation Software Inc. is C$3,875.00, about 17.3% above its August 10 closing price of C$3,304.36
The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 14 three months ago
Reuters Recommended Reads
Aug 10 - Canada's Stingray Q1 revenue beats estimates but margins weigh on profit
Aug 10 - Canada's DATA Communications Q2 revenue falls on lower prior-year sales activity
Aug 11 - Cardinal Infrastructure Q2 revenue jumps 114% on organic and acquisition growth, raises 2026 sales guidance
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)
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Constellation Software Inc. reports results for the quarter ended June 30 - Earnings Summary
Canada's Constellation Software Q2 net income up on foreign exchange gains, liability revaluation impacts