Q4 and FY 2024 - Constellation Software & Its Spin-Outs - Full Analysis
Returning to more typical revenue and EBITA growth in Q4; strong M&A exit rate
Yesterday, Constellation Software Inc. (CSI) published its Q4 and full-year 2024 report. It’s of utmost importance to reconcile the financials on a look-through basis rather than taking the fully-consolidated numbers at face value and coming up with a valuation shortcut.
In this quite lengthy recap, we’re going to dig deeper into the performance of the spinouts (Topicus (TOI) and Lumine (LMN)), CSI on a standalone basis, cash flows, margins, M&A activity and other factors that are relevant to the long-term investment case.
Finally, we’ll share our updated projections for CSI standalone, Topicus, Lumine, and the implications on the blended valuation for Constellation Software shares. For an introduction to CSI’s business model, track record and recent trends (prior to Q4), we’d like to refer you to our previously shared deep dive.
Off note: over the past year, Constellation stock has outpaced its two spinout companies with notably lower volatility.
MarketScreener
Headline Numbers
As usual, CSI’s headline numbers warrant quite a bit of contextualization. FCF available to shareholders came in very strong.
If you’ve read our previous earnings recap, you shouldn’t be surprised.