Altus Group Aktie

Thank you. Ladies and gentlemen, thank you for joining us and welcome to Altus Group's Q2 2026 Financial Results Conference Call. and webcast. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Camilla Bartoszewicz, Chief Communications Officer. Camilla, please go ahead.

Thank you, Operator. Hi, everyone, and welcome to the conference call and webcast discussing Altus Group's second quarter results for the period ended June 30th, 2026. Our press release MD&A financial statements and the slides accompanying our prepared remarks are on our website and as required have been filed to Cedar Plus after market close this afternoon. joined today by our CEO, Mike Gordon, Pavan Chhabra, and our new CFO, Katie Royce. Turning to our disclaimer slide, some of our remarks on this call and in our disclosures may contain forward-looking information based on certain assumptions and are therefore subject to risks and uncertainties that could cause actual results to differ materially. Please Please refer to the forward-looking information disclaimer in today's materials. We also use certain non-GAAP financial measures, ratios, capital management measures, and supplementary and other financial measures as defined in National Instrument 52112. We believe these measures provide useful additional insight into our performance and may assist investors in evaluating our shares. However, they are not standardized under IFRS and may differ from similarly titled measures used by other issuers and therefore may not be comparable.

They should not be considered an isolation or as a substitute for IFRS measures. Further details are provided in today's IR materials. Unless otherwise noted, all percentage and basis point growth rates discussed on today's call are presented on a constant currency basis relative to the comparable period in 2025. With that, I'll now turn it over to Pavan to cover our Q2 results.

Good evening, everyone, and thank you for joining us. Our second quarter results reflect the continued progress we're making towards a more focused, higher growth, higher margin business. REVENUE GREW 6%, ADJUSTED EBITDA INCREASED 34%, MARGINS EXPANDED BY 540 BASIS POINTS, AND ADJUSTED EPS INCREASED 36%. AS A REMINDER, THE PRIOR PERIOD INCLUDED 1-11. EXCLUDING 1-11 FROM THE COMPARATIVE PERIOD, BOTH REVENUE AND RECURRING REVENUE grew 7%, reflecting stronger underlying performance in the reported results. Net income declined year over year, driven primarily by items outside of our core operating performance. This included approximately 10.7 million unfavorable foreign exchange swing compared to last year, as well as approximately 5.2 million of one-time costs related to strategic corporate initiatives and activities supporting our divestitures.

Turning to the revenue by line, growth was once again led by our flagship offerings, Argus Intelligence and VMS. Software revenue grew double digits for a second consecutive quarter driven by strong Argus intelligence sales. As Mike will discuss shortly, we are seeing encouraging improvements in sales execution. VMS revenue grew 7%, underscoring its critical role in supporting our clients' compliance and valuation workflows. It also serves as an important entry point to Argus Intelligence, creating opportunities to deepen client relationships over time. In data, which reflects our standalone market data offerings, churn continues to trend in the right direction, and we expect that progress to be increasingly reflected in revenue as we move toward year end. Services revenue declined year over year.

Excluding 111 from the prior period, revenue would have been down modestly. Overall, we're encouraged by the continued strength in software and VMS and the improving trends we're seeing in data. Our KPIs remain healthy and continue to support the strength of our recurring revenue model. Software ARR increased 10.4% to 206.8 million, while NRR was 106.9%. Consistent with our long-term growth profile, approximately 80% of the growth came from volume and pricing, with new low acquisitions contributing to the balance. VMS metrics also remain strong, underscoring the critical role of VMS plays in our clients' valuation and reporting workflows. over all these operating metrics reinforce the predictability and resilience of our recurring revenue base. Turning to the P&L, we continue to make progress towards our target operating model.

Gross margins expanded by 190 basis points, reflecting revenue growth and operating leverage in the business. GNA declined by 360 basis points as a percentage of revenue driven by our restructuring actions, portfolio simplification, and disciplined management of corporate costs. We also continue to invest in growth. Sales and marketing expense increased and included the impact of Altus Connect, our annual client conference. Our The R&D increased modestly as we continued bringing more solutions onto the Argus Intelligence platform. The result is meaningful margin expansion while continuing to invest in our growth priorities. And finally, a recap of cash generation in the balance sheet.

On a year-to-date basis, underlying cash generation improved by approximately $7 million year-over-year before interest and taxes driven by stronger billings and collections. The year-over-year comparison is also affected by the inclusion of businesses classified as discontinued operations. taxes related to the property tax sale and lower interest income following the return of excess cash to shareholders. our balance sheet remains a source of strength. We ended the quarter with 61.9 million of cash, funded debt to EBITDA of two times, and approximately 364 million of available capital. We continue to optimize our capital structure and expect leverage to settle in the mid two times range over time. WITH CAPITAL RETURNS, WE HAVE NOW RETURNED APPROXIMATELY 450 MILLION TO SHAREHOLDERS YEAR TO DATE. reducing our share count by roughly 20% to 34.7 million shares outstanding. Before I hand it over to Mike, I'd like to thank the entire Altus team for their hard work and commitment over the years. I'd also like to thank our shareholders, clients, analysts, and the broader investment community for their engagement and support.

I am proud of what we've accomplished together and the results that we've delivered. With that, I'll turn it over to Mike.

Thanks, Bhavan. Before we move on, I just want to take a moment to thank you for everything you've contributed to Altus. your time with the company, you've helped strengthen our financial foundation, supported a significant transformation, and played an important role in positioning Altus for the next phase of growth. Many of these things are shareholders' value today, including a more focused portfolio, a disciplined capital return program, and a more efficient and efficient financial better visibility into business performance, and greater transparency with the investment community. This all reflects the work that you've helped drive. We're grateful for the steady leadership, discipline, and partnership that you've brought to the role, and for the support you're providing through this transition. As the saying goes, leave it better than you found it. And Pavan, you did exactly that. So on behalf of the board, the leadership team, and everyone at Altus, thank you.

We wish you all the best in what comes next. As you can probably tell from our recent news flow, it's been an exceptionally active and productive period for Altus. At the beginning of the year, we laid out our objectives for our value creation plan. The foundational element was simplifying the portfolio to sharpen focus on the market leading valuation solutions. It was foundational because it would help fuel our operation expense reductions and capital returns while entirely changing for companies financial profile ahead of our planned returns. US listing in 2027. I am pleased to say that we have been executing ahead of plan. Since the start of the year, we've successfully completed four divestiture transactions, even monetizing our remaining legacy interest in the GeoVera joint venture for $26.7 million.

Before we get started, I'd like to thank all of you for joining us today. Before I go any further, I'd like to recognize the many Altus team members who worked tirelessly to make this happen. Executing transactions on this scale and complexity on an accelerated timeline is no small accomplishment, and their efforts have been instrumental in transforming Altus ahead of schedule. While we always maintain a disciplined approach to portfolio management and capital allocation, I am pleased to say that portfolio simplification work we set out to accomplish this year is now complete. Altus is now a much more focused company with a business model centered on the areas where we see the greatest long-term opportunity to create value. And the benefits of that simplified model are already showing up in our financial profile. now have a higher quality earning stream that will drive stronger adjusted EBITDA to free cash flow conversion. These are tangible proof points that the operating model that we've been building toward is taking hold.

Importantly, the sale of our development advisory business to Newmark has also created new commercial opportunities. Our new enterprise agreement with Numark includes Argus Intelligence and several of its add-on capabilities including Argus Assist. We're helping their professionals work more efficiently, generate insights faster, and deliver a greater value to their clients. Workflows that once took days can now be completed in moments, which speaks directly to the value our technology can deliver. The divestitures have also enabled us to deliver on our capital return objectives. As Pavan just mentioned, we're already returned more than $450 million and brought down our float by 20%. With a strong balance sheet in hand, we remain committed to returning additional capital in the second half of the year.

Another benefit of simplifying the business is showing up in our cost structure. Delivering the work ahead of plan has allowed us to capture efficiencies sooner than expected, which gives us the confidence to increase our adjusted EBITDA margin expansion outlook by an additional 60 basis points this year. At the same time, we've remained disciplined in balancing our cost reductions with investments that support future growth. As we continue to reshape the organization around our strategic priorities, our year-to-date restructuring initiatives will generate approximately $15 million in annualized savings. With the final divestitures now behind us, coupled with our annualized savings, we're going to be able to continue to grow our business. AI enablement initiative, we are seeing additional opportunities to further improve the efficiency and the effectiveness of this business. Our sales motion is also getting sharper and we're starting to see our investments in sales and go to market translates into stronger execution.

New sales are tracking in line with our plan, with momentum building as we move into the second half. The team is also getting better at cross-selling and winning larger deals across Argus and VMS. The quality of our recurring revenue base continues to show through as well. Software net revenue retention at 107% is a clear sign that our cross-sell, upsell, and pricing discipline are working. Underneath that number, the cross-sell momentum is especially encouraging. Q2 software cross-sell was up three times over the past year, reflecting more people on the platform, stronger sales execution, and faster pace of delivering new product updates. top of that, Argus's gross retention is over 95%. As platform adoption grows, we're consistently bringing more assets on the platform.

More assets on the platform will fuel better analytics for our clients. Adoption is not only happening with our clients, it is also happening inside of Altus. With our VMS team increasingly leveraging Argus intelligence to do their work. Over 90% of our VMS employees are now trained and using the platform for their customer portfolio reviews. That internal adoption is important because it allows us to bring VMS and Argus together more effectively. to scale a co-selling motion that creates opportunities to cross-sell software into that base. Now, turning to our business outlook for the year. As a reminder, relates to continuing operations on an organic basis.

Reflecting the organic momentum we've seen in the business, we are raising our revenue outlook by 25 basis points to a range of 5.25% to 7.25% organic constant currency growth. In addition, with our cost actions tracking ahead of plan and driving more efficiencies, we're increasing our margin expansion outlook by 60 basis points to 510 to 610 basis points for the full year. This guidance range would translate into approximately $127 to $131 million in adjusted EBITDA this year, a meaningful step up over last year's $98 million in EBITDA. Looking to the balance of the year, our expectations remain consistent with our typical seasonal pattern, with Q4 anticipated to be stronger than Q3, but our raise in guidance is based on the momentum we're seeing in the second half of the year. Also, as you might recall, Q3 last year benefited from pricing actions as a large cohort of our Argus Enterprise came up for renewal and contracted on Argus Intelligence. As mentioned, this guidance is on an organic basis as the new Valus acquisition that we announced today is not material to financial guidance. While Valus has delivered strong ARR growth and is already profitable, it remains relatively small from our financial perspective.

All that said, we're feeling really good about our trajectory and a path to becoming a Rule 40 company even sooner than we originally anticipated. Now, let's shift gears to the VALOS.AI acquisition. VALOS.AI is a UK-based company that has quickly become a leading platform for connecting valuers and lenders within the property valuation workflow. In many ways, VALOS is highly complimentary to what we already do. Similar to how our VMS practice sits at the center of appraisers and investment reporting, Valos sits at the center of the workflow between appraisers and lenders. Valus started six years ago with a simple idea. Valuation report production was just taking too long and costing firms too much.

The founders set out to solve that problem. And since then, they've built Valus into a market leading valuation platform used by many firms and surveyors in the UK. What they have built is special, a product that is changing how valuers and lenders work together, and a business that has earned real trust in the market. It is exactly the kind of innovation and client impact we want to support and to scale at Altus. Now that we have finished our divestitures, we are in the market for these types of efforts. acquisitions. AI is also deeply embedded across the Valus platform. It helps automate data gathering, read and structure complex documents, support quality assurance, extract comparables, and it can turn fragmented property information into reusable data.

In practical terms, this means faster workflows, better accuracy, and a platform that becomes more valuable as more data moves through it. help put Valis in context, it's useful to understand the role that it plays in commercial real estate lending ecosystem. When a lender needs a property valuation to support a financing decision, the process typically involves coordinating with an independent valuer, exchanging large amounts of information, managing compliance requirements, and reviewing the final report before it can be used in a credit and risk decision. Historically, much of that process has been manual, fragmented, and time-consuming. Valus brings that workflow together on a single platform. A lender can initiate and manage a valuation request directly through Valus, and the selected valuer receives those instructions seamlessly within the same ecosystem. The valuer then uses the platform to access property data, gather comparable data, evidence, complete the valuation report, and to satisfy the lender's specific requirements. Before that report is submitted, VALIS automatically checks it against lender requirements, helping improving accuracy and reducing work, Once completed, the valuation is delivered back through the platform, creating a single transparent workflow for both parties.

What's particularly powerful is that the process doesn't end with the report itself. Valus transforms that valuation data into structured intelligence that lenders can use across credit decisioning, portfolio monitoring, risk management, reporting, and other downstream workflows. So while valuation management is the entry point, the real value is that Valance sits at the center of a critical workflow, connecting lenders and valuers while generating high quality actionable data and insights that help customers operate more efficiently and make better decisions. This is right in Altus's sweet spot. While relatively small from a financial standpoint, Valus is exactly the type of strategic tuck in acquisition we're looking for. It strengthens our position in a critical commercial real estate workflow, expands our reach into the lending ecosystem and adds differentiated AI and data capabilities that align directly with our long-term strategy. strategy. The lender to value workflow is a natural adjacency to our valuation business and gives us deeper access to lenders, an important customer segment for us where we see significant opportunity to continue to expand our presence over time.

Equally important, Valus is fundamentally a data acquisition engine. The platform captures property information at the point of work, turning traditionally unstructured valuation documents into structured, enriched, and reusable data. Over time, that creates a growing repository of high-quality property intelligence that has the potential to further strengthen and enrich the Altus Knowledge Graph. Acquisition also adds valuable AI capabilities. Valos has developed AI models purpose-built for commercial real estate valuation and lending workflows, trained on valuation grade documents and lender specific requirements. We believe that these capabilities complement our existing AI initiatives and create opportunities to extend our family of specialized AI agents beyond valuers and further into lender workforce. Finally, Valus expands our international footprint and creates attractive commercial opportunities.

The business has established a strong position in the UK, which broadens our offering in an important market, while also creating meaningful cross-sell and up-sell opportunities across the Altus global customer customer base. In particular, we can leverage Altus' deep relationships for cross-sell and help them expand into our core geographies, such as Canada, another RICS-driven market where we believe that the Valis model can be successfully replicated. When you step back and look at the transaction holistically, Valis brings together many of the elements for prioritizing. A strong strategic adjacency, access to unique data, workflow tailored AI capabilities, and opportunities to accelerate growth across our customer ecosystem. That's why we believe it's an excellent fit with our long-term value creation strategy. Most importantly, it is another example of the more focused Altus we're building today, leveraging software, data, and AI to create greater value for customers and shareholders alike. That's the opportunity that attracted Katie Daltis, so why don't I turn it over to her for a short introduction.

Thank you, Mike. I'm excited to be joining Altus at such an important moment for the company. This With the business transformation now largely complete, Altus is entering its next chapter from a position of growing momentum and stronger operational discipline. What attracted me to Altus is the strength of its market leading technology, deep data assets and clear opportunity to shape the future of commercial real estate intelligence as the industry continues to evolve. Just as importantly, the work ahead is very much in my wheelhouse. I spent much of my career at the intersection of finance, capital markets, investor relations, and operations, and I understand what investors value. Clear execution, disciplined capital allocation, scalable growth, and consistent progress towards long-term financial targets. I'm excited to partner with Mike and the broader leadership team to build on the strong foundation already in place.

As Altus advances its path towards Rule of 40 and prepares for broader investor engagement, including a future U.S. listing, finance has an important role to play in helping the business scale efficiently, make better decisions, and create a better future. create durable stakeholder value. I'm coming into the company at the tail end of the company's multi-year transformation. We're ahead of schedule on a number of our strategic initiatives. into 2027 with a much cleaner financial profile that will drive earnings per share and free cash flow. This allows me to focus on what matters to our shareholders. I also want to thank Pavan for his partnership and support through the transition. I look forward to getting to know the team, our shareholders, and the analyst community in the weeks ahead.

Thanks, Katie. We're thrilled to have you aboard. Before we open the line for questions, I want to leave you with one observation from my many conversations with customers because it gets to the heart of what we're building. The more time that I spend with our clients, the more convinced I am that the commercial real estate industry is still one of the least transparent major asset classes. In public, we have access to consistent and trusted data. In commercial real estate, that visibility often doesn't exist uniformly. We believe that it's a massive opportunity for all. By bringing together valuations, benchmarking, portfolio analytics, and performance insights, we're helping our customers make better investment decisions.

We're not just helping customers value assets. We're helping them understand performance, allocate capital more effectively, and navigate an increasingly complex market. That's a powerful opportunity for our customers and a compelling long-term growth opportunity for us at Altus as we position ourselves to be the core platform in their operations.

With that, let's open the line for questions. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Your first question comes from the line of Doug Taylor with National Bank. Your line is open. Please go ahead.

Yes, thank you. Good evening Mike and welcome Katie to this I want to start with a bigger picture question. You've shown some pretty impressive progress on the margin side towards the Rule of 40 bogey that you've laid out for yourselves. I think you've said here that there's more room still to go now that the business has been streamlined. If I was to take the current, mid 30s combination that it stands at right now or the guidance reflects. Would you say the gap towards 40 and above is easiest closed by further margin expansion. Is there more? I mean, maybe you can articulate what headroom there still is there, or is this dependent on the revenue side of the equation to scale to that objective?.

Yes, Doug, thanks for the question and good to hear from you. I think very simply we can get there in both ways and the timing is shortening a lot more quickly than we had originally anticipated when we went through this at Investor Day last year. specifically on the cost side of the equation as we have gone through and uh... divested the businesses there's there's some work that we're working with with the the parties about the businesses and once that work is done that gives us an opportunity and then the second thing um... that we did that will actually improve our run rates as well as we've been consolidating our different product sets to our platforms that will reduce our run rate quite a bit. We have been running a lot of different platforms in the years and we feel right now that early in 27 that we should be moving a lot of those older platforms to the newer platforms. And once we retire that technology, we should see a good run rate improvement, especially early in 27. There's a couple other things that we see as well as we've been just consolidating our go-to-market motions as well as just looking for things as we go through the business. But we feel very good about the cost side of the equation to continue to get good benefit from on the revenue side. The equation, like I said earlier, you know our cross sell motion is starting to really kick into gear.

We're happy with that, especially on the software side. I think if that cross-sell motion continues into, the early next year not only will we see the growth and the revenue growth continue to expand but at the same point that will help from that side so we'll be doing it from both ends.

Do you think, based on your prepared remarks, I mean, obviously the software growth is is evident, but the drag, at least to the overall corporate growth profile from VM but also data and services. Are you are are you suggesting that you know that? Those segments will be less of a drag through the balance of this year. Am I understanding what you're trying to get across in your prepared remarks correctly there?.

you are we feel that those things are going to be less of a drag we're very happy with where our VMS business has been historically it's been in the last couple years has been quite a quite a bit lower grower and we're starting to see that growth return because we're actually hitting different parts of the market that we had never hit before and we're starting to see some internet opportunities come our way so we think that that increases our active market that we can go after on the BMS side and then when it comes to the data side we've been working a little a little bit around the data around just getting it we've improved what I would call the hit rates of the data quite a bit in the last number of months. And we think that we will start to see that number turn around from a negative to a start to be in the lowest single digits. So while it'll be less than the software, we just get that moving in the right direction and we continue our pace on software, especially with the cross-sell that we're seeing, and our friends at advisory services continue where we are. We feel very confident about where our growth will go.

Okay, that's helpful. Maybe one more for me on Valos. Seems like a logical fit as you explained in detail. And I know you described as it being not material to the guide, but perhaps you can talk a little bit more about medium term, the monetization plan in more detail. You're streamlining a lot of your other products and you're adding another one into the mix here. Is the goal to keep this as a standalone module that you have? dual upsell or you know, but this ultimately going to be integrated more into your into your suite.

and leveraged elsewhere in the portfolio. Yes, I think the plan in the near term, which I would say through the end of the year, we're going to put our sales force and our work around them. We like what they're doing, especially in the UK and we would love that. We'd like to really kick into gear their growth. And at the same point, we'll probably bundle that into some of our products. We have a lot, while we have a number of customers that are overlaps, we have a lot more customers that we would like to get their product set into. Um, secondarily, as I said, we believe that there is a great opportunity in our home country of Canada, uh, And this is something that we will be bringing, you know, working on bringing to market pretty quickly therein.

In 27, I think what you'll see us do very quickly is integrate it into the platform because what we would like to have is that as people open up Argus Intelligence, they can leverage this technology right there. And then it can be used. Again, the data sets that we have, that they have and that we have, that we can actually bring more power on the data together.

Thanks, Verlaine. I'll pass the line. Your next question comes from... Your next question comes from the line of Stephen McLeod with BMO Capital Markets. Your line is open. Please go ahead.

Thank you. Good evening and welcome to Katie and congrats to Pavan. I think best of luck with your next adventure. I just wanted to ask a little bit about the VMS business. We saw some nice growth sequentially between Q2 and Q1. I'm just curious how you're thinking about that business as we turn to the back half of the year, especially with the backdrop of rates being higher for longer.

Steven, fair question. We actually, one of the things that I just mentioned in the last question, as we're starting to get into adjacent markets with that, we have found to... opportunity to continue areas where growth is happening, especially in different parts of the market where maybe in less complex assets where the team can work or we have some opportunities that we're starting to see in the Canadian business where we can leverage VAS. And then finally, there is activity around the also in the UK. So while the rates are somewhat still, you know, I would say not in the area that we would all like them, I think that what we've been able to do with the VAST business and especially with the ability to bundle that to Argus Intelligence and align Argus Assist with, with it would be is a is a easier win for our customers to adopt and then they can adopt the vast business. So we're seeing still. Probably compared to periods before, we're seeing good growth from it, even when rates have gone up to the type of where they are today.

OK, that's that's helpful. Thanks Mike and then maybe just on the software side I'm I'm just wondering if I might have missed, I think Pavan mentioned it in his prepared remarks, but I was just wondering if you could break down sort of the key drivers of growth, um, in the quarter and then maybe separately, I know you're probably not going to be able to answer this, but just wanted to get a sense of if you're able to share the magnitude of the organization I guess assist add on with with Newmark associated with the sale.

So the second one first. Yes. I'm sorry. I'm sorry, Bob. Answer Stephen. Yes, we're probably not going to be able to talk about it. But like, yes, think about Argus Assist and the number of users that they have. I'm just going to give you the concept of it that we know how many users that they have in Canada. We also know how many users that they have in the United States. And they're one of the largest appraisers and brokers in the world, it's quite an opportunity for us.

I'll leave it at that on the Argus assist. Pavan, do you want to take the first part of the question?.

Yes, look, obviously you see the second performance for software, which was a good double-digit growth within that. Yes. the layers back, Argus intelligence is growing significantly higher than the total software category, along with just the progress we're making with Forbury in terms of providing a different user interface for clients. So that's very positive. We're also seeing the mix of Argus intelligence improve over time. I think last quarter we reported, we had 84% on Argus intelligence. We have about 87% on Argus intelligence. So steady improvement sequentially. We now have 48% of Argus intelligence of our Argus intelligence base on asset-based pricing. And as you guys recall, last quarter we talked about it as 44%.

So we continue to be able to drive more of the value to, you know, broader usage across, you know, the client's asset base and really, really drive more ubiquitous use across the base. So it's a very positive and growing trend that we're extremely proud about.

Okay, that's great, Keller. Thanks, guys. Appreciate it. Your next question comes from the line of Gavin Fairweather with ATB Cormark. Your line is open. Please go ahead.

Oh, hey, good afternoon. Thanks for taking my questions. Great to hear about the upsell progress. the new products moving into Argus Intelligence in terms of pairways debt, tally-ins, Argus assist. Can you just put into context for us how much opportunity that opens up in the base for 2027?.

I'M GOING TO ASK YOU A QUESTION. It's not often that you get me stumped, but it's like if you take a look at, like, as we go through, I'll give it to you this way. As you go through how many products each one of our customers have, very few of our customers actually have crossover, like where we have, like they have two of the products working together. rarely do we have three. And so as we, and I'm not including benchmark manager and portfolio manager, and I'm going to leave Argus Assist out of it because that we look at Argus Assist being a horizontal product that runs multiple agents of working across those things. But when we sit back look at getting investment manager, which would be the Taliance product, and we get debt manager, which would be our fairways product on board. Um, we think that when we look at our largest customers, uh, all of them have given us an interest in like how they can move, uh, like look at those products and move to them because. Historically we have been with the asset manager, but fund managers and the investment managers and the banking assets are starting to look at us from a perspective of what they can use from the product set.

So our largest customers, I wouldn't be surprised if we, you know, we an early pipeline of having 15 to 20 opportunities each. So we're waiting for the product to come out. And then we have what I call our challenge, you know, our challenger group, which is same size like companies, but use us a little bit less. And I think that's something that we'll be pushing with them. And so there's a number of customers who have been looking at those products, especially as they come out the door. to Argus workbook. That is again something that's horizontal that's coming off. We hope to make a pretty good push especially in our European theater, probably as we get into the fourth quarter, and then really getting into the US early next year as that's tied in and the data models are aligned.

I think that as we, with our strategy as the as the data models, and we've done already the core plumbing, work with all those different pieces together it'll be easier for different users to get on and leverage that information.

Very helpful. And then, secondly for me, just on the VMS business, great to hear about, the education within the employee base, just on Argus Assist. First for Argus Intelligence, can you talk about how much efficiency that's driving for the team? And should we be expecting gross margins on this business to be expanding and to what extent will you be passing on some of the savings to customers.

So we will be basically on the first piece with the team starting to use it. Part of the reason why we can hit parts of the market that we've not been able to hit before is because it actually does make us a lot. It does make us more efficient. But when we're getting back to our core customers who have used us for years, it's actually allowing us to do more of the advisory work that they've been asking us to do and being able to bundle that through to give them more insight to what their portfolios are and help them in their valuations, not just doing the work and running through that. So we would also look at that as a, a great opportunity where we are. We have taken out effort, but we've actually applied more value. Finally, in next year as we continued and the teams continues to leverage it, we do think that there's some to make our costs a little bit more efficient in that area.

But also from the standpoint, like as our customers and our users are leveraging actually the platform to do the work. So our teams are helping them in the platform directly and collaborating on that. And they're using Argus Assist in that I think there'll be more opportunities next year. So we do expect that product set will become probably somewhat more profitable. And so to the first question that we had gotten from Doug. We do see some opportunities to improve our margins over the next year or two.

That's great. And then lastly for me, just with the streamlined business, it sounds like there could be some additional cost savings coming in the next few quarters. But as you're sitting down to start the budgeting process for next year, are there any kind of areas of the business that you think could be worthy of additional investment?.

Yes, I think we've broke, as we're going through this and we're breaking it through, Listen, there's going to be investment into our data business, which is what we've been working on right now. We see data as a very good moat for us, and we've been leveraging that. One of the things that we've been leveraging very quickly with the data business is not only that we're sitting on our laurels with, we don't want to sit on our laurels with Argus Assist, but our next agents that that are all under Argus Assist are coming out. So our goal is to be bringing out multiple, two to three agents per quarter, working on different areas where Argus Assist helps coordinate all that across the different products. So you'll see a good amount of investment going into that. And I think that another area that we have a lot of activity in that I think I've probably talked about before is that we do do... especially into this community. And we have like 200 lenders who are using our products in in in many ways, and I think there will be more in that to help them with their credit with their credit life cycle and helping them get a good sense of how they can look at the valuation information and be able to do a better job at managing their risk and managing their dollars to like basically make better loan selections.

And then finally, I think what you're going to see when we come to just as we make it easier to use, we've made quite an investment in UI and UX. around just basically as different people come into the platform, they'll come very much into their own home screens, which will be able to provide our insights from our teams right there so that we will also be giving them a good amount of reports so that it will give them a rounded view of what the market is providing them as we go forward. So that's something that we're looking forward to early on.

next year as well. Thanks so much and welcome, Katie, and it's been great working together, Robin.

Thanks Kevin, I appreciate it. Your next question comes from the line of John Chow with TD Cowan. Your line is open, please go ahead.

Thanks for taking my question. In terms of the Valus acquisition, I understand this is the typical buy versus build mentality. So my question is, even with AI coding today, do you still find it hard to replicate this asset? So that's why you pulled the trigger on this acquisition?.

Yes, I think what we looked at is there's the ability to build it and the ability to get done, but we also, there's three things that we looked at. Number one is we have a focus on bringing our current assets onto the platform and getting those assets done pretty quickly because we think that that adoption cycle for investment manager and for debt manager would be if we didn't focus on those, we'd be leaving some money on the table. But at the same time, as we look at things and we look at the data that we have, we looked at what they have built and they've built quite a good product. Our teams are very excited about it. It's been, you know, it's, it's, it's, It is a core SaaS product, core cloud product built from scratch, got great. agents working at it and good information and what we also liked is that we like the the progress that they had made with their customers and I And I think that while we could, could we replicate it, we could do some work. I think that the team is very dynamic and has done a very nice job of really, continuing to expand on what they're doing. And we just felt when we looked at it, it was a way for us to get there faster.

It wouldn't take the attention off our core builds that we were doing. And at the same time, it allowed us to get into parts of the market that we weren't serving as well. And we get that alliance pretty quickly. So that was why we made the decision on the buy versus the build.

Thanks for the call. Regarding RUA-40 targets, how much of a market recovery do you assume at this point? And do you think you can still get there without a meaningful market rebound?.

Yes. Thank you. A pop-up. Do you want more color?.

Sorry, John. We feel very comfortable that we can get... Yes, good. I'll leave it quick.

Your next question comes from the line of Paul Traber with RBC Capital Markets. Your line is open. Please go ahead.

Thanks very much and good afternoon. A question on larger deal wins, it's mentioned in the press release, and that's due to improved sales execution. Is that primarily from better success in terms of cross-selling, just given the more products they have available, or is there another other drivers that improve sales execution. And can you quantify the increase in the average deal sizes, how that's been trending?.

So, on the first question, that we won in this quarter. All of these were in the millions. So I'll give you from a standpoint of like the size. So we're starting to see more million dollar deals than not. But They were one, a couple of them were with brand new customers. And a couple of them were cross-sells with current customers. But what they were not is they were not like what we had last year, the moves from AE to AIP.

Okay, that's helpful. Secondly, just on guidance, can you speak to the moving parts in terms of FX? It does look like FX had a fairly significant tailwind on the revenue line. Can you speak to it in terms of the impact on EBITDA?.

Our increase was all on constant currency. So there is we as much as we could, we took FX out of it. So when we are talking through the raise and guide on both on revenue and the raise and guide on EBITDA, that is all done in constant currency. and currency and there's no impact on FX from it. One thing I should say though, is that realistically our quarter was better than we reported on growth because we did have some drag from like having the 111 business still in our numbers from last year all the way through. So while we've pulled the 111 business business out and we're comparing our we're not exactly comparing apples to apples so the business did perform better comparatively when it comes down to it so our growth was probably our organic growth was probably closer to 7%.

Okay, thanks for that clarification. I'll pass the line. Your next question comes from the line of Aaron Kyle with CIBC Capital. Your line is open.

Please go ahead. Hi, good evening. Thanks for taking the questions. Maybe just one for me on capital allocation side. Mike, you mentioned the volus acquisition was, or volus acquisition was An example of what you'd like to do going forward. Is that to say that acquisition focus here is still predominantly on tuck-ins or are you considering larger size deals on a go-forward basis here, given you've got a lot of cash on the balance sheet as well? And then maybe Katie has a different view on M&A as well. She's joined the team.

Yes, fair question, Aaron. I think we are like, we kind of turned the page on the divestitures and as we turned the page on divestitures, we started to look, but we are, we're more firmly in like the tuck in expanding our, our, our, our, our, our, our, our, our, our, our, our, our, our, our reach and hitting a part of the market and getting some of the functionality like that. And this is something that we're building up a pipeline on and looking at. I would be never but we don't really look at doing something on a massive scale. I think that our investors have been very happy with the returns that we've been giving them of the capital in repurchasing our stock. So we'll continue with that, but we'll also now leverage in on capital allocation.

these tuck-ins. Katie? Yes, I agree. I mean, I'd say from what I've seen, the business has been through, largely through a transformation. And so I think the product roadmap and where we want to go is very clear. And so tuck-ins are a great way, like Valo's, to accelerate that vision going forward. And so, you know, never say never, as Mike said, but I don't think another transformative action is what we've got and soar right now.

Okay, that's helpful. Thank you. And then maybe one for you, Katie. Welcome. Looking forward to working with you. I appreciate you've only been with the ELTIS team just this week, so I'm not sure if this is Totally fair question, but maybe in your view, what areas do you see the most opportunity for growth at Altus? And then is there anything about Altus that you believe is being underappreciated by investors today?.

Yes, maybe I'll take the second part and then give myself some space to learn the business more on what I'm most excited about for growth. I think that the market really truly does a bit underappreciate the durability and the moat around the core product, the data, the AI, and the ability to really become more integrated in workflow and kind of part of how our customers do business across the spectrum. And so I'm pretty excited about being here to kind of help enable that and bring those proof points to life. I do think that that is undervalued currently.

And any specific growth area in your view that we haven't already discussed?.

No, I mean, I'm just starting to kind of dive in across all of the clients, products, geos, et cetera. So I'll hold on that one and maybe next time we talk, I'll have a stronger point of view.

Fair enough. Thank you. I'll pass the line. There are no further questions at this time. I will now turn the call back to Mike Gordon, CEO, for closing remarks.

Thanks, Operator. And I want to thank everybody for joining the call tonight, and I appreciate your time this evening. It's been an exciting period for us, and we are very happy to be really through what we laid out last year at this point, or not even this point, but in November, and we're happy to really get on to the business of operating the business the way that we wanted to. look forward to discussions with you all, but if we don't see you soon, enjoy the rest of your summer, and we'll talk soon. Thanks.

This concludes today's call. Thank you for attending. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Gentlemen, thank you for joining us, and welcome to Altus Group's First Quarter 2026 Financial Results Conference Call and Webcast. [Operator Instructions] I will now hand the conference over to Camilla Bartosiewicz, Chief Communications Officer. Camilla, please go ahead.

Thank you, Jay. Hi, everyone, and welcome to the conference call and webcast discussing Altus Group's first quarter results for the period ended March 31, 2026. Our press release, MD&A, financial statements and the slides accompanying our prepared remarks are all available on our website and as required, have been filed to SEDAR+ after market close this afternoon. I'm joined today by our CEO, Mike Gordon; and our CFO, Pavan Chhabra.

Turning to our disclaimer slide. Some of our remarks on this call and in our disclosures may contain forward-looking information based on certain assumptions and are therefore subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the forward-looking information disclaimer in today's materials. We also use certain non-GAAP financial measures, ratios, capital management measures and supplementary and other financial measures as defined in National Instrument 52-112. We believe these measures provide useful additional insight into our performance and may assist investors in evaluating our shares. However, they are not standardized under IFRS and may differ from similarly titled measures used by other issuers and may not be comparable. They should not be considered in isolation or as a substitute for IFRS measures. Further details are provided in today's IR materials. Unless otherwise noted, all percentage and basis point growth rates discussed on today's call are presented on a constant currency basis relative to the comparable period in 2025.

Before we start, I would like to point out that the Development Advisory business was moved under discontinued operations this quarter. Accordingly, our results for Q1 and the comparative period are presented without it. However, certain metrics like net cash provided by operating activities and free cash flow still include contribution from the development advisory business. Additionally, on April 30, we sold the One11 Managed Services business, which was part of the Analytics segment. This business line did not qualify for discontinued operations accounting treatment. So just keep in mind that on a go-forward basis, the revenue contribution of One11 Managed Services, approximately $5.2 million in 2025, including $3.9 million of which went into the recurring revenue line will still remain in the comparative period of the -- and then the Q2 results will include partial contribution up to April 30.

And with that, I'll now turn it over to Mike.

Thanks, Camilla. Good evening, everyone, and thank you for joining us. Over the past quarter, I've spent a lot of time visiting our offices, meeting with customers and having candid conversations with many of our largest shareholders. Those discussions have sharpened my view of what's working well and where we still need to continue to improve. And for those of you who know me, you know I like to move decisively. We've already begun aligning the organization around this clear set of priorities to drive our next phase of growth.

Our teams are energized, and I'm encouraged by the feedback we heard at our recent Altus Connect user conference, where we unveiled ARGUS Assist, our latest AI capability and Agentic AI experience on the ARGUS Intelligence platform and walked clients through the evolution of that platform. We demonstrated capabilities that are built and ready to deploy and prebuild our new upcoming capabilities. Customers are looking for a single platform that connects users and data across multiple capabilities throughout the CRE life cycle. Based on client feedback, we are accelerating our road map to move the key capabilities of our other stand-alone software products onto the platform by early 2027. I'm very excited to capture new opportunities coming out of the Altus Connect Conference.

With that conference and that context, let me spend a moment on ARGUS Assist. At its core, it's a conversational interface built directly into ARGUS Intelligence. It lets our users interact with their ARGUS data more naturally, ask a question about an asset and ARGUS Assist can draw on relevant models, workflows and data to return an informed answer. Instead of navigating multiple screens, tools, calculations, users can generate insights, run analysis, retrieve information through a single interface. Work that previously took days can now be surfaced in moments. ARGUS Assist leverages our proprietary and patented Knowledge Graph technology, which helps organize data from multiple sources to a common Altus ID for the asset. This enables faster, more flexible access to high-quality data across the platform with added AI capabilities through ARGUS Assist. This is one of the things that makes what we're building transformative to this industry.

Unlike generic AI tools, ARGUS Assist is purpose-built for commercial real estate. It leverages Argus' structured cash flow models, valuation workflows and market data. So, insights are grounded in the rigor and standard CRE professionals rely on and the outputs that they can stand behind when they take something to investment committees. Because it's based off well-established valuation-grade workflows backed by our decades of industry and domain experience and pulling from trusted high-value ARGUS data, it doesn't just provide an answer, it provides an answer that they can trust and defend. ARGUS Assist is designed to expand over time as we build out our family of agents across our platform. The latest agent is our valuation agent built to support valuation with accuracy, rigor and defensibility our customers expect. And we know it passes the test because our VMS team, one of the most respected authorities in CRE valuation has helped shape it.

I'm very encouraged by the positive client reception, including customers reaffirming on stage that it delivers a superior AI solution to anything they could have ever attempted to do themselves in-house, precisely because it's underpinned by our data and workflows. It's early days, but about 30% of our customers who attended Altus Connect are in the process of signing up for ARGUS Assist.

As I step back and look at where we are today, our platform is solid. Wherever there is a step change in technology, the conversation naturally turns to disruption. But in my experience, the companies that win are the ones that are already embedded in their most -- in their customers' most important decisions, and that's exactly where we at Altus operate. Our data, our valuation-grade workflows and the trust we have earned across commercial real estate aren't easily replicated. And they give us a real advantage as AI becomes part of how this industry works. With Argus Assist, we're not asking clients to rethink how they do business. We're making what they already do better, faster and more insightful. When you combine that with our sharper focus, our strong free cash flow profile and a disciplined approach to capital allocation, I'm confident we're strengthening Altus' competitive position and building a more durable, higher-quality business for the long-term.

And you should be pleased to know that we're consistently executing against the commitments we laid out at Investor Day. Demand for our flagship offerings remain solid, supporting steady ARR growth in the first quarter. With improving platform engagement, we feel good about being able to expand cross-sell and upsell opportunities across our client set. A key priority this year is onboarding more assets to ARGUS Intelligence, both through new client additions and by helping existing clients bring their portfolios onto the platform, with each asset organized under a unique Altus ID on our Knowledge Graph. This is foundational to our vision so that we can deliver better analytics and drive more value for our customers.

Earlier this year, we set up a dedicated team to help move our customers and their models onto the platform, and we're using our AI and data curation technology to help them move faster. As a result, we're seeing a good quarterly cadence, building upon the hundreds of thousands of assets that are already on the ARGUS Intelligence platform. It's certainly a big step up from last year. Our portfolio rationalization also remains on track. After the sale of the appraisals business in Q1, we've also recently sold the One11 Managed Services business line, and we expect to sell the development advisory business by year-end. Our continuing operations financials are already providing a simpler, clearer view of performance and the potential we see ahead.

As you'll hear from Pawan shortly, we're increasing our guidance based on the simplicity of our operations and performance of our underlying business doing well. We can offset the loss of One11 revenues with increased analytics growth expectations. In addition, we're making steady progress improving our operating leverage and reducing operating expenses. These actions are driving strong adjusted EBITDA growth and margin expansion with more benefits expected to flow through the coming quarters. This supports our confidence in the trajectory to our exit 2027 as a Rule of 40 company and has enabled us to increase our EBITDA margin guidance as well. We're also on a strong trajectory to deliver robust free cash flow, one of our key KPIs and the North Star for many of the operational enhancements underway.

Following the completion of our recent substantial issuer bid, we've returned approximately $400 million to shareholders year-to-date. These capital returns have already reduced our outstanding share count by 18% thus far this year with more to come. And as we prepare for our U.S. dual listing next year, I expect Altus to enter the U.S. capital markets with a stronger operating posture and an improved financial profile, positioning Altus as the leading analytics business that we are. We are moving with intent. We're balancing urgency with discipline as we execute against a compelling value creation opportunity.

And with that, I'll turn things over to Pawan to walk through our quarterly results. Pawan?

Thanks, Mike, and good evening, everyone. As Camilla mentioned, we're primarily presenting results for continuing operations, which excludes Development Advisory. Our financials now reflect Altus as a pure-play software, data and analytics company. Our first quarter results highlight the strength of our recurring revenue model and the progress we're making towards a more focused, high-margin analytics business. As you can see from this slide, we delivered steady top line growth and our disciplined cost actions drove meaningful margin expansion. Both recurring revenue and margin expansion came in ahead of our Q1 guidance. With a strong start to the year and consistent execution against our strategic priorities, I share Mike's confidence in our trajectory to exit 2027 as a Rule of 40 company.

Turning to our revenue performance. Growth is led by our flagship solutions, ARGUS Intelligence and VMS, which continued to drive stronger customer adoption and renewal activity. Software revenue was up 12%, driven primarily by ARGUS Intelligence with broad-based growth across several of our other solutions such as Forbury, which we recently rebranded to ARGUS Workbook. As previously discussed, our target growth algorithm remains consistent. Roughly 80% of growth is expected to come from volume and pricing and 20% from new logos. We are seeing steady adoption of our asset-based pricing model, which allows clients to roll out the ARGUS Intelligence platform more broadly across their organizations.

Coming off of a seasonal peak with some onetime benefits last quarter, VMS posted steady growth in Q1. As many of you know, VMS is a core component of our clients' valuation process, often driven by compliance and investor reporting requirements. We're really pleased with the steady performance. And as the market activity continues to pick up, we're better equipped to scale now that the teams are powered by ARGUS Intelligence and its latest Agentic AI features. The data and services business lines came in softer. The investments we are making there will take some time to come through. We're increasing marketing investments in Reonomy in the U.S. and in Canada, we're investing in our data Studio product.

I'm also very pleased to share that we expanded the role of our Chief Legal Officer, Terrie-Lynne Devonish, to include Managing Director of Canada. In addition, we hired Jason Lowe, a seasoned CRE executive with deep client relationships as General Manager of Software and Data for Canada. With this added leadership focus, we are well positioned to accelerate growth in Canada, which is an important geography for Altus, where we benefit from a home base advantage.

Turning to our operating metrics. All our KPIs are solid. Recurring revenue was up, software and VMS ARR were up and our retention metrics remain strong. These operating metrics reflect the durable, high-quality nature of our key recurring revenue streams. Across the P&L lines, we are seeing the benefits of optimization in both R&D and G&A, which have declined as a percentage of revenue. This reflects the impact of our restructuring activities, product portfolio rationalization and continued third-party cost optimization. In particular, we remain focused on bringing G&A expenses down as we rightsize the business.

Q1 continued our pattern of strong cash generation and adjusted EBITDA to cash conversion. We are seeing the cash generation strength of the business come through consistently, reinforcing our confidence in our capital return plans. Year-to-date, through 2 SIBs and an NCIB, we returned over $400 million to shareholders. That's ahead of our expectations, and we remain committed to doing more this year. We believe the current market environment presents an opportunity to allocate capital at attractive return levels and our best investment continues to be in Altus itself.

Strong working capital execution drove record collections. We also benefited from increased prebilling, which lifted deferred revenue and cash. We view this primarily as timing related, and we've adjusted future working capital assumptions accordingly. Subsequent to the quarter, we amended our credit facility ahead of its upcoming expiry in 2027. The amendment extends maturities to March 2029 for participating lenders, maintains our $550 million of capacity with flexibility to increase to $650 million and preserves our existing leverage covenants. We're very pleased with the outcome. It strengthens our liquidity and preserves financial flexibility and continues to reflect continued lender confidence. You'll notice that the credit facility is classified as a current liability. This is purely a temporary IFRS presentation requirement as the amendment was finalized after quarter end. Importantly, with the extension now in place, there is no impact on our liquidity or leverage profile.

And finally, I'll wrap with an overview of our business outlook, which we're presenting on an organic basis for continued operations only at the consolidated level. We've updated our full year outlook to reflect the removal of development advisory business to discontinued operations and the partial contribution of One11's Managed Services business through April -- which we sold in April and the results reflect through April 30. We've also refreshed our implied as-reported dollar ranges for current FX rates. With the recurring revenue now representing 95% of total revenues, we've simplified our disclosure to focus on revenue growth and adjusted EBITDA margin expansion. As a result, prior guidance from recurring revenue is withdrawn, but it will continue to trend in line with our overall revenue guidance.

As you can see from this slide, we're increasing our full year revenue growth outlook and range and guidance by 1 point to 5% to 7%. This reflects our new continuing operations profile while also absorbing the loss of One11's contribution, which, as Camilla pointed out, will remain in the comparative period and represents about 1 percentage point of headwind to our growth. Importantly, the underlying analytics business continues to remain strong, which allows us to offset that headwind and still move the growth outlook and guidance higher. We are also seeing margin expansion by 100 basis points to 450 to 550 basis points. This reflects the continued cost discipline alongside a step-up in product investment to accelerate the integration of our stand-alone software products onto the platform by early next year versus over multiple years.

With that, Jade, if you will, let's open up the line for questions now.

[Operator Instructions] Your first question comes from the line of Erin Kyle from CIBC.

The first one I wanted to ask is just on the guidance here. So, as you've resegmented it, it looks like you've removed the corporate cost line as well. So, can you just help us reconcile the 2026 margin expansion here? Maybe specifically how much of that lift is driven by structural corporate costs removed versus just incremental operating leverage here?

Pawan, do you want to start with that one?

Yes. Erin, it's a great question. So, as you noted, we did increase the EBITDA guidance, you did see a pretty strong print in Q1 in regards to where we are from an EBITDA growth perspective. And to a lot of the conversations that we've had over time, the simplification of our business is allowing us now to present the business in a much cleaner manner. And so the corporate, we're essentially a segment business at this point at Analytics. So, we have completely removed the corporate line, which is now reflected as part of our total EBITDA growth number. As you've seen in our history, we have a pretty strong track record of being able to take out cost out of the business and continue to scale as our business grows without increasing that cost.

There's a lot of opportunity that we have to be able to continue to do that. A key focus area, as we said in the prepared remarks, and we've talked about in the past is we've had a pretty elevated G&A cost across the business. That continues to present an opportunity for us really from a function of being able to drive higher productivity across the organizations, but also the simplification of our business helps tremendously on that. And so, from an operational perspective, that continues to drive our margin expansion opportunities. We've got a lot of cost discipline in place in regard to making sure that our spend is accurate. We're leveraging third-party services versus hiring in-house for product and development just to give us more agility and flexibility as we scale and ramp projects.

And so, we continue to drive forward, Erin, in terms of the opportunities that we have that are in front of us. And there continues to be a significant amount of opportunities. We're going to continue to drive more discipline across our G&A lines, both from a standpoint of just headcount within G&A, facilities within G&A and then third-party type spend across G&A. So, we're going to continue to drive that lower. And again, we are adopting, as Mike mentioned in his prepared remarks, the teams are using the software internally, which is driving a significant amount of operational efficiencies for us as well, too. It allows us to drive processes faster. It also allows us to leverage offshore capabilities as well, too, as the work becomes more standardized and more repeatable.

Yes. If I could pile on the -- for a moment there. I think the big thing as we go forward, we're seeing that expansion of the margin. But in addition, we're also doing that while we continue to transform the business and transform the shape of the business. So, like as we align our sales organization, as we align where we're putting people on to product and R&D, we're also seeing the opportunities to do -- to shift those resources around because at this point, we -- that simplification has helped us and the focus has helped us on where we're going. So, from that perspective, that's why we now feel like as we've started to simplify the business, we can make the additional investment into the product set and at the same point, deliver at a faster point but continue to get that margin expansion.

That's helpful color. And then maybe just on the discontinued operations, just following the appraisal divestiture and the pending development advisory sales, what remains, if anything, in the portfolio that's still considered noncore at this point?

Once we're finished with those, we feel pretty comfortable with the business we have left. There's always opportunities to see if something doesn't feel like noncore, but that is the definition of noncore for us at this point.

Your next question comes from the line of Gavin Fairweather from Cormark.

Maybe just on the guide, nice to see the lift despite the One11 headwind. Maybe you can just discuss what's coming in ahead of your initial expectations for the business relative to what you talked about coming out of Q4? Is it asset-based pricing or selling more modules or VMS, discuss what's strengthening in analytics?

Good question. So, we had a very strong quarter when it came to our software products. As Pawan indicated, we were -- we had growth of in and around 12%. And as we look at that, that -- some of that certainly is some of the overhang and still the expansion to asset-based pricing. But to be honest with you, a lot of that has been new opportunities or cross-sell opportunities as people are starting to get on to the platform and starting to use the platform. As we went through the first quarter, and the platform was fairly new at the end of last year and just people using it, we've seen as the quarter went through, Gavin, the number of users increase on the platform by over 20x.

And as Pawan already talked about, we also saw that our VMS teams are actively using the platform as well. And in that 20x, that doesn't include our guys. And as a result, what we're starting to see is we're starting to see more use of the platform for folks to do their business. So, while the software has grown, we've also seen good steady growth from VMS. And what we think that we'll start to see as we go through this, more opportunities coming through for that business as we go on through the year. The opportunity then to also kind of expand our product set on the platform gives us more cross-sell opportunities. So, we already had investment manager scheduled to come on later this year. We talked about our Forbury workbook functionality in ARGUS Workbook. But now we're really going to be focusing on pulling in the Fairways product to become our debt manager and developer.

And when we talked about it at Connect a couple of weeks ago, a lot of customers pushed us for that they would like that interaction on the platform, and it just made sense for us to doing it. So, to summarize again, strong software push, a lot more cross-sell and upsell, and we hope to continue that going into Q2 and Q3. Gavin, did I miss anything?

No, I think you answered it well, Mike. It's kind of related, but you talked about getting more assets on the platform. I'm curious like coming out of Connect, where you've seen the pace of kind of adoption picking up and speeding up given that people want access to some of the new functionality.

Yes. Our pace has definitely hastened. So like I said earlier on ARGUS Assist, we got really good take-up of ARGUS Assist at the conference. As I said earlier, 30% of our customers who were there, individual companies, not just all the attendees. We're excited to step up to that. But what was really heartening for us is we've seen a lot more work happened over the last couple of weeks as we are helping our customers curate and clean their data. As Steve -- as we talked about at the conference, Steve Besner and his team have really got quite a few capabilities that we have developed with our Knowledge Graph and the AI that we have to help do that and pull their data on. And we see a lot of customers taking advantage of that. In fact, we've also made that technology available to customers who don't want to use us and some customers have just taken our cookbook and put that on.

So, we're seeing a lot of push on that. So, a lot of the customers are starting to drive us, which is excellent. So, we're seeing a lot of the largest funds push that. But in addition, what we're also seeing is that we're having very good conversations across our different ICPs. So, the funds are eager to do that because they're engaging with all the VMS teams but our brokerage clients as well because they can see the value to it. And then even the lenders who have quite a large portfolio on there, we see them starting to jump on as well. So, it's across the board, good uptake. And again, this is -- this gives us a good opportunity to really improve value for our customers.

Gavin, just a good proof point in that would be just looking at the ARR growth that we have on software north of 10%, close to 11%. And the other data point that I think would just give you color in regard to the pace of adoption is you see that our GRR continues to remain in the mid-90s. So those are 2 really good proof points in regards to just the traction that's building in our adoption and client interest.

At this time, there are no further questions. I will now turn the call back to Mike Gordon, CEO, for closing remarks.

Thanks, Jade. Everybody, thanks again for joining us on this call this evening. As you can tell, we're excited about where our business is heading and the work that we have ahead of us. But as always, if there are any questions, please don't hesitate to get in touch with Camilla or Martin, and look forward to talking to you all as we head into finishing this quarter. Have a great one, guys. Thanks.

This concludes today's call. Thank you for attending. You may now disconnect.

Are asked to vote, a voting tab will appear on your webcast platform requesting you to cast your votes. You will only have a limited amount of time to do so. If you've already voted, there is no need to vote again. Voting on all matters will be cast on a single electronic ballot. Registered shareholders or duly appointed proxy holders can ask questions during the meeting using the instant messaging function of the webcast.

Please note that there will be a slight delay in the publication of the communications that are received. As we begin the business of the meeting, I ask Terrie-Lynne Devonish, the company's Chief Legal Officer and Corporate Secretary, to start with an important notice and a reminder.

Thank you, Mr. Chair. The statements made during this meeting, which are not historical facts, are statements containing forward-looking information in respect of which various factors and assumptions were applied or taken into consideration. Our actual results could differ materially as a result of numerous risks and uncertainties, and reference should be made to our annual information form and most recent management discussion and analysis for a discussion of these and related risks.

With that, I'll turn the meeting back to the Chair.

Thank you, Terrie. I will now officially call this meeting to order, and we'll start by addressing a few procedural matters. With the consent of the shareholders, I will act as Chair of this meeting. Terrie-Lynne Devonish will act as the Secretary and TSX Trust Company, our transfer agent, by its representatives, will act as the scrutineer of the voting. We will be dealing with a number of formal and administrative matters at today's meeting and to avoid any technical or logistical difficulties, I will move and second all motions unless there are any objections.

Okay. Hearing no objection, I ask that Terrie-Lynne Devonish please table the documents entitled: one, Notice of Meeting; two, form of proxy; three, Management Information Circular dated March 25, 2026; and four, declaration of mailing, which provided service of notice of all of these materials on each shareholder of record of the company.

I confirm the tabling of the following documents: one, notice of meeting; two, form of proxy; three, management information circular dated March 25, 2026; and four, declaration of mailing.

The notice of meeting, form of proxy and management information circular were mailed to shareholders on or about April 2, 2026. Accordingly, unless there is any objection, I will dispense with the reading of the notice of the meeting. Copies of the meeting materials are available on our website and on the SEDAR+ website under our company's profile.

I confirm that all of these documents have been delivered to each director and the auditors of the company as well. According to the bylaw #1, 2 or more persons holding or representing 25% of the votes attached to the common shares entitled to be voted at the meeting represent a quorum. And I have been advised that there are proxies representing more than 25% of all outstanding common shares of the company, and therefore, a quorum of shareholders of the company is present, and the meeting is properly called and duly constituted for the transaction of business.

Terrie, please include the declaration of mailing of the notice of the meeting and the scrutineers' final report on attendance in the meeting's minutes. As mentioned at the beginning of this meeting, registered shareholders and duly appointed proxy holders will be asked to vote on each item. Voting on each item of business that requires a vote will take place during the meeting. A tab will be visible on the webcast platform requesting you to cast your votes. After you cast your votes on all business items, the scrutineer will compile the votes, and the results will be reported at the end of the meeting after all votes on all matters have been counted.

As the first item of business on the agenda for today's meeting, I now table the 2025 financial statements and auditor's report of the financial statements. Copies of the statements are available on our website, on the SEDAR+ website under our company's profile and were mailed to shareholders who requested them. The next item of business is the election of directors. As the company did not receive notice of any director nominations in connection with the meeting in accordance with its general bylaw # 2 and advanced notice bylaw, the only persons eligible to be nominated for election to the Board of Directors of the company are the nominees described in the management information circular. The nominees for election as directors of Altus Group Limited are Will Brennan, Angela Brown, Colin Dyer, Mike Gordon, Anthony Long, Carolyn Schuetz and Thomas Warsop. If elected, the nominees will hold office until the next Annual Meeting of Shareholders or until their successors have been elected or appointed.

Since there are no other nominations, I move and second a motion to elect the directors. The motion is now on the floor. Our corporate governance guidelines provide for the election of directors according to the line to the company's majority voting policy. A full description of this policy is provided in the management information circular for the meeting. As mentioned at the beginning of this meeting, voting today will be conducted by a single electronic ballot. You will be prompted to vote on the election of each director. Voting will now open on all resolutions.

[Voting]

Unless there are any questions or discussions, I will move to the next item of business. The next item of business is the appointment of our auditor for the current year and authorizing the Board of Directors to fix the remuneration of the auditors. On the recommendation of the Audit Committee, the Board of Directors recommends that the present auditor, Ernst & Young, be retained for the current year as auditors of the company. And I move and second that E&Y -- sorry, Ernst & Young be appointed auditors of the company until the next Annual Meeting of Shareholders and that the Board of Directors be authorized to fix their remuneration. The next item of business is to approve the resolution to increase the number of shares reserved for issuance under the company's long-term equity incentive plan by 1,830,000 shares to 8,594,000 shares. A full description of this item of business is set out at Page 13 of the management information circular.

On March 19, 2026, the Board of Directors approved the increase of 1,830,000 in the number of shares reserved for issuance under the company's long-term incentive plan for equity. Subject to shareholder and approval of the Toronto Stock Exchange, this increase of the number of shares has been conditionally approved by the Toronto Stock Exchange, subject to shareholder approval. I move -- sorry, I move and second that, that resolution to increase the number of shares reserved for issuance under the company's long-term incentive plan by 1,830,000 shares, which shall be taken as read and be approved. The motion is now on the floor, and you may vote on the resolution to increase the number of shares reserved for issuance under the company's long-term equity incentive plan. Unless there are any questions or discussions, I will move to the final item of business.

[Voting]

The final item of business is the approval of the nonbinding resolution, the full text of which is set starting on Page 14 of the management information circular that on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, the shareholders of the company accept the approach to executive compensation described in the management information circular. The advisory vote is an opportunity for shareholders to have their say regarding our executive compensation. Our plans are designed to align executive compensation with the long-term interest of our shareholders and adopt the policy of pay for performance. I move and second that the shareholders of the company accept the approach to the executive compensation described in the nonbinding advisory resolution in the management information circular, which shall be taken as read and be approved. The motion is now on the floor, and you may cast your vote.

Unless there are any questions and discussions, we will move on.

[Voting]

Once again, I remind you that if you've already voted prior to attending the meeting by completing a proxy or voting information form, there is no need to vote again. Only registered shareholders and duly appointed proxy holders may vote. And if you have signed in as a guest, you will not be able to vote. Once the electronic balloting closes, the voting page will disappear and your votes will be automatically submitted. We'll wait a few more moments for the completion of the electronic ballots and then move on with the remainder of the meeting.

That's my favorite part of the meeting. I have received the scrutineer's preliminary report and confirm the following: Will Brennan, Angela Brown, Colin Dyer, Mike Gordon, Anthony Long, Carolyn Schuetz and Thomas Warsop have been approved as elected directors of the company to serve until the next Annual Meeting of the Shareholders or until their successors are elected or appointed.

Number two, the appointment of Ernst & Young as the auditors of the company has been approved, and the Board of Directors of the company has been authorized to fix their remuneration. Number three, the resolution to increase the number of shares reserved for issuance under the company's long-term incentive plan has been approved, and number four, the nonbinding advisory resolution that the shareholders of the company accept the approach to executive compensation described in the management information circular has also been approved.

As the formal items of business as set out in the notice of the meeting have now been addressed, I move and second that this meeting now terminate. As there is no further business to come before the meeting, I declare the meeting to be concluded.

As announced on April 7, 2026, the company will be releasing earnings and conducting an earnings call after the market close tomorrow, at which time I, as Board of Chair and CEO, Pawan Chhabra, our CFO, will report on the financial performance and operations of the company. On behalf of the Board and the company, I would like to thank you for your attendance today and your continued support of our company. We're now going to open the floor to questions from you, our shareholders.

If you would like to ask a question, please use the instant messaging feature of the webcast platform to do so. When asking your question, please state your name, the entity you represent, if any, and confirm your status as a registered shareholder or a duly appointed proxy holder. Please limit your questions to topics relating to today's subject matter.

Well, that seems to be all of the questions for today or appears there are no questions at this time. So I'd like to thank everybody for joining today, and have a great rest of your day. Thank you all.

Good day, everyone. Welcome to Altus Group's Q4 and Full Year 2025 Financial Results Conference Call. At this time, I would like to hand things over to Camilla. Please go ahead.

Thank you, Lisa. Hi, everyone, and welcome to the conference call and webcast discussing Altus Group's fourth quarter and year-end financial results for the period ended December 31, 2025. Our press release, MD&A, financial statements and the slides accompanying our prepared remarks are all available on our website and as required, have been filed to SEDAR+ after market close this afternoon.

I'm joined today by our CEO, Mike Gordon; and our CFO, Pawan Chhabra. Before we get started, I wanted to point out a couple of things. As discussed at our Investor Day, beginning with our Q4 results, we have rolled out some of our new disclosures. To help investors and analysts rebuild their models under our new reporting format, we have published a supplemental document that shows a representation of our historic results, posted on the Investors section of our website along with the other materials I referenced.

Earlier this week, we announced the sale of our appraisal business to Newmark. This business has been moved under discontinued operations for our results. And accordingly, our results for continuing operations exclude the Appraisals business revenue and adjusted EBITDA contribution. Also of note, we plan to eliminate the corporate cost line in our reporting at some point in 2026.

Turning to our disclaimer slide. Some of our remarks on this call and in our disclosures may contain forward-looking information based on certain assumptions and are therefore subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the forward-looking information disclaimer in today's materials.

We also use certain non-GAAP financial measures, ratios, total segment measures, capital management measures and supplementary and other financial measures as defined in National Instrument 52-112. We believe these measures provide useful additional insight into our performance, and they may assist investors in evaluating our shares. However, they are not standardized under the measures of IFRS and may differ from similarly titled measures used by other issuers and may not be comparable. They should not be considered in isolation or as a substitute for IFRS measures. Further details are provided in our IR materials as well.

And finally, unless otherwise noted, all percentage and basis point growth rates discussed on today's call are presented on a constant currency basis relative to the comparable period in '24. I would also like to point out that the supplemental document includes the majority of those numbers on an as-reported basis.

And with that, I'll now turn it over to Mike.

Thanks, Camilla, and hello, everyone. Before we begin, there's been a lot of market discussion around how AI may reshape the software landscape. Let me take a moment to address how we view this at Altus and why we believe our position is well protected. From our perspective, AI reinforces our strategic direction and strengthens the advantages that already differentiate our business.

In commercial real estate, valuation, accuracy, auditability and trusted data are nonnegotiable. These decisions influence significant capital deployment and involve robust scrutiny and fiduciary responsibility. Outcomes must be explainable, defensible and grounded in high-quality data. That's precisely where Altus stands apart. So first, our solutions are trusted in CRE valuation to the point where "ARGUS it" is commonly used as a verb in the industry. When a product becomes shorthand for the task itself, it signals our position in critical client workflows and market trust that goes well beyond the software features.

Second, our strength is amplified by our network effects arising from significant value provided to our customers. Our valuation solutions are core to the valuation collaboration across investors, lenders, owners, appraisers, asset managers and auditors. We are not just a tool used by one stakeholder. We serve as a platform that facilitates the creation, review and use of valuation information by multiple stakeholders in the CRE industry. Every additional participant in this ecosystem reinforces the value of the platform for all others, and this is not something that can be easily replicated.

Third, as AI evolves, our role becomes even more strategic. We are enhancing our agentic capabilities to do more than just generate insights but rather perform critical actions within the valuation workflow. From data ingestion and validation to scenario analysis and recommendation engines, our platform will increasingly act as the orchestration layer that connects and coordinates every stakeholder in the valuation process.

And finally, across the CRE ecosystem, ARGUS is the system of record for valuations. We support tens of thousands of users globally, stewarding valuations on portfolios and funds worth millions and billions of dollars in value. That scale creates proprietary data sets, historical context and benchmarking depth that is extremely difficult to replicate via AI. So when we at Altus think about AI, we don't see disruption to our model, but we see acceleration. AI systems are only as powerful as the data, the context and the workflow integration behind them. Those are precisely our advantages.

Additionally, with our strategic shift to asset-based pricing, we see ourselves as less vulnerable to the disruption risks associated with seat-based models. We also believe that our increasing use of AI internally has potential to unlock tremendous efficiencies. As we demonstrated at our Investor Day, the internal use of our valuation agent capabilities will free up our VMS experts' time and significantly reduce manual work and focus on higher-value tasks. We demonstrated how automating the valuation process can decrease the time to valuation by up to 90%. This is on top of AI deployment within our R&D teams where increased use of AI coding will further optimize our R&D expenses, increase our speed of innovation, rapidly increase the value and the delivery of our products to our customers. Again, we see AI as the accelerator to our strategic efforts, not a threat.

Now turning to our full year financial results. 2025 was a year where steady revenue growth and excellent retention reinforced the strategic importance of our solutions. Even in the softer market, we demonstrated that demand for our solutions remains resilient and driven by client needs, not market cycles. The team also demonstrated strong cost discipline and operating leverage, driving a 310 basis point improvement in consolidated margins. As you'll hear from Pawan shortly, we see more opportunity to drive margin improvements in this coming fiscal year.

We are also beginning to see the cash generation potential of the business come through, which gives us confidence as we look to enhance our capital return plans. The team executed well against our strategic initiatives, driving value for clients, delivering innovation and optimizing our corporate structure and capital allocation to unlock shareholder value.

Upgrading ARGUS Enterprise clients to ARGUS Intelligence remained a major focus for us. We closed the year with the vast majority of our clients recontracted and are now turning our attention to driving deeper engagement on the platform and adoption of our add-on capabilities. On the innovation front, we bolstered ARGUS Intelligence with Benchmark Manager and advanced Valuation Agent.

For those of you who missed the demo, we have advanced our AI capabilities to make the valuation process faster, more accurate and insightful. This is already being tested internally with our VMS professionals. AI complements the professional judgment of our valuation experts, helping reduce their effort while at the same time increasing the amount of information used to reach conclusions. Our AI capabilities are quickly evolving from optimization and information analysis to more complex agent-led workflows for decisioning. We have a deep road map on continuing to enhance both agentic and decision-making AI and see a significant opportunity to drive efficiency and value for clients.

We also delivered numerous feature enhancements throughout the year. As of note, we have been approved for a patent on the Altus Knowledge Graph, reinforcing the R&D investments over the past years. The Altus Knowledge Graph, which is built on our AI, enables us to connect disparate asset-level data to form a common golden record using an Altus ID. It is a foundational component of ARGUS Intelligence, as we help our customers collaborate with each other and collate their data.

Strategically, we're doubling down on the simplification of Altus, both through portfolio and organizational optimization, as we enhanced our capital allocation framework with a higher weighting towards capital returns. We kept the momentum going starting the year at an accelerated pace. We opened the year on a high note with some client announcements. I'm pleased to share that we now have big brokers upgraded to ARGUS Intelligence, including JLL, Newmark and Cushman, and we are currently migrating their data to the platforms using our integration data solutions.

We are also making meaningful progress on our portfolio rationalization. We announced the sale of the Canadian Appraisal business and have a couple of additional divestitures underway that we anticipate could close in the first half of 2026, including having recently signed an LOI for the Canadian Development Advisory business. In addition to the AD&A (sic) [ A&DA ] segment, we have identified select noncore Analytics businesses for potential divestiture. Our objective is to sharpen our focus and simplify the portfolio as we continue our transformation and prepare for a U.S. listing in 2027.

On the cost side, we took decisive steps to streamline operations, reduce unnecessary layers and align our cost structure with our future direction. Earlier this month, we initiated a restructuring program and other cost actions that will deliver millions of dollars in annualized savings. Alongside this, we implemented targeted go-to-market refinements designed to better support client needs and drive growth. These decisions are never taken lightly, but they are important to ensure we operate with focus and discipline.

And then finally, we remain committed to returning capital to shareholders and announced that the Board approved an increase to our annual plans, giving us the flexibility to deploy up to $800 million this year. We can do this through a combination of various methods, including our NCIB and potential SIB tenders. We're evaluating methods to return up to an additional $450 million to shareholders within the first half of 2026.

Our plan is to be in the market over the next 100 days, returning that capital. We believe the current market environment presents an opportunity to allocate capital at attractive return levels, and our best investment continues to be on Altus itself.

It's certainly been a busy period, but that pace reflects our ambition. We are moving with urgency and discipline because we see the real opportunity to create value.

I'll now turn things over to Pawan to dive into our quarterly results. Pawan?

Thank you, Mike. We closed the year with momentum and disciplined execution. Recurring revenue continued to grow steadily, and we delivered our sixth consecutive quarter of margin expansion as operating leverage strengthened across the business.

Turning to the Analytics segment. We delivered another quarter of steady revenue growth and margin expansion. Performance was led by our flagship solutions, ARGUS Intelligence and VMS, which continue to drive strong customer adoption and renewal activity. Overall, software revenue grew 5.4% with ARGUS Intelligence delivering double-digit growth. As Mike noted, our portfolio optimization efforts will streamline noncore products that are dilutive to growth and retention, strengthening the long-term profile of the segment.

Quarter also included a heavier renewal mix toward the end of Q4, which can affect quarterly comparability but doesn't change the segment's trajectory. VMS grew at 9.8% in the quarter. That result includes a onetime benefit from an operational efficiency that allowed us to complete the valuation work earlier than usual, shifting that revenue into Q4 on a go-forward basis. Excluding that shift, underlying growth was in the 5% range.

Our margins expanded by 360 basis points in the quarter and 270 basis points for the full year. We finished at 33% adjusted EBITDA margins, reflecting the discipline in how we operate and the leverage we're unlocking as we scale, putting us in strong position as we work towards Rule of 40 by end of 2027.

The margin expansion reflects a combination of factors: revenue growth, ongoing portfolio optimization, enhanced delivery efficiency through our global service center, benefits from restructuring initiatives and disciplined expense management.

Turning to some of our recently introduced operating metrics for the Analytics segment. All of our KPIs are trending in the right direction. Recurring revenue was up, software and VMS ARR were up and our retention metrics remain strong. This reflects the durable high-quality nature of our key recurring revenue streams.

This quarter, we also rolled out our new disclosures across the P&L to better align our reporting with other technology companies. We're steadily progressing towards our target model, and the improvements we saw in Q4 are encouraging. In particular, we're benefiting from the optimization of R&D and G&A, which will increasingly reflect the impact of our restructuring activities, product portfolio rationalization and third-party cost optimization.

This quarter continued our pattern of strong cash generation with double-digit growth driven by record conversion. As Mike mentioned, we're seeing the cash generation strength of this business come through consistently, which reinforces our confidence in our capital return plans. We ended the year with a very strong balance sheet, giving us the flexibility to execute those plans while maintaining financial strength. As discussed at our Investor Day, we believe the business can comfortably operate with modest incremental leverage over time, and we intend to progress towards our funded debt-to-EBITDA target of roughly 2.5x to support those returns.

And finally, I'll wrap with an overview of our business outlook, which we're presenting on an organic basis for continuing operations only without the Appraisal business. As you can see on this slide, we're expecting steady top line growth and sustained margin expansion. To be very clear, the constant currency growth rates represented our guidance, but we've also presented the indicative dollar range for easier comparison. The implied dollar ranges are based on our January FX assumptions, which are subject to fluctuations and will cause the dollar figures to differ from what we ultimately report.

Our expectations are based on our target growth algorithm, which expects roughly 80% of the growth to be driven by volume and pricing and 20% by new logos. Adjusted EBITDA margin expansion is expected to be driven primarily by improved operating efficiencies and expense management, reflecting the actions we took this past month that Mike just discussed. Within that framework, we expect software to remain our strongest grower, maintaining solid high single-digit growth. For VMS, we're not underwriting a market rebound. Our outlook assumes sustained growth consistent with current market conditions. And in data, we see opportunities to improve growth, and we expect that progress to build over the next couple of quarters. Given the ongoing plans for other divestitures, we'll update our guidance throughout the year as additional transactions get completed.

With that, Lisa, let's open up the line for questions now.

[Operator Instructions] Your first question comes from Erin Kyle, CIBC.

I first wanted to just ask on the guidance here. I just want to get some help comparing apples to apples. And maybe for the full year guidance, I understand it excludes Appraisals. But maybe can you help us understand where you expect the Development Advisory business to land from a revenue and EBITDA standpoint for 2026? I think most estimates at this point still include both Appraisals and Development Advisory.

Yes. It's a fair question, Erin, and great hearing from you. So as you noted, our guidance now has flipped to recurring and continued operations. The continued operations drops out the Analytics guide, which we moved to discontinued operations. Post the divestitures that Mike outlined in terms of the noncore businesses and DA, we're essentially going to be an analytics company. So we're just getting ahead of it in regards to how we're formulating our guidance.

As it relates to the Development Advisory business, historically, you've seen that as a combined segment. Appraisals represented about 30% of that number. Development Advisory was about 70% of that number. And then when you break apart Development Advisory, it was -- it's about 70% North America and about 30% APAC. So hopefully, that gives you a little bit of clarity in regards to how to compare it to how you guys have modeled it in the past in regards to just the overall revenue contribution to the total number. Our plan in regards to guidance is, as we sign definitive LOIs, we'll start moving these businesses over to discontinued operations, which will lead us to then recast our guidance to just help you guys continue to drive that level of clarity.

Okay. And is that 70-30 split on both a revenue and EBITDA basis or just revenue?

Yes, so the numbers that I gave you were on the revenue component.

Okay. And then on the adjusted EBITDA side, I just wanted to ask about some add-backs in the quarter. There were $17.5 million in other operating expenses added back. Can you maybe just clarify what's included in there? I see $12 million allocated to corporate initiatives and strategic projects in the quarter, so maybe that specifically, if you could just expand on what's in there.

I'm sorry, Erin, did you say in the other operating category?

Yes, the other operating expenses in the adjusted EBITDA.

Yes. So the other operating, as you mentioned, includes a host of different elements in it. Give me a second. So we've got the -- some degree of transitional costs in that $18.5 million related to some of our onetime corporate initiatives and strategic projects that we've run. We also benefited from about $6.5 million of realized and unrealized FX gains in Q4 of last year, and so that is obviously part of that $18.5 million higher on a year-over-year basis.

Okay. That's helpful. And I'll squeeze one more in here, maybe for Mike. Just on the AI disruption risk, I appreciate you touched on it earlier on the call. I just wanted to expand on it a little bit in terms of some of the commentary we maybe heard out of some of the larger real estate brokerages last week just discussing ways to leverage their own proprietary data internally with AI. And I realize we did just see -- you signed a licensing agreement with Newmark for Portfolio Manager and Benchmark Manager as well. So maybe just how are you thinking about, yes, some of your customers looking to go in-house with their own data?

So I think from the standpoint, we're not seeing that trend per se, Erin. What we're being pushed on by our customers is with the value that they see in ARGUS Intelligence is that they are wanting to get their data loaded into ARGUS Intelligence so that they can collaborate with others more quickly. I think that as we have very good data protection rights for our customers, we do a very good job of curating their data. And from the perspective of them leveraging the solution, I think that they look at us as an extension of what they would see as in-house as well.

So where you have like alignment is that we see that our customers, especially the ones that I mentioned, are eager to use the new concepts that we have and use some of the tools that we have, the AI tools, and we have a number of like what we would call white box and gray box AI tools that they can go ahead and leverage going forward as well. So we -- I think we're looking as an extension to them versus just being in competition with them.

The next question comes from Paul Treiber, RBC Capital Markets.

I was hoping you can dig a bit further into 2026 guidance. Just for the 4% to 6% revenue growth, you mentioned a couple of moving parts there with VMS versus ARGUS Intelligence. Can you just elaborate further on the growth that you expect for ARGUS Intelligence and the drivers of that, particularly with ARR was quite healthy this quarter, up 11%? How do you see that translating into ARGUS Intelligence growth in '26?

Yes. It's great hearing from you. Hope all is well. Just it's a great question. As you know, externally, we've created the categories of software, data services and VMS. Software includes all of our software components, and so when I talk about high single-digit revenue growth, we're talking about all of the software categories, including ARGUS Intelligence and our other software categories. But if you were to break that apart and look at ARGUS Intelligence specifically, we are seeing great traction on there. You see that from the ARR growth rates, particularly high from a full year perspective. It was very strong in quarter as well, too.

And so within the software category, we expect ARGUS Intelligence to be double-digit growth within that paradigm with some headwinds from the other software categories as we continue to resolve those onto the platform over time but very bullish in regards to the progress that we've seen in ARGUS Intelligence, both in terms of the ARR growth in the quarter as well as the continued strong retention metrics, both on a gross and on a net basis. So very, very pleased with that progress.

We have, I would say, at this point, 80% of our ARGUS Enterprise ARR is sitting on ARGUS Intelligence, and we continue to move the needle in regards to moving more and more of our business to asset base. So roughly 40% of our business in ARGUS Intelligence is sitting on asset base. And when you look at that from a total segment perspective, keep in mind, VMS is all asset-based. So the percentage of our business that's sitting on asset base now is the lion's share of our revenue.

That's helpful. The second question is just on -- previously disclosed the proportion of customers that have contracted to use the cloud, and I think it was the vast majority. The -- what proportion of those have actually migrated over to the cloud and where you can start mining or using some of that data for your analytics products?

Yes. So the majority of our clients are now sitting on ARGUS Intelligence, and we're working very closely with our delivery teams, our services teams and the clients to provision those models that they've migrated over to be able to leverage the tools and technologies that are available to them through Benchmark Manager, Portfolio Manager.

There is a degree of data cleansing that has to happen. It's really a change in user behavior in regards to hardening the data so that it can become referenceable and something that we can benchmark. And so there's a lot of effort in regards to working with our clients to resolve kind of this last mile element of getting their models ready for full benchmarking.

Yes, Paul, one other thing that we've done and just the -- when we talk about the patent that we just got. As we leverage the customers' information for them on ARGUS Intelligence, we're now doing it by asset versus by valuation. And so we're now building out probably a fuller view of that asset for those customers and as a result, a view that is not only greater in the intensity of the data looking at things but also goes horizontally with time so that they can start looking at time series as well. So from this perspective, we think we're giving them like a better 360-degree view of what that has done not only today, but where it has been and where it's going.

Gavin Fairweather from ATB Cormark has the next question.

Maybe we can just dig in on the go-to-market refinements that you referenced, Mike. I remember back in 2020 or 2021, the last time you did a bit of a go-to-market overhaul, it led to a pretty meaningful increase in sales productivity. So maybe you can just discuss the changes that you're making and what impact you'd expect that to make?

Sure. I think -- and thanks for remembering that. It makes me feel good. The thing that we have is we've had historically a business that -- even in Analytics, the different parts of the business went together separately. So our VMS team, our software sales team, our data sales teams, while they try to coordinate, they did go and separately do things, and their quotas and how we would pay them were really set up on their own opportunities.

What we've changed and with us putting Rich Sarkis into the role of Chief Commercial Officer, our entire suite of valuation solutions now go to market in one motion. Now there's work to be done to make sure that, that motion works in a consistent, coherent way. But what we believe is what we have is now, instead of having maybe 60 software sales guys and a few guys looking at VMS and data, we have probably over 600 people in our organization focusing on the customer every day, while they're acting either in the sales function, a customer support or a customer success function or just an account management function or delivery function.

And so as we've done that, we've also focused on making them focus on the customer first, whether it's for their product or their solution or something else. And so what we've seen -- and we just ran our sales kickoff. What we've seen is, as we've been training these guys around it, it's not only talking about the value that their solutions bring but how they can bring total solutions as customers are asking for it. And we're starting to see good pickup in executive sessions with our customers. Just like everything's happened to everybody over the last 4 to 6 weeks, we're seeing a lot of them ask questions on where we can fit in and how we can help them solve some of the problems with their internal staff.

So I would look at it as we are -- it's easy to say that we're doing a consultative or value-based sell, but we see those things really driving pretty well. And we have our Connect conference happening in about -- maybe about just under 2 months from now, and we'll be pulling that together even further for that conference.

Appreciate that color. And then maybe just on ARGUS Intelligence, can you discuss the shape of the renewal book through kind of '26 and '27 and where those renewals are stacked up?

Yes. It's a great question. As you know, we went through a heavy renewal cycle last year, and we purposely -- prior to last year, we're signing up clients to 1-year contracts, so we can move them from seat-based to asset-based pricing. Majority of those clients now that have moved to asset-based pricing are now on 3-year contracts, and so we have a smaller cohort this year of renewals than we did last year. And so a lot of that focus from a sales effort is really focused now on, a, moving the seat-based asset base; and two, ensuring that we can continue very strong motions on our cross-sell and upsell opportunities into those clients.

If I added on to that, where we -- when we were doing the analysis earlier this year, the -- our expected renewals this year will be down about 20%, not because we're losing anything because, as Pawan said, they've gone to 3-year contracts, and we would expect that to be down and like average out next year as well. So getting back to the go-to-market motion that I was talking about, the team's got more time focusing on cross-sell or upsell opportunities with them, especially around the different product sets that we have.

Appreciate that. And then just lastly for me, thanks for the new disclosures. I guess the problem with putting out gross retention, net retention is that it opens up questions about churn. So maybe can you just discuss the primary reasons for churn? And maybe you could talk about like what gross retention looks like if you just focus on the ARGUS business and then how you think ARGUS Intelligence could influence churn going forward as the customers take a broader suite of your solutions.

If I start, if I go to the churn on the ARGUS business, the ARGUS business has very little churn. Typically, we see gross retention in and around or above 95%. And where we get any churn is when you get down into like if you think about our very long-tail customers, where we get funds that come and go and they go and they leave, but we're very sticky with that, so that's pretty strong for us.

Where we actually -- in some areas, around data last year, we saw a little bit more churn, and part of that is like -- and this was -- we have a strategy to fix that. That business has typically been the feed the beast business. It's very much market to the customers, do work around them. We're starting to see good impacts on net retention. And then if you get into the VAS retention, well, we talked about that at Investor Day. That's incredibly high retention and keeping current customers. That business, though, tends to have a lot of what we look at. We look at net upsell and downsell in that business. We rarely have any churn. Does that help?

That's great.

Next up is John Shao, TD Cowen.

So could you tell us the pace of your margin expansion throughout 2026? Because it looks like you're going to start with 18% to 19% in Q1, and we'll finish the year with 25% to 26%. So that basically implies a much higher EBITDA margin close to 30% by Q4. Is that a correct thinking?

Yes. Look, so that is correct. Again, as we talked about our guidance from a kind of midterm perspective at Investor Day, we talked about it in the form of Rule of 40, and that Rule of 40 was a combination of high single-digit revenue growth which would then imply margins by the end of 2027 to get us to that Rule of 40, so low to mid-30s in that range.

And so the point of what we're doing here is just we're building a steady pace of improvement. Our revenue is going to continue to steadily improve, and we're taking direct actions to make sure that we're scaling our business appropriately with our growth to drive that margin expansion. And so we have a lot of confidence in regards to our margin expansion capabilities.

Mike referenced the fact that we did do some actions in regards to just making sure that we continue to remain in fighting shape as we rightsize the business. It's just good hygiene work for us, but we're going to get the full year benefit of the work that we've done in 2025 into 2026, which will help us get to those measures that you're talking about.

So you're thinking about it in the right way. We should see a steady progress throughout 2026 to get us to what we talked about at Investor Day for 2027.

Got it. And back to the Rule of 40, how much of your Rule of 40 target by '27 is dependent on a broader market recovery in terms of the macro? Any update since last Investor Day? Do you still think 2026 will be a key year for some recoveries?

Yes. As I mentioned, our guide is not underwriting a market recovery, and Mike refers to this often with the Board. We're going to have good growth in a down market, and we're going to have great growth in an up market. And so as we think about our guide and its correlation to the market, investment decisions are being highly selective now. While dry powder is up, transaction activity is up. We're seeing a greater degree of selectivity, and that plays right into our strength in regards to helping our clients ensure that they are managing risk appropriately and driving performance and investing in the most profitable and highest return assets.

And so we built a plan, and we're executing around the plan where we're going to continue to see steady growth in any market. And if the market has significant tailwinds, then we should have great growth. But we're confident in our path right now in any market.

Maybe one last question for me on AI. So if you're going to roll out more agentic AI features, how should we think about -- number one, is the pricing of these additional features. And maybe number two, could you talk about the impact on your margin profile? Because my understanding is the tokens from some of the frontier models can be quite expensive.

That's a fair question. So there's 2 ways that we look to do this and just in some of the experience I've had with it. We'll roll it out in a method that it is -- it runs by itself or it runs alongside human intelligence. And so depending on how they will use it, they can use it to support or they can use it to provide reports on that.

The key thing that we need to make sure is when we run this is we need to understand the cost to run that based off of the compute power that we have. So as we've looked at this, we've looked at what those costs look like and what those loads look like. So we have a pretty good sense of how those things will run. And we feel like those will be, from a gross margin perspective, as profitable as some of our other lines of business when it comes to ARGUS Intelligence.

We'll take the next question today from Richard Tse, National Bank Capital Markets.

In the outlook section, you sort of talked about 80-20 sort of growth from volume pricing and then new logos. How does that mix change under different market conditions for commercial real estate?

Yes. Look, we've got a tremendous opportunity from a cross-sell and upsell perspective as we continue to roll out new features and functionalities in our product suite, which gives us that opportunity both from a pricing perspective. New logo, [ we were certain ] about 20% of our growth in new logo. There's a lot of efficiencies that we've built within the business to be able to deliver our solution at a better cost point for us, particularly in VMS as we're leveraging a lot of the technology that we're rolling out to the clients where the beta customers internally to adopt those solutions. And so that is giving us the opportunity to expand our VMS from Tier 1 into Tier 2 opportunities to continue to capture the new logo opportunity.

But we've got a large base of clients. We've got a whole new suite of offers that we can bring to those clients, and that's going to give us that opportunity from a pricing perspective and from a volume perspective to be able to drive more into existing relationships. Plus, the team selling the full portfolio of solutions plus our scalability from a cost perspective allows us to go after white space and new clients as well.

And just your perspective kind of on the market in general. Like if you had to sort of rate it on a scale of 1 today in terms of the market conditions for Altus specifically, like where do you think we are right now?

Yes. Look, I can give you kind of my thoughts on market sentiment, but there are views that people can talk both sides of the coin on. We've seen rate volatility has eased, but trade policy, regulatory uncertainty continues to weigh on the sentiment. Transaction activity, we did see improvement through 2025, and it's fully expected that the transaction activity is going to continue to be good in 2026.

But the recovery is uneven across asset types. You're seeing multifamily and industrial continue to lead. Retail is stable, and office is bifurcated between prime space leasing and some of the older commodity stock that continues to reprice. I mentioned we've got near record levels of dry powder that continues to build. But there's going to be a lot of selectivity in regards to how that capital is deployed in the markets, and that's where it's a tailwind for us. It's a very strong opportunity for us to really help the CRE industry maximize the performance and effectively manage the risk and make better and more informed decisions. And so this market environment plays to the strength of exactly the value proposition that we're selling to our clients.

Great. And just one last quick one for me. With respect to other potential noncore divestitures, specifically in Analytics, can you maybe help us understand a little bit what may be considered noncore? Because in terms of trying to value the stock, we sort of want to see what a run rate business looks like here going forward.

Yes. I think, listen, there's not a lot where we would have this in Analytics. But just to be very straightforward, we are in the valuation space. And so as we look at like what we do, anything seen -- any of the products that we have Argus branded to or some of the new products that we've had and we're putting out there or the analytics-based products and our workflow, those are all very much in the valuation space and helps in that platform. That also includes the data that we include and ingest into that platform as well as clearly our VMS team. We look at them as the guys who really get a lot of activity on that platform.

If it's a couple of steps removed, it starts to be something that we will be looking at and deciding does it make a lot of sense to keep it. But it's -- there's not going to be a lot of things there. But we just are -- as part of like the review that we started when we talked about at Investor Day, we're still continuing on that, and there'll probably be a couple of small items that we'll move on.

[Operator Instructions] We'll go to Stephen MacLeod from BMO.

I just had a couple of questions just regarding the guide given the new reporting and some of the changes to the reportable segments. Just quickly first on the Development Advisory business. So you've signed an LOI, but it's not -- but it's still included in the guidance. Is that right?

Yes. Let me answer that. That's right. That is actually -- and it got -- as we talked about, it's in italics. We just got that done. So as we were announcing things, Stephen, I think we wanted to be a little conservative on that. But our belief is that, that will be done, hopefully, more or less by the next 60 to 70 days.

Right. Okay. Okay. That's helpful. And then just on the advisory -- or sorry, the Appraisals business breakdown, Pawan, did you say it was -- it's roughly 30% of the underlying AD&A business?

Yes, that's correct. About 70% of the previous development -- the AD&A number was about 70% Appraisals -- I'm sorry, 30% Appraisals, 70% Development Advisory. And within Development Advisory, North America represents about 70% and APAC represents 30%. Yes, so you were correct.

Okay. That's helpful.

Put another way, Appraisals did $31 million in revenue last year, if that helps.

Okay. I saw that in your disclosure. That's helpful. And then maybe just finally, just on now the pre-IFRS 16 basis that you're reporting EBITDA, is -- would you expect your occupancy costs to change much heading into 2026 given some of the cost-saving measures that you've began implementing in 2025?

Yes. Look, I mean, as we stated on numerous occasions, we do have a wide real estate footprint that we're rationalizing as we continue to simplify the business. So we would expect that to continue to lower as well, too.

Right. Right. Okay. Okay. That's great. A lot of my other questions have been answered. Lots of great color.

We'll now take a follow-up from Gavin Fairweather, ATB Cormark.

Just on capital allocation, you indicated an amount that you'll look to deploy in the first half above and beyond what you've already done. With $800 million, you've left yourself with some additional kind of capacity and room for the back half. I guess I'm just curious kind of under what conditions you'd look to become more aggressive in the back half of the year and increase the amount of capital returns.

I think for us, it's going to be something that as we -- we'll continue to watch the market. We'll continue to watch the sentiment. And we believe we have good value in what we're doing, and we will get there fairly quickly.

I think that, as we said, we're going to deploy a good portion of that in the first half. I think depending on how the instruments that we use are taken up, that will be dependent upon how we start to deploy in the second half and when we deploy. I think if the market remains a little choppy in -- or similar to as we've seen it, we'll start -- we think that that's still a great buying opportunity for us, and so then we'll continue to leverage that.

And everyone, at this time, there are no further questions. I'd like to hand the conference back to Mr. Mike Gordon for any additional or closing remarks.

Well, I would just want to thank everybody for getting on the call. It's been a pleasure to talk to all of you, and thank you for the questions. As we talked as a team here, we're excited about the opportunities for this year, and we're getting to work. So looking forward to talking to you all coming forward in the next couple of months. Have a good night.

Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.

Ladies and gentlemen, please welcome Altus Group Chief Communications Officer, Camilla Bartosiewicz.

Thank you. And that was a really great pronunciation of my last name. Good morning, everyone. Thank you so much for joining us, both in person and online. It's so great to see a packed room. And I think we have doubled numbers online as well. It's also great to see a lot of familiar faces. We're so appreciative of your continued interest in the company and your ongoing support. For those of you who have followed us over the years, you know we've been a company in transformation. We've been building, changing and we're not done. We're going to continue to do that. But today is really about turning the page onto a new chapter. And our team built for performance sort of speaks to that. It speaks to the operating foundation we've forged to improve our operating and financial results.

It also speaks to our client mission, which is to power their performance. So today's sessions have really been structured under 2 core sections. So first, we'll start off with Mike, who will take us through -- today's announcements as well as the strategic focus. We'll do a client customer fireside chat, and we'll have the team come and actually do a show and tell on the product roadmap. And we'll be then breaking for about 20 minutes at 9:50, and we'll come back with the financial overview section where we'll be discussing our new financial metrics and our capital allocation disclosures.

And then to be followed by a 40-minute Q&A session. So if you could just please wait to ask your questions then. We'll take them both from the room as well as online. And then we'll have Mike back on for some closing remarks. I'm joined today by my fellow presenters with really great representation across the business. You guys always remind me, it's about the people, and I couldn't be more proud to share the stage with many of my colleagues. And I think, yes, before I officially kick it off, I do need to remind you that today's presentation will include some forward-looking statements and that -- those forward-looking statements are based on certain assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

I would also like to remind you that we use certain non-GAAP, non-IFRS measures, and we have a lot of those detailed in our appendix as well as on this disclaimer slide, which I would just ask you to read at your leisure, instead of reading it out. And then I would also just like to point out that today's growth rates and whatnot will be presented on a constant currency basis, and we'll be talking in Canadian dollar currency.

So with that, I'll now turn it over to our incoming CEO and Executive Chair, Mike Gordon, to officially kick off our 2025 Investor Day.

Thank you. Doing great. Well, first off, I guess I should say it's good to be back and good to see a lot of friendly faces who have lots of questions. And the good news about Camilla and the communications other than that last slide we showed, which shows you that we are a technology company because you can't read it, is the fact that she got everything out at 7:00 a.m. this morning has made my job a lot easier. So we put a number of announcements out this morning. And just excited to be here. It's a lot to be doing this work over the last 2 weeks.

I got to talk to a lot of you guys -- you had a lot of questions, obviously. And I said, just give us a couple of weeks, and everybody said, "Well, what can you get done in a couple of weeks? Well, this team can move mountains in a couple of weeks. And when we get ourselves focused on what we'll be showing you today, we feel really good about where we're going. You're not going to hear anything about the market. I may regret saying this, I care about the market, but we don't -- we're not defined by the market. As a software data and analytics company that has some of the best advisers in the business, we make our own way. And while there have been headwinds in the market, and that has happened over the last couple of years, we don't define ourselves by that. And you shouldn't define us by that either.

I've talked about pace. Hopefully, you're going to see pace. We're accelerating that pace and making sure that we get that through. One of the things you're going to start to see from us today is that we're going to simplify things. The business -- I love our business, and I love all parts of our business. But there is a point where we have to start simplifying who we are, what we are and what we do. And so we're going to be going through that.

You're going to see new transparency from us. With transparency, I had a talk earlier, the truth set you free., The point being, as you should see what all parts of our business are. We love all of the parts of the business that are going to be focused on how this works together with our software and our expertise. There's going to be new focus. We need to focus on what we're doing. It's not that we can't operate, but we have had distractions and impediments that have led us to not focus as much as what we need to do. And if we focus on the value that we drive to our customers, this team can do anything. And then we're going to measure that and then we're going to operate that way.

And there are going to be sometimes, there are going to be good moments, and there are going to be bad moments. Hopefully, more good than bad, but the fact of the matter is when we do operate and we talk about these things and it becomes part of our culture and it becomes ingrained then it is just continuing all the way down the road. And this is what some of the greatest software companies do. If you just sit back and you keep measuring and you keep measuring and then you talk to the customer about the value you're driving them.

And if we do that, this team will be extremely strong. So let me just get to what we talked about earlier today. I was told that it would take a moment to put this up there. So it's up there, so we're good. First off, you're going to see our roadmaps today. And you're going to see actually some customers talking about what we're doing for them. So what we are explaining today is real. This is not any kind of MVP stuff. This is not any of this stuff. This is stuff that we have out in the market that we're talking to customers about and why we feel so confident about the organic assets we have.

Do we need anything else? We're good right now. I'll come back to that in a second. So you're going to get a good sense on this. We're also going to get focused on who we are. So we put out a note today that we're divesting appraisals and development advisory. These are good people who deserve a home where they're going to get focused on. And so they can get focused on their places, we can get focused on ours.

I would say one thing right already, just to give you -- to continue on the pace. We already have a signed LOI for our Appraisal Unit. There's -- Terrie would kill me if I didn't say there's no guarantee that it will close. It will close. That's what I think. Difference between a CLO and a CEO is that I always think I have to look at that and she looks for all the reasons why something doesn't happen. I've been practicing that all evening. But it will close, and we will -- we have an exclusive over the next 45 days to get this done.

We need to act on this. They were a great part of our business for a long period of time. It's time to move and it's time to like really focus on where our future is. We will be doing work with the development advisory teams, and we'll find them new homes. It's a little bit longer, but hopefully within the first half of next year because we've already started some discussions.

Operating expenses. If anybody likes the corporate line, you can talk to me offline and why we shouldn't keep it, but we're going to get rid of that. Now how fast we get rid of that is a question because we've got everything, and Pawan has been working on this over the last year or so. So there's a lot of work that he's done, but we need to get rid of that. When I talk about ourselves, becoming a Rule of 40 company, a couple of lines down. It is as a company, it is not as an operating unit.

There is no point to what we've talked about in the past. In the past, we were probably the smallest holding company that there was for all these collection of assets. We're not that anymore. So from that standpoint, we're going to be focusing on our operating expenses, and we're going to get there quickly. So by 2027, when I say we're a Rule of 40 company, we are a Rule of 40 company, all right? Now how you're going to ask me how fast is our growth? We're going to get our growth up. I -- those of you who know me, know I like double-digit growth. There are parts of us that are growing double digits and there are parts that are not. We will figure out every unit that we have either is going to get us very good profitability, over 35% EBITDA. And I want that growth to be as close to 10%. So maybe I just said Rule of 45 company, but I'm going to hold it down at Rule of 40 right now.

Pavan is going to go through a lot of the metrics we're using. I know it's an alphabet soup, but you know them all. ARR, gross retention, net retention -- there's going to be more -- I don't want to take that away from him, but these are things that we have to measure. And we feel pretty good about those things. And they're all in your handout as it is, so you guys can go ahead and look forward on that.

Finally -- or the final 2 points, we are going to do a stock buyback of about $0.5 billion. For the last year, since we exited tax, we've been sitting on a bunch of cash. There's no point for us to be a bank for you guys as investors. All right? So we are -- we've looked through this next week. We're going to kick off our SIB and we've looked at the price, you should expect something in the $50 to $57 range that we'll be doing some of this stuff out. So that's coming out there. The Board's voted on it. They're very excited about that. It doesn't mean -- so people have asked me, are you getting rid of acquisitions. It's just not -- it's not like what we're looking at right now. And the reason why going back to what I said when I opened on this, we have what we need. We feel good about what we have. Our products, our solutions, we think, are second to none.

And then finally, last point is that we will pursue a U.S. stock listing in 2027. Some of you will say, why aren't you doing it in 2026? Well, we want the organization to be in the right state when we go do that. And what I mean by that is we're simplifying it, okay? There are things that are core, there are things that are non-core. The non-core things we're going to get out in 2026. There's no point in trying to move that over to try to explain ourselves in another market when we don't have our stuff where we need it to be, but 2027, it's going to happen. We've been talking about this for too dam long. So this is where -- these are the announcements that we have today. This is what we're excited about is -- we're excited about as a Board.

So from that point of view, that's where we'll stick. Now -- I now have to get you set up for what we're talking about next, which is really our product set. And -- when we talk about things, you've heard us talk about intelligence and what we're trying to do with that. We have the greatest software that does all the valuations that everybody uses that we want everybody putting their assets on. Our asset-based pricing is starting to get there. I had a discussion with one of our customers who use seat-based pricing up to a couple of days ago.

And basically, they couldn't understand, wait a second, I can put my -- all my assets on this and you're not going to charge me for this in a weird way. And the answer is get your assets on. That's where your number is based off the price point. If you go above that, we grow with you. And they're like, well, that seems kind of refreshing. That's what we do with software companies. Now do I want to make more money? Do I want to raise prices? Sure. Sorry for those guys out there listening it. But I want to win with my customers. Our team wants to win with our customers. And so when you look at this, you're bringing ARGUS together, and then we have the greatest set of advisers in this space.

Rick Kalvoda has built a team that is the trusted adviser to everybody. Anybody using our folks, they tell me all the time that these guys walk on water. Rick is not going to do that for you today. But the point being is they're using our software. They're seeing the value from it. They're using the AI and the analytics that we're building, all right? We want to make sure that we get that all out there, but their advice is going to be huge. I sat back and talked to our teams about who are you talking to and some of them are like, they're advising the C-levels at some of these places and the funds are doing really well. We need to like get that with our software working together. And so this is where we get very simply to ARGUS Intelligence. It is basically what we look at is the platform for performance.

All right. Everybody should be using this. It should be ubiquitous, and that's what we want to make it in the market. People would think back that is an ARGUS Enterprise, ubiquitous. It is and it's been on the cloud and now we need to leverage what we're doing on the cloud. We need to leverage all the information we can give to people. We need to give them the insights that they need about their assets. As far as I'm concerned, when I say that I don't really care about the market, it's weird for a CEO or Chair to say that, we should be doing well when the market's up, when the market is embroiled when the markets all over the place.

The reason being is we're trying to give our customers the best set of information so that they can make the best decisions on the assets that they have. And they have to make decisions no matter what the market is. Yes, if the market's down, will they actually do things a little less often? Probably. But if we give them the information that they need, we can help them through those times in a faster manner. And that's what we're trying to do with that and that's what you'll hear with some of the discussions that are going to be coming up from some of them and how they're using our tools today. So I'm very excited about that.

So strategically, it's very simple from a manner of what we look at. We've automated the workflows, makes life a lot easier when you automate the workflows. We'll talk again about -- everybody talks about analytics and AI, it's real. It's in there. I always think about AI and everybody talks about a genetic AI. Genetic AI is great. Don't get me wrong. It is great. You can save a lot of efficiencies with that and make that happen. But it's the -- also the decisioning part of AI and analytics that's so important. That gives you the effectiveness. Those two things working in coordination is what we think is our secret sauce that will actually connect data on our platform and be able to have people use that data more holistically and being able to make a better set of decisions.

By doing this, we continue to make our model smarter. We continue to make our customers smarter, they get more value from things. We keep adding properties on. We feel pretty good about where we stand and what we can deliver as part of our vision around this. So finally, as I get -- as these guys try to get me out of here because I know there's somebody here that I like really a lot that they will give me this when I've gone too long. If you remember anything from where I open up today, I look at -- I always talk about the legs of the stool. You have one, it's really not a really good stool. You have a couple, yes, can lean against the wall. You have 3 even better, but I watch my kids knock that over, and in 4, you're doing really well.

Software, data analytics. I'll have to use a term AI, even though, I'm an old analytics guy, unsurpassed expertise. Those 4 things together is what we bring to our customers. When we bring that to our customers, I feel like we can drive a ton of value. My team, and you guys heard me on the call, say, we're talking about quantitative value proposition. We are going to start doing that in '26 to like say how much we're saving our customers and why we're so good at what we do. This team is excellent what we do.

My job is very simple as a Chair and a CEO. I just have to get all the crap out of their way, and this team can do a great job. So as far as I told the team when I got my town hall in New York City, it was very simple. My job is to take the impediments out of the way. So if you see anything that I'm going to do, that's how I think you should value me is at the end of the day, I have to make it easy for them to do their job. So with that, with not being an impediment, I'm going to invite Rich Sarkis and his friends up here to talk about how our customers are using the software and how they're using things. Thanks for having me back.

Thank you, Mike, and thank you all of the folks for being here. Let me also start by thanking Joe and Chris. Chris has come from all the way in Australia. So over a day to get here -- so it really means a lot. Joe came from Boston, not as far, but we also want to thank him. Before we get going with our discussion, I thought it might be good for you guys to introduce yourselves to get a little bit of context about what they're about to hear.

Absolutely. Thanks, Rich. My name is Joe Crescio. I've been in the commercial real estate valuation industry, my entire career. I came from the principal side, then was at E&Y on the real estate advisory side for a bit. I'm licensed in a bunch of states, MAI Valuation background, keep things interesting for sure. And then recently, I've joined Manulife. Manulife is going through a bit of a transition going from within the real estate area, traditionally insurance company to more of an investment management focus, super focused on taking on more risk across the different parts of the capital stack, driving data analytics and really differentiating ourselves as we look to grow more of our third-party investment management business.

I've really ship with Altus -- when I was hired from EY, my task was building out a best-in-class valuation function Historically, we didn't -- we had a mediocre one, I would say, it worked. And there were 2 legs of that. There is not just getting credible valuations for the NAV for consistency, et cetera, but also to do more with the data, in terms of forward-looking insights, which historically, as an industry, we haven't really done the best.

Thanks, Rich, and thanks for having me. I actually started my career for the first 10 years just doing a lot of financial modeling. I taught post graduate students in financial modeling and spent a lot of time doing derivatives, property-backed listed securities, and I worked for an entrepreneurial company for those 10 years where there was really -- anything goes. So I was that guy that built all the models and prepared all the public offer documents.

Just prior to the GFC, I then moved into sort of direct property where I was a responsible for asset management, third-party capitals and capital transactions. And for the last 10 years, I've been the Managing Director for CBRE Investment Management in Australia and New Zealand. In that role, we provide full funds management service to our clients, our global clients investing into Australia. We do everything from acquisition through to disposal of all asset management, debt arrangement, trust management. So that's quite a good role.

So Chris, staying with you, you're at CBRE, as you mentioned, firstly, CBRE has a global enterprise by agreement with us. They use all of our software, the VMS users as well. But your journey into the ARGUS Intelligence family. So to speak, is a bit of a different one that came by the acquisition of a company we made a few years ago, Forbury, provide the Excel and basement to ARGUS -- can you speak a little bit about how that came to be?

Yes, absolutely. So with my background of financial modeling, the issue that we have when investing in property securities is it's generally got to generate 10 years of monthly cash flows. And to do that within the Excel environment, it's very difficult. It makes really large models. So what we do in the past is used, say, ARGUS Enterprise or another similar program run the cash flows in there, bring them into Excel, then wrap around the debt fees, trust expenses and so on for us to get the equity returns providing the numbers for our clients.

When I saw the Forbury product, it was a game changer, a quantum leap for us. So being able to then just use the Excel environment to do all of those cash flows and forecasting and build around that within the native environment, it was a quantum leap for us. So I've managed to cut our underwriting and reporting from -- it used to take us weeks quite honestly, down to about an hour. So we can very quickly get to the source and get those numbers quickly to our clients.

And we like to say, we meet our customers where they are [indiscernible] familiar in uses with Excel. And I think one of those things that this brings that sort of eliminates the barrier adoption.

Absolutely, yes. There's -- and with the -- with all due respect to ARGUS Enterprise, it's not a very well-used product in the Australian market and APAC in particular, but Excel is everywhere. Everyone is familiar with it, very low barrier to entry. A great example is, I had an analyst from Singapore come down to seconded to my office. I had a really important market rent review for a major tenant. I asked him to do some analysis on what my bookends were. So it was a 10-year deal with a market rent review in year 5. In year 5, my 2 options were hit them with the market rent review and assume that they're going to vacate and lease or I cut a deal with them, lower market rent and we get a 10-year lease. So I asked him to do what those bookings were. You have no idea. And after 30 minutes of showing him in the XL interface, he was able to turn that around in a day and come back with the correct results. So I think that's really shows the power of that Excel interface, the familiarity of someone that can do the modeling. But yes, to be able to use it that quickly and that accurately was really powerful.

Yes. Just to build up that a little bit more. That's always been the criticism of the ARGUS Software. It's like it's not. If you can download things out of ARGUS Excel, but the ability to build customers from actually push that and run the calculations, have that be seamlessly and connected. That's a pain point. I think there's unlocking that is going to create a lot of immediate steps to drive more efficient reporting, aggregation of data, et cetera. We didn't now, but it's just a little bit inefficient.

Great. And I think that's a great segue for like talk about the convergence onto ARGUS Intelligence that includes ARGUS Enterprise that includes Forbury Excel Interface. Team about the demo, ARGUS Intelligence for all the viewer online. And I know you've been very familiar with it and over the last sort of 12 to 18 months. Can you explain the value of measuring performance, both for portfolio manager and benchmark manager to the folks on in the room.

Yes, absolutely. So there's the Asset Management portfolio manager and the benchmark manager. I kind of look at those -- there's value across each of those, but most importantly is the benchmark manager. We have a lot of the asset management, portfolio management data now, but really how do you compare that to benchmark and not just the headline number, but it's drilling down into the various different attributions, yields, the cash flow impact and then the cash flow impact going deeper within submarkets et cetera. So we're able to take the performance headline number, which we've had for a while, income versus capital and then actually drive into what the attribution is and then get as granular as we can on the asset individual. And there's a lot of value there. I think the deeper we go, the more value is there. And I know you got to kind of start at the MSA level broader levels, and there's a push to bring that even drill down. That's where I think where you can really get a true comparable set of data where it becomes pretty powerful.

Yes. We were chatting backstage. You also made the point of how you use the tool or can use the tool to assess your asset managers' performance sort of almost at the compensation level.

Yes. Look, I think across -- everyone needs to know their scorecard they're measured to. And I think the more objective data you can build into a process that's fair. No data point is the end all be all, but it starts to drive a conversation. And even like in a down market, if you have an asset, maybe you're an Asset Manager, you dealt a bad hands, but it's more of a stop-loss type thing you're doing. And it's like, okay, yes, market rent and the market has gone down, but you've managed to keep that up. I think that drives the conversation. It's not just the yield -- oftentimes, it gets blurry with the yield and the cash flow. And if you start to then within the cash flow, be able to benchmark those things to a relevant data point at that granular level. That's something pretty powerful and something that Altus has the unique ability to do so given the amount of data that you have insights into?

I think, Joe, that's a really good point as well. Really, for us as an investment manager, it's important we can benchmark obviously against -- but in downturn of downtime or good times, how do we demonstrate the offer that we're delivering for our clients and being able to clearly point that out and whether it's sector strategy, a property strategy, whatever it is, that then helps us to raise capital in the future as well, being -- having that clear strategy.

That's a great point, leveraging for our LP presentation [indiscernible]?

Exactly. The LPs have a lot of resources that keep us very busy. So any tools that are going to help us get to the key points very quickly and be able to explain those to our LPs. It's -- as I said, I think before, I mentioned it was a game changer. Just that efficiency for us is fantastic, really powerful.

I just add on that a little bit. One source of truth. I always say that one source of truth right now across various different funds of an idea. This, the data is out there, but people are kind of running things in different areas. So if you have -- there's the Altus ID for each property and then that becomes connected across the different systems. I think that is pretty powerful just for efficiency. So I think there's kind of short term, once these -- all these systems are connected and you kind of drive reporting from it, the reporting and efficiency that's kind of the short-term thing, but I think once you have all these forward-looking data points with historical data points, with benchmark data points, you blend all that together seamlessly, all these ideas have been out there forever, but the technology is only so many hours of a day. So we're not able to always do all the analysis that we want to do.

And I think we're starting to see that come to fruition or at least that the foundations are building blocks...

And I think that's a foundationally important point because I think folks outside of commercial real estate, perhaps don't realize just how hard it is to connect the data. I'd like to [indiscernible] when I found my previous company Reonomy that was one of the seminal points of technology and IP that we developed through the Reonomy ID, which is now the office ID, but I lost my hair doing it. That's right?

And just to pull on that thread a little more. I think part of it is also the data interoperability so that you don't have to jump from one application to the next, from Excel into ARGUS and back and forth. Can you talk a little bit about the benefits about the unified solution as well?

Yes. So having an interface -- I mean, this kind of relates back to the Excel point, but everyone is familiar with Excel. I mean, people have to take ARGUS trainings to learn. It's not the most intuitive thing and it's kind of badge of honor when you're the ARGUS Expert. But is that -- if you can have that ability in Excel, which so much of the other reporting analysis is being done and customized analysis. Having that all is something that in a format that's readily available and can calculate based off that interface, that everyone's used is critically important.

Yes. I'd like to add to that as well. I think, for me, it allows me to collaborate with my global colleagues. The journey of distance and time in Australia is that generally, I can work on -- I need to work on a 24-hour turnaround, which is so inefficient. So being able to work on the one model, see if you're sitting in Germany, in Japan or in the U.S. at the one time. It just, again, cuts all that friction down. And as Joe was saying in the Excel interface, it's really easily adopted by all of our teams around the globe. So it's -- and I can even open it up to my Asset Managers. So then I'm getting real live time data and insights into the market at all times because an Asset Manager is typically not the -- I wouldn't know the first thing about using an ARGUS Enterprise model. But for an Excel interface, they can easily pick it up and be trained quite easily...

As Mike mentioned, we're moving to that base pricing now. So you guys like mention -- you guys are on asset-based pricing usually and that's one of the things that also facilitates that ubiquitous and eliminates the barriers to adoption...

So historically reported the asset-based pricing, always be this kind of game would go back and forth with how many users are they all critical. We've reduced the amount of licenses, then that will reduce our fees and then there's backlog. At the end of the day, everyone on the platform should have access to these systems. And so I think opening that up is a really net positive direction. We don't have to -- everyone has access to the data within our organization. No one is prohibited from seeing all that. From my perspective, I think it's a definitely step in the right direction.

And just staying with you for a moment longer, you've been on the journey of ARGUS Intelligence from the early days when we first released a beta and your team were planning around giving us feedback that you tell the [indiscernible] online, how has been over the last 6, 12, 18 months to sort of see the evolution of ARGUS Intelligence?

Yes. Absolutely. I've been using ARGUS in my entire career, backbone is DCF 15, et cetera. And there's always been this like untapped potential of doing more with the data. And so over the last -- there's been a time where we wanted to see this happening as an industry, and it's taken a little bit longer than I think we would have liked to, but the fact that -- so when I saw the initial demo like this is powerful. This has a lot of great potential here. But being in beta form, it's like, okay, we have this data. We're doing this now. It would be interesting to see where it turns out it now fast forward a year or 1.5 years, there is incremental changes. They've moved at a pace that's pretty profound, and it's now -- it's going from something that's kind of like theoretical to maybe a nice to have to we should get on board here because when -- if we're not the rest of the industry is going to, we don't want to be a lagger in that regard. And there's -- it's profoundly moved in the right direction over the last year.

That's great to hear. Thanks, Joe. I know we're coming up on time, but we cannot have a fireside chat in 2025 without talking about AI. So I'll maybe end it by asking you, Chris, what are your thoughts on AI and how it should or could be applied in commercial real estate?

Thank you, Rich. Look, I'm just a simple property guy. So AI. I'm not quite sure of its capabilities. One thing I do know is that you need to have solid data. And once that's there, it's verified, it's accurate, then I'd say, let the AI out. So I think in the commercial real estate, we've been pretty slow adopters of change. But I'm really excited to see what that AI can bring to commercial real estate.

Awesome. Well, we're at about time. I am all that standing in between you and demos of those products that these guys were talking about. So I will thank you both again. And then I'll turn it over to my esteemed colleague, David Ross, to run you through the next part of the session. Thank you again.

Thank you very much. Particularly, thank you to Chris and to Joe. Obviously, my job is that every day is to make sure that I'm listening to our customers. Understanding what is most important to them and to deliver on that. What I'm going to do is I'm going to stand, do a little bit of framing from my -- the smarter people in the room for me, who are going to come up and show you more about what we've been doing over the last few years. But to just frame that strategy, I wanted to take you back where we've been, what we have been doing and then give you some direction about where we're going.

Over the last number of years, we have completed the migration of our customers, their software, their usage on to cloud. A big driver, a big important element of that is allowed us to aggregate the data. So there's a whole host of data that is behind what our customers do with ARGUS Enterprise. The asset information, the models that they generate, the outputs and the performance ultimately that they understand from that. And we put that into a safe, secure environment and it also allowed us to scale the investment.

We then met that with the development of a modern native cloud platform, and that was intended deliberately to then return back to our users and to our customers, access to the insight that we have been developing. You've heard from Chris and from Joe, you'll continue to hear what drives AI is the access to high-quality usable data, and that's a lot of what we've been putting in place. Underneath the covers within ARGUS Intelligence is a lot of learning, some of which we brought in from outside.

So with the acquisition of Reonomy, we've got access to new techniques and tools that allows us to aggregate and move data at pace. So the knowledge graph, the development of Altus ID and a lot of the tools that sit around that have allowed us to produce a much more capable way of interacting with the data. And then where we're going from here is very much converging all of the user experiences we have into a unified experience itself. So we will focus a lot on valuers today, but those are Asset Managers, they're portfolio monitors, there's fund managers, there's appraisers, there's brokers, I could go on. .

And I think you heard directly from Joe and from Chris, they want to have that ability to share across all of those different parts of the life cycle. All right, we are driving towards being able to do that with a compelling user experience, but also making sure the data is being shared backward and forward. And then ultimately, you're going to hear a lot about it because that's probably we are -- we want to be able to leverage the AI. So for me, I have been working in AI for nearly 30 years. It is my bread and butter. I know what we're doing with it. It is a vault dramatically. It isn't just about generative AI and LLM, there are a lot of different ways that we can bring this to automate what we do to guide users to help them take the next step.

So when we talked about Forbury, the Excel interface, making sure you can do that in that space as much as any other experience that we deliver. To give them insight to give them information or give them a derived outcome from what is in the data itself that they may have taken much longer and more challenging to actually find it and then ultimately to generate output that can be shared broadly across organizations, so whether that's a valuation model, it's an appraisal report or whether there's some other aspects.

So with that, I'm going to invite my colleagues up and they're going to show you a bit of what we've got. What's key behind this is that we want to show how we're combining data and AI, collecting the right information, using our information, assembling it in the right way that we can actually produce some appropriate output. We're going to show how we augment the human with the AI. This is not about replacing or removing individuals from this. This is about supplementing our human experts with tools and capabilities that help them do their job faster and more capably.

And then ultimately, how that unlocks value for them, ensuring that we're empowering those users to do higher order tasks. I think what was key from what was Chris was saying that allows them to spend more time developing their strategies. The things that actually really drive value for our customers, cranking the handle on actually producing valuation models isn't that much fun. And certainly, if it's time consuming, it takes you away from things that really help the business. So that's where we're at today.

So with that, I'm going to invite Matt LaHood, who is our Head of Platform Data and Analytics, alongside Lauren and Peter to come up and give the demo and show you how we're actually bringing this to life.

Thank you, David. So I just need a second to plug in here. Okay. So thanks, everybody, for taking some time to be with us. And for everybody who's joining remotely. We appreciate your time and attention. And really, what we want to do today is bring the strategy that you've been hearing about to life. So it's not just about, let's bring the data and put a web interface on it. Let's really work with the experts. Let's work with the Chris and the Joe's. Let's work with Lauren and the broader valuation advisory team to really understand the why behind the things that they do, so when we do build out the software, when we do build in the automation and the intelligence, it can have the most meaningful impact to the things that they do and the decisions that they make.

So just one housekeeping note before we get in it for the people who are joining remotely. The demo will not be broadcasted, but you'll still see us as presenters up here on the stage. So as we get into it, we can see here, this is the homepage. This is a landing page. This is ARGUS Intelligence for the people who haven't seen it before. And you can see here, we have ARGUS Intelligence core, so this is the Asset Manager and ARGUS Enterprise. As the name implies, Asset Manager, we're really focusing at the asset level. Here, we're giving users the ability to create assets in a number of different ways. But then we're also bringing in new data sources as well. So it's not just the modeling data, we have access to all kinds of rich data sources like the Reonomy data. So bringing that in, surfacing that in new ways for people to use it to make better decisions.

Moving on to the portfolio. Here, we'll be able to aggregate those assets in a number of different ways for people to do all kinds of different analytics and comparisons on. Here, one thing that you'll see is we're able to instantly and consistently create these portfolios and service the information. One of the things that we hear a lot from our clients is it could take hours, even days to do those aggregations. And when they're done, A lot of times, each of the portfolio managers do it a little bit differently. So there's not a lot of consistency there. Here, we'll see that we can solve both of those.

And then finally, we have the Benchmark Manager. Here, the Benchmark, a super powerful tool. It's not just a list of numbers. It's not just here's your benchmark. Here's your average market rent or your contract rent for a particular sector. Here, we spent a tremendous time working with the valuation advisory team, working with clients. We've actually conducted over 100 interviews and demos to really fine-tune what we have here. And as you'll see, it's focused on attribution. It's really focused on how has the benchmark changed? How has my portfolio changed? And then as Joe was saying, what are those differences in terms of yield and in terms of cash flow and drilling all the way down to the asset level. So a lot of powerful tools here.

You can see each of the different components that we have. They build on each other. They build on the rich data that we have and they build on the expertise that we're leveraging. So if we start off with Asset Manager, here, we could see I just -- I have a list of assets that I have permission to view -- and we can see here, one is just a simple asset. It's one address, it's one property, one building, but I also have the ability to create things that are a little bit more complex, that might be in line with my investment. So here, we have just a demo property. It's actually made up of 3 different buildings, with 3 different addresses.

And when I click on that, what we'll see is -- so it is just demo, like demo addresses. So the map just puts us over the ocean. When you have real addresses in there, it will actually put you at your actual location. But here, one of the most powerful things behind the scenes is that Altus ID, right? So we're connecting these properties with the models from ARGUS Enterprise. And you can see here, I actually have over 45, 47 models for each of these properties that I can access with just a couple of clicks.

And let me jump in there, Matt, because I think, yes, it's good to be aware of our clients who have been using ARGUS Enterprise for many years, so in some cases, even decades. And you can imagine that over the course of time, they've been collecting dozens, hundreds of models for an individual asset. And it will take them a lot of time looking at and going through that data set to actually retrieve and find the information that is truly valuable. So imagine that you're getting a question from one of your investors, one of your LPs. And we heard Chris saying the 24-hour turnaround, being able to answer such a question to boost the confidence and the trust in your insights to your LPs is going to be critical. So being able to actually retrieve that information in a way that it's accessible is of great value to a lot of our clients. .

Yes, that's great. And we'll see through some of the demo, how we can access those different models and do some of those comparisons and analysis. So here, when I click on the overview, we can see that it's going behind the scenes. It's summarizing those 3 properties, the latest valuation models that we have for each of those 3 and giving us a number of key metrics. So here, I can see we're actually doing pretty well with this asset. It's got 100% occupancy. The base rent is actually higher than the market rent. So it's doing really well. And then I have a number of forecasts.

I have my NOI forecast. I have my cash flow. I can see how the occupancy is going to play out over the years. I have some of my modeling assumptions here in the discount rate and the cap rate and then a summary of the cash flow. And then at the bottom, I can see I have each of those 3 properties with some of the key metrics. So if there was something up top, where I had questions on, I could come down here and then see how that's playing out or I can simply click on one of those, and then the page will refresh. And then instead of being all 3 of those properties, it will give me the same information just for that single one.

And then here is the first place where we're actually starting to introduce some of the automation. So here, if I click on the files and I launched the tenancy importer, what this does is allow me to automatically ingest my rent roll. So up until now, the users have to actually hand type in their rent rolls into ARGUS Enterprise, takes a lot of time. It could be prone to errors. A lot of review has to be done because this is really valuable information as a key part of the model. So it has to be right. Here, what we're doing, we're leveraging AI. We're using the strength of the LLM to actually read the files that come in to understand what's in it. And then once we have that understanding, we can map it to the data that we actually want to bring in. The user will confirm that. Yes, that's the data that I want, that's the right spot and then that can be set up as a template. And then the next time you do it, it could be automated.

So Lauren, do you want to talk a little bit about how your team would take advantage of this.

Yes. Thanks, Matt. So right now, our data ingestion, as Matt mentioned and as a couple of our clients mentioned is highly manual. It requires many layers of review and it's definitely prone to human error. By using this automation, we'll be able to eliminate that error, streamline our processes, honestly and be able to complete valuations faster and spend more time on high-value analysis, which is really end of the day, what we want to be spending our time doing.

Great. So then the next piece that we want to show. So once you have your rent roll ingested, the thing that you would do is work, spend a lot of time researching and coming up with the modeling assumptions that you're going to be using for that quarter. So here, I just have an individual model. And what I'm going to do is I'm going to use our valuation agent to actually come up with a set of recommendations. So here, what we have. We've spent a tremendous amount of time developing this. So we have a research lab with about a dozen data scientists. They've built a whole suite of machine learning models behind this to actually come up with all of these recommendations. They've also built algorithms to figure out what comps are most relevant for this individual property and the recommendations that we're making.

And then that's not it. That's not the whole story. Like a lot of us who are well versed in analytics, you know you can have the best model, you can have the most predictive model. But if you're not surfacing it in the right context for the user, they're not going to take advantage of it. They're not going to use it. It's just going to on the shelf. So we actually ran an alpha program with the valuation advisory team that was 3 or 4 months. We did about 8 iterations on the software to really fine-tune and understand the context that they need to use these recommended values, so then we can really streamline and impact what they're doing.

So we can see here highlighted in the blue, we have the recommended ranges for each of the modeling assumptions. And then one of the first things that they wanted to see was how does that compare to my last model. So that was the model that we selected when we first did these calculations. So we can see, here's the model, the last model and the delta between what's being recommended now and what they had last quarter. They also spend a tremendous amount of time in the benchmark, looking at the benchmark, doing comparisons, trying to figure out where the market is, where it's going. And so we've built that in side by side. So we can see here for the same property type for the CBSA, which is the same geographical region, what are those benchmark numbers.

And then we also did the national averages as well. So then they can really have at their fingertips, a lot of information to start to home in on what they want to do and where they want those recommendations to be. The other thing that was really valuable for them was the comparables. So we have comparable sales, we have comparable leases and then also the exit cap and the discount rate. Here, the functionality is all the same between those. So I'll just click on one. We'll look at the comparable leases. And here, as I was mentioning, we have algorithms just crawling through the data, trying to find the most relevant ones to surface to the user. So here, we have our subject property, and we can see some basic information on it. The building size, the year it was built and then a lot of information on the leases. We're surfacing 10 comparables, but it's really up for the experts to go through there and pick out the ones that are going to be most relevant for the current situation and the ones that they want to use to reference in their models. So Lauren, I think you guys go through here and you take about 5 for the valuations that you do.

Yes, that's right. So what we find really exciting here is that all the comparable leases, sales, key data points and KPIs are really brought to one place. Right now, our teams can spend endless hours doing research, compiling all these data points from different sources. And manually and putting them into our own software, our own spreadsheets, right here. All the data is right in front of us, which will allow us to complete our valuations faster, spend time finding the right comps, the right data points, which is really great. .

Yes. Matt, maybe imagine we're looking at this from the perspective of doing a valuation, but imagine putting this into the hands of an acquisition or underwriting team who are working through dozens of deals each month, hundreds of deals and opportunities each year. If you would put this into the hands of that user group, they would be able to start joining those deals much faster and really spend time on more diligence to identify those deals that are making most sense and best aligned to their strategy to hit their targets. And this is going to be a huge way of saving time for those kind of teams and also help them in the end, prove out better returns. And based on those data-driven decisions that they're able to make with these kind of capabilities.

Yes. So that's great. So it's functionality that we build out once, but it applies to multiple personas and different points in the CRE life cycle. So that's great that it's going to be powerful for a number of different types of users. So once we've gone through that, once we've imported our data, we've gone through, we've landed on all of our modeling assumptions. We've got our models set. The next thing that we'd want to do is really aggregate those models or aggregate those assets into portfolios. So here in portfolio manager, we actually have a number of different ways that we can do that. So I can come in and I can select from a list of assets. So I can say these are the assets that I specifically want in that portfolio or I can write some simple rules to capture the assets that I'm interested in.

So here, we could see there's a number of different ways to do that, just to call out one specifically. If I wanted to have all of the industrial properties in New York, I could code that and then that would dynamically update every time I clicked on that portfolio. So as things were acquired or disposed of, the system would automatically know that and take that into account when I clicked on the portfolio. So I'll just click on one here. So every time I click on it, it's going through, it's understanding what assets are in there. And then it's doing all of the calculations for the metrics and summarizing. So see -- I can see here I have 75 assets in this portfolio. Some of them have multiple properties in it. I'm actually up to 78 properties. .

And then I can see that it's a very similar layout and set of information that I had when I was looking at the asset, and it's actually all of the same information, right? It's the same models -- it's the same summaries that I had at the asset level that I have here. And then I also, as before, I have the list of properties or yes, the list of properties and some of their key metrics. And then if I saw something here and I wanted to go back, I would just click on it, it would take me right back to Asset Manager, and I can do some further investigation.

One of the most powerful things here -- and to what Peter was alluding to before, having all of that history. So I could come in here and I can select my valuation from the prior period, and I can instantly get a comparison to see what has changed from the prior quarter, right? So I can see here that I've increased actually 6 assets. Obviously, my total value is going to go up. But my value per square foot is down. That's probably something I'd want to look at and investigate. I'd be free to go through that here. But really, the power in having all of that history as I could come in and I could look at, okay, well, what's happened since the start of the year. What's happened in the same period last year. I can all go back all the way to when this portfolio was initially set up having all of those models in and see since inception what has happened, all just with a couple of clicks, having that history built into the platform.

Yes. And you make it look really simple, but I think it's good to understand how difficult this is for our customers as of today. But having this data organized and structured around that asset ID that Altus ID, is really going to drive the ability that you're showing here. So when we're speaking to clients and I think Joe was alluding to it earlier on as well, it's getting the insights out and having to pull the data in some cases into Excel. But if you want to look at this from different angle, so you want to look at this from -- for all your office assets or you want to look at all your West Coast assets in the U.S. you want to be able to build those insights really quick, and this is going to save hours. This is really where you're going to be able to pull the data together in minutes rather than having to spend a day or so, putting this back into Excel and compiling those insights.

Yes. And then from a valuation advisory standpoint, we spend countless hours pulling this data for our clients. Do they want a set of assets together or set of portfolios together. We don't always have the time to do this. But with this product, it really does allow the data to be at their fingertips and it can really help with us and give us an opportunity to provide additional insights for portfolio analysis. So this would be very helpful. .

So that's great. So we're already seeing some areas where you could have time savings and then there's actually a real need from our customers to have further insights and that all can be driven from here. So the next thing we'd like to highlight is the benchmark. So I click into Benchmark Manager. There is intelligence behind it. So I was looking at the Connect Portfolio and the Connect Portfolio is the one that comes up. So it remembers what I was doing. But I'm free here to select any of the portfolios that were created, and I don't have to do anything for this. As soon as the portfolio is created and it's available in portfolio manager, it's also available here. So there's no additional setup needed. Just to take a quick tour through the tool bar here.

I could either look at all of the data, which is the data that we have from our software side of the business in AE plus the services side that we get from the valuation advisory. We're bringing all of that data together to have a really comprehensive set of data for our clients to analyze. Here, I could also select core open-end, so I could have a fun type. Here, this is something that our clients have been asking for, they want to see more fund types, something that we're considering for '26. And really, what we're hearing across the Board is they just want finer views of the data. So we'll hear a little bit about that in a minute, but the fund type is one that they're really interested in.

We've also seeded this with 5 years of history, so I'm free to come in. And if I wanted to do a historical analysis to click on one of those dates. And then everything here is a delta. It's a difference between -- and so I could look at the quarterly difference and annual difference or 3 or 5 year. Here, I'm just going to stick current period quarter, and I can see that in my portfolio, I actually have 78 properties and I'm comparing that to well over 15,000 in the benchmark. So one of the other things that our clients have been asking for is to include property subtypes to really get into finer cuts, so we released this in Q1. We've already built this in for them. It was by far and above the #1 feature request. So we're glad to have that in there.

And then I can scroll down and I can see the headline. So here, I'd be a little bit frustrated and slightly under the benchmark in terms of my appreciation. And I can see how that plays out in terms of the yield and the cash flow and the allocation and selection. And then as we heard from the fireside chat, right? We can see the detail behind that. So I can see, yes, my discount rate, my cap rate are creeping up a little bit, but the benchmark has actually been pretty stable on both. So I'm slightly disadvantaged to them. But I actually have a positive cash flow when they're negative.

And if we start to look into some of the detail here, we can see a pretty interesting story building out. So I have a pretty big decrease in my occupancy. Usually, that's coupled with the OpEx ratio going up OpEx over revenue, my revenue is going down because I'm losing some occupancy. So those usually go hand in hand. What I'm also seeing is an increase in my contract rent. So this might not be a totally bad story because it seems like I'm losing leases that are under contract, under this current contract rent, but also under market. So I can see that I'm well under the market rent, and I'm under both the benchmark contract and market rent as well.

So as with Asset Manager and portfolio manager, I can simply scroll down to the bottom here, I can expand and I can see either all of the yield -- the yield effects are the cash flow effects for each of the individual properties. And so here, I can just simply scroll through and see if this is really the case, if that's really the story that's playing out. I see some little increases and decreases, some puts and takes. And then I get to property 42 and there it is. There's a significant drop in occupancy, coupled with a big increase in the contract rent. So those are the -- indeed, the leases that I want to be losing out and recycling. And yes, my OpEx ratio did come up. And so if I wanted to investigate that further, I click on the hyperlink it opens up a new tab. It takes me back to the asset page and the overview, and then I'd be free to investigate any further here.

So you already mentioned, Matt, it's a bit frustrating, right? Because this portfolio is underperforming against the benchmark. But there's a little more frustrating and having to go and tell your LP that you're underperforming. And then not coming prepared with a plan on how you're going to remediate or what is causing that in the performance. So with this in my hands, I'm able to actually quickly identify what is the cause of this. I can work with my team. I can start collaborating with my asset management, property management teams to actually build out a plan, see how that plays out. I can use the Asset Manager and portfolio manager capabilities to work out a couple of scenarios and then go back to my LPs and say, I know I'm not maybe hitting the mark today, but this is my plan. This is how I'm going to improve my performance coming next round.

Right. So really taking advantage of all the capabilities here to come up with that plan and have as big of an impact on the negative performance as you can. So one other thing that I'd like to highlight is just a different way to use the Benchmark Manager. So this was very much a top down. Let's see how the portfolio is performing. But if I come in and I select a property type, I select a region. So it's Southern California, and I select just an individual property -- now I can compare just this individual property against what else is in the market that could be used to judge my performance.

So here, it's just my single model against 470 that are in the benchmark. So before, when we were looking at comparables, we had a list of 10 to choose from, and we're trying to narrow it down to 5, but here, we can actually see we have a much broader dataset to start doing some of these comparisons. So here, the story is a little bit different. I'm actually very positive on the appreciation, which is great. Again, as before, I'm a little bit challenged on the yield side, but I'm positive on the cash flow. And then if I look down into the details, I can see that I'm actually very stable. I haven't had hardly any changes at all in any of my metrics. And this is really what we want to see.

We want to see stability in our asset. We want to see positive appreciation. And if this is all I had I might just move on to the next one and be done with my analysis here. But with the 5 years of history that we've seeded into the benchmark, I can actually come down. I could see both the yield and the cash flow metrics and how they played out over the last 5 years. And there's a pretty interesting story here. So my occupancy is great. It's been 100% for the last 4 or 5 years. I can see that I started out with a pretty good separation in terms of the contract rent for what is charged -- what the benchmark has versus where I'm at. But over time, I've only increased pennies, while the benchmark has increased dollars.

The good news is that I actually have further separation in the market rent. So I'm actually able to -- would be able to charge a much higher, almost 2.5x where I am currently, and it's much higher for where the benchmark is today. The other thing that highlights is this linear relationship with time and the lease term. So this tells me I have a single tenant, and I have about 2 years left on this lease. So this would be a high time for me to make a plan to see am I really going to be able to increase this lease by 2.5x. And if not, 2 years would probably be a good time to start who's going to come in, how much time is it going to take? Are there any renovations that I need to be doing in order to get my property ready to really be able to take advantage of the separation I have and the higher market rent.

Yes. And this analysis for both property and portfolio is currently offered as a service by our performance and analytics team, but it's only to a set amount of clients because it's manual and it's also delivered as a static report. Benchmark Manager will really allow our clients to dig into the data when it's available. And reduce that turnaround time that there currently is, which will bring a lot more collaboration to these client meetings and offer more insights on our side, which will be helpful coming into those meetings.

Yes, for sure. I could see a huge value in that. Like if I was a client and I had access to the tool and you guys were going to come in and actually use the tool to do the analysis, I could be prepared. I could have my questions ready. And then just interactively during the session, we could look and we can filter and investigate anything that we would need. So I could go on for hours, maybe even all day. There's a ton more in here that we just don't have time to show today. So we're going to close this part of the demo. But hopefully, you've been able to see the 4 legs that Mike was talking about in his strategy and really coming to life in the software. It's not just about, hey, let's surface the data in a new way, but let's leverage the expertise from internally, from our clients, and let's make sure that we're surfacing it in ways that it's going to be much more powerful.

It's all built on our foundation. It's built on the AE calc engine. It's built on the Altus ID. And these are new foundational pieces that we're bringing to market. But I'm sure you can imagine if we had a team of agents working on your behalf, interacting with these foundational pieces, we could be much more efficient and effective. And that's actually what we've been working on and built and Aditya is going to show us.

Thanks, Matt. Good morning, everyone. Super excited to be here today. I'm going to show you all a piece of innovation that we've built. It's an agent that we've built that brings together, as Mike had mentioned, analytics, data expertise together in this application. We asked ourselves a question a few months ago, right? Can we build an agent that automates a ton of what our users like Lauren can do. So we started on the goal of building an agent that generates a restricted appraisal report for our users and gets that in about 90% of the time that it takes today.

The AI that you're going to see is built on the same trusted foundations as an ARGUS calc engine. It's rooted in the same outcomes that Matt just described the same numbers. They all come from our calc engine under the hood. And our AI encapsulates that and brings the outcomes and augments the users. So to start with, this is our landing page for the agent. It's clean, it's simple. Our appraisers today deliver -- build about 20,000 assets worth of restricted appraisal reports day in, day out, quarter in, quarter out.

What if we could take the agent, roll forward previous quarter's valuation model and make the report available for the next quarter with all the data from our platform, from the knowledge that pulling it together. And let's see that in action. Generate an appraisal report 4. These are the assets I've worked on in the previous quarter. Let's pick one. And the agent will go do its thing and should come back. Maybe let me refresh.

All right. As you can see, the agent went back, created the appraisal report for the next quarter and here it is. This is our landing page. So this is our page of the appraisal report, we have laid it out in a pretty user-friendly fashion with help from our users guiding and shaping the vision all along. There are different sections available. The restricted appraisal report consists of a variety of tables organized in different sections on our traditional standard printable report, we have reflected those here that go on from value conclusion, the summary assumptions, income expense summaries, the cash flows, the input assumptions, and this is where all the supporting ARGUS model schedules are available all the way to standard stuff, boilerplate stuff like the cover page, the transmittal letter so on and so forth.

So going back to the value conclusion. Let's start with the simple prompt. One of the pain points we've heard from our users is we make changes, adjustments to discount rate, exit cap rate all the time depending on the market. What if someone could just summarize very neatly for us what happened actually in the model. So that's a simple pain point that we started to focus on, and we'll look at that example now.

So this is the prompt I gave it. I asked it to adjust the discount rate downward by about 150 bps. What the agent does under the hood is it goes in, opens up the ARGUS calculation engine that's been packaged up as an AI agent. It finds the relevant sources of data knows where to go in and make the change to the agent and then the agent will be intuitive and will tell the user, "Hey, I've understood your ask, I'm trying to figure it out, and let me go do that now, and it gives that transparency and the user is in control over here.

And the agent is now going back and saying, you can see changes being reflected -- it's making the changes live on the report, and it's done. The value changed. It gives the previous value with the change, the new discount rate and gives a summary and a commentary of what it did, how it did in so on and so forth. It also pulls in our recommendation agent that Matt was just showing and highlights, hey, you're doing something. This may be out of range, may not be out of range, it gives that insight and pulls together for the user. Peter, would you like to add something here?

Well, so what I would like to point out here is if you speak to customers and you ask them, do you want to apply AI? And well, we've heard Chris saying -- he's a property guy. So he doesn't really know if he can trust this. But I think one thing that is really relevant here is that what is sitting behind this -- it's the same set of data, the same set of calculations, the same modeling capabilities that the industry has been trusted and have been relying on for the last decades. So when I hear clients saying the outcome of an AI model, 80% accuracy is not enough. We take -- we hear them saying that, and we're taking that into the way that we built this -- and we're making sure that this is comparable to the way that we're delivering our services as of today through all the manual processes that we have in place to actually deliver this.

That's exactly right. Moving on to a more complex prompt. As you can see here, you've got a vacant suite in this property at Suite 15066. One of the pain points you've heard from the users, and I was in the meeting in Chicago when this happened, the client calls Lauren, we've got an update to this property, someone just signed a lease, what happens to my value. So let's try to do that. I just signed a new lease for Suite 15066, new tenant is Altus Group. Lease is a 5-year term, starts Jan 1, 2026. All other parameters stay the same and we ask it to update. I'm being nice to the agent, please.

Yes. And throughout the quarter, we will get many calls from our clients as Aditya mentioned asking us to model a new lease and amendment and there is a downtime that -- we need to send it in a day or 2 days, but with using this tool, we'd be able to tell them on the phone, what happened to the value, how does it impact the value, which is really huge efficiency.

Yes. As you can see here, again, the agent has been transparent. It's telling the user what it's doing. It will go in and identify what part of the model, what part of the lease schedule it needs to make the update. We'll try to identify the empty suite, here in this case, Suite 15066. It will go ahead and update. And as you can see, it's identified the right spot, it will give the user that visual queue and then we'll go ahead and make the update there you go. And it adds commentary on what happened, how it changes the income, anything changed materially or not, so on and so forth.

Now moving on to a different kind of user journey and a feature that we worked on, we've heard a lot of questions from a user pain points around what if something happens? I want to do X, I want to do Y. I have some capital in hand, I want to deploy that. I want to plan the renovation, what may happen, what may not happen and they ask these kind of what of questions to the agent. Now this agent here can do that. Let's slide the report out of the way, let the user focus on the agent at hand and the conversation. And let's collaborate with the agent. I'm planning a $2 million renovation in say, 2027. Please update. I'll be nice again. Peter, how does the market feel about this?

Well, so you can look at this from the perspective of a valuation, but I'm also wanting to think about other use cases -- preparing an investment committee memo. So looking at your acquisitions, if you're a bit more opportunistic investor, the question that you're just raising is going to be very relevant, right? So I'm going to build this all building, but I want to renovate it, I want to spend money. I want to be able to quickly answer this, and I want to make sure that this is a deal that is going to help me making my strategic objectives and my targets that I'm put out there with my LPs. Being able to do this like this in just a few seconds, yes, that's a game changer. This is going to create a lot of scalability for those teams that are working through all of those deals. So they can start processing 20 deals rather than the 10 deals that they might be doing each week.

That's awesome. And as you can see the agent came back and outline how it changes the cash flow across the years. The last piece of feature that I want to showcase today is the ARGUS model, the currency of the industry that moves around. And as you mentioned, like acquisition analysts and brokers get their hands on an ARGUS model, they want to see what is in there. They want to interrogate the data quickly. The agent can do that, too. Let's go back to the landing page. I have an ARGUS model here, I'm going to drag and drop it. I click go and the Wi-Fi still working. The agent goes back and then brings that out for this particular property in question. And that folks is breakthrough innovation in agentic AI that we brought to the platform. Really excited that I was able to demo this today, and I'm going to hand off to Rick Kalvoda, the President of Valuation Advisory to round this out.

Thanks, Aditya, and good morning, everyone. Wow, was that not impressive is. And I'm excited about this, and I'm speaking of someone who has been in this industry for 35 years, and this is transformational. This is something that will change the way we operate, just not only in the commercial real estate valuation side of the business, but everything we do in the commercial real estate industry.

Why is that? As I think back to 35 years ago, when I started doing commercial real estate valuations and what did I do back then? I manually typed a rent roll, I manually typed an I&E statement. I manually inputted that into a DCF model and then spend hours going out and collecting data to bring that together to come up with a value conclusion. This changes that. This changes it to another level. Why does it do it? The first thing is, is 90% of what we do in the valuation process today, not just us, but everyone in the industry, 90% of that is menial, mundane and repetitive -- it's stuff that does not add anything -- any value to the end product. It's stuff that you just have to do to get to the 10% of what really adds value and coming up with the value of that asset. This changes it by automating it and bringing it right to the expert.

The second thing that is transformational is -- we spend a lot of time going out and collecting that data relevant to that asset to come up with that value conclusion. This now centralizes that data, brings it to the expert and not going out to disparate data sources and trying to find different what is particular to that specific asset. It brings that to the expert, customized for that specific data. So then again, they can focus on the 10% that matters to come up with that value conclusion.

Next is, and as Peter mentioned, is the obvious question that any expert, whether it's Lauren or anybody in our team or anybody in the industry, Jim -- or Joe and Chris, they're going to ask is, can I trust this? Can I trust the output from this? And two important things that we talked about that was critical, and this brings is, one is it's transparent. It's not a black box. Just as Peter said, is you can download the model at any point from this and audit and go down to the individual factual tenant information and understand where that value came from, that is critical for this.

Second is it's run by the expert. The expert takes the output of that and comes up with a value conclusion. It's not relying on just what comes out of that. So two very important things as to what makes this transformational and then finally is if you take 90% of anything out of any process and especially if it's menial, mundane and repetitive and doesn't add any value to the end conclusion. Imagine how much more you can do with the 10% that does matter. That is critical not only to us and to the valuer and to the people in the industry, but it's to our clients and customers who now what they can do, and this will now help even more with the performance and the management of their portfolios. So very excited about the changes that we're seeing here and how we're going to use it, how the industry is going to use it.

Before I pass it back to Camilla is I just want to reemphasize one of the things that you kind of heard throughout this morning is it's not just because AI is here. It's not just in what Aditya has done in a short amount of time. Technology is a very big part of it. But it's also Lauren and the 400 experts that we have in Valuation Advisory and then working very closely with the technology team to come up with what it's helping them. They live and breathe the valuation process every single day, of every single month, of every single quarter is it's them working with Aditya and Peter and Matt and helping them understand not only what we do, what's in that valuation process, but what part is menial, mundane, and repetitive that we need to solve for. That's what they did here.

And then on top of that, so it's the technology, it's the experts that we have, but then also very critical. It's the data. It's not tens of thousands, hundreds of thousands, not even millions. It's tens of millions of models with hundreds of data points in each of those models that allows the experts and the technology to bring this together to come up with the solutions that you're seeing here. So I'm excited about what I've seen. I'm even more excited about what this will continue to evolve for and look forward to the future with that.

So with that, I'll pass it back to Camilla.

Okay. Thank you, everyone. I think we'll take a 20-minute break, which I believe would put us at -- actually, I don't have a watch. So 20 minutes from now. There's coffee and snacks outside.

[Break]

Thank you. I hope you guys enjoyed the break. Okay. I would like to thank our great demo team. That was such a terrific showcase of the innovations. Every time I see it, I walk away feeling just even more enthused about what's to come. Thank you, guys. That was really great. We're going to move on to the next session, the financial update, which is a great opportunity to walk you through, not only the new financial disclosures, we'll be rolling out with our Q4 results, but also the new capital allocation framework that we press released today.

So with that, I would love to introduce Pawan Chhabra, our CFO; and Mike Gordon to take to the stage and to take us through the next session. Thank you.

[Technical Difficulty] in our shareholders [indiscernible] as the portfolio [indiscernible] obviously, we are start down [indiscernible] we are very comfortable in that. [indiscernible] If we can't be the right home to them, then they should be somewhere else. And I did get a couple of questions also from -- during the break, well, does this mean you're going to be looking at some non-core analytics products? And the answer is yes. At the end of the day, it's very simple for me when you take a look at the product set and what we have on the truck. If you can't make something be at least just one adjacency over and there's too much distance between what your core is and what that is and you're not going to build that bridge, it's probably not for us.

And the reason being is, while it might be really good software, we won't do the right thing for that software ultimately because we'll continue to invest in the things that we would define as core. So that is going to be working, and we are going to be looking at that, again, same time frames. It's something that we want to do. We gave some midterm targets. Yes, guys, everybody knows the Rule of 40 companies kind of stuff. We -- our management team believes in it. We're going to push on that. And again, on the consolidated level. I have to keep saying consolidated level because you guys have been looking at us for years in a different way, and we've kind of conditioned you to look at us this way.

And so we don't want to be that way anymore. I mean at the end of the day, this is who we are. And then finally, and again, we'll sit back about this as Pawan has told me this for the last 2 weeks, every day, he wakes up and he keeps telling me, Mike, we're the best PropTech investment that's out there. So why would we use the money any other way? That's how we're looking at it. So we are going to be increasing our go-forward capital allocation. We'll talk through that. We're going back -- we're not -- I feel like it's a back to the future moment.

Before we got -- before we exited tax, we actually had a set target, and we just got away from that a little bit. We're going to get back to where we were. We think that this is a good place with us. We have really good strong cash flows. And with those strong cash flows, we should be able to return good value to our shareholders and at the same time, ensure that our customers are seeing the investment that we need to do into our product set.

So with that, I'm going to turn it over to you because I get to play color commentary to this. Pawan is the designated driver for the next 30 minutes.

Yes. Look, I'm super excited to be here with you guys today. This has been multiple years in the making, and we're very excited to be sharing our new disclosures and how we're thinking about the capital allocation framework going forward. So let me start with the Analytics segment revenue reporting. So in addition to recurring revenue, we're now going to be breaking out the Analytics segment into 4 categories. The first one being software consist of ARGUS Intelligence plus a host of other software applications that we're resolving to the platform to become add-on step to ARGUS Intelligence. We heard you. We're carving VMS out separately, gives you a visibility of the tech-enabled expert services that our valuation management solutions team are delivering.

And then we're carving out data and services separately. This represents the stand-alone elements of data and service. They have a different revenue and gross margin profile. And so it's really about making sure that we've got the right level of visibility and clarity on the core franchises of software and VMS, but then also understand the contributions of growth associated with data and services. Ultimately, the point here is to make sure that we're increasing our transparency and giving you the better blueprint to be able to start modeling growth. So when -- let's double-click into the software portfolio. As I mentioned, the software portfolio category consists of ARGUS Intelligence, which represents about 2/3 of our software category. But then we have a host of complementary software applications that we are resolving to the platform to be able to drive more models and more value into the core. And so you see those reflected here. Collectively, these are going to help provide an unified user experience for our clients as they utilize ARGUS Intelligence and the add-on capabilities.

Yes. And if you think about it and what David and the team talked about, I mean, again, when we talk about the platform, it's a platform, but it's made up of its services-oriented architecture -- they came -- we're just developing services and we're going to put more services out there. So the team is already working on the next set of services. So when I sit back and say, I feel comfortable with what we got. We've got a lot of things that we can expand into just within our own portfolio. So this is why we're just trying to simplify on this.

So keep going on software. So let's dig a little bit into the financial profile and some of the reporting and metrics that you guys are going to hear from us going forward. So first and foremost, we were going to talk about organic revenue growth. We're going to talk about annual recurring revenue growth. And as you can see from a year-to-date perspective, annual recurring revenue growing at a healthy 10% growth rate. We're going to be focused on talking about gross and net revenue retention for our software portfolio. Again, this ultimately helps speak to the stickiness that our software solutions provide, but also talk to the tremendous expansion opportunity that we have with our software developing at the platform and rolling out add-on modules.

So as you think about the path forward for software, really 2 big growth levers for the business. One, you've heard Mike talk about the opportunity for us to continue to cross-sell as we deliver more value in the platform and when we provide our clients with a quantitative value proposition. And then secondly, asset-based pricing, which allows us to get ubiquitous collaboration across the client's enterprise. It drives adoption. It allows us to get deeply embedded into the client workflows. And then when it comes time for renewal, it gives us pricing opportunity as we continue to become more penetrated into the clients day-to-day.

Yes. And if I add it on, I mean I had a lot of -- you guys all asked a couple of questions like, okay, I look at the gross retention, what should I be thinking about ARGUS, ARGUS is higher. There's no doubt. ARGUS is in the mid-90s, and you guys understand where that is. So then you're going to do the math on me. Well, that means the rest of it has some problems. Some of them do. We have some older pieces of product out there and kit that we actually have to sit back and figure out how we're going to retire. And there's 2 ways to retire either you let it slip away over time or you just say, okay, we're going to do this and you have to move to this. I'm more of the partial of the second one. There are some good reasons why you let it slip over time, but that's just the normal thing when it comes to software.

And so from our perspective, as we're looking at this, what I'm happy with and what I'd like to continue to see is that 15-point difference between gross and net retention. That means we're doing a good job of things on -- when you think about your recurring revenue table. So it's just -- we're not going to be doing anything that's remarkable. You guys are all doing this anyways, but you got your new business -- you got your cross-sell, you got your upsell, you got your churn and down-sell. The good news is we're not really down-selling on our core stuff. The good news is we're not really churning on our core stuff.

But what we have is we have -- what we want to make sure is as we talk as a leadership team, and then we have our guys talk through everything else going down into our organization is that we really want to understand like, okay, once you landed here, how can we get them to use more? I want our VMS guys to be talking to our guys about software. They're not software salespeople. I don't expect Rick to do that, but Rick is pretty good as a software sales people. You heard them today. But I don't expect that. But what I do expect is that as the funds are using us, there's so much we can bring to them and so much data that we can bring to them and so much information that each piece that we're showing, I think, becomes a lot stronger. And so that's where these things coming together makes sense. So while we've broken the 2 pieces out, so you can see them -- at the same point, we do think that they're very synergistic.

Excellent. So let's look at our second category, VMS. Again, as you all are familiar, VMS delivers trusted valuation insight and compliance to some of our largest clients around the world. The valuation process creates a lot of exhaust data, and we provide independent oversight to manage that process, but then we also normalize that data and put it into ARGUS Intelligence. At the end of a VMS process, we have a very thorough conversation with the clients, as you saw in the demo in regard to what are the drivers of growth, what are the attributions of growth. And so that leads to a very fulsome conversation from a VMS perspective.

As we think about the path forward on VMS, our VMS teams internally now are leveraging ARGUS Intelligence. So now they can go faster and they can process through information in a much more efficient manner. And then as you think about the convergence between software and VMS, we can now take the relationships that we have on VMS and look at their assets that may not have the same compliance requirements and deliver the same type of output that we're delivering from a VMS perspective. So it's a very synergistic relationship in regard to how we're growing VMS and software and how they are both complementary to growth.

I've said enough about it. They do -- I mean, Rick will be walking on water later. Maybe you too. If you want to see what they really know how to do in this space.

So keeping with the theme in regard to reporting and how we're going to talk about VMS going forward. Again, very similar to software. We will look at the organic revenue growth, and we'll also talk about the annual recurring revenue growth number, but the most important measure for me within the VMS business is really understanding that gross logo retention. And really, what it does is it showcases the durability that we have with our clients, whether it's an up market or whether it's a down market, our gross retention is remarkably high and a testament to the power that our teams deliver. And again, as we think about path forward and growth from a VMS perspective, we're going to continue to have secular tailwinds that's going to drive capital into the CRE space, which will translate into more assets being deployed.

And as our teams become more efficient to deliver the VMS output, it allows us to be able to enter new customer fund types at potentially different price points, so it really expands the addressable market for what VMS can serve because weaken process information much more efficiently now.

Yes. With what you saw out there today, I mean, this is a piece that I think a piece of the business that we think will grow and will grow consistently and grow well. And the reason being is, at the end of the day, we have the best people, and we have the best mousetraps. And as a result of this, we're going to do a good job of like anybody else can go out there and do this. There's plenty of good people out there. But it's the combination of the 2 things. And what we're going to be able to do is like our guys know how to ask the right questions to the system.

Now the AI will continue to evolve, but -- and people will start to get there, but that's when we'll have -- give them more and more tools. This is not just a step in time. This is going to be like what Matt was trying to show you with looking back over 5 years. We look at this going forward over 5 years, this business and the assets that we can deploy on this platform based off what our team is doing, we expect this to grow and be a really good pillar for us going forward.

So data and services, and again, as I mentioned, this represents a stand-alone opportunity for data and services. Obviously, given the different growth profile and margin profile, we are carving this separate to provide cleaner optics in regard to what's happening with our 2 core franchises, but it also gives you a baseline in regard to how these businesses are progressing. So from a data perspective, we've got data studio in Canada. We have the Reonomy in the U.S. When you take a look at the revenue trajectory here, we've talked to at our various earnings calls that we have a lot of scale episodic clients in the data business that have churned out. So we expect that to normalize over time.

Services represents our premium support around our ARGUS products and services. We are consciously exiting non-core areas where it doesn't involve implementing ARGUS solutions. And so carving that out separately allows you to understand the dynamics of that driving in versus bleeding it in into a total recurring revenue number, which decreases your visibility. So this is really about giving you the tool set to be able to model our business appropriately and have the right transparency in regard to the contributions of growth that data and service brings to the total analytics segment.

On the data side, I know you guys will take a look at the gross margin and say, okay, can you guys do better? And the answer is going to be yes. There's been a lot of work that has been done over the last couple of years that we've been curating the data. This is not just keeping the data on every property and having like a file where you just open it up internally. This is actually pulling the data into some sort of usable foundation that we can use for analytics. That curation did take some time and effort. And once you -- and how you curate that data coming in and making it usable for our customers and our clientele and our AI was good, right? Then you can now get to the questions that you need to get to. So we expect our gross margin to improve on that.

When you take a look at our services, one of the things that we're also doing is we're making it easier to deploy our products. I mean people want to be -- people do not want long implementations, like you saw in the product set that we can now ingest rent rolls, all right? Well, that was a large piece at one point of doing a lot of work around services to get that working.

Now that we have that in the product, we expect that to go down. We're still going to have to do some of the value-added services. There's no doubt about it, but we're not necessarily looking at managing ourselves in that manner. We are not -- at the end of the day, software, data analytics and then that value-added services or that advisory role that we play, that's what we want to play. Just entering data, not where we want to be. We want -- would get that done in our platform as much as possible.

So simplifying the portfolio, obviously, a big theme. Mike started the meeting and you guys read our press release in regard to the immediate work that we're doing on that front, but let me take you back a little bit. When we divested the Property Tax business, we purposefully announced in that press release that we're accelerating our transformation to a pure-play software data and analytics platform. And so what that means is we're very comfortable shrinking to grow, shrinking to grow more profitably by disposing of non-core and low-margin businesses. It allows us to have clarity in regard to our capital allocation perspective. It allows us to deploy our capital in a smart way, and it allows us to take a lot of costs out of the business. So to that end, as you guys heard this morning, we're in advanced conversations on divesting the appraisal business, hopefully, with the Q1 output.

Very advanced. We have an LOI. I keep -- I have to put that out there for Terry. Signed LOI.

We're also in the process of advanced conversations on the Development Advisory business as well [indiscernible].

Not as advanced.

Not as advanced. Several conversations on the DA business that we're hopefully going to provide you more updates on going forward. And then obviously, as Mike just referenced, there are some non-core elements products and services. Within the Analytics segment that we've talked about at the earnings call that we're also going to look to divest. But again, this is really about simplify to grow and how do we just make sure that we've got strategic clarity in regard to where the value is, and it's really around ARGUS, VMS and the platform.

I think if I just added one more word in here that I didn't open up with, but we've talked about it as a leadership team and a Board is predictability. We -- as we've been trying to pull the businesses together, we want to be very predictable with how we're flowing, how that's happening, so that we can give you guys that over time that we're just going to continue to roll. I mean that's -- I mean, a boring business that's predictable that continues to hit what it needs to hit is like not a bad business. And so I'd rather be a little bit boring and predictable than being a little less predictable. So from -- with that, that's why as we go through all these metrics. That's why when we look at these, these foundational metrics will help us bring that out to you guys.

And that predictability will make my life a lot easier. Thanks for that, Mike.

I'm trying.

Look, in terms of the P&L, I'll keep it brief. But the point of this page really is to show you that we're changing the format or P&L from a presentation by nature to our presentation by function, which hopefully will give you a lot more clarity in regard to the moving parts within the business. It will highlight the strength of our analytics business and the gross profit and margins that we're driving and continue to drive in that space. But equally as important for me and hopefully for you as well, too, is we have a lot of corporate costs in the business, a big focus area for us.

And again, the catalyst to be able to action corporate costs is to simplify the business. And so we're breaking down and breaking out in a more traditional fashion. You can see our path on how we're going to optimize R&D, sales and marketing and G&A. It will become a part of our talk track as we go forward. And I wanted to make sure that you all had very clean optics in regard to how that's impacting growth and measure our performance and see if we do what we say over time to be able to achieve that. But this new format will allow us to be able to get to that state pretty quickly.

Yes. And when we look at some of the metrics and the ratios we have here, we know we have some work to do. There's no doubt that we have some work to do. And you guys can all come back and tell me where certain numbers should be. And I would agree with you. I'd agree with you. But this is what we're going to be doing in '26. Actually, it starts after we're done with you today that this is the first 2 weeks. The next 2 weeks start with that. And that's where we're going to sit back and talk about as an organization, how we're going to run. We've had that discussion already, but like now it's really saying, okay, now how do we do that and apply that across the business so that when you look at us and as we move into that software type of business, that SaaS type of business, you'll see all these metrics start to get into like what you think the business should look like. I mean this is why Pawan has been working on this, and there's a lot of things that he and his team have been lifting. Now we know how to do it, and now we're going to start executing on it.

Great. So as it relates to midterm goals and as you guys heard from Mike this morning, look, our path on simplification and driving operating efficiencies within the business give us a lot of conviction on our ability to hit our midterm goals. So our midterm goal is anchored on being a rule of 40-plus company exiting 2027. So how do we do that? So looking at it from a revenue perspective, we expect revenue on a consolidated basis to grow at the high single-digit level across Altus all in. .

Within that, that means that ARGUS Intelligence is going to grow in the double digit. Again, the transition to asset-based pricing and deeper adoption that we get within the client base and the fact that we're bringing all of this power into the platform is going to accelerate our abilities to be able to cross-sell.

From a VMS perspective, we're expecting growth to be in the mid-single-digit growth, mid- to high single-digit growth for VMS. Again, that's a combination of a CRE volume recovery that we're expecting to see in the marketplace, but more importantly, we're also making our teams more efficient. So now they can address a wider array of customer types and fund types a potentially different price points.

So again, to Mike's point earlier this morning is how do we disconnect ourselves from the market, and it's about making ourselves more efficient driving more quantifiable value to our clients, and therefore, making us a very useful tool in a down market or in an up market. From a margin perspective, we're applying the same discipline. You guys have seen our track record in regard to what we're doing from a cost savings perspective, a lot of low-hanging fruit for us to still hit that particularly as we continue to simplify the business.

Obviously, the adoption of ARGUS Intelligence internally is huge because it drives significant value for us from a service delivery perspective, it lowers our cost to serve, but at the same time, the innovation that spins out of the work that we're consuming internally is what we're now taking to the market as well to, but that is a tremendous opportunity for us from a cost perspective of drinking our own champagne and leveraging our tools to be able -- to be operate more efficiently. You've heard our story about our love for our India location in the global service center. It was not really a model that was in our DNA in the years past. .

We've proven that we've won the hearts and minds of our own internal associates that there is a tremendous advantage of leveraging India and the great talent that we have there to be able to take best practices and standardize that a broad significant cost leverage for us as well, too, and a great model for us to continue to scale. And then obviously, there's a lot of opportunity for us from a G&A perspective to rationalize our corporate costs, reduce our facilities footprint and really just rightsize the organization as we continue to simplify and grow.

Yes. I think as we go through this, when you look at this slide, I think there's a lot of work to do here. I would tell you right now, we feel really good about our path on the cost side because we know what we're going to do around that. And then we're going to start executing on that -- starting in an hour or two. What I would tell you and I had a lot of people from the Board and from the team saying, well, going from 2% to high single digits, Mike, are you sure you want to put yourself out there on that?

Yes. If we don't put a goal out there and we don't go -- get to that goal, well, if I just go medium single digits, they did tell me not to put a number. So HSD is the new acronym of the day. But if we don't set our goals to something, how are we ever going to achieve it? And this company has grown and we have assets that are growing at that pace right now and actually are growing at low double digits. And in my mind, there's 4 mutually exclusive ways to grow, very simply. Number one, we get new customers. We think that we can go down market effectively with the platforms that we have. We actually have -- we've integrated Forbury and ARGUS intelligence. We feel pretty good about that, that we can add a lot of value down there, and that also allows Rick to go down market to.

Secondly, you raised price. Now for all the used people on camera. That doesn't mean we're going to raise price, but what we will do is we will bundle differently, and we think that there's benefits for that, and there is more value that we can get with our customers around that. So we'll leverage that a little bit. Third area is that we're going to introduce new products. You've got to see those new products walking out the door today.

And the fourth area is to reduce churn. And the team has done a pretty good job of that. We can do a little bit more with that. And so if we just focus on each one of those 4 things and you just get small improvements in each, you go from 2% up to 8% or 9% pretty quickly. So again, I'm not out here preaching to you that we're going to turn that around immediately. But what I will say, regardless of the market -- that's how we're going to be looking at this, and that's how we're going to be managing this so that we can get to those numbers as quickly as possible.

So I see the path and we'll be looking at this quarterly and we'll get there. And again, they told me not to put out high single digits. I don't care. We're going to get there, and we're going to find a way to that. And if I have to come up here in a year or two and you guys can say I told you so, then then we'll deliver something differently, but we're going to find our way there because we've done it before, and we can do it again.

So let's talk about our capital allocation framework. Again, for us, driving the most value back to shareholders is our north star. So as we think about our priorities from a capital allocation perspective, first and foremost, we're going to continue to invest in the business in organic growth of the business, to fuel and fund our innovation going forward. We're going to maintain our dividend. It's a great, consistent way to return value back to shareholders. We're going to continue to -- and as we started off, we're going to continue to opportunistically look at M&A opportunities. But again, the best M&A opportunity for us right now is to buy our own stock, and we'll talk about that in the next page in a bigger way.

And then lastly, we are comfortable with taking our debt leverage ratio up to 2.5x. We have a very strong cash flow generation within our business. We have a very healthy balance sheet. We have a lot of comfort that we can run at a slightly higher net debt leverage ratio and still operate efficiently.

I agree.

So you heard in regard to our conviction behind our future and our conviction in regard to the confidence that we have in our growth and nothing can demonstrate that more with the fact that the Board has approved a $0.5 billion share buyback for 2026. So how are we going to roll this out. We're rolling out a SIB early next week. You guys saw the pricing in regard to where we're placing it from -- in the press release in the 50% to 57% range as a Dutch auction, and that's going to be launching next week. That will close sometime in Q1.

We're keeping flexibility then up to the $500 million mark to run an NCIB, which kicks in February. And it gives us a lot of flexibility during the course of the year to continue to support our stock. Again, very comfortable with over time, progressing at 2.5x debt leverage, but a very strong positioning in regard to the conviction that we have in regard to our future and the support that we're putting behind it.

Yes. And I think from what you see is this is getting back to like where some of the numbers were a couple of years ago and actively managing this further. As Pawan said, this is the best investment is on ourselves right now. And we have -- I think we have the best software here. So we continue to build that. We'll invest in ourselves. If we see something, we see something. But like we're focusing here right now. .

Excellent. I think we're right at time. So we're going to open it up to Q&A now. So I'm going to ask David Ross and Rich Sarkis, Dan Hurley to join us.

My fellow colleagues, that's right.

The hot seat right here.

Mike, by the way, who is they? Who are they who are trying to keep you from the high single digits?

Some of the people -- I don't know, some people were just telling me yesterday. I was a little -- it's okay, man. I don't bite.

We try to underpromise, overachieve.

We're going to go better than that. Yes, we'll overachieve.

Okay. So, thank you all for joining us. We'll start off with some questions. We'll start with the audience. I'll also try to take some questions from our online participants. So just to keep the logistics a little bit simpler, if you could raise your hand, we have Brandy over there who will come by with the mic so that we could let the online participants hear you clearly as well. Opening up the floor then. Okay. Yes.

Nick Appelo at Capco Asset Management. I was wondering if you could talk a little bit about the VMS customer base. And maybe if you could give any more color on the mix of that business by fund type? And what are the sort of growth exposures that will drive growth there on a customer basis? Is it assets flowing into private equity funds or other fund types?

So I told you, you had the middle seat.

Yes. So best way to look at it is if you look at the biggest investors across the globe, biggest investment managers, we work with those. We have about 170-some clients. Most of those are in the top 200 to 300 global investors. Think of anyone that has a large portfolio that requires frequent valuation, we generally work with those types of customers. It's generally and because of the compliance base that you hear -- component that we provide, it's generally the open-ended funds. So there's trading on a monthly, quarterly, even in some cases, daily basis.

And so they need that independent oversight of that process where we come in and help with that and provide that oversight. Where we see going forward, as Pawan mentioned, is because of what we can do, where it's not a required component from a client's perspective, but rather it's something that, yes, we need a value, but it's not as critical. No one's transacting on it for financial reporting purposes is there's opportunity there, and that represents about with our existing customers about double the opportunity, double the market share or double the expansion opportunity because that's in the closed-end funds, that's in the separate accounts where it's coming up with values just for reporting purposes.

So with the tools, not only providing it at a more cost-effective -- cost effective for them, but then also with the analytics and all of the output that they get from that, that prevents even more of a reason for them to use our services in combination with the technology and analytics that we have. So that presents a big opportunity going forward. And it also opens up into -- and so you mentioned private equity.

As we see -- so historically, most of these open-end funds have been in the diversified -- or sorry, in the defined benefit space. We're seeing more and more now, whether it's in TRs, whether it's the daily funds, where it's more and more into the defined contribution side of the business. And that's just going to grow more and more going forward. And we've seen a lot of growth in that over the past 5, 6, 7 years, and that's just going to grow even more exponentially going forward.

Okay. Thanks for the question, Nick. Yes. Paul? Paul from RBC Capital Markets.

A couple of questions. Paul Treiber from RBC. A couple of questions. One on data. Can you speak to the market coverage of Altus ID and then also of ARGUS Cloud in terms of assets globally covered? And then related to that data question is on just the data rights. I believe with ARGUS Cloud, you have rights from an anonymous and aggregate basis. Has there been any pushback from clients on those rights when they move over?

Do you want to start? Do you want to go?

I'll go first. So in terms of the asset data, we have a whole variety of different sources that help us platform from public commercial customer and so forth. Coverage was, I think, your key question. It follows our market to a large extent. So very highly concentrated in North America between the U.S. and Canada, very concentration in EMEA. And then in terms of other markets, we'll drop off from that point of view. The other part of the question, sorry.

Yes. And then just to make a finer point on that, just to be clear, everywhere our customers have assets currently in our system, the Altus ID results, right? So it does follow our customers, as David was saying. The second part of the question was around user rights and our opt-ins and how we got rights to use the data. So we do have a large proportion of our customers in terms of providing rights to the use of the data, but it's an anonymized aggregated approach. So we're not trading on that information. We're using it to help us drive those insights, and that's where that combination of the AI, you see that, therefore, in the benchmarks, for example.

If I would just follow on, on it, not to pile on it for you, Paul, at the end of the day, the insights that we're giving based off the flow of data, I always like the derivative. I would love to be able to pass -- pull up and just give everybody the data as well, but we have -- those are things we don't have. But what we've done is at some point, we have actually put it into a format that everybody could use. And so there is a day that maybe we will convince some people that we could have that. But for now, what we have is we have all the insights on top of that data.

And as you can see, those are value-added things that our customers want us to do. The benchmark manager runs on that. The ability to get down to that low location is going to be incredibly important. And so as we continue to get more and more assets on the platform, that becomes incredibly important. So back to your number of assets, it's changing all the time. We'll get you a better number of what that is. But like if I sat back and talk to one of the brokers who was looking at the sets of assets that we have, I think that there's 4x the number of assets they can now put on the platform that they had never thought of before.

And one of the reasons why, and I think you heard from some of our customers that they were playing sort of the bingo game and like how many assets do they want to put in the platform because they're trying to manage that. If all of this just gets into the fund and we just have that working through, then it's a really simple thing for them, and then they can actually just use it. So there's a little bit of a move that we -- and it's not as hard as you think. They're actually starting to understand that I can use this much more broadly, and I can share this across different units and stuff. That becomes useful for them. So I think from our view is we're going to see a huge increase in the number of assets really in '26 and '27 because the collaboration opportunity is huge for them.

Steve MacLeod.

Just on your core ARGUS software business, and Mike, when you talked about the growth levers you mentioned new client growth and going down market. I was just wondering if you can give some color as to how we can think about what that opportunity looks like, like whether it's market share or kind of how you segment the market and where you think you are stronger and where you have opportunity?

Well, I think I'll start. I think Rick already explained on his side of the business, but that -- there's an analogous part right there where we're strong, and we see we can move into those other pieces as well. To be honest with you, I've always had an interest in banks like you. The product is needed there. You guys -- you do lend to these guys, and there is something that we haven't made very simple. And so as we simplify and we've made it easier to use F4bearry, we've used more with that Excel front end, we think that there's a good opportunity to like take one step over and create that exchange of data in a better way and then simplify how you're going to evaluate that. So that's one angle.

Going down market into these other funds and going down market into smaller areas is something that we've always had an issue with as well because people would sit back, I'm only looking at a couple of assets, how do I can do this easier? Well, that's a bundling question. So I think that there's many rooms for us to move to. That's why when I sit back and I think about the growth, and I think you saw on the slide that we're expecting 20% from like new customers and 80% from the cross-sell. We have a lot of good cross-sell opportunities, but we think that we can move into these different areas and attack this in a better way. And then Rick likes the software, too. So that's going to help us.

And just to make one additional point on that is the geographic expansion as well. As you zoom out outside of North America, there's a lot of local tropicalization, if you will, of how valuations are done across EMEA, APAC, et cetera. I think Chris started to allude to that. And again, the packaging of the Excel interface -- I practiced it. And so with that Excel interface, you allow the sort of nuances of the various valuation methodologies to be captured pretty easily.

I think Rich wants to go to some islands.

I would just add, it's a very exciting part of this opportunity that we look at customers that spend at least x amount, our first analysis, we just said, what do the customers look like that spend $100,000 with us a year? How many more of those can we find? And the answer is many, many times more. I won't give you the number, but using that profile, finding them and going out to get them has an been exciting part of the motion for sales over my 18 months here.

We'll take our next question from a virtual participant, Paul Steep, who actually was a former sell-side analyst at Scotia. Now it's Dunlop Capital. Pawan, this is for you. Can you please speak to how much stranded cost you expect to have and the time line to remove those costs from the operations, assuming we close the signed LOI in the near term?

Yes. So first of all, with the property tax divestiture, maybe taking it one step back, we're exiting the calendar year with no stranded cost. So that's great news from an appraisal perspective and the likelihood. We are also going to action that stranded cost pretty quickly. It's a small portion. It's a smaller business, but there are some centralized costs that are supported. That will not go with the deal that we'll have to resolve. So we'll exit 2026 with stranded costs.

Okay. And Mike, there was a follow-up for you. Are the new operating metrics that are being introduced today aligned with management compensation? Or will they be implemented in the 2026 compensation cycle for the relevant managers within the business?

Yes, for '26. '25 has it. What I would say more in management by objectives, I'd like to get to just the metrics as a whole. So I think we're going to be a lot more aligned in that. And again, something that we need as a leadership team is to drive this down multiple levels. So it's very clear what good looks like.

Yes. The one there, yes. Thank you.

We're making him run. You're getting your steps though.

This is [ John Shao ] from TD Cowen. Two questions on divestment. The first one is, how should we think about your corporate costs post the divestment? And the second question is, I believe you also mentioned plans to divest other noncore analytics assets. Any color on that?

You're going to take the corporate costs?

Yes, I'll take the corporate cost. Look, there is an allocation that we give to the appraisal business that is part of corporate costs. It's not a very material number, but we have a clear path on how we would exit that cost out of the business coming out.

Yes. So back to Pawan's comment earlier, our view is that, that's going to be rectified all within the '26 cycle. That's our goal. actually, our plan, our goal and our mission, just to be clear. As to the other things that we would look at, there are some software products that, again, as I said earlier, that are a couple of adjacencies away from what we do. I always sit back and ask my teams, how close is this to it? How are you going to invest in this? What's going to happen?

And if it's not adjacent, like I said, it doesn't get the investment that it needs. And so as we've been looking at and rationalizing the portfolio, we've realized that while we might have had some goals a couple of years ago, that those goals were not in those markets. And so there's a couple of things that we're looking at right now, but similar to like what we talked about with ADA, we'll probably put out some notes early next year on which pieces those are.

Okay. Our next question comes from Richard Tse at National Bank. Real estate professionals are historically late adopters of technology. I think we heard that from our panel today.

Not you guys.

From a go-to-market -- not you guys, company excluded. From a go-to-market perspective, how do you go about accelerating the pace of adoption when it comes to monetizing the broad portfolio?

Yes, I'll take that. So I have the most fun job of the folks up here, Ernie, who's back there, our Chief Marketing Officer and I have the job to do really 3 things. One, as Joe mentioned earlier, this is not an aggressive industry in terms of its adoption of new technology. So the first thing we got to do is educate people about what's possible. And that requires partnering with our early adopter customers that really can share the experience of executing on this vision. And it's about getting that message out to the rest of the market.

I know Rich wants to talk about this as well. But I mean that is the key. As we talked about this industry, it is -- it lags in adopting technology. So we just have to get the message out, educating folks on -- executing this vision really is delivering the value, and that will jump people into the interaction.

Yes. Just to build on that, it's obviously something I'm very passionate about. I've been selling software to commercial real estate for a while now. And the things I found is that whereas I do agree with Richard in terms of historically, it's been sort of a slower laggard in terms of adopting real meaningful technology. But I think a big driver of that is they've been hit as an industry with a lot of cool solutions over the last few years with PropTech, CRE tech, et cetera, that don't really have many problems.

Or said differently, I think a lot of the solutions in the space haven't really been attuned to listening to the voice of the customer, getting something out there early to the Joes and the Chris' of this world, listening to the feedback, even though it might hurt sometimes to say, you missed the mark here on the software or we want more of that or seeing it differently and being able to iterate rapidly and build up from that base, I think, has been missing in the industry by and large. And I think hopefully, you've seen with what the team showed and our voice of the customer that we view things differently. And we're not making Dan's job easy where it's order taking, but I do think that's an important part of the equation that sometimes gets overlooked.

I say I have 3 words. quantifiable value proposition. At the end of the day, it is simple. For every dollar that somebody spends with us, they should get $15 in return. Analytics should get that to them, and we should be able to show this. We showed that to you today. We heard from our team today that we expect that we can reduce certain things by 90%, quantifiable. At the end of the day, people will sit back and say, I don't believe it, but at 15:1, wow, maybe I'll get 3:1. Maybe I'll get 4:1. We need to make sure that they see that.

And I don't like talking about qualifiable. My New York office heard today, I heard 2 days ago, I want to talk -- quantifiable. I want to sit back and talk to my customers, did you get value from us? Are we doing well with you? Because back to what I said, I'm not raising prices on you guys. But then we can actually win together. And then we can say that we grow with them. So that is as simple as it gets. That's what we have to do. That's how we have to get it out there, and that's where we need -- where we partner with our customers.

And maybe I'll just add to that as well is part of that adoption is it's seeing the value you get out of it is what can the customer use. It's the value add that's created. And going forward, one of the things we're doing is we have 400 internal customers that are using it and seeing the value prop. So one is we see it, understand it and help with the innovation of it.

But secondly, probably more importantly, is we'll be working with our customers with that. So as we're talking on the phone with them, we have it on our platform. We can show them the analytics and the output that comes from that. They will see that, see the benefit of that, and that helps with the go-to-market side of that as well.

Okay. We'll take a question from [ Sam Edwards ].

Following up on that, could you maybe give some tangible examples of early learnings from folks who have adopted asset-based pricing and what engagement you've seen as you've made the platform available throughout the entire organization as opposed to just the individual users historically?

Yes. I'll start and I'll hand it over to you. Historically, ARGUS Enterprise has been a very powerful tool, but a select few within an organization have used it, but many have benefited from the outputs of ARGUS Enterprise, right, the reports that are generated, the analytics, et cetera. And so with asset-based pricing, what you're doing is you're enabling that proliferation of the access to the solution, but that's not enough. You also have to couple it with something like ARGUS Intelligence that taps into that rich data but allows a non-power user to access the analytics. And so you really need the duality of asset-based pricing plus a low friction, easy-to-adopt solution to unlock that user base within a company.

I would just say asset-based pricing is one more tool to lower barriers to adoption. Like we're providing access now to everyone that can get value out of that data instead of, as Rich said, the select few. And as we build that out and the organizations are literally getting more value out of what they already had, but more folks are able to drive value from it.

How have you guys changed your -- like a customer success team and from just a pure sell-in to then monitoring and making sure that engagement is building throughout their organization so they are getting value out of it?

Yes. We made significant changes this year to our customer success from the way it's organized to the way it's compensated. And more fully aligning that team with both sales and support to ensure we're capturing the -- this is a very significant change for our customers. So again, it's about making sure everyone understands what is possible, sharing the successes and then creating that as a compelling vision to get after for those customers. That is what's going to help them take action to get there.

I think if I followed up, I think we have 2 areas where we help with customer success. One, I mean, and not to call Rick's team customer success, but they show from the standpoint of how to get the most value out of it when they just talk about how they're using the system and how they're working with it. They do so much more than that, but every day that they work with our customers in that and they work through the appraisals, they are really working through how to get more out of the platform.

Then on our customer success side of things, you have the technical guys who are working through them, how to think about the data, how to think about the data and how to be using -- getting things onto the platform. The key thing about asset-based pricing is it's great once you put more and more on the platform and helping them get through that and understanding like how to use that and why the Forbury acquisition was so important to us was it opens up the aperture on what we could do.

So like as a Board and as we've been watching this, one of the key metrics has been how many assets are on the platform. How are we seeing that? We're seeing that go double from what we've had just a number of months ago. And so we expect that to continue to go. If we follow that -- and that's our internal metric. If we follow that and we continue to push that and help our teams get there, that's a good thing for us. It's one of those things where it's like it's not necessarily how we do it, but it's helping them to believe that they can do it and they should be using it as part of their everyday workforce.

And just one follow-up question. Earlier, you were talking about data access and the rights you have to that data. Is there an opportunity to productize that data into some form of index or intelligence that could be externalized?

Yes, mic drop. Yes. I mean, coming from -- again, those of you who know me, I come from a credit bureau industry. And when I look at the way that the bureaus run things, it's not -- again, the data that's out there is too variable, getting down to the main things, so like getting the Altus ID in place, starting to understand each and every piece and what are the important pieces of that, having Matt walk you through all the things that you can see out there that are the standard things, there is the standard items, there isn't that opportunity coming sooner than later.

That said, we will focus on the analytics side of it because those are the rights we have today. But I think that as it becomes more and more evident that this is where the world is moving, that's a good conversation to have with some of our customers.

I think that when you look in place with benchmark. And to be clear, that's been built over an extended period with a lot of feedback from our users. And when you compare and say, like a residential real estate index, they want the specificity. They want to be able to do the drill down and up again. So they want a wide variety of property subtypes, and they want to be able to trend on that basis. And you saw how we did that in the demo earlier. And they also want to do it in a lot more variability around the regions.

So we've been increasing that level of being able to zoom in and zoom out consistently. And I think that's what we contrast it with, say, other indices where you have in other markets because they want that flexibility. We want to dynamically interrogate it, and that's what they get with Benchmark Manager from that perspective. We'll keep adding. We're going to get more and more, as Mike says, more data, more capacity to do -- add more information into it. And obviously, there's opportunity for us to summarize that in different ways based on what we're seeing in the market need.

The greatest thing about David is he understands data curation. So I mean just for if anybody wants to talk to him about that, it's not that boring.

Yes. Erin from CIBC. Brandy, if we could just give the mic.

Erin from CIBC. So maybe just a question on the segments. So first on the asset divestiture, you mentioned the signed LOI for the Appraisals business and then the development advisory business is a little bit earlier stage. So any clarity you can give us in terms of like the size within that segment? Is Appraisals the majority of it? Or how is that split? If you can give us any detail there? And then separately, the additional disclosure on analytics today was great. Maybe have you considered post divesting the valuation appraisal and development advisory business? Did you consider giving EBITDA for each of the individual segments within Analytics? Or is that something that you thought about?

Do you want to start?

Yes. So in regards to the EBITDA within the individual businesses, again, we're crafting a P&L that's by function versus by nature. So hopefully, that will give more clarity in regards to the piece parts and the contribution of growth that each segment is providing within the Analytics business. We're not necessarily going to talk about product level profitability or EBITDA as part of our disclosures. But obviously, again, in regards to the level of disclosures that we're making today, you can get a good idea at least at a much more granular level in regards to how that breaks out. Erin, I think I missed the first part of your question.

How big is the appraisals part of the AD&A.

It's about half of it, I believe, off the top of my head in terms of that in terms of revenue contribution. Obviously, the business, both appraisals and debt advisory have been facing margin pressure. We've been talking about that pretty openly in regards to our earnings call as our focus was driving to more profitable growth. So it's not as much EBITDA in terms of the impact associated with that.

I'll take the under on the half. I think -- but I think it's pretty darn close.

Any more questions from the room? Yes, [ Eric Fall from Oracle ].

I think you hit on most of my punch list items, but just maybe if you could open the comment a little bit on VMS. Is there anything you can tell us about -- I know we're not talking about bookings anymore, thankfully, but maybe just kind of like the layer...

There is a debate on bookings, and I've reopened, but I'll come back to that one. I think I like ACV better.

Yes, I think I like the ARR. So yes, latent earnings power, backlog, is there a path to -- with also expanding into new fund types at VMS. Is there a path to getting that to double-digit growth again?

So what was the second part again?

Is there a path to getting VMS to double-digit growth again?

Yes. So one, if you look back to 2024, I believe it was 6.5% in terms of revenue growth and then it dropped to 2.1%. That drop is actually -- so even though Mike doesn't focus on the market, that is part of our growth that we see in years when clients are adding assets to their portfolios. That's inherent growth. We saw that slow in 2023, 2024. As you start coming out of the market downturn, first thing that happens in the core funds is they will start selling assets to prepare to start buying again.

So during 2025, what we've seen is as the market is starting to turn around, as we're seeing transactions starting to occur, that generally occurs in the core funds. The acquisitions, the transactions that are occurring are more the value add, the opportunistic funds where they're buying early in the cycle. So the expectation is market will return, which will help with that growth but then also just what we're seeing is when you see markets turn is that's when the new funds start, so you see new funds starting up, you see not only new logos for us with new funds where they come to us or we are out looking for those customers to find them to start up the new funds, but it's also our existing customers that are starting new funds and growing with that.

So all of that feeds into our growth. We've seen that in spades in the past over the past 15 years. We expect to see that again going forward. And then layer on top of that is all of the new technology and analytics that we do is it allows us to get into the noncore -- or sorry, non-open-ended fund space is it presents a lot of opportunities with those other funds as well.

So as a CEO, when I hear Rick talk... yes?

Yes. I was going to say, I'm going to take that as a yes.

So I'm excited because I love when Rick tells me this stuff. But I think that the big thing as we are tracking things, and I get your point on the bookings piece, I think the most important thing is the backlog as well. And I think that as the team and as we're selling things, we do need to keep track of like what we're getting out there and what's getting on the platform. And I think it's going to be inherently an important number for us to manage and help our customers get that on the platform sooner than later. That backlog piece becomes a pretty critical foreshadowing event for Rick's business.

Any rough dimensions you could give us on what the existing backlog is?

And this goes to a lot of -- some of the deals that have been signed over the past couple of years is it's those new funds that as the market starts coming out is they're waiting to do those transactions and in some cases, waiting for the capital flows to come in is that's some of the backlog that as we see things open up, all of that. And so we're happy to have them even if it's a booking that hasn't yet translated into a revenue. We're happy to have them in as a client ready where when they're ready and the market is ready for them to start buying, we're there in place and ready to grow the portfolio with them.

So I'm glad you got me on something. The last thing I'd put out there is I actually believe that at some point, we're going to be doing this monthly. -- versus quarterly. I think that as we -- as you have the power of the platform and the ability to see the information and see how this changes, that's a lot of value and that just, I think, will help make this market move a little bit quicker.

Especially in light of the new 401(k) changes, right, that could be a meaningful opportunity to increase frequency?

Yes, absolutely. Everything from the defined contribution side of it is just a whole another part of the growth going forward as well.

I think we have time for one more question, and then I'll turn it over to you, Mike.

I think we're good. I think we're good online. So Mike, why don't we some closing remarks and then we get out of here.

These guys -- should we let them get off the switch. I mean you guys can sit up here if you want. I don't think I have a slide. Is there a slide? Yes, there is a slide. There's always a slide.

Listen, guys, I use that as a colloquial term. Thanks for today. Thanks for today. Thanks for paying attention. Thanks for coming. For all those people online, thanks for listening to what we had to say. There was a lot of folks that when I got to talk to everybody in and around November 6, they said, why are you running this? And the answer was because we could. We did a lot of work looking at ourselves strategically over the last number of months. And when you pull things apart and you think about things are new and you figure out what you're trying to do on that, it doesn't mean that you're just walking away from this business.

It means that you're thinking about how to make this business better and how you're trying to get more value out there. And I hope you got a good sense today why we are so confident in the solutions that we're offering. It's not necessarily -- there's always things that you can do, and there's always a million things that this team is thinking about and what they're trying to do about it, but it's getting it out there, talking about it and making it clear.

And so for us, again, we've been saying, we think we should be investing in ourselves. There's a lot of folks who would -- who want to invest with us. I'd say, well, come talk to us. But at the same point, we feel like we have a good plan. We're going to create a lot of value with that plan, and we're going to be doing that in a very quick period of time.

I want to -- as I end, I'll just give it very simply. I want to thank the Board for the opportunity that I have. It's not a lot of times that you get to do a second act because people don't really like sequels. I actually think the Empire strikes back was pretty good. So I guess I'm ruthless be kind, I was told. But I think from the perspective of this, I think the team is ready for the next act.

I also want to sit back and thank the folks who got us here. And there are a lot of folks who are not in this room today who did get us here. And I also want to thank Ray Mikulich for his time period. He did a lot of work to get us into this spot. I get to take it from a different -- from one space to the next and it was a good time for that handoff, and it's good to still have Ray as part of the Board because one thing that Ray loves to tell our team about is like what are we doing with these analytics and can we actually get more out of them.

So it's good to have him and our team from the guys on the Board who come from the CRE industry, really opening up the pace for us because from the standpoint, it's very easy to talk adoption, but they're helping us make that adoption easier. So thank you to the Board. Thank you to the executive team, and thank you to you guys as investors and analysts. Happy to talk to you after outside. Thanks for coming today.

Thank you for standing by. At this time, I would like to welcome everyone to the Altus Group's Third Quarter 2025 Financial Results Conference Call and webcast. [Operator Instructions]

I would now like to turn the call over to Camilla, Chief Communications Officer. You may begin.

Thank you, operator. Hello, everyone, and welcome to the conference call and webcast discussing Altus Group's Q3 results for the period ended September 30, 2025. Our press release, MD&A, financial statements, and the slides accompanying our prepared remarks are all available on our website and as required, have been filed to SEDAR+ after market close this afternoon.

In conjunction with our earnings release this afternoon, Altus Group also announced that our CEO, Jim Hannon, has departed the company effective immediately. Mike Gordon, Altus Group's former CEO and Director since 2020, has been appointed Executive Chair effective immediately and has agreed to assume the CEO role in Q1 2026. Concurrently, Raymond Mikulich is stepping down from the Chair role and remaining on the Board as a Director. The press release can also be found on our website. I'm joined today by Pawan as well as Mike Gordon. We also have Rich Sarkis, the President of Software and Data, joining us for the Q&A portion of the call.

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 disclaimer in today's materials. Please be reminded that Altus Group uses certain non-GAAP financial measures, ratios, total segment measures, capital management measures, and supplementary and other financial measures as defined in National Instrument 52-112. We believe that these measures may assist investors in assessing an investment in our shares as they provide additional insight into our performance.

Readers are cautioned that they are not defined performance measures and do not have any standardized meaning under IFRS and may differ from similar computations as reported by other entities, and accordingly, may not be comparable to those financial measures as reported by those entities. These measures should not be considered in isolation or as substitute for financial measures prepared in accordance with IFRS. An explanation of these measures is detailed in today's IR materials. I would also like to point out that unless otherwise specified, all the percentage and basis point growth rates we refer to on this call today will be on a constant currency basis over the same period in 2024.

I'll now turn it over to Mike Gordon.

Thank you, Camilla, and hello, everyone. Before we discuss our results, I want to take a few moments to address the leadership changes we announced earlier today as well as the conclusion of our strategic review. On behalf of the Board, I want to thank Jim for his contributions to the company as well as to Ray for his years of service as the Chair as he transitioned into a director role. Their leadership, vision, and tireless efforts over the past several years have established a strong foundation. Jim has played an integral role in positioning Altus Group for the opportunity as a pure-play software, data, and analytics platform. During his tenure, we successfully strengthened our platform, we refined our market approach, and we improved how we are going to operate across the business.

As Altus Group enters its next growth phase, our focus shifts from operational build-out to accelerating market adoption of our new product innovations and improving our profitability and focus across the businesses, making this the right time for a leadership change that aligns with Altus Group's future needs. I look forward to carrying momentum forward and accelerating the pace of progress as I step into the Executive Chair and eventually the CEO role.

Now let me touch briefly on the conclusion of our strategic review. The Board undertook a disciplined and thorough strategic review process as we periodically do. To evaluate potential options for maximizing the shareholder value of our shareholders. The company engaged in a fulsome review, which included consideration of a wide spectrum of strategic alternatives, including soliciting interest from potential acquirers. After careful consideration of these alternatives, including reviewing multiple proposals, the Board determined that remaining independent and continuing to execute and accelerate its strategy is the best path forward for Altus Group and to maximize the value for its shareholders. The company has undergone significant business transformation in recent years to operate more efficiently and transition into a pure-play CRE software, data and analytics platform.

Altus Group is in the early stages of its new product cycle as market conditions strengthen and the benefits of its operational and strategic transformation are beginning to take hold. Our Board believes that these factors present considerable upside potential for the company's shareholders in the periods ahead. The strategic review gave us tremendous insight and reinforced confidence in our value creation plan. We came away with clear priorities and a strengthened conviction of what needs to be done and how we need to execute to accelerate our momentum. Altus Group is at a critical inflection point, and I'm excited to execute on this opportunity for our shareholders. The team is really looking forward to taking all of you through our value creation plan at our upcoming Investor Day on November 20. Among other things, we're planning to introduce new financial disclosures and walk you through the growth and profitability algorithm of our midterm goals. I hope you all can join us.

I'll now turn things over to Pawan to dive into our quarterly results.

Thank you, Mike. I want to personally thank Jim and Ray for their leadership and contributions. The foundation they built will continue to guide our execution and drive value for shareholders.

Let me start with a few key highlights from the quarter. These include sustained growth in recurring revenue, improved operating leverage and strong cash flow generation. Recurring revenue was up 5.2%, anchored by the strength of ARGUS Intelligence, which delivered double-digit growth for a second consecutive quarter.

Consolidated revenue grew by 2.2%, tempered by softer performance in the Appraisals and Development Advisory segment and the impact of our ongoing portfolio simplification. For the fifth quarter in a row, we delivered consolidated margin expansion. Consolidated margins grew by 230 basis points to 19.2%. Year-to-date margins are up 440 basis points. Profit from continuing operations increased meaningfully, underscoring the quality of our earnings. Adjusted EBITDA rose 16.1% year-over-year, driven by top line expansion of ARGUS Intelligence and operating improvements in Analytics as we continue to optimize the portfolio.

Adjusted EPS came in at $0.38, doubling from the prior year as a result of both higher profit and lower share count following our buyback program. Cash provided by operating activities and free cash flow were up in the quarter on an as-reported basis by 22.8% and 36.5%, respectively. These are strong results considering the comparative period still had contribution from the divested property tax business. Most notably, free cash flow per share was up 45.7%. Our operational improvements and ongoing portfolio simplification are translating to higher quality earnings compared to a year ago. This has been and will continue to be a driver of cash flow improvements. During the quarter, we took further action to right size Altus, reducing headcount and terminating leases and other contracts. In the quarter, we recorded $6.6 million in restructuring costs.

Turning to the Analytics business segment. Our revenue performance came in line with our guidance expectations and outperformed on margin expansion. As a side note, as we talked about in a couple of calls, we're no longer reporting on new bookings as we plan to roll out new KPIs at our upcoming Investor Day here shortly. Recurring revenue is a key metric for our performance. For our second consecutive quarter, ARGUS Intelligence was up double digits, reflecting strong renewals on the platform and good traction with our new pricing model. GMS delivered moderate growth, anchored by strong client relationships and pricing strength. With CRE sentiment improving, we're well positioned as momentum builds.

Both businesses continue to exhibit low churn with net revenue retention levels above 100%. Margins continue to expand, increasing by 250 basis points this quarter and year-to-date. The improvement reflects a combination of factors: Revenue growth, ongoing portfolio optimization, enhanced delivery efficiency through our global service center, benefits from restructuring initiatives and disciplined expense management.

Turning to the Appraisals and Development Advisory segment. Revenue and adjusted EBITDA were down, reflecting softer market conditions across both businesses. The Appraisal business, which operates exclusively in Canada, was particularly impacted by the ongoing tariff uncertainty, inflationary pressures, and evolving monetary policy.

Turning to the balance sheet. We ended the quarter with $405.1 million in cash and $157.2 million in bank debt, resulting in a funded debt-to-EBITDA ratio of 1.21x. As a reminder, we fully executed our NCIB last quarter, retiring approximately 3.3 million shares and reducing our outstanding share count to 43.2 million. Year-to-date, we've returned $178 million to shareholders. With a strong net cash position and consistent free cash flow generation, we continue to view buybacks as an effective way to return capital. We look forward to sharing more on our capital allocation plans at Investor Day.

With respect to our fiscal 2025 business outlook, we're refining our full year guidance ranges to reflect current expectations. Notably, we're taking a more conservative view on revenue and given the ongoing softness in Appraisal and Debt Advisory segment, we're moderating our view on consolidated adjusted EBITDA margins. In the Analytics segment, we're slightly moderating our revenue range. EMS continues to build momentum, supported by strong client engagement and a healthy pipeline, but the broader acceleration is expected to extend into 2026. We remain confident in the trajectory and opportunity ahead.

ARGUS Intelligence continues to perform well and remains a consistent bright spot. We're seeing growing optimism across our client base. Market activity is picking up, capital is becoming more accessible and valuations are rebounding with Q3 asset value showing double-digit gains across all major CRE sectors. It's a really strong setup heading into next year. With that, the team is once again really looking forward to taking you through our value creation plan at our upcoming Investor Day on November 20. Before we take questions, I want to thank our employees for an exceptional quarter and for the ongoing work to finish the year strong.

Okay. Operator, let's open the lines up for questions now, please.

[Operator Instructions] And your first question comes from Stephen MacLeod with BMO.

Welcome back, Mike. I guess just a couple of questions. Maybe for Mike and the team, just with respect to the CEO change and you stepping into the role beginning in Q1. Just curious if you can give a little bit of color around -- I mean, I guess the biggest question is why now?

Stephen, it's good to hear from you again, and glad to be back on these calls with you. I think why now is we looked at what we were trying to do in creating a new value creation plan, what that plan would look like over the next 3 to 5 years. And what we were trying to make sure is as we were starting to shift and accelerate what we were trying to do is make sure that we were all aligned. And as a result, as we talked about this at the Board level, for instance, Ray has always sit back and said to me that he's got a couple of years left and he felt that this would be the right time to move on. And then as we also talked with Jim, we just came to the same conclusion, and that was how we jumped into this as we were going to enter into 2026. So as we go through into the Investor Day, we felt pretty good about where everything was with the value creation plan, and we want to talk with that to all of you, of course. And then we just decided that this is best for the company and best for all the individuals.

And then maybe just with respect to the strategic review and one of the things that sort of I guess my question is twofold. One is, can you give a little bit of specifics around why remaining a stand-alone business is the right thing? Like what were the key characteristics that you looked at? And then maybe secondly, along those lines, with respect to the portfolio simplification that you're going through, how does that roll into kind of the outlook over the next few years?

Two good questions. So the strategic review, we had a framework in which we were looking at everything because what we were trying to do is get a good sense of we knew strategically what we wanted to build, how we wanted to start to execute and how we wanted to accelerate across things. And given truly just the interest as a whole in our business, we wanted to make sure that we did a fulsome review and we did. And as we look through things, we felt that it was better to stay as a stand-alone business because we felt like we could execute and deliver more value for our shareholders through that execution in the short term and in the medium term so that we could actually put that forward.

As to the portfolio simplification, we started that last year, and we are planning on really working through that very quickly as we enter into 2026. Again, good discussion for a couple of weeks from now, but we are, as I said, a software data and analytics platform, and that's how we're looking at the business.

Your next question comes from the line of Gavin Fairweather with Cormark.

Nice to reconnect Mike and happy to hear that Altus is staying public, nice to hear. Maybe just firstly for me on ARGUS Intelligence and the rollout, nice to hear about the double-digit growth there. Last quarter, you did talk about the pricing that you're achieving on renewal. Maybe you could give us an update on how your results are tracking versus your 15% target there.

Yes. Look, we -- as we mentioned, ARGUS Intelligence is going through -- we're in a very meaningful migration and upgrade pattern and ARGUS Intelligence is performing extremely well. And from a growth perspective, we're seeing high double-digit growth in ARGUS Intelligence. high double-digit growth in our ARR. As I mentioned, our net revenue retention, which is a function of cross-sell and upsell activity is well north of 100%.

And even from a pure retention perspective, we're having a great client logo retention as clients are going through a change. So highlighting very strong renewals of our customers. It's showing the benefit of our price increase, which we are -- which the clients are absorbing and translating to very high customer revenue and logo retention. But we're roughly 56% of the way through the migration to ARGUS Intelligence. And I would say roughly about 70% of that is landing as seat-based, 30% of that is landing as asset-based, and they're both coming with pretty meaningful price increases. And so one, it's a good proof point that it's delivering what the clients are looking for and two, gives us a very long tail to continue to drive adoption and flip more clients over to asset base over time.

And then just secondly for me on Analytics margins. They just continue to surprise to the upside here. I know you got your 35% target for next year, which the business is getting pretty close to here in the Q3. So I'm curious, when you get -- when we get into a cyclical recovery, I mean, there should be some nice margin tailwinds. Is there anything preventing margins in analytics from kind of pushing higher than that 35%, like specific areas where you might want to reinvest for growth?

Yes. Look, we've talked about for quite some time that there are multiple paths for margin improvement for this business. And so we continue to execute on that. We're very pleased with the 440 basis points expansion year-to-date on a consolidated level. But to your point, Gavin, the 250 bps that we're getting year-to-date from analytics. Obviously, it's a function of the fact that we're continuing to grow both total and recurring revenue despite the fact that we're in a challenged commercial real estate market environment. Obviously, there are a lot of signs of that dying. But in the current market environment for us to be able to print the level of growth that we're generating is pretty phenomenal in my book.

We've also highlighted the fact that we continue to focus on portfolio simplification. And so just proof of that with the disposal of the fair rates guarantees business last year, and we're also consciously exiting the services business where we implement non-Altus products as well as exiting some nonprofitable businesses in Canada associated with the appraisal business. Despite that revenue headwind, we continue to be able to print very solid consolidated revenue growth and recurring revenue growth. So that's a great news, story for us.

Obviously, I highlighted in the prepared remarks the notion that we continue to right size Altus and so we are going through a pretty large restructuring. We also have a very large focus on G&A, which we'll talk a lot about at Investor Day upcoming to make sure that we can continue to rationalize both our spend and our real estate footprint. And so -- and we continue to leverage the GSE. I think roughly 15% of our employee base now in terms of total headcount is sitting in the GSE. And as you guys will hear from us at Investor Day, we're going to continue to push on that. So Gavin, it's a great question. We're very proud of the margin improvement that we're delivering, and there's a lot of opportunity ahead of us to continue to do that. And so we look forward to talking to you about that on the 20th.

Your next question comes from the line of Erin Kyle with CIBC.

I wanted to ask a question just on the guidance revision here. You trimmed fiscal 2025 guidance last quarter, and then we've taken it down again this quarter. So I just want to dig into that a little bit. I know last quarter, the guidance cut was due to the slower BMS activity. It sounds like the answer to this is no. But are you seeing any softness in ARGUS Intelligence sales? And are you still seeing that 20% yield on pricing that you mentioned last quarter? Or how should we think about the guidance revision for '25?

Yes. Look, we've got 60 days left to go in the year and the quarter. So obviously, we want to try to narrow the range down as much as possible with everyone. As it relates to the guidance, I'm going to just -- again, I'm not overly concerned with the guidance concern. And the reason for that is, one, ARGUS Intelligence continues to fire on all cylinders, as we mentioned in some of the prepared remarks and as I just highlighted in regards to the ARR, NRR, and GRR growth that we're seeing in that business. We did allude to the fact that there is a pricing uplift on the conversion.

On a blended basis, we're seeing about a 16% price increase. Seat is about 10%, asset based is about 30%. So very good price absorption. And then when you match that up with the strong net revenue retention and strong gross revenue retention to tell the clients understand the value that's being delivered. So that is a very positive story.

From an analytics, just to round out the story, the other big component, the other big core franchise is VMS, and we've talked about that a few times in the sense that our VMS revenue is predicated on our clients deploying assets. And given the fact that we are seeing still some tepid in regards to asset deployment, we're not seeing that inflection in VMS. With that said, we have a very healthy pipeline. We have a growing backlog, and we do see that this opportunity is extending into 2026. So therefore, we're just rightsizing the guidance for 2025 with the inflection period into 2026.

Appraisals and Development Advisory is lower than we had anticipated from a top line perspective, but the team is doing a phenomenal job in executing what we said we wanted them to do in terms of driving more profitable growth. But that top line does have an impact on consolidated revenue. It's just math. And so again, the premise that the guidance was to really help both the Q4 and the full year is do the math for you guys and give you a view of where we see things are playing out.

And again, like I said, there's a lot of optimism in regards to where we are from a product road map and a commercialization perspective. The CRE market is fine. We are seeing positive signs of activity. Asset values have seen double-digit gains across all major sectors on an annual basis in Q3. Cost and availability of capital continue to improve as the Fed dovetails into an easing monetary policy, pick your report, but the Q3 Preqin is estimating that dry powder for commercial real estate stands at approximately $395 billion globally. We are seeing transaction volumes starting to trend in the right direction, albeit still down low single digit year-over-year, it is up on a sequential basis. So as the market continues to signal price stability and we are seeing favorable rate trajectories, these all position us well to accelerate the market adoption of our new product innovation. So we're really excited about 2026 and finishing the year off strong.

And maybe if I can just follow-up with one -- another question on the strategic review and the conclusion there. You mentioned it was wide ranging and considering several options, including the solicitation of offers. So bid. Maybe to the extent that you can comment, were valuations that you were seeing throughout the process in line with what you would have expected? Or yes, anything you can add there for additional color would be great.

Yes, sure. I mean I think that we -- with the review that we did and we looked internally and looked externally and we also try to look at many different options there. We did get things that were I would say, pretty good when it came to the standpoint of valuations. But to be honest, as we looked at our framework and how we were evaluating that and how we would execute going forward and what the team believed, we felt that there was more value that we could drive for our shareholders.

And as we sat down as a Board, it became evident that we knew like what that execution plan would be. We knew how that we would take advantage of art intelligence, as Pawan has said, and how we were going to start to really think about the business as we're going to accelerate. So we moved forward with the game plan as we did, and we know what we are marching towards over the next 3 to 5 years.

Your next question comes from the line of Paul Treiber with RBC.

Just a couple of questions for Mike. Just on the value creation plan that you mentioned, you said that you wanted everyone to be aligned. Is that plan that the go-forward value creation plan, does that differ from what the company has messaged to investors over the last couple of years?

Paul, no, not necessarily. What I would say is that I think we're looking at an acceleration of that plan. I think that as we have gone through things over the last couple of years, we have been -- I mean -- and to be fair, the team has been working very methodically on trying to change the business and really get it started to be focused towards being more of that software and that data and analytics business, which in a lot of ways, is a pretty good side lift. And I think as we are looking forward, when I get back to the alignment is now that we feel like we have the pieces and parts, now it's going to be adding those in faster so that we can get a faster group.

So as you look at things like on where do we want to continue to invest and grow, that's -- we have a good perspective on that. As Pawan said, we are looking to really look at how we can increase profitability. And we've been doing that consistently, but we think that we have a -- we feel like we can really work on that as well. And then that when I look at things and just execution plans, it's just really putting yourself out there in a couple of years, working yourself backward per quarter to see how you're going to really get customers value and how they're going to adopt our products.

And we've been really talking about that and trying to create a value prop -- like a quantitative value prop for our customers. And our customers are seeing what that could be. So I think from our view, that's the alignment that you can get to. It's not an alignment of person's thought processes, but it's more on how we're going to execute.

And then second question, just on the strategic review. Does the Board see possible divestitures and/or acquisitions as part of the value-creating strategies going forward here?

Good question. I would say -- so -- the answer on the divestitures is we're always looking at that, and we will talk about that on November 20 and at the Investor Day. And then I would say that we're going to be focusing on driving value back to our shareholders in the nearer term. We think that we have the pieces and parts in place. Certainly, if there's something that is out there that becomes interesting to us as we've done in the past, we'll consider it. But right now, we really think that we're going to be focusing on driving the value back to our customers in the short and medium term.

[Operator Instructions] Your next question comes from Richard Tse with National Bank Capital Markets.

Welcome back, Mike. I had a question also on the strategic review. You said that you had some inbounds that were pretty good. At what valuation would you consider or would you have considered pursuing those strategic options?

That's something that is between us and the Board. We looked at a variety of things. And as we were walking through what we were seeing from the market, we're very happy at like how people made a lot of time to take a look at us and we spend time with them. But again, at the end of the day, we felt like we can drive a lot more value for our shareholders in a short-term and medium-term consequence. So that's how we just went through it.

And then as you come into the job here early next year, is it fair to sort of ask you what your top 1 or 2 operating initiatives are going to be in terms of priorities for 2026? Or should we wait until you're actually in that job?

I think it's fair. It's early, so I appreciate you just getting right down to it. The -- I would tell you the following. When I look at just our execution and how we can accelerate that execution, that's really what I want to get down to on this. And in talking to the team and talking to the Board, it's been a focus for all of us so far. And that's, again, one of the reasons why we look strategically at our options. I also think as we look through this and to where Pain has talked, we have a lot of opportunity to really continue to get the good growth with our core franchises, and we really want to accelerate that growth as well as to accelerate the profitability. So I think as we go on this, what I would call, march with the team, we think that, that is -- we're really going to line up to this so that we can be a very good and strong growing software company.

Your next question comes from the line of Kevin Krishnaratne with Scotiabank.

I've just got one. I think you mentioned that you're 56% on the way through the ARGUS Intelligence migrations. I'm wondering if you can comment on adoption of the various different packages. There's the core portfolio and benchmark management. I'm wondering if you can give any update on how those are trending? Are they within your expectations? And maybe I'll follow up after that.

Yes. Kevin, great question. Maybe I'll start the answer and then I'll hand it over to Rich Sarkis, who heads that up. So as you know, Benchmark Manager, Portfolio Manager, a big add-on that we brought on board with ARGUS Intelligence. We just recently launched it. We're seeing a very healthy pipeline. We expect a fair number of clients to be closed by the end of the year in addition to the clients that we have today. The first iteration of Benchmark Manager was designed with a voice of the customer in mind where we literally have the lead product manager sit on BMS quarterly reviews with clients to be able to create a scenario that can mimic the benchmark analysis that we provide clients through that BMS process. We're also leveraging that technology internally, as you guys heard in the past in terms of Project One, which is driving greater efficiency within our business and using as the biggest customer of our own product, using that innovation that comes out of our own use to bring that to the marketplace.

Look, in order for clients to have access to Benchmark Manager, and we've mentioned this in the past, they do have to move their models to the platform. So there is some work that the client has to do. But we are leveraging our own automation capabilities through the Altus ID and Reonomy ID to help facilitate that. As part of the continuing involvement of the product, we are adding more MSAs and more cities to the view. We're expanding the property subtypes. We just had a large release recently, and we continue to add more property subtypes. But punchline, Kevin, is we're iterating fast based on a kind of a full circle of continual feedback loop from our early clients to continue to evolve the product.

And so that gives us a lot of upside in the sense that our sales team has a great opportunity to stay engaged with clients and continue to build the pipeline, not only as they one, migrate to ARGUS Intelligence, but now the opportunity to follow that on with the add-ons that we're continuing to bring more and more to the platform. And so that gives us a pretty long runway in terms of opportunity and growth, both from a new logo perspective, but also from a price volume perspective as well, too. But Rich?

Yes. I think you covered that really well. I think the 2 points that underscore are, one, the rapid pace of iteration, right, real modern software development and not iteration done in a vacuum. This is with both the internal and external voice of the customer, obviously, with our several hundred BMS practitioners providing us that voice of the market internally, but also spending a lot of time with customers who have the core ARGUS Intelligence product, previewing Portfolio and Benchmark Manager with them and getting that feedback that has informed our road map.

And the second piece is really around thinking about the core ARGUS Intelligence product that, as Pawan mentioned, is having really strong traction as the launching pad for future upsells and cross-sells for Portfolio and Benchmark Manager, both of which would require a move to asset-based pricing. So I think we're just really starting to scratch the surface around that asset-based pricing uptake as well in '26 and beyond.

And for that very comprehensive answer. I'm wondering, like do you think that the Benchmark Manager, is it something that will be valuable to both your largest customers and the smallest? Or is it something that might only be adopted by large? I'm just trying to understand where you think -- what type of customers might be the best suited for the product? Or is it kind of something that you think over time can be beneficial to big large and small?

That's a great question. And I think the answer is both. For the larger ones, this is a great complement to some of the benchmarking insights that they are currently getting from our BMS colleagues on a quarterly basis with Benchmark Manager that really brings it to life and allows that intra-period inspection and diving into the benchmarking trends, which really brings those benchmarking reports to life. And for the smaller and medium ones, there's almost like a democratization of benchmarking where now it is available for those who have perhaps a smaller portfolio or different types of assets and different pricing models that they are looking for. The Benchmark Manager software really unlocks that capability for them, whereas previously, they might have been sort of not able to get that type of capability.

There are no further questions at this time. I will now turn the call back over to Pawan for closing remarks.

Yes. Thanks again, everyone, for joining us on this call this evening. And as always, please don't hesitate to get hold of us through Camilla or Marty, if you have any follow-up questions. With that, I'll conclude the call and look forward to seeing everyone at Investor Day. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.