Constellation Software grows revenue while its shareholder cash measure falls
Canada’s Constellation Software recorded a 19 per cent rise in third-quarter revenue, while its own measure of free cash available to shareholders fell 16 per cent. Operating cash flow increased over the same period. The shareholder measure includes a larger noncash revaluation deduction and excludes acquisition consideration, making its calculation distinct from the cash generated by operations.
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Quarterly revenue increases
Canada’s Constellation Software, which acquires and manages software businesses, reported higher third-quarter revenue than a year earlier. The results cover the quarter ended in September.[1], [2]
Revenue increased from 2,948 million US dollars to 3,512 million dollars, a 19 per cent rise. Organic growth was 2 per cent, both including currency movements and at constant currencies. Net income attributable to common shareholders rose from 210 million dollars to 212 million dollars.[1]
Operating cash rises as shareholder measure declines
Cash generated by operations increased from 685 million dollars to 717 million dollars. Constellation’s separately defined free cash flow available to shareholders fell from 529 million dollars to 443 million dollars, down 16 per cent. Its calculation deducted a noncash membership-liability revaluation expense of 117 million dollars, against 16 million dollars a year earlier.[1]
The shareholder measure also adjusts for debt interest, lease payments, capital spending and non-controlling interests. Acquisition consideration is excluded from its calculation. Capital expenditure in the quarter was 20 million dollars, compared with 16 million dollars a year earlier.[1]
Nine-month cash measure increases
For the first nine months, revenue rose from 8,446 million dollars to 10,027 million dollars. Free cash available to shareholders increased from 1,259 million dollars to 1,522 million dollars. Acquisitions completed in the third quarter involved 484 million dollars in cash consideration, including acquired cash, and 125 million dollars in deferred consideration, totalling 609 million dollars.[1]
