Altering Group Limited's (ASGTF) Second-Quarter 2025 Earnings Discussion Transcript

Altering Group Limited's (ASGTF) Second-Quarter 2025 Earnings Discussion Transcript

Altus Group Reports Q2 2025 Earnings, Showcasing Strong Performance and Strategic Transformation

Altus Group Limited (OTCPK:ASGTF) has announced its Q2 2025 earnings, demonstrating a strategic transformation with impressive margin expansion, despite a slight revenue miss. The company posted earnings per share (EPS) of $0.50, beating estimates by 44.47%, even though revenue was $131.45 million, below the expected $133.7 million.

The earnings call, held on August 7, 2025, was led by Camilla Bartosiewicz, Chief Communication Officer. Key participants included Jim Hannon, CEO and Director, Pawan Chhabra, Chief Financial Officer, and several analysts such as Paul Michael Treiber from RBC Capital Markets, Research Division, Richard Tse from National Bank Financial, Inc., Research Division, Yuri Lynk from Canaccord Genuity Corp., Research Division, and Stephen MacLeod from BMO Capital Markets Equity Research.

Recurring revenue grew 3.7% to $100.8 million, now representing 76% of total revenue, primarily driven by the cloud-native ARGUS Intelligence platform, signifying Altus Group's transition towards a SaaS (software-as-a-service) business model.

Highlights from the Q2 2025 earnings and analysis include:

• Margin Expansion: Adjusted EBITDA rose 55.7% to $28.5 million, with a margin of 21.7%, due in part to cloud adoption and operational efficiency.
• Share Buybacks: Management returned $101.7 million to shareholders through share repurchases, reducing shares outstanding by about 6.5%, signaling strong confidence in long-term value.
• Financial Position: Despite a 30.5% decline in free cash flow, Altus Group maintains robust cash reserves at $382.7 million with a conservative debt-to-EBITDA ratio of 1.26x, supporting financial stability amid market uncertainties.
• Market Reaction: Shares fell 8.72% post-earnings to $47.26 despite the earnings beat, reflecting investor caution in the near term but also suggesting a potential buying opportunity given the company’s strategic repositioning and margin outlook.
• Valuation: The stock trades at a discounted 12x P/EBITDA multiple, while analysts forecast a 10-20% upside over 12–18 months fueled by margin improvement, U.S. market penetration, and platform dominance.
• Dividend: Altus Group is set to go ex-dividend on September 29, 2025, with a payment of $0.11188 per share scheduled for October 15, 2025.

The call emphasized Altus Group’s ongoing focus on transforming into a data-driven, cloud-based SaaS provider, underpinning recurring revenue and client retention. The company’s capital discipline and strategic realignment amid a challenging commercial real estate market highlight its long-term growth potential.

Readers are cautioned to refer to the forward-looking information disclaimer in today's materials. The press release, MD&A, financial statements, and slides accompanying the prepared remarks are available on Altus Group's website and have been filed to SEDAR after market close on August 7, 2025.

In summary, Altus Group’s Q2 2025 results reveal strong earnings performance and margin gains driven by digital transformation, making it a strategically attractive buy despite short-term share price weakness.

Investors may find it worthwhile to consider Altus Group's shares due to its margin expansion and transition towards a SaaS (software-as-a-service) business model, as shown in the Q2 2025 earnings report. The company's strong financial position, coupled with a dividend payment scheduled for October, makes it an appealing investment opportunity in the finance sector.

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