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Revenue: No specific revenue figures were disclosed during the call.
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Earnings: No specific earnings figures were disclosed during the call.
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Margins: No specific margin figures were disclosed during the call.
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Cash Flow: No specific cash flow figures were disclosed during the call.
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Expenses: No specific expense figures were disclosed during the call.
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Same-Store Sales: No same-store sales performance was discussed during the call.
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Store Locations: No changes in store locations or number of outlets were mentioned during the call.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AI adoption is improving development productivity across the portfolio, enabling faster product road map execution.
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Verticalization strategy aims to strengthen market positioning and build long-term reputation as a preferred acquirer.
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M&A activity remains robust with a strong pipeline, including larger deals and carve-outs, despite competitive pressure.
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Recent acquisitions like Derby Soft are performing well, with high growth and profitability justifying premium valuations.
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Management maintains disciplined capital allocation, focusing on IRR and operating cash flow rather than working capital gains.
Negative Points
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Organic growth in maintenance and recurring revenue decelerated to 4%, below the historical 5-6% range, due to one-offs and acquisition drags.
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Altera’s organic growth is expected to remain negative for the next year or two, with a large customer loss impacting results.
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AI-driven revenue uplift has not yet materialized, with management noting it is still a ways out.
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Competition for acquisitions remains intense, with no improvement in win rates or pricing, especially at the high end.
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Larger acquisitions like Altera are harder to integrate and improve, with best practices taking longer to implement.
Q & A Highlights
Q: Can you provide more color on the organic growth deceleration in maintenance and recurring revenue, excluding Altera, which came in at 4% versus the historical 5%-6% range?A: Jamal Baksh (CFO) explained that the deceleration was due to several one-off items. These included accounting-related impacts from large acquisitions like Altera and Dark Matter, which had strong Q2 2025 comps due to upfront revenue recognition on large contracts, creating difficult year-over-year comparisons. Additionally, Lumin’s recent large acquisitions are currently dragging on growth as those businesses are being fixed, and a business in South America lost a large customer that was known about at the time of acquisition. Baksh noted that backing out these 3-4 items would normalize growth back to the historical 5% trend.
