Altus Group Limited

Thank you, Michael. Good afternoon everyone and welcome to Altus Group's second quarter results conference call and webcast for the period ended June 30, 2019.

For reference, our earnings results news release was issued after market close this afternoon and is also posted on our website, along with our MD&A and financial statements. Please visit altusgroup.com to obtain these documents and for more information.

On today's call, we will begin with an overview of our performance, including a discussion of our financial results and noteworthy developments. We will finish by taking questions from analysts and institutional investors.

If we miss anyone, please contact me directly after the call. Joining us today is Bob Courteau, Chief Executive Officer, Carl Farrell, President; and Angelo Bartolini, Chief Financial Officer.

Before we get started, please be advised that some of our statements today may contain forward-looking information. Various factors and assumptions were applied or taken into consideration in arriving at the forward-looking information that do not take into account the effect of events announced today.

There are also numerous risks and uncertainties that could cause actual results to differ materially from those set out or implied by such statements. These are all described in our company's filings and on SEDAR.

Our comments and answers to any questions must also be considered in the context of the disclosure in those materials. Also, please be reminded that Altus Group uses certain non-GAAP, non-IFRS measures as indicators of financial and operational performance.

Readers are cautioned that they are not defined performance measures under IFRS and may differ from similar computations as reported by other companies. And accordingly, may not be comparable to financial measures as reported by those companies.

We believe that these measures are useful supplemental measures that may assist investors in assessing an investment in our shares and provide more insight into our performance. And with that, I'll now turn the call over to Angelo, who will start with our financial performance.

Thank you, Camilla and thank you all for joining us on the call and webcast this afternoon. I'll begin with the consolidated financial review of our performance in the second quarter and then drill into business segment performance.

Before I do that though, I would like to remind you that we have implemented IFRS 16 using the modified retrospective approach, which means that the change of the treatment is only reflected in the current period and beyond. We have not, in other words, restated prior periods.

In both our interim financial statements and MD&A, we present specific line items separately that relate to this change to enable the reader to understand the specific impacts to both the P&L and balance sheet. In order to provide the reader with comparability with past periods, we have modified our definition of the non-GAAP measure, adjusted EBITDA and adjusted EPS to reflect our rent or occupancy expense that would have been measured on a consistent basis with prior periods.

We will continue to report in this fashion for the balance of this year to guide users in this transition, but we'll monitor best practices and determine whether it is best to alter these metrics in future. Turning to our Q2 results.

We posted the strongest quarter in our company's history, setting new highs for our Property Tax group and leading to record consolidated performance. While the cyclical and seasonality annuity invoicing in the U.K.

Property Tax business was a key driver, on balance we had robust organic growth across the business. Consolidated revenues were CAD153.7 million, up 14.5% from prior period, driven primarily by 30% revenue growth at Property Tax and 7% growth at Altus Analytics.

Our Valuation and Cost Advisory segment and our Geomatics business posted single-digit improvements. Consolidated adjusted EBITDA was CAD31 million for the quarter, up 30% following the strong performance from Property Tax.

Consolidated profit in accordance with IFRS was CAD13.3 million and CAD0.34 per share basic and CAD0.33 per share diluted. Adjusted earnings per share for the quarter were CAD0.52 compared to CAD0.40 last year.

And highlighting our strong cash generation during the quarter, cash from operating activities was CAD5.1 million. Moving on to the segment review.

At Altus Analytics, revenues were CAD50.2 million, up 7% over last year. Of the revenue growth, the acquisition of Taliance represented 3.4%.

Going into the quarter, the bar was set high as Q2 2018 results included a sizable subscription contract, which as you recall had a large upfront revenue component. Nonetheless, we continue to experience solid growth in our AOD sales, and also saw higher maintenance revenues supported by AE renewal rates of 97%.

Along with seeing double-digit growth in our Appraisal Management business, recurring revenues or contract values for software subscriptions are recognized ratably over the contract term were up 17% from last year. In the month, we also experienced higher growth in software consulting and education services and due diligence assignments.

Adjusted EBITDA for Altus Analytics was CAD11.2 million, up sequentially over Q1, but down 14% year-over-year. Although, we benefited from higher revenues, investments in ongoing product development and in our sales and delivery areas impacted earnings.

As we have indicated on recent calls, our product development costs are leveling off and our expectations are for moderate growth in proportion with revenue growth. As many of you are aware, we recently provided annual guidance for Altus Analytics business, and I'll just reiterate that our outlook for the year remains intact.

We're well positioned to meet the 2019 guidance targets we set out on our June 26 Investor Update call. Moving onto our CRE Consulting segment.

Revenues rose 21% to CAD93.1 million and adjusted EBITDA rose by 67% to CAD32 million, driven primarily by the exceptional performance from the U.K. region of our global Property Tax group.

As mentioned Property Tax posted record results. Revenues were CAD65.3 million, up 30% with strong organic growth across the board.

We saw double-digit growth in the U.S. as a result of higher appeal volumes and increased assessment values, which led to higher savings for our clients.

We saw a double-digit growth in Canada, specifically driven by strong performance in British Columbia and Alberta, both annual cycles that tend to have a higher concentration of settlements in the first half of the year. Although Ontario continued to be impacted by the appeal process changes, revenues improved sequentially and we are starting to see a positive trend in the current cycle case settlements, which have doubled sequentially from the first quarter.

And in the U.K., we experienced a solid quarter as per our expectations with annuity billings, which represented CAD9.9 million compared to CAD4.7 million last year. Recall this reflects annual billings or revenues related to the cumulative number of 2017 cycle cases settled in 2017 to pre-April 2019 time frame.

This occurs only in Q2. Next year, we expect this number to be higher, reflecting the number of additional appeal cases, which would be settled between Q2 2019 and Q1 2020.

Our outlook for the Property Tax remains solid. We're on track with our expectations of appeal settlements.

Our expectation remains that will have a gradual pickup in appeal settlements in both Ontario and the U.K. in the second half of the year, accelerating into 2020.

Also given the backlog of cases, we expect settlements to carry well into the next cycle. As we have stated previously, we continue to expect a record revenue year, but would like to highlight that given the annuity billings, Q2 should represent our strongest quarter for the year.

Moving on to other business segments, Valuation and Cost Advisory performed as expected, with solid growth coming from our cost practice. We expect to see steady performance and continued stable margins as we move forward.

At Geomatics, despite the continuing market challenges it is facing, revenues, earnings and margins all improved. We continue to expect these improvements to continue for the balance of the year, and expect will remain profitable.

Finally, in our Corporate division, Corporate costs trended higher, consistent with our earlier statements that they would increase as we continue to scale our business also as a result of higher accruals, our variable compensation and incremental professional advisory fees. At the end of the quarter, our balance sheet remained strong.

Bank debt stood at CAD150 million, representing a funded debt to EBITDA leverage of 1.9x. Our cash position at the end of the quarter was CAD51.6 million and as noted in our MD&A, our credit facilities mature at the end of April of next year.

We are currently in the process of reviewing our credit requirements and expect to negotiate a renewed facility well in advance of maturity. With that now, I'll turn it over to Bob.

Thanks for that summary, Angela, and good afternoon everyone. We're really pleased with our financial and operating performance in the second quarter, which as Angela pointed out sets a new quarterly record.

Quarters such as this one really underpin the strength of our growth strategy and speak to the future oriented returns of the various investments we have pursued. They have enabled us to consistently and steadily grow consolidated revenues since the company's IPO back in 2005.

With a great run ahead for our Property Tax business, due in part to where we are in the cycle in 2 key markets Ontario and the U.K., this is the start of a great period as we've been saying, plus a very attractive future financial profile of our Altus Analytics business as we transition to a recurring revenue model. It's an exciting time for Altus Group and by extension for our shareholders.

On a recent call, we spent a lot of time on the Altus Analytics strategy. So I'll lead with Property Tax today.

As you know, one of the drivers of our growth strategy has been to grow and scale our property tax business, where our penetration is still relatively modest to the size of the opportunity ahead, especially in the U.S. and the U.K.

Over the last several years, we have been pursuing various organic growth initiatives to drive market share gains, enhancement of technology and data to improve operating efficiency and client value and financially, accretive acquisitions to expand geographically. Although our performance in tax exhibits quarterly variability, this quarter been no exception.

We've been steadily growing, and enhancing this business. The returns of our investment strategy may not always be apparent in our immediate financial results, but it was, as we've always said, we have a clear line of sight on the payback and this particular quarter speaks to the attractive returns for our strategy.

Specifically the acquisition of CVS provides an applicable example. We recognize the attractive opportunity of bringing CVS together with our U.K.

Property Tax group, aside from the immediate synergies and the doubling of our size recall we kept some expenses on to grow our market share. Well, some of our competitors hit the pause button amidst some of the uncertainty brought on by the process change, we opportunistically accelerated our efforts to build out our pipeline.

And in parallel, by successfully integrating the business, we improved our operations across a number of key process indicator metrics. Couple of examples, we're achieving the higher success rates than the national averages.

Through process and organizational improvements, we're increasing our efficiencies and are operating at a higher margin post integration. The value of our pipeline is higher, not by -- just by sheer size of files, but it reflects improved pricing terms and value per appeal and overall we currently rank as having the highest rate of moving our clients through the system.

This speaks to the strength of our processes and the quality of our team. And now we're better positioned over our competitors.

The cyclical and seasonal annuity billing in Q2 was definitely a driver but the size of it is a direct byproduct of the improved operating model. I did want to take this opportunity to recognize the excellent performance of our U.K.

Property Tax team under the leadership of Alex Probyn program and also congratulate our Canadian and U.S. team for their terrific contributions.

It was a classic quarter where each one of our geographies, each national division put up strong double-digit growth. As you've heard us say before, this business has a great growth runway ahead with 2020 having strong potential to be a better year.

This will -- this also provides us with a good backdrop for our consolidated performance, while we transition our analytics -- Altus Analytics business in 2019 and 2020 and then a little bit more on that in just a second. The other services business Cost and Valuation Advisory and Geomatics are exceptionally well run and continuing stable contributors to our growth and profitability.

There has been significant progress made in implementing technology in their business processes and we're excited about some of these advancements, such as the use of ARGUS state master and our cost group in both internal and client workflows. In our Altus Analytics business, as mentioned, we recently provided a detailed update on our June 26 call.

So I'm going to be brief. Overall, we had healthy performance, especially when you consider that on a comparative view, AA posted a very, very strong quarter last year where the big subscription transaction contributed to growth over a comparative second quarter that had historical high sales of AA the end of DCF support.

Consistent with our expectation, we're seeing a sustained trend of existing customers returning to buy more licenses and add new functionality, while continuing to attract new customers. We're also on the trend with a growing mix of subscription sales driven in part by another strong ARGUS on demand quarter.

In fact this was our best ARGUS on demand quarter ever. This particular quarter, we saw a good balance between high-value and high-volume transactions, including 2 notable deals with a global service provider and a European-based investment management firm.

As you've heard in our recent call at the end of June, we're just starting our initial push with the cloud. In July, we launched AE 12, an update version of ARGUS Enterprise that is now powered by ARGUS Cloud.

Argus Enterprise 12 builds on the strength of our industry leading CRE valuation capabilities and now includes cloud only deployment and multi-instance support of ARGUS Enterprise, plus new cloud benchmarking and dashboard functionality, enhanced workflows through integration with ARGUS Taliance and ARGUS Voyanta and support for German and French market valuations, which we expect will support our efforts to grow market share in those regions and take our customers globally. Coinciding with the launch of ARGUS Enterprise 12, we recently completed our sales training programs to prepare a sales force for selling cloud and initiated our client marketing campaigns to promote the benefits of moving to cloud.

Additionally, we also initiated the transition of our internal ARGUS Enterprise users from our Canadian valuations group and US Appraisal Management group will be migrating all of our internal users to ARGUS Enterprise 12 in the cloud transferring over 10 years of historic models. We expect that our internal experience with the transition will enhance our ability to better support clients as they transition.

And although we're just starting with their initial push with the cloud, with our hybrid strategy for the balance of 2019, customer feedback is very encouraging, both from large and small customers and our cloud pipeline is already starting to build. We're taking a very focused approach by segment, in our customer base, leading with migrating some of our current smaller customers, while also engaging with the larger most influential firms, but who could help drive adoption through the ecosystem.

Based on our discussions to date, the motivations for chains vary from looking at lower cost and reduce the hassle of their own IT infrastructure to wanting to benefit from sharing data in the cloud, plus taking the benefits of the new benchmarking feature. Many of our customers also already have a cloud-first strategy, so it's a natural move for some of those clients.

As we prepared for this move, security of data is of importance for many clients. So we're also engaging with our client security groups and IT departments, but overall the comfort level is there as many of our clients offer application that are already cloud-based.

Like it's still early days since we launched ARGUS Enterprise 12, but we've already seen several net new cloud deals and 1 upgrade an on-premise client who decided to move to the cloud. So for all in the Americas, with small to medium size clients as those transactions generally close faster and we're growing our pipeline as we drive demand from the AE 12 release.

Also of note, subsequent to quarter end, we acquired One 11 Advisors, a highly regarded real estate consulting and software firm. In addition to strengthening our software consulting services capability, the unique expertise in complex CRE software and analytics, client needs supports our strategy of serving our clients with (inaudible) solutions to meet their various commercial real estate technology and data strategy needs.

As the industry request more managed services, we'll be able to scale much faster as we call on the knowledge of One 11, who have built these over the last several years. After all, we're not just selling products and services, we're solving business problems for our clients.

We have relationship to the highest levels with the world's largest and most influential CRE firms and clients increasingly view as the research and development provider partner and strategic advisor. Given their expertise, the acquisition of One 11 is strategic from that regard and supports our strategy to increase enterprise selling with our top 200 clients and the deployments that go with that.

Touching briefly on our Appraisal Management solutions, as Angelo mentioned we had a solid double-digit growth quarter. This remains an attractive growth opportunity for us.

And we're making some general enhancements to our data exchange workflow software to include some new functionality that we expect will drive both client value and improve our internal workflows and also, integrating it with ARGUS Cloud then moving all of our internal database to ARGUS Cloud. As you've heard me say before this offering increasingly converges with our ARGUS line of business and the transactions that come from that.Kudo to Rick Kalvoda, his management team and the whole RVA team, they have incredibly tied relationships with their customers.

Overall, we feel really good about the next phase of growth for our Altus Analytics business and our ability to get back on the long -- on the path to long-term steady double-digit topline and profitable growth had expanded margins. The market fundamentals remain exceptionally attractive and support our growth ambitions and we're very well positioned for the opportunity ahead, especially with our cloud strategy which allows us to improve the economic value of our contracts.

As Angelo mentioned, our investment spending is starting to flat now and then we expect to balance 2019 revenue growth with investment in strategic areas that extend the moat around our business, enabling us to continue our business transformation and maximize shareholder value. So in closing, I wanted to reiterate that we remain in growth mode.

We're very energized by the market opportunity ahead of us and there are a lot of components to our strategy, but first of all, we have a solid track record of execution, a significant market advantage, plenty of room for growth, and quite frankly, we've only scratched the surface. We have innovation in every one of our businesses and we have the best people.

With that, I'd like to open it up for questions.

Good to see the spike in Property Tax. Excuse me, I got a frog in my throat.

Bob, Angelo, we have good comfort on the visibility on the Ontario cycle in the second half and in the 2020. Less than in the U.K., what can you talk about in terms of visibility there, how it is improving, and what are the kind of indicators that you have that give you a sense that you'll get some pickup in the second half of this year?

We have great internal visibility actually. We track our performance rate from end to end.

I mean, we've got a very strong and deep pipeline. We're starting to see appeal settlements increase sequentially and we expect it to continue into the back half of this year and into 2020.

So, our visibility is good and we're very confident about it.

Okay. And I think you mentioned that the annuity billing doubled year-over-year to CAD10 million or more than doubled.

Are you seeing a shift between customers and their preference between annuity billing and non-annuity billing in the U.K. in particular?

And how is that trend shifting since you bought CVS?

Well, actually the standard contract is sort of annuity billing based. So it's -- we charge our clients on an annual basis for the most part.

We still do have a segment of our clients that are on our legacy system, where we charge for the full cycle savings when we settle the case, but the most significant part of the pipeline is on sort of this annuity billing basis.

Okay. 2 minor follow-ups on the Property Tax side.

Can you comment on what market share gains you're seeing so far versus pre-CVS? Or is it too soon in the cycle?

We continue to add new clients consistently. We have a very strong business development team.

And so we're continuing to capture market share. We started off in sort of that mid-to-high teens.

And we're growing that segment. We're continuing to grow our market share both in pipeline and in settlement volumes.

Okay, excellent. And then the last one and I'll pass the line.

I think Bob, last quarter you said you were comfortable with consensus for 2019 on Property Tax, it was around CAD200 million. Are you still comfortable with that?

Are you more confident that you can see that any kind of thoughts on the balance of the year?

Yes. No, I'm comfortable with that.

Nothing has changed from last quarter. I think the fun part of this for us is that, we've been talking about Q2 now for 4 quarters as a turning point and a really robust period for tax and we were able to do that because of what Angelo was talking about.

We have really good visibility and metrics into the business. And so I think there was some anxiety about how this quarter was going to land.

It's good, it's behind us and we feel really good about the rest of the year.

Bob, could you or Angela, could you talk a little bit about where you think the peak in the cycle now lands in terms of the first half of 2020? We've sort of shifted around that peak cycle with regards to Ontario in the U.K.?

Well, we continue to grow the pipeline, as I mentioned. 2020, I mean, both Ontario and the U.K.

should improve on a year-over-year basis, just because of the increase in volumes. And then in terms of just the annuity billings in Q2 of next year, so I mentioned in the script, whatever we settle this year, will get added on and build in -- on annuity basis next Q2.

So next Q2 should be even stronger, 2020 should be a very strong year. And then given the backlog that -- we just see and have in terms of in both U.K.

and Ontario, there's just so much volume that we just can't see it all being settled in a sufficient manner by the end of 2020. So we expect a very large spill over into -- well into 2021 and possibly 2022.

Okay, great. And then maybe talk a little bit, Bob, given his prepared remarks about the early reception to [ADM] the shift to the cloud.

Normally we wouldn't talk about pipeline, but anything you can characterize in terms of how clients have reacted, you mentioned the 2 early wins there. But what you and Carl are seeing from clients in terms of their willingness to shift over?

Yes, perhaps I'll take that one. We spent a lot of time listening to the clients before we released AE 12 and the commentary has gone straight into the quarter, we were seeing good reception.

The pipeline is building. We only released the product at the end of July.

The sales team are trained. We're seeing great pipeline build that understanding the value proposition.

We're just trying to make sure we get aligned and explaining the value proposition as we go forward, but some early deals have already come in. I think in the remarks there and we expect that to continue.

Yes, the only thing I would add to that is, one of the things that's going to happen and we sort of touched on it in the prepared remarks. Look, we just had a record AOD quarter, which is a precursor to the kind of volume we expect to see for cloud in the smaller mid-market.

It's going to come in fields. We're already proven that with AOD, and we're going to flip that base over to cloud and we're going to push our selling algorithm there.

And then in the large accounts, the large clients and we'll think about this as the pincers start from the bottom, but right at the top of the biggest companies in the world, they're all hiring digital transformation executives, they're thinking about how they're going to build their cloud strategy. And what we're going to do is make sure that ARGUS is a fundamental platform, a foundation for things like data standardization, data sharing.

It becomes something that delivers capabilities like global valuation, will present data to their workflows, and so we've got a reasonable -- we have a very good strategy to target critical thought leaders that are already trying to build their plan to make sure we align with them. And so that's the 12 strategy, get the volume, keep our SMB sales aside.

We changed our whole model frankly -- Carl did amazing job in a short period of time, creating productivity out of our volume business and our fulfillment business. And now, on top of that, what he is going to look at like we did with AE, get the largest companies in the world to move first and create that thing I call tech envy.

This is actually Andrew in place of Richard. I'm going to jump back on to the tax questions and I know it's been asked a few different ways, but as you look at the pipeline, I know that you have pretty good visibility into what's in that pipeline.

And I'm just hoping that you can provide a little bit of context into regionally how much you've actually started to work through. I imagine that in the U.K.

you work through a decent balance, but in Ontario, you might be working at a lower point. Any kind of color on that would be helpful.

Well, we don't give specific metrics. At least currently we're not doing that.

Having said that, we're at the early stages of getting through that pipeline. As you know, as we've stated previously, 2017 was the first year.

So, typically you are just preparing appeals and filing them and then 2018 given process changes that was just a very low volume year for us. And you saw that in the results and we're just starting to pick up.

And I can tell -- and I feel confident by saying that we are going to continue to have a pretty -- a number of cases that are unsettled by the end of 2020 period before we get into the next cycle. And so, it could be anywhere from 30% to 40% that will spill over into 2021.

So that's really all we can say at this point. We've just not published any metrics beyond that, but if you were (inaudible) into that and add what's going to happen in 2020 and 2019, it really talks about being well below the 50% mark in U.K.

and in Ontario. So it's pretty cool.

Like where we -- we get preoccupied talking about U.K. and Ontario.

Meanwhile, Western Canada amazing quarter. We had a great U.S.

quarter. The team down there is killing it, driving market share.

So look this is a -- this is not a 2 jurisdiction business. This is a business that's coming into a really exciting period that can be sustained for a long period of time.

And just kind of building on that exact point that it is a regional business and you're working through a pretty robust pipeline throughout the many geographies. I'm wondering if you can help us think about the margin profile by region and whether or not certain regions are a little bit stronger than others, as the U.K.

may run on annuity where as in Ontario and BC, it may run differently. So any kind of commentary as we think about the margin profile as certain region start to kind of take as they built?

It's for the most part, the U.S., U.K. and high percentage in -- I think in Canada, a consistency business.

Look when we started a number of -- when I start and I should say, it was something like 60-40, 60% T&M, 40% contingency and we've completely flipped that. And every year, it's going to be higher contingency.

And so that drives a really exciting model when you start seeing the kind of volumes that we did now and obviously other than compensation, including performance bonuses in that, we have a fixed cost, that's the beauty of a contingency business. So we got in pretty good shape.

The only variability that drives beyond that is the behavior of the government, which continue to want to get more tax revenue, usually 98% of the time works in our favor, and the volatility of market rates. And like we see continuing volatility which really helps our business.

So but we are in -- it's in a pretty good place. I don't know, Angela, would you add anything to that?

Well, I would just add that, we see great growth across all of the regions. And I would say that the margin profile is pretty consistent across all of the regions as well.

I mean, you may get particular quarters, such as the U.K., obviously this quarter would drive a higher margin, given the annuity billings, but over the course of the year it will be consistent with what we see across the board.

I just wanted to focus on the June 26 call the announcements you made the customer feedback. What's been the customer feedback, both positive and negative just in regards to the hybrid strategy that you're rolling out this year?

Again, mostly positive. We spend a lot of time talking this through client councils for that.

So there's really no surprises. Some of our customers -- larger customers maybe who just gone through an implementation, I basically said, okay.

I've just finished one maybe, I'm going to wait a little while, but we're not seeing anything at any scale like that. Most of the feedback been extremely good as Bob mentioned.

AOD record demand there. We'll see that transition to the cloud as we move to that new platform now.

So it really hasn't hit us in any ways we're not expecting. So we're going to continue to promote the benefits of moving to cloud, the several benefits for existing customers.

It's a lot of our larger customers are moving to cloud-first strategies anyway. So we're aligning to their strategies.

It seems to be quite positive.

Yes, the only thing to remember is with 3 or 4 weeks into it, we'll get a lot of feedback when we start putting new contracts in front of the large customers. And they come to understand we did a transaction in the quarter -- this quarter where they wanted to take a perpetual for reasons that made sense for how they wanted to manage their business.

We won't be giving them that option in January and -- or we could not give it that option in January as we go forward. So we're thinking about how this all plays out, but right now, we're being fairly flexible, right, as part of the hybrid model.

And the industry is getting used to cloud, though it's not a new thing for the industry. Many of the vendors are out there with cloud-only product.

So and there's a lot of pre-education been done before we got there.

And an extension to that question is, what have you seen in terms of your license pipeline, and how do you think your license pipeline will track through the year? Do you think it will diminish through the year as customers begin increasing the probability of buying in the cloud or do you think maybe it could pick up towards December?

Well, all new customers can only buy cloud subscriptions. So anyone new to us, its cloud only.

So we're giving the option for existing customers. My guess is, we're going to see more of them go to cloud.

For simplicity, some of our larger customers, when they're adding a few users may want to use their existing perpetual contract. Again, as Bob said, we're just a few weeks into this.

We're going to get more experience and knowledge of this in the upcoming months. And Paul where bias to subscription contracts.

Absolutely.

We want to -- if we want to make this transition, we got to favor those as we go forward, right. And so, and the closer we get to the end of the year, the more we're going to be over weighting that strategy.

Okay. Just 1 question for Angela here.

Could you speak to the seasonality of free cash flow? And is it typically weighted towards the second half of the year and what drives that?

Well, in terms of cash flow, we-re -- we just have got more working capital that's just generated through stronger seasonality with particularly in our tax business and so we'll start seeing the cash sort of come in the back half as well. There's bonuses that get paid out in the first half of the year as well.

And so there is more of a cash requirement, end of -- towards the end of Q1 and early Q2 for those reasons.

Well, thanks all for joining. And again, thanks to the whole team at Altus Group for a great quarter.

A particular kudos to our tax team across the board. Just a spectacular quarter.

I just said a note to one of them, now that we're talking about it, and his reply was, yes, yes, yes, we're on to the next quarter. So that's -- I love that.

This team is focused on the future. Thanks so much.