Good morning. Thank you, Dan.

As you folks know, on our regular quarterly calls, we go directly to questions. So thank you for joining us this morning, and Dan is going tee you up for any questions you may have.

Mark, it might be worth talking a little bit about how and where you've been sourcing deals from lately. I'd be curious to see your view as to what you've seen in terms of the mix of the pipeline coming in from various sources.

I haven't done that analysis recently, Paul. Historically, we've had about 2/3 direct and 1/3 through brokers.

And historically, the majority of our leads have come out of the States. It's a very large market for us.

But increasingly, we've been generating deal flow out of Europe as well and we're starting to get a few in further flung geographies over time.

Great. If we think about executing more deals or acquisitions over time here, what are the constraints in terms of you moving forward here?

Are you constrained by capital, idea flow or just the broader valuation environment?

I would say it's letting people know the availability of ourselves as a buyer. And so there are tens of thousands of suspects out there.

It's reaching out and letting them know that whenever the time is right, we'd love to chat with them about being the new home for their business.

Great. And the last one I'll toss in here this morning is we saw good organic growth across both segments in the quarter again, which was nice.

Where -- which underlying business segments have seen the highest rates of sort of organic growth over the last quarter or 2?

Quarterly organic growth, I'm not sure, is a particularly good metric because we don't actually look to drive license revenues unlike a lot of other software businesses. We're way more interested in recurring revenues.

So I don't really focus on quarter-to-quarter organic growth. What I will do from time to time is look back on longer-term organic growth trends inside our businesses.

Because there are so many, it's a very hard thing to track on a regular basis. But obviously, the general managers of the 200-odd -- well, actually, it was 212 business units this quarter that we were looking at -- stay abreast of that stuff.

And Jamal, did you have any sort of sense for...

Yes. I mean, I sort of look at it by all of the different business units.

And it's fairly evenly spread. And there's a couple of the large verticals that are still a little bit troubled like U.S.

health care, but it was a general positive organic growth across the companies. I mean, there was comments about hardware driving organic growth.

I mean, if you look at private, which doesn't have any hardware, I mean, they clearly had strong organic growth in the quarter as well. And the impact of hardware is like 1% on the total organic growth.

So I'd say it's fairly even as opposed to one specifically driving [indiscernible].

Okay, that helps. The last one, I guess, is on the cloud side of the business, have you seen any shift in the tone in acquisitions there?

Obviously, we saw a massive deal with NetSuite announced just before we got on this call. But if we look at the smaller end of the market, Mark, have you been able to start to pick away at people who have built an interesting cloud application but unfortunately the business is uneconomic at basically acquiring customers on a sustained basis?

Have you been able to -- I know you had bought some in the past in that realm. Has there been any more start to come into the fold?

We probably wouldn't be very interested in buying one that was totally uneconomic at bringing in new customers because it means that you're buying an asset that is eventually going to liquidate itself. So one would hope that there is a way of selling the software that generates value.

I think the biggest challenge in the cloud or SaaS market is the amount of money chasing deals and driving them towards uneconomic behavior. And when one company in a space starts behaving irrationally, you don't have a whole lot of choice but to follow to some extent.

And one of the things we track is a sort of SaaS index to get a feeling for how much dumb money is going into the industry. And unfortunately, that index has rebounded.

From the beginning of 2016, it was starting to cool off, and we were starting to get enthusiastic that irrational behavior in the sector would taper off. But their stocks have popped right back up, and I imagine they will be raising more money and spending it on acquiring clients.

So I think it's as tough as it was late last year.

Mark, can you comment on the competitive environment for deals? And I'm sure, it's extremely competitive given the availability of cheap capital.

But specifically, I was wondering on small deals, which historically haven't been very competitive. Has there been any change in that regard?

Or are there typically few buyers for smaller assets that you look at?

There's always buyers. They're nice businesses and so there's always buyers out there.

I don't see it having changed a lot. We look at the ratio of those that we participate in to those we close, and it's not decreasing over time in any significant way.

Okay, that's encouraging. And then on your revenue mix, the mix of recurring revenue keeps growing, which is certainly good to see.

As you pointed out, you're focused on driving your maintenance revenue. Just curious, is there sort of a natural limit in terms of how high that can go?

I know that to some extent, you can't completely do away with license and hardware and services revenue. And so what do you think the natural limit might be for maintenance as a percentage of revenue?

If I had my druthers, I would get rid of the license revenue and just have professional service revenue and recurring revenue, the professional services reflecting the amount of effort spent installing, customizing, et cetera, the products. By vertical, the amount of PS required varies enormously.

There are some verticals that require much more than others, which can just operate out of the box. There tends to be a correlation with client size there as well.

The larger the client, the more likely they are to want customization and modifications of their product and interfaces to other systems. And the smaller the client, the less they can afford those things no matter how much they want them.

And so we are always going to have PS as a significant piece of our business. We tend to view it as something that makes our bigger client stickier and happier.

And so it's something we're happy to do. So I don't know what the limit is, Thanos, but it will vary by the different kind of businesses that we're in.

Okay, fair enough. And one for Jamal.

The tax rate was higher this quarter due to the intercompany dividend withholding tax. Just to clarify, I would imagine that would be an annual recurring item.

And if so, should the magnitude just proportionately be sort of consistent to your year-by-year? Or would there be any change on that front?

I mean, as we grow in various jurisdictions and want to repatriate cash, then the number will likely grow. I mean, in the short term, I would assume it would be something similar.

And again, just sort of a once a year event?

Yes.

And then aside for that, should we still be thinking about taxes in the mid-teens otherwise near term?

Yes. I mean, our sense has always been that taxes are going to go up over time, Thanos.

And it's a constant battle. If we happen to do a pile of acquisitions that have structures that are tax-effective in a particular year, that really helps.

If we do some that are not, then we're going to slip faster, so to speak.

Mark, I just want to go down memory lane a little bit in just thinking about the growth of the company since the IPO. If you could just recall, maybe using rough numbers, what was the number of M&A targets in your database at the time of the IPO?

And how does that compare to the current number? And then what do you attribute from an organizational point of view the growth -- the biggest drivers of the growth in that database to?

The IPO is a bit of a blur, Paul. So I don't recall what the number was.

It's been obviously very rapid. We've been working on it hard.

If you ask me next time, I'll have that number handy. And so what drove the growth was basically a process whereby we asked each of the operating groups to stake out the suspects that they wanted to pursue.

So it was pushing down a bunch of the capital allocation to the operating groups that drove the significant growth in the suspect funnel.

And then in regards to that funnel, what proportion of those -- I think the last count you gave was 30,000 in that funnel. What was the proportion of those that are typically sold in a given year?

Hey, that's a great question, which we had enormous debate over at both the board and the managers' meeting level yesterday. So we believe it's very, very significant.

And we're not seeing enough of them, and we need to improve our coverage. That's all I'm comfortable saying.

Are you comfortable saying in what ways you're looking to improve the coverage going forward?

Obviously, more resources is one of the answers. It's not like we have any easy solutions to this.

We're experimenting with a host of different ways of communicating with business owners that will like these kinds of businesses and that we're a good place for them to place those businesses for the long term when they're looking to exit.

Okay. I just want to shift over to organic growth and not focusing on the quarter itself but just looking at 2015.

You did give a breakdown of organic maintenance growth, and we can compare that against the organic growth of the total revenue line. How should we think about the organic growth of the other revenue lines in 2015?

I suppose we could go back and do that analysis. It's not something I worry about.

We concentrate on building the recurring revenues in the business, both organically and by acquisition because we think that is the driver of intrinsic value in these businesses.

But clearly, the -- like in professional services, there was a decline in '15. I mean, the maintenance is growing at 8%.

We only grew at 2% or 3%, whatever it was overall. But clearly, the other lines were down, but there were reasons for that, right.

When you're acquiring these large companies and we're focusing them on a specific portion of the market or if they came with legacy large contracts and we're declining them down, that was what was driving that sort of negative organic growth in PS.

Okay, that's clear to me. Just one more for you, Jamal.

You mentioned in the MD&A that you purchased shares of 2 public companies this year, that's in available-for-sale securities. Where would you include on the balance sheet bond international the ownership in that?

And then do you own shares of any other public companies other than those 3?

Yes. The bond is a other long-term asset, so we break down the amount in the note to the financials because we equity account for it because of our percentage ownership.

And no, we don't own any other public companies[ph] other than...

At this time.

Mark, you talked about professional services revenues. We saw a bit of a recovery in those this quarter.

They were up 17% year-on-year, just up 3% a quarter ago when -- actually contracted, as we just heard, in 2015. Any particular drivers this quarter?

They were attributable to what you just talked about. What drives typically your professional services side?

And sort of any part of that sort of new customers going live in the second half?

Yes. We have 60-odd-thousand customers.

I couldn't even hazard a guess as to how many go live in any particular quarter. There are, as I said, 212 business units.

And so what drove the professional services in each of them will vary. So it's a difficult question to ask at the aggregate -- or at least to answer at the aggregate levels.

It's pretty easy to ask. So the general themes are we go to our largest clients, and we try to do PS for them.

With the small clients, we recognize that they are much more price-conscious, and we try to be as efficient on PS as possible and to try and reduce the amount of PS required to install and configure the products. And so your R&D has a quite different focus for each of those 2 sort of segments of the market.

And then often over time, as you build the business and you get to a certain size, there's a strong case to be made to fork the code and to have a version for the large clients that gets customized, highly customized for their particular predilections and a version for the low-end clients that goes in slick and doesn't have as many features and functions.

I appreciate the color. It was just such a large delta that warranted the ask.

Maybe my second question is on the FX. It seems like FX this quarter was a bit of a less of a headwind than we saw in prior quarters.

Jamal, do you have any view sort of what FX impact will be for the second half should the rates stay where they are? I know you provided that in the past.

I appreciate any color there.

The decline in the pounds right after Brexit really didn't impact us in Q2, so I haven't analyzed where it's going to show up yet. But I mean, the U.K.

operations are -- I think on an EBIT perspective, aren't material. From a revenue perspective, there may be some headwinds there.

But beyond that, it's calculated out. From a euro perspective, I think it's -- there shouldn't be much of an impact in Q3 if things stay as they are.

And the final question maybe along the same lines. I noticed amortization was a bit volatile over the last few quarters, particularly dropped Q-on-Q this quarter.

Anything there that we should be aware of? Any write-downs or such things?

The amortization, what's flowing through there right now, it's just pure accounting amortization. It depends on the timing of when we buy businesses and the valuation that we have, and we write it down accordingly.

But...

Wasn't there some quarter-to-quarter...

Adjustments?

Adjustments?

Yes.

For a couple of million?

Yes. So there was an adjustment -- and so we did a cleanup in Q1 and there was an immaterial -- what we consider immaterial adjustments that might have some impact on that.

And then also, changes in FX also do impact since they're booked in their native currencies. But there's no write-downs or impairment that is flowing through that number.

If you look at H1 this year versus H1 last year, I think you'll be looking at apples-to-apples. Is that fair to say?

Right.

The adjustment was relatively short-term adjustment.

Okay then. Thank you, everyone, for joining the call.

We appreciate it. Look forward to chatting with you next quarter.

Bye-bye now.