Constellation & Lumine Q4 2024 Earnings Brief
The Future is Bright
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Summary
Lumine (LMN.V) and Constellation Software (CSU.TO) released their Q4 2024 and full-year results on March 6th and 7th, 2025, respectively. These reports highlighted strong organic maintenance for CSU, solid EBITA margins, and a significant increase in FCFA2S. This analysis will delve into the performance of Lumine, Topicus, and Constellation Software (both with and without Altera), exploring cash flows, margins, M&A activity, and their impact on the long-term investment thesis for each. We will conclude with updated projections for each entity.
On a consolidated basis, the company achieved significant revenue growth in 2024. Fourth-quarter revenue reached $2.703 billion, a 16% increase over the previous year. Annual revenue climbed to $10.06 billion, representing a 20% rise. As always this growth was primarily driven by acquisitions, with organic growth contributing 1% for the quarter and 2% for the year (or 2% for both periods when adjusted for currency fluctuations).
Cash flow from operations also saw substantial gains. Fourth-quarter CFO increased by 33% ($167 million) to $678 million, while annual CFO rose by 23% ($417 million) to $2.196 billion.
FCFA2S surged even higher, with a 48% ($157 million) increase to $482 million in the fourth quarter and a 27% ($312 million) increase to $1.472 billion for the year.
Constellation has consistently delivered exceptional shareholder value, achieving a 36% total return CAGR since its IPO and a 35% CAGR over the past five years. This performance has substantially exceeded the growth rates of our key financial metrics, including revenue, EBIT, operating cash flow, and EBITA, as shown below. We will elaborate on our forward IRR projections in the valuation section.
