Constellation Software : Shareholders Report (Q1 2026 Shareholder Report)

Published: 2026-05-13 15:36:13 ET CSU.TO

Published on 05/13/2026 at 03:36 pm EDT

Constellation Software Inc.

First Quarter Fiscal Year 2026

For the three month period ended March 31, 2026 (UNAUDITED)

CONSTELLATION SOFTWARE INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A")

The following discussion and analysis should be read in conjunction with the Unaudited Condensed Consolidated Interim Financial Statements for the three month period ended March 31, 2026, which we prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS). Certain information included herein is forward-looking and based upon assumptions and anticipated results that are subject to uncertainties. Should one or more of these uncertainties materialize or should the underlying assumptions prove incorrect, actual results may vary significantly from those expected. See "Forward-Looking Statements" and "Risks and Uncertainties".

Unless otherwise indicated, all dollar amounts are expressed in U.S. dollars. All references to "$" are to

U.S. dollars and all references to "C$" are to Canadian dollars. Due to rounding, certain totals and subtotals may not foot and certain percentages may not reconcile.

Additional information about Constellation Software Inc. (the "Company", "Constellation" or "CSI"), including our most recently filed Annual Information Form ("AIF"), is available on SEDAR+ at https://www.sedarplus.ca.

Forward Looking Statements

Certain statements in this report may contain "forward looking" statements that involve risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company or industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Words such as "may", "will", "expect", "believe", "plan", "intend", "should", "anticipate" and other similar terminology are intended to identify forward looking statements. These statements reflect current assumptions and expectations regarding future events and operating performance as of the date of this MD&A May 12, 2026. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements, including, but not limited to, the factors discussed under "Risks and Uncertainties". Although the forward looking statements contained in this MD&A are based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this MD&A and the Company assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances. This report should be viewed in conjunction with the Company's other publicly available filings, copies of which can be obtained electronically on SEDAR+ at https://www.sedarplus.ca.

Non-IFRS Measures

This MD&A includes certain measures which have not been prepared in accordance with IFRS such as Free cash flow available to shareholders.

Free cash flow available to shareholders "FCFA2S" refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on debt, debt transaction costs, payments of lease obligations, the IRGA / TSS membership liability revaluation charge, and property and equipment purchased, and includes interest and dividends received, and the proceeds from sale of interest rate caps. The portion of this amount applicable to non-controlling interests is then deducted. We believe that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if we do not make any acquisitions, or investments, and do not repay any debts. While we could use the FCFA2S to pay dividends or repurchase shares, our objective is to invest all of our FCFA2S in acquisitions which meet our hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities. See "Results of Operations -Free cash flow available to shareholders" for a reconciliation of FCFA2S to net cash flows from operating activities.

Overview

We acquire, manage and build vertical market software ("VMS") businesses. Generally, these businesses provide mission critical software solutions that address the specific needs of our customers in particular markets. Our focus on acquiring businesses with growth potential, managing them well and then building them, has allowed us to generate significant cash flows and revenue growth during the past several years.

Our revenue consists primarily of software license fees, maintenance and other recurring fees, professional service fees and hardware sales. Software license revenue is comprised of non-recurring license fees charged for the use of software products licensed under multiple-year or perpetual arrangements. Maintenance and other recurring revenue primarily consists of fees charged for customer support on software products post-delivery and also includes recurring fees derived from combined software/support contracts, transaction revenues, managed services associated with CSI software that has been sold to the customer, and hosted software-as-a-service products. Professional service revenue consists of fees charged for implementation services, custom programming, product training, certain managed services, and consulting. Hardware and other revenue includes the resale of third party hardware as part of customized solutions, as well as sales of hardware assembled internally and the reimbursement of travel costs. Our customers typically purchase a combination of software, maintenance, professional services and hardware, although the type, mix and quantity of each vary by customer and by product.

Expenses consist primarily of staff costs, the cost of hardware, third party licenses, maintenance and professional services to fulfill our customer arrangements, travel and occupancy costs, depreciation, and other general operating expenses.

Preferred Share Investment in Lumine

On February 22 and 23, 2023 (as part of a series of transactions relating to the acquisition of WideOrbit Inc. ("WideOrbit")), the Company's subsidiary, Lumine Group Inc. ("Lumine"), completed a corporate reorganization. At the beginning of the period, the Company owned 63,582,712 preferred shares ("Lumine Preferred Shares") in the capital of the Company's subsidiary, Lumine. The Lumine Preferred Shares were non-voting and under certain conditions were redeemable at the option of CSI for a redemption price of $21.74 (the "Initial Face Value") per share. The redemption price was to either be settled in cash or through the issuance of a variable number of subordinate voting shares of Lumine ("Lumine Subordinate Voting Shares") based on the terms of the Lumine Preferred Shares, or any combination thereof. The Lumine Preferred Shares were also convertible into Lumine Subordinate Voting Shares at a conversion ratio of 1:2.4302106 at any time. The Lumine Preferred Shares entitled CSI to a fixed annual cumulative dividend of 5% per annum on the Initial Face Value.

On March 25, 2024, all of the Lumine Preferred Shares were automatically converted into Lumine Subordinate Voting Shares, and additional Lumine Subordinate Voting Shares were issued in satisfaction of the amounts owing in connection with the accrued dividends on the Lumine Preferred Shares. As at March 31, 2026, CSI holds 157,553,539 Lumine Subordinate Voting Shares.

Subsequent to the conversion, CSI continues to consolidate Lumine and now reflects an equity interest of 61.40% in Lumine and a non-controlling interest of 38.60%.

Results of Operations

Three months ended Period-Over-Period March 31, Change

2026

2025

$ %

3,181

2,654

527 20%

2,420

2,001

419 21%

326

272

54 20%

(45)

(76) NM

(76)

(171) NM

(15)

(80)

65 -81%

(10)

(10) NM

0 NM

5 194%

10 14%

493

262

231 88%

172

137

34 25%

(78)

(49)

(30) 61%

5 5%

367

136

231 170%

(5) -12%

400

174

227 131%

897

827

70 9%

733

510

223 44%

21.2

$ 17.32

$ 6.41

$ 10.91 170%

$ 42.33

$ 39.00

$ 3.33 9%

$ 34.60

$ 24.07

$ 10.53 44%

$ 1.00

$ - 0%

(In millions of dollars, except percentages and per share amounts) Unaudited

Revenue

Expenses

Amortization of intangible assets Foreign exchange (gain) loss

IRGA / TSS membership liability revaluation charge Finance and other expense (income)

Share in net (income) loss of equity investee Bargain purchase gain

Impairment of intangible and other non-financial assets Finance costs

Income before income taxes

Income tax expense (recovery) Current income tax expense (recovery) Deferred income tax expense (recovery) Income tax expense (recovery)

Net income (loss) attributable to:

Common shareholders of CSI Non-controlling interests

Net income (loss) (Note 1)

Net cash flows from operating activities Free cash flow available to shareholders Weighted average number of shares

outstanding

Basic and diluted

Net income (loss) per share

Basic and diluted

Net cash flows from operating activities per share

Basic and diluted

Free cash flow available to shareholders per share

Basic and diluted

Cash dividends declared per share

Basic and diluted

NM - Not meaningful

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

Note 1: The Company made an adjustment to the financial inf ormation for the three months ending March 31, 2025. This resulted in an increase in finance and other income of $35 million, an increase in current income tax expense of $2 million and an increase in net income of $34 for the three months ended March 31, 2025. The Company has recast the comparative interim period in its Q1 2026 filings. See Note 5 to the Company's Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2025 for additional inf ormation.

Comparison of the first quarter ended March 31, 2026 and 2025

Revenue:

Total revenue for the quarter ended March 31, 2026 was $3,181 million, an increase of 20%, or $527 million, compared to $2,654 million for the comparable period in 2025. The increase is primarily attributable to growth from acquisitions as the Company experienced organic growth of 6% in the quarter, 2% after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business. For acquired companies, organic growth is calculated as the difference between actual revenues achieved by each company in the financial period following acquisition compared to the estimated revenues they achieved in the corresponding financial period preceding the date of acquisition by Constellation. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Three months ended March 31,

Period-Over-Period Change

$ %

Q125

Proforma Adj. (Note 1)

Organic Growth

2026

2025

($ in millions, except percentages)

(5)

-5%

-9%

546

487

12%

100

35%

-1%

2,444

1,996

447

22%

246

3,181

2,654

527

20%

335

The following table displays the breakdown of our revenue according to revenue type:

Licenses Professional services Hardware and other

Maintenance and other recurring

$M - Millions of dollars

Due to rounding, certain totals may not f oot and certain percentages may not reconcile.

Note 1: Estimated pre-acquisition revenues for the three months ended March 31, 2025 from companies acquired after December 31, 2024. (Obtained from unaudited vendor financial information.)

For comparative purposes the table below shows the quarterly organic growth as compared to the same period in the prior year by revenue type since Q1 2024. Note that the estimated revenues achieved by acquired companies in the corresponding financial period preceding the date of acquisition by Constellation may be updated in the quarter following the quarter they were acquired resulting in slight variances to previously reported figures.

Quarter Ended

Mar. 31

2024

Jun. 30

2024

Sep. 30

2024

Dec. 31

2024

Mar. 31

2025

Jun. 30

2025

Sep. 30

2025

Dec. 31

2025

Mar. 31

2026

Licenses

-8%

-23%

-20%

-19%

-9%

-7%

19%

-19%

-9%

Professional services

-1%

-2%

-6%

-4%

-6%

-1%

Hardware and other

-11%

-9%

-7%

-4%

17%

-1%

Maintenance and other recurring

Revenue

The following table shows the same information adjusting for the impact of foreign exchange movements.

Quarter Ended

Mar. 31

2024

Jun. 30

2024

Sep. 30

2024

Dec. 31

2024

Mar. 31

2025

Jun. 30

2025

Sep. 30

2025

Dec. 31

2025

Mar. 31

2026

Licenses

-9%

-22%

-20%

-19%

-7%

-9%

17%

-22%

-13%

Professional services

-2%

-7%

-3%

-4%

-2%

-3%

-5%

Hardware and other

-12%

-8%

-6%

12%

-7%

Maintenance and other recurring

Revenue

Expenses:

Three months ended March 31,

Period-Over-Period Change

2026 2025 $ %

($ in millions, except percentages)

1,687 1,412 275 19%

57 40 17 42%

312 254 58 23%

159 131 28 21%

64 47 17 36%

87 70 17 24%

55 46 8 18%

2,420

2,001

419

21%

The following table displays the breakdown of our expenses:

Expenses Staff Hardware

Third party license, maintenance and professional services

Travel, Telecommunications, Supplies & Software and equipment Professional fees

Other, net Depreciation

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

Overall expenses for the quarter ended March 31, 2026 increased 21%, or $419 million to $2,420 million, compared to $2,001 million during the same period in 2025. As a percentage of total revenue, expenses equalled 76% for the quarter ended March 31, 2026 and 75% for the same period in 2025. The change in valuation of the US dollar against most major currencies in which the Company transacts business resulted in an approximate 5% decrease in expenses for the three months ended March 31, 2026 compared to the first quarter of 2025.

Staff expense - Staff expenses increased 19% or $275 million for the quarter ended March 31, 2026 over the same period in 2025. Staff expense can be broken down into five key operating departments: Professional Services, Maintenance, Research and Development, Sales and Marketing, and General and Administrative. Included within staff expenses for each of the above five departments are personnel and related costs associated with providing the necessary services. The table below compares the period over period variances.

Three months ended March 31,

Period-Over-Period Change

2026 2025 $ %

($ in millions, except percentages)

311 292 19 6%

345 293 52 18%

459 389 71 18%

210 167 43 26%

361 271 90 33%

1,687

1,412

275

19%

Professional services Maintenance

Research and development Sales and marketing General and administrative

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

The increase in staff expenses for the quarter ended March 31, 2026 was primarily due to the growth in the number of employees compared to the same period in 2025 primarily due to acquisitions. Staff expenses in the first quarter of every year are typically higher as a percentage of revenue as compared to other quarters, largely attributable to increased payroll tax costs associated with our annual bonus payments that are made in the month of March.

Hardware expenses - Hardware expenses increased 42% or $17 million for the quarter ended March 31, 2026 over the same period in 2025, as compared to the 35% increase in hardware and other revenue for the same period. Hardware margin for the three months ended March 31, 2026 was 43% as compared to 46% for the same period in 2025.

Third party license, maintenance and professional services expenses - Third party license, maintenance and professional services expenses increased 23% or $58 million for the quarter ended March 31, 2026 over the same period in 2025. The increase is primarily due to third party license, maintenance and professional services expenses of acquired businesses.

Travel, Telecommunications, Supplies & Software and equipment expenses - Travel, Telecommunications, Supplies & Software and equipment expenses increased 21% or $28 million for the quarter ended March 31, 2026 over the same period in 2025. The increase in these expenses is primarily due to expenses incurred by acquired businesses.

Professional fees - Professional fees increased 36% or $17 million for the quarter ended March 31, 2026 over the same period in 2025. There are no individually material reasons contributing to this variance.

Other, net - Other expenses increased 24% or $17 million for the quarter ended March 31, 2026 over the same period in 2025. The following table provides a further breakdown of expenses within this category.

Three months ended March 31,

Period-Over-Period Change

2026 2025 $ %

($ in millions, except percentages)

19 17 2 14%

47 37 10 27%

11 10 2 16%

4 1 3 241%

(14) (10) (3) 32%

4 7 (3) -49%

16 9 8 85%

24%

Occupancy

Advertising and promotion Recruitment and training Bad debt expense

R&D tax credits Contingent consideration Other expense, net

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

The contingent consideration expense amounts recorded for the three months ended March 31, 2026 related to an increase (decrease) in anticipated acquisition earnout payment accruals primarily as a result of increases (decreases) to revenue forecasts for the associated acquisitions. Revenue forecasts are updated on a quarterly basis and the related anticipated acquisition earnout payment accruals are updated accordingly.

There are no individually material reasons contributing to the remaining variances.

Depreciation - Depreciation of property and equipment and right of use assets increased 18% or $8 million for the quarter ended March 31, 2026 over the same period in 2025. The increases are primarily due to the depreciation expense associated with acquired businesses.

Other Income and Expenses:

Three months ended March 31,

Period-Over-Period Change

2026 2025 $ %

($ in millions, except percentages)

326 272 54 20%

(45) 32 (76) NM

(76) 94 (171) NM

(15) (80) 65 -81%

(10) 0 (10) NM

0 - 0 NM

8 3 5 194%

81 71 10 14%

93 89 5 5%

361

480

(119)

-25%

The following table displays the breakdown of our other income and expenses:

Amortization of intangible assets Foreign exchange (gain) loss

IRGA / TSS membership liability revaluation charge Finance and other expense (income)

Share in net (income) loss of equity investee Bargain purchase gain

Impairment of intangible and other non-financial assets Finance costs

Income tax expense (recovery)

NM - Not meaningful

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

Amortization of intangible assets - Amortization of intangible assets increased 20% or $54 million for the quarter ended March 31, 2026 over the same period in 2025. The increase in amortization expense is primarily

attributable to an increase in the carrying amount of our intangible asset balance over the twelve-month period ended March 31, 2026 as a result of acquisitions completed during this twelve-month period.

Three months ended March 31,

Period-Over-Period Change

2026 2025 $ %

($ in millions, except percentages)

(13) (4) (9) 193%

(7) 0 (7) NM

(24) 29 (54) NM

(1) 6 (7) NM

(45)

(76)

Foreign exchange - Most of our businesses are organized geographically so many of our expenses are incurred in the same currency as our revenues, which mitigates some of our exposure to currency fluctuations. For the quarter ended March 31, 2026, we realized a foreign exchange gain of $45 million compared to a loss of $32 million for the same period in 2025. The following table provides a breakdown of these amounts.

Unrealized foreign exchange (gain) loss related to:

revaluation of intercompany loans between entities with differing functional currencies (1)

revaulation of the Company's unsecured subordinated floating rate debentures as a result of the appreciation (depreciation) of the Canadian dollar against the US dollar.

revaluation of the liability associated with the IRGA (Euro denominated liability)

Remaining foreign exchange (gain) loss

NM - Not meaningful

Due to rounding, certain totals may not foot and certain percentages may not reconcile.

(1) Offsetting amounts recorded in other comprehensive income. Net impact to Total comprehensive income for each period is nil.

The remaining foreign exchange gains and losses per the table above are primarily related to the unrealized foreign exchange translation gains and losses of certain non-US dollar denominated working capital balances to US dollars as a result of the depreciation or appreciation of the US dollar.

IRGA / TSS membership liability revaluation charge - On December 23, 2014, in accordance with the terms of the purchase and sale agreement for the initial acquisition of TSS (as defined below) by CSI, and on the basis of the term sheets attached thereto, Constellation and the Joday Group, among others, entered into a Members Agreement (the "Members Agreement") pursuant to which the Joday Group acquired 33.29% of the voting interests in Constellation Software Netherlands Holding Coöperatief U.A. (which was renamed to Topicus.com Coöperatief U.A.), a subsidiary of Constellation and the indirect owner of 100% of TSS at the time of the acquisition. Total proceeds from this transaction was €39 million ($49 million).

On January 5, 2021, the Members Agreement was terminated in conjunction with the acquisition of Topicus.com B.V., the reorganization of Topicus Coop and the execution of the IRGA. The IRGA was established to create certain contractual obligations of the parties in respect of the governance of Topicus and Topicus Coop. As of March 31, 2026 the Joday Group's interest in Topicus Coop comprised 38,148,221 Topicus Coop Ordinary Units ("Topicus Coop Units") resulting in an interest of 29.38% in Topicus Coop. The IRGA provides for transfer restrictions in respect of the Topicus Coop Units. See "Liability of CSI under the terms of the IRGA" below for further details.

The valuation of the IRGA liability (previously the TSS membership liability) decreased by approximately 8% or $101 million from Q4 2025. The decrease is primarily the result of the decrease in the fair value of Topicus' investment in the equity securities of Sygnity S.A. ("Sygnity") and Asseco Poland S.A. ("Asseco") as determined

by their respective share prices at the end of each reporting period, offset by an increase related to the organic growth in Topicus' trailing twelve month maintenance and other recurring revenue and net profits. The valuation of CSI's obligations under the IRGA is also impacted by the change in the net tangible assets of Topicus (as defined under the IRGA). The table below summarizes the changes.

€ in millions

December 31,

March 31,

Change for the Quarter ending

20252026March31,2026

Liability of CSI under the IRGA excluding equity security

investments

643

684

Fair Value of Equity securities of Sygnity

103

(24)

Fair Value of Equity securities of Asseco

305

223

(82)

Liability of CSI under the IRGA

1,051

985

(66)

$ in millions

Liability of CSI under the IRGA

1,234

1,133

(76)

The liability recorded on the balance sheet decreased by 8% or $101 million over the three month period ended March 31, 2026 from $1,234 million to $1,133 million as a result of the revaluation charge of $76 million and a $24 million foreign exchange loss. The IRGA / TSS membership liability is denominated in Euros and the Euro depreciated 2% versus the US dollar during the three months ended March 31, 2026.

Finance and other expense (income) - Finance and other income for the three months ended March 31, 2026 was $15 million compared to $80 million for the same period in 2025. The following table provides a further breakdown of expenses (income) within this category.

Three months ended March 31,

2026

2025

Interest income on cash

$ (12)

$ (11)

(Increase) decrease in the fair value of equity securities

(7)

(32)

(Increase) decrease in the fair value of derivative

(5)

Finance and other income

(3)

(32)

Finance and other expense (income)

$ (15)

$ (80)

The increase in the fair value of equity securities for the three months ended March 31, 2025 included $35 million relating to the Company's investment in Asseco. On January 31, 2025, the Company purchased 8,300,029 shares in Asseco, representing approximately 9.99% of the issued shares in Asseco. The Asseco shares were acquired at a price of 85 PLN per share for total consideration of $174 million. At the time of initial recognition the Company made an irrevocable election to present subsequent changes in fair value in other comprehensive income ("FVOCI"). The Company designated the Asseco investment as equity securities at FVOCI because the investment in Asseco represents an investment that the Company intends to hold for the long term. At the time the Company purchased shares of Asseco, the trading price per Asseco share on the WSE was in excess of the purchase price of 85 PLN per share. The Company recorded a gain of $35 million in the statement of income (loss). On September 25, 2025, the Company received the last outstanding regulatory approval for the acquisition of

12,318,863 treasury shares representing 14.84% of Asseco's share capital and subsequent to this date, applied the equity method of accounting to the investment in Asseco.

Finance and other income for the three months ended March 31, 2025 includes a $29 million settlement payment related to the fair value of the net tangible assets acquired as part of an acquisition that closed in 2024. There are no individually material reasons contributing to the remaining variances.

Share in net (income) loss of equity investee - The Company owns 19,207,886 shares in Asseco representing an ownership interest of approximately 23.14%. Asseco offers comprehensive, proprietary IT solutions for certain sectors of the economy and is listed on the Polish Warsaw Stock Exchange (the "WSE"). The Company applies the equity method of accounting to its investment in Asseco as a result of its ability to exercise significant influence over Asseco. Under the equity method of accounting, the investment is initially recognized at cost and is subsequently adjusted to reflect Topicus' share of profit or loss and other comprehensive income of Asseco. The Company has elected to use "lag reporting" in relation to its investment in Asseco. The Company will record its share of profit or loss and other comprehensive income on a "three-month lag" because the concurrent financial information is impracticable to obtain from Asseco. The share of net income recorded for the three months ended March 31, 2026 was $11 million compared to nil for the same period in 2025. The investment in Asseco has been classified as a non-current asset as at March 31, 2026 within "Investments in associates". A net loss of $1 million relating to other investments in associates was recorded for the three months ended March 31, 2026 compared to nil for the same period in 2025.

Bargain purchase gain - A bargain purchase gain of $0.1 million was recorded in the three months ended March 31, 2026 compared to nil for the same period in 2025, relating to an acquisition made in 2026. The gain resulted from the fact that the fair value of the separately identifiable assets and liabilities acquired exceeded the total consideration paid, principally due to the acquisition of certain assets that will benefit the Company that had limited value to the sellers.

Impairment of intangible and other non-financial assets - An impairment expense of $8 million was recorded in the three month period ended March 31, 2026 compared to $3 million for the same period in 2025. The expenses relate to businesses that have been unable to achieve the goals established in their respective investment theses.

Finance costs - Finance costs for the quarter ended March 31, 2026 increased $10 million to $81 million, compared to $71 million for the same period in 2025. The following table provides a further breakdown of expenses within this category.

Three months ended March 31,

2026

2025

Interest expense on debt and debentures

$ 64

$ 59

Interest expense on lease obligations

Amortization of debt related transaction costs

Amortization of debenture discount (premium)

(1)

Other finance costs

Finance costs

$ 81

$ 71

The increase in interest expense on debt is primarily a result of an increase in the average debt outstanding in Q126 as compared to Q125.

Income taxes - We operate globally and we calculate our tax provision in each of the jurisdictions in which we conduct business. Our effective tax rate on a consolidated basis is, therefore, affected by the realization and

anticipated relative profitability of our operations in those various jurisdictions, as well as different tax rates that apply and our ability to utilize tax losses and other credits. For the quarter ended March 31, 2026, income tax expense increased $5 million to $93 million compared to $89 million for the same period in 2025. Current tax expense has historically approximated our cash tax rate however the quarterly expense can sometimes fall outside of the annual range due to out of period adjustments. Current tax expense reflects gross taxes before the application of R&D tax credits which are classified as part of "other, net" expenses in the statement of income (loss). The Company's consolidated effective tax rate in respect of continuing operations for the three months ended March 31, 2026 was 19% (34% for the three months ended March 31, 2025). The March 31, 2026 effective tax rate was impacted by $11 million of current tax expense relating to certain revaluation charges recorded in the Condensed Consolidated Interim Statement of Income (loss).

Constellation is subject to tax audits in the countries in which the Company carries on business globally. These tax audits could result in additional tax expense in future periods relating to historical filings. Reviews by tax authorities generally focus on, but are not limited to, the validity of the Company's inter-company transactions, including financing and transfer pricing policies which generally involve subjective areas of taxation and a significant degree of judgment. If any of these tax authorities are successful with their challenges, the Company's income tax expense may be adversely affected and Constellation could also be subject to interest and penalty charges.

Net Income and Earnings per Share:

Net income attributable to common shareholders of CSI for the quarter ended March 31, 2026 was $367 million compared to $136 million for the same period in 2025. On a per share basis this translated into net income per basic and diluted share of $17.32 in the quarter ended March 31, 2026 compared to $6.41 for the same period in 2025.

There was no change in the number of shares outstanding.

Netcashflowsfromoperatingactivities("CFO"):

For the quarter ended March 31, 2026, CFO increased $70 million to $897 million compared to $827 million for the same period in 2025 representing an increase of 9%.

Freecashflowavailabletoshareholders("FCFA2S"):

For the quarter ended March 31, 2026, FCFA2S increased $223 million to $733 million compared to $510 million for the same period in 2025 representing an increase of 44%.

The following table reconciles FCFA2S to net cash flows from operating activities:

Three months ended

March 31,

2026 2025

($ in millions)

897

827

(4)

(61)

(1)

(38)

(19)

(4)

(62)

(0)

(31)

(94)

(15)

863

632

(130) (121)

733

510

Net cash flows from operating activities Adjusted for:

Interest paid on lease obligations Interest paid on debt

Debt transaction costs Payments of lease obligations

IRGA / TSS membership liability revaluation charge Property and equipment purchased

Interest and dividends received

Less amount attributable to Non-controlling interests

Free cash flow available to shareholders

Due to rounding, certain totals may not foot.

Quarterly Results

Quarter Ended

Mar. 31

2024

Jun. 30

2024

Sep. 30

2024

Dec. 31

2024

Mar. 31

2025

Note 1

Jun. 30

2025

Sep. 30

2025

Dec. 31

2025

Mar. 31

2026

Revenue

2,353

2,468

2,541

2,703

2,654

2,844

2,948

3,177

3,181

Net income (loss) *

105

177

164

285

136

210

110

367

CFO

737

265

517

678

827

433

685

788

897

FCFA2S

446

182

362

482

510

220

529

423

733

Net income per share *

Basic & diluted 4.95

8.35

7.74

13.44

6.41

2.66

9.89

5.19

17.32

CFO per share

Basic & diluted 34.76

12.51

24.37

31.99

39.00

20.44

32.31

37.19

42.33

FCFA2S per share

Basic & diluted 21.04

8.61

17.06

22.76

24.09

10.37

24.96

19.97

34.60

* Attributable to common shareholders of CSI

Note 1: The Company made an adjustment to the financial information for the three months ending March 31, 2025. This resulted in an increase in finance and other income of $35 million, an increase in current income tax expense of $2 million and an increase in net income of $34 for the three months ended March 31, 2025. The Company has recast the comparative interim period in its Q1 2026 filings. See Note 5 to the Company's Unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2025 for additional information.

We experience seasonality in our operating results in that CFO and FCFA2S in the first quarter of every year is typically the highest and CFO and FCFA2S in the second quarter of every year is typically the lowest. The key driver impacting this seasonality is the timing of annual maintenance contract renewals. Our quarterly results may also fluctuate as a result of the various acquisitions which may be completed by the Company in any given quarter. We may experience variations in our net income on a quarterly basis depending upon the timing of certain expenses or gains, which may include changes in provisions, acquired contract liabilities, foreign exchange gains and losses, bargain purchase gains, and gains or losses on the sale of financial and other assets.

Spin-Outs

Topicus.com Inc.

Constellation (TSX:CSU) and Topicus (TSXV:TOI) announced on January 5, 2021 that Constellation, acting through its Total Specific Solutions ("TSS") operating group and its subsidiary TPCS Holding B.V., completed the purchase of 100% of the shares of Topicus.com B.V., a Netherlands-based diversified vertical market software provider, from IJssel B.V. and that in connection with the closing of the acquisition, TSS has been spun out of Constellation and now operates, together with Topicus.com B.V., as a separate public company, Topicus.com Inc. (collectively, the "Spin-Out Transactions").

In connection with the completion of the Spin-Out Transactions, on January 4, 2021, all of Constellation's common shareholders of record on December 28, 2020 received, by way of a dividend-in-kind, 1.859817814 subordinate voting shares of Topicus.com (the "Spin-Out Shares") for each common share of Constellation held.

Constellation's equity interest in TSS prior to the Spin-Out Transactions was 66.7%. Constellation's equity interest in Topicus after completion of the Spin-Out Transactions on a fully diluted basis was approximately 30.4%. Constellation's equity interest on a fully diluted basis as at March 31, 2026 is approximately 31.3%. In addition, Constellation as the holder of the Topicus Super Voting Share is entitled to that number of votes that equals 50.1% of the aggregate number of votes attached to all of the outstanding voting shares at such time. As a result of the Topicus Super Voting Share Constellation consolidated the financial results of Topicus with its financial results.

Lumine Group Inc.

The Company holds 1 super voting share of Lumine (the "Lumine Super Voting Share"). The Lumine Super Voting Share entitles CSI to that number of votes that equals 50.1% of the aggregate number of votes attached to all the outstanding Lumine Super Voting Shares, Lumine Subordinate Voting Shares and Lumine Special Shares. As a result, the Company controls Lumine and has consolidated Lumine's financial position and results of operations. As at March 31, 2026, the Company holds 157,553,539 Lumine Subordinate Voting Shares and now reflects an equity interest of 61.40% in Lumine and a non-controlling interest of 38.60%.

The tables below provide certain supplemental balance sheet, statement of income, and net operating cash flow information of Topicus and Lumine for the three months ended March 31, 2026. Neither Topicus or Lumine are considered a reportable operating segment of Constellation, however, management has chosen to provide certain supplemental financial information to provide greater clarity into the operating performance and cash flow from operations of Topicus and Lumine considering Constellation's equity ownership. The financial information includes the adjustments discussed in the "Finance and other expense (income)" section above.

Selected Balance Sheet Information As at March 31, 2026

(Unaudited)

Constellation Software Inc. (excluding Topicus

& Lumine) Topicus Lumine Consolidated

Cash

2,381

381

248

3,010

Bank debt, loans, bonds and debentures

3,103

516

370

3,990

Statement of Income

(Excluding intercompany activity)

For the three months ended March 31, 2026

(Unaudited)

Constellation Software Inc. (excluding Topicus & Lumine)

Topicus

Lumine

Consolidated

Revenue

2,466

507

208

3,181

Expenses

1,893

377

150

2,420

Amortization of intangible assets

243

326

Foreign exchange (gain) loss

(43)

(0)

(2)

(45)

IRGA / Membership liability revaluation charge

(76)

Finance and other income

(18)

(0)

(15)

Share in net (income) loss of equity investee

(11)

(10)

Bargain purchase gain

(1)

Impairment of intangible and other non-financial assets

Finance costs

Income (loss) before income taxes

396

493

Income tax expense (recovery)

Current income tax expense (recovery)

140

172

Deferred income tax expense (recovery)

(62)

(13)

(4)

(78)

Income tax expense (recovery)

Net income (loss)

318

400

Net cash flows from operating activities

548

329

897

Foreign Exchange Adjusted Organic Revenue Growt

(Excluding intercompany activity)

For the three months ended March 31, 2026

Constellation Software Inc. (excluding Topicus

& Lumine) Topicus Lumine Consolidated

Licenses

-17%

17%

-13%

Professional services

-5%

-2%

-8%

-5%

Hardware and other

-3%

13%

-59%

-7%

Maintenance and other recurring

Revenue

-2%

Acquisition of business segment from Allscripts Healthcare Solutions

On May 2, 2022, Constellation, through its wholly-owned subsidiary, N. Harris Computer Corporation, completed the purchase from Allscripts Healthcare Solutions ("Allscripts") of Allscripts' Hospitals and Large Physician Practices business segment. This business segment now operates under the name Altera.

The tables below provide certain supplemental balance sheet, statement of income, and net operating cash flow information of Altera for the three months ended March 31, 2026. Altera is not considered a reportable operating segment of Constellation, however, management has chosen to provide certain supplemental financial information to provide greater clarity into the operating performance and cash flow from operations of Altera considering the size of the business and its impact on the results of Constellation. The financial information includes the adjustments discussed in the "Finance and other expense (income)" section above.

Selected Balance Sheet Information As at March 31, 2026

(Unaudited)

Constellation Software Inc. (excluding

Altera) Altera Consolidated

Cash

2,868

142

3,010

Bank debt, loans, bonds and debentures

3,796

193

3,990

Statement of Income

(Excluding intercompany activity)

For the three months ended

March 31, 2026

Constellation

Software Inc.

(excluding

(Unaudited)

Altera) Altera

Consolidated

Revenue

3,033 147

3,181

Expenses

2,301 119

2,420

Amortization of intangible assets

308 18

326

Foreign exchange (gain) loss

(44) (1)

(45)

IRGA / Membership liability revaluation charge

(76)

Finance and other income

(14)

(1)

(15)

Share in net (income) loss of equity investee

(10)

Bargain purchase gain

Impairment of intangible and other non-financial assets

Finance costs

Income (loss) before income taxes

484

493

Income tax expense (recovery)

Current income tax expense (recovery)

166

172

Deferred income tax expense (recovery)

(75)

(3)

(78)

Income tax expense (recovery)

Net income (loss)

393

400

Net cash flows from operating activities

858

897

Free cash flow available to shareholders

699

733

Foreign Exchange Adjusted Organic Revenue Growth (Excluding intercompany activity)

For the three months ended March 31, 2026

Constellation Software Inc. (excluding

Altera) Altera Consolidated

Licenses

-14%

92%

-13%

Professional services

-2%

-27%

-5%

Hardware and other

-7%

-81%

-7%

Maintenance and other recurring

-6%

Revenue

-13%

Liquidity

March 31,

2026

December 31,

2025

Variance

Cash

3,010

3,089

(78)

Debt with recourse to Constellation Software Inc.

1,480

1,489

(9)

Debt without recourse to Constellation Software Inc.

2,509

2,642

(133)

Debt

3,990

4,131

(142)

Cash less Debt

(979)

(1,043)

Cash flows from operations exceeded the net capital deployed on acquisitions plus dividends during the three months ended March 31, 2026. Cash decreased by $78 million to $3,010 million at March 31, 2026 compared to $3,089 million at December 31, 2025 and debt decreased by $142 million to $3,990 million at March 31, 2026 compared to $4,131 million at December 31, 2025.

Total assets increased $803 million, from $16,167 million at December 31, 2025 to $16,969 million at March 31, 2026. The increase is primarily due to the $163 million increase in accounts receivable, and the $519 million increase in intangible assets. At March 31, 2026 Topicus, Lumine and other subsidiaries with non-recourse debt facilities hold approximately $1,095 million of cash. As explained in the "Capital Resources and Commitments" section below, there are limitations on the ability of these subsidiaries to distribute funds to Constellation.

Current liabilities increased $462 million, from $6,069 million at December 31, 2025 to $6,532 million at March 31, 2026. The increase is primarily due to an increase in deferred revenue of $676 million mainly due to acquisitions made since December 31, 2025 and the timing of maintenance and other billings versus performance and delivery under those customer arrangements, offset by decreases in accounts payable and accrued liabilities of

$182 million and the liability of CSI under the IRGA of $121 million.

Net Changes in Cash Flows

($ in millions)

Three months ended March 31,

2026

2025

Net cash provided by operating activities

897

827

Net cash from (used in) financing activities

(236)

(91)

Cash used in the acquisition of businesses

(766)

(110)

Cash obtained with acquired businesses

Net cash from (used in) other investing activities

(37)

(172)

Net cash from (used in) investing activities

(726)

(271)

Effect of foreign currency

(13)

Net increase (decrease) in cash and cash equivalents

(78)

497

The net cash flows from operating activities were $897 million for the three months ended March 31, 2026. The $897 million provided by operating activities resulted from net income of $400 million plus $419 million of adjustments to net income (primarily amortization of intangible assets, depreciation, IRGA/TSS Membership liability revaluation charge, finance and other income, finance costs, and income tax expense) and $185 million of cash from non-cash working capital, offset by $107 million in taxes paid.

The net cash flows used in financing activities for the three months ended March 31, 2026 were $236 million, which is mainly a result of interest payments of $65 million, lease obligation payments of $38 million, dividends paid to common shareholders of $21 million, and a net decrease in debt facilities of $114 million.

The net cash flows used in investing activities for the three months ended March 31, 2026 were $726 million. The cash used in investing activities was primarily due to acquisitions for an aggregate of $766 million (including payments for holdbacks relating to prior acquisitions) offset by $77 million of acquired cash.

We believe we have sufficient cash and available credit capacity to continue to operate for the foreseeable future. Generally our VMS businesses operate with negative working capital as a result of the collection of maintenance payments and other revenues in advance of the performance of the related services. As such, management anticipates that it can continue to grow the business organically without any additional funding. If we continue to acquire VMS businesses we may need additional external funding depending upon the size and timing of the potential acquisitions (see "Subsequent Events" below).

Capital Resources and Commitments

Debt with recourse to CSI comprises the following ($ in millions):

CSI Facility Senior Notes Debentures Term Loan Total

Principal outstanding at December 31, 2025 (and, except

for debentures, equal to fair value) $

- $ 1,000

$ 356

$ 86

1,441

Deduct: Unamortized transaction costs included in debt balance

- (6)

(0)

(6)

Add: Unamortized debt premium

- -

Carrying value at December 31, 2025

- 994

401

1,480

Current portion Non-current portion

- -

- 994

-401

-1,480

CSI Facility

On January 31, 2024, the Company completed an amendment and restatement of its existing credit facility agreement (the "CSI Facility"). The facility limit was increased from $840 million to $1,085 million, with a syndicate of existing and new institutions. The agreement has also moved from a secured to an unsecured facility structure, which continues to be available for general corporate purposes including acquisitions and working capital. The CSI Facility is guaranteed by certain subsidiaries of the Company. The CSI Facility bears a variable interest rate with no fixed repayments required over the term to maturity. Interest rates are calculated at standard U.S. and Canadian reference rates plus interest rate spreads based on a leverage table. The CSI Facility contains standard events of default which if not remedied within a cure period would trigger the repayment of any outstanding balance. As at March 31, 2026, nil had been drawn from this credit facility, and letters of credit totaling $13 million were issued, which limits the borrowing capacity on a dollar-for-dollar basis.

Senior Notes

On February 16, 2024, the Company completed a private offering of $500 million aggregate principal amount of 5.158% senior notes due 2029 and $500 million aggregate principal amount of 5.461% senior notes due 2034 (collectively, the "Senior Notes"). The Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment to all of the Company's existing and future senior unsecured indebtedness, including the CSI Facility. The Senior Notes are guaranteed by certain subsidiaries of the Company on the same basis as such subsidiaries have guaranteed the CSI Facility. Transaction costs associated with the Senior Notes are being amortized through profit or loss using the effective interest rate method.

Debentures

On October 1, 2014 and November 19, 2014, the Company issued unsecured subordinated debentures (the "Debentures") with a total principal value of C$96 million for total proceeds of C$91 million. On September 30, 2015, the Company issued an additional tranche of Debentures with a total principal value of C$186 million for total proceeds of C$214 million. On October 6, 2023, a total of C$213 million principal amount of Debentures were issued at a price of C$133.00 per C$100.00 principal amount of Debentures purchased representing proceeds to the Company of C$283 million which was used by the Company to pay down indebtedness under its existing credit facility. The Debentures were issued as an additional tranche of, and formed a single series with, the outstanding C$282 aggregate principal amount of Debentures.

The total principal value of debentures outstanding at March 31, 2026 was $356 million (C$495 million).

Guarantees

One of CSI's subsidiaries has entered into a $86 million (£65 million) term debt facility with a financial institution for which CSI has guaranteed the debt. The facility bears a fixed rate of interest. The term loan contains events of default that, if not remedied, allow the loan note holder to require repayment of the loan principal and interest. The loan is due in 2028.

Liability of CSI under the terms of the IRGA / TSS Membership Agreement

On December 23, 2014, in accordance with the terms of the purchase and sale agreement for the initial acquisition of TSS by CSI, and on the basis of the term sheets attached thereto, Constellation and the Joday Group, among others, entered into a Members Agreement (the "Members Agreement") pursuant to which the Joday Group acquired 33.29% of the voting interests in Constellation Software Netherlands Holding Coöperatief U.A. (which was renamed to Topicus.com Coöperatief U.A.), a subsidiary of Constellation and the indirect owner of 100% of TSS at the time of the acquisition. Total proceeds from this transaction was €39 million ($49 million).

On January 5, 2021, the Members Agreement was terminated in conjunction with the acquisition of Topicus.com B.V., the reorganization of Topicus Coop and the execution of the IRGA. The IRGA was established to create certain contractual obligations of the parties in respect of the governance of Topicus and Topicus Coop. As of March 31, 2026 the Joday Group's interest in Topicus Coop comprised 38,148,221 Topicus Coop Ordinary Units resulting in an interest of 29.38% in Topicus Coop. The IRGA provides for transfer restrictions in respect of the Topicus Coop Units.

Any time after January 5, 2021, any member of the Joday Group has the right, at his or its option, to sell any number of its Topicus Coop Units to CSI at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon the exercise of such option by a member of the Joday Group, CSI will be obligated to purchase 33.33% of such Topicus Coop Units within 30 days, and an additional 33.33% on each of the first and the second anniversary of such initial purchase with the exception of certain items which have been classified as a current liability. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI.

In the event of a change of control of CSI, any member of the Joday Group has the right, at his or its option, to sell all of its Topicus Coop Units to CSI at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon the exercise of such option by a member of the Joday Group, CSI will be obligated to purchase all such Topicus Coop Units. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI.

If CSI reduces its economic interest in Topicus by a sale or transfer of its economic interest (and not due to any additional issuance of any shares or equity by Topicus) by more than one-third (calculated on a fully converted basis in accordance with the IRGA), any member of the Joday Group has the right, at his or its option, to sell to CSI one-third of its Topicus Coop Units at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon the exercise of such put option by a member of the Joday Group, CSI will be obligated to purchase all such put Topicus Coop Units. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI. Any member of the Joday Group has a similar right to sell one-half or all of its remaining Topicus Coop Units, respectively, at its option, if CSI further reduces its remaining fully-diluted economic interest in Topicus by a sale or transfer of its economic interest by one-half and again if CSI sells its entire remaining economic interest in Topicus.

All of the Topicus Coop Ordinary Units and Topicus Coop Preference Units held by the Joday Group and Ijssel B.V. (collectively, the "Topicus Coop Exchangeable Units") are exchangeable, directly or indirectly, for Topicus Subordinate Voting Shares. All of the above rights of members of the Joday Group apply to any Topicus Subordinate Voting Shares issued on an exchange of Topicus Coop Exchangeable Units.

At any time after December 31, 2023, CSI has the right, at its option, to buy all of the Topicus Coop Units and shares of Topicus held by certain members of the Joday Group (excluding Joday) at a cash price per Topicus Coop Unit (or share of Topicus, as applicable) determined in accordance with the IRGA. After December 31, 2043, CSI has the same right to buy all of the Topicus Coop Units and shares of Topicus held by the remaining members of the Joday Group, including Joday.

In addition, if certain individuals affiliated with Joday are terminated from their employment with Topicus Coop or an affiliate thereof for urgent cause (as defined in the Dutch Civil Code), CSI has the right, at its option, to buy all of Topicus Coop Units held by such individuals at a cash price per Topicus Coop Unit determined in accordance with the IRGA.

The Company has continued to classify the above obligations of CSI under the terms of the IRGA as a liability. The main valuation driver in such calculation is the maintenance and other recurring revenue of Topicus. The valuation of CSI's obligations under the IRGA is also impacted by the change in the net tangible assets of Topicus (as defined under the IRGA). As the net tangible assets increase (which is typically the result of net profits in the applicable period), the valuation of CSI's obligations under the IRGA increases. Maintenance and recurring revenue of Topicus for the trailing twelve months on a pro-forma basis determined at the end of the current reporting period was used as the basis for valuing the interests at each redemption date. Any increase or decrease in the value of such liability is recorded as an expense or income in the consolidated statements of income (loss) for the period.

In addition, the liability of CSI under the terms of the IRGA is impacted by changes in the fair value of Topicus' investment in the equity securities of Sygnity and Asseco as determined by their respective share prices at the end of each reporting period.

The liability recorded on the balance sheet at March 31, 2026 was $1,133 million.

Debt without recourse to CSI

Certain of CSI's subsidiaries have entered into term debt facilities and revolving credit facilities with various financial institutions. Except as noted above, CSI does not guarantee the debt of its subsidiaries, nor are there any cross-guarantees between subsidiaries. The credit facilities are collateralized by substantially all of the assets of the borrowing entity and its subsidiaries. The credit facilities typically bear interest at a rate calculated using an interest rate index plus a margin. The financing arrangements for each subsidiary typically contain certain restrictive covenants, which may include limitations or prohibitions on additional indebtedness, payment of cash dividends, redemption of capital, capital spending, making of acquisitions and sales of assets. In addition, certain financial covenants must be met by those subsidiaries that have outstanding debt.

In conjunction with the acquisition of Optimal Blue, the Company entered into a promissory note agreement ("Promissory Note") with the seller, Intercontinental Exchange, Inc. for $500 million. The Promissory Note accrues interest at a rate of 7% per annum, is compounded annually and is payable in arrears. The first cash interest and principal payment under the Promissory Note is due on the day prior to the fifth anniversary and thereafter interest and principal payments will be due annually on the subsequent anniversaries of that date. The Promissory Note matures in 2063, subject to earlier optional prepayment.

Debt without recourse to CSI comprises the following ($ in millions):

Topicus Revolving

Credit Facility

Debt

Facilities

Promissory

Note

Total

Principal outstanding at March 31, 2026 (and equal to fair value)

$ 104

$ 1,925

$ 500

$ 2,529

Deduct: Carrying value of transaction costs included in debt balance

(2)

(18)

(20)

Carrying value at March 31, 2026

101

1,908

500

2,509

Current portion

101

483

585

Non-current portion

1,425

500

1,925

Other commitments

Commitments include operating leases for office equipment and facilities, letters of credit and performance bonds issued on our behalf by financial institutions in connection with facility leases and contracts with public sector customers. Also, occasionally we structure some of our acquisitions with contingent consideration based on the future performance of the acquired business. The fair value of contingent consideration recorded in our statement of financial position was $225 million at March 31, 2026. Derivative assets and liabilities relate to contractual arrangements of the Company which have uncertain outcomes. If the probability of the outcomes associated with the contractual arrangements increases, the underlying value of the derivative will increase. If the probability of the outcomes decreases, the underlying value of the derivative will decrease. Assuming a probability of 100% and utilizing the observable inputs as of March 31, 2026, the maximum exposure of the Company's derivative liabilities is approximately $58 million as of March 31, 2026. Aside from the aforementioned, we do not have any other business arrangements, derivative financial instruments, or any equity interests in non-consolidated entities that would have a significant effect on our assets and liabilities as at March 31, 2026.

Contractual obligations at March 31, 2026 are summarized below.

(in millions of dollars)

Total

< 1 yr

1-5 yrs

> 5 yrs

Lease obligations

479

155

286

Holdbacks

471

238

234

Liability of CSI under the terms of the IRGA/TSS Members Agreement

1,133

655

478

Debentures

356

Term Loan

CSI revolving credit facility

Senior Notes

1,000

500

Topicus revolving credit facility without recourse to Constellation Software Inc.

104

Promissory note

500

489

Other debt facilities without recourse to Constellation Software Inc.

1,925

135

1,643

148

Total outstanding commitments

6,054

1,286

3,238

1,530

The IRGA liability commitment assumes that the Joday Group has exercised their put option to sell 100% of their interests back to Constellation. This option however has not been exercised as at May 12, 2026. See note 8 to the Unaudited Condensed Consolidated Interim Financial Statements for the three month period ended March 31, 2026 for a discussion on the valuation methodology utilized.

Financial Instruments

The carrying values of cash, accounts receivable, accounts payable, accrued liabilities, dividends payable, the majority of acquisition holdbacks, and the CSI Facility, approximates fair value due to the short-term nature of these instruments. The carrying value of the debt without recourse to CSI approximate their fair values as the debt

is subject to market interest rates. The carrying value of the IRGA liability and the term loan with recourse to CSI approximates fair value.

Financial assets and financial liabilities measured at fair value as at March 31, 2026 and December 31, 2025 in the Unaudited Condensed Consolidated Interim Financial Statements for the three month period ended March 31, 2026 are summarized below. The Company has no additional financial liabilities measured at fair value after initial recognition other than those recognized in connection with business combinations and the redeemable preferred securities.

March 31, 2026

December 31, 2025

Level 1

Level 2 Level 3

Total

Level 1

Level 2 Level 3

Total

Assets:

Equity securities

$ 88 $

- $ - $

88 $

64 $ - $ - $ 64

Derivatives - - 10 10 - - 9 9

Liabilities:

Contingent consideration

225

215

Derivatives

239

223

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 inputs are inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly (i.e. prices) or indirectly (i.e. derived from prices); and

Level 3 inputs are inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

Foreign Currency Exposure

We operate internationally and have foreign currency risks related to our revenue, operating expenses, assets and liabilities denominated in currencies other than the U.S. dollar. Consequently, we believe movements in the foreign currencies in which we transact will impact future revenue and net income. The impact to organic revenue growth for the three months ended March 31, 2026 was approximately positive 5%. We cannot predict the effect of foreign exchange gains or losses in the future; however, if significant foreign exchange losses are experienced, they could have a material adverse effect on our business, revenues, results of operations, and financial condition. The Company enters into forward foreign exchange contracts from time to time with the objective of mitigating volatility in profit or loss in respect of financial liabilities. In entering into these forward exchange contracts, the Company is exposed to the credit risk of the counterparties to such contracts and the possibility that the counterparties will default on their payment obligations under these contracts. However, given that the counterparties are Schedule 1 banks or affiliates thereof, the Company believes these risks are not material. During the three months ended March 31, 2026, the Company did not purchase any contracts of this nature.

The following table provides an approximate breakdown of our revenue and expenses by currency, expressed as a percentage of total revenue and expenses, as applicable, for the three months ended March 31, 2026:

Three Months Ended March 31, 2026

Currencies

% of Revenue

% of Expenses

USD

47%

42%

EUR

22%

21%

GBP

CAD

AUD

BRL

CHF

SEK

Others

10%

Total

100%

Due to rounding, certain totals may not f oot.

Off-Balance Sheet Arrangements

As a general practice, we have not entered into off-balance sheet financing arrangements. Except for insignificant and short-term operating leases and letters of credit, all of our liabilities and commitments are reflected as part of our statement of financial position.

Proposed Transactions

We seek potential acquisition targets on an ongoing basis and may complete several acquisitions in any given fiscal year.

Share Capital

As at May 12, 2026, there were 21,191,530 common shares outstanding.

Risks and Uncertainties

The Company's business is subject to a number of risk factors which are described in our most recently filed AIF. Additional risks and uncertainties not presently known to us or that we currently consider immaterial also may impair our business and operations and cause the price of the common shares to decline. If any of the noted risks actually occur, our business may be harmed and the financial condition and results of operations may suffer significantly. In that event, the trading price of the common shares could decline, and shareholders may lose all or part of their investment.

Controls and Procedures

Disclosure controls and procedures:

Management is responsible for establishing and maintaining disclosure controls and procedures as defined under National Instrument 52-109. The President and Chief Financial Officer have designed or caused to be designed by those under their supervision, disclosure controls and procedures which provide reasonable assurance that material information regarding the Company is accumulated and communicated to the Company's management, including its President and Chief Financial Officer in a timely manner.

Internal controls over financial reporting:

The President and Chief Financial Officer have designed or caused it to be designed under their supervision internal controls over financial reporting ("ICFR") to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. The President and Chief Financial Officer have been advised that the control framework the President and the Chief Financial Officer used to design the Company's ICFR is recognized by the Committee of Sponsoring Organizations of the Treadway Commission.

The President and the Chief Financial Officer have evaluated, or caused to be evaluated by those under their supervision, whether or not there were changes to its ICFR during the period ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect the Company's ICFR. No such changes were identified through their evaluation.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures and our internal controls over financial reporting are effective in providing reasonable, not absolute, assurance that the objectives of our control systems have been met.

Subsequent Events

On May 12, 2026 the Company declared a $1.00 per share dividend that is payable on July 10, 2026 to all common shareholders of record at close of business on June 19, 2026.

Subsequent to March 31, 2026, the Company completed or has open commitments to acquire a number of businesses for aggregate cash consideration of $627 million on closing plus total estimated deferred payments of

$159 million for total consideration of $786 million. The business acquisitions operate in the local government, printing, financial services, healthcare, security, education, marketing management, gaming, aviation, justice, manufacturing, mining, asset management, utilities, legal, defence, dealer, and travel verticals and are all software companies similar to the existing business of the Company.

Condensed Consolidated Interim Financial Statements (In U.S. dollars)

For the three months ended March 31, 2026 and 2025 Unaudited

CONSTELLATION SOFTWARE INC

Condensed Consolidated Interim Statements of Financial Position

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.) Unaudited

March 31, 2026 December 31, 2025

Assets

Current assets:

Cash and cash equivalents

3,010

3,089

Accounts receivable

1,630

1,467

Unbilled revenue

478

450

Inventories

Other assets (note 6)

755

726

5,956

5,798

Non-current assets:

Property and equipment

239

241

Right of use assets

390

384

Deferred income taxes

369

355

Investments in associates (note 5)

683

655

Other assets (note 6)

425

345

Intangible assets (note 7)

8,907

8,388

11,013

10,368

Total assets

16,969

16,167

Liabilities and Shareholders' Equity

Current liabilities:

Debt with recourse to Constellation Software Inc. (note 8)

Liability of CSI under the IRGA (note 8)

655

775

Debt without recourse to Constellation Software Inc. (note 9)

585

591

Accounts payable and accrued liabilities

1,759

1,941

Dividends payable (note 12)

Deferred revenue

2,891

2,215

Provisions (note 10)

Acquisition holdback payables

238

218

Lease obligations

149

141

Income taxes payable

217

150

6,532

6,069

Non-current liabilities:

Debt with recourse to Constellation Software Inc. (note 8)

1,480

1,489

Liability of CSI under the IRGA (note 8)

478

458

Debt without recourse to Constellation Software Inc. (note 9)

1,925

2,051

Deferred income taxes

935

890

Acquisition holdback payables

234

208

Lease obligations

289

282

Other liabilities (note 6)

487

451

5,828

5,830

Total liabilities

12,360

11,899

Shareholders' equity (note 12): Capital stock

Accumulated other comprehensive income (loss)

130

Retained earnings

3,687

3,347

Non-controlling interests (note 18)

725

692

4,609

4,267

Subsequent events (notes 19)

Total liabilities and shareholders' equity

16,969

16,167

See accompanying notes to the condensed consolidated interim financial statements.

Condensed Consolidated Interim Statements of Income (loss)

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31,

2026

2025

Revenue

License

$ 91

$ 96

Professional services

546

487

Hardware and other

100

Maintenance and other recurring

2,444

1,996

3,181

2,654

Expenses Staff

1,687

1,412

Hardware

Third party license, maintenance and professional services

312

254

Travel, telecommunications, supplies, software and equipment

159

131

Professional fees

Other, net

Depreciation

Amortization of intangible assets (note 7)

326

272

2,745

2,272

Foreign exchange loss (gain)

(45)

IRGA/TSS Membership liability revaluation charge (note 8)

(76)

Finance and other expense (income) (note 13)

(15)

(80)

Share in net (income) loss of equity investee (note 5)

(10)

Bargain purchase gain (note 4)

Impairment of intangible and other non-financial assets (note 7)

Finance costs (note 13)

(58)

119

Income (loss) before income taxes

493

262

Current income tax expense (recovery) (note 11)

172

137

Deferred income tax expense (recovery)

(78)

(49)

Income tax expense (recovery)

Net income (loss)

400

174

Net income (loss) attributable to:

Common shareholders of Constellation Software Inc.

367

136

Non-controlling interests (note 18)

Net income (loss)

400

174

Earnings per common share of Constellation Software Inc.

Basic and diluted (note 14)

$ 17.32

$ 6.41

See accompanying notes to the condensed consolidated interim financial statements.

CONSTELLATION SOFTWARE INC

Condensed Consolidated Interim Statements of Comprehensive Income (loss)

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2026 2025

Net income (loss)

$ 400 $

174

Items that are or may be reclassified subsequently to net income (loss):

Foreign currency translation differences from foreign operations and other, net of tax (37) 79

Items that will not be reclassified to net income (loss):

Changes in the fair value of equity investments at FVOCI

120

Other comprehensive income (loss), net of income tax

(37)

199

Total comprehensive income (loss)

$ 363

372

Total other comprehensive income (loss) attributable to: Common shareholders of Constellation Software Inc.

(32)

139

Non-controlling interests (note 18)

(5)

Total other comprehensive income (loss)

$ (37)

199

Total comprehensive income (loss) attributable to: Common shareholders of Constellation Software Inc.

335

275

Non-controlling interests (note 18)

Total comprehensive income (loss)

$ 363

372

See accompanying notes to the condensed consolidated interim financial statements.

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statement of Changes in Equity

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2026

Equity Attributable to Common Shareholders of CSI

Capital stock

Accumulated other comprehensive income (loss)

Retained earnings

Total Non-controlling

interests

Total equity

Balance at January 1, 2026 $

$ 130

$ 3,347

$ 3,576 $

692 $

4,267

Total comprehensive income (loss):

Net income (loss) -

367

400

Other comprehensive income (loss)

Foreign currency translation differences from foreign operations and other, net of tax and

changes in the fair value of equity investments at FVOCI -

(32)

(5)

(37)

Total other comprehensive income (loss) -

(32)

(5)

(37)

Total comprehensive income (loss) -

(32)

367

335

363

Transactions with owners, recorded directly in equity

Other movements in non-controlling interests Dividends to shareholders of the Company

- - (5) (5) 5 0

- - (21) (21) - (21)

Balance at March 31, 2026

$ 99 $

98 $

3,687 $

3,884 $

725 $

4,609

See accompanying notes to the condensed consolidated interim financial statements.

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statement of Changes in Equity

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2025

Equity Attributable to Common Shareholders of CSI

Capital stock

Accumulated other comprehensive income (loss)

Retained earnings

Total Non-controlling

interests

Total equity

Balance at January 1, 2025 $

$ (224) $

2,919

$ 2,795

$ 493

$ 3,288

Total comprehensive income (loss):

Net income (loss) -

136

174

Other comprehensive income (loss)

Foreign currency translation differences from

foreign operations and other, net of tax -

139

199

Total other comprehensive income (loss) -

139

199

Total comprehensive income (loss) -

139

136

275

372

Transactions with owners, recorded directly in equity

Dividends to shareholders of the Company

(21)

Balance at March 31, 2025 $ 99

$ (85) $

3,030 $

3,045 $

594 $

3,639

Other movements in non-controlling interests Dividends paid to non-controlling interests

- - (4) (4) 4 (0)

- - - - (0) (0)

See accompanying notes to the condensed consolidated interim financial statements.

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Cash Flows

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31,

2026

2025

Cash flows from (used in) operating activities:

Net income (loss)

400

174

Adjustments for:

Depreciation

Amortization of intangible assets (note 7)

326

272

IRGA/TSS Membership liability revaluation charge (note 8)

(76)

Finance and other expense (income) (note 13)

(15)

(80)

Share in net (income) loss of equity investee (note 5)

(10)

Bargain purchase (gain) (note 4)

Impairment of intangible and other non-financial assets (note 7)

Finance costs (note 13)

Income tax expense (recovery)

Foreign exchange loss (gain)

(45)

Depreciation of third party costs

Change in non-cash operating assets and liabilities

exclusive of effects of business combinations (note 17)

185

231

Transaction costs associated with equity securities classified as FVOCI

(2)

Income taxes paid

(107)

Net cash flows from (used in) operating activities

897

827

Cash flows from (used in) financing activities:

Interest paid on lease obligations

(4)

Interest paid on debt

(61)

(62)

Increase (decrease) in Topicus revolving credit debt facility without recourse to CSI

(286)

Proceeds from issuance of debt facilities without recourse to CSI

244

Repayments of debt facilities without recourse to CSI

(73)

(30)

Other financing activities

(1)

Dividends paid to non-controlling interests

(0)

Debt transaction costs

(1)

(0)

Payments of lease obligations, net of sublease receipts

(38)

(31)

Dividends paid to common shareholders of the Company (note 12)

(21)

Net cash flows from (used in) in financing activities

(236)

(91)

Cash flows from (used in) investing activities:

Acquisition of businesses (note 4)

(697)

(94)

Cash obtained with acquired businesses (note 4)

Post-acquisition settlement payments, net of receipts

(69)

(16)

Purchases of investments and other assets

(32)

(175)

Decrease (increase) in restricted cash

Interest, dividends and other proceeds received

Property and equipment purchased

(19)

(15)

Net cash flows from (used in) investing activities

(726)

(271)

Effect of foreign currency on cash and cash equivalents

(13)

Increase (decrease) in cash and cash equivalents

(78)

497

Cash and cash equivalents, beginning of period

$ 3,089

$ 1,980

Cash and cash equivalents, end of period

$ 3,010

$ 2,477

See accompanying notes to the condensed consolidated interim financial statements.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

Notes to the condensed consolidated interim financial statements

Reporting entity 11. Income taxes

Basis of presentation 12. Capital and other components of equity

Material accounting policies 13. Finance and other expense (income) and finance costs

Business acquisitions 14. Earnings per share

Investments in associates 15. Financial instruments

Other assets and other non-current liabilities 16. Contingencies

Intangible assets 17. Changes in non-cash operating assets and liabilities Debt with recourse to CSI and Liability of CSI

under the IRGA

18. Non-controlling interests

Debt without recourse to CSI 19. Subsequent events

Provisions

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

Reporting entity

Constellation Software Inc. is a company domiciled in Canada. The address of Constellation Software Inc.'s registered office is 66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada. The condensed consolidated interim financial statements of Constellation Software Inc. as at and for the three-month period ended March 31, 2026 comprise Constellation Software Inc. and its subsidiaries (together referred to as "Constellation", "CSI", or the "Company") and the Company's interest in associates. The Company is engaged principally in the development, installation and customization of software as well as in the provisioning of related professional services and support for customers globally across over 100 diverse markets.

Basis of presentation

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB") and using the accounting policies disclosed in Note 3 of the Company's 2025 annual consolidated financial statements, available on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at https://www.sedarplus.com, except as disclosed herein.

These condensed consolidated interim financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 12, 2026.

These condensed consolidated interim financial statements should be read in conjunction with the Company's 2025 annual consolidated financial statements.

Basis of measurement

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for certain assets and liabilities initially recognized in connection with business combinations, derivative financial instruments, equity securities, and contingent consideration related to business acquisitions, which are measured at their estimated fair value.

Functional and presentation of currency

The condensed consolidated interim financial statements are presented in U.S. dollars, which is Constellation's functional currency.

Use of estimates and judgements

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses, consistent with those disclosed in the 2025 annual consolidated financial statements and described in these condensed consolidated interim financial statements. Actual results may differ from these estimates.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical experience and other assumptions that are considered reasonable in the circumstances. The actual amount or values may vary in certain instances from the assumptions and estimates made. Changes will be recorded, with corresponding effect in profit or loss, when, and if, better information is obtained.

Material accounting policies

Unless otherwise noted in the condensed consolidated interim financial statements, the material accounting policies used in preparing these condensed consolidated interim financial statements are unchanged from those disclosed in the Company's 2025 annual consolidated financial statements and have been applied consistently to all periods presented in these condensed consolidated interim financial statements.

The accounting policies have been applied consistently by Constellation's subsidiaries.

Recent accounting pronouncements not yet adopted:

The IASB has issued IFRS 18, Presentation and Disclosure in Financial Statements (replacing IAS 1, Presentation of Financial Statements), with an aim to improve how information is communicated in the financial statements, with a focus on information in the statement of income that will become effective on January 1, 2027. The Company is assessing the impacts IFRS 18 will have on the consolidated financial statements.

Business acquisitions

On February 13, 2026, the Company completed the acquisition of 100% of the shares of Synchronoss Technologies, Inc. ("Synchronoss") for cash proceeds of $309.

Synchronoss is a software company that offers cloud-based software and services that enable communications service providers and other enterprises to manage, monetize, and securely deliver digital content, messaging, and customer engagement solutions. The acquired business operates in the communications and media market. The acquisition has been accounted for using the acquisition method with the results of operations included in the condensed consolidated interim financial statements for three months ended March 31, 2026 from the date of the acquisition.

The goodwill recognized in connection with this acquisition is primarily attributable to the application of the Company's best practices to improve the operations of the company acquired, synergies with existing businesses of the Company, and other intangible assets that do not qualify for separate recognition including assembled workforce. The goodwill is not expected to be deductible for income tax purposes.

The gross contractual amounts of acquired receivables was $15; however, the Company has recorded an allowance of $NIL as part of the acquisition accounting to reflect contractual cash flows that are not expected to be collected.

Due to the complexity and timing of this acquisition, the Company is in the process of determining and finalizing the estimated fair value of the net assets acquired. The amounts determined on a provisional basis generally relate to net asset assessments and measurement of the assumed liabilities. The provisional purchase price allocations may differ from the final purchase price allocations, and these differences may be material. Revisions to the allocations will occur as additional information about the fair value of assets and liabilities becomes available.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

The impact of acquisition accounting applied on a provisional basis in connection with the acquisition of Synchronoss is as follows:

Assets acquired: Cash

$ 34

Accounts receivable 15

Other current assets 12

Property and equipment 2

Right of use assets 4

Other non-current assets 4

Technology assets 111

Customer assets 175

356

Liabilities assumed:

Current liabilities 31

Deferred revenue 0

Deferred income taxes 29

Long-term lease obligations 8

Other non-current liabilities 7

Goodwill 28

Total consideration $ 309

The acquisition of Synchronoss contributed revenue of $22 and a net loss of $2 for the three months ended March 31, 2026. If this acquisition had occurred on January 1, 2026, the Company estimates that pro-forma consolidated revenue and pro-forma condensed consolidated interim net income would have been $3,201 and $402 compared to the actual amounts reported in the consolidated statement of income (loss) for three months ended March 31, 2026.

During the three months ended March 31, 2026, the Company completed a number of additional acquisitions for aggregate cash consideration of $388 plus cash holdbacks of $91 and contingent consideration with an estimated acquisition date fair value of $21. The total consideration resulting from the additional acquisitions in the three months ended March 31, 2026 was $500. The contingent consideration is payable on the achievement of certain financial targets in the post-acquisition periods. The obligation for contingent consideration for acquisitions during the three months ended March 31, 2026 has been recorded at its estimated fair value at the various acquisition dates. The estimated fair value of the applicable contingent consideration is calculated using the estimated financial outcome and resulting expected contingent consideration to be paid and inclusion of a discount

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

rate as appropriate. For these arrangements, which include both maximum, or capped, and unlimited contingent consideration amounts, the estimated increase to the initial consideration is not expected to exceed $27.

Aggregate contingent consideration of $225 (December 31, 2025 - $215) has been reported in the condensed consolidated interim statement of financial position at its estimated fair value relating to applicable acquisitions completed in the current and prior periods. Changes made to the estimated fair value of contingent consideration are included in other, net in the condensed consolidated interim statements of income (loss). An expense of $4 has been recorded for the three months ended March 31, 2026 (an expense of $7 for the three months ended March 31, 2025).

No additional acquisitions were deemed to be individually significant. The majority of the businesses acquired during the period were acquisitions of shares and the remainder were asset acquisitions. The cash holdbacks are generally payable over a two-year period and are adjusted, as necessary, for such items as working capital or net tangible asset assessments, as defined in the agreements, and claims under the respective representations and warranties of the purchase and sale agreements.

The additional acquisitions during the three months ended March 31, 2026 include software companies catering to the following markets: accounting, agriculture equipment dealers, asset management, automotive, aviation, chemicals, content management, education, enterprise resource planning, financial services, fitness, gaming, gas monitoring, government, healthcare, hospitality, human capital, insurance, legal, manufacturing, mining, planning, policy and procedure management, procurement, real estate, retail management and distribution, social compliance, and telematics all of which are software businesses similar to existing businesses operated by the Company. The acquisitions have been accounted for using the acquisition method with the results of operations included in these consolidated financial statements from the date of each acquisition.

The goodwill recognized in connection with these additional acquisitions is primarily attributable to the application of Constellation's best practices to improve the operations of the companies acquired, synergies with existing businesses of Constellation, and other intangible assets that do not qualify for separate recognition including assembled workforce. Goodwill in the amount of $19 is expected to be deductible for income tax purposes.

The gross contractual amounts of acquired receivables was $43; however, the Company has recorded an allowance of $2 as part of the acquisition accounting to reflect contractual cash flows that are not expected to be collected.

Due to the complexity and timing of certain additional acquisitions made, the Company is in the process of determining and finalizing the estimated fair value of the net assets acquired as part of the acquisitions closed during the three months ended March 31, 2026 and the last nine months of 2025. The amounts determined on a provisional basis generally relate to net asset assessments and measurement of the assumed liabilities, including acquired contract liabilities. The provisional purchase price allocations may differ from the final purchase price allocations, and these differences may be material. Revisions to the allocations will occur as additional information about the fair value of assets and liabilities becomes available. The cash consideration associated with these provisional estimates (including individually significant acquisitions) totals $1,830.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

The aggregate impact of acquisition accounting applied in connection with the aggregate of business acquisitions that are not individually significant in the period ended March 31, 2026 is as follows:

Assets acquired:

Cash

$ 43

Accounts receivable

Other current assets

Property and equipment

Right of use assets

Other non-current assets

Deferred income taxes

Technology assets

229

Customer assets

273

656

Liabilities assumed: Current liabilities

Deferred revenue

Deferred income taxes

Long-term lease obligations

Other non-current liabilities

231

Non-controlling interest

(0)

Goodwill

Bargain purchase gain

(0)

Aggregate purchase price

$ 500

Non-cash consideration:

Fair value of investment in affiliate in which control was acquired

(0)

Total consideration

500

The 2026 additional business acquisitions did not have a material impact to either the consolidated revenue or the consolidated net income (loss) for the three months ended March 31, 2026. The materiality threshold is reviewed on a regular basis taking into account the quantitative (contribution to revenue and net income (loss)) and

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

qualitative (size and comparability with other Constellation businesses) factors of current period acquisitions on both an individual and aggregate basis.

The chart below outlines the significant measurement period adjustments and adjustments to estimated holdback payables on prior year acquisitions which have been reflected on the condensed consolidated interim statement of financial position as of December 31, 2025.

Current Assets:

Accounts receivable

(3)

Unbilled revenue

Inventories

(2)

Acquisition holdback receivables

Other assets

(0)

(5)

Non-current Assets: Property and equipment

Right of use assets

Intangible assets

(0)

Total assets

(5)

Current liabilities:

Accounts payable and accrued liabilities

Deferred revenue

Acquisition holdback payables

(5)

Lease obligations

Income taxes payable

(0)

(5)

Non-current liabilities: Deferred income taxes

(0)

Acquistion holdback payables

Lease obligations

Other liabilities

(0)

Total liabilities

(5)

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot)

Three months ended March 31, 2026 and 2025 (Unaudited)

5. Investments in associates

Investments in associates comprise the following:

March 31, 2026

December 31, 2025

Investment in Asseco

590

575

Other investments in associates

683

655

Investment in Asseco:

The Company owns 19,207,886 shares in Asseco Poland S.A. ("Asseco") representing an ownership interest of approximately 23.14%. Asseco offers comprehensive, proprietary IT solutions for certain sectors of the economy and is listed on the Polish Warsaw Stock Exchange (the "WSE"). The Company applies the equity method of accounting to its investment in Asseco as a result of its ability to exercise significant influence over Asseco. Under the equity method of accounting, the investment is initially recognized at cost and is subsequently adjusted to reflect the Company's share of profit or loss and other comprehensive income (loss) of Asseco. The Company has elected to use "lag reporting" in relation to its investment in Asseco. The Company will record its share of profit or loss and other comprehensive income (loss) on a "three-month lag" because the concurrent financial information is impracticable to obtain from Asseco. Due to the complexity and timing of the investment, the Company is in the process of determining and finalizing the estimated fair value of the net assets acquired. The provisional purchase price allocation may differ from the final purchase price allocation, and these differences may be material. Revisions to the allocation will occur as additional information about the fair value of assets and liabilities becomes available.

The below table presents a reconciliation of the investment in Asseco from the beginning of the period to the end of the period:

At January 1, 2026 575

Share in net (income) loss of equity investee

Share in other comprehensive income (loss) of equity investee

Dividends received

Foreign exchange and other adjustments

At March 31, 2026

590

The fair value of the Company's investment in Asseco based on the share price of Asseco at March 31, 2026 is

$872.

Summarized Financial Information:

The tables below provide summarised financial information for the investment in Asseco as at December 31, 2025, due to the application of lag reporting. The information disclosed reflects the amounts presented in the financial statements of Asseco and not the Company's share of those amounts. The amounts have been amended to reflect adjustments made by the Company when using the equity method, including fair value adjustments and significant events during the lag reporting period.

Disclaimer

Constellation Software Inc. published this content on May 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 13, 2026 at 19:35 UTC.