This article first appeared on GuruFocus .
Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Altus Group Ltd ( ASGTF ) delivered strong Q2 2026 results with revenue growing 6% and adjusted EBITDA increasing 34%, with margins expanding by 540 basis points.
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The company's flagship software offerings, Argus Intelligence and VMS, continue to drive growth, with software revenue growing double-digits for the second consecutive quarter and VMS revenue up 7%.
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Altus Group Ltd ( ASGTF ) has successfully completed its portfolio simplification ahead of schedule, completing four divestitures and monetizing its legacy interest in the Gio Vera joint venture.
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The company is seeing improved sales execution, with software cross-sell up 3 times year-over-year and net revenue retention at a healthy 106.9%.
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Altus Group Ltd ( ASGTF ) raised its full-year revenue outlook by 25 basis points and increased its margin expansion outlook by 60 basis points, reflecting confidence in its growth trajectory.
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The acquisition of Valis.AI is a strategic tuck-in that strengthens Altus Group Ltd ( ASGTF )'s position in the lender-valuator workflow, adds differentiated AI capabilities, and expands its international footprint.
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Altus Group Ltd ( ASGTF ) has returned over $450 million to shareholders year-to-date, reducing its share count by roughly 20%, and remains committed to returning additional capital.
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The company is making progress towards its Rule of 40 target sooner than anticipated, driven by both margin expansion and accelerating revenue growth.
Negative Points
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Net income declined year-over-year, driven by unfavorable foreign exchange swings of approximately $10.7 million and one-time costs of $5.2 million related to strategic corporate initiatives.
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Services revenue declined year-over-year, and even excluding the divested 1/11 business, revenue would have been down modestly.
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The company's data segment, while trending in the right direction, is still expected to only return to low single-digit growth, remaining a drag on overall growth.
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Altus Group Ltd ( ASGTF ) faces a challenging macro environment with higher-for-longer interest rates, which could continue to pressure certain parts of the business like VMS.
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The company's Q3 2026 results will face a difficult comparison as Q3 2025 benefited from pricing actions on a large cohort of Argus Enterprise renewals.
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The Valis.AI acquisition, while strategically important, is not material to financial guidance, indicating it will have a limited near-term financial impact.
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The company's growth is still heavily reliant on the software segment, with other areas like data and services contributing less to the overall growth profile.
Q & A Highlights
Q: Can you articulate the headroom for further margin expansion and whether the path to Rule of 40 is best closed by margin expansion or revenue scale? A: Mike Gordon (CEO) stated that the company can achieve Rule of 40 through both avenues, with the timeline shortening faster than originally anticipated. On the cost side, the completion of divestitures and the consolidation of legacy platforms onto newer onesexpected in early 2027will drive significant run-rate improvements. On the revenue side, the cross-sell motion is "kicking into gear," particularly in software, which will help expand growth. The company is confident in executing from both ends.
Q: With the Valis.AI acquisition, is this a typical buy-versus-build decision, and was it hard to replicate this asset even with AI coding tools? A: Mike Gordon (CEO) explained that while they could build it, the decision was driven by three factors: a focus on bringing current assets onto the platform quickly, the high quality of the product Valis built (a core cloud product from scratch), and the dynamic team's progress with customers. The acquisition allows them to get to market faster without diverting attention from core builds, and it provides immediate access to underserved market segments.
Q: Can you provide more detail on the medium-term monetization plan for Valis.AI, and will it remain a standalone module or be integrated into the suite? A: Mike Gordon (CEO) outlined that in the near term (through year-end), they will support Valis's existing growth in the UK and bundle it into other products. There is a significant opportunity to bring it to Canada in 2027. The plan is to integrate it quickly into the Argus Intelligence platform so users can leverage the technology directly, combining data sets to enhance power and insights.
Q: How are you thinking about the VMS business in the back half of the year, given the higher-for-longer rate environment? A: Mike Gordon (CEO) noted that VMS is finding opportunities in adjacent markets, including less complex assets and international opportunities in Canada and the UK. The ability to bundle VMS with Argus Intelligence and Argus Assist makes it an easier win for customers to adopt. Despite higher rates, the company is seeing good growth compared to previous periods.
Q: Can you break down the key drivers of software growth in the quarter and share the magnitude of the Argus Assist add-on with Newmark? A: Pavan Chopra (CFO) highlighted that Argus Intelligence is growing significantly higher than the total software category, with 87% of software now on the platform (up from 84% last quarter) and 48% of Argus Intelligence on asset-based pricing (up from 44%). Mike Gordon (CEO) declined to quantify the Newmark deal but emphasized the scale of the opportunity, noting Newmark is one of the largest appraisers and brokers globally, with a substantial user base in Canada and the US.
Q: With new products moving into Argus Intelligence, how much opportunity does this open up in the base for 2027? A: Mike Gordon (CEO) explained that very few customers currently have cross-over usage of multiple products. With the introduction of Investment Manager (Talian) and Debt Manager (Fairways), they expect significant interest from their largest customers, with an early pipeline of 15-20 opportunities each. The horizontal Argus Workbook product is also expected to gain traction in Europe in Q4 and the US early next year as data models align.
Q: Can you talk about the efficiency Argus Intelligence is driving for the VMS team and whether gross margins should expand, with savings passed to customers? A: Mike Gordon (CEO) stated that using the platform makes the team more efficient, allowing them to serve new market segments and provide more advisory work to core customers. While they have taken out effort, they have applied more value. Next year, they expect opportunities to make costs more efficient as customers use the platform directly, leading to improved product profitability and margin expansion over the next year or two.
Q: With the streamlined business, are there areas worthy of additional investment as you start the budgeting process for next year? A: Mike Gordon (CEO) identified three key investment areas: the data business (a strong moat), the development of new AI agents under Argus Assist (aiming to release 2-3 agents per quarter), and expanding offerings for the 200 lenders using their products to help with credit lifecycle and risk management. Additionally, they are investing in UI/UX to provide personalized home screens and insights for users.
Q: Regarding Rule of 40 targets, how much of a market recovery do you assume, and can you get there without a meaningful market rebound? A: Mike Gordon (CEO) responded confidently, stating, "We feel very comfortable that we can get there," indicating that the company can achieve Rule of 40 without relying on a significant market recovery.
Q: Can you speak to the moving parts in terms of FX on guidance, and was FX a tailwind on revenue and EBITDA? A: Pavan Chopra (CFO) clarified that the guidance raise on both revenue and EBITDA is entirely on a constant currency basis, with no FX impact. He also noted that the quarter's growth was actually better than reported because the prior year included the 111 business, making the organic growth closer to 7% when adjusted for comparability.
Q: Is the acquisition focus still predominantly on tuck-ins, or are you considering larger deals given the cash on the balance sheet? A: Mike Gordon (CEO) stated that they are firmly in the tuck-in category, focusing on expanding reach and functionality. They are building a pipeline but do not plan massive-scale deals, as investors have been happy with capital returns and share repurchases. Katie Boyce (new CFO) agreed, noting that tuck-ins like Valis are a great way to accelerate the clear product roadmap without another transformative action.
Q: In your view, what areas do you see the most opportunity for growth at Altus, and what is being underappreciated by investors today? A: Katie Boyce (CFO) stated that the market underappreciates the durability and moat around the core product, data, and AI, and the ability to become more integrated into customer workflows. She is excited to help enable
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
