Altus Group Limited (AIF) Earnings Call Transcript & Summary

Okay. Good morning, everyone. Thank you so much for joining us, both in person and virtually on the line. With over 160 people registered, we're really pleased with the growing and strong interest in the company. Approximately 90% of our outstanding shares are held by institutional Investors Day, which -- of which 50% are now American, hence, why we founded fitting to the event here. This is a very exciting chapter in the company's growth journey, and we remain very appreciative of your ongoing support and the shareholder value creation ahead that we'll be able to discuss today. It's great to see a lot of familiar faces. But for those who haven't met me, my name is Camilla Bartosiewicz, I'm the Head of Investor Relations. Before I go any further, for those of you who need WiFi access, the network is called Convene and you could use the password, stayconnected, one word all lower case. We have a great lineup of speakers today with solid representation across the business. And as many of you have reminded me over the years, it really does come down to the people. So I trust that today's leadership team will just strengthen your conviction in the management team. In addition to our speakers, we also have certain members from our Board of Directors and our executive team also in attendance, and they'll be around if you guys wanted to catch up after the event. We structured today's presentation under 5 key sessions, so followed by 30 minutes of Q&A. We'll have a 10-minute coffee break at around 10 a.m., and we're targeting to finish by around 11:30 a.m. Eastern Time. As a reminder for our in-person guests, breakfast and snacks will be made available throughout the event. And to keep us on schedule, just ask if you guys could hold off on asking your questions until the very end when we have the Q&A session for about 30 minutes, at which point, we'll start with the in-person questions and then take questions from online as well. And of course, if we do run out of time, you guys can always e-mail me directly, and we can continue after the event. And before we go any further, please be advised that some of our remarks today will contain forward-looking statements and that Altus uses certain non-GAAP, non-IFRS measures of our operating performance and financial performance. So please review these slides at your leisure, and you can always consult our SEDAR filings for more information. And with that, I'll turn it over to our CEO, Mike Gordon, to officially kick of our Investor Day.

Thank you. Good morning, everybody. The -- I think that when I sat down and talked to Camilla about like what we would just sit back and talk about, we're going to talk about the meats and potatoes of where we're going to go on things, especially on product road maps and most of you guys who haven't gotten a chance to meet me, I like to be transparent to the industry. The reason why is like we want to drive the industry to the point that we think we can. And we believe in a lot of ways, we have the best real estate in the commercial real estate industry where we are. I had a good chance when I was coming on to sit and talk to the Board about different thought processes, why I was interested in this and why I looked -- I thought that this would be a great next step for myself. And it came down to 1 simple thing, I watch the financial services industry, where I came from, transform over 20 years, starting in 2005 and going through all of the issues that happened in 2007, 2008 and 2009. And I watched the explosion of how technology rules, workflow, data, analytics, changed that industry. And when I looked at commercial real estate, commercial real estate being a very similar asset class or size-wise and how things were starting to change in that industry, it was -- I felt like it was at the same precipice. And you got -- I got very excited about it with the board because the board was at a point where they were looking for the same change and they saw the same things. And so this was like something that made a lot of sense to me. And as we think about it and you think about proptech. Proptech is probably something that's overused, fintech was overused. I -- this is not Mike tech or Jorge tech, it's just -- this is good technology and platforms that we look at. But there's a huge explosion that has taken place. And most of the guys on this page probably other than us won't make it. And I'm not saying that, that is a bad thing, but what they're doing is they're changing the way that people are starting to think about the industry. One of the things that comes out of this is there's going to be accelerated transactions. You can see this already starting to happen right now. People want better insights to what's going on with these large assets. So much money is flowing into this market that that's why these things are being created. New business models coming up. How you build buildings, how you build -- how you maintain those are all very different. We're not going to be in the tenant space, but like what's happening in there would be something that could impact us going forward. The transparency in how you trade these assets, how you move these asset classes around? You get into just globalization on how you value things and how the risk management about these things are becoming more standard. All of these things are coming together. I can get into regulatory and then you get into the pandemic. Now we did our best to create a slide that actually looked like the COVID virus. But if you think about this, sometimes you actually need an impetus for the industry to change. And as I said earlier, financial services watching things melt down, they decided that they needed something to change. And because what happened is everybody put more and more reserves in. They were trying to collect money from people, but they couldn't do it fast enough because the technology was not keeping up with it. Same thing happened as you sit back and we sit back and talk to our customers, last -- in 2020, they did a great job of thinking through their workforce, thinking about how they can cut costs, how they can improve cash flows, but to 1 point, they couldn't get further. Technology is a great equalizer. Data is the medium that works wonders for them. But analytics strikes how you make decisions. And realistically, as things are changing in the marketplace and you have the acceleration of the technology investments, you have how are you looking at the portfolio and what are you trying to do around that portfolio, what is lending going to look like, how should I actually decide how much debt to take on, what should my valuations be, how can I actually think about appraisal management, not on a yearly basis, but every month, every week? Because you're trying to capture -- everything is getting tighter and faster. The thing that I would -- like going back to my background, which I would liken in it to, when I started FICO in 2005, once a year, the banks ordered credit reports or credit scores; on the average, once a year. Then they realize it was good every quarter to do it to reset their portfolio. Then they did it every month. And then all of a sudden, we convinced discover to actually put it on your statements and then everybody ran it from there. And now you can see how the industry has exploded, but at the same point, the transparency in the industry became ubiquitous and people could start making decisions for themselves. The same thing while a different asset class can happen here. And that is how we look at it and how we will apply what we're trying to do with the technology. Now why we also like this? It is a very scattered marketplace. Now we're in a lot of the boxes. There's a lot of our competitors in a lot of the boxes. But when I came into the industry, I got to talk to a lot of you guys, and you guys asked me how acquisitive I would be? I actually didn't think we'd be that acquisitive. I don't -- history-wise would tell me that great operations is what you want to focus on, you get great operations going, good organic growth. will lead in, and you'll make some nice tuck-in acquisitions, and that will be a good thing for the business. There are very few platforms in this space. And on top of that, there are very few platforms and actually, there's only 1 platform, ARGUS, that actually owns the intersection where everything goes in when it comes to transactions, valuation and risk management. And there's a ton of growth even in that opportunity. We'll talk a little bit about like what the size of the market we think is. While we're the market leader, there's a lot of areas that we can move in just with our core software. But then if you add in data and analytics and decisioning on top of that, it's not about what you're serving up to the customers, it's how you're helping them make decisions on AUMs in the $200 billion range. When we got talking to the guys at StratoDem, we were talking, we were geeking out on analytics. I mean anybody who will talk to me, I'll geek out on this stuff. And they started saying, "I can save you 180 basis points on your portfolio." dam, that's a lot of money, like prove it to me. So they walked me through it and it was like, "Okay, I think we can work through this and we can sell this in an easy way." And that's what we're trying to do is we're trying to make it more transparent and easier. And in this marketplace, there's a lot of rooms to expand. Like there's a lot of things that we see as great adjacencies for us, but it's adjacencies that sit back on the value chain from build to buy, to manage your investment or asset to dispose. That's what our value chain is, and that's where we fit from a perspective of Altus Group. So we think it's a great opportunity for us. We'll talk a lot about our products today. But before we do, I always have to like bring Sung Lee up here because Sung will be talking about like the industry fundamentals and why we think that this is our time. So Sung?

Thanks, Mike. Good morning, everyone. I'm Sung Lee with Altus Analytics, and I'll be providing a quick overview of what we're seeing in the market and how Altus' strategy is aligned to really meet the changing needs of the industry. So as we all know, commercial real state industry is facing disruption at an unprecedented scale. The COVID-19 -- I'm sorry, so the COVID-19 has really accelerated the rate of change that we're seeing in the marketplace today. And the that -- sorry, just give me a minute. I lost my chain of my thought.

gets into this. And what I would say with Sung is there's many deep pieces of information that he'll be looking at as he gets this together. But as we go into transformation and opportunity, what you have, as we talk about the demographic shifts as we're seeing this, if you think about multi-res and how multi-res is starting to shift around, it is very simply that every asset is going to change. People would come to me and say, "Why did you go into commercial real estate?" The key reasons on why you go into commercial real estate at this time is very simple, the buildings need to be used. So yes, hotels and retail will be very different and things are shifting around on that. But man, you have good talks on industrial, and industrial is a good place to be, and you can go from there. And then there's large players who are looking at changing things and just who we deal with and how they're bringing and bringing more assets into their portfolio, there's a ton of things that have changed. So from that standpoint, acceleration and we see this all working in a major way. You good? Go for it.

So sorry, so COVID-19 has really added urgency to the adoption of data and analytics to gain competence -- I'm sorry, competitive edge create efficiencies and generate transparency. COVID-19 has shrunk the universe of institutional grade investments from the 5 major food groups, so multifamily, industrial, office, retail and hospitality to just 2 sectors, multifamily and industrials. And the competition for these best-in-class assets within these sectors remain as fierce as ever. And investors are now looking beyond these asset types to sectors such as single-family for rentals, manufactured homes, life science centers, looking -- seeking on edge using data and technology. So the good news is that real estate is no longer considered an alternative asset class in many ways, as it competes directly against stocks and bonds and has the full attention of major investors worldwide. And Altus, we're in a really good position to help our clients adapt to this new hypercompetitive environment for investments and talents. The volume in the transaction markets dipped at the start of the COVID-19, but the markets never actually stalled out. And the -- and the -- we're actually now on pace to exceed the record volume of [ $318 ] billion set back in fourth quarter of 2019. And there's still a ton of capital sitting on the sideline looking to come in, especially with those properties and portfolios with high expected yields. So value-add, opportunistic and debt funds are getting a lot of attention in the marketplace. So where is all of this capital coming from? As real estate really permanently into the portfolio allocation of smaller investors like 401K and retail investors, there's a whole new source of capital that are chasing the same pool of real estate investments that were previously sought by large institutional investors backed by institutional capital sources, like wealth funds and pension plans. So in this example, a portfolio with 10% allocation to private real estate outperformed your traditional portfolio with 60% equities and 40% fixed income, both in terms of return and volatility during the 20-year period from 1999 and to 2019. So firms like Blackstone and Starwood Capital were the first to really recognize and promote the advantages that real estate, I mean, generates within our portfolio. There are new funds now dominate the institutional real estate landscape. So with all this capital looking for a home in real estate, and -- both institutional and noninstitutional, and historically low cap rate -- I'm sorry, the historically low interest rate environment that we're in, the overall trajectory of the cap rates is downward. And the landscape is as competitive as ever, which means that it's really easy to slip up in this environment and the mistakes made today could be amplified in the future. So a good question to ask and answer is whether your organization has the analytical capability to identify and invest in winners, while avoiding the losers with conviction driven by data and analytics? So these are the questions that we seek to help our clients, ask and answer, not through a backward look at the past, but as a forward-looking forecast as part of their active asset selection process. So the privately held real estate values actually never dipped strongly in reaction to COVID-19. The Property Index or NPI, representing about 9,700 properties with a gross market value of $785 [ billion ], saw about a 3% decline in value during 2020 versus about 30% negative appreciation during the great financial crisis. And coming out of 2020, Property Index delivered 2 quarters of record performance, driven by low interest rates and strong property fundamentals, both market rents and the occupancy. So as real estate becomes an expected part of balanced portfolio, composition amongst investors across the institutional landscape is changing. And this slide really drives home that point. So nontraded REITs that are geared towards retail investors as evidenced by net contributions of the hot new players in the marketplace. And 401K or defined contributions appear to be the next new frontier, meaning that increasing allocation to real estate as an investment or asset class is likely to continue for some time. And perhaps not surprisingly, the private equity firms or nontraded RIETs really make up a portion of the most active buyers in the marketplace and many traditional players are now net sellers. And private market real estate buyers are absorbing the assets public REITs, which have become net sellers. So the good news is that commercial real state industry is really thriving, as evidenced by the record performance seen in return numbers and the significant amount of capital that are looking for a home in the sector. However, our clients are really facing major challenges in this changing real estate environment. Never before have they ever faced the level of competition that they're facing today, which is really forcing them to, one, find and maintain yield while managing risk in the historically low yield environment that we're in; and two, manage your liabilities and adhere to compliance standards that come with managing retail, 401K and small investor money. And three, use data to support your decision-making process, reporting and compliance functions as well as creating efficiency within the organization. So these are the major challenges that we're seeing in the marketplace. And I'll hand it over to Mike to discuss how Altus is in a really good position to help our clients address these challenges.

Thank you, Sung. All right. So this is our time. So this is like the before and after slide that you go with. So I'm going to go with that everybody knows, well, most of my team knows, I do not like wearing suits. I have great suits. Being in financial services, I have great suits, and I have great ties, but I got rid of those a long time ago. I'm wearing slacks for you all today because I was told I wasn't allowed to wear jeans. So -- and it's not because I put on some weight during the COVID. So where we were? Let's talk about those are the tie and jacket-wearing days, okay? We performed and we still perform great services. Our guys are value-added services working with our customers to grab value for them, all right, value-added services, not implementation services, not low-end services, we provide value. We hear that all the time. Where we are today is we started getting into software. ARGUS got us in the software. We got into Taliance. We got into Voyanta. You start looking at the different pieces that we have. Individual products that were point solutions in an industry that started to collect data that started to think about how you would do with decisions, but didn't tie together. You've probably done all the research on us and you know that, that was somewhat true. However, what we had is because we had the right real estate and where we sat, our platform was being used by more and more people. And the platform was making decisions. When it comes down to it, I said it earlier, it's about the decision-making that needs to occur. We need to facilitate that in a world that is changing rapidly. And where you get into and where you're going, this is the jeans and hoodie moment. When we bought the guys from Reonomy, the Head of Development, he had one request to me because we really like him. I just want to be able to wear my hoodie. I got called Mr. Gordon, by the way. That said, it's the intelligence, it's actionable intelligence. What's happening? Where is this happening? Why is this happening? What's going on? It's the who, what, why, where and how, the 2-year-old questions at all of our kids had asked us at 1 point. This is really starting to say, okay, with these assets, how do I operate this? How do I change -- how do I work with this? And this is pulling the full value of Altus together. In the past, we've talked about different divisions, different solutions. I would tell you, when I first came here, I think I told Camilla that this is the smallest conglomerate I have ever seen. And as I got to talk to many of you the analysts, they would all ask me about you have so many different things that pull together, but they go one way in another way. What we're looking at is pulling these things together, and they do fit. They fit across the value chain, they fit across valuation. The intelligence goes through tax. We use our intelligence around cost to help people construct their assets. And then we help advise on appraisals. But at the bottom of this, you take the services that we were excellent at, you put a platform in technology behind it, you accelerate it with the analytics and you bolster it by the data. And you pull that together, there's nobody else doing this in this industry. And in my mind, this is what the industry is going to need over the next couple of years because, as I said, things are going faster. So as we get into like how we're marketing this, the empowerment of CRE professionals to do their jobs in a faster, more informative way. I keep talking about valuation and risk management and intelligent decisioning. You're going to hear Jorge talk about Intelligence-as-a-Service. That's where we're going with this. It's not just analytics, it's not just data, but you have to drive it in some sort of decisioning system, and ARGUS is the system for this. Every day, we have people log in ARGUS. We also have people try to log in to Excel because we have -- we are actually expanding the use of ARGUS and making it simpler to use. So this is helping on a global presence. However, people do valuations, however people make risk decisions around the way property is. So some of you guys have seen this slide before. We're setting ourselves up for 2022. But on 2021, we have been working -- we had 5 main things that we wanted to get done when we entered the year. The first thing was we have been talking about cloud forever. People are adopting cloud right now. We will end the year probably around 35% to 40%. I don't know the right exact percentage rate, but where we were at the end of the third quarter, as you guys -- as we announced, we were 3x higher than we were at the same point last year. Focus, execution, simplicity. Our team is working on getting people onto the cloud. Second thing, we've said we were going to get into a full data game. People said, "Well, you're a data guy. What do you see here? What's the opportunity? I think I've said with a couple of you guys for every dollar of technology you sell, you should get at least $0.50 on that dollar for data. There's no doubt about it if you actually have the data that matters. I would venture to say in this industry, there's some really good data providers, and they're probably listening in right now, and I say hi to them. But it's really about the core pieces of data that matter. It's not about like how long your data file is. If anything that I learned at FICO was there's really like 20 things that matter when it goes into a FICO score. The rest of it is noise. Helping the industry figure that out and get that down into a standard is what our guys are working on and doing. And so that's the data strategy. So that included analytics and that included the data side. We've built on the data, we've got our data set up, we now have Reonomy in fold with us as a partner on this. Actually, that merger was excellent for us. We merged with StratoDem. And now we have what we call full data and analytics that we're selling to the market right now and people are adopting. That will be continued to be emerged with our ARGUS platform, our ARGUS Cloud. Then you get to the debt adjacency. People ask me why debt right away? The amount of debt in this space, I mean, it sounds -- as American I like that is good. But you need to look at these assets from the equity that's put in the return on equity, but also to look at how you're leveraging the debt and how you're leveraging that with the explosion on how much money is coming into this industry. The one area that we did service, we service banks in a very good way, but the debt adjacency allows us to be full service to the banks, who are an integral part of this industry. And also, by the way, helped us get -- helped us build the ground game in Europe and that team, and Jim will talk in his operating model, how we're expanding upon that. I get to Property Tax. I can take a deep breath because I know like I've had a lot of good discussions with people in this room and people on the phone about Property Tax. I like Property Tax. I'm out there saying it, it's a 12-step process. You get to say it, if we all say it together after a while, we'll be fine. Why? It's not about being parts of different business, but it's like when you think about the valuation and what's going on in valuation around these assets. Number one, it's all the advisory work that our guys do and that appraisal management. But it's really -- tax is the second most important thing. So if you're looking at this stuff, tax is a good thing. Why we were running them as optionality? I don't get it. What I would say is when you look at the data that comes through tax, how they use analytics to determine where should appeals be and how they drive value to their customers, it's a great opportunity. Now does it have to change? Absolutely. Will we change it like we're changing Altus Analytics? Absolutely. It will be a combination of our services, our technology platforms, our data and analytics firing to help our customers do a better job of managing their asset. And what we spent a lot of time doing last year was setting the foundation for this in this tax space while we continue to grow. And then finally, on the corporate alignment space. People have been asking us, we've had a great year from bookings. Team has done a great job. They're selling great stuff. There's more to come. People are like, is it just a year because you've rebounded from COVID? No. The blocking and tackling that the teams are doing and looking at how those pipelines are moving and how things are happening, they've accelerated the opportunities, and they'll continue to do it. They've done this as we've started to advance our new operating model. We're going to have customer success. We're going to focus on retention. We're going to focus on lots of things that while we talked and gave lip service to, if you have great go-to-market and you're out there and you're providing value and you have good NPS scores as a software or as a service company or I should say, intelligence as a service company, you will get more and more opportunities. Customers need this support. And what we hear in this space is there's not a lot of people doing this. So you'll see this slide from Jorge later. This is going to get into our tech stack and how we're building this through. And as you see, it has all the different areas like -- there's more parts of the value chain that I talked about, but they've broken that down a little bit further because that's what product guys do in a good way, and I don't do it as well. But you'll see how ARGUS, Reonomy, StratoDem, all fit into this with our appraisal management. And then there's going to be the same thing on the tax side, it's the same platform, working on tax use cases, not in 2 platforms, similar platform working in coordination to make sure that the data comes in and that we make sure that we get that wonderful tax data that's out there at the asset level, more detail than anybody will have it, and we pull that into what we now have in the breadth level from our friends at Reonomy, where there's 54, and I'm rounding up, 54 million assets in the United States that we have data Now before I go, we always have to give a plug for ESG. And it's not like ESG because we're doing it, there will be a March report, you'll see that, it will be great. guys, you guys will do a great job. But It's about where do we fit in, in this value chain? Today, our tax professionals are already helping our customers work around the environmental and sustainability pieces, right off the bat. When you're going to be an ESG company, it should not be what you're doing internally, but it's also what you're doing externally to the market, helping in the work that you're doing, helping in how you do the valuations how you actually hire, how you promote, how you look at this. Our team is committed to this. Our team is very much looking at this as a transformational point for the industry and how the industry can grow to the next steps. So from our perspective, you're going to see a lot of work. I mean Kim will come up and talk about what we're doing around human capital -- or at the end. And we will sit back and talk about how we are actually going to put in the environmental aspects of how we look at these assets. It's changing. We have to change with it, and we have to drive upon this. So we have a big -- we feel that this is a big place for us, and there will be a lot of room around this as we get into 2022. With that, I'm going to let -- Alex is going to come on, on the screen because he couldn't fly in for good reason. And Jim is coming up to talk about the large tax and analytics at the same time, talking about the large addressable global market. I will tell you, I think it's bigger than what they're telling you. But that's just no pressure.

It's $10 trillion. And Mike just feels 1% more than that. Well, I guess that's it. Total adjustable market clear. Intelligence-as-a-service, net out a lot of data into 1 data point. I guess I'm done. We'll move on. We've got Alex up there. I'm assuming he's going to pop up on the screen here at some point. I'm Jim Hannon, President of Altus Analytics. I met a lot of you last night, but looking forward to meeting the rest of you soon. Let me just start off with Mike, he's going to me on this one. The market -- the addressable market for us, we believe, is conservatively greater than $5 billion globally. And we're going to show you how we got there. Just jump right into it. So we're going to start with -- maybe I'm going to start with the data point? All right. I'm going to start with a data point. We're an analytics company. We've been analyzing addressable market for the entire year that I've been here. We have a couple of our data scientists on this. We've cut this many, many ways, as I'm sure most of you have, but we've just said, all right, how do we net this out into a simple conversation for the sakes of thinking about investments and it's -- you have to take all these complex data points and correlations and get it down to some simple facts. So some simple facts. Let's start with what we're talking about, what Mike and Sung have just teed up. This is more than just the awesome ARGUS franchise, it's more than the awesome appraisal management franchise or the tax franchise or a cost business. It's a total shift of how do we go from being best-in-class for those very specific services to how do we change the conversation to we drive alpha, and we reduce beta. It's a very different approach for Altus. The core assets were set up to start to have that conversation. The assets that we've purchased and integrated in the last year have completely accelerated that. So when we think total addressable market, think about it in terms of driving alpha, reducing beta, right? That said, let's just go to some data points. On this slide, you can see where our growth focus is. We're in lots of countries. I'm going to talk about that in a slide or 2. But from a growth focus where we are going to specifically invest to chase growth markets, you can see it, it's Canada, U.S., France, U.K., Germany, Australia. We are not pulling back investments from other markets. But where we're doubling down is based on the TAM information that we're going to get into with you right here. So let's just start with core data, 100 million commercial real estate assets in these focused markets alone, another 100 million commercial real estate assets in Rest of World, not even going to bring that into the equation, okay? So what does that mean? How do you go from 100 million assets, nice number. So what does it mean? Where are we going to invest? How am I going to invest across the analytics, P&L? How is Alex going to invest across the tax P&L to capitalize on this opportunity? So we did some math. We broke it down. I'm sure you guys have all done your own TAM calculations elements that we looked at before getting to the simple example that I have on the screen. We looked at our revenue by country, our revenue by user type, the number of users that we have per user type. We looked at the average spend per client. We looked at the average spend per user. We looked at the number of businesses in the different commercial real estate segments. We've looked at the number of assets that each of those clients have. And we've looked at the amount that they spend with us as a function of their NOI. So we've hit this from many, many angles. We could have a religious debate about total addressable market and how you calculate it. We're going to go with this simple netting out of the calculation. So we said 100 million assets. If you go and look at a 5% -- just cutting it down. We're just -- it's just math right now. If we could go after 5% of those assets and on 5% of those assets, we could achieve a $1,000 spend with us against those assets, there's your $5 billion. Now you guys are going to go, well, Jim, there's fast food restaurants in there, there's gas stations in there, there's gymnasiums in there. Those aren't your addressable market, right? Take 5%, just do the math of how many assets are professionally managed in the U.S.? We've looked at that. I'm not going to get into all of those calculations. 5% is an attainable number for us to target. The $1,000 spend, and you think about that, that is significantly less than what we achieved per customer today, significantly less. Why did we use 1,000 we wanted to come up here and say this is a conservative view and hopefully, that, that would be an indisputable view on 1,000. But let me frame out the 1,000 again just for context. That $1,000 per asset that we have up there, that uncovers valuation, appraisal management, data, our Canadian data solutions, the Reonomy business, finance active, the opportunities for advanced analytics with StratoDem, portfolio asset management services, data management, tax and cost. When you think about the collective portfolio that we bring to yield 1,000 per asset, we really believe it's a conservative number that we're looking at there. If you look at that with $5 billion, then you get down to, well, that says as a company, we're at about a 15% penetration rate. It feels about right and core takeaway, major opportunity for us to grow this market significantly. We didn't do this just to say, is there a major opportunity from and invest in Altus perspective. We did this work to figure out where do we invest, where do we put our next dollar of investment. And that's what's informed the new Altus Analytics operating model, which I'll talk about later. So it was for very pragmatic reasons that we went through this total addressable market. So we can get our appropriate segmentation and get our resources deployed in the right places. So now I'd like to talk about how analytics is poised to take advantage of that market opportunity. Our products are used in over 105 countries. We do training in over 200 universities worldwide. We are the market leader for valuation. As you guys know, we're mission critical in many of the commercial real estate processes. We have over 12,000 clients worldwide. Our market coverage, particularly now with the Reonomy acquisition, gives us robust coverage. In the U.S., we know we have over 53 million assets covered in the Reonomy database. Most importantly, we're trusted. It's about performance and trust with the clients, and we have that with the clients. And we have the opportunity to go beyond our current awesome franchises into solving up in beta for the clients. And we have retention for those of you guys who are oriented to LTV and type calculations, our retention numbers are fantastic. So you put all those ingredients together, Altus Analytics is very well positioned to continue to lead the market and go after that addressable market. With that, I will turn it over to my friend, Alex, in the U.K.

Here we are Hopefully, everybody can hear me. Thanks, Jim. Please note, I'm not wearing a tie. Good morning from London, everybody. I'm Alex Probyn, and I'm very sorry that I can't be there in person. So Jim has provided some great insight into the huge total market that presents itself. And we see this aligning perfectly with the growing opportunity we see emerging as the property tax market evolves. We believe that this has been the direction of travel for some time. And by this, I mean, we are seeing a property tax world driven by the increasing digital environment and regulatory compliance shifting from one which was centered around event-driven reassessment and appeals to one which will require a more programmatic continuous real-time service. Now successful delivery in this new environment will inevitably require large data, but critically not just large data, but the better use of that data, better analytic capability from that data, but also with the technology to serve the increasing demand for insight, mitigation, compliance and reporting around risk management. These opportunities will favor those with the greatest scale, the furthest reach and the best data but will also require operational execution with an increasing digital capability, smart use of technology to support their people and a move to a more flexible consumption model. So if it's not already obvious, we're really excited by this opportunity. And needless to say, we're already working towards it. We believe the reasons to the right-hand side of this slide support our excitement. We have strong or leading positions in core markets. We have national capabilities in those markets. We have relationships with tens of thousands of clients across these markets, and we're winning new ones every day. Many of those relationships are long-standing, and we're deeply embedded with these clients and their tax management processes. We've been at this a long time. So we are well respected by the taxing authorities, and we seek to work closely with them in a positive way. Along with our clients, we're both stakeholders in the system. So we believe it's our responsibility to work together for positive improvement. We are trusted by our clients and rewarded with their loyalty because of our exceptional track record of success on the behalf, and we have and are collecting huge amounts of data on these markets, particularly at a property level through the work our consultants and teams are doing every day. So as Mike has said, this industry is changing fast, as many others have done so before. And just like those, the opportunities will be there for the providers who have scale, innovation flexibility and great execution. So we feel really well placed at this point in time, and I'm very excited about the road map ahead. And on that note, I will pass over to Jorge, who will talk you through our exciting product road map.

Thank you, Alex. I guess I need to carry the microphone. Jorge Blanco. Pleasure to meet you. First time in front of many of you and had a great time last night speaking to many of you. What I'm going to do is spend probably about 35, 40 minutes, walking you through how we are going to enable the change that we've already discussed at up to this point? The first thing is this -- I like Mike's slides better because they make the world look a little bit more realistically complex. A few of you asked me, great question yesterday because I've been at Altus since the 1st of March. And they said, "Well, what did you find? How can you describe it?" And there's 2 words that came to mind. I'm sure my partner in crime, [ Steve Bezner ], in development will smile at this because it was -- it's an artificially complex market. We've made it hard because we've made it hard. People like [ Rube Goldberg ] in this market. They have not really taken a step back to look at what is the client trying to do, which Jim has already articulated is the pursuit of higher alpha and lower beta. And Altus is as a leader in a platform with ARGUS, certainly playing an important role, but very much in a state that looked a lot like this. And what we have found is that critical to creating that intelligence as a service we've talked about, there is a massive, massive data problem that is only exacerbated through fragmentation. At FICO, we had a saying, and it's in Mike and Dave Ross, Jim, we made us saying data is where every advanced analytics project goes to die. We talked about optimization. We talked about predictive analytics. We could talk about the future. We could tell you absolutely everything and then go, okay, but where is the data? Well, we don't know where that is. Then all of a sudden you've turned into the swamy, and you have no idea what you're going to do. Our clients are telling us exactly the same thing. They are spending an inordinate amount of time in what is the raw material for where we are headed. So we have to deal with the data component before we get to anything, and we certainly have been focused on that area. But with that said, what you can see is that we are on a path to move well beyond what people have described in the context of analytics for the past 20, 25 years since it's become a practice, which has mostly been descriptive analytics, which is, let me show you a pretty picture about your data. That's interesting, but it's constantly, constantly giving you answers in arrears. And what we're looking to do is how do we help our clients gain that edge on what is going to happen? And eventually, how is that decisioning going to become a core component of a prescriptive workflow. It is difficult to achieve. It has to be pursued methodically as we go into this, it will not change overnight, but we definitely believe we've been putting the pieces in place to pursue this. Alex and Jim have both talked about trust. My God, have we had a year that has put us right in contact with how much our clients do trust us and how much do they expect out of that trust as we go. But when you look at the technology, the technology that powers that trust that sits behind our experts, which are and will continue to be frontline to everything that we do. There are a number of requirements that need to be met that have not been commonplace, as Mike said, in the context of what this industry has delivered. First, you've got to look at scale and high performance. As Sung mentioned, this has become a bonafied asset class. At the top of the list of many. Second, it does need to provide value. It can't just be about widgets and tools that spit out something that is going to cause another 3, 4 months of work. In addition to that, it needs to become much more predictive. It needs to give you an edge what is going to happen next? Why is it happening? And where is it going to be? The other piece of this is we talk about hyper productivity, I'm sure you've all noticed, but [ Kim Carter ], our Chief People Officer, is probably the busiest person in our team simply because right now, talent is in sharp scarcity. Our clients are facing exactly the same thing. So hyper productivity, meaning how much can we extract out the human capital and how much do we enable it is absolutely critical. I can't say enough. I mean if I had a middle name, I don't think the connected in Spanish is all that interesting. But in English, it sounds great. But it is about connecting the dots. Everything has to connect, it has to be designed for connection first, which has not been the case in the industry. Consequently, you end up in a science project of integration for the rest of your life that by the time you're done, you're thinking about how you're going to redo it. And the last piece, it is about optimizing decisions. The best decision you can make. Are we going to be making the decision for our clients? Absolutely not. Are we going to be a key enabler in their strategic kit for those decisions, you get, yes. So that's -- those are the parameters that we've placed around our portfolio as we go. With that said, that connection of the dots is something that we've been doing very aggressively, especially since Mike got here, to begin to bring all of those pieces of information to answer how good is that intelligence is going to be for our clients. How much time do we save them? How much error do we take out of the decision? And when there is error, how much agility can we deliver and provide when it needs to be remediated? So when you take a look at, for example, the combination of valuation data and asset intelligence, my first experience in this company, as I came in, in March, as who is in the audience who runs our strategy offers, it's telling me about this little company called StratoDem. And the main thing that I heard beyond predictive analytics, which wasn't that novel to me because I happened to have been in the industry was the fact that when we combined the demographic and economic data that they were collecting in predictive models and combine it with our valuation data, magic happened. Three months later, we acquired them and [ James Chung ] is here. I haven't seen but that group has come in and have begun to teach us and teach the marketplace how you can begin to apply those principles. Ultimately, as Jim said, this is all about a very simple set of messages to our clients, increase your alpha, reduce your beta on everything you do. Quality of decision and speed decision are the dimensions, the dimensionality of the problem as we pursue it. The other piece of this is the industry has had a tendency to disconnect the different buyer types, even though I'm here to tell you, and actually, it is an advantage, we have had some of these arguments with some of our clients, especially with people like me that they go, "Oh my God, you have spent like maybe 2 milliseconds on commercial real estate, Jorge, what do you know?" And I go, "Well, hold on, what are you trying to do"? "Well, we're trying to gather a massive amount of data, and then we're trying to optimize it so we can use it. And then we're trying to put some workflow behind it, and then we're letting people consume it." I'm like, "All right, kind of have seen that movie before, and we've got plenty of experts at Altus to ensure that we're doing the right thing with that combination." My focus and my organization is to make sure that everyone that touches the Altus ecosystem, starting with our technology are fully connected to those workflows to that data doesn't matter where it comes from. Ultimately, what we're trying to do is get to what we call asset level intelligence in that dimensionality can and is delivered and will be enhanced, not only through our analytics assets, but every one of our tax professionals and our cost and development professionals, they touch the same assets. So one of the things that we have to do is look at how do we enhance the process of ensuring that, that information is the most up-to-date, most comprehensive, and we would be silly and we would be wasting an opportunity if we didn't connect all of those elements to exactly the same process. You will never hear me talk about a tax platform or an analytics platform or a development platform. We will have 1 platform at Altus, and it will be in the market in '22. Now Mike showed this chart, and a lot of people go, "Well, where's ARGUS in all this?" The answer is simple, everywhere, everywhere because no matter what you touch along the continuum of this value chain, the intelligence that our ARGUS-driven platform or component of the platform now delivers is critical to everything else. So you've got to think about it as a common denominator that is not going away, but it's now part of a picture that extends the company's breadth and our points of access to clients across the value chain rather than in just narrow verticals that we have been in for most of our history. Every acquisition that we made this year, and Mike knows this because I'm a little bit artistic as well, and I don't like to do things that are not elegant, but every one of these acquisitions have been tested against how do they fit in the model? And it's been scrutinized like that by the Board, by Mike and everybody else to ensure that there is a reason they're here: Reonomy, StratoDem, Finance Active, and they will not remain discrete components in this architecture. Now when you think about why this matters? I'll just use 1 use case just as an example. The use case that occurs every day by investors in this industry of where am I going to invest? Where should I invest? That is typically a question that in many cases, can take weeks or even in most cases, months. What neighborhoods am I going to go into? Which particular type of properties? What size of fund I want to go into? And our experience has been that even with seasoned investors, you ask them how do they do that, and it feels very much like, "Well, we're going to look at the Sunbelt, lots of good things happening there." And if you imagine a world where that can get taken down to neighborhood level, that level of precision, that is precisely what our StratoDem asset does. But then you ask yourself the question, "Great, you got me to a neighborhood. That's fantastic. Now what? What's available? What's there? What are the typical valuations? What are the comps?" Reonomy steps in and takes us all the way down to the 54 out of the 54 million that essentially are the critical ones. And then you go, "Okay, are you done yet?" No. Now I got to leverage ARGUS to understand the valuation of those properties and how do they fit into my own investment model. All 3 connect. What used to take weeks, I'm here to tell you is now in minutes. And I wish I was making it up just for a fact because I've watched it. And I encourage you, there's a number of our experts here, James, Matthew, Pat, these folks can actually show you what we're talking about. Now think about if we return you weeks of time on a decision what you could actually do, what can you do with that time? How much competitive edge do you get? How much buying power can you exercise? How much leverage can you exercise? That's what we're talking about as we go into this. So StratoDem, Reonomy, ARGUS Enterprise, they are not 3 things, they are 3 parts of the same equation. With that said, as Jim mentioned, he's been doing work for months in the analytics world. We're doing the same with Alex in Property Tax and actually started to do some work with the cost business, too. The idea here is how do we make these components simpler to consume? We are not arms dealers. We're not going to be selling tools. Here's my nice little tool, go in the corner, use it, find 10 people. No. What we're doing is we are driving towards different business problems that are compartmentalized to a point where we can actually assist our clients effectively. Now my old firm, we used to talk about the concept of the 21st century enterprise. The 21st century enterprise had 1 distinct characteristic and that is everything is going to be offered as a service, everything. And you can see it now. The largest software company in the world does not sell software anymore. They sell service. They're in Redmond, they're kind of little, start with an M. Microsoft Azure is a service. It's not just Software-as-a-Service, you're essentially subscribing to their platform so you can build your own on top of it. Amazon across town, same thing. So when you begin to look at that and when I looked at Altus, what got me really excited is I understood that an expert-led professional organization like this one was dealing with a problem that said our clients want us to solve their valuation challenges every day. That is a highly specialized skill. They want to do it in scale. You can't scale it if you're only or main differentiating factor is just the human capital. You've got to achieve a combination. So what we are doing is taking that expertise, the intelligence that we derive from our technology and our expertise and the technology itself and packaging it to solve for valuation, I know many of you refer to it as appraisal management, you're going to hear me talk about valuation. It's a synonym for me. The delivery of intelligence, constant access to that intelligence, which are Reonomy acquisition complemented by, of course, StratoDem, our core. Assistance with directly -- or directly assisting with transactions that are occurring every day, not just on the equity side, but also now on the debt side and managing performance over time from a portfolio management perspective. I was actually -- since I was learning CRE as I was coming in and learning ARGUS, realized that some people use ARGUS strictly for compliance. They do evaluation, they put it on the side and off they go. We've got other people building 5-year plans on the thing. They use it for completely different things, connected by valuation, but different things. So the management of our portfolio is something we want to do better at. And of course, assisting our clients with strategy much like the use case that I just showed you. What do they do next? How do we help them improve that strategy, hone it in and the intelligence? I'm telling you -- I also want to make sure, last night, I got a lot of questions about property tax, I'm really excited about this. Tax fits, as Mike stated, like a glove in this model. So working with Alex and [ Russ ] and the rest of the tax team as to how do they become not just participants, but core components of exactly the same thing we're doing as we execute the strategy that Alex is putting in place of creating a programmatic business on the heels to what we've been doing in the tax space? The data, the acquisition of that data, the management of that data, the serving of that data, all absolutely connects. I don't need to go out and build new technology in many cases. I just need to apply it. So we are essentially beginning to connect all of these into a platform into what we call as a set of offers. You can use the word solution, you could please don't use the word bundle, I hate that because it isn't. It is a thought through, there's a value, there's a buyer, and we are going to package it in a recurring model that takes our experts, our intelligence, our technology and makes it available to a client, easier but much more powerful to buy. In terms of what you're going to see us do, '22 is a year of the platform. We've got to put the technology in place. We got to tuck in all of the different things. We got to stop or redirect different elements of the business to ensure that they all connect. I've told my team, if we're doing something more than once, we've done it once, too many because you don't need to do that in this market. We can reinvent, we can rescale. There's no reason to have my own workflow engine, my own web presence, my own data. No, no and no. There will be 1 full connection. So that's what we're doing this year. That's setting us up for beginning to expand the ecosystem. And that means that third parties should begin to participate much more directly in the collaboration. Building platform-based approaches is not unique to Altus. We're not going to claim, "Wow, we're really smart. We just have this great idea that nobody has ever thought of." Our clients are doing this. So we certainly now need to begin to look at '23 as the points of integration, how is it going to come in? How do they leverage our data? How does it integrate with theirs? When it integrates with theirs? How can we provide the toolkits for them to manipulate it, something we call the studio? Eventually, we see marketplaces growing up out of this because there will be all of these common users or I mean actually varied users in a common environment that can begin to transact business that we could potentially broker. And then ultimately, we're going to get to a point of industry transformation. We know. We know because I've learned it here, you got to be very careful when you tell someone that is doing an acquisition in the context of transactions that you can do things in near real time because new real time is measured in milliseconds. I've got a deal, I've changed the number, the valuations going south. I need to go back here, you've got a minute to come back to me with what is the impact of the flow. Well, this all has to become not just near real time but really approaching real time. To do that, you got to build a boatload of technology and a boatload of scale, but more importantly, you've got to do it in a way that the alchemy starts with the expertise and the face of the client. So one of the things that I would tell you, I've got the title of Chief Product Officer. We will build no products. We're building Intelligence-as-a-Service. That's the product. And that will have expertise, intelligence and technology packaged together and, in many cases, very, very difficult to unravel. Two things, 1 of the things -- first thing I asked myself and the rest of the team when I came into Altus is what are we about? Why are we here? And these 2 words came right to the top. I went to the worship at the tempo of Sung Lee and and we go ask him questions like, does this make sense? Does this resonate? Is this the right thing?" They said absolutely. One, this is about our clients trusting us to a system with their decisions, with our Intelligence-as-a-Service portfolio. And of course, how did it impact alpha, how did it reduce beta, which is the performance element to this. We're not doing that, we're not doing anything. But we are poised. I mean I will tell you personally from -- on a personal note, I haven't had this much fun in a while. And our clients -- I know that our clients are absolutely rooting -- not only rooting for us, but wanting us. I just had a very large head of innovation, just look at me and said, "Jorge, I am not building a thing, so hurry up." That's exactly what we want to hear. So very excited about where we're going. We definitely believe this is the first in industry, and we are absolutely committed to do it. So let me just give the final word before the break to Mike. Thank you.

Thank you. I learned because we have -- you have to think about French in a French company. I love the title that's what I'm going by now on. It was awesome and it was French. These are the things like why did -- somebody asked me why did you join the company? [Foreign Language], it sounds pretty good. A couple of things I wanted to do to state as we go through this and I'll talk about the innovation side as we get before the break. First off, just a couple of our beliefs as we do this. This company believes in an open ecosystem. The best way to protect your moats is to be able to partner with others and provide access to your systems. It's a little different -- a little bit of a different twist that Altus used to talk about before. We're going to partner. We're going to drive integration. We're going to allow others to get in. They have to provide value. If they provide value to our customers, we're going to find a way to do that. It's an easy thing to do, and it's innovative to go through. I know a lot of you guys will ask the question, is there a step-out investment as part of this because you see a lot of things going on in the page? The answer is no. We have the investment we need. Why -- very clearly, the answer is no. We are going to start not only growing at a faster pace, but we are also going to be expanding our margins. We believe we have the right amount of investment for our product sets to drive our products and the time frames in the space. Now People will ask, Mike, can you grow faster? And if we can, we will. And we will invest in that. Our view is that we want to grow at a very fast organic pace. What does that mean? Double digits across our different product lines, all right? Some of them are already growing at a very fast pace. If you guys saw the results from -- which you all did, from Altus Analytics in Q3, the organic growth rate was well over 15% and we expect that to increase. No pressure on Jim. But at the same point, we also realized that we need to start expanding our EBITDA margins, and we're planning on doing that next year, even as we integrate these different acquisitions. So that is our plan. That is our promise to you. You sit back and think about like what Jorge has talked to you about and how it comes to fruition and into the market. It's not enough for us to talk about it, but it's also for what our customers say. So just a couple of customers who said we could talk about them here to today. First off, Dream out of Canada. Great customer. We've had great relationships with them, a customer that we do a lots of work with ARGUS, started using our advisory services in the United States. They've adopted FA across their entire portfolio. Why? They want a 360-degree view of their assets. We're starting that implementation right now. I'm pretty sure next year -- and they've looked at like -- talked to our guys and said, "Hey, we need to talk about analytics as well. Second group, another advisory client, AEW, this last week adopted StratoDem to help with their portfolio management and actually advise on their portfolio going further. It makes sense. We do the advice. We do all the appraisal management work for them. And at the same time, providing them these tools, they can actually do more themselves. It's actually a really good thing. Yes, we talk about the basis points. But an easy part of the sell, just to get into this, which the like James and Sung have talked about, it's guys, it's hard to find people to do this. This tool will make every one of your assets and your people more effective. You don't have to hire that extra person. This will make everybody more effective. So they are down that path. At the current rate and pace that with that acquisition, we were -- we wanted to have 6 or 7 of these items. We talk about units. We don't talk about like how much revenue when we talk about software. If you get to it, it sort of like inventory turns. We think we'll sell 6 or 7 units of StratoDem this year on top of this, and we have a great portfolio building for next year. And then the third client I'd like to mention is Allianz Real Estate. Allianz Real Estate, when you take a look at the entire platform, is now deploying across the cloud, across the entire platform. We worked with them for a while, the team has worked very hard with them to bring the next level, they take a look at what we're building. We're looking to get that deployed very quickly. So overall, it's easy for us to get up here and talk to you about our innovation. But it's great to sit back and start telling you clients and customers who are saying, "Yes, this makes sense. I want to adopt this." And what you'll see from this as well as we hope to, as more -- we do more of these things or we go back to our Connect conference, more customers will talk about it because the best thing versus me saying it or Jorge or Jim or Alex is our customers coming up here and telling you why they're using us. And so that -- those are 3 customers I wanted to mention. As we come back from the break, we've talked about innovation today and at the top end of where we're innovating. But part of like to get you the double-digit growth and improve upon the margins, it's about execution. And this executive team is relentlessly focused on operational execution. And so Jim and Alex will talk about how we're going to be changing the operating models around to take advantage of capturing that growth and what we're trying to do around that because you can have the innovation, but it's like a tree falling in the forest. If nobody is around, it doesn't make a sound, all right? So we're going to be talking about that after the break. Did we want to show them the video before we go to the break? So now this is the video, the better video of me with better looking people and talking about the future of real estate. So queue the video, and then we'll take the break. [Presentation]

Yes. I love this sh**. All right. We're running a little bit ahead of time. So we'll take a 20-minute break, and we'll sit back and talk a little bit about the operating model. And we'll be happy to talk as you outside get your coffees. So see you in 20. [Break]

I think all right, if we can get back, we're going to get a panel up here. But before that, we got Jim sitting and talking about like why he likes operating models and effective ones. Let me get the rest of the panel. We have Alex back. Is Alex, Alex, can you hear us? .

Yes, I can hear you, Mike. Yes, no problem.

Take the voice of God. All right. I'm going to sit on this side. I'm going to sit close to you. Is that okay? All right. Go for it.

All right, guys, when I saw this part of the agenda -- I was like great. I got 20 minutes to talk about operations and no way this guy can keep an operations conversation at 20 minutes because this is the stuff I really enjoy. It turns out, I got 5 minutes. So the bets are against me on this one. But here we go. Five minutes on operating model. So you've heard us talk a couple of times today about simplicity, focus and execution. It's not a mantra for this meeting. That's how we're running the business. It's about simplifying the offer structures, the way Jorge talked about. It's about focus, which is how do we deploy our people against the addressable market opportunities. And it's about execution which are the metrics that we're going to use to run the business and the cadence of when we're going to talk to our people about the metrics. So a very, very simple business model. A couple of years ago, I think it was at Investor Day, I'll just talk to you about an integrated analytics model. It was 1 of the core tenets of the Investor Day presentation. It was the right call. It was the right strategy, and we've done it. So we announced at the beginning of November, the integrated Optus analytics model, and I'm going to talk to you about that right now with a couple of slides. So the top part of the slide talks about go-to-market service delivery and customer success. I'm going to -- I have a page on each of those, so I'm going to come back to those in a minute. But here's what's new. Right in the middle of the page, you'll see regional P&L leaders, North America, EMEA, APAC. That's it. It's not rocket science. It's various companies go to geo are they go to matrix models with geos leaders and functional leaders. And that's what we've done. We've put in place. What's new is we were organized into the various business units that made up Altus Analytics, and they ran separately. And the company has been successful to date running in that way, but to drive margin expansion, efficiencies. But mostly, these were our goals: improve the customer journey, make it easier for clients to do business with us and consume our services, intelligence as a service and make it easier for our folks to work here. Said differently, tech-enabled the services. So you need folks in play who can bring best practices around sales, the whole go-to-market function, customer success, service to tech enable what we're doing twofold, improves customer stat, improves employee stat, proves employee retention, drives up margins. The simple goal of what we're getting at here. Here's the other piece that's new. In the middle of the page talks about client engagement. The client engagement role is very simply this. We were creating go-to-market capacity in our model without increasing our investment this year. We didn't need to increase our headcount or investment to drive growth. You're seeing it in our numbers. We rolled this out, the go-to-market piece of this, we rolled out July 2. We started building customer success in May. We rolled this out to live second. You can see the dividends in our numbers and the bookings numbers that we've put up for this year. Creating capacity, how do you do it? Well, we have across our company world experts in commercial real estate, and they have close relationships with the biggest decision makers and the biggest commercial real estate clients in the world. They're delivering services, and they're focused, as I said earlier, on that 1 swim lane that they delivered really well. We're not asking them to become salespeople. We're asking them to look at Altus Analytics through 1 lens and look at the client through 1 lens. So the client engagement person, think of it as the general consultant, pick your consultancy. The general consultant that goes in there, we were in there as the tax consultant or the advisory consultant or the valuation consultant, we will still do that. That's part of the go-to-market. That's part of the service delivery, but the client engagement role or the people have these close relationships with the decision-makers of clients and can talk to them about what are the biggest problems you're trying to solve. And then we can figure out, do we solve those? And if we sell them, we sell them better than the competition. And when we engage in a complex deployment with those clients, how do we manage that across what used to be 6 separate services units. That's the client engagement role, the quarter back to client, be the general consultant at the client. So I'm going to dive into the various pieces of this. Go to market. On the go-to-market piece, as I said, this was in play -- this has been in place since July. Pre-acquisitions. We had about 5 different go-to-market motions across appraisal management, 4 different software suites, our Data Solutions group, One11 professional services. And now you think about adding in finance active and you add in reonomy and you're adding Strata, had the potential for 8 different motions. We're at 1 now. simplify the offers, simplify the sales enablement, go to 1 structure, simplify the clients' ability to engage with us and you drive efficiency and you drive improved customer journeys. So where were we? We were at multiple sales teams. This is product focused. You can think of that as business unit focused. Where we're going, 1 global sales team client focused. Every sales team in the world says they're client focused. Of course, it's client focused. But the point is now so looking at the client holistically and saying which problems can we solve rather than 6 different people from Altus showing up talking to the clients about different problems. As simple as that. So what's the benefit in that? Increased opportunity to cross-sell and upsell, single view of the client, sales execs and the client engagement managers. And by the way, an executive sponsorship program for our top clients, all to create capacity for our sales teams. All right. The next piece that we introduced this year, that's new. Customer success. Our acquisitions had customer success teams. They were SaaS companies. Of course, they did. It's breathing. We, the legacy business had 1 person in a pilot for ARGUS. This has now stood up as a formalized organization. We brought someone who had worked with us in the past to run that organization for us. And we are -- customer success is about bringing best practices across the portfolio to our clients. It's not about selling, it's about the client having a much better experience interacting with us. So it's about the clients getting a value realization on this chart. That's not our value realization, that's the clients value realization. It's about customer retention. This is a group that will be handling renewals instead of the frontline sales team, again, creating sales capacity without adding salespeople. It's about creating teams that have different focus. And customer success drives customer set, which, of course, drives customer retention and expansion opportunities. It's, again, no-brainer here. You guys are used to hearing this in all sorts of tech-enabled services companies around the world. We've done it. It's in place now. Finally, the new service delivery model. Again, 5 sub -- we ran with 5 sub business units with different methodologies across services. And what we've gone to is 1 global services organization with 3 teams, business advisory services. So think about our appraisal management services was a business unit, appraisal management is a service we deliver, and now we'll be delivering it with more consistent methodology. That is to make our teams more efficient, tech enable them more so that they can go solve bigger, higher-value problems for our clients like driving alpha and reducing beta. Consulting services, that's -- clients are trying to figure out their data strategies. We can go in and help them figure out what their data strategy is and then we can enable their data strategy for them. We also have our Classic One11 business, which gives us visibility across various vendors and across our clients' estate to see what are the investments they're making and why? And those are often in very adjacent spaces to us. It gives us insight to what problems are they trying to solve? Where are they making the investments. And how does that inform how we think about the next steps of what we're going to do with our portfolio and what we're going to position. And finally, Global Solutions. We had the word managed services here, old term word, but it's 1 that many people can relate to. But when we talk about intelligence as a service, this is the team that's going to deliver it. They will white glove the service rather than let real estate professionals be great at managing the real estate let us deliver to you the data services and the data insights that you're looking to drive out of your teams don't deploy the technology. We'll do it. And that's tech team. So recap bunch of small business units inside of Altus Analytics. This is about focused execution, bringing best practices, making sure they have the metrics, tech-enabling the services improve the customer journey, improve employee satisfaction, make it easier to buy from us and to work here. That's what the at model is about. That inherently drives margin expansion. That's what we're doing with this model. With that, I will turn it over to Alex.

Thank you, Jim. Appreciate that. Yes. So I spoke earlier about the opportunity that we've foreseen emerging over the last few years and the importance of an operational execution through an efficient, scalable operating model. And as we've been organizing our tax business for greater long-term growth, we've had particular focus around 2023 as we know the U.K. resets for shorter 3-year cycles and the Ontario reassessment is pushed back a year. These types are evented to be expected, and we have a successful track record for managing and pivoting our focus to navigate them. We love the value in our revenue mix across 3 core markets and the mix across every real estate sector. It acts as a moat against the natural fluctuations within tax cycles, but we have been organizing ourselves further to a global, more unified model, capable of delivering stronger organic growth in its current offerings as well as emerging recurring revenues in 2022. This will help to protect and improve our margins and help mitigate around the potential impact of the 2023 reset. This year, we've spent time improving our business development strategies, and we've been extremely pleased with the significant growth in our booking value, particularly in Canada. We've continued to deliver the foundational tech platforms, which will enable the shift through '22 to digital transformation and a more unified model, where the U.K. has led the way in North America will follow. Lastly, we've implemented common metrics across the business to increase predictability and better measure our operational performance. But as we evolve through '22, our plan is to globally organize ourselves around 3 key focus areas: firstly, go-to-market in sales; secondly, operations and delivery performance; and lastly, client service and relationships, and you may hear an echo in this model from the 1 that Jim's just explained. But importantly, we're respecting the necessary overlap that's naturally required in managing a services business and the importance of the geographical differences. So if you could just flip to the next slide for me, please. So we've talked frequently in the past about our intention to digitally transform our tech business. And that work has already started. As we planned our path through '22 and the outlook beyond the advantages we predicted through this transformation are already coming on stream in these key areas, be it client portals, automated reporting and client communications to enhance our client or employee experience to internal process improvements via document ingestion, OCR and RPA on repeatable activities or AI and predictive analytics in our business development strategies to identify the high-margin opportunities. We are clearly positioning ourselves for growth in an increasingly tech and digital environment. With intelligent as a service powered by our best-in-class people and supported by products and self-serve capability. So if you could flick to the final slide for me. So as we position our product strategy into this new more digital environment, we see considerable and increasing value in end-to-end property tax management. But 1 that can also deliver insight and risk mitigation around this significant but unavoidable expense on top of workflows, oversight and reporting. Furthermore, we believe there are segments of the market that are currently either underserved or increasingly difficult to serve with the traditional model. We believe that the successful use of the platform Jorge explained, coupled with our tax data, create space for a property tax management offer with increased capability for both high-touch consultancy all the way through to a full self-serve offering. Depending on the client type and their varying needs and wants, this strategy has the benefit of choice for our clients and importantly, choice for the market, cloud-based to integrate new technologies, enhance synergies among applications, improved data accessibility and streamline document management, plus flexible pricing models with the ability to layer on recurring revenue with an improved value proposition into a far larger target market. And at the same time, it supports the plan to improve the utilization of our consultants our greatest assets, so they can spend more time adding value to our clients on the parts of the work that they enjoy the most. Thank you.

Thank you, Jim and Alex. That's a really helpful way to frame the discussion. So at the executive panel session, we'll just dive into a few topics where we could get some deeper insights. So staying on the topic of the operational efficiencies we'll be gaining from these changes in our theme of accelerating growth perhaps is a good starting point, Jim and Alex, you could take us through the key growth drivers 2022. And really, in the case of analytics, how we can start to expect those -- the operating leverage and margins?

All right. You know what Alex, do you want to go first this time?

Yes, happy to do that. So the key drivers, I think, for '22, we've had some really great sales through '21. right? We've seen significant growth, as I mentioned, in our Canadian business, strong growth in the U.S. and improved growth again through the U.K. So the amount of new work that we're bringing on stream gives me real confidence through the next 12 months and beyond. In addition to that, we're making a lot of progress in our product strategy. So we feel there are new revenue streams that we're going to start to see emerging through 2022. And there are some of the adjacent services that we've been developing in parts of our business that are also growing in terms of business development. So we're expecting to see stronger revenues come on from that over the next 2 or 3 years.

All right. On the growth side of this, start with -- I'd like you to think in terms of simple models like the 4 Ps model. And when you think about the amount of core product that we have to sell in FY '22, we have -- we've just surface of integrating finance active, StrataDEm, Rionmy into our core sales process. We've -- Sung was presenting earlier, Sung is driving the integration of our acquisitions. Sung has some of our top relationships with our biggest clients. He talks to them daily about what drives value for them. So it's leveraging those types of relationships. And right now, we're doing it on the -- we're in the alpha phase with the new acquisitions. And the next step is taking the learnings from those conversations and those customer wins that we've already had, packaging them up and making them scalable across the entire organization. The next piece of that is the best practices across sales and marketing and connecting the dots between sales and marketing, and it's key focus for us is the enablement program that Jorge and Ernie Clark, our Chief Marketing Officer; and Scott Cashin, our Head of Sales, are driving together to get the teams to focus on the highest value problems at our clients and how we target our teams to focus and talk to them about what we can do to solve those problems. And the next part of your question, Camilla was around efficiency. I think you guys could probably see just going from 5 or 6 separate business units to 1 standardized set of methodologies across functions has inherent value right there.

And as a follow-up to that, I think some of you are aware, we did a pricing study, and we see pricing as an opportunity to expand the user base. Could you share some insights on how we see pricing evolving across our solutions. Maybe we'll start with Mike and Jorge.

I'll come in next.

You'll correct whatever I'm about to say. So the pricing study revealed a couple of -- or actually, what it did is improved the number of hypotheses that we already had. One is that, for example, when we looked at as we've been putting ARGUS Enterprise into the marketplace, the per seat model is 1 that was not translating into the type of value capture that we definitely believe we can command. So you will see us over the next 6 to 7 months, begin to introduce much more asset-based pricing that will be much more commensurate with the types of portfolios and the AUM sizes that our clients are managing with these capabilities. All of that principle will be fairly consistent with what we're doing with our -- the rest of our portfolio. If you look at the intelligence components of these, you will also see much more aggressive packaging. I'd like to call it bundling, I've had this conversation. Mike will call it bundling in a second. But the packaging of our capabilities behind particular use cases, be it strategy, performance, transactions, et cetera. We sold in a very disconnected fashion, as Jim already outlined. So all of those principles that we found, those were 2 or 3 of the core ones, definitely streaming into the pricing and packaging, we will be putting into execution in '22.

I got my own. Yes. Yes. I'll stay away from bundling. I think what the study gave us and 1 of the things I've learned in the past is to try to get the pricing more quickly than not. Pricing is pretty powerful. You want to -- the 3 ways to grow is you take market share. You have new product introductions and you price in a more effective way. And I think that what we learned is there was misalignment between our pricing and how we were going to market. We are -- per seat model are restricting our own access to the market because if we talk to our large customers, they do the math and they do the calculator and they think about how many seats. They've all sat back and talked to us, it's like we would like more seats. Now that doesn't mean we're discounting, but there are different users and they're disciplined user personas they're going to get on, and this is what we're trying to do with aligning this. And we think that a lot of these customers, there is great growth for us there. And if we can get them on to ARGUS, then as we package differently, the different pieces of data and analytics, then we can upsell and cross-sell from there. So I think that you'll see that work around the products. What we've also learned is we have plenty of old versions of products in the marketplace. And I think we have a very good sense of the elasticity that we can charge around that and use that in a way to continue to move people to the cloud, whether that is addressing different maintenance pricing, addressing what we should be charging to be on the cloud or how we work with that. I think we have a pretty good sense of like what our customers want to pay. They were very open with us, and they -- and we think as long as we can align that right to value, we'll be in a great place. So this is something that we're going to be instituting in 2022.

The acquisition of Finance Active this year was a very big step in expanding our capabilities on the debt side. So maybe, Mike, why don't you take us through why this is so strategic and why customers require that 360-degree view?

Well, I think that when I first came in, Ray Wattula, who runs Corporate Development for me, ran up to me, and it was like my 5th call and said, we are looking at -- we have been looking at Finance Active for a long period of time. And we need to think through what we're going to do on the debt side. So then I got a chance to talk to Robbie Tanjong and Sung on the appraisal management side of like tell me about like what we're going to do with market. And the guys are starting to do work on doing debt valuation. Okay. How big is this? Well, the market got I got to talk to a Ray Michele our Chairman, and markets like 2 to 3x the size of just the equity side. And as a result of this, as we were looking at this and talking to our largest customers, they all started to sit back and tell us we don't have a very good view on this. If you guys can pull these things together, we'd love to do it. We built a -- this was before [indiscernible] BJ versus AJ. But we built a Steve Bezner, and myself sat down. We built out like what the product specs would look like for this. We knew what the 8 or 9 key use cases were. And then at the same point, we talk to Finance Active. For us, Finance Active fit a lot of those pieces as well as linked the people who were -- we're looking at technologies that link the owner operators, the brokers, the banks together and through the portal technology that they've created, we thought that they would be a great fit for us. So it gives us a great -- it actually extends our market, it extends our TAM, as Jim talked about earlier. And I think at the same point, it gives us great reach into the European market. I've opened up businesses in Europe before. If you don't have feet on the street or you don't have a partner on the street, it is incredibly hard to go into Continental Europe. Napoleon learned that with Russia, we were not -- we will not do the same thing with France and Germany. So now we have very good people in the street working on this. They're talking about ARGUS, they're talking about Finance Active. We brought their guys over here to talk about Finance Active and ARGUS together, it's not hard, but that's what you need to do when you start thinking through that. So this gives us -- I know we've been talking about getting into Continental Europe for a while. This gets us there in a good way.

And so to expanding in our debt capabilities, as we heard from Jorge today making a lot of advancements on the data strategy. So the combination of our existing data assets and capabilities with now Reonomy and Strata then really put us position to scale and grow. But what we haven't talked about yet is all the data that resides in ARGUS enterprise through the cloud, so maybe you could touch on the plans for that and how we could get to unlocking the value there.

Actually, Bill asked me a great question from the break. The data is all going to land in the same place. So 1 of the things that I want to make sure that we've been -- the board actually approved investment in '21 for us to be able to start consolidating that data and people like Steve Bezner, our Chief Development Officer, Matthew, have been working on the consolidation of the ARGUS data for consumption in the scalable model. When we did our due diligence, especially for StratoDem in Reonomy, we then considered what would be the path to ensure that, that does become a central common repository because as I said in my remarks, the most exciting part of the fusion of these things was when we took that ARGUS data and combined it with stated or we took the ARGUS data and began to see how do we connect it to the Reonomy ID structures and the knowledge graph that they've brought to the table. So essentially, none of it is getting dropped. Actually, it's all getting consolidated for the purposes that I outlined before. We will most definitely begin to see that consolidation in the calendar year as we started.

Okay. Can I add in? So I'm sorry, no, I'm going to go 1 step further. So I know that we've been talking about ARGUS and the analytics side. One of the things that we saw with the addition of Reonomy, and we didn't actually put in our business cases on why we're doing this is actually also grabbing the data from the tax side of the equation. When you think about where tax gets to and our analytics guys have looked at the data that we have on tax, the access that we have on tax and how we collect that, it is deeper. And what do you mean by that? What do I mean by that? That is it gets down to very much bits and bites at the asset level. And some of that becomes very intuitive to people like when they're taking a look at their portfolios and how they can extend things. So if you think about it, we now -- we have breadth with what we have with Reonomy. We're deepening that with what we have in ARGUS and what we've gotten through our appraisal management teams, and then we're going to deepen it even further from our tax side. And then as you do this, you start to get really a sense of like what are the core variables that are valuable. You can build the intelligence on top of this. And those 2 things kind of fit hand in glove. We will have the same discussion on the cost side of the equation as we try to get the building attributes as the buildings are being erected.

Topic of data and client data, in particular, as their cloud and data offerings scale, data privacy and data security really are a high priority for Altus and all of our stakeholders. So Terrie, why don't you take us through where we stand on data governance, the contracts or rights and how we've readied the business for the opportunity in data?

Absolutely. Absolutely. So as a starting point, we obtain the requisite data rights from our clients and our offering to work within those rights. And what we're seeing more and more is that clients are increasingly willing to give us the data and you've heard a lot about what we're doing with our offerings. And they see the unique value to them for insights and analytics, and they understand that providing that data is beneficial to them. So we're certainly seeing that. And this all goes towards -- you heard Mike talk about the open ecosystem that we're looking to build. So it certainly goes towards that. And part of our unique value proposition is, unlike other providers in the space, in the data space, we're not hand cracked. So we have a solid infrastructure already with which we can pull that data in. And then what I'd say finally and most importantly is that we protect the data. So for example, we anonymize and we aggregate the data. And we do have a data governance program. We're constantly looking for ways to improve that and that's an important and key part of our data strategy.

Appreciate that. Thank you. Turning to property tax. This business does touch a lot of substantial amounts of CRE assets and data which is really key to our client outcomes. So what's the innovation potential on the data and property tax? And maybe we'll start with Russ and Alex to chime in.

So the first thing I think about is through processing across the property tax business process. The digital transformation that the journey we're on. On the 1 hand, it allows us to drive margin out of the services part of the business, but then it also allows us to extend our platform to our customers. So once the customers are actually on our platform, they start to want to see more and more data. And so we can show the benchmark, we can show the national data competitive in the market and then you start bringing in the predictive analytics, we start scoring properties that we may or may not be part of our contract. It's their properties, it's properties in the market that they're interested in investing in is a lot of excitement in our customer base about that. So we're being asked today, can I store properties in your platform that you're not working on from a tax services business, and we're more able to say yes.

Alex, would you have anything to add?

Yes. I would only add, I think I would echo what Mike said earlier, I think there's considerable value in that asset level data. We're collecting huge amounts of data every day just through our everyday activity. And I think we're forming a very unique view of the use and specification of real estate at an asset level. and there's value in that. And my final point is your leasing data as well. So as part of the appeal work, we collect a lot of leasing data. which we keep within our files and in our data. So there's value there, too.

Can I add 1 more thing? Because these guys are like moving ahead. I like to use analogies to it. And I think it's like insurance industry at 1 point I worked in the insurance industry, and it's like adverse selection. We're not going to be adversely selected but we're going to help adversely select others. The idea behind this is that if we can give them insights to like where they're going to get the best returns from a tax perspective across their portfolio by giving them their own points of view on their assets, but also assets in the area, and we can do that. Number one, that's a great use case for our customers. It creates incredible value. But also what it does, it creates incredible value for them to use our consultants. And from that perspective, we think that, that data play is probably 1 of the first use cases that you get to the combination of the data and analytics actually getting that score like Russ was talking to, that's exactly what it will start to do, and we can provide a better -- we can provide better insights, a better return. And from that standpoint, it gets it and goes on from there. So we get very excited about that.

Great. And recognizing that people are our greatest assets and in the context of the battle and talent, as we discussed and with our high-end focus on ESG, maybe can we can share some thoughts on how we're revamping our HR strategies.

Yes. Thank you. It is obviously an incredibly exciting time to be part of this industry. And when you hear from my colleagues this morning and you hear words about transformation, innovation, the tech at the heart of attracting great talent is the quality of work that people get to do. And we definitely have that available. So that has been a real key for us in telling that story. The second part of that is what Jim talked about in the operating model, which is creating great roles for people and making it easier for our people to do their job, also key. On the flip side, on the retention side of things, we have to be laser-focused in creating a differentiated and competitive experience for our employees. At the heart of that is our commitment to ESG. It's something our employees are passionate about and we're passionate about it the organization. So when we think about how we're differentiating that experience, we're staying close to our employee engagement levels, which are strong. We're staying close to that and staying close to some innovative practices around how we have implemented our activity-based work model, creating flexibility for our employees, how we build career paths and create opportunities across different parts of our businesses and globally. And of course, our evolving focus on equity diversity and inclusion has been very important for us and continues to be a place where we can differentiate ourselves. So with all of those in mind, it's a really great opportunity to move forward.

Well, turnover the panel for the time being, bring up Angelo on stage to shift gears to our capital allocation discussion, and then we'll invite you guys back for the Q&A for the final 30 minutes.

Good morning, everybody. It's a pleasure to be here today. I think I'd like to just begin by saying that with all my tenure at Altus Group, I've never been more excited about our future prospects than I do today. I mean I think we're definitely at an inflection point. And I'm just very excited. I'm also very pleased with how we're ending the year. We provided guidance. And I think we're showing some very good progress in how we're closing the year given our revenue growth and our margin improvements. And I'm very excited about how we're entering 2022, given our strong bookings, our strong pipeline and our backlog. So just turning to the slide where we show the strength of our cash flows. And in the last couple of years, you'll see we've had pretty good strong cash flow growth, 22% CAGR and this is at a time when we're investing in cloud. It's a time where we're changing our model in analytics from a perpetual model to a SaaS model, which typically the first couple of years, you're hitting those troughs. And it's a time where we have been investing in digitization and in our tax deployer -- tax platforms, as you've heard earlier. We -- after the Reonomy acquisition, from a financial leverage standpoint, I wanted to let you know that our bank-funded debt-to-EBITDA ratio stood at about 3. By year-end, we're deleveraging to about 2.75. And on a net debt basis, we're actually be closer to about 2.5. And by next year, we should be well below 2x leverage. So again, I just wanted to point out the strength of our cash flows. It's pretty compelling. So then the question becomes, what do you do with the cash? And you've heard this morning a lot of opportunity in just investing in ourselves. You've heard about how we're going to continue to build out and integrate our platforms. You've heard that from Jorge, who made a very compelling case. And we expect to generate excessive shareholder returns, we really do expect to drive shareholder value. So that's the first place that we focus on. Again, as Mike pointed out, these aren't step-out investments, but we are putting money back to work. Secondly, we're investing in acquisitions. Clearly, you've seen us in the last year, really drive acquisitions and at a very early stage, we're integrating them, and we're showing early wins. And there is still a lot of opportunity in that area. Lastly, return on capital, 1 of the areas that we are considering is share buybacks. Now just want to stress, it's not that we're out of options in terms of how to reinvest and gain greater returns. But that certainly on an opportunistic basis is an opportunity for us, and we will look at it. So on acquisitions, there is an evolving and consolidating landscape in CRE. There's lots of opportunities for acquisitions. And the area that we're going to be focused primarily is going to be tech targets. So companies that provide us an edge in technology in both analytics and in tax. Tax as well does have some tuck-in opportunities still, particularly in the U.S., where it's a fragmented market. And so that will be somewhat of a focus for us. So what are some of the criteria that we look at? Well, first of all, it's got to be within our core verticals. I mean that is absolutely important and/or a close adjacency that provides us with some advantages within the CRE value chain that Mike discussed earlier. It needs to or should add or contribute to the use cases, a few of which you heard this morning and/or contribute new use cases that we -- that are close to our core. Also, they can contribute in terms of expanding our geographic footprint and/or getting us into new market segments that we're just not tackling today. And finally, it's about -- really it's about continuing to expand our moat and really improve and enhance our competitive position. And don't want to forget the talent. I mean out there, I mean, very clearly in this last acquisition with Reonomy, the talent that we are acquiring is a key asset, and it really is at the top of the list of the considerations when we're looking at these targets. So it is absolutely top of mind. Looking at financial filters. Well, today's market is just making sure that you're buying something at the right price. The multiples are fairly high. But we are looking and very cognizant of what precedent transactions are and staying within those guardrails. And absolutely, I mean, they have to create value. They have to provide above ROIC thresholds that we have. So that is absolutely important to us. They have to be accretive, either absolutely right out of the chute -- or through synergies, organic growth or synergistic growth to be able to provide accretiveness. And if it's an early-stage company, with perhaps a very high growth opportunity, but negative EBITDA, given its stage. Our target is to make it accretive within 2 years. And I think we're proving that out with Reonomy in early days. That's our -- we've talked about it being neutral after 1 year, and it will be accretive after -- within 2 years. So capital structure. I talked about leverage -- or sorry, I've talked about our cash flows and the opportunity that we have to redeploy that capital. And we think that next year, we have the ability to make acquisitions between $250 million to $300 million without actually raising any additional equity. And from that point on with every successive year, that number should grow. In terms of the balance sheet itself, obviously, our mandate -- my mandate is to make sure that we continue to maintain a strong balance sheet as we've had historically. Guard wells that we're looking at to staying within, I think, quite comfortably given our cash flow generating ability is between 2.5 to 3x. So that's a long-term target that we have. But we're also very open to going to 3.5 or above that if we have great visibility to those cash flows have great visibility and confidence in terms of deleveraging and getting back down within that 2.5 to 3x guardrail. In terms of -- just in terms of the debt options that we have, we are investigating various options, particularly addressing sort of an increasing interest rate environment. And so that's underway. We are looking at mitigating that risk in the near term. Dividend policy. It's a question that comes up quite often. Look, we're always evaluating our dividend policy. Having said that, though, we don't have any real near-term plans to change in the status quo. So that's pretty much where we're at today. And then alluded to a share buyback program, we are looking at potentially putting 1 in place. Again, it would be opportunistic in nature. And it would be really there to mitigate equity dilutions that we may have from time to time. So this last slide -- this last slide that I'd like to show you is basically plotting out what our revenue growth and margin profile looks like. And we've kind of benchmarked ourselves to a set of peers, very strong peers, I'd say. And what you can see is that over the last several years, we've had growing revenue growth successfully, and we've had growing margins. And this is on a consolidated basis. And you can see that given the consensus estimates for 2022 that we're going to be back close to a Rule of 40. Now we used to be a Rule of 40, we are, I think, are underway, close in our analytics business. But on a consolidated basis, we will approach that next year. And if you look at what Rule of 40 companies trade at, they, on average, at least this peer set is roughly at a 32 multiple and Altus Group today is basically at a 26 multiple. And the conclusion to that is there's lots of room for us to grow, grow our shareholder value. I think this is a really great time to invest in Altus. That's it. I thank you and safe journey home.

Okay. Thank you guys. So we'll start with questions from the audience, and then we have a few that have come in from online portal. So would just kindly ask if you do have a question, please raise your hand and our colleague, Thomas, will come up and if you could speak close to the microphone. Arthur, go ahead.

Thank you. I found out of interest that you started with a slide of where we were, where we are and where we're going. And in that context, have you considered listing in the United States given the change in the shareholder and customer base, the lack of liquidity in the stock and the fact that you're vertically -- really vertical software, I could say, service company. So that's the first part of my question. And then the second in the same context of where you're going and where you are today. I know Angelo touched upon it briefly, but what is the logic right now of keeping the dividend given all of the opportunities for capital allocation?

I'll take that?

Please.

Right. So I love those 2 questions. Getting right down to the [indiscernible] Tax. So we are right now starting the evaluation about a U.S. listing. We are looking at a cross listing or dual listing between Canada and the U.S., and we're determining what the best way to do that. One of the things when you do in dual listings or new listings, is there's a lot of costs that come in and what we're trying to do is make sure that we maintain this and be able to use what we have in place. Part of what we're doing next year, we didn't get into, we have -- we've talked a little bit at a high level about our project Genesis. We are replacing all our internal financial systems. The idea behind that is that we want to be ready for something like that as well as have better metrics for us to operate on. So from that standpoint, those things are in coordination. So I would tell you that the evaluation has started. The time is nearing, we don't have a time frame just yet. As to the second question on the dividend. Yes. There's a great evaluation and conversation happening with the Board on this right now. I certainly have some views. What I would tell you is we will, in coordination with that move to a -- if we do make a move to a U.S. exchange along with the Canadian exchange, we're going to reevaluate the dividend and do that at that time. What we're going to do is we don't want to have a bunch of moves not in coordination like, okay, like we talked a little bit about stock buybacks, the stuff we don't want to confuse the market. But at the same point, we realize that we might have -- we have to revisit our dividend policy as we revisit like what we're doing on different markets.

Thanks, Arthur. We have a few questions that have come in online from Gavin Fairweather of Cormark. So related to our Analytics and data [ TAM ] calculations, maybe Jim, you could take this one, but can you share how penetrated you believe you are with our current clients?

That's a great question. I wanted to go back to -- we had a couple of data scientists on this topic for a year. And as you can imagine, it depends which segment are you looking at, which subsegment of -- within commercial real estate, what type of business are you talking about? What we did was -- so the answer is, it depends by client, it's not consistent. And that is the opportunity. So what we did was we took the various businesses. We looked at their classification codes, grouped them together, grouped them by size, grouped them by geography and then looked at what is the penetration of advisory against the number of funds they have. What is penetration of ARGUS Enterprise users, what's the penetration of developer or State Master into those clients. And the opportunity is that it's inconsistent depending on the clients. And when you start to drill into why is it inconsistent, I think Mike or Jorge hit on it earlier, gets into per seat license pricing. So there's an opportunity to drive more value out of pricing while creating significantly more value for the clients by modest increase in price give significant increase in capacity in some parts of the business where we're not in. Some clients are very heavily in planning. So using ARGUS Enterprise as an example. Heavily in planning, do not use them in acquisitions. You use it in acquisitions, don't use it in planning. So because they don't want to pay that cost per seat, their IT group isn't funded for it. So it's about shifting the personas that we're talking to at the client and then making it easier for the clients to consume and deploy across their enterprise.

Can I add on? Because I think Jim is being a little bit modest here on this stuff. There's -- I think there's a lot of -- we all think that there's a lot of white space to go after in each one of these customers. And he's absolutely right. Customers use our stuff in different use cases. But like if you take a look at ARGUS, I have talked to a couple of you at the break, people are surprised that we actually pulled on 338 new customers in the last quarter, all right? And that's a huge number. But we think we're scratching the surface because we think that there's a lot of new opportunity, but there's also opportunity to grow at our core clients like what Jim just talked about, if you think about like when I got here and Jim started talking with [ Rick and Sung ] it's a great business , it grows double digits. We asked them, could you double your growth if we get them focused? I think that, that was like one of the first calls with them. And I think that there was a big silent moment, but they did it. And they were able to do it by good old-fashioned sales, getting out there, getting the opportunities, talking about different parts to get to. And everything that we've talked about as we got our growth this year has been just doing what we do better. Next year, it really is going to start -- you're going to start to see the pivot from moving just to the cloud, but really seeing the cross-sell. What Jim and Jorge have talked about and Steve's building and David's getting like the baseline with us with Altus Analytics is that we should be able to see our cross-sell go up. We have not been the greatest cross-sell company in the past. And if we can get that cross-sell with each and every one of these products going out there, that's an amazing thing. Just the fact that we think we're going to have a number of StratoDem opportunities to close this year is like the start of that cross-sell on that. And we'll do the same thing on Reonomy, and we're starting to do the same thing with FA, as we discussed about dream earlier. So I think there's a lot of white space.

[indiscernible] Question as you productize property tax into your module, how should we think about contract value potential with some of your top-tier ARGUS customers?

So that was like contract value? How big is the contract?

Or the potential there?

So I mean this is -- I think that with-[indiscernible] guys, they can sit back and talk about what they think. Our view is in the next couple of years that we want revenue from tax to have something -- this is where people get nervous about what I'll say out there, and then you guys will put this out there that somebody said $400 million. No, no. We're going to -- we would like about 20% of our revenue in tax to be coming from recurring revenue over the next couple of years, right now. It's going to ramp up over time. But if you think about that and you think about what you're talking about, if we can just get -- if we can get to $5 million to $10 million of ACV this year, the guys are kind of focusing their teams on that and you can double that the year after and double that the year after, we think we can get there pretty quickly. And by the way, there's a lot of market share in this area to go grab. So I think that when you compare it to like what the Altus Analytics team is bringing in, I think you're going to see it in a pretty comparable amount based off like Altus Analytics will do something theoretically around $90-some million this year, including all the acquisitions. Great growth with us this year. We think Tax has the same potential for us.

Thank you. Here's a fun one for Jorge. As you provide -- can you provide further detail on the potential for a marketplace? What kind of transactions do you envision taking place on the platform?

Good question. The -- so I'll give you 2 particular examples. And actually, one of them is in the property tax base in itself. As we expand the use of -- or the leverage of a common platform to support our professionals, one of the things that, that allows us to do is, is expand to potentially professionals beyond what we've got and offer those services to them. And this is not a new model to us because we've seen it in appraisal management already. So that marketplace could be a connection to a client that we already know, portfolios that we already know, that would then allow us to connect our platform services connecting to the [ recurring ] model that Mike just mentioned and allow them to essentially leverage our platform as a meet-up place for commercial relationships between them. So that's one example. The other is we are getting much more active as we look at the, no pun intended, the Finance Active asset and once we go across and you look at all of the connections, for example, the banking vertical relative to connections between institutions that are focused on, of course, onboarding, underwriting to them soliciting funding for that instruments and eventually managing the loan. All of those are transactions that if we are able to or when we are able to connect the workflows, allow us to expose, if you will, the platform for usage and eliminate essentially the friction that occurs between these transactions where you've got to go find your buyer, find your bank, find your developer. So that's what we are anticipating seeing as opportunities. Clearly, in order to do that, I stress you've got to have your house completely built; you've got to have the data, you've got to have the platform, you've got to be able to bring them in. But certainly, I haven't found too many spaces in our industry that are essentially monolithic in terms of user personas. There's appraisers, there's valuators, there's banks, there's lenders. There's all kinds of participants in a transaction. All of them will be touching our platform and leveraging our platform in one way or another. We have an opportunity to connect them.

Great. Next question from Richard Tse at National Bank. Cloud is obviously important to the success of a lot of your initiatives. Any plans to further accelerate cloud conversions? And I guess we talked a little bit about pricing changes on the Q3 call. Any additional comments?

Listen, I think we're -- Richard, we've talked about this quite a bit. We're -- we are -- we believe we're at the inflection point at the end of this year with our customers and with the big ones coming on. We did a lot of work this year to put a lot of carrots out there, put new technologies in there easier for them to digest, new technologies on the cloud versus the on-premise version. And I would say we've made some announcements that we're retiring some old versions of software from 12.1 and below. And if people read between the lines, we're not putting anything out on on-premise for 14 and above. Cloud's the future. Our belief is that -- we think we -- if we achieve what we want to achieve this year, we'll get the preponderance of our groups on to the cloud by next year. I would talk, our target is about 2/3 to 3/4. It's a little bit wider range than the 35% to 40%, just depends on where we're starting from. But I think that we want to accelerate that through. Some people have asked me why don't you say 100% next year? Well, we got some big guys who will move when they're ready. And we have some smaller guys who will move when they're ready. And -- but they will be -- I wouldn't say isolated, isolated is the wrong term. I think there's going to be a good conversation with them. And we just need to think about as they're moving, part of the power of the new ARGUS platform is the ability to rethink how you do your work. We've taken Jorge and Steve have taken a point solution and build it out as a platform solution. So that means you need to think about your workflow, your decisioning, how you're incorporating data, and we want our customers to leverage the power of like everything that's in that. If we move them over quickly, we might lose the opportunity for the cross and upsell. So I would say we're moving at a good pace. If we can keep that pace up, accelerate it a little bit into next year and have a good managed transition with that, we think that we're on the right side of things. Also, to be honest, a lot of the other acquisitions we made, there's really only one way to access that, and that's through the cloud. So this kind of stuff is going to start pushing people naturally towards it because they're going to want these solutions.

Actually, it's a good -- [indiscernible] the next question from Richard. So what's the incremental revenue opportunity from upselling new services into the existing customer base? And how will that scale over the next 3 years?

So Richard, you're probably trying to ask like what's the next -- what are we going to do [indiscernible]

Richard, you would.

I realize that I got to come in here and the first question I got from everybody, Mike, are you going to confirm 400? Yes, that was great. Let me answer it in a different way and maybe not give you the answer that you want. I think that the -- I think I've talked about like $1 of software should beget probably another $0.75 to another $1 of cross-sell. I think that holds. I think that also gives us $0.50 to $0.75 on data and Analytics, can add on top of that, and then there's a little bit more. So there's a big room for us to improve. I would say the way that we look at it and the way the executive team looks at it is we're looking at double-digit organic growth. If we can maintain double-digit and I'll give it 15%, 18% range, in that range for that business over the next couple of years, that's what we want to do. We think there's market to grab, there's market to gain. And if we can get to 20, we'll go to try to get to 20. But what we're trying to do at the same time, there are a lot of feedback that I got when I came on as like you made investments, we want to see those investments churn out. We think that we are coming out of the inflection point. We're going to start to expand our margins. And we're managing that expansion at the same time of the growth. We will go grab market share if we can. And we will grab more. But our goal is to expand a couple of hundred basis points. Next year, we're looking on margins and try to accelerate from there. So from that standpoint, that's kind of the guidance that we're going to give. I'm not going to give an absolute number on what that looks like, but you guys can put that into your models, and we'll have a good discussion over that.

Okay. And the final one for Richard, are there opportunities to divest business segments to amplify our growth rate even more?

There is. So to the question that Arthur asked about, like what are we evaluating going forward? We always evaluate every part of our business. And the way that we look at it is, what could we get in return? And how would that help our other parts of our business to grow in a faster rate if we were to do that? I mean you get into focus and you get into execution when you're trying to think through those things. Right now, we like the businesses that we have. And what we're starting to see is with a lot of the CRE Consulting businesses, is a lot of the work that was done on Altus Analytics this year. We started doing in the background on the CRE Consulting businesses, and we're starting to see the return on those businesses as well. Angelo mentioned Rule of 40. For the last 4 months, across Canada was above the Rule of 40. And you guys have an idea of like where that's grown in the past. And so we think that there's good opportunity out there. The key thing before we make any decisions on any divestiture is that we want to take a look at our technology platforms, our analytic platforms and our data platforms and understand how we can bring those to that business and can we make those services more tech-enabled and valuable. If we can, we want to keep them. If we can't, we'll think about what we're doing next.

Question from Dan Chan at TD Securities. How are you doing relative to the targets you set out at your 2019 Investor Day on growth and margins? Would you still be able to meet those margins? And I look at Jim. For the record, we had declared 30% margin range by the end of 2023.

Deliver.

That's what you're saying here.

Busted, yes.

No.

The dynamics -- the mix of the business is different than it was in 2019. I will tell you, I think you heard it through various presentations. I hope you picked it [ at about my ] operating model presentation. Number one focus, improve the customer journey, clearly. But margin expansion is also very high on the priority list. So that said, we announced Reonomy would be -- we did announce the impact of it, right, from a ...

Yes.

So it's neutral. So you guys can do the math on that. It adds in revenue. So that's going to degrade the basis point improvement that we've targeted on the core business. But on the core business, we have -- I would put it in the rock solid margin expansion, low risk for execution to drive that expansion. It will be diminished just from a pure calculation basis on the higher revenue and not additional EBITDA this year from that business. But going forward, I think the long-term EBITDA targets that we put out there are very attainable.

If I add it in, and I think I've been asked about 1,001 times about the 400. We have multiple paths to 400 in 2023 on the top line. I think Jim has got multiple paths, how we pull those paths will depend on how the market evolves. And if we can accelerate, we will. We have a good plan for next year. We have a good plan for the year thereafter. So we feel very good on those numbers that we have there, and we feel like what we have in-house will get us to that point. On the margin side of the equation, I think that we expect to be a 30% to 35% -- probably 35% EBITDA business as we go forward, and we expect to expand margins. Will that all happen in 2023? Probably not. Will that happen thereafter? Yes, it will, because we're going to expand those margins pretty quickly and religiously, as we've moved across from an on-premise company to a cloud-based company, we've worked out all the on-premise-based issues that we've had. We're retiring software, gives you great opportunities for margin expansion. We said that we already had the development teams and the product teams in place. So you can start to see as we layer on new revenue, how that should start to expand margins going forward for us. We're just probably -- as I would say, bookings, then comes revenue, then comes EBITDA. And so we're following that plan, and you'll see EBITDA starting to pick up pretty quickly.

And maybe just on that topic [indiscernible] of the margin potential of property tax?

Sure. No pressure on property [indiscernible] Maybe I should actually push it up on Altus Analytics, but I don't want to twist Jim too hard while he is on stage. But we think -- we're doing really well with our margins on property tax, and that's -- those are strong margins in the low 30s. Now we definitely have a reset in 2023, but we believe that we can -- as we control -- we grow and we have good bookings there, we can get those margins into the 40% range.

Our next question [indiscernible] Stephen MacLeod at BMO. So you talked about having more third-party integration in Altus Analytics. Can you talk about how that would impact Analytics economics, if at all, pricing, revenue, margins?

To start, I would [indiscernible] about being an open ecosystem Stephen. I think our view is very straightforward and simple. The more people who get on our platforms, the more people who are using our platforms for technology or data or Analytics, the more opportunity we have to sell and we will price accordingly to get that opportunity to make it ubiquitous in the state. I think historically, we've been a little bit more of a walled garden than we need to be. And I think going forward, we don't need to have that because I think that if we are part of the fabric of -- and we are part of the fabric of commercial real estate and we tie to other people and make those solutions easier to get to, I think that we'll see our revenue just inherently go up by the number of people using our solutions, the amount of cross-sell that we'll have. And by the way, I think that it will reinforce our moats based off the fact that we're already integrated in. I believe in an open ecosystem. As a market leader, if you're not constantly innovating, somebody will innovate around you. We will be constantly innovating. So therefore, we feel like we will make sure that we maintain our space.

I would add to that. It's going to get into the business model of the partner that's coming in through the marketplace. So you can look at it as if it's going to be sold on our paper, then compared to our current set of offerings and the new offerings that we're going to be rolling out, yes, you could argue that, that would be a lower margin return given that it's a third-party vendor. I would flip that around and say, so it also depends on our involvement in the sale and the liability that we're taking on, whether you would actually book that as revenue going through, whether that's other income coming on or whether that actually books as revenue from like an agency fee perspective, which would have no cost, and now you're talking about extremely high profit revenue coming through the model. So it's going to depend on the relationship with the vendor and the liability that we take on in the contracts associated with that marketplace sale.

[indiscernible] From Gavin Fairweather at Cormark. What data sets do you need to pull together? And what development do you need to complete to go live with AVMs for your clients? Jorge, do you want to take that one?

So the -- first of all, [indiscernible] standpoint, we believe we've already begun to put all the fundamental data sets in place. Reonomy certainly adds to that, but the StratoDem data set brings both demographic and economic data that are critical for this. The -- in terms of how we put them together, the assembly is in place, and I can't forget the fact that we've got the data sets in Canada through our Altus Data Studio business as well, which is very much going to be a part of this. With that said, in terms of the enablement, we definitely anticipate in '22 to begin to induce the modeling tools that you would need to begin to explore what potentially would fit into the category of an AVM, another potential use for marketplace actually when we think about that. So the pieces will be in place from a development standpoint in '22. As I like to remind my entire team, I'm giving you the technology-enabled answer of this, which is about 20% of the equation. We then need to think about the model, the support, how is it going to run, how is it going to be provisioned? And that may take us a little bit longer to make sure that it's ready. But the technology, all the critical components of the technology will be there fundamentally within the next 12 months.

And what I would add, fundamentally, we've already been having conversations with some of our customers about this. So we believe we're in a good place to deliver. Now how they use that? Is it going to -- is it all going to be 100% automated? I've watched these things happened before in other industries. I got to sit with -- I got to be on the home residential side in the U.K., and there was an AVM there, and it was the greatest thing that I've ever seen run, 25% of the transactions ran on it. But once you started getting to the point where you started to make it augmented with the appraisers, the numbers went up incredibly quickly. So what the key thing about the AVM which I think people have forgotten in this industry or tried to do is you're trying to replace the appraisers. It's not what you need to do. You need to make the appraisers more valuable and have them get through more on faster turnaround times. And that Analytic working in coordination with the person, we think is the right use case, and that's where we're going to focus on the early time.

I would add that's not only an external use case for productization, that's part of the tech enablement of our own services organization that Mike's talking about with the augmented AVM. So that is on the critical path for us as part of our margin expansion plan.

Very good point. Next question from Arvin Valencia, TD Securities. Angelo, probably for you, the $250 million to $300 million of capital availability for M&A, will that be mostly focused towards Altus Analytics or Property Tax?

I think the greater -- the vast opportunity is on the Analytics side, but there is a compelling opportunity on the tax side as well. And our focus, as I indicated, is on the technology part. And that's where we are going to focus to begin with, but there are still some tuck-in opportunities that can drive scale and we can bring on midsized type firms that we can bolt on and get the leverage of our platform. So there's some really good ROI acquisition opportunities out there. But maybe I should turn it over to you and rest.

I would add, we have a technology and a product group that are not for Analytics and not for tax. It goes across both units. It goes across cost, too. So when we are looking at this, we're looking at technology, Analytics, data, those kind of assets that fit into the value chain in which we want to compete in, build, acquire, manage, dispose. Those are the kinds we look at. And whether we deploy those things through Analytics or tax or cost or anything else that we have, that's how we're looking at it. So one of the great things about Reonomy was we knew that we could deploy that across both Analytics and tax. StratoDem, we knew could be across Analytics and Tax. And so from that perspective, that's how we're looking at it. So I would look at it from the standpoint Jorge has product managers in both Analytics and Tech. Steve has development teams in Analytics and Tax. And [ Dave ] builds internal infrastructure, both Analytics and Tax, and that's how we go to market.

Sun [indiscernible] from Dan [indiscernible]. Finance Active brought you to the debt market. What other adjacent markets do you believe you have the most opportunity for you?

Well, you try not to tip your hand too much on some of these things that you go through it. But I think that what we look at is, we've done a lot of work on the investment management and the asset management side of things this year. I think to the question, I think we're going to spend a lot of time in the next year looking at tax, looking at the construction and build/space and build out and see what we have there. We always start with a build-first mentality and how we do that. We like the platforms that we have. If we can get there faster with that, that's great. If there's an opportunity to grab a piece of technology that really makes sense, those 2 areas make some sense, also some international expansion would probably make some sense. But I would go as we talk about the technology, every one of the technologies we bought were software service companies or data service companies or Analytics as services companies. Those are going to be the assets we're buying.

Okay. Any [indiscernible] audience. I'll carry on with one more question from the virtual participants, from Dan again. So going back to the $400 million targets, somewhat looking at a split between how much will be organic or acquisitive, but maybe you can talk about the organic path?

So I know the wrong answer is, who cares. No. The right one [indiscernible] is the following: we need to be growing organically in the 15% to 16% range and beyond in Altus Analytics. We achieved that in Q3. I think Jim's got a good plan for Q4. We have good line of sight to Q1. We keep doing that. We'll hit 400. We have the pieces and parts in place that will allow us to hit that. We're not looking at it. We're not -- if we get into acquisitions, we're being opportunistic because we think that we can grow our market faster. We have the right pieces of technology. We have the right pieces of data and the right pieces of Analytics to do what we need to do. It's a little different than what was set out there in 2018, 2019. But we think that this is a greater path for even more growth -- more consistent growth past the 400 in 2023. So when I talk about multiple paths, we have multiple paths. I think that if you look at it, you should judge us by being in those mid-teens to high teens of organic growth and improving our margins past 20% on the EBITDA side of things. And that's -- and ultimately, getting to 30%. That's how we would rather evaluate it than 400, which was a time in a place and is no longer the time and place.

Okay. Great. And by some [indiscernible] at 11:30, and that was our final question. So unless there's any other questions from the audience or online, we're happy to turn it over back to you for some closing remarks.

Oh. Okay. Kirk, you guys want to go down. Anyways, first off, we were really excited to do this in person. I think that what we feel like as an executive team is that we weathered the storm. It was funny, like I did not get to meet any of my team members live probably for the first 8 to 9 months that I was here, and many of you I talked to from my basement office. It's great to be back in person. I think our teams feel like that we can accelerate what we're doing by getting together. And I think that as we go forward with this, we feel like a lot of the major hit is behind us. And now we feel actually COVID is giving us a really good tailwind. Change in this industry, change in valuation is good for our business. Up or down, people need our tools to help them make decisions in a better way. So from our perspective, I think we're going to get back to work. We have a year to finish off. You guys will all tell us that we gave guidance, we have to hit that guidance. And so that's what our team is focusing on between now and the last 3 weeks of this year. You can tell that we have excitement with what we're trying to do, with what we're trying to build. And you got to like what you do. And I hope you felt that our team actually likes what they do. So from that standpoint, I wish you all a happy holiday season. Thank you for attending today, and I thank my team for doing a good show. Thanks, guys.