Altus Group Limited (AIF) Earnings Call Transcript & Summary

Thank you. Ladies and gentlemen, thank you for joining us and welcome to Altus Group's Q2 2026 Financial Results Conference Call. and webcast. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Camilla Bartoszewicz, Chief Communications Officer. Camilla, please go ahead.

Thank you, Operator. Hi, everyone, and welcome to the conference call and webcast discussing Altus Group's second quarter results for the period ended June 30th, 2026. Our press release MD&A financial statements and the slides accompanying our prepared remarks are on our website and as required have been filed to Cedar Plus after market close this afternoon. joined today by our CEO, Mike Gordon, Pavan Chhabra, and our new CFO, Katie Royce. Turning to our disclaimer slide, some of our remarks on this call and in our disclosures may contain forward-looking information based on certain assumptions and are therefore subject to risks and uncertainties that could cause actual results to differ materially. Please Please refer to the forward-looking information disclaimer in today's materials. We also use certain non-GAAP financial measures, ratios, capital management measures, and supplementary and other financial measures as defined in National Instrument 52112. We believe these measures provide useful additional insight into our performance and may assist investors in evaluating our shares. However, they are not standardized under IFRS and may differ from similarly titled measures used by other issuers and therefore may not be comparable. They should not be considered an isolation or as a substitute for IFRS measures. Further details are provided in today's IR materials. Unless otherwise noted, all percentage and basis point growth rates discussed on today's call are presented on a constant currency basis relative to the comparable period in 2025. With that, I'll now turn it over to Pavan to cover our Q2 results.

Good evening, everyone, and thank you for joining us. Our second quarter results reflect the continued progress we're making towards a more focused, higher growth, higher margin business. REVENUE GREW 6%, ADJUSTED EBITDA INCREASED 34%, MARGINS EXPANDED BY 540 BASIS POINTS, AND ADJUSTED EPS INCREASED 36%. AS A REMINDER, THE PRIOR PERIOD INCLUDED 1-11. EXCLUDING 1-11 FROM THE COMPARATIVE PERIOD, BOTH REVENUE AND RECURRING REVENUE grew 7%, reflecting stronger underlying performance in the reported results. Net income declined year over year, driven primarily by items outside of our core operating performance. This included approximately 10.7 million unfavorable foreign exchange swing compared to last year, as well as approximately 5.2 million of one-time costs related to strategic corporate initiatives and activities supporting our divestitures. Turning to the revenue by line, growth was once again led by our flagship offerings, Argus Intelligence and VMS. Software revenue grew double digits for a second consecutive quarter driven by strong Argus intelligence sales. As Mike will discuss shortly, we are seeing encouraging improvements in sales execution. VMS revenue grew 7%, underscoring its critical role in supporting our clients' compliance and valuation workflows. It also serves as an important entry point to Argus Intelligence, creating opportunities to deepen client relationships over time. In data, which reflects our standalone market data offerings, churn continues to trend in the right direction, and we expect that progress to be increasingly reflected in revenue as we move toward year end. Services revenue declined year over year. Excluding 111 from the prior period, revenue would have been down modestly. Overall, we're encouraged by the continued strength in software and VMS and the improving trends we're seeing in data. Our KPIs remain healthy and continue to support the strength of our recurring revenue model. Software ARR increased 10.4% to 206.8 million, while NRR was 106.9%. Consistent with our long-term growth profile, approximately 80% of the growth came from volume and pricing, with new low acquisitions contributing to the balance. VMS metrics also remain strong, underscoring the critical role of VMS plays in our clients' valuation and reporting workflows. over all these operating metrics reinforce the predictability and resilience of our recurring revenue base. Turning to the P&L, we continue to make progress towards our target operating model. Gross margins expanded by 190 basis points, reflecting revenue growth and operating leverage in the business. GNA declined by 360 basis points as a percentage of revenue driven by our restructuring actions, portfolio simplification, and disciplined management of corporate costs. We also continue to invest in growth. Sales and marketing expense increased and included the impact of Altus Connect, our annual client conference. Our The R&D increased modestly as we continued bringing more solutions onto the Argus Intelligence platform. The result is meaningful margin expansion while continuing to invest in our growth priorities. And finally, a recap of cash generation in the balance sheet. On a year-to-date basis, underlying cash generation improved by approximately $7 million year-over-year before interest and taxes driven by stronger billings and collections. The year-over-year comparison is also affected by the inclusion of businesses classified as discontinued operations. taxes related to the property tax sale and lower interest income following the return of excess cash to shareholders. our balance sheet remains a source of strength. We ended the quarter with 61.9 million of cash, funded debt to EBITDA of two times, and approximately 364 million of available capital. We continue to optimize our capital structure and expect leverage to settle in the mid two times range over time. WITH CAPITAL RETURNS, WE HAVE NOW RETURNED APPROXIMATELY 450 MILLION TO SHAREHOLDERS YEAR TO DATE. reducing our share count by roughly 20% to 34.7 million shares outstanding. Before I hand it over to Mike, I'd like to thank the entire Altus team for their hard work and commitment over the years. I'd also like to thank our shareholders, clients, analysts, and the broader investment community for their engagement and support. I am proud of what we've accomplished together and the results that we've delivered. With that, I'll turn it over to Mike.

Thanks, Bhavan. Before we move on, I just want to take a moment to thank you for everything you've contributed to Altus. your time with the company, you've helped strengthen our financial foundation, supported a significant transformation, and played an important role in positioning Altus for the next phase of growth. Many of these things are shareholders' value today, including a more focused portfolio, a disciplined capital return program, and a more efficient and efficient financial better visibility into business performance, and greater transparency with the investment community. This all reflects the work that you've helped drive. We're grateful for the steady leadership, discipline, and partnership that you've brought to the role, and for the support you're providing through this transition. As the saying goes, leave it better than you found it. And Pavan, you did exactly that. So on behalf of the board, the leadership team, and everyone at Altus, thank you. We wish you all the best in what comes next. As you can probably tell from our recent news flow, it's been an exceptionally active and productive period for Altus. At the beginning of the year, we laid out our objectives for our value creation plan. The foundational element was simplifying the portfolio to sharpen focus on the market leading valuation solutions. It was foundational because it would help fuel our operation expense reductions and capital returns while entirely changing for companies financial profile ahead of our planned returns. US listing in 2027. I am pleased to say that we have been executing ahead of plan. Since the start of the year, we've successfully completed four divestiture transactions, even monetizing our remaining legacy interest in the GeoVera joint venture for $26.7 million. Before we get started, I'd like to thank all of you for joining us today. Before I go any further, I'd like to recognize the many Altus team members who worked tirelessly to make this happen. Executing transactions on this scale and complexity on an accelerated timeline is no small accomplishment, and their efforts have been instrumental in transforming Altus ahead of schedule. While we always maintain a disciplined approach to portfolio management and capital allocation, I am pleased to say that portfolio simplification work we set out to accomplish this year is now complete. Altus is now a much more focused company with a business model centered on the areas where we see the greatest long-term opportunity to create value. And the benefits of that simplified model are already showing up in our financial profile. now have a higher quality earning stream that will drive stronger adjusted EBITDA to free cash flow conversion. These are tangible proof points that the operating model that we've been building toward is taking hold. Importantly, the sale of our development advisory business to Newmark has also created new commercial opportunities. Our new enterprise agreement with Numark includes Argus Intelligence and several of its add-on capabilities including Argus Assist. We're helping their professionals work more efficiently, generate insights faster, and deliver a greater value to their clients. Workflows that once took days can now be completed in moments, which speaks directly to the value our technology can deliver. The divestitures have also enabled us to deliver on our capital return objectives. As Pavan just mentioned, we're already returned more than $450 million and brought down our float by 20%. With a strong balance sheet in hand, we remain committed to returning additional capital in the second half of the year. Another benefit of simplifying the business is showing up in our cost structure. Delivering the work ahead of plan has allowed us to capture efficiencies sooner than expected, which gives us the confidence to increase our adjusted EBITDA margin expansion outlook by an additional 60 basis points this year. At the same time, we've remained disciplined in balancing our cost reductions with investments that support future growth. As we continue to reshape the organization around our strategic priorities, our year-to-date restructuring initiatives will generate approximately $15 million in annualized savings. With the final divestitures now behind us, coupled with our annualized savings, we're going to be able to continue to grow our business. AI enablement initiative, we are seeing additional opportunities to further improve the efficiency and the effectiveness of this business. Our sales motion is also getting sharper and we're starting to see our investments in sales and go to market translates into stronger execution. New sales are tracking in line with our plan, with momentum building as we move into the second half. The team is also getting better at cross-selling and winning larger deals across Argus and VMS. The quality of our recurring revenue base continues to show through as well. Software net revenue retention at 107% is a clear sign that our cross-sell, upsell, and pricing discipline are working. Underneath that number, the cross-sell momentum is especially encouraging. Q2 software cross-sell was up three times over the past year, reflecting more people on the platform, stronger sales execution, and faster pace of delivering new product updates. top of that, Argus's gross retention is over 95%. As platform adoption grows, we're consistently bringing more assets on the platform. More assets on the platform will fuel better analytics for our clients. Adoption is not only happening with our clients, it is also happening inside of Altus. With our VMS team increasingly leveraging Argus intelligence to do their work. Over 90% of our VMS employees are now trained and using the platform for their customer portfolio reviews. That internal adoption is important because it allows us to bring VMS and Argus together more effectively. to scale a co-selling motion that creates opportunities to cross-sell software into that base. Now, turning to our business outlook for the year. As a reminder, relates to continuing operations on an organic basis. Reflecting the organic momentum we've seen in the business, we are raising our revenue outlook by 25 basis points to a range of 5.25% to 7.25% organic constant currency growth. In addition, with our cost actions tracking ahead of plan and driving more efficiencies, we're increasing our margin expansion outlook by 60 basis points to 510 to 610 basis points for the full year. This guidance range would translate into approximately $127 to $131 million in adjusted EBITDA this year, a meaningful step up over last year's $98 million in EBITDA. Looking to the balance of the year, our expectations remain consistent with our typical seasonal pattern, with Q4 anticipated to be stronger than Q3, but our raise in guidance is based on the momentum we're seeing in the second half of the year. Also, as you might recall, Q3 last year benefited from pricing actions as a large cohort of our Argus Enterprise came up for renewal and contracted on Argus Intelligence. As mentioned, this guidance is on an organic basis as the new Valus acquisition that we announced today is not material to financial guidance. While Valus has delivered strong ARR growth and is already profitable, it remains relatively small from our financial perspective. All that said, we're feeling really good about our trajectory and a path to becoming a Rule 40 company even sooner than we originally anticipated. Now, let's shift gears to the VALOS.AI acquisition. VALOS.AI is a UK-based company that has quickly become a leading platform for connecting valuers and lenders within the property valuation workflow. In many ways, VALOS is highly complimentary to what we already do. Similar to how our VMS practice sits at the center of appraisers and investment reporting, Valos sits at the center of the workflow between appraisers and lenders. Valus started six years ago with a simple idea. Valuation report production was just taking too long and costing firms too much. The founders set out to solve that problem. And since then, they've built Valus into a market leading valuation platform used by many firms and surveyors in the UK. What they have built is special, a product that is changing how valuers and lenders work together, and a business that has earned real trust in the market. It is exactly the kind of innovation and client impact we want to support and to scale at Altus. Now that we have finished our divestitures, we are in the market for these types of efforts. acquisitions. AI is also deeply embedded across the Valus platform. It helps automate data gathering, read and structure complex documents, support quality assurance, extract comparables, and it can turn fragmented property information into reusable data. In practical terms, this means faster workflows, better accuracy, and a platform that becomes more valuable as more data moves through it. help put Valis in context, it's useful to understand the role that it plays in commercial real estate lending ecosystem. When a lender needs a property valuation to support a financing decision, the process typically involves coordinating with an independent valuer, exchanging large amounts of information, managing compliance requirements, and reviewing the final report before it can be used in a credit and risk decision. Historically, much of that process has been manual, fragmented, and time-consuming. Valus brings that workflow together on a single platform. A lender can initiate and manage a valuation request directly through Valus, and the selected valuer receives those instructions seamlessly within the same ecosystem. The valuer then uses the platform to access property data, gather comparable data, evidence, complete the valuation report, and to satisfy the lender's specific requirements. Before that report is submitted, VALIS automatically checks it against lender requirements, helping improving accuracy and reducing work, Once completed, the valuation is delivered back through the platform, creating a single transparent workflow for both parties. What's particularly powerful is that the process doesn't end with the report itself. Valus transforms that valuation data into structured intelligence that lenders can use across credit decisioning, portfolio monitoring, risk management, reporting, and other downstream workflows. So while valuation management is the entry point, the real value is that Valance sits at the center of a critical workflow, connecting lenders and valuers while generating high quality actionable data and insights that help customers operate more efficiently and make better decisions. This is right in Altus's sweet spot. While relatively small from a financial standpoint, Valus is exactly the type of strategic tuck in acquisition we're looking for. It strengthens our position in a critical commercial real estate workflow, expands our reach into the lending ecosystem and adds differentiated AI and data capabilities that align directly with our long-term strategy. strategy. The lender to value workflow is a natural adjacency to our valuation business and gives us deeper access to lenders, an important customer segment for us where we see significant opportunity to continue to expand our presence over time. Equally important, Valus is fundamentally a data acquisition engine. The platform captures property information at the point of work, turning traditionally unstructured valuation documents into structured, enriched, and reusable data. Over time, that creates a growing repository of high-quality property intelligence that has the potential to further strengthen and enrich the Altus Knowledge Graph. Acquisition also adds valuable AI capabilities. Valos has developed AI models purpose-built for commercial real estate valuation and lending workflows, trained on valuation grade documents and lender specific requirements. We believe that these capabilities complement our existing AI initiatives and create opportunities to extend our family of specialized AI agents beyond valuers and further into lender workforce. Finally, Valus expands our international footprint and creates attractive commercial opportunities. The business has established a strong position in the UK, which broadens our offering in an important market, while also creating meaningful cross-sell and up-sell opportunities across the Altus global customer customer base. In particular, we can leverage Altus' deep relationships for cross-sell and help them expand into our core geographies, such as Canada, another RICS-driven market where we believe that the Valis model can be successfully replicated. When you step back and look at the transaction holistically, Valis brings together many of the elements for prioritizing. A strong strategic adjacency, access to unique data, workflow tailored AI capabilities, and opportunities to accelerate growth across our customer ecosystem. That's why we believe it's an excellent fit with our long-term value creation strategy. Most importantly, it is another example of the more focused Altus we're building today, leveraging software, data, and AI to create greater value for customers and shareholders alike. That's the opportunity that attracted Katie Daltis, so why don't I turn it over to her for a short introduction.

Thank you, Mike. I'm excited to be joining Altus at such an important moment for the company. This With the business transformation now largely complete, Altus is entering its next chapter from a position of growing momentum and stronger operational discipline. What attracted me to Altus is the strength of its market leading technology, deep data assets and clear opportunity to shape the future of commercial real estate intelligence as the industry continues to evolve. Just as importantly, the work ahead is very much in my wheelhouse. I spent much of my career at the intersection of finance, capital markets, investor relations, and operations, and I understand what investors value. Clear execution, disciplined capital allocation, scalable growth, and consistent progress towards long-term financial targets. I'm excited to partner with Mike and the broader leadership team to build on the strong foundation already in place. As Altus advances its path towards Rule of 40 and prepares for broader investor engagement, including a future U.S. listing, finance has an important role to play in helping the business scale efficiently, make better decisions, and create a better future. create durable stakeholder value. I'm coming into the company at the tail end of the company's multi-year transformation. We're ahead of schedule on a number of our strategic initiatives. into 2027 with a much cleaner financial profile that will drive earnings per share and free cash flow. This allows me to focus on what matters to our shareholders. I also want to thank Pavan for his partnership and support through the transition. I look forward to getting to know the team, our shareholders, and the analyst community in the weeks ahead.

Thanks, Katie. We're thrilled to have you aboard. Before we open the line for questions, I want to leave you with one observation from my many conversations with customers because it gets to the heart of what we're building. The more time that I spend with our clients, the more convinced I am that the commercial real estate industry is still one of the least transparent major asset classes. In public, we have access to consistent and trusted data. In commercial real estate, that visibility often doesn't exist uniformly. We believe that it's a massive opportunity for all. By bringing together valuations, benchmarking, portfolio analytics, and performance insights, we're helping our customers make better investment decisions. We're not just helping customers value assets. We're helping them understand performance, allocate capital more effectively, and navigate an increasingly complex market. That's a powerful opportunity for our customers and a compelling long-term growth opportunity for us at Altus as we position ourselves to be the core platform in their operations.

With that, let's open the line for questions. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Doug Taylor with National Bank. Your line is open. Please go ahead.

Yes, thank you. Good evening Mike and welcome Katie to this I want to start with a bigger picture question. You've shown some pretty impressive progress on the margin side towards the Rule of 40 bogey that you've laid out for yourselves. I think you've said here that there's more room still to go now that the business has been streamlined. If I was to take the current, mid 30s combination that it stands at right now or the guidance reflects. Would you say the gap towards 40 and above is easiest closed by further margin expansion. Is there more? I mean, maybe you can articulate what headroom there still is there, or is this dependent on the revenue side of the equation to scale to that objective?.

Yes, Doug, thanks for the question and good to hear from you. I think very simply we can get there in both ways and the timing is shortening a lot more quickly than we had originally anticipated when we went through this at Investor Day last year. specifically on the cost side of the equation as we have gone through and uh... divested the businesses there's there's some work that we're working with with the the parties about the businesses and once that work is done that gives us an opportunity and then the second thing um... that we did that will actually improve our run rates as well as we've been consolidating our different product sets to our platforms that will reduce our run rate quite a bit. We have been running a lot of different platforms in the years and we feel right now that early in 27 that we should be moving a lot of those older platforms to the newer platforms. And once we retire that technology, we should see a good run rate improvement, especially early in 27. There's a couple other things that we see as well as we've been just consolidating our go-to-market motions as well as just looking for things as we go through the business. But we feel very good about the cost side of the equation to continue to get good benefit from on the revenue side. The equation, like I said earlier, you know our cross sell motion is starting to really kick into gear. We're happy with that, especially on the software side. I think if that cross-sell motion continues into, the early next year not only will we see the growth and the revenue growth continue to expand but at the same point that will help from that side so we'll be doing it from both ends.

Do you think, based on your prepared remarks, I mean, obviously the software growth is is evident, but the drag, at least to the overall corporate growth profile from VM but also data and services. Are you are are you suggesting that you know that? Those segments will be less of a drag through the balance of this year. Am I understanding what you're trying to get across in your prepared remarks correctly there?.

you are we feel that those things are going to be less of a drag we're very happy with where our VMS business has been historically it's been in the last couple years has been quite a quite a bit lower grower and we're starting to see that growth return because we're actually hitting different parts of the market that we had never hit before and we're starting to see some internet opportunities come our way so we think that that increases our active market that we can go after on the BMS side and then when it comes to the data side we've been working a little a little bit around the data around just getting it we've improved what I would call the hit rates of the data quite a bit in the last number of months. And we think that we will start to see that number turn around from a negative to a start to be in the lowest single digits. So while it'll be less than the software, we just get that moving in the right direction and we continue our pace on software, especially with the cross-sell that we're seeing, and our friends at advisory services continue where we are. We feel very confident about where our growth will go.

Okay, that's helpful. Maybe one more for me on Valos. Seems like a logical fit as you explained in detail. And I know you described as it being not material to the guide, but perhaps you can talk a little bit more about medium term, the monetization plan in more detail. You're streamlining a lot of your other products and you're adding another one into the mix here. Is the goal to keep this as a standalone module that you have? dual upsell or you know, but this ultimately going to be integrated more into your into your suite.

and leveraged elsewhere in the portfolio. Yes, I think the plan in the near term, which I would say through the end of the year, we're going to put our sales force and our work around them. We like what they're doing, especially in the UK and we would love that. We'd like to really kick into gear their growth. And at the same point, we'll probably bundle that into some of our products. We have a lot, while we have a number of customers that are overlaps, we have a lot more customers that we would like to get their product set into. Um, secondarily, as I said, we believe that there is a great opportunity in our home country of Canada, uh, And this is something that we will be bringing, you know, working on bringing to market pretty quickly therein. In 27, I think what you'll see us do very quickly is integrate it into the platform because what we would like to have is that as people open up Argus Intelligence, they can leverage this technology right there. And then it can be used. Again, the data sets that we have, that they have and that we have, that we can actually bring more power on the data together.

Thanks, Verlaine. I'll pass the line. Your next question comes from... Your next question comes from the line of Stephen McLeod with BMO Capital Markets. Your line is open. Please go ahead.

Thank you. Good evening and welcome to Katie and congrats to Pavan. I think best of luck with your next adventure. I just wanted to ask a little bit about the VMS business. We saw some nice growth sequentially between Q2 and Q1. I'm just curious how you're thinking about that business as we turn to the back half of the year, especially with the backdrop of rates being higher for longer.

Steven, fair question. We actually, one of the things that I just mentioned in the last question, as we're starting to get into adjacent markets with that, we have found to... opportunity to continue areas where growth is happening, especially in different parts of the market where maybe in less complex assets where the team can work or we have some opportunities that we're starting to see in the Canadian business where we can leverage VAS. And then finally, there is activity around the also in the UK. So while the rates are somewhat still, you know, I would say not in the area that we would all like them, I think that what we've been able to do with the VAST business and especially with the ability to bundle that to Argus Intelligence and align Argus Assist with, with it would be is a is a easier win for our customers to adopt and then they can adopt the vast business. So we're seeing still. Probably compared to periods before, we're seeing good growth from it, even when rates have gone up to the type of where they are today.

OK, that's that's helpful. Thanks Mike and then maybe just on the software side I'm I'm just wondering if I might have missed, I think Pavan mentioned it in his prepared remarks, but I was just wondering if you could break down sort of the key drivers of growth, um, in the quarter and then maybe separately, I know you're probably not going to be able to answer this, but just wanted to get a sense of if you're able to share the magnitude of the organization I guess assist add on with with Newmark associated with the sale.

So the second one first. Yes. I'm sorry. I'm sorry, Bob. Answer Stephen. Yes, we're probably not going to be able to talk about it. But like, yes, think about Argus Assist and the number of users that they have. I'm just going to give you the concept of it that we know how many users that they have in Canada. We also know how many users that they have in the United States. And they're one of the largest appraisers and brokers in the world, it's quite an opportunity for us. I'll leave it at that on the Argus assist. Pavan, do you want to take the first part of the question?.

Yes, look, obviously you see the second performance for software, which was a good double-digit growth within that. Yes. the layers back, Argus intelligence is growing significantly higher than the total software category, along with just the progress we're making with Forbury in terms of providing a different user interface for clients. So that's very positive. We're also seeing the mix of Argus intelligence improve over time. I think last quarter we reported, we had 84% on Argus intelligence. We have about 87% on Argus intelligence. So steady improvement sequentially. We now have 48% of Argus intelligence of our Argus intelligence base on asset-based pricing. And as you guys recall, last quarter we talked about it as 44%. So we continue to be able to drive more of the value to, you know, broader usage across, you know, the client's asset base and really, really drive more ubiquitous use across the base. So it's a very positive and growing trend that we're extremely proud about.

Okay, that's great, Keller. Thanks, guys. Appreciate it. Your next question comes from the line of Gavin Fairweather with ATB Cormark. Your line is open. Please go ahead.

Oh, hey, good afternoon. Thanks for taking my questions. Great to hear about the upsell progress. the new products moving into Argus Intelligence in terms of pairways debt, tally-ins, Argus assist. Can you just put into context for us how much opportunity that opens up in the base for 2027?.

I'M GOING TO ASK YOU A QUESTION. It's not often that you get me stumped, but it's like if you take a look at, like, as we go through, I'll give it to you this way. As you go through how many products each one of our customers have, very few of our customers actually have crossover, like where we have, like they have two of the products working together. rarely do we have three. And so as we, and I'm not including benchmark manager and portfolio manager, and I'm going to leave Argus Assist out of it because that we look at Argus Assist being a horizontal product that runs multiple agents of working across those things. But when we sit back look at getting investment manager, which would be the Taliance product, and we get debt manager, which would be our fairways product on board. Um, we think that when we look at our largest customers, uh, all of them have given us an interest in like how they can move, uh, like look at those products and move to them because. Historically we have been with the asset manager, but fund managers and the investment managers and the banking assets are starting to look at us from a perspective of what they can use from the product set. So our largest customers, I wouldn't be surprised if we, you know, we an early pipeline of having 15 to 20 opportunities each. So we're waiting for the product to come out. And then we have what I call our challenge, you know, our challenger group, which is same size like companies, but use us a little bit less. And I think that's something that we'll be pushing with them. And so there's a number of customers who have been looking at those products, especially as they come out the door. to Argus workbook. That is again something that's horizontal that's coming off. We hope to make a pretty good push especially in our European theater, probably as we get into the fourth quarter, and then really getting into the US early next year as that's tied in and the data models are aligned. I think that as we, with our strategy as the as the data models, and we've done already the core plumbing, work with all those different pieces together it'll be easier for different users to get on and leverage that information.

Very helpful. And then, secondly for me, just on the VMS business, great to hear about, the education within the employee base, just on Argus Assist. First for Argus Intelligence, can you talk about how much efficiency that's driving for the team? And should we be expecting gross margins on this business to be expanding and to what extent will you be passing on some of the savings to customers.

So we will be basically on the first piece with the team starting to use it. Part of the reason why we can hit parts of the market that we've not been able to hit before is because it actually does make us a lot. It does make us more efficient. But when we're getting back to our core customers who have used us for years, it's actually allowing us to do more of the advisory work that they've been asking us to do and being able to bundle that through to give them more insight to what their portfolios are and help them in their valuations, not just doing the work and running through that. So we would also look at that as a, a great opportunity where we are. We have taken out effort, but we've actually applied more value. Finally, in next year as we continued and the teams continues to leverage it, we do think that there's some to make our costs a little bit more efficient in that area. But also from the standpoint, like as our customers and our users are leveraging actually the platform to do the work. So our teams are helping them in the platform directly and collaborating on that. And they're using Argus Assist in that I think there'll be more opportunities next year. So we do expect that product set will become probably somewhat more profitable. And so to the first question that we had gotten from Doug. We do see some opportunities to improve our margins over the next year or two.

That's great. And then lastly for me, just with the streamlined business, it sounds like there could be some additional cost savings coming in the next few quarters. But as you're sitting down to start the budgeting process for next year, are there any kind of areas of the business that you think could be worthy of additional investment?.