Mr. Jim Hannon reports

ALTUS GROUP REPORTS Q2 2023 FINANCIAL RESULTS AND QUARTERLY DIVIDEND

Altus Group Ltd. has released its financial and operating results for the second quarter ended June 30, 2023, and its board of directors has approved the payment of a cash dividend of 15 cents per common share for the third quarter ending Sept. 30, 2023.

Unless otherwise indicated, percentages are on an as reported basis in comparison with Q2 2022.

Q2 2023 summary:

• Consolidated revenues were $205.2-million, down 0.6 per cent (4.1 per cent on a constant currency* basis), reflecting the anticipated negative $33.2-million jurisdictional reset of the United Kingdom annuity billings in property tax.
• Profit was $11.9-million, compared with $12.5-million.
• Earnings per share were 26 cents, basic and diluted, compared with 28 cents, basic and diluted.
• Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)* was $44.7-million, down 10.1 per cent (15.3 per cent on a constant currency basis).
• Adjusted EPS* was 53 cents, compared with 77 cents.
• Analytics revenues were $99.7-million, up 21.4 per cent (15.5 per cent on a constant currency basis), of which recurring revenue* was $88.8-million, up 25.2 per cent (19.0 per cent on a constant currency basis), and adjusted EBITDA was $23.8-million, up 72.8 per cent (59.0 per cent on a constant currency basis) driving an adjusted EBITDA margin* of 23.8 per cent, up 700 basis points.
• Analytics new bookings* totalled $24.6-million, up 4.9 per cent (0.4 per cent on a constant currency basis), of which recurring new bookings* were $18.4-million, up 7.9 per cent (3.4 per cent on a constant currency basis). Sequentially, recurring new bookings increased 30.5 per cent.
• At the end of Q2 2023, 70 per cent of the company's total Argus Enterprise user base had been contracted on Argus Cloud (cloud adoption rate*), compared with 52 per cent at the end of Q2 2022.
• Reflecting the anticipated reset of the U.K. annuity billings, property tax revenues were $75.1-million, down 19.7 per cent (22.4 per cent on a constant currency basis), and adjusted EBITDA was $28.2-million, down 32.9 per cent (35.3 per cent on a constant currency basis). Excluding the $33.2-million impact of the U.K. annuity billings in 2022, revenue growth was 24.5 per cent (20.4 per cent on a constant currency basis).
• Appraisals and development advisory revenues were $30.5-million, down 1.2 per cent (1.0 per cent on a constant currency basis), and adjusted EBITDA was $3.3-million, down 25.9 per cent (25.3 per cent on a constant currency basis).
• As at June 30, 2023, financed debt to EBITDA ratio as defined in the company's credit facility agreement was 2.19 times, and net debt to adjusted EBITDA leverage ratio* was 2.10 times.

* Altus Group uses certain non-generally accepted accounting principle financial measures such as adjusted earnings (loss) and constant currency and non-GAAP ratios such as adjusted EPS, total of segments measures such as adjusted EBITDA, capital management measures such as free cash flow, and supplementary financial and other measures such as adjusted EBITDA margin, net debt to adjusted EBITDA leverage ratio, new bookings, recurring new bookings, non-recurring new bookings, organic revenue, recurring revenue, non-recurring revenue, AE software maintenance retention rate and cloud adoption rate.

Jim Hannon, chief executive officer of Altus Group, said: "Our second quarter results reflect the resiliency of our revenue model and continued focus to operate with increasing efficiency. Our U.S. and Canadian property tax operations had very strong quarters with double-digit growth over prior year. Our U.K. property tax team proficiently managed the reset of the annuity. Combined, the property tax teams significantly outperformed against our expectations.

"We are also pleased with the continuation of strong results at Analytics with 21-per-cent revenue growth and a 700-basis-point improvement in our adjusted EBITDA margins. The steady execution of our strategy, alongside the improvement in our Analytics new bookings, reinforce our outlook for the year to deliver sustained top- and bottom-line growth."

Third quarter 2023 dividend

Altus Group's board of directors approved the payment of a cash dividend of 15 cents per common share for the third quarter ending Sept. 30, 2023, with payment to be made on Oct. 16, 2023, to common shareholders of record as at Sept. 30, 2023.

Altus Group's dividend reinvestment plan (DRIP) permits eligible shareholders to direct their cash dividends to be reinvested in additional common shares of the company. For shareholders who wish to reinvest their dividends under the DRIP, Altus Group intends to issue common shares from treasury at a price equal to 96 per cent of the weighted-average closing price of the shares for the five trading days preceding the dividend payment date. Full details of the DRIP program are available on the company website.

Altus Group confirms that all dividends paid or deemed to be paid to its common shareholders qualify as eligible dividends for purposes of Subsection 89(14) of the Income Tax Act (Canada) and similar provincial and territorial legislation, unless indicated otherwise.

Q2 2023 results conference call and webcast

Date:  Thursday, Aug. 10, 2023

Time:  5 p.m. ET

Webcast:  at the Altus Group website (under investor relations)

Live call:  1-888-660-6785 (toll-free) (conference ID: 8366990)

Replay:  A replay of the call will be available by webcast at the Altus Group website.

About Altus Group Ltd.

Altus Group is a leading provider of asset and fund intelligence for commercial real estate. It delivers intelligence as a service to its global client base through a connected platform of industry-leading technology, advanced analytics and advisory services. Trusted by the largest CRE leaders, its capabilities help commercial real estate investors, developers, proprietors, lenders and advisers manage risks and improve performance returns throughout the asset and fund life cycle. Altus Group is a global company headquartered in Toronto with approximately 2,900 employees across North America, Europe, the Middle East and Africa, and Asia Pacific.

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