This article first appeared on GuruFocus.

Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Altus Group Ltd (ASGTF) reported steady revenue growth and excellent retention, demonstrating resilience even in a softer market. The company achieved a 310 basis point improvement in consolidated margins, showcasing strong cost discipline and operating leverage. Altus Group Ltd (ASGTF) is enhancing its AI capabilities, which are expected to significantly reduce manual work and improve efficiency. The company has successfully upgraded the majority of its Argus Enterprise clients to Argus Intelligence, focusing on deeper engagement and adoption of add-on capabilities. Altus Group Ltd (ASGTF) announced plans to return up to $800 million to shareholders, reflecting confidence in its cash generation potential.

Negative Points

The sale of the appraisal business and other divestitures may lead to a temporary reduction in revenue from discontinued operations. There is a risk associated with the transition to asset-based pricing, which could impact revenue if not managed effectively. The company faces challenges in ensuring data quality and user behavior changes as clients migrate to cloud-based solutions. Altus Group Ltd (ASGTF) is undergoing restructuring and cost-cutting measures, which could lead to short-term disruptions. The market environment remains uncertain, with potential impacts on transaction activity and client investment decisions.

Q & A Highlights

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Q: Can you provide clarity on the full-year guidance, especially regarding the development advisory business and its expected revenue and EBITDA contribution for 2026? A: Unidentified_4 (CFO): Our guidance now focuses on recurring and continued operations, excluding the analytics guide moved to discontinued operations. Historically, appraisals represented about 30% of the development advisory segment, with the remaining 70% being development advisory. We plan to recast our guidance as we finalize LOIs for divestitures to provide clarity on revenue contributions.

Q: Can you explain the $17.5 million in other operating expenses added back in the quarter's adjusted EBITDA? A: Unidentified_4 (CFO): The other operating expenses include transitional costs related to corporate initiatives and strategic projects. We also benefited from $6.5 million in realized and unrealized FX gains in Q4, contributing to the higher year-over-year figure.

Story Continues

Q: How are you addressing AI disruption risks, especially with customers potentially leveraging their own proprietary data? A: Unidentified_3 (CEO): We are not seeing a trend of customers moving in-house with their data. Instead, they are eager to integrate their data into Argus Intelligence for better collaboration. Our AI tools are seen as an extension of their capabilities, and we provide robust data protection and curation.

Q: Can you elaborate on the expected growth for Argus Intelligence in 2026, given the healthy ARR growth? A: Unidentified_4 (CFO): We expect Argus Intelligence to achieve double-digit growth within the software category, driven by strong ARR growth and retention metrics. Approximately 80% of our Argus Enterprise ARR is now on Argus Intelligence, with 40% of the business on asset-based pricing.

Q: What impact do you expect from the go-to-market refinements, and how will they affect sales productivity? A: Unidentified_3 (CEO): We have integrated our evaluation solutions into a single go-to-market motion, enhancing coordination across sales, customer support, and account management. This approach focuses on customer needs and total solutions, leading to increased executive engagement and consultative selling.

Q: How do you anticipate the pace of margin expansion throughout 2026? A: Unidentified_4 (CFO): We expect steady margin expansion, starting with 18-19% in Q1 and reaching 25-26% by Q4. This aligns with our Rule of 40 target by 2027, driven by revenue growth and scaling efficiencies.

Q: How does the Rule of 40 target by 2027 depend on broader market recovery? A: Unidentified_4 (CFO): Our guidance does not rely on a market recovery. We aim for steady growth in any market condition, leveraging our strengths in risk management and performance optimization to drive client value.

Q: How will the rollout of more AI features impact pricing and margins, considering the cost of compute power? A: Unidentified_3 (CEO): We will offer AI features that can operate independently or alongside human intelligence. We have assessed the compute costs and expect these features to be as profitable as other Argus Intelligence lines, maintaining strong gross margins.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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