Toronto’s Constellation Software (CSU) has reported that its second-quarter net income, or profit, declined 18% from a year as it completes larger and more expensive acquisitions.
The company, whose business strategy is to acquire software companies and hold them for the long-term, reported that its Q2 revenue grew 26% to $2.04 billion from $1.62 billion a year earlier.
Constellation Software also reported that its free cash flow rose 22% to $14 million in Q2 compared to $12 million in the same period of 2022.
However, net income decreased 18% to $103 million from $126 million during the same period of 2022.
The company attributed the profit decline to several acquisitions that were completed between April and June of this year.
In the past, Constellation Software has acquired smaller companies for prices that typically ranged from $50 million U.S. to $250 million U.S.
However, the company is now casting a wider net and beginning to purchase larger, more expensive software concerns.
In July of this year, for example, Constellation Software announced plans to acquire Black Knight’s Optimal Blue software business for $700 million U.S.
In May, Constellation Software acquired Winklevoss Technologies for an undisclosed sum. Run by Howard Winklevoss, the company is a leading provider of accounting software to Fortune 500 companies.
Constellation Software also announced a $1 per share dividend payable on October 11 of this year to all shareholders of record at close of business on September 20, 2023.
The stock of Constellation Software has increased 26% over the past year and currently trades at $2,762.14 a share.
