Constellation Software (CSU) Q1 2026 earnings summary

Executive summary

• Revenue rose 20% year-over-year to $3,181 million in Q1 2026, with 6% organic growth and 2% growth after adjusting for FX rates.

• Net income attributable to common shareholders increased to $367 million ($17.32 per diluted share), up from $136 million ($6.41 per share) in Q1 2025.

• M&A activity was strong in Q1, with several larger and many smaller deals closed or pending, and capital deployment ahead of schedule compared to prior years.

• Organic growth remained in line with historical norms, but leadership continues to push for improvement, especially leveraging new tools and technologies.

• Leadership collaboration and engagement across operating groups is at an all-time high, with best practices—especially around AI—being shared rapidly.

Financial highlights

• Maintenance and recurring revenue was $2,444 million, up from $1,996 million year-over-year.

• Margins were negatively impacted by the Q1 cohort of acquisitions, which had a larger drag than in previous quarters.

• Hardware margins declined to 43% from 46%, resulting in a 20 basis point impact on overall margins.

• Staff expenses rose to $1,687 million from $1,412 million year-over-year.

• Cash flows from operations increased 9% to $897 million.

Outlook and guidance

• No changes to bonus plans or capital allocation strategies are planned, with management viewing the current environment as a buying opportunity.

• Organic growth initiatives are expected to take time to translate into revenue, as customer adoption cycles are lengthy.

• Management is optimistic about continuing strong M&A activity throughout the year.

• Subsequent to March 31, 2026, additional acquisitions or commitments were made for $627 million in cash plus $159 million in deferred payments.

• Forward-looking statements caution about risks and uncertainties affecting future results.