Constellation Software

Constellation Software buys small software companies. Each company makes software for one specific industry, such as public transit, libraries, or local government. Customers depend on this software to run daily operations, so they rarely switch to a new system.

Constellation earns most of its money from maintenance fees and recurring subscriptions. It almost never sells a company after it buys it.

Investors worry that cheap AI tools will let rivals copy Constellation's niche, industry-specific software. This fear grew when organic growth slowed to 3% in the second quarter of 2026, or 1% after currency effects. Organic growth of maintenance and recurring revenue fell to 2% after currency effects, its lowest rate in at least two years, and recovered only to 4% in Q3 2026, because Altera and the US healthcare businesses keep losing customers. Founder Mark Leonard also resigned as President for health reasons in 2025 and left the board in May 2026.

Constellation's software runs core, regulated tasks such as utility billing or court case management. Customers rarely remove this kind of system, since a failure would disrupt daily operations. This makes a quick AI clone unlikely to displace it. But the new President, Mark Miller, has not yet run the company's acquisition process through a full economic cycle without Leonard.

S&P raised its outlook on Constellation in August 2026 because leverage fell, so the balance sheet is not the market's main worry. The first test is whether organic growth of recurring revenue returns to about 5%, the rate Miller calls normal. Management said that $17 million of one-time revenue at Altera in the second quarter of 2025 caused most of the slowdown. The second test is whether Miller keeps finding acquisitions at the same hurdle rates while competition for targets stays strong.

Spending on acquisitions was $1.91 billion in the first nine months of 2026, up from $755 million a year earlier. The full-year 2026 results, estimated for about February 6, 2027, give the next organic-growth reading. But proving the capital-allocation approach works without Leonard takes several years of results. So this discount likely takes several years to close fully.

1. Nov 6, 2026Failed

   Q3 2026 results: organic growth and acquisition spendingOrganic growth of maintenance and recurring revenue back near 5% after currency effects (2% in Q2), as Mark Miller expects, passes; growth at or below 2% after currency effects or a lower pace of acquisitions fails.Outcome: Organic growth of maintenance and recurring revenue rose only to 4% after currency effects, below the rate near 5% that the test asked for, although acquisition spending rose.
2. Feb 6, 2027 · est.Pending

   Full-year 2026 results and first annual letter under MillerOrganic growth in the second half of 2026 above the 3% of Q2 and a clear capital-allocation plan from Mark Miller pass; organic growth at or below 3% or weaker returns on acquisitions fail.

Every passed and failed checkpoint across all picks

• November 6, 2026Constellation reported Q3 2026 revenue of $3,512 million, up 19% from last year. Organic growth was 2%, and organic growth of maintenance and recurring revenue was 4% after currency effects, up from 2% in Q2. Altera and two US healthcare businesses bought in the quarter lost customers. Free cash flow available to shareholders was $443 million, down 16%. Constellation spent $484 million on acquisitions in the quarter and declared a dividend of $1.00 per share.
• October 21, 2026Constellation appointed Daan Dijkhuizen as Chief AI Officer and a member of its leadership team. He keeps his roles as CEO of the Topicus Operating Group and Managing Partner of VMS Ventures, Constellation's venture arm. His main task is to use VMS Ventures to invest in AI-native vertical market software businesses and to help the business units use AI in their products and operations.
• October 16, 2026Constellation said that it will release Q3 2026 results after the Toronto Stock Exchange closes on November 6, 2026. It will hold a conference call on November 9, 2026, at 8:00 a.m. ET.

• Founder Mark Leonard resigned as President for health reasons in September 2025 and left the board in May 2026. Constellation's decentralized model depended heavily on his capital-allocation judgment. It is not yet proven under the new President, Mark Miller, over a full cycle.
• Organic growth fell to 3% in Q2 2026 and 2% in Q3 2026. Management named a one-time item at Altera in Q2 2025, weak results at Dark Matter and Lumine, and customer losses in the US healthcare businesses, which it expects to continue. If growth does not recover, the compounding math behind the stock weakens.
• Competition for acquisition targets stays strong. On the Q2 2026 call, management said that prices are a little weaker only for the largest targets. If Constellation cannot keep buying enough companies at attractive prices, it must deploy more cash into lower-return uses, which slows long-term compounding.

Constellation reports in US dollars and splits its debt into two groups. The parent must repay the first group. Read more

Yield at the current rate

0.2% (current annual rate, at today’s price)

Dividend yield

0.2% (last 12 months, at today’s price of CA$3,454.21)

Paid per share

CA$5.576 in the last 12 months (4 payments)

Current annual rate

CA$5.596 (CA$1.399 × 4 a year)

Latest ex-dividend date

September 18, 2026, CA$1.399 per share

Dividends per share by year

From 2020 to 2025, the dividend grew by about 0.8% a year. From 2015 to 2025, the dividend fell by about 1.5% a year.

One-off payments far above the usual dividend are left out of these numbers.

Source: company filings and market data, read on November 13, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.