Altus Group Ltd

TSX:AIF

Earnings Call Transcript 2021-Q3

[Operator]

Thank you for standing by. This is the conference. Welcome to the Altus Group Third Quarter 2021 Financial Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Camilla Bartosiewicz. Please go ahead.

[Camilla Bartosiewicz, Vice President of Investor Relations]

Thank you, Ariel. Good afternoon, everyone, and welcome to Altus Group's third quarter Results conference call and webcast for the period ended September 30, 2021. The news release announcing our results was issued after market close this afternoon and is posted on our website, along with our interim MD&A and financial statements and a press release announcing the signing of the definitive agreement to acquire Reonomy. Joining us today are CEO, Mike Gordon; and CFO, Angelo Bartolini. We'll start with some prepared remarks, and then we'll move right into the Q&A session. If we miss any questions, please contact me directly by e-mail. Angelo will begin by covering off our financial performance during the quarter, and then Mike will provide an operational update and discuss today's announcement regarding the proposed acquisition of Reonomy.Before we get started, please be advised that some of our remarks on this call may contain forward-looking information. Also, please be reminded that Altus uses certain non-GAAP non-IFRS measures as indicators of financial and operational performance. Forward-looking information and an explanation of these measures are detailed in today's news releases and in our related reports on SEDAR. All of the forward-looking information discussed today is qualified by the cautionary statements included in those reports. I will now turn the call over to Angelo.

[Angelo Bartolini, Chief Financial Officer]

Thanks, Camilla, and thank you all for joining us this afternoon. Our solid sales execution and improving operational efficiencies from the changes we made to our go-to-market plans continue to drive strong results, enabling us to deliver better-than-expected financial results for the third quarter. We're very pleased with our performance, and as you'll hear today, very excited about the transformational innovation ahead of us enabled by the proposed acquisition of Reonomy. We're making solid progress against our strategic initiatives, which gives us a solid foundation for continued growth over the long term.Turning to our financial results in Q3, I'll discuss our growth rates on an as-reported basis, and where relevant, I'll discuss the constant currency growth rates as well. We're really pleased with the robust growth in our consolidated revenues, up 12.5% to $151.8 million and adjusted EBITDA up 1.5% to $24.4 million. In constant currency, we were up 15.5% and 5%, respectively. Altus Analytics delivered very strong results. Revenues were $65 million, up 32% or 38% in constant currency. Organic revenues were up 21% in constant currency. We had double-digit organic growth across all key business lines: software, data solutions and appraisal management, benefiting from existing customer cross-sell and upsell and from new customer additions to our platforms.Our organic constant currency growth is the highest it's been in 4 years, a solid indicator of the effectiveness of our go-to-market strategies and the strength of the demand for our products and services. Equally impressive, our Over Time revenues, our key metric for recurring revenues, were $55.1 million, which in constant currency represented a 38% year-over-year increase, an 18% increase organically and an 8% sequential increase. We had solid growth across software subscription, data subscriptions and appraisal management solutions.In addition to the strong Over Time revenue growth, total revenue growth also benefited from higher software consulting revenues which provides strong indication of the investments companies are making in their technology platforms.Adjusted EBITDA showed strong improvement in the quarter, up 22% to $11.7 million, 29% in constant currency. Organic growth was 6% or 13% in constant currency and adjusted EBITDA margins were 18% and 17.3% for the quarter and year-to-date, respectively. Similar to last quarter, earnings were impacted by a $1 million purchase price accounting adjustment to Finance Active's deferred revenues, which in turn had a 1% impact to our margins.Our gross retention rates remain the industry-leading range across all our software and data analytics solutions, many of which are considered to be mission-critical by our clients. Our customer success team is laser-focused on driving positive results to both net and gross retention. By one measure, our AE software maintenance retention rate remains resilient at 95%.Bookings growth continues to trend very strongly, up 89% in Q3 in constant currency, of which 77% was organic. As you'll hear from Mike shortly, we're making steady progress against our cloud transition plans, all to say that growth engine at Altus Analytics is going strong. And we're really pleased with the solid execution as all the key leading performance indicators are on our very positive trajectory.Turning to the CRE Consulting segment, our results were on par with the prior year. At Property Tax, revenues were up 0.5% to $58.5 million, and earnings were up 1% to $22.5 million. As discussed in our business update during the quarter, COVID-related disruptions and appeal settlement delays in the U.S. and in the U.K. caused some revenue variability. This translated to anticipated third quarter revenues to be deferred into future quarters. something we've seen play out before. As a result, revenues in the U.S. and the U.K. were on par with the prior year on a constant currency basis, with healthy growth in Canada, driven by strong performance in Ontario and Alberta.Overall, we're on track to deliver a record revenue and earnings year for Property Tax in 2021. With growing scale, a robust backlog of appeals and our ongoing digital improvements, our performance is becoming more balanced across our key markets to help us mitigate the inherent quarterly variability of this business. Our Property Tax bookings are up year-over-year and as we deliver on our digitization initiatives and go-to-market programs, we remain very well positioned for the long term.As you'll hear from us at the Investor Day, we're positioning the business for the very attractive opportunity ahead of us, become more tech-enabled and operationally efficient. And finally, our Valuation and Cost Advisory businesses continue to deliver steady performance, a solid reflection of their market leadership. Revenues were up 2% to $28.3 million and earnings were $3.9 million.As Camilla mentioned, we also wanted to discuss the proposed acquisition of Reonomy on today's call, which is scheduled to close tomorrow, given that today is a bank holiday. Mike will cover off the strategic rationale, and I'll spend a couple of minutes now on the financials as we have factored the proposed acquisition into our updated financial guidance for the year.First, this is a very exciting and highly strategic acquisition for us that really propels our data strategy. The synergies are significant in both the revenue and cost side of the equation. The acquisition also immediately improves our Over Time revenue profile as we layer on these additional fast-growing recurring revenues.On a trailing 12-month basis to September 30, their total revenues were $18.3 million. Their annual recurring revenues are expected to be $21 million by year-end and expected to grow to the mid- to high $20 million range next year.On the earnings front, adjusted EBITDA loss was $16.9 million, also on a TTM basis. The loss largely reflects Reonomy's investment focus on user growth, revenue acceleration and on platform development. With the anticipated synergies beginning soon after the close of the transaction and into early next year, we expect nominal impact to our earnings for 2022 and we expect Reonomy to be accretive to earnings in 2023.Notwithstanding Reonomy's impact to the Altus Analytics' adjusted EBITDA in 2022, we still expect a year-over-year improvement in Altus Analytics' EBITDA margins for full year 2022.The purchase price of $201.5 million represents roughly a 9.5 multiple on their 2021 ARR, in line with recent comparable transactions in the market, and reflects today's environment for scarce, high-growth data and analytics companies. As we think about the value creation potential ahead of us over the next couple of years, and how it will fuel growth and enable transformative innovation, we expect returns from this transaction will be extremely attractive as it will give us an increased position in the CRE data and analytics space. Again, very strategic transaction for us.So factoring in Reonomy, we have increased our full year 2021 consolidated revenue guidance, calling for year-over-year growth in the range of 10.5% to 11.5% and our adjusted EBITDA guidance, which would have been on the top end of our previous range, has now been adjusted to reflect the impact of Reonomy's losses. A table of our updated financial guidance by business segment is available in our press release or as detailed in our MD&A.With robust financial flexibility, we're well positioned to acquire Reonomy for approximately CAD 250 million, which will be funded primarily by a combination of cash on hand in addition to our credit facility of approximately $100 million, with a total of approximately $330 million as debt subsequent to the acquisition. We estimate this will bring our funded debt to adjusted EBITDA leverage ratio to approximately 3x, still maintaining healthy room to our maximum covenant of 4x. We're comfortable being at this level in the near term as we see a significant deleverage path to the low 2s by the end of 2022 through a combination of debt repayments and higher adjusted EBITDA.With that, I'll now turn it over to Mike.

[Michael J. Gordon, CEO & Director]

Thanks, Angelo, and good afternoon, everyone. There's a lot to cover today, so I'll focus my time on a quick cloud transition update, cover off some of the operational changes at Altus Analytics and then dive right into the strategic fit of Reonomy.Accelerating ARGUS Enterprise cloud adoption remains a top priority for us, and we're tracking right on plan. I'm very pleased to share this week, we reached our 2,000th AE cloud customer milestone. This includes both new AE customers as well as those who have migrated from the legacy on-premise version, representing a solid base of AE customers and thousands of users in our cloud ecosystem. Also worth pointing out, we continue to have strong add-on purchase rates for our software products, and we've been consistent in adding new customers each quarter. In Q3, we accelerated this by adding 338 new software logos, putting us over 870 year-to-date. Clearly, we still have a lot of runway in our large addressable market. This is substantially higher than what we were adding in 2020 and a solid reflection of our improved go-to-market posture and our focus on developing our inside sales, customer success and new sales strategies.In Q3, we saw a consistent trend of more medium-sized businesses moving to the cloud, finishing the quarter with 29% of our total ARGUS Enterprise user base contracted on the ARGUS Cloud platform. That's approximately triple the customer base at the same time last year. This trend is consistent with our expectations that we'll finish the year between 35% to 40% penetration and we expect a good inflection point next year, especially as more of our larger customers have indicated interest and plan to move in the coming quarters.Earlier this week, we released ARGUS Enterprise version 14 and the collaboration service feature on ARGUS Cloud. In this release, multiple requests from large and multinational CRE organizations have now been satisfied. These improvements are universally applicable to our target market for large multiproduct deals that will use ARGUS Enterprise as the basis for their business planning functions. For users who upgrade to version 14 on ARGUS Cloud, they'll have access to our collaboration service functionality. This feature allows administrators to add guest users into their cloud environments with control over how they will access and collaborate on ARGUS Enterprise files. Effectively, this allows customers to spend less time managing the file transfer involved in the complex processes such as budgeting or valuation, and gain more trust from the data that they're working on. Collectively, we believe these updates will help drive ARGUS Cloud adoption and retention, and continue to expand the global ARGUS Enterprise market.Coinciding with the release of ARGUS Enterprise 14, we also announced to our customers that it marks the final version that the software will be available on-premise. Beginning with version 14.1, all updates will only be available on ARGUS Cloud. We also announced that the end of support for AE 12.1 or older by June 30, 2022, requiring customers to upgrade to Version 13 or 14 to remain on supported versions of the software.Given the importance of the model capability between versions and being on the supported software...

[Operator]

Pardon me, this is the operator. The speakers have disconnected. Please stand by while we reconnect.[Technical Difficulty]

[Michael J. Gordon, CEO & Director]

Well, I can definitely say that was user error at my part. Clearly, I'm a tech-oriented CEO who doesn't know how to hit the right button. Let me move on. Going forward, as I talked before, that we're under a simple, focused and execution-oriented operating model that will unify our go-to-market service delivery and customer success teams. We believe as we move forward, this ubiquitous model that unifies our valuation, investment and asset management capabilities into a single cloud-based platform that integrates numerous key workflows and enhances data-driven insights for the CRE industry. Finance Active, StratoDem Analytics and now Reonomy will integrate into this new model. While we are looking forward to sharing more information on that at our upcoming Investor Day on December 9, this new model will continue to enhance our go-to-market model and will allow us to continue to grow bookings and revenue more effectively, building on the improvements this year.Overall, we'll be better positioned to bring more value to clients by helping them solve their biggest problems in a holistic way, shifting from a product to a solution orientation that will address more of the customer value chain. Above all, we will scale more effectively and efficiently going forward, bringing consistency, avoid duplication of effort and offer a far more attractive employee value proposition.Having done similar transitions with Jim Hannon before throughout our careers, I'm very optimistic about the value we can unlock for our clients and our business and I have full confidence in Jim's execution. We've done it successfully before, and the model is best suited for where we're taking our Altus Analytics' business, particularly as we build upon our data and analytics solutions.This now brings us to Reonomy. As we've been discussing on our past earnings call, we've been accelerating our efforts on driving product innovation with predictive analytics and data, organically through our data strategy initiatives and through the acquisition of StratoDem Analytics platform earlier this year. The timing is indeed critical. The CRE tech market is maturing, and consolidating point solution providers at a much faster pace than in the past, not dissimilar to what I saw unfold in the financial services industry a couple of decades ago.Scaled category-owning leaders are emerging and the market is forming. This compels us to move fast to protect our strong business moats and stay ahead of the demand curve. When the opportunity with Reonomy emerged, we wanted to move quickly as high-quality assets like theirs are rare in our space and the strategic fit was spot on.We are also pleased to have been able to come to terms outside of the sales process. The strategic fit between our companies was obvious to both parties, enabling transformative innovation that can only be achieved together. As you heard from Angelo today, the transaction is financially compelling. Reonomy will enhance our growth profile, particularly in annual recurring revenue growth, and there are robust synergies ahead. There's a solid plan to improve their profitability to become accretive to our adjusted EBITDA and cash flow by 2023.But this acquisition is also highly strategic for us. The combination of Reonomy's AI power data platform with Altus' suite of software, data and analytics capabilities creates a very compelling client offering that will enable our clients to better manage performance and risk within their CRE portfolios, with data-driven insights, and eventually predictive analytics and alert capabilities. It significantly accelerates our transformational innovation in AI predictive data analytics by better positioning us technologically, with data science and analytics expertise. And with a robust data set to add analytics into workflows that not only look back at what happened and why, but look forward with machine learning informing us on what might happen next. So let me take a couple of seconds to take you through the vision.Real estate investment activities are becoming more complex as equity investors chase alpha while managing beta, manage risks, take advantage of the growing demand for real estate as an alternative investment and given the global fight for talent, are looking to do all of this at scale with more automation and intelligence. Altus currently serves the top global investors with our integrated valuation management, ARGUS software and performance management solutions. We have been executing on a strategy to transition from descriptive and diagnostic solutions into predictive and eventually prescriptive offerings.Following extensive client validation, third-party research and industry analysis, we have identified that data automation, asset scoring, predictive analytics and decision optimization as being opportunities to expand our value to our customers. The acquisition of StratoDem Analytics was the first step in this process, fast-tracking the go-to-market time line for predictive analytics by at least 2 years. The addition of Reonomy will be foundational to and accelerates our innovation and data strategy to solve key CRE challenges with real-time data-driven insights, predictive analytics and alert capabilities. The team over there provides us with the following: AI-powered and highly automated data management organization technology; extensive CRE data coverage across the entire U.S. CRE market; a scalable web platform to deliver insights; and key talent and resources with a very strong cultural fit with ARGUS. Bill Okun, Richard Sarkis and the entire Reonomy team has done an exceptional job leveraging AI and machine learning to solve key data management challenges in the CRE industry and unveil hidden data relationships.Integrating Reonomy's data and technical capabilities with our recently acquired StratoDem analytics platform for predictive analytics will enable us to deliver analytics at scale, and when integrated together with our foundational ARGUS software solutions, will be transformational for the CRE industry. Our clients will be able to gain deep insights on their CRE assets in a way we believe has never been done before.Our combined use cases will be highly differentiated in encompassing data management, opportunity and acquisition analytics, property scoring, CRE market data and data ingestion technology. In addition to the strong strategic fit, Reonomy meets all the criteria that we seek in our acquisition targets for Altus Analytics: A strong market presence in strategic adjacent and market geography; modern technology in cloud solutions; it addresses a critical workflow for our product road map; a strong installed base with mutual cross-selling potential; potential for very high financial returns; and, of course, a strong talent and cultural fit. We're inheriting a very well-run business with a talented team that aligns with our Altus Group employees.But fundamentally, the potential future returns are especially attractive as there is a solid plan for how we make a 1 plus 1 equal 3 by coming together. We're extremely excited about our coming together and look forward to sharing more information on our product road map at our Investor Day on December 9.In closing, we'll finish off the year in a very strong position heading into 2022. Our growth engine at Altus Analytics is going strong, with all the key leading performance indicators on a very positive trajectory. Our cloud transition is on plan and set up for a good inflection point this year and next year. We're adding value to clients through our product innovation, and as evidenced by our strong bookings growth, our new go-to market plans are effective, driving strong execution, and this is a great precursor to our new operating model for 2022.On the CRE consulting side, Property Tax has now transitioned on their global model, and making good progress against our digitization agenda. Many of the changes we have been making this year at Altus Analytics will be the focus for Tax next year. In addition, we're seeing phenomenal progress in our Cost business units as their focus on sales has increased immensely. We'll be entering the new year with substantially improved IT infrastructure, and we delivered on our goal of moving our strategic market adjacencies in debt and data analytics.All of this puts us in a very strong position to head into 2022 to continue growing our business and creating additional value for our shareholders.To my colleagues, congratulations for another solid quarter. It has been a busy year, and I appreciate all your hard work and dedication to our mission. I'd also love to welcome the Reonomy team to Altus as well as their customers and partners. We're glad to have you join us at a very exciting chapter in our growth journey as we continue to drive transformational innovation in the market.To our shareholders and analysts, we appreciate your ongoing support as we continue to transition Altus, and we look forward to welcoming them with you at our Investor Day on December 9, both in person in New York and virtually. Please don't forget to register on Events on our website. Okay. Now let's open the line for questions. Operator?

[Operator]

[Operator Instructions] Our first question comes from Yuri Lynk of Canaccord Genuity.

[Yuri Lynk]

Congratulations on the interesting acquisition. Just on the Reonomy, it seems like it's a fairly transactional-driven tool in terms of the solutions that it provides. And AE is a valuation portfolio management and benchmarking in there as well. So just maybe a bit more detail on how your existing users might be interested in the offering from Reonomy. Or is it all about stepping out into adjacent markets? Just what's the -- maybe a little more detail on how it all ties in.

[Michael J. Gordon, CEO & Director]

Sure. I think that it's obviously an adjacency for us, so that's an easy thing for us to go to. But I think that as we looked at the solution set that they had, we were very drawn to their knowledge graph analytics as well as their ability to put a unique identifier on key assets in the CRE space. And when we looked at that and the ability to bring that into our data that's sitting on the ARGUS platform, we felt that those 2 pieces, along with what we were building on StratoDem around investment management analytics as well as valuation analytics, we felt that those things would add into how people would run their models using ARGUS. So in the short term, we're going to be leveraging those -- that platform in coordination with ARGUS. But in the long term, you're going to see this pulling together on the cloud platform where people will be able to leverage the analytics running and the machine learning running right with their ARGUS valuation models while they're sitting in ARGUS, collaborating with our other users, and at the same time, being able to pull data and other asset insights in. And that's how we're looking to improve it. So it's -- yes, we're stepping out into an adjacency but very much, we are trying to build upon our valuation and risk management and help our customers make better decisions around their assets.

[Yuri Lynk]

Okay. Makes sense. Just a clarification question. Angelo referenced Altus Analytics. Mark, do you still expect margin increases next year on the EBITDA line? Is that correct, for Altus Analytics?

[Michael J. Gordon, CEO & Director]

Yes.

[Angelo Bartolini, Chief Financial Officer]

Yes, that's correct, Yuri.

[Michael J. Gordon, CEO & Director]

I'm just keeping it simple.

[Yuri Lynk]

Good. I just want to make sure I heard that right. Okay, guys. Congrats. I'll get back in the queue.

[Operator]

Our next question comes from Daniel Chan of TD Securities.

[Daniel Chan, Research Analyst]

It sounds like a pretty interesting asset there. I think it was probably maybe just 3 years ago that we were talking about the market readiness of CRE to just move to the cloud and the hesitancy to do that. What gives you comfort that the market is now ready to take on something like AI/ML network flows?

[Michael J. Gordon, CEO & Director]

I think that a lot of things have changed. I mean, obviously, I've only been here a year. So I can't talk about 3 years ago. But what I would say is, I think the market really absorbed some punches from COVID. And I think that when they start looking at new ways to look at the industry and actually start evaluating things, tools that have been used in financial services for years and access to data and alerts, and like I talked about, the knowledge graph or a unique identifier have been done in other places in the past. And as we've been looking through and mapping the data that we have from our customers and how we can bring more value to them, this is something that we heard as we've been putting together our product road maps, that customers want to go there.They need to get more out of what was historically point solutions in 2018, and they really want these enterprise solutions. And I think that if you look at what we're doing with this is we are really building an enterprise risk management and valuation solution to really help our CRE customers manage their decisions more effectively. And make it in a very quick and educated way. And I think as we do that, that unlocks a huge amount of value for them as they are trying to manage their portfolios, whether they're doing it from an investment management perspective, whether they're doing it from an asset management perspective or whether they're servicing their customers. And so I think -- there was some -- there was probably some skepticism a number of years ago, but I think that skepticism has broken and people are looking at these things, and they know they need to move to these things fairly quickly, and we're seeing very good demand.

[Daniel Chan, Research Analyst]

That sounds good. It makes a lot of sense. It sounds like there's a lot of good cross-sell opportunities here as well. How will you be charging for Reonomy? Is it kind of like an annual subscription per user as an add-on to your ARGUS Enterprise? And if so, what is the customer overlap you got with your ARGUS users?

[Michael J. Gordon, CEO & Director]

So Reonomy has historically been in what I would call the tier -- maybe the Tier 2, Tier 3 and Tier 4 space, and they have phenomenal coverage across all assets in the U.S., and they have some Tier 1 suppliers -- or some Tier 1 customers. We're expecting to fit this right into ARGUS into all our Tier 1 and Tier 2 customers and offering this as an add-on to ARGUS, but also adding -- as an add-on with StratoDem. I think that as we price this, you're going to see -- we're going to leverage the pricing models that there's historically been user-based pricing, but you'll see transactional-based pricing and/or asset-based pricing. So we'll be finalizing those models as we move the platforms together. But our goal is to make it easy to pull up in the ARGUS platform, the data and analytics into one platform so they don't have to leave and look at multiple platforms to do valuation and risk management.

[Daniel Chan, Research Analyst]

Okay. That makes sense. And then maybe one question on cloud. You mentioned that you're going to end support for anything below AE 13. Can you give us an update on how much of their AE user base is on that -- on those versions?

[Michael J. Gordon, CEO & Director]

That's a good question. I think there's probably a couple of thousand users down there. I'm guessing right now. But we've had -- one of the things that we've done is we've talked to our biggest users who are using 12.1 and below, and confirmed with them and told them before we announced that this was going to happen. So the preponderance of those users are prepared to make a move. Now we would like them to move to the cloud, but we will support them if they want to move to an on-premise version as well.

[Operator]

Our next question comes from Stephen MacLeod of BMO Capital Markets.

[Stephen MacLeod, Analyst]

I just wanted to follow up -- just about -- on Reonomy. Can you give a little bit of color on sort of what the recent growth rate has been in terms of the revenue growth?

[Michael J. Gordon, CEO & Director]

Yes. On an ARR plan with what they're doing -- what we believe they're going to finish 2021 with compared to 2020 is over 25%. And we think that we will be able to enhance that with cross-sell next year as we bring that into our customer set. If you look at their long-term growth, they've been in the 25% to 30% range. If you look at CAGR, they had some step back in -- as COVID came in. But the team -- the management team did a very good job at directing the ship through the COVID time frame. And we're very impressed with what they're building.

[Stephen MacLeod, Analyst]

Great. And the 21% that you said there, is that from today to the end of 2021, is that what you meant -- or sorry, the end of 2022? Or sorry...

[Michael J. Gordon, CEO & Director]

What we're looking at is if I compare where they will be, and we've gone through this with them at the end of 2021, to compare it to what they finished at 2022 -- I'm sorry, what they finished in 2020, their ARR growth will be over 25%. For the -- from the end of 2022, what we're expecting is we expect that growth rate to increase maybe into the mid-30s.

[Stephen MacLeod, Analyst]

I see. I see. Okay. Okay. That's great. And just looking on the Reonomy website, it looks like they do sort of some commercial -- mostly commercial, but also it looks like some residential, unless I'm seeing that wrong. Is there a portion of their business that is focused on the residential market? Or is it all commercial?

[Michael J. Gordon, CEO & Director]

It's all commercial. There might be a couple of things that trail into like what I would call multifamily, but it's all commercial.

[Stephen MacLeod, Analyst]

Okay. That's great. And then I guess when you think about where the ARR is today versus where you want it to be and you talked about sort of the accretion in 2023. Are most of those -- is most of that growth coming from cross-selling and just leveraging the platform? Or is there other things you can do to pull other levers to drive that growth?

[Michael J. Gordon, CEO & Director]

No, I think there's a couple of different ways that we looked at the revenue and how we looked at what they're doing. So first off, they have a very good sales team, and they've been doing a great job improving upon their retention, from their customers' success to their go-to-market teams. What we've just looked at is we just took what we thought that their growth rate would be going into next year. And we're shifting a little bit of -- we're going to ask them to shift a little bit of their focus to some of the Tier 1 and Tier 2 customers along with our teams. And then we think that is going to be the difference between what they're achieving today to what we think we'll go into next year. So our belief is that we're going to be talking to our larger customers and walking them through the value of the analytics and the data that they have along with the cross-sell that we believe that we'll bring with the StratoDem Analytics that we already have as well and pulling that together with the data that we have on ARGUS.So my view is we intend fully put out there about a 35% to 36% growth curve for us for next year and the year thereafter. At the same point, we think that we'll see a good amount of the growth also coming in our StratoDem models. So that is separated still. And as we pull things together in 2023, as we bring our ADS business in Canada together with Reonomy, together with StratoDem, I think we'll be producing something that will be closer to $100 million in revenue. And we believe that we'll get into the 20% to 25% range in EBITDA. So the 3 of those businesses combined. So our goal is to bring those businesses together into a data unit.

[Operator]

Our next question comes from Richard Tse of National Bank Financial.

[Richard Tse, MD & Technology Analyst]

Yes. Thank you. Mike, I'm just wondering how long do you think it will take to integrate Reonomy with StratoDem? And I guess, in a related question, do you have to have those assets integrated before you go to market?

[Michael J. Gordon, CEO & Director]

No. So to your second question, we don't need to -- those assets, we've got our sales plans, and we've been working with their team to put that together immediately. We'll start to hit the market as soon as we finalize the sales solution tomorrow. Actually, a number of our executives will be meeting with their executives in New York tomorrow. I'm talking to you guys, so I'll be up here and I'll be down there on Monday and Tuesday. So I think we don't need that to be integrated.Now as to some of the other use cases that we want to get to, and some of the further growth items, that's where we want to get the integration to, especially when you get into the analytics side and especially the alerting side that we've been talking about, Richard, finding the changes on the data and how that would relate when it comes to valuation and risk management, that would be something that we want those alerts to be working on, and we would want that to integrate directly into ARGUS, so that ARGUS would be telling people something is changing.

[Richard Tse, MD & Technology Analyst]

Okay. Okay. And then to sort of Yuri's question at the beginning here, could you maybe sort of share with us an example of the most sort of common use case Reonomy would offer your existing customer base?

[Michael J. Gordon, CEO & Director]

Yes, sure. I think that the use case that we want to get out there really quickly in a nonintegrated way is for them to be able to open up the data profiles in ACW where they can look at Reonomy data, and we would go right into their web interface and they could actually take a look at how that data is changing and make decisions on their valuation. Next year, where we'd like to get to is we'd like to pipe that data directly in and integrate that right into ARGUS. So you're pulling that right in, you're looking at your valuation and you're making a change right then and there. And then what we would like to do, then you could use the strength of StratoDem and be able to do optimization and portfolio management and run simulations on what you're seeing happening there. So I guess I'd put it in and kind of evolve as we integrate the businesses together.

[Richard Tse, MD & Technology Analyst]

Okay. And just one last one for me. You're clearly making a pretty concerted effort to get further into tech. So when you look at the Property Tax business today, is that still considered strategic? Or is it sort of now a bit dilutive given what you're trying to do here?

[Michael J. Gordon, CEO & Director]

Fair question. It is absolutely strategic. I should probably -- I mean, today was the day that we talked more on Altus Analytics for sure. But what we look at with the data and analytics that we have, and sitting down and talking with Alex Probyn, we are absolutely bringing this technology into tax. And I think that as we sit back and talk about what we're going to be doing in tax next year, we're going to be really focusing on building those tax platforms out so that we can share data back and forth with assets from ARGUS to our tax platforms and be able to push that forward with Reonomy and StratoDem. So tax is incredibly important and will be transformative for us.

[Operator]

Our next question comes from Paul Treiber of RBC Capital Markets.

[Paul Michael Treiber, Director of Canadian Technology & Analyst]

You mentioned several times that you see the combination of Altus and Reonomy as transformational for the industry. When you look at the landscape -- the competitive landscape, other players, start-ups and even larger players, how unique do you feel that the assets and the technology that you now have put together are in the space?

[Michael J. Gordon, CEO & Director]

I think fundamentally, we will be the definitive leaders when it comes to valuation and risk management in commercial real estate. I think that when you take a look at our technology platforms and the breadth of our functionality that we have in ARGUS, is broader than everything. We've had that embedded in with our large Tier 1 and Tier 2 providers and bringing together an analytics platform, which we have been already starting to talk to our customers with, along with advisory solutions, and now you bring together like a knowledge graph that can kind of take a look at things for you and bring and do the matching algorithms, I think that's incredibly transformational. I feel like our technology is going to be leading in this industry. I think that as we sit back and talk to you all in the next month or so about our road maps, you'll see what we're trying to do with our platforms going forward. And I think the platforms, from a perspective of we'll be leading with analytics, we'll be following that up with data, but you have to also follow that up with the workflow and the decisioning that's there. And I think those 4 things we have, and we're building out pretty well. So we feel really good. And again, when I talk about our space, it is valuation and risk management or the decisioning in commercial real estate. So to us, we think we've got something that will be very hard to compete with.

[Paul Michael Treiber, Director of Canadian Technology & Analyst]

And you've made a number of acquisitions this year, fairly large ones. And when you look at the road map, do you feel like there's anything missing from a product road map point of view in the sort of the medium term that you think is crucial? Or maybe another way of putting it is like what is the willingness to continue to make acquisitions, ignoring the financial need from a capacity point of view?

[Michael J. Gordon, CEO & Director]

Paul, that's a very fair question. I'll put it this way. I sit back and we talk with our product teams, I talked with Jorge Blanco and Steve Bezner, all the time, we sit back and like where we're putting things together. As we look at things, we're looking across the value chain. And the value chain for us, when we moved into Finance Active, there was debt, but that also helped us on some of the construction side of things. And I think that as we look across the value chain from a build aspect to an asset acquisition, to the asset management and slash investment management, to the disposal, I think that in any case and where we have a gap in that area, you'll see us looking either to acquire a point solution to fill that in, build something or partner with a third party.

[Paul Michael Treiber, Director of Canadian Technology & Analyst]

That's helpful. And last question for me, just following up from Richard's question, just on integration, like how should we think about the level of product integration? Are you thinking of just fairly light integration through APIs? Or should we think of -- that you see a need for a deep rewrite of the different code bases. Like is that a necessity in the near term or not?

[Michael J. Gordon, CEO & Director]

I don't think it's at either end of the spectrum. When I look at it, I think about it with our teams, I think about it in the layers. We look at the different layers. And I would tell you that I think the integration layer that Reonomy has will be called the integration layer that we leverage with ARGUS. And so I think you're going to see us -- our teams have already been working together with their teams on what should be brought forward, what should be separated, how we should be looking at these things together. All of these are cloud-based solutions. We have some things on the ARGUS platform that we want to bring it into a serverless kind of technology, very similar to like where Reonomy and StratoDem are. And this is something that you'll see -- those things moving the ARGUS Enterprise solution along faster.

[Operator]

This concludes the question-and-answer session. I would like to turn the conference back over to Mike Gordon for any closing remarks.

[Michael J. Gordon, CEO & Director]

Well, thank you for all your attention and for your interest in Altus Group. And we do look forward to hosting all of you next month at our Investor Day on December 9. If anyone has any additional questions, please contact Camilla directly, she knows how to work with all of you. I want to again thank my team and the entire Altus and Reonomy team for a job well done, looking forward to finishing off a great year. Thanks for your time, and have a great evening.

[Operator]

This concludes today's conference call. Should you have any further questions, please contact Camilla Bartosiewicz at Altus Group. You may disconnect your lines. Thank you for participating, and have a pleasant day.