Okay, we'll get started. Okay, good morning, everyone. Thank you so much for joining us, both in person and virtually on the line. With over 160 people registered, we're really pleased with the growing and strong interest in the company. Approximately 90% of our outstanding shares are held by institutional investors today of which 50% are now American, hence why we found it fitting to do the event here. This is a very exciting chapter in the company's growth journey, and we remain very appreciative of your ongoing support and the shareholder value creation ahead that we'll be able to discuss today. It's great to see a lot of familiar faces, but for those who haven't met me, my name is Camilla Bartosiewicz. I'm the Head of Investor Relations.
Before I go any further, for those of you who need Wi-Fi access, the network is called Convene, and you could use the password, stayconnected, one word, all lowercase. We have a great lineup of speakers today with solid representation across the business. As many of you have reminded me over the years, it really does come down to the people, so I trust that today's leadership team will just strengthen your conviction in the management team. In addition to our speakers, we also have certain members from our board of directors and our executive team also in attendance, and they'll be around if you guys wanted to catch up after the event. We structured today's presentation under five key sessions, so followed by 30 minutes of Q&A.
We'll have a 10-minute coffee break at around 10 A.M., and we're targeting to finish by around 11:30 A.M. Eastern Time. As a reminder for our in-person guests, breakfast and snacks will be made available throughout the event. To keep us on schedule, just ask if you guys could hold off on asking your questions till the very end when we have the Q&A session for about 30 minutes, at which point we'll start with the in-person questions and then take questions from online as well. Of course, if we do run out of time, you guys can always email me directly, and we can continue after the event. Before we go any further, please be advised that some of our remarks today will contain forward-looking statements and that Altus uses certain non-GAAP, non-IFRS measures of our operating performance and financial performance.
Please review these slides at your leisure, and you can always consult our SEDAR filings for more information. With that, I'll turn it over to our CEO, Mike Gordon, to officially kick off our Investor Day.
Thank you. Thanks. I'll let you come down first. Good morning, everybody. I guess I got this with me. I think that when I sat down and talked to Camill a about, like, what we would just sit back and talk about, we're gonna talk about the meats and potatoes of where we're gonna go on things, especially on product roadmaps. Most of you guys who've gotten a chance to meet me, I like to be transparent to the industry. The reason why is, like, we wanna drive the industry to the point that we think we can. We believe in a lot of ways we have the best real estate in the commercial real estate industry where we are.
I had a good chance when I was coming on to sit and talk to the board about different thought processes, why I was interested in this, and why I thought that this would be a great next step for myself. It came down to one simple thing. I watched the financial services industry, where I came from, transform over 20 years, starting in 2005 and going through all the issues that happened in 2007, 2008, and 2009. I watched the explosion of how technology rules, workflow, data, analytics, change that industry.
When I looked at commercial real estate, commercial real estate being a very similar asset class or size-wise, and how things were starting to change in that industry, it was. I felt like it was at the same precipice. I got very excited about it with the board because the board was at a point where they were looking for the same change, and they saw the same things. This was, like, something that made a lot of sense to me. As we think about it and you think about PropTech is probably something that's overused. Fintech was overused. I, you know, this is not MikeTech or JorgeTech. It's just. This is good technology and platforms that we look at. There's a huge explosion that has taken place.
Most of the guys on this page probably, other than us, won't make it. I'm not saying that is a bad thing, but what they're doing is they're changing the way that people are starting to think about the industry. One of the things that comes out of this is there's gonna be accelerated transactions. You can see this already starting to happen right now. People want better insights to what's going on with these large assets. So much money is flowing into this market that that's why these things are being created. New business models coming up. How you build buildings, how you maintain those are all very different. You know, we're not gonna be in the tenant space, but, like, what's happening in there would be something that could impact us going forward.
The transparency in how you trade these assets, how you move these asset classes around. You get into just globalization on how you value things and how the risk management about these things are becoming more standard. All these things are coming together. I can get into regulatory, and then you get into the pandemic. Now, we did our best to create a slide that actually looked like the COVID virus. If you think about this, sometimes you actually need an impetus for the industry to change. As I said earlier, financial services, watching things melt down, they decided that they needed something to change. Because what happened is everybody put more and more reserves in. They were trying to collect money from people, but they couldn't do it fast enough because the technology was not keeping up with it.
same thing happened as you sit back, and we sit back and talk to our customers. In 2020, they did a great job of thinking through their workforce, thinking about how they can cut costs, how they can improve cash flows. But at one point, they couldn't get further. Technology is a great equalizer. Data is the medium that works wonders for them. But analytics is how you make decisions. Realistically, as things are changing in the marketplace and you have the acceleration of the technology investments, you have how are you looking at the portfolio and what are you trying to do around that portfolio? What is lending gonna look like? How should I actually decide how much debt to take on? What should my valuations be? How can I actually think about appraisal management, not on a yearly basis, but every month, every week?
Because you're trying to capture everything is getting tighter and faster. The thing that I would like, going back to my background, which I would liken it to when I started FICO in 2005, once a year, the bank sorted credit reports or credit scores. On the average, once a year. They realized it was good every quarter to do it, to reset their portfolio. They did it every month. All of a sudden, we convinced Discover to actually put it on your statements, and then everybody ran it from there. Now you can see how the industry has exploded. At the same point, the transparency in the industry became ubiquitous and people could start making decisions for themselves. The same thing, while a different asset class can happen here.
That is how we look at it and how we will apply what we're trying to do with the technology. Now, why we also like this, it is a very scattered marketplace. Now we're in a lot of the boxes. There's a lot of our competitors in a lot of the boxes. But, you know, when I came into the industry, I got to talk to a lot of you guys. You guys asked me how acquisitive I would be. I actually didn't think we'd be that acquisitive. History-wise would tell me that, you know, great operations is what you wanna focus on. You get great operations going, good organic growth. Less will lead in, and you'll make some, you know, nice tuck-in acquisitions, and that will be a good thing for the business. There are very few platforms in this space.
On top of that, there are very few platforms, and actually there's only one platform, ARGUS, that actually owns the intersection where everything goes in when it comes to transactions, valuation, and risk management. There's a ton of growth even in that opportunity. We'll talk a little bit about, like, what the size of the market we think is. While we're the market leader, there's a lot of areas that we can move in just with our core software. If you add in data and analytics and decisioning on top of that, it's not about what you're serving up to the customers, it's how you're helping them make decisions on AUMs in the $200 billion range. When we got talking to the guys at StratoDem, we were talking, we were geeking out on analytics.
I mean, anybody will talk to me, I'll geek out on this stuff. I just. You know, they started saying, "I can save you 180 basis points on your portfolio." I go, T hat's a lot of money. Like, prove it to me." They walked me through it, and it was like, "Okay, I think we can work through this, and we can sell this in an easy way." That's what we're trying to do, is we're trying to make it more transparent and easier. In this marketplace, there's a lot of room to expand. Like, there's a lot of things that we see as great adjacencies for us, but it's adjacencies that sit back on the value chain from build to buy, to manage your investment or asset, to dispose.
That's what our value chain is, and that's where we fit from a perspective of Altus Group. We think it's a great opportunity for us. We'll talk a lot about our products today. Before we do, I always have to, like, bring Sung Lee up here 'cause Sung will be talking about, like, the industry fundamentals and why we think that this is our time. Sung?
Thanks, Mike. Good morning, everyone. I'm Sung Lee with Altus Analytics, and I'll be providing a quick overview of what we're seeing in the market and how Altus strategies align to really meet the changing needs of the industry. As we all know, commercial real estate industry is facing disruption at an unprecedented scale. COVID-19 has really accelerated the rate of change that we're seeing in the marketplace today.
I lost my chain of thought. Just give me a minute.
Gets into this, and what I would say with Sung is there's many deep pieces of information that he'll be looking at as he gets this together. As we go into transformation and opportunity, what you have is we talk about the demographic shifts as we're seeing this. If you think about multi-res and how multi-res is starting to shift around, it is very simply that every asset's gonna change. People would come to me and say, "Why did you go into commercial real estate?" The key reasons on why you go into commercial real estate at this time is very simple. The buildings need to be used. Yeah, hotels and retail will be very different, and things are shifting around on that.
Man, you have good talks on industrial, and industrial is a good place to be, and you can go from there. Then there's large players who are looking at changing things and just who we deal with and how they're bringing more assets into their portfolio. There's a ton of things that have changed. From that standpoint, acceleration, we see this all working in a major way. You good?
Ready to start.
Go for it.
COVID-19 has really added urgency to the adoption of data analytics to gain competitive edge, create efficiencies, and generate transparency. COVID-19 has shrank the universe of institutional-grade investments from the five major food groups, multifamily, industrial, office, retail, and hospitality, to just two sectors, multifamily and industrials. The competition for these best-in-class assets within these sectors remain as fierce as ever. Investors are now looking beyond these asset types to sectors such as single-family for rentals, manufactured homes, lifestyle centers seeking an edge using data and technology. The good news is that real estate is no longer considered an alternative asset class in many ways, as it competes directly against stocks and bonds, and has the full attention of major investors worldwide.
At Altus, we're in a really good position to help our clients adapt to this new hyper-competitive environment for investments and talents. The volume in the transaction markets dipped at the start of the COVID-19, but the markets never actually stalled out. We're actually now on pace to exceed the record volume of $318 billion set back in fourth quarter of 2019. There's still a ton of capital sitting on the sideline looking to come in, especially with those properties and portfolios with high expected yields. Value add, opportunistic, and debt funds are getting a lot of attention in the marketplace. Where is all of this capital coming from?
As real estate really wedges itself permanently into the portfolio allocation of smaller investors like 401(k) and retail investors, there's a whole new source of capital that are chasing the same pool of real estate investments that were previously sought by large institutional investors backed by institutional capital sources like sovereign wealth funds and pension plans. In this example, a portfolio with 10% allocation to private real estate outperformed your traditional portfolio with 60% equities and 40% fixed income, both in terms of return and volatility during the 20-year period from 1999 to 2019. Firms like Blackstone and Starwood Capital were the first to really recognize and promote the advantages that real estate generates within a portfolio. Their new funds now dominate the institutional real estate landscape.
With all this capital looking for a home in real estate and both institutional and non-institutional, and the historically low interest rate environment that we're in, the overall trajectory of the cap rates is downward. The landscape is as competitive as ever, which means that it's really easy to slip up in this environment, and the mistakes made today could be amplified in the future. A good question to ask and answer is whether your organization has the analytical capability to identify and invest in the winners while avoiding the losers with conviction driven by data and analytics. These are the questions that we seek to help our clients ask and answer, not through a backward look at the past, but as a forward-looking forecast as part of their active asset selection process.
The privately held real estate values actually never dipped strongly in reaction to COVID-19. The NCREIF Property Index or NPI, representing about 9,700 properties with a gross market value of $785 billion, saw about a 3% decline in value during 2020, versus about 30% negative appreciation during the Great Financial Crisis. Coming out of 2020, NCREIF Property Index delivered two quarters of record performance driven by low interest rates and strong property fundamentals, both market rents and the occupancy. As real estate becomes an expected part of balanced portfolio composition amongst investors across the institutional real estate landscape is changing. This slide really drives home that point.
Non-traded REITs that are geared toward retail investors, as evidenced by net contributions, are the hot new players in the marketplace. 401(k) or defined contributions appear to be the next new frontier, meaning that increasing allocation to real estate as an investment or asset class is likely to continue for some time. Perhaps not surprisingly, private equity firms or non-traded REITs really make up a good portion of the most active buyers in the marketplace, and many traditional players are now net sellers. Private market real estate buyers are absorbing the assets of public REITs, which have become net sellers.
The good news is that commercial real estate industry is really thriving, as evidenced by the record performance seen in NCREIF return numbers and the significant amount of capital that are looking for a home in the sector. However, our clients are really facing major challenges in this changing real estate environment. Never before have they ever faced the level of competition that they're facing today, which is really forcing them to, one, find and maintain yield while managing risk in the historically low-yield environment that we're in. And two, manage your liabilities and adhere to compliance standards that come with managing retail, 401(k) and small investor money. And three, use data to support your decision-making process, reporting and compliance functions, as well as creating efficiency within the organizations. These are the major challenges that we're seeing in the marketplace.
I'll hand it over to Mike to discuss how Altus is in a really good position to help our clients address these challenges.
Cool. Thank you, Sung. That'd be great. Thank you. All right. I'll get off this as our time. This is like the before and after slide that you go with. I'm gonna go with that, you know. Everybody knows, well, most of my team knows I do not like wearing suits. I have great suits. Being in financial services, I have great suits, and I have great ties, but I got rid of those a long time ago. I'm wearing slacks for you all today 'cause I was told I wasn't allowed to wear jeans. It's not because I put on some weight during COVID. Where we were, let's talk about those are the tie and jacket-wearing days. Okay. We perform, and we still perform great services.
Our guys are value-added services working with our customers to grab value for them. All right? Value-added services. Not implementation services, not low-end services. We provide value. We hear that all the time. Where we are today is we started getting into software. ARGUS got us into software. We got into Taliance. We got into Voyanta. You start looking at the thing, different pieces that we have. Individual products that were point solutions in an industry that started to collect data, that started to think about how you would do with decisions, but didn't tie together. You've probably done all the research on us, and you know that that was somewhat true. However, what we had is, because we had the right real estate and where we sat, our platform was being used by more and more people, and the platform was making decisions.
When it comes down to it, I said it earlier, it's about the decision-making that needs to occur. We need to facilitate that in a world that is changing rapidly. Where you get into and where you're going, this is the jeans and hoodie moment. When we bought the guys from Reonomy, the head of development, he had one request of me, 'cause we really like him. "I just wanna be able to wear my hoodie." I got called Mr. Gordon, by the way. That said, it's the intelligence. It's actionable intelligence. What's happening? Where is this happening? Why is this happening? What's going on? It's the who, what, why, where, and how. The two-year-old questions that all of our kids had asked us at one point.
This is really starting to say, "Okay, with these assets, how do I operate this? How do I work with this?" This is pulling the full value of Altus together. In the past, we've talked about different divisions, different solutions. I would tell you when I first came here, I think I told Camilla that this is the smallest conglomerate I have ever seen. As I got to talk to many of your analysts, they would all ask me about, "You have so many different things that pull together, but they go one way and another way." What we're looking at is pulling these things together, and they do fit. They fit across the value chain. They fit across valuation. The intelligence goes through tax. We use our intelligence around cost to help people construct their assets.
Then we help advise on appraisals. At the bottom of this, you take the services that we were excellent at. You put a platform and technology behind it. You accelerate it with the analytics, and you bolster it by the data. You pull that together, there's nobody else doing this in this industry. In my mind, this is what the industry is gonna need over the next couple of years because, as I said, things are going faster. As we get into, like, how we're marketing this, the empowerment of CRE professionals to do their jobs in a faster, more informative way. I keep talking about valuation and risk management and intelligent decisioning. You're gonna hear, Jorge talk about intelligence as a service. That's where we're going with this.
It's not just analytics, it's not just data, but you have to drive it into some sort of decision system. ARGUS is the system for this. Every day, we have people log into ARGUS. We also have people try to log into Excel because we are actually expanding the use of ARGUS and making it simpler to use. This is helping on a global presence, however people do valuations, however people make risk decisions around the way property is. Some of you guys have seen this slide before. You know, we're setting ourselves up for 2022. On 2021, we have been working. We had five main things that we wanted to get done when we entered the year. The first thing was we have been talking about cloud forever. People are adopting cloud right now.
We will end the year probably around 35%-40%. I don't know the exact percentage rate, but where we were at the end of Q3 , as we announced, we were three times higher than we were at the same point last year. Focus, execution, simplicity. Our team is working on getting people onto the cloud. Second thing, we said we were gonna get into a full data game. People said, "Well, you're a data guy. What do you see here? What's the opportunity?" I think I've said with a couple of you guys, for every dollar of technology you sell, you should get at least 50 cents on that dollar for data. There's no doubt about it if you actually have the data that matters.
I would venture to say in this industry, there's some really good data providers, and they're probably listening in right now, and I say hi to them. It's really about the core pieces of data that matter. It's not about, like, how long your data file is. If anything that I learned at FICO was there's really, like, 20 things that matter when it goes into a FICO score. The rest of it's noise. Helping the industry figure that out and get that down into a standard is what our guys are working on and doing. That's the data strategy. That included analytics, and that included the data side. We built on the data. We've got our data set up. We now have Reonomy in the fold with us as a partner on this. Actually, that merger was excellent for us.
We merged with StratoDem, and now we have what we call full data and analytics suite that we're selling to the market right now, and people are adopting. That will be continued to be merged with our ARGUS platform, our ARGUS Cloud. Then you get to the debt adjacency. People ask me, "Why debt right away?" The amount of debt in this space, I mean, it sounds as an American, I like that, is good. But you need to look at these assets from the equity that's put in, the return on equity, but also to take a look at how you're leveraging the debt and how you're leveraging that with the explosion on how much money's coming into this industry. The one area that we did service, we serviced banks in a very good way.
The debt adjacency allows us to be full service to the banks, who are an integral part of this industry. Finance Active also, by the way, helped us build the ground game in Europe and that team, and Jim will talk in his operating model, how we're expanding upon that. I get to property tax. I take a deep breath because I know, like, I've had a lot of good discussions with people in this room and people on the phone about property tax. I like property tax. I'm out there saying it. You know, it's a 12-step process. You get to say it. If we all say it together after a while, we'll be fine. Why?
It's not about being parts of different business, but it's like when you think about the valuation and, what's going on in valuation around these assets, number one, it's all the advisory work that our guys do and the appraisal management. It's really tax is the second most important thing. If you're looking at this stuff, tax is a good thing. Why we were running them as optionality, I don't get it. What I would say is, when you look at the data that comes through tax, how they use analytics to determine where should appeals be and how they drive value to their customers, it's a great opportunity. Now, does it have to change? Absolutely. Will we change it like we're changing Altus Analytics?
Absolutely. It'll be a combination of our services, our technology platforms, our data and analytics firing to help our customers do a better job of managing their asset. What we spent a lot of time doing last year was setting the foundation for this in this tax space while we continue to grow. Finally, on the corporate alignment space, people have been asking us, we've had a great year from bookings. Team's done a great job. They're selling great stuff. There's more to come. People are like, "Is it just a year because you've rebounded from COVID?" No. The blocking and tackling that the teams are doing and looking at how those pipelines are moving and how things are happening, they've accelerated the opportunities, and they'll continue to do it. They've done this as we've started to advance our new operating model. We're gonna have customer success.
We're gonna focus on retention. We're gonna focus on lots of things that while we talked and gave lip service to, if you have great go-to-market and you're out there, and you're providing value, and you have good NPS scores as a software, as a service company, or I should say intelligence as a service company, you will get more and more opportunities. Customers need this support. What we hear in this space is there's not a lot of people doing this. You'll see this slide from Jorge later. This is gonna get into our tech stack and how we're building this through. As you see, it has all the different areas.
Like there's more parts of the value chain that I talked about, but they've broken that down a little bit further because, you know, that's what product guys do in a good way, and I don't do it as well. You'll see how ARGUS, Reonomy, StratoDem, Finance Active all fit into this with our appraisal management. There's gonna be the same thing on the tax side. It's the same platform working on tax use cases. Not two platforms, similar platform working in coordination to make sure that the data comes in and that we make sure that we get that wonderful tax data that's out there, have it, and we pull that into what we now have in the breadth level from our friends at Reonomy, where there's 54, and I'm rounding up, 54 million assets in the United States that we have data about.
Now, before I go, we always have to give a plug for ESG. It's not like ESG because we're doing it. There will be a March report. You'll see that. It'll be great. I'm telling you guys, you guys will do a great job. It's about where do we fit in this value chain. Today, our tax professionals are already helping our customers work around the environmental and sustainability pieces. Right off the bat, when you're gonna be an ESG company, it should not be what you're doing internally, but it's also what you're doing externally to the market, helping in the work that you're doing, helping in how you do the valuations, how you actually hire, how you promote, how you look at this. Our team is committed to this.
Our team is very much looking at this as a transformational point for the industry and how the industry can grow to the next steps. From our perspective, you're gonna see a lot of work. I mean, Kim will come up and talk about what we're doing around human capital, or at the end. We will sit back and talk about how we are actually gonna put in the environmental aspects of how we look at these assets. It's changing, we have to change with it, and we have to drive upon this. We feel that this is a big place for us and there'll be a lot of room around this as we get into 2022. With that, I'm gonna let...
Alex is gonna come on the screen 'cause he couldn't fly in for good reason. Jim's coming up to talk about Altus Tax and Analytics at the same time, talking about the large and addressable global market. I will tell you, I think it's bigger than what they're telling you. That's just no pressure.
It's $10 trillion. Mike just feels 1% more than that. Well, I guess that's it. Total addressable market, we're clear. Intelligence as a service, net out a lot of data into one data point. I guess I'm done. We'll move on. We got Alex up there. I'm assuming he's gonna pop up on screen here at some point. Jim Hannon, President of Altus Analytics. I think I met a lot of you last night, but looking forward to meeting the rest of you soon. Let me just start off with Mike, he's gonna help me on this one. The market, the addressable market for us, we believe is conservatively greater than $5 billion globally. We're gonna show you how we got there. Let me just jump right into it. We're gonna start with.
All right, I'm gonna start with a data point. We're an analytics company. We've been analyzing addressable market for the entire year that I've been here. We have a couple of our data scientists on this. We've cut this many, many ways, as I'm sure most of you have, but we just said, "All right, how do we net this out into a simple conversation for the sake of thinking about investments in Altus?" It's you have to take all these complex data points and correlations and get it down to some simple facts. Some simple facts. Let's start with what we're talking about, what Mike and Sung have just teed up. This is more than just the awesome ARGUS franchise.
It's more than the awesome appraisal management franchise or the tax franchise or our cost business. It's a total shift of how do we go from being best in class for those very specific services to how do we change the conversation to we drive alpha and we reduce beta? It's a very different approach for Altus. The core assets were set up to start to have that conversation. The assets that we've purchased and have integrated in the last year have completely accelerated that. When we think total addressable market, think about it in terms of driving alpha, reducing beta. All right, that said, let's just go to some data points. On this slide, you can see where our growth focus is. We're in lots of countries. I'm gonna talk about that in a slide or two.
From a growth focus, where we are going to specifically invest to chase growth markets, you can see it. It's Canada, U.S., France, U.K., Germany, Australia. We are not pulling back investments from other markets, but where we're doubling down is based on the TAM information that we're gonna get into with you right here. Let's just start with core data. 100 million commercial real estate assets in these focus markets alone. Another 100 million commercial real estate assets in rest of world. I'm not even gonna bring that into the equation. Okay? What does that mean? How do you go from 100 million assets, nice number, to what does it mean? Where are we going to invest? How am I going to invest across the analytics P&L? How is Alex going to invest across the tax P&L to capitalize on this opportunity?
We did some math. We broke it down. I'm sure you guys have all done your own TAM calculations. Elements that we looked at before getting to the simple example that I have on the screen, we looked at our revenue by country, our revenue by user type, the number of users that we have per user type. We've looked at the average spend per client. We've looked at the average spend per user. We looked at the number of businesses in the different commercial real estate segments. We've looked at the number of assets that each of those clients have. We've looked at the amount that they spend with us as a function of their NOI. We've hit this from many, many angles. We could have a religious debate about total addressable market and how you calculate it.
We're gonna go with this simple, netting out of the calculation. We said 100 million assets. If you go and look at a 5%, just cutting it down. It's just math right now. If we could go after 5% of those assets, and on 5% of those assets, we could achieve a $1,000 spend with us against those assets, there's your $5 billion. Now, you guys are gonna go, "Well, Jim, there's fast food restaurants in there. There's gas stations in there. There's gymnasiums in there. Those aren't your addressable market." Right. Take 5%. You guys do the math of how many assets are professionally managed in the U.S. We've looked at that. I'm not gonna get into all of those calculations. 5% is an attainable number for us to target.
The CAD 1,000 spend, now you think about that is significantly less than what we achieve per customer today. Significantly less. Why'd we use CAD 1,000 ? We wanted to come up here and say, "This is a conservative view, and hopefully that would be an indisputable view on CAD 1,000." Let me frame out the CAD 1,000 again just for context. That CAD 1,000 per asset that we have up there, that covers valuation, appraisal management, data, our Canadian data solutions, the Reonomy business, Finance Active, the opportunities for advanced analytics with StratoDem, portfolio asset management services, data management, tax, and cost. When you think about the collective portfolio that we bring to yield CAD 1,000 per asset, we really believe it's a conservative number that we're looking at there.
If you look at that with $5 billion, then you get down to, well, that says that as a company, we're at about 15% penetration rate. Feels about right. The core takeaway, major opportunity for us to grow this market significantly. We didn't do this just to say, "Is there a major opportunity from an investment in Altus perspective?" We did this work to figure out where do we invest? Where do we put our next dollar of investment? That's what's informed the new Altus Analytics operating model, which I'll talk about later. It was for very pragmatic reasons that we went through this total addressable market, so we could get our appropriate segmentation and get our resources deployed in the right places. Now let's talk about how analytics is poised to take advantage of that market opportunity.
Our products are used in over 105 countries. We do training in over 200 universities worldwide. We are the market leader for valuation. As you guys know, we're mission-critical in many of the commercial real estate processes. We have over 12,000 clients worldwide. Our market coverage, particularly now with the Reonomy acquisition, gives us robust coverage. In the U.S., we know we have over 53 million assets covered in the Reonomy database. Most importantly, we're trusted. It's about performance and trust with the clients, and we have that with the clients, and we have the opportunity to go beyond our current awesome franchises into solving other data for the clients. We have retention for those of you guys who are oriented to LTV and cap-type calculations, our retention numbers are fantastic.
You put all those ingredients together, Altus Analytics is very well-positioned to continue to lead the market and go after that addressable market. With that, I will turn it over to my friend Alex in the U.K.
Here we are. Hopefully, everybody can hear me. Thanks, Jim. Please note, I'm not wearing a tie. Good morning from London, everybody. I'm Alex Probyn.
That was for me.
I'm very sorry that I can't be there in person. Jim has provided some great insight into the huge total market that presents itself, and we see this aligning perfectly with the growing opportunity we see emerging as the property tax market evolves. We believe that this has been the direction of travel for some time, and by this, I mean we are seeing a property tax world driven by the increasing digital environment and regulatory compliance shifting from one which was centered around event-driven reassessment and appeals to one which will require a more programmatic, continuous real-time service. Now, successful delivery in this new environment will inevitably require large data.
Critically, not just large data, but the better use of that data, better analytic capability from that data, but also with the technology to serve the increasing demands for insight, mitigation, compliance, and reporting around risk management. These opportunities will favor those with the greatest scale, the furthest reach, and the best data, but will also require operational execution with an increasing digital capability, smart use of technology to support their people, and a move to a more flexible consumption model. If it's not already obvious, we're really excited by this opportunity. Needless to say, we're already working towards it. We believe the reasons to the right-hand side of this slide support our excitement. You know, we have strong or leading positions in core markets. We have national capabilities in those markets.
We have relationships with tens of thousands of clients across these markets, and we're winning new ones every day. Many of those relationships are long-standing, and we're deeply embedded with these clients and their tax management processes. You know, we've been at this a long time, so we are well respected by the taxing authorities, and we seek to work closely with them in a positive way. Along with our clients, we're both stakeholders in the system, so we believe it's our responsibility to work together for positive improvement. We are trusted by our clients and rewarded with their loyalty because of our exceptional track record of success on their behalf. We have and are collecting huge amounts of data on these markets, particularly at a property level, through the work our consultants and teams are doing every day.
As Mike has said, you know, this industry is changing fast as many others have done so before. Just like those, the opportunities will be there for the providers who have scale, innovation, flexibility, and great execution. We feel really well placed at this point in time and are very excited about the roadmap ahead. On that note, I will pass over to Jorge, who will talk you through our exciting product roadmap.
Thank you, Alex. Guess I need to carry the microphone. Jorge Blanco, pleasure to meet you. First time in front of any of you and had a great time last night speaking to many of you. What I'm gonna do is spend probably about 35, 40 minutes walking you through how we are going to enable the change that we've already discussed ad nauseam up to this point. The first thing is this. I like Mike's slides better 'cause they make the world look a little bit more realistically complex. A few of you asked me a great question yesterday, 'cause I've been at Altus since 1 March. They said, "Well, what did you find? How can you describe it?" There's two words that came to mind.
I'm sure my partner in crime, Steve Bessner, in development will smile at this because it's an artificially complex market. We've made it hard because we've made it hard. People like Rube Goldberg in this market. They have not really taken a step back to look at what is the client trying to do, which Jim's already articulated is the pursuit of higher alpha and lower beta. Altus was, as a leader and a platform with ARGUS, certainly playing an important role, but very much in a state that looked a lot like this. What we have found is that critical to creating that intelligence as a service we've talked about, there is a massive data problem that is only exacerbated through fragmentation.
At FICO, we had a saying, and it's funny, Mike and David Ross, Jim, "Data is where every advanced analytics project goes to die." We talked about optimization. We talked about predictive analytics. We could talk about the future. We could tell you absolutely everything and then go, "Okay, but where's the data?" "Oh, well, we don't know where that is." All of a sudden, you've turned into the Swami, and you have no idea what you're going to do. Our clients are telling us exactly the same thing. They are spending an inordinate amount of time in what is the raw material for where we are headed. We have to deal with the data component before we get to anything, and we certainly have been focused on that area.
With that said, what you can see is that we are on a path to move well beyond what people have described in the context of analytics for the past 20-25 years since it's become a practice, which has mostly been descriptive analytics. Which is, let me show you a pretty picture about your data. That's interesting, but it's constantly giving you answers in arrears. What we're looking to do is, how do we help our clients gain that edge on what is going to happen? Eventually, how is that decisioning gonna be become a core component of a prescriptive workflow? It is difficult to achieve. It has to be pursued methodically as we go into this. It will not change overnight, but we definitely believe we've been putting the pieces in place to pursue this.
Alex and Jim have both talked about trust. My God, have we had a year that has put us right in contact with how much our clients do trust us, and how much do they expect out of that trust as we go. When you look at the technology, the technology that powers that trust, that sits behind our experts, which are and will continue to be front line to everything that we do, there are a number of requirements that need to be met that have not been commonplace, as Mike said, in the context of what this industry has delivered. First, you've got to look at scale and high performance. As Sung mentioned, this has become a bona fide asset class at the top of a list of many. Second, it does need to provide value.
It can't just be about widgets and tools that spit out something that is gonna cause another three, four months of work. In addition to that, it needs to become much more predictive. It needs to give you an edge. What is going to happen next? Why is it happening, and where is it going to be? The other piece of this is we talk about hyper-productivity. I'm sure you've all noticed, but Kim Carter, our Chief People Officer, is probably the busiest person in our team, simply because right now, talent is in sharp scarcity. Our clients are facing exactly the same thing. Hyper-productivity, meaning how much can we extract out of human capital, and how much do we enable it, is absolutely critical. I can't say enough.
I mean, if I had a middle name, I don't think the connected in Spanish is all that interesting, but in English it sounds great. It is about connecting the dots. Everything has to connect. It has to be designed for connection first, which has not been the case in the industry. Consequently, you end up in a science project of integration for the rest of your life, that by the time you're done, you're thinking about how you're gonna redo it. The last piece, it is about optimizing decisions. The best decision you can make. Are we going to be making the decision for our clients? Absolutely not. Are we going to be a key enabler in their strategic kit for those decisions? You betcha. So those are the parameters that we've placed around our portfolio as we go.
With that said, that connection of the dots is something that we've been doing very aggressively, especially since Mike got here, to begin to bring all of those pieces of information to answer, how good is that intelligence going to be for our clients? How much time do we save them? How much error do we take out of the decision? And when there is error, how much agility can we deliver and provide when it needs to be remediated? When you take a look at, for example, the combination of valuation data and asset intelligence, my first experience in this company as I came in in March, as Matthew Buckle, who's in the audience, who runs our strategy office, was telling me about this little company called StratoDem.
The main thing that I heard beyond predictive analytics, which, you know, wasn't that novel to me 'cause I happen to have been in the industry, was the fact that when we combined the demographic and economic data that they were collecting in predictive models and combined it with our valuation data, magic happened. Three months later, we acquired them. James Chung is here. I haven't seen Michael Clawar, but, you know, that group has come in and have begun to teach us and teach the marketplace how you can begin to apply those principles. Ultimately, as Jim said, this is all about a very simple set of messages to our clients. Increase your alpha, reduce your beta on everything you do. Quality of decision and speed to decision are the dimensions, the dimensionality of the problem as we pursue it.
The other piece of this is the industry has had a tendency to disconnect the different buyer types, even though I'm here to tell you, and actually it is an advantage, we have had some of these arguments with some of our clients, especially with people like me, that they go, "Oh my God, you have spent like maybe 2ms on commercial real estate, Jorge. What do you know?" I go, well, hold on. What are you trying to do? Well, we're trying to gather a massive amount of data, and then we're trying to optimize it so we can use it, and then we're trying to put some workflow behind it, and then we're letting people consume it. I'm like, all right. Kind of have seen that movie before.
We've got plenty of experts at Altus, you know, to ensure that we're doing the right thing with that combination. My focus and my organization is to make sure that everyone that touches the Altus ecosystem, starting with our technology, are fully connected to those workflows, to that data. Doesn't matter where it comes from. Ultimately, what we're trying to do is get to what we call asset-level intelligence, and that dimensionality can and is delivered and will be enhanced not only through our analytics assets, but every one of our tax professionals and our cost and development professionals. They touch the same assets.
One of the things that we have to do is look at how do we enhance the process of ensuring that that information is the most up-to-date, most comprehensive, and we would be silly, and we would be wasting an opportunity if we didn't connect all of those elements to exactly the same process. You will never hear me talk about a tax platform or an analytics platform or a development platform. We will have one platform at Altus, and it will be in the market in 2022. Now, Mike showed this chart, and a lot of people go, "Well, where's ARGUS in all this?" The answer is simple. Everywhere. Everywhere. Because no matter what you touch along the continuum of this value chain, the intelligence that our ARGUS-driven platform or component of the platform now delivers is critical to everything else.
You've got to think about it as a common denominator that is not going away, but is now part of a picture that extends the company's breadth and our points of access to clients across the value chain rather than in just narrow verticals that we have been in for most of our history. Every acquisition that we made this year, and Mike knows this because I'm, you know, I'm a little bit artistic as well, and I don't like to do things that are not elegant, but every one of these acquisitions have been tested against how do they fit in the model. It's been scrutinized like that by the board, by Mike, and everybody else to ensure that there is a reason they're here. Reonomy, StratoDem, Finance Active, and they will not remain discrete components in this architecture.
Now, when you think about why this matters, I'll just use one use case as an example. The use case that occurs every day by investors in this industry of where am I going to invest? Where should I invest? That is typically a question that in many cases can take weeks or even in most cases, months. What neighborhoods am I going to go into? Which particular type of properties? What size of fund I want to go into? Our experience has been that even with the most seasoned investors, you ask them how they do that, and it feels very much like, well, you know, we're going to look at the Sun Belt. Lots of good things happening there.
If you imagine a world where that can get taken down to neighborhood level, that level of precision, that is precisely what our StratoDem asset does. You ask yourself the question, great, you got me to a neighborhood. That's fantastic. Now what? What's available? What's there? What are the typical valuations? What are the comps? Reonomy steps in and takes us all the way down to the 54 out of the 54 million that essentially are the critical ones. You go, okay, are you done yet? No. Now I got to leverage ARGUS to understand the valuation of those properties and how do they fit into my own investment model. All three connect. What used to take weeks, I'm here to tell you, is now in minutes. I wish I was making it up just for effect because I've watched it.
I encourage you, there's a number of our experts here, James, Matthew, Pat, these folks can actually show you what we're talking about. Now, think about if we return you weeks of time on a decision, what you could actually do. What can you do with that time? How much competitive edge do you get? How much buying power can you exercise? How much leverage can you exercise? That's what we're talking about as we go into this. StratoDem, Reonomy, ARGUS Enterprise, they are not three things. They are three parts of the same equation. With that said, as Jim mentioned, he's been doing work for months in the analytics world. We're doing the same with Alex in property tax. It's actually starting to do some work with the COTS business too. The idea here is how do we make these components simpler to consume?
We are not arms dealers. We're not gonna be selling tools. Here's my nice little tool. Go in the corner, use it, find 10 people. No. What we're doing is we are driving towards different business problems that are compartmentalized to a point where we can actually assist our clients effectively. Now, my old firm, we used to talk about the concept of the 21st century enterprise. The 21st century enterprise had one distinct characteristic, and that is everything is going to be offered as a service. Everything. You can see it now. The largest software company in the world does not sell software anymore. They sell service. They're in Redmond. They're kinda little. Start with an M. Microsoft Azure is a service. It's not just software as a service. You're essentially subscribing to their platform, so you can build your own on top of it.
Amazon across town, same thing. When you begin to look at that, when I looked at Altus, what got me really excited is I understood that an expert-led professional organization like this one was dealing with a problem that said, "Our clients want us to solve their valuation challenges every day. That is a highly specialized skill. They wanna do it in scale." You can't scale it if your only or main differentiating factor is just the human capital. You gotta achieve a combination. What we are doing is taking that expertise, the intelligence that we derive from our technology and our expertise and the technology itself, and packaging it to solve. For valuation, I know many of you refer to it as appraisal management. You're gonna hear me talk about valuation. It's a synonym for me. The delivery of intelligence.
Constant access to that intelligence, which our Reonomy acquisition complemented by, of course, StratoDem, our core. D irectly assisting with transactions that are occurring every day, not just on the equity side, but also now on the debt side. Managing performance over time from a portfolio management perspective. Yeah, I was actually since I was learning CRE as I was coming in and learning ARGUS, realized that, you know, some people use ARGUS strictly for compliance. They do valuation, they put it on the side, and off they go. We've got other people building five-year plans on the thing. They use it for completely different things, connected by valuation, but different things. The management of a portfolio is something we wanna do better at. Of course, assisting our clients with strategy, much like the use case that I just showed you.
What do they do next? How do we help them improve that strategy, hone it in, and the intelligence? I'm telling you, I also wanna make sure, last night I got a lot of questions about property tax. I'm really excited about this. Tax fits, as Mike stated, like a glove in this model. I'm working with Alex and Russ and the rest of the tax team as to how do they become not just participants, but core components of exactly the same thing we're doing as we execute the strategy that Alex is putting in place of creating a programmatic business on the heels of what we've been doing in the tax space. The data, the acquisition of that data, the management of that data, the serving of that data all absolutely connects.
I don't need to go out and build new technology in many cases. I just need to apply it. We are essentially beginning to connect all of these into a platform, into what we call is a set of offers. You can use the word solution. Please don't use the word bundle. I hate that because it isn't. It is a thought through. There's a value, there's a buyer, and we are going to package it in a recurring model that takes our experts, our intelligence, our technology, and makes it available to a client easier, but much more powerful to buy. In terms of what you're gonna see us do, 2022 is the year of the platform. We've got to put the technology in place. We've got to tuck in all of the different things.
We've got to stop or redirect different elements of the business to ensure that they all connect. I've told my team, if we're doing something more than once, we've done it once too many. Because you don't need to do that in this market. We can reinvent. We can re-rescale. There's no reason to have my own workflow engine, my own web presence, my own data. No, no, and no. There will be one full connection. That's what we're doing this year. That's setting us up for beginning to expand the ecosystem, and that means that third parties should begin to participate much more directly in the collaboration. Building platform-based approaches is not unique to Altus. We're not gonna claim, "Wow, we're really smart.
We just have this great idea that nobody has ever thought of." Our clients are doing this. We certainly now need to begin to look at 2023 as the points of integration. How is it going to come in? How do they leverage our data? How does it integrate with theirs? When it integrates with theirs, how can we provide the toolkits for them to manipulate it? Something we call the Studio. Eventually, we see marketplaces growing up out of this because there will be all of these common users, or I mean, actually varied users in a common environment that can begin to transact business that we could potentially broker. Ultimately, we're gonna get to a point of industry transformation.
We know because I've learned it here, you got to be very careful when you tell someone that is doing an acquisition in the context of transactions that you can do things in near real time, because near real time is measured in milliseconds. I've got a deal. I've changed the number. The valuation's going south. I need to go back here. You've got a minute to come back to me with what is the impact to the flow. Well, this all has to become not just near real time, but really approaching real time. To do that, you got to build a boatload of technology and a boatload of scale. More importantly, you've got to do it in a way that the alchemy starts with the expertise and the face of the client.
One of the things that I would tell you, I've got the title of Chief Product Officer. We will build no products. We're building intelligence as a service. That's the product. And that will have expertise, intelligence, and technology packaged together, and in many cases, very, very difficult to unravel. Two things. One of the first things I asked myself and the rest of the team when I came into Altus is, what are we about? Why are we here? And these two words came right to the top. I went to the, you know, we all worship at the temple of Sung Lee and Rick Kalvoda, and we go ask them questions like, "Does this make sense? Does this resonate?
Is this the right thing?" They said, "Absolutely." One, this is about our clients trusting us to assist them with their decisions with our intelligence as a service portfolio. Of course, how did it impact alpha? How did it reduce beta? Which is the performance element to this. If we're not doing that, we're not doing anything. We are poised. I mean, I will tell you personally on a personal note, I haven't had this much fun in a while. And our clients, I know that our clients are absolutely rooting, not only rooting for us, but wanting us. I just had a very large head of innovation just look at me and said, "Jorge, I am not building a thing, so hurry up." That's exactly what we wanna hear. Very excited about where we're going.
We definitely believe this is a first in industry, and we are absolutely committed to do it. Let me just give the final word before the break to Mike. Thank you.
Thank you. I don't need that. I got my own.
It's good to be the CEO.
It's good to be. I learned because you have to think about French in a French company. I love the title, le chef de la direction. That's what I'm going by from now on. It was awesome in French. These are the things like why did you join the company. Somebody asked me, "Why did you join the company?" Le chef de la direction. It sounds pretty good. A couple of things I wanted to just state as we go through this, and I'll talk about the innovation side as we go before the break. First off, just a couple of our beliefs as we do this. This company believes in an open ecosystem. The best way to protect your moats is to be able to partner with others and provide access to your systems.
It's a little different, a little bit of a different twist that Altus used to talk about before. We're gonna partner. We're gonna drive integration. We're gonna allow others to get in. They have to provide value. If they provide value to our customers, we're gonna find a way to do that. It's an easy thing to do, and it's innovative to go through. I know a lot of you guys will ask the question, is there a step-out investment as part of this because you see a lot of things going on the page? The answer is no. We have the investment we need. Very clearly, the answer is no. We are going to start not only growing at a faster pace, but we are also gonna be expanding our margins.
We believe we have the right amount of investment for our product sets to drive our products and the time frames in the space. Now, people will ask, "Mike, can you grow faster?" If we can, we will, and we will invest in that. Our view is that we want to grow at a very fast organic pace. What does that mean? Double digits across our different product lines. All right? Some of them are already growing at a very fast pace. If you guys saw the results from Altus Analytics, which you all did, the organic growth rate was well over 15%, and we expect that to increase. No pressure on Jim.
At the same point, we also realize that we need to start expanding our EBITDA margins, and we're planning on doing that next year, even as we integrate these different acquisitions. That is our plan. That is our promise to you. You sit back and think about, like, what Jorge's talked to you about and how it comes to fruition and into the market. It's not enough for us to talk about it, but it's also for what our customers say. Just a couple of customers who said we could talk about them here today. First off, Dream out of Canada. Great customer. We've had great relationships with them. A customer that we do lots of work with ARGUS, started using our advisory services in the United States. They've adopted FA across their entire portfolio. Why?
They want a 360-degree view of their assets. We're starting that implementation right now. I'm pretty sure next year and they've looked at, like, talked to our guys and said, "Hey, we need to talk about analytics as well." Second group, another advisory client, AEW, this last week, adopted StratoDem to help with their portfolio management and actually advise on their portfolio going further. It makes sense. We do the advice. We do all the appraisal management work for them. At the same time, providing them these tools, they can actually do more themselves. It's actually a really good thing. Yes, we talk about the basis points, but an easy part of the sell just to get into this, which guys like James and Sung have talked about, it's, guys, it's hard to find people to do this.
This tool will make every one of your assets and your people more effective. You don't have to hire that extra person. This will make everybody more effective. They're down that path. At the current rate and pace that with that acquisition, we wanted to have six or seven of these items. We talk about units. We don't talk about how much revenue when we talk about software. If you get to it's sort of like inventory turns. We think we'll sell six or seven units of StratoDem this year on top of this, and we have a great portfolio building for next year. Then the third client I'd like to mention is Allianz Real Estate.
Allianz Real Estate, when you take a look at the entire platform, is now deploying across the cloud across the entire platform. We worked with them for a while. The teams worked very hard with them to bring the next level. They take a look at what we're building. We're looking to get that deployed very quickly. So overall, you know, it's easy for us to get up here and talk to you about our innovation. But it's great to sit back and start telling you clients and customers who are saying, "Yeah, this makes sense. I wanna adopt this." What you'll see from this as well is we hope as we do more of these things or we go back to our Connect conference, more customers will talk about it.
Because the best thing versus me saying it or Jorge or Jim or Alex is our customers coming up here and telling you why they're using us. That's, those are three customers I wanted to mention. As we come back from the break, we've talked about innovation today at the top end of where we're innovating. Part of, like, to get to the double-digit growth and improve upon the margins is about execution. This executive team is relentlessly focused on operational execution. Jim and Alex will talk about how we're gonna be changing the operating models around to take advantage of capturing that growth and what we're trying to do around that. Because you can have the innovation, but it's like a tree falling in the forest. If nobody's around, it doesn't make a sound. All right?
We're gonna be talking about that after the break. Did we wanna show them the video before we go to the break? You know, now this is the video, the better video of me with better-looking people and talking about the future of real estate. Cue the video, and then we'll take the break.
The world around us moves all the time. Finance, laws, economies, technologies, industries, people, all of them spinning faster than ever. Billions of data points driving the performance of assets across the globe. As the demand for real asset investments grows, the industry needs to harness the power of data more than ever before. That's why Altus Group has set out on a journey to deliver the expertise, intelligence, and technology that will expand our value to our customers through data automation, asset scoring, decision optimization, and predictive analytics. New acquisitions like StratoDem Analytics and Finance Active have already enhanced and accelerated our capabilities. Now Reonomy is our next step, offering data management technology, a scalable web platform to deliver deeper insights, CRE coverage across the entire U.S. with more places to come, and talent with the vision and ability to connect the fragmented world of commercial real estate.
Reonomy will move us forward again towards our goal of predicting future outcomes using data and technology to drive the decisions that will benefit our clients. At Altus Group, we're building the future. Join us.
Yeah. I love this . All right, we're running a little bit ahead of time, so we'll take a 20-minute break, and we'll sit back and talk a little bit about the operating model. We'll be happy to talk to you outside while you get your coffees. See you in 20. I'm gonna take an end seat. I think. All right, if we can get back, we're gonna get a panel up here, but before that, we got Jim sitting and talking about, like, why he likes operating models. Effective ones. Let me get the rest of the panel.
We have Alex back on.
Alex, can you hear us?
Yes, I can hear you, Mike. Yeah, no problem.
It's like the voice of God. All right. I'm gonna sit on this side. I'm gonna sit close to you. Is that okay?
All right.
All right. Go for it.
All right, guys, when I saw this part of the agenda.
Oh, thank you. I want a microphone.
I was like, "Great, I got 20 minutes to talk about operations, there's no way this guy can keep an operations conversation to 20 minutes 'cause he knows this is the stuff I really enjoy." Turns out I got five minutes, so the bets are against me on this one. Here we go. Five minutes on operating models. You've heard us talk a couple of times today about simplicity, focus, and execution. That's not a mantra for this meeting. That's how we are running the business. It's about simplifying the offer structures the way Jorge talked about. It's about focus, which is how do we deploy our people against the addressable market opportunities? It's about execution, which are the metrics that we're gonna use to run the business and the cadence of when we're going to talk to our people about the metrics.
Very, very simple business model. Couple years ago, I think it was at Investor Day, Altus talked to you about an integrated analytics model. It was one of the core tenets of the Investor Day presentation. It was the right call, it was the right strategy, and we've done it. We announced at the beginning of November, the integrated Altus Analytics model, and I'm gonna talk to you about that right now with a couple of slides. The top part of the slide talks about go-to-market, service delivery, and customer success. I have a page on each of those, so I'm gonna come back to those in a minute. Here's what's new. Right in the middle of the page, you'll see regional P&L leaders, North America, EMEA, APAC. That's it. It's not rocket science.
It's various companies go to geo, or they go to matrix models with geos leaders and functional leaders, and that's what we've done. We've put in place. What's new is we were organized into the various business units that made up Altus Analytics, and they ran separately. The company's been successful to date running in that way. To drive margin expansion, efficiencies, but mostly these were our goals: improve the customer journey, make it easier for clients to do business with us and consume our services, intelligence as a service, and make it easier for our folks to work here. Said differently, tech enable the services. You need folks in play who can bring best practices around sales, the whole go-to-market function, customer success, service, to tech enable what we're doing. Twofold. Improves customer sat, improves employee stat, improves employee retention, drives up margins.
It's the simple goal of what we're getting at here. Here's the other piece that's new. In the middle of the page, it talks about client engagement. The client engagement role is very simply this. We were creating go-to-market capacity in our model without increasing our investment this year. We didn't need to increase our head count or investment to drive growth. You're seeing it in our numbers. We rolled this out. The go-to-market piece of this, we rolled out 2 July . We started building customer success in May. We rolled this out 2 July . You can see the dividends in our numbers and the bookings numbers that we've put up for this year. Creating capacity. How do you do it?
Well, we have, across our company, world experts in commercial real estate, and they have close relationships with the biggest decision-makers and the biggest commercial real estate clients in the world. They're delivering services, and they're focused, as I said earlier, on that one swim lane that they delivered really well. We're not asking them to become salespeople. We're asking them to look at Altus Analytics through one lens and look at the client through one lens. The client engagement person, think of it as the general consultant. Pick your consultancy. The general consultant that goes in there. We were in there as the tax consultant or the advisory consultant or the valuation consultant. We will still do that. That's part of the go-to-market. That's part of the service delivery.
The client engagement role are the people have these close relationships with the decision makers or clients and can talk to them about what are the biggest problems you're trying to solve. Then we can figure out, do we solve those? If we solve them, do we solve them better than the competition? When we engage in a complex deployment with those clients, how do we manage that across what used to be six separate services units? That's the client engagement role, to quarterback the client, be the general consultant at the client. I'm gonna dive into the various pieces of this. Go-to-market. On the go-to-market piece, as I said, this was in play this has been in play since July. Pre-acquisitions, we had about five different go-to-market motions across appraisal management, four different software suites, our data solutions group, one eleven professional services.
Now you think about adding in Finance Active, and you add in Reonomy, and you add in StratoDem. Had the potential for eight different motions. We're at one now. Simplify the offers, simplify the sales enablement, go to one structure, simplify the client's ability to engage with us, and you drive efficiency and you drive improved customer journeys. Where were we? We were at multiple sales teams. This is product-focused. You can think of that as business unit-focused. Where we're going, one global sales team, client-focused. Every sales team in the world says they're client-focused. Of course, it's client-focused, but the point is now looking at the client holistically and saying which problems can we solve rather than six different people from Altus showing up talking to the clients about different problems. Simple as that. What's the benefit in that?
Increased opportunity to cross-sell and upsell. Single view of the client. Sales execs and the client engagement managers. By the way, an executive sponsorship program for our top clients, all to create capacity for our sales teams. All right. The next piece that we introduced this year that's new, customer success. Our acquisitions had customer success teams. They were SaaS companies. Of course, they did. It's breathing. We, the legacy business, had one person in a pilot for ARGUS. This is now stood up as a formalized organization. We brought someone in who had worked with us in the past to run that organization for us. Customer success is about bringing best practices across the portfolio to our clients. It's not about selling. It's about the client having a much better experience interacting with us.
It's about the clients getting a value realization on this chart. That's not our value realization. That's the client's value realization. It's about customer retention. This is the group that will be handling renewals instead of the frontline sales team. Again, creating sales capacity without adding salespeople. It's about creating teams that have different focus. Customer success drives customer sat, which of course drives customer retention and expansion opportunities. It's again no-brainer here. You guys are used to hearing this in all sorts of tech-enabled services companies around the world. We've done it. It's in place now. Finally, the new service delivery model. We ran with five sub business units with different methodologies across services. What we've gone to is one global services organization with three teams, business advisory services. If you think about our appraisal management services was a business unit.
Appraisal management is a service we deliver. Now we'll be delivering it with more consistent methodology. That is to make our teams more efficient, tech enable them more, so that they can go solve bigger, higher value problems for our clients, like driving alpha and reducing beta. Consulting services, that's clients are trying to figure out their data strategies. We can go in and help them figure out what their data strategy is, and then we can enable their data strategy for them. But we also have our classic one eleven business, which gives us visibility across various vendors and across our clients estate to see what are the investments they're making and why. Those are often in very adjacent spaces to us.
It gives us insight to what problems are they trying to solve, where are they making the investments, and how does that inform how we think about the next steps of what we're gonna do with our portfolio and what we're gonna position. Finally, global solutions. We have the word managed services here. Old term word, but it's one that many people can relate to. When we talk about intelligence as a service, this is the team that's gonna deliver it. They will white glove the service rather than let real estate professionals be great at managing the real estate. Let us deliver to you the data services and the data insights that you're looking to drive out of your teams. Don't deploy the technology. We'll do it, and that's that team. Recap. Bunch of small business units inside of Altus Analytics.
This is about focused execution, bringing best practices, making sure they have the metrics, tech enabling the services, improve the customer journey, improve employee satisfaction, make it easier to buy from us and to work here. That's what the OPT model is about. That inherently drives margin expansion. That's what we're doing with this model. With that, I will turn it over to Alex.
Thank you, Jim. I appreciate that.
Yeah.
I spoke earlier about the opportunity that we've seen emerging over the last few years and the importance of an operational execution through an efficient, scalable operating model. As we've been organizing our tax business for greater long-term growth, we've had particular focus around 2023, as we know the U.K. resets for shorter three-year cycles and the Ontario reassessment is pushed back a year. You know, these types of events are to be expected, and we have a successful track record for managing and pivoting our focus to navigate them. You know, we love the value in our revenue mix across three core markets and the mix across every real estate sector. It acts as a moat against the natural fluctuations within tax cycles.
We have been organizing ourselves further to a global, more unified model, capable of delivering stronger organic growth in its current offerings, as well as emerging recurring revenues in 2022. This will help to protect and improve our margins and help mitigate around the potential impact of the 2023 reset. This year, we've spent time improving our business development strategies, and we've been extremely pleased with the significant growth in our booking value, particularly in Canada. We've continued to deliver the foundational tech platforms, which will enable the shift through 2022 to digital transformation and a more unified model where the U.K. has led the way, North America will follow. Lastly, we've implemented common metrics across the business to increase predictability and better measure our operational performance. As we evolve through 2022, our plan is to globally organize ourselves around three key focus areas.
Firstly, go-to-market and sales. Secondly, operations and delivery performance. Lastly, client service and relationships. You may hear an echo in this model from the one that Jim's just explained. Importantly, we're respecting the necessary overlap that's naturally required in managing a services business and the importance of the geographical differences. If you could just flip to the next slide for me, please. We've talked frequently in the past about our intention to digitally transform our tech business, and that work has already started. As we've planned our path through 2022 and the outlook beyond, the advantages we predicted through this transformation are already coming on stream in these key areas.
Be it client portals, automated reporting and client communications to enhance our client or employee experience, to internal process improvements via document ingestion, OCR and RPA on repeatable activities, or AI and predictive analytics in our business development strategies to identify the high-margin opportunities. W e are clearly positioning ourselves for growth in an increasingly tech and digital environment with intelligence as a service, powered by our best-in-class people and supported by products and self-serve capability. If you could flick to the final slide for me. As we position our product strategy into this new, more digital environment, we see considerable and increasing value in end-to-end property tax management, one that can also deliver insight and risk mitigation around this significant but unavoidable expense on top of workflows, oversight, and reporting.
Furthermore, we believe there are segments of the market that are currently either underserved or increasingly difficult to serve with a traditional model. We believe that the successful use of the platform Jorge explained, coupled with our tax data, creates space for a property tax management offer with increased capability for both high-touch consultancy all the way through to a full self-serve offering. Depending on the client type and their varying needs and wants, this strategy has the benefit of choice for our clients, and importantly, choice for the market. Cloud-based to integrate new technologies, enhance synergies among applications, improve data accessibility, and streamline document management. Plus flexible pricing models with the ability to layer on recurring revenue with an improved value proposition into a far larger target market.
It supports the plan to improve the utilization of our consultants, our greatest assets, so they can spend more time adding value to our clients on the parts of the work that they enjoy the most. Thank you.
Great. Thank you, Jim and Alex. That's a really helpful way to frame the discussion. At the executive panel session, we'll just dive into a few topics where we could get some deeper insights. Staying on the topic of the operational efficiencies we'll be gaining from these changes and our theme of accelerating growth, perhaps as a good starting point, Jim and Alex, you could take us through the key growth drivers 2022. In the case of analytics, how we can start to expect those, the operating leverage and margins.
All right. You know what, Alex, do you wanna go first this time?
Yeah, happy to do that. The key drivers, I think for 2022, we've had some really great sales through 2021, right? We've seen significant growth, as I mentioned, in our Canadian business, strong growth in the U.S., and improved growth again through the U.K. The amount of new work that we're bringing on stream gives me real confidence through the next 12 months and beyond. In addition to that, we're making a lot of progress in our product strategy. We feel there are new revenue streams that we're gonna start to see emerging through 2022. There are some of the adjacent services that we've been developing in parts of our business that are also growing in terms of business development.
We're expecting to see stronger revenues come on from that over the next two or three years.
All right. On the growth side of this, start with. I like to think in terms of simple models like the four Ps model. When you think about the amount of, quote, "product" that we have to sell in FY 2022, we've just started integrating Finance Active, StratoDem, Reonomy into our core sales process. Sung was presenting earlier. Sung's driving the integration of our acquisitions. Sung has some of our top relationships with our biggest clients. He talks to them daily about what drives value for them.
It's leveraging those types of relationships, and right now we're doing it on the...., we're in that alpha phase with the new acquisitions, and the next step is taking the learnings from those conversations and those customer wins that we've already had, and packaging them up and making them scalable across the entire organization. The next piece of that is the best practices across sales and marketing and connecting the dots between sales and marketing. It's key focus for us is the enablement program that Jorge and Ernie Clark, our Chief Marketing Officer, and Scott Cations, our Head of Sales, are driving together to get the teams to focus on the highest value problems at our clients, and how we target our teams to focus and talk to them about what we can do to solve those problems.
On the next part of your question, Camilla, was around efficiency. I think you guys could probably see just going from five or six separate business units to one standardized set of methodologies across functions has inherent value right there.
Thank you. As a follow-up to that, I think some of you are aware we did a pricing study, and we see pricing as an opportunity to expand the user base. Could you share some insights on how we see pricing evolving across our solutions? Maybe we'll start with Mike and Jorge.
I'll come in next.
You'll correct whatever I'm about to say. The pricing study actually proved a number of hypotheses that we already had. One is that, for example, as we've been putting ARGUS Enterprise into the marketplace, the per-seat model is one that was not translating into the type of value capture that we definitely believe we can command. You will see us, over the next six to seven months, begin to introduce much more asset-based pricing that will be much more commensurate with the types of portfolios and the AUM sizes that our clients are managing with these capabilities. All of that principle will be fairly consistent with what we're doing with the rest of our portfolio.
If you look at the intelligence components of these, you will also see much more aggressive packaging. I don't like to call it bundling. I've had this conversation. Mike will call it bundling in a second. The packaging of our capabilities behind particular use cases, be it strategy, performance, transactions, et cetera, we sold in a very disconnected fashion, as Jim already outlined. All of those principles that we found, those were two or three of the core ones definitely streaming into the pricing and packaging we will be putting into execution in 2022.
I got my own.
Oh, yeah.
Yeah. I'll stay away from bundling. I think what the study gave us, and one of the things I've learned in the past, is to try to get to pricing more quickly than not. Pricing is pretty powerful. You know, the three ways to grow is you take market share, you have new product introductions, and you price in a more effective way. I think that what we learned is there was misalignment between our pricing and how we were going to market. We, in a per seat model, are restricting our own access to the market because if we talk to our large customers, they do the math and they do the calculation, and they think about how many seats. They've all sat back and talked to us.
It's like, "We would like more seats." Now, that doesn't mean we're discounting, but there are different users, and there are different user personas that are gonna get on, and this is what we're trying to do with aligning this. We think that a lot of these customers, there is great growth for us there. If we can get them onto ARGUS, then as we package differently the, different pieces of data and analytics, then we can upsell and cross-sell from there. I think that you'll see that work around the products. What we have also learned is we have plenty of old versions of products in the marketplace, and I think we have a very good sense of the elasticity that we can charge around that and use that in a way to continue to move people to the cloud.
Whether that is addressing different maintenance pricing, addressing what we should be charging to be on the cloud or how we work with that, I think we have a pretty good sense of, like, what our customers want to pay. They were very open with us, and we think as long as we can align that right to value, we'll be in a great place. This is something that we're gonna be instituting in 2022.
Thanks, Mike. The acquisition of Finance Active this year was a very big step in expanding our capabilities in the debt side. Maybe, Mike, why don't you take us through why this is so strategic and why customers require that 360-degree view?
Well, I think that when I first came in, Ray Watulo, who runs corporate development for me, ran up to me and it was like my fifth call, and said, "You know, we are looking at. We have been looking at Finance Active for a long period of time. And you know, we need to think through what we're gonna do on the debt side." I got a chance to talk to Robbie, Tan Jong, and Sung on the appraisal management side of like, "Tell me about, like, what we're gonna do with market." And the guys are starting to do work on doing debt valuation. "Okay. How big is this?" "Well, the market," I gotta send this to Chen.
I got to talk to Raymond Mikulich, our chairman, and market's, like, 2-3x the size of just the equity side. As a result of this, as we were looking at this and talking to our largest customers, they all started to sit back and tell us, "We don't have a very good view on this. If you guys can pull these things together, we'd love to do it." This was before Jorge. You know, BJ versus AJ. But Steve Bezner and myself sat down. We built out, like, what the product specs would look like for this. We knew what the eight or nine key use cases were. Then at the same point, we talked to Finance Active.
For us, Finance Active fits a lot of those pieces as well as links the people, you know, we're looking at technologies that link the owner-operators, the brokers, the banks together. Through the portal technology that they've created, we thought that they would be a great fit for us. It gives us a great opportunity. It actually extends our market. It extends our TAM, as Jim talked about earlier. I think at the same time, it gives us great reach into the European market. I've opened up businesses in Europe before. If you don't have feet on the street or you don't have a partner on the street, it is incredibly hard to go into continental Europe. Napoleon learned that with Russia.
We will not do the same thing with France and Germany. Now we have very good people in the street working on this. They're talking about ARGUS. They're talking about Finance Active. We've brought their guys over here to talk about Finance Active and ARGUS together. It's not hard, but that's what you need to do when you start thinking through that. This gives us. I know we've been talking about getting into continental Europe for a while. This gets us there in a good way.
All right. Thank you. In to expanding in our debt capabilities, as we heard from Jorge today, making a lot of advancements on the data strategy. The combination of our existing data assets and capabilities with now Reonomy and StratoDem really put us in a position to scale and grow. What we haven't talked about yet is all the data that resides in ARGUS Enterprise through the cloud. Maybe you could touch on the plans for that and how we could get to unlocking the value there.
Yeah. Actually, Bill asked me a great question on the break. The data is all going to land in the same place. One of the things that I wanna make sure that the board actually approved investment in 2021 for us to be able to start consolidating that data. People like Steve Bezner, our Chief Software Development Officer, Matthew Buckle, have been working on the consolidation of the ARGUS data for consumption in the scalable model.
When we did our due diligence, especially for StratoDem and Reonomy, we then considered what would be the path to ensure that that does become a central common repository. Because as I said in my remarks, the most exciting part of the fusion of these things was when we took that ARGUS data and combined it with StratoDem. We took the ARGUS data and began to see how do we connect it to the Reonomy ID structures and the knowledge graph that they've brought to the table. Essentially, none of it is getting dropped. Actually, it's all getting consolidated for the purposes that I outlined before. We will most definitely begin to see that consolidation in the calendar year as we started.
Okay. Can I add in? I'm sorry. No, I'm gonna go one step further. I know that we've been talking about ARGUS and the analytics side. One of the things that we saw with the addition of Reonomy, and we didn't actually put in our business cases on why we're doing this, is actually also grabbing the data from the tax side of the equation. When you think about where tax gets to, and our analytics guys have looked at the data that we have on tax, the access that we have on tax and how we collect that, it is deeper. What do you mean by that? What do I mean by that? That is it gets down to very much bits and bytes at the asset level.
Some of that becomes very intuitive to people, like when they're taking a look at their portfolios and how they can extend things. If you think about it, we now have breadth with what we have with Reonomy. We're deepening that with what we have in ARGUS and what we've gotten through our appraisal management teams. Then we're gonna deepen it even further from our tax side. You know, as you do this, you start to get really a sense of, like, what are the core variables that are valuable. You can build the intelligence on top of this, and those two things kind of fit hand in glove. We will have the same discussion on the cost side of the equation as we try to get the building attributes as the buildings are being erected.
Okay. Thank you. Topic of data and client data in particular. As our cloud and data offerings scale, data privacy and data security really are a high priority for Altus and all of our stakeholders. Terri, why don't you take us through where we stand on data governance, the contractual rights, and how we've readied the business for the opportunity in data.
Absolutely. Is it on? I'm good? Absolutely. As a starting point, we obtain the requisite data rights from our clients, and our offerings work within those rights. What we're seeing more and more is that clients are increasingly willing to give us the data. I mean, you've heard a lot about what we're doing with our offerings, and they see the unique value to them for our insights and analytics, and they understand that providing that data is beneficial to them. We're certainly seeing that. This all goes towards you heard Mike talk about the open ecosystem that we're looking to build. It certainly goes towards that. Part of our unique value proposition is, unlike other providers in the space, in the data space, we're not hand-cranked.
We have a solid infrastructure already with which we can pull that data in. Then what I'd say finally and most importantly is that we protect the data. For example, we anonymize and we aggregate the data, and we do have a data governance program. We're constantly looking for ways to improve that, and that's an important and key part of our data strategy.
Appreciate that. Thank you. Turning to property tax. You know, this business does touch a lot of substantial amounts of the real assets and data, which is really key to our client outcomes. So what's the innovation potential on the data and property tax? Maybe we'll start with Russ and Alex to chime in.
Thanks. The first thing I think about is through processing across the Property Tax business processes. The digital transformation of the journey we're on one hand, it allows us to drive margin out of the services part of the business, but it also allows us to extend our platform to our customers. Once the customers are actually on our platform, they start to wanna see more and more data. We can show them benchmark, we can show them national data competitive in the market space. You start bringing in the predictive analytics. You start scoring properties that we may or may not own or be part of our contract. It's their properties, it's properties in the market that they're interested in investing in.
There's a lot of excitement in our customer base about that. We're being asked today, "Can I store properties in your platform that you're not working on from a tax services business?" We're more and more able to say yes and get paid for it.
Awesome. Alex, would you have anything to add?
I would only add. I think I would echo what Mike said earlier. I think there's considerable value in that asset level data. You know, we're collecting huge amounts of data every day just through our everyday activity. I think we're forming a very unique view of the use and specification of real estate at an asset level. There's value in that. My final point is your leasing data as well. As part of the appeal work, we collect a lot of leasing data, which we, you know, which we keep within our files and in our data. There's value there too.
Can I add one more thing? 'Cause these guys are, like, moving ahead. I like to use analogies to it. I think it's like insurance industry. At one point, I worked in the insurance industry, and it's like adverse selection. We're not gonna be adversely selected, but we're gonna help adversely select others. The idea behind this is that if we can give them insights to, like, where they're gonna get the best returns from a tax perspective across their portfolio by giving them their own points of view on their assets, but also assets in the area, and we can do that, number one, that's a great use case for our customers. It creates incredible value. Also what it does, it creates incredible value for them to use our consultants.
From that perspective, we think that the data play is probably one of the first use cases that you get to that combination of the data and analytics actually giving that score like Russ was talking about. That's exactly what it'll start to do, and we can provide better insights, a better return, and from that standpoint, it goes on from there. We get very excited about that.
Okay. Great. Recognizing that people are our greatest assets and in the context of the battle on talent, as we discussed, and with our heightened focus on ESG, maybe Kim can share some thoughts on how we're revamping our HR strategy.
Yeah. Thanks, Camill a. It is obviously an incredibly exciting time to be part of this industry. When you hear from my colleagues this morning and you hear words about transformation, innovation, the tech, at the heart of attracting great talent is the quality of work that people get to do. We definitely have that available. That has been a real key for us in telling that story. The second part of that is what Jim talked about on the operating model, which is creating great roles for people and making it easier for our people to do their job, also key. On the flip side, on the retention side of things, we have to be laser-focused in creating a differentiated and competitive experience for our employees. At the heart of that is our commitment to ESG.
It's something our employees are passionate about, and we're passionate about at the organization. When we think about how we're differentiating that experience, we're staying close to our employee engagement levels, which are strong. We're staying close to that, and staying close to some innovative practices around how we have implemented our activity-based work model, creating flexibility for our employees, how we build career paths and create opportunities across different parts of our businesses and globally. Of course, our evolving focus on equity, diversity, and inclusion has been very important for us and continues to be a place where we can differentiate ourselves. With all of those in mind, it's a really great opportunity to move forward.
Thank you. We'll turn over the panel for the time being, bring up Angelo on stage to shift gears to our capital allocation discussion, and then we'll invite you guys back for the Q&A.
Okay.
For the final 30 minutes.
Good morning, everyone. It's a pleasure to be here today. I think I'd like to just begin by saying that, with all my tenure at Altus Group, I've never been more excited about our future prospects than I do today. I mean, I think we're definitely at an inflection point, and I'm just very excited. I'm also very pleased with how we're ending the year. We provided guidance, and I think we're showing some very good progress in how we're closing the year, given our revenue growth and our margin improvements. I'm very excited about how we're entering 2022, given our strong bookings, our strong pipeline and our backlog.
Just turning to the slide where we show the strength of our cash flows, and in the last couple of years, you'll see we've had pretty good, strong cash flow growth, 22% CAGR, and this is at a time when we're investing in cloud. It's a time where we're changing our model in analytics from a perpetual model to a SaaS model, which typically the first couple years, you know, you're hitting those troughs. It's a time where, you know, we have been investing in digitization and in our tax form, tax platforms as you've heard earlier. We after the Reonomy acquisition, from a financial leverage standpoint, I wanted to let you know that our bank-funded debt-to-EBITDA ratio stood at about three, and by year-end, we're deleveraging to about 2.75.
On a net debt basis, we're actually closer to about 2.5. By next year, we should be well below 2x leverage. I just wanted to point out the strength of our cash flows. It's pretty compelling. The question becomes: what do you do with the cash? You've heard this morning a lot of opportunity in just investing in ourselves. You've heard about how we're going to continue to build out and integrate our platforms. You've heard that from Jorge, who made a very compelling case. We expect to generate excessive, you know, shareholder returns. We really do expect to drive shareholder value. That's the first place that we focus on.
Again, as Mike pointed out, these aren't step-out investments, but we are putting money back to work. Secondly, we're investing in acquisitions. Clearly, you've seen us in the last year really drive acquisitions. At a very early stage, we're integrating them, and we're showing early wins. There is still a lot of opportunity in that area. Lastly, return on capital. You know, one of the areas that, you know, we are considering is share buybacks. Now, just wanna stress, it's not that we're out of options in terms of how to reinvest and gain greater returns, but that certainly on an opportunistic basis is an opportunity for us, and we will look at it. On acquisitions, there is an evolving and consolidating landscape in CRE. There's lots of opportunities for acquisitions.
Tech targets. It does have some tuck-in opportunities still, particularly in the U.S. where it's a fragmented market, and that will be somewhat of a focus for us. What are some of the criteria that we look at? Well, first of all, it's gotta be within our core verticals. I mean, that is absolutely important, and/or a close adjacency that, you know, provides us with some advantages within the CRE value chain that Mike discussed earlier. It needs to or should add or contribute to the use cases, a few of which you heard this morning, and/or contribute new use cases that are close to our core.
Also, they can contribute in terms of expanding our geographic footprint and/or getting us into new market segments that we're just not tackling today. Finally, it's about really, you know, continuing to expand our moat and really, you know, improve and enhance our competitive position. Don't wanna forget the talent. I mean, out there, I mean, very clearly in this last acquisition with Reonomy, you know, the talent that we are acquiring is a key asset, and it really is at the top of the list of considerations when we're looking at these targets. So it's absolutely top of mind. Looking at financial filters. Well, today's market is just making sure that, you know, you're buying something at the right price.
The multiples are fairly high, but, you know, we are looking and very cognizant of what precedent transactions are and staying within those guardrails. Absolutely, I mean, they have to create value. They have to provide above ROIC thresholds that we have. That is absolutely important to us. They have to be accretive, either absolutely right out of the chute or through synergies, organic growth or synergistic growth to be able to provide, you know, accretiveness. If it's an early stage company with perhaps, you know, a very high growth opportunity but negative EBITDA, given its stage, our target is to make it accretive within two years. I think we're proving that out with Reonomy in early days. That's our...
You know, we've talked about it being neutral after one year, and it'll be accretive after within two years. Capital structure. Talked about leverage. Or sorry, I've talked about our cash flows and the opportunity that we have to redeploy that capital. You know, we think that next year, you know, we have the ability to make acquisitions between CAD 250- 300 million without actually raising any additional equity. From that point on, with every successive year, that number should grow. In terms of the balance sheet itself, obviously our mandate, my mandate is to make sure that we continue to maintain a strong balance sheet as we've had historically.
Guardrails that we're looking at to staying within, I think quite comfortably given our cash flow generating ability is between 2.5-3x , so that's a long-term target that we have. We're also very open to going to 3.5x or above that if we have great visibility to those cash flows and confidence in terms of deleveraging and getting back down within that 2.5-3x guardrail. In terms of the debt options that we have, we are investigating various options, particularly addressing sort of an increasing interest rate environment. That's underway. You know, we are looking at mitigating that risk in the near term.
Dividend policy, it's a question that comes up quite often. Look, you know, we're always evaluating our dividend policy. Having said that though, we don't have any real near-term plans to changing the status quo. That's pretty much where we're at today. Alluded to a share buyback program. We are looking at potentially putting one in place. Again, it would be opportunistic in nature, and it would be really there to mitigate equity dilutions that we may have from time to time.
This last slide that I'd like to show you is basically plotting out what our revenue growth and margin profile looks like. We've kind of benchmarked ourselves to a set of peers, very strong peers, I'd say. What you can see is that over the last several years, we've had growing revenue growth successively, and we've had growing margins, and this is on a consolidated basis. You can see that given the consensus estimates for 2022, that we're gonna be back close to a Rule of 40. Now, we used to be Rule of 40. Well, we are, I think, or underway close in our analytics business. But on a consolidated basis, we will approach that next year.
If you look at what Rule of 40 companies trade at, they on average, at least this peer set, is roughly at a 32 multiple. Altus Group today is basically at a 26 multiple. The conclusion to that is there's lots of room for us to grow our shareholder value, and I think this is a really great time to invest in Altus. That's it. I thank you, and safe journeys home.
Okay. Thank you, guys. We'll start with questions from the audience, and then we have a few that have come in online portal.
Sounds good.
I would just kindly ask if you do have a question, please raise your hand, and our colleague, Thomas, will come up, and if you could speak close to the microphone. Arthur, go ahead.
Hello, Arthur.
Thank you. You know, I found it of interest that you started with a slide of where we were, where we are, and where we're going. In that context, have you considered listing in the United States, given the change in the shareholder and customer base, the lack of liquidity in the stock, and the fact that you're really a vertical software, or I could say service company? That's the first part of my question. Then the second in the same context of where you're going and where you are today, I know Angelo touched upon it briefly, but what is the logic right now of keeping the dividend given all of the opportunities for capital allocation?
Can I take that?
Yeah, please.
All right. I love those two questions. Getting right down to the brass tacks. We are right now starting the evaluation about a U.S. listing. You know, we are looking at a cross listing or a dual listing between Canada and the U.S., and we're determining what the best way to do that. One of the things when you do dual listings or new listings, you know, there's a lot of costs that come in, and what we're trying to do is make sure that we maintain this and be able to use what we have in place. Part of what we're doing next year, we didn't get into, we've talked a little bit at a high level about our Project Genesis. We're replacing all our internal financial systems.
The idea behind that is that we wanna be ready for something like that as well as have, you know, better metrics for us to operate on. From that standpoint, those things are in coordination. I would tell you that the evaluation is, has started. The time is nearing. We don't have a timeframe just yet. As to, the second question on the dividend.
Dividend.
Yeah, I, there's a great evaluation and conversation happening with the board on this right now. You know, I certainly have some views. What I would tell you is we will, in coordination with that move to a, if we do make a move to a U.S. exchange along with the Canadian exchange, we're gonna reevaluate the dividend and do that at that time. What we don't wanna do is we don't wanna have a bunch of moves not in coordination, like, okay, like we talked a little bit about stock buybacks and stuff. We don't wanna confuse the market. At the same point, we realize that we have to revisit our dividend policy as we revisit, like, what we're doing on different markets. Does that....
Thanks.
Thanks, Arthur. Okay, we have a few questions that have come in online from Gavin Fairweather at Cormark. Related to our analytics and data TAM calculations, maybe Jim, you could take this one, but can you share how penetrated you believe you are with our current clients?
That's a great question. I wanna go back to we had a couple of data scientists on this topic for a year, and as you can imagine, it depends which segment are you looking at, which sub-segment of within commercial real estate, what type of business are you talking about. What we did was.... The answer is, depends by client. It's not consistent. And that is the opportunity. What we did was we took the various businesses, we looked at their classification codes, grouped them together, grouped them by size, grouped them by geography, and then looked at what is the penetration of a dvisory.
What's the penetration against the number of funds they have? What is the penetration of ARGUS Enterprise users? What's the penetration of ARGUS Developer or ARGUS EstateMaster into those clients? The opportunity is that it's inconsistent depending on the clients. When you start to drill into why is it inconsistent, I think Mike or Jorge hit on it earlier, gets into per seat license pricing. There's an opportunity to drive more value out of pricing while creating significantly more value for the clients by modest increase in price, gives significant increase in capacity into parts of the business where we're not in. Some clients are very heavily in planning, using ARGUS Enterprise as an example. Heavily in planning, do not use it in acquisitions. You use it in acquisitions, don't use it in planning.
Because they don't wanna pay that cost per seat, their IT group isn't funded for it. It's about shifting the personas that we're talking to at the client, and then making it easier for the clients to consume and deploy across their enterprise.
Okay. Jim?
Can I add on? 'Cause I think Jim is being a little bit modest here on this stuff. We all think that there's a lot of white space to go after in each one of these customers, and he's absolutely right. Customers use it, our stuff in different use cases. Like, if you take a look at ARGUS, you know, I've talked to a couple of you at the break, people are surprised that we actually won 338 new customers in the last quarter. All right? That's a huge number.
You know, we think we're scratching the surface because we think that there's a lot of new opportunity, but there's also opportunity to grow at our core clients, like what Jim just talked about. If you think about, like, when I got here and Jim started talking with Rick and Sung, you know, it's a great business. It grows double digits. We asked them, "Could you double your growth if we get them focused?" I think that was, like, one of the first calls with them, and I think that there was a big silent moment. They did it. They were able to do it by good old-fashioned sales, getting out there, getting the opportunities, talking about different parts to get to.
Everything that we've talked about as, you know, we got our growth this year has been just doing what we do better. Next year, it really is gonna start. You're gonna start to see the pivot from moving just to the cloud, but really seeing the cross-sell. What Jim and Jorge have talked about, and Steve's building, and David's getting, like, the baseline with this with Altus Analytics, is that we should be able to see our cross-sell go up. We have not been the greatest cross-sell company in the past. If we can get that cross-sell with each and every one of these products going out there, that's an amazing thing. Just the fact that we think we're gonna have a number of StratoDem opportunities to close this year is, like, the start of that cross-sell on that.
We'll do the same thing on Reonomy, and we're starting to do the same thing with FA as we discussed about Dream earlier. I think there's a lot of white space.
Great. Thank you. Question: As you productize property tax into your module, how should we think about contract value potential with some of your top-tier ARGUS customers?
That was, like, contract value?
Yeah.
How big is the contract?
Yeah, or the potential there.
I mean, this is—I think that with the guys, they can sit back and talk about what they think. Our view is in the next couple of years that we want, you know, we want revenue from tax to have something. You know, this is where people get nervous about what I'll say out there, and then you guys will put this out there that somebody said CAD 400 million. No. We would like about 20% of our revenue in tax to be coming from recurring revenue over the next couple of years. All right. Now, it's gonna ramp up over time.
If you think about that and you think about what you're talking about, if we can get to, you know, CAD 5- 10 million of ACV this year, the guys are kinda focusing their teams on that, and you can double that the year after and double that the year after, we think we can get there pretty quickly. By the way, there's a lot of market share in this area to go grab. I think that when you compare it to, like, what the Altus Analytics team's bringing in, I think you're gonna see it in a pretty comparable amount, based off, like, you know, Altus Analytics will do something theoretically around CAD 90-some million this year, including all the acquisitions. You know, great growth with us this year.
We think tax has the same potential for us.
Okay. Thank you. Here's a fun one for Jorge. Can you provide further detail on the potential for marketplaces? What kind of transactions do you envision taking place on the platform?
Good question. I'll give you two particular examples, and actually, one of them is in the property tax space in itself. As we expand the use of, or the leverage of a common platform to support our professionals, one of the things that allows us to do is expand to potentially professionals beyond what we've got and offer those services to them. This is not a new model to us 'cause we've seen it in appraisal management already. That marketplace could be a connection to a client that we already know, portfolios that we already know, that would then allow us to connect our platform services connecting to the recurring model that, Mike just mentioned, and allow them to essentially leverage our platform as a meetup place f or commercial relationships between them. That's one example.
The other is we are getting much more active as we look at the, no pun intended, the Finance Active asset. Once we go across and you look at all of the connections, if, for example, the banking vertical relative to connections between institutions that are focused on, of course, onboarding, underwriting, to then soliciting funding for debt instruments and eventually managing the loan. All of those are transactions that if we are able to or when we are able to connect the workflows, allow us to expose, if you will, the platform for usage and eliminate essentially the friction that occurs between these transactions, where you got to go find your buyer, find your bank, find your developer. That's what we are anticipating seeing as opportunities.
Clearly, in order to do that, I stress, you've got to have your house completely built. You've got to have the data, you've got to have the platform, you've got to be able to bring them in. But certainly, I haven't found too many spaces in our industry that are essentially monolithic in terms of user personas. There's appraisers, there's valuators, there's banks, there's lenders, there's all kinds of participants in a transaction. All of them will be touching our platform and leveraging our platform in one way or another. We have an opportunity to connect them.
Great. Next question from Richard Tse at National Bank Financial. Cloud is obviously important to the success of a lot of your initiatives. Any plans to further accelerate cloud conversions? I guess we talked a little bit about pricing changes on the Q3 call.
Yeah.
Any additional comments?
Listen, I think we're, Richard, we've talked about this quite a bit. We believe we're at the inflection point at the end of this year with our customers and with the big ones coming on. We did a lot of work this year to put a lot of carrots out there, put new technologies in there, easier for them to digest new technologies on the cloud versus the on-premise version. I would say we've made some announcements that we're retiring some old versions of software from 12.1 and below. If people read between the lines, we're not putting anything out on premise for 14 and above. Cloud's the future.
Our belief is that if we achieve what we want to achieve this year, we'll get the preponderance of our groups onto the cloud by next year. You know, our target's about two-thirds to three-quarters. It's a little bit wider range than the 35%-40%, just depends on where we're starting from. I think that we want to accelerate that through. Some people have asked me, "Why don't you say 100% next year?" Well, we got some big guys who will move when they're ready, and we have some smaller guys who will move when they're ready. But they will be, I wouldn't say isolated. Isolated is the wrong term.
I think there's gonna be a good conversation with them, and we just need to think about as they're moving. Part of the power of the new ARGUS platform is the ability to rethink how you do your work. Jorge and Steve have taken a point solution and built it out as a platform solution. That means you need to think about your workflow, your decisioning, how you're incorporating data, and we want our customers to leverage the power of, like, everything that's in that. If we move them over quickly, we might lose the opportunity for the cross and upsell. I would say we're moving at a good pace.
If we can keep that pace up, accelerate it a little bit into next year and have a good managed transition with that, we think that we're on the right side of things. Also, to be honest, a lot of the other acquisitions we made, there's really only one way to access that, and that's through the cloud. This kind of stuff is gonna start pushing people naturally towards it because they're gonna want these solutions.
Actually, it's good. The next question from Richard. What's the incremental revenue opportunity from upselling new services into the existing customer base, and how will that scale over the next three years?
Richard, you're probably trying to ask like, what are we gonna do hundred? I re-
No, I'm not sure he would.
I realize that I got to come in here and the first question I got from everybody, "Mike, are you gonna confirm 400?" Yeah, that was great. Let me answer it in a different way and maybe not give you the answer that you want. I think I've talked about, like, CAD 1 of software should beget probably another CAD 0.75 to another CAD 1 of cross-sell. I think that holds. I think that also gives us CAD 0.50- 0.75 on data and analytics can add on top of that. You know, then there's a little bit more. There's a big room for us to improve.
I would say the way that we look at it and the way the executive team looks at it is we're looking at double-digit organic growth. If we can maintain double-digit and what I'll give the 15%-18% range, in that range for the business over the next couple of years, that's what we wanna do. We think there's market to grab, there's market to gain, and if we can get to 20%, we'll go to try to get to 20%. What we're trying to do at the same time, there's a lot of feedback that I got when I came on is like, "You made investments, we wanna see those investments turn out." We think that we are coming out of the inflection point. We're gonna start to expand our margins, and we're managing that expansion the same time as the growth.
We will go grab market share if we can, and we will grab more. Our goal is to expand 200 basis points, you know, for next year. We're looking at margins and try to accelerate from there. From that standpoint, that's kind of the guidance that we're gonna give. I'm not gonna give an absolute number on what that looks like, but you guys can put that into your models and you know, we'll have good discussion over that.
The final one from Richard. Are there opportunities to divest business segments to amplify our growth rate even more?
There is. Like, to the question that Arthur asked about like what we are evaluating going forward, we always evaluate every part of our business. The way that we look at it is, you know, what could we get in return, and how would that help our other parts of our business to grow at a faster rate if we were to do that. I mean, you know, you get into focus and you get into execution when you're trying to think through those things. Right now, we like the businesses that we have.
What we're starting to see is with a lot of the CRE consulting businesses is a lot of the work that was done on Altus Analytics this year, we started doing in the background on the CRE consulting businesses, and we're starting to see the return on those businesses as well. Angelo mentioned Rule of 40. You know, for the last four months, COTS Canada was above a Rule of 40. You guys have an idea of like where that's grown in the past. We think that there's good opportunity out there. The key thing before we make any decisions on any divestiture is that we wanna take a look at our technology platforms, our analytic platforms, and our data platforms and understand how we can bring those to that business, and can we make those services more tech-enabled and valuable.
If we can, we wanna keep them. If we can't, we'll think about what we're doing next.
Question from Daniel Chan at TD Securities. How are you doing relative to the targets you set out at your 2019 investor day on growth and margins? Will you still be able to meet those margins? I look at Jim. For the record, we had declared 30% margin range by the end of 2023.
No. That's what you're saying too. Boss said yes.
No. No.
The dynamics, the mix of the business is different than it was in 2019. I will tell you, I think you heard it through various presentations. I hope you picked it up out of my operating model presentation. Number one focus, improve the customer journey, clearly. Margin expansion is also very high on the priority list. That said, what we announced Reonomy would be. We did announce the impact of it, right?
Yeah. We did.
It's neutral. You guys can do the math on that. It adds in revenue, so that's gonna degrade the basis point improvement that we targeted on the core business. On the core business, we have I would put it in the rock solid margin expansion, low risk for execution, to drive that expansion. It will be diminished, just from a pure calculation basis on the higher revenue and not additional EBITDA this year from that business. Going forward, I think the long-term EBITDA targets that we put out there are very attainable.
If I add it in. I think I've been asked about 1,001x about the 400. We have multiple paths to 400 in 2023 on the top line. I think Jim's got multiple paths. How we pull those paths will depend on how the market evolves, and if we can accelerate, we will.
We have a good plan for next year. We have a good plan for the year thereafter. We feel very good on the numbers that we have there, and we feel like what we have in-house will get us to that point. On the margin side of the equation, I think that we expect to be a 30%-35%, probably 35% EBITDA business as we go forward, and we expect to expand margins. Will that all happen in 2023? Probably not. Will that happen thereafter? Yeah, it will, 'cause we're gonna expand those margins pretty quickly and religiously as we've moved across from an on-premise company to a cloud-based company. We've worked out all the on-premise-based issues that we've had. We're retiring software, gives you great opportunities for margin expansion.
We said that we already had the development teams and the product teams in place, so you can start to see as we layer on new revenue, how that should start to expand margins going forward for us. We're just probably, as I always say, bookings, then comes revenue, then comes EBITDA. We're following that plan, and you'll see EBITDA starting to pick up pretty quickly.
Maybe just on that topic, can you lift the margin potential of property tax?
Sure. No pressure on property. You know, maybe I should actually push it up on Altus Analytics, but I don't wanna twist Jim too hard while he's on stage. But we think, you know, we're doing really well with our margins on property tax and, you know, those are strong margins in the low 30s%. Now we definitely have a reset in 2023, but we believe that we can as we control, we grow, and we have good bookings there, we can get those margins into the 40% range.
Our next question, Stephen MacLeod at BMO. You talked about having more third-party integration in Altus Analytics. Can you talk about how that would impact analytics economics, if at all, pricing revenue margins?
To start, I would think about being an open ecosystem, Stephen. I think our view is very straightforward and simple. The more people who get on our platforms, the more people who are using our platforms for technology or data and analytics, the more opportunity we have to sell, and we will price accordingly to get that opportunity to make it ubiquitous in the space. I think. Historically, we've been a little bit more of a walled garden than we need to be.
I think going forward, we don't need to have that because I think that if we are part of the fabric of commercial real estate, and we tie to other people and make those solutions easier to get to, I think that we'll see our revenue just inherently go up by the number of people using our solutions, the amount of cross-sell that we'll have. By the way, I think that it'll reinforce our moats based off the fact that we're already integrated in. I believe in an open ecosystem. As a market leader, if you're not constantly innovating, somebody will innovate around you. We will be constantly innovating, so therefore, we feel like we will make sure that we maintain our space.
Russ, add?
I would add to that. It's gonna get into the business model of the partner that's coming in through the marketplace. You can look at it as if it's going to be sold on our paper, then compared to our current set of offerings and the new offerings that we're gonna be rolling out. Yeah, you could argue that would be a lower margin return given that it's a third-party vendor. I would flip that around and say, it also depends on our involvement in the sale and the liability that we're taking on, whether you would actually book that as revenue going through, whether that's other income coming on, or whether that actually books as revenue from, like, an agency fee perspective, which would have no cost. Now you're talking about extremely high profit revenue coming through the model.
So it's gonna-
Yep.
....depend on the relationship with the vendor and the liability that we take on in the contracts associated with that marketplace sale.
From Gavin Fairweather at Cormark. What data sets do you need to pull together, and what development do you need to complete to go live with AVMs for your clients?
Hmm.
Jorge, do you wanna take that one?
First of all, from a data standpoint, we believe we've already begun to put all the fundamental data sets in place. Reonomy certainly adds to that, but the StratoDem data set brings both demographic and economic data that are critical for this. In terms of how we put them together, the assembly's in place, and I can't forget the fact that we've got the data sets in Canada through our Altus Data Studio business as well, which is very much gonna be a part of this. With that said, in terms of the enablement, we definitely anticipate in 2022 to begin to introduce the modeling tools that you would need to begin to explore what potentially would fit into the category of an AVM. Another potential use for marketplace actually, when we think about that.
The pieces will be in place from a development standpoint in 2022. As I like to remind my entire team, I'm giving you the technology-enabled answer of this, which is about 20% of the equation. We then need to think about the model, the support, how's it gonna run, how's it gonna be provisioned, and that may take us a little bit longer to make sure that it's ready. The technology, all the critical components of the technology will be there fundamentally within the next 12 months.
What I would add, fundamentally, we've already been having conversations with some of our customers about this. We believe we're in a good place to deliver. Now, how they use that, is it gonna be 100% automated? I've watched these things happen before in other industries. I got to be on the home residential side in the U.K., and there was an AVM there, and it was the greatest thing that I've ever seen run. 20-25% of the transactions ran on it. Once you started getting to the point where you started to make it augmented with the appraisers, the numbers went up incredibly quickly.
What the key thing about the AVM, which I think people have forgotten in this industry or tried to do, is you're trying to replace the appraisers. It's not what you need to do. You need to make the appraisers more valuable and have them get through more on faster turnaround times. That analytic working in coordination with the person, we think is the right use case, and that's where we're gonna focus on the early timing.
I would add, that's not only an external use case for productization, that's part of the tech enablement of our own services organization that Mike's talking about with the augmented AVM. That is on the critical path for us as part of our margin expansion plan.
Very good point. Next question from Arvin Valencia, TD Securities. Angelo, probably for you. The CAD 250- 300 million of capital availability for M&A, will that be mostly focused towards Altus Analytics or Property Tax?
I think the greater, you know, the vast opportunity is on the analytics side. There is a compelling opportunity on the tax side as well. Our focus, as I indicated, is on the technology part. That's where we are gonna focus to begin with. There are still some tuck-in opportunities that can drive scale, and, you know, we can bring on, you know, midsize-type firms that we can bolt on and get the leverage of our platform. There's some really good ROI acquisition opportunities out there, but maybe I should turn it over to you and Russ and.....
I would add, we have a technology and a product group that is not for analytics and not for tax. It goes across both units. It goes across costs, too. When we are looking at this, we're looking at technology, analytics data, those kind of assets that fit into the value chain in which we wanna compete in. Build, acquire, manage, dispose. Those are the kinds we look at, and whether we deploy those things through analytics or tax or cost or anything else that we have, that's how we're looking at it. One of the great things about Reonomy was we knew that we could deploy that across both analytics and tax. StratoDem, we knew could be across analytics and tax. From that perspective, that's how we're looking at it.
I would look at from the standpoint. Jorge has product managers in both analytics and tax. Steve has development teams in analytics and tax, and Dave builds internal infrastructure for both analytics and tax, and that's how we go to market.
Okay. From Dan Shanagan: Finance Active brought you to the debt market. What other adjacent markets do you believe you have the most opportunity for you?
Well, you try not to tip your hand too much on some of these things as you go through it. But I think that what we look at is, we've done a lot of work on the investment management and the asset management side of things this year. I think, you know, to the question, I think we're gonna spend a lot of time in the next year looking at tax, looking at the construction and build space and build out and see what we have there. We always start with a build first mentality and how we do that. We like the platforms that we have. If we can get there faster that's great.
If there's an opportunity to grab a piece of technology that really makes sense, those two areas make some sense. Also some international expansion would probably make some sense, but I would go as we talk about the technology, every one of the technologies we bought were software-as-a-service companies or data-as-a-service companies or analytics-as-a-service companies. Those are gonna be the assets we're buying.
Okay. Any audience? Okay, I'll carry on with one more question from the virtual participants, from Dan again. Going back to the CAD 400 million targets-
Yeah.
You know, someone looking at a split between how much will be organic or acquisitive, but maybe you can talk about the organic path.
I know the wrong answer is, who cares? No. That's no. The right answer is the following. We need to be growing organically in the 15%-16% range and beyond in Altus Analytics. We achieved that in Q3. I think Jim's got a good plan for Q4. We have good line of sight to Q1. We keep doing that, we'll hit CAD 400 million. We have the pieces and parts in place that will allow us to hit that. We're not looking at it. We're not. If we get into acquisitions, we're being opportunistic because we think that we can grow our market faster. We have the right pieces of technology, we have the right pieces of data, and the right pieces of analytics to do what we need to do.
It's a little different than what was set out there in 2018, 2019, but we think that this is a greater path for even more growth more consistent growth past the CAD 400 million in 2023. When I talk about multiple paths, we have multiple paths. I think that if you look at it, you should judge us by being in those, you know, those mid-teens to high-teens of organic growth and improving our margins past 20%, on the EBITDA side of things. And ultimately getting to 30%. That's how we would rather evaluate it than CAD 400 million, which was a time and a place and is no longer the time and place.
Okay, great. By 11:30, and that was our final question. Unless there's any other questions from the audience or online, we're happy to turn it over back to you for some closing remarks.
Okay. Okay, cool. You guys wanna go down?
Weird boy band. It is sad when you have us as the boy band up here. One of us will blow out a knee, a back, you know. Anyways, first off, you know, we were really excited to do this in person. You know, I think that what we feel like as an executive team is that, you know, we weathered the storm. It was funny, like, I did not get to meet any of my team members live, probably for the first eight to nine months that I was here, and many of you I talked to from my basement office. It's great to be back in person.
I think our teams feel like that we can accelerate what we're doing by getting together, and I think that as we go forward with this, we feel like a lot of the major hit is behind us. Now we feel actually COVID's giving us a really good tailwind. Change in this industry, change in valuation is good for our business, up or down. People need our tools to help them make decisions in a better way. From our perspective, I think we're gonna get back to work. We have a year to finish off. You guys will all tell us it. You know, we gave guidance, we have to hit that guidance. That's what our team's focusing on between now and the last three weeks of this year.
You can tell that we have excitement with what we're trying to do, with what we're trying to build, and you gotta like what you do. I think, I hope you felt that our team actually likes what they do. From that standpoint, I wish you all a happy holiday season. Thank you for attending today, and I thank my team for doing a good show. Thanks, guys.