Constellation Software Inc. — Interim / Quarterly Report 2021

May 5, 2021

Condensed Consolidated Interim Financial Statements (In U.S. dollars)

CONSTELLATION SOFTWARE INC.

For the three months ended March 31, 2021 and 2020 Unaudited

CONSTELLATION SOFTWARE INC.

Consolidated Statements of Financial Position

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

		March 31,2021		December 31,2020		March 31,2020
Assets
Current assets:
Cash	$	932	$	758	$	364
Accounts receivable		518		483		455
Unbilled revenue		128		98		104
Inventories		27		27		32
Other assets(note 5)		288		219		209
		1,892		1,585		1,163
Non-current assets:
Property and equipment		92		86		78
Right of use assets		266		251		233
Deferred income taxes		57		52		46
Other assets (note 5)		80		75		70
Intangible assets(note 6)		2,759		2,325		1,987
		3,254		2,790		2,414
Total assets	$	5,147	$	4,375	$	3,577
Liabilities and Shareholders' Equity
Current liabilities:
Debt with recourse to Constellation Software Inc. (note 7)	$	122	$	113	$	90
Debt without recourse to Constellation Software Inc. (note 8)		34		28		2
Redeemable preferred securities (note 9)		390		-		-
Accounts payable and accrued liabilities		637		666		453
Dividends payable (note 12)		21		21		21
Deferred revenue		1,296		962		1,035
Provisions (note 10)		15		12		10
Acquisition holdback payables		78		85		78
Lease obligations		77		74		59
Income taxespayable(note 11)		91		78		60
		2,761		2,040		1,809
Non-current liabilities:
Debt with recourse to Constellation Software Inc. (note 7)		527		421		348
Debt without recourse to Constellation Software Inc. (note 8)		271		199		143
Deferred income taxes (note 11)		371		285		250
Acquisition holdback payables		31		37		30
Lease obligations		214		201		191
Other liabilities(note 5)		139		146		87
		1,554		1,288		1,049
Total liabilities		4,315		3,328		2,858
Shareholders' equity (note 12):
Capital stock		99		99		99
Other equity		(165)		-		-
Accumulated other comprehensive income (loss)		(67)		(31)		(70)
Retained earnings		950		980		690
Non-controllinginterests(notes 1 and 18)		15		-		-
		832		1,048		719
Subsequent events (notes 12 and 19)
Total liabilities and shareholders' equity	$	5,147	$	4,375	$	3,577

See accompanying notes to the condensed consolidated interim financial statements.

1

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Income

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited
		Three months	ended March 31,
		2021		2020
Revenue
License	$	66	$	57
Professional services		237		178
Hardware and other		39		42
Maintenance and other recurring		834		676
		1,176		953
Expenses
Staff		641		510
Hardware		22		23
Third party license, maintenance and professional services		96		79
Occupancy		9		9
Travel, telecommunications, supplies, software and equipment		39		51
Professional fees		15		14
Other, net		5		5
Depreciation		29		25
Amortization of intangible assets(note 6)		118		94
		975		810
Foreign exchange loss (gain)		(13)		(6)
IRGA/TSS Membership liability revaluation charge (note 7)		61		18
Finance and other expense (income) (note 13)		(2)		(0)
Impairment of intangible and other non-financial assets (note 6)		3		5
Redeemable preferred securities expense (income) (note 9)		263		-
Finance costs(note 13)		15		11
		327		28
Income (loss) before income taxes		(126)		115
Current income tax expense (recovery)		64		44
Deferred income tax expense(recovery)		(14)		(12)
Income tax expense (recovery)		49		33
Net income(loss)		(175)		83
Net income (loss) attributable to:
Equity holders of Constellation Software Inc. (notes 1 and 18)		(9)		83
Non-controllinginterests(notes 1 and 18)		(166)		-
Net income(loss)		(175)		83
Earnings per common share of Constellation Software Inc.
Basic and diluted (note 14)	$	(0.41)	$	3.91

See accompanying notes to the condensed consolidated interim financial statements.

2

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Comprehensive Income

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Unaudited
		Three months	ended March	31,
		2021	2020
Net income (loss)	$	(175)	$	83
Items that are or may be reclassified subsequently to net income:
Foreign currency translation differences from foreign operations and other		(23)		(30)
Other comprehensive income (loss) for the period, net of income tax		(23)		(30)
Total comprehensive income(loss)for theperiod	$	(198)	$	53
Total other comprehensive income (loss) attributable to:
Equity holders of Constellation Software Inc. (notes 1 and 18)		(17)		(30)
Non-controllinginterests(notes 1 and 18)		(6)		-
Total other comprehensive income(loss)	$	(23)	$	(30)
Total comprehensive income (loss) attributable to:
Equity holders of Constellation Software Inc. (notes 1 and 18)		(26)		53
Non-controllinginterests(notes 1 and 18)		(172)		-
Total comprehensive income(loss)	$	(198)	$	53

See accompanying notes to the condensed consolidated interim financial statements.

3

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statement of Changes in Equity

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Unaudited
Net income (loss) Foreign currency translation differences from foreign operations and other Three months ended March 31, 2021 Balance at January 1, 2021 Total comprehensive income for the period: Other comprehensive income (loss)	Capital stock Other equity Accumulated other comprehensive income (loss) Retained earnings Total Non- controlling interests Total equity 99 $ - $ (31) $ 980 $ 1,048 $ - 1,048 $ - - - (9) (9) (166) (175) - - (17) - (17) (6) (23) Equity Attributable to Shareholders of CSI
Total other comprehensive income (loss) for the period	- - (17) - (17) (6) (23)
Total comprehensive income(loss) for theperiod	- - (17) (9) (26) (172) (198)
Net acquisition of non-controlling interest associated with acquisitions and other movements Special dividend of Topicus Subordinated Voting Shares (note 1 and 12) Issuance of Topicus Coop Ordinary Units to non-controlling interests (note 4) Transactions with owners, recorded directly in equity Dividends to shareholders of the Company (note 12)	- (141) (16) - (157) 157 - - (21) (2) - (23) 23 - - (3) - 0 (3) 6 3 - - (21) (21) - (21)
Balance at March 31, 2021	99 $ (165) $ (67) $ 950 $ 817 $ 15 $ 832 $

See accompanying notes to the condensed consolidated interim financial statements.

4

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statement of Changes in Equity

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2020

foreign operations and other Balance at January 1, 2020 Total comprehensive income for the period: Net income (loss) Other comprehensive income (loss) Foreign currency translation differences from	Capital stock Other equity Accumulated other comprehensive income (loss) Retained earnings Total Non- controlling interests Total equity 99 $ - $ (40) $ 628 $ 687 $ - $ 687 $ - - - 83 83 - 83 - - (30) - (30) - (30) Equity Attributable to Shareholders of CSI
Total other comprehensive income (loss) for the period	- - (30) - (30) - (30)
Total comprehensive income(loss) for theperiod	- - (30) 83 53 - 53
Transactions with owners, recorded directly in equity Dividends to shareholders of the Company (note 12)	- - (21) (21) - (21)
Balance at March 31, 2020	99 $ - $ (70) $ 690 $ 719 $ - $ 719 $

See accompanying notes to the condensed consolidated interim financial statements.

5

CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Cash Flows

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited
		Three months ended	March	31,
		2021		2020
Cash flows from operating activities:
Net income (loss)	$	(175)	$	83
Adjustments for:
Depreciation		29		25
Amortization of intangible assets		118		94
IRGA/TSS Membership liability revaluation charge		61		18
Finance and other expense (income)		(2)		(0)
Impairment of intangible and other non-financial assets		3		5
Redeemable preferred securities expense (income) (note 9)		263		-
Finance costs		15		11
Income tax expense (recovery)		49		33
Foreign exchange loss (gain)		(13)		(6)
Change in non-cash operating assets and liabilities
exclusive of effects of business combinations (note 17)		198		136
Income taxespaid		(51)		(38)
Net cash flows from (used in) operating activities		495		361
Cash flows from (used in) financing activities:
Interest paid on lease obligations		(2)		(2)
Interest paid on other facilities		(9)		(8)
Increase (decrease) in CSI facility (note 7)		-		(65)
Increase (decrease) in revolving credit debt facilities without recourse to CSI		6		(55)
Proceeds from issuance of term debt facilities without recourse to CSI		79		-
Repayments of term debt facilities without recourse to CSI		(1)		(1)
Credit facility transaction costs		(2)		-
Payments of lease obligations		(20)		(14)
Distribution to the Joday Group (note 7)		(22)		-
Dividendspaid		(21)		(21)
Net cash flows from (used in) in financing activities		6		(167)
Cash flows from (used in) investing activities:
Acquisition of businesses (note 4)		(314)		(107)
Cash obtained with acquired businesses (note 4)		44		14
Post-acquisition settlement payments, net of receipts		(46)		(32)
Purchases of other investments		(0)		(1)
Interest, dividends and other proceeds received		3		0
Propertyand equipmentpurchased		(4)		(7)
Net cash flows from (used in) investing activities		(319)		(133)
Effect of foreign currency on
cash and cash equivalents		(9)		(13)
Increase (decrease) in cash		174		48
Cash, beginning of period		758		316
Cash,end ofperiod	$	932	$	364

See accompanying notes to the condensed consolidated interim financial statements.

6

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Notes to the condensed consolidated interim financial statements

1. Reporting entity 11. Income taxes

2. Basis of presentation

3. Significant accounting policies

4. Business acquisitions

5. Other assets and other non-current liabilities

6. Intangible assets

7. Debt with recourse to CSI

8. Debt without recourse to CSI

9. Redeemable preferred securities

10. Capital and other components of equity

11. Finance and other income and finance costs

12. Earnings per share

13. Financial instruments

14. Contingencies

15. Changes in non-cash operating assets and liabilities 18. Non-controlling interests

16. Subsequent events

17. Provisions

7

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

1. Reporting entity

Constellation Software Inc. is a company domiciled in Canada. The address of Constellation Software Inc.'s registered office is 20 Adelaide Street East, Suite 1200, Toronto, Ontario, Canada. The condensed consolidated interim financial statements of Constellation Software Inc. as at and for the three-month period ended March 31, 2021 comprise Constellation Software Inc. and its subsidiaries (together referred to as “Constellation”, “CSI”, or the "Company") and the Company's interest in associates. The Company is engaged principally in the development, installation and customization of software as well as in the provisioning of related professional services and support for customers globally across over 100 diverse markets.

On January 4, 2021 (in anticipation of the acquisition of Topicus.com B.V.), the Company’s subsidiary, Constellation Software Netherlands Holding Coöperatief U.A. (“CSNH”), which principally holds the Total Specific Solutions Operating Group (“TSS”), completed a corporate reorganization. In conjunction with the reorganization, the following steps were completed on January 4, 2021:

• CSNH changed its name to Topicus.com Coöperatief U.A. (“Topicus Coop”).

• The Company engaged in a series of transactions the result of which was that its then existing equity interest in Topicus Coop became an equity interest in Topicus.com Inc. (“Topicus”) and Topicus became the new parent company of Topicus Coop. Topicus issued and Constellation received 39,412,385 preferred shares of Topicus (the “Topicus Preferred Shares”) and 39,412,385 subordinate voting shares of Topicus (the “Topicus Subordinate Voting Shares”). CSI distributed 39,412,367 of the Topicus Subordinate Voting Shares to its common shareholders pursuant a dividend-in-kind and continues to hold 18 Topicus Subordinate Voting Shares of Topicus.

• Constellation also holds 1 super voting share of Topicus (the “Topicus Super Voting Share”). The Topicus Super Voting Share entitles Constellation to that number of votes that equals 50.1% of the aggregate number of votes attached to all the outstanding Topicus Super Voting Shares and Topicus Subordinate Voting Shares. As a result, Constellation Software Inc. controls Topicus.

• Topicus Coop issued 19,665,642 Preference Units and 19,665,642 Ordinary Units to Joday Investments II B.V. (“Joday”) and certain individual investors affiliated therewith (being the previous minority owners of CSNH) (collectively known as the “Joday Group”).

The Company now reflects a non-controlling interest in Topicus of 69.7% as at March 31, 2021. The Company’s equity interest of 30.3% in Topicus principally comprises the ordinary units of Topicus Coop (“Topicus Coop Ordinary Units”) that are currently owned by the Joday Group and subject to the terms of the IRGA (as defined below) including the corresponding put/call provisions agreed as between CSI and the Joday Group. Refer to notes 7, 9, and 18 for more details.

Preferred Share Investment in Topicus.com Inc.

As noted above, the Company owns 39,412,385 Topicus Preferred Shares. The Topicus Preferred Shares are non-voting and under certain conditions are redeemable at the option of CSI for a redemption price of approximately EUR 19.06 per share. The redemption price may either be settled in cash or through the issuance of a variable number of Topicus Subordinate Voting Shares based on the terms of the Topicus Preferred Shares, or any combination thereof. The Topicus Preferred Shares are also convertible into Topicus Subordinate Voting Shares at a conversion ratio of 1:1. The Topicus Preferred Shares entitle CSI to a fixed annual cumulative dividend of 5% per annum on the initial Topicus Preferred Share value of approximately EUR 19.06 per share.

8

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Further descriptions of the significant terms and conditions of the Topicus Preferred Shares are described below. The terms and conditions of the Topicus Preferred Shares should be read in conjunction with the terms and conditions of the preference units of Topicus Coop (“Topicus Coop Preference Units”) as outlined in note 9.

Conversion

CSI is entitled to convert some or all of its Topicus Preferred Shares into Topicus Subordinate Voting Shares on a one for one basis at any time (the “Topicus Preferred Share Conversion Right”).

Upon the exercise of the Topicus Preferred Share Conversion Right, CSI will be entitled to receive all accrued but unpaid dividends accruing on the Topicus Preferred Shares to the day before the conversion date. Pursuant to the terms of the investor rights and governance agreement entered into by CSI, the Joday Group, Ijssel B.V., Topicus and Topicus Coop (the “IRGA”), the board of directors of Topicus will make a determination as to whether Topicus has sufficient cash on hand to satisfy the payment of any accrued but unpaid dividends on the Topicus Preferred Shares in cash. If the board of directors of Topicus determines that Topicus does not have sufficient cash on hand, the accrued but unpaid dividends will, subject to TSX Venture Exchange (“TSXV”) approval, be satisfied by the issuance of Topicus Subordinate Voting Shares of equal value.

Redemption at the Option of CSI

Pursuant to the terms of the IRGA, upon either the exercise by Topicus of the Topicus Call Right (as defined below), or the exercise of the Topicus Preferred Share Retraction Right (as defined below), CSI will, subject to the terms of the IRGA, be entitled to receive an amount of cash equal to approximately EUR 19.06 per share, or Topicus Subordinate Voting Shares of equal value, or any combination thereof, in each case at the option of CSI (the “Topicus Preferred Share Call Price Right”). Notwithstanding the foregoing, if the board of directors of Topicus determines that Topicus does not have sufficient cash on hand to make the payment in cash, CSI will, subject to TSXV approval, receive Topicus Subordinate Voting Shares of equal value.

Topicus Preferred Share Retraction Right

The “Topicus Preferred Share Retraction Right” provides that (i) at any time until July 5, 2021, CSI will have the right (but not the obligation) to sell all of its Topicus Preferred Shares to Topicus and exercise the Topicus Preferred Share Call Price Right (in which case, pursuant to the terms of the IRGA, the holders of the Topicus Coop Preference Units will be entitled to sell all of their Topicus Coop Preference Units to Topicus Coop and exercise the Topicus Coop Preference Unit Call Price Right as outlined in note 9 below), and (ii) at any time after July 5, 2021 holders representing 95% of the Topicus Preferred Shares and the Topicus Coop Preference Units (together, the “Preferred Securities”), excluding any Topicus Coop Preference Units held by Topicus, will have the right (but not the obligation) to entitle CSI to sell all of its Topicus Preferred Shares to Topicus and to exercise the Topicus Preferred Share Call Price Right. Upon the exercise of the Topicus Preferred Share Retraction Right, CSI will also be entitled to receive all accrued but unpaid dividends accruing to the day before the redemption date. These accrued but unpaid dividends will be satisfied by the payment of cash.

Topicus Preferred Share Put Right

Subject to the terms of the IRGA, CSI will be entitled to require Topicus to repurchase some or all of its Topicus Preferred Shares (the “Topicus Preferred Share Put Right”). Upon the exercise of the Topicus Preferred Share Put Right, CSI will be entitled to receive an amount of cash equal to approximately EUR 19.06 per share.

9

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Pursuant to the terms of the IRGA, the Topicus Preferred Share Put Right can be exercised at any time on or after February 1, 2024 but if the Topicus Preferred Share Put Right is exercised prior to February 1, 2026, it shall only be exercisable if at such time the board of directors of Topicus determines that Topicus has sufficient cash on hand to satisfy the payment of approximately EUR 19.06 per share in cash; if the board of directors of Topicus determines that it does not have sufficient cash on hand, CSI will not be permitted to exercise the Topicus Preferred Share Put Right.

If the Topicus Preferred Share Put Right is exercised at any time after February 1, 2026, then regardless of whether Topicus has sufficient cash on hand at that time, CSI will be entitled to receive an amount of cash equal to approximately EUR 19.06 per share and, subject to the terms below, upon the exercise of the Topicus Preferred Share Put Right by CSI, Topicus must notify each other holder of Topicus Preferred Shares of such exercise, and invite (but not oblige) such other holders to also exercise their Topicus Preferred Share Put Right, upon 30 days’ notice to Topicus. During that 30-day notice period, Topicus will determine whether or not it has sufficient cash on hand to satisfy the payment in cash, and if it does not, Topicus will have the option to exercise the Topicus Call Right, in which case the Topicus Preferred Share Put Right will not be exercised in respect of any of the Topicus Preferred Shares. Upon the exercise of the Topicus Preferred Share Put Right, CSI will also be entitled to receive all accrued but unpaid dividends accruing to the day before the redemption date. These accrued but unpaid dividends will be satisfied by the payment of cash.

Redemption at the Option of Topicus

Subject to the terms of the IRGA, if the Topicus Subordinate Voting Shares achieve (the “Mandatory Conversion Moment”) a volume weighted average share price that is equal to or greater than the Canadian dollar equivalent of 125% of the initial Topicus Preferred Share value of approximately EUR 19.06 per share (being the Canadian dollar equivalent of approximately EUR 23.83), (the “Premium Target Price”) determined on the basis of the 60-day volume weighted average trading price of the Topicus Subordinate Voting Shares for any 60-day trading period, and CSI has not exercised the Topicus Preferred Share Conversion Right within 30 days after notice has been given to it that the Premium Target Price has been achieved, Topicus will redeem the Topicus Preferred Shares in exchange for a cash payment to CSI of approximately EUR 19.06 per share (the “Topicus Mandatory Conversion Moment Call Right”).

Pursuant to the terms of the IRGA, the earliest date that the actual conversion or redemption of Topicus Preferred Shares resulting from the occurrence of the Mandatory Conversion Moment may occur is the first business day occurring 12-months following February 1, 2021 and, thereafter, such conversion may only occur after the first business day that is six months following the Mandatory Conversion Moment (note 19).

Upon the exercise of the Topicus Mandatory Conversion Moment Call Right, CSI will also be entitled to receive all accrued but unpaid dividends accruing to the day before the redemption date. Pursuant to the terms of the IRGA, the board of directors of Topicus will make a determination as to whether Topicus has sufficient cash on hand to satisfy the payment of any accrued but unpaid dividends on the Topicus Preferred Shares in cash. If the board of directors of Topicus determines that Topicus does not have sufficient cash on hand, the accrued but unpaid dividends will, subject to TSXV approval, be satisfied by the issuance of Topicus Subordinate Voting Shares of equal value.

Pursuant to the terms of the IRGA, achieving the Mandatory Conversion Moment will require Topicus to exercise the Topicus Mandatory Conversion Moment Call Right and Topicus Coop will then be required to exercise its corresponding right over the Topicus Coop Preference Units.

10

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Topicus Call Right

At any time after February 1, 2026, Topicus will have the option to redeem all the Topicus Preferred Shares in exchange for, at the option of CSI, payment of an amount in cash equal to approximately EUR 19.06 per share, or Topicus Subordinate Voting Shares of equal value, or any combination thereof (the “Topicus Call Right”). Notwithstanding the foregoing, if the board of directors of Topicus determines that Topicus does not have sufficient cash on hand to make the payment in cash, CSI will, subject to TSXV approval, receive Topicus Subordinate Voting Shares of equal value.

Upon the exercise of the Topicus Call Right, CSI will also be entitled to receive all accrued but unpaid dividends accruing to the day before the redemption date. Pursuant to the terms of the IRGA, the board of directors of Topicus will make a determination as to whether Topicus has sufficient cash on hand to satisfy the payment of any accrued but unpaid dividends on the Topicus Preferred Shares in cash. If the board of directors of Topicus determines that Topicus does not have sufficient cash on hand, the accrued but unpaid dividends will, subject to TSXV approval, be satisfied by the issuance of Topicus Subordinate Voting Shares of equal value.

Pursuant to the terms of the IRGA, if the Topicus Call Right is exercised, and at the time of such exercise the value of a Topicus Subordinate Voting Share exceeds approximately EUR 19.06 per share, then CSI will first have the option to exercise the Topicus Preferred Share Conversion Right, in which case the Topicus Call Right will not be exercised.

The Topicus Call Right can only be exercised by Topicus if Topicus Coop exercises the Topicus Coop Call Right (as defined in note 7) concurrently.

2. Basis of presentation

(a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”) and using the accounting policies disclosed in Note 3 of the Company’s 2020 annual consolidated financial statements except as disclosed herein.

The policies applied in these condensed consolidated interim financial statements are based on International Financial Reporting Standards (“IFRS”), issued and outstanding as of May 5, 2021, the date the Board of Directors approved the condensed consolidated interim financial statements.

These condensed consolidated interim financial statements should be read in conjunction with the Company’s 2020 annual consolidated financial statements.

(b) Basis of measurement

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for certain assets and liabilities initially recognized in connection with business combinations, derivative financial instruments and contingent consideration related to business acquisitions, which are measured at their estimated fair value.

11

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

(c) Functional and presentation of currency

The condensed consolidated interim financial statements are presented in U.S. dollars, which is Constellation's functional currency.

(d) Use of estimates and judgements

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses, consistent with those disclosed in the 2020 annual consolidated financial statements and described in these condensed consolidated interim financial statements. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical experience and other assumptions that are considered reasonable in the circumstances. The actual amount or values may vary in certain instances from the assumptions and estimates made. Changes will be recorded, with corresponding effect in profit or loss, when, and if, better information is obtained.

The Company is closely monitoring the impact of COVID-19 on all aspects of its business. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. The COVID-19 pandemic has had disruptive effects in countries in which the Company operates and has adversely impacted many of its business units’ operations to date, including through the cancellation by certain customers of their ongoing software maintenance contracts and the suspension or cancellation of new software purchases. The pandemic may also have an adverse impact on many of the Company’s customers, including their ability to satisfy ongoing payment obligations to the Company, which could increase the Company’s bad debt exposure. The future impacts of the pandemic and any resulting economic impact are largely unknown and rapidly evolving. It is possible that the COVID-19 pandemic, the measures taken by the governments of countries affected and the resulting economic impact may continue to adversely affect the Company’s results of operations, cash flows and financial position as well as its customers in future periods, and this impact could be material. During the three months ended March 31, 2021, the Company recorded income of $7 ($0 for the three months ended March 31, 2020) relating to government grants from various government authorities relating to the pandemic. The Company has recorded the income for the three months ended March 31, 2021 within “Other, net” expenses in the condensed consolidated interim statements of income.

3. Significant accounting policies

The significant accounting policies used in preparing these condensed consolidated interim financial statements are unchanged from those disclosed in the Company’s 2020 annual consolidated financial statements and have been applied consistently to all periods presented in these condensed consolidated interim financial statements.

The accounting policies have been applied consistently by Constellation’s subsidiaries.

4. Business acquisitions

During the three-month period ended March 31, 2021, the Company completed a number of acquisitions for aggregate cash consideration of $314 plus cash holdbacks of $26 and contingent consideration with an estimated fair value of $5. In conjunction with the acquisition of Topicus.com B.V., the Company (through Topicus Coop) also issued 5,842,882 Topicus Coop Preference Units to the seller for an initial subscription price of $102 plus an

12

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

additional subscription amount of $34 which will be owed by the Seller to the Company and will be paid to the Company in May 2021. The Company (through Topicus Coop) also issued 5,842,882 Topicus Coop Ordinary Units to the seller in conjunction with the acquisition of Topicus.com B.V. The total consideration resulting from acquisitions in the three-month period ended March 31, 2021 was $448. The contingent consideration is payable on the achievement of certain financial targets in the post-acquisition periods. The obligation for contingent consideration for acquisitions during the three-month period ended March 31, 2021 has been recorded at its estimated fair value at the various acquisition dates. The estimated fair value of the applicable contingent consideration is calculated using the estimated financial outcome and resulting expected contingent consideration to be paid and inclusion of a discount rate as appropriate. For these arrangements, which include both maximum, or capped, and unlimited contingent consideration amounts, the estimated increase to the initial consideration is not expected to exceed $12. Aggregate contingent consideration of $82 (December 31, 2020 - $88) has been reported in the condensed consolidated interim statement of financial position at its estimated fair value relating to applicable acquisitions completed in the current and prior periods. Changes made to the estimated fair value of contingent consideration are included in other, net in the condensed consolidated interim statements of income. An expense of $0 has been recorded for the three months ended March 31, 2021, as a result of such changes (recovery of $13 for the three months ended March 31, 2020).

There were no acquisitions during the three-month period that were deemed to be individually significant. The majority of the businesses acquired during the three-month period were acquisitions of shares and the remainder were asset acquisitions. The cash holdbacks are generally payable over a two-year period and are adjusted, as necessary, for such items as working capital or net tangible asset assessments, as defined in the agreements, and claims under the respective representations and warranties of the purchase and sale agreements.

The acquisitions during the three month period ended March 31, 2021 include software companies catering to the following markets: insurance, agribusiness, healthcare, financial services, education, local government, mining, communications, transit, utilities, asset management, tire distribution, hospitality, real estate brokers and agents, retail management and distribution, all of which are software businesses similar to existing businesses operated by the Company. The acquisitions have been accounted for using the acquisition method with the results of operations included in these consolidated financial statements from the date of each acquisition.

The goodwill recognized in connection with these acquisitions is primarily attributable to the application of Constellation’s best practices to improve the operations of the companies acquired, synergies with existing businesses of Constellation, and other intangible assets that do not qualify for separate recognition including assembled workforce. Goodwill in the amount of $2 is expected to be deductible for income tax purposes.

The gross contractual amounts of acquired receivables was $38; however, the Company has recorded an allowance of $5 as part of the acquisition accounting to reflect contractual cash flows that are not expected to be collected.

Due to the complexity and timing of certain acquisitions made, the Company is in the process of determining and finalizing the estimated fair value of the net assets acquired as part of the acquisitions closed during the last three quarters of 2020 and first quarter of 2021. The amounts determined on a provisional basis generally relate to net asset assessments and measurement of the assumed liabilities, including acquired contract liabilities. The cash consideration associated with these provisional estimates totals $685.

The aggregate impact of acquisition accounting applied in connection with business acquisitions in the three-month period ended March 31, 2021 is as follows:

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Assets acquired:
Cash	$	44
Accounts receivable		33
Other current assets		32
Property and equipment		14
Other non-current assets		27
Deferred income taxes		8
Trademarks		20
Technology assets		234
Customer assets		288
		701
Liabilities assumed:
Current liabilities		57
Deferred revenue		29
Deferred income taxes		112
Long-term debt		90
Other non-current liabilities		26
		314
Non-controlling interest		5
Goodwill		65
Total consideration	$	448

The 2021 business acquisitions did not have a material impact to either the consolidated revenue or the consolidated net income for the three months ended March 31, 2021. The materiality threshold is reviewed on a regular basis taking into account the quantitative (contribution to revenue and net income) and qualitative (size and comparability with other Constellation businesses) factors of current period acquisitions on both an individual and aggregate basis.

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

5. Other assets and other non-current liabilities

(a) Other assets

		March 31,2021		December 31,2020
Prepaid expenses and other current assets	$	138	$	115
Holdback receivable from Ijssel B.V.		32		-
Investment tax credits recoverable		25		24
Sales tax receivable		23		18
Equity securities held for trading		10		9
Other receivables		58		52
Total other current assets	$	288	$	219
Investment tax credits recoverable	$	14	$	12
Costs to obtain a contract		41		40
Non-current trade and other receivables and other assets		22		21
Equityaccounted investees		3		2
Total other non-current assets	$	80	$	75

(b) Other non-current liabilities

		March 31,2021	March 31,2021		December 31,2020	December 31,2020
Contingent consideration	$		57	$		67
Deferred revenue			45			44
Other non-current liabilities			37			35
Total other non-current liabilities	$		139	$		146

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

6. Intangible Assets

	Technology	Technology		Customer			Non-compete	Non-compete
		Assets		Assets		Backlog	agreements		Trademarks		Goodwill			Total
Cost
Balance at January 1, 2020	$	2,169	$	1,309	$	16	$	3	$	7	$	361	$	3,865
Acquisitions through business combinations		343		285		-		-		-		60		688
Effect of movements in foreign exchange		57		47		0		0		0		15		119
Balance at December 31,2020	$	2,568	$	1,640	$	17	$	3	$	8	$	435	$	4,671
Balance at January 1, 2021	$	2,568	$	1,640	$	17	$	3	$	8	$	435	$	4,671
Acquisitions through business combinations		234		294		-		-		20		60		609
Effect of movements in foreign exchange		(34)		(34)		0		(0)		(1)		(10)		(79)
Balance at March 31,2021	$	2,769	$	1,901	$	17	$	3	$	27	$	485	$	5,201
Accumulated amortization and impairment losses
Balance at January 1, 2020	$	1,351	$	495	$	16	$	3	$	2	$	-	$	1,868
Amortization for the period		261		142		0		0		0		-		403
Impairment charge		6		2		-		-		-		4		12
Effect of movements in foreign exchange		43		19		0		0		0		-		63
Balance at December 31,2020	$	1,662	$	659	$	17	$	3	$	3	$	4	$	2,346
Balance at January 1, 2021	$	1,662	$	659	$	17	$	3	$	3	$	4	$	2,346
Amortization for the period		73		45		0		0		0		-		118
Impairment charge		2		1		-		-		-		-		3
Effect of movements in foreign exchange		(17)		(8)		(0)		(0)		0		-		(25)
Balance at March 31,2021	$	1,719	$	697	$	17	$	3	$	3	$	4	$	2,442
Carrying amounts
At January 1, 2020	$	817	$	813	$	(0)	$	0	$	5	$	361	$	1,997
At December 31, 2020	$	907	$	981	$	(0)	$	0	$	5	$	432	$	2,325
At January 1, 2021	$	907	$	981	$	(0)	$	0	$	5	$	432	$	2,325
At March 31, 2021	$	1,050	$	1,203	$	(0)	$	0	$	24	$	482	$	2,759

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

7. Debt with recourse to CSI

				Liability of CSI under	Liability of CSI under
		CSI Facility			the IRGA	Debentures			Term Loans			Total
Principal outstanding at March 31, 2021 (and equal to fair
value)	$		-	$	336	$	224	$	89		$		650
Deduct: Carrying value of transaction costs included in
debt balance			-		-		-		(1)				(1)
Carryingvalue at March 31, 2021			-		336		224		89	-			649
Current portion			-		122		-		-				122
Non-currentportion			-		214		224		89				527

CSI Facility

On December 13, 2019, Constellation completed an amendment and restatement of its revolving credit facility agreement (the “CSI Facility”), with a syndicate of Canadian chartered banks, U.S. banks, and a Japanese bank in the amount of $700, extending its maturity date to December 2024. The CSI Facility bears a variable interest rate with no fixed repayments required over the term to maturity. Interest rates are calculated at standard U.S. and Canadian reference rates plus interest rate spreads based on a leverage table. The CSI Facility is currently collateralized by the majority of the Company’s assets including the assets of certain material subsidiaries. The CSI Facility contains standard events of default which, if not remedied within a cure period, would trigger the repayment of any outstanding balance. As at March 31, 2021 $nil (December 31, 2020 – $nil) had been drawn from this credit facility, and letters of credit totaling $19 (December 31, 2020 - $19) were issued, which limits the borrowing capacity on a dollar-for-dollar basis. Transaction costs associated with the CSI Facility are being amortized through profit or loss using the effective interest rate method. As at March 31, 2021 the carrying amount of such costs is $1 (December 31, 2020 - $1).

Liability of CSI under the terms of the IRGA/TSS Membership Agreement

On December 23, 2014, in accordance with the terms of the purchase and sale agreement for the initial acquisition of TSS by CSI, and on the basis of the term sheets attached thereto, Constellation and the Joday Group, among others, entered into a Members Agreement (the “Members Agreement”) pursuant to which the Joday Group acquired 33.29% of the voting interests in Constellation Software Netherlands Holding Coöperatief U.A. (which was renamed to Topicus.com Coöperatief U.A.), a subsidiary of Constellation and the indirect owner of 100% of TSS at the time of the acquisition. Total proceeds from this transaction was EUR 39 ($49). The liability under the Members Agreement amounted to $311 at December 31, 2020.

On January 5, 2021, the Members Agreement was terminated in conjunction with the acquisition of Topicus.com B.V., the reorganization of Topicus Coop and the execution of the IRGA. The IRGA was established to create certain contractual obligations of the parties in respect of the governance of Topicus and Topicus Coop. The Joday Group’s interest in Topicus Coop now comprises 19,665,642 Topicus Coop Ordinary Units and 19,665,642 Topicus Coop Preference Units (collectively the “Topicus Coop Units”) resulting in an interest of 30.29% in Topicus Coop as of March 31, 2021. The IRGA provides for transfer restrictions in respect of the Topicus Coop Units.

Any time after January 5, 2021, any member of the Joday Group has the right, at their option, to sell any number of its Topicus Coop Units to CSI at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon

17

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

the exercise of such option by a member of the Joday Group, CSI will be obligated to purchase 33.33% of such Topicus Coop Units within 30 days, and an additional 33.33% on each of the first and the second anniversary of such initial purchase. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI.

In the event of a change of control of CSI, any member of the Joday Group has the right, at their option, to sell all of its Topicus Coop Units to CSI at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon the exercise of such option by a member of the Joday Group, CSI will be obligated to purchase all such Topicus Coop Units. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI.

If CSI reduces its economic interest in Topicus by a sale or transfer of its economic interest (and not due to any additional issuance of any shares or equity by Topicus) by more than one-third (calculated on a fully converted basis in accordance with the IRGA), any member of the Joday Group has the right, at their option, to sell to CSI one-third of its Topicus Coop Units at a cash price per Topicus Coop Unit determined in accordance with the IRGA. Upon the exercise of such put option by a member of the Joday Group, CSI will be obligated to purchase all such put Topicus Coop Units. Notwithstanding the foregoing, CSI can offer Topicus the right to purchase such Topicus Coop Units in lieu of CSI. Any member of the Joday Group has a similar right to sell one-half or all of its remaining Topicus Coop Units, respectively, at its option, if CSI further reduces its remaining fully-diluted economic interest in Topicus by a sale or transfer of its economic interest by one-half and again if CSI sells its entire remaining economic interest in Topicus.

All of the Topicus Coop Ordinary Units and Topicus Coop Preference Units held by the Joday Group and Ijssel B.V. (collectively, the “Topicus Coop Exchangeable Units”) are exchangeable, directly or indirectly, for Topicus Subordinate Voting Shares. All of the above rights of members of the Joday Group apply to any Topicus Subordinate Voting Shares issued on an exchange of Topicus Coop Exchangeable Units.

At any time after December 31, 2023, CSI has the right, at its option, to buy all of the Topicus Coop Units and shares of Topicus held by certain members of the Joday Group (excluding Joday) at a cash price per Topicus Coop Unit (or share of Topicus, as applicable) determined in accordance with the IRGA. After December 31, 2043, CSI has the same right to buy all of the Topicus Coop Units and shares of Topicus held by the remaining members of the Joday Group, including Joday.

In addition, if certain individuals affiliated with Joday are terminated from their employment with Topicus Coop or an affiliate thereof for urgent cause (as defined in the Dutch Civil Code), CSI has the right, at its option, to buy all of Topicus Coop Units held by such individuals at a cash price per Topicus Coop Unit determined in accordance with the IRGA.

The Company has continued to classify the above obligations of CSI under the terms of the IRGA as a liability. The main valuation driver in such calculation is the maintenance and other recurring revenue of Topicus. Maintenance and recurring revenue of Topicus for the trailing twelve months on a pro-forma basis determined at the end of the current reporting period was used as the basis for valuing the interests at each redemption date. Any increase or decrease in the value of such liability is recorded as an expense or income in the consolidated statements of income for the period. In conjunction with the termination of the Members Agreement and the execution of the IRGA, the Company recognized an expense of $19 as the formula associated with the calculation of the obligation has changed from the use of actual trailing twelve months maintenance and other recurring revenue of Topicus to a calculation which includes the revenue increase from acquired companies on a pro-forma basis.

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

During the periods ended March 31, 2021 and December 31, 2020, no options were exercised. During the period, a distribution in the amount of $22 was paid to the Joday Group.

Debentures

On October 1, 2014 and November 19, 2014, the Company issued debentures with a total principal value of C$96 for total proceeds of C$91. On September 30, 2015, the Company issued another tranche of debentures (collectively with the 2014 issuances called the “Debentures”) with a total principal value of C$186 for total proceeds of C$214.

The Debentures have a maturity date of March 31, 2040 (the “Maturity Date”).

The interest rate from and including:

• March 31, 2019 but excluding March 31, 2020 was 8.8%

• March 31, 2020 but excluding March 31, 2021 was 8.4%

• March 31, 2021 but excluding March 31, 2022 is 7.2%

Subsequent from and including March 31, 2022 to but excluding the Maturity Date, the interest rate applicable to the Debentures will be reset on an annual basis on March 31 of each year, at a rate equal to the annual average percentage change in the All-items Consumer Price Index during the 12-month period ending on December 31 in the prior year (which amount may be positive or negative) plus 6.5%. Notwithstanding the foregoing, the interest rate applicable to the debentures will not be less than 0%. The Company may, subject to certain approvals, elect the Payment in Kind election (“PIK Election”), in lieu of paying interest in cash, to satisfy all or any portion of its interest obligation payable on an interest payment date by issuing to each Debenture holder PIK Debentures equal to the amount of the interest obligation to be satisfied. The PIK Debentures will have the same terms and conditions as the Debentures and will form part of the principal amount of the Debentures. If, on any interest payment date, the Company fails to pay the amount of interest owing on the Debentures in full in cash, the Company will not (A) declare or pay dividends of any kind on the Common Shares, nor (B) participate in any share buyback or redemption involving the Common Shares, until the date on which the Company pays such interest (or the unpaid portion thereof) in cash to holders of the Debentures; however, where the Company has issued PIK Debentures in respect of all or a portion of the amount of interest owing on the Debentures on an interest payment date, the Company may resume declaring or paying dividends of any kind on the Common Shares and participating in any share buyback or redemption involving the Common Shares beginning on the next earlier of (i) the interest payment date of which the Company pays the amount of interest owing on the Debentures in full in cash and (ii) the date on which the Company repays all amounts owing under the PIK Debenture. All payments in respect of the Debentures will be subordinated in right of payment to the prior payment in full of all senior indebtedness of the Company.

The Debentures will be redeemable in certain circumstances at the option of the Company or the holder. During the period beginning on March 16 and ending on March 31 of each year, the Company will have the right, at its option, to give notice to holders of Debentures of its intention to redeem the Debentures, in whole or in part, on March 31 in the year that is five years following the year in which notice is given, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the date fixed for redemption. During the period beginning on March 1 and ending on March 15 of each year, holders of Debentures will also have the right, at their option, to give notice to the Company of their intention to require the Company to repurchase (or to “put”) the Debentures, in whole or in part, on March 31 in the year that is five years following the year in which notice is given, at a price equal to the principal amount thereof plus accrued and unpaid interest up to but excluding the date fixed for repurchase.

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

During the periods ended March 31, 2021 and December 31, 2020, no notices for redemption of the Debentures were received or given by the Company.

The fair value of the debentures as at March 31, 2021 was $307 (December 31, 2020 - $284).

Term Loan

One of CSI’s subsidiaries has entered into a $89 (GBP 65) term debt facility with a financial institution for which CSI has guaranteed the debt. The facility bears a fixed rate of interest. The term loan contains events of default that, if not remedied, allow the loan note holder to require repayment of the loan principal and interest. The loan is due in 2028.

8. Debt without recourse to CSI

Certain of CSI’s subsidiaries have entered into term debt facilities and revolving credit facilities with various financial institutions. CSI does not guarantee the debt of these subsidiaries, nor are there any cross-guarantees between subsidiaries. The credit facilities are collateralized by substantially all of the assets of the borrowing entity and its subsidiaries. The credit facilities typically bear interest at a rate calculated using an interest rate index plus a margin. The financing arrangements for each subsidiary typically contain certain restrictive covenants, which may include limitations or prohibitions on additional indebtedness, payment of cash dividends, redemption of capital, capital spending, making of acquisitions and sales of assets. In addition, certain financial covenants must be met by those subsidiaries that have outstanding debt.

Debt without recourse to CSI comprises the following:

	Revolving Credit Facilities	Revolving Credit Facilities		Term Debt Facilities		Total
Principal outstanding at March 31, 2021 (and equal to fair value)	$	29	$	284	$		313
Deduct: Carrying value of transaction costs included in debt balance		(1)		(8)			(8)
Carryingvalue at March 31, 2021		29		276			305
Current portion		29		5			34
Non-currentportion		-		271			271

The annual minimum repayment requirements for the term facilities without recourse to CSI are as follows:

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Year	Term Debt Facilities
2021	4
2022	5
2023	16
2024	4
2025	175
2026	8
2027	1
2028	71
	284

9. Redeemable Preferred Securities

In conjunction with the acquisition of Topicus.com B.V., Topicus Coop issued 5,842,882 Topicus Coop Preference Units to Ijssel B.V. The Topicus Coop Preference Units are non-voting and are redeemable at the option of the holder for a redemption price of approximately EUR 19.06 per unit. The redemption price may either be settled in cash or through the issuance of a variable number of Topicus Coop Ordinary Units. The number of Topicus Coop Ordinary Units would be determined based on the terms of the Topicus Coop Preference Units. The Topicus Coop Preference Units are convertible into Topicus Coop Ordinary Units (note 18) at a conversion ratio of 1:1. The Topicus Coop Preference Unit holders will also be entitled to a fixed annual cumulative dividend of 5% per annum on the initial Topicus Coop Preference Unit value of approximately EUR 19.06 per unit.

The fair value of the Topicus Coop Preference Units owned by Ijssel B.V. at issuance was $136 and has been classified as a liability. The Company has determined that the conversion option associated with the Topicus Coop Preference Units does not result in a fixed amount of cash being exchanged for a fixed amount of units (i.e. the conversion option does not meet the “fixed for fixed” requirement). As a result, the Topicus Coop Preference Units have been recorded at fair value at the end of each reporting period. The change in fair value of the Topicus Coop Preference Units owned by Ijssel B.V. is recorded as a redeemable preferred securities expense (income) in the condensed consolidated interim statements of income.

Further descriptions of the significant terms and conditions of these Topicus Coop Preference Units are described below. The terms and conditions of the Topicus Coop Preference Units should be read in conjunction with the terms and conditions of the Topicus Preferred Shares held by CSI in Topicus (note 1).

Conversion

Holders of the Topicus Coop Preference Units are entitled to convert some or all of their Topicus Coop Preference Units into Topicus Coop Ordinary Units on a one for one basis at any time (the “Topicus Coop Preference Unit Conversion Right”). Pursuant to the terms of the IRGA and the exchange agreement entered into among Topicus, Topicus Coop, the Joday Group and Ijssel B.V. (the “Exchange Agreement”), the portion of the Topicus Coop Preference Units which constitute Topicus Coop Exchangeable Units are indirectly exchangeable for Topicus Subordinate Voting Shares.

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Upon the exercise of the Topicus Coop Preference Unit Conversion Right, the holders of the Topicus Coop Preference Units will be entitled to receive all accrued but unpaid dividends accruing to the day before the conversion date. Pursuant to the terms of the IRGA, the board of directors of Topicus Coop will make a determination as to whether Topicus Coop has sufficient cash on hand to satisfy the payment of any accrued but unpaid dividends on the Topicus Coop Preference Units in cash. If the board of directors of Topicus Coop determines that Topicus Coop does not have sufficient cash on hand, the accrued but unpaid dividends will be satisfied by the issuance of Topicus Coop Ordinary Units of equal value, based on the terms of the Topicus Coop Preference Units.

Holders of Topicus Coop Preference Units are entitled to exercise their Topicus Coop Preference Unit Conversion Right, and either continue to hold Topicus Coop Ordinary Units, or, pursuant to the terms of the IRGA and the Exchange Agreement, the portion of Topicus Coop Ordinary Units which constitute Topicus Coop Exchangeable Units can be exchanged for Topicus Subordinate Voting Shares.

Redemption at the Option of the Holder

Upon the exercise by Topicus Coop of the Topicus Coop Call Right (as defined below), or the exercise of the Topicus Coop Preference Unit Retraction Right (as defined below), holders of the Topicus Coop Preference Units have a right that mirrors the Topicus Preferred Share Call Price Right (but at the Topicus Coop level) (the “Topicus Coop Preference Unit Call Price Right”), and is subject to substantially the same terms and restrictions as apply to the Topicus Preferred Share Call Price Right (but at the Topicus Coop level). As the Topicus Coop Preference Unit Call Price Right occurs at the Topicus Coop level, the holders of the Topicus Coop Preference Units would receive Topicus Coop Ordinary Units, and not Topicus Subordinate Voting Shares, in connection with the exercise of this right.

The “Topicus Coop Preference Unit Retraction Right” provides that (i) at any time until July 5, 2021, CSI will have the right (but not the obligation) to sell all of its Topicus Preferred Shares to Topicus and exercise the Topicus Preferred Share Call Price Right, in which case, the holders of the Topicus Coop Preference Units will be entitled to sell all of their Topicus Coop Preference Units to Topicus Coop and exercise the Topicus Coop Preference Units Call Price Right, and (ii) at any time after July 5, 2021, holders representing 95% of the Preferred Securities (excluding any Topicus Coop Preference Units held by Topicus) will have the right (but not the obligation) to entitle the holders of the Topicus Coop Preference Units to sell all of their Topicus Coop Preference Units to Topicus Coop and exercise the Topicus Coop Preference Unit Call Price Right.

Holders of the Topicus Coop Preference Units have a redemption right that mirrors the Topicus Preferred Share Put Right (but at the Topicus Coop level), and is subject to substantially the same terms and restrictions that apply to the Topicus Preferred Share Put Right (but at the Topicus Coop level).

Redemption at the Option of Topicus Coop

Topicus Coop has a redemption right in respect of the Topicus Coop Preference Units that mirrors the Topicus Mandatory Conversion Moment Call Right (but at the Topicus Coop level), and is subject to substantially the same terms and restrictions that apply to the Topicus Mandatory Conversion Moment Call Right (but at the Topicus Coop level). This right can only be exercised by Topicus Coop if Topicus exercises the Topicus Mandatory Conversion Moment Call Right.

Topicus Coop has a redemption right in respect of the Topicus Coop Preference Units that mirrors the Topicus Call Right (but at the Topicus Coop level), and which is subject to substantially the same terms and restrictions that

22

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

apply to the Topicus Call Right (but at the Topicus Coop level) (the “Topicus Coop Call Right”). The Topicus Coop Call Right can only be exercised by Topicus Coop if Topicus exercises the Topicus Call Right concurrently.

10. Provisions

At January 1, 2021	$	20
Reversal		(0)
Provisions recorded during the period		8
Provisions used during the period		(2)
Effect of movements in foreign exchange and other		(0)
At March 31,2021	$	25
Provisions classified as current liabilities		15
Provisions classified as other non-current liabilities		10

The provisions balance is comprised of various individual provisions for onerous contracts and other estimated liabilities of the Company of uncertain timing or amount.

11. Income taxes

Income tax expense is recognized based on management’s best estimate of the actual income tax rate for the interim period applied to the pre-tax income of the interim period for each entity in the consolidated group. As a result of foreign exchange fluctuations, acquisitions and ongoing changes due to intercompany transactions amongst entities operating in different jurisdictions, the Company has determined that a reasonable estimate of a weighted average annual tax rate cannot be determined on a consolidated basis. The Company’s consolidated effective tax rate in respect of continuing operations for the three months ended March 31, 2021 was -39% (28% for the three months ended March 31, 2020). The current period effective tax rate is impacted by the redeemable preferred securities expense, which is not deductible for tax purposes.

Constellation is subject to tax audits in the countries in which the Company does business globally. These tax audits could result in additional tax expense in future periods relating to historical filings. Reviews by tax authorities generally focus on, but are not limited to, the validity of the Company’s inter-company transactions, including financing and transfer pricing policies which generally involve subjective areas of taxation and a significant degree of judgment. If any of these tax authorities are successful with their challenges, the Company’s income tax expense may be adversely affected and Constellation could also be subject to interest and penalty charges.

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

12. Capital and other components of equity

March 31, 2021 December 31, 2020	Common Shares
	Number Amount
	21,191,530 99 $ 21,191,530 99 $

Dividends and other distributions to shareholders

During the three months ended March 31, 2021, the Company declared a $1.00 per share dividend to all common shareholders of record at close of business on March 16, 2021. The dividend declared in the quarter ended March 31, 2021 representing $21 were paid and settled on April 9, 2021.

A dividend of $1.00 per share representing $21 were accrued as at December 31, 2020 and subsequently paid and settled on January 11, 2021.

On December 18, 2020, the Company declared a special dividend pursuant to which all common shareholders of record on December 28, 2020 of the Company were entitled to receive, by way of a dividend-in-kind, 1.859817814 Topicus Subordinate Voting Shares for each Constellation Software Inc. share held. The dividend was distributed on January 4, 2021.

13. Finance and other expense (income) and finance costs

		Three months	ended March 31,	ended March 31,
		2021		2020
Interest income on cash	$	(1)	$	(0)
(Increase) decrease in the fair value of equity securities held for trading		(1)		2
Share in net (income) loss of equity investee		0		(0)
Finance and other income		(1)		(2)
Finance and other expense(income)	$	(2)	$	(0)
Interest expense on debt and debentures	$	10	$	8
Interest expense on lease obligations		2		2
Amortization of debt related transaction costs		1		0
Amortization of debenture discount (premium) and associated rights offering, net		(1)		(1)
Other finance costs		3		2
Finance costs	$	15	$	11

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

14. Earnings per share

Basic and diluted earnings per share

		Three months ended March 31,	Three months ended March 31,	Three months ended March 31,
		2021		2020
Numerator:
Net income attributable to common shareholders of CSI	$	(9)	$	83
Denominator:
Basic and diluted shares outstanding		21,191,530		21,191,530
Earnings per share
Basic and diluted	$	(0.41)	$	3.91

15. Financial instruments

Fair values versus carrying amounts

The carrying values of cash, accounts receivable, accounts payable, accrued liabilities, dividends payable, income taxes payable, the majority of acquisition holdbacks, and the CSI Facility, approximate their fair values due to the short-term nature of these instruments. The carrying value of the debt without recourse to CSI and the Term Loan approximate their fair values as the debt is subject to market interest rates.

Fair value hierarchy

The table below analyzes financial instruments carried at fair value, by valuation method.

• level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• level 2 inputs are inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly (i.e. prices) or indirectly (i.e. derived from prices); and

• level 3 inputs are inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

In the table below, the Company has segregated all financial assets and liabilities that are measured at fair value into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

Financial assets and financial liabilities measured at fair value as at March 31, 2021 and December 31, 2020 in the condensed consolidated interim financial statements are summarized below. The Company has no additional financial liabilities measured at fair value after initial recognition other than those recognized in connection with business combinations and the redeemable Preferred Securities.

25

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements

(In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

	Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total March 31, 2021 December 31, 2020
Assets: Equity securities held for trading Liabilities: Redeemable preferred securities Contingent consideration	10 $ - $ - $ 10 $ 9 $ - $ - $ 9 $
	10 - - 10 9 - - 9
	- $ - $ 390 $ 390 $ - $ - $ - $ - $ - - 82 82 - - 88 88
	- - 472 472 - - 88 88

There were no transfers of fair value measurement between level 1, 2 and 3 of the fair value hierarchy in the periods ended March 31, 2021 and December 31, 2020.

The following tables shows a reconciliation from the beginning balances to the ending balances for fair value measurements in level 3 of the fair value hierarchy.

Contingent Consideration

Balance at January 1, 2021	88
Increase from business acquisitions	5
Cash recoveries (payments)	(10)
Charges through profit or loss	2
Foreign exchange and other movements	(3)
Balance at March 31,2021	82
Contingent consideration classified as current liabilities	25
Contingent consideration classified as other non-current liabilities	57

Estimates of the fair value of contingent consideration are performed by the Company on a quarterly basis. Key unobservable inputs include revenue/profitability growth rates and the discount rates applied (8% to 11%). The estimated fair value increases as the annual revenue/profitability growth rate increases and as the discount rate decreases and vice versa.

26

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

Redeemable Preferred Securities

Balance at January 1, 2021	$	-
Issuance in relation to the acquisition of Topicus.com B.V.		136
Cash recoveries (payments)		-
Charges through profit or loss		263
Foreign exchange and other movements		(9)
Balance at March 31,2021		390

Estimates of the fair value of the Redeemable Preferred Securities are performed by the Company on a quarterly basis. Key unobservable inputs include expected volatility and credit spread of the Topicus Preferred Shares. The estimated fair value increases as the expected volatility increases. The estimated fair value decreases as the credit spread increases. The key observable input is the subordinated voting share price of Topicus.com Inc. As the Topicus.com Inc. subordinate voting share price increases, the fair value of the Redeemable Preferred Securities increases.

16. Contingencies

In the normal course of operations, the Company is subject to litigation and claims from time to time. The Company may also be subject to lawsuits, investigations and other claims, including environmental, labour, income and sales tax, product, customer disputes and other matters. Management believes that adequate provisions have been recorded in the accounts where required. Although it is not always possible to estimate the extent of potential costs, if any, management believes that the ultimate resolution of such contingencies will not have a material adverse impact on the results of operations, financial position or liquidity of the Company.

17. Changes in non-cash operating assets and liabilities

		Three months ended	Three months ended
		March 31,
		2021	2020
Decrease (increase) in current accounts receivable	$	(14)	$	(29)
Decrease (increase) in current unbilled revenue		(14)		6
Decrease (increase) in other current assets		(22)		(10)
Decrease (increase) in inventories		(0)		(1)
Decrease (increase) in other non-current assets		(4)		4
Increase (decrease) in other non-current liabilities		(9)		(12)
Increase (decrease) in current accounts payable and accrued liabilities,
excluding holdbacks from acquisitions		(63)		(64)
Increase (decrease) in current deferred revenue		321		245
Increase (decrease) in current provisions		3		(3)
Change in non-cash operatingworkingcapital	$	198	$	136

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CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

18. Non-controlling interests

The Company’s non-controlling interests at March 31, 2021 were associated with Topicus, a company whose operations are based in the Netherlands. Prior to January 4, 2021, the Company reflected a 100% ownership interest in Topicus. However, as outlined in Note 1 to the condensed consolidated interim financial statements and Note 4, Constellation’s equity interest in Topicus was reduced from 100% to 30.3% (69.7% being non-controlling interest) in 2021.

The following tables summarize the information relating to the Company's non-controlling interests in Topicus before and after intercompany eliminations:

Non-controlling interest Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Less: Non-controlling interest of Topicus subsidaries Net assets Net assets attributable to non-controlling interests of Topicus Revenue Expenses Redeemable preferred securities expense (income) (note 1 and 9) Income before income taxes Income tax expense Net income (loss) prior to non-controlling interest allocation of Topicus subsidaries Less: Non-controlling interest of Topicus subsidaries Net income (loss) after allocation of non-controlling interest of Topicus subsidaries Net income (loss) attributable to non-controlling interests of Topicus	As at March 31, 2021 Intra-Group Eliminations 69.7% 275 933 1,208 4,794 341 5,135 3	Total
	(3,931) 3,947	16
	Three months ended March 31, 2021 Intra-Group Eliminations 216 186 2,923 (2,893) 6 (2,898) 0
		11
		Total
	(2,898) 2,659	(239)
		(167)

Financial information on the statement of cash flows for Topicus is as follows:

	Three months ended
	March 31, 2021
Cash flows from operating activities	195
Cash flows from (used in) in financing activities	9
Cash flows from (used in) investing activities	(167)

28

CONSTELLATION SOFTWARE INC.

Notes to Condensed Consolidated Interim Financial Statements (In millions of U.S. dollars, except per share amounts and as otherwise indicated) (Due to rounding, numbers presented may not foot) Three months ended March 31, 2021 and 2020 (Unaudited)

19. Subsequent events

On May 5, 2021 the Company declared a $1.00 per share dividend that is payable on July 10, 2021 to all common shareholders of record at close of business on June 19, 2021.

Subsequent to March 31, 2021, the Company completed or entered into agreements to acquire a number of businesses for aggregate cash consideration of $187 on closing plus cash holdbacks of $9 and contingent consideration with an estimated fair value of $1 for total consideration of $198. The business acquisitions include companies catering primarily to the education, church and religion, healthcare, hospitality, safety management, mining, enterprise resource planning, financial services, asset management and transit verticals and are all software companies similar to the existing business of the Company.

As of April 29, 2021, the Mandatory Conversion Moment (note 1 and 9) for the mandatory conversion or redemption of all Topicus Preferred Shares (all of which are held by CSI) and all Topicus Coop Preference Units has been reached. Once the Subordinate Voting Shares of Topicus reach the Premium Target Price determined on the basis of the 60-day volume weighted average trading price of the Subordinate Voting Shares for any 60-day trading period, all outstanding Topicus Preferred Shares and Topicus Coop Preference Units must be, at the option of the respective holder (in the case of the Topicus Preferred Shares, CSI), either converted into Subordinate Voting Shares of Topicus or Topicus Coop Ordinary Units respectively (on a one-for-one basis), or, if such holder does not choose such conversion within 30 days of receiving notice that the Mandatory Conversion Moment has occurred, then such Topicus Preferred Shares or Topicus Coop Preference Units must be sold to and purchased by Topicus and Topicus Coop respectively in exchange for a cash payment equal to approximately EUR 19.06 per share (or per unit as applicable). CSI and the holders of the Topicus Preference Units will be required to provide their notification no later than May 29, 2021. The actual conversion or redemption of the Topicus Preferred Shares and Topicus Coop Preference Units will occur on February 1, 2022.

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