If you’ve been investing for a while, you may have already come across the name Constellation Software (TSX:CSU). In fact, this is one of the first stocks, tech or otherwise, that investors will find once they start looking at Canadian investing opportunities.
The problem? CSU comes with a hefty price tag. In fact, the company currently trades at about $4,420. A high cost for any investor, not just your average Joe. However, there’s another company that has the potential to see the same kind of growth as CSU, which by the way is almost 200% in the last five years alone. Even better? It’s run by CSU itself.
Enter Topicus
If you want a cheaper CSU, then you’re in luck. Topicus.com (TSXV:TOI) is exactly that, a tech stock that’s a spinoff of the great CSU. The tech stock also has the potential to become a global leader in vertical-market software, all because it’s run by a company that’s been there, done that.
The tech stock just posted another strong quarter, with revenue up 20% year over year at €372 million, and net income climbing 54% to €41.5 million. You’ll notice the euros, and that’s because this company is doing the same thing as CSU, but across Europe. Simply put, Topicus expands through acquisitions, buying up niche companies and seeing organic growth after purchases.
The system worked for CSU, and it’s working here as well. Topicus generated over €256 million in operating cash flow in the first half of 2025, a 9% gain, even though the second quarter alone was down from seasonal billing. Now that cash is being reused for more than €240 million in acquisitions.
More to come
Again, the acquisition model is what makes Topicus strong. Like CSU, it focuses on vertical-market software. These are niche solutions that are built for industries that value specialized systems. Then, these companies usually produce sticky, recurring revenue with high margins. Then, as Topicus scales out further, it gains earnings, but also builds expertise in integrating, improving, and expanding.
Now, Topicus might not be in the four-digit range, but it’s not cheap either. The company currently trades at 10 times sales, showing that the market has already priced in high expectations. Furthermore, organic growth is still modest, so leverage is on the rise while acquisitions continue to be financed with debt.
Yet if the company manages to continue sourcing disciplined deals and integrating them seamlessly, converting them into cash generators, it has the potential to create even more cash for investors — even on par with CSU. The company is already producing recurring revenue, and cash flow is strong. Therefore, this is a company that’s potentially only beginning its path upwards.
Bottom line
Topicus certainly has the chance and ability to become a global leader. This comes down to its scale, recurring revenue, disciplined acquisitions, and strong management. The key will be whether investors can buy this stock at a good price or keep holding it for years to come, because it certainly has the chance to become that one stock you say, “I bought it back when.”
