Bravura Solutions Is Running The Constellation Software Playbook

Fund managers track a new CEO's push toward higher margins as repeated earnings upgrades test a sceptical minority

15 Jul 2026 · 7 min read

Forager Funds' July 2026 case for Bravura Solutions rests on a simple observation about switching costs. The manager said Bravura's software sits at the heart of wealth management, life insurance and funds administration businesses, where replacement would be expensive, risky and disruptive, and pointed to recent earnings upgrades as evidence customers are still spending money on existing Bravura systems through renewals and project work, not preparing to abandon them for cheaper AI-generated alternatives, with margins rising quickly and cash generation growing.

Recent earnings upgrades suggest customers are still spending money on existing Bravura systems through renewals and project work, not preparing to throw them out for cheaper AI-generated alternatives. Margins are rising quickly and cash generation is growing.

— Forager Funds, Article, July 2026

A strong half that came with a surprise dividend

That conviction followed a standout February 2026 half-year result. Tamim Funds Management reported upgraded EBITDA of $37.9 million driven by 9.8 per cent revenue growth, with cash EBITDA surging 24.8 per cent to $34.2 million and net profit after tax of $25.8 million well ahead of forecasts, helped by foreign exchange gains and tax benefits. A special dividend of 4.46 cents per share plus a 5.77 cent interim dividend far exceeded expectations, and FY26 guidance was upgraded again to $280 million to $285 million in revenue and $69 million to $73 million in cash EBITDA. The manager said the new CEO had signalled a focus on M&A going forward, and viewed Bravura as undervalued at 12 times cash EBITDA given limited AI threat, since the software is deeply embedded in client workflows for a risk-averse customer base that requires secure data handling.

A CEO appointment that reshaped the bull case

Much of that confidence traces back to the September 2025 appointment of Colin Greenhill as CEO, effective January 2026. Naos Asset Management, describing the hire in detail, noted Greenhill's most recent roles included CEO of SSP Worldwide, a Constellation Software subsidiary, where he delivered improved customer retention and a material increase in profits over roughly three years, before serving as a portfolio manager within Constellation's broader Vencora group. The manager said Bravura's business would drive shareholder value through three levers: continuous improvement in cash EBITDA margins, deeper penetration of its existing customer base, and eventually using cash generation to acquire complementary software businesses, all patterned on Constellation Software's own long-term track record.

Colin's entire LTI package is tied to cash Ebitda margins and share price performance - both measures that we focus the most as investors.

— Tamim Funds Management, Monthly Report, September 2025

A volatile stock even long-term holders traded around

Forager Funds' own trading history with Bravura captures how sharply sentiment has swung even as the underlying story improved. The manager sold its entire holding in October 2025 at an average price north of $3, having added shares as low as $2.13 and originally bought in at just 83 cents in early 2024, saying the stock would need a decent uplift in growth to justify the higher price. It repurchased the position in January and February 2026 as software valuations fell broadly during the AI-driven selloff, and by June 2026 its annual report noted Bravura had added 1.9 per cent to fund returns before that initial exit, with the business having returned nearly 42 cents per share to investors via dividends and capital returns over 18 months, roughly half the fund's original purchase price.

Not everyone was convinced

Seneca Financial Solutions took the most sceptical view in October 2025, calling the stock a short or sell despite its popularity among peers, arguing the Midwinter product itself was not yet very good and that at five and a half times EV to sales, the market was pricing Bravura like a high-quality, top-line growth business when it viewed the story as fundamentally a cost-out exercise. Maple-Brown Abbott pushed back directly, noting the most recent FY26 upgrade was driven mostly by top-line growth rather than cost cuts, with sales momentum returning as the company cycled through previously lost contracts, and welcomed management's incentive structure tying pay to revenue growth and EBITDA margin expansion. Ellerston Capital exited entirely in January 2026 after the stock fell 21 per cent on no company-specific news, attributing the move to a broader shift in interest rate expectations that hit higher-valuation technology names generally.

What managers are watching next

With the new CEO's incentives tied directly to cash EBITDA margins that Tamim Funds Management expects to trend toward 30 per cent over time, and management now signalling appetite for acquisitions, the key questions for managers are whether Greenhill can replicate even a fraction of Constellation Software's long-term track record at Bravura, and whether the professional services wins that have repeatedly preceded revenue upgrades continue to convert into the recurring revenue growth the business needs to justify its current valuation.