Tecsys Inc. Reports Strong Q1 for Fiscal Year 2025

Tecsys Inc. (TSX: TCS), a global supply chain solution provider, announced significant growth in the first quarter of fiscal year 2025. The company experienced a 33% increase in Software-as-a-Service (SaaS) revenue, reaching $15.3 million, and a remarkable 57% growth in SaaS bookings, primarily due to a substantial healthcare migration contract covering over 100 hospitals.

Despite a slight decline in professional services revenue, Tecsys’ overall revenue increased by 1%, and the company confidently reiterated its guidance for continued growth throughout FY2025.

Key Takeaways

• SaaS Growth: SaaS revenue increased by 33% year-over-year, with bookings up 57%.
• Healthcare Expansion: Major deal with Integrated Delivery Network (IDN) enhances presence in healthcare.
• Leadership Changes: Rex Ahlstrom appointed Chief Strategy Officer to bolster SaaS and data capabilities.
• Recognition: Named a great workplace in Canada, the US, and Denmark.
• Financials: Gross margin of 47%, adjusted EBITDA of $2.6 million.
• Outlook: Reiterated guidance for total revenue growth, SaaS growth, and adjusted EBITDA margin.

Company Outlook

• Strong financial position with a healthy backlog.
• Plans to invest in refining SaaS software and strategic partnerships.
• Anticipating an increase of about CAD $1 million in annual recurring revenue (ARR) per network in the pharma market.

Highlights

• Bearish Points: Professional services revenue down by 10% due to scheduling issues.
• Bullish Points: Significant growth evident in healthcare and pharmacy sectors.

Q1 Financial Summary

• Total Revenue: $42.3 million.
• SaaS Revenue: $15.3 million, 33% increase.
• Professional Services Revenue: $13.4 million, down 10%.
• Adjusted EBITDA: $2.6 million.

CEO Peter Brereton emphasized the company’s strong performance, strategic initiatives, and commitment to customer satisfaction. CFO Mark Bentler provided detailed financial insights, affirming confidence for the quarters ahead. The earnings call closed with a positive outlook as Tecsys prepares for Q2.