Tecsys Inc., an industry-leading supply chain management SaaS company, announced its results for the second quarter fiscal year 2024, ended October 31, 2023. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
“We have made notable progress this quarter, with a 37% increase in SaaS revenue,” said Peter Brereton, president and CEO of Tecsys. “Our activities in the quarter have strengthened our market position, bolstered our customer and partner communities, and reaffirmed our commitment to innovation. We are seeing strong pipeline expansion and activity across verticals. Notably, there is accelerated demand for our pharmacy supply chain solutions, where we have multiple new customer proof points in the face of Drug Supply Chain Security Act regulation enforcement. On top of that, our user conference in Scottsdale in the month of September was excellent, with attendance up 40% and a massive increase in average customer size.”
Mark Bentler, chief financial officer of Tecsys adds, “We continue to see positive momentum with SaaS RPO up 34%, our SaaS margins continuing to expand and our partner driven pipeline up 98% from the same time last year.”
Second Quarter Highlights:
- SaaS revenue increased by 37% to $12.1 million, up from $8.8 million in Q2 2023.
- SaaS subscription bookingsi (measured on an ARRi basis) increased by 34% to $3.7 million, compared to $2.8 million in the second quarter of fiscal 2023.
- SaaS Remaining Performance Obligation (RPOi) increased by 34% to $146.7 million at October 31, 2023, up from $109.5 million at the same time last year.
- Annual Recurring Revenue (ARRi) at October 31, 2023 was up 19% to $84.9 million compared to $71.2 million at October 31, 2022.
- Professional services revenue was down by 5% to $12.9 million compared to $13.5 million in Q2 fiscal 2023.
- Total revenue excluding hardware revenue was $34.1 million, 8% higher than $31.5 million reported for Q2 last year, while total revenue rose 9% to reach $41.5 million.
- Gross margin was 44%, flat compared to the same period of fiscal 2023.
- Total gross profit increased to $18.3 million, up 10% from $16.7 million in Q2 fiscal 2023.
- Operating expenses increased to $18.7 million, higher by $3.1 million or 20% compared to $15.6 million in Q2 last year.
- Loss from operations was $0.4 million compared to Profit from operations of $1.0 million in Q2 last year.
- Net loss was $340 thousand or $0.02 per share on a fully diluted basis in Q2 fiscal 2024, compared to net profit of $0.7 million or $0.05 per share for the same period in fiscal 2023.
- Adjusted EBITDAii was $1.0 million compared to $2.8 million reported in Q2 last year.
Year-to-date performance for first half of Fiscal 2024:
- SaaS revenue increased by 40% to $23.6 million, up from $16.8 million in the same period of fiscal 2023.
- SaaS subscription bookingsi (measured on an ARRi basis) decreased by 15% to $5.7 million, compared to $6.7 million in the same period of fiscal 2023.
- Professional services revenue was up 2% to $27.8 million compared to $27.2 million in the same period of fiscal 2023.
- Total revenue excluding hardware revenue was $69.2 million, 12% higher than $61.8 million reported for the same period of fiscal 2023, while total revenue rose 15% to reach $83.5 million.
- Gross margin was 45% for the first half of fiscal 2024 compared to 43% for the same period in fiscal 2023.
- Total gross profit increased to $37.8 million, up 20% from $31.4 million in the same period of fiscal 2023.
- Operating expenses increased to $36.5 million, higher by $6.2 million or 20% compared to $30.3 million in the same period of fiscal 2023.
- Profit from operations was $1.4 million, up from $1.1 million in the same period of fiscal 2023.
- Net profit was $0.8 million or $0.06 per fully diluted share compared to $0.8 million or $0.05 per share on a fully diluted basis for the same period in fiscal 2023.
- Adjusted EBITDAii was $4.2 million compared to $4.3 million reported in the same period of fiscal 2023.
“Despite a temporary dip in professional services revenue this quarter due to project scheduling and the swift growth of our partner ecosystem, we maintain a strong backlog” added Mark Bentler “We anticipate continued growth in professional services revenue and are adequately staffed to meet these demands. As a result of that temporary slow down in professional services revenue, we are adjusting our short-term Adjusted EBITDA outlook to provide a range, while affirming our Adjusted EBITDA guidance for Fiscal 2025 and our SaaS and total revenue growth guidance for Fiscal 2024.”
Financial Guidance:
Tecsys is updating financial guidance as follows:
|
Current |
Previous |
Reiterate |
|
|
FY24 Guidance |
FY24 Guidance |
FY25 Guidance |
|
|
Total Revenue Growth |
10-15% |
10-15% |
n.a. |
|
SaaS Revenue Growth |
35-37% |
35-37% |
n.a. |
|
Adjusted EBITDA1 Margin |
4-6% |
6% |
8-9% |
On November 30, 2023, the Company declared a quarterly dividend of $0.08 per share to be paid on January 5, 2024 to shareholders of record on December 14, 2023.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
i See Key Performance Indicators in Management’s Discussion and Analysis of the Q2 2024 Financial Statements.
ii See Non-IFRS Performance Measures in Management’s Discussion and Analysis of the Q2 2024 Financial Statements.
Second Quarter Fiscal 2024 Results Conference Call
Date: December 1, 2023
Time: 8:30am EST
Phone number: 877-224-7327 or 416-641-6705
The call can be replayed until December 8, 2023 by calling:
800-558-5253 or 416-626-4144 (access code: 22028536)
