Tecsys Inc., an industry-leading supply chain management SaaS company, announced its results for the third quarter fiscal year 2024, ended January 31, 2024. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
“Our third quarter represents another record quarter led by SaaS revenue and included the addition of five new logos, three new hospital networks, ongoing customer SaaS migrations, and the biggest bookings quarter of the fiscal year so far,” said Peter Brereton, president and CEO of Tecsys. “Our SaaS margins continue to expand and the resulting impact on our overall margin profile is becoming evident. We are seeing activity across all key verticals and through all commercial channels, with rising demand and pipeline expansion. This solid financial performance is bolstered by a market that is showing no signs of slowing down.”
Mark Bentler, chief financial officer of Tecsys, added, “After our third quarter we embarked on a strategic restructuring designed to improve profitability over the long term. As part of this effort, we reduced our workforce by about 4% across a range of departments. This restructuring is expected to result in one-time costs of around $2.3 million, which will be recorded in our Q4 fiscal 2024 financial statements and result in anticipated annual operating cost savings of around $4.6 million heading into fiscal 2025.”
Third Quarter Highlights:
- SaaS revenue increased by 48% to $14.2 million, up from $9.5 million in Q3 2023.
- SaaS subscription bookingsi (measured on an ARRi basis) decreased by 17% to $4.9 million, compared to $5.8 million in the third quarter of fiscal 2023.
- SaaS Remaining Performance Obligation (RPOi) increased by 23% to $157.2 million at January 31, 2024, up from $128.3 million at the same time last year.
- Annual Recurring Revenue (ARRi) at January 31, 2024, was up 16% to $87.2 million compared to $75.4 million at January 31, 2023.
- Professional services revenue was down by 4% to $13.0 million compared to $13.6 million in Q3 fiscal 2023.
- Total revenue excluding hardware revenue was $36.2 million, 11% higher than $32.5 million reported for Q3 last year, while total revenue rose 13% to reach a record $43.8 million.
- Gross margin was 45%, compared to 44% for the same period of fiscal 2023.
- Total gross profit increased to $19.9 million, up 17% from $17.0 million in Q3 fiscal 2023.
- Operating expenses increased to $18.7 million, higher by $2.7 million or 17% compared to $16.0 million in Q3 last year.
- Profit from operations was $1.2 million, up from $1.0 million in the same period of fiscal 2023.
- Net profit was $0.8 million or $0.05 per share on a fully diluted basis in Q3 fiscal 2024, compared to net profit of $0.9 million or $0.06 per share for the same period in fiscal 2023.
- Adjusted EBITDAii was $2.6 million compared to $2.8 million reported in Q3 last year.
- In the third quarter of fiscal 2024, Tecsys acquired 50,400 of its outstanding common shares for $1.5 million as part of its ongoing normal course issuer bid.
Year-to-date performance for first nine months of Fiscal 2024:
- SaaS revenue increased by 43% to $37.7 million, up from $26.3 million in the same period of fiscal 2023.
- SaaS subscription bookingsi (measured on an ARRi basis) decreased by 16% to $10.5 million, compared to $12.5 million in the same period of fiscal 2023.
- Professional services revenue was $40.8 million compared to $40.7 million in the same period of fiscal 2023.
- Total revenue excluding hardware revenue was $105.4 million, 12% higher than $94.4 million reported for the same period of fiscal 2023, while total revenue rose 14% to reach $127.3 million.
- Gross margin was 45% for the first nine months of fiscal 2024 compared to 44% for the same period in fiscal 2023.
- Total gross profit increased to $57.8 million, up 19% from $48.4 million in the same period of fiscal 2023.
- Operating expenses increased to $55.2 million, higher by $8.9 million or 19% compared to $46.3 million in the same period of fiscal 2023.
- Profit from operations was $2.6 million, up from $2.2 million in the same period of fiscal 2023.
- Net profit was $1.6 million or $0.11 per fully diluted share, flat compared to the same period in fiscal 2023.
- Adjusted EBITDAii was $6.8 million compared to $7.0 million reported in the same period of fiscal 2023.
“Based on our Q3 results and our Q4 outlook, we are revising our full year fiscal 2024 guidance to tighten the range on total revenue growth, tighten the range and increase the high end on SaaS revenue growth and tighten the range on short-term Adjusted EBITDA margin guidance,” continued Bentler. “We expect to provide updated guidance for fiscal 2025 as part of our Q4 and full year fiscal 2024 earnings release.”
Conference Call:
Third Quarter Fiscal 2024 Results Conference Call
Date: March 1, 2024
Time: 8:30am EST
Phone number: 800-935-9319 or 416-981-9016
The call can be replayed until March 8, 2024, by calling:
800-558-5253 or 416-626-4100 (access code: 22029167)
