MONTREAL, March 5, 2025 /CNW/ -- Tecsys Inc. (TSX: TCS), an industry-leading supply chain management SaaS company, today announced its results for the third quarter of fiscal 2025, ended January 31, 2025. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
TECSYS (PRNewsfoto/TECSYS)
"This quarter, we achieved record revenue driven by strong growth in SaaS. We're seeing diversified activity across key sectors, from major health systems to healthcare 3PLs as well as industrial distributors. Our pharmacy supply chain solutions continue to drive strong market activity." said Peter Brereton, president and CEO of Tecsys.
Mark Bentler, chief financial officer of Tecsys, added, "We are experiencing strong momentum in our SaaS business, coupled with increasing profitability. We're pleased to see Adjusted EBITDA scaling effectively, up 33% year-to-date."
Third quarter highlights:
SaaS revenue increased by 22% to $17.3 million, up from $14.2 million in Q3 2024.
SaaS subscription bookingsi (measured on an ARRi basis) were $4.0 million compared to $4.9 million in the third quarter of fiscal 2024.
SaaS Remaining Performance Obligation (RPOi) increased by 34% to $210.2 million at January 31, 2025, up from $157.2 million at the same time last year.
Total revenue increased to a record $45.2 million compared to $43.8 million in Q3 2024.
Net profit was $1.2 million or $0.08 per share on a fully diluted basis in Q3 2025, compared to a net profit of $0.8 million or $0.05 per share for the same period in fiscal 2024.
Adjusted EBITDAii was $3.5 million compared to $2.6 million reported in Q3 last year.
In the third quarter of fiscal 2025, Tecsys acquired 38,200 of its outstanding common shares for approximately $1.7 million as part of its ongoing Normal Course Issuer Bid, compared to 50,400 shares acquired in the same period last year for approximately $1.5 million.
Year-to-date performance for first nine months of fiscal 2025
SaaS revenue increased by 29% to $48.7 million, up from $37.7 million in the same period of fiscal 2024.
SaaS subscription bookingsi (measured on an ARRi basis) increased by 3% to $10.8 million, compared to $10.5 million in the same period of fiscal 2024.
Total revenue increased to $129.9 million compared to $127.3 million in the same period of fiscal 2024.
Net profit was $2.7 million ($0.19 per basic share or $0.18 per fully diluted share) in the first nine months of fiscal 2025, compared to a net profit of $1.6 million ($0.11 per basic and fully diluted share) for the same period in fiscal 2024.
Adjusted EBITDAii was $9.1 million compared to $6.8 million reported in the same period of fiscal 2024.
In the first nine months of fiscal 2025, Tecsys acquired 149,400 of its outstanding common shares for approximately $6.0 million as part of its ongoing Normal Course Issuer Bid, compared to 76,200 shares acquired in the same period last year for approximately $2.2 million.
Financial guidance:
Tecsys is maintaining its FY25 guidance for SaaS revenue growth of 30-32% and Adjusted EBITDA margins of 8-9% for FY25 and 10-11% for FY26. We saw strong Q3 Professional Services bookings and year-over-year growth in SaaS bookings; however, the timing of these bookings is expected to result in full-year AEBITDA margins and SaaS revenue being at the lower end of the guidance range.
Overall, based on actual third quarter hardware shipments and visibility into overall fourth quarter revenue, the Company is raising its fiscal 2025 total revenue growth guidance from flat to 1-3% growth and will provide fiscal 2026 guidance with its Q4 and full-year fiscal 2025 earnings release.
On March 5, 2025, the Company declared a quarterly dividend of $0.085 per share to be paid on April 16, 2025 to shareholders of record on March 26, 2025.
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 Q3 2025 Financial Statements.
ii See Non-IFRS Performance Measures in Management's Discussion and Analysis of the Q3 2025 Financial Statements
Q3 2025 Financial Results Conference Call Date: March 6, 2025 Time: 8:30 a.m. ET Phone number: 800-836-8184 or 646-357-8785 The call can be replayed until March 13, 2025, by calling: 888-660-6345 or 646-517-4150 (access code: 14330#)
About Tecsys
Tecsys is a global provider of advanced supply chain solutions. With a commitment to innovation and customer success, the company equips organizations with the essential software, technology and expertise needed for operational excellence and competitive advantage. Its cloud solutions serve a diverse range of industries, including healthcare, distribution and converging commerce, across multiple complex, regulated and high-volume markets. Built on the Itopia® low-code application platform, Tecsys' offerings include enterprise resource planning, warehouse management, consolidated service management, distribution and transportation management, supply management at the point of use and order management solutions. Tecsys provides critical data insights and control across the supply chain, ensuring that organizations are agile, responsive and scalable.
Tecsys is publicly traded on the Toronto Stock Exchange under the ticker symbol TCS. For more about Tecsys and its solutions, please visit www.tecsys.com.
Forward Looking Statements
The statements in this news release relating to matters that are not historical fact are forward-looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance and are subject to a number of uncertainties, including but not limited to future economic conditions, the markets that Tecsys Inc. serves, the actions of competitors, major new technological trends, and other factors beyond the control of Tecsys Inc., which could cause actual results to differ materially from such statements. More information about the risks and uncertainties associated with Tecsys Inc.'s business can be found in the MD&A section of the Company's annual report and the most recently filed annual information form. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR+ (www.sedarplus.ca).
EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before stock-based compensation and restructuring costs. The exclusion of interest expense, interest income, income taxes and restructuring costs eliminates the impact on earnings derived from non-operational activities and non-recurring items, and the exclusion of depreciation, amortization and stock-based compensation eliminates the non-cash impact of these items.
The Company believes that these measures are useful measures of financial performance without the variation caused by the impacts of the items described above and that could potentially distort the analysis of trends in our operating performance. In addition, they are commonly used by investors and analysts to measure a company's performance, its ability to service debt and to meet other payment obligations, or as a common valuation measurement. Excluding these items does not imply that they are necessarily non-recurring. Management believes these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company's operating results, underlying performance and future prospects in a manner similar to management. Although EBITDA and Adjusted EBITDA are frequently used by securities analysts, lenders and others in their evaluation of companies, they have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the Company's results as reported under IFRS.
The reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable IFRS measure is provided below.
Three months
ended January 31,
Nine months
ended January 31,
Trailing 12 months
ended January 31,
(in thousands of CAD)
2025
2024
2025
2024
2025
2024
Net profit for the period
$
1,193
$
759
$
2,749
$
1,590
$
3,008
$
2,036
Adjustments for:
Depreciation of property and equipment and right-of-use assets
376
355
1,124
1,116
1,485
1,556
Amortization of deferred development costs
190
147
585
436
732
581
Amortization of other intangible assets
322
356
984
1,146
1,331
1,548
Interest expense
18
45
67
136
94
153
Interest income
(150)
(260)
(530)
(782)
(763)
(993)
Income taxes
811
644
1,674
1,422
893
2,177
EBITDA
$
2,760
$
2,046
$
6,653
$
5,064
$
6,780
$
7,058
Adjustments for:
Stock based compensation
775
594
2,415
1,770
2,946
2,225
Restructuring costs
-
-
-
-
2,122
-
Adjusted EBITDAii
$
3,535
$
2,640
$
9,068
$
6,834
$
11,848
$
9,283
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
(In thousands of Canadian dollars)
January 31, 2025
April 30, 2024
Assets
Current assets
Cash and cash equivalents
$
20,970
$
18,856
Short-term investments
11,614
16,713
Accounts receivable
21,563
22,090
Work in progress
7,060
4,248
Other receivables
189
134
Tax credits
5,365
6,422
Inventory
1,937
1,359
Prepaid expenses and other
9,756
9,143
Total current assets
78,454
78,965
Non-current assets
Other long-term receivables and assets
640
421
Tax credits
6,757
4,737
Property and equipment
1,068
1,372
Right-of-use assets
934
1,251
Contract acquisition costs
4,610
4,478
Deferred development costs
3,430
2,683
Other intangible assets
6,833
7,703
Goodwill
17,517
17,363
Deferred tax assets
9,073
9,073
Total non-current assets
50,862
49,081
Total assets
$
129,316
$
128,046
Liabilities
Current liabilities
Accounts payable and accrued liabilities
24,677
20,030
Deferred revenue
38,684
36,211
Lease obligations
732
812
Total current liabilities
64,093
57,053
Non-current liabilities
Other long-term accrued liabilities
3,886
496
Deferred tax liabilities
552
826
Lease obligations
783
1,302
Total non-current liabilities
5,221
2,624
Total liabilities
$
69,314
$
59,677
Equity
Share capital
$
53,788
$
52,256
Contributed surplus
5,877
9,417
Retained earnings
7,251
8,121
Accumulated other comprehensive loss
(6,914)
(1,425)
Total equity attributable to the owners of the Company
60,002
68,369
Total liabilities and equity
$
129,316
$
128,046
Condensed Interim Consolidated Statements of Income and Comprehensive (Loss) Income (Unaudited)
(In thousands of Canadian dollars, except per share data)
Three Months Ended
January 31,
Nine Months Ended
January 31,
2025
2024
2025
2024
Revenue:
SaaS
$
17,252
$
14,160
$
48,696
$
37,727
Maintenance and Support
8,142
8,620
24,560
25,817
Professional Services
13,920
13,021
41,452
40,798
License
212
396
1,517
1,104
Hardware
5,655
7,626
13,674
21,841
Total revenue
45,181
43,823
129,899
127,287
Cost of revenue
23,907
23,893
68,449
69,512
Gross profit
21,274
19,930
61,450
57,775
Operating expenses:
Sales and marketing
9,053
8,223
26,457
24,539
General and administration
3,096
2,650
9,273
8,580
Research and development, net of tax credits
7,114
7,834
21,650
22,079
Total operating expenses
19,263
18,707
57,380
55,198
Profit from operations
2,011
1,223
4,070
2,577
Other (costs) income
(7)
180
353
435
Profit before income taxes
2,004
1,403
4,423
3,012
Income tax expense
811
644
1,674
1,422
Net profit
$
1,193
$
759
$
2,749
$
1,590
Other comprehensive (loss) income:
Effective portion of changes in fair value on designated revenue hedges
(5,188)
4,101
(5,721)
1,101
Exchange differences on translation of foreign operations
(90)
(90)
232
(424)
Comprehensive (loss) income
$
(4,085)
$
4,770
$
(2,740)
$
2,267
Basic earnings per common share
$
0.08
$
0.05
$
0.19
$
0.11
Diluted earnings per common share
$
0.08
$
0.05
$
0.18
$
0.11
Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
(In thousands of Canadian dollars)
Three Months Ended
January 31,
Nine Months Ended
January 31,
2025
2024
2025
2024
Cash flows from operating activities:
Net profit
$
1,193
$
759
$
2,749
$
1,590
Adjustments for:
Depreciation of property and equipment and right-of-use-assets
376
355
1,124
1,116
Amortization of deferred development costs
190
147
585
436
Amortization of other intangible assets
322
356
984
1,146
Interest (income) expense and foreign exchange loss
7
(180)
(353)
(435)
Unrealized foreign exchange and other
516
(452)
599
(1,050)
Non-refundable tax credits
(1,008)
(151)
(1,942)
(1,365)
Stock-based compensation
775
594
2,415
1,770
Income taxes
34
78
221
454
Net cash from operating activities excluding changes in non-cash working capital items related to operations
2,405
1,506
6,382
3,662
Accounts receivable
269
(4,175)
571
(1,950)
Work in progress
(2,563)
557
(2,804)
(1,662)
Other receivables and assets
90
184
(346)
136
Tax credits
3,338
3,160
979
841
Inventory
178
213
(576)
(871)
Prepaid expenses
(1,534)
(304)
(571)
(945)
Contract acquisition costs
(251)
(401)
(171)
(261)
Accounts payable and accrued liabilities
3,111
3,890
1,111
597
Deferred revenue
1,764
(2,295)
2,455
327
Changes in non-cash working capital items related to operations
4,402
829
648
(3,788)
Net cash provided by (used in) operating activities
6,807
2,335
7,030
(126)
Cash flows from financing activities:
Payment of lease obligations
(205)
(195)
(607)
(593)
Payment of dividends
(1,251)
(1,177)
(3,619)
(3,385)
Interest paid
(18)
(45)
(67)
(136)
Issuance of common shares on exercise of stock options
971
423
1,568
3,067
Shares repurchased and cancelled
(1,679)
(1,532)
(5,991)
(2,205)
Net cash used in financing activities
(2,182)
(2,526)
(8,716)
(3,252)
Cash flows from investing activities:
Interest received
32
22
59
91
Transfers from short-term investments
-
18
5,570
40
Acquisitions of property and equipment
(88)
(190)
(497)
(455)
Deferred development costs
(447)
(309)
(1,332)
(809)
Net cash (used in) provided by investing activities
(503)
(459)
3,800
(1,133)
Net increase (decrease) in cash and cash equivalents during the period
4,122
(650)
2,114
(4,511)
Cash and cash equivalents - beginning of period
16,848
17,374
18,856
21,235
Cash and cash equivalents - end of period
$
20,970
$
16,724
$
20,970
$
16,724
Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)
(In thousands of Canadian dollars, except number of shares)
Share capital
Contributed Surplus
Accumulated other comprehensive (loss) income
Retained earnings
Total
Number
Amount
Balance, May 1, 2024
14,840,150
$
52,256
$
9,417
$
(1,425)
$
8,121
$
68,369
Net profit
-
-
-
-
2,749
2,749
Other comprehensive (loss) income:
Effective portion of changes in fair value on designated revenue hedges
-
-
-
(5,721)
-
(5,721)
Exchange difference on translation of foreign operations
-
-
-
232
-
232
Total comprehensive (loss) income
-
-
-
(5,489)
2,749
(2,740)
Shares repurchased and cancelled
(149,400)
(531)
(5,460)
-
-
(5,991)
Stock-based Compensation
-
-
2,415
-
-
2,415
Dividends to equity owners
-
-
-
-
(3,619)
(3,619)
Share options exercised
53,337
2,063
(495)
-
-
1,568
Total transactions with owners of the Company
(96,063)
$
1,532
$
(3,540)
$
-
$
(3,619)
$
(5,627)
Balance, January 31, 2025
14,744,087
$
53,788
$
5,877
$
(6,914)
$
7,251
$
60,002
Balance, May 1, 2023
14,582,837
$
44,338
15,285
$
(17)
$
10,832
$
70,438
Net profit
-
-
-
-
1,590
1,590
Other comprehensive income:
-
Effective portion of changes in fair value on designated revenue hedges
-
-
-
1,101
-
1,101
Exchange difference on translation of foreign operations
