SaaS Revenue Rises 44% and Total Revenue Rises 23% in the First Quarter
"We are pleased to kick off fiscal 2024 with robust results, led by 44% growth in SaaS revenue and record quarterly revenue," says
First Quarter Highlights:
- SaaS revenue increased by 44% to
$11.5 million , up from$8.0 million in Q1 2023. - SaaS subscription bookingsi (measured on an ARRi basis) decreased by 50% to
$1.9 million , compared to$3.9 million in the first quarter of fiscal 2023. - SaaS Remaining Performance Obligation (RPOi) increased by 36% to
$139.4 million atJuly 31, 2023 , up from$102.5 million at the same time last year. - Annual Recurring Revenue (ARRi) at
July 31, 2023 was up 20% to$78.3 million compared to$65.1 million atJuly 31, 2022 . - Professional services revenue was up 9% to
$14.9 million compared to$13.6 million in Q1 2023. - Total revenue excluding hardware revenue was
$35.2 million , 16% higher than$30.4 million reported for Q1 last year, while total revenue rose 23% to reach a record$42.0 million . - Gross margin was 46% for the first quarter of fiscal 2024 compared to 43% for the same period in fiscal 2023.
- Total gross profit increased to
$19.5 million , up 32% from$14.8 million in Q1 2023. - Operating expenses increased to
$17.7 million , higher by$3 million or 21% compared to$14.7 million in Q1 last year. - Profit from operations was
$1.8 million , up from$0.1 million in Q1 2023. - Net profit was
$1.2 million or$0.08 per share on a fully diluted basis in Q1 2024, compared to$40 thousand or$0.00 per share for the same period in fiscal 2023. - Adjusted EBITDAii was
$3.2 million , up 114% compared to$1.5 million reported in Q1 last year.
Financial Guidance:
Tecsys is reiterating previously presented financial guidance as follows:
FY24 Guidance | FY25 Guidance | ||
Total Revenue Growth | 10-15% | n.a. | |
SaaS Revenue Growth | 35-37% | n.a. | |
Adjusted EBITDAii Margin | 6 % | 8-9% |
On
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 Q1 2024 Financial Statements.
ii See Non-IFRS Performance Measures in Management's Discussion and Analysis of the Q1 2024 Financial Statements.
First Quarter Fiscal 2024 Results Conference Call
Date:
Time:
Phone number: (877) 209-9554 or (416) 981-9007
The call can be replayed until
(800) 558-5253 or (416) 626-4144 (access code: 22027896)
About Tecsys
Since our founding 40 years ago, much has changed in the realm of supply chain technology. But one thing has remained constant; by developing dynamic and innovative supply chain solutions, Tecsys has been equipping organizations for growth and competitive advantage. Serving healthcare, distribution and converging commerce industries, and spanning multiple complex, regulated and high-volume markets, Tecsys delivers warehouse management, distribution and transportation management, supply management at point of use, retail order management, as well as complete financial management and analytics solutions.
Tecsys' shares are listed on the
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
Copyright © Tecsys Inc. 2023. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
Non-IFRS Measures
Reconciliation of EBITDA and Adjusted EBITDA
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, gain on remeasurement of lease liability and recognition of tax credits generated in prior periods. The exclusion of interest expense, interest income and income taxes eliminates the impact on earnings derived from non-operational activities, and the exclusion of depreciation, amortization, share-based compensation, gain on remeasurement of lease liability and recognition of tax credits generated in prior periods 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-GAAP 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 | Trailing 12 months ended | |||||||
(in thousands of CAD) | 2023 | 2022 | 2023 | 2022 | ||||
Net profit for the period | $ | 1,171 | $ | 40 | $ | 3,220 | $ | 4,274 |
Adjustments for: | ||||||||
Depreciation of property and equipment and right-of-use assets | 384 | 430 | 1,729 | 2,049 | ||||
Amortization of deferred development costs | 142 | 102 | 536 | 338 | ||||
Amortization of other intangible assets | 396 | 396 | 1,603 | 1,597 | ||||
Interest expense | 38 | 119 | 325 | 580 | ||||
Interest income | (269) | (104) | (851) | (538) | ||||
Income taxes | 859 | 25 | 2,458 | 242 | ||||
EBITDA | $ | 2,721 | $ | 1,008 | $ | 9,020 | $ | 8,542 |
Adjustments for: | ||||||||
Stock based compensation | 452 | 476 | 2,153 | 1,806 | ||||
Gain on remeasurement of lease liability | - | - | - | (573) | ||||
Recognition of tax credits generated in prior periods | - | - | - | (617) | ||||
Adjusted EBITDAii | $ | 3,173 | $ | 1,484 | $ | 11,173 | $ | 9,158 |
Consolidated Statements of Financial Position | ||||
As at July31, 2023 and | ||||
(In thousands of Canadian dollars) | ||||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ | 15,825 | $ | 21,235 |
Short-term investments | 16,046 | 15,835 | ||
Accounts receivable | 24,648 | 22,900 | ||
Work in progress | 2,555 | 1,734 | ||
Other receivables | 2,028 | 523 | ||
Taxcredits | 6,672 | 5,338 | ||
Inventory | 1,874 | 1,034 | ||
Prepaid expenses | 8,264 | 8,193 | ||
Total current assets | 77,912 | 76,792 | ||
Non-current assets | ||||
Other long-term receivables | 1,415 | 363 | ||
Taxcredits | 5,545 | 5,368 | ||
Property and equipment | 1,638 | 1,802 | ||
Right-of-use assets | 1,575 | 1,708 | ||
Contract acquisition costs | 3,944 | 3,738 | ||
Deferred development costs | 2,359 | 2,254 | ||
Other intangible assets | 8,733 | 9,287 | ||
17,280 | 17,467 | |||
Deferred tax assets | 8,132 | 8,137 | ||
Total non-current assets | 50,621 | 50,124 | ||
Total assets | $ | 128,533 | $ | 126,916 |
Liabilities | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities | $ | 18,001 | $ | 21,669 |
Deferred revenue | 31,745 | 30,388 | ||
Lease obligations | 788 | 793 | ||
Total current liabilities | 50,534 | 52,850 | ||
Non-current liabilities | ||||
Other long-term liabilities | - | 253 | ||
Deferred tax liabilities | 1,220 | 1,255 | ||
Lease obligations | 1,910 | 2,120 | ||
Total non-current liabilities | 3,130 | 3,628 | ||
Total liabilities | $ | 53,664 | $ | 56,478 |
Equity | ||||
Share capital | $ | 46,645 | $ | 44,338 |
Contributed surplus | 15,193 | 15,285 | ||
Retained earnings | 10,901 | 10,832 | ||
Accumulated other comprehensive income (loss) | 2,130 | (17) | ||
Total equity attributable to the owners of the Company | 74,869 | 70,438 | ||
Total liabilities and equity | $ | 128,533 | $ | 126,916 |
Consolidated Statements of Income and Comprehensive Income | ||||
For the three-month periods ended | ||||
(In thousands of Canadian dollars, except per share data) | ||||
Revenue: | ||||
SaaS | $ | 11,495 | $ | 8,001 |
Maintenance and Support | 8,298 | 8,268 | ||
Professional Services | 14,908 | 13,631 | ||
License | 456 | 459 | ||
Hardware | 6,818 | 3,845 | ||
Total revenue | 41,975 | 34,204 | ||
Cost of revenue | 22,475 | 19,446 | ||
Gross profit | 19,500 | 14,758 | ||
Operating expenses: | ||||
Sales and marketing | 7,671 | 6,250 | ||
General and administration | 2,959 | 2,734 | ||
Research and development, net of tax credits | 7,112 | 5,684 | ||
Total operating expenses | 17,742 | 14,668 | ||
Profit from operations | 1,758 | 90 | ||
Other (income) costs | (272) | 25 | ||
Profit before income taxes | 2,030 | 65 | ||
Income tax expense | 859 | 25 | ||
Net profit | $ | 1,171 | $ | 40 |
Other comprehensive income (loss): | ||||
Effective portion of changes in fair value on designated revenue hedges | 2,573 | 154 | ||
Exchange differences on translation of foreign operations | (426) | (304) | ||
Comprehensive income (loss) |
$ | 3,318 | $ | (110) |
Basic and diluted earnings per common share | 0.08 | 0.00 |
See accompanying notes to the consolidated financial statements. |
Consolidated Statements of Cash Flows | |||||
For the three-month periods ended | |||||
(In thousands of Canadian dollars) | |||||
Cash flows from operating activities: | |||||
Net profit | $ | 1,171 | $ | 40 | |
Adjustments for: | |||||
Depreciation of property and equipment and right-of-use-assets | 384 | 430 | |||
Amortization of deferred development costs | 142 | 102 | |||
Amortization of other intangible assets | 396 | 396 | |||
Interest expense (income) and foreign exchange (gain) loss | (272) | 25 | |||
Unrealized foreign exchange and other | (1,198) | (372) | |||
Non-refundable tax credits | (440) | (421) | |||
Stock-based compensation | 452 | 476 | |||
Income taxes | 14 | 25 | |||
Net cash from operating activities excluding changes in non-cash working capital items related to operations | 649 | 701 | |||
Accounts receivable | (1,820) | (543) | |||
Work in progress | (829) | (954) | |||
Other receivables | (262) | (335) | |||
Tax credits | (1,071) | (1,048) | |||
Inventory | (842) | (255) | |||
Prepaid expenses | (283) | (562) | |||
Contract acquisition costs | 3 | (253) | |||
Accounts payable and accrued liabilities | (3,799) | (3,012) | |||
Deferred revenue | 1,376 | 1,238 | |||
Changes in non-cash working capital items related to operations | (7,527) | (5,724) | |||
Net cash used in operating activities | (6,878) | (5,023) | |||
Cash flows from financing activities: | |||||
Repayment of long-term debt | - | (300) | |||
Payment of lease obligations | (199) | (244) | |||
Interest paid | (38) | (119) | |||
Issuance of common shares on exercise of stock options | 1,763 | 62 | |||
Net cash provided by (used in) financing activities | 1,526 | (601) | |||
Cash flows from investing activities: | |||||
Interest received | 269 | 104 | |||
Transfer from short-term investments | 22 | - | |||
Acquisitions of property and equipment | (102) | (60) | |||
Deferred development costs | (247) | (209) | |||
Net cash used in investing activities | (58) | (165) | |||
Net decrease in cash and cash equivalents during the period | (5,410) | (5,789) | |||
Cash and cash equivalents - beginning of period | 21,235 | 23,004 | |||
Cash and cash equivalents - end of period | $ | 15,825 | $ | 17,215 |
See accompanying notes to the consolidated financial statements. |
Consolidated Statements of Changes in Equity | |||||||||||
For the three-month periods ended | |||||||||||
(In thousands of Canadian dollars, except number of shares) | |||||||||||
Share capital | |||||||||||
Number | Amount | Contributed Surplus | Accumulated other | Retained earnings | Total | ||||||
Balance, | 14,582,837 | $ | 44,338 | $ | 15,285 | $ | (17) | $ | 10,832 | $ | 70,438 |
Net profit | 1,171 | 1,171 | |||||||||
Other comprehensive income: | |||||||||||
Effective portion of changes in fair value on designated revenue hedges | - | - | - | 2,573 | - | 2,573 | |||||
Exchange difference on translation of foreign operations | - | - | - | (426) | (426) | ||||||
Total comprehensive income | - | - | - | 2,147 | 1,171 | 3,318 | |||||
Stock-based Compensation | - | - | 452 | - | - | 452 | |||||
Dividends to equity owners | - | - | - | - | (1,102) | (1,102) | |||||
Share options exercised | 111,306 | 2,307 | (544) | - | - | 1,763 | |||||
Total transactions with owners of the Company | 111,306 | 2,307 | (92) | - | (1,102) | 1,113 | |||||
Balance, | 14,694,143 | 46,645 | 15,193 | 2,130 | 10,901 | 74,869 | |||||
Balance, | 14,562,895 | $ | 43,973 | $ | 13,176 | $ | (1,434) | $ | 12,968 | $ | 68,683 |
Net profit | - | - | - | - | 40 | 40 | |||||
Other comprehensive income: | |||||||||||
Effective portion of changes in fair value on designated revenue hedges | - | - | - | 154 | - | 154 | |||||
Exchange difference on translation of foreign operations | - | - | - | (304) | - | (304) | |||||
Total comprehensive (loss) income | - | - | - | (150) | 40 | (110) | |||||
Stock-based Compensation | - | - | 476 | - | - | 476 | |||||
Dividends to equity owners | - | - | - | - | (1,020) | (1,020) | |||||
Share options exercised | 3,994 | 76 | (14) | - | - | 62 | |||||
Total transactions with owners of the Company | 3,994 | $ | 76 | $ | 462 | $ | - | $ | (1,020) | $ | (482) |
Balance, | 14,566,889 | $ | 44,049 | $ | 13,638 | $ | (1,584) | $ | 11,988 | $ | 68,091 |
See accompanying notes to the consolidated financial statements. |
SOURCE
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