Tecsys Inc (TCYSF) Q1 2025 Earnings Call Highlights: Strong SaaS Growth Amidst Revenue Challenges

GuruFocus News
4 min read

In This Article:

  • SaaS Revenue: $15.3 million, up 33% year-over-year.

  • SaaS Bookings: $3 million, up 57% year-over-year.

  • Total Revenue: $42.3 million, a 1% increase compared to the same period last year.

  • Professional Services Revenue: $13.4 million, down 10% from the same quarter last year.

  • Gross Margin: 47%, compared to 46% in the same period last year.

  • Net Profit: $798,000, down from $1.2 million in the same quarter last year.

  • Adjusted EBITDA: $2.6 million, compared to $3.2 million in the same period last year.

  • Cash and Short-term Investments: $27.1 million, with no debt.

  • Share Buybacks: $2.2 million spent on share buybacks in Q1.

  • Quarterly Dividend: $0.08 per share.

  • Financial Guidance for FY 2025: Total revenue growth between 7% and 9%; SaaS revenue growth between 30% and 32%; Adjusted EBITDA margin between 8% and 9%.

Release Date: September 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Tecsys Inc (TCYSF) reported a strong start to fiscal 2025 with a 33% year-over-year increase in SaaS revenue and a 57% increase in SaaS bookings.

  • The company secured a major healthcare migration deal with one of the largest IDNs in North America, highlighting significant growth potential.

  • Tecsys Inc (TCYSF) continues to experience traction in the pharmacy supply chain, with a growing interest in their centralized pharmacy service center model.

  • The company has a robust backlog and a strong balance sheet with $27.1 million in cash and no debt, supporting its growth initiatives.

  • Tecsys Inc (TCYSF) is expanding its partner ecosystem, with about a third of its deals being partner-influenced over the last 12 months, enhancing market access and product development.

Negative Points

  • Total revenue growth was only 1% compared to the same period last year, with fluctuations in professional services and hardware revenue affecting overall growth.

  • Professional services revenue decreased by 10% year-over-year, impacted by project delivery schedules outside of the company's control.

  • Net profit for the quarter decreased by $400,000 to $798,000 compared to the same quarter last year.

  • Adjusted EBITDA was down to $2.6 million from $3.2 million in the same period last year.

  • The company faces challenges in the timing of SaaS revenue recognition, with some deals having delayed starts, affecting immediate revenue realization.

Q & A Highlights

Q: Are there any inorganic opportunities to accelerate Tecsys' penetration into the pharma market, such as acquiring a point solution provider? A: Peter Brereton, CEO, stated that the market is largely greenfield, and there are no significant players doing what Tecsys is doing with centralized pharma. The company has built out a platform to manage 340b and daily drug distribution, and they plan to continue building and selling this solution.

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