Tecsys Reports Financial Results for the Second Quarter of Fiscal 2021
33% growth in recurring revenue drives seventh consecutive quarter of record revenue
Montreal, December 2, 2020 — Tecsys Inc. (TSX: TCS), an industry-leading supply chain management software company, today announced its results for the second quarter of fiscal year 2021, ended October 31, 2020. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
Second Quarter Highlights:
- SaaS Revenue in Q2 2021 increased 142% to $5.1 million, up from $2.1 million in Q2 2020.
- Cloud, maintenance and subscription revenue increased 33% year-over-year to $13.4 million in Q2 2021, up from $10.1 million in Q2 2020. The increase was primarily driven by SaaS.
- Annual Recurring Revenue (ARRi) at October 31, 2020 was up 26% to $50.9 million compared to $40.5 million at October 31, 2019 and up 3.9% sequentially from July 31, 2020 on a constant currency basis.
- During Q2 2021, SaaS subscription bookingsi (measured on an ARRi basis) were $2.7 million, a 15% increase over $2.4 million reported in Q2 2020.
- Professional services revenue was up 16% to $11.8 million in Q2 2021 compared to $10.2 million in Q2 2020. Professional services bookingsi were up 19% to $11.5 million in the second quarter of fiscal 2021 compared to $9.7 million in the same period last year.
- Total revenue was a record $30.7 million, 18% higher than $26.0 million reported for Q2 2020.
- Gross margin was 52% compared to 50% in the prior year quarter. Total gross profit increased to $16.0 million, up 23% from $13.1 million in Q2 2020.
- Operating expenses increased to $12.6 million, higher by $1.8 million or 16% compared to $10.8 million in Q2 fiscal 2020 with continuing investment in sales and marketing as well as research and development.
- Profit from operations in Q2 2021 was $3.5 million, compared to $2.2 million in Q2 2020.
- Profit was $2.1 million or $0.14 per share on a fully diluted basis in Q2 2021 compared to a profit of $1.4 million or $0.11 per share for the same period in fiscal 2020.
- Adjusted EBITDAii was a record $4.8 million in Q2 2021, up 31% compared to $3.7 million reported in Q2 2020.
“Our performance for the second quarter of fiscal 2021 represents a continuation of positive business momentum that we have been experiencing,” said Peter Brereton, president and CEO of Tecsys Inc. “This is our seventh straight quarter reporting record revenue. The pandemic has had minimal negative effect on our business and solid growth in our pipeline bodes well for our financial performance for the remainder of fiscal 2021 and beyond. Our trailing twelve month SaaS bookings are up 159% compared to prior trailing twelve to a large extent driven by an explosion of business coming from our customer base. Finally, volume on our distributed order management platform was up 140% for the black Friday period compared to last year.”
Mark Bentler, chief financial officer of Tecsys Inc., added, “SaaS revenue continues to be our fastest growing revenue stream and in the second quarter of fiscal 2021 represented 38% of total cloud, maintenance and subscription revenues, up from 21% in the prior year period. We continue to see strong demand and the transition to SaaS continues with 81% of our product bookings coming from SaaS in the first half of fiscal 2021 compared to 75% for the same period last year. While we continue to see some demand for perpetual licenses, the longer term trend toward SaaS appears solid.”
Year-to-date performance for first half of fiscal 2021
- SaaS revenue in the first half of fiscal 2021 increased 133% to $9.0 million, up from $3.9 million in the first half of fiscal 2020.
- Cloud, maintenance and subscription revenue increased 29% year-over-year to $25.7 million in the first half of fiscal 2021, up from $19.8 million in the prior year. The increase was primarily driven by SaaS.
- SaaS subscription bookingsi increased 85% to $5.1 million in the first six months of fiscal 2021 compared to $2.7 million in the first half of fiscal 2020.
- Professional services revenue was up 15% to $23.0 million the first half of fiscal 2021 compared to $19.9 million in the prior year period. Professional services bookings were up 50% to $25.6 million in the first half of fiscal 2021 compared to $17.1 million in the same period last year.
- Revenue for the first six months of fiscal 2021 was $58.8 million, up 17% from $50.3 million reported in the previous fiscal year period.
- Total gross profit increased to $29.5 million, up $4.9 million or 20% in the first six months of fiscal 2021 compared to $24.6 million in the same prior year period.
- Total gross profit margin increased slightly to 50% compared to 49% reported for the first half of fiscal 2020.
- Net profit for the first six months of fiscal 2021 was $3.3 million, or $0.23 per share, compared to a profit $1.1 million or $0.09 per share, for the same period in fiscal 2020.
- Adjusted EBITDAii for the first six months of fiscal 2021 was $8.3 million, up 47% compared to $5.7 million reported for the same period in fiscal 2020.
On December 2nd, 2020, the Company declared a quarterly dividend of $0.065 per share payable on January 8, 2021 to shareholders of record at the close of business on December 17, 2020.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
Second Quarter Fiscal 2021 Results Conference Call
Date: December 3, 2020
Time: 8:30am EST
Phone number: (800) 931 6427 or (416) 981 0157
The call can be replayed until December 10, 2020 by calling:
(800) 558 5253 or (416) 626 4100 (access code: 21972640)
Tecsys is a global provider of supply chain solutions that equip the borderless enterprise for growth. Organizations thrive when they have the software, technology and expertise to drive operational greatness and deliver on their brand promise. Spanning healthcare, retail, service parts, third-party logistics, and general wholesale high-volume distribution industries, Tecsys delivers dynamic and powerful solutions for 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 Toronto Stock Exchange under the ticker symbol TCS. For more information on Tecsys, visit www.tecsys.com.
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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 annual information form for the fiscal year ended April 30, 2020. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR (www.sedar.com).
Copyright © Tecsys Inc. 2020. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.
i See Key Performance Indicators in Management’s Discussion and Analysis of the Q2 2021 Financial Statements.
ii See Non-IFRS Performance Measures in Management’s Discussion and Analysis of the Q2 2021 Financial Statements.