Eleventh consecutive quarter of record revenue; SaaS revenue up 28% year-over-year
Montreal, December 1, 2021— Tecsys Inc. (TSX: TCS), an industry-leading supply chain management SaaS company, today announced its results for the second quarter of fiscal year 2022, ended October 31, 2021. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).
Second Quarter Highlights:
- SaaS revenue increased by 28% to $6.6 million in Q2 2022, up from $5.1 million in Q2 2021.
- Annual Recurring Revenue (ARRi) at October 31, 2021 was up 12% to $56.9 million compared to $50.9 million at October 31, 2020.
- During Q2 2022, SaaS subscription bookingsi (measured on an ARRi basis) were $4.0 million, up 50% compared to $2.7 million in the second quarter of fiscal 2021.
- Professional services revenue was up 11% to $13.1 million in Q2 2022 compared to $11.8 million in Q2 2021.
- Total revenue was a record $34.3 million, 12% higher than $30.7 million reported for Q2 2021.
- Gross margin was 45% compared to 52% in the prior year quarter, negatively impacted by a weaker US dollar, investment in our key growth initiatives and revenue mix. Total gross profit decreased to $15.5 million, down 3% from $16.0 million in Q2 2021.
- Operating expenses increased to $13.9 million, higher by $1.3 million or 11% compared to $12.6 million in Q2 fiscal 2021 with continuing investment in sales and marketing as well as research and development.
- Profit from operations in Q2 2022 was $1.6 million, down from $3.5 million in Q2 2021.
- Net profit was $0.7 million or $0.05 per share on a fully diluted basis in Q2 2022 compared to a net profit of $2.1 million or $0.14 per share on a fully diluted basis for the same period in fiscal 2021.
- Adjusted EBITDAii was $3.2 million in Q2 2022, down 34% compared to $4.8 million reported in Q2 2021.
“We continue our momentum into yet another quarter of record revenue and solid sequential and year-over-year growth. We are supporting that performance with excellent strides in building out our sales team, strengthening our delivery capacity, investing in our platform, and developing our pipeline,” said Peter Brereton, president and CEO of Tecsys, Inc. “Our three target verticals are all performing or outperforming expectations, with notable wins in healthcare with three new major hospital networks, and an expanding customer base in global retail and our distribution market. We are confident that we are favorably positioned as the heightened focus on supply chains turns into greater investment in supply chain agility and the specialized technologies that underpin it.”
Mark Bentler, chief financial officer of Tecsys Inc., added, “We are pleased with another quarter of solid revenue growth in spite of significant foreign currency headwinds. On a constant currency basis, our second quarter fiscal 2022 revenue grew by about 18% compared to the same period last year, with SaaS revenue once again being a key driver. Currency fluctuations knocked about $2 million off of revenue and $1.5 million off of adjusted EBITDA compared to the same quarter last year. Considering the general trajectory of our SaaS revenue, within a few quarters we are likely to see SaaS revenue overtaking maintenance and support as our leading source of recurring revenue.”
Year-to-date performance for first half of fiscal 2022:
- SaaS revenue increased by 36% to $12.2 million in the first half of fiscal 2022, up from $9.0 million the same period of fiscal 2021.
- SaaS subscription bookingsi (measured on an ARRi basis) were $5.1 million for both the first half of fiscal 2022 and 2021.
- Professional services revenue was up 14% to $26.2 million in the first half of fiscal 2022 compared to $23.0 million in the same period of fiscal 2021.
- Total revenue was a record $67.5 million, 15% higher than $58.8 million reported for the same period of fiscal 2021.
- Gross margin was 44% compared to 50% in the same period of fiscal 2021, negatively impacted by a weaker US dollar, investment in our key growth initiatives and revenue mix.
- Total gross profit increased to $29.9 million, up 2% from $29.5 million in the same period fiscal 2021.
- Operating expenses increased to $27.2 million, higher by $3.2 million or 13% compared to $24.0 million in the same period of fiscal 2021 with continuing investment in sales and marketing as well as research and development.
- Profit from operations in the first half of fiscal 2022 was $2.7 million, down from $5.4 million in the same period of fiscal 2021.
- Net profit was $1.0 million or $0.06 per share on a fully diluted basis in the first half of fiscal 2022 compared to a net profit of $3.3 million or $0.23 per share on a fully diluted basis for the same period in fiscal 2021.
- Adjusted EBITDAii was $5.7 million in the first half of fiscal 2022, down 32% compared to $8.3 million reported in the same period in fiscal 2021.
On December 1, 2021, the Company’s Board of Directors declared a quarterly dividend of $0.07 per share to be paid on January 7, 2022 to shareholders of record on December 16, 2021.
Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be “eligible” dividends.
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Second Quarter of Fiscal 2022 Results Conference Call
Date: December 2, 2021
Time: 8:30 a.m. EST
Phone number: (800) 582-4087 or (416) 981-9018
The call can be replayed until December 9, 2021 by calling:
(800) 558-5253 or (416) 626-4100 (access code: 21999394).
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.
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, 2021. 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. 2021. 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 2022 Financial Statements.
ii See Non-IFRS Performance Measures in Management’s Discussion and Analysis of the Q2 2022 Financial Statements.