Tecsys' Record Revenue Quarter: A SaaS Success Story

Tecsys Inc. (TSX: TCS), a global provider of advanced supply chain solutions, has reported record revenue for the third quarter of fiscal 2025, driven by strong growth in its SaaS business. The company's SaaS revenue increased by 22% to $17.3 million, up from $14.2 million in Q3 2024, while total revenue reached a record $45.2 million, compared to $43.8 million in the same period last year. Tecsys' Remaining Performance Obligation (RPO) also grew by 34% to $210.2 million, reflecting the company's ability to retain and expand its customer base.



Tecsys' success in the SaaS market can be attributed to several key factors:

1. Strong SaaS bookings growth: Tecsys has seen a significant increase in SaaS subscription bookings, which measure the value of new contracts signed on an annual recurring revenue (ARR) basis. In the third quarter of fiscal 2025, SaaS subscription bookings were $4.0 million, compared to $4.9 million in the same period last year, indicating a 3% increase year-over-year (YoY). This growth in bookings demonstrates the company's ability to attract new customers and expand existing relationships.
2. Expansion of existing customer relationships: Tecsys has been successful in growing its customer base and expanding its relationships with existing customers. This is evident in the 34% increase in SaaS Remaining Performance Obligation (RPO) to $210.2 million at January 31, 2025, up from $157.2 million at the same time last year. RPO represents the value of future revenue that Tecsys is expected to recognize from existing contracts, and its growth indicates that the company is effectively retaining and upselling to its customers.
3. New customer acquisitions: Tecsys has been successful in winning new customers, particularly in key sectors such as major health systems, healthcare 3PLs, and industrial distributors. This diversification in customer acquisition helps Tecsys maintain consistent growth and reduces the risk of relying on a single industry or customer segment.

Tecsys' acquisition of its outstanding common shares as part of its Normal Course Issuer Bid (NCB) has also contributed to the company's shareholder value and financial performance. By repurchasing its shares, Tecsys reduces the number of outstanding shares, which can lead to an increase in earnings per share (EPS) and potentially boost the company's stock price. 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 NCB. This acquisition is part of a larger trend, as Tecsys has been actively repurchasing its shares over time.

In conclusion, Tecsys' record revenue quarter, driven by strong SaaS growth, reflects the company's ability to attract new customers, expand existing relationships, and win new business in key sectors. With a strong SaaS bookings growth, increasing RPO, and a successful NCB, Tecsys is well-positioned to continue its growth trajectory and create shareholder value. As an investor, keeping an eye on Tecsys' progress and the broader SaaS market is essential for capitalizing on this exciting opportunity.