Tecsys Q1 Earnings Call Highlights

Key Points

• Record Q1 performance: Tecsys’ revenue rose 9% year over year to C$50 million, while adjusted EBITDA more than doubled to C$6.9 million and net profit increased 306% to C$3.1 million.
• Healthcare-led expansion drove bookings: Existing customers, particularly healthcare organizations such as Prisma Health and UT Southwestern, expanded their Tecsys deployments. SaaS revenue grew 18%, Elite SaaS revenue rose 24%, and remaining performance obligations surpassed C$250 million.
• Fiscal 2027 guidance was raised: Tecsys increased its expected growth ranges for Elite SaaS, total SaaS and overall revenue, while lifting its adjusted EBITDA margin outlook to 11%–14%, supported by early SaaS bookings, pipeline strength and hardware demand.

Tecsys TSE: TCS opened fiscal 2027 with record first-quarter revenue, record adjusted EBITDA and what Chief Executive Officer Peter Brereton described as the company’s second-highest bookings quarter ever, led primarily by expansions among existing healthcare customers.

For the quarter ended July 31, 2026, total revenue rose 9% year over year to C$50 million, or 8% on a constant-currency basis. Net profit increased 306% to C$3.1 million, or C$0.21 per diluted share, from C$0.8 million a year earlier. Adjusted EBITDA more than doubled to C$6.9 million from C$3.2 million.

“Q1 delivered record bookings, in fact, the second highest bookings quarter Tecsys has ever recorded,” Brereton said. “The story this quarter was expansion.”

Healthcare expansions lead bookings

Brereton said existing users of Tecsys’ Elite platform, particularly healthcare organizations, expanded their deployments during the quarter. He cited Prisma Health, UT Southwestern Medical Center and a leading cancer treatment center as health systems that increased their relationships with the company.

At Prisma Health, South Carolina’s largest private nonprofit health system, Tecsys’ expansion moved beyond earlier warehouse and pharmacy inventory deployments to include hospital point-of-use technology across its network. Brereton said the deployment is intended to provide greater visibility for clinical and supply-chain teams supporting 1.6 million patients annually across 19 hospitals.

While healthcare was the principal source of expansion activity, Tecsys also reported SaaS migrations among general-distribution customers, including Rinchem, as well as a new European life-sciences customer.

During the question-and-answer session, Brereton said first-quarter bookings were “heavily slanted towards expansions.” New-account bookings were light, which he characterized as typical for the company’s summer quarter, while bookings from migrations of legacy on-premise customers have diminished as more of that customer base has already moved to SaaS.

He said more than 90% of pipeline activity is now split relatively evenly between new-account opportunities and expansions among existing SaaS customers, with migrations representing a smaller component.

SaaS growth and contract backlog accelerate

Total SaaS revenue rose 18% to C$22.7 million from C$19.1 million in the prior-year quarter, or 17% in constant currency. Elite SaaS revenue, the company’s core product offering, grew 24%, or 23% on a constant-currency basis.

Total SaaS annual recurring revenue reached C$93.7 million at quarter-end, up 18% year over year. Tecsys separately disclosed Elite SaaS ARR of C$89.6 million, up 24% from a year earlier, or 22% in constant currency.

Remaining performance obligations, a measure of contracted future revenue, reached C$259.2 million, surpassing C$250 million for the first time. The figure was up 14% year over year, or 13% in constant currency.

Brereton said the expansion activity reflected customers’ increasing use of TecsysIQ, the company’s data and AI capabilities. He said customers need broader deployment of Tecsys’ underlying platform to provide data for the AI engine, and that Tecsys is not seeing customers purchase its latest platform without TecsysIQ.

The company is developing additional AI features, including expanded labor-management capabilities within its warehouse management system. Brereton also said Tecsys continued advancing its FedRAMP certification process and expects full certification by late winter or early spring, assuming the audit process proceeds as anticipated.

Guidance raised after earlier-than-expected bookings

Chief Financial Officer Mark Bentler said Tecsys raised its fiscal 2027 outlook based on strong Elite SaaS bookings, pipeline strength and robust hardware bookings. The company now expects:

• Elite SaaS revenue growth of 21% to 23%, up from prior guidance of 18% to 20%.
• Total SaaS revenue growth of 16% to 18%, up from 13% to 15%.
• Total revenue growth of 5% to 8%, up from 2% to 4%.
• Adjusted EBITDA margin of 11% to 14%, compared with prior guidance of 11% to 13%.

Bentler said a portion of SaaS bookings that management had expected later in the fiscal year closed earlier than anticipated, increasing the amount of revenue that can be recognized during the year. He also pointed to substantial hardware bookings late in the first quarter and early in the second quarter, for which the company has visibility into delivery timing.

Despite the strong first-quarter adjusted EBITDA margin of 13.7%, near the upper end of the revised guidance range, Bentler said Tecsys expects to increase investment through hiring across several functional areas during the remainder of the fiscal year.

Professional-services bookings were lighter during the quarter, reducing the related backlog. Bentler said professional-services revenue is expected to decline slightly sequentially in the second quarter, though he noted such demand often follows SaaS bookings with a timing lag as customers proceed with deployment planning. Brereton said several statements of work and project charters were being finalized and could replenish that backlog in the near term.

Tecsys ended the quarter with C$35 million in cash and short-term investments and no debt. The company repurchased 17,400 shares for about C$0.6 million under its normal course issuer bid, and its board approved a quarterly dividend of C$0.09 per share.

About Tecsys (TSE:TCS)

Tecsys is trusted by mission-critical organizations in healthcare and distribution to build resilient, efficient and secure supply chains. A global provider of cloud-based, AI-driven software with deep domain expertise, Tecsys delivers real-time operational visibility and execution across critical workflows when performance and reliability matter most. Tecsys is publicly traded on the Toronto Stock Exchange (TCS). For more information, visit www.tecsys.com.

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