Tecsys (TCS) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 delivered strong SaaS revenue growth of 33% and bookings up 57% year-over-year, with total revenue rising 1% to $42.3 million, driven by healthcare and pharmacy sector expansion and broad participation across key verticals.

• Net profit decreased 32% to $0.8 million, and adjusted EBITDA fell 18% to $2.6 million, mainly due to higher operating expenses.

• SaaS now represents 36% of total revenue, with ARR up 24% to $96.9 million and RPO up 40% to $194.9 million, providing strong revenue visibility.

• Strategic hires, including a new Chief Strategy Officer, and board additions were made to drive SaaS and data initiatives, while company culture was recognized as a 2024 Great Place to Work.

• The company continues to focus on SaaS growth, recurring revenue, and backlog, with a strengthening partner ecosystem and ongoing product innovation.

Financial highlights

• SaaS revenue reached $15.3 million, up 33% year-over-year; SaaS bookings were $3.0 million, up 57%; total revenue was $42.3 million, a 1% increase year-over-year.

• Professional services revenue was $13.4 million, down 10% year-over-year, but bookings in this segment rose 25% to $17.2 million.

• Gross margin was 47% (up from 46%); combined SaaS, maintenance, support, and professional services margin was 49%.

• Net profit was $0.8 million, down from $1.2 million year-over-year; adjusted EBITDA was $2.6 million, down from $3.2 million.

• Cash and short-term investments totaled $27.1 million with no debt; share repurchases totaled $2.2 million in Q1.

Outlook and guidance

• Reiterated FY2025 guidance: total revenue growth of 7–9%, SaaS revenue growth of 30–32%, and adjusted EBITDA margin of 8–9%.

• FY2026 adjusted EBITDA margin guidance remains at 10–11%.

• Management expects total services revenue (SaaS, maintenance, support, professional services) of $38–39 million per quarter in the short term, supported by ARR and backlog.

• Strong sales pipeline, backlog, and continued investment in product innovation and data capabilities support confidence in achieving guidance.