Tecsys (TCS) Q1 2026 earnings summary

Executive summary

• SaaS revenue grew 25% year-over-year to $19.1 million in Q1 FY2026, driving total revenue of $46 million, up 9% from last year.

• Adjusted EBITDA rose 24% to $3.2 million, with net profit steady at $0.8 million ($0.05 per share).

• Professional services revenue increased 20% to $16 million amid robust implementation activity.

• Major new customer wins included a leading biomedical brand, with continued growth in healthcare and pharmacy segments and expansion in Bangalore.

• Investments in innovation (Tecsys IQ, generative AI), India operations, and leadership appointments are accelerating product delivery and market differentiation.

Financial highlights

• SaaS ARR increased 21% year-over-year to $79.3 million; total ARR reached $107.8 million.

• SaaS RPO grew 16% to $226.3 million; SaaS net retention rate at 105%.

• Gross margin improved to 51% from 47% last year, with gross profit at $23.6 million.

• EPS remained steady at $0.05; trailing twelve months EPS at $0.30, up 200% year-over-year.

• Cash and short-term investments totaled $31 million; cash and cash equivalents at $19.2 million at quarter-end.

Outlook and guidance

• Fiscal 2026 guidance maintained: SaaS revenue growth of 20%-22%, total revenue growth of 8%-10%, adjusted EBITDA margin of 8%-9%.

• Projected SaaS margin expansion, with consolidated SaaS margin expected to reach 75% by FY2028.

• SaaS pipeline remains strong, especially in pharmacy and general distribution markets.

• Majority of SaaS growth expected from new accounts and expansions, with maintenance ARR migration slowing.

• Continued investment in product development, AI-driven solutions, and market leadership in healthcare supply chain.