Tecsys (TCS) Q2 2025 earnings summary

Executive summary

• SaaS revenue grew 34% year-over-year in Q2 2025, reaching $16.1 million and now represents 38% of total revenue, up from 23% two years ago.

• Annual recurring revenue surpassed $100 million, and SaaS remaining performance obligations exceeded $200 million, up 39% year-over-year.

• Adjusted EBITDA rose to $2.9 million in Q2 2025, up from $1.0 million last year, and year-to-date Adjusted EBITDA increased to $5.5 million.

• Net profit for Q2 2025 was $0.8 million, compared to a net loss of $0.3 million in Q2 2024.

• Share buybacks totaled $2.1 million in Q2 2025, and a quarterly dividend of $0.085 per share was approved.

Financial highlights

• Total revenue for the first half of fiscal 2025 was $84.7 million, up 2% year-over-year; Q2 revenue was $42.4 million.

• Gross margin improved to 48% in Q2 2025 from 44% last year, driven by higher SaaS and professional services margins.

• Professional services revenue in Q2 was $14.1 million, up 10% year-over-year.

• Fully diluted EPS for Q2 2025 was $0.05, compared to a loss of $0.02 last year; year-to-date EPS was $0.10, up from $0.06.

• Cash and short-term investments stood at $28.3 million with no debt at quarter-end.

Outlook and guidance

• Fiscal 2025 SaaS revenue growth guidance maintained at 30%-32%.

• Adjusted EBITDA margin guidance for fiscal 2025 and 2026 remains at 8%-9% and 10%-11%, respectively.

• Fiscal 2025 total revenue guidance revised to roughly flat due to hardware unpredictability and evolving business model.

• SaaS margin targets for fiscal 2027 and 2028 raised to 70% and 75%, respectively, due to migration to modern cloud infrastructure.