Tecsys (TCS) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 revenue of $45.2M (CAD 45.2M), with SaaS revenue up 22% for the quarter and 29% year-to-date; SaaS now represents 56% of total revenue and $106M in annual recurring revenue.

• Net profit for Q3 was $1.2M ($0.08/share diluted), up from $0.8M ($0.05/share) in Q3 2024; adjusted EBITDA was $3.5M, up 34% year-over-year.

• SaaS bookings and backlog diversified across markets and geographies, with RPO reaching $210M, up 34% year-over-year.

• Strong business activity in healthcare, including new health system wins, major migration deals, and pharmacy solutions gaining traction.

• Partner ecosystem contributed to about a quarter of deals, expanding market reach and supporting growth in distribution and retail convergence markets.

Financial highlights

• Q3 SaaS revenue was $17.3M, up 22% year-over-year; professional services revenue reached $13.9M, up 7%; bookings hit a record $24.4M, up 170%.

• Gross margin improved to 47% in Q3, with gross profit at $21.3M; adjusted EBITDA margin was 8% in Q3, up from 6% a year ago.

• EPS (diluted) was $0.08, up 60% year-over-year; year-to-date adjusted EBITDA rose 33% to $9.1M.

• Year-to-date total revenue was $129.9M, up 2% (10% excluding hardware); SaaS backlog reached $210M.

• Cash and cash equivalents at January 31, 2025, were $21.0M, with no debt and strong liquidity.

Outlook and guidance

• FY25 SaaS revenue growth guidance maintained at 30%-32%; adjusted EBITDA margin guidance at 8%-9% for FY25 and 10%-11% for FY26.

• Total revenue growth guidance for FY25 raised to 1%-3% (from flat); full-year SaaS revenue and EBITDA margins expected at lower end of range due to booking timing.

• Projected SaaS margin expansion, with consolidated SaaS margin expected to reach 75% by FY28.

• Large addressable markets: $1.2B ARR in U.S. health systems and $6B ARR in complex distribution.

• Strong pipeline and continued investment in product and go-to-market strategy support long-term growth.