Tecsys (TCS) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 revenue of $45.2M, driven by 22% SaaS revenue growth year-over-year and strong professional services performance.

• Year-to-date SaaS revenue grew 29% to $48.7M; SaaS now represents 56% of total revenue, with SaaS ARR up 35% year-over-year to $75.4M in Q3 FY25.

• Net profit for Q3 FY25 was $1.2M ($0.08/share diluted), up 57% year-over-year; adjusted EBITDA grew 34% to $3.5M.

• SaaS bookings diversified across markets and geographies, with RPO at $210.2M, up 34% year-over-year.

• Tecsys is positioned as a leader in healthcare and complex distribution supply chain solutions, with significant market opportunities in both sectors.

Financial highlights

• Q3 FY25 total revenue was $45.2M, up 3% year-over-year; SaaS revenue grew 22% to $17.3M.

• Gross profit for Q3 was $21.3M, with gross margin at 47.1%; nine-month gross margin was 47.3%.

• Adjusted EBITDA margin improved to 8% in Q3 FY25 from 6% a year ago; Q3 Adjusted EBITDA was $3.5M.

• EPS (diluted) was $0.08 in Q3; nine-month EPS was $0.18.

• SaaS backlog reached $210.2M, up 34% year-over-year.

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 Adjusted EBITDA margins expected at the lower end of guidance.

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

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

• Monitoring international trade tensions and Medicaid policy risks, but no material impact anticipated currently.