Tecsys Reports Financial Results for the Second Quarter of Fiscal 2026

SaaS Revenue Up 22%, Record Adjusted EBITDAⁱ Up 71%

MONTREAL, Dec. 3, 2025 /CNW/ -- Tecsys Inc. (TSX: TCS), an industry-leading supply chain management SaaS company, today announced its results for the second quarter of fiscal 2026, ended October 31, 2025. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards (IFRS).

"We are pleased with our second quarter performance, achieving record total revenue, record SaaS revenue and record Adjusted EBITDA – which was up 71% over the same period last year," said Peter Brereton, president and CEO of Tecsys. "While facing headwinds from the U.S. healthcare policy environment and government shutdown, as well as uncertainty created by shifting tariffs, we believe these results demonstrate our disciplined execution and the scalability of our business. This quarter we also made Elite™ available on AWS Marketplace, giving customers a faster, trusted way to buy and deploy our technology."

Mark Bentler, chief financial officer, added: "On top of our solid SaaS revenue growth, up 22% compared to the second quarter last year, we hit a new record for professional services revenue which grew 20% compared to the same quarter last year amid continuing robust implementation activity in the quarter. While this demonstrates our ability to drive significant margins, we expect a moderation of professional services revenue in the coming quarter based on backlog levels as well as seasonality. For that reason and based on our first-half performance and visibility for remainder of the fiscal year, we are maintaining our full fiscal 2026 guidance for total revenue growth, SaaS revenue growth and Adjusted EBITDA margin." 

Second Quarter Highlights:

• SaaS revenue increased by 22% to $19.7 million, up from $16.1 million in Q2 2025.
• SaaS ARRⁱⁱ increased by 16% to $81.1 million on October 31, 2025 compared to $69.8 million on October 31, 2024.
• SaaS Remaining Performance Obligation (RPOⁱⁱ) increased by 18% to $240.4 million at October 31, 2025, up from $203.8 million at the same time last year.
• Total revenue increased to a record $48.6 million compared to $42.4 million in Q2 2025.
• Net profit was $1.8 million ($0.12 per basic and fully diluted share) in Q2 2026 compared to a net profit of $0.8 million ($0.05 per basic and fully diluted share) for the same period in Q2 2025.
• Adjusted EBITDAⁱ was $5.0 million compared to $2.9 million reported in Q2 last year.
• In the second quarter of fiscal 2026, Tecsys acquired 79,714 of its outstanding common shares for approximately $2.8 million as part of its ongoing Normal Course Issuer Bid, compared to 51,600 common shares acquired in the same period last year for approximately $2.1 million.

Year-to-date performance for first half of fiscal 2026:

• SaaS revenue increased by 23% to $38.8 million, up from $31.4 million in the same period last year.
• Total revenue increased to $94.6 million compared to $84.7 million in the same period last year.
• Net profit was $2.5 million ($0.17 per basic and fully diluted share) in the first half of fiscal 2026 compared to a net profit of $1.6 million ($0.11 per basic share or $0.10 per fully diluted share) for the same period in fiscal 2025.
• Adjusted EBITDAⁱ was $8.3 million compared to $5.5 million reported in the same period of fiscal 2025.
• In the first half of fiscal 2026, Tecsys acquired 101,014 of its outstanding common shares for approximately $3.6 million as part of its ongoing Normal Course Issuer Bid, compared to 111,200 common shares acquired in the same period last year for approximately $4.3 million.

Financial Guidance:

Tecsys is maintaining full fiscal year financial guidance as follows:

	FY26 Guidance
Total Revenue Growth	8-10%
SaaS Revenue Growth	20-22%
Adjusted EBITDA^i Margin	8-9%

On December 3, 2025, the Company declared a quarterly dividend of $0.09 per share to be paid on January 6, 2026 to shareholders of record on December 17, 2025.

Pursuant to the Canadian Income Tax Act, dividends paid by the Company to Canadian residents are considered to be "eligible" dividends.

Q2 2026 Financial Results Conference Call
Date: December 4, 2025
Time: 8:30 a.m. ET
Phone number: 800-836-8184 or 646-357-8785
The call can be replayed until December 11, 2025, by calling:
888-660-6345 or 646-517-4150 (access code: 34855#)

ⁱ See Non-IFRS Performance Measures in Management's Discussion and Analysis of the Q2 2026 Interim Financial Statements.

ⁱⁱ See Key Performance Indicators in Management's Discussion and Analysis of the Q2 2026 Interim Financial Statements.

About Tecsys

Tecsys is a global provider of advanced supply chain solutions. With a commitment to innovation and customer success, the company equips organizations with the essential software, technology and expertise needed for operational excellence and competitive advantage. Its cloud solutions serve a diverse range of industries, including healthcare, distribution and converging commerce, across multiple complex, regulated and high-volume markets. Built on the Itopia® low-code application platform, Tecsys' offerings include enterprise resource planning, warehouse management, consolidated service management, distribution and transportation management, supply management at the point of use and order management solutions. Tecsys provides critical data insights and control across the supply chain, ensuring that organizations are agile, responsive and scalable. Tecsys is publicly traded on the Toronto Stock Exchange under the ticker symbol TCS. For more about Tecsys and its solutions, please visit www.tecsys.com.

Forward Looking Statements

The statements in this news release relating to matters that are not historical fact are forward-looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance and are subject to a number of uncertainties, including but not limited to future economic conditions, the markets that Tecsys Inc. serves, the actions of competitors, major new technological trends, and other factors beyond the control of Tecsys Inc., which could cause actual results to differ materially from such statements. More information about the risks and uncertainties associated with Tecsys Inc.'s business can be found in the MD&A section of the Company's annual report and the most recently filed annual information form. These documents have been filed with the Canadian securities commissions and are available on our website (www.tecsys.com) and on SEDAR+ (www.sedarplus.ca).

Copyright © Tecsys Inc. 2025. All names, trademarks, products, and services mentioned are registered or unregistered trademarks of their respective owners.

Non-IFRS Measures

Reconciliation of EBITDA and Adjusted EBITDA

EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before stock-based compensation and restructuring costs. The exclusion of interest expense, interest income, income taxes and restructuring costs eliminates the impact on earnings derived from non-operational activities and non-recurring items, and the exclusion of depreciation, amortization and stock-based compensation eliminates the non-cash impact of these items.

The Company believes that these measures are useful measures of financial performance without the variation caused by the impacts of the items described above and that could potentially distort the analysis of trends in our operating performance. In addition, they are commonly used by investors and analysts to measure a company's performance, its ability to service debt and to meet other payment obligations, or as a common valuation measurement. Excluding these items does not imply that they are necessarily non-recurring. Management believes these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company's operating results, underlying performance and future prospects in a manner similar to management. Although EBITDA and Adjusted EBITDA are frequently used by securities analysts, lenders and others in their evaluation of companies, they have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the Company's results as reported under IFRS.

The reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable IFRS measure is provided below.

	Three Months Ended October 31,				Six Months Ended October 31,				Trailing 12 Months Ended October 31,
(in thousands of CAD)		2025		2024		2025		2024		2025		2024
Net profit	$	1,766	$	758	$	2,528	$	1,556	$	5,431	$	2,574
Adjustments for:
Depreciation of property and equipment and right-of-use assets		332		377		661		748		1,386		1,464
Amortization of deferred development costs		281		198		562		395		936		689
Amortization of other intangible assets		529		328		1,072		662		1,714		1,365
Interest expense		7		24		18		49		51		121
Interest income		(98)		(163)		(219)		(380)		(480)		(873)
Income taxes		1,150		427		1,775		863		3,888		726
EBITDA	$	3,967	$	1,949	$	6,397	$	3,893	$	12,926	$	6,066
Adjustments for:
Stock based compensation		1,073		993		1,857		1,640		3,168		2,765
Restructuring costs		-		-		-		-		-		2,122
Adjusted EBITDA^i	$	5,040	$	2,942	$	8,254	$	5,533	$	16,094	$	10,953

Condensed Interim Consolidated Statements of Financial Position (Unaudited) (In thousands of Canadian dollars)
		October 31, 2025		April 30, 2025
Assets
Current assets
Cash and cash equivalents	$	18,560	$	27,580
Short-term investments		11,908		11,712
Accounts receivable		23,103		23,943
Work in progress		6,249		7,436
Other receivables		609		274
Tax credits		8,788		6,390
Inventory		1,901		1,870
Prepaid expenses and other		9,470		10,699
Total current assets		80,588		89,904
Non-current assets
Other long-term receivables and assets		927		1,457
Tax credits		7,265		6,120
Property and equipment		1,753		1,164
Right-of-use assets		201		836
Contract acquisition costs		4,279		5,017
Deferred development costs		4,199		3,838
Other intangible assets		8,481		6,726
Goodwill		18,021		17,827
Deferred tax assets		7,998		7,521
Total non-current assets		53,124		50,506
Total assets	$	133,712	$	140,410
Liabilities
Current liabilities
Accounts payable and accrued liabilities		21,175		22,367
Deferred revenue		42,824		45,025
Lease obligations		315		590
Total current liabilities		64,314		67,982
Non-current liabilities
Other long-term accrued liabilities		906		33
Deferred tax liabilities		202		405
Lease obligations		122		728
Total non-current liabilities		1,230		1,166
Total liabilities	$	65,544	$	69,148
Equity
Share capital	$	57,624	$	57,573
Contributed surplus		3,294		4,755
Retained earnings		7,711		7,700
Accumulated other comprehensive (loss) income		(461)		1,234
Total equity attributable to the owners of the Company		68,168		71,262
Total liabilities and equity	$	133,712	$	140,410

Condensed Interim Consolidated Statements of Income and Comprehensive Income (Unaudited) (In thousands of Canadian dollars, except per share data)
	Three Months Ended October 31,				Six Months Ended October 31,
		2025		2024		2025		2024
Revenue:
SaaS	$	19,654	$	16,130	$	38,793	$	31,444
Maintenance and Support		7,702		7,703		15,559		16,418
Professional Services		17,000		14,145		33,039		27,532
License		93		444		182		1,305
Hardware		4,192		4,020		7,028		8,019
Total revenue		48,641		42,442		94,601		84,718
Cost of revenue		23,287		21,994		45,679		44,542
Gross profit		25,354		20,448		48,922		40,176
Operating expenses:
Sales and marketing		9,908		9,052		20,224		17,404
General and administration		4,022		3,199		7,407		6,177
Research and development, net of tax credits		8,695		7,205		17,199		14,536
Total operating expenses		22,625		19,456		44,830		38,117
Profit from operations		2,729		992		4,092		2,059
Other income		187		193		211		360
Profit before income taxes		2,916		1,185		4,303		2,419
Income tax expense		1,150		427		1,775		863
Net profit	$	1,766	$	758	$	2,528	$	1,556
Other comprehensive (loss) income:
Effective portion of changes in fair value on designated revenue hedges, net of tax		(1,221)		(513)		(1,968)		(533)
Exchange differences on translation of foreign operations		276		165		273		322
Comprehensive income	$	821	$	410	$	833	$	1,345
Basic earnings per common share	$	0.12	$	0.05	$	0.17	$	0.11
Diluted earnings per common share	$	0.12	$	0.05	$	0.17	$	0.10

Condensed Interim Consolidated Statements of Cash Flows (Unaudited) (In thousands of Canadian dollars)
	Three Months Ended October 31,				Six Months Ended October 31,
		2025		2024		2025		2024
Cash flows from operating activities:
Net profit	$	1,766	$	758	$	2,528	$	1,556
Adjustments for:
Depreciation of property and equipment and right-of-use-assets		332		377		661		748
Amortization of deferred development costs		281		198		562		395
Amortization of other intangible assets		529		328		1,072		662
Interest (income) expense and foreign exchange (gain)		(187)		(193)		(211)		(360)
Unrealized foreign exchange and other		184		206		(11)		83
Non-refundable tax credits		(630)		(505)		(1,146)		(934)
Stock-based compensation		1,073		993		1,857		1,640
Income taxes		620		184		1,240		187
Net cash from operating activities excluding changes in non-cash working capital items related to operations		3,968		2,346		6,552		3,977
Accounts receivable		(1,810)		(2,132)		943		302
Work in progress		(174)		2,245		1,207		(241)
Other receivables and assets		61		84		(519)		(436)
Tax credits		(1,422)		(1,325)		(2,397)		(2,359)
Inventory		160		(40)		(30)		(754)
Prepaid expenses		652		60		1,258		963
Contract acquisition costs		455		119		719		80
Accounts payable and accrued liabilities		2,212		1,119		(3,740)		(2,000)
Deferred revenue		1,708		3,652		(2,840)		691
Changes in non-cash working capital items related to operations		1,842		3,782		(5,399)		(3,754)
Net cash provided by operating activities		5,810		6,128		1,153		223
Cash flows from financing activities:
Payment of lease obligations		(214)		(204)		(431)		(402)
Payment of dividends		(2,517)		(2,368)		(2,517)		(2,368)
Interest paid		(7)		(24)		(18)		(49)
Issuance of common shares on exercise of stock options		-		320		350		597
Shares repurchased and cancelled		(2,789)		(2,101)		(3,617)		(4,312)
Net cash used in financing activities		(5,527)		(4,377)		(6,233)		(6,534)
Cash flows from investing activities:
Interest received		1		3		23		27
Transfers from short-term investments		-		5,022		-		5,570
Acquisitions of property and equipment		(497)		(200)		(1,065)		(409)
Acquisition of intangible assets		-		-		(1,975)		-
Deferred development costs		(405)		(433)		(923)		(885)
Net cash (used in) provided by investing activities		(901)		4,392		(3,940)		4,303
Net (decrease) increase in cash and cash equivalents during the period		(618)		6,143		(9,020)		(2,008)
Cash and cash equivalents - beginning of period		19,178		10,705		27,580		18,856
Cash and cash equivalents - end of period	$	18,560	$	16,848	$	18,560	$	16,848

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited) (In thousands of Canadian dollars, except number of shares)
	Share capital
	Number		Amount		Contributed Surplus		Accumulated other comprehensive income (loss)		Retained earnings		Total
Balance, May 1, 2025	14,836,120	$	57,573	$	4,755	$	1,234	$	7,700	$	71,262
Net profit	-		-		-		-		2,528		2,528
Other comprehensive (loss) income:
Effective portion of changes in fair value on designated revenue hedges	-		-		-		(1,968)		-		(1,968)
Exchange difference on translation of foreign operations	-		-		-		273		-		273
Total comprehensive (loss) income	-		-		-		(1,695)		2,528		833
Shares repurchased and cancelled	(101,014)		(398)		(3,219)		-		-		(3,617)
Stock-based compensation	-		-		1,857		-		-		1,857
Dividends to equity owners	-		-		-		-		(2,517)		(2,517)
Share options exercised	12,615		449		(99)		-		-		350
Total transactions with owners of the Company	(88,399)	$	51	$	(1,461)	$	-	$	(2,517)	$	(3,927)
Balance, October 31, 2025	14,747,721	$	57,624	$	3,294	$	(461)	$	7,711	$	68,168
Balance, May 1, 2024	14,840,150	$	52,256	$	9,417	$	(1,425)	$	8,121	$	68,369
Net profit	-		-		-		-		1,556		1,556
Other comprehensive (loss) income:
Effective portion of changes in fair value on designated revenue hedges	-		-		-		(533)		-		(533)
Exchange difference on translation of foreign operations	-		-		-		322		-		322
Total comprehensive income	-		-		-		(211)		1,556		1,345
Shares repurchased and cancelled	(111,200)		(394)		(3,918)		-		-		(4,312)
Stock-based compensation	-		-		1,640		-		-		1,640
Dividends to equity owners	-		-		-		-		(2,368)		(2,368)
Share options exercised	23,899		766		(169)		-		-		597
Total transactions with owners of the Company	(87,301)	$	372	$	(2,447)	$	-	$	(2,368)	$	(4,443)
Balance, October 31, 2024	14,752,849	$	52,628	$	6,970	$	(1,636)	$	7,309	$	65,271

SOURCE Tecsys Inc.

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