Tecsys Inc. · TSX:TCS
Tecsys — Q4 2023 Earnings Presentation
23 slides from Tecsys's earnings presentation, July 2023
Slide 1: Investor Presentation Q4 2023
Investor Presentation Q4 2023 Committed to a Connected World
Slide 2: Safe Harbour
Safe Harbour The statements in this presentation 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
Slide 3: Our story is all about our customers
Our story is all about our customers Our Purpose: To empower good companies to be great. Our Position: To clarify uncertainty in the supply chain. Our Mission: To equip supply chain greatness. Our Vision: That good companies have the space to thrive. 3
Slide 4: Visionary provider of supply chain technology for the world's most complex supply networks
40 11 9 Years Times Customers of complex supply Tecsys named in Gartner's Tecsys is proud to have nine network experience Magic Quadrant for WMS customers, two with and promoted to Masters recognition, on Challenger in 2022 Gartner’s Healthcare Supply Chain Top 25 for 2022 Visionary provider of supp
Slide 5: Global Reach
Global Reach 40% $152M $78M 745 1,000+ Revenue** Annual Recurring SaaS Revenue Employees*** Customers 69% U.S. Revenue*** Growth* 18% Canada 13% ROW (primarily Europe) * Constant currency growth in Q4 vs. same period last year based on April 30, 2023 exchange rates 5 ** Last twelve months, April 30,
Slide 6: End-to-end Integrated Supply Chain Management Solutions
End-to-end Integrated Supply Chain Management Solutions SUPPLIERS PARTNERS CUSTOMERS ENTERPRISE SYSTEMS Collaboration E-Commerce Demand Procurement Warehouse Transportation Planning & Inventory Point of Use Financial Management 3RD Party Billing ANALYTICS Healthcare – Distribution – Retail – 3PL 6
Slide 7: Tecsys Momentum
$152 Tecsys Momentum $137 $123 Total Revenue (in $ million) $105 $76 $25.58* TSX:TSE $15.40 2019 2020 2021 2022 2023 TSX30™ New CHRO New New CRO Partner COVID-19 Organic New IT Sec CMO Ecosystem Growth Leadership Promoted to Challenger New R&D New Global in Gartner WMS Quadrant Leadership Alliances
Slide 8: SaaS Growth Driving Increase in Recurring Revenue
SaaS Growth Driving Increase in Recurring Revenue in $CAD millions $70.2 $59.6 $52.9 39% $37.5 $41.1 $26.9 41% $19.2 $9.0 $32.1 $33.7 $32.7 $32.7 FY 2020 FY 2021 FY 2022 FY 2023 Maintenance and Support Revenue SaaS Revenue % SaaS Revenue growth YoY 8
Slide 9: Key Markets
Key Markets Converging Complex Distribution Healthcare Percentage of Annual Recurring Revenue 46% 54% Solutions Built on Experience: Delivering end-to-end solutions with technology & services tailored to key industries 9
Slide 10: Healthcare Supply Chains are Stressed
Healthcare Supply Chains are Stressed Point of Use breakdowns Standardization across Volume fluctuations networks IDNs struggling Extraordinary pressure on supply chain to deliver Result: Healthcare supply chains need solutions urgently Opportunity: Tecsys is considered the LEADER in solvi
Slide 11: Healthcare Market Opportunity
Healthcare Market Opportunity Becoming Dominant in U.S. Health Systems Market – The $1B ARR* Opportunity Health Systems Base Account Market Share Penetration 21% 18% 300 ARR Opportunity: $1B ARR Opportunity with Current Base: Target Health Systems 82% $175M 79% Market Opportunity Current Share Marke
Slide 12: Brand Owner/Retail Convergence Drives Opportunity in Complex Distribution
Brand Owner/Retail Convergence Drives Opportunity in Complex Distribution Seismic shift happening Businesses/trading in retail partners expect the same Consumers demand Extraordinary pressure on products faster supply chain to deliver Result: Supply Chain Management needs urgent upgrade to h
Slide 13: Distribution Convergence Market Opportunity
Distribution Convergence Market Opportunity –$6B Industries: High-volume distribution/wholesalers of hard goods in these specific verticals: General hard goods – agricultural equipment, auto parts, computer equipment, construction materials, consumer packaged goods, electrical & electronics, fulfill
Slide 14: Partner Ecosystem - Accelerate Growth
Partner Ecosystem - Accelerate Growth Technology Alliances Advisory & Service Alliances e.g., Workday, Microsoft, AWS, IBM, e.g., RiseNow, Huron, Valtech, Avalon, Zebra Technologies, Terso Solutions Bricz, Sequoia, Six Peaks • Synergistic Solutions • Synergistic Services • Market Reach • Aligned Ver
Slide 15: Building Annual Recurring Revenue (ARR)
Building Annual Recurring Revenue (ARR*) Amounts in April 30, 2023 constant in $CAD Millions $90 46% $80 $78 $70 $65 of ARR is Healthcare $60 $56 $50 $47 54% Complex Distribution $40 $38 (3PL, Retail, Distributors) $30 $20 19% YoY constant currency $10 growth FY23 $0 2019 2020 2021 2022 2023 15 *Ref
Slide 16: Annual Recurring Revenue Net Retention Rate
Annual Recurring Revenue Net Retention Rate 115% 113% 110% 108% 107% 106% 113% 105% 100% LTM Fiscal 2023 Recurring Revenue Net Retention Rate 95% 90% Net Retention = (Existing customer expansion less churn) divided by Beginning 85% period ARR 80% 2020 2021 2022 2023 16
Slide 17: SaaS Remaining Performance Obligation (RPO)
SaaS Remaining Performance Obligation (RPO) in $CAD millions FY23 SaaS RPO Growth: 47% $160 $138 $140 $120 $100 $94 April 30, 2023 SaaS RPO: $80 $66 $60 $52 $138 million $40 $20 $15 $0 $0 2018 2019 2020 2021 2022 2023 17
Slide 18: Sales & Marketing – Creating Recurring Margin and Value
Sales & Marketing – Creating Recurring Margin and Value LTV to CAC LTV and CAC (in $ CAD millions) 28.1 LTM Apr 30, 2023 LTM Apr 30, 2023 4.4 123.0 6.3 Q1 FY23 Q1 FY23 4.7 29.3 6.7 Q2 FY23 3.1 Q2 FY23 21.0 7.3 Q3 FY23 5.9 Q3 FY23 43.5 Q4 FY23 7.8 3.8 Q4 FY23 29.3 CAC LTV We measure sales & marketing
Slide 19: Projected SaaS Margin Expansion
Projected* SaaS Margin Expansion Combined services margins include SaaS, maintenance and support (including hosting) and professional services. Previously sub-scale SaaS business at an inflection point. *Projection assumes: 30% YoY SaaS Bookings growth, incremental SaaS deals with 75% margins
Slide 20: Corporate Information
Corporate Information
Slide 21: Financial Highlights
Financial Highlights in $CAD millions except EPS Q4 2023 Q4 2022 Δ YoY Q4 2023 TTM Q4 2022 TTM Δ YoY $ % $ % $ % $ % $ % $ % Total Revenue $41,192 100% $34,288 100% $6,904 20% $152,424 100% $137,200 100% $15,224 11% Total Revenue Excluding Hardware $34,268 83% $29,170 85% $5,098 17% $128,659 84% $11
Slide 22: Corporate Overview
Corporate Overview $373M 29¢ 19% Market Cap** Symbol TCS Dividend per Year* Insider Ownership** 14.6M S/O Bank of Montreal Brokerage Cormark Securities National Bank Coverage Raymond James Stifel/GMP * Last twelve months, April 30, 2023 22 ** At April 28, 2023
Slide 23: Reasons to Invest
Reasons to Invest $1B $6B 2.21x Cloud- ARR ARR ARR SaaS NTM based Growth TAM TAM EV/sales Operates a single Greenfield Disruptor SaaS bookings LTM April 30, Trading at 2.21x cloud-based opportunity in opportunity in representing 95% 2023 ARR YoY NTM EV/sales, a platform that healthcare with complex