Tecsys Inc. · TSX:TCS
Tecsys — Q2 2024 Earnings Presentation
24 slides from Tecsys's earnings presentation, December 2023
Slide 1: Investor Presentation Q2 FY2024
Investor Presentation Q2 FY2024 40 YEARS OF GROWTH
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: Tecsys at a Glance
Tecsys at a Glance Our Purpose: Our Position: Our Mission: Our Vision: To empower To clarify To equip supply That good good companies uncertainty in the chain greatness companies have to be great supply chain the space to thrive Our story is all about our customers 3
Slide 4: Trusted provider of supply chain technology for the world's most complex supply networks
12 Times Top 2 40 Years Tecsys named in Eight customers, two with Masters of complex Gartner's Magic recognition, on supply network Quadrant for WMS and Gartner’s Healthcare experience positioned as Supply Chain Top 25 Challenger since 2022 for 2022 Trusted provider of supply chain technology for th
Slide 5: Company history and milestones
SCM IPO POU SAAS REVENUE CHALLENGER Launches SCM Becomes a public Enters Clinical In October 2018, Reaches $100 million Positioned as Challenger in the platform company traded on TSX POU market sells the first Elite™ milestone, doubling annual Gartner® Magic Quadrant for SaaS deal revenue in five ye
Slide 6: Global Reach and Financial Strength
Global Reach and Financial Strength 1,000+ 34% $164M $85M 763 Customers SaaS Revenue Revenue** Annual Recurring Employees*** Growth* 72% USA Revenue*** 16% Canada 12% ROW (primarily Europe) * Constant currency growth in Q2 FY24 vs. same period last year based on October 31, 2023 exchange rates ** La
Slide 7: End-to-end Integrated Supply Chain Management Solutions
End-to-end Integrated Supply Chain Management Solutions A platform for success POU Point of Use CONSUME PLAN BUY STORE SELL FULFILL Demand Procurement, Warehousing E-Commerce, Order Distribution, COMPLETE Forecasting and Contracting and and Inventory AI Management and Pick, Pack AI Planning Releasin
Slide 8: Tecsys Momentum
Tecsys Momentum $164* $152 $137 Total Revenue (in $ million) $123 $105 $76 $26.50** TSX:TSE $15.40 2019 2020 2021 2022 2023 2024 New CHRO New CMO New CRO Partner COVID-19 Organic TSX30™ Launched Normal Ecosystem Growth Course Issuer Bid New R&D New Global New IT Sec Promoted to Challenger Leadership
Slide 9: SaaS Growth Driving Increase in Recurring Revenue
SaaS Growth Driving Increase in Recurring Revenue in $CAD millions 70.2 59.6 52.9 37.5 41.1 9.0 19.2 26.9 37% Q2 2024 SaaS Revenue Growth YoY 32.1 33.7 32.7 32.7 FY 2020 FY 2021 FY 2022 FY 2023 Maintenance and Support Revenue SaaS Revenue 9
Slide 10: Our Customers
Our Customers Percentage of Annual Recurring Revenue Converging Complex Distribution 51% 49% Healthcare Solutions Built on Experience: Delivering end-to-end solutions with technology & services tailored to key industries 10
Slide 11: Healthcare Supply Chains Are Stressed
Healthcare Supply Chains Are Stressed § Standardization across § Point of Use breakdowns networks § Volume fluctuations § Extraordinary pressure on § IDNs struggling supply chain to deliver § Regulatory requirements Result: Healthcare supply chains need solutions urgently Opportunity: Tecsys is cons
Slide 12: Healthcare Market Opportunity
Healthcare Market Opportunity Becoming Dominant in U.S. Health Systems Market – The $1.2B ARR* Opportunity Health Systems Base Account Market Share Penetration 22% 373 16% ARR Opportunity: ARR Opportunity $1.2B with Current Base: Target Health Systems 84% $188M 78% Market Opportunity Current Share M
Slide 13: 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 14: Distribution Convergence Market Opportunity – $6B
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, 12,000 consumer packaged goods, electrical & electronics,
Slide 15: Partner Ecosystem - Accelerate Growth
D e l i v e r i n g E x c e p t i o n a l I n n o v a t i o n & S e r v i c e To g e t h e r Partner Ecosystem - Accelerate Growth Software Alliances Consultants & SIs AWS, Workday, Oracle, Shopify, Locus, Deloitte, CGI, KPMG, Accenture, Bizzkit, Zebra, SVT Robotics, Cerner, Episerver West Monroe, e
Slide 16: SaaS Driving Annual Recurring Revenue (ARR) Growth
SaaS Driving Annual Recurring Revenue (ARR)1 Growth in $CAD millions SaaS represents 63% of total ARR Q2 FY24 84.9 71.2 75.4 78.3 78.3 35% Q2 FY24 SaaS ARR Constant currency growth YoY 53.2 46.7 47.2 44.2 32% 38.8 Q2 FY24 SaaS Remaining Performance Obligation (RPO)1 Constant currency growth YoY Q2 F
Slide 17: Annual Recurring Revenue Net Retention Rate
Annual Recurring Revenue Net Retention Rate 115% 113% 113% 110% 108% 107% 106% 105% 113% 100% LTM Q2 Fiscal 2024 Recurring Revenue Net 95% Retention Rate 90% Net Retention = (Existing customer expansion less churn) divided by Beginning 85% period ARR 80% 2020 2021 2022 2023 LTM Q2 2024 17
Slide 18: SaaS Remaining Performance Obligation (RPO)
SaaS Remaining Performance Obligation (RPO) in $CAD millions $138 $147M $94 Q2 FY24 SaaS RPO $66 $52 34% Q2 FY24 SaaS RPO YoY Growth $15 2019 2020 2021 2022 2023 18
Slide 19: Sales & Marketing – Creating Recurring Margin and Value
Sales & Marketing – Creating Recurring Margin and Value LTV and CAC (in $ CAD millions) LTV to CAC (LTM Q2 FY24) 3.7x LTV to CAC LTM Q2 FY24 We measure sales & marketing efficiency by comparing Customer Acquisition Cost (CAC) to Lifetime Value (LTV) of expected margin contribution. CAC is measured a
Slide 20: 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 21: Financial Highlights
Financial Highlights in $CAD thousands except EPS Q2 2024 Q2 2023 Δ YoY Q2 2024 TTM Q2 2023 TTM Δ YoY $ % $ % $ % $ % $ % $ % Total Revenue 41,489 100% 38,111 100% 3,378 9% 163,573 100% 142,014 100% 21,559 15% Total Revenue Excluding Hardware 34,092 82% 31,490 83% 2,602 8% 136,059 83% 120,043 85% 16
Slide 22: Corporate Overview
Corporate Overview $390M 30¢ 19% Market Cap** Symbol TCS Dividend per Year* Insider Ownership** 14.7M S/O § Cormark Securities Inc. Brokerage § § Echelon Capital Markets National Bank Financial Coverage § Raymond James § Stifel * Last twelve months, October 31, 2023 22 ** On October 31, 2023
Slide 23: Reasons to Invest
Reasons to Invest $1.2B $6B 40% 2.11x Cloud- SaaS ARR ARR NTM based Revenue TAM TAM Growth EV/sales Operates a single Greenfield Disruptor LTM October 31, Trading at 2.11x cloud-based opportunity in opportunity in 2023 YoY SaaS NTM EV/sales, a platform that healthcare with complex revenue growth of
Slide 24: Thank You
Thank You