Tata Consultancy Services Ltd. — Call Transcript 2025

Good morning, everyone. Welcome to Tecsys fourth quarter and fiscal year 2025 results conference call. Please note that the complete fourth quarter, including MD&A and financial statements, were filed on SEDAR Plus after market close yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to welcome everyone to this call. It is being recorded on Friday, June 27, 2025, at 8:30 A.M. Eastern Time. I would now like to turn the conference over to Peter Brereton, Chief Executive Officer at Tecsys. Please go ahead, sir. Thank you. Good morning, everyone. Joining me today is Mark Bentler, our Chief Financial Officer. We appreciate you joining us for today's call. As most of you have likely seen in the results issued last night, fiscal 2025 has been another strong year for Tecsys. SaaS revenue grew 29% for the year, just shy of our 30% guidance, while our core product Elite grew 32%, driven by high-quality multi-site wins and strong adoption in our core markets. Between new logos, renewing and expanding base accounts, and continued migration momentum, we are seeing sustained indicators of business health, reflecting steady progress toward our long-term value creation goals. SaaS RPO continues to grow. In healthcare, we added two new health system providers in the quarter and completed another large migration. We also saw continued uptake in our pharmacy offerings as more healthcare organizations respond to DSCSA and look to drive efficiency and visibility through their supply chains. Distribution also saw continued growth, with multi-site deals in electrical, industrial, and healthcare distribution, and important new customer additions in both North America and Europe. Our strategy of being selective but deliberate in the markets and geographies we pursue continues to bear fruit. Notably, healthcare distribution has emerged as a dynamic vertical, with increasing demand for scalable inventory management and Drug Supply Chain Security Act aligned logistics across the care continuum. Our pipeline is responding accordingly. We also had another standout quarter in professional services. Q4 marked another record for PS revenue, and we ended the fiscal year with the largest professional services backlog in our history at CAD 49 million. That's up 52% year over last year. These results indicate strong ongoing demand. That said, we anticipate that professional services revenue will continue to remain variable, influenced by the timing of project deliveries and the level of involvement from integration partners. We also saw several strategic milestones since our last results call. We announced a major milestone with Roche, with our SaaS platform now being progressively deployed at over 1,000 sites globally. This rollout demonstrates the scalability of our system and reinforces the trust that Roche places in us to support their operations across multiple regions. On May 1 of 2025, we announced the establishment of a new subsidiary in India as part of an asset acquisition that included the hiring of an India-based team. This acquisition enhances our development and support capacity and capability, positioning us for long-term scalability and growth. As we continue to build momentum in the market, we also saw validation of the capability of our WMS for a 14th consecutive time by Gartner. Included in the Challenger quadrant, we were once again recognized for our product's completeness of vision and ability to execute. This is on top of the fact that Tecsys customers represent 40% of Gartner's healthcare supply chain top 25 list for calendar 2024. While it came just after our fiscal year-end, our Tecsys user conference was a key event for us. It's a chance to connect with our customers, highlight new products, build stronger relationships, and explore new growth opportunities. This year, we had our largest turnout ever, with over 200 customers and prospects. We also shared that we'll be making the conference an annual event moving forward, so we'll have this important touchpoint with our customers on a more regular basis. At the user conference, we announced two exciting innovations. First, we introduced an enhanced electronic shelf label, or ESL Plus, which represents an important advancement in hospital supply chain management at the point of use. These are bi-directional smart tags that add real-time visual cues and allow clinical teams to request additional product or rush orders in real time. Secondly, we unveiled a brand new data product we're calling Tecsys IQ, a data layer that interacts with the existing Tecsys' ecosystem. Tecsys IQ is a major leap forward in applied AI, and the excitement among customers and partners was evident. Built on the Databricks data intelligence platform, Tecsys IQ helps organizations unify fragmented data and deliver AI-powered insights across clinical, operational, and financial systems. We have good reason to feel confident about our position in the market, our base expansion rate, our backlog in both SaaS and professional services, and the strength of our vertical strategy. As we continue to invest in the products we sell and in our go-to-market strategy, Tecsys is proving to be among the best cloud-based solutions available in the markets we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Mark will now provide further details on our Fourth Quarter and year-to-date financial results, as well as financial guidance on several key metrics. Thank you, Peter. First, I'll focus on fourth quarter Fiscal 2025 results. SaaS revenue growth was 29%, reaching CAD 18.4 million. SaaS bookings were down year-on-year from a record CAD 8 million last Q4, which was the high watermark so far for quarterly bookings, to CAD 6.5 million this Q4. That CAD 6.5 million, by the way, is the second highest SaaS booking quarter in our history. Q4 was another record total revenue quarter at CAD 46.6 million. That was up 6% from the same quarter last year. If you exclude hardware revenue, that growth was 16%. Professional services revenue for the fourth quarter was a record CAD 16.2 million. That was up 13% from the same quarter last year. We had another solid professional services bookings quarter in Q4, and as Peter noted, we ended the year with record professional services backlog. For the fourth quarter of fiscal 2025, gross margin was 51%, compared to 47% in the same period last year. The key drivers here are increasing SaaS margins, as well as strength in professional services margins in the quarter. Net profit in the quarter was CAD 1.7 million, compared to CAD 259,000 in the same quarter last year. Fully diluted earnings per share were CAD 0.11 in the current quarter, compared to CAD 0.02 in the prior year quarter. Adjusted EBITDA was CAD 4.3 million in Q4 fiscal 2025, compared to CAD 2.8 million in the same quarter last year. Turning briefly to our full fiscal 2025 highlights, SaaS revenue for fiscal 2025 was CAD 67.1 million. Again, that's up 29% from last year. SaaS bookings for the year were CAD 17.3 million. That was actually down 7% compared to last year. While this will have the impact of moderating SaaS revenue growth in fiscal 2026, based on the size and quality of our pipeline, we're optimistic about the future of SaaS revenue growth. Our total revenue reached CAD 176.5 million. That was a 3% increase from last year. If you exclude hardware, overall revenue grew by 12%. For fiscal 2025, our adjusted EBITDA increased to CAD 13.4 million. That was up from CAD 9.6 million last year. That's a 39% year-on-year increase in adjusted EBITDA. Basic and fully diluted earnings per share for fiscal 2025 were CAD 0.30. That compares to CAD 0.13 in the same period last year. We ended fiscal 2025 with a solid balance sheet. We had cash and short-term investments of CAD 39.3 million and no debt. We used about CAD 6.9 million of cash in the year to buy back shares under our normal course issuer bid. Additionally, the board yesterday approved a quarterly dividend of CAD 0.08 per share. Turning to financial guidance, we are providing fiscal 2026 guidance for SaaS revenue growth of 20%-22% and total revenue growth of 8%-10%. We have decided to increase our investment in R&D and marketing in fiscal 2026 to drive SaaS margin growth and SaaS revenue growth, respectively. As a result, we are revising our fiscal 2026 adjusted EBITDA margin guidance to 8%-9%. We expect adjusted EBITDA growth in the range of 20%-30%. I will now turn the call back to Peter to provide some outlook comments. Thanks, Mark. Tecsys' fourth quarter and full year results reflect the consistent execution and momentum we've built throughout the year. Our solid footprint in key markets reinforces our confidence that we are well-positioned to upsell and cross-sell within healthcare. Our value proposition in pharmacy remains compelling. We believe we are uniquely positioned to capitalize on the expanding opportunities in pharmacy and other adjacent healthcare vectors, which we see as an important growth engine for us. Our converging and general distribution also represents a substantial market opportunity. We are pursuing targeted marketplaces and geographies within this space, with an expanding emphasis on healthcare in this market as well. We are pleased that our pipeline is robust, and we continue to see strong buyer intent across our verticals. As I mentioned in my opening, we just wrapped up our largest-ever user conference in Nashville, and the energy from our customers was incredible. We heard from a great mix of voices, including presenters from Nissan, Vanderbilt Health, Mayo Clinic, Texas Children's Hospital, WellStar Health, and Accuristix. These customer advocates shared some amazing insights on how Tecsys is making a real difference for them. It's clear we have a great opportunity to keep these conversations going, build on the momentum we've created, and capitalize on the market opportunity this event creates. In summary, I want to share with analysts and investors our key themes for fiscal 2026. First, we will continue to invest to maintain and enhance our market leadership across the supply chain landscape, with an emphasis on the end-to-end healthcare supply chain. This includes investments in product development and marketing to drive SaaS margin expansion and bookings growth. Second, we are unlocking the full potential of data with our AI-driven Tecsys IQ platform to drive value and innovation across our solutions. This will be transformational for our customers. Third, we remain deeply focused on customer satisfaction, ensuring our software is reliable, scalable, and easy to use, giving our customers every reason to be passionate advocates for us. With that, we'll open the call up for questions. Thank you. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Amir Azat with Ventum Capital Markets. Your line is now open. Good morning. Thanks for taking my question. My first one is on your SaaS revenue guidance of 20%-22%. It's below what you guys just posted, like 29% for fiscal 2025. I'm wondering what specifically are you guys seeing in the pipeline that leads you to expect a deceleration? Is it you guys just being conservative, or is there something more structural? Maybe this is related. If you could maybe talk about how bookings and pipeline activity are trending early into the year with both the House and Senate advancing cuts to Medicaid. I think it's our contrast from the last conference call when we last chatted. Can you elaborate on any early signs of caution from your clients or anything like that? Sure. Mark, do you want to take the first part of that? I'll take the second. Sure. Sure. Sounds good. Thanks for the question, Amir. The thing about our SaaS revenue, we've got at the end of this fiscal year, we've got what we think is 90% plus of our revenue for SaaS in fiscal 2026 already booked. Right? If you kind of look at that and do the math on that, if you book a CAD 1 million SaaS deal in Q4, it adds basically CAD 1 million of revenue in the subsequent year, depending if there's a ramp in it or if there's a slight delayed start, which we do from time to time, but normally it starts right away. We've got pretty good visibility into the revenue in fiscal 2026. We've also got line of sight to what we believe to be some pretty robust bookings, and Peter will talk maybe to the pipeline and market conditions afterwards. We're seeing strong indications of pipeline activity and expecting strong bookings on top to add accretively to that backlog of SaaS that we have at the end of the year. Yeah. I would just add, Amir, that as Mark's commented, we're not at this point seeing a slowdown in activity. There's no question. It's on everybody's mind. I was down at the SMI conference, whatever it was, two weeks ago, I guess. These are all supply chain leaders from hospital organizations. The general consensus there was that all these sort of threats to cut Medicaid are sort of political posturing. Most of the dates that they're talking about in terms of when those cuts would kick in, if this bill passes with those cuts in it, the dates are sort of staggered out over the next couple of years with lots of time to delay or cancel those cuts before those dates actually arrive. The feeling generally seemed to be that it was largely political posturing and was not going to happen because any party that actually cuts 16 million people out of Medicaid is doomed to lose the next election. At the same time, there is no question. It was top of mind for everybody. I mean, it was a frequent matter of conversation, but the consensus seemed to be that it was unlikely to actually bite. We will see. We are keeping an eye on it. At this point, though, we are not seeing any slowdown in activity. I mean, as we mentioned, we closed two deals in the fourth quarter when this was already sort of in the air, like two new accounts, plus some expansions. Certainly the pipeline activity in the first quarter is showing is remaining quite strong. We will see how this ends. We're keeping an eye on it, but at this point, it's still all systems go. Fantastic. Appreciate the color. I think one of your highlights of the quarter is you call it margin expansion on staff. Can you elaborate on the key levers driving that? It seems to be tracking ahead of expectations. Is there anything abnormal helping the expansion this quarter specifically? No. I mean, it's going to continue to bounce around a little bit. There's no question. There's really sort of three core levers we have on that. I'll sort of try to keep this brief. First is we still have a few older accounts that first came onto our SaaS platform back in 2019 and 2020, and even 2021 when we first introduced it. They came onto our first-generation SaaS. They have not migrated forward onto our mainline platform that includes automatic upgrades and all those kinds of things. That whole infrastructure and technology stack is much lower growth margin. We are migrating those accounts forward onto our newest, latest platform that includes automatic upgrades and the latest and greatest security and all those kinds of things. It also, as they move, we end up with a client coming off of a low gross margin stack onto a high gross margin stack. That is a driver. We are also continuing to re-architect our overall platform for more and more public cloud infrastructure efficiency. We are making very good headway on that. I think we've got probably two more years of investing in that where we're still dealing with pretty serious payback as we go. I think sort of two years from now, there's always going to be ways to continue to improve it. I think the bulk of that progression will be complete within about two years. The last area is just as we continue to drive up quality and reliability and user-friendliness, we continue to drive down customer care costs. You end up with less and less calls, less and less tickets coming into the customer care team. That is another aspect of cost that goes into supporting a SaaS account. We're making pretty good headway on that. If I look at the last 12 months, we've actually brought our severity one and severity two tickets down by about 35% compared to a year ago. We're continuing to drive that number down. That is another key factor in achieving higher SaaS gross margin. I mean, our objective over the next sort of two to three years is actually to drive it to 80%. We'll see how we do on that trajectory. I know our investor deck shows a progression to 75%, where internally we're shooting a little higher than that. We think we've got sort of these three key levers to make that lift. That's great to hear. Maybe one last one if you'll allow me. Your adjusted EBITDA guidance of 8%-9% is down from 10%-11%. This is despite, obviously, the gross margin expansion. My quick math is it's like an extra CAD 4 million of OpEx investments. I just wonder where exactly are you guys spending in R&D than in marketing, if you could just break down the different areas? Sure. I would lump them into two main areas. There is some additional spend in sales. We do continue to invest there. We brought on a senior expert out of the hospital market to join the sales team. He's been a senior supply chain leader at a hospital network. He's joined the sales organization as a sort of hospital supply chain expert. He's going to be helping the entire hospital sales team. We do continue to invest in sales. That's probably the smallest piece of that, I would think. Mark can correct me here when I'm done. Yep. Probably the high level. The majority is really marketing. We are looking to sort of get the messaging out around the end-to-end healthcare supply chain that we are not hospitals, but we are also distributors and 3PLs and manufacturers. We have a complete end-to-end platform for the whole hospital supply chain continuum. We want to get that message out across both North America and Europe. We are cranking up marketing spend in that area with the interest of driving bookings back up, bookings growth back up to a higher level. We think we can get bookings growth back up to close to 30%. We think we have got to get that messaging out there loud and clear. On the R&D front, there is some additional investment going into FedRAMP because we really need to do a lot of government business, and we really need to be FedRAMP compliant. That has driven some extra costs. The bulk of the extra investment in R&D is it's just AI, AI, and AI. I mean, we're putting it everywhere across the product. We've got some really exciting stuff coming out. That whole Tecsys IQ platform is sort of underlying that effort. We are investing across point of use, the IR, OR, cath lab, nursing station, the warehouse, the warehouse execution system, etc., right across the board to create a platform that really takes full advantage of the excellent data that we have in our platform. Fantastic. I think I would add one thing to that, Amir. I think is that we just closed up that asset acquisition in India on May 1, as Peter mentioned earlier in the call. That is going to, if you're looking at OpEx lines of cost, add sequential costs. There was some revenue that came with that too, but it is going to add sequential costs into that R&D line and also a little bit in the margin, but mostly in the R&D line. Yep. I suspect the user conference as well. Yeah. You'll see that come through in Q1. Exactly. Fantastic. Thanks for the time, Mark. Pass the mic. Thank you. Your next question comes from Gavin Fairweather with Cormark. Your line is now open. Oh, hey. Good morning. Thanks for taking my questions. Maybe just to start, I mean, you guys seem to be getting more traction in the broader healthcare supply chain, so call it outside the hospitals, and you're talking about leading in on sales and marketing. Curious if you've done any work to size up that PIM, and what are your thoughts about the velocity of that market in the years ahead? You're saying the U.S. hospital market? No. It's like the broader supply chain, the distributors. Have you sized up that PIM, and what are your thoughts on the speed of that market in the years ahead? I mean, it's interesting that the general, I mean, what we're seeing in the market is some really serious activity, right? We're trying to tighten our focus because that market is actually so large, right? If I look at the general supply chain market that we've played in for years, where we say there's 12,000 companies in North America with an average initial ARR of CAD 500,000 for a CAD 6 billion PIM, that's a very, very large market. Our win rate in that very large market tends to run 30%-40%. We have decided we would rather narrow our focus in that market to only pursue the verticals within it or subverticals, if you will, where our win rate is over 50%. We're narrowing our focus to areas like, for instance, electrical. Our win rate is very high in electrical. Our win rate is very high in anything to do with healthcare. That can be eye care products, ear products, foot products, joints and knees and medical supplies and safety supplies and drugs. Certainly, drugs is a huge part of it. Across all those subverticals, you have the manufacturers within those, the distributors within those, and the 3PLs within those. When we narrow to that focus, we find our win rate shoots a lot higher. We are still, as we're making that pivot, we've done some analysis to say, "How big is that PIM?" It is still very large. We can't give you precise numbers yet because we're also pulling in Europe. We're doing business in the U.K. We added a nice deal in the fourth quarter over in the U.K. in the healthcare supply chain space. We're still getting a handle on what that PIM is. If I were to hazard a guess, I think it's about CAD 2 billion PIM across sort of Europe and North America. We're still trying to get that nailed down. Velocity, it's moving at a good clip. There's been some tariff fears. There's no question. There's a lot of disturbance around tariffs. In the meantime, as I think we've chatted about before, the bulk of the systems these companies are running were put in in time for Y2K. That story is coming to its last chapter. I mean, these systems need to be replaced. You have organizations like Gartner and others saying that this market is going to grow at 10%-15% a year for probably the next 10 years. It's certainly what we're seeing. We will see how this goes as we make this sort of shift to a narrower focus within that very broad market. But we're pretty excited about the possibilities. Very helpful. Secondly for me, I think last call you talked about a couple additional customers going live on pharma. Just curious how those implementations went, how the data coming out of that is looking in terms of the ROI, and whether you think that that'll catalyze activity in fiscal 2026 for you. We certainly believe it well that the go-lives are quite recent. We've had one that sort of did a gradual go-live over April. I guess the initial inbound was in April, and then they started some of the outbound go-lives in June. We actually had one of the supply chain leaders was actually at our user conference. Pharmacy supply chain leaders was at our user conference as their organization was in the process of going through the next phase of go-live, which I thought actually showed a pretty strong confidence. They've now proceeded to the next phase. Everything's progressing on track. I would say it will be, I would think it will be this fall by the time they have enough data to really say, "Sort of, okay, here's the before picture and here's the after picture and here's what we're seeing," etc. I mean, we already have Parkview Health, who's willing to stand up and say, "Yeah, they turned it all on over a year ago, and they're seeing great results." This latest wave, Northwestern and [those] others, I would think that it's probably this fall by the time we're seeing that data. Very helpful. Maybe lastly for me, for Mark, I think last quarter you talked about a couple decent maintenance to SaaS migrations. I think the script, you talked about another one in healthcare maybe this quarter. Can you just help us frame how we should be thinking about the maintenance line going forward and how we should think about maybe winding down a little bit as that revenue flips to SaaS? Yeah. That's a good point. I mean, we do see it. It came down a little bit from 2024 to 2025 as these historical migrations kind of go live on SaaS and turn off on-prem stuff. There's definitely a wave of that coming. I think you'll see a like or actually probably slightly higher decline in year-on-year maintenance and support if you look out at 2026, from 2025 to 2026 versus what happened in 2024 to 2025, which you would kind of expect because we've been selling these on-prem migrations for a number of years, and we've sold a good chunk of them. Yeah, that's going to come rippling through, and you'll see that in 2026. Thanks so much. I'll pass the line. Thanks, you. Your next question comes from John Cho with National Bank. Your line is now open. Hey, good morning. Thanks for taking my question. I'm trying to get an understanding of your net revenue retention. I mean, it's still robust at 106%, but a bit lower compared to 2023 and 2024 levels. Are we getting some normalizations following the COVID peak? Yeah. I think that. Sorry. Go ahead, Mark. Yeah. I was just going to say, I think what you're seeing there is we've got that base of customers, that number that we disclosed there is ARR. So, it's all ARR-based. And what we have going on in there is expansions and migrations drive that number up, and churn drives that number down. What we saw happening in the latest quarter last year in Q4 of 2024, we had a really big booking quarter. There was a lot of expansion and migration in that booking quarter. What you're kind of seeing here is that we do that measurement on an LPM basis. We're no longer picking up the large sort of outsized migration and expansion in that one Q4. It kind of dips down here as we normalize. Certainly, we expect that to climb, to continue to climb back up. When we look forward and look at bookings and bookings mix, we're sure expecting that our base of customers that are existing SaaS customers now will continue to grow with us. The bookings that we reported in Q4 of this year played that out pretty nicely for one quarter, where we had a big chunk of those bookings in the current Q4 coming from migration. We expect that to continue in the future. Expansion bookings and new logo bookings together will become a much bigger part of our total bookings, and that should drive that number, we believe, back north. Got it. Thanks. You have two years in a row where you report strong SaaS bookings by Q4. Is that a new trend, something we should expect going forward? You know what? It's a good question. As much as we try to manage that moderate alpha lumpiness in our, forget about our year or even our quarters, it's really tough to do. We've seen that historically, Q4 been a time where bookings have peaked. I mean, I think the base of prospects is pretty well trained. They know when our year-ends are, and they tend to kind of use it as well. Yeah, it's hard to call, but I think that is, we've tried to break that trend, but it is kind of the trend. I would expect that in the future. When we think about planning, we're certainly ramping up our bookings in the back half of our fiscal year and into Q4 as opposed to in the front half of the year. Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Suthan Sukumar with Stifel. Your line is now open. Hey, guys. This is Esai speaking on behalf of Stifel. Just a few questions for me. I know you mentioned that pro-service is variable, but pro-service and backlog in bookings are strong in this quarter. I was curious to know if you could just give some additional color on what is driving that and what that implies for SaaS revenue growth. Yeah. It's a good question. I think if I could take maybe that question, the back half of our bookings year for PS this year was super robust, and that's driving that ending backlog. I think what that tells us is the market, the purse strings of our prospects in that hospital network market have loosened up, we believe. We saw that in the back half of the year with these big projects extending and more capital flowing from the hospital networks into our professional services projects. That's great because that means projects will continue to move. They'll move more quickly, and customers go live. That's great for us because it just firms up the customer commitment to the platform. We feel good about that. I think in some ways, especially that happening in light of kind of some market, some geopolitical turmoil and things, I think gives us cause for optimism in hospital network budgets, at least for the near term and the future. We feel like that's a good positive sign. In terms of what that's going to do to professional services revenue, we crossed over. We just reported this CAD 16 million professional services revenue quarter, which was bigger. We've never been in the 16th before. In fact, we haven't been in the 15th before. We think with this backlog, we think we may not be at this sort of CAD 16 million level in the coming quarters, but we're going to be at a very, we believe we'll be at a very robust level of professional services revenue in the coming quarters on the back of that backlog. Thank you. Thank you. Maybe a follow-up for that. SaaS backlog was up 10%, and it seems that there's still elevated activity and demand here. Could you provide maybe a quick rehash on backlog conversion and how we should look, how we should see that, how we should think about that, and how that looks like? Are you talking about how contracts sort of convert into SaaS revenue and how that backlog converts into SaaS revenue? Yeah. Yeah. So, I mean, our typical contracts are three to five years long. When we track our SaaS backlog, we're taking the totality of the future value of that contract. If we sign a five-year contract, the SaaS backlog is 5x that SaaS ARR amount. The revenue recognition of that, of course, is typically recognized ratably over the contract period, over the five-year period. That backlog itself is made up by now of a mix of many different multi-year contracts, all with varying sort of end dates. That's why when you look in the footnotes and you look at how we actually disclosed when that revenue is expected to be recognized on those contract commitments, you can see that in our notes to our financial statements. That's kind of how we disclose that backlog and how it looks like it's going to roll out in the future. Of course, every quarter, we book more SaaS, which increases that RPO, and revenue recognition, of course, reduces that RPO. Great. Just one last one for me. I was curious to know what the fiscal 2026 guide is taking in terms of or with regards to contributions from healthcare versus distribution. Yeah. I mean, if you look at kind of what we've been seeing over the last number of quarters and even number of years, and especially as we look at our marketplace, our healthcare marketplace more broadly now, i.e., it's hospital networks plus it's hospital-related distribution companies like the medical equipment supplier that Peter referred to that we signed in Q4. If you look at that broader definition of the market, a significant majority of our business and our growth is coming out of that healthcare marketplace. That's where we're focused. That's where we're putting more marketing energy now with this additional investment, and that's where we expect the significant majority of our bookings to come from. Perfect. Thank you. I'll pass over to Mark. Thanks. This is the operator. Your line is open, Stephen. Oh, hi. Thanks. Hey, guys. Peter, your comments on not seeing any slowdown in activity. When we think of SaaS bookings for fiscal 2026, you would fully expect to see good bookings growth, right? You would be very disappointed, let's say, if it's flat. Is that correct? Yeah. Yeah. I would be very disappointed. I'm not about to make a prediction, Stephen, which I know is what you're trying to draw me into, but I would agree with you 100% that I would be very disappointed if I didn't see bookings growth in fiscal 2026. Okay. Got it. I might have missed it, but did she say how many IDNs she wanted Q4? Two. Two. Okay. Perfect. Thank you. Yeah. We added two new IDNs in Q4. Got it. Thanks. There are no further questions at this time. I will now turn the call over to management for closing remarks. Great. Thank you, everyone, for joining us. I'm glad to have you with us. Thanks for taking time out of your day to be with us on the call. As usual, if you have additional questions, please do not hesitate to reach out to Mark or myself, and we will look forward to chatting to you in September after we release our Q1 results. Thanks, and have a great summer. Bye for now. Thanks. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Speaker 4: Good morning, everyone. Welcome to Tecsys fourth quarter and fiscal year 2025 results conference call. Please note that the complete fourth quarter, including MD&A and financial statements, were filed on SEDAR Plus after market close yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to welcome everyone to this call. It is being recorded on Friday, June 27, 2025, at 8:30 A.M. Eastern Time. I would now like to turn the conference over to Peter Brereton, Chief Executive Officer at Tecsys. Please go ahead, sir. Good morning, everyone. good morning everyone Welcome to Tecsys fourth quarter and fiscal year 2025 results conference call. welcome to tecsys fourth quarter and fiscal year 2025 results conference call Please note that the complete fourth quarter, including MD&A and financial statements, were filed on SEDAR Plus after market close yesterday. please note that the complete fourth quarter including md&a and financial statements were filed on sedar plus after market close yesterday All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. all dollar amounts are expressed in canadian currency and are prepared in accordance with international financial reporting standards Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. some of the statements in this conference call including the question and answer period may include forward-looking statements that are based on management's beliefs and assumptions Actual results may differ materially from such statements. actual results may differ materially from such statements I would like to welcome everyone to this call. i would like to welcome everyone to this call It is being recorded on Friday, June 27, 2025, at 8:30 A.M. it is being recorded on friday june 27 2025 at 8:30 a.m Eastern Time. eastern time I would now like to turn the conference over to Peter Brereton, Chief Executive Officer at Tecsys. i would now like to turn the conference over to peter brereton chief executive officer at tecsys Please go ahead, sir. please go ahead sir

Speaker 5: Thank you. Good morning, everyone. Joining me today is Mark Bentler, our Chief Financial Officer. We appreciate you joining us for today's call. As most of you have likely seen in the results issued last night, fiscal 2025 has been another strong year for Tecsys. SaaS revenue grew 29% for the year, just shy of our 30% guidance, while our core product Elite grew 32%, driven by high-quality multi-site wins and strong adoption in our core markets. Between new logos, renewing and expanding base accounts, and continued migration momentum, we are seeing sustained indicators of business health, reflecting steady progress toward our long-term value creation goals. SaaS RPO continues to grow. In healthcare, we added two new health system providers in the quarter and completed another large migration. Thank you. thank you Good morning, everyone. good morning everyone Joining me today is Mark Bentler, our Chief Financial Officer. joining me today is mark bentler our chief financial officer We appreciate you joining us for today's call. we appreciate you joining us for today's call As most of you have likely seen in the results issued last night, fiscal 2025 has been another strong year for Tecsys. as most of you have likely seen in the results issued last night fiscal 2025 has been another strong year for tecsys SaaS revenue grew 29% for the year, just shy of our 30% guidance, while our core product Elite grew 32%, driven by high-quality multi-site wins and strong adoption in our core markets. saas revenue grew 29% for the year just shy of our 30% guidance while our core product elite grew 32% driven by high-quality multi-site wins and strong adoption in our core markets Between new logos, renewing and expanding base accounts, and continued migration momentum, we are seeing sustained indicators of business health, reflecting steady progress toward our long-term value creation goals. between new logos renewing and expanding base accounts and continued migration momentum we are seeing sustained indicators of business health reflecting steady progress toward our long-term value creation goals SaaS RPO continues to grow. saas rpo continues to grow In healthcare, we added two new health system providers in the quarter and completed another large migration. in healthcare we added two new health system providers in the quarter and completed another large migration We also saw continued uptake in our pharmacy offerings as more healthcare organizations respond to DSCSA and look to drive efficiency and visibility through their supply chains. Distribution also saw continued growth, with multi-site deals in electrical, industrial, and healthcare distribution, and important new customer additions in both North America and Europe. Our strategy of being selective but deliberate in the markets and geographies we pursue continues to bear fruit. Notably, healthcare distribution has emerged as a dynamic vertical, with increasing demand for scalable inventory management and Drug Supply Chain Security Act aligned logistics across the care continuum. Our pipeline is responding accordingly. We also had another standout quarter in professional services. Q4 marked another record for PS revenue, and we ended the fiscal year with the largest professional services backlog in our history at CAD 49 million. That's up 52% year over last year. These results indicate strong ongoing demand. We also saw continued uptake in our pharmacy offerings as more healthcare organizations respond to DSCSA and look to drive efficiency and visibility through their supply chains. we also saw continued uptake in our pharmacy offerings as more healthcare organizations respond to dscsa and look to drive efficiency and visibility through their supply chains Distribution also saw continued growth, with multi-site deals in electrical, industrial, and healthcare distribution, and important new customer additions in both North America and Europe. distribution also saw continued growth with multi-site deals in electrical industrial and healthcare distribution and important new customer additions in both north america and europe Our strategy of being selective but deliberate in the markets and geographies we pursue continues to bear fruit. our strategy of being selective but deliberate in the markets and geographies we pursue continues to bear fruit Notably, healthcare distribution has emerged as a dynamic vertical, with increasing demand for scalable inventory management and Drug Supply Chain Security Act aligned logistics across the care continuum. notably healthcare distribution has emerged as a dynamic vertical with increasing demand for scalable inventory management and drug supply chain security act aligned logistics across the care continuum Our pipeline is responding accordingly. our pipeline is responding accordingly We also had another standout quarter in professional services. we also had another standout quarter in professional services Q4 marked another record for PS revenue, and we ended the fiscal year with the largest professional services backlog in our history at CAD 49 million. q4 marked another record for ps revenue and we ended the fiscal year with the largest professional services backlog in our history at cad 49 million That's up 52% year over last year. that's up 52% year over last year These results indicate strong ongoing demand. these results indicate strong ongoing demand That said, we anticipate that professional services revenue will continue to remain variable, influenced by the timing of project deliveries and the level of involvement from integration partners. We also saw several strategic milestones since our last results call. We announced a major milestone with Roche, with our SaaS platform now being progressively deployed at over 1,000 sites globally. This rollout demonstrates the scalability of our system and reinforces the trust that Roche places in us to support their operations across multiple regions. On May 1 of 2025, we announced the establishment of a new subsidiary in India as part of an asset acquisition that included the hiring of an India-based team. This acquisition enhances our development and support capacity and capability, positioning us for long-term scalability and growth. That said, we anticipate that professional services revenue will continue to remain variable, influenced by the timing of project deliveries and the level of involvement from integration partners. that said we anticipate that professional services revenue will continue to remain variable influenced by the timing of project deliveries and the level of involvement from integration partners We also saw several strategic milestones since our last results call. we also saw several strategic milestones since our last results call We announced a major milestone with Roche, with our SaaS platform now being progressively deployed at over 1,000 sites globally. we announced a major milestone with roche with our saas platform now being progressively deployed at over 1,000 sites globally This rollout demonstrates the scalability of our system and reinforces the trust that Roche places in us to support their operations across multiple regions. this rollout demonstrates the scalability of our system and reinforces the trust that roche places in us to support their operations across multiple regions On May 1 of 2025, we announced the establishment of a new subsidiary in India as part of an asset acquisition that included the hiring of an India-based team. on may 1 of 2025 we announced the establishment of a new subsidiary in india as part of an asset acquisition that included the hiring of an india-based team This acquisition enhances our development and support capacity and capability, positioning us for long-term scalability and growth. this acquisition enhances our development and support capacity and capability positioning us for long-term scalability and growth As we continue to build momentum in the market, we also saw validation of the capability of our WMS for a 14th consecutive time by Gartner. Included in the Challenger quadrant, we were once again recognized for our product's completeness of vision and ability to execute. This is on top of the fact that Tecsys customers represent 40% of Gartner's healthcare supply chain top 25 list for calendar 2024. While it came just after our fiscal year-end, our Tecsys user conference was a key event for us. It's a chance to connect with our customers, highlight new products, build stronger relationships, and explore new growth opportunities. This year, we had our largest turnout ever, with over 200 customers and prospects. We also shared that we'll be making the conference an annual event moving forward, so we'll have this important touchpoint with our customers on a more regular basis. As we continue to build momentum in the market, we also saw validation of the capability of our WMS for a 14th consecutive time by Gartner. as we continue to build momentum in the market we also saw validation of the capability of our wms for a 14th consecutive time by gartner Included in the Challenger quadrant, we were once again recognized for our product's completeness of vision and ability to execute. included in the challenger quadrant we were once again recognized for our product's completeness of vision and ability to execute This is on top of the fact that Tecsys customers represent 40% of Gartner's healthcare supply chain top 25 list for calendar 2024. this is on top of the fact that tecsys customers represent 40% of gartner's healthcare supply chain top 25 list for calendar 2024 While it came just after our fiscal year-end, our Tecsys user conference was a key event for us. while it came just after our fiscal year-end our tecsys user conference was a key event for us It's a chance to connect with our customers, highlight new products, build stronger relationships, and explore new growth opportunities. it's a chance to connect with our customers highlight new products build stronger relationships and explore new growth opportunities This year, we had our largest turnout ever, with over 200 customers and prospects. this year we had our largest turnout ever with over 200 customers and prospects We also shared that we'll be making the conference an annual event moving forward, so we'll have this important touchpoint with our customers on a more regular basis. we also shared that we'll be making the conference an annual event moving forward so we'll have this important touchpoint with our customers on a more regular basis At the user conference, we announced two exciting innovations. First, we introduced an enhanced electronic shelf label, or ESL Plus, which represents an important advancement in hospital supply chain management at the point of use. These are bi-directional smart tags that add real-time visual cues and allow clinical teams to request additional product or rush orders in real time. Secondly, we unveiled a brand new data product we're calling Tecsys IQ, a data layer that interacts with the existing Tecsys' ecosystem. Tecsys IQ is a major leap forward in applied AI, and the excitement among customers and partners was evident. Built on the Databricks data intelligence platform, Tecsys IQ helps organizations unify fragmented data and deliver AI-powered insights across clinical, operational, and financial systems. At the user conference, we announced two exciting innovations. at the user conference we announced two exciting innovations First, we introduced an enhanced electronic shelf label, or ESL Plus, which represents an important advancement in hospital supply chain management at the point of use. first we introduced an enhanced electronic shelf label or esl plus which represents an important advancement in hospital supply chain management at the point of use These are bi-directional smart tags that add real-time visual cues and allow clinical teams to request additional product or rush orders in real time. these are bi-directional smart tags that add real-time visual cues and allow clinical teams to request additional product or rush orders in real time Secondly, we unveiled a brand new data product we're calling Tecsys IQ, a data layer that interacts with the existing Tecsys' ecosystem. secondly we unveiled a brand new data product we're calling tecsys iq a data layer that interacts with the existing tecsys' ecosystem Tecsys IQ is a major leap forward in applied AI, and the excitement among customers and partners was evident. tecsys iq is a major leap forward in applied ai and the excitement among customers and partners was evident Built on the Databricks data intelligence platform, Tecsys IQ helps organizations unify fragmented data and deliver AI-powered insights across clinical, operational, and financial systems. built on the databricks data intelligence platform tecsys iq helps organizations unify fragmented data and deliver ai-powered insights across clinical operational and financial systems We have good reason to feel confident about our position in the market, our base expansion rate, our backlog in both SaaS and professional services, and the strength of our vertical strategy. As we continue to invest in the products we sell and in our go-to-market strategy, Tecsys is proving to be among the best cloud-based solutions available in the markets we serve. The steady growth we have experienced affirms our vision and strategy for shareholder value. Mark will now provide further details on our Fourth Quarter and year-to-date financial results, as well as financial guidance on several key metrics. We have good reason to feel confident about our position in the market, our base expansion rate, our backlog in both SaaS and professional services, and the strength of our vertical strategy. we have good reason to feel confident about our position in the market our base expansion rate our backlog in both saas and professional services and the strength of our vertical strategy As we continue to invest in the products we sell and in our go-to-market strategy, Tecsys is proving to be among the best cloud-based solutions available in the markets we serve. as we continue to invest in the products we sell and in our go-to-market strategy tecsys is proving to be among the best cloud-based solutions available in the markets we serve The steady growth we have experienced affirms our vision and strategy for shareholder value. the steady growth we have experienced affirms our vision and strategy for shareholder value Mark will now provide further details on our Fourth Quarter and year-to-date financial results, as well as financial guidance on several key metrics. mark will now provide further details on our fourth quarter and year-to-date financial results as well as financial guidance on several key metrics

Speaker 3: Thank you, Peter. First, I'll focus on fourth quarter Fiscal 2025 results. SaaS revenue growth was 29%, reaching CAD 18.4 million. SaaS bookings were down year-on-year from a record CAD 8 million last Q4, which was the high watermark so far for quarterly bookings, to CAD 6.5 million this Q4. That CAD 6.5 million, by the way, is the second highest SaaS booking quarter in our history. Q4 was another record total revenue quarter at CAD 46.6 million. That was up 6% from the same quarter last year. If you exclude hardware revenue, that growth was 16%. Professional services revenue for the fourth quarter was a record CAD 16.2 million. That was up 13% from the same quarter last year. We had another solid professional services bookings quarter in Q4, and as Peter noted, we ended the year with record professional services backlog. Thank you, Peter. thank you peter First, I'll focus on fourth quarter Fiscal 2025 results. first i'll focus on fourth quarter fiscal 2025 results SaaS revenue growth was 29%, reaching CAD 18.4 million. saas revenue growth was 29% reaching cad 18.4 million SaaS bookings were down year-on-year from a record CAD 8 million last Q4, which was the high watermark so far for quarterly bookings, to CAD 6.5 million this Q4. saas bookings were down year-on-year from a record cad 8 million last q4 which was the high watermark so far for quarterly bookings to cad 6.5 million this q4 That CAD 6.5 million, by the way, is the second highest SaaS booking quarter in our history. that cad 6.5 million by the way is the second highest saas booking quarter in our history Q4 was another record total revenue quarter at CAD 46.6 million. q4 was another record total revenue quarter at cad 46.6 million That was up 6% from the same quarter last year. that was up 6% from the same quarter last year If you exclude hardware revenue, that growth was 16%. if you exclude hardware revenue that growth was 16% Professional services revenue for the fourth quarter was a record CAD 16.2 million. professional services revenue for the fourth quarter was a record cad 16.2 million That was up 13% from the same quarter last year. that was up 13% from the same quarter last year We had another solid professional services bookings quarter in Q4, and as Peter noted, we ended the year with record professional services backlog. we had another solid professional services bookings quarter in q4 and as peter noted we ended the year with record professional services backlog For the fourth quarter of fiscal 2025, gross margin was 51%, compared to 47% in the same period last year. The key drivers here are increasing SaaS margins, as well as strength in professional services margins in the quarter. Net profit in the quarter was CAD 1.7 million, compared to CAD 259,000 in the same quarter last year. Fully diluted earnings per share were CAD 0.11 in the current quarter, compared to CAD 0.02 in the prior year quarter. Adjusted EBITDA was CAD 4.3 million in Q4 fiscal 2025, compared to CAD 2.8 million in the same quarter last year. Turning briefly to our full fiscal 2025 highlights, SaaS revenue for fiscal 2025 was CAD 67.1 million. Again, that's up 29% from last year. SaaS bookings for the year were CAD 17.3 million. That was actually down 7% compared to last year. For the fourth quarter of fiscal 2025, gross margin was 51%, compared to 47% in the same period last year. for the fourth quarter of fiscal 2025 gross margin was 51% compared to 47% in the same period last year The key drivers here are increasing SaaS margins, as well as strength in professional services margins in the quarter. the key drivers here are increasing saas margins as well as strength in professional services margins in the quarter Net profit in the quarter was CAD 1.7 million, compared to CAD 259,000 in the same quarter last year. net profit in the quarter was cad 1.7 million compared to cad 259,000 in the same quarter last year Fully diluted earnings per share were CAD 0.11 in the current quarter, compared to CAD 0.02 in the prior year quarter. fully diluted earnings per share were cad 0.11 in the current quarter compared to cad 0.02 in the prior year quarter Adjusted EBITDA was CAD 4.3 million in Q4 fiscal 2025, compared to CAD 2.8 million in the same quarter last year. adjusted ebitda was cad 4.3 million in q4 fiscal 2025 compared to cad 2.8 million in the same quarter last year Turning briefly to our full fiscal 2025 highlights, SaaS revenue for fiscal 2025 was CAD 67.1 million. turning briefly to our full fiscal 2025 highlights saas revenue for fiscal 2025 was cad 67.1 million Again, that's up 29% from last year. again that's up 29% from last year SaaS bookings for the year were CAD 17.3 million. saas bookings for the year were cad 17.3 million That was actually down 7% compared to last year. that was actually down 7% compared to last year While this will have the impact of moderating SaaS revenue growth in fiscal 2026, based on the size and quality of our pipeline, we're optimistic about the future of SaaS revenue growth. Our total revenue reached CAD 176.5 million. That was a 3% increase from last year. If you exclude hardware, overall revenue grew by 12%. For fiscal 2025, our adjusted EBITDA increased to CAD 13.4 million. That was up from CAD 9.6 million last year. That's a 39% year-on-year increase in adjusted EBITDA. Basic and fully diluted earnings per share for fiscal 2025 were CAD 0.30. That compares to CAD 0.13 in the same period last year. We ended fiscal 2025 with a solid balance sheet. We had cash and short-term investments of CAD 39.3 million and no debt. We used about CAD 6.9 million of cash in the year to buy back shares under our normal course issuer bid. While this will have the impact of moderating SaaS revenue growth in fiscal 2026, based on the size and quality of our pipeline, we're optimistic about the future of SaaS revenue growth. while this will have the impact of moderating saas revenue growth in fiscal 2026 based on the size and quality of our pipeline we're optimistic about the future of saas revenue growth Our total revenue reached CAD 176.5 million. our total revenue reached cad 176.5 million That was a 3% increase from last year. that was a 3% increase from last year If you exclude hardware, overall revenue grew by 12%. if you exclude hardware overall revenue grew by 12% For fiscal 2025, our adjusted EBITDA increased to CAD 13.4 million. for fiscal 2025 our adjusted ebitda increased to cad 13.4 million That was up from CAD 9.6 million last year. that was up from cad 9.6 million last year That's a 39% year-on-year increase in adjusted EBITDA. that's a 39% year-on-year increase in adjusted ebitda Basic and fully diluted earnings per share for fiscal 2025 were CAD 0.30. basic and fully diluted earnings per share for fiscal 2025 were cad 0.30 That compares to CAD 0.13 in the same period last year. that compares to cad 0.13 in the same period last year We ended fiscal 2025 with a solid balance sheet. we ended fiscal 2025 with a solid balance sheet We had cash and short-term investments of CAD 39.3 million and no debt. we had cash and short-term investments of cad 39.3 million and no debt We used about CAD 6.9 million of cash in the year to buy back shares under our normal course issuer bid. we used about cad 6.9 million of cash in the year to buy back shares under our normal course issuer bid Additionally, the board yesterday approved a quarterly dividend of CAD 0.08 per share. Turning to financial guidance, we are providing fiscal 2026 guidance for SaaS revenue growth of 20%-22% and total revenue growth of 8%-10%. We have decided to increase our investment in R&D and marketing in fiscal 2026 to drive SaaS margin growth and SaaS revenue growth, respectively. As a result, we are revising our fiscal 2026 adjusted EBITDA margin guidance to 8%-9%. We expect adjusted EBITDA growth in the range of 20%-30%. I will now turn the call back to Peter to provide some outlook comments. Additionally, the board yesterday approved a quarterly dividend of CAD 0.08 per share. additionally the board yesterday approved a quarterly dividend of cad 0.08 per share Turning to financial guidance, we are providing fiscal 2026 guidance for SaaS revenue growth of 20%-22% and total revenue growth of 8%-10%. turning to financial guidance we are providing fiscal 2026 guidance for saas revenue growth of 20%-22% and total revenue growth of 8%-10% We have decided to increase our investment in R&D and marketing in fiscal 2026 to drive SaaS margin growth and SaaS revenue growth, respectively. we have decided to increase our investment in r&d and marketing in fiscal 2026 to drive saas margin growth and saas revenue growth respectively As a result, we are revising our fiscal 2026 adjusted EBITDA margin guidance to 8%-9%. as a result, we are revising our fiscal 2026 adjusted ebitda margin guidance to 8%-9% We expect adjusted EBITDA growth in the range of 20%-30%. we expect adjusted ebitda growth in the range of 20%-30% I will now turn the call back to Peter to provide some outlook comments. i will now turn the call back to peter to provide some outlook comments

Speaker 5: Thanks, Mark. Tecsys' fourth quarter and full year results reflect the consistent execution and momentum we've built throughout the year. Our solid footprint in key markets reinforces our confidence that we are well-positioned to upsell and cross-sell within healthcare. Our value proposition in pharmacy remains compelling. We believe we are uniquely positioned to capitalize on the expanding opportunities in pharmacy and other adjacent healthcare vectors, which we see as an important growth engine for us. Our converging and general distribution also represents a substantial market opportunity. We are pursuing targeted marketplaces and geographies within this space, with an expanding emphasis on healthcare in this market as well. We are pleased that our pipeline is robust, and we continue to see strong buyer intent across our verticals. As I mentioned in my opening, we just wrapped up our largest-ever user conference in Nashville, and the energy from our customers was incredible. Thanks, Mark. thanks mark Tecsys' fourth quarter and full year results reflect the consistent execution and momentum we've built throughout the year. tecsys' fourth quarter and full year results reflect the consistent execution and momentum we've built throughout the year Our solid footprint in key markets reinforces our confidence that we are well-positioned to upsell and cross-sell within healthcare. our solid footprint in key markets reinforces our confidence that we are well-positioned to upsell and cross-sell within healthcare Our value proposition in pharmacy remains compelling. our value proposition in pharmacy remains compelling We believe we are uniquely positioned to capitalize on the expanding opportunities in pharmacy and other adjacent healthcare vectors, which we see as an important growth engine for us. we believe we are uniquely positioned to capitalize on the expanding opportunities in pharmacy and other adjacent healthcare vectors which we see as an important growth engine for us Our converging and general distribution also represents a substantial market opportunity. our converging and general distribution also represents a substantial market opportunity We are pursuing targeted marketplaces and geographies within this space, with an expanding emphasis on healthcare in this market as well. we are pursuing targeted marketplaces and geographies within this space with an expanding emphasis on healthcare in this market as well We are pleased that our pipeline is robust, and we continue to see strong buyer intent across our verticals. we are pleased that our pipeline is robust and we continue to see strong buyer intent across our verticals As I mentioned in my opening, we just wrapped up our largest-ever user conference in Nashville, and the energy from our customers was incredible. as i mentioned in my opening we just wrapped up our largest-ever user conference in nashville and the energy from our customers was incredible We heard from a great mix of voices, including presenters from Nissan, Vanderbilt Health, Mayo Clinic, Texas Children's Hospital, WellStar Health, and Accuristix. These customer advocates shared some amazing insights on how Tecsys is making a real difference for them. It's clear we have a great opportunity to keep these conversations going, build on the momentum we've created, and capitalize on the market opportunity this event creates. In summary, I want to share with analysts and investors our key themes for fiscal 2026. First, we will continue to invest to maintain and enhance our market leadership across the supply chain landscape, with an emphasis on the end-to-end healthcare supply chain. This includes investments in product development and marketing to drive SaaS margin expansion and bookings growth. Second, we are unlocking the full potential of data with our AI-driven Tecsys IQ platform to drive value and innovation across our solutions. We heard from a great mix of voices, including presenters from Nissan, Vanderbilt Health, Mayo Clinic, Texas Children's Hospital, WellStar Health, and Accuristix. we heard from a great mix of voices including presenters from nissan vanderbilt health mayo clinic texas children's hospital wellstar health and accuristix These customer advocates shared some amazing insights on how Tecsys is making a real difference for them. these customer advocates shared some amazing insights on how tecsys is making a real difference for them It's clear we have a great opportunity to keep these conversations going, build on the momentum we've created, and capitalize on the market opportunity this event creates. it's clear we have a great opportunity to keep these conversations going build on the momentum we've created and capitalize on the market opportunity this event creates In summary, I want to share with analysts and investors our key themes for fiscal 2026. in summary i want to share with analysts and investors our key themes for fiscal 2026 First, we will continue to invest to maintain and enhance our market leadership across the supply chain landscape, with an emphasis on the end-to-end healthcare supply chain. first we will continue to invest to maintain and enhance our market leadership across the supply chain landscape with an emphasis on the end-to-end healthcare supply chain This includes investments in product development and marketing to drive SaaS margin expansion and bookings growth. this includes investments in product development and marketing to drive saas margin expansion and bookings growth Second, we are unlocking the full potential of data with our AI-driven Tecsys IQ platform to drive value and innovation across our solutions. second we are unlocking the full potential of data with our ai-driven tecsys iq platform to drive value and innovation across our solutions This will be transformational for our customers. Third, we remain deeply focused on customer satisfaction, ensuring our software is reliable, scalable, and easy to use, giving our customers every reason to be passionate advocates for us. With that, we'll open the call up for questions. Thank you. This will be transformational for our customers. this will be transformational for our customers Third, we remain deeply focused on customer satisfaction, ensuring our software is reliable, scalable, and easy to use, giving our customers every reason to be passionate advocates for us. third we remain deeply focused on customer satisfaction ensuring our software is reliable scalable and easy to use giving our customers every reason to be passionate advocates for us With that, we'll open the call up for questions. with that we'll open the call up for questions Thank you. thank you

Speaker 4: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Amir Azat with Ventum Capital Markets. Your line is now open. Thank you. thank you Ladies and gentlemen, we will now begin the question and answer session. ladies and gentlemen we will now begin the question and answer session Should you have a question, please press star, followed by the 1 on your touch-tone phone. should you have a question please press star followed by the 1 on your touch-tone phone You will hear a prompt that your hand has been raised. you will hear a prompt that your hand has been raised Should you wish to decline from the polling process, please press star, followed by the 2. should you wish to decline from the polling process please press star followed by the 2 If you are using a speakerphone, please lift the handset before pressing any keys. if you are using a speakerphone please lift the handset before pressing any keys Your first question comes from Amir Azat with Ventum Capital Markets. your first question comes from amir azat with ventum capital markets Your line is now open. your line is now open

Speaker 1: Good morning. Thanks for taking my question. My first one is on your SaaS revenue guidance of 20%-22%. It's below what you guys just posted, like 29% for fiscal 2025. I'm wondering what specifically are you guys seeing in the pipeline that leads you to expect a deceleration? Is it you guys just being conservative, or is there something more structural? Maybe this is related. If you could maybe talk about how bookings and pipeline activity are trending early into the year with both the House and Senate advancing cuts to Medicaid. I think it's our contrast from the last conference call when we last chatted. Can you elaborate on any early signs of caution from your clients or anything like that? Good morning. good morning Thanks for taking my question. thanks for taking my question My first one is on your SaaS revenue guidance of 20%-22%. my first one is on your saas revenue guidance of 20%-22% It's below what you guys just posted, like 29% for fiscal 2025. it's below what you guys just posted like 29% for fiscal 2025 I'm wondering what specifically are you guys seeing in the pipeline that leads you to expect a deceleration? i'm wondering what specifically are you guys seeing in the pipeline that leads you to expect a deceleration Is it you guys just being conservative, or is there something more structural? is it you guys just being conservative or is there something more structural Maybe this is related. maybe this is related If you could maybe talk about how bookings and pipeline activity are trending early into the year with both the House and Senate advancing cuts to Medicaid. if you could maybe talk about how bookings and pipeline activity are trending early into the year with both the house and senate advancing cuts to medicaid I think it's our contrast from the last conference call when we last chatted. i think it's our contrast from the last conference call when we last chatted Can you elaborate on any early signs of caution from your clients or anything like that? can you elaborate on any early signs of caution from your clients or anything like that

Speaker 5: Sure. Mark, do you want to take the first part of that? I'll take the second. Sure. sure Mark, do you want to take the first part of that? mark do you want to take the first part of that I'll take the second. i'll take the second

Speaker 3: Sure. Sure. Sounds good. Thanks for the question, Amir. The thing about our SaaS revenue, we've got at the end of this fiscal year, we've got what we think is 90% plus of our revenue for SaaS in fiscal 2026 already booked. Right? If you kind of look at that and do the math on that, if you book a CAD 1 million SaaS deal in Q4, it adds basically CAD 1 million of revenue in the subsequent year, depending if there's a ramp in it or if there's a slight delayed start, which we do from time to time, but normally it starts right away. We've got pretty good visibility into the revenue in fiscal 2026. We've also got line of sight to what we believe to be some pretty robust bookings, and Peter will talk maybe to the pipeline and market conditions afterwards. Sure. sure Sure. sure Sounds good. sounds good Thanks for the question, Amir. thanks for the question amir The thing about our SaaS revenue, we've got at the end of this fiscal year, we've got what we think is 90% plus of our revenue for SaaS in fiscal 2026 already booked. the thing about our saas revenue we've got at the end of this fiscal year we've got what we think is 90% plus of our revenue for saas in fiscal 2026 already booked Right? right If you kind of look at that and do the math on that, if you book a CAD 1 million SaaS deal in Q4, it adds basically CAD 1 million of revenue in the subsequent year, depending if there's a ramp in it or if there's a slight delayed start, which we do from time to time, but normally it starts right away. if you kind of look at that and do the math on that if you book a cad 1 million saas deal in q4 it adds basically cad 1 million of revenue in the subsequent year depending if there's a ramp in it or if there's a slight delayed start which we do from time to time but normally it starts right away We've got pretty good visibility into the revenue in fiscal 2026. we've got pretty good visibility into the revenue in fiscal 2026 We've also got line of sight to what we believe to be some pretty robust bookings, and Peter will talk maybe to the pipeline and market conditions afterwards. we've also got line of sight to what we believe to be some pretty robust bookings and peter will talk maybe to the pipeline and market conditions afterwards We're seeing strong indications of pipeline activity and expecting strong bookings on top to add accretively to that backlog of SaaS that we have at the end of the year. We're seeing strong indications of pipeline activity and expecting strong bookings on top to add accretively to that backlog of SaaS that we have at the end of the year. we're seeing strong indications of pipeline activity and expecting strong bookings on top to add accretively to that backlog of saas that we have at the end of the year

Speaker 5: Yeah. I would just add, Amir, that as Mark's commented, we're not at this point seeing a slowdown in activity. There's no question. It's on everybody's mind. I was down at the SMI conference, whatever it was, two weeks ago, I guess. These are all supply chain leaders from hospital organizations. The general consensus there was that all these sort of threats to cut Medicaid are sort of political posturing. Most of the dates that they're talking about in terms of when those cuts would kick in, if this bill passes with those cuts in it, the dates are sort of staggered out over the next couple of years with lots of time to delay or cancel those cuts before those dates actually arrive. Yeah. yeah I would just add, Amir, that as Mark's commented, we're not at this point seeing a slowdown in activity. i would just add amir that as mark's commented we're not at this point seeing a slowdown in activity There's no question. there's no question It's on everybody's mind. it's on everybody's mind I was down at the SMI conference, whatever it was, two weeks ago, I guess. i was down at the smi conference whatever it was two weeks ago i guess These are all supply chain leaders from hospital organizations. these are all supply chain leaders from hospital organizations The general consensus there was that all these sort of threats to cut Medicaid are sort of political posturing. the general consensus there was that all these sort of threats to cut medicaid are sort of political posturing Most of the dates that they're talking about in terms of when those cuts would kick in, if this bill passes with those cuts in it, the dates are sort of staggered out over the next couple of years with lots of time to delay or cancel those cuts before those dates actually arrive. most of the dates that they're talking about in terms of when those cuts would kick in if this bill passes with those cuts in it the dates are sort of staggered out over the next couple of years with lots of time to delay or cancel those cuts before those dates actually arrive The feeling generally seemed to be that it was largely political posturing and was not going to happen because any party that actually cuts 16 million people out of Medicaid is doomed to lose the next election. At the same time, there is no question. It was top of mind for everybody. I mean, it was a frequent matter of conversation, but the consensus seemed to be that it was unlikely to actually bite. We will see. We are keeping an eye on it. At this point, though, we are not seeing any slowdown in activity. I mean, as we mentioned, we closed two deals in the fourth quarter when this was already sort of in the air, like two new accounts, plus some expansions. Certainly the pipeline activity in the first quarter is showing is remaining quite strong. We will see how this ends. The feeling generally seemed to be that it was largely political posturing and was not going to happen because any party that actually cuts 16 million people out of Medicaid is doomed to lose the next election. the feeling generally seemed to be that it was largely political posturing and was not going to happen because any party that actually cuts 16 million people out of medicaid is doomed to lose the next election At the same time, there is no question. at the same time there is no question It was top of mind for everybody. it was top of mind for everybody I mean, it was a frequent matter of conversation, but the consensus seemed to be that it was unlikely to actually bite. i mean it was a frequent matter of conversation but the consensus seemed to be that it was unlikely to actually bite We will see. We are keeping an eye on it. we will see. we are keeping an eye on it At this point, though, we are not seeing any slowdown in activity. at this point though, we are not seeing any slowdown in activity I mean, as we mentioned, we closed two deals in the fourth quarter when this was already sort of in the air, like two new accounts, plus some expansions. i mean as we mentioned we closed two deals in the fourth quarter when this was already sort of in the air like two new accounts plus some expansions Certainly the pipeline activity in the first quarter is showing is remaining quite strong. certainly the pipeline activity in the first quarter is showing is remaining quite strong We will see how this ends. we will see how this ends We're keeping an eye on it, but at this point, it's still all systems go. We're keeping an eye on it, but at this point, it's still all systems go. we're keeping an eye on it but at this point it's still all systems go

Speaker 1: Fantastic. Appreciate the color. I think one of your highlights of the quarter is you call it margin expansion on staff. Can you elaborate on the key levers driving that? It seems to be tracking ahead of expectations. Is there anything abnormal helping the expansion this quarter specifically? Fantastic. fantastic Appreciate the color. appreciate the color I think one of your highlights of the quarter is you call it margin expansion on staff. i think one of your highlights of the quarter is you call it margin expansion on staff Can you elaborate on the key levers driving that? can you elaborate on the key levers driving that It seems to be tracking ahead of expectations. it seems to be tracking ahead of expectations Is there anything abnormal helping the expansion this quarter specifically? is there anything abnormal helping the expansion this quarter specifically

Speaker 5: No. I mean, it's going to continue to bounce around a little bit. There's no question. There's really sort of three core levers we have on that. I'll sort of try to keep this brief. First is we still have a few older accounts that first came onto our SaaS platform back in 2019 and 2020, and even 2021 when we first introduced it. They came onto our first-generation SaaS. They have not migrated forward onto our mainline platform that includes automatic upgrades and all those kinds of things. That whole infrastructure and technology stack is much lower growth margin. We are migrating those accounts forward onto our newest, latest platform that includes automatic upgrades and the latest and greatest security and all those kinds of things. No. no I mean, it's going to continue to bounce around a little bit. i mean it's going to continue to bounce around a little bit There's no question. there's no question There's really sort of three core levers we have on that. there's really sort of three core levers we have on that I'll sort of try to keep this brief. i'll sort of try to keep this brief First is we still have a few older accounts that first came onto our SaaS platform back in 2019 and 2020, and even 2021 when we first introduced it. first is we still have a few older accounts that first came onto our saas platform back in 2019 and 2020 and even 2021 when we first introduced it They came onto our first-generation SaaS. they came onto our first-generation saas They have not migrated forward onto our mainline platform that includes automatic upgrades and all those kinds of things. they have not migrated forward onto our mainline platform that includes automatic upgrades and all those kinds of things That whole infrastructure and technology stack is much lower growth margin. that whole infrastructure and technology stack is much lower growth margin We are migrating those accounts forward onto our newest, latest platform that includes automatic upgrades and the latest and greatest security and all those kinds of things. we are migrating those accounts forward onto our newest latest platform that includes automatic upgrades and the latest and greatest security and all those kinds of things It also, as they move, we end up with a client coming off of a low gross margin stack onto a high gross margin stack. That is a driver. We are also continuing to re-architect our overall platform for more and more public cloud infrastructure efficiency. We are making very good headway on that. I think we've got probably two more years of investing in that where we're still dealing with pretty serious payback as we go. I think sort of two years from now, there's always going to be ways to continue to improve it. I think the bulk of that progression will be complete within about two years. The last area is just as we continue to drive up quality and reliability and user-friendliness, we continue to drive down customer care costs. It also, as they move, we end up with a client coming off of a low gross margin stack onto a high gross margin stack. it also as they move we end up with a client coming off of a low gross margin stack onto a high gross margin stack That is a driver. that is a driver We are also continuing to re-architect our overall platform for more and more public cloud infrastructure efficiency. we are also continuing to re-architect our overall platform for more and more public cloud infrastructure efficiency We are making very good headway on that. we are making very good headway on that I think we've got probably two more years of investing in that where we're still dealing with pretty serious payback as we go. i think we've got probably two more years of investing in that where we're still dealing with pretty serious payback as we go I think sort of two years from now, there's always going to be ways to continue to improve it. i think sort of two years from now there's always going to be ways to continue to improve it I think the bulk of that progression will be complete within about two years. i think the bulk of that progression will be complete within about two years The last area is just as we continue to drive up quality and reliability and user-friendliness, we continue to drive down customer care costs. the last area is just as we continue to drive up quality and reliability and user-friendliness we continue to drive down customer care costs You end up with less and less calls, less and less tickets coming into the customer care team. That is another aspect of cost that goes into supporting a SaaS account. We're making pretty good headway on that. If I look at the last 12 months, we've actually brought our severity one and severity two tickets down by about 35% compared to a year ago. We're continuing to drive that number down. That is another key factor in achieving higher SaaS gross margin. I mean, our objective over the next sort of two to three years is actually to drive it to 80%. We'll see how we do on that trajectory. I know our investor deck shows a progression to 75%, where internally we're shooting a little higher than that. We think we've got sort of these three key levers to make that lift. You end up with less and less calls, less and less tickets coming into the customer care team. That is another aspect of cost that goes into supporting a SaaS account. you end up with less and less calls less and less tickets coming into the customer care team. that is another aspect of cost that goes into supporting a saas account We're making pretty good headway on that. we're making pretty good headway on that If I look at the last 12 months, we've actually brought our severity one and severity two tickets down by about 35% compared to a year ago. if i look at the last 12 months we've actually brought our severity one and severity two tickets down by about 35% compared to a year ago We're continuing to drive that number down. we're continuing to drive that number down That is another key factor in achieving higher SaaS gross margin. that is another key factor in achieving higher saas gross margin I mean, our objective over the next sort of two to three years is actually to drive it to 80%. i mean our objective over the next sort of two to three years is actually to drive it to 80% We'll see how we do on that trajectory. we'll see how we do on that trajectory I know our investor deck shows a progression to 75%, where internally we're shooting a little higher than that. i know our investor deck shows a progression to 75% where internally we're shooting a little higher than that We think we've got sort of these three key levers to make that lift. we think we've got sort of these three key levers to make that lift

Speaker 1: That's great to hear. Maybe one last one if you'll allow me. Your adjusted EBITDA guidance of 8%-9% is down from 10%-11%. This is despite, obviously, the gross margin expansion. My quick math is it's like an extra CAD 4 million of OpEx investments. I just wonder where exactly are you guys spending in R&D than in marketing, if you could just break down the different areas? That's great to hear. that's great to hear Maybe one last one if you'll allow me. maybe one last one if you'll allow me Your adjusted EBITDA guidance of 8%-9% is down from 10%-11%. your adjusted ebitda guidance of 8%-9% is down from 10%-11% This is despite, obviously, the gross margin expansion. this is despite obviously the gross margin expansion My quick math is it's like an extra CAD 4 million of OpEx investments. my quick math is it's like an extra cad 4 million of opex investments I just wonder where exactly are you guys spending in R&D than in marketing, if you could just break down the different areas? i just wonder where exactly are you guys spending in r&d than in marketing if you could just break down the different areas

Speaker 5: Sure. I would lump them into two main areas. There is some additional spend in sales. We do continue to invest there. We brought on a senior expert out of the hospital market to join the sales team. He's been a senior supply chain leader at a hospital network. He's joined the sales organization as a sort of hospital supply chain expert. He's going to be helping the entire hospital sales team. We do continue to invest in sales. That's probably the smallest piece of that, I would think. Mark can correct me here when I'm done. Sure. sure I would lump them into two main areas. i would lump them into two main areas There is some additional spend in sales. there is some additional spend in sales We do continue to invest there. we do continue to invest there We brought on a senior expert out of the hospital market to join the sales team. we brought on a senior expert out of the hospital market to join the sales team He's been a senior supply chain leader at a hospital network. he's been a senior supply chain leader at a hospital network He's joined the sales organization as a sort of hospital supply chain expert. he's joined the sales organization as a sort of hospital supply chain expert He's going to be helping the entire hospital sales team. he's going to be helping the entire hospital sales team We do continue to invest in sales. we do continue to invest in sales That's probably the smallest piece of that, I would think. that's probably the smallest piece of that i would think Mark can correct me here when I'm done. mark can correct me here when i'm done

Speaker 3: Yep. Yep. yep

Speaker 5: Probably the high level. The majority is really marketing. We are looking to sort of get the messaging out around the end-to-end healthcare supply chain that we are not hospitals, but we are also distributors and 3PLs and manufacturers. We have a complete end-to-end platform for the whole hospital supply chain continuum. We want to get that message out across both North America and Europe. We are cranking up marketing spend in that area with the interest of driving bookings back up, bookings growth back up to a higher level. We think we can get bookings growth back up to close to 30%. We think we have got to get that messaging out there loud and clear. Probably the high level. probably the high level The majority is really marketing. the majority is really marketing We are looking to sort of get the messaging out around the end-to-end healthcare supply chain that we are not hospitals, but we are also distributors and 3PLs and manufacturers. we are looking to sort of get the messaging out around the end-to-end healthcare supply chain that we are not hospitals but we are also distributors and 3pls and manufacturers We have a complete end-to-end platform for the whole hospital supply chain continuum. we have a complete end-to-end platform for the whole hospital supply chain continuum We want to get that message out across both North America and Europe. we want to get that message out across both north america and europe We are cranking up marketing spend in that area with the interest of driving bookings back up, bookings growth back up to a higher level. we are cranking up marketing spend in that area with the interest of driving bookings back up bookings growth back up to a higher level We think we can get bookings growth back up to close to 30%. we think we can get bookings growth back up to close to 30% We think we have got to get that messaging out there loud and clear. we think we have got to get that messaging out there loud and clear On the R&D front, there is some additional investment going into FedRAMP because we really need to do a lot of government business, and we really need to be FedRAMP compliant. That has driven some extra costs. The bulk of the extra investment in R&D is it's just AI, AI, and AI. I mean, we're putting it everywhere across the product. We've got some really exciting stuff coming out. That whole Tecsys IQ platform is sort of underlying that effort. We are investing across point of use, the IR, OR, cath lab, nursing station, the warehouse, the warehouse execution system, etc., right across the board to create a platform that really takes full advantage of the excellent data that we have in our platform. On the R&D front, there is some additional investment going into FedRAMP because we really need to do a lot of government business, and we really need to be FedRAMP compliant. on the r&d front there is some additional investment going into fedramp because we really need to do a lot of government business and we really need to be fedramp compliant That has driven some extra costs. that has driven some extra costs The bulk of the extra investment in R&D is it's just AI, AI, and AI. the bulk of the extra investment in r&d is it's just ai ai and ai I mean, we're putting it everywhere across the product. i mean we're putting it everywhere across the product We've got some really exciting stuff coming out. we've got some really exciting stuff coming out That whole Tecsys IQ platform is sort of underlying that effort. that whole tecsys iq platform is sort of underlying that effort We are investing across point of use, the IR, OR, cath lab, nursing station, the warehouse, the warehouse execution system, etc., right across the board to create a platform that really takes full advantage of the excellent data that we have in our platform. we are investing across point of use the ir or cath lab nursing station the warehouse the warehouse execution system etc right across the board to create a platform that really takes full advantage of the excellent data that we have in our platform

Speaker 1: Fantastic. Fantastic. fantastic

Speaker 3: I think I would add one thing to that, Amir. I think is that we just closed up that asset acquisition in India on May 1, as Peter mentioned earlier in the call. That is going to, if you're looking at OpEx lines of cost, add sequential costs. There was some revenue that came with that too, but it is going to add sequential costs into that R&D line and also a little bit in the margin, but mostly in the R&D line. I think I would add one thing to that, Amir. i think i would add one thing to that amir I think is that we just closed up that asset acquisition in India on May 1, as Peter mentioned earlier in the call. i think is that we just closed up that asset acquisition in india on may 1 as peter mentioned earlier in the call That is going to, if you're looking at OpEx lines of cost, add sequential costs. that is going to if you're looking at opex lines of cost add sequential costs There was some revenue that came with that too, but it is going to add sequential costs into that R&D line and also a little bit in the margin, but mostly in the R&D line. there was some revenue that came with that too but it is going to add sequential costs into that r&d line and also a little bit in the margin but mostly in the r&d line Yep. I suspect the user conference as well. Yep. yep I suspect the user conference as well. i suspect the user conference as well Yeah. You'll see that come through in Q1. Exactly. Yeah. yeah You'll see that come through in Q1. you'll see that come through in q1 Exactly. exactly

Speaker 5: Fantastic. Thanks for the time, Mark. Pass the mic. Fantastic. fantastic Thanks for the time, Mark. thanks for the time mark Pass the mic. pass the mic

Speaker 3: Thank you. Thank you. thank you

Speaker 4: Your next question comes from Gavin Fairweather with Cormark. Your line is now open. Your next question comes from Gavin Fairweather with Cormark. your next question comes from gavin fairweather with cormark Your line is now open. your line is now open

Speaker 2: Oh, hey. Good morning. Thanks for taking my questions. Maybe just to start, I mean, you guys seem to be getting more traction in the broader healthcare supply chain, so call it outside the hospitals, and you're talking about leading in on sales and marketing. Curious if you've done any work to size up that PIM, and what are your thoughts about the velocity of that market in the years ahead? Oh, hey. oh hey Good morning. good morning Thanks for taking my questions. thanks for taking my questions Maybe just to start, I mean, you guys seem to be getting more traction in the broader healthcare supply chain, so call it outside the hospitals, and you're talking about leading in on sales and marketing. maybe just to start i mean you guys seem to be getting more traction in the broader healthcare supply chain so call it outside the hospitals and you're talking about leading in on sales and marketing Curious if you've done any work to size up that PIM, and what are your thoughts about the velocity of that market in the years ahead? curious if you've done any work to size up that pim and what are your thoughts about the velocity of that market in the years ahead

Speaker 5: You're saying the U.S. hospital market? You're saying the U.S. hospital market? you're saying the u.s hospital market

Speaker 2: No. It's like the broader supply chain, the distributors. Have you sized up that PIM, and what are your thoughts on the speed of that market in the years ahead? No. no It's like the broader supply chain, the distributors. it's like the broader supply chain the distributors Have you sized up that PIM, and what are your thoughts on the speed of that market in the years ahead? have you sized up that pim and what are your thoughts on the speed of that market in the years ahead

Speaker 5: I mean, it's interesting that the general, I mean, what we're seeing in the market is some really serious activity, right? We're trying to tighten our focus because that market is actually so large, right? If I look at the general supply chain market that we've played in for years, where we say there's 12,000 companies in North America with an average initial ARR of CAD 500,000 for a CAD 6 billion PIM, that's a very, very large market. Our win rate in that very large market tends to run 30%-40%. We have decided we would rather narrow our focus in that market to only pursue the verticals within it or subverticals, if you will, where our win rate is over 50%. We're narrowing our focus to areas like, for instance, electrical. Our win rate is very high in electrical. I mean, it's interesting that the general, I mean, what we're seeing in the market is some really serious activity, right? i mean it's interesting that the general i mean what we're seeing in the market is some really serious activity right We're trying to tighten our focus because that market is actually so large, right? we're trying to tighten our focus because that market is actually so large right If I look at the general supply chain market that we've played in for years, where we say there's 12,000 companies in North America with an average initial ARR of CAD 500,000 for a CAD 6 billion PIM, that's a very, very large market. if i look at the general supply chain market that we've played in for years where we say there's 12,000 companies in north america with an average initial arr of cad 500,000 for a cad 6 billion pim that's a very very large market Our win rate in that very large market tends to run 30%-40%. our win rate in that very large market tends to run 30%-40% We have decided we would rather narrow our focus in that market to only pursue the verticals within it or subverticals, if you will, where our win rate is over 50%. we have decided we would rather narrow our focus in that market to only pursue the verticals within it or subverticals if you will where our win rate is over 50% We're narrowing our focus to areas like, for instance, electrical. we're narrowing our focus to areas like for instance electrical Our win rate is very high in electrical. our win rate is very high in electrical Our win rate is very high in anything to do with healthcare. That can be eye care products, ear products, foot products, joints and knees and medical supplies and safety supplies and drugs. Certainly, drugs is a huge part of it. Across all those subverticals, you have the manufacturers within those, the distributors within those, and the 3PLs within those. When we narrow to that focus, we find our win rate shoots a lot higher. We are still, as we're making that pivot, we've done some analysis to say, "How big is that PIM?" It is still very large. We can't give you precise numbers yet because we're also pulling in Europe. We're doing business in the U.K. We added a nice deal in the fourth quarter over in the U.K. in the healthcare supply chain space. Our win rate is very high in anything to do with healthcare. our win rate is very high in anything to do with healthcare That can be eye care products, ear products, foot products, joints and knees and medical supplies and safety supplies and drugs. that can be eye care products ear products foot products joints and knees and medical supplies and safety supplies and drugs Certainly, drugs is a huge part of it. certainly drugs is a huge part of it Across all those subverticals, you have the manufacturers within those, the distributors within those, and the 3PLs within those. across all those subverticals you have the manufacturers within those the distributors within those and the 3pls within those When we narrow to that focus, we find our win rate shoots a lot higher. when we narrow to that focus we find our win rate shoots a lot higher We are still, as we're making that pivot, we've done some analysis to say, "How big is that PIM?" It is still very large. we are still as we're making that pivot we've done some analysis to say "how big is that pim?" it is still very large We can't give you precise numbers yet because we're also pulling in Europe. we can't give you precise numbers yet because we're also pulling in europe We're doing business in the U.K. we're doing business in the u.k We added a nice deal in the fourth quarter over in the U.K. in the healthcare supply chain space. we added a nice deal in the fourth quarter over in the u.k in the healthcare supply chain space We're still getting a handle on what that PIM is. If I were to hazard a guess, I think it's about CAD 2 billion PIM across sort of Europe and North America. We're still trying to get that nailed down. Velocity, it's moving at a good clip. There's been some tariff fears. There's no question. There's a lot of disturbance around tariffs. In the meantime, as I think we've chatted about before, the bulk of the systems these companies are running were put in in time for Y2K. That story is coming to its last chapter. I mean, these systems need to be replaced. You have organizations like Gartner and others saying that this market is going to grow at 10%-15% a year for probably the next 10 years. It's certainly what we're seeing. We're still getting a handle on what that PIM is. we're still getting a handle on what that pim is If I were to hazard a guess, I think it's about CAD 2 billion PIM across sort of Europe and North America. if i were to hazard a guess i think it's about cad 2 billion pim across sort of europe and north america We're still trying to get that nailed down. we're still trying to get that nailed down Velocity, it's moving at a good clip. velocity it's moving at a good clip There's been some tariff fears. there's been some tariff fears There's no question. there's no question There's a lot of disturbance around tariffs. there's a lot of disturbance around tariffs In the meantime, as I think we've chatted about before, the bulk of the systems these companies are running were put in in time for Y2K. in the meantime as i think we've chatted about before the bulk of the systems these companies are running were put in in time for y2k That story is coming to its last chapter. that story is coming to its last chapter I mean, these systems need to be replaced. i mean these systems need to be replaced You have organizations like Gartner and others saying that this market is going to grow at 10%-15% a year for probably the next 10 years. you have organizations like gartner and others saying that this market is going to grow at 10%-15% a year for probably the next 10 years It's certainly what we're seeing. it's certainly what we're seeing We will see how this goes as we make this sort of shift to a narrower focus within that very broad market. But we're pretty excited about the possibilities. We will see how this goes as we make this sort of shift to a narrower focus within that very broad market. we will see how this goes as we make this sort of shift to a narrower focus within that very broad market But we're pretty excited about the possibilities. but we're pretty excited about the possibilities

Speaker 2: Very helpful. Secondly for me, I think last call you talked about a couple additional customers going live on pharma. Just curious how those implementations went, how the data coming out of that is looking in terms of the ROI, and whether you think that that'll catalyze activity in fiscal 2026 for you. Very helpful. very helpful Secondly for me, I think last call you talked about a couple additional customers going live on pharma. secondly for me i think last call you talked about a couple additional customers going live on pharma Just curious how those implementations went, how the data coming out of that is looking in terms of the ROI, and whether you think that that'll catalyze activity in fiscal 2026 for you. just curious how those implementations went how the data coming out of that is looking in terms of the roi and whether you think that that'll catalyze activity in fiscal 2026 for you

Speaker 5: We certainly believe it well that the go-lives are quite recent. We've had one that sort of did a gradual go-live over April. I guess the initial inbound was in April, and then they started some of the outbound go-lives in June. We actually had one of the supply chain leaders was actually at our user conference. Pharmacy supply chain leaders was at our user conference as their organization was in the process of going through the next phase of go-live, which I thought actually showed a pretty strong confidence. They've now proceeded to the next phase. Everything's progressing on track. I would say it will be, I would think it will be this fall by the time they have enough data to really say, "Sort of, okay, here's the before picture and here's the after picture and here's what we're seeing," etc. We certainly believe it well that the go-lives are quite recent. we certainly believe it well that the go-lives are quite recent We've had one that sort of did a gradual go-live over April. we've had one that sort of did a gradual go-live over april I guess the initial inbound was in April, and then they started some of the outbound go-lives in June. i guess the initial inbound was in april and then they started some of the outbound go-lives in june We actually had one of the supply chain leaders was actually at our user conference. we actually had one of the supply chain leaders was actually at our user conference Pharmacy supply chain leaders was at our user conference as their organization was in the process of going through the next phase of go-live, which I thought actually showed a pretty strong confidence. pharmacy supply chain leaders was at our user conference as their organization was in the process of going through the next phase of go-live which i thought actually showed a pretty strong confidence They've now proceeded to the next phase. they've now proceeded to the next phase Everything's progressing on track. everything's progressing on track I would say it will be, I would think it will be this fall by the time they have enough data to really say, "Sort of, okay, here's the before picture and here's the after picture and here's what we're seeing," etc. i would say it will be i would think it will be this fall by the time they have enough data to really say "sort of okay here's the before picture and here's the after picture and here's what we're seeing," etc I mean, we already have Parkview Health, who's willing to stand up and say, "Yeah, they turned it all on over a year ago, and they're seeing great results." This latest wave, Northwestern and [those] others, I would think that it's probably this fall by the time we're seeing that data. I mean, we already have Parkview Health, who's willing to stand up and say, "Yeah, they turned it all on over a year ago, and they're seeing great results." This latest wave, Northwestern and [those] others, I would think that it's probably this fall by the time we're seeing that data. i mean we already have parkview health who's willing to stand up and say "yeah they turned it all on over a year ago and they're seeing great results." this latest wave northwestern and [those] others i would think that it's probably this fall by the time we're seeing that data

Speaker 2: Very helpful. Maybe lastly for me, for Mark, I think last quarter you talked about a couple decent maintenance to SaaS migrations. I think the script, you talked about another one in healthcare maybe this quarter. Can you just help us frame how we should be thinking about the maintenance line going forward and how we should think about maybe winding down a little bit as that revenue flips to SaaS? Very helpful. very helpful Maybe lastly for me, for Mark, I think last quarter you talked about a couple decent maintenance to SaaS migrations. maybe lastly for me for mark i think last quarter you talked about a couple decent maintenance to saas migrations I think the script, you talked about another one in healthcare maybe this quarter. i think the script you talked about another one in healthcare maybe this quarter Can you just help us frame how we should be thinking about the maintenance line going forward and how we should think about maybe winding down a little bit as that revenue flips to SaaS? can you just help us frame how we should be thinking about the maintenance line going forward and how we should think about maybe winding down a little bit as that revenue flips to saas

Speaker 3: Yeah. That's a good point. I mean, we do see it. It came down a little bit from 2024 to 2025 as these historical migrations kind of go live on SaaS and turn off on-prem stuff. There's definitely a wave of that coming. I think you'll see a like or actually probably slightly higher decline in year-on-year maintenance and support if you look out at 2026, from 2025 to 2026 versus what happened in 2024 to 2025, which you would kind of expect because we've been selling these on-prem migrations for a number of years, and we've sold a good chunk of them. Yeah, that's going to come rippling through, and you'll see that in 2026. Yeah. yeah That's a good point. I mean, we do see it. that's a good point. i mean we do see it It came down a little bit from 2024 to 2025 as these historical migrations kind of go live on SaaS and turn off on-prem stuff. it came down a little bit from 2024 to 2025 as these historical migrations kind of go live on saas and turn off on-prem stuff There's definitely a wave of that coming. there's definitely a wave of that coming I think you'll see a like or actually probably slightly higher decline in year-on-year maintenance and support if you look out at 2026, from 2025 to 2026 versus what happened in 2024 to 2025, which you would kind of expect because we've been selling these on-prem migrations for a number of years, and we've sold a good chunk of them. i think you'll see a like or actually probably slightly higher decline in year-on-year maintenance and support if you look out at 2026 from 2025 to 2026 versus what happened in 2024 to 2025 which you would kind of expect because we've been selling these on-prem migrations for a number of years and we've sold a good chunk of them Yeah, that's going to come rippling through, and you'll see that in 2026. yeah that's going to come rippling through and you'll see that in 2026

Speaker 2: Thanks so much. I'll pass the line. Thanks so much. thanks so much I'll pass the line. i'll pass the line

Speaker 5: Thanks, you. Thanks, you. thanks you

Speaker 4: Your next question comes from John Cho with National Bank. Your line is now open. Your next question comes from John Cho with National Bank. your next question comes from john cho with national bank Your line is now open. your line is now open

Speaker 6: Hey, good morning. Thanks for taking my question. I'm trying to get an understanding of your net revenue retention. I mean, it's still robust at 106%, but a bit lower compared to 2023 and 2024 levels. Are we getting some normalizations following the COVID peak? Hey, good morning. hey good morning Thanks for taking my question. thanks for taking my question I'm trying to get an understanding of your net revenue retention. i'm trying to get an understanding of your net revenue retention I mean, it's still robust at 106%, but a bit lower compared to 2023 and 2024 levels. i mean it's still robust at 106% but a bit lower compared to 2023 and 2024 levels Are we getting some normalizations following the COVID peak? are we getting some normalizations following the covid peak

Speaker 3: Yeah. I think that. Yeah. yeah I think that. i think that

Speaker 5: Sorry. Go ahead, Mark. Sorry. sorry Go ahead, Mark. go ahead mark

Speaker 3: Yeah. I was just going to say, I think what you're seeing there is we've got that base of customers, that number that we disclosed there is ARR. So, it's all ARR-based. And what we have going on in there is expansions and migrations drive that number up, and churn drives that number down. What we saw happening in the latest quarter last year in Q4 of 2024, we had a really big booking quarter. There was a lot of expansion and migration in that booking quarter. What you're kind of seeing here is that we do that measurement on an LPM basis. We're no longer picking up the large sort of outsized migration and expansion in that one Q4. It kind of dips down here as we normalize. Certainly, we expect that to climb, to continue to climb back up. Yeah. yeah I was just going to say, I think what you're seeing there is we've got that base of customers, that number that we disclosed there is ARR. i was just going to say i think what you're seeing there is we've got that base of customers that number that we disclosed there is arr So, it's all ARR-based. so it's all arr-based And what we have going on in there is expansions and migrations drive that number up, and churn drives that number down. and what we have going on in there is expansions and migrations drive that number up and churn drives that number down What we saw happening in the latest quarter last year in Q4 of 2024, we had a really big booking quarter. what we saw happening in the latest quarter last year in q4 of 2024 we had a really big booking quarter There was a lot of expansion and migration in that booking quarter. there was a lot of expansion and migration in that booking quarter What you're kind of seeing here is that we do that measurement on an LPM basis. what you're kind of seeing here is that we do that measurement on an lpm basis We're no longer picking up the large sort of outsized migration and expansion in that one Q4. we're no longer picking up the large sort of outsized migration and expansion in that one q4 It kind of dips down here as we normalize. it kind of dips down here as we normalize Certainly, we expect that to climb, to continue to climb back up. certainly we expect that to climb to continue to climb back up When we look forward and look at bookings and bookings mix, we're sure expecting that our base of customers that are existing SaaS customers now will continue to grow with us. The bookings that we reported in Q4 of this year played that out pretty nicely for one quarter, where we had a big chunk of those bookings in the current Q4 coming from migration. We expect that to continue in the future. Expansion bookings and new logo bookings together will become a much bigger part of our total bookings, and that should drive that number, we believe, back north. When we look forward and look at bookings and bookings mix, we're sure expecting that our base of customers that are existing SaaS customers now will continue to grow with us. when we look forward and look at bookings and bookings mix we're sure expecting that our base of customers that are existing saas customers now will continue to grow with us The bookings that we reported in Q4 of this year played that out pretty nicely for one quarter, where we had a big chunk of those bookings in the current Q4 coming from migration. the bookings that we reported in q4 of this year played that out pretty nicely for one quarter where we had a big chunk of those bookings in the current q4 coming from migration We expect that to continue in the future. we expect that to continue in the future Expansion bookings and new logo bookings together will become a much bigger part of our total bookings, and that should drive that number, we believe, back north. expansion bookings and new logo bookings together will become a much bigger part of our total bookings and that should drive that number we believe back north

Speaker 6: Got it. Thanks. You have two years in a row where you report strong SaaS bookings by Q4. Is that a new trend, something we should expect going forward? Got it. got it Thanks. thanks You have two years in a row where you report strong SaaS bookings by Q4. you have two years in a row where you report strong saas bookings by q4 Is that a new trend, something we should expect going forward? is that a new trend something we should expect going forward

Speaker 3: You know what? It's a good question. As much as we try to manage that moderate alpha lumpiness in our, forget about our year or even our quarters, it's really tough to do. We've seen that historically, Q4 been a time where bookings have peaked. I mean, I think the base of prospects is pretty well trained. They know when our year-ends are, and they tend to kind of use it as well. Yeah, it's hard to call, but I think that is, we've tried to break that trend, but it is kind of the trend. I would expect that in the future. When we think about planning, we're certainly ramping up our bookings in the back half of our fiscal year and into Q4 as opposed to in the front half of the year. You know what? you know what It's a good question. it's a good question As much as we try to manage that moderate alpha lumpiness in our, forget about our year or even our quarters, it's really tough to do. as much as we try to manage that moderate alpha lumpiness in our forget about our year or even our quarters it's really tough to do We've seen that historically, Q4 been a time where bookings have peaked. we've seen that historically q4 been a time where bookings have peaked I mean, I think the base of prospects is pretty well trained. i mean i think the base of prospects is pretty well trained They know when our year-ends are, and they tend to kind of use it as well. they know when our year-ends are and they tend to kind of use it as well Yeah, it's hard to call, but I think that is, we've tried to break that trend, but it is kind of the trend. yeah it's hard to call but i think that is we've tried to break that trend but it is kind of the trend I would expect that in the future. i would expect that in the future When we think about planning, we're certainly ramping up our bookings in the back half of our fiscal year and into Q4 as opposed to in the front half of the year. when we think about planning we're certainly ramping up our bookings in the back half of our fiscal year and into q4 as opposed to in the front half of the year

Speaker 4: Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Suthan Sukumar with Stifel. Your line is now open. Ladies and gentlemen, as a reminder, should you have a question, please press star 1. ladies and gentlemen as a reminder should you have a question please press star 1 Your next question comes from Suthan Sukumar with Stifel. your next question comes from suthan sukumar with stifel Your line is now open. your line is now open

Speaker 7: Hey, guys. This is Esai speaking on behalf of Stifel. Just a few questions for me. I know you mentioned that pro-service is variable, but pro-service and backlog in bookings are strong in this quarter. I was curious to know if you could just give some additional color on what is driving that and what that implies for SaaS revenue growth. Hey, guys. hey guys This is Esai speaking on behalf of Stifel. this is esai speaking on behalf of stifel Just a few questions for me. just a few questions for me I know you mentioned that pro-service is variable, but pro-service and backlog in bookings are strong in this quarter. i know you mentioned that pro-service is variable but pro-service and backlog in bookings are strong in this quarter I was curious to know if you could just give some additional color on what is driving that and what that implies for SaaS revenue growth. i was curious to know if you could just give some additional color on what is driving that and what that implies for saas revenue growth

Speaker 3: Yeah. It's a good question. I think if I could take maybe that question, the back half of our bookings year for PS this year was super robust, and that's driving that ending backlog. I think what that tells us is the market, the purse strings of our prospects in that hospital network market have loosened up, we believe. We saw that in the back half of the year with these big projects extending and more capital flowing from the hospital networks into our professional services projects. That's great because that means projects will continue to move. They'll move more quickly, and customers go live. That's great for us because it just firms up the customer commitment to the platform. We feel good about that. Yeah. yeah It's a good question. it's a good question I think if I could take maybe that question, the back half of our bookings year for PS this year was super robust, and that's driving that ending backlog. i think if i could take maybe that question the back half of our bookings year for ps this year was super robust and that's driving that ending backlog I think what that tells us is the market, the purse strings of our prospects in that hospital network market have loosened up, we believe. i think what that tells us is the market the purse strings of our prospects in that hospital network market have loosened up we believe We saw that in the back half of the year with these big projects extending and more capital flowing from the hospital networks into our professional services projects. we saw that in the back half of the year with these big projects extending and more capital flowing from the hospital networks into our professional services projects That's great because that means projects will continue to move. that's great because that means projects will continue to move They'll move more quickly, and customers go live. they'll move more quickly and customers go live That's great for us because it just firms up the customer commitment to the platform. that's great for us because it just firms up the customer commitment to the platform We feel good about that. we feel good about that I think in some ways, especially that happening in light of kind of some market, some geopolitical turmoil and things, I think gives us cause for optimism in hospital network budgets, at least for the near term and the future. We feel like that's a good positive sign. In terms of what that's going to do to professional services revenue, we crossed over. We just reported this CAD 16 million professional services revenue quarter, which was bigger. We've never been in the 16th before. In fact, we haven't been in the 15th before. We think with this backlog, we think we may not be at this sort of CAD 16 million level in the coming quarters, but we're going to be at a very, we believe we'll be at a very robust level of professional services revenue in the coming quarters on the back of that backlog. I think in some ways, especially that happening in light of kind of some market, some geopolitical turmoil and things, I think gives us cause for optimism in hospital network budgets, at least for the near term and the future. i think in some ways especially that happening in light of kind of some market some geopolitical turmoil and things i think gives us cause for optimism in hospital network budgets at least for the near term and the future We feel like that's a good positive sign. we feel like that's a good positive sign In terms of what that's going to do to professional services revenue, we crossed over. in terms of what that's going to do to professional services revenue we crossed over We just reported this CAD 16 million professional services revenue quarter, which was bigger. we just reported this cad 16 million professional services revenue quarter which was bigger We've never been in the 16th before. we've never been in the 16th before In fact, we haven't been in the 15th before. in fact we haven't been in the 15th before We think with this backlog, we think we may not be at this sort of CAD 16 million level in the coming quarters, but we're going to be at a very, we believe we'll be at a very robust level of professional services revenue in the coming quarters on the back of that backlog. we think with this backlog we think we may not be at this sort of cad 16 million level in the coming quarters but we're going to be at a very we believe we'll be at a very robust level of professional services revenue in the coming quarters on the back of that backlog

Speaker 7: Thank you. Thank you. Maybe a follow-up for that. SaaS backlog was up 10%, and it seems that there's still elevated activity and demand here. Could you provide maybe a quick rehash on backlog conversion and how we should look, how we should see that, how we should think about that, and how that looks like? Thank you. thank you Thank you. thank you Maybe a follow-up for that. maybe a follow-up for that SaaS backlog was up 10%, and it seems that there's still elevated activity and demand here. saas backlog was up 10% and it seems that there's still elevated activity and demand here Could you provide maybe a quick rehash on backlog conversion and how we should look, how we should see that, how we should think about that, and how that looks like? could you provide maybe a quick rehash on backlog conversion and how we should look how we should see that how we should think about that and how that looks like

Speaker 3: Are you talking about how contracts sort of convert into SaaS revenue and how that backlog converts into SaaS revenue? Are you talking about how contracts sort of convert into SaaS revenue and how that backlog converts into SaaS revenue? are you talking about how contracts sort of convert into saas revenue and how that backlog converts into saas revenue

Speaker 7: Yeah. Yeah. yeah

Speaker 3: Yeah. So, I mean, our typical contracts are three to five years long. When we track our SaaS backlog, we're taking the totality of the future value of that contract. If we sign a five-year contract, the SaaS backlog is 5x that SaaS ARR amount. The revenue recognition of that, of course, is typically recognized ratably over the contract period, over the five-year period. That backlog itself is made up by now of a mix of many different multi-year contracts, all with varying sort of end dates. That's why when you look in the footnotes and you look at how we actually disclosed when that revenue is expected to be recognized on those contract commitments, you can see that in our notes to our financial statements. Yeah. yeah So, I mean, our typical contracts are three to five years long. so i mean our typical contracts are three to five years long When we track our SaaS backlog, we're taking the totality of the future value of that contract. when we track our saas backlog we're taking the totality of the future value of that contract If we sign a five-year contract, the SaaS backlog is 5x that SaaS ARR amount. if we sign a five-year contract the saas backlog is 5x that saas arr amount The revenue recognition of that, of course, is typically recognized ratably over the contract period, over the five-year period. the revenue recognition of that of course is typically recognized ratably over the contract period over the five-year period That backlog itself is made up by now of a mix of many different multi-year contracts, all with varying sort of end dates. that backlog itself is made up by now of a mix of many different multi-year contracts all with varying sort of end dates That's why when you look in the footnotes and you look at how we actually disclosed when that revenue is expected to be recognized on those contract commitments, you can see that in our notes to our financial statements. that's why when you look in the footnotes and you look at how we actually disclosed when that revenue is expected to be recognized on those contract commitments you can see that in our notes to our financial statements That's kind of how we disclose that backlog and how it looks like it's going to roll out in the future. Of course, every quarter, we book more SaaS, which increases that RPO, and revenue recognition, of course, reduces that RPO. That's kind of how we disclose that backlog and how it looks like it's going to roll out in the future. that's kind of how we disclose that backlog and how it looks like it's going to roll out in the future Of course, every quarter, we book more SaaS, which increases that RPO, and revenue recognition, of course, reduces that RPO. of course every quarter we book more saas which increases that rpo and revenue recognition of course reduces that rpo

Speaker 7: Great. Just one last one for me. I was curious to know what the fiscal 2026 guide is taking in terms of or with regards to contributions from healthcare versus distribution. Great. great Just one last one for me. just one last one for me I was curious to know what the fiscal 2026 guide is taking in terms of or with regards to contributions from healthcare versus distribution. i was curious to know what the fiscal 2026 guide is taking in terms of or with regards to contributions from healthcare versus distribution

Speaker 3: Yeah. I mean, if you look at kind of what we've been seeing over the last number of quarters and even number of years, and especially as we look at our marketplace, our healthcare marketplace more broadly now, i.e., it's hospital networks plus it's hospital-related distribution companies like the medical equipment supplier that Peter referred to that we signed in Q4. If you look at that broader definition of the market, a significant majority of our business and our growth is coming out of that healthcare marketplace. That's where we're focused. That's where we're putting more marketing energy now with this additional investment, and that's where we expect the significant majority of our bookings to come from. Yeah. yeah I mean, if you look at kind of what we've been seeing over the last number of quarters and even number of years, and especially as we look at our marketplace, our healthcare marketplace more broadly now, i.e., it's hospital networks plus it's hospital-related distribution companies like the medical equipment supplier that Peter referred to that we signed in Q4. i mean if you look at kind of what we've been seeing over the last number of quarters and even number of years and especially as we look at our marketplace our healthcare marketplace more broadly now i.e it's hospital networks plus it's hospital-related distribution companies like the medical equipment supplier that peter referred to that we signed in q4 If you look at that broader definition of the market, a significant majority of our business and our growth is coming out of that healthcare marketplace. if you look at that broader definition of the market a significant majority of our business and our growth is coming out of that healthcare marketplace That's where we're focused. that's where we're focused That's where we're putting more marketing energy now with this additional investment, and that's where we expect the significant majority of our bookings to come from. that's where we're putting more marketing energy now with this additional investment and that's where we expect the significant majority of our bookings to come from

Speaker 7: Perfect. Thank you. I'll pass over to Mark. Perfect. perfect Thank you. thank you I'll pass over to Mark. i'll pass over to mark

Speaker 3: Thanks. Thanks. thanks

Speaker 4: This is the operator. Your line is open, Stephen. This is the operator. this is the operator Your line is open, Stephen. your line is open stephen

Speaker 8: Oh, hi. Thanks. Hey, guys. Peter, your comments on not seeing any slowdown in activity. When we think of SaaS bookings for fiscal 2026, you would fully expect to see good bookings growth, right? You would be very disappointed, let's say, if it's flat. Is that correct? Oh, hi. oh hi Thanks. thanks Hey, guys. hey guys Peter, your comments on not seeing any slowdown in activity. peter your comments on not seeing any slowdown in activity When we think of SaaS bookings for fiscal 2026, you would fully expect to see good bookings growth, right? when we think of saas bookings for fiscal 2026 you would fully expect to see good bookings growth right You would be very disappointed, let's say, if it's flat. you would be very disappointed let's say if it's flat Is that correct? is that correct

Speaker 5: Yeah. Yeah. I would be very disappointed. I'm not about to make a prediction, Stephen, which I know is what you're trying to draw me into, but I would agree with you 100% that I would be very disappointed if I didn't see bookings growth in fiscal 2026. Yeah. yeah Yeah. yeah I would be very disappointed. i would be very disappointed I'm not about to make a prediction, Stephen, which I know is what you're trying to draw me into, but I would agree with you 100% that I would be very disappointed if I didn't see bookings growth in fiscal 2026. i'm not about to make a prediction stephen which i know is what you're trying to draw me into but i would agree with you 100% that i would be very disappointed if i didn't see bookings growth in fiscal 2026

Speaker 8: Okay. Got it. I might have missed it, but did she say how many IDNs she wanted Q4? Okay. okay Got it. got it I might have missed it, but did she say how many IDNs she wanted Q4? i might have missed it but did she say how many idns she wanted q4

Speaker 5: Two. Two. two Two. Two. two

Speaker 8: Okay. Perfect. Thank you. Okay. okay Perfect. perfect Thank you. thank you

Speaker 5: Yeah. We added two new IDNs in Q4. Yeah. yeah We added two new IDNs in Q4. we added two new idns in q4

Speaker 8: Got it. Thanks. Got it. got it Thanks. thanks

Speaker 4: There are no further questions at this time. I will now turn the call over to management for closing remarks. There are no further questions at this time. there are no further questions at this time I will now turn the call over to management for closing remarks. i will now turn the call over to management for closing remarks

Speaker 5: Great. Thank you, everyone, for joining us. I'm glad to have you with us. Thanks for taking time out of your day to be with us on the call. As usual, if you have additional questions, please do not hesitate to reach out to Mark or myself, and we will look forward to chatting to you in September after we release our Q1 results. Thanks, and have a great summer. Bye for now. Great. great Thank you, everyone, for joining us. thank you everyone for joining us I'm glad to have you with us. i'm glad to have you with us Thanks for taking time out of your day to be with us on the call. thanks for taking time out of your day to be with us on the call As usual, if you have additional questions, please do not hesitate to reach out to Mark or myself, and we will look forward to chatting to you in September after we release our Q1 results. as usual if you have additional questions please do not hesitate to reach out to mark or myself and we will look forward to chatting to you in september after we release our q1 results Thanks, and have a great summer. thanks and have a great summer Bye for now. bye for now

Speaker 3: Thanks. Thanks. thanks

Speaker 4: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Ladies and gentlemen, this concludes your conference call for today. ladies and gentlemen this concludes your conference call for today We thank you for participating and ask that you please disconnect your lines. we thank you for participating and ask that you please disconnect your lines