5/15/2025

speaker
Conference Operator
Operator

Thank you for standing by. This is the conference operator. Welcome to the Syllogist Limited first quarter 2025 results conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star, then zero. I would like now to turn the conference over to Alex Balka, Corporate Development with Syllogist.

speaker
Alex Balka
Corporate Development, Syllogist

Please go ahead. Thank you, Alan, and good morning. Joining me to discuss Syllogist's first quarter 2025 results are Bill Wood, Syllogist's President and Chief Executive Officer, alongside Sajid Keeney, Chief Financial Officer. This call is being recorded live at 8.30 a.m. Eastern Time on May 15, 2025. I'd like to remind everyone that our Q1 2025 press release, MD&A, financial statements, and accompanying notes have been issued and are available for download on CDAR+. Please note that some of the statements made on the call today may be forward-looking. Actual events or results may differ materially from those expressed or implied, and so just disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The complete safe harbor statement is available in both our MD&A press release as well as on SILGIS.com. We encourage our investors to read it in its entirety. Additionally, we are reporting our financial results in accordance with IFRS accounting standards or IFRS. Today, we may also make reference to and discuss non-IFRS performance measures, which should be viewed as supplemental. We have included in our MD&A the definitions of non-IFRS performance measures. All of the comments on this call are in Canadian dollars. Following that, Sajid will provide a detailed review of our Q1 financial performance. Bill will then return to conclude with closing comments, at which time we'll open the line for Q&A. With that, Bill.

speaker
Bill Wood
President and Chief Executive Officer

Thank you, Alex.

speaker
Bill Wood
President and Chief Executive Officer

Good morning or good afternoon, everyone, and thank you for joining us. We're pleased to share that Q1 2025 was strong in terms of value creation aspects of the business we're hyper-focused on. Our results clearly reflect the continued success of our transition to an ARR-driven enterprise, as nearly 67% of our total revenue is recurring, marking a significant milestone. Our strategy and execution is delivering results. We have an engaged and expanded partner channel, three best-in-class fully SaaS platforms in market, a loyal customer community driving strong net revenue retention, and increasing traction in our strategic markets. This quarter's performance further validates our long-term value creation strategy. Let me take a minute to walk you through a few key highlights from the quarter. Bookings grew over 150% year-over-year, fueled by new logo wins and strong upsell and cross-sell performance. Notably, 79% of our total contract value, or TCV bookings, came from our syllogist gov sector and The Texas Office of the Attorney General Award for our Syllogist Gov Victim Services Suite solution is the largest contract in the company's history and further confirms the opportunity we see ahead in the Syllogist Gov sector at the state, provincial, and local level. Our competitive position is also strengthening. Our overall win rate exceeded 50%, reflecting the power of our targeted displacement strategy and the strength of our vertically specialized fully SaaS offerings. In partner-attached deals, our win rate was over 70%, which confirms the success we're seeing with our partner community leading deal sourcing RFP responses, and closing, with our internal team supporting their sales motions and empowering their project delivery teams in our Syllogist Gov and Syllogist Mission Market segments. We're also seeing material, more balanced pipeline growth across our three core segments, Syllogist, Mission, and Gov. Our bookings pipeline is up 42% year-over-year, setting the stage for continued SaaS ARR growth as we move through 2025 and beyond. We did see some turbulence and impact in the quarter due to the new U.S. administration's policies, specifically in our existing customer non-governmental organizations or NGO segment. Due to Doge cutbacks, we lost approximately a million dollars in ARR from legacy customers that lost their funding. However, other than the narrow NGO segment, we have not seen any material impact to the segments of the nonprofit, ed, or gov sectors we target. except for an initial slowdown in new logo deal decision-making early in the quarter, which we now see returning to normal cadence. Overall, we see the administration's shift of dollars and decision-making from the federal level to the state and local level as potentially having a beneficial impact to us. And we do not expect the announced tariffs will have any direct impact on us whatsoever. As we shared for several quarters now, a central pillar of our go-forward strategy is our partner network, which enables scalable growth and faster market penetration. We've made significant progress in partner activation over the last year in Syllogist Gov and Syllogist Missions. Again, we don't yet engage partners in Syllogist Ed or the Syllogist Gov VSS subsector. Those are direct in terms of sales and project delivery. With those sector exclusions in mind and combining the primary Syllogist Gov sector with Syllogist Mission, nearly 45% of the bookings were partner attached in the quarter. which bodes well for future margin expansion and leverage. It's important for us to remind everyone that to ensure the success of our partner community, we've continued to maintain our internal delivery team and have expanded our partner enablement team. While this temporarily compresses gross margins, given we're still absorbing costs, but handing off the project service revenue to partners This is a planned and a strategic investment phase. And as partners ramp and take on project delivery themselves, we expect to see a natural shift in our cost structure. This will allow us to focus even more on high-margin SaaS growth with increasing scalability and profitability. It's important to share that we see operating leverage increasing in the back half of 2025 and continuing to strengthen going forward as we planned. We continue to drive healthy SaaS metrics. SaaS ARR grew 15% year-over-year to $31.4 million. SaaS net revenue retention remains strong at 108%, demonstrating customer satisfaction, advocacy, and wallet expansion. Both are solid indicators of durable growth and long-term customer value. With that, I'll turn it over to Sujit to walk you through our financial results for the quarter in a little more detail. Sujit?

speaker
Sajid Keeney
Chief Financial Officer

Thank you, Bill. And good morning and good afternoon, everybody. Before diving into the numbers and like I'd done last quarter, I'd like to quickly remind you that we divested of our managed IT services division in Q2 2024. Therefore, to provide a clearer comparison, all year-over-year financial comparisons exclude the impact of that divestiture. Our Q1 results reinforce a successful transition to a SaaS-driven enterprise with a strong focus on high-margin SaaS revenue and ARR growth. Q1 revenue was $16.3 million, up 3% year-over-year, and SaaS subscription revenue grew at 15%, This offset by declines in maintenance and support related to the DOGE-related cutbacks that Bill alluded to earlier. SAS revenue now represents 71% of recurring revenue, up from 65% last year. ARR, total ARR, rather, grew 6% year-over-year to 44.3 million, with SAS ARR up 15% to 31.4 million. SAS NRR continues to remain strong at 108%. On the gross margin front, Q1 gross margins grew at, sorry, on the gross margin front, Q1 gross margin at 59% improved compared to Q1 fiscal 2024 at 59%. This primarily due to higher levels of SAS recurring revenue. On the expenses front, G&A increased $0.5 million in Q1 to $3.1 million at 19% of revenue versus 16% last year. The increases here are primarily due to third-party expenses, including professional fees and slightly higher payroll compensation costs. Sales and marketing expenses in Q1 rose to $2.1 million or 13%, that is 1.3% of revenues versus 9% last year, This reflecting an anticipated increase in spending on quota-bearing sales headcount, with our sales and marketing headcount growing to 30, that's 3-0 from 26, as well as increased programmatic marketing spend. Gross R&D spend for Q1 was $2.8 million at 17% of revenue versus 15% last year. This increase primarily related to higher third-party costs. At a net revenue R&D spend level, R&D spend was $1.8 million, an increase of $0.8 million, of which approximately $500,000 was due to lower levels of eligible capitalized development spend in the current quarter, and this in turn being attributable to the maturing of all of our three SaaS platforms. I will state that we expect this trend to continue. On the adjusted EBITDA front, Q1 adjusted EBITDA was 2.6 million at 16.1% margin versus 27.4% last year. Our adjusted EBITDA margin was primarily impacted by the lower levels of capitalized development costs that I just mentioned earlier and higher sales and marketing expenditures in the current quarter. And finally, We ended Q1 with $10.5 million in cash, this being consistent with our expectations. With that, I'll hand it back to you, Bill.

speaker
Bill Wood
President and Chief Executive Officer

Thanks, Ajit. With all three of our leading SaaS platforms now in market, a growing and productive partner ecosystem, strong customer advocacy, and real traction from our targeted competitor displacement strategy, we're in a strong position to deliver increasingly scalable, profitable, and repeatable growth. Thanks to our exceptional team, fully SaaS best-in-class solutions, and a customer-first mindset, our investments are delivering. We've laid a strong foundation for increasing recurring revenue, growing free cash flow, and expanding margins, momentum we expect to accelerate in the second half of 2025 and beyond. For fiscal year 2025, the company aims to achieve SAS ARR year-over-year growth in the low to mid-20% range, a gross margin of approximately 60%, and an adjusted EBITDA margin in the mid 20% range. With that, thank you again for your continued support and confidence. We're looking forward to what's ahead for syllogists in 2025 and beyond. With that, let's take some questions.

speaker
Conference Operator
Operator

We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. Our first question today comes from Daniel Rosenberg of Paradigm. Please go ahead.

speaker
Daniel Rosenberg
Analyst, Paradigm

Good morning, Bill and Sujit. My first question was around the channel partner strategy. It was nice to see SAS growth kind of accelerating this quarter over the last, I was wondering what are the kind of key learnings that you're seeing as you're working with your channel partners to increasingly leverage that sales function?

speaker
Bill Wood
President and Chief Executive Officer

Hey, good morning, Daniel.

speaker
Bill Wood
President and Chief Executive Officer

Yeah, I appreciate the question because it is important. As I've signaled over the last few quarters, we are seeing – our partner community having unique sight lines to cohorts of customers that they are, or opportunities that they have that we may not have. They may have installed prior systems for them. They may have an existing relationship with them. So they are very in tune with the needs of a particular customer, prospective customer sets, as well as how our software fits into those. We're also seeing scenarios where In certain instances, we have maybe two, sometimes three partners that are bidding our platform as the solution. So both results are leading to a really high win rate in terms of the relationships that they have and the alignment of our platform to something that the communities that we're targeting are anxious for.

speaker
Daniel Rosenberg
Analyst, Paradigm

Okay, thanks for that. I appreciate the color. Secondly, on the margin profile, so there was a bit of investment in the OPEC side of the equation. I was just wondering how you think about further investment in resources and kind of is this a baseline for us or how we should think about the year ahead?

speaker
Bill Wood
President and Chief Executive Officer

Yeah, at a macro level, Daniel, I think that we don't see additional build-in now. As we've said, we have leaned in on our project service bench as well as our partner enablement team. We've added resources in there. So to that end, we do feel like our overall count in terms of what we need to do and as well as adding new partners as we go forward is in a good position. We don't see a lot of additional build out there. And we did want to make sure that, as Sujit highlighted, that we really increased our sales and marketing muscle on that front. And we feel that now with the strengthening of our partner execution in terms of sales efficacy, we do see our existing quota carrying team being built out to what we think will drive good value creation as we expect going forward.

speaker
Daniel Rosenberg
Analyst, Paradigm

Thanks for that. Lastly for me, you guys secured a large contract win recently, which was great to see. I was wondering if you could speak to the pipeline and, you know, is there anything to say about the size of opportunities that you're going after, that you're seeing in market as you look at your sales function?

speaker
Bill Wood
President and Chief Executive Officer

Yeah, on a macro level, we, as I mentioned in my comments, we do see an acceleration and an expansion and a balanced expansion across our three market segments. in our pipeline, that's a really good signal in terms of what bodes for us going ahead when you combine that with our win rate. On the large award that we received, that subsector of the VSS suite is by nature a larger deal because they're statewide agreements. And so to that end, we are very pleased with the three wins that we had in the quarter. Texas, Massachusetts, and Nevada, and do see continued opportunity for expansion and displacement with our competitor displacement strategy in that segment. So the lift of our average deal size is skewed because of that VSS deal magnitude. But overall, we see good cadence and consistency in the deals that we're landing, And we generally see the SaaS platforms and the usability of those platforms also with our land and expand with the customer wallet share expansion where we see customers adding subscriptions as they become acclimated to software and want to empower more users. So that's a good signal to us as well.

speaker
Daniel Rosenberg
Analyst, Paradigm

Great. Thanks for taking my questions. I'll pass the line.

speaker
Conference Operator
Operator

Our next question comes from Gavin Fairweather of Carmark. Please go ahead.

speaker
Gavin Fairweather
Analyst, Carmark

Oh, hey, good morning. Thanks for taking my questions. Maybe just to follow on that Texas contract, can you provide a bit more detail in terms of the implementation revenue that we should be expecting and how we should be thinking about, you know, the timelines towards getting it live and starting to recognize the ARR?

speaker
Bill Wood
President and Chief Executive Officer

If you want to share that, good morning, Gavin.

speaker
Sajid Keeney
Chief Financial Officer

Yeah, absolutely. Good morning, Gavin. So from an overall contract perspective, Gavin, basically the overall position from a revenue is it is an integrated contract, essentially what one might call from a revenue recognition perspective a bundle arrangement. We're working through kind of the machinations of the contract with our with our auditors. And essentially, our best view on this is that it is primarily ARR revenue that will be recognized through the term of the contract. And that is the position. We will keep you posted on the accounting for this, and you will see this in our due to results, but essentially the contract is an integrated project with the bulk of the revenue being recognized essentially largely as ARR.

speaker
Gavin Fairweather
Analyst, Carmark

Okay, that's helpful. And then maybe you can just discuss kind of your view on the VSS TAM and to what extent there's, you know, further RFPs that you're seeing in the market. I mean, great to hear that it wasn't just Texas. There's another kind of couple wins in the quarter, so it seems like there's built-in momentum, so think it would be helpful just to frame the opportunity for people.

speaker
Bill Wood
President and Chief Executive Officer

Yeah, happy to. As we've mentioned, there is a current existing provider that has the majority of the U.S. market and has had for many, many years that we are having success in displacing with a more contemporary platform and a different approach to how we treat customer data differently, which is we don't touch it, we don't use it in any manner, and we certainly don't aggregate it in terms of other products. And so that is something that is a differentiator for us in addition to the idea of our platform is far more contemporary. So, because these are public awards, they're also public contracts through the state, we do have technology that's enabled us to see what the expiry date of existing agreements with that particular provider. We have good sightline in terms of... how we engage with them in advance to make sure that they are aware of us. And certainly now with our momentum, most states are increasingly aware of us. Within each state, there's oftentimes two, if not three, opportunities for our platform to be utilized by different departments within that. So it isn't just a one state and done. For instance, Texas was an existing state. account for us in another facet of their criminal justice area. And ultimately, this is the second award in that state. So it isn't just a one and done. So therefore, 50 states, 50 opportunities. Interesting, we're also seeing some early green shoots of interest in this area within Canada, as well as abroad, where they have had largely not nearly as sophisticated systems, but they still need in terms of notifications for victims and so on. So that bodes well that we do believe that it goes beyond just the U.S. as an opportunity as well downstream.

speaker
Gavin Fairweather
Analyst, Carmark

Yeah, that's super helpful. I appreciate that. And then maybe also staying in the Gov sector, you talked about the GP Great Plains sunset in 2028. I'm curious, like, when you're expecting to begin seeing RFPs, begin seeing kind of contracts being awarded, do you think customers are going to wait until that sunset in 2028, or are you starting to see some movement in activity now?

speaker
Bill Wood
President and Chief Executive Officer

We're starting to see some movement. And the partners, as I mentioned, they – many of them have cohorts of customers that they implemented Great Plains at years back. And so – I do not expect, and certainly our partner community and our marketing motions are helping people to realize waiting may not be in their best interest in terms of opportunity to do it in a smooth and thoughtful and organized manner. And our partners are beating that drum with us. So there's an amplification of Moving now, it makes sense. Why it makes sense. And we see continuing and expanding Great Plains RFPs coming to us and coming to our partners.

speaker
Gavin Fairweather
Analyst, Carmark

Great. And then just lastly for me, it sounds like on the R&D spending side, there are some third-party costs which you've ramped up. Is there some specific projects that you call out, and do those have a fixed timeline where we might see R&D step back down afterwards? Maybe just help us, you know, model that line out and point at any projects that you're maybe bringing some external help on.

speaker
Bill Wood
President and Chief Executive Officer

Yeah, and I'm glad you asked that, Gavin, because it's important. I had – we had, say, did Q4 last year and under – that we had had some learnings relative to our partner community in our ERP platform where they were looking for kind of more out-of-the-box interconnectivity capability that we had somewhat underestimated how anxious they were to be able to connect our solution to other things as part of a particular installation that our partners undertake. So we actually went back in, and it was time-sensitive because we don't want that to lag too long in terms of partner engagement and successful light-up of opportunities. And so to that end, we did throw resources that we see that project largely coming to completion in the summertime frame, and we see that the bulk-up that we had on the R&D and the – And the people side of that has to turn back. The other piece is that, as Sujit mentioned, We did move costs that were previously sitting in as capitalized back up above the line as part of the natural trend as well, which if you put those kind of in addition to what we had as a pro forma, it kind of puts us where I think many of you had us in terms of sitting from an adjusted EBITDA standpoint because we did move some costs back above the line that maybe you hadn't seen before.

speaker
Gavin Fairweather
Analyst, Carmark

Thanks so much, Apostle Ant.

speaker
Conference Operator
Operator

Thanks, John. Our next question comes from Amir Azad from Ventum Capital. Please go ahead.

speaker
Amir Azad
Analyst, Ventum Capital

Hi, Bill. Hi, Sajid. Congrats to both of you and the team for the very strong bookings number. From what we can tell from the public documents, it seems like the implementation timeline is quite tight. Are you guys starting to recognize revenues in Q2, or is that a Q3 event, then you also mentioned it's being handled internally. Is that fully internally, or are you involving partners in any capacity to help train, I guess, for future scale deployments?

speaker
Sajid Keeney
Chief Financial Officer

Yes.

speaker
Amir Azad
Analyst, Ventum Capital

Good morning.

speaker
Sajid Keeney
Chief Financial Officer

Thank you for that.

speaker
Bill Wood
President and Chief Executive Officer

The revenue recognition is tilted toward the summertime in terms of the Q2 and starting more materially in Q3. So we have that's kind of tied to the integrated approach that we're in discussion with KPMG around. So we do see the momentum in the back half of the year really starting to blossom. And On the question with regard to the resourcing, not a partner per se. However, we're pulling – that is going in with their own team. We're actually pulling would-be contractors from partner resources, if you will, and adding them to our team to be able to bulk up, to push through. So it is largely direct. But we are also developing and expanding our playbook as we think about the future to be able to hand off the motions that lead to success and what's involved. But it's mostly through contractor resources that we're bulking up on to be able to deliver in very specific areas that is complementary and synergistic with our bench delivering ourselves for the VSS right now.

speaker
Amir Azad
Analyst, Ventum Capital

Understood. So the full approximately $15 million Canadian is your revenues, and you're not giving up any of these revenues from my understanding?

speaker
Bill Wood
President and Chief Executive Officer

Generally, that's correct, yeah. There's no margin share or anything in terms of a deal that's traditional or that's more common in the rest of our partner arrangements. So, yeah, that's spot on. That's fantastic.

speaker
Sajid Keeney
Chief Financial Officer

Then... Sorry, I'm just going to... Yeah, sorry, Amar, I was just going to jump in for the benefit of everybody. The $15 million you quoted is a total contract value. I just wanted that to be clear out there.

speaker
Amir Azad
Analyst, Ventum Capital

With the options and so on, no, I understand that.

speaker
Sajid Keeney
Chief Financial Officer

Exactly, yeah, thank you.

speaker
Amir Azad
Analyst, Ventum Capital

No, no, I understand that. I appreciate that clarification. Then just to clarify, so from where you stand currently, we shouldn't expect a lift in project services. I believe that was what you were implying, Sajid? Yes. it's all, like, embedded in ARR and specifically probably SAS as opposed to maintenance?

speaker
Sajid Keeney
Chief Financial Officer

Yeah, that would be broadly accurate, Amar, and, again, we will emphasize that, you know, we are in discussions in terms of, you know, I'm just going to throw out the word, the complexity of this arrangement from the point of view of revenue recognition, but that is broadly an accurate assumption that, essentially, the way the agreement is is structured from a business perspective is that it lends itself to essentially being a bundle arrangement and therefore a larger skewness towards ARR. So that would be accurate.

speaker
Amir Azad
Analyst, Ventum Capital

Fantastic. Then not to take away from all the good news, but I wanted to go back to your NGO-related funding comments like you had once. I missed a number. Did you say half a million or a million, number one? Then are they now – Is that headwind, like, fully reflected in your maintenance and support revenue base for the quarter, or should we expect further erosion as contracts roll off?

speaker
Bill Wood
President and Chief Executive Officer

It was a million-dollar from the standpoint of the gross amount, and Sujit, do you want to take the last half? But, yes, we don't really see this being – something that we see more of this going on. We feel, and based on the customers' existing NGOs, we see them now with their getting their feet underneath us and understanding if they do still exist, that they're able to go forward in a manner that they've now worked out. So we feel that this is not a wait till the next shoe drops kind of a scenario unless something changes with the administration that we're not aware of.

speaker
Sajid Keeney
Chief Financial Officer

Yeah, and I'll quickly jump in after Bill on that comment. So supplementary, Amar, what I will add is, and thank you for actually asking the question. So basically the $1 million number that Bill quoted is effectively the ARR impact or is the ARR impact. From a timing perspective, what happened was a lot of these actions happened late February into March. So effectively, one would not, from a numbers perspective, see the fullness of the impact on maintenance and support revenue in March. So the fullness of the impact actually plays out in the latter, in the remaining three quarters. So from a revenue perspective, that dipping of the revenue happens essentially through the rest of the years. There was, I would say, a more diminished impact in Q1. Okay.

speaker
Amir Azad
Analyst, Ventum Capital

Understood. And just to clarify, this is maintenance and support revenues, right?

speaker
Sajid Keeney
Chief Financial Officer

It's primarily maintenance and support. Yes, that is accurate.

speaker
Bill Wood
President and Chief Executive Officer

And I will add, and I'm sure you picked up on this, Amber, is we continue to have a sightline to what we had shared relative to the framework of where we see our flight path for 2025 We maintain that view, even with this unforeseen kind of turbulence in Q1 relative to what's led to that crisis. those those those cuts affecting our NGO customers. So I think it speaks to the strength of our core areas. And the NGO space is not an expanding area for us. It's not one of our core markets relative to as we think about growth and material growth going forward. And so to that end, I think that speaks to the strength of the business as we see it in other areas.

speaker
Amir Azad
Analyst, Ventum Capital

Yeah, no, I see like you're booking like obviously Trump What's happening there no pun intended there? Then just the one last one appreciate the color on OPEX, but I just want to step back again like on the R&D number So I do appreciate that the capitalized number is a little lower But that the gross number at two point eight billion dollars for the quarter seventeen percent of revs did I understand correctly when you're answering Gavin's question and that probably stays at the same level through the summer?

speaker
Sajid Keeney
Chief Financial Officer

Yes, so Amar, from a dollar perspective, getting away from the percentages, which is I think your question, yeah, exactly, from a dollar run rate perspective, yes, I would say broadly we would stay in that range. We were expecting to see some lightning as we go through the year, but just from an overall dollar headline perspective, we kind of we'd like to think that it will kind of stay in that range.

speaker
Amir Azad
Analyst, Ventum Capital

Fantastic. Okay. Thank you, and congrats again. I'll pass the line.

speaker
Conference Operator
Operator

Our next question comes from Doug Taylor from Canaccord Genuity. Please go ahead.

speaker
Doug Taylor
Analyst, Canaccord Genuity

Yeah, thank you. Good morning. I'm going to impress a little more on Amir's last line of questioning there. You know, the jump in OpEx lines this quarter, you've noted some temporary third-party resources, but it did sound like a bunch of the expenses related to sales, salaries, moving previously capitalized R&D above the line, you know, sound fairly permanent. So I guess my question is, you know, maybe more broadly, would you be reconfirming the objective of mid-20s EBITDA margins from, you know, the 16% you reported here in I mean, can you help us just reconcile that? Is that going to be purely a function of more top line absorbing this cost base? And you've got the SAS RAM ahead of you to support that. Is that a fair characterization?

speaker
Sajid Keeney
Chief Financial Officer

So, I would say broadly, yes, Doug. That would be a fairly accurate characterization. The ramp up towards stronger margins would be a combination of higher SaaS revenues going into the latter part of the year. And then essentially from a gross margins perspective as well, we do see potential for the gross margins improving, again, as a result of the higher SAS revenues in the latter part of the year. So I would say, yeah, overall, that premise is broadly accurate.

speaker
Doug Taylor
Analyst, Canaccord Genuity

And then, you know, maybe a similar, you know, line of questioning, Bill, you just reiterated, you know, your flight path. I think you characterized it objectives for the year being to get, you know, SAS revenue, sorry, SAS ARR growth you know, also into that 20% plus range. I mean, is it fair to say with, you know, the Texas win, you know, being in your bookings, not yet in your ARR, is it fair to say you've now got pretty strong visibility to that ramp back into that territory based on what you've got now, you know, in your bookings?

speaker
Bill Wood
President and Chief Executive Officer

We do. Yeah, I think all of you at this point understand that it isn't an immediate rollover of bookings to ARR. So given the cadence, we largely are comfortable with projects we have in the end, bookings we have in the end, and the sightline for the SAS ARR acceleration to achieve what we've outlined. So I would say, yeah, we feel quite good about our posture as we sit right now early into Q2. or Q1, as we've said about it.

speaker
Bill Wood
President and Chief Executive Officer

Okay. Well, thank you for those clarifications. I'll pass on.

speaker
Conference Operator
Operator

The next question comes from Susan Sukumar from Stiefel, Canada. Please go ahead.

speaker
Susan Sukumar
Analyst, Stiefel

Good morning, gents. For my first question, I wanted to touch on the Texas VSS deal. Can you speak a little bit more about, you know, what the initial scope and revenue basis for the initial deployment and what expansions may look like over the duration of the agreement?

speaker
Bill Wood
President and Chief Executive Officer

Good morning, Suzanne. We'll speak to what's publicly out there, which is kind of what we just don't parse deals typically more than that. But because this is a public contract, it does speak to – what the annual ARR in the contract award represents based on how it's published and how it was drafted by Texas OAG and us. And that's over 2,223,000 in U.S., so it's almost 2,900,000 of ARR on a Canadian basis. Sujit, please verify that those are generally correct.

speaker
Sajid Keeney
Chief Financial Officer

Yeah, and Sultan, good morning. As Bill says, those are publicly available numbers. Essentially, what Bill quoted out there was the ARR equivalent of the 15 million that Amar referred to. I mean, I don't know that we want to talk about sort of anything that's not out there in the public domain, but essentially, the way the contract is structured is it's a is a 10.6 million U.S. dollar arrangement or around a 15 million Canadian dollar arrangement. Effectively, approximately around 3 million of recurring revenue happening from a Canadian dollar perspective on an annualized basis.

speaker
Susan Sukumar
Analyst, Stiefel

Okay. Okay, great. That's helpful. For my second question, I just wanted to touch on revenue mix. Could you touch, can you provide a little bit more color on recent revenue trends in This is up slightly quarter to quarter, but down year over year. You know, is that largely reflective of the NGO impact that you guys talked about or are there other factors here to kind of think about?

speaker
Bill Wood
President and Chief Executive Officer

I will say generally we are seeing an expanding population. posture of our bookings within that segment attributable to more users being securing more subscriptions for more users at implementation. The other thing is we're starting to see a build of the thesis, which was we have a better mousetrap when we have an integrated CRM and ERP. And so in our pipeline and what we've seen in certain deals where we're we do see opportunities where we are actually getting IP in both areas, which previously we would not have had that in our arsenal because we now have the fully integrated offering once the acquisition was completed of the mission CRM solution. So overall, I would say the deal size on the mission side, It's hard to peg it quarter to quarter, Susan. I know you appreciate that because it can be lumpy and one deal can skew it one way or another, but I would say on a trend basis, we see the deal sizes to be expanding.

speaker
Susan Sukumar
Analyst, Stiefel

Okay. Okay, great. That's helpful. Bill, could you remind us on what progress is with respect to migration of your existing customer base to SaaS? You know, what, you know, roughly what percentage are you at now? And is there really a focus push here to migrate this remaining base or are you just, at this point, is it more about just leaving it to sort of a natural evolution in that customer's life cycle?

speaker
Bill Wood
President and Chief Executive Officer

Yeah, I think that for the most part, we have not disclosed what that shift is. And funny it is, It has gone as or ahead of plan in terms of what we anticipated on the legacy to SaaS posture. There's an appetite to move customers. We prefer to have one set of IP out there. We prefer to have the same support to be able to deliver our knowledge base kind of tied to one, our AI that we're building in tied to a platform SaaS versus legacy. However, you know, when we get into the 80-plus percent range and so on, there are some portions of that that are maybe going to need to fit to what the customer flight path is for that. I'll also remind that there's portions of that that we do not have an upgrade path to a SaaS platform now. We have legacy customers in our Epic community and other user communities which we will see and will continue to maintain those platforms in their current posture. They're typically got good margin. They're typically profitable entities for us and sectors of our business. So, one should not assume that if, you know, we're going to have a segment of that maintenance and support that likely stays as maintenance and support, but ultimately the rest of the community will continue to march forward in a thoughtful way.

speaker
Susan Sukumar
Analyst, Stiefel

Does that make sense? Thank you, Bill. Thank you, Sujit. I'll pass the line.

speaker
Conference Operator
Operator

This concludes our question and answer session. I would like to turn the conference back over to Mr. Bill Wood for closing remarks.

speaker
Bill Wood
President and Chief Executive Officer

Yeah, I want to thank you all again for the questions as well as the continued support of civil just I will say that the work that's gone on since I joined has been monumental, and I do now see much more clearly the results as we do across the organization, the results of that starting to turn into value creation and real clear value creation as we think about the back half of 25 and beyond. I've highlighted the pillars for that around our partner thesis, now having three SaaS platforms, But I also want to restate that the Syllogist team and management team and the colleagues I work with every day are the best I've ever had the pleasure of working with. And in the end, people lead businesses. People make decisions. And to that end, I'm very, very proud and humbled by the work that's gone on at Syllogist to create the opportunity for our customers and our investors as we think about the go forward. I'm very, very proud. humbled by the work that's gone on and ultimately now where we sit in terms of opportunity going forward. So a true tip of the cap to the Syllogist team in terms of the go forward and a sincere thanks to our investor community who has really stayed close to our story and now really see the excitement that I feel lies ahead for Syllogist more fulsomely. So thank you for your time and thank you for your continued support. I appreciate it.

speaker
Conference Operator
Operator

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

-

-