TECSYS Inc.

Good morning, everyone. Welcome to Texas fiscal year 2026 second quarter results conference call. Please note that the complete second quarter report, including MD&A and financial statements were filed on Cedar Plus after market closed 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 remind everyone that this call is being recorded on Thursday, December 4, 2025, at 8.30 a.m. Eastern Time. I would now like to turn the conference over to Mr. Peter Burton, Chief Executive Officer at Texas, please go ahead, sir.

Thank you. Good morning, everyone. I'm joined today by Mark Bettler, our Chief Financial Officer. We appreciate you joining us for today's call. I'm pleased to report second quarter fiscal 26 results with SAS revenue up 22% and total revenue up 15% from the same quarter last year. We also had record adjusted EBITDA in the quarter, which was up 71% compared to the same quarter last year. These results highlight the strength of our elite healthcare solutions and a primary driver of SAS ARR. As indicated in our earnings press release, while facing headwinds from the US healthcare policy environment and government shutdown, as well as uncertainty created by shifting tariffs, we believe these results demonstrate our disciplined execution and the scalability of our business. During Q2, we saw these headwinds manifest in extended decision cycles and elongated procurement processes Against this backdrop of near-term headwind, our SAS pipeline continues to grow and has never been stronger, with our healthcare pipeline up about 60% compared to the same time last year, and with accelerating traction in pharmacy and key markets within general distribution. This quarter, bookings were led by expansions in our healthcare and life sciences business, including hospital networks. We also had an exciting new logo win with a marquee healthcare and life sciences brand, and a migration in our general distribution business in Europe. As we have discussed in prior calls, our migration bookings will continue to become a smaller component of our SaaS ARR growth. Growth will be driven by new logos and expansion of existing customers. This quarter marked an important milestone. Our lead platform is now available on AWS Marketplace. This is an important step in our cloud strategy because it helps shorten the path from interest to implementation. It reduces friction in the buying process and makes it easier for customers to realize value from Texas Elite platform more quickly. It also broadens our reach and strengthens our relationship with AWS, a key partner as we help organizations modernize their supply chain operations in the cloud. During the quarter, we published a case study that illustrates the impact of our solutions. Texas Children's Hospital partnered with Texas to deploy an RFID-enabled, fully automated pharmacy inventory system integrated with Epic Willow. The results have been remarkable with the hospital network achieving approximately $14 million in annual savings, and there is more potential ahead. This demonstrates how we continue to focus our product development and go-to-market efforts on strengthening our competitive advantage as a true end-to-end healthcare supply chain management platform. We're aiding these efforts by a growing portfolio of referenceable healthcare customers whose results continue to validate our approach. Mark will now provide further details on our Q2 results, as well as financial guidance on several key metrics.

Thank you, Peter. As a reminder to everyone, our second quarter ended October 31st, 2025. I'll start with SAS. As Peter mentioned, SAS revenue growth was 22% reaching $19.7 million in the quarter. SAS ARR was 81.1 million at the end of Q2 fiscal 26, which was up 16% from the same quarter last year. Our elite SAS ARR, which is our core product and the predominant contributor to total SAS ARR, grew by 21% over the same period. Sequentially, SAS ARR increased by $1.8 million in Q2 fiscal 2026 compared to prior quarter, As new bookings and the favorable impact from foreign exchange were partially upset by attrition in a small group of non-core customers. In our core elite customer base, we're quite pleased that attrition over the last 12 months was less than 2%. SAS RPO was 240.4 million at the end of Q2 fiscal 26. That was up 18% from the same time last year. Foreign exchange did not have a material impact on that reported growth number. Professional services revenue for the second quarter was up 20% from the same quarter last fiscal year to a record $17 million. Professional services backlog remained robust at the end of Q2 fiscal 2026. It was up 14% compared to Q2 last year. but at downs 10% sequentially from the prior quarter after record level professional services revenue in Q2 fiscal 26. Based on our PS backlog heading into Q3 and general seasonality, we expect Q3 PS revenue to look more like Q3 last year. That was around $14 million versus Q2 of this year. For the second quarter of fiscal 26, Gross margin was 52% up 400 basis points compared to 48% in the same period last year. The key drivers here are increasing SAS margins, as well as strength and professional services margins in the current quarter. Net profit in the quarter was 1.8 million compared to 758,000 in the same quarter last year. Basic and fully diluted earnings per share were $0.12 in Q2 this year compared to $0.05 in Q2 of last year. Adjusted EBITDA was $5.0 million in Q2 fiscal 26. That compares to $2.9 million same quarter last year. On the last 12-month basis through Q2 of fiscal 2026, adjusted EBITDA is up 47%. Turning briefly to our year-to-date highlights, SAS revenue for the first half of fiscal 26 was $38.8 million. That's up 23% from the same period last year, or 22% growth on a constant currency basis. Our total revenue reached $94.6 million, a 12% increase from last year. That was up 10% on a constant currency basis. And if you exclude hardware, overall revenue grew by 14% or 13% on a constant currency basis. For the first half of fiscal 26, our adjusted EBITDA increased to $8.3 million. That was up from $5.5 million in the same period last year. And fully diluted earnings per share for the first half were $0.17 compared to $0.10 first half last year. We ended Q2 with a solid balance sheet. We had cash and short-term investments of $30.5 million and no debt. We used about $2.8 million of cash in the quarter to buy back shares under our NCIB and also paid out about $2.5 million in dividends during the quarter. Additionally, the board yesterday approved a quarterly dividend of $0.09 a share. Turning to financial guidance. We are maintaining full-year fiscal 26 guidance for SAS revenue growth of 20% to 22%, total revenue growth of 8% to 10%, and adjusted EBITDA margin between 8% and 9%. I'll now turn the call back to Peter to provide some outlook comments.