TECSYS Inc.

Good morning, everyone. Welcome to Texas Fiscal Year 2026 Third Quarter Results Conference Call. Please note that the complete third quarter report, including MD&A and financial statements, was filed on SADAR 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, 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, March 5th, 2026 at 830 a.m. Eastern Time. I would now like to turn the conference over to Mr. Peter Brereton, Chief Executive Officer at Texas. Please go ahead, sir.

Thank you. Good morning, everyone. I'm joined today by Mark Butler, our Chief Financial Officer. We appreciate you joining us for today's call. I'm pleased to share our third quarter fiscal 26 results with SAS revenue up 17% and adjusted EBITDA up 43% compared to the same quarter last year. This is the highest adjusted EBITDA quarter in our company's history. We also achieved the largest Q3 SaaS bookings quarter in our history, achieved without any migration bookings, which we believe underscores the demand for our core offerings and the strength of our pipeline. We saw strong SaaS bookings across both our healthcare and distribution verticals, with new logo wins leading the way, including Memorial Sloan Kettering, one of the world's most renowned cancer centers, UT Southwestern, one of the top academic medical centers in the U.S., and one of the world's largest paper packaging companies as well. In Q3, our pipeline growth remains strong, with our ending Q3 pipeline up 30% from the same time last year. These results highlight the strength of our elite platform and our healthcare solutions, which represent the core of our business and a primary driver of SAS ARR. They also strongly reinforce our value as customers navigate the convergence of three powerful forces, an evolving regulatory landscape, persistent macroeconomic pressure, and an AI ecosystem characterized by rapid innovation and uneven maturity. The shifting regulatory landscape in the U.S. healthcare system continues to reshape requirements across the supply chain. For example, the Drug Supply Chain Security Act requires every product to be electronically traceable at the package level and the 340B program demands rigorous tracking, auditing, and documentation to show that discounted drugs are being used appropriately. As these regulations move into a period of stricter enforcement throughout 2026, compliance is shifting from a best effort initiative to an imperative operating discipline with real consequences for organizations that aren't ready. At the same time, The broader macroeconomic climate is prompting healthcare leaders to accelerate technology investment, not slow it down. Despite cost pressures, organizations are allocating more budget to digital infrastructure, automation, and data readiness. Analysts project continued year-over-year growth in technology spending among U.S. healthcare providers, reflecting the urgency around modernization and resilience. Finally, the era of unrestrained AI evangelism is giving way to more mindful evaluation, and we're seeing buyers gravitate toward partners with advanced AI capabilities combined with deep vertical expertise and industry-specific solutions like unit-level traceability, federal compliance, audit capability, and secure chain of custody requirements in healthcare, the kind of domain-informed approach exemplified by Texas. As mentioned in our earnings press release, our AI intelligence layer, Texas IQ, became commercially available in Q3. Texas IQ unifies data from multiple sources, including healthcare-specific ones like ASHIP, which is the American Society of Health System Pharmacies, GoodID, which is the global unique device identification database, and the U.S. Food and Drug Administration. It can bring together critical information like drug shortage data, device identifier data, and recalls and safety alerts, transforming it into clear and actionable insights. This capability significantly amplifies the value of our core enterprise systems, empowering customers to unlock the full potential of AI and improve operational performance. We're encouraged by the early momentum and the expanding role Texas IQ will play in delivering measurable supply chain value. The same appetite for operational improvement is fueling exceptional interest in our pharmacy solutions while accelerating our brand awareness in the market. Pipeline for our pharmacy inventory management system grew more than 200% year over year, supported by strong brand momentum, new industry research, and record engagement at our pharmacy summit in Houston, Texas this week, where total registrations increased 77% year over year, and participation from health system leaders was up 67%. Our research survey findings are driving increased media coverage, while recent recognitions from Modern Healthcare and RxInsider reinforce our position as a leading and trusted partner in the pharmacy space. Our distribution business also delivered solid progress in the quarter, reflecting ongoing demand, strong execution, and significant market traction. As I mentioned at the top of the call, we signed a significant deal with one of the world's largest paper packaging companies, reinforcing our position as a partner of choice for complex high volume distribution environments. In November, we went live with Carolina Cat, who are already seeing strong ROI for their operating efficiency. And in December, we successfully went live with Kirby Risk, an electrical supply manufacturing and logistics organization operating in more than 40 locations. This implementation establishes a solid foundation for their next phase of operational transformation, which will include expanded automation capabilities. Overall, the quarter reinforced the strength of our strategy as organizations across healthcare and distribution increasingly seek partners who combine domain expertise with advanced purpose-built AI. With strong pipeline expansion and rising market visibility, we are well-positioned as a trusted modernization partner in sectors where reliability, compliance, and AI readiness are critical. Mark will now provide further details on our Q3 results, as well as financial guidance on several key metrics.

Thank you, Peter. As a reminder to everyone, our third quarter ended January 31st, 2026. I'll start with SaaS. As Peter mentioned, SaaS revenue growth was 17%. reaching $20.1 million in the quarter. That growth was 18% on a constant currency basis. SAS ARR was 83.3 million at the end of Q3 fiscal 26, which was up 10% or 16% on a constant currency basis from the 10 quarter last year. Our elite SAS ARR, which is our core product and the predominant contributor of total SAS ARR, grew by 17% over the same period, which was actually 23% on the constant currency growth basis. Sequentially, SAS ARR increased by $2.2 million in Q3 fiscal 26 compared to the prior quarter, as record Q3 bookings were partially offset by unfavorable impact from foreign exchange of about $2.1 million, and attrition among a small group of non-core customers. which was previously discussed in the Q2 MD&A earnings call. That known attrition will continue to have a moderating effect on reported SAS ARR growth over the next two quarters. One more point about SAS bookings. I want to highlight that bookings from new logos are up over 150% during the last 12 months compared to the year-ago period. That acceleration is an important indicator of the underlying demand environment and the strength of our competitive position. It speaks to the durability of our growth and the expanding relevance of our platform in the markets we serve. SAS RPO was $248.9 million at the end of Q3 fiscal 26. That's up 18% from the same time last year. That's actually 24% growth on a constant currency basis. demonstrating again momentum on SAS bookings as well as renewals in the period. Professional services revenue for the third quarter was up 8% from the same quarter last fiscal year to $15 million. Professional services backlog was $36 million at the end of Q3 fiscal 26. That's down 19% or 14% on a constant currency basis. from a tough comp at the end of Q3 last year. Based on our professional services backlog heading into Q4, we expect Q4 professional services revenue to look more like Q3 this year than Q4 last year, which was $16.2 million. For the third quarter of fiscal 26, gross margin was 51% compared to 47% same period last year. The key drivers here are increased success margins as well as strength in professional services margins in the current quarter. Net profit per quarter was $1.7 million compared to $1.2 million in the same quarter last year. Basic and fully diluted earnings per share were $0.12 in Q3 this year compared to $0.08 Q3 last year. Adjusted EBITDA was $5 million in Q3 fiscal 26. compared to 3.5 million same quarter last year. On a last 12-month basis through Q3 fiscal 26, adjusted EBITDA is up 49%. Turning briefly to our year-to-date highlights, SAS revenue for the first nine months of fiscal 26 was $58.9 million. That's up 21% from the same period last year. foreign exchange is not having a significant impact on SAS revenue compared to the same period last year. Our total revenue reached $143.1 million. That was a 10% increase from last year, which was 9% on a constant currency basis. Excluding hardware, overall revenue grew by 13% or 12% constant currency. For the first nine months of fiscal 26, our adjusted EBITDA increased to $13.3 million, up from $9.1 million in the same period last year. Fully diluted earnings per share for the first nine months of fiscal 26 were 29 cents. That's up 61% compared to 18 cents in the first nine months of last year. We ended Q3 with a solid balance sheet. We had cash and short-term investments of $36.2 million. and no debt. We used about $3.7 million of cash in the quarter to buy back shares under our NCIB. And we also paid out $1.3 million in dividends. Additionally, the board yesterday approved a quarterly dividend of 9 cents a share. After the end of the third quarter, we implemented a workforce reduction of approximately 7% across multiple functions as part of a broader initiative to optimize the company's operations. This action will result in an estimated restructuring charge of $4.5 million, which will be recorded in our fourth quarter of fiscal 26, and is expected to generate approximately $8.1 million in annual operating cost savings. These reductions create flexibility for the company to redirect resources into strategic growth initiatives And accordingly, the future operating cost profile will reflect both the realized efficiencies and the reinvestments required to support long-term growth. Turning to financial guidance, based on our performance through the first three quarters of fiscal 26 and our outlook for the remainder of the year, we're reaffirming our full-year fiscal 26 guidance for SAS revenue growth of 20% to 22%, total revenue growth of 8% to 10%, and adjusted even a margin of 8% to 9%. I'll now turn the call back to Peter to provide some outlook comments.