Canada's Sylogist Q4 revenue falls 6.2% as project services decline

Overview

• Canada public sector SaaS provider's fiscal Q4 total revenue declined 6.2% yr/yr

• Q4 SaaS subscription revenue grew 12.4% yr/yr as company transitions to SaaS model

• Company attributed revenue decline to reduced project services amid partner-led transition

Outlook

• Sylogist expects enhanced recurring revenue growth and profitability in coming quarters

Result Drivers

• SAAS TRANSITION - Co said revenue decline was due to reduced project services as it shifted to a partner-led SaaS model

• SAAS SUBSCRIPTION GROWTH - Q4 SaaS subscription revenue rose 12.4% yr/yr as part of ongoing SaaS transformation

• HIGH RECURRING REVENUE - Recurring revenue accounted for 81% of total revenue in Q4

Company press release: ID:nGNX6g99WH

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Sylogist Ltd is C$8.50, about 119.6% above its March 18 closing price of C$3.87

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