Tecsys (TSX:TCS) released first-quarter financial results and hosted an earnings call on Monday. Read the complete transcript below.
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
Access the full call at https://www.tecsys.com/about-us/investors
Summary
Tecsys opened fiscal 2027 with a strong Q1, achieving record bookings and the second-highest bookings quarter in its history.
Healthcare sector expansion, particularly through existing customer growth with the Tecsys Elite platform, was a significant driver, with notable expansions at Prisma Health and others.
Elite SaaS ARR grew by 24% year-over-year, with a total revenue growth of 9% compared to Q1 last year, and adjusted EBITDA up 113%.
The company raised its full-year fiscal 2027 guidance based on strong Q1 performance, anticipating higher Elite SaaS revenue growth and total revenue growth.
Tecsys continues to invest in Tecsys IQ, with new AI-driven capabilities in development, while advancing its FedRAMP program for enhanced security and compliance.
Professional services bookings were lighter, impacting PS revenue expectations for Q2, but the company expects recovery as SaaS bookings translate into professional services demand.
Management expressed confidence in the pipeline and highlighted the increasing role of ROI studies in driving sales, particularly in the healthcare sector.
Full Transcript
OPERATOR
Good morning, everyone. Welcome to Tecsys fiscal year 2027 first quarter results conference call. Please note that the complete first quarter report, including MD&A and financial statements, was filed on SEDAR+ 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 remind everyone that this call is being recorded on Friday, September 11, 2026, at 8:30 a.m. Eastern Time. I would now like to turn the conference over to Mr. Peter Brereton, Chief Executive Officer at Tecsys. Thank you. Please go ahead, sir.
Peter Brereton, CEO
Thank you, and good morning, everyone. Thank you for joining us to discuss our Q1 2027 results. We're pleased to open fiscal 2027 with one of the strongest quarters in our history. Q1 delivered record bookings, in fact the second highest bookings quarter Tecsys has ever recorded, giving us real momentum and visibility as we head into the rest of the year. The story this quarter was expansion. Our installed base, particularly in healthcare, continues to deepen its commitment to the Tecsys Elite platform, with existing customers substantially increasing their footprint with us.
We're proud to count organizations like Prisma Health, UT Southwestern Medical Center and a leading cancer treatment center among the health systems that expanded their relationship with Tecsys during this period, a strong signal of the trust hospitals place in our hospital supply chain platform as they scale their operations. At Prisma Health, South Carolina's largest private nonprofit health system, the expansion extends beyond initial deployments of our warehouse and pharmacy inventory systems to now include our hospital point-of-use technology across their network, giving clinical and supply chain teams greater visibility as they support 1.6 million patients a year across 19 hospitals. Healthcare was the primary driver of this expansion activity, but it wasn't the whole story. We also saw general distribution customers continue their migration to SaaS, including Rincem, a large global distribution customer. And we added a notable new logo in Europe with a growing life sciences company, evidence that our platform resonates well beyond our core North American healthcare base. Turning to our SaaS metrics, Elite SaaS ARR and revenue growth continue to accelerate.
Elite SaaS ARR grew 24% year over year, or 22% in constant currency, and Elite SaaS revenue grew 24% in the quarter, or 23% constant currency. This acceleration reflects both the strength of our SaaS-first strategy and the increasing scale of our Elite platform customer base. We also passed a significant milestone in Q1, with our remaining performance obligations, or RPO, crossing the quarter-billion-dollar mark for the first time, reaching 259 million, up 14% year over year, or 13% in constant currency.
RPO is a key forward indicator of the durability of our SaaS business, and this milestone underscores the growing visibility we have into future revenue. Our strong SaaS bookings and momentum in Q1 give us the confidence to raise our full-year fiscal 2027 guidance across the board. Mark will discuss the updated ranges shortly. On the product side, Tecsys IQ continued to gain momentum in the quarter, helping customers turn supply chain data into faster, more confident operational decisions.
We continue to invest in Tecsys IQ's roadmap, with a number of new AI-driven capabilities in early development that we look forward to sharing more about as they mature. We also continued to advance our FedRAMP program throughout the quarter as we work towards full certification. This progress reflects the broader investment we've made in our security and compliance posture, and it's given both public sector and enterprise healthcare customers greater confidence in Tecsys as a long-term trusted platform partner.
We're also proud that our commitment to people and culture, including growth in our team in India, helped earn Great Place to Work certification for a third consecutive year across every country where we operate. With 91% of our employees telling us that Tecsys is a great place to work, that kind of consistency across every market we operate in is something we don't take for granted as we scale. With that, I'll turn it over to Mark to walk through the financial results and updated guidance in more detail.
Mark Bentler, CFO
Thank you, Peter. As a reminder, our first quarter ended July 31, 2026. Q1 was an exceptional quarter for Tecsys, highlighted by record SaaS bookings for a first quarter, record total revenue and record adjusted EBITDA. Total SaaS revenue grew 18% in Q1, reaching $22.7 million, up from $19.1 million in Q1 last year. That growth was about 17% on a constant currency basis. As Peter mentioned, Elite SaaS revenue, our core product and the predominant contributor to total SaaS revenue, increased by 24% compared to Q1 last year, at 23% growth on a constant currency basis.
Total SaaS ARR was $93.7 million at July 31, 2026, up 18% from the same time last year. On a constant currency basis, SaaS ARR growth was 17%. You'll notice that we've begun disclosing Elite SaaS ARR separately in our MD&A. This additional disclosure is intended to highlight the underlying growth trend we have discussed over the past several quarters and provide greater visibility into a key leading indicator of future SaaS revenue growth. Elite SaaS ARR was $89.6 million at the end of Q1, up 24% year over year, representing 22% growth on a constant currency basis.
As Peter mentioned, SaaS RPO was $259.2 million at July 31, 2026, up 14% from a year ago, or 13% on a constant currency basis. Professional services bookings were lighter, which brought our PS backlog down somewhat. As a result, we expect PS revenue to tick down slightly on a sequential basis in Q2. It's important to note that it's not uncommon for professional services bookings to follow SaaS bookings with a timing lag. As a result, the strong SaaS bookings in Q1 may not translate into professional services demand until later in Q2 or subsequent periods as customers advance through deployment planning and execution.
Q1 fiscal 2027 total revenue was $50 million compared to $46 million in Q1 last year. That's 9% growth, 8% on a constant currency basis. Net profit in Q1 fiscal 2027 was $3.1 million, or $0.21 per diluted share. That's up 306% from $0.8 million in Q1 last year. Adjusted EBITDA was $6.9 million in Q1 this fiscal year, up 113% from $3.2 million in the same period last year. We ended the quarter with cash and short-term investments of $35 million and no debt.
Cash flow from operating activities was particularly strong, driven by profit and strong cash collections. During the quarter we repurchased 17,400 shares for approximately $0.6 million under our normal course issuer bid. That compares to 21,300 shares for $0.8 million in Q1 last year. Finally, the Board yesterday approved a quarterly dividend of per share. Moving on now to fiscal 2027 guidance: based on strong Q1 Elite SaaS bookings, continued pipeline strength and robust hardware bookings, we're raising our fiscal 2027 guidance ranges for Elite SaaS revenue growth, total SaaS revenue growth, total revenue growth, and adjusted EBITDA margin.
Our updated guidance for fiscal 2027 is as follows: Elite SaaS revenue growth of 21% to 23%—that's up from 18% to 20% in previous guidance; total SaaS revenue growth of 16% to 18%—and that's up from 13% to 15% previous guidance; total revenue growth of 5% to 8%—and that's up from previous guidance of 2% to 4%; and finally, adjusted EBITDA margin—we're broadening the range and extending it on the high side to 11% to 14%—and that's up from 11% to 13% previous guidance.
I'll now turn the call back to Peter.
Peter Brereton, CEO
Thank you, Mark. Record SaaS bookings, our second highest ever, accelerating Elite SaaS ARR growth of 24%, and crossing a quarter billion dollars in RPO for the first time all point to real momentum as we open fiscal 2027. That strength gives us the confidence to raise our full-year guidance, and we are excited about what's ahead. With that, we will open the call for questions.
OPERATOR
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 one on your telephone keypad. You will hear a prompt that your hand has been raised, and should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you.
And the first question comes from the line of Amir Izat from Canaccord Genuity. Please go ahead.
Amir Izat, Analyst at Canaccord Genuity
Good morning, Peter, Mark. Congrats on the strong performance. Peter, clearly a very strong bookings quarter. In your prepared remarks, you highlighted expansions, I believe, as the primary driver, and I'd like to know if you could give us a better sense of the mix between new logos and expansion. Then on the pipeline conversion side, did Q1 reflect a release of deals that have been delayed over the last couple of quarters, or are you seeing broader acceleration in decision-making?
Peter Brereton, CEO
On your first question? There's no question this quarter was heavily slanted towards expansions. You know, it's been interesting for us, of course, we really have these three contributors to SaaS bookings. We have migrations from old on‑prem software, we have new accounts, and then we have expansions of customers that are already on our platform. And we've seen over the last few years a dropping off, particularly over the last two years, a real dropping off of SaaS bookings coming from migrations from our base.
So we knew we had to sort of get over that. It's like it was this wonderful source of SaaS bookings, but it was, you know, eventually you run out of accounts to move across and, you know, most of the sort of early and mid crowd have moved. There's really just sort of a few laggards that are left. So we know that's going to decrease. And certainly this quarter that was a, it was a contributor, but it was a small contributor. New account bookings are typically light in summer.
You know, our year‑end is April 30, so typically whatever is close to closing, we kind of push to get it closed for year‑end. So then you’ve got sort of May is kind of cleaned out by the April push. You’ve got June to sell something and by July everybody's leaving on vacation. So it's typically a tough quarter for new accounts. And this was no exception. I mean it was light on new accounts. We did land one new account in Europe that said the. Well, let me just finish on that thought. Whereas conversions, sorry, expansions I should say were widespread and we booked a number of deals, one larger deal, a wide variety of sort of small and medium‑sized deals. It was a pretty exciting quarter from an expansion standpoint. Some of that I think is partly driven by people understanding what Tecsys IQ is going to do for them and the fact that they have to sort of further roll out our underlying platform in order for Tecsys IQ to have the data that it needs for the AI engine to operate.
But, you know, pretty interesting there from the standpoint of the overall pipeline. You know, as you know, the pipeline really grew substantially a little over a year ago. It's continued to grow. It's up again over this time last year. And we knew that at some point that dramatically larger pipeline was going to start to break and convert to closed business. And that's what seems to be happening. I mean we saw some of the surge start to happen in Q4 continue.
A very strong Q1 and even now where we are in Q2, you know, the activity level remains very high and that is across new accounts and expansions from our base. Again, there's a small amount still in there that's migrations. But, I mean, it added up. We're probably talking well over 90% of the pipeline activity is a pretty even mix between new accounts and expansions of existing SaaS customers.
Amir Izat, Analyst at Canaccord Genuity
Fantastic. Just on expansions, and I asked you this a few quarters ago and wanted to revisit it. Among the IDNs that initially came to you specifically for pharmacy, have any expanded into your broader solutions?
Peter Brereton, CEO
I don't think so yet. No, not yet. Am I right, Mark?
Mark Bentler, CFO
Expansions. One of the expansions that we had this quarter was one that had Purchase Pharmacy, but they were also using other products as well.
Amir Izat, Analyst at Canaccord Genuity
Fantastic. I'll leave this in a few quarters just to close the loop on the non‑core piece. By our math, Elite ARR increased about $7.5 million sequentially and the non‑Elite ARR declined by roughly half a million. Is that the right way to think about the quarter, or is my math wrong and are we now at a point? Go ahead.
Mark Bentler, CFO
That's good math.
Amir Izat, Analyst at Canaccord Genuity
Okay, fantastic then. Okay, Mark, while I have you, like on the Q1 EBITDA margin, like 13.7 already near the top of the new 11% to 14% range. At Q4 you said the restructuring savings were fully embedded in your original guidance, but not all the planned reinvestment has happened yet. But when I'm looking at your Q1 numbers, should we expect any meaningful step‑up in operating investments through the balance of the year, or is the quarter closer to the underlying sort of earnings run rate?
Mark Bentler, CFO
Yeah, no, we're expecting to increase investment. You know, we'll be doing some hiring, we'll be doing some hiring, you know, pretty broadly across different functional areas. I mean, we continue to scale the business. I think that investment is going to be quite measured. But you will see an increase in investment in the quarters ahead this fiscal.
Amir Izat, Analyst at Canaccord Genuity
Fantastic. Congrats again. I'll pass the mic, thanks. Thanks.
OPERATOR
Thank you. And your next question comes from the line of Gavin Fairweather from ADP Core. Gavin, please go ahead.
Gavin Fairweather, Analyst at ADP Core
Oh, hey, good morning, and congrats on the strong quarter. Maybe just circling back to bookings. I mean, just very strong, especially for Q1, which is, you know, seasonally weak. Like I'm just curious what you attribute that to. I mean, are you seeing just more buying intents or urgency in the base? I mean, any kind of further color would be helpful.
Peter Brereton, CEO
Yeah, I mean, first of all, Gavin, there is always a certain amount of lumpiness in our business, right. You know, just the sheer deal size relative to our size creates lumpiness. And I don't think that lumpiness is going to go away for quite a while. So we, you know, some of it I would just attribute to normal lumpiness, if there's such a thing as normal when you're talking lumpiness. But the other factor is I think in fact our sales organization is getting much better at using the data out of the hospital networks to put together a return on investment prediction that can now be backed up with sort of real‑life stories from other accounts that have already done it. And once you get an ROI study in front of a hospital executive team that shows they're going to save, you know, $200 million over the next five years by deploying our platform or whatever the number is, it's created some real urgency around it. And, you know, most of these hospital networks are now in a position where, you know, whatever, I mean politics in the US continues to sort of ebb and flow and there's lots of different factors going on there.
But the overall long‑term trend is, you know, reimbursements are declining and the population is aging and doctors want to make more money every year and nurses want to make more money every year. So there's only so many places they can go to save money and try to sort of balance the cash‑flow picture. And much better management of supplies and drugs is a huge source of potential savings and may be in fact the primary source of potential savings.
So as we're getting better at sort of, you know, data‑backed ROI studies, we're seeing across the board acceleration in pipeline. So we're continuing to invest in that. We continue to build out the team that puts that together. We have, you know, we have a pharmacist, we have a nurse, we now have a part‑time surgeon that's part of that team as well as, you know, some good sort of math and supply chain guys that work together as a team to build out these ROI studies.
And it seems to be proving very effective.
Gavin Fairweather, Analyst at ADP Core
You talked about pipeline growing every year, but I'm curious if you grew it sequentially in the quarter given the strong bookings now.
Peter Brereton, CEO
We did actually. It actually continued to grow in the quarter in spite of the bookings that obviously came out of the pipeline.
Gavin Fairweather, Analyst at ADP Core
Awesome. Good to hear. Maybe just on FedRAMP, a few things. Maybe you can just update us on the timing and milestones to completion. Also curious if you've done any kind of work to size up the TAM. And also curious for your thoughts on some of the political noise around the GSA this week and whether that could impact opportunities out there.
Peter Brereton, CEO
Yeah, I mean, first of all on your question about what's happening at FedRAMP, I mean the FedRAMP process is underway. There's sort of two main phases to FedRAMP certification. One is you work with a FedRAMP consulting firm to basically review—I don't remember the number, I think it's 491—processes and procedures and technologies that have to be reviewed to make sure they conform to FedRAMP standards. That work is done. We've produced sort of the 900‑page book that documents all that.
We're now in the stage where there's a second company, which is considered a FedRAMP auditor, that's now in there reviewing everything we've done to make sure that it passes muster. And we are in that process right now. So assuming that process goes well, we expect that we will achieve full certification by sort of late winter, early spring is kind of where I would put it. We might be able to beat that by a bit. But right now that's what it's looking like.
In terms of the sort of the political noise going on and, you know, discussions around GSA schedules and so on. We do a small amount of business through GSA, but it's a very small amount of business. And we are also set up with a, you know, we do quite a business in the U.S., so we have a U.S. subsidiary, Tecsys US Inc. And so it's possible that we may need to sort of shift more contracts to our U.S.‑based business. But we don't anticipate it being a problem.
It may just be a change in sort of which one of our legal entities does the contracting.
Gavin Fairweather, Analyst at ADP Core
Great. And then lastly for me, just on SaaS gross margins, can you update us on where those stand? When I look through your slide deck, it looks like you're still targeting 70% for this fiscal year. But when I dig through the services gross margin this quarter, it feels like you might quite already be operating there within kind of striking distance. So maybe just discuss where those are right now and the pace of gains for the rest of the year.
Peter Brereton, CEO
Yeah. Do you want to take that one, Mark?
Mark Bentler, CFO
Sure, sure. Yeah, Gavin, you're right. We are very close to that level now. But we do have, as I mentioned on one of the prior questions, we do have some investment coming. So while we see some expansion opportunity from new bookings, you know, that are always accretive to margin, we do expect to continue some investment there in the current fiscal year. So we sort of, we've got line of sight on that 70%. We're still holding our objectives on that number.
You know, for the short term, you know, clearly longer term, our eye is on a much bigger prize. And just by way of example there, these expansions that we've put on in this quarter, a lot of expansion dollars and the bookings, those are coming in at incrementally quite high margins, 80% plus. So there is definitely runway for continued expansion beyond this fiscal.
Gavin Fairweather, Analyst at ADP Core
Thank you very much. Have fun.
OPERATOR
Thank you, Gavin. Thank you. And your next question comes from Melania Stock Taylor from National Bank. Please go ahead.
Melania Stock Taylor, Analyst at National Bank
Yeah, thank you. Good morning. And again, congrats on a very strong quarter to start here, as others have noted. Really one question area I'd like to get some color on. I mean, given the sequence of events here with the initial guidance you provided and the new guidance you've given with these results, the primary question I'd still like to pin you to is a more specific answer on where the surprise was. It's been just over two months since you gave that guidance.
You were most of the way through Q1 when it was provided. It's a good problem to have, but I mean, is it just pipeline conversion was well ahead of your initial assumptions? Did some renewals surprise you with increased scope? Just trying to get a handle on that. Any other thoughts there?
Peter Brereton, CEO
Sure, sure. Yeah. I mean, we had two. Sorry, go ahead, Mark.
Mark Bentler, CFO
Do you want to take it? Peter? Yeah, really two main things there. One is on the, on the SaaS side and we talked about the big quarter and we talked about the lumpiness and, you know, we had line of sight to a very large pipeline coming into this year. And we weren't shy about describing that heading into this year. Pipeline velocity is always kind of hard to, you know, it's hard to hit. You're never quite sure how fast that stuff is going to convert. Of course, if you book SaaS in Q1 versus Q3 or Q4, there's a massive difference on in-year revenue realization.
Because I think, as you know, when we book SaaS in a particular quarter or a particular month, essentially most typically the revenue starts almost immediately. So at the platform, we make it available, we start the project, and start recognizing revenue. So pulling forward some of these targeted bookings that we were confident in the year, but less confident on early-year timing, the fact that we hit that, pulled in a bunch of that SaaS, it has a pretty massive impact on the SaaS metrics.
So, you know, that gave us great confidence, including the fact that we've still got a robust pipeline to support bookings in the outer quarters. But it gave us really good visibility on how much revenue we're going to realize for the rest of this year. So that moved the — and those were Elite platform bookings. So that moved the bar on the Elite SaaS revenue growth. And then as part of that, it also moves the bar on total SaaS revenue growth. And the other thing that happened for total revenue — and we mentioned that in the prepared remarks and the press release — we did have a really substantial amount of hardware bookings that came through in Q1, late in Q1 and even into the early part of this quarter. And we've got really good visibility on the delivery timing of those hardware bookings. These are lumpy and they're material enough that they're going to move the needle on headline revenue growth. So those are the two things that happened and why, you know, we were maybe a little bit — on the SaaS side, we were a little bit surprised by the timing. On the hardware side, it's just notoriously — it's a hard one.
It's a hard one to call. And we didn't actually expect the level of bookings that we saw. Yeah, that's a great question. I mean, for right now, I would say, you know, we're very, very quite confident in our initial objectives on where we wanted to land ARR at the end of this year. There's still, you know, there's still several quarters of bookings left to do to get to that number. But I would say our level of confidence in our models has definitely risen substantially. I don't know that I would start to call overperformance on our own internal targeting there, but we'll see.
I mean, the pipelines are big and very— I don't know if that's the kind of color you were looking for, but that's how I would.
OPERATOR
Thank you. And your next question comes from the line of John Shao from TD Cowen. Please go ahead.
John Shao, Analyst at TD Cowen
Good morning, guys. Thanks for taking my question. So, Peter, could you talk about the current spending environment among U.S. hospitals and whether that spending profile is kind of dependent on the results of midterm elections?
Peter Brereton, CEO
We don't think so. We were actually just talking about at the board meeting yesterday, it feels like the hospital networks — at least the ones we're working with, and we obviously are working with many of them — they're kind of just ignoring the political noise. They don't see any sort of short-term massive shift. They've already seen the impact of the fact that, you know, the Affordable Care Act, or Obamacare as they call it, is not being subsidized as it was for a few years.
So they've seen more patients that were insured under that program sort of falling off insurance, but they've already really absorbed that impact. They've seen what that impact is and they're not really expecting any other major shift. So they seem to be largely ignoring the noise and focusing on their long-term planning and, you know, getting their networks in the kind of shape they need to be to really harness the power of, you know, some of the technologies they're seeing coming.
I mean, AI itself is becoming a driver right across the board as they're seeing that, you know, you can't run AI against data that you don't have. And, you know, the networks that are not working with us really only have information about what they bought and what they billed, and they're kind of blind on what's in between. So that's where our platform comes in. It gives them that end-to-end real-time data about where their stuff is, when it's going to expire, utilization rates, et cetera, which is massive in terms of being able to then run AI against that and gain all kinds of efficiencies and advanced planning and so on.
So we're not seeing — and we keep watching for it; there's so much political noise you keep sort of watching, is any of this affecting — this happening? Our sales team is slammed with activity right now with lots of these networks wanting to move ahead.
John Shao, Analyst at TD Cowen
Got it. And how much of your SaaS bookings this quarter is kind of partner-led? And how should we think about your PS backlog recovery in the context of a growing partnership ecosystem?
Peter Brereton, CEO
Yeah, I mean, you know, our partnership ecosystem is growing. At the same time, some of the deals we're now signing, even with a partner involved, still require a fair bit of work from us. We also believe we're shortly going to see more and more work coming out of the implementation of Tecsys IQ. We've seen a little bit of that now. We see that team continuing to grow. So we're not really expecting growth in PS overall. We think professional services overall — I mean, last year was quite robust in professional services — and we're kind of anticipating it's not going to move that much.
Timing-wise, we did have, you know, as you know, our bookings in the first, sort of the first three quarters of last year were actually quite slow, which was — I mean, interestingly, it was almost identical to what happened the first year of Trump's first term in power. The networks were quite distracted and worried about what was coming, and everything slowed down for the first year and then sort of picked up speed. So the speed for us picked up in terms of SaaS bookings in Q4 and then accelerated further into Q1.
And we've now got a number of statements of work and project charters that are being finalized right now to implement that SaaS that was booked in Q4 and Q1. So as that gets signed, we expect it's going to fill the professional services backlogs back up. As it is, professional services is still quite busy. It's running fine right now, but we do need to fill that backlog back up. But with some of these statements of work that are in the pipe to get signed in the very near term, we expect that to catch up very soon.
John Shao, Analyst at TD Cowen
Thanks for the color. I'll pass the line.
OPERATOR
Thank you, John. Thank you once again. Your next question comes from the line of Sudan Sukumar from Stifel. Please go ahead.
UNKNOWN, Analyst at Stifel
Hey, good morning, guys. This is SA speaking on behalf of Suzanne. Congrats on the quarter. And for my first question, I just want to double click on the U.S. healthcare backdrop. How are demand signals and sales cycles progressing? And it looks like expansions were strong in the quarter, but maybe on new logos, just given all the Affordable Care Act and reimbursement pressure, how do you see new logos for the rest of the year?
Peter Brereton, CEO
I mean, it's always hard to predict until it happens. We have a number of situations where they've already told us, okay, you're the selected vendor. We now want to move to contract. At the same time, contracting in today's world is a complex process. Typically there's a security committee to get through, there's an IT committee to get through, there's now an AI committee to get through, as well as, of course, legal. So that process can take anywhere from two to six months to get through all those committees.
So we have a very active new account pipeline. We're confident we're going to have a pretty strong booking year from the standpoint of new accounts. But the timing is always the killer on this stuff, so we continue to push ahead. That's where, when I mentioned earlier about ROI studies, these ROI studies really help. Because what it ends up highlighting to all the parties involved is that there's so much money to be saved by implementing these platforms that, in a sense, if you take six months to get through committee, you've potentially wasted 20 million bucks.
So it increases the pressure to get these things through committee, but there's still a lot of committees. So I guess I would say — I was going to say cautiously optimistic, but we're actually way beyond cautiously optimistic. We are optimistic about this year's new account pipeline. It looks pretty exciting for us.
UNKNOWN, Analyst at Stifel
Sounds good. Thank you. For my second question, maybe to kind of dive into Tecsys IQ, I'm wondering how it is affecting pricing, and is it becoming more central to conversations across the business? And just anything incremental on the AI front?
Peter Brereton, CEO
Yeah, I mean, that platform continues to move at a great pace. Part of it is once you've built the underlying tech stack that allows you to connect an AI engine to all the underlying data as well as other third-party data sources to a certain extent, then you build as fast as you come up with good applications. So, you know, today, from a point of view, for instance, we have a dashboard that shows you your current situation, what you should be worried about, any pending shortages, specifically any pending shortages that may affect scheduled surgeries.
That's all there. We've got a chat interface that allows a head of surgery or a charge nurse or whatever to literally chat with the data: Okay, what's going on? What should I be concerned about? Do I have shortages? Hey, do those shortages—finding substitutes we could use—where are those substitutes in the network, et cetera. But we keep coming up with more. I mean, we've got a project underway right now to roll out a dramatically enhanced labor management capability on top of our WMS.
And it's just utilizing tons of what you would almost call information exhaust that has accumulated in our WMS over the years. I mean, the WMS keeps track of every single movement of every single worker and exactly the time of every move they've made right down to the millisecond. Well, you can use that data to plot all kinds of labor productivity trends and concerns and comparisons to benchmarks and so on. So once you have that data, which we have sitting there for a long time and continue to accumulate, and then you add this AI engine on top of it, the sky's the limit.
I mean, as fast as we can imagine things, we can build them. So we are very happy with how that's coming along. And we are not seeing anyone buy our latest platform without buying IQ. Even anyone migrating up from previous releases is just adding IQ as soon as they get to a release that supports IQ.
UNKNOWN, Analyst
Okay, perfect, perfect. And for my last question, I wanted to touch on the distribution, general distribution segment. Could you provide an update on what's happening in Life Sciences and broader general distribution and how much is the reported growth being masked by the legacy churn on Order Dynamics? I know that was more of a factor last year, but I think there's some expected runoff for this year as well.
Peter Brereton, CEO
Sure. You want to take that one, Mark?
Mark Bentler, CFO
Yeah, yeah, maybe I'll start with the, you know, sort of the legacy churn thing. We provided in our MD&A a kind of disaggregation of elite SaaS ARR and total SaaS ARR. So the difference between those two numbers is going to be that retail OD ARR number. So you can see the decline that's happened there. You can see the decline quarter on quarter and you can see the decline from last year. And as I mentioned in the commentary, there was a disproportionate amount of churn in this quarter that came from that non-core elite platform.
We think that'll probably moderate out a little bit. Now, you try to read the tea leaves a little bit for the rest of this fiscal year. It'll continue to sort of grind out, but beyond this fiscal year, it'll come down a little bit in the current fiscal year. And still, we think we end up being disproportionately heavy on the overall attrition number. But the numbers are getting so small now. You know, like on that business, a year ago that was closer to just under 10% of the ARR.
Now it's less than 5%. And by the end of this year, it's going to be very much down in the very low single digits as a percentage of the business. So, after this year the number's going to sort of stop, in a way. It's going to matter a lot less. And then your other question I think was about Life Sciences and—like, can you just repeat that question if you don't mind?
UNKNOWN, Analyst
Yeah, just more comment on Life Sciences and the general distribution segment.
Peter Brereton, CEO
Yeah, I mean that continues to be an important part. I mean our healthcare provider stuff is obviously the big piece of the opportunity set there for us. But we continue to see really interesting activities, including win activity, in the life sciences area. So it's one that we're quite keen on. There's new stuff popping into the pipeline there pretty much every month. So in some ways it's a bit of a less sort of tapped market for us. It's one that, in a way, is broader and a little bit harder to get your arms all the way around.
The healthcare provider stuff is a bit more discrete; it's a bit more of a discrete market. So we're super honed in on that. You know, I think over time we'll start looking at the broader TAM opportunity in that life sciences, non–healthcare provider, life sciences world and fire some more guns in that direction. But right now the key focus is really that specific TAM around health providers. I would say that's the primary base expansion and new logo driver.
UNKNOWN, Analyst
Okay, great, thanks guys. And I'll pass the line, thanks.
OPERATOR
Thank you and there are no further questions at this time. I will now hand the call back to Mr. Peter Brereton for any closing remarks.
Peter Brereton, CEO
Great. Well, thank you everyone for joining us for the call. We appreciate your time and, as always, if you have additional questions, please don't hesitate to reach out to Mark or I, and we will look forward to chatting to you around the end of November with our Q2 results. Thanks and have a great day.
OPERATOR
This concludes today's call. Thank you for participating. You may all disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
Login to comment