Business Summary
Sylogist is a SaaS provider serving government, education, and nonprofit sectors with ERP, CRM, and payments platforms. The company generates over 60% recurring revenue and reported an annual run rate above $62 million by 2023, with EBITDA margins in the mid 20s%. Contracts like the Texas VSS award (CAD 15 million, CAD 3 million recurring annual revenue) highlight its ability to secure large, ARR-driven deals without revenue sharing. Bookings momentum is strong, reaching $17 million in Q2 2025, supported by competitive displacements (nearly 75% of bookings). SaaS accounted for 65% of recurring revenue in 2023, with expectations to rise toward 70% by 2024. The company invests 12–13% of revenue in R&D ($2 million per quarter), with strategic acquisitions funded by a $125 million credit facility. Management emphasizes a partner-led go-to-market model, leveraging Microsoft’s ecosystem to accelerate adoption across tens of thousands of underserved municipalities and K-12 districts.
Catalysts & Milestones
2020 - Revenue decline reached 11% before turnaround investments began
2022 - Organic growth reached 17%, swinging from prior 11% decline
2023 - Consecutive quarters of 20%+ organic growth achieved
2023 - SaaS reached 63% of revenue, run rate surpassed $62 million
2023 - First North Carolina school district went live with successful payroll tie-out
2024 - SaaS recurring revenue share expected to approach 70%
2024 - Expansion into 2–3 additional U.S. states planned beyond Oklahoma and North Carolina
2025 - Texas OAG contract secured (~USD 10.6m / CAD 15m, ~CAD 3m ARR)
Investment Highlights
ARR lifted by 5% annually on long-term contracts, compounding growth
Annual run rate above $62 million, over 60% recurring revenue
Texas contract adds CAD3 million ARR, full CAD15 million value retained
Q2 2025 bookings totaled $17 million, 75% competitive displacements
SaaS recurring revenue share rose to 66%, targeting 70% by 2024
Future Growth Drivers
Expansion of SylogistGov and SylogistEd into additional U.S. states beyond Oklahoma and North Carolina
Microsoft ecosystem partnerships scaling reach into municipalities and nonprofits
SaaS migration of legacy Bellamy, SunPac, and Great Plains cohorts ahead of 2028 sunset
Cross-selling payments, ERP, and CRM modules to existing customer base
Partner-led implementations accelerating customer adoption and reducing internal delivery costs
Risk Factors
Biannual invoicing delays cash inflows, straining working capital early in contracts
$1 million ARR hit from NGO funding cuts illustrates policy risk exposure
Texas VSS contract accounting shifts depress gross margins in year 1
Heavy OpEx in sales and marketing sustains mid-20s% EBITDA margins
Acquisition pipeline valuations remain elevated, risking overpayment or delays
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Capital Allocation
11/02/2021 How are you thinking about Sylogist's strategy and mix of organic and inorganic growth?
Given our strong cash position and new credit facility, we are in a very strong position to accelerate M&A. That may include complementary tuck-ins, IP-related targets to strengthen go-to-market competitiveness, and possibly larger transformative opportunities. On the organic side, we will focus on markets that present the best value creation opportunities, making investments in R&D, direct sales, and partner channel initiatives.
Sylogist enjoys high customer satisfaction and substantial best practice expertise that we will leverage in thought leadership and customer success. We also have a significant opportunity to bring new capabilities to customers that already exist in-house and simply need to be repurposed. This will increase our annual recurring revenue (ARR) and lifetime value (LTV), and, as importantly, deepen customer trust and commitment.
11/02/2021 How have rising tech valuations affected your M&A strategy?
Valuations have certainly risen, especially in our spaces as the private equity community has become very active. Given our strong financial position, we can be aggressive in pursuing opportunities. We evaluate companies through a strategic criteria lens of how they drive value creation in our business, supported by our modeling.
With our experience and industry relationships, we can identify and approach companies that may not consider themselves for sale and are not on others’ radar. That gives us the ability to engage and potentially close transactions that competitors may not even see.
12/05/2021 How is the mass integration progressing, and will you use their products in your portfolio?
The mass integration is going very well. Unlike past acquisitions where integration of IP, team alignment, and systems was handled differently, I have brought a methodology I used at other companies that allows us to approach integration systematically, repeatably, and measurably across the organization. Our leaders are actively interacting with their counterparts, and the framework gives us visibility into the effort required.
Most importantly, we know their business well from due diligence, including the markets they serve and the intellectual property they hold. We are well along with integration and expect it to be largely complete by the end of June or early July.
12/05/2021 What is Sylogist’s appetite for further M&A, and how does the pipeline look?
The appetite remains strong. As I’ve mentioned before, we are focused on finding companies that are a good fit, which we qualify against a number of criteria. Our tracker currently has more than 100 opportunities we are following. We recently added another resource to the team to increase outbound connections and research, ensuring we keep opportunities fresh and engaged.
The pipeline is very strong, our appetite is strong, and we have the resources to execute once we identify and engage. We are in a very good, very positive position as we look forward.
17/08/2021 What are your thoughts on the recent link deal with Alio and E-Grantz, and what does it mean for Sylogist and sector M&A dynamics?
The deals in the market are attracting interest from all corners. The one you referenced was consummated through a private equity-backed firm that has been acquisitive. It was an opportunity we were aware of, though it had gone somewhat quiet. The impetus for them to strike the deal was compelling enough that they did not feel the need to reach out further. Overall, the landscape continues to offer opportunities, with a mix of regional players and legacy systems that have been particularly challenged during the COVID period.
We certainly look at similar opportunities within our pipeline, and those conversations are ongoing.
17/08/2021 What does your M&A pipeline look like, and how much capital are you comfortable deploying?
The pipeline is as strong as I have seen. Kudos to the team, as we added resources to increase outbound activity. We are tracking well over 120 opportunities, constantly refreshed and evaluated relative to our strategy and market dynamics. We also use our connections to motivate strategic targets that may not see themselves as for sale.
Those conversations are more active than ever. In terms of size, MAS is generally representative, with targets typically in the $5 million to $15 million run-rate range, where they face hurdles in technology or capital to expand. Overall, the pipeline and market are strong, and we are well positioned to continue pursuing opportunities.
17/08/2021 Where does your dividend strategy sit given heavier M&A investment?
The dividend is a long-standing value component for our shareholder community. While it is not the cherished golden egg, it is something we respect and review each quarter. We weigh the dividend’s value against other uses of capital, such as M&A, and those conversations will continue.
Overall, our commitment to the dividend remains strong at this time.
14/12/2021 Will future M&A focus on managed services or was Pavliks mainly about the Portal Connector?
We value all three facets of Pavliks. Its synergies with our D365 practice expand our North American footprint. Government grants flowing to cities and states to upgrade technology will create a strong project pipeline for 2022 and beyond, positioning us well for services delivery.
The Portal Connector is especially synergistic, as it can be pulled across our customer community to support citizen engagement, school communications, medical records, and other two-way data needs. Managed services also bring strategic advantage. Customers with a SaaS posture often struggle with licensing, subscriptions, security, and optimization. By complementing in-house teams with consulting and expertise, we help them stay secure, efficient, and ready for next-stage adoption. Managed services will grow in value as we expand our SaaS footprint.
14/12/2021 Can you provide an update on the M&A funnel, deal multiples, and fiscal 2023 revenue goals?
We believe our $20–25 million fiscal 2023 revenue target from M&A is achievable, possibly sooner, if transformational deals arise. Good companies with attractive attributes still command strong multiples, while weaker companies draw less interest and lower valuations. We are not pursuing bidding wars, but instead building trust with founders who want a strong steward for their business.
Our deal tracker is more robust than six months ago, reflecting a refined screen focused on growth orientation and the Rule of 40. We have added resources to support outreach and diligence while protecting the executive team from distraction. We can move quickly if companies enter a process and are confident in our ability to execute without disrupting core operations.
10/02/2022 Can you update us on M&A activity following the credit facility increase to $125 million?
Our M&A pipeline is strong, stronger in both quality and visibility than at any time in the past 12–15 months. The team has been disciplined, focusing not on dialing broadly but on entering meaningful conversations with targets where Sylogist can be a true partner. Capturing companies before they enter a formal sales process often leads to better outcomes.
The three acquisitions we made recently have created positive momentum. Leaders of those businesses have shared their experiences, and because our approach was not “buy and bury” but instead collaborative and respectful, it has generated quality inbound leads from brokers and direct outreach. We feel very good about the quality of our pipeline and our ability to continue executing in the markets we’ve targeted.
12/05/2022 What is the outlook for M&A activity with the expanded $125 million credit facility?
Our M&A pipeline is stronger in quality and visibility than at any time in my 15 months here. The team is disciplined in pursuing meaningful conversations with targets before they enter formal sale processes, which tends to lead to better outcomes.
The success of our recent three acquisitions has generated positive momentum and word-of-mouth in the market, including from brokers and directly from company leaders. This reputation has attracted quality inbound leads, giving us confidence in both the quantity and quality of targets we are evaluating.
11/08/2022 Will M&A activity be higher in the next 12 months?
Our appetite remains high, but we are prudent and strategic. This year’s cadence was not impacted by interest rates, but by some targets not fitting strategically or being at price points we felt were not appropriate for long-term value creation. We continue to be acquisitive, and our deal cadence is now higher than since I joined. We had about 200 targets in our tracker, now we are near 400 across North America and beyond. It is a healthy pipeline, and we will be aggressive on strategic deals that drive our plan forward.
11/08/2022 What are your updated thoughts on the dividend given M&A growth priorities?
Same as before, Jim. I’ve said we would revisit the dividend when we had earned the right to consider the best use of capital. The Board and I continue to evaluate our fiduciary duty to maximize opportunities for Sylogist. While we respect the dividend, we believe at this stage that capital may be better used inside the company to drive growth and long-term value creation.
15/11/2022 Will M&A activity increase in the next 12 months, and how does NCIB fit into capital allocation?
On NCIB, there is no set threshold; the Board will weigh buybacks when they clearly create shareholder value. Regarding M&A, we are in a strong position to pursue opportunities, though we are applying a tighter lens. Our focus remains on executing initiatives already in front of us, which we view as substantial from an ROI standpoint.
We still see M&A as a potential accelerator for value creation, but acquisitions must be complementary. Our platforms—SylogistGov, Ed, and Mission—are already well rounded, so IP is less critical than customer density and talent. The pipeline of discussions is robust, and we continue to scrutinize opportunities carefully.
15/11/2022 Are there assets that no longer fit the business model, and are you considering divestitures?
Since I joined, we have consistently reviewed our portfolio. While some assets may appear asymmetrical, they contribute cash and EBITDA. That said, focus and execution are critical for long-term success, and we continue to evaluate alignment.
We are open to potential divestitures but will only pursue them under favorable conditions. There is no cash pressure forcing sales, and we will not accept terms that fail to reflect the value we have built. Any decisions will be thoughtful and strategic.
15/11/2022 With the dividend cut freeing capital, will you target $20–25 million of annual M&A in 2023 or lower expectations?
Inorganic growth is evaluated through a tight lens of return on investment. We feel bullish about our organic growth and return on invested capital, which remains the priority. That said, our interest in M&A is unchanged. Some private companies still have inflated valuation expectations due to the prior buying frenzy, so we are prepared to be patient.
There is nothing missing in our IP offerings that forces us to buy rather than build. We will continue to pursue opportunities, even outside of formal processes, but patience is now an advantage. The dollar threshold does not change materially, but if activity comes in lower, it should not be viewed as a concern. It simply reflects whether the opportunity is the best use of capital.
15/11/2022 Will you be more acquisitive in the next 12 months, and how do you balance that with share buybacks?
The Board will evaluate NCIB opportunities case by case, without a fixed number. Buybacks will be considered when they create shareholder value. On M&A, we are well positioned and have a robust pipeline, but our lens is tighter. Our focus is on execution of current initiatives with strong ROI potential. M&A remains interesting as an accelerator of value, though we now prioritize customer density and talent over incremental IP, since our platforms in government, education, and mission markets are already well rounded.
15/11/2022 Are there assets that no longer fit the business model, and will you divest?
Since I started, we have continually reviewed assets, including those that may appear asymmetrical. While they contribute cash and EBITDA, focus and execution are what drive success. We evaluate market conditions in the tech sector to assess timing and value.
We will only consider divestitures where we believe there is a fair return. We are not under pressure to sell for cash reasons, so any action would be deliberate and thoughtful, not a forced sale.
15/11/2022 With dividend capital freed, will you pursue $20–25 million of annual M&A in 2023?
Our approach weighs inorganic opportunities against organic returns. We are bullish on organic growth and confident in our ability to win new business. That does not dampen M&A interest, but we see some private sellers still holding inflated expectations after recent market froth, so we can be patient.
Currently, nothing is missing in our IP that compels us to buy rather than build. We will continue to evaluate opportunities, often off-market, but with a tighter lens on ROI. Deal size thresholds may flex, but that should not be viewed as cause for concern—it simply reflects best use of capital.
14/03/2024 How are you approaching capital allocation between organic growth and M&A?
Organic growth remains the priority, and we will continue investing capital in marketing and sales to raise awareness, especially in the newer Gov and Ed markets. Sales and marketing spend will remain in the current range as a percentage of revenue. At the same time, we have free cash flow and credit facilities available for M&A. We do not expect to use equity given dilution concerns, unless in a very unique situation. Our approach will be a blended use of capital, with organic growth as the primary lever and M&A as a strategic complement.
14/03/2024 How has competitive intensity evolved in M&A, and what pace do you expect in 2024?
We do not set a specific pace but remain highly active. Brokered deals remain competitive, but we differentiate through direct relationships built over time, focusing on targets that add IP, customer density, or team strength. M&A remains a strategic lever, supported by the board, but it is not required for competitiveness. We believe our existing customer base provides credibility, so acquisitions are pursued through a disciplined but opportunistic lens.
09/05/2024 Were the $800,000 restructuring and acquisition costs mainly earn-out accruals and integration?
That is accurate. About $600,000 relates to the Mission CRM earn-out accrual, which combines Q1 and Q2. Their fiscal year ends September 30, so we are at the halfway point of year three.
The remainder reflects acquisition and integration costs.
09/05/2024 How do you view M&A competitiveness and urgency in education and public sector markets?
We feel positive about our approach. Brokered deals remain competitive, but our strength lies in direct outreach to founders and organizations not currently in a process. Our network and long-standing relationships across our three verticals give us direct access to strategic opportunities.
We focus on two criteria: customer density and strategic IP that complements our platform. There is no urgency to act, as deals must evolve on their own cadence. Direct outreach, ongoing conversations, and opportunistic timing remain key to our M&A strategy.
11/05/2023 Are you still targeting $20–25 million of acquired revenue this year, and what are you seeing in private market valuations?
We continue to see private company valuations at a premium that does not make sense for us right now. We are engaged in conversations and stacking actionable deals, but we believe time is on our side as market pressures begin to reset valuations. For that reason, I would not put a firm pin in the $20–25 million acquired revenue target for this year.
We think patience is working in our favor. At the same time, strong execution on the organic side is ensuring that management remains focused on initiatives with the highest return on invested capital. Our organic strategy is delivering, and we do not want distractions from that.
11/05/2023 How are you thinking about share repurchases while waiting on M&A?
We are aligned with the idea that repurchases are highly accretive at current levels. The Board is actively discussing continued use of the NCIB to enhance shareholder value. We believe the stock price is ridiculously low compared to the value creation path we see ahead.
We intend to keep taking advantage of this opportunity to buy our own shares, while also encouraging our investor community to recognize the same opportunity. Repurchases fit alongside our internal investments and patient approach to M&A as part of delivering long-term shareholder value.
29/09/2023 How do you view capital allocation and M&A at Sylogist?
Once we had data proving our strategy was working, we significantly cut the long-standing dividend to free cash for growth investment. We also put a normal course issuer bid in place during the tech sell-off, repurchasing shares to create value. Debt repayment is another focus, with about $20 million outstanding from the three acquisitions since I joined. With a $125 million credit facility available, I want to keep dry powder and avoid being constrained by debt when strategic opportunities arise.
M&A for us is an accelerator of organic growth, not a revenue growth mechanism. We will not chase shiny new objects or stray from our three core markets. At current share prices we do not intend to use Sylogist paper for deals to avoid dilution. We see the SaaS flywheel building momentum, accelerating revenue growth, expanding partner channel leverage, and increasing gross margins. With three massive markets in buy mode, positive reception to our platforms, and KPIs trending strongly upward, we are only at the beginning of creating long-term shareholder value.
09/11/2023 Guidance on capitalized R&D going forward?
The increase this quarter was mainly from tail-end education investments and rollout of our victim services suite. We saw more eligible projects in those areas. While we are not providing formal guidance, we expect elevated capitalized R&D through year-end, then a return to normalized levels in 2024 as most incremental investments are completed. We are in our 2024 budgeting cycle now, so further clarity will come next quarter.
08/08/2024 With strong vertical momentum, is M&A becoming a bigger focus, and how is the deal landscape?
Yes, it continues to be a focus. For us, it is not an or, it is an and. We remain diligent and see many opportunities in the space, but we are disciplined about only pursuing deals that are synergistic rather than adding revenue for its own sake.
Strategic M&A is an accelerator for us. We are focused on complementary intellectual property, talent, and customer density. Appetite for acquisitions remains high, but we want the right results, not distractions.
07/11/2024 How are you approaching M&A in the current market?
Our appetite for M&A remains strong. We continue active outreach, both directly and through partners, and we have a credit facility available to pursue deals that make sense. We are disciplined about not taking on burdensome or ill-fitting assets.
Valuations remain high for quality assets, with significant activity in public processes. We are also pursuing opportunities that may not yet be in a process, where we can present a compelling preemptive case as a buyer. Although we have not closed a deal in recent quarters, we remain very much in the hunt and continue to evaluate targets for value creation.
07/11/2024 Can you update on capital allocation priorities and M&A focus?
Our capital allocation priorities remain consistent. We will continue exercising our normal course issuer bid, as we believe there is headroom in share value and that repurchases remain a shareholder value opportunity. On M&A, while we are complete on IP, bolt-on or complementary IP remains attractive, particularly if it supports school districts, municipalities, or charities. We also prioritize customer density, especially where legacy communities have not moved to SaaS and may need a bridge solution.
We are open to acquisitions as well as partnerships that generate royalties without requiring full purchase. Our partner community has relationships with many solution providers, creating opportunities for integration and revenue. We have the team, playbook, and appetite to pursue both organic and inorganic growth, while remaining disciplined in execution.
14/08/2025 What are your investment priorities beyond R&D, and where do you see mid- to long-term operating leverage for margin expansion?
Without a doubt, we are leaning in further on sales and marketing motions, where ROI has been very strong. Partner advocacy and direct efforts are raising awareness significantly; a year ago, few Canadian municipalities knew of SylogistGov, but now nearly all do. Customers are pleased with the new software, which provides material advantages over legacy systems.
Sales, marketing, and partner enablement remain key areas of focus. We also evaluate capital deployment across debt repayment, inorganic opportunities, share buybacks, and reinvestment where we see long-term value creation.
Competitive Advantage
14/12/2021 Can you update us on the payments initiative and its opportunity?
It is a unique win for us because we own the technology, unlike others who rely on partnerships. Shortly after I joined, I identified it as a hidden jewel. We have since developed pilots offering a ready-to-go model across product platforms, enabling easier displacement of incumbents through value beyond pricing.
The richness of transaction data fed back into ERP or fundraising systems provides differentiation. Materiality in 2022 is limited, but it builds a flywheel effect as more transactions occur and deployment expands across our footprint. We expect green shoots in the back half of this year, with long-term growth ahead.
10/02/2022 What interest do Bellamy and SunPac communities have in cloud migration, and what is the revenue lift?
Interest is high, as customers recognize they are on legacy systems and cannot delay digital transformation. We have conducted webinars and roadshows to demonstrate our roadmap and technology, generating excitement and long-term commitment.
Beyond services revenue, cloud migrations create pricing opportunities and wallet share expansion. Modern platforms offer more innovation, and we can cross-sell additional intellectual property such as payments. This combination should drive recurring revenue lift and expand our relationship with these customer communities over time.
12/05/2022 What is the cloud migration appetite in Bellamy and SunPac customer communities?
Appetite is high, as these customers know they are on legacy systems and cannot postpone digital transformation. We have run roadshows and webinars to acclimate them to our technology and roadmap, and the response has been very positive.
Beyond services revenue, there is real pricing opportunity from moving to more modern platforms with greater innovation. This also enables us to cross-sell additional IP such as payments. We see meaningful potential to increase wallet share over time.
15/11/2022 What trends are you seeing in pipeline size and development?
We now have a much stronger pipeline due to consolidating disparate marketing systems into a single company-wide platform. All initiatives are tracked consistently from first inquiry through deal progress. Lead activity is strong within our ideal customer profile, which is exactly where we want it. We no longer chase opportunities outside that profile.
All new deals are viewed through a lens that ensures a material IP component, driving annual recurring revenue (ARR) and higher billing rates on project services. This positions us competitively with a full SaaS posture, strong customer satisfaction, and references that support our credibility in the market.
14/03/2024 What gives you confidence in accelerating ARR conversion and deal closures in coming quarters?
Our platforms are now industry leading in innovation, usability, and full functionality, which strengthens our competitive position and ability to win business. Customer advocacy has never been stronger, and with pipeline expansion and ICP targets, we are confident in converting more leads. Both direct and partner efforts are driving attachment rates and increasing deal velocity, and as buying cycles kick in, we expect even greater momentum in the back half of the year compared to 2023.
14/03/2024 Are partner contributions broad-based, or are they mainly from Microsoft?
We are seeing both. Microsoft is walking us into deals in our targeted Ed, Gov, and nonprofit markets, while other partners with regional or North American footprints are also becoming accredited and bringing us opportunities. Collaboration between our team and partners is not easy, but under the leadership of our CRO, Grant McLarnon, we are building a repeatable, scalable model. Customers are enthusiastic about these partnerships, and we see partner traction as a key differentiator going forward.
14/03/2024 What drives success in competitive displacement wins?
Three factors stand out. First, competitor pricing often assumes customers will renew at levels they no longer find acceptable. Second, many competitor offerings lack a full SaaS posture, while customers now demand stronger security and innovation. Third, customer advocacy is powerful—our satisfied clients are sharing their experiences with peers, which drives awareness and credibility for Sylogist beyond what marketing alone can achieve.
09/05/2024 How important is word-of-mouth versus direct and partner sales efforts?
Word-of-mouth is essential but not sufficient on its own. Referenceable customers who can speak to successful transitions or long-standing partnerships are a critical lever in both direct and partner-driven sales. These testimonials differentiate us and reinforce confidence in our platform and execution.
Both our direct sales team and partners rely heavily on this, and it remains a must-have element of our strategy. However, strength of platform and delivery capability are equally critical to win and retain business.
29/09/2023 How would you describe the customer value proposition of Sylogist’s products?
Our differentiation is not just technology. Public sector clients adopt slowly, and when they do, they want a trusted partner to guide them, not simply sell software. Many had used legacy systems for 20 years. We focus on easing that transition, helping them change ingrained processes while ensuring staff feel empowered, not overwhelmed. Citizens, parents, donors, and teachers expect more, so we provide solutions that deliver value quickly and help organizations adapt successfully.
29/09/2023 Why is your Net Promoter Score (NPS) so important, and how have you improved it?
We poured in both personal and political capital to deliver what we promised. For decades, this market has been overpromised and underdelivered to. I told the board I would only take this role if we could be truthful, transparent, and consistently over-deliver. We rebuilt trust by engaging customers early in our roadmap, involving them in development, and giving them a voice in shaping outcomes.
When I started, we faced churn, revenue loss, and looming renewals. COVID ironically gave us breathing room, as schools and governments delayed ERP changes, allowing us to prove ourselves before customers made decisions. We engaged key customer leaders—respected voices in their peer groups—and worked with them first, creating advocates who then influenced others. That approach doubled our NPS in less than two years, moving us into the top-tier “great” category, and it continues to fuel growth through customer advocacy.
29/09/2023 How do dynamics in the public sector drive both repeat and new business?
There is no place to hide in this market. If you disappoint one customer, the entire community knows about it quickly. On the other hand, if you deliver and build trust, word spreads just as fast. In the charitable sector, professionals often move between organizations, carrying their experiences with them. That mobility reinforces the importance of being a trusted partner.
These are not “nice to have” systems; they are the systems that run schools, towns, and charities. That makes us extremely sticky, with lifetime value through the roof. But if trust erodes, customers will influence others not to work with you. After 35 years in this space, I deeply appreciate how critical reputation and trust are in sustaining growth.
07/11/2024 What is your strategy to protect Government customers and drive organic growth?
Our moat comes from the lack of viable alternatives matching the sophistication and security posture of SylogistGov. We can demonstrate working solutions in active municipalities, which partners can present to their customer cohorts. We also use technology and AI to track RFPs across North America, sharing that data with partners to align efforts and ensure pipeline visibility.
In many cases, we can secure sole-source provider scenarios due to our unique Microsoft Business Central platform, avoiding competitive bids and shortening sales cycles. Partners are so encouraged by the opportunity that they are adding staff to better leverage the data and accelerate their go-to-market activity with our platform.
07/11/2024 What must occur to monetize synergistic partner integrations?
Technically, very little. We are continuing to expand our API suite, which makes integration largely plug and play. As part of Microsoft Business Central and CRM, many plug-ins are available out of the box. Strategically, we are prioritizing customer onboarding and success in Government and Education before fully activating complementary IP.
That said, discussions are already underway. Our Director of Partnerships and CRO, Grant McLarnon, are engaged in conversations with potential partners, preparing for future integrations that can drive incremental revenue without acquisitions.
14/08/2025 How do you maximize opportunities given strong partner and internal win rates?
Partner-attached deals are increasingly becoming partner-led, with partners proactively identifying opportunities in their large customer bases, such as legacy Great Plains cohorts. Their confidence in our solutions is driving transitions we might not uncover through marketing alone. This creates an exciting accelerator as partners leverage their deep customer relationships. We see this as a key pillar of the partner thesis and a powerful driver of future growth.
Financials
11/02/2021 Are lower margins from higher professional services revenue an anomaly, or should we expect this mix going forward?
We acquired InfoStrat in April last year, and it generally takes 18 to 24 months to fully integrate an acquisition. We are reorienting that business to be more product-focused versus services-focused, which takes time. As we prioritize products, this will drive more services tied to subscription and maintenance revenue, which command higher margins.
As we integrate InfoStrat, we expect our margin profile to expand and move closer to our long-term subscription-driven model.
14/12/2021 Why did MAS revenue jump 35% quarter-on-quarter to $2.3 million?
As you mentioned, deferred revenue accounting rules changed. Under IFRS 15 we now recognize actual contracted value rather than applying a haircut, which added about $300,000 that had been excluded the prior quarter. Q4 also included billings for contracts running through June, with July 1 moving onto our books.
Beyond that, in addition to recurring subscription fees, we billed for forms used by schools and some professional services on training. Those elements accounted for the variance.
14/12/2021 What drove the 400 basis point gross margin lift in Q4, and is it sustainable?
That margin lift came from an accounting policy change. Revenue previously recognized with a haircut against deferred revenue was fully recognized in Q4, which increased margins. This was a one-time effect tied to the policy adjustment.
10/02/2022 Should we expect mid-60% gross margins after acquisitions?
Mid-60% to low-70% is where we expect to track. We did face delays, and as Bill mentioned, some milestone billings were deferred until this quarter. With those now coming through, I see gross margins picking up into the high-60s to low-70s range.
12/05/2022 Should we expect gross margins in the mid-60% range going forward after acquisitions?
Mid-sixties to low seventies is where we expect to track. Some delays and milestone billings were deferred until this quarter, but we see margins picking up into the high sixties to low seventies range.
12/05/2022 What revenues come from legacy platforms being sunset?
We have not carved that out specifically, but from today’s comments you can unpack it at roughly $1.2 million per year, or about 15% of that portfolio. That is in exchange for a three-year secured contract, plus associated services revenue on top.
11/08/2022 What explains recent gross margin erosion, and have margins troughed?
Hi, Amr. You are correct that professional services carry lower margins than subscriptions. Much of the backlog we worked through required front-end professional services. Additionally, Pavliks has a customized D365 arm that is primarily professional services. Combined with purposeful discounts, this explains margin levels. As subscriptions grow, margins should improve somewhat. We are in the midst of planning for fiscal 2023 and will share more then.
11/08/2022 Is Mission CRM revenue about $0.5 million this quarter?
We do not break out revenue for individual entities on a quarterly basis. That said, they are tracking well and are on pace to deliver more than 100% of revenue compared to when we bought them.
15/11/2022 Should we expect margin compression with inflation and ongoing investment?
We believe margins can continue at current levels. Our ability to attract and retain talent remains within budget, which is solid. Investments will continue, but they will be balanced as we move forward with the posture I described.
14/03/2024 What is the upside potential for SaaS gross margins as the platform scales?
We see SaaS revenue as a percentage of overall revenue accelerating, driven by increased deal velocity and shifting project services to partners. This transition creates leverage for margin as ARR becomes a larger contributor to profitability. Partners are enthusiastic about delivering services with us, and these combined levers position us for stronger margins as SaaS grows.
14/03/2024 How will SaaS margins be impacted by partner-led delivery?
There will be margin contribution from additional SaaS revenue, but we must maintain a professional services bench to train partners as they onboard. This means that while SaaS growth increases gross margins, overall margin expansion will be somewhat muted until we fully pivot to a partner-led delivery model.
14/03/2024 Can you quantify SaaS margin differences between partner-led and direct models?
On an annualized basis, SaaS represented about 65% of recurring revenues at the end of fiscal 2023. We expect this to rise into the high 60s, close to 70%, by the end of 2024.
14/03/2024 Why did EBITDA margins jump in Q4 despite guidance for expansion later in 2024?
The margin expansion primarily came from lower G&A, driven by several factors. Recruiting costs declined significantly because we brought recruiting in-house, reducing reliance on external agencies. Legal and professional fees were lower due to cadence of use. Our vacation policy created a benefit as accruals reset at year-end. Lastly, a few non-key departures late in Q4 created temporary savings, with backfills occurring in Q1 2024.
09/05/2024 Was the gross margin softness from wrapping up a multiyear project just one quarter?
Yes, it was a one-time anomaly. The wrap-up of the project had two accounting impacts: we held off on recognizing revenue until the appropriate triggers, and at the same time, we recognized accumulated costs.
This created the appearance of softness, but it was tied specifically to the timing of revenue recognition versus costs. Your understanding is correct.
11/05/2023 What were the one-time expenses that reduced EBITDA margin by 300 basis points, and why were they not excluded from adjusted EBITDA?
These expenses relate to items we would not expect to see on a continuing operating basis. In a sense, they are the opposite of the tailwinds we saw in the prior quarter. On whether to adjust them out of EBITDA, we discussed it internally and reached consensus that the appropriate approach was to include them, in line with GAAP fidelity.
That said, we do not expect to see these expenses recur. The most accurate presentation was to include them in adjusted EBITDA but call them out as one-time items that impacted results this quarter and will not affect us on an ongoing basis.
10/08/2023 Capitalized software development costs rose to $1.2 million from $700,000. How should we think about that trend?
Capitalized development was 5% of revenue this quarter versus 8% to 9% in prior quarters, with overall product development costs closer to 12%. The 5% reflected a true up from additional projects, some dating back to Q1.
Looking ahead, we expect capitalized development to rise into the 7% to 8% range, higher than this quarter’s 5% but below prior peaks of 9%. The true up affects expenses, not cash costs.
29/09/2023 How has Sylogist’s financial performance evolved since 2020?
Before I joined in 2020, the company had virtually no investment in products, service, or sales and marketing. Revenue erosion had begun and accelerated, with organic growth non-existent and EBITDA myopically prioritized. By Q1 2022, revenue decline reached 11 percent. Through strategic investments, active outreach, and strong team execution, we reversed the trend, generating 17 percent organic growth in 2022, swinging from minus 11 percent to plus 6 percent in Q4. In 2023 we have reported consecutive quarters of 20 percent-plus organic growth.
This reflects the recruitment of a talented management team with deep public sector SaaS experience, effective strategic M&A as an accelerator, and the discipline to endure short-term discomfort to build long-term value. With annual run rate above $62 million, over 60 percent recurring, and EBITDA margins in the mid-20s, Q2 2023 results show profitable growth. Importantly, 64 percent of project services revenue is attached to our intellectual property, a leading indicator of future SaaS ARR growth that becomes a high-margin annuity after implementation.
09/11/2023 Is $2 million per quarter still a good estimate for total R&D spend?
Yes. Viewed as total R&D spend, both capitalized and expensed, we have been running at about $2 million per quarter, or 12% to 13% of revenue. That remains a reasonable number to use going forward.
09/11/2023 What prevents subscription revenue growth from matching 26% SaaS ARR growth, and how does bookings translate into ARR?
Doug, the transition of bookings into ARR occurs as customers go live. Depending on size and complexity, that can take three to nine months. So the timing is tied directly to implementations.
In terms of subscription revenue aligning with ARR growth, subscriptions were 63% of total revenue in June 2023 and are now 66%. We expect that upward trajectory to continue, with a long-term goal of about 85%. While legacy customers still provide valuable recurring revenue, we are transitioning them to SaaS at a steady pace. The objective is not 100% SaaS, but rather maintaining healthy recurring revenue while expanding SaaS.
09/11/2023 Does converting legacy government customers to SaaS increase ARR without similar subscription revenue growth?
Yes, that is a fair characterization. SaaS revenue growth is significantly higher than maintenance and support growth, and also higher than total recurring revenue growth. While timing of conversions creates some offsets, overall recurring revenue and SaaS revenue are both increasing, with SaaS growing the fastest.
08/08/2024 Can you explain the working capital movements this quarter and how to model them going forward?
From a working capital perspective, our business has a clear seasonality. The first half of the year looks very different from the second half. In the second half, particularly on the education side, we issue a large volume of invoices.
This creates positive impacts across cash, free cash flow, accounts receivable, and deferred revenue. What you saw in this quarter’s results is tied to this seasonality, not an underlying shift in working capital dynamics.
07/11/2024 Explain the slight dip in SylogistEd net retention rate this quarter.
There were some legacy customers that no longer aligned with our go-forward SylogistEd strategy. This was anticipated strategic attrition, as several of these customers exited as a cohort during the Q3 budgeting cycle. Nothing should be read into it as churn picking up. It was strategic churn, not something that gives us pause.
15/05/2025 Can you provide more detail on the Texas contract revenue recognition and implementation timeline?
From a revenue recognition perspective, the Texas contract is an integrated bundled arrangement. We are working through the mechanics of this with our auditors. Our best view is that the bulk of the revenue will be recognized as annual recurring revenue (ARR) over the contract term. You will see this reflected in our Q2 results, and we will keep you posted on any accounting updates, but the essential point is that this contract is largely ARR-driven.
15/05/2025 Does the full CAD15 million contract value flow entirely to you, with no partner revenue share?
Yes, that is correct. Unlike typical partner arrangements, there is no margin share in this deal. The approximately CAD15 million is the total contract value, and we retain full revenue.
15/05/2025 Should we expect a lift in project services revenue, or is the contract revenue all embedded in ARR?
That’s broadly accurate, it is embedded in ARR, primarily SaaS, rather than project services or maintenance. The structure of the agreement as a bundled arrangement lends itself to recognition largely as ARR. While the accounting is complex and still under review, the directional assumption is correct.
15/05/2025 What was the NGO funding headwind number, and is it fully reflected in your revenue base?
It was a $1 million ARR impact. We do not view this as an ongoing erosion scenario. Most affected NGOs now have their footing and are moving forward, so we do not anticipate additional drops unless broader policy changes occur.
The timing is important: much of the impact occurred late February into March, so Q1 only reflected part of it. The fuller effect will flow through the remaining three quarters, primarily affecting maintenance and support revenue.
15/05/2025 What is the scope and revenue basis for the Texas VSS contract, and how might it expand?
Because this is a public contract, the published ARR equivalent is clear. The Texas OAG award represents approximately USD 10.6 million, or about CAD 15 million, translating to roughly CAD 3 million of recurring annual revenue. These figures are public and align with what has been disclosed.
15/05/2025 Can you provide more color on revenue trends in Mission, given the quarterly fluctuations?
We are seeing expanding bookings in this segment, with more subscriptions per user at implementation. Importantly, we now have an integrated CRM and ERP offering following the Mission acquisition, which strengthens our pipeline. In some deals we are securing both CRM and ERP, which was not possible before.
Deal sizes in Mission can be lumpy quarter to quarter, as a single transaction can skew results, but the overall trend shows expanding deal sizes.
15/05/2025 What progress have you made migrating your customer base to SaaS, and is this being actively pushed or left to natural evolution?
We haven’t disclosed exact percentages, but the transition is on or ahead of plan. Customers have an appetite to move, and we prefer to operate from one SaaS platform that ties to our knowledge base and AI capabilities rather than supporting both SaaS and legacy. Once we reach the 80% range, some customers will continue at their own pace, depending on their flight path.
That said, not all legacy platforms have a SaaS upgrade path. In areas such as our Epic community and other user groups, we will continue to maintain those platforms as they are. These customers typically generate strong margins and remain profitable. So while the majority of the base will migrate to SaaS, a segment will likely remain on maintenance and support.
14/08/2025 Can you discuss the $17 million bookings mix across SaaS and services, and whether any large deals drove the number?
Gavin, thanks for your question. I don’t think we’ll break out the actual SaaS and professional services mix; I’ll defer to Sujeet on that. What I will say is the blend was very healthy across all three segments. Importantly, there wasn’t anything materially chunky that skewed bookings upward. We saw a good blend of all platforms firing, strong deal closings, and partner success.
So overall, it was just a really strong quarter in terms of the mix and performance of our efforts.
14/08/2025 Can you explain the shift in accounting treatment of the Texas VSS contract between SaaS and services?
You are right, Gavin. Initially, accounting experts viewed the contract as an integrated bundled arrangement, meaning all revenues would be recurring and recorded within SaaS. That would have resulted in higher ARR and SaaS revenue on the income statement.
Based on additional guidance, the view now is that it should be unbundled. Revenues are allocated between SaaS and project services based on standard selling prices. The effect is an unbundling on the income statement and project services costs being fully allocated upfront, which depresses gross margins early in the contract. However, as the contract comes up for its first renewal, the SaaS ARR returns to its original level. That is the key impact of the accounting treatment.
14/08/2025 Can you explain the cash flow treatment of the Texas VSS contract compared to accounting?
On this contract, invoicing is on a biannual basis, regardless of whether it is professional services or ARR. This creates a lag in cash inflows. Meanwhile, costs are incurred and cash is spent upfront, particularly on implementation and project services. That bulk outlay happens mainly in year 1, which is why there is a mismatch between revenue recognition and cash timing.
14/08/2025 What caused the revenue decline in Mission, and was it only NGO customers impacted by U.S. federal cuts?
The decline was predominantly due to further DOGE cuts impacting a small number of large global charity customers, especially in health and human services. Many are reorganizing and reducing in-country footprints faster than expected, which created pressure.
From a numbers perspective, the bulk of the decline came from project services, which are nonrecurring. SaaS subscriptions remained intact and even grew modestly in both ARR and revenue, partially offsetting the impact of DOGE-related reductions.
14/08/2025 Should we view Q2 as peak OpEx intensity, or will investments continue in the second half?
We think thoughtfully through each quarter and invest where ROI is strongest. We highlighted in our prepared remarks continued investments in sales and marketing to support pipeline growth. We avoid calling a quarter a peak or trough, but Q2’s OpEx profile will generally continue into Q3, with selective targeted investments where ROI is highest.
14/08/2025 What was SaaS RPO this quarter, and can you provide color on bookings-to-revenue conversion pace?
Total RPO, defined as deferred revenue plus SaaS ARR contracts not yet converted into revenue plus project services revenue, is roughly the same as last year and slightly higher year over year.
On conversion pace, it varies by segment. Education tends to be more elongated due to school-year cycles, while government has its own timing nuances depending on state and municipal structures. We don’t guide at that level of specificity, but we confirm variation exists by vertical.
Competition
15/11/2022 What sales pipeline trends are you seeing, including new hires and funnel development?
We now have a much stronger pipeline because disparate marketing systems have been consolidated into a single company-wide system. All initiatives are tracked with consistent KPIs, from initial inquiry through deal progress. Lead activity is concentrated within our ideal customer profile, which is where we want to compete.
We have shifted pricing to ensure every deal includes a material intellectual property (IP) component, driving annual recurring revenue (ARR) alongside higher billing rates on project services. Deals coming in reflect this new lens. We are confident in our competitive positioning given our IP stack, full SaaS posture, and strong customer satisfaction, which is reinforced by customers actively advocating for us.
15/11/2022 How will you approach the municipal solution opportunity, including Bellamy migration, new logos, and deal sizes?
The market is calling for a modern mid-market solution, and that is where SylogistGov is focused. Large vendors dominate big cities, but mid-market municipalities lack a full SaaS, comprehensive platform. We see a huge North American opportunity with tens of thousands of potential customers, many stuck with legacy providers who have not modernized.
We will target pockets of customer density where relationships are weak, focusing on smooth data migration and onboarding. Scaling will rely heavily on partner channels for coverage and implementation, leveraging their local presence and delivery capabilities. Typical annual IP subscriptions range from $75,000 to $200,000, with services adding $100,000 to $150,000 per year.
14/03/2024 How much Mission growth comes from competitor displacements?
We are not disclosing that. The more quietly we execute on displacements, the better. Momentum is building, and we believe it is best to keep walking the walk rather than publicizing those details.
09/05/2024 What factors led Dallas United Way to transition to Sylogist?
The United Way of Metropolitan Dallas had been pursuing a national platform with United Way Worldwide and Salesforce since 2018–2019. That project struggled in development and rollout, creating material problems in meeting the needs of local United Way groups seeking corporate community engagement and direct donor capabilities. The relationship dissolved in 2023, leaving a major market looking for a new solution to empower their communities.
It is a market I know well from my prior companies. Dallas is recognized for technology adoption and innovation, and when they looked for a new system, they considered us along with others. The win, along with United Way of King County in Seattle adopting Mission CRM, represents two key leaders in the space. These wins signal more opportunity within a major market as we move forward.
09/05/2024 Do local United Way affiliates decide independently, or could these wins snowball?
They are independent and make decisions at the local level. While the United Way brand is shared, decision-making is loosely held within each community. However, affiliates collaborate extensively on ideas, infrastructure, and strategy.
Momentum among leaders in the space often influences others, and I have seen that play out for years. These wins, and others in our pipeline, are representative of that dynamic.
09/05/2024 How large are customer bases still using Great Plains ahead of its 2028 sunset?
It is material. Great Plains has been widely used, and many partners built strong practices around it. As that platform reaches end of life, it creates significant opportunity for us on the Mission ERP side.
Our strategy is both direct and indirect through channel partners, as they already serve large cohorts of Great Plains customers.
29/09/2023 What is the competitive landscape in your markets, and how do you measure success against larger players?
On the government side, the largest players focus on major cities. They do not scale down well in terms of pricing, delivery, or support. That leaves the mid-market underserved, where legacy regional providers are struggling or unwilling to modernize. Occasionally we compete in RFPs where a Workday or similar tries to move down market, but the price is usually prohibitive. This is where our positioning is strongest.
In education, states have unique requirements for reporting, funding, and compliance, which have traditionally been served by regional vendors. Those players are now running out of steam, creating both organic and acquisition opportunities for us. Acquiring Municipal Accounting Systems in Oklahoma is a good example of riding strong local relationships to scale. In non-profits, we have the most innovative technology, combining fundraising and finance into one platform. Competitors like Blackbaud are raising prices on outdated products, creating a significant opportunity for us to capture share. With a head start in AI, we are confident in extending our leadership.
09/11/2023 How are RFP activity levels and win rates trending across Mission and other products?
RFP activity is increasing and the pipeline is up quarter-over-quarter on a consistent basis. We are refining our ideal customer profile to focus efforts on customers where we are most likely to succeed. This sharper focus, combined with strong platforms and process discipline, is improving win rates. It shows both the strength of our solutions and the efficacy of our approach in driving decisions in our favor.
08/08/2024 How is the competitive environment evolving, and are you seeing new entrants or mainly the same players?
It is largely the same players, which is a good thing for us. Some competitors have rebranded or been acquired, but the core solutions remain unchanged and still lack innovation or usability within our ideal customer profile. These are mission critical systems, so newcomers face a heavy lift, and organizations are unlikely to risk betting everything on unproven solutions.
Many competitors have been unwilling to modernize into full SaaS or improve usability, while we are ahead on both fronts, including AI. We feel good about where we sit, having invested and leaned in. I do not expect the landscape to change meaningfully, which is also positive for us.
07/11/2024 Update on competitor displacement pace compared to prior quarters?
We are actually seeing it accelerate. With all three platforms in market, we now have crosshairs in Education, Government, and Mission. Within Mission specifically, we are seeing strength, better efficiencies, and new customer wins against targeted competitors. The momentum is building, and we feel it is sustainable for many quarters ahead.
07/11/2024 How much of go-to-market success comes from greenfield versus competitor displacement?
Greenfield is a small segment. Most organizations are coming off existing systems, sometimes decades old. Nearly 75% of our bookings this quarter were targeted competitor displacements. This shows the size of the opportunity, our focus, and the high efficiency of our motions.
Displacement is not a small pond but a very large ocean of opportunity. We are focused on where we can win at high rates with efficiency, leading to strong customer satisfaction.
07/11/2024 How is the Microsoft relationship evolving, and what was its contribution to bookings and pipeline?
We feel very good about our commitment to the Business Central and Dynamics 365 CRM platforms. They give us advantages over competitors in AI, security, and scalability, and customers increasingly see Microsoft as the platform of choice in the public sector. This is a strong tailwind for us. With Grant McLarnon’s leadership, our engagement with Microsoft has expanded, aligning marketing and go-to-market efforts, and positioning us as a premier partner. Microsoft is horizontally oriented, so they rely on vertical partners like us to add functionality, sell SaaS subscriptions, and deliver solutions.
This relationship helps accelerate growth while containing R&D spend. Financially, we don’t disclose bookings attributed directly to Microsoft, but the real benefit is business leverage. More often than not, we are brought into deals because of the Microsoft relationship, and that is a huge advantage for both growth and efficiency.
07/11/2024 Are you displacing smaller local players or larger incumbents, and how does deal size trend?
Our displacement strategy targets our ideal customer profile rather than moving down market. We are not seeing deal deflation; in fact, booking sizes are expanding. In some markets, we are displacing larger incumbents, while in Government we are not targeting ultra-large cities served by SAP-type solutions, which are not our customer profile.
Deal value continues to grow, not just in initial installs but also through upsell and cross-sell as customers expand functionality and users. This reflects strong opportunity across both Education and Government segments.
14/08/2025 Can you discuss the bookings strength, mix of net new vs. expansions, and how much of net new came from competitive displacement?
On the new business side, all wins were targeted competitor replacements, not unexpected bluebird deals. These were specific motions against identified competitors, and we are seeing strong repeatability both in wins and customer onboarding.
Regarding operating leverage, the compression we are experiencing is tied to ARR postponement and the need to absorb full professional services costs of the Texas contract upfront, rather than over its full term. This impacts current margins, but as ARR scales and professional service costs roll off, margins will expand significantly.
Growth
14/12/2021 What trends are you seeing in the pipeline, new logos, and cross-sell opportunities?
We see activity resuming where projects were not canceled but postponed. Customers have learned to manage COVID realities and now view a SaaS profile as essential to strategy. Many recognize clear ROI from upgrading, especially as COVID exposed weaknesses in legacy systems. We served them well through the hardest times, and now they view us as a trusted partner, creating a backlog that accelerates our SaaS flywheel.
On new opportunities, visibility has increased through stronger web presence and self-serve content, which generates more qualified leads. We now celebrate leads that match our ideal customer profile (ICP), and those are growing well, with traction in our target markets.
14/12/2021 Can you provide an update on MAS and expansion into new markets?
There were two prongs available to us. First, pulling MAS intellectual property into our existing ERP-focused customers by offering the student information and lunchroom solutions. Appetite is there, and most K-12 schools make system decisions early in the calendar year with implementation in the summer. Workshops and walkthroughs have shown strong interest, so we feel good about that.
Second, expansion beyond Oklahoma. Federal funding for technical and workforce training schools has created opportunities both in Oklahoma and elsewhere. We are targeting footholds through superintendents who left Oklahoma, as well as leveraging existing footprints on the eastern seaboard. We are raising awareness through workshops, online presence, and hiring account executives focused on this market.
14/12/2021 Which of your key markets show the strongest near-term spending opportunities?
We are seeing consistent activity across all markets. The U.S. federal program is driving demand, but there is also pent-up need as organizations reassess their systems. Schools are transforming not only classrooms but also administration and parent engagement through apps and digital access. Non-profits and NGOs are shifting toward personalized digital engagement with donors, emphasizing impact reporting rather than just thank-yous.
Municipalities, once steady and slow to change, were forced to adapt when in-person services stopped. That urgency is pushing ERP upgrades. Our acquisitions and platform approach strengthen our position by letting customers onboard where they feel pain while giving us room to expand value across their organization. Overall, activity levels are material and positive across sectors.
10/02/2022 Can you provide more color on pipeline strength and fiscal 2022 growth confidence?
The sales pipeline remains strong, benefiting from the pause in 2021 and increasing urgency for transformation. With new quota-carrying account executives—experienced hunters rather than green hires—we are better equipped to capture opportunities. Customer wellness is also driving quality referrals and endorsements, reinforcing our credibility.
Overall, I feel confident about both our pipeline and our expanded headcount’s ability to convert those opportunities into revenue.
10/02/2022 Can you provide an update on Navigator for municipalities and expected market entry?
We are very excited about this opportunity. Municipalities represent a market with significant appetite for digital transformation, both in Canada and the U.S., especially in the mid-market where legacy players are struggling to keep up. From both organic and inorganic perspectives, we see attractive opportunities. The project is already staffed, and the base technology and intellectual property are in place—we are adapting them to meet municipal needs.
We expect to begin engaging early adopters in 2023, with demonstrable interaction to queue them up for upgrades. Momentum should then accelerate in the back half of 2023 and into 2024 as municipal customers align this with their planning cycles.
12/05/2022 How are your two recent acquisitions performing relative to expectations?
The mission-CRM ideal customer profile overlaps strongly with our Ceramic Navigator ERP, and we already have customers adding one or the other depending on their starting point. This validates the appetite we anticipated and shows the team’s collaboration. We also see additional cross-selling opportunities in the pipeline.
For Pavliks, we are already introducing the Pavliks Portal Connector to our government customer community and are looking to extend this to K-12 and non-profit customers. We have also integrated the Pavliks Dynamics 365 practice with our InfoStrat unit and are seeing cross-selling opportunities emerge, while also adding bench strength to accelerate implementations in North America.
12/05/2022 How will you achieve high single-digit organic growth in fiscal 2022 after Q1 headwinds?
The sales pipeline remains strong, building off the pause in 2021. We have added experienced, quota-carrying account executives who know the space and can be effective hunters. Customer wellness and referrals are also increasing, driving high-quality leads.
We now have the headcount to deliver on this demand, giving us confidence in bridging the gap between Q1 softness and our full-year expectations.
11/08/2022 Is 7–10% organic growth sustainable or will there be volatility?
Hi, Amr, thanks for your question. Generally, because there is some lumpiness in our bookings and projects, there could be peaks and valleys. But for the most part, that’s our target and what our plan calls for. As I’ve said for quite some time, sustainable high single-digit growth is our goal with some ups and downs along the way.
11/08/2022 When will subscription and maintenance organic growth materialize?
Thanks, Jim. As a SaaS company, we no longer see the large, immediate license revenue spikes; revenue is spread across 12 months. The fullness of recent deals will not be visible until the same period next year. We aim to maximize passive revenue but must also have staff to deliver, since we are not simply a download-and-done solution. Aside from Sylogist Pay, most offerings involve active services. We see the market now more conducive to deal flow, and initiatives that stalled earlier are moving again. We expect growth to normalize in late Q3, continue into Q4, and carry into the new year.
15/11/2022 Where are new bookings coming from—new logos, sectors, or existing clients?
Booking activity has been strong across all divisions, including large deals that had been delayed but closed later in the year. This reinforces our confidence that market pressures are not causing deals to disappear. Bookings include a healthy mix of IP and project services, with encouraging new logo wins.
I feel positive about both the new customer activity and the strength of our sales pipeline. Deals continue to progress well through the pipeline, providing visibility into future growth.
15/11/2022 How will you pursue the municipal solution opportunity, including Bellamy migrations, new logos, and deal sizes?
The mid-market is underserved, and SylogistGov is designed to fill that gap with a full SaaS, modern, comprehensive solution. Large providers focus on big cities, leaving tens of thousands of municipalities with legacy systems. We see strong opportunities to displace these incumbents by offering seamless onboarding, particularly around data migration.
Our strategy includes targeting disenfranchised customer communities and leveraging a partner channel for scale. Local partners bring relationships and delivery capabilities, enabling simultaneous implementations at scale. Typical deals are in the low six-figure range: subscriptions of $75,000 to $200,000 annually, plus associated services, often totaling $100,000 to $150,000 per year. This combination positions us well to capture share in a large market.
15/11/2022 Can you expand on new bookings by logos, sectors, or sources of strength?
Bookings came from all divisions, including large deals that had slipped but closed later in the year. This reinforces confidence that market pressures are not causing deals to vanish. We saw a healthy mix of IP and project services, with good new logo additions and a strong sales pipeline moving forward.
14/03/2024 Can you give an update on the Education segment in North Carolina?
Yes, our position in North Carolina is strong, supported by the state itself promoting our efforts, which we see as a positive competitive signal. We have successfully delivered our first lift there and are now building a pipeline with existing and new customers, including new market opportunities. Interest is high, with schools engaging in webinars and serious discussions about contracts. Because of school-year cycles, procurement and implementation are mostly in the back half of the year and summer. We are very positive about progress in North Carolina and are beginning discussions in additional states.
09/05/2024 What KPIs stand out in your 2024 pipeline after strong Q1 bookings?
We highlighted the acceleration in partner attachment, which tripled from Q4. Partners are increasingly walking us into deals, and that cadence is ahead of expectations.
With our education and government platforms launching at the end of 2023, the pipeline now shows balance across all three markets. We see government and education opportunities accelerating into the back half of 2024, with most growth so far coming from Mission. By late 2024 and 2025, we expect all three divisions to contribute strongly.
09/05/2024 How involved are you in partner-attached sales processes?
It is highly collaborative. While partners increasingly bring opportunities, most marketing motions originate with us. We then involve partners during the sales process and empower their teams with our sales engineers so they can take on more over time.
This allows us to increase sales capacity with partners at our side. Our win rate is strong, attracting more partners, and their relationships in target markets give us confidence the cadence will strengthen further.
09/05/2024 What is your strategy for expanding channel partners beyond 30%?
We prioritize quality over quantity. The right partners matter more than opportunistic ones. We are focused on Microsoft ecosystem partners with established practices in Business Central or Dynamics CRM.
Enlisting partners is only the start. We commit to a six to twelve month process of training and empowerment so they can execute sales and implementation as effectively as we do. This ensures long-term alignment and effectiveness rather than short-term opportunism.
09/05/2024 Has initial customer feedback on new government and education products met expectations?
Yes, early feedback has confirmed the strong appetite we anticipated. In government, particularly the underserved mid-market, reactions have been very positive, with customers expressing relief that our SaaS platforms and innovation are now available.
In education, results are playing out as expected given our prior experience in that footprint. Overall, early signals validate our thesis that these markets represent material opportunities.
09/05/2024 How motivated are customers to change compared to when Mission launched?
The motivation is real. COVID was the turning point that forced many to move beyond simply thinking about system changes to actually executing them. The realities of the pandemic required self-serve and cloud-based platforms. That urgency drove budget commitments to digital transformation and more self-serve offerings for parents, teachers, and citizens.
We feel very good that our timing and thesis are proving out, and customers are now acting decisively on these needs.
09/05/2024 Does increased marketing spend directly drive more wins?
Yes, we see clear ROI on increased marketing motions and spend. We track inbound leads, partner-driven leads, and direct opportunities to confirm what is working. The data shows that more investment leads to more wins.
While there are ceilings, the flywheel effect of greater brand awareness and visibility through customer referrals and testimonials is building momentum. Near term, we will continue to lean into marketing spend to amplify awareness and expand opportunities.
11/05/2023 Which verticals are gaining the most traction now, and when will others begin contributing?
The education and government verticals are tied to the rollout of our new SylogistGov and SylogistEd platforms. On the education side, beyond Oklahoma, we saw a very strong quarter in mission-driven not-for-profits, largely from cross-sell opportunities where customers who already used us for CRM or ERP came back wanting more of our platform. That success is often at the expense of competitors.
For education and government, we have a healthy pipeline, but their buying cycles push contributions toward the latter part of this year and into 2024. Our plan remains to demonstrate success with early implementations, generate customer enthusiasm, and then expand rapidly. So you should expect meaningful contribution from those markets starting late this year and into next year.
11/05/2023 Is strong services growth this quarter a leading indicator of future subscription and maintenance revenue?
Yes, that is exactly how we view it. The services growth is tied directly to our IP, meaning bookings are converting into project services to onboard new customers. Once those customers go live, we can then recognize SaaS revenue over time.
This is a clear leading indicator of strength. We have built the capacity not only to win new business but to implement successfully and then expand with customers who may not adopt the entire platform immediately. Services momentum signals SaaS revenue growth in the coming quarters.
10/08/2023 What are customers saying about budgets, priorities, and your pipeline for recurring revenue growth?
We are not seeing any pullback from customers. The number of RFPs (requests for proposals) available in the market is strong, and our positioning is improving. Customers feel confident about targeting their budgets toward digital transformation, queuing them up for 2024 and 2025.
Our pipeline is as strong or stronger than it has ever been since I joined. The blend of deals is aligned with our focus on mid-market and up-market segments, and we expect these opportunities to materialize over the coming quarters.
10/08/2023 Where are you in building the partner channel, and how are you approaching enablement?
I give a lot of credit to the team for identifying partners with strong market roots and relationships in the areas we want to expand. We have developed and refined our own playbook, and partners are shadowing us on early deals to learn our priorities and how to represent our software with customers. The foundation is being laid, and early partners are already in place.
We now see additional interest from partners, including those in the Microsoft ecosystem. We have built repeatable motions, added three resources dedicated to the partner channel, and will soon add an implementation specialist to ensure partners have the support they need to succeed.
10/08/2023 How are recurring revenue and professional services trending, and what is the mix between mission and government?
We are pleased with the project services attachment rate, which has risen to 64% of overall project services revenue tied to our RFP activity. This is a clear leading indicator for SaaS revenue, which takes 12 months to flow through. As a SaaS provider, there is an inherent lag, but the strength of our professional services backlog supports subscription revenue growth over the next year.
The pipeline for professional services remains very strong, and we have expanded resources to deliver on the growing backlog. Project services are increasingly tied to the blossoming of subscription revenue in the coming 12 months.
10/08/2023 How much of your higher win rate is from RFPs versus greenfield opportunities?
The vast majority of our deals are competitive RFP situations. We feel well positioned with a strong SaaS posture, integrated platform, and Microsoft’s support in our core markets. The number of Microsoft-originated leads being passed to us is higher than at any time since I joined.
This dovetails with our marketing strategy, which is driving more ICP-qualified leads. We are now seeing better quality prospects, stronger awareness, and overall more effective outreach than in the past.
10/08/2023 What is the outlook for North Carolina expansion?
We have solid market share in North Carolina. Some customers had been moving to other state-anointed solutions, but those decisions have been unwound. We feel confident about transitioning existing customers while also growing share based on the credibility we have earned.
We deliberately took a measured approach to avoid the struggles our competitors faced. The state has now stepped back from endorsing specific vendors, and our relationships with stakeholders are strong. With a new customer signed, we are well positioned to accelerate growth in North Carolina.
10/08/2023 Can you quantify the education opportunity and explain how state-level talks unfold?
When we lifted our platform from Oklahoma into North Carolina, we removed state-specific hardwiring and made the code state agnostic. It now operates with toggle switches and setup information tailored to each state’s requirements. This allows us to expand into new states without the same level of R&D investment required initially. We wanted to first prove both the software and our ability to deliver the type of long-term relationships states expect, as competitors offering “shiny new objects” have struggled with delivery and service.
We already have some customer density in other states from legacy software. While not yet at North Carolina’s scale, these outposts give us a base to expand. We plan to build bridges into those states and believe the opportunities are material. Our sights are on two to three additional states in 2024.
10/08/2023 Is the education market as collegial as other public sector areas?
School districts tend to collaborate extensively, more so than nonprofits or other public entities. Within each state, one success often leads to many others. Once a district adopts a platform and feels supported, they typically stay for decades.
Our very high net promoter score in education reflects strong trust and long-standing relationships. We believe this loyalty and collegiality will enable us to grow effectively as more states adopt our solutions.
29/09/2023 Which products will drive growth going forward?
Our legacy brands such as Serenity, Wengage, and Mission CRM have been rolled into our core thesis: ERP and finance at the center of each vertical. These are all built on Microsoft Business Central with fund accounting tailored to the public sector. That provides a common IP foundation deployed across government, education, and non-profit.
In the mission sector, growth opportunities are strongest due to Blackbaud renewals and broader demand for integrated fundraising-to-finance platforms. On the government side, we estimate over 1,000 opportunities in Canada and roughly 10 times that in the U.S. While I do not speak in TAM terms, we believe we can capture 50 to 60 percent of the addressable market within three years. In education, the opportunity is state-by-state. Once we establish a foothold, expansion within that state accelerates quickly. Over the next few years, we see ourselves as a five- or six-state player with dominant positions. Today, government and education contribute little to growth, but by 2024 we expect those segments to accelerate meaningfully.
09/11/2023 You mentioned partner channel is 5x year-to-date. What does that mean?
While starting from a low base, partner channel activity is now on its way to becoming a 7-figure number as of Q3. Interest from partners has been strong, and our focus has been on effectively screening and onboarding them to ensure they deliver the same quality and customer commitment as we do directly. This creates upside in bookings and provides leverage in service delivery.
09/11/2023 What percentage of Q3 bookings came from partners?
It remains small, but we expect to share percentages once we have more data. Within the next quarter or two, we should be comfortable providing that breakdown.
09/11/2023 How is the partner channel building in municipal and K-12 verticals?
It is building well and thoughtfully. On the government side, we expect the majority of business will eventually be accomplished through the partner channel. For education, the process will take longer to build regional density, but we expect strong partner contributions to bookings and service delivery in 2024 and 2025.
08/08/2024 Can you explain the strong bookings pace this quarter, and how much was displacement versus wallet share growth?
We are not providing specific numbers, but the acceleration in the education sector was a major contributor, lifting bookings significantly. Cross-sell was also important, with our largest total contract value booking to date. We are intentionally reaching out to customers and showing how our integrated platforms provide new benefits.
We feel very good about acceleration on both fronts, new bookings and cross-sell, and both will be meaningful contributors going forward.
08/08/2024 The 25% figure you gave, was that of growth or total bookings?
It was 25% of the total dollar bookings.
08/08/2024 Is the 25% figure specific to North Carolina or are other states contributing?
Currently, only North Carolina is contributing to that breakout pace. Other states will follow, as I have signaled in the past.
08/08/2024 Are the new bookings being executed in 2024?
Yes, we are executing on those bookings in 2024. We are delivering on them while also continuing to build pipeline activity within education and other sectors.
08/08/2024 How confident are you that Mission can maintain its strong growth amid competition and cross-sell opportunities?
We feel good. Our targeted competitor displacement campaign is broadening, and awareness is growing within communities about the outcomes we deliver. Success stories spread quickly, which accelerates growth.
We are confident in our ability to keep driving the Mission segment forward, not just through ERP or fundraising solutions but also by layering in other intellectual property over time.
08/08/2024 How much runway remains in cross-selling Navigator with Mission CRM, and how do you size the opportunity?
Only in the last 12 months have we earnestly positioned CRM on top of ERP. After our acquisition, we worked to integrate the systems in a way that brought real new features to customers rather than just compatibility. This positions us well for both existing customers and new logos.
Typically, organizations start with their primary pain point and then add other mission-critical systems. In the non-profit sector, those are fundraising and ERP. Once we are embedded, we believe the moat is very strong for the future.
08/08/2024 Where do you plan to increase go-to-market investment to sustain bookings momentum?
It is really about awareness. We feel very good about where we stand in the ERP and CRM landscapes, especially within competitor communities, but these are still relatively new offerings. We must continue to raise awareness of our dual offerings in Mission and the non-profit community. In Gov and Ed, we wanted proof of results, and that is now showing through.
Our marketing and sales messaging continues to improve. We are very encouraged by what we see in education bookings and in government pipeline activity. Unlike education, government activity has less seasonality, so we see opportunities to convert deals throughout the year, supporting growth into 2025 and beyond.
08/08/2024 What does a typical land-and-expand motion in Mission look like?
Cross-selling CRM to ERP or vice versa is key, but our modular architecture allows us to add incremental IP over time. Customers may not adopt the full solution immediately, but additional modules expand wallet share.
We are also seeing more users activated within existing customers, as our platforms displace competitors and provide more usability. Adding both incremental IP and new users drives compounding growth in wallet share.
08/08/2024 How do you expect the mix of net new bookings versus expansions to evolve long term?
Net new will continue to expand as a percentage because our two new platforms are now in market. Upgrades remain important to our remaining performance obligations, but new bookings are accelerating, signaling stronger awareness and demand. Mission ERP is more mature, but the CRM addition gives us a powerful new offering.
That acquisition was a home run, creating innovation and differentiation for the non-profit sector. It allows donors to better engage and track their impact, fundamentally changing the landscape. This has increased cross-sell and attracted new customers. In education and government, the opportunity is still largely untapped, and early successes point to sustainable, long-term growth.
07/11/2024 What factors are driving strength in the Education vertical?
It is validation of our lift-and-shift approach. We adapted technology originally developed for Oklahoma and successfully deployed it in North Carolina, adding both existing and new customers. This has led to adoption by other districts dissatisfied with their current systems.
This strategy now acts as our springboard into other states in 2025 and beyond. We have removed Oklahoma-specific hardwiring, allowing the platform to adapt to state-specific requirements through configuration rather than code changes. That validation in North Carolina gives us confidence in our ability to scale efficiently.
07/11/2024 What feedback are you receiving from Government customers and partners on the SaaS platform?
Customers are delighted, having transitioned their core business functions onto a fully SaaS platform. Prospective customers and RFPs are also very receptive, as there has been a lack of modern technology in this segment. RFP activity is strong and demand for Microsoft-based solutions is high.
We are bullish on Government as an accelerator, expanding east to west in Canada and across North America. This is 100% partner-driven, with partners eager to serve their Great Plains customer cohorts that have lacked suitable alternatives. We believe we are now in a strong position to accelerate in this space.
07/11/2024 Do you still face a SaaS growth capacity bottleneck, or has that eased?
We do see SaaS ARR growth increasing, but we want to be measured through mid-2025 so as not to overstate. Our capacity is expanding on both the direct and indirect side, and partner efficacy is high as they are now able to deliver independently. This increases implementation capacity and accelerates ARR realization.
We are coming out of the bottleneck. Success remains precious, but we now have visibility to greater capacity across all three markets, whereas previously we were more limited. By the back half of 2025, we see strengthening acceleration and leverage, with clear momentum in place.
15/05/2025 What key learnings are you seeing from working with channel partners to drive SaaS growth?
We are finding that our partners often have unique visibility into customer cohorts, sometimes through prior system installations or existing relationships. This gives them a strong understanding of customer needs and how our software fits. In some cases, we see two or three partners bidding our platform as the solution, which has resulted in a very high win rate given both the strength of their relationships and the alignment of our platform to what these communities want.
15/05/2025 Can you speak to the pipeline and size of opportunities following your large contract win?
We see both acceleration and balanced expansion across all three of our market segments, which, combined with our high win rate, is a strong signal for the future. The recent large wins in Texas, Massachusetts, and Nevada reflect the nature of our VSS suite, which typically involves larger statewide agreements. These deals skew our average deal size upward, but overall, our cadence and consistency remain strong.
We are also seeing SaaS usability driving expansion, with customers adding subscriptions as they acclimate to the software and empower more users. This “land and expand” approach increases wallet share and is a positive signal for ongoing growth.
15/05/2025 How do you view the VSS total addressable market (TAM) and the pipeline of RFPs?
We are displacing a long-standing incumbent that holds most of the U.S. market with a more contemporary platform and a differentiated approach to customer data. Unlike them, we don’t touch, use, or aggregate customer data, which is a significant differentiator. Public contracts allow us visibility into expiry dates, giving us a clear sight line to engage states in advance. Our growing momentum means more states are aware of us, and within each state there can be two or three separate opportunities across different departments.
Texas, for example, was already an account for us in one area of criminal justice before this latest award, showing that opportunities extend beyond a single win. With 50 states, that represents many potential opportunities. We are also seeing early signs of interest in Canada and abroad, where systems are less sophisticated but still need victim notification and related services. This supports our belief that the opportunity goes beyond just the U.S. market.
15/05/2025 When do you expect to see RFPs related to the Great Plains 2028 sunset, and are customers waiting until then?
We are already starting to see movement. Many of our partners originally implemented Great Plains years ago, and they are actively encouraging customers not to wait until 2028. With our marketing motions and partner outreach, customers are realizing it is better to transition sooner in a smooth, thoughtful, and organized manner. As a result, we are seeing Great Plains-related RFPs continue to increase both through us and through our partners.
14/08/2025 Any additional comments on pipeline momentum and sales funnel growth?
I’ll defer to Sujeet on specifics, but the healthy blend I mentioned is the most positive outcome we’re seeing across our motions. Our platforms are in market, live with customers, and serving them well. The lift of development is largely behind us, so the pipeline reflects stronger product uptake.
We are also seeing partners gaining more traction every month, building confidence, and having incredible success winning their own deals. That is very encouraging.
14/08/2025 What additional color can you provide on pipeline growth drivers?
Gavin, from a pipeline perspective, I’ll tie back to our prepared comments. We are seeing very strong traction from sales and marketing investments, particularly programmatic marketing. Our marketing team is traveling across the country, attending conferences, and engaging directly with stakeholders in what is a very collegial business.
This visibility is driving pipeline growth. Our CRO has built a robust marketing team under a new Head of Marketing, targeting each channel specifically. We’re very pleased with the traction and with the ROI from our sales and marketing spend.
14/08/2025 How should we think about growth expectations into Q3 and Q4 after the managed services sale?
The managed services business was not material, so we are not adjusting growth expectations downward because of it. The updated outlook reflects elongated sales cycles and partner-led delivery motions that affect timing of revenue, not bookings themselves. Bookings remain driven by a strong pipeline, particularly in education and municipal government, and we continue to see momentum there.
14/08/2025 With record bookings but elongated revenue timing, how does the growth curve look going forward?
The elongation of sales cycles and partner-led implementations is the main factor shifting revenue timing. This does not reflect weaker bookings, which remain robust. As Bill noted, the booking outlook into 2026 is very strong and balanced across all platforms. Product competitiveness, partner efficacy, and marketing motions are driving high win rates and market appetite. Temporary Q2 disruptions are largely behind us, and we see momentum improving in the back half.
Operations
17/08/2021 What are you seeing in professional services backlog and funnel, and will Q3 be the trough for billings?
Project services are largely triggered by customers gaining confidence in budgets and stability to engage in add-on projects, new modules, and upgrades, especially in relation to our SaaS offering. Those are more active than I have seen since joining, which is a positive sign.
To replace the large projects we wrapped up last year, we are seeing activity tied to deals that have been in our pipeline for some time. I am pleased with those conversations, many of which are moving toward contracts. I expect project services to return to a more normal level in the near future.
17/08/2021 What are the gating items before taking the Wen-GAGE platform to other states?
We first wanted clarity on our go-forward strategy for their intellectual property relative to our existing IP, and alignment with customer communities in K-12. We held focus groups with these communities to orient them to the MAS offerings compared to what they currently receive from us. It was important to stay in touch with our existing customers and align around accelerating MAS’s visibility.
Second, each state has its own hurdles for introducing technology. Over the last 75 to 90 days, we have curated these requirements to identify states most amenable to our fit and where hurdles are fewer. Where material opportunity exists but reviews are required, we will pursue them. It comes down to navigating each state’s nuances.
17/08/2021 Can you provide an update on the nonprofit payments initiative?
We first inventoried where our customer communities are already transacting with third parties. We now have a clear understanding of where the opportunity lies. Some areas are being postponed, such as within the MAS customer community, where Oklahoma waived all lunch fees for the school year due to COVID. We are evaluating community by community.
The platform itself is ready, adapted into a plug-and-play capability with our offerings. The focus now is strategic rollout where opportunities exist. That does not preclude us from entering other spaces, such as fuel payments, where current technology is used. We have created a new business plan for opportunities both within our customer base and externally, through partnerships and direct go-to-market approaches.
17/08/2021 Can you update us on MAS implementation and cross-selling efforts?
Our integration plan included more than 185 tasks touching HR, people, processes, systems, marketing, and sales. This multi-faceted playbook was necessary because that level of integration had not been prioritized in the past. It was embraced and effective, enabling us to bring the companies and teams together quickly and collaboratively. We built on diligence learnings and executed on them, meshing development and product teams successfully.
It is a shining example of success. Many acquisitions drain resources or leave assets orphaned, but this integration has proven the opposite. It sets the stage for future acquisitions with confidence that we can execute without derailing other activities.
14/12/2021 How is the integration of Mission CRM and Pavliks progressing?
Our diligence before closing gave us a solid understanding of what we were acquiring, though inevitably some items emerge post-close. So far the integration has gone extraordinarily well. We go far beyond just accounting or early system work, using a companywide playbook we also applied with MAS. That includes people, processes, go-to-market positioning, branding, and capturing early wins while planning long-term synergies.
The teams are talented, the intellectual property is complementary, and the cadence demonstrated with MAS shows we can bring a company fully into the fold within about four months. We are now about a month into both Mission CRM and Pavliks. Doing two simultaneously raises the bar but demonstrates our growing integration muscle.
10/02/2022 How are recent acquisitions performing relative to expectations?
The Mission CRM ideal customer profile overlaps well with our Navigator ERP, and we already have customers adding one or the other depending on their starting point. That demonstrates appetite within the base and strong team collaboration. We also see cross-selling opportunities developing. With Pavliks, we are already introducing the Portal Connector to government customers and are exploring the same for K-12 and nonprofit clients.
We are well along in integrating the Pavliks Dynamics 365 practice with our InfoTrack business unit, and cross-selling opportunities are materializing. This also strengthens our North American bench to accelerate implementations.
10/02/2022 What revenues come from legacy platforms being sunset?
We have not carved that out specifically in disclosures. However, you can unpack it from today’s comments. It represents about $1.2 million per year, approximately 15% lightening of that portfolio, in return for what we secured over a three-year timeframe plus additional services revenue on top.
10/02/2022 How will operating expenses evolve with investments and wage inflation?
We recently added quota-carrying sales reps and engineers in Q1 and a few more in January. On R&D, we were purposeful last year in allocating spend and used offshore resources to add innovation and complete sprints. Regarding wages, we are able to attract strong talent with competitive salaries and the employee bonus plan introduced last year, which makes us competitive and aligned with performance.
We have already made significant investments, and I expect them to bear fruit in securing and landing more deals as the year progresses. On wages, we feel confident we can continue attracting talent. The employee bonus plan was implemented to address industry-wide pressures and is hyper-aligned with the company’s key performance indicators and shareholder value creation.
10/02/2022 Are other contracts at risk of requiring similar pricing discounts?
This was a one-time event based on our portfolio. I was aware of it when I joined, and we wanted to get ahead of it. The pricing discounts effectively locked in those customer communities and their annual recurring revenue in a way that is highly beneficial.
We are not seeing any other contracts that would require similar action in fiscal 2022 or 2023. This was a specific situation we wanted to resolve proactively.
12/05/2022 Can you update us on Navigator for municipalities and timeline to market?
We are very excited. This market has a clear appetite for transformation, not just in Canada and the U.S. but also mid-market globally where legacy players are falling behind. The project is already staffed, built on technology and IP we have in place, and adapted for municipal needs.
We expect to engage early adopters in 2023, then accelerate in late 2023 and 2024 as municipalities align upgrades with their planning processes.
15/11/2022 What product or IP initiatives are you focusing on now?
We remain focused on our three core markets. Our platform strategy combines internal product development with acquired IP, ensuring that solutions deliver clear value through data visibility, decision support, and customer engagement.
The most significant initiative is a complete rewrite of our municipal solution, SylogistGov. Building on our longstanding ERP foundation, we are enhancing modules for city and town management, including citizen engagement, asset management, and licensing and permitting. Customer roundtables and competitive analysis have shaped this development, which we aim to roll out as a complete platform in early 2023.
15/11/2022 Why were some bookings delayed from Q3 into Q4, and what drove the pickup?
In the public sector, timing is often out of our control. The delays were not due to pauses or extra diligence, but rather government and municipal approval processes that sometimes take longer. Deals occasionally slide into the next quarter.
Quarterly timing is not always the best measure of performance. The $12.1 million reported reflects one or two large deals that shifted into Q4. There was nothing unusual behind the delays; it is simply the nature of the business.
15/11/2022 What are you currently focusing on in product innovation and IP?
We remain focused on our three core markets, not adjacent sectors. Recent product work combines internal development with acquired IP to deliver improved visibility, decision-making, and engagement. Most significantly, we have completed a full rewrite of our municipal solution, SylogistGov, building on our legacy ERP foundation. We drew heavily on competitive insights and customer round tables to design for the future. Key modules include citizen engagement, asset management, licensing, and permitting. Over the past six months we leaned heavily into this work and will continue for another three to four months before rolling out the complete platform in early 2023.
14/03/2024 What are your sales hiring plans for 2024?
We will add more modestly than in 2023, focusing on perfecting sales and marketing motions while building partner capacity. Partner-led deals grew 8X from Q1 to Q4 of 2023, showing that channel is becoming the lead driver of pipeline and deal conversion. As a result, we do not need to expand direct sales at the same pace as last year.
14/03/2024 When will operating leverage from the partner channel start to show?
We will see early signs in late 2024 and more materially in 2025. We are careful not to compromise implementation quality, so our internal bench will continue training and supporting partners. By 2025, repeatable and scalable processes such as self-serve training will be in place, allowing real acceleration and leverage benefits.
14/03/2024 Do you still expect an acceleration in services revenue and margin improvement despite weaker recent quarters?
Yes. We will continue to maintain an internal professional services bench, supplemented by both full-time hires and contractors, to stay agile. This mix lets us adjust spending depending on whether services are delivered directly or through partners, which provides flexibility to protect gross margins. We will monitor closely through 2024 as we pivot more toward the partner-led model while retaining the ability to pull levers on cost and utilization.
14/03/2024 How does the Gov and Education product cycle differ from Mission?
We are platform, not product. In Gov and Ed, customers typically adopt the full platform upfront to replace existing functionality. Dynamics are different from nonprofits, as pricing and adoption are tied to citizen or student footprints. We have carefully researched these markets to offer superior functionality and innovation without pricing ourselves out of the mid-market. Our goal is to maximize SaaS value without leaving dollars on the table.
09/05/2024 Can you give an update on North Carolina and your team’s progress there?
It is going well, and we are tracking ahead of expectations in North Carolina. As with any school district or state entity, decisions are made independently if there is no statewide agreement. In this case, on the ERP side, there is no blanket agreement in North Carolina.
We see upgrades of our existing footprint progressing well, along with new logo opportunities in our pipeline. Execution is at or ahead of plan, and we expect to share more detail on wins and acceleration over the next quarter or two.
09/05/2024 Why was R&D spend 15% of revenue, higher than the usual 12–13%?
There is nothing unusual to read into it. Capitalization of R&D depends on time spent and projects meeting capitalization criteria. This is tied to getting our education and government offerings fully market-ready, and we are in the final stretch.
Looking ahead, we expect the capitalized development portion of R&D to start declining in the second half of 2024.
09/05/2024 What KPIs do you track to measure partner impact beyond attach rates?
Efficacy is the focus. We monitor whether partners can deliver the same success motions as our own team, including training, data conversion, and customer standups. The key KPIs are time to implement, outcomes relative to platform utilization, and net promoter score (NPS), both near term and at scale.
Currently, we collaborate on most implementations, but in the back half of 2024 more will be handed off to partners while we shadow their efforts. These three KPIs will be monitored closely as we transition.
11/05/2023 What is your partner strategy, and which markets or products are best suited for the channel?
The government vertical is primarily a partner-led go-to-market model. We first prove out the sales and implementation motions with early adopters, and then partners shadow us to learn our DNA, which is about being a trusted partner as much as a technology provider. Education is similar, where local presence is important to reflect state or district nuances.
We are also seeing growing partner involvement in the mission vertical. Consulting firms with credibility in the space often guide charitable organizations that are struggling with legacy platforms. These consultants increasingly recommend us because of our customer wellness reputation. As a result, partners are actively encouraging prospects to evaluate us and working alongside us to transition them to our platform.
29/09/2023 What changes have you made at Sylogist since you joined in 2020?
When I joined in November 2020, the company needed investment and realignment. We made those investments quickly, guided by a clear strategy, and within a tight timeframe launched three 100% SaaS platforms: Sylogist Gov, Sylogist Mission, and Sylogist Ed. With the heavy R&D lift complete, we are seeing traction across all three markets.
Sylogist Gov is a new ERP platform for mid-sized cities and towns, built on Microsoft Business Central. It is the only Microsoft-based ERP solution for municipalities. We are upgrading legacy customers and adding new ones as national players retreat from the small-to-mid market and regional providers struggle to modernize. Sylogist Mission combines ERP and CRM into the only fully integrated fundraising-to-finance SaaS platform for non-profits. Through our 2021 acquisition of Mission CRM and significant integration work, we now provide mid- to upper-market charities with unique end-to-end data visibility. More than half of Blackbaud’s 10,000 Razor’s Edge customers are up for renewal in the next 18 months, and with their lack of investment plus price increases, we see a major share-capture opportunity. Sylogist Ed, meanwhile, serves public school administration behind the scenes—finance, budgeting, and student information—rather than the classroom.
29/09/2023 How did you build and expand Sylogist Ed for school administration?
Although Sylogist already had three school administration products, I determined the time, cost, and risk to rewrite into a modern solution were far greater than acquiring. In March 2021, we acquired Municipal Accounting Systems, whose fully SaaS school administration software was already in use at 450 Oklahoma districts. We invested to lift and shift that technology, rebranded it as Sylogist Ed, and expanded into North Carolina. One of the top 10 U.S. school districts will go live in the coming weeks, with many more expected in 2024. We have also targeted expansion into two additional states in late 2024.
If I have a paranoia, it is that if we do not fill the vacuum, someone else will. To move quickly, we rely on a partner channel strategy, led by our partnership with Microsoft and their vast ecosystem. Building out a strong partner channel expands our reach, boosts implementation capacity without significant headcount growth, and most importantly focuses revenue growth on high-margin cloud subscriptions and annual recurring revenue.
09/11/2023 Can you update us on North Carolina education opportunity, client feedback, and strategy progress?
Thanks, Amr. The North Carolina school district we targeted first, Durham, is now fully live on the platform. Due to payroll issues with other vendors in the last year and a half, the state asked us and our customer to run parallel with its payroll through year-end, though the system is effectively live. Our first payroll tie-out was 100% accurate, which gives us confidence, and onlookers are excited about the progress.
We intentionally slow rolled the implementation to gain the trust of the state and districts as they assessed their path forward. Now we feel well positioned, with many other school districts leaning in and preparing to go live in 2024, both from existing customers and new logos.
09/11/2023 Are you working with other North Carolina districts for 2024 go-lives?
We are in discussions with both existing and new districts about timing, so yes, those conversations are happening now.
09/11/2023 Outside Oklahoma and North Carolina, where are you focusing deployments?
We made sure Oklahoma-specific hardwiring was adapted for North Carolina and beyond. We are working with legacy customer pods to extend conversations into other strategic states, which are going positively. The work ensures we meet requirements not only in those states but also in a few more. Those discussions are active and encouraging.
09/11/2023 Was the SylogistGov go-live an existing customer transitioning to the new platform?
Yes, we deliberately started with an existing customer we understood well. The goal was to ensure functionality and costs aligned. It was a major achievement by our team to migrate data from an old legacy system into the new platform, empowering users to continue working as before while also unlocking new innovation opportunities. Yesterday’s go-live was a significant milestone.
08/08/2024 Do channel partners now lead implementations independently, or are your PS professionals still shadowing them?
We have transitioned with several partners from us leading and them shadowing, to them leading and us shadowing. This is a natural step we had planned. The original partner cohort has reached this stage, and we are adding new partners where we still lead and they shadow.
This momentum gives us confidence in our overall capacity not only for implementations but also for broader sales activity in 2025.
08/08/2024 Will your professional services teams be focused mostly on education going forward?
No. We see a continued role for our professional services teams through 2025 and beyond, delivering directly where there are nuanced needs. For the foreseeable future in education, however, nearly 100% of implementations will be direct without partners.
08/08/2024 Any updates on SylogistPay?
Not at this time. Stay tuned.
07/11/2024 Any updates on SylogistPay? Nothing material this quarter.
We expect to provide updates in coming periods. SylogistPay remains integral to our strategy as we monetize transactions flowing through the platforms. As SylogistEd, Mission, and Government continue to scale, we expect to see more transaction activity, particularly within municipalities.
07/11/2024 How many partners do you have now, and how mature is the cohort?
We have approximately 2x the number of partners compared to this time last year, which gives us the coverage we need. About one-third to one-half are now standing on their own, with us shadowing them rather than the reverse. Newer partners remain in training and certification. It is very positive to see inbound partner interest and increasing activity, and we view the transition toward more partner-led implementations as an encouraging signal.
07/11/2024 Will you deepen existing partner relationships or expand partner count further?
We see both happening. Many inbound partners are Microsoft-certified firms with deep practices in digital transformation and public sector consulting. We are selective, ensuring new partners are committed and sustainable, as turnover is costly. We appreciate the visibility and scale mature partners bring, as their relationships open more opportunities and add credibility.
Going forward, we expect partners to go deeper with us while also expanding partner count. The combination provides stronger deal flow, more coverage, and broader reach across North America.
13/03/2025 Bookings mix by vertical: broad-based, small contracts, or large government deals?
We won’t provide specific pipeline detail, but we are seeing more balance across our three growth pillars, which validates our strategy. These opportunities are not just early-stage, they are sales-qualified leads with direct and partner engagement.
In government, both municipal opportunities and our victim services suite are gaining traction. We see larger deals with good visibility where our offering competes strongly against entrenched providers. Some large contracts are present, but we view them as part of the normal cadence going forward.
13/03/2025 Any new wins in victim services suite within bookings number?
We do.
13/03/2025 Differences in partner strategy between Education, Government, and Mission segments
In education, we have not yet engaged partners and are delivering directly due to the smaller footprint and traction. Government and Mission are being addressed with partners, many of whom have segment-specific expertise. Some partners focus initially on one vertical, then expand into both as they gain experience. A few already operate in both.
The technology underpinning is the same across segments. Differences lie in modules, such as assessment, tax, and billing for government that do not apply to non-profit or Mission. As partners gain familiarity with these nuances, we expect a blended community of partners with expertise across both Gov and Mission.
14/08/2025 Where are the bottlenecks in government contracts going live, and can implementation timelines compress?
The main challenge has been partner readiness. Their teams needed more resources to meet municipal customers’ requirements for all-at-once implementations, as opposed to phased approaches. They are now adding resources to match customer timelines, and we’ve embedded some of our own team members to help accelerate delivery.
Municipal governments often operate with very small crews, so even one or two people being out can delay projects. We’re coaching partners on how to plan around this. In addition, municipalities often pause implementations around budget season, preferring to wait for approval of new budgets. Some of our early adopters didn’t reflect these delays, so we’re adjusting our expectations and planning accordingly.
14/08/2025 How are Ed and Gov implementation cycles evolving, and what impact does this have on ARR recognition?
Historically, Ed and Gov customers viewed implementations as limited to narrow annual windows, like school-year transitions. We are seeing that mindset change. Partners are helping open more windows throughout the year, allowing projects to begin outside those traditional cycles.
This shift means ARR recognition is no longer tied exclusively to annual windows, and postponements don’t necessarily imply 12-month delays. Our partners are now starting municipal implementations monthly, creating a more normal cadence and expanding influence over revenue timing.
Outlook & Guidance
11/02/2021 How should we think about revenue impact from a large implementation project that completed last year?
This was a multi-state, multi-year implementation across the globe. Some sites were installed in previous years, and as new versions are released, upgrades will be required. That means there will be a continual cadence of upgrades, along with regular ongoing maintenance and support.
Going forward, you will not see another large one-time implementation, but we will generate upgrade revenue as the customer moves to the latest version of Microsoft, along with steady maintenance and support contributions.
11/02/2021 Can you describe the strategic planning process now underway at Sylogist?
The first step is communication—ensuring our teams and technologies have top-down sharing so we fully understand the strengths and weaknesses of our assets and talent. We then combine that with an assessment of the market landscape, identifying where we are strongest, where organic and inorganic opportunities exist, and whether our teams are aligned and prepared to execute. Another component is company wellness: how connected we are around focus and goals, accountability, and keeping our customer communities engaged. These communities do not see themselves as competitive, which creates an opportunity for us to foster best practice sharing, generate market buzz, and position ourselves as partners rather than just a product company.
Out of this comes a focused plan with defined 12-month goals, action items, ownership, and measures of success. Beyond that, we map out 24 to 36-month objectives with broader targets. This includes recruiting, resourcing, and IP development to ensure we can execute near-term plans and then build on them in years two and three.
12/05/2021 Do you anticipate stronger near-term growth, and what does that mean for margins?
Yes, we are seeing NGOs and NPOs return to the table and finalize deals. However, we probably will not see billable time pick up until Q4 of our fiscal year.
As we continue executing on our strategic investments, margins will compress as we gear up for rapid growth.
17/08/2021 Should we expect EBITDA to move lower near-term as you invest, ahead of returns building in fiscal 2022?
Yes, our investments need to continue in line with our strategy. Returning the company to a growth posture required infusion across people, processes, alignment, and reward structures, including bonuses. These investments are foundational to sustained growth.
I believe those investments must continue through this year and into the latter part of the calendar year. We will refine the strategy and budget over the next 60 to 75 days before presenting to the Board. There is no hesitancy from the Board to keep investing to accelerate growth and create value.
14/12/2021 Are you seeing recovery in professional services volumes?
Yes. Deals announced are representative, not exhaustive, and we see increasing activity for our professional services team. We are adding capacity now and in future quarters to meet demand. This reflects both customer eagerness to upgrade, creating sustained workstreams, and new implementations as technology adoption broadens within our community.
10/02/2022 How are you modeling the business given EBITDA margin decline despite strong Rule of 40?
Investments naturally precede results, so results lag investment. We continue to target a Rule of 40 posture for fiscal 2022, balancing revenue growth and profitability at or above that level. We are deliberate in our strategic spending, and the impact of those investments should accelerate later in 2022 and into 2023.
This company needed to be jump-started into a growth profile, so we made the investments. COVID affected us through 2021, and the Omicron surge impacted Q1 2022, but we expect the effect of those disruptions to be behind us now.
10/02/2022 Should we expect a $3 million-plus run rate for professional services in fiscal 2022?
It depends on the solution, project size, and whether it is with a new or existing customer, which drives revenue recognition cadence. Typical deployments last 3 to 12 months, with some larger projects extending 12 to 18 months, occasionally 24.
On the other end, some solutions take only weeks to implement. For bookings already discussed, we are confident that the majority of that revenue will be recognized in fiscal 2022.
12/05/2022 How should we expect operating expenses to evolve given investments and wage inflation?
We recently brought on quota-carrying sales reps and sales engineers in Q1, with more added in January. We have been purposeful in R&D spending, using offshore resources to drive innovation. Wage pressures are manageable—we are attracting strong talent with competitive salaries and the employee bonus plan introduced last year.
We believe our investments are well-timed and should begin to bear fruit in securing and landing more deals as the year progresses. The employee bonus plan aligns closely with company KPIs and shareholder value creation, helping us get ahead of broader industry pressures.
12/05/2022 Are other contracts at risk of needing similar pricing discounts as the recent three-year contract?
No, this was a one-time event based on our portfolio. We were aware of it when I joined, and we wanted to get ahead of it. The pricing discounts locked in customer communities and annual recurring revenue in a way that is very beneficial. We do not see any other contracts requiring similar actions at this time.
12/05/2022 How are you modeling EBITDA margin floors given revenue growth and declining margins?
Investments naturally precede results, and results lag investments. For fiscal 2022, we expect to maintain a Rule of 40 posture, at or above that level. The impact of our strategic spending should accelerate later this year and into 2023.
We are conscientious about spending, but the company needed to be jump-started into a growth profile. COVID disruptions in 2021 and the Omicron surge in early 2022 affected us, but the impacts seen in Q1 are now behind us.
12/05/2022 What professional services run rate should we expect in fiscal 2022?
It really depends on the solutions, project size, and whether it is a new customer or cross-sell. Typical deployments span three to twelve months, though a few very large projects may take twelve to eighteen months, sometimes as long as twenty-four. On the other end, some solutions take only a few weeks to implement.
Overall, for the material revenue we’ve booked, we are confident we will see the majority recognized in fiscal 2022. While a consistent $3 million per quarter may not always hold, we expect strength in professional services to continue.
12/05/2022 Have you begun to see benefits from U.S. infrastructure bill funding?
Yes, we are starting to see that. COVID created real pressures on our customer community and highlighted that digital transformation could not be delayed. The infrastructure bill has accelerated this, with dollars now flowing into the markets we serve.
Customers are moving into a posture where transformation is accepted as necessary, and they have budgets to act. We are well positioned to capture this increased momentum.
11/08/2022 Can Mission CRM still achieve its big fiscal 2023 revenue target?
Yes. They were penalized by the Omicron flare-up in Q1 and Q2, but we are seeing strength in bookings and pipeline each month. Organizations are excited about the solution, which is industry-leading and the premier Microsoft-based option in the space. While the first-year goal was ambitious, they are already up 100% year over year. We expect them to maintain the pace we saw in Q3 and continue in Q4 and beyond.
11/08/2022 As subscription grows, will gross margins rise or stay flat due to reinvestment?
Yes. Since I started, my posture has been to earn the right to deploy capital strategically. This quarter, as we executed our plan, we put ourselves in position to invest behind the opportunities we’ve teed up. We will remain conscientious of profitability, but when attractive windows appear over the next 12 to 15 months, we would be remiss not to invest to drive value.
11/08/2022 Closing remarks on Q3 and outlook for Sylogist
Q3 was a turning point. For several quarters I’ve said our work was purposeful and positioning us to unlock value, and now that is showing up in our financials. Investors can begin to see the traction, which makes me more confident. I’ve never been more positive about the opportunities ahead for Sylogist. I’m very excited and deeply appreciative of the support from our investor community as we continue forward.
15/11/2022 Did you guide to low single-digit or low double-digit growth for fiscal 2023?
To clarify, our posture is low double-digit growth as we exit the year. This reflects customer buying cycles, which in our markets are largely midyear. If any document suggested low single digits, that should be corrected.
15/11/2022 What is the organic growth potential beyond fiscal 2023 relative to investments?
Yes, we believe organic growth will rise further. There is plenty of headroom, but because of customer buying cycles, bookings and ARR tend to be skewed toward the back half of the year. The compounding effect of ARR will continue to drive growth as more recurring revenue enters the portfolio.
Cross-selling and upselling across the platform, combined with customers adopting broader IP solutions, should further boost organic growth. As we expand our product portfolio and migrate customers to integrated platforms, we expect to sustain IRR above 100%.
15/11/2022 How should we think about Rule of 40 given higher organic growth targets and EBITDA pressure?
We are continuing to invest, which will put some pressure on EBITDA in the near term. As bookings and subscriptions from Q4 and earlier periods take hold, profitability will improve. This is not a case of needing major new R&D, and our largest expense—people—remains well managed. We feel good about attracting and retaining top talent, which powers our growth.
There may be fluctuations between growth and margin, but we remain committed to strong profitable growth and maintaining balance. As growth accelerates in the back half, scaling will rely on the partner channel rather than large headcount increases, helping us manage costs effectively.
15/11/2022 How are client conversations evolving given economic uncertainty?
We are not seeing clients show increased hesitation despite inflationary pressures. The need for digital transformation remains strong, and overall dialogue has not been negatively affected by broader market concerns. We feel confident in the cadence continuing.
15/11/2022 How should we think about margins amid inflation and investment?
We believe margins can continue at current levels. Our ability to attract and retain talent remains within budget, and while investments will continue, we expect them to be balanced with profitability going forward.
15/11/2022 Can you clarify growth guidance—low single-digit or low double-digit?
It is low double-digit growth as we exit the year. If the MD&A indicated low single-digit, that was incorrect. Growth reflects our market’s midyear buying cycles.
15/11/2022 What is your view on organic growth potential in 2024 and beyond relative to investments?
Yes, we believe we can drive organic growth higher. There is significant headroom. Our go-to-market approach is only beginning to show results, but given customer buying cycles, the materiality of bookings and ARR typically skews to the back half of the year.
As ARR builds, it compounds growth, adding passive revenue and pushing net revenue retention above 100%. With more IP embedded across our platforms, customers can adopt broader solutions, fueling cross-sell and upsell. This flywheel effect supports higher organic growth in 2024 and beyond.
15/11/2022 How should we think about Rule of 40 positioning with higher organic growth and lower EBITDA margins?
We are continuing to invest, which applies some pressure to EBITDA near term. However, bookings and subscriptions are gaining traction, particularly from Q4 onward. Importantly, we do not face heavy new R&D requirements, and wages remain under control. Our ability to attract and retain talent, our key expense, is strong.
15/11/2022 Why were some Q3 bookings delayed into Q4?
After 30 years in this industry, I can say public sector deals often slip due to factors outside our control, such as government or municipal approval timelines. These delays were not due to pause or added diligence, just normal process.
Quarter-to-quarter is not always a good performance indicator for us. The $12.1 million result was driven by one or two large deals sliding into Q4, but there was nothing unusual behind the timing.
14/03/2024 Does low to mid-teens growth exiting 2024 imply single-digit full-year growth and double-digit growth in 2025?
No. Growth acceleration in the latter half reflects market buying cycles, with budgets typically approved around July. ARR and overall growth will be stronger in the back half, but we expect full-year 2024 growth in the low to mid-teens range, with that velocity carrying into 2025.
14/03/2024 How should we reconcile muted backlog and RPO growth with stronger ARR and revenue growth?
We do not want backlog to grow at the same pace as ARR. Increased delivery capacity, both internally and through partners, allows us to work through backlog more efficiently rather than letting it build up. This reflects business maturity and ensures customers are not left waiting. ARR is now more closely tied to contract signing and platform provisioning, rather than being recognized only at project completion, which accelerates ARR recognition relative to historical practice.
14/03/2024 Should we still expect margin expansion exiting 2024?
Margins in 2024 should remain in the mid-20s range. We need to maintain a professional services bench to onboard partners, which is a drag. At the same time, we are increasing sales and marketing capacity, while benefiting from G&A savings. With these puts and takes, we remain comfortable guiding to mid-20s EBITDA margins.
09/05/2024 What drove recurring revenue margins to fall to 68%, and what is the outlook?
The one-time project wrap-up also affected recurring revenue gross margins, creating a tandem impact. This was specific to the quarter.
Going forward, we expect recurring revenue margins to return to their normal cadence of 70% and above.
09/05/2024 Should we assume growth spend as a percentage of sales will decline from 15%?
Yes, our expectation is that it will likely be around 14% in the second half of the year.
11/05/2023 How long will EBITDA margins remain in the mid-20s percent range given higher sales and marketing spend?
We are pleased with the ROI from go-to-market investments and will continue to push ahead. These activities create inertia, where new wins lead to referrals and expansion. It is a collegial market, not a highly competitive one, so we see exponential effects as adoption spreads. Over time, we expect margins to strengthen, but in the near term our best use of capital is to keep investing so that inertia builds into 2024 and beyond.
Yes, for the balance of 2023 you should assume margins around the mid-20s, plus or minus. We do see opportunities for margins to improve over time. It is always about balancing profitable growth, and as our SaaS revenue base grows the annuity effect will have a positive impact. EBITDA margins will expand as that shift plays through.
11/05/2023 Will you keep EBITDA margins at 25% if organic growth reaches at least 15%, in line with the Rule of 40?
Yes. The Rule of 40 has been a guiding principle for us, and we view it as a north star. We will not drain the piggy bank just to chase growth at all costs, because that is not the right posture for Sylogist.
We will generally aim to be plus or minus the Rule of 40. However, that does not mean we would celebrate 45% growth with no profitability. We believe maintaining both growth and profitability together is the right balance, and that principle will continue to guide us.
11/05/2023 When will operating leverage begin to show, with incremental revenue coming in at higher margins?
We expect operating leverage to become more visible as we head into 2024 and beyond. The SaaS bookings we are making now will start to show up more materially in revenue recognition and margin expansion as they build into recurring revenue streams.
The effect of these investments will be a stronger margin profile as the SaaS annuity base grows. The combination of subscription revenue scaling month by month and reduced incremental cost will support operating leverage starting in 2024.
10/08/2023 Should we expect margin expansion this year or more in 2024?
Our view is that operating leverage and efficiencies of scale will be more evident in 2024, particularly in mid-2024. That is when we expect the benefits of operating leverage to flow through more meaningfully.
10/08/2023 Should we expect R&D spending to decrease or plateau?
At this stage, R&D spending is plateauing. We still have quarters ahead with ongoing development needs, but we do not expect R&D to rise further. Over time, R&D will decline as a percentage of revenue, and leverage should begin to materialize in 2024.
10/08/2023 So R&D dollars may stay the same but decline as a percentage of revenue?
Yes, that is accurate. This quarter included a true up for additional capital development projects, which created a trough in R&D expense. Going forward, R&D as a percentage of revenue should trend downward.
29/09/2023 Can you introduce yourself, Sylogist, and the opportunity you see in the public sector?
Thank you and good morning. Sylogist is a software as a service company providing mission-critical solutions to over 2,000 customers in three public sector verticals: education, non-profit, and government. These markets are large and support multi-billion-dollar market cap companies. Historically, the public sector has been slow to adopt new technologies, often relying on decades-old systems. That created stability but also slowed innovation.
COVID changed that dynamic. It exposed outdated systems, drove federal stimulus earmarked for digital transformation, and heightened cybersecurity concerns. As a result, public sector organizations are now in a buying mode unlike anything I have seen in 30 years. That opportunity brought me back to a space I care deeply about. Today’s Sylogist is customer-centric, disciplined in capital allocation, focused on profitable growth, and fully aligned with shareholder value creation. We have a balanced Rule of 40+ posture and strong customer advocacy, as shown by our Net Promoter Score rising from the low 20s to 51 in less than two years. This advocacy fuels growth because municipalities, schools, and charities share best practices openly. Earning their trust is the key to long-term success.
29/09/2023 What did you inherit at Sylogist in 2020, and how far along are you in turning the business around?
When I joined, the company was overly focused on EBITDA through an inorganic roll-up strategy—acquire, cut costs, generate cash, and repeat. That approach had run its course, with products underfunded and customer trust at risk. In the public sector, customers need more than a vendor. They need a partner that invests in solutions, people, and long-term support. At that time, Sylogist had five development teams, seven marketing systems, and four finance systems. Internally it was fragmented, and externally customers weren’t confident in our future commitment.
COVID changed the timeline. It forced institutions to accelerate digital adoption, giving us a unique opportunity. My focus from the outset was to move Sylogist rapidly to a SaaS posture. That required fixing people, processes, and systems, eliminating tribal silos from prior acquisitions, and showing customers that we were making real investments. Without COVID, competitors might have pulled ahead. Instead, we used that window to transform the company and rebuild customer trust.
29/09/2023 What growth rate do you expect over the next two to six quarters?
I am comfortable signaling mid-teens growth and believe we can deliver that consistently. I prefer to under promise and over deliver, but our partner channel strategy should begin to blossom in 2024, giving us additional leverage. The key is not just any partner, but the right partners who can deliver the same high NPS outcomes as we would directly. That will allow us to scale without heavy operating expense and maintain gross margin expansion.
09/11/2023 Why guide to low-to-mid-teens organic growth when results have been stronger?
Seasonality plays a role, particularly in Q4 when holidays limit customer activity and team availability. Despite putting up higher numbers recently, we remain comfortable with mid-to-low-teens organic growth as a consistent year-over-year range. It reflects realistic pacing while acknowledging continued market expansion in government and education verticals.
08/08/2024 What proof points are you seeing in Ed and Gov product rollouts, and what are the next steps?
Success comes not just from pipeline or signed contracts, but from standing customers up successfully and using them as ambassadors. Early adopters are now live and can show peers how our software outperforms prior systems. That creates momentum in the market.
We are now further down the path, with more early adopters active and more partners being enabled on the Gov side. Our marketing is bringing in the right organizations within our ideal customer profile, giving us confidence to expand outreach in both segments.
08/08/2024 What are your priorities for continued investment, particularly in OpEx and product development?
Our investment plans remain unchanged, and we will lean in further. First, we needed to regain customer confidence, which we have done by delivering and engaging differently. That gave us the right to introduce SaaS migration and new technology with the customer voice embedded in development.
We will continue innovating, adding modules, and separating from competitors. On go-to-market, we will increase investment across all three markets now that motions are proving successful. Internally, our professional services team is carrying a dual load—helping partners ramp up while also supporting increased bookings. We expect relief beginning in early 2025 as more partners take full ownership of implementations.
08/08/2024 What are you seeing in terms of customer demand profiles and budget trends?
We are not seeing any budget compression or slowdown. On the education side, even as federal stimulus dollars phase out, schools are maintaining classroom capabilities and relying on mission critical systems that are fairly priced. Competitors we thought would be harder to displace are losing customers who want a better fit and more capabilities at a sustainable price point.
In government, legacy systems are being replaced by modern SaaS platforms for both usability and security reasons. Security requirements are intensifying, and as a Microsoft-oriented provider, we are well positioned. Overall, demand remains strong across our markets, and we see activity accelerating, not slowing.
07/11/2024 Do you expect further attrition in education over coming quarters?
We see that mostly done. There may be the occasional instance, but we have a good sight line to that customer community and have been engaged with them for several years. We believe any further churn would be minor.
07/11/2024 With expanded partner capacity, what SaaS growth rates do you anticipate entering 2025?
We expect to maintain SaaS recurring revenue growth at current levels. The partner channel is gaining traction, but because there is a lag between bookings and revenue, sustaining current growth rates reflects that timing effect. Our pipeline supports this view as we model 2025 impacts.
07/11/2024 Could SaaS growth inflect from mid-teens to 20%+ with new capacity?
Yes, an inflection will happen, though pinpointing when is difficult. The lag between bookings and revenue means the growth acceleration occurs after the underlying bookings inflect. The timing of that crossover is what remains less precise.
07/11/2024 What do pipeline KPIs suggest about investment in marketing, partners, and direct sales?
We agree with your assessment. With the motions now reflected, we are not just spending blindly. By enabling partners to bring us into deals, activating our own deals, and leaning on increasingly meaningful customer referrals, we are gaining efficiency from marketing efforts. Starting from a small base, we wanted to scale thoughtfully before having more demand than we could serve. We are now through that phase and see scalability ahead.
Our pipeline is growing more balanced and materially year-over-year. This supports confidence that bookings growth can continue in coming quarters as we scale both marketing and partner enablement.
07/11/2024 Would you sacrifice margins to accelerate growth?
Profitable growth remains foundational. We are not seeking to overspend or gamble, but our strong close and win rates support leaning in when the returns are clear. If sales and marketing motions generate outsized results, we will allocate more resources.
Our focus is SaaS ARR growth, even as professional services revenue is intentionally reduced. We aim to balance growth and EBITDA through a disciplined Rule of 40 approach, but will be opportunistic in shifting that balance as conditions warrant. We believe now is the time to lean in, given the foundation we have built, strong market demand, and partner leverage.
13/03/2025 Does 2025 SaaS ARR guidance reflect NGO turbulence and what drives range outcomes?
Yes, our 2025 outlook will be somewhat noisier as we digest spending cuts. However, much of the acceleration is tied to projects already in annual recurring revenue from late 2024 and early 2025.
That activity gives us continued confidence that the 20% to 25% growth range remains achievable. We believe the guidance appropriately reflects both the turbulence and the embedded momentum from existing initiatives.
15/05/2025 How should we think about OpEx investments and resource levels going forward?
At a macro level, we don’t anticipate further significant building. We have already added resources to our project services bench and our partner enablement team, which puts us in a good position as we bring on new partners. We also strengthened our sales and marketing capability. With improved partner execution and sales efficacy, we believe our existing quota-carrying team will drive strong value creation without major additional buildout.
15/05/2025 Can you discuss recent R&D spending increases, project timelines, and whether costs will step down afterward?
In Q4 last year, we learned from our ERP partners that they needed more out-of-the-box interconnectivity than we initially anticipated. We quickly redirected resources to address this because partner engagement and successful implementations were time sensitive. That project should largely conclude by summer, at which point related R&D expenses will taper off.
Additionally, as Sujit noted, some costs previously capitalized were moved above the line, which affects adjusted EBITDA comparisons. Combining these factors explains the temporary increase, but overall we expect R&D to normalize once this project is complete.
15/05/2025 Will revenue recognition from the large contract begin in Q2 or Q3, and how are you resourcing implementation?
Revenue recognition will tilt toward the summer, beginning in Q2 and becoming more material in Q3, consistent with our integrated approach being reviewed with KPMG. Momentum should build in the back half of the year. Implementation is largely direct, but we are supplementing with contractors, including resources drawn from partner organizations, to bulk up delivery in specific areas. This allows us to push through efficiently while also developing a playbook for future scaled deployments.
15/05/2025 Do you still expect mid-20s EBITDA margins despite the OpEx increase in Q1?
Yes, broadly that is correct. Margin expansion will come from higher SaaS revenues in the latter part of the year, which should also improve gross margins. So while some costs are permanent, the top-line growth and SaaS mix shift will support the margin ramp.
15/05/2025 With the Texas win booked but not yet in ARR, do you have visibility to SaaS ARR growth above 20%?
We do. Bookings do not immediately roll into ARR, but with the cadence of projects already in hand and visibility into the pipeline, we are comfortable that SaaS ARR acceleration will achieve our outlined targets. We feel good about our posture going into Q2.
14/08/2025 What is the updated SaaS ARR expectation for the Texas contract, previously guided at $4 million?
From a SaaS ARR perspective in the first year, the expectation is approximately $800,000.
14/08/2025 Are ARR timing headwinds due to deal slippage, implementation delays, or other factors? Can you still reach 20% SaaS ARR growth in the back half?
Our guidance reflects that, given where we are in the year, the likelihood of reaching that prior 20% ARR guide in the back half is lower. The main driver is postponement tied to the Texas VSS agreement and its revenue re-architecture. We expect a pickup in subsequent quarters, but thought it was fairest to reset guidance relative to what we see over the next couple of quarters.
14/08/2025 In year 2 of the Texas VSS contract, will ARR still reach $4 million under the new accounting treatment?
Let me reset the numbers. The initial contract value in year 1 is $2 million U.S. dollars, or about $3 million Canadian. The $800,000 ARR figure mentioned earlier was in U.S. dollars, with year 1 comprising roughly $1.2 million in services and $800,000 in recurring revenue.
In year 2, the characterization changes, and the entire $2 million U.S. dollar contract value becomes recurring revenue. That is the expected run-rate under the accounting treatment.
Risks & Macro
11/02/2021 How vulnerable is Sylogist to currency fluctuations, and do you consider hedging?
Roughly 75% of our business is U.S.-based, and we report our results in Canadian dollars, making us susceptible to foreign exchange fluctuations. Historically, we treated cash as dry powder for strategic initiatives, mainly acquisitions, and avoided exotic tools like hedging.
That said, given current economic volatility and the pandemic, we could entertain exploring some form of currency hedge in the future.
12/05/2021 Is the US economic reopening visible in client behavior and willingness to engage?
Yes, we are seeing activity return to our deal pipeline, with discussions becoming more substantive in terms of timing and final decision details. Many charities are starting to feel better, though I want to caution that in my 30 years of experience, the charitable and nonprofit community is often first impacted and last to recover.
Philanthropy in North America has been extraordinarily strong. I recently saw that online giving to charities was up almost 32%. People are supporting charities, which is helping our customers and prospects get into a position to move forward and exit the hunker-down state they had been managing through.
14/12/2021 How is the new COVID variant impacting implementation or bookings?
Not materially. Most organizations have adopted policies and practices to manage COVID realities. Customers are more determined than ever to move forward with activity and bookings, as I noted in my earlier comments. Should circumstances expand, we will remain alert.
At this time, we do not see a material effect.
14/12/2021 How does infrastructure funding impact customer communities and IT projects?
It is material. Federal dollars in the U.S. have flowed to states and cities with few covenants, leaving local leaders to decide how best to support citizens, retrain workforces, and aid those in need. That creates a strong case for internal technology upgrades to support outward-facing services. Customers can now improve their infrastructure and report progress back to funding entities. We are bullish on how this will impact our business across multiple fronts.
14/12/2021 What challenges or risks could you face over the next 12 months?
The key risk is execution speed. Market opportunities demand urgency, and we must ensure we are positioned to capitalize. Our executive team and leadership are strong, with capable teams underneath them, so execution efficacy is critical. COVID remains a factor, though we believe its policy impact will be less severe than in fiscal 2021. Customers have adapted, and because we serve essential markets, work continues even under restrictions.
Competition is always on our radar, but we believe our positioning is strong. The priority is ensuring strategy is recognized, customers remain happy, and our SaaS posture stays paramount. In SaaS, you cannot rely on past success—retention is as critical as adding new logos. We are focused on being seen as a trusted partner, and we are making investments to ensure customers value and maintain their relationships with us
10/02/2022 Are COVID-related impacts now behind you?
That’s correct.
10/02/2022 Have infrastructure bill funds started benefiting your customers?
Yes, we are starting to see those dollars flow. COVID created urgency among customers to accelerate digital transformation, and the infrastructure bill provides budgets that support this. Customers are now better positioned to execute, purchase, and move forward with projects. We are well positioned to capture this increased momentum.
15/11/2022 How are client conversations evolving given the fragile economic outlook?
Overall, we are not seeing increased hesitation despite the pressures of inflation and a fragile economic environment. Clients continue to prioritize digital transformation. The dialogue has not been significantly affected by broader financial market realities, and we feel confident that the cadence of business will continue.
11/05/2023 Are you seeing any macro slowdown in your verticals, or should sales remain insulated?
We feel very good about pipeline activity across the board and our ability to close deals. We are not seeing anxiety in our markets. Customers are very interested in our full SaaS platform solutions, and demand is increasing.
We believe we are benefiting at the expense of some competitors who lack our technology posture or customer focus. While others may be under pressure, we feel emboldened to win new opportunities and expand wallet share with existing customers. Our platform versus product strategy, combined with acquisitions that round out our offering, has positioned us well. With clear alignment to our ideal customer profile, we are winning both new logos and expansion opportunities.
Personal Questions
11/02/2021 Now that you’ve been CEO for a few months, what has surprised or concerned you at Sylogist?
There is a considerable amount of untapped potential here. I did as much homework as possible before joining, and after more than 90 days in the role, the realities have proved not only true but maybe understated relative to what I believed. Our products are contemporary, but there has not been enough pull-through of IP and talent across teams to create additional value in the customer verticals we serve. The acquisitions made have been thoughtful and additive, but we now need to ensure those capabilities are recognized and leveraged elsewhere.
I see opportunities in areas like merchant services to monetize payment streams in supported verticals, and I am very focused on how our ERP system enables us to deliver business intelligence and data visibility to customers. Additionally, the Microsoft Dynamics expertise and solutions from our InfoStrat division are very strong and can be productized and scaled more efficiently going forward. Overall, I believe we have the right team and assets in place to execute.
17/08/2021 Are you facing any issues recruiting or retaining talent?
I never take it for granted, but I am proud that our team is more energized and excited than I have seen. Communication, transparency, and a clear strategy that emphasizes customers, product quality, and innovation have energized long-tenured employees. The performance management structure we implemented shows people we are investing in them and their careers.
On the recruiting side, Sylogist is attractive not only because of the markets we serve, but also the investments, innovation, and products we offer. We are seeing strong candidates for open roles and can now offer competitive compensation packages with a bonus component that aligns with the broader market.
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Sources
Earnings calls