Sylogist Ltd.

Q2 fiscal 2026 total revenue was $14.7 million, down from $15.7 million a year ago. SaaS revenue grew 5% year over year, with growth of 17% in Solutions, 14% in Gov and 6% in Ed, offset by a 3% decline in Mission. Project services revenue was $3.3 million versus $4.2 million last year, recurring revenue was 76% of total revenue versus 70%, ARR was $45 million and SaaS ARR was $33.5 million, up 3% and 6% year over year, respectively. SaaS NRR was 99% versus 107% a year ago, gross margin was 57% versus 58%, recurring revenue gross margin was 72% versus 71%, and adjusted EBITDA was $1.6 million for a 10.8% margin, up from 7.9% in Q1 but down from 15.3% last year. The cash balance at quarter end was $2.5 million, and management said cash is now approximately $9 million. No formal next-quarter or full-year financial guidance was provided; instead, management emphasized continued focus on improving ARR growth, retention, project services execution, margins and operating discipline.

Joel Leetzow said his first months as CEO reinforced confidence in Sylogist’s long-term potential, but also confirmed that “more work ahead” is needed. His strategy centers on improving execution, strengthening the product portfolio, investing in customer experience and operating with greater discipline, while leaning more heavily on a channel-first model. He highlighted growth opportunities in government ERP, education and Victim Services, and said the company is using AI both in customer-facing products and internally for efficiency.

Sujeet Kini framed Q2 as part of Sylogist’s transition toward a SaaS-driven business with a higher mix of recurring revenue. He cited total revenue of $14.7 million, recurring revenue at 76% of total, SaaS ARR of $33.5 million, gross margin of 57%, recurring revenue gross margin of 72% and adjusted EBITDA of $1.6 million. He also noted costs tied to shareholder engagement and severance, said Q2 cash was $2.5 million but that cash is now about $9 million, and told analysts the restructuring reduced bench strength by about 40 headcount for about $3 million in savings, with OpEx expected to stay in the current Q2 range.

Analysts focused on where growth will come from, how the partner program is being redesigned, what the restructuring means for the cost base, and whether persistent churn in the Mission business has been contained. Management pointed to government ERP, education, Victim Services and services as growth areas, said partners want better documentation and self-serve tools, and said services will be smaller than in the past because the company is now channel-first. On churn, Joel said new-customer churn is not a problem and legacy churn has been contained, while on M&A he said the company should get its “house in order” first but sees acquisitions as a future opportunity.