Enghouse Systems Limited (TSX:ESL) reported a jump in fourth-quarter and full-year revenue driven by the expansion of its recurring Software-as-a-Service (SaaS) revenue base.
For the quarter ended October 31, 2023, the provider of enterprise software solutions said its revenue increased 13.9% year over year to C$123.1 million, with recurring revenue up 35% to C$87.2 million.
Earnings per share decreased from C$0.67 in the year-ago quarter to C$0.45.
For the full year, revenue grew 6.2% to C$454 million and EPS was C$1.31, compared to C$1.70 for the prior year.
It attributed its revenue growth to new revenue from acquisitions integrated during fiscal 2023 – Qumu, Navita and Lifesize - in addition to positive impacts from foreign exchange rates.
This was offset by a decline in software license revenue as Enghouse noted increasing customer preference for SaaS solutions.
“We are pleased to announce record annual SaaS and Maintenance services revenue of C$297.6 million, an increase of C$39.4 million or 15.2% compared to the prior year,” Enghouse said in a statement.
“SaaS and maintenance services are an important strategic source of revenue characterized by their predictable and recurring nature. They now represent 65.6% of total revenues for the year compared to 60.4% in the prior year.”
Shares of Enghouse traded higher following its results, up 1.2% at C$33.74 mid-morning on Friday.