Sylogist Announces First Quarter 2026 Results

• Q1 2026 total revenue fell 9.7% YoY to $14.7M, with SaaS subscription revenue up only 4.9% YoY.
• SaaS Annual Recurring Revenue (ARR) grew 7% YoY to $33.6M, but declined sequentially from Q4 2025’s $33.8M, indicating negative net new ARR.
• Total ARR was $45.6M, up just 3% YoY.
• Net loss widened dramatically to $3.8M (vs. $0.9M net loss in Q4 2025 and $0.9M in Q3 2025), reversing the recent trend of narrowing losses.
• Adjusted EBITDA margin collapsed to 7.9% ($1.2M), barely a quarter of FY2025’s 14.6% margin.
• Gross profit margin slipped to 57%.
• Board suspended the quarterly dividend entirely, a sharp break from the $0.01/share payout maintained for years.
• Interim CEO Craig O’Neill cited short-term pressure from transitioning project services to partners and reaffirmed focus on operational efficiency.
• This release lands on the same day as the contested Annual and Special Meeting (May 12, 2026), where shareholders vote on dissident director nominees.

• The Q1 results are significantly worse than recent quarters and show a clear acceleration of deterioration. The $3.8M net loss is a 4x jump from Q4 2025’s $0.9M loss, while adjusted EBITDA margin fell below 8% for the first time in at least a year.
• SaaS ARR declining sequentially ($33.6M vs. $33.8M) means the core growth engine is stalling; partner‑led project services transition is not yet offsetting lost professional services revenue.
• Suspension of the dividend removes a key support for the stock and signals cash conservation or liquidity stress.
• These results are materially worse than the already‑downbeat Q4 2025 release and feed directly into OneMove Capital’s narrative of failed oversight and value destruction.
• The market had partially priced in distress (stock at $3.75), but this update reveals operational weakness deeper than expected, likely putting further downward pressure on the stock.
• In the context of a proxy battle with voting today, the results strengthen the dissident’s case and erode management’s credibility.

• Sylogist provides cloud‑based SaaS enterprise resource planning (ERP) and constituent management solutions to public‑sector organizations (local/state governments, K‑12 education, nonprofits) across North America.
• Its solutions are built on Microsoft Dynamics 365 and Azure, positioning it as a Microsoft ISV partner.
• The flagship offering spans financial management, payroll, HR, grant management, and case management for mission‑driven organizations.
• The company is transitioning from a services‑heavy model to a partner‑led delivery model, aiming to scale through resellers like the RSM US LLP alliance formed in March 2026.