The Ottawa firm, which specializes in customer survey and data collection software, reported revenues of $23.5 million in the 12-month period ending Dec. 31.
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Intouch Insight’s revenues hit an all-time high in fiscal 2022 as its acquisition of a U.S. company brought new client wins and its burgeoning subscription software business continued to grow.
The Ottawa firm, which specializes in customer survey and data collection software, reported revenues of $23.5 million in the 12-month period ending Dec. 31, a 47 per cent increase over the previous year.
Insight’s recurring revenues grew 35 per cent year-over-year to $21.6 million. CEO Cameron Watt credited the resurgence of bread-and-butter customer verticals such as the retail and service industries last year as well as his firm’s acquisition in late 2021 of Georgia’s SeeLevel HX, which provides mystery shopping and audit services for a slew of big-name retailers south of the border.
Watt said SeeLevel brought “excellent new logos and some good pipeline of business” to his company. He noted that Insight has also attracted new business from some of SeeLevel’s “six- and seven-figure clients” that are now using the Ottawa firm’s legacy products.
While Intouch’s expenses rose 28 per cent last year as the company nearly doubled its spending on travel and marketing, those investments paid off with increased sales. After posting a net loss of more than $300,000 in 2021, Intouch turned a $600,000 profit last year.
Insight’s software generates customer feedback surveys as well as forms and checklists that gather employee input on issues such as health and safety. Its customers include fast-food chain A&W.
More recently, the company has added a subscription-based platform that analyzes customer survey and other operational data for clients in the restaurant, retail and financial services industries.
That income stream grew 21 per cent last year to nearly $1.35 million, the seventh straight year that Intouch’s software-as-a-service arm posted double-digit sales increases.
Watt loves the continued upward sales trajectory of Intouch’s SaaS business. He refers to the subscription software as “sticky” – meaning once customers sign on to the platform and witness its benefits first-hand, they’re usually hooked.
At the same time, he’d like to see the growth curve get a little steeper.
“I’m never happy with (our) growth trajectory on SaaS,” he told Techopia on Monday. “SaaS business is one where you always want it to grow faster.”
Insight also got a hefty boost from a one-time contract worth more than $1.9 million to map urban landmarks for a video-game manufacturer using Lidar technology.
It’s not the kind of deal Watt expects Insight to land on a regular basis, but the CEO said it does demonstrate that his firm’s data-capture expertise extends well beyond the restaurant floor or supermarket aisle.
“As long as they’re profitable, we’ll take any kind of data-capture (contract) out there,” he said. “As the opportunities present themselves, we’ll continue to take advantage of them.”
It’s the first time Intouch Insight, which was founded in 1992, has surpassed the $20-million revenue mark. It’s also another signal that the company is in recovery mode after its business took a major hit during the early days of the pandemic, when restaurants, retailers and other key customers saw sales plummet amid COVID-related shutdowns and restrictions.
Still, Watt isn’t breaking out the champagne just yet.
In financial documents filed late last week, Insight management warned that while the firm is “pleased with its sales pipeline and is confident in its ability to secure new clients,” those sales gains could be “somewhat offset by reduced revenues from existing clients who may temporarily reduce program spending for 2023 as they navigate their own economic concerns.”
Indeed, the dreaded R-word is keeping tech CEOs around the world up at night as economic growth shrinks and signs of a prolonged slowdown abound. Watt said his company is not immune to macroeconomic issues such as soaring inflation, rising interest rates and labour shortages that could prompt customers to rethink the amount of money they spend on Insight’s products.
“I don’t think the effects of the pandemic are over,” he explained. “Some of our clients may cut their programs back. We don’t expect any of them to leave or fire us, but somebody may say, ‘You know what? I’m going to cut back.’ We expect some of that to happen.”
But Watt remains relatively sanguine. He said the company has weathered downturns in the past and come out stronger on the other side, and he sees no reason why that trend won’t continue in 2023 and beyond.
For now, Intouch isn’t offering revenue projections for the current fiscal year. Watt said he expects recurring revenues to keep growing, albeit perhaps not at the same rate as a year ago as “economic pressures may mitigate some of the growth that we might have otherwise enjoyed.”
Now at 91 employees, the firm likely won’t do much hiring in the year ahead but will keep looking for opportunities to reach new customers through trade shows, market studies and other measures, he added.
“We’ve always had good financial management,” Watt said. “We are going to continue to take those responsible decisions, but we need to put the hammer down a little bit more on the sales and marketing side of things to get that growth going even faster.”
Despite the record earnings report, Intouch shares were down three cents to 46 cents in midday trading Monday on the TSX Venture Exchange. Since the start of January, the firm’s stock has shed more than 20 per cent of its value.
Noting that “creating shareholder value is part of the job description,” Watt admitted the firm’s declining share price is a concern.
But he also noted many of his competitors have seen their stock fall even further amid the widespread tech downturn over the past 15 months.
“If you look at the market and the space that we’re in, we’ve actually done very well.”
