Increased investment in sales and marketing cut into second-quarter earnings for Ottawa-based In-Touch Survey Systems, its president and CEO said Friday, adding there will be no change in the company’s strategy.
“We remain committed to securing growth through software sales and will continue strong investments in sales, marketing and product development,” Cameron Watt said in a statement. “Effectively resourcing our efforts around recurring revenue from software sales is key to securing sustainable future growth.”
The company’s second-quarter net earnings before income tax, at $69,973, fell 60 per cent from the same quarter last year, even though revenue for the quarter increased six per cent to $2.2 million. Recurring revenue of $480,276 was up 52 per cent from the second quarter of 2014.
Company-defined adjusted EBITDA dropped seven per cent to $262,000 for the quarter, while In-Touch’s gross margin for the quarter slipped to 54 per cent from 58 per cent for the same three-month period last year.
“We are pleased with the outcome of the quarter, particularly the strong growth in recurring revenue from software licensing and user fees,” Mr. Watt said. “While margins for the quarter were slightly below expectations, we forecast that they will be within expectations for the year.
“We also anticipate continued success in our new and existing product lines along with positive EBITDA and revenue growth for the remainder of 2015 in line with year-to-date results.”
The company also announced its vice-president of product development and chief technology officer, Michael Kahn, has resigned.
"Michael has been with the Company since August 1, 2006 and has contributed a lot to the technical vision and capabilities of the company over the years," Mr. Watt said in a statement. "I respect his decision to pursue outside opportunities and I would like to thank Michael for his dedication and service to In-Touch."