Amid all the uncertainty gripping the tech sector, Cameron Watt is sleeping easy.
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Amid all the uncertainty gripping the tech sector, Cameron Watt is sleeping easy.
The chief executive of Ottawa-based Intouch Insight seems unfazed by the ups and downs of life in the software business, even as his company’s stock has been on the same kind of rollercoaster ride as the likes of Shopify over the past 12 months.
The way Watt sees it, the 30-year-old company – which makes software that helps clients track customer satisfaction as well as collect data on issues such as employee health and safety concerns – is clearly back on the road to recovery after a tough three-year stretch.
He notes that some of Intouch’s biggest customers, which include fast-food chains such as A&W, were among businesses hit the hardest by the pandemic as lockdowns battered the food, beverage and retail industries.
Now, as people flock back to restaurants and resume in-person shopping in earnest, Watt says his company is reaping the benefits.
Unlike companies that focus on e-commerce and other industries that boomed during the height of the COVID-19 crisis but are now struggling to maintain that growth, Intouch targets sectors that are still gaining momentum coming out of the pandemic, the longtime executive explains.
“What’s interesting with our customer base, the people that we serve, is they’re not even back to where they were before the pandemic, some of them,” Watt says. “They’re not at a high. Because the industries we serve aren’t part of that (pandemic growth) wave, there’s no real reason for us to believe that they’re going to have a big crash.”
The veteran CEO argues that the customer service intelligence his company provides to customers will be “more important as they continue to recover. I don’t think we’re going to get caught up in this (downturn) in a way that I’m overly concerned about right now.
“We’re still climbing the hill. Could the hill get a little steeper for a bit? Sure. But I think we’ll still be climbing.”
Watt has good reason to be upbeat. Intouch reported revenues of $5.4 million for the quarter ending Sept. 30, a 38 per cent increase over the previous year as the company continues a resurgence that’s seen sales spike 70 per cent year-over-year compared to the first three quarters of 2021.
Intouch is now projecting revenues of more than $23 million for the 2022 fiscal year, up more than 40 per cent from last year’s total of $16 million and nearly double the $12.8 million the company generated in 2020, the first year of the pandemic.
But the post-pandemic retail and restaurant revival is only part of the story, Watt notes.
The company is also getting exactly the kind of bump it hoped for from its acquisition last fall of Georgia-based SeeLevel HX, which provides mystery shopping and audit services for a slew of big-name retailers south of the border.
Watt says its clients include “big logos” in the quick-service restaurant space as well as automotive, financial services and market research firms.
Thanks largely to SeeLevel, U.S. customers now account for three-quarters of Intouch’s revenues, up from about two-thirds in 2021.
“(SeeLevel) brought in some verticals that we weren't as strong in,” Watt says, adding he believes the company still has plenty of “room to grow” its presence in the U.S.
In addition, Intouch’s push to beef up its sales and marketing spending by nearly 50 per cent so far this year is paying off with new customer wins. Watt says the company recently finalized a major deal with a multinational restaurant chain as well as a couple of other big-name brands.
Meanwhile, Insight’s burgeoning software-as-a-service product line is now bringing in more than $100,000 in monthly recurring revenues.
“All of those things have been contributing, which is how you get really strong growth,” he says.
Those gains are reflected in the firm’s bottom line. Intouch generated net income of nearly $367,000 in the third quarter, or one cent per share, compared with a net loss of just under $57,000 in the same period in 2021.
Yet despite all the positive signs, investors still appear hesitant to buy in, Watt says. He’s hoping a continued run of growth will shake the firm’s stock out of its doldrums.
After trading as high as 88 cents on the TSX Venture Exchange earlier this year, Intouch fell as low as 44 cents at Monday’s open before rebounding to 54 cents by Wednesday afternoon.
“I still believe as long as we continue to build fundamental value in the company that is sustainable and real and tangible, then the stock price will come,” Watt says.
“It’s just a question of getting the timing right with the markets and people waking up to the story. I think (investors) are taking a wait-and-see approach on a lot of things right now, and I think we’re getting caught up in that. As we continue to push out results that are consistent, I think things will change.”
