Intouch Insight (TSX-V:INX), an Ottawa developer of data collection programs, said it swung to a financial loss last year despite a four per cent increase in revenues.
The firm said it’s investing in new products that it believes will lead to higher recurring revenues in the future.
“We are quickly transitioning to a software and services company,” said Intouch CEO Cameron Watt in a statement. “Beginning in 2017, we accelerated product development, started onboarding new sales team members and began ramping up our marketing activities.”
The local tech company develops mobile applications for customer satisfaction surveys, checklists, audits and other information recording tools.
On Thursday evening, Intouch said its revenues increased to $13.87 million last year, up from $13.35 million in 2016, primarily on the strength of higher recurring services revenue.
Overall, the company attributed the higher revenues to organic growth as well as the impact of the firm’s December 2016 acquisition of Ottawa-based RetailTrack.
However, the company also reported a pretax loss of $763,860 in 2017, compared to a profit of $212,945 a year earlier.
While the company’s gross margin remained steady at 53 per cent, spending on product development as well as salaries related to customer support services increased. The company said the additional spending is largely focused on a new SaaS customer experience management platform.
This marks a shift in strategy for Intouch, which said its investments were previously managed “in line with available profits of the corporation.”
Last year, however, the company’s management “felt confident that the organization was ready to move aggressively into the software business and began to scale product development and marketing to support its new software product strategy,” according to regulatory filings.