SaaS, or Software as a Service, is a software licensing and delivery model in which software is licensed on a subscription basis. Canada is rich in thriving young software developers, and included amongst the high-potential SaaS companies in that country are the names on our list today.
Benefits to a SaaS business model include: lower initial costs for consumers (which provides for an easier sales pitch, and a greater chance of onboarding a client), painless software updates (all done via the Cloud, not affecting the user experience), integration across platforms (software may be accessed on any device, anywhere, anytime), and SaaS provides for a recurring revenue model (something that investors love). The more well-known SaaS companies are: Salesforce (NYSE: CRM), Adobe (NASDAQ: ADBE), NetSuite (NYSE: N), and Marketo (NASDAQ: MKTO). Canada, however, is also rich in thriving young software developers. Included amongst the high-potential SaaS companies in that country are the stocks on our list today.
Halogen Software (TSX: HGN)
Price: $7.46 | Market Cap: $164 million
Halogen provides cloud-based talent management solutions. Its customers use Halogen’s suite of integrated talent management solutions to retain talent, align goals, assess and develop employees, cultivate leaders, provide feedback and recognition, employee engagement, communication and manager-employee relationships, support a pay-for-performance culture and build talent bench strength through planning. The Company’s Halogen TalentSpace suite consists of nine integrated talent management modules. It also provides industry configurations of its solutions for healthcare, professional services, financial services, manufacturing, education, public sector, technology, and hospitality.
Halogen generated $64 million in revenue over the past 12 month, yet it operated at a $16 million loss. The Company has a large pool of capital, with $40 million in cash and $7 million in working capital. These funds may be used for acquisitive purposes to grow the business.
Descartes Systems Group (TSX: DSG)
Price: $26.24 | Market Cap: $2.0 billion
The Descartes Systems Group is a global provider of on-demand logistics and supply chain management business processes. Customers use its integrated SaaS solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; file customs and security documents for imports and exports; research and perform trade tariff and duty calculations and complete other logistics processes. The Company’s primary focus is on serving transportation providers, including air, ocean and truck modes; logistics service providers, including third-party logistics providers, freight forwarders and customs brokers, and distribution-intensive companies.
The Company generated $177 million in revenue over the past 12 months, with $25 million in operating profit. Descartes has $47 million in cash and $51 million in working capital.
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ProntoForms (TSXV: PFM)
Price: $0.30 | Market Cap: $28 million
ProntoForms has developed a cloud-based mobile forms software catering to businesses needing to securely build, manage and deploy a wide variety of forms for mobile workforce management. ProntoForms enables organizations to mobilize business processes in minutes, increasing productivity and eliminating the use of paper. Workgroups can create their own forms, capture data from the field, and then report and act on mission critical information, all in real time and in a secured and managed cloud environment. The Company has great traction, generating over 3,500 customers, 88% recurring revenue, and is one of 51 enterprise solutions chosen by Apple for its Mobility Partner Program.
ProntoForms generated $7 million in revenues over the last 12 months, and is operating at a $2 million loss. The company has $5 million in cash and $2 million in working capital.
