NamSys Inc. (TSXV: CTZ) - Fiscal 2025 Update
Recurring Revenue, Accelerating Profits, and Getting Paid 12.5% Yield to Wait Out the Sell Wall
If you are new to The Checklist Compounder or haven't read the original investment thesis, I highly recommend starting with my Original Deep Dive on NamSys (TSXV: CTZ)
In that report, we ran NamSys through the Microcap Master Checklist. It graded out as a nearly perfect target. We identified a high-margin, inflation-resistant SaaS monopoly operating in the niche world of cash logistics, severely mispriced due to a structural, non-fundamental sell wall (the estate liquidation of the former Chairman).
The only major fundamental failure on the original checklist was capital deployment. The company was hoarding a massive treasury of cash, which dragged down its Return on Equity and left capital sitting idle.
With the release of the Fiscal 2025 financials and a major corporate update, that failure has been decisively resolved. The underlying business is accelerating, the balance sheet remains a fortress, and management just handed shareholders a massive catalyst.
Here is the breakdown of the latest filings and why the thesis has fundamentally accelerated.
The Catalyst: A 12.5% Yield While You Wait The most significant news is the announcement of a one-time special dividend of $0.15 per share, payable on March 12, 2026, to shareholders of record on March 5, 2026.
With the stock currently trading around the $1.20 level, this represents an immediate 12.5% yield. Management is taking a portion of their $10M+ cash pile and directly rewarding shareholders. This is a highly efficient mechanism to clear excess treasury cash without creating the structural liability of a regular, recurring dividend. You are effectively being paid a double-digit yield to hold the stock while the estate overhang clears.
Fiscal 2025 Results: The SaaS Engine is Accelerating
The underlying business is performing exceptionally well, passing our growth and profitability gates with even stronger numbers than previously anticipated.
Revenue Growth: Total revenue for Fiscal 2025 hit $7.89 million, representing a 15.4% year-over-year increase.
Elite Revenue Quality: Recurring revenue (software subscriptions, hosted services, maintenance, and product support) now makes up 99.0% of total sales, up from 98.2% in 2024. This confirms NamSys operates as a pure-play, highly predictable SaaS business.
Margin Expansion: Gross profit margins expanded by 200 basis points, jumping from 62.4% to 64.4%. The company achieved this by scaling revenue while keeping staffing resources relatively flat, perfectly demonstrating the massive operating leverage inherent in their software model.
Bottom Line: Net income for the year reached $2.48 million ($0.09 per share), an increase of roughly 19% from 2024.
The Fortress Balance Sheet & Aggressive Post-Year-End Buybacks Prior to the dividend announcement, the balance sheet became even more robust. As of October 31, 2025, total cash and short-term investments swelled to $10.17 million (comprising $846k in cash and $9.32M in GICs). The company remains completely debt-free. Even after distributing roughly $4 million for the special dividend, NamSys will retain over $6 million in cash.
Crucially, the financial notes reveal exactly how management is actively managing the estate’s selling pressure. While the company only repurchased 33,200 shares during the fiscal year, they aggressively stepped up their Normal Course Issuer Bid (NCIB) after the year ended. Subsequent to October 31, 2025, the company repurchased 149,600 shares for cancellation. Management is actively soaking up the estate’s sell wall at depressed prices, permanently reducing the share count.
Investing for International Growth: The Next Major Catalyst The financials also show the company is actively executing on the international growth roadmap discussed in recent annual meetings. Selling and marketing expenses jumped 61.6% year-over-year. Management explicitly noted this increase was driven by the addition of a new business development position dedicated to covering the European market, alongside expanded travel and trade show costs.
This targeted international expansion acts as a massive future growth catalyst. Because NamSys operates a highly scalable, cloud-based software model with 64.4% gross margins, any new European recurring revenue will flow disproportionately to the bottom line due to established operating leverage. Securing a contract with a major European bank, armored carrier, or retail network would not only accelerate top-line growth but also provide powerful market validation, potentially triggering a fundamental re-rating of the stock completely independent of the current estate liquidation thesis. They are actively reinvesting capital to acquire international market share and expand their moat.
The Structural Overhang is Clearing The MD&A confirms the retirement of the former Chairman on October 31, 2024. Consequently, related-party management fees and rent paid to his partially owned company dropped from $155,600 in 2024 to $nil in 2025. This provides concrete evidence that the old guard has fully exited, aligning perfectly with the thesis that the current market pressure is a temporary, non-fundamental liquidity event.
Conclusion
These new filings serve as the ultimate validation of our Information Arbitrage thesis. The “Cash Drag” risk has been decisively mitigated by returning capital to owners, the core SaaS business is compounding at an accelerated rate, and the company is aggressively buying back stock. Once the estate’s sell wall is fully exhausted, the fundamental reality of this high-margin compounder will take over.
I am long with a full position and eagerly waiting for a juicy dividend.
Disclaimer: I am not a financial advisor, and this newsletter is not financial, investment, or legal advice. The content provided in “The Checklist Compounder” is strictly for educational and informational purposes. Microcap stocks are inherently volatile, often lack liquidity, and carry a high degree of risk. I currently hold a long position in NamSys Inc. (TSXV: CTZ). Always conduct your own exhaustive due diligence, review all public filings, and consult with a registered financial professional before making any investment decisions.