Profit Magazine has just released its 24th Annual PROFIT 200 rankings. The Profit 200 ranks companies across all sectors by five-year revenue growth. Technology companies were once again a major contributor to the list, with software development contributing thirty companies, and IT with twenty-two.
Profit’s Jim McElgunn points out that these companies didn’t achieve their top-line growth at great expense to the bottom line; 87% of the two-hundred companies were profitable in their most recent fiscal year. The average five year revenue growth of the entire list was an astounding 1044%.
The Toronto Stock Exchange, which has lost several important tech players to takeovers in the past year, hasn’t seen many IPOs of late, but perhaps private tech companies will take notice of this year’s Profit 200 Rankings. The top two growth stories in Canada, NexJ and Mood Media, are technology companies listed on the TSX.
Culled from Profit Magazine’s List, here are the ten fastest growing tech stocks in Canada.
1. NexJ Systems (TSX:NXJ)
Bill Tatham founded NexJ, he told Cantech Letter earlier this year, “the Monday after the non-compete had expired” after selling Janna, the CRM company he founded in 1990 and sold to Siebel Systems (which was itself acquired by Oracle in 2005) ten years later. NexJ’s specific verticals in CRM are finance, insurance and healthcare. The company uses applied analytics and intelligent modeling, believing these tools allow them to analyze greater amounts of data with more context and relevance. Though the company already counts three of the six largest global wealth managers as clients, Tatham believes it has an even greater opportunity in the healthcare vertical, where it plans to dedicate increasing resources. NexJ has grown from just $7.86-million in revenue in fiscal 2008, to more than $30-million in 2011.
This story is brought to you by Serenic (TSXV:SER). Serenic’s market cap of $3.18 million (as of January 27th, 2012) was less than its cash position of $4.03 million (as of Q2, 2012). The company has no debt. Click here for more information.
2. Mood Media (TSX:MM)
In May of 2011, Toronto-based Mood Media (which was previously known as Fluid Music Canada) sprung to public attention when it completed the $345 million acquisition of Muzak, forming an entity that had $400 million in revenue in what is now being referred to as the sensory branding space, a term for marketing tactics now being used by giants such as Nissan, Pizza Hut and Starbucks. Mood Media’s revenue has grown from $12.46-million in fiscal 2009 to more than $330-million in 2011.
3. Wi-LAN (TSX:WIN)
Wi-LAN, which founded in Ottawa in 1992, developed a range of communications and consumer electronics products including routers, 3G handsets and WiMAX base stations. The Company now has more than three-thousand patents, and has already licensed their technologies to blue chip techs such as Cisco, Nokia, Panasonic, Samsung. Wi-LAN sprung to life after MOSAID employee Jim Skippen was unsuccessful in convincing his employer to become a pure patent play, and left for Wi-LAN, from whom he was negotiating the purchase of patents. The company is now no stranger to patent infringement claims, having launched actions against dozens of multinationals, including Apple, Hewlett-Packard, Intel, Sony and Toshiba. Under Skippen’s watch, the company’s revenue has climbed from just over $2 million in fiscal 2006, to the more than $100 million in fiscal 2011. Wi-LAN has quietly become one of the world’s top patent acquirers, on par or better than Apple, Google and Samsung in the third quarter of 2011.
4. 5N Plus (TSX:VNP)
A few years ago, Montreal based 5N Plus, which produces essential components of thin-film solar modules, became a primary material supplier to US cleantech giant First Solar. When First Solar’s revenue was skyrocketing they were being supplied cadmium telluride cells by 5N Plus. 5N Plus, meanwhile, was mirroring the action, albeit on a much smaller scale. The company’s revenue has grown from $67.4-million in fiscal 2009 to more than $391-million in 2011.
5. Guestlogix (TSX:GXI)
Guestlogix was formed in 2002 and has since become the dominant player in the business of delivering ancillary revenue to airlines, with contracts to service more than a billion trips annually. At last year’s M Partners Technology Conference in Toronto, Guestlogix CEO Tom Douramakos said all little extras; a fee for your second bag, a surcharge for reserving your seat in advance, are actually saving the industry, producing close to $60 billion in revenue last year. Without this ancillary revenue, the airline industry would still be a losing game. The company’s revenue has grown from just $5.43 million in fiscal 2007 to $22.8-million in 2011
6. Points International (TSX:PTS)
Toronto’s Points International lives at the corner of technology and loyalty programs, which these days is a good place to be. Points International manages the back end of loyalty currencies, frequent flyer miles, hotel points, retailer rewards and credit card points. The company has more than fifty partners worldwide including Delta, BestBuy, Starbucks and PayPal. Points has grown its revenue from $30 million in 2007 to more than $122.9-million in fiscal 2011.
7. PNI Digital Media (TSX:PN)
Vancouver’s PNI Digital Media, which was once known as PhotoChannel, has an international reach. The Company’s PNI Digital Media Platform reaches clients through retail giants such as Walmart, Costco, SAM’s Club, CVS/pharmacy, Tesco, Kodak, ASDA, K-Mart Australia, and Hallmark UK. The Company’s kiosks are a hit for their ease of use. PNI Digital’s growth helped it to graduate to a senior listing on the TSX last October.
8. QHR Technologies (TSXV:QHR)
Kelowna’s QHR Technologies has become an aggressive consolidator in the electronic medical records space. Last August’s acquisition of EMIS Inc, the Canadian division of the Leeds based Egton Medical Information Systems, the U.K.’s largest vendor of electronic medical records, was the company’s eleventh acquisition in just eight years. QHR is clearly gaining critical mass; its revenue has grown from just $5.89 million in 2007 to $23.8-million in fiscal 2011. QHR’s growth is mirroring larger trends. A recent report from MarketResearch.com said the U.S. EMR market is expected to grow from $2.17-billion in 2009 to more than $6-billion in 2015; an estimated compound annual growth rate of 18.1% .
9. Mint Technology (TSXV:MIT)
Based in Toronto, but operating out of Dubai, Mint Technology is a small and regionalized player in a space that is starting to show some real traction worldwide; prepaid debit cards. Mint currently processes payroll for over 200 corporate clients, mainly in the Gulf Region of the Middle East.
10. TIO Networks (TSXV:TNC)
Tio Networks specializes in billing solutions to the “unbanked”; a segment of society that, in the US alone, could be as many as thirty million households that simply do not deal with conventional banks. Northern Securities analyst Sameet Kanade has a $1 target on Tio.
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