Review of Sylogist Ltd.

JUN 12, 2025 - SYZ used to be an attractive name for income investors, but it started to change the investment thesis completely in recent years. SYZ has invested meaningfully to become a growth SaaS name rather than a steady dividend-growth legacy software company. SYZ also focused more on organic growth rather than through large acquisitions. SYZ is a high-quality business with tremendous cash flow generation and an attractive double-digit growth driver from the subscription segment. SYZ may see a natural gross margin and multiple expansion over time as the SaaS subscription business becomes a larger portion of total revenue. It is still early days, but we are seeing a positive trend in SYZ’s fundamentals. We are open to an upgrade in the future if the company can continue to execute to drive double-digit subscription growth. To be conservative, we will maintain the rating at “B” for now.