KXS Kinaxis Inc

• SaaS revenue grows 16%, adjusted EBITDA1 margin of 25%, annual recurring revenue grows 14%
• Increases profitability outlook for third consecutive quarter after 32% growth in Adjusted EBITDA
• Company adds Mark Morgan as president of commercial operations

Kinaxis® (TSX:KXS), a leading provider of supply chain orchestration solutions, reported results for its third quarter ended September 30, 2024. All amounts are in U.S. dollars. All figures are prepared in accordance with IFRS Accounting Standards unless otherwise indicated.

“We delivered a solid third quarter with continued strength in customer wins, win rates and financial results that allow us to increase our full-year profitability guidance for the third consecutive quarter,” said John Sicard, president and chief executive officer at Kinaxis. “We recently hit several exciting product milestones, including over 100 customers using our Maestro AI chat agent, and our Enterprise Scheduling product going live at a global consumer products company. I am also particularly proud that Kinaxis was named a 2024 Gartner® Peer Insights™ Customers’ Choice for Supply Chain Planning Solutions, the only vendor to earn that distinction in the report, which highlighted that 93% of customers are willing to recommend Kinaxis. This kind of achievement is only possible through outstanding strategy and execution, company-wide.”

Q3 2024 Highlights

$ USD thousands, except as otherwise indicated

Q3 2024

Q3 2023

Change

Total Revenue

121,528

108,079

12%

SaaS

78,621

67,940

16%

Subscription term licenses

2,250

2,535

(11)%

Professional services

35,471

32,851

8%

Maintenance and support

5,186

4,753

9%

Gross profit Margin

76,365 63%

65,336 60%

17%

Profit (loss) Per diluted share

6,751 $0.23

7,390 $0.25

(9)%

Adjusted EBITDA1 Margin

30,013 25%

22,801 21%

32%

Cash from operating activities

29,945

(1,460)

_

(1)

“Adjusted EBITDA” is a non-IFRS measure and is not a recognized, defined or standardized measure under IFRS. This measure as well as any other non-IFRS financial measures reported by Kinaxis are defined in the “Non-IFRS Measures” section of this news release.

“I’m pleased with ongoing progress towards our normalized, mid-term 25% adjusted EBITDA margin target, as well as progress on strategic initiatives to capture even more of the $16 billion supply chain management software market,” said Bob Courteau, executive chair at Kinaxis. “The Board and management have been working very closely over the past six months to review our strategic plan and to assess performance across our operations. That work, with additional input from consultants, has confirmed the strength of Kinaxis’ leading market position and strategy, and highlighted some exciting opportunities ahead, which we’re already acting on.

Courteau concluded: “I’m also thrilled we have added proven industry leader, Mark Morgan, as our new president of commercial operations to drive our go-to-market functions. Incoming leadership, new initiatives, and Kinaxis’ stellar foundation, which John Sicard was instrumental in building, are all key elements to scaling the organization through our next phase of rapid, profitable growth.”

Key Performance Indicators

The company’s Annual Recurring Revenue2 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 14% to 347 million at the end of the quarter.

$USD millions

Q3 2024

Q3 2023

Change

Annual recurring revenue2

347

304

14%

(2)

Annual Recurring Revenue (ARR) is the total annualized value of recurring subscription amounts (ultimately recognized as SaaS, Subscription term licenses and Maintenance and support revenue) of all subscription contracts at a point in time. Annualized subscription amounts are determined solely by reference to the underlying contracts, normalizing for the varying revenue recognition treatments under IFRS 15 for cloud-based versus on-premise subscription amounts. It excludes one-time fees, such as for non-recurring professional services, and assumes that customers will renew the contractual commitments on a periodic basis as those commitments come up for renewal, unless such renewal is known to be unlikely. We believe that this measure provides a more current indication of our performance in the growth of our subscription business than other metrics.

The nature of the company’s long-term contracts provides visibility into future, contracted revenue. The following table presents revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2024.

 

$USD millions

Remainder of 2024

 

2025

 

2026 and later

 

Total

SaaS

79.3

253.2

350.3

682.8

Maintenance and support

5.2

15.7

17.2

38.1

Subscription term licenses

—

0.1

0.1

0.2

Total

84.5

269.0

367.6

721.1

Financial Guidance

Kinaxis is updating its fiscal 2024 guidance, as follows:

 

FY 2024 Guidance

Total revenue

$483-495 million

SaaS

15-17% growth

Subscription term license

$11-12 million

(Increased)

Adjusted EBITDA1 margin

20-22%

(Increased)

Guidance in this press release is provided to enhance visibility into Kinaxis’ expectations for financial targets for the periods indicated. Please refer to the section regarding forward-looking statements that forms an integral part of this release. This press release along with the financial statements and MD&A for the quarter ended September 30, 2024 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call

Kinaxis will host a conference call tomorrow, October 31, 2024, to discuss these results. John Sicard, chief executive officer, Bob Courteau, executive chair, and Blaine Fitzgerald, chief financial officer, will host the call starting at 8:30 a.m. Eastern Time. A question and answer session will follow management's presentation. Investors and participants must register for the call in advance. See registration link below. Please call the conference telephone number fifteen minutes prior to the start time.

DATE:

Thursday, October 31, 2024

TIME:

8:30 a.m. Eastern Time

CALL REGISTRATION:

https://registrations.events/direct/Q4I91416395

WEBCAST

https://events.q4inc.com/attendee/409878969 (available for three months)

About Kinaxis Inc.

Kinaxis is a global leader in modern supply chain orchestration. We serve supply chains and the people who manage them in service of humanity. Our software is trusted by renowned global brands to provide the agility and predictability needed to navigate today’s volatility and disruption. We combine our patented concurrency technique with a human-centered approach to AI to empower businesses of all sizes to orchestrate their end-to-end supply chain network, from multi-year strategic planning through down-to-the-second execution and last-mile delivery. For more news and information, please visit kinaxis.com or follow us on LinkedIn.

Non-IFRS Measures

This press release makes reference to Adjusted Profit and Adjusted EBITDA, which are non-IFRS financial measures, as well as Adjusted EBITDA margin which expresses Adjusted EBITDA as a percentage of revenue. Adjusted Profit, Adjusted EBITDA and Adjusted EBITDA margin are not recognized, defined or standardized measures under IFRS. We use these measures to provide investors with supplemental information on our operating performance and to highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Providing these non-IFRS measures provides useful information because they portray the financial results of the Company before certain expenses that do not impact the ongoing operating decisions taken by management. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements, and to determine components of employee compensation.

Adjusted Profit represents profit adjusted to exclude the changes in the fair value of contingent consideration, our equity compensation plans, special charges, and non-recurring items. Adjusted EBITDA represents profit adjusted to exclude the change in the fair value of contingent consideration, our equity compensation plans, special charges, non-recurring items, income tax expense, depreciation and amortization, foreign exchange loss (gain) and net finance (income) expense. Adjusted EBITDA margin expresses Adjusted EBITDA as a percentage of revenue. Our definitions of Adjusted Profit, Adjusted EBITDA and Adjusted EBITDA margin will likely differ from those used by other companies (including our peers) and therefore comparability may be limited. Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures. Kinaxis has reconciled Adjusted Profit and Adjusted EBITDA to the most comparable IFRS financial measure as follows:

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

 

 

(In thousands of USD)

 

(In thousands of USD)

Profit

 

6,751

 

 

 

7,390

 

 

16,372

 

 

 

6,039

 

Change in fair value of contingent

 

—

 

 

 

(705

)

 

—

 

 

 

1,951

 

Share-based compensation

 

12,929

 

 

 

8,745

 

 

29,353

 

 

 

26,119

 

Special charges1

 

3,174

 

 

 

—

 

 

3,174

 

 

 

—

 

Non-recurring item2

 

22

 

 

 

—

 

 

7,320

 

 

 

—

 

Adjusted profit

 

22,876

 

 

 

15,430

 

 

56,219

 

 

 

34,109

 

Income tax expense

 

3,337

 

 

 

3,584

 

 

8,028

 

 

 

4,885

 

Depreciation and amortization

 

6,209

 

 

 

6,456

 

 

18,882

 

 

 

19,860

 

Foreign exchange gain (loss)

 

411

 

 

 

(76

)

 

245

 

 

 

2,033

 

Net finance and other income

 

(2,820

)

 

 

(2,593

)

 

(8,751

)

 

 

(5,742

)

 

 

7,137

 

 

 

7,371

 

 

18,404

 

 

 

21,036

 

Adjusted EBITDA

 

30,013

 

 

 

22,801

 

 

74,623

 

 

 

55,145

 

Adjusted EBITDA Margin

 

25

%

 

 

21

%

 

21

%

 

 

18

%

 

Note:

(1) Costs associated with business transformation activities, financial advice and shareholder communications.

(2) Costs associated with the restructuring initiative

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to our expectations for:

• growth of annual total revenue, annual SaaS and Subscription term licenses revenue, and our expectations for Adjusted EBITDA margin achievement, in each case looking forward for our fiscal year ending December 31, 2024;
• SaaS growth and increased profitability in years beyond 2024; and
• contracted revenue in future periods, including 2024, 2025 and 2026 and later.

This release also includes forward-looking statements as to Kinaxis’ growth opportunities and the potential benefits of, and markets and demand for, Kinaxis’ products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis’ products and services compared to competitive offerings in the industry.

In particular, our guidance for 2024 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, as well as our comments on our expectations for SaaS growth and increased profitability in years beyond 2024, are subject to certain assumptions and associated risks including:

• our ability to win business from new customers and expand business from existing customers;
• the timing of new customer wins and expansion decisions by our existing customers;
• maintaining our customer retention levels, and specifically, that customers will renew contractual commitments on a periodic basis as those commitments come up for renewal, at rates consistent with our historic experience;
• fluctuations in the value of foreign currencies relative to the U.S. Dollar; and
• with respect to Adjusted EBITDA and profitability, our ability to contain expense levels while expanding our business.

Our guidance and commentary for achievement of contracted revenue in future periods, including in 2024, 2025 and 2026 and later, is based on assumptions and associated risks including:

• our ability to satisfy material unperformed obligations under our long-term contracts; and
• the continued financial capacity and creditworthiness of our customers under long-term contracts.

These and other assumptions, risks and uncertainties may cause Kinaxis’ actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by forward-looking statements. Material risks and uncertainties relating to our business are described under the headings “Forward-Looking Statements” and “Risks and Uncertainties” in our annual MD&A dated February 28, 2024, under the heading “Risk Factors” in our Annual Information Form dated March 25, 2024 and in our other public documents filed with Canadian securities regulatory authorities, which are available at www.sedarplus.ca. Forward-looking statements are provided to help readers understand management’s expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to place undue reliance on forward-looking statements. Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

SOURCE: Kinaxis Inc.

Kinaxis Inc. Condensed Consolidated Interim Statements of Financial Position (Expressed in thousands of USD) (Unaudited)

 

September 30, 2024

December 31, 2023

 

 

 

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

183,228

$

174,844

Short-term investments

 

111,402

 

118,118

Trade and other receivables

 

137,485

 

156,609

Prepaid expenses

 

19,355

 

14,810

 

 

451,470

 

464,381

Non-current assets:

 

 

Unbilled receivables

 

1,121

 

3,155

Other receivables

 

925

 

972

Prepaid expenses

 

2,128

 

1,130

Investment tax credits recoverable

 

11,271

 

8,362

Deferred tax assets

 

35,092

 

1,184

Contract acquisition costs

 

30,186

 

27,438

Property and equipment

 

33,342

 

40,300

Right-of-use assets

 

46,055

 

47,109

Intangible assets

 

19,535

 

23,394

Goodwill

 

74,997

 

74,556

 

 

254,652

 

227,600

 

 

 

 

$

706,122

$

691,981

 

 

 

Liabilities and Shareholders’ Equity

 

 

Current liabilities:

 

 

Trade payables and accrued liabilities

 

107,149

 

39,700

Provisions

 

605

 

—

Deferred revenue

 

126,382

 

137,598

Lease obligations

 

5,305

 

5,805

 

 

239,441

 

183,103

Non-current liabilities:

 

 

Lease obligations

 

45,016

 

45,985

Deferred tax liabilities

 

6,362

 

8,065

 

 

51,378

 

54,050

Shareholders’ equity:

 

 

Share capital

 

283,605

 

307,327

Contributed surplus

 

11,322

 

44,339

Accumulated other comprehensive income (loss)

 

2,202

 

1,360

Retained earnings

 

118,174

 

101,802

 

 

415,303

 

454,828

 

 

 

 

$

706,122

$

691,981

 

Kinaxis Inc.

Condensed Consolidated Interim Statements of Comprehensive Income (Expressed in thousands of USD, except share and per share data) (Unaudited)

 

Three months ended September 30,

Nine months ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

$

121,528

 

$

108,079

 

$

359,176

 

$

314,981

 

 

 

 

 

 

Cost of revenue

 

45,163

 

 

42,743

 

 

139,695

 

 

124,974

 

 

 

 

 

 

Gross profit

 

76,365

 

 

65,336

 

 

219,481

 

 

190,007

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Selling and marketing

 

22,639

 

 

23,532

 

 

74,907

 

 

76,113

 

Research and development

 

21,137

 

 

20,111

 

 

66,343

 

 

61,042

 

General and administrative

 

24,977

 

 

14,098

 

 

62,489

 

 

43,666

 

 

 

68,753

 

 

57,741

 

 

203,739

 

 

180,821

 

 

 

 

 

 

 

 

7,612

 

 

7,595

 

 

15,742

 

 

9,186

 

Other income:

 

 

 

 

Foreign exchange gain (loss)

 

(411

)

 

76

 

 

(245

)

 

(2,033

)

Net finance and other income

 

2,887

 

 

2,598

 

 

8,903

 

 

5,722

 

Change in fair value of contingent consideration

 

—

 

 

705

 

 

—

 

 

(1,951

)

 

 

2,476

 

 

3,379

 

 

8,658

 

 

1,738

 

 

 

 

 

 

Profit before income taxes

 

10,088

 

 

10,974

 

 

24,400

 

 

10,924

 

 

 

 

 

 

Income tax expense

 

3,337

 

 

3,584

 

 

8,028

 

 

4,885

 

 

 

 

 

 

Profit

 

6,751

 

 

7,390

 

 

16,372

 

 

6,039

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Items that are or may be reclassified subsequently to profit (loss):

 

 

 

 

Foreign currency translation differences - foreign operations

 

3,053

 

 

(1,757

)

 

1,097

 

 

(1,468

)

Change in valuation of cash flow hedges

 

463

 

 

(594

)

 

(255

)

 

(364

)

 

 

3,516

 

 

(2,351

)

 

842

 

 

(1,832

)

 

 

 

 

 

Total comprehensive income

$

10,267

 

$

5,039

 

$

17,214

 

$

4,207

 

 

 

 

 

 

Basic earnings per share

$

0.24

 

$

0.26

 

$

0.58

 

$

0.21

 

Weighted average number of basic Common Shares

 

28,226,878

 

 

28,428,856

 

 

28,286,208

 

 

28,250,462

 

Diluted earnings per share

$

0.23

 

$

0.25

 

$

0.57

 

$

0.21

 

Weighted average number of diluted Common Shares

 

28,812,999

 

 

29,240,154

 

 

28,946,558

 

 

29,119,827

 

 

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Expressed in thousands of USD) (Unaudited)

 

 

Accumulated other comprehensive income (loss)

 

 

Share

capital

Contributed

surplus

Cash flow hedges

Currency translation adjustments

Total

Retained

earnings

Total equity

 

 

 

 

 

 

 

 

Balance, December 31, 2022

$

244,713

 

$

65,129

 

$

—

 

$

(156

)

$

(156

)

$

91,742

$

401,428

 

Profit

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

10,060

 

10,060

 

Other comprehensive income

 

—

 

 

—

 

 

441

 

 

1,075

 

 

1,516

 

 

—

 

1,516

 

Total comprehensive income

 

—

 

 

—

 

 

441

 

 

1,075

 

 

1,516

 

 

10,060

 

11,576

 

 

 

 

 

 

 

 

 

Share options exercised

 

41,545

 

 

(9,991

)

 

—

 

 

—

 

 

—

 

 

—

 

31,554

 

Restricted share units vested

 

10,676

 

 

(10,676

)

 

—

 

 

—

 

 

—

 

 

—

 

—

 

Performance share units vested

 

2,628

 

 

(2,628

)

 

—

 

 

—

 

 

—

 

 

—

 

—

 

Share-based payments

 

—

 

 

35,788

 

 

—

 

 

—

 

 

—

 

 

—

 

35,788

 

Shares issued for contingent consideration

 

11,097

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

11,097

 

Shares repurchased

 

(3,332

)

 

(33,283

)

 

—

 

 

—

 

 

—

 

 

—

 

(36,615

)

Total shareholder transactions

 

62,614

 

 

(20,790

)

 

—

 

 

—

 

 

—

 

 

—

 

41,824

 

 

 

 

 

 

 

 

 

Balance, December 31, 2023

$

307,327

 

$

44,339

 

$

441

 

$

919

 

$

1,360

 

$

101,802

$

454,828

 

Profit

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

16,372

 

16,372

 

Other comprehensive loss

 

—

 

 

—

 

 

(255

)

 

1,097

 

 

842

 

 

—

 

842

 

Total comprehensive income (loss)

 

—

 

 

—

 

 

(255

)

 

1,097

 

 

842

 

 

16,372

 

17,214

 

 

 

 

 

 

 

 

 

Share options exercised

 

17,777

 

 

(4,193

)

 

—

 

 

—

 

 

—

 

 

—

 

13,584

 

Restricted share units vested

 

11,841

 

 

(11,841

)

 

—

 

 

—

 

 

—

 

 

—

 

—

 

Deferred share units vested

 

1,396

 

 

(1,396

)

 

—

 

 

—

 

 

—

 

 

—

 

—

 

Performance share units vested

 

5,533

 

 

(5,533

)

 

—

 

 

—

 

 

—

 

 

—

 

—

 

Share-based payments

 

—

 

 

29,739

 

 

—

 

 

—

 

 

—

 

 

—

 

29,739

 

Shares repurchased

 

(38,489

)

 

(39,793

)

 

—

 

 

—

 

 

—

 

 

—

 

(78,282

)

Obligation related to share repurchases

 

(21,780

)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

(21,780

)

Total shareholder transactions

 

(23,722

)

 

(33,017

)

 

—

 

 

—

 

 

—

 

 

—

 

(56,739

)

 

 

 

 

 

 

 

 

Balance, September 30, 2024

$

283,605

 

$

11,322

 

$

186

 

$

2,016

 

$

2,202

 

$

118,174

$

415,303

 

Condensed Consolidated Interim Statements of Cash Flows (Expressed in thousands of USD) (Unaudited)

 

Three months ended September 30,

Nine months ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Profit

$

6,751

 

$

7,390

 

$

16,372

 

$

6,039

 

Items not affecting cash:

 

 

 

 

Depreciation of property and equipment and right-of-use assets

 

4,870

 

 

5,126

 

 

14,888

 

 

15,787

 

Amortization of intangible assets

 

1,339

 

 

1,330

 

 

3,994

 

 

4,073

 

Share-based payments

 

12,929

 

 

8,745

 

 

29,353

 

 

26,119

 

Net finance income

 

(2,820

)

 

(2,593

)

 

(8,751

)

 

(5,742

)

Change in fair value of contingent consideration

 

—

 

 

(705

)

 

—

 

 

1,951

 

Income tax expense

 

3,337

 

 

3,584

 

 

8,028

 

 

4,885

 

Investment tax credits recoverable

 

(900

)

 

(825

)

 

(2,909

)

 

(2,234

)

Change in operating assets and liabilities

 

3,511

 

 

(23,810

)

 

9,714

 

 

736

 

Interest received

 

2,199

 

 

2,150

 

 

10,387

 

 

5,345

 

Interest paid

 

(436

)

 

(399

)

 

(1,277

)

 

(1,247

)

Income taxes paid

 

(835

)

 

(1,453

)

 

(4,703

)

 

(4,324

)

 

 

29,945

 

 

(1,460

)

 

75,096

 

 

51,388

 

Cash flows from (used in) investing activities:

 

 

 

 

 

 

 

 

 

Purchase of property and equipment and intangible assets

 

(163

)

 

(378

)

 

(2,247

)

 

(2,010

)

Purchase of short-term investments

 

(21,891

)

 

(72,053

)

 

(238,760

)

 

(172,724

)

Redemption of short-term investments

 

46,722

 

 

35,005

 

 

245,117

 

 

95,165

 

 

 

24,668

 

 

(37,426

)

 

4,110

 

 

(79,569

)

 

 

 

 

 

Cash flows from (used in) financing activities:

 

 

 

 

 

 

 

 

 

Payment of lease obligations

 

(1,834

)

 

(1,689

)

 

(5,360

)

 

(5,245

)

Repurchase of shares

 

(20,875

)

 

—

 

 

(78,282

)

 

—

 

Proceeds from exercise of stock options

 

2,276

 

 

1,071

 

 

13,584

 

 

20,715

 

 

 

(20,433

)

 

(618

)

 

(70,058

)

 

15,470

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

34,180

 

 

(39,504

)

 

9,148

 

 

(12,711

)

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

147,155

 

 

201,608

 

 

174,844

 

 

175,347

 

 

 

 

 

 

Effects of exchange rates on cash and cash equivalents

$

1,893

 

$

(1,801

)

 

(764

)

 

(2,333

)

 

 

 

 

 

Cash and cash equivalents, end of period

 

183,228

 

 

160,303

 

$

183,228

 

$

160,303

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030951042/en/

Investor Relations Rick Wadsworth | Kinaxis rwadsworth@kinaxis.com 613-907-7613 Media Relations Jaime Cook | Kinaxis jcook@kinaxis.com 289-552-4640