- Q1 SaaS revenue grows 16%, adjusted EBITDA1 margin of 19%,
annual recurring revenue grows 15%
- Increases FY 2024 adjusted EBITDA1 guidance as key initiative
heightens focus on profitability
Kinaxis® (TSX:KXS), a leading provider of supply chain
orchestration solutions, reported results for its first quarter
ended March 31, 2024. All amounts are in U.S. dollars. All figures
are prepared in accordance with IFRS Accounting Standards unless
otherwise indicated.
“During the first quarter, Kinaxis continued to add exciting new
brands to our customer base while delivering solid financial
results. We were once again named a Leader in the 2024 Gartner®
Magic Quadrant™ for Supply Chain Planning Solutions, with
recognition for our strong product vision and the highest
positioning on Ability to Execute,” said John Sicard, president and
chief executive officer at Kinaxis. “The supply chain markets
continue to evolve rapidly and we are reshaping the organization to
ensure we capitalize on the best opportunities ahead. With our
ongoing product leadership, we are in a better position than ever
to transform the world’s supply chains through AI-powered
end-to-end orchestration.”
Q1 2024 Highlights
$ USD thousands, except as otherwise
indicated
Q1 2024 Q1 2023 Change
Total Revenue
119,370
101,130
18%
SaaS
73,371
63,145
16%
Subscription term
licenses
6,741
7,028
(4)%
Professional services
34,443
26,568
30%
Maintenance and
support
4,815
4,389
10%
Gross profit
72,930
61,001
20%
Margin
61%
60%
Profit
6,187
1,189
420%
Per diluted share
$0.21
$0.04
Adjusted EBITDA1
22,680
17,142
32%
Margin
19%
17%
Cash from operating activities
32,011
38,905
(18)%
(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.
In the first quarter of 2024, Kinaxis initiated a restructuring
of its organization to focus on its next wave of growth,
eliminating approximately 6% of its workforce across functions and
geographical regions. Some restructuring charges have been incurred
in the first quarter of 2024, and the company expects that the
majority of related charges will be incurred in the second quarter,
by the end of which the initiative will be substantially complete.
Kinaxis intends to reinvest a portion of savings into key product
innovations and go-to-market priorities throughout the remainder of
the year and into 2025.
Key Performance Indicators The company’s Annual Recurring
Revenue2 (ARR), which includes subscription amounts related to both
SaaS and on-premise contracts, rose 15% to $327 million at the end
of the quarter.
$USD millions
Q1 2024
Q1 2023
Change
Annual recurring revenue2
$
327
$
285
15
%
(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 March 31, 2024.
$USD millions
Remainder of
2024
2025
2026 and later
Total
SaaS
215.7
215.6
258.4
689.7
Maintenance and support
14.8
14.7
12.3
41.8
Subscription term licenses
2.0
0.1
—
2.1
Total
232.5
230.4
270.7
733.6
Financial Guidance Kinaxis is increasing its fiscal 2024
Adjusted EBITDA margin guidance, while maintaining all other
elements of guidance, as follows:
FY 2024 Guidance
Total revenue
$483-495 million
SaaS
17-19% growth
Subscription term
license
$9-11 million
Adjusted EBITDA1 margin
18-20%
“I’m pleased to be able to increase our Adjusted EBITDA guidance
for fiscal 2024, which reflects both the cost savings from our
restructuring initiative and some anticipated reinvestment in the
year. We have taken a major step forward in our progress towards
achieving our target of consistently achieving 25% Adjusted EBITDA
in the mid-term, and have enhanced our focus on the best growth
opportunities ahead,” said Blaine Fitzgerald, chief financial
officer at Kinaxis. “Financial results in the first quarter were
solid, while our ARR continued to reflect caution in the economic
environment, particularly among the largest deals where we
typically generate most of our growth. Also, for the first time in
over a year, ARR growth was notably impacted by foreign exchange
fluctuations.”
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 March 31, 2024 are available on Kinaxis’ website and
on SEDAR at www.sedar.com.
Changes to the Board Our long-standing Chair of the board
of directors, John (Ian) Giffen, will be leaving the board of
directors after Kinaxis’ upcoming annual meeting, having served as
a director of Kinaxis since 2010. Ian became lead independent
director of the board at the time of Kinaxis’ IPO in 2014, and
Chair in 2018. Our new Chair will be Robert (Bob) Courteau. Ian has
guided the board in developing our successful strategy and building
shareholder value, including growing our market capitalization by
over Cdn$4 billion since Kinaxis’ IPO. Ian’s achievements in
business and governance are renowned in Canada, and most recently
he has been recognized as a recipient of the 2024 ICD Fellowship
Award. Only 105 directors across Canada have received this
recognition over the lifetime of the award. Ian is also widely
applauded for his charitable and philanthropic efforts for the
Stratford Festival and other organizations. We thank Ian for his
countless contributions as Chair.
Conference Call Kinaxis will host a conference call
tomorrow, May 9, 2024, to discuss these results. John Sicard, chief
executive officer, 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, May 9, 2024
TIME:
8:30 a.m. Eastern Time
CALL REGISTRATION:
https://registrations.events/direct/Q4I9141617384
WEBCAST
https://events.q4inc.com/attendee/189167848 (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. 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 and non-recurring items. Adjusted EBITDA
represents profit adjusted to exclude the change in the fair value
of contingent consideration, our equity compensation plans,
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 March
31,
2024
2023
(In thousands of USD)
Profit
6,187
1,189
Change in fair value of contingent
consideration
—
2,194
Share-based compensation
8,722
8,219
Non-recurring item
1,752
—
Adjusted profit
16,661
11,602
Income tax expense
2,609
304
Depreciation and amortization
6,405
6,887
Foreign exchange gain
(126
)
(265
)
Net finance income
(2,869
)
(1,386
)
6,019
5,540
Adjusted EBITDA
22,680
17,142
Adjusted EBITDA Margin
19
%
17
%
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)
March 31,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
219,374
$
174,844
Short-term investments
83,753
118,118
Trade and other receivables
134,297
156,609
Prepaid expenses
20,654
14,810
458,078
464,381
Non-current assets:
Unbilled receivables
3,933
3,155
Other receivables
917
972
Prepaid expenses
1,020
1,130
Investment tax credits recoverable
9,262
8,362
Deferred tax assets
1,260
1,184
Contract acquisition costs
29,486
27,438
Property and equipment
37,073
40,300
Right-of-use assets
49,921
47,109
Intangible assets
21,761
23,394
Goodwill
73,873
74,556
228,506
227,600
$
686,584
$
691,981
Liabilities and Shareholders’
Equity
Current liabilities:
Trade payables and accrued liabilities
39,086
39,700
Deferred revenue
135,382
137,598
Lease obligations
6,616
5,805
181,084
183,103
Non-current liabilities:
Lease obligations
47,147
45,985
Deferred tax liabilities
7,117
8,065
54,264
54,050
Shareholders’ equity:
Share capital
323,260
307,327
Contributed surplus
20,438
44,339
Accumulated other comprehensive income
(loss)
(451
)
1,360
Retained earnings
107,989
101,802
451,236
454,828
$
686,584
$
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 March 31,
2024
2023
Revenue
$
119,370
$
101,130
Cost of revenue
46,440
40,129
Gross profit
72,930
61,001
Operating expenses:
Selling and marketing
24,927
24,164
Research and development
22,985
19,929
General and administrative
19,249
14,791
67,161
58,884
5,769
2,117
Other income (expense):
Foreign exchange gain
126
265
Net finance and other income
2,901
1,305
Change in fair value of contingent
consideration
—
(2,194
)
3,027
(624
)
Profit before income taxes
8,796
1,493
Income tax expense
2,609
304
Profit
6,187
1,189
Other comprehensive income (loss):
Items that are or may be reclassified
subsequently to profit:
Foreign currency translation differences -
foreign operations
(1,334
)
712
Change in net unrealized loss on cash flow
hedges
(477
)
77
(1,811
)
789
Total comprehensive income
$
4,376
$
1,978
Basic earnings per share
$
0.22
$
0.04
Weighted average number of basic Common
Shares
28,262,317
28,086,983
Diluted earnings per share
$
0.21
$
0.04
Weighted average number of diluted Common
Shares
28,953,287
28,941,335
Kinaxis Inc.
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
—
—
—
—
—
6,187
6,187
Other comprehensive loss
—
—
(477
)
(1,334
)
(1,811
)
—
(1,811
)
Total comprehensive income (loss)
—
—
(477
)
(1,334
)
(1,811
)
6,187
4,376
Share options exercised
5,408
(1,226
)
—
—
—
—
4,182
Restricted share units vested
6,981
(6,981
)
—
—
—
—
—
Performance share units vested
5,533
(5,533
)
—
—
—
—
—
Share-based payments
—
9,132
—
—
—
—
9,132
Shares repurchased
(1,989
)
(19,293
)
—
—
—
—
(21,282
)
Total shareholder transactions
15,933
(23,901
)
—
—
—
—
(7,968
)
Balance, March 31, 2024
$
323,260
$
20,438
$
(36
)
$
(415
)
$
(451
)
$
107,989
$
451,236
Kinaxis Inc.
Condensed Consolidated Interim
Statements of Cash Flows
(Expressed in thousands of USD)
(Unaudited)
Three months ended March 31,
2024
2023
Cash flows from operating activities:
Profit
$
6,187
$
1,189
Items not affecting cash:
Depreciation of property and equipment and
right-of-use assets
5,076
5,475
Amortization of intangible assets
1,329
1,412
Share-based payments
8,722
8,219
Net finance income
(2,869
)
(1,386
)
Change in fair value of contingent
consideration
—
2,194
Income tax expense
2,609
304
Investment tax credits recoverable
(900
)
(915
)
Change in operating assets and
liabilities
9,107
22,959
Interest received
4,410
1,261
Interest paid
(382
)
(433
)
Income taxes paid
(1,278
)
(1,374
)
32,011
38,905
Cash flows from (used in) investing
activities:
Purchase of property and equipment and
intangible assets
(191
)
(863
)
Purchase of short-term investments
(59,357
)
(55,083
)
Redemption of short-term investments
92,563
15,006
33,015
(40,940
)
Cash flows from (used in) financing
activities:
Payment of lease obligations
(1,740
)
(1,819
)
Repurchase of shares
(21,282
)
—
Proceeds from exercise of stock
options
4,182
10,511
(18,840
)
8,692
Increase in cash and cash equivalents
46,186
6,657
Cash and cash equivalents, beginning of
period
174,844
175,347
Effects of exchange rates on cash and cash
equivalents
(1,656
)
(438
)
Cash and cash equivalents, end of
period
$
219,374
$
181,566
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508888180/en/
Investor Relations Rick Wadsworth | Kinaxis
rwadsworth@kinaxis.com 613-907-7613
Media Relations Jaime Cook | Kinaxis jcook@kinaxis.com
289-552-4640
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