- FY 2023 delivers 24% SaaS revenue growth and 18% adjusted
EBITDA1 margin
- Q4 SaaS revenue grows 19%, adjusted EBITDA1 margin of 18%,
annual recurring revenue2 grows 18%
- Record RPO and free cash flow reflects strength of business and
focus on profitability
- Repurchased approximately 329,000 common shares for $36.6
million
Kinaxis® (TSX:KXS), the leading provider of supply chain
management solutions, reported results for its fourth quarter and
year ended December 31, 2023. All amounts are in U.S. dollars. All
figures are prepared in accordance with International Financial
Reporting Standards (IFRS) unless otherwise indicated.
“We finished the year with a record number of customer wins, a
record backlog that provides strong visibility into 2024 and
beyond, and record free cash flow. These achievements were won
through a persistently high win rate against key competitors,
ongoing progress penetrating all tiers of our markets, strong
renewals and expansions, ongoing enhancement of the value we offer,
and a focus on balancing rapid growth with profitability,” said
John Sicard, president and chief executive officer at Kinaxis.
“More and more, we are seeing siloed, legacy methods giving way to
end-to-end supply chain orchestration, where Kinaxis is the
acknowledged leader. We have made strong investments over the past
few years that have put us in excellent position to capture even
more share in our markets while we make steady progress towards our
mid-term profitability goals.”
Q4 2023 Highlights
$ USD thousands, except as otherwise
indicated
Q4 2023
Q4 2022
Change
Total Revenue
111,990
98,483
14%
SaaS
69,891
58,839
19%
Subscription term
licenses
2,899
9,131
(68)%
Professional services
34,318
26,156
31%
Maintenance and
support
4,882
4,357
12%
Gross profit
68,890
61,266
12%
Margin
62%
62%
Profit
4,021
8,562
(53)%
Per diluted share
$0.14
$0.30
Adjusted EBITDA1
19,727
21,116
(7)%
Margin
18%
21%
Cash from (used in) operating
activities
27,969
(2,327)
1,302%
(1) “Adjusted EBITDA” is a non-IFRS measures that 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.
FY 2023 Highlights
$ USD thousands, except as otherwise
indicated
FY 2023
FY 2022
Change
Total Revenue
426,971
366,889
16%
SaaS Revenue
265,080
213,306
24%
Adjusted EBITDA1
74,872
79,446
(6)%
Margin
18%
22%
Key Performance Indicators
The company’s Annual Recurring Revenue2 (ARR), which includes
subscription amounts related to both SaaS and on-premise contracts,
rose 18% to $322 million at the end of the quarter.
$USD millions
Q4 2023
Q4 2022
Change
Annual recurring revenue2
$
322
$
274
18
%
(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 December 31, 2023.
$USD millions
2024
2025
2026 and later
Total
SaaS
274.0
197.7
228.9
700.6
Maintenance and support
17.5
12.4
8.3
38.2
Subscription term licenses
2.2
0.1
—
2.3
Total
293.7
210.2
237.2
741.1
Financial Guidance
Kinaxis is introducing its fiscal 2024 financial guidance, as
follows.
FY 2024 Guidance
Total revenue
$483-495 million
SaaS
17-19% growth
Subscription term
license
$9-11 million
Adjusted EBITDA1 margin
16-18%
"We are steadily marching towards our baseline mid-term Adjusted
EBITDA margin target of 25%. Our 2024 guidance reflects the current
ARR growth level, ongoing operating leverage, but also the impacts
of being at the low point in our normal cycle for our high-margin
subscription term license revenue and our current transition to
public cloud, which involves some duplicative costs. Normalizing
for these two items better demonstrates our steady progress,”
said Blaine Fitzgerald, chief financial officer at Kinaxis.
"I am particularly pleased to have generated a record $77.1 million
in free cash flow in 2023, which is over 70% higher than in any
other year. It's another data point that demonstrates our focus on
balancing strong growth and profitability."
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 December 31, 2023 are available on Kinaxis’ website
and on SEDAR at www.sedar.com.
Conference Call
Kinaxis will host a conference call tomorrow, February 29, 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, February 29, 2024
TIME:
8:30 a.m. Eastern Time
CALL REGISTRATION:
https://registrations.events/direct/Q4I914168
WEBCAST
https://events.q4inc.com/attendee/409673001 (available for three
months)
REPLAY:
(800)-770-2030 or (609) 800-9909
Available through March 14, 2024
Reference number: 91416
About Kinaxis Inc.
Kinaxis is a global leader in modern supply chain management. 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
Adjusted EBITDA and Adjusted EBITDA
Margin
This press release contains non-IFRS measures, specifically
Adjusted EBITDA and Adjusted EBITDA margin. We use Adjusted EBITDA
to provide investors with a supplemental measure of our operating
performance and thus 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.
Adjusted EBITDA and Adjusted EBITDA margins are not recognized,
defined or standardized measures under IFRS. Our definition of
Adjusted EBITDA and Adjusted EBITDA margin will likely differ from
that 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 EBITDA to the most
comparable IFRS financial measure as follows:
Three months ended December
31,
Year ended December
31,
2023
2022
2023
2022
(In thousands of USD)
(In thousands of USD)
Profit
4,021
8,562
10,060
20,080
Change in fair value of contingent
consideration
—
1,367
1,951
(826
)
Share-based compensation
8,388
7,558
34,507
26,238
Adjusted profit
12,409
17,487
46,518
45,492
Income tax expense (recovery)
4,791
(635
)
9,676
11,406
Depreciation and amortization
6,424
6,761
26,284
25,060
Foreign exchange loss (gain)
(797
)
(1,648
)
1,236
(1,499
)
Net finance income
(3,100
)
(849
)
(8,842
)
(1,013
)
7,318
3,629
28,354
33,954
Adjusted EBITDA
19,727
21,116
74,872
79,446
Adjusted EBITDA as a percentage of
revenue
17.6
%
21.4
%
17.5
%
21.7
%
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 3, 2023 and in our other public documents filed
with Canadian securities regulatory authorities, which are
available at www.sedar.com. 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.
Consolidated Statements of Financial
Position
(Expressed in thousands of USD)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
174,844
175,347
Short-term investments
118,118
50,476
Trade and other receivables
156,609
157,657
Prepaid expenses
14,810
13,660
464,381
397,140
Non-current assets:
Unbilled receivables
3,155
7,245
Other receivables
972
971
Prepaid expenses
1,130
2,395
Investment tax credits recoverable
8,362
7,591
Deferred tax assets
1,184
1,065
Contract acquisition costs
27,438
24,892
Property and equipment
40,300
51,852
Right-of-use assets
47,109
53,537
Intangible assets
23,394
28,271
Goodwill
74,556
73,314
227,600
251,133
691,981
648,273
Liabilities and Shareholders’
Equity
Current liabilities:
Trade payables and accrued liabilities
39,700
40,107
Deferred revenue
137,598
133,467
Provisions
—
296
Contingent consideration
—
9,146
Lease obligations
5,805
6,991
183,103
190,007
Non-current liabilities:
Lease obligations
45,985
49,977
Deferred tax liabilities
8,065
6,861
54,050
56,838
Shareholders’ equity:
Share capital
307,327
244,713
Contributed surplus
44,339
65,129
Accumulated other comprehensive gain
(loss)
1,360
(156
)
Retained earnings
101,802
91,742
454,828
401,428
691,981
648,273
Kinaxis Inc.
Consolidated Statements of
Comprehensive Income
(Expressed in thousands of USD,
except share and per share data)
Three months ended December
31,
Year ended December 31,
2023
2022
2023
2022
Revenue
$
111,990
$
98,483
$
426,971
$
366,889
Cost of revenue
43,100
37,217
168,074
131,102
Gross profit
68,890
61,266
258,897
235,787
Operating expenses:
Selling and marketing
26,606
21,213
102,719
79,446
Research and development
20,665
19,494
81,707
74,147
General and administrative
16,703
13,804
60,369
54,273
63,974
54,511
244,795
207,866
4,916
6,755
14,102
27,921
Other income:
Foreign exchange gain (loss)
797
1,648
(1,236
)
1,499
Net finance and other income
3,099
891
8,821
1,240
Change in fair value of contingent
consideration
—
(1,367
)
(1,951
)
826
3,896
1,172
5,634
3,565
Profit before income taxes
8,812
7,927
19,736
31,486
Income tax expense (recovery):
4,791
(635
)
9,676
11,406
Profit
4,021
8,562
10,060
20,080
Other comprehensive income:
Items that are or may be reclassified
subsequently to profit:
Foreign currency translation differences -
foreign operations
2,543
4,539
1,075
441
Change in net unrealized gain on cash flow
hedges
804
—
441
—
3,347
4,539
1,516
441
Total comprehensive income
$
7,368
$
13,101
$
11,576
$
20,521
Basic earnings per share
$
0.14
$
0.31
$
0.36
$
0.73
Weighted average number of basic Common
Shares
28,114,987
27,903,102
28,321,874
27,667,100
Diluted earnings per share
$
0.14
$
0.30
$
0.35
$
0.70
Weighted average number of diluted Common
Shares
28,863,575
28,790,951
29,149,535
28,609,603
Kinaxis Inc.
Consolidated Statements of Changes in
Shareholders’ Equity
(Expressed in thousands of USD)
Accumulated other comprehensive
income (loss)
Share
capital
Contributed
surplus
Cash flow
hedges
Currency
translation
adjustments
Total
Retained
earnings
Total equity
Balance, December 31, 2021
$
195,414
$
54,739
$
—
$
(597
)
$
(597
)
$
71,662
$
321,218
Profit
—
—
—
—
—
20,080
20,080
Other comprehensive income
—
—
—
441
441
—
441
Total comprehensive income
—
—
—
441
441
20,080
20,521
Share options exercised
38,791
(9,076
)
—
—
—
—
29,715
Restricted share units vested
10,091
(10,091
)
—
—
—
—
—
Performance share units vested
417
(417
)
—
—
—
—
—
Share based payments
—
29,974
—
—
—
—
29,974
Total shareholder transactions
49,299
10,390
—
—
—
—
59,689
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 re-purchased
(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
Kinaxis Inc.
Consolidated Statements of Cash
Flows
(Expressed in thousands of USD)
Three months ended December
31,
Year ended December 31,
2023
2022
2023
2022
Cash flows from (used in) operating
activities:
Profit
$
4,021
$
8,562
$
10,060
$
20,080
Items not affecting cash:
Depreciation of property and equipment and
right-of-use assets
5,093
5,363
20,880
21,496
Amortization of intangible assets
1,331
1,398
5,404
3,564
Share-based payments
8,388
7,558
34,507
26,238
Net finance income
(3,100
)
(849
)
(8,842
)
(1,013
)
Change in fair value of contingent
consideration
—
1,367
1,951
(826
)
Income tax expense (recovery)
4,791
(635
)
9,676
11,406
Investment tax credits recoverable
1,463
(601
)
(771
)
(3,975
)
Change in operating assets and
liabilities
4,633
(24,064
)
5,369
(49,123
)
Interest received
2,508
1,087
7,853
2,546
Interest paid
(393
)
(444
)
(1,640
)
(1,841
)
Income taxes paid
(766
)
(1,069
)
(5,090
)
(4,034
)
27,969
(2,327
)
79,357
24,518
Cash flows from (used in) investing
activities:
Acquisition of business, net of cash
acquired
—
(76
)
—
(36,738
)
Purchase of property and equipment and
intangible assets
(289
)
(8,169
)
(2,299
)
(18,249
)
Purchase of short-term investments
(32,955
)
(35,149
)
(205,679
)
(80,314
)
Redemption of short-term investments
45,501
15,149
140,666
60,314
12,257
(28,245
)
(67,312
)
(74,987
)
Cash flows from (used in) financing
activities:
Payment of lease obligations
(1,729
)
(1,770
)
(6,974
)
(6,733
)
Lease incentives received
—
—
—
3,858
Repurchase of shares
(36,615
)
—
(36,615
)
—
Proceeds from exercise of stock
options
10,839
6,345
31,554
29,715
(27,505
)
4,575
(12,035
)
26,840
Increase (decrease) in cash and cash
equivalents
12,721
(25,997
)
10
(23,629
)
Cash and cash equivalents, beginning of
year
160,303
202,764
175,347
203,220
Effects of exchange rates on cash and cash
equivalents
$
1,820
$
(1,420
)
$
(513
)
$
(4,244
)
Cash and cash equivalents, end of year
174,844
175,347
174,844
175,347
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228712992/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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