TechDogs-"Kinaxis Inc. Reports Second Quarter 2023 Results"

Enterprise Solutions

Kinaxis Inc. Reports Second Quarter 2023 Results

By Business Wire

Business Wire
Overall Rating
  • Q2 SaaS revenue grows 25%, adjusted EBITDA1 margin of 14%
  • Record number of quarterly customer wins pushes customer base over 300
  • Annual recurring revenue grows 22%

OTTAWA--(BUSINESS WIRE)--Kinaxis® (TSX:KXS), the leading provider of supply chain management solutions, reported results for its second quarter ended June 30, 2023. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

We had a record number of customer wins, an increasing win rate against competitors, and the highest amount of incremental subscription business won in any second quarter in Kinaxis' history,” said John Sicard, president and CEO of Kinaxis. “While we need to remain appropriately cautious about the global economy, we continue to see a persistent urgency to transform supply chain management practices. Siloed approaches are giving way to a concurrent, end-to-end orchestration model and Kinaxis remains alone in its ability to deliver on that vision.”

Q2 2023 Highlights

$ USD thousands, except as otherwise indicated

Q2 2023

Q2 2022

Change

Total Revenue

105,772

80,800

31 %

SaaS

64,104

51,109

25 %

Subscription term licenses

7,086

378

1775 %

Professional services

29,991

25,386

18 %

Maintenance and support

4,591

3,927

17 %

Gross profit
Margin

63,670
60%

49,776
62%

28 %

Profit (loss)
Per diluted share

(2,540)
$(0.09)

(2,632)
$(0.10)

3 %

Adjusted EBITDA1
Margin

15,202
14%

10,376
13%

47 %

Cash from operating activities

13,943

8,415

66 %

(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.

Key Performance Indicators

The company’s Annual Recurring Revenue2 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 22% to $293 million at the end of the quarter.

$USD millions

Q2 2023

Q2 2022

Change

Annual recurring revenue2

293

241

22 %

(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 June 30, 2023.

$USD millions

Remainder of

2023

2024

2025 and later

Total

SaaS

127.4

205.0

210.1

542.5

Maintenance and support

9.3

16.1

16.2

41.6

Subscription term licenses

2.3

0.4

0.1

2.8

Total

139.0

221.5

226.4

586.9

Financial Guidance

Kinaxis is reiterating its fiscal 2023 financial guidance, as follows.

FY 2023 Guidance

Total revenue

$425-435 million

SaaS

25-27% growth

Subscription term license

$16-18 million

Adjusted EBITDA1 margin

14-16%

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 June 30, 2023 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call

Kinaxis will host a conference call tomorrow, August 10, 2023, 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, August 10, 2023

TIME:

8:30 a.m. Eastern Time

CALL REGISTRATION:

https://conferencingportals.com/event/wAzPWobN

WEBCAST:

https://events.q4inc.com/attendee/842174481 (available for three months) 

REPLAY:

(800)-770-2030 or (647)-362-9199 

Available through August 24, 2023 

Reference number: 29488 

About Kinaxis Inc.

Everyday volatility and uncertainty demand quick action. Kinaxis® delivers the agility to make fast, confident decisions across integrated business planning and the digital supply chain. People can plan better, live better and change the world. Trusted by innovative brands, we combine human intelligence with AI and concurrent planning to help companies plan for any future, monitor risks and opportunities and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone can know sooner, act faster and remove waste. For more Kinaxis news, follow us on LinkedIn or Twitter.

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 June 30,

Six months ended June 30,

2023

2022

2023

2022

(In thousands of USD)

(In thousands of USD)

Profit (loss)

(2,540

)

(2,632

)

(1,351

)

9,890

Change in fair value of contingent consideration

462

2,656

Share-based compensation

9,155

6,503

17,374

12,506

Adjusted profit

7,077

3,871

18,679

22,396

Income tax expense

997

986

1,301

8,114

Depreciation and amortization

6,517

6,061

13,404

11,975

Foreign exchange loss (gain)

2,374

(623

)

2,109

542

Net finance expense (income)

(1,763

)

81

(3,149

)

498

8,125

6,505

13,665

21,129

Adjusted EBITDA

15,202

10,376

32,344

43,525

Adjusted EBITDA as a percentage of revenue

14

%

13

%

16

%

24

%

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, 2023; and
  • SaaS growth and increased profitability in years beyond 2023; and
  • contracted revenue in future periods, including 2023, 2024 and 2025 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 2023 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 2023, 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 2023, 2024 and 2025 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 March 1, 2023, 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)
(Unaudited)

June 30,
2023

December 31,
2022

Assets

Current assets:

Cash and cash equivalents

201,608

175,347

Short-term investments

91,789

50,476

Trade and other receivables

120,773

157,657

Prepaid expenses

14,383

13,660

428,553

397,140

Non-current assets:

Unbilled receivables

3,134

7,245

Other receivables

954

971

Prepaid expenses

2,389

2,395

Investment tax credits recoverable

9,000

7,591

Deferred tax assets

2,368

1,065

Contract acquisition costs

26,283

24,892

Property and equipment

46,216

51,852

Right-of-use assets

49,821

53,537

Intangible assets

25,815

28,271

Goodwill

74,020

73,314

240,000

251,133

668,553

648,273

Liabilities and Shareholders’ Equity

Current liabilities:

Trade payables and accrued liabilities

35,524

40,107

Deferred revenue

120,261

133,467

Provisions

296

Contingent consideration

6,021

9,146

Lease obligations

6,341

6,991

168,147

190,007

Non-current liabilities:

Lease obligations

47,994

49,977

Deferred tax liabilities

5,172

6,861

53,166

56,838

Shareholders’ equity:

Share capital

278,497

244,713

Contributed surplus

77,988

65,129

Accumulated other comprehensive income (loss)

364

(156

)

Retained earnings

90,391

91,742

447,240

401,428

668,553

648,273

Kinaxis Inc.

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

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Revenue

$

105,772

$

80,800

$

206,902

$

178,908

Cost of revenue

42,102

31,024

82,231

59,490

Gross profit

63,670

49,776

124,671

119,418

Operating expenses:

Selling and marketing

28,417

21,138

52,581

38,264

Research and development

21,002

18,076

40,931

36,233

General and administrative

14,777

12,817

29,568

26,001

64,196

52,031

123,080

100,498

(526

)

(2,255

)

1,591

18,920

Other income (expense):

Foreign exchange gain (loss)

(2,374

)

623

(2,109

)

(542

)

Net finance and other income (expense)

1,819

(14

)

3,124

(374

)

Change in fair value of contingent consideration

(462

)

(2,656

)

(1,017

)

609

(1,641

)

(916

)

Profit (loss) before income taxes

(1,543

)

(1,646

)

(50

)

18,004

Income tax expense

997

986

1,301

8,114

Profit (loss)

(2,540

)

(2,632

)

(1,351

)

9,890

Other comprehensive income (loss):

Items that are or may be reclassified subsequently to profit:

Foreign currency translation differences - foreign operations

(423

)

(1,059

)

289

(1,439

)

Change in net unrealized gain on cash flow hedges

154

231

(269

)

(1,059

)

520

(1,439

)

Total comprehensive income (loss)

$

(2,809

)

$

(3,691

)

$

(831

)

$

8,451

Basic earnings (loss) per share

$

(0.09

)

$

(0.10

)

$

(0.05

)

$

0.36

Weighted average number of basic Common Shares

28,318,956

27,593,598

28,181,727

27,537,845

Diluted earnings (loss) per share

$

(0.09

)

$

(0.10

)

$

(0.05

)

$

0.35

Weighted average number of diluted Common Shares

28,318,956

27,593,598

28,181,727

28,478,656

Kinaxis Inc. 

Consolidated 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, 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

Loss

(1,351

)

(1,351

)

Other comprehensive income

231

289

520

520

Total comprehensive income (loss)

231

289

520

(1,351

)

(831

)

Share options exercised

25,706

(6,062

)

19,644

Performance share units vested

2,297

(2,297

)

Share based payments

21,218

21,218

Shares issued for contingent consideration

5,781

5,781

Total shareholder transactions

33,784

12,859

46,643

Balance, June 30, 2023

278,497

77,988

231

133

364

90,391

447,240

Kinaxis Inc.

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

Three Months Ended June 30,

Six months ended June 30,

2023

2022

2023

2022

Cash flows from operating activities:

Profit (loss)

$

(2,540

)

$

(2,632

)

$

(1,351

)

$

9,890

Items not affecting cash:

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

5,186

5,437

10,661

10,768

Amortization of intangible assets

1,331

624

2,743

1,207

Share-based payments

9,155

6,503

17,374

12,506

Net finance expense (income)

(1,763

)

81

(3,149

)

498

Change in fair value of contingent consideration

462

2,656

Income tax expense

997

986

1,301

8,114

Investment tax credits recoverable

(494

)

(1,482

)

(1,409

)

(2,524

)

Change in operating assets and liabilities

1,587

(64

)

24,546

(7,296

)

Interest received

1,934

372

3,195

402

Interest paid

(415

)

(475

)

(848

)

(929

)

Income taxes paid

(1,497

)

(935

)

(2,871

)

(2,228

)

13,943

8,415

52,848

30,408

Cash flows used in investing activities:

Acquisition of business, net of cash acquired

9

(3,019

)

Purchase of property and equipment and intangible assets

(769

)

(1,275

)

(1,632

)

(7,554

)

Purchase of short-term investments

(45,588

)

(15,154

)

(100,671

)

(30,160

)

Redemption of short-term investments

45,154

15,154

60,160

30,160

(1,203

)

(1,266

)

(42,143

)

(10,573

)

Cash flows from financing activities:

Payment of lease obligations

(1,737

)

(1,754

)

(3,556

)

(3,231

)

Lease incentives received

3,858

3,858

Proceeds from exercise of stock options

9,133

516

19,644

7,693

7,396

2,620

16,088

8,320

Increase in cash and cash equivalents

20,136

9,769

26,793

28,155

Cash and cash equivalents, beginning of period

181,566

221,983

175,347

203,220

Effects of exchange rates on cash and cash equivalents

(94

)

(3,890

)

(532

)

(3,513

)

Cash and cash equivalents, end of period

$

201,608

$

227,862

$

201,608

$

227,862


Contacts

Investor Relations
Rick Wadsworth | Kinaxis
rwadsworth@kinaxis.com
613-907-7613

Media Relations
Jaime Cook | Kinaxis
jcook@kinaxis.com
289-552-4640

First published on Thu, Aug 10, 2023

Enjoyed what you read? Great news – there’s a lot more to explore!

Dive into our content repository of the latest tech news, a diverse range of articles spanning introductory guides, product reviews, trends and more, along with engaging interviews, up-to-date AI blogs and hilarious tech memes!

Also explore our collection of branded insights via informative white papers, enlightening case studies, in-depth reports, educational videos and exciting events and webinars from leading global brands.

Head to the TechDogs homepage to Know Your World of technology today!

Disclaimer - Reference to any specific product, software or entity does not constitute an endorsement or recommendation by TechDogs nor should any data or content published be relied upon. The views expressed by TechDogs’ members and guests are their own and their appearance on our site does not imply an endorsement of them or any entity they represent. Views and opinions expressed by TechDogs’ Authors are those of the Authors and do not necessarily reflect the view of TechDogs or any of its officials. All information / content found on TechDogs’ site may not necessarily be reviewed by individuals with the expertise to validate its completeness, accuracy and reliability.

Tags:

Supply Chain Management SoftwareKinaxis® Supply Chain Management Solutions Integrated Business Planning

References:

Join The Discussion

  • Dark
  • Light