News Release

Kinaxis Inc. Reports First Quarter 2022 Results

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  • SaaS revenue grows 22% to $49.3 million, total revenue grows 70% to $98.1 million, adjusted EBITDA1 margin of 34%
  • New customer wins match Q4 '21 record levels
  • ARR grows 24% in constant currency
  • Company increases guidance

OTTAWA, ON, May 5, 2022 /CNW/ - Kinaxis® (TSX: KXS) , the authority in driving agility for fast, confident decision-making in an unpredictable world, reported results for its first quarter ended March 31, 2022. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

"We are pleased to report a very strong start to the year with first quarter financial performance beating our expectations and ultimately driving an improved outlook for the full calendar year. Momentum in winning new customers continues to accelerate as more companies consider replacing inflexible, legacy cascaded planning techniques in favour of a more agile concurrent planning approach." said John Sicard, President and CEO of Kinaxis. "Uncertainty and disruption are the only true constants in today's supply chain, regardless of industry. We continue to be humbled by the number of world leading companies that put their trust and confidence in Kinaxis and RapidResponse to bring about transformative improvement in supply chain planning performance. We will continue to invest to meet the growing opportunity in front of us."

Q1 2022 Highlights

$ USD thousands, except as otherwise indicated

Q1 2022

Q1 2021

Change

Total Revenue

98,108

57,728

70%

SaaS

49,320

40,576

22%

Subscription term licenses

23,474

2,059

1,040%

Professional services

21,458

12,027

78%

Maintenance and support

3,856

3,066

26%

Gross profit

69,642

37,222

87%

Margin 

71%

64%


Profit

12,522

(1,534)

nm

Per diluted share

$0.44

($0.06)


Adjusted EBITDA(1)
Margin

33,149  
34%  

9,041  
16%  

267%

 

Cash from operating activities

21,993

20,649

7%

(1)      "Adjusted EBITDA" is a non-IFRS measure and is not a recognized, defined or a standardized measure under IFRS. This measure as well as 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 24% in constant currency to $236 million at the end of the quarter

$USD millions

Q1 2022

Q1 2021

Annual recurring revenue2

232

22%

191

18%

Year-over-year growth

Annual recurring revenue2, constant currency

Year-over-year growth

236

24%

189

17%

(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, 2022.


$USD millions


Remainder of
2022


2023


2024 and
later



Total

SaaS


145.2


151.6


148.4


445.2

Maintenance and support


10.8


10.5


12.3


33.6

Subscription term licenses


0.3


-


0


0.3

Total


156.3


162.1


160.7


479.1

 

Financial Guidance
Based on the current business outlook, Kinaxis is updating its fiscal 2022 financial guidance, as follows:


FY 2022 Guidance

Total revenue

$345-355 million

SaaS

23-25% growth

Subscription term license

$32-34 million

Adjusted EBITDA(1) margin       

 16-19%

 

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 three months ended March 31, 2022 are available on Kinaxis' website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, May 6, 2022, 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:                                   Friday, May 6, 2022
TIME:                                    8:30 a.m. Eastern Time
CALL REGISTRATION:        https://dpregister.com/sreg/10165881/f258f2c0cd
WEBCAST:                           https://bit.ly/3rpPeqs (available for three months)
REPLAY:                               (877)-344-7529
                                              Available through May 20, 2022
                                              Reference number: 9783912

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
This news 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

March 31,


2022


2021


(In thousands of USD)





Profit (loss)

$                  12,522


$                   (1,534)

Share-based compensation

6,003


5,307

Adjusted profit

$                  18,525


$                    3,773

Income tax expense

7,128


68

Depreciation and amortization

5,914


4,470

Foreign exchange loss

1,165


468

Net finance expense

417


262


14,624


5,268

Adjusted EBITDA

$                  33,149


$                    9,041

Adjusted EBITDA as a percentage of revenue        

34%


16%

 

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, 2022; and
  • contracted revenue in future periods, including 2022, 2023 and 2024 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 2022 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, is 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; and
  • with respect to Adjusted EBITDA, our ability to contain expense levels while expanding our business.

Our guidance and commentary for achievement of contracted revenue in future periods, including in 2022, 2023 and 2024 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, 2022, under the heading "Risk Factors" in our Annual Information Form dated March 25, 2022 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

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


March 31,
2022

December 31,
2021




Assets






Current assets:



      Cash and cash equivalents

$              221,983

$              203,220

      Short-term investments

30,175

30,168

      Trade and other receivables

106,715

89,247

      Prepaid expenses

11,649

8,502


370,522

331,137

Non-current assets:



      Unbilled receivables

1,371

512

      Other receivables

1,051

1,096

      Prepaid expenses

3,095

1,780

      Investment tax credits recoverable

4,658

3,616

      Deferred tax assets

2,311

6,000

      Contract acquisition costs

22,501

19,691

      Property and equipment

54,472

52,093

      Right-of-use assets

57,452

53,578

      Intangible assets

11,095

10,778

      Goodwill

42,420

39,988


200,426

189,132





$              570,948

$              520,269




Liabilities and Shareholders' Equity






Current liabilities:



      Trade payables and accrued liabilities

$                39,583

$                43,328

      Deferred revenue

121,183

99,239

      Provisions

551

716

      Lease obligations

3,324

2,526


164,641

145,809

Non-current liabilities:



      Lease obligations

57,476

53,233

      Deferred tax liabilities

2,340

9


59,816

53,242

Shareholders' equity:



      Share capital

205,626

195,414

      Contributed surplus

57,658

54,739

      Accumulated other comprehensive loss

(977)

(597)

      Retained earnings

84,184

71,662


346,491

321,218





$              570,948

$              520,269

 

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


Three months ended March 31,


2022

2021




Revenue

$                98,108

$                57,728




Cost of revenue

28,466

20,506




Gross profit

69,642

37,222




Operating expenses:



      Selling and marketing

17,126

12,838

      Research and development

18,157

13,682

      General and administrative

13,184

11,542


48,467

38,062





21,175

(840)




Other expense:



      Foreign exchange loss

(1,165)

(468)

      Net finance and other expense

(360)

(158)


(1,525)

(626)




Profit (loss) before income taxes

19,650

(1,466)




Income tax expense

7,128

68




Profit (loss)

12,522

(1,534)




Other comprehensive loss






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



      Foreign currency translation differences - foreign operations

(380)

(269)




Total comprehensive income (loss)

$                12,142

$                 (1,803)




Basic earnings (loss) per share

$                    0.46

$                   (0.06)




Weighted average number of basic Common Shares

27,481,560

27,109,227




Diluted earnings (loss) per share

$                    0.44

$                   (0.06)




Weighted average number of diluted Common Shares

28,466,916

27,109,227




 

Kinaxis Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity 
(Expressed in thousands of USD)
(Unaudited)


 

Share
capital

 

Contributed
surplus

Accumulated
other
comprehensive
loss

 

Retained
earnings

 

Total
equity







Balance, December 31, 2020

$         173,104

$           35,846

$                    (20)

$           72,827

$         281,757







Loss

(1,534)

(1,534)

Other comprehensive loss

(269)

(269)

Total comprehensive loss

(269)

(1,534)

(1,803)







Share options exercised

3,159

(899)

2,260

Share based payments

5,307

5,307

Total shareholder transactions

3,159

4,408

7,567







Balance, March 31, 2021

$         176,263

$           40,254

$                  (289)

$           71,293

$         287,521







Balance, December 31, 2021

$         195,414

$           54,739

$                  (597)

$           71,662

$         321,218







Profit

12,522

12,522

Other comprehensive loss

(380)

(380)

Total comprehensive income (loss)

(380)

12,522

12,142







Share options exercised

9,197

(2,020)

7,177

Restricted share units vested

598

(598)

Performance share units vested

417

(417)

Share based payments

5,954

5,954

Total shareholder transactions

10,212

2,919

13,131







Balance, March 31, 2022

$         205,626

$           57,658

$                  (977)

$           84,184

$         346,491

 

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


Three months ended March 31,


2022

2021




Cash flows from operating activities:






   Profit (loss)

$                12,522

$                 (1,534)

   Items not affecting cash:



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

5,331

3,909

      Amortization of intangible assets

583

561

      Share-based payments

6,003

5,307

      Net finance expense

417

158

      Income tax expense

7,128

68

      Investment tax credits recoverable

(1,042)

(425)

   Change in operating assets and liabilities

(7,232)

12,940

   Interest received

30

23

   Interest paid

(454)

(184)

   Income taxes paid

(1,293)

(174)


21,993

20,649




Cash flows used in investing activities:






   Acquisition of business, net of cash acquired

(3,028)

(800)

   Purchase of property and equipment

(6,279)

(4,441)

   Purchase of short-term investments

(15,006)

(15,006)

   Redemption of short-term investments

15,006

15,006


(9,307)

(5,241)




Cash flows from financing activities:






   Payment of lease obligations

(1,477)

(1,172)

   Proceeds from exercise of stock options

7,177

2,260


5,700

1,088




Increase in cash and cash equivalents

18,386

16,496




Cash and cash equivalents, beginning of period

203,220

182,958




Effects of exchange rates on cash and cash equivalents

377

(311)




Cash and cash equivalents, end of period

$              221,983

$              199,143

 

SOURCE Kinaxis Inc.

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