News Release

Kinaxis Inc. Reports First Quarter 2023 Results

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  • Q1 SaaS revenue grows 28%, adjusted EBITDA1 margin of 17%
  • Annual recurring revenue grows 23% as company continues to win marquee brands

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, 2023. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

“Our first quarter results provide a solid start to support our outlook for another Rule of 402 performance this year. Our win rate remains high, and we continue to secure marquee brands even as an uncertain economic backdrop drives some prospects to exercise extra rigor in their purchasing processes,” said John Sicard, President and CEO of Kinaxis. “We recently announced our relationship with Havi, which manages the supply chains of the world’s largest quick service restaurant brands. Additionally, during the first quarter we added two more iconic brands, including another household name in QSR and one of the most recognized and oldest snacking powerhouses globally. We’re thrilled to see market leaders continuing to partner with Kinaxis to leverage the power of concurrent planning and our unique ability to combine state-of-the-art machine learning/AI, optimization, and configurable heuristics to drive their digital transformations.”

Q1 2023 Highlights

           

$ USD thousands, except as otherwise indicated

 

Q1 2023

 

Q1 2022

 

Change

Total Revenue

 

101,130

 

98,108

 

3%

SaaS

 

63,145

 

49,320

 

28%

Subscription term licenses

 

7,028

 

23,474

 

(70%)

Professional services

 

26,568

 

21,458

 

24%

Maintenance and support

 

4,389

 

3,856

 

14%

Gross profit

 

61,001

 

69,642

 

(12%)

Margin

 

60%

 

71%

 

 

Profit

 

1,189

 

12,522

 

(91%)

Per diluted share

 

$0.04

 

$0.44

 

 

Adjusted EBITDA1

 

17,142

 

33,149

 

(48%)

Margin

 

17%

 

34%

   

Cash (used in) from operating activities

 

38,905

 

21,993

 

77%

(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.

(2)

 

Rule of 40 calculated as the sum of SaaS revenue growth and adjusted EBITDA margin results.

Key Performance Indicators
The company’s Annual Recurring Revenue3 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 23% to $285 million at the end of the quarter.

$USD millions

Q1 2023

Q1 2022

Change

Annual recurring revenue3

285

232

23%

(3)

 

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, 2023.


$USD millions

 

Remainder of
2023

 


2024

 


2025 and later

 


Total

SaaS

 

180.2

 

185.5

 

161.9

 

527.6

Maintenance and support

 

12.4

 

14.3

 

12.3

 

38.9

Subscription term licenses

 

1.0

 

0.2

 

-

 

1.2

Total

 

193.5

 

200.0

 

174.2

 

567.7

Financial Guidance
Kinaxis is updating 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 March 31, 2023 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, May 4, 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, May 4, 2023

TIME:

 

8:30 a.m. Eastern Time

CALL REGISTRATION:

 

https://conferencingportals.com/event/eopSfgtI

WEBCAST:

 

https://events.q4inc.com/attendee/676139643 (available for three months)

REPLAY:

 

(800)-770-2030 or (647)-362-9199

Available through May 18, 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 March 31,

 

 

 

2023

 

 

 

 

2022

 

 

(In thousands of USD)

Profit

 

$

1,189

 

 

 

$

12,522

 

Change in fair value of contingent consideration

 

 

2,194

 

 

 

 

 

Share-based compensation

 

 

8,219

 

 

 

 

6,003

 

Adjusted profit

 

$

11,602

 

 

 

$

18,525

 

Income tax expense

 

 

304

 

 

 

 

7,128

 

Depreciation and amortization

 

 

6,887

 

 

 

 

5,914

 

Foreign exchange loss (gain)

 

 

(265

)

 

 

 

1,165

 

Net finance expense (income)

 

 

(1,386

)

 

 

 

417

 

 

 

 

5,540

 

 

 

 

14,624

 

Adjusted EBITDA

 

$

17,142

 

 

 

$

33,149

 

Adjusted EBITDA as a percentage of revenue

 

 

17

%

 

 

 

34

%

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
  • 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 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.

Consolidated Statements of Financial Position
(Expressed in thousands of USD)
(Unaudited)

   
     
 

March 31,

December 31,

 

2023

2022

 

 

 

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

181,566

$

175,347

 

Short-term investments

 

91,111

 

50,476

 

Trade and other receivables

 

119,218

 

157,657

 

Prepaid expenses

 

15,965

 

13,660

 

 

 

407,860

 

397,140

 

Non-current assets:

 

 

Unbilled receivables

 

1,285

 

7,245

 

Other receivables

 

989

 

971

 

Prepaid expenses

 

2,577

 

2,395

 

Investment tax credits recoverable

 

8,506

 

7,591

 

Deferred tax assets

 

837

 

1,065

 

Contract acquisition costs

 

25,764

 

24,892

 

Property and equipment

 

48,989

 

51,852

 

Right-of-use assets

 

51,747

 

53,537

 

Intangible assets

 

27,199

 

28,271

 

Goodwill

 

74,126

 

73,314

 

 

 

242,019

 

251,133

 

 

 

 

 

$

649,879

$

648,273

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

Current liabilities:

 

 

Trade payables and accrued liabilities

$

30,805

$

40,107

 

Deferred revenue

 

124,245

 

133,467

 

Provisions

 

119

 

296

 

Contingent consideration

 

5,559

 

9,146

 

Lease obligations

 

6,819

 

6,991

 

 

 

167,547

 

190,007

 

Non-current liabilities:

 

 

Lease obligations

 

48,433

 

49,977

 

Deferred tax liabilities

 

4,208

 

6,861

 

 

 

52,641

 

56,838

 

Shareholders’ equity:

 

 

Share capital

 

266,595

 

244,713

 

Contributed surplus

 

69,532

 

65,129

 

Accumulated other comprehensive gain (loss)

 

633

 

(156

)

Retained earnings

 

92,931

 

91,742

 

 

 

429,691

 

401,428

 

 

$

649,879

$

648,273

 

           

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

 
   

 

Three months ended March 31,

 

 

2023

 

 

2022

 

Revenue

$

101,130

 

$

98,108

 

 

 

 

Cost of revenue

 

40,129

 

 

28,466

 

 

 

 

Gross profit

 

61,001

 

 

69,642

 

 

 

 

Operating expenses:

 

 

Selling and marketing

 

24,164

 

 

17,126

 

Research and development

 

19,929

 

 

18,157

 

General and administrative

 

14,791

 

 

13,184

 

 

 

58,884

 

 

48,467

 

 

 

 

 

 

2,117

 

 

21,175

 

 

 

 

Other income (expense):

 

 

Foreign exchange gain (loss)

 

265

 

 

(1,165

)

Net finance and other income (expense)

 

1,305

 

 

(360

)

Change in fair value of contingent consideration

 

(2,194

)

 

 

 

 

(624

)

 

(1,525

)

 

 

 

Profit before income taxes

 

1,493

 

 

19,650

 

 

 

 

Income tax expense

 

304

 

 

7,128

 

 

 

 

Profit

 

1,189

 

 

12,522

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

Items that are or may be reclassified subsequently to profit:

 

 

Foreign currency translation differences - foreign operations

 

712

 

 

(380

)

Unrealized gain on cash flow hedges

 

77

 

 

 

 

 

 

Total comprehensive income

$

1,978

 

$

12,142

 

 

 

 

Basic earnings per share

$

0.04

 

$

0.46

 

Weighted average number of basic Common Shares

 

28,086,983

 

 

27,481,560

 

Diluted earnings per share

$

0.04

 

$

0.44

 

Weighted average number of diluted Common Shares

 

28,941,335

 

 

28,466,916

 

             
             

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

   
                   

 

 

 

 

 

Accumulated other comprehensive income

 

 

   

 

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

 

   

 

 

 

 

 

 

 

 

 

   

1,189

 

 

1,189

Other comprehensive income

 

   

 

 

 

77

 

 

712

 

 

 

789

 

   

 

 

789

Total comprehensive income

 

   

 

 

 

77

 

 

712

 

 

 

789

 

   

1,189

 

$

1,978

 

 

     

 

 

 

 

 

     

 

Share options exercised

 

13,804

   

(3,293

)

 

 

 

 

 

 

 

 

   

 

 

10,511

Performance share units vested

 

2,297

   

(2,297

)

 

 

 

 

 

 

 

 

   

 

 

Share based payments

 

   

9,993

 

 

 

 

 

 

 

 

 

   

 

 

9,993

Shares issued from contingent consideration

 

5,781

   

 

 

 

 

 

 

 

 

 

   

 

 

5,781

Total shareholder transactions

 

21,882

   

4,403

 

 

 

 

 

 

 

 

 

   

 

 

26,285

 

 

     

 

 

 

 

 

     

 

Balance, March 31, 2023

$

266,595

 

$

69,532

 

 

$

77

 

$

556

 

 

$

633

 

 

$

92,931

 

$

429,691

                           

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

 
   

 

Three Months Ended March 31,

 

 

2023

 

 

2022

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Profit

$

1,189

 

$

12,522

 

Items not affecting cash:

 

 

             

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

 

5,475

 

 

5,331

 

Amortization of intangible assets

 

1,412

 

 

583

 

Share-based payments

 

8,219

 

 

6,003

 

Net finance expense (income)

 

(1,386

)

 

417

 

Change in fair value of contingent consideration

 

2,194

 

 

 

Income tax expense

 

304

 

 

7,128

 

Investment tax credits recoverable

 

(915

)

 

(1,042

)

Change in operating assets and liabilities

 

22,959

 

 

(7,232

)

Interest received

 

1,261

 

 

30

 

Interest paid

 

(433

)

 

(454

)

Income taxes received (paid)

 

(1,374

)

 

(1,293

)

 

 

38,905

 

 

21,993

 

 

 

 

Cash flows used in investing activities:

 

 

 

 

 

Acquisition of business, net of cash acquired

 

 

 

(3,028

)

Purchase of property and equipment and intangible assets

 

(863

)

 

(6,279

)

Purchase of short-term investments

 

(55,083

)

 

(15,006

)

Redemption of short-term investments

 

15,006

 

 

15,006

 

 

 

(40,940

)

 

(9,307

)

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Payment of lease obligations

 

(1,819

)

 

(1,477

)

Proceeds from exercise of stock options

 

10,511

 

 

7,177

 

 

 

8,692

 

 

5,700

 

 

 

 

(Decrease) increase in cash and cash equivalents

 

6,657

 

 

18,386

 

 

 

 

Cash and cash equivalents, beginning of period

 

175,347

 

 

203,220

 

 

 

 

Effects of exchange rates on cash and cash equivalents

 

(438

)

 

377

 

 

 

 

Cash and cash equivalents, end of period

$

181,566

 

$

221,983

 

 

 

 

 

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

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

Source: Kinaxis Inc.

Contact Us

We love working with journalists to share compelling, unique stories. If you’re a journalist and would like to talk, please get in touch with the appropriate team member.

Media Relations
Jaime Cook | Kinaxis
Tel: +1 289-552-4640 
jcook@kinaxis.com

Investor Relations
Rick Wadsworth | Kinaxis
Tel: +1 613-907-7613
rwadsworth@kinaxis.com

Investor relations

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