News Release

Kinaxis Inc. Reports Fourth Quarter 2022 Results

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  • Q4 SaaS revenue grows 26% (32% cc1), total revenue grows 44% (51% cc1), ARR grows 24% (26% cc1), and adjusted EBITDA1 margin hits 21% (22% cc1)
  • For FY 2022, Company adds record number of new customers and exceeds initial targets for total revenue and adjusted EBITDA margin
  • FY 2023 guidance reflects ongoing SaaS revenue growth acceleration, to 25-27%

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

“Kinaxis finished the year with clear signs of momentum in the business. We exceeded our initial total revenue and adjusted EBITDA targets despite currency headwinds, grew our customer base by 40%, and achieved Rule of 402 performance. From a constant currency perspective, we reported SaaS revenue growth of 28%, and a 23% Adjusted EBITDA margin. I couldn’t be prouder of the Kinaxis team,” said John Sicard, President and CEO of Kinaxis. “Our unique concurrent planning technique, which combines heuristics, optimization and state-of-the art machine learning/AI, puts us in a leadership position to take advantage of the very strong demand backdrop in our markets, and will be key to driving a successful 2023, including another year of accelerated SaaS revenue growth. We will continue to invest for the long-term to cement our leadership position and in anticipation of even faster SaaS growth and increased profitability in coming years.”

Q4 2022 Highlights

$ USD thousands, except as otherwise indicated

Q4 2022

Q4 2021

Change

Total Revenue

98,483

68,506

44%

(constant currency1)

103,528

 

51%

SaaS

58,839

46,855

26%

(constant currency1)

61,777

 

32%

Subscription term licenses

9,131

1,442

533%

Professional services

26,156

17,036

54%

Maintenance and support

4,357

3,173

37%

Gross profit

61,266

43,887

40%

Margin

62%

64%

 

Profit

8,562

(2,919)

nm

Per diluted share

$0.30

$(0.11)

 

Adjusted EBITDA1

21,116

11,277

87%

Margin

21%

17%

 

(constant currency1)

22,913

 

103%

 

22%

 

 

Cash (used in) from operating activities

(2,327)

3,238

(172%)

(1)

 

“Adjusted EBITDA” and constant currency (or “cc”) metrics are non-IFRS measures and are not recognized, defined or standardized measures under IFRS. These 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.

FY 2022 Highlights

$ USD thousands, except as otherwise indicated

FY 2022

FY 2021

Change

Total Revenue

366,889

250,726

46%

(constant currency1)

384,926

 

54%

SaaS Revenue

213,306

174,463

22%

(constant currency1)

223,299

 

28%

Adjusted EBITDA1

79,446

39,851

99%

Margin

22%

16%

 

(constant currency1)

88,528

 

122%

 

23%

 

 

Key Performance Indicators
The company’s Annual Recurring Revenue3 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 26% in constant currency1 to $279 million at the end of the quarter.

$USD millions

Q4 2022

Q4 2021

Change

Annual recurring revenue3

 

274

 

221

 

24%

 

Annual recurring revenue3,
constant currency1

279

 

26%

(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 December 31, 2022.

$USD millions

Remainder of 2023

2024

2025 and later

Total

SaaS

230.1

173.7

145.9

549.7

Maintenance and support

16.2

14.0

12.1

42.3

Subscription term licenses

6.1

0.2

-

6.3

Total

252.4

187.9

158.0

598.3

Financial Guidance
Kinaxis is introducing fiscal 2023 financial guidance, as follows.

 

FY 2023 Guidance

Total revenue

$420-430 million

SaaS

25-27% growth

Subscription term license

$12-14 million

Adjusted EBITDA1 margin

13-15%

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 year ended December 31, 2022 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, March 2, 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, March 2, 2023

TIME:    

8:30 a.m. Eastern Time

CALL REGISTRATION:

   

https://conferencingportals.com/event/eopSfgtI

WEBCAST:

   

https://events.q4inc.com/attendee/549598293 (available for three months)

REPLAY:

   

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

     

Available through March 16, 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 December 31,

 

Year ended December 31,

 

 

2022

 

2021

 

2022

 

 

2021

 

 

(In thousands of USD)

 

 

 

 

 

 

 

 

 

 

 

Profit (loss)

$

8,562

 

 

$

(2,919

)

 

$

20,080

 

 

 

$

(1,165

)

 

Change in fair value of contingent consideration

 

1,367

 

 

 

 

 

 

(826

)

 

 

 

 

 

Share-based compensation

 

7,558

 

 

 

6,633

 

 

 

26,238

 

 

 

 

24,343

 

 

Non-recurring other items

 

 

 

 

716

 

 

 

 

 

 

 

(7,190

)

 

Adjusted profit

$

17,487

 

 

$

4,430

 

 

$

45,492

 

 

 

$

15,988

 

 

Income tax expense (recovery)

 

(635

)

 

 

(32

)

 

 

11,406

 

 

 

 

2,262

 

 

Depreciation and amortization

 

6,761

 

 

 

6,557

 

 

 

25,060

 

 

 

 

20,409

 

 

Foreign exchange loss (gain)

 

(1,648

)

 

 

194

 

 

 

(1,499

)

 

 

 

558

 

 

Net finance expense (income)

 

(849

)

 

 

128

 

 

 

(1,013

)

 

 

 

634

 

 

 

 

3,629

 

 

 

6,847

 

 

 

33,954

 

 

 

 

23,863

 

 

Adjusted EBITDA

$

21,116

 

 

$

11,277

 

 

$

79,446

 

 

 

$

39,851

 

 

Adjusted EBITDA as a percentage of revenue

 

21.4

%

 

 

16.5

%

 

 

21.7

%

 

 

 

15.9

%

 

                     

Constant Currency metrics
We present SaaS revenue, total revenue, adjusted EBITDA, ARR and their related growth rates under constant currency, a non-IFRS measure, to provide a framework for assessing estimates of how our business would have performed excluding the effect of foreign currency rate fluctuations. For SaaS revenue, total revenue and adjusted EBITDA under constant currency, results for entities reporting in currencies other than U.S. Dollars (“USD”) are converted into USD at the average exchange rates in effect during the comparison period (i.e., for Q4 2022, the average exchange rates in effect for Q4 2021), rather than the actual average exchange rates in effect during the current period. For constant currency ARR, we convert all non-US-dollar-denominated recurring subscription amounts at the exchange rates in effect at the end of the comparison period, rather than the exchange rates in effect at the end of the current period.

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 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.

SOURCE: Kinaxis Inc.

Consolidated Statements of Financial Position

(Expressed in thousands of USD)

   
         

 

December 31,
2022

 

December 31,
2021

 

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

175,347

 

$

203,220

 

Short-term investments

 

50,476

 

 

30,168

 

Trade and other receivables

 

157,657

 

 

89,247

 

Prepaid expenses

 

13,660

 

 

8,502

 

 

 

397,140

 

 

331,137

 

Non-current assets:

 

 

 

 

Unbilled receivables

 

7,245

 

 

512

 

Other receivables

 

971

 

 

1,096

 

Prepaid expenses

 

2,395

 

 

1,780

 

Investment tax credits recoverable

 

7,591

 

 

3,616

 

Deferred tax assets

 

1,065

 

 

6,000

 

Contract acquisition costs

 

24,892

 

 

19,691

 

Property and equipment

 

51,852

 

 

52,093

 

Right-of-use assets

 

53,537

 

 

53,578

 

Intangible assets

 

28,271

 

 

10,778

 

Goodwill

 

73,314

 

 

39,988

 

 

 

251,133

 

 

189,132

 

 

 

 

 

 

 

$

648,273

 

$

520,269

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Trade payables and accrued liabilities

$

40,107

 

$

43,328

 

Deferred revenue

 

133,467

 

 

99,239

 

Provisions

 

296

 

 

716

 

Contingent consideration

 

9,146

 

 

 

Lease obligations

 

6,991

 

 

2,526

 

 

 

190,007

 

 

145,809

 

Non-current liabilities:

 

 

 

 

Lease obligations

 

49,977

 

 

53,233

 

Deferred tax liabilities

 

6,861

 

 

9

 

 

 

56,838

 

 

53,242

 

Shareholders’ equity:

 

 

 

 

Share capital

 

244,713

 

 

195,414

 

Contributed surplus

 

65,129

 

 

54,739

 

Accumulated other comprehensive loss

 

(156

)

 

(597

)

Retained earnings

 

91,742

 

 

71,662

 

 

 

401,428

 

 

321,218

 

 

 

 

 

 

 

$

648,273

 

$

520,269

 

             

Consolidated Statements of Comprehensive Income (Loss)

(Expressed in thousands of USD, except share and per share data)

             

 

Three months ended December 31,

 

Year ended December 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

Revenue

$

98,483

 

$

68,506

 

$

366,889

 

$

250,726

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

37,217

 

 

24,619

 

 

131,102

 

 

86,755

 

 

 

 

 

 

 

 

 

 

Gross profit

 

61,266

 

 

43,887

 

 

235,787

 

 

163,971

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing

 

21,213

 

 

16,960

 

 

79,446

 

 

59,078

 

Research and development

 

19,494

 

 

16,465

 

 

74,147

 

 

57,424

 

General and administrative

 

13,804

 

 

13,183

 

 

54,273

 

 

45,550

 

 

 

54,511

 

 

46,608

 

 

207,866

 

 

162,052

 

 

 

 

 

 

 

 

 

 

 

 

6,755

 

 

(2,721

)

 

27,921

 

 

1,919

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

1,648

 

 

(194

)

 

1,499

 

 

(558

)

Net finance and other income (expense)

 

891

 

 

(36

)

 

1,240

 

 

(264

)

Change in fair value of contingent consideration

 

(1,367

)

 

 

 

826

 

 

 

 

 

1,172

 

 

(230

)

 

3,565

 

 

(822

)

 

 

 

 

 

 

 

 

 

Profit before income taxes

 

7,927

 

 

(2,951

)

 

31,486

 

 

1,097

 

 

 

 

 

 

 

 

 

 

Income Tax Expense (recovery):

 

(635

)

 

(32

)

 

11,406

 

 

2,262

 

 

 

 

 

 

 

 

 

 

Profit (loss)

 

8,562

 

 

(2,919

)

 

20,080

 

 

(1,165

)

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Items that are or may be reclassified subsequently to profit:

 

 

 

 

 

 

 

 

Foreign currency translation differences - foreign operations

 

4,539

 

 

(124

)

 

441

 

 

(577

)

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss)

$

13,101

 

$

(3,043

)

$

20,521

 

$

(1,742

)

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

$

0.31

 

$

(0.11

)

$

0.73

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Weighted average number of basic Common Shares

 

27,903,102

 

 

27,372,618

 

 

27,667,100

 

 

27,248,193

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

$

0.30

 

$

(0.11

)

$

0.70

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Weighted average number of diluted Common Shares

 

28,790,951

 

 

27,372,618

 

 

28,609,603

 

 

27,248,193

 
         

 

 

 

 
                 

Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in thousands of USD)

                 

 

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

 

 

 

 

 

 

(1,165

)

 

(1,165

)

Other comprehensive loss

 

 

 

 

(577

)

 

 

 

(577

)

Total comprehensive loss

 

 

 

 

(577

)

 

(1,165

)

 

(1,742

)

 

 

 

 

 

 

 

 

 

Share options exercised

 

14,221

 

(3,459

)

 

 

 

 

 

10,762

 

Restricted share units vested

 

8,089

 

(8,089

)

 

 

 

 

 

 

Share based payments

 

 

30,441

 

 

 

 

 

 

30,441

 

Total shareholder transactions

 

22,310

 

18,893

 

 

 

 

 

 

41,203

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

195,414

 

54,739

 

 

(597

)

 

71,662

 

 

321,218

 

 

 

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

20,080

 

 

20,080

 

Other comprehensive income

 

 

 

 

441

 

 

 

 

441

 

Total comprehensive income

 

 

 

 

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

)

$

91,742

 

$

401,428

 

                             

Consolidated Statements of Cash Flows

(Expressed in thousands of USD)

             

 

Three Months Ended December 31,

 

Year ended December 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss)

$

8,562

 

$

(2,919

)

$

20,080

 

$

(1,165

)

Items not affecting cash:

 

 

 

 

 

 

 

 

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

 

5,363

 

 

5,995

 

 

21,496

 

 

18,164

 

Amortization of intangible assets

 

1,398

 

 

562

 

 

3,564

 

 

2,245

 

Share-based payments

 

7,558

 

 

6,633

 

 

26,238

 

 

24,343

 

Net finance expense (income)

 

(849

)

 

406

 

 

(1,013

)

 

634

 

Change in fair value of contingent consideration

 

1,367

 

 

 

 

(826

)

 

 

Income tax expense (recovery)

 

(635

)

 

(32

)

 

11,406

 

 

2,262

 

Investment tax credits recoverable

 

(601

)

 

(1,356

)

 

(3,975

)

 

(1,527

)

Change in operating assets and liabilities

 

(24,064

)

 

(5,846

)

 

(49,123

)

 

5,523

 

Interest received

 

1,087

 

 

37

 

 

2,546

 

 

428

 

Interest paid

 

(444

)

 

(442

)

 

(1,841

)

 

(1,050

)

Income taxes received (paid)

 

(1,519

)

 

200

 

 

(4,484

)

 

281

 

 

 

(2,327

)

 

3,238

 

 

24,518

 

 

50,138

 

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of business, net of cash acquired

 

(76

)

 

 

 

(36,738

)

 

(800

)

Purchase of property and equipment and intangible assets

 

(8,169

)

 

(11,464

)

 

(18,249

)

 

(33,833

)

Purchase of short-term investments

 

(35,149

)

 

(26,434

)

 

(80,314

)

 

(71,599

)

Redemption of short-term investments

 

15,149

 

 

26,434

 

 

60,314

 

 

71,599

 

 

 

(28,245

)

 

(11,464

)

 

(74,987

)

 

(34,633

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of lease obligations

 

(1,770

)

 

(1,411

)

 

(6,733

)

 

(4,911

)

Lease incentive received

 

 

 

 

 

3,858

 

 

 

Proceeds from exercise of stock options

 

6,345

 

 

2,577

 

 

29,715

 

 

10,762

 

 

 

4,575

 

 

1,166

 

 

26,840

 

 

5,851

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(25,997

)

 

(7,060

)

 

(23,629

)

 

21,356

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

202,764

 

 

210,382

 

 

203,220

 

 

182,958

 

 

 

 

 

 

 

 

 

 

Effects of exchange rates on cash and cash equivalents

 

(1,420

)

 

(102

)

 

(4,244

)

 

(1,094

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

$

175,347

 

$

203,220

 

$

175,347

 

$

203,220

 

 

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.