News Release

Kinaxis Inc. Reports Third Quarter 2021 Results

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  • SaaS revenue grows 14% to $44.7 million, adjusted EBITDA(1) margin of 19%
  • Record new customers wins, 23% ARR growth supports outlook for accelerated growth ahead
  • Updates guidance for FY 2021

OTTAWA, ON, Nov. 4, 2021 /CNW/ -  Kinaxis® (TSX: KXS) , the authority in driving agility for fast, confident decision-making in an unpredictable world, reported results for its third quarter. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

"We won a record number of new customers this quarter, and year-to-date we have more than tripled new customer wins compared to the same time last year. That success is reflected in very strong year-over-year growth in our annual recurring revenue2 and a slightly improved outlook for 2021," said John Sicard, President and CEO of Kinaxis. "Supply chain issues continue to be at the centre of boardroom conversations and daily newsfeeds, and we are helping companies navigate the complexities. The sustained, positive momentum in our market gives us confidence in our mid-term target of 23-25% growth in SaaS revenue, including for next year."

 Q3 2021 Highlights

$ USD thousands, except as otherwise indicated

Q3 2021

Q3 2020

Change

Total Revenue

64,436

55,116

17%

SaaS

44,731

39,322

14%

Subscription term license

1,997

1,035

93%

Professional services

14,576

11,492

27%

Maintenance and support

3,132

3,267

(4%)

Gross profit

42,589   
66%  

36,559   
66%  

16%

Profit

200   
$0.01/diluted share  

731  
$0.03/diluted share  

(73%)

Adjusted EBITDA(1)

12,384   
19%  

10,134  
18%  

22%

Cash from operating activities

11,249

4,497

150%

(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 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 September 30, 2021.


$USD millions

2021

2022

2023 and
later

Total
backlog

SaaS

45.4

144.7

168.0

358.1

Maintenance and support

3.1

8.8

5.8

17.7

Total

48.5

153.5

173.8

375.8

The company's Annual Recurring Revenue2 (ARR), which includes amounts related to both SaaS and on-premise subscription contracts, rose 23% to $206.6 million at the end of the quarter.


Financial Guidance

$USD millions

2019

2020

Q1 2021

Q2 2021

Q3 2021

Annual recurring revenue2

Year-over-year growth

159

21%

185

17%

191

18%

200

24%

207

23%

(2)

Annual Recurring Revenue (ARR) is the total annualized value of recurring subscription amounts (ultimately recognized as SaaS, Subscription Term Licenses and Maintenance & 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.


Based on the current business outlook, Kinaxis is updating its fiscal 2021 financial guidance, as follows:


FY 2021 Guidance

Total revenue

$248-250 million

SaaS

17-20% growth

Subscription term license

$6-7 million

Adjusted EBITDA(1) margin

14-16%

Beyond 2021, and assuming an ongoing return to more typical business and market conditions, the company continues to believe that annual SaaS revenue growth of 23-25% is achievable in the mid-term.

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 September 30, 2021 are available on Kinaxis' website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, November 5, 2021, 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.

CONFERENCE CALL DETAILS

DATE:

Friday, November 5, 2021

TIME:  

8:30 a.m. Eastern Time

CALL REGISTRATION:

https://dpregister.com/sreg/10161310/eee2d47ea8

WEBCAST: 

https://bit.ly/2YQtUit (available for three months)

REPLAY:

(877)-344-7529


Available through Friday, November 19, 2021

REFERENCE NUMBER:

10161310

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
September 30,



Nine months ended
September 30,


2021



2020


2021


2020






(In thousands of USD)

Profit

$

200


$

731


$

1,754


$

15,316

Share-based compensation

6,501



4,732


17,710


12,231

Non-recurring item




(7,906)


Adjusted profit

$

6,701


$

5,463


$

11,558


$

27,547

Income tax expense

1,310



354


2,294


10,094

Depreciation and amortization

4,784



4,500


13,852


11,068

Foreign exchange loss (gain)

(547)



(124)


364


(168)

Net finance expense (income)

136



(59)


506


(884)


5,683



4,671


17,016


20,110

Adjusted EBITDA

$

12,384


$

10,134


$

28,574


$

47,657

Adjusted EBITDA as a percentage of revenue

19%



18%


16%


28%

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, 2021; and
  • contracted revenue in future periods, including 2021, 2022 and 2023 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 2021 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 2021, 2022 and 2023 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.

Our guidance and commentary for annual SaaS revenue growth beyond 2021 is based on assumptions and associated risks including normalization of macroeconomic factors, including business and market conditions, relative to recent conditions that have been affected by the COVID-19 pandemic. 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 3, 2021, under the heading "Risk Factors" in our Annual Information Form dated March 25, 2021 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)





September 30,
2021

December 31,
2020




Assets






Current assets:



Cash and cash equivalents

$

210,382

$

182,958

Short-term investments  

30,169

30,180

Trade and other receivables

50,988

82,883

Investment tax credits recoverable

-

1,109

Prepaid expenses

9,291

9,264


300,830

306,394




Non-current assets:



Property and equipment

44,133

30,746

Right-of-use assets

52,621

15,722

Contract acquisition costs

17,945

16,484

Unbilled receivables

430

2,013

Other receivables

692

752

Deferred tax assets

3,014

2,308

Investment tax credits recoverable

2,260

980

Intangible assets

11,340

13,023

Goodwill

39,988

39,988





$

473,253

$

428,410




Liabilities and Shareholders' Equity






Current liabilities:



Trade payables and accrued liabilities

$

31,769

$

33,030

Deferred revenue

75,541

94,275

Lease obligations

1,649

4,554


108,959

131,859

Non-current liabilities:



Lease obligations

51,734

12,065

Deferred tax liabilities

3,607

2,729


55,341

14,794




Shareholders' equity:



Share capital 

183,984

173,104

Contributed surplus

50,861

35,846

Accumulated other comprehensive loss

(473)

(20)

Retained earnings

74,581

72,827


308,953

281,757





$

473,253

$

428,410

 

Kinaxis Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

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





For the three months
ended September 30,

For the nine months
ended September 30,


2021

2020

2021

2020






Revenue 

$

64,436

$

55,116

$

182,220

$

169,244






Cost of revenue

21,847

18,557

62,136

50,027






Gross profit

42,589

36,559

120,084

119,217






Operating expenses:





Selling and marketing

15,001

12,881

42,118

37,109

Research and development 

16,054

13,664

40,959

33,598

General and administrative

10,502

9,209

32,367

24,249


41,557

35,754

115,444

94,956







1,032

805

4,640

24,261

Other income (expense):





Foreign exchange gain (loss)

547

124

(364)

168

Net finance and other income (expense)

(69)

156

(228)

981


478

280

(592)

1,149






Profit before income taxes

1,510

1,085

4,048

25,410






Income tax expense

1,310

354

2,294

10,094






Profit

200

731

1,754

15,316






Other comprehensive income (loss):





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





Foreign currency translation differences - foreign operations

(223)

146

(453)

91






Total comprehensive income (loss)

$

(23)

$

877

$

1,301

$

15,407






Basic earnings per share

$

0.01

$

0.03

$

0.06

$

0.58






Weighted average number of basic Common Shares 

27,135,455

26,596,412

27,206,262

26,622,939






Diluted earnings per share

$

0.01

$

0.03

$

0.06

$

0.55






Weighted average number of diluted Common Shares

28,279,754

27,766,505

28,397,945

28,000,655

 

Kinaxis Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

(Expressed in thousands of USD)
(Unaudited)










Accumulated






other




Share

Contributed

comprehensive

Retained



capital

surplus

loss

earnings

Total equity







Balance, December 31, 2019

$

140,961

$

30,392

$

(348)

$

59,097

$

230,102







Profit

-

-

-

15,316

15,316

Other comprehensive income

-

-

91

-

91

Total comprehensive income

-

-

91

15,316

15,407







Share options exercised

23,884

(5,988)

-

-

17,896

Share based payments                               

-

12,231

-

-

12,231

Total shareholder transactions

23,884

6,243

-

-

30,127







Balance, September 30, 2020

$

164,845

$

36,635

$

(257)

$

74,413

$

275,636







Balance, December 31, 2020

$

173,104

$

35,846

$

(20)

$

72,827

$

281,757







Profit

-

-

-

1,754

1,754

Other comprehensive loss

-

-

(453)

-

(453)

Total comprehensive income (loss)

-

-

(453)

1,754

1,301







Share options exercised

10,880

(2,695)

-

-

8,185

Share based payments

-

17,710

-

-

17,710

Total shareholder transactions

10,880

15,015

-

-

25,895







Balance, September 30, 2021

$

183,984

$

50,861

$

(473)

$

74,581

$

308,953

 

Kinaxis Inc.
Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of USD)
(Unaudited)





For the three months  
ended September 30, 

For the nine months ended  
September 30, 


2021

2020

2021

2020






Cash flows from operating activities:










Profit 

$

200

$

731

$

1,754

$

15,316

Items not affecting cash:





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

4,223

3,939

12,169

10,403

Amortization of intangible assets

561

561

1,683

665

Share-based payments

6,501

4,732

17,710

12,231

Net finance and other (income) expense

69

(156)

228

(981)

Income tax expense

1,310

354

2,294

10,094

Investment tax credits recoverable

(420)

-

(171)

-

Change in operating assets and liabilities

(1,641)

(5,219)

11,369

10,474

Interest received

185

596

391

1,658

Interest paid

(251)

(198)

(608)

(487)

Income taxes received (paid)

512

(843)

81

(3,103)


11,249

4,497

46,900

56,270






Cash flows used in investing activities:










Acquisition of business, net of cash acquired

-

(59,166)

(800)

(61,743)

Purchase of property and equipment

(5,439)

(1,299)

(22,369)

(12,337)

Purchase of short-term investments

(15,005)

(20,150)

(45,165)

(95,452)

Redemption of short-term investments

15,005

65,302

45,165

95,404


(5,439)

(15,313)

(23,169)

(74,128)






Cash flows from financing activities:










Payment of lease obligations

(1,143)

(1,154)

(3,500)

(2,639)

Common shares issued on exercise of stock options

3,621

6,548

8,185

17,896


2,478

5,394

4,685

15,257






Increase (decrease) in cash and cash equivalents

8,288

(5,422)

28,416

(2,601)






Cash and cash equivalents, beginning of period

202,771

184,992

182,958

182,284






Effects of exchange rates on cash and cash equivalents

(677)

286

(992)

173






Cash and cash equivalents, end of period

$

210,382

$

179,856

$

210,382

$

179,856

 

SOURCE Kinaxis Inc.