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Kinaxis Inc. Reports Fourth Quarter 2021 Results

March 1, 2022
  • SaaS revenue grows 18% to $46.9 million, adjusted EBITDA1 margin of 16%
  • FY 2021 new customer wins double previous year
  • Record Q4 and full year 2021 incremental bookings support 23-25% SaaS revenue growth and 34-38% total revenue growth for FY 2022

OTTAWA, ON, March 1, 2022 /CNW/ - 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, 2021. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

"We are thrilled with the accelerated momentum Kinaxis experienced in Q4 as reflected by an all-time record level of incremental subscription bookings brought on by another record-breaking number of new customer wins, including globally recognized brands.  New customer wins for the year were more than twice that of 2020 and, combined with subscription expansion within our customer base, drove strength in both our annual recurring revenue2 and year-end backlog. As a result, we remain confident in our visibility into rapidly accelerating SaaS revenue growth," said John Sicard, President and CEO of Kinaxis. "As we exit pandemic protocols, we continue to see supply chains at the forefront of boardroom conversations and the news. The need for supply chain resilience has never been more apparent and demands transformation towards true end-to-end concurrent planning – our unique differentiator. Kinaxis has never been more relevant nor better positioned to serve the needs of our markets. We will continue to invest to capture additional market share and enhance our platform and service offerings to further distance ourselves from the competition."

 Q4 2021 Highlights

$ USD thousands, except as otherwise indicated

Q4 2021

Q4 2020

Change

Total Revenue

68,506

54,945

25%

SaaS

46,855

39,815

18%

Subscription term license

1,442

1,948

(26%)

Professional services

17,036

11,334

50%

Maintenance and support

3,173

1,848

72%

Gross profit

43,887

34,841

26%


64%

63%


Profit

(2,919)

(1,586)

84%


($0.11)/diluted share 

($0.06)/diluted share 


Adjusted EBITDA(1)

11,277

6,095

85%


16%

11%


Cash from operating activities

3,238

3,200

1%

(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.

FY 2021 Highlights

$ USD thousands, except as otherwise indicated

FY 2021

FY 2020

Change

Total Revenue

250,726

224,189

12%

SaaS

174,463

148,873

17%

Subscription term license

6,118

17,890

(66%)

Professional services

57,640

45,899

26%

Maintenance and support

12,505

11,527

8%

Gross profit

163,971

154,058

6%


65%

69%


Profit

(1,165)

13,730

nm


($0.04/diluted share)  

$0.49/diluted share  


Adjusted EBITDA(1)

39,851

53,751

(26%)


16%

24%


Cash from operating activities

50,138

59,470

(16%)

Key Performance Indicators
The company's Annual Recurring Revenue2 (ARR), which includes amounts related to both SaaS and on-premise subscription contracts, rose 21% in constant currency to $225 million at the end of the quarter.

$USD millions

2019

2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Annual recurring revenue2

Year-over-year growth

159

21%

185

17%

191

18%

200

24%

207

23%

221

19%

Annual recurring revenue2, constant currency

Year-over-year growth


159

21%


183

15%


189

17%


198

23%


207

23%


225

21%

(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.

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, 2021.


$USD millions

2022

2023

2024 and later

Total

SaaS

178.9

132.7

111.9

423.5

Maintenance and support

14.3

10.5

12.0

36.8

Subscription term licenses

23.5

-

0

23.5

Total

216.7

143.2

123.9

483.8

Financial Guidance

Based on the current business outlook, Kinaxis is introducing fiscal 2022 financial guidance, as follows:


FY 2022 Guidance

Total revenue

$335-345 million

SaaS

23-25% growth

Subscription term license

$30-32 million

Adjusted EBITDA(1) margin

15-18%

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 and year ended December 31, 2021 are available on Kinaxis' website and on SEDAR at www.sedar.com.

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

Wednesday, March 2, 2022

TIME:

8:30 a.m. Eastern Time

CALL REGISTRATION: 

https://dpregister.com/sreg/10163765/f163678c39

WEBCAST: 

https://bit.ly/3IUd8ke (available for three months)

REPLAY:   

(877)-344-7529


Available through Wednesday, March 16, 2022


Reference number: 2827510

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

December 31,


Year ended

December 31,


2021


2020


2021


2020


(In thousands of USD)



Profit (loss)

$

(2,919)


$

(1,586)


$

(1,165)


$

13,730

Share-based compensation

6,633


4,986


24,343


17,217

Non-recurring item

716


0


(7,190)


0

Adjusted profit

$

4,430


$

3,400


$

15,988


$

30,947

Income tax expense (recovery)

(32)


(2,354)


2,262


7,740

Depreciation and amortization

6,557


4,494


20,409


15,562

Foreign exchange loss

194


364


558


196

Net finance expense (income)

128


191


634


(694)


6,847


2,695


23,863


22,804

Adjusted EBITDA

$

11,277


$

6,095


$

39,851


$

53,751

Adjusted EBITDA as a percentage of revenue

16.5%


11.1%


15.9%


24.0%

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.

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 1, 2022, 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.





Consolidated Statements of Financial Position









As at December 31





(Expressed in thousands of USD)












2021


2020






Assets










Current assets:





Cash and cash equivalents

$

203,220

$

182,958

Short-term investments


30,168


30,180

Trade and other receivables


89,247


82,883

Prepaid expenses


10,282


9,264

Investment tax credits recoverable


-


1,109



332,917


306,394

Non-current assets:





Property and equipment


52,093


30,746

Right-of-use assets


53,578


15,722

Contract acquisition costs


19,691


16,484

Unbilled receivables


512


2,013

Other receivables


1,096


752

Deferred tax assets


6,000


2,308

Investment tax credits recoverable


3,616


980

Intangible assets


10,778


13,023

Goodwill


39,988


39,988



187,352


122,016







$

520,269

$

428,410






Liabilities and Shareholders' Equity










Current liabilities:





Trade payables and accrued liabilities

$

43,328

$

33,030

Deferred revenue


99,239


94,275

Provisions


716


-

Lease obligations


2,526


4,554



145,809


131,859

Non-current liabilities:





Lease obligations


53,233


12,065

Deferred tax liabilities


9


2,729



53,242


14,794

Shareholders' equity:





Share capital


195,414


173,104

Contributed surplus


54,739


35,846

Accumulated other comprehensive loss


(597)


(20)

Retained earnings


71,662


72,827



321,218


281,757







$

520,269

$

428,410

 

Kinaxis Inc.





Consolidated Statements of Comprehensive Income (Loss)






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







For the three months ended December 31, 

For the year ended December 31,


2021

2020

2021

2020






Revenue 

$

68,506

$

54,945

$

250,726

$

224,189






Cost of revenue

24,619

20,104

86,755

70,131






Gross profit

43,887

34,841

163,971

154,058






Operating expenses:





Selling and marketing

16,960

15,521

59,078

52,630

Research and development 

16,465

13,822

57,424

47,420

General and administrative

13,183

8,983

45,550

33,232


46,608

38,326

162,052

133,282







(2,721)

(3,485)

1,919

20,776






Other income (expense):





Foreign exchange loss

(194)

(364)

(558)

(196)

Net finance and other income (expense)

(36)

(91)

(264)

890


(230)

(455)

(822)

694






Profit (loss) before income taxes

(2,951)

(3,940)

1,097

21,470






Income tax expense (recovery)

(32)

(2,354)

2,262

7,740






Profit (loss)

(2,919)

(1,586)

(1,165)

13,730






Other comprehensive income (loss):










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





Foreign currency translation differences - foreign operations

(124)

237

(577)

328






Total comprehensive income (loss)

$

(3,043)

$

(1,349)

$

(1,742)

$

14,058






Basic earnings (loss) per share

$

(0.11)

$

(0.06)

$

(0.04)

$

0.51






Weighted average number of basic common shares 

27,372,618

26,993,691

27,248,193

26,716,027






Diluted earnings (loss) per share

$

(0.11)

$

(0.06)

$

(0.04)

$

0.49






Weighted average number of diluted common shares

27,372,618

26,993,691

27,248,193

28,138,911

 

Kinaxis Inc.






Consolidated Statements of Changes in Shareholders' Equity 







For the years ended December 31


(Expressed in thousands of USD)









Share capital

Contributed surplus

Accumulated other comprehensive loss

Retained earnings

Total equity







Balance, December 31, 2019

$

140,961

$

30,392

$

(348)

$

59,097

$

230,102







Profit

-

-

-

13,730

13,730

Other comprehensive income

-

-

328

-

328

Total comprehensive income

-

-

328

13,730

14,058







Share options exercised

27,187

(6,807)

-

-

20,380

Restricted share units vested

4,956

(4,956)

-

-

-

Share-based payments                               

-

17,217

-

-

17,217

Total shareholder transactions

32,143

5,454

-

-

37,597







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

 

Kinaxis Inc.





Consolidated Statements of Cash Flows









(Expressed in thousands of USD)











For the three months ended December 31, 

For the year ended December 31,


2021

2020

2021

2020






Cash flows from operating activities:










Profit (loss)

$

(2,919)

$

(1,586)

$

(1,165)

$

13,730

Items not affecting cash:




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

5,995

3,932

18,164

14,335

Amortization of intangible assets

562

562

2,245

1,227

Share-based payments

6,633

4,986

24,343

17,217

Net finance expense (income)

406

91

634

(890)

Income tax expense (recovery)

(32)

(2,354)

2,262

7,740

Investment tax credits recoverable

(1,356)

(2,089)

(1,527)

(2,089)

Change in operating assets and liabilities

(5,846)

18

5,523

10,492

Interest received

37

103

428

1,761

Interest paid

(442)

(187)

(1,050)

(674)

Income taxes received (paid)

200

(276)

281

(3,379)


3,238

3,200

50,138

59,470






Cash flows used investing activities:










Acquisition of business, net of cash acquired

-

(24)

(800)

(61,767)

Purchase of property and equipment

(11,464)

(2,102)

(33,833)

(14,439)

Purchase of short-term investments

(26,434)

(15,164)

(71,599)

(110,616)

Redemption of short-term investments

26,434

15,154

71,599

110,558


(11,464)

(2,136)

(34,633)

(76,264)






Cash flows from financing activities:










Payment of lease obligations

(1,411)

(1,103)

(4,911)

(3,742)

Common shares issued on exercise of stock options

2,577

2,484

10,762

20,380


1,166

1,381

5,851

16,638






Increase (decrease) in cash and cash equivalents

(7,060)

2,445

21,356

(156)






Cash and cash equivalents, beginning of period

210,382

179,856

182,958

182,284






Effects of exchange rates on cash and cash equivalents

(102)

657

(1,094)

830






Cash and cash equivalents, end of period

$

203,220

$

182,958

$

203,220

$

182,958

 

SOURCE Kinaxis Inc.

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