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Kinaxis Inc. Reports Third Quarter 2022 Results

November 3, 2022
  • SaaS revenue grows 21%, or 28% in constant currency1; total revenue grows 39%, or 49% in constant currency1
  • ARR grows 25%, or 30% in constant currency1
  • Adjusted EBITDA1 margin of 17%, or 19% in constant currency1
  • Company increases annual guidance

Kinaxis® (TSX:KXS) , the authority in driving agility for fast, confident decision-making in an unpredictable world, reported results for its third quarter ended September 30, 2022. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

“Momentum in our business continues to prove consistent, as reflected in our exceptional Q3 performance. Year-to-date, we have won over 35% more new customers compared to last year, excluding those we onboarded through our recent acquisition of MPO. In total, we have over 40% more customers than this time last year. Strong incremental bookings and renewals have driven our reported backlog well beyond a half-billion dollars for the first time, and we are thrilled with the accelerating growth in ARR, having added to it by more than double the amount we did in the same quarter last year. As always, we remain pleased with our ability to deliver strong adjusted EBITDA,” said John Sicard, President and CEO of Kinaxis. “Our entirely unique concurrent planning approach continues to be our most important differentiator as companies seek real-time visibility, actionability and agility to manage persistent uncertainty. We are a leader in this global transformation to best-of-breed, fully digitized supply chain management solutions.”

Q3 2022 Highlights

$ USD thousands, except as otherwise indicated

Q3 2022

 

Q3 2021

 

Change

Total Revenue

89,498

 

64,436

 

39%

(constant currency1)

95,933

 

 

 

49%

SaaS

54,038

 

44,731

 

21%

(constant currency1)

57,431

 

 

 

28%

Subscription term licenses

5,827

 

1,997

 

192%

Professional services

25,613

 

14,576

 

76%

Maintenance and support

4,020

 

3,132

 

28%

Gross profit

55,103

 

42,589

 

29%

Margin

62%

 

66%

 

 

Profit

1,628

 

200

 

714%

Per diluted share

$0.06

 

$0.01

 

 

Adjusted EBITDA1

14,805

 

12,384

 

20%

Margin

17%

 

19%

 

 

(constant currency1)

17,856

 

 

 

44%

19%

 

 

 

 

Cash from operating activities

(3,563)

 

11,249

 

(132%)

(1)

“Adjusted EBITDA” and constant currency 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.

Key Performance Indicators

The company’s Annual Recurring Revenue2 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 30% in constant currency1 to $269 million at the end of the quarter.

$USD millions

Q3 2022

Q3 2021

Change

Annual recurring revenue2

259

207

25%

Annual recurring revenue2, constant currency1

269

 

30%

(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 September 30, 2022.


$USD millions

Remainder of
2022


2023


2024 and later


Total

SaaS

55.8

191.2

242.1

489.0

Maintenance and support

4.2

15.6

27.0

46.8

Subscription term licenses

8.6

4.5

-

13.2

Total

68.6

211.3

269.1

549.0

Financial Guidance
Kinaxis is updating its previous fiscal 2022 financial guidance to reflect expectations of higher revenue and Adjusted EBITDA margin for the year.

 

Previous FY 2022 Guidance

Updated FY 2022 Guidance

Total revenue

$355-365 million

$365-370 million

SaaS

21-23% growth

21-23% growth

(25-27%, constant currency1 basis)

(25-27%, constant currency1 basis)

Subscription term license

$34-36 million

$38-40 million

Adjusted EBITDA1 margin

16-19%

18-20%

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, 2022 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, November 4, 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, November 4, 2022

TIME:

8:30 a.m. Eastern Time

CALL REGISTRATION:

https://conferencingportals.com/event/eopSfgtI

WEBCAST:

https://events.q4inc.com/attendee/921613130 (available for three months)

REPLAY:

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

Available through November 18, 2022

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 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,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

 

2021

 

 

(In thousands of USD)

 

 

 

 

 

 

 

 

 

Profit

$

1,628

 

 

$

200

 

 

$

11,518

 

 

 

$

1,754

 

Change in fair value of contingent consideration

 

(2,193

)

 

 

 

 

 

(2,193

)

 

 

 

 

Share-based compensation

 

6,174

 

 

 

6,501

 

 

 

18,680

 

 

 

 

17,710

 

Non-recurring item

 

 

 

 

 

 

 

 

 

 

 

(7,906

)

Adjusted profit

$

5,609

 

 

$

6,701

 

 

$

28,005

 

 

 

$

11,558

 

Income tax expense

 

3,927

 

 

 

1,310

 

 

 

12,041

 

 

 

 

2,294

 

Depreciation and amortization

 

6,324

 

 

 

4,784

 

 

 

18,299

 

 

 

 

13,852

 

Foreign exchange loss (gain)

 

(393

)

 

 

(547

)

 

 

149

 

 

 

 

364

 

Net finance expense (income)

 

(662

)

 

 

136

 

 

 

(164

)

 

 

 

506

 

 

 

9,196

 

 

 

5,683

 

 

 

30,325

 

 

 

 

17,016

 

Adjusted EBITDA

$

14,805

 

 

$

12,384

 

 

$

58,330

 

 

 

$

28,574

 

Adjusted EBITDA as a percentage of revenue

 

17

%

 

 

19

%

 

 

22

%

 

 

 

16

%

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 Q3 2022, the average exchange rates in effect for Q3 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.

The outlook for constant currency SaaS revenue growth rate is derived by applying the average exchange rates in effect during the comparison period rather than the exchange rates for the guidance period (i.e., for FY 2022 constant currency guidance, the average exchange rates in effect for FY 2021). We believe the presentation of the above results and metrics, and applicable related growth rates, adjusted for constant currency facilitates the corresponding year‑over‑year comparisons.

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;
  • fluctuations in the value of foreign currencies relative to the U.S. Dollar; 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.

SOURCE: Kinaxis Inc.

 
 

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

 
 

 

September 30,

2022

 

December 31,

2021

 

Assets

 

 

 

 

 

Current assets:

 

 

Cash and cash equivalents

$

202,764

 

$

203,220

 

Short-term investments

 

30,270

 

 

30,168

 

Trade and other receivables

 

82,329

 

 

89,247

 

Prepaid expenses

 

12,498

 

 

8,502

 

 

 

327,861

 

 

331,137

 

Non-current assets:

 

 

Unbilled receivables

 

6,592

 

 

512

 

Other receivables

 

923

 

 

1,096

 

Prepaid expenses

 

2,547

 

 

1,780

 

Investment tax credits recoverable

 

6,990

 

 

3,616

 

Deferred tax assets

 

1,359

 

 

6,000

 

Contract acquisition costs

 

22,485

 

 

19,691

 

Property and equipment

 

47,948

 

 

52,093

 

Right-of-use assets

 

54,619

 

 

53,578

 

Intangible assets

 

27,123

 

 

10,778

 

Goodwill

 

70,701

 

 

39,988

 

 

 

241,287

 

 

189,132

 

 

 

 

 

$

569,148

 

$

520,269

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

Trade payables and accrued liabilities

$

45,134

 

$

43,328

 

Deferred revenue

 

81,439

 

 

99,239

 

Provisions

 

305

 

 

716

 

Contingent consideration

 

4,019

 

 

 

Lease obligations

 

6,766

 

 

2,526

 

 

 

137,663

 

 

145,809

 

Non-current liabilities:

 

 

Contingent consideration

 

3,760

 

 

 

Lease obligations

 

50,830

 

 

53,233

 

Deferred tax liabilities

 

7,729

 

 

9

 

 

 

62,319

 

 

53,242

 

Shareholders’ equity:

 

 

Share capital

 

226,834

 

 

195,414

 

Contributed surplus

 

63,847

 

 

54,739

 

Accumulated other comprehensive loss

 

(4,695

)

 

(597

)

Retained earnings

 

83,180

 

 

71,662

 

 

 

369,166

 

 

321,218

 

 

$

569,148

 

$

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

September 30,

 

Nine months ended

September 30,

 

 

2022

2021

 

2022

2021

 

 

 

 

 

 

Revenue

$

89,498

 

$

64,436

 

$

268,406

 

$

182,220

 

 

 

 

 

 

Cost of revenue

 

34,395

 

 

21,847

 

 

93,885

 

 

62,136

 

Gross profit

 

55,103

 

 

42,589

 

 

174,521

 

 

120,084

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Selling and marketing

 

19,969

 

 

15,001

 

 

58,233

 

 

42,118

 

Research and development

 

18,420

 

 

16,054

 

 

54,653

 

 

40,959

 

General and administrative

 

14,468

 

 

10,502

 

 

40,469

 

 

32,367

 

 

 

52,857

 

 

41,557

 

 

153,355

 

 

115,444

 

 

 

2,246

 

 

1,032

 

 

21,166

 

 

4,640

 

 

 

 

 

 

Other income (expense):

 

 

 

 

Foreign exchange gain/(loss)

 

393

 

 

547

 

 

(149

)

 

(364

)

Net finance and other income/(expense)

 

723

 

 

(69

)

 

349

 

 

(228

)

Change in fair value of contingent consideration

 

2,193

 

 

 

 

2,193

 

 

 

 

 

3,309

 

 

478

 

 

2,393

 

 

(592

)

 

 

 

 

 

Profit before income taxes

 

5,555

 

 

1,510

 

 

23,559

 

 

4,048

 

 

 

 

 

 

Income tax expense

 

3,927

 

 

1,310

 

 

12,041

 

 

2,294

 

Profit

 

1,628

 

 

200

 

 

11,518

 

 

1,754

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

Items that are or may be reclassified subsequently to profit:

 

 

 

 

Foreign currency translation differences - foreign operations

 

(2,659

)

 

(223

)

 

(4,098

)

 

(453

)

Total comprehensive income (loss)

$

(1,031

)

$

(23

)

$

7,420

 

$

1,301

 

 

 

 

 

 

Basic earnings per share

$

0.06

 

$

0.01

 

$

0.42

 

$

0.06

 

 

 

 

 

 

Weighted average number of basic Common Shares

 

27,685,391

 

 

27,135,455

 

 

27,587,568

 

 

27,206,262

 

 

 

 

 

 

Diluted earnings per share

$

0.06

 

$

0.01

 

$

0.40

 

$

0.06

 

 

 

 

 

 

Weighted average number of diluted Common Shares

 

28,653,288

 

 

28,279,754

 

 

28,544,299

 

 

28,397,945

 

 
 

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

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

1,754

 

1,754

 

Other comprehensive loss

 

 

 

 

(453

)

 

 

(453

)

Total comprehensive 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

 

 

 

 

 

 

 

Balance, December 31, 2021

$

195,414

$

54,739

 

$

(597

)

$

71,662

$

321,218

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

11,518

 

11,518

 

Other comprehensive loss

 

 

 

 

(4,098

)

 

 

(4,098

)

Total comprehensive income (loss)

 

 

 

 

(4,098

)

 

11,518

 

7,420

 

 

 

 

 

 

 

Share options exercised

 

30,405

 

(7,035

)

 

 

 

 

23,370

 

Restricted share units vested

 

598

 

(598

)

 

 

 

 

 

Performance share units vested

 

417

 

(417

)

 

 

 

 

 

Share based payments

 

 

17,158

 

 

 

 

 

17,158

 

Total shareholder transactions

 

31,420

 

9,108

 

 

 

 

 

40,528

 

 

 

 

 

 

 

Balance, September 30, 2022

$

226,834

$

63,847

 

$

(4,695

)

$

83,180

$

369,166

 

 
 

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

 

 

 

 

 

 

Three Months Ended

September 30,

 

 

Nine months ended

September 30,

 

 

2022

2021

 

 

2022

2021

 

Cash flows from operating activities:

 

 

 

 

Profit

$

1,628

 

$

200

 

$

11,518

 

$

1,754

 

Items not affecting cash:

 

 

 

 

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

 

5,365

 

 

4,223

 

 

16,133

 

 

12,169

 

Amortization of intangible assets

 

959

 

 

561

 

 

2,166

 

 

1,683

 

Share-based payments

 

6,174

 

 

6,501

 

 

18,680

 

 

17,710

 

Net finance expense

 

(662

)

 

69

 

 

(164

)

 

228

 

Change in fair value of contingent consideration

 

(2,193

)

 

 

 

(2,193

)

 

 

Income tax expense

 

3,927

 

 

1,310

 

 

12,041

 

 

2,294

 

Investment tax credits recoverable

 

(850

)

 

(420

)

 

(3,374

)

 

(171

)

Change in operating assets and liabilities

 

(18,500

)

 

(1,641

)

 

(25,796

)

 

11,369

 

Interest received

 

1,057

 

 

185

 

 

1,459

 

 

391

 

Interest paid

 

(468

)

 

(251

)

 

(1,397

)

 

(608

)

Income taxes paid

 

(737

)

 

512

 

 

(2,965

)

 

81

 

 

 

(3,563

)

 

11,249

 

 

26,845

 

 

46,900

 

Cash flows used in investing activities:

 

 

 

 

Acquisition of business, net of cash acquired

 

(33,643

)

 

 

 

(36,662

)

 

(800

)

Purchase of property and equipment and intangible assets

 

(2,526

)

 

(5,439

)

 

(10,080

)

 

(22,369

)

Purchase of short-term investments

 

(15,005

)

 

(15,005

)

 

(45,165

)

 

(45,165

)

Redemption of short-term investments

 

15,005

 

 

15,005

 

 

45,165

 

 

45,165

 

 

 

(36,169

)

 

(5,439

)

 

(46,742

)

 

(23,169

)

Cash flows from financing activities:

 

 

 

 

Payment of lease obligations

 

(1,732

)

 

(1,143

)

 

(4,963

)

 

(3,500

)

Lease incentive received

 

 

 

 

 

3,858

 

 

 

Proceeds from exercise of stock options

 

15,677

 

 

3,621

 

 

23,370

 

 

8,185

 

 

 

13,945

 

 

2,478

 

 

22,265

 

 

4,685

 

(Decrease)/increase in cash and cash equivalents

 

(25,787

)

 

8,288

 

 

2,368

 

 

28,416

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

227,862

 

 

202,771

 

 

203,220

 

 

182,958

 

 

 

 

 

 

Effects of exchange rates on cash and cash equivalents

 

689

 

 

(677

)

 

(2,824

)

 

(992

)

 

 

 

 

 

Cash and cash equivalents, end of period

$

202,764

 

$

210,382

 

$

202,764

 

$

210,382

 

 

 

 

 

 

 

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.
Categories: Press Releases
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