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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kinaxis Inc | TSX:KXS | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.57 | -0.38% | 149.47 | 148.50 | 149.85 | 153.47 | 148.56 | 151.67 | 63,454 | 21:12:25 |
Kinaxis® (TSX:KXS), the leading provider of supply chain management solutions, reported results for its fourth quarter and year ended December 31, 2023. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.
“We finished the year with a record number of customer wins, a record backlog that provides strong visibility into 2024 and beyond, and record free cash flow. These achievements were won through a persistently high win rate against key competitors, ongoing progress penetrating all tiers of our markets, strong renewals and expansions, ongoing enhancement of the value we offer, and a focus on balancing rapid growth with profitability,” said John Sicard, president and chief executive officer at Kinaxis. “More and more, we are seeing siloed, legacy methods giving way to end-to-end supply chain orchestration, where Kinaxis is the acknowledged leader. We have made strong investments over the past few years that have put us in excellent position to capture even more share in our markets while we make steady progress towards our mid-term profitability goals.”
Q4 2023 Highlights
$ USD thousands, except as otherwise indicated
Q4 2023
Q4 2022
Change
Total Revenue
111,990
98,483
14%
SaaS
69,891
58,839
19%
Subscription term licenses
2,899
9,131
(68)%
Professional services
34,318
26,156
31%
Maintenance and support
4,882
4,357
12%
Gross profit
68,890
61,266
12%
Margin
62%
62%
Profit
4,021
8,562
(53)%
Per diluted share
$0.14
$0.30
Adjusted EBITDA1
19,727
21,116
(7)%
Margin
18%
21%
Cash from (used in) operating activities
27,969
(2,327)
1,302%
(1) “Adjusted EBITDA” is a non-IFRS measures that 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.
FY 2023 Highlights
$ USD thousands, except as otherwise indicated
FY 2023
FY 2022
Change
Total Revenue
426,971
366,889
16%
SaaS Revenue
265,080
213,306
24%
Adjusted EBITDA1
74,872
79,446
(6)%
Margin
18%
22%
Key Performance Indicators
The company’s Annual Recurring Revenue2 (ARR), which includes subscription amounts related to both SaaS and on-premise contracts, rose 18% to $322 million at the end of the quarter.
$USD millions
Q4 2023
Q4 2022
Change
Annual recurring revenue2
$
322
$
274
18
%
(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 December 31, 2023.
$USD millions
2024
2025
2026 and later
Total
SaaS
274.0
197.7
228.9
700.6
Maintenance and support
17.5
12.4
8.3
38.2
Subscription term licenses
2.2
0.1
—
2.3
Total
293.7
210.2
237.2
741.1
Financial Guidance
Kinaxis is introducing its fiscal 2024 financial guidance, as follows.
FY 2024 Guidance
Total revenue
$483-495 million
SaaS
17-19% growth
Subscription term license
$9-11 million
Adjusted EBITDA1 margin
16-18%
"We are steadily marching towards our baseline mid-term Adjusted EBITDA margin target of 25%. Our 2024 guidance reflects the current ARR growth level, ongoing operating leverage, but also the impacts of being at the low point in our normal cycle for our high-margin subscription term license revenue and our current transition to public cloud, which involves some duplicative costs. Normalizing for these two items better demonstrates our steady progress,” said Blaine Fitzgerald, chief financial officer at Kinaxis. "I am particularly pleased to have generated a record $77.1 million in free cash flow in 2023, which is over 70% higher than in any other year. It's another data point that demonstrates our focus on balancing strong growth and profitability."
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 December 31, 2023 are available on Kinaxis’ website and on SEDAR at www.sedar.com.
Conference Call
Kinaxis will host a conference call tomorrow, February 29, 2024, 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, February 29, 2024
TIME:
8:30 a.m. Eastern Time
CALL REGISTRATION:
https://registrations.events/direct/Q4I914168
WEBCAST
https://events.q4inc.com/attendee/409673001 (available for three months)
REPLAY:
(800)-770-2030 or (609) 800-9909
Available through March 14, 2024
Reference number: 91416
About Kinaxis Inc.
Kinaxis is a global leader in modern supply chain management. We serve supply chains and the people who manage them in service of humanity. Our software is trusted by renowned global brands to provide the agility and predictability needed to navigate today’s volatility and disruption. We combine our patented concurrency technique with a human-centered approach to AI to empower businesses of all sizes to orchestrate their end-to-end supply chain network, from multi-year strategic planning through down-to-the-second execution and last-mile delivery. For more news and information, please visit kinaxis.com or follow us on LinkedIn.
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,
2023
2022
2023
2022
(In thousands of USD)
(In thousands of USD)
Profit
4,021
8,562
10,060
20,080
Change in fair value of contingent consideration
—
1,367
1,951
(826
)
Share-based compensation
8,388
7,558
34,507
26,238
Adjusted profit
12,409
17,487
46,518
45,492
Income tax expense (recovery)
4,791
(635
)
9,676
11,406
Depreciation and amortization
6,424
6,761
26,284
25,060
Foreign exchange loss (gain)
(797
)
(1,648
)
1,236
(1,499
)
Net finance income
(3,100
)
(849
)
(8,842
)
(1,013
)
7,318
3,629
28,354
33,954
Adjusted EBITDA
19,727
21,116
74,872
79,446
Adjusted EBITDA as a percentage of revenue
17.6
%
21.4
%
17.5
%
21.7
%
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:
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 2024 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 2024, are subject to certain assumptions and associated risks including:
Our guidance and commentary for achievement of contracted revenue in future periods, including in 2024, 2025 and 2026 and later, is based on assumptions and associated risks including:
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 February 28, 2024, 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.
Kinaxis Inc.
Consolidated Statements of Financial Position
(Expressed in thousands of USD)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
174,844
175,347
Short-term investments
118,118
50,476
Trade and other receivables
156,609
157,657
Prepaid expenses
14,810
13,660
464,381
397,140
Non-current assets:
Unbilled receivables
3,155
7,245
Other receivables
972
971
Prepaid expenses
1,130
2,395
Investment tax credits recoverable
8,362
7,591
Deferred tax assets
1,184
1,065
Contract acquisition costs
27,438
24,892
Property and equipment
40,300
51,852
Right-of-use assets
47,109
53,537
Intangible assets
23,394
28,271
Goodwill
74,556
73,314
227,600
251,133
691,981
648,273
Liabilities and Shareholders’ Equity
Current liabilities:
Trade payables and accrued liabilities
39,700
40,107
Deferred revenue
137,598
133,467
Provisions
—
296
Contingent consideration
—
9,146
Lease obligations
5,805
6,991
183,103
190,007
Non-current liabilities:
Lease obligations
45,985
49,977
Deferred tax liabilities
8,065
6,861
54,050
56,838
Shareholders’ equity:
Share capital
307,327
244,713
Contributed surplus
44,339
65,129
Accumulated other comprehensive gain (loss)
1,360
(156
)
Retained earnings
101,802
91,742
454,828
401,428
691,981
648,273
Kinaxis Inc.
Consolidated Statements of Comprehensive Income
(Expressed in thousands of USD, except share and per share data)
Three months ended December 31,
Year ended December 31,
2023
2022
2023
2022
Revenue
$
111,990
$
98,483
$
426,971
$
366,889
Cost of revenue
43,100
37,217
168,074
131,102
Gross profit
68,890
61,266
258,897
235,787
Operating expenses:
Selling and marketing
26,606
21,213
102,719
79,446
Research and development
20,665
19,494
81,707
74,147
General and administrative
16,703
13,804
60,369
54,273
63,974
54,511
244,795
207,866
4,916
6,755
14,102
27,921
Other income:
Foreign exchange gain (loss)
797
1,648
(1,236
)
1,499
Net finance and other income
3,099
891
8,821
1,240
Change in fair value of contingent consideration
—
(1,367
)
(1,951
)
826
3,896
1,172
5,634
3,565
Profit before income taxes
8,812
7,927
19,736
31,486
Income tax expense (recovery):
4,791
(635
)
9,676
11,406
Profit
4,021
8,562
10,060
20,080
Other comprehensive income:
Items that are or may be reclassified subsequently to profit:
Foreign currency translation differences - foreign operations
2,543
4,539
1,075
441
Change in net unrealized gain on cash flow hedges
804
—
441
—
3,347
4,539
1,516
441
Total comprehensive income
$
7,368
$
13,101
$
11,576
$
20,521
Basic earnings per share
$
0.14
$
0.31
$
0.36
$
0.73
Weighted average number of basic Common Shares
28,114,987
27,903,102
28,321,874
27,667,100
Diluted earnings per share
$
0.14
$
0.30
$
0.35
$
0.70
Weighted average number of diluted Common Shares
28,863,575
28,790,951
29,149,535
28,609,603
Kinaxis Inc.
Consolidated Statements of Changes in Shareholders’ Equity
(Expressed in thousands of USD)
Accumulated other comprehensive income (loss)
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
—
—
—
—
—
10,060
10,060
Other comprehensive income
—
—
441
1,075
1,516
—
1,516
Total comprehensive income
—
—
441
1,075
1,516
10,060
11,576
Share options exercised
41,545
(9,991
)
—
—
—
—
31,554
Restricted share units vested
10,676
(10,676
)
—
—
—
—
—
Performance share units vested
2,628
(2,628
)
—
—
—
—
—
Share based payments
—
35,788
—
—
—
—
35,788
Shares issued for contingent consideration
11,097
—
—
—
—
—
11,097
Shares re-purchased
(3,332
)
(33,283
)
—
—
—
—
(36,615
)
Total shareholder transactions
62,614
(20,790
)
—
—
—
—
41,824
Balance, December 31, 2023
307,327
44,339
441
919
1,360
101,802
454,828
Kinaxis Inc.
Consolidated Statements of Cash Flows
(Expressed in thousands of USD)
Three months ended December 31,
Year ended December 31,
2023
2022
2023
2022
Cash flows from (used in) operating activities:
Profit
$
4,021
$
8,562
$
10,060
$
20,080
Items not affecting cash:
Depreciation of property and equipment and right-of-use assets
5,093
5,363
20,880
21,496
Amortization of intangible assets
1,331
1,398
5,404
3,564
Share-based payments
8,388
7,558
34,507
26,238
Net finance income
(3,100
)
(849
)
(8,842
)
(1,013
)
Change in fair value of contingent consideration
—
1,367
1,951
(826
)
Income tax expense (recovery)
4,791
(635
)
9,676
11,406
Investment tax credits recoverable
1,463
(601
)
(771
)
(3,975
)
Change in operating assets and liabilities
4,633
(24,064
)
5,369
(49,123
)
Interest received
2,508
1,087
7,853
2,546
Interest paid
(393
)
(444
)
(1,640
)
(1,841
)
Income taxes paid
(766
)
(1,069
)
(5,090
)
(4,034
)
27,969
(2,327
)
79,357
24,518
Cash flows from (used in) investing activities:
Acquisition of business, net of cash acquired
—
(76
)
—
(36,738
)
Purchase of property and equipment and intangible assets
(289
)
(8,169
)
(2,299
)
(18,249
)
Purchase of short-term investments
(32,955
)
(35,149
)
(205,679
)
(80,314
)
Redemption of short-term investments
45,501
15,149
140,666
60,314
12,257
(28,245
)
(67,312
)
(74,987
)
Cash flows from (used in) financing activities:
Payment of lease obligations
(1,729
)
(1,770
)
(6,974
)
(6,733
)
Lease incentives received
—
—
—
3,858
Repurchase of shares
(36,615
)
—
(36,615
)
—
Proceeds from exercise of stock options
10,839
6,345
31,554
29,715
(27,505
)
4,575
(12,035
)
26,840
Increase (decrease) in cash and cash equivalents
12,721
(25,997
)
10
(23,629
)
Cash and cash equivalents, beginning of year
160,303
202,764
175,347
203,220
Effects of exchange rates on cash and cash equivalents
$
1,820
$
(1,420
)
$
(513
)
$
(4,244
)
Cash and cash equivalents, end of year
174,844
175,347
174,844
175,347
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228712992/en/
Investor Relations Rick Wadsworth | Kinaxis rwadsworth@kinaxis.com 613-907-7613
Media Relations Jaime Cook | Kinaxis jcook@kinaxis.com 289-552-4640
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