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Kinaxis Inc. Reports First Quarter 2021 Results

  • SaaS revenue grows 19% to $40.6 million
  • Adjusted EBITDA(1) margin of 16%

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

“We’re pleased with the results of our first quarter, which represent a good initial step towards achieving our outlook for the year. While COVID-related delays are not fully behind us, the environment for booking new business has shown continued signs of improvement. We won a record number of new customers for a first quarter, which together with project expansions, resulted in record first quarter incremental subscription bookings. Overall, we continue to see a heightened level of interest from companies looking to drive hyper-agility in their supply chain,” said John Sicard, President and CEO of Kinaxis.

Q1 2021 Highlights

$ USD thousands, except as otherwise

indicated

Q1 2021

Q1 2020

Change

Total Revenue

57,728

52,755

9%

SaaS

40,576

33,995

19%

Subscription term license

2,059

4,904

(58%)

Professional services

12,027

10,673

13%

Maintenance and support

3,066

3,183

(4%)

Gross profit

37,222

64%

36,919

70%

1%

Profit (Loss)

(1,534)

($0.06)/diluted share

5,581

$0.20/diluted share

(127%)

Adjusted EBITDA(1)

9,041

16%

15,052

29%

(40%)

Cash from operating activities

20,649

20,960

(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.

Financial Guidance and Outlook

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 March 31, 2021.



$USD millions

2021

2022

2023 and

later

Total

backlog

SaaS

119.8

118.6

122.4

360.8

Maintenance and support

9.2

8.4

5.1

22.7

Subscription term license

0.5

0.5

Total

129.5

127.0

127.5

384.0

Based on this backlog and the current outlook, Kinaxis is reiterating its fiscal 2021 financial guidance, as follows:


FY 2021 Guidance

Total revenue

$242-247 million

SaaS

17-20% growth

Subscription term license

$3-5 million

Adjusted EBITDA(1) margin

11-14%

Beyond 2021, and assuming 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 March 31, 2021 are available on Kinaxis’ website and on SEDAR at www.sedar.com.

Conference Call

Kinaxis will host a conference call tomorrow, May 5, 2021, to discuss these results. John Sicard, Chief Executive Officer, and Richard Monkman, 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:

Wednesday, May 5, 2021

TIME:

8:30 a.m. Eastern Time

CALL REGISTRATION:

http://www.directeventreg.com/registration/event/8858568

WEBCAST:

https://bit.ly/3tl0i7d

REPLAY:

(416) 849-0833 or (855) 859-2056


Available through Wednesday, May 19, 2021

REFERENCE NUMBER:

8858568

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 March 31,


2021


2020


(In thousands of USD)

Profit (loss)…………………………………………………………

$

(1,534)


$

5,581

Share-based compensation………………………………….

5,307


3,776

Adjusted profit……………………………………………………

$

3,773


$

9,357

Income tax expense…………………………………………….

68


3,476

Depreciation and amortization……………………………..

4,470


2,941

Foreign exchange loss (gain)………………………………..

468


(49)

Net finance income (expense)………………………………

262


(673)


5,268


5,695

Adjusted EBITDA…………………………………………………

$

9,041


$

15,052

Adjusted EBITDA as a percentage of revenue…………


16%


29%

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 years 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 current customer retention levels; 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)


March 31,

2021

December 31,

2020

Assets






Current assets:



Cash and cash equivalents

199,143

182,958

Short-term investments 

30,182

30,180

Trade and other receivables

70,945

82,883

Investment tax credits recoverable

1,109

Prepaid expenses

10,138

9,264


310,408

306,394

Non-current assets:



Property and equipment

32,019

30,746

Right-of-use assets

15,127

15,722

Contract acquisition costs

17,152

16,484

Unbilled receivables

913

2,013

Other receivables

701

752

Deferred tax assets

2,986

2,308

Investment tax credits recoverable

2,514

980

Intangible assets

12,462

13,023

Goodwill

39,988

39,988





434,270

428,410

Liabilities and Shareholders’ Equity






Current liabilities:



Trade payables and accrued liabilities

29,437

33,030

Deferred revenue

98,182

94,275

Lease obligations

4,796

4,554


132,415

131,859

Non-current liabilities:



Lease obligations

11,316

12,065

Deferred tax liabilities

3,018

2,729


14,334

14,794

Shareholders’ equity:



Share capital

176,263

173,104

Contributed surplus

40,254

35,846

Accumulated other comprehensive loss

(289)

(20)

Retained earnings

71,293

72,827


287,521

281,757


434,270

428,410

Kinaxis Inc.

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

For the three months ended

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

(Unaudited)




March 31,

March 31,


2021

2020




Revenue

57,728

52,755




Cost of revenue

20,506

15,836

Gross profit

37,222

36,919




Operating expenses:



Selling and marketing

12,838

11,975

Research and development

13,682

9,677

General and administrative

11,542

6,932


38,062

28,584





(840)

8,335

Other income (expense):



Foreign exchange gain (loss)

(468)

49

Net finance and other income (expense)

(158)

673


(626)

722




Profit (loss) before income taxes

(1,466)

9,057




Income tax expense

68

3,476

Profit (loss)

(1,534)

5,581




Other comprehensive income (loss):



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



Foreign currency translation differences – foreign operations

(269)

(124)

Total comprehensive income (loss)

(1,803)

5,457




Basic earnings (loss) per share

(0.06)

0.21




Weighted average number of basic Common Shares

27,109,227

26,432,585




Diluted earnings (loss) per share

(0.06)

0.20




Weighted average number of diluted Common Shares

27,109,227

27,534,441

Kinaxis Inc.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

For the three months ended March 31, 2021 and 2020

(Expressed in thousands of USD)

(Unaudited)




Accumulated






other




Share

Contributed

comprehensive

Retained



capital

surplus

income (loss)

earnings

Total equity







Balance, December 31, 2019

140,961

30,392

(348)

59,097

230,102







Profit

5,581

5,581

Other comprehensive (loss)

(124)

(124)

Total comprehensive income (loss)

(124)

5,581

5,457







Share options exercised

6,724

(1,714)

5,010

Share based payments   

3,776

3,776

Total shareholder transactions

6,724

2,062

8,786







Balance, March 31, 2020

147,685

32,454

(472)

64,678

244,345







Balance, December 31, 2020

173,104

35,846

(20)

72,827

281,757







Profit (loss)

(1,534)

(1,534)

Other comprehensive (loss)

(269)

(269)

Total comprehensive (loss)

(269)

(1,534)

(1,803)







Share options exercised

3,159

(899)

2,260

Share based payments

5,307

5,307

Total shareholder transactions

3,159

4,408

7,567







Balance, March 31, 2021

176,263

40,254

(289)

71,293

287,521


Kinaxis Inc.

Condensed Consolidated Interim Statements of Cash Flows

For the three months ended            

(Expressed in thousands of USD)

(Unaudited)


March 31,

March 31,


2021

2020

Cash flows from operating activities:



Profit (loss)

(1,534)

5,581

Items not affecting cash:



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

3,909

2,899

Amortization of intangible assets

561

42

Share-based payments

5,307

3,776

Net finance and other income (expense)

158

(673)

Income tax expense

68

3,476

Income tax credits recoverable

(425)

Change in operating assets and liabilities

12,940

6,856

Interest received

23

862

Interest paid

(184)

(120)

Income taxes paid

(174)

(1,739)


20,649

20,960

Cash flows used in investing activities:



Acquisition of businesses, net of cash acquired

(800)

(2,410)

Purchase of property and equipment

(4,441)

(1,709)

Purchase of short-term investments

(15,006)

(65,302)

Redemption of short-term investments

15,006

20,102


(5,241)

(49,319)

Cash flows from financing activities:



Payment of lease obligations

(1,172)

(591)

Common shares issued on exercise of stock options

2,260

5,010


1,088

4,419




Increase (decrease) in cash and cash equivalents

16,496

(23,940)




Cash and cash equivalents, beginning of period

182,958

182,284




Effects of exchange rates on cash and cash equivalents

(311)

(196)




Cash and cash equivalents, end of period

199,143

158,148

SOURCE Kinaxis Inc.

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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