- SaaS revenue grows 26% to $35.7 million
- Total revenue grows 45% to $61.4 million
- Adjusted EBITDA(1) margin of 37%
OTTAWA, ON, Aug. 5, 2020 /CNW/ - Kinaxis® (TSX: KXS) , the authority in driving agility for fast, confident decision-making in an unpredictable world, today reported results for its second quarter ended June 30, 2020. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.
"We are pleased to report another very strong quarter. SaaS revenue grew by 26% and our sales pipeline and field teams have continued to expand despite every employee continuing to work remotely. At the start of Q3, we also acquired Rubikloud, an AI-based demand planning SaaS provider that immediately adds value for our CPG customers and creates an important entry point for us into the enterprise retail industry – our seventh target market," said John Sicard, President and CEO of Kinaxis. "On the strength of our backlog and sales pipeline, we are able to reiterate our SaaS revenue guidance for fiscal 2020 while increasing other aspects of 2020 guidance. Due to COVID-19, we have seen some customers and prospects expand their contract approval processes, which has delayed some deal signings. We remain confident in our ability to close these opportunities and interest and engagement from the market remains high and well-balanced across geographies and verticals. Kinaxis has quite simply never been more relevant. There has never been more attention on global supply chain resilience, and the power of concurrent planning to provide the agility needed to respond to daily disruption."
|
Q2 2020 Highlights |
|
|
|
|
|
|
|
|
|
$ USD thousands, except as otherwise indicated |
Q2 2020 |
Q2 2019 |
Change |
|
Total Revenue |
61,373 |
42,352 |
45% |
|
SaaS |
35,741 |
28,283 |
26% |
|
Subscription term license |
10,003 |
2,414 |
314% |
|
Professional services |
12,400 |
8,358 |
48% |
|
Maintenance and support |
3,229 |
3,297 |
-2% |
|
Gross profit |
45,739 |
29,368 |
56% |
|
|
(75%) |
(69%) |
|
|
Profit |
9,004 |
4,001 |
125% |
|
|
($0.32/diluted share) |
($0.15/diluted share) |
|
|
Adjusted EBITDA(1) |
22,471 |
11,555 |
|
|
|
(37%) |
(27%) |
94% |
|
Cash from operating activities |
30,813 |
8,761 |
252% |
|
(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 June 30, 2020.
|
|
2020 |
2021 |
2022 and |
Total |
|
SaaS |
71.2 |
105.9 |
125.7 |
302.7 |
|
Subscription term license |
0.7 |
0.2 |
- |
0.9 |
|
Maintenance and support |
6.4 |
11.3 |
11.7 |
29.5 |
|
Total |
78.3 |
117.4 |
137.4 |
333.0 |
Based on this backlog and its current outlook, Kinaxis is reiterating its fiscal 2020 SaaS revenue growth and Adjusted EBITDA margin guidance and increasing other aspects of its financial guidance for the year, as follows:
|
|
FY 2020 Guidance |
|
Total revenue |
$216-220 million |
|
SaaS |
23-25% growth |
|
Subscription term license |
$16-17 million |
|
Adjusted EBITDA margin |
20-23% of revenue |
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 June 30, 2020 are available on Kinaxis' website and on SEDAR at www.sedar.com.
Conference Call
Kinaxis will host a conference call tomorrow, August 6, 2020, 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.
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Date: |
Thursday, August 6, 2020 |
|
Time: |
8:30 a.m. Eastern Time |
|
Webcast: |
|
|
Dial-in number: |
(647) 427-7450 or (888) 231-8191 |
|
Replay: |
(416) 849-0833 or (855) 859-2056 |
|
|
Available until 11:59 p.m. EDT, Thursday, August 13, 2020 |
|
Reference number: |
8089191 |
Please call the conference telephone number five to ten minutes prior to the start time. An operator will register your name and organization.
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 June 30, |
|
Six months ended June 30, |
||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||
|
|
(In thousands of USD) |
||||||||||
|
Profit |
$ |
9,004 |
|
$ |
4,001 |
|
$ |
14,585 |
|
$ |
10,967 |
|
Share-based compensation |
3,723 |
|
3,581 |
|
7,499 |
|
6,653 |
||||
|
Adjusted profit |
$ |
12,727 |
|
$ |
7,582 |
|
$ |
22,084 |
|
$ |
17,620 |
|
Income tax expense |
6,264 |
|
1,905 |
|
9,740 |
|
5,723 |
||||
|
Depreciation and amortization |
3,627 |
|
2,974 |
|
6,568 |
|
5,651 |
||||
|
Foreign exchange loss (gain) |
5 |
|
(85) |
|
(44) |
|
85 |
||||
|
Net finance income |
(152) |
|
(821) |
|
(825) |
|
(1,586) |
||||
|
|
9,744 |
|
3,973 |
|
15,439 |
|
9,873 |
||||
|
Adjusted EBITDA |
$ |
22,471 |
|
$ |
11,555 |
|
$ |
37,523 |
|
$ |
27,493 |
|
Adjusted EBITDA as a percentage of revenue |
37% |
|
27% |
|
33% |
|
31% |
||||
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, 2020; and
- contracted revenue in future periods, including 2020, 2021 and 2022 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 2020 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 2020, 2021 and 2022 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 February 25, 2020, under the heading "Risk Factors" in our Annual Information Form dated March 23, 2020 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. |
||||
|
|
|
|
||
|
As at June 30, 2020 and December 31, 2019 |
||||
|
|
|
|
||
|
|
June 30, |
December 31, |
||
|
|
|
|
||
|
Assets |
|
|
||
|
|
|
|
||
|
Current assets: |
|
|
||
|
Cash and cash equivalents |
$ |
184,992 |
$ |
182,284 |
|
Short-term investments |
75,571 |
30,319 |
||
|
Trade and other receivables |
54,764 |
80,623 |
||
|
Prepaid expenses |
8,777 |
6,534 |
||
|
|
324,104 |
299,760 |
||
|
|
|
|
||
|
Non-current assets: |
|
|
||
|
Property and equipment |
32,088 |
25,704 |
||
|
Right-of-use assets |
14,085 |
8,671 |
||
|
Contract acquisition costs |
15,306 |
15,497 |
||
|
Unbilled receivables |
3,035 |
249 |
||
|
Other receivables |
719 |
713 |
||
|
Deferred tax assets |
407 |
149 |
||
|
Intangible assets |
646 |
- |
||
|
Goodwill |
3,659 |
- |
||
|
|
|
|
||
|
|
$ |
394,049 |
$ |
350,743 |
|
|
|
|
||
|
Liabilities and Shareholders' Equity |
|
|
||
|
|
|
|
||
|
Current liabilities: |
|
|
||
|
Trade payables and accrued liabilities |
$ |
29,027 |
$ |
20,770 |
|
Deferred revenue |
79,308 |
83,673 |
||
|
Lease obligations |
3,657 |
2,288 |
||
|
|
111,992 |
106,731 |
||
|
Non-current liabilities: |
|
|
||
|
Lease obligations |
11,013 |
6,818 |
||
|
Deferred tax liabilities |
7,565 |
7,092 |
||
|
|
18,578 |
13,910 |
||
|
|
|
|
||
|
Shareholders' equity: |
|
|
||
|
Share capital |
156,234 |
140,961 |
||
|
Contributed surplus |
33,966 |
30,392 |
||
|
Accumulated other comprehensive loss |
(403) |
(348) |
||
|
Retained earnings |
73,682 |
59,097 |
||
|
|
263,479 |
230,102 |
||
|
|
|
|
||
|
|
$ |
394,049 |
$ |
350,743 |
|
Kinaxis Inc. |
||||||||
|
|
|
|
||||||
|
For the three and six months ended June 30, 2020 and 2019 |
||||||||
|
|
|
|
||||||
|
|
For the three months |
For the six months |
||||||
|
|
2020 |
2019 |
2020 |
2019 |
||||
|
|
|
|
|
|
||||
|
Revenue |
$ |
61,373 |
$ |
42,352 |
$ |
114,128 |
$ |
88,106 |
|
|
|
|
|
|
||||
|
Cost of revenue |
15,634 |
12,984 |
31,470 |
25,175 |
||||
|
|
|
|
|
|
||||
|
Gross profit |
45,739 |
29,368 |
82,658 |
62,931 |
||||
|
|
|
|
|
|
||||
|
Operating expenses: |
|
|
|
|
||||
|
Selling and marketing |
12,253 |
10,446 |
24,228 |
19,761 |
||||
|
Research and development |
10,257 |
8,101 |
19,934 |
16,095 |
||||
|
General and administrative |
8,108 |
5,821 |
15,040 |
11,886 |
||||
|
|
30,618 |
24,368 |
59,202 |
47,742 |
||||
|
|
|
|
|
|
||||
|
|
15,121 |
5,000 |
23,456 |
15,189 |
||||
|
Other income (expense): |
|
|
|
|
||||
|
Foreign exchange gain (loss) |
(5) |
85 |
44 |
(85) |
||||
|
Net finance income |
152 |
821 |
825 |
1,586 |
||||
|
|
147 |
906 |
869 |
1,501 |
||||
|
|
|
|
|
|
||||
|
Profit before income taxes |
15,268 |
5,906 |
24,325 |
16,690 |
||||
|
|
|
|
|
|
||||
|
Income tax expense |
6,264 |
1,905 |
9,740 |
5,723 |
||||
|
|
|
|
|
|
||||
|
Profit |
9,004 |
4,001 |
14,585 |
10,967 |
||||
|
|
|
|
|
|
||||
|
Other comprehensive income (loss): |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Items that are or may be reclassified subsequently to profit or loss: |
|
|
|
|
||||
|
Foreign currency translation differences - foreign operations |
69 |
21 |
(55) |
(35) |
||||
|
|
|
|
|
|
||||
|
Total comprehensive income |
$ |
9,073 |
$ |
4,022 |
$ |
14,530 |
$ |
10,932 |
|
|
|
|
|
|
||||
|
Basic earnings per share |
$ |
0.34 |
$ |
0.15 |
$ |
0.55 |
$ |
0.42 |
|
|
|
|
|
|
||||
|
Weighted average number of basic Common Shares |
26,546,213 |
26,146,682 |
26,489,205 |
26,119,264 |
||||
|
|
|
|
|
|
||||
|
Diluted earnings per share |
$ |
0.32 |
$ |
0.15 |
$ |
0.53 |
$ |
0.41 |
|
|
|
|
|
|
||||
|
Weighted average number of diluted Common Shares |
27,960,482 |
26,840,552 |
27,776,206 |
26,841,775 |
||||
|
|
|
|
|
|
||||
|
Kinaxis Inc. |
||||||||||
|
|
||||||||||
|
For the six months ended June 30, 2020 and 2019
|
||||||||||
|
|
|
|
|
|
|
|||||
|
|
|
|
Accumulated |
|
|
|||||
|
|
|
|
other |
|
|
|||||
|
|
Share |
Contributed |
comprehensive |
Retained |
|
|||||
|
|
capital |
surplus |
loss |
earnings |
Total equity |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, December 31, 2018 |
$ |
124,951 |
$ |
24,284 |
$ |
(319) |
$ |
35,766 |
$ |
184,682 |
|
|
|
|
|
|
|
|||||
|
Profit |
- |
- |
- |
10,967 |
10,967 |
|||||
|
Other comprehensive loss |
- |
- |
(35) |
- |
(35) |
|||||
|
Total comprehensive income (loss) |
- |
- |
(35) |
10,967 |
10,932 |
|||||
|
|
|
|
|
|
|
|||||
|
Share options exercised |
3,026 |
(928) |
- |
- |
2,098 |
|||||
|
Share based payments |
- |
6,653 |
- |
- |
6,653 |
|||||
|
Total shareholder transactions |
3,026 |
5,725 |
- |
- |
8,751 |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, June 30, 2019 |
$ |
127,977 |
$ |
30,009 |
$ |
(354) |
|
46,733 |
$ |
204,365 |
|
|
|
|
|
|
|
|||||
|
Balance, December 31, 2019 |
$ |
140,961 |
$ |
30,392 |
$ |
(348) |
|
59,097 |
$ |
230,102 |
|
|
|
|
|
|
|
|||||
|
Profit |
- |
- |
- |
14,585 |
14,585 |
|||||
|
Other comprehensive loss |
- |
- |
(55) |
- |
(55) |
|||||
|
Total comprehensive income (loss) |
- |
- |
(55) |
14,585 |
14,530 |
|||||
|
|
|
|
|
|
|
|||||
|
Share options exercised |
15,273 |
(3,925) |
- |
- |
11,348 |
|||||
|
Share based payments |
- |
7,499 |
- |
- |
7,499 |
|||||
|
Total shareholder transactions |
15,273 |
3,574 |
- |
- |
18,847 |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, June 30, 2020 |
$ |
156,234 |
$ |
33,966 |
$ |
(403) |
|
73,682 |
$ |
263,479 |
|
Kinaxis Inc. |
||||||||
|
|
||||||||
|
For the three and six months ended June 30, 2020 and 2019 |
||||||||
|
|
|
|
|
|
||||
|
|
For the three months |
For the six months |
||||||
|
|
2020 |
2019 |
2020 |
2019 |
||||
|
|
|
|
|
|
||||
|
Cash flows from (used in) operating activities: |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Profit |
$ |
9,004 |
$ |
4,001 |
$ |
14,585 |
$ |
10,967 |
|
|
|
|
|
|
||||
|
Items not affecting cash: |
|
|
|
|
||||
|
Depreciation of property and equipment and right-of-use assets |
3,565 |
2,974 |
6,464 |
5,651 |
||||
|
Amortization of intangible assets |
62 |
- |
104 |
- |
||||
|
Share-based payments |
3,723 |
3,581 |
7,499 |
6,653 |
||||
|
Net finance income |
(152) |
(821) |
(825) |
(1,586) |
||||
|
Income tax expense |
6,264 |
1,905 |
9,740 |
5,723 |
||||
|
Change in operating assets and liabilities |
8,837 |
(2,045) |
15,693 |
10,974 |
||||
|
Interest received |
200 |
1,000 |
1,062 |
1,873 |
||||
|
Interest paid |
(169) |
(158) |
(289) |
(270) |
||||
|
Income taxes paid |
(521) |
(1,676) |
(2,260) |
(12,465) |
||||
|
|
30,813 |
8,761 |
51,773 |
27,520 |
||||
|
|
|
|
|
|
||||
|
Cash flows from (used in) investing activities: |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Acquisition of business, net of cash acquired |
(167) |
- |
(2,577) |
- |
||||
|
Purchase of property and equipment |
(9,329) |
(8,301) |
(11,038) |
(9,194) |
||||
|
Purchase of short-term investments |
(10,000) |
(15,001) |
(75,302) |
(30,006) |
||||
|
Redemption of short-term investments |
10,000 |
22,500 |
30,102 |
50,006 |
||||
|
|
(9,496) |
(802) |
(58,815) |
10,806 |
||||
|
|
|
|
|
|
||||
|
Cash flows from (used in) financing activities: |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Payment of lease obligations |
(894) |
(687) |
(1,485) |
(1,287) |
||||
|
Common shares issued on exercise of stock options |
6,338 |
1,153 |
11,348 |
2,098 |
||||
|
|
5,444 |
466 |
9,863 |
811 |
||||
|
|
|
|
|
|
||||
|
Increase in cash and cash equivalents |
26,761 |
8,425 |
2,821 |
39,137 |
||||
|
|
|
|
|
|
||||
|
Cash and cash equivalents, beginning of period |
158,148 |
156,984 |
182,284 |
126,144 |
||||
|
|
|
|
|
|
||||
|
Effects of exchange rates on cash and cash equivalents |
83 |
103 |
(113) |
231 |
||||
|
|
|
|
|
|
||||
|
Cash and cash equivalents, end of period |
$ |
184,992 |
$ |
165,512 |
$ |
184,992 |
$ |
165,512 |
SOURCE Kinaxis Inc.