News Release

OTTAWA, Ontario--(BUSINESS WIRE)-- 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

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.

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.

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

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.

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:

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.