Kinaxis Inc. Reports Third Quarter 2021 Results

• SaaS revenue grows 14% to $44.7 million, adjusted EBITDA⁽¹⁾ margin of 19%
• Record new customers wins, 23% ARR growth supports outlook for accelerated growth ahead
• Updates guidance for FY 2021

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

"We won a record number of new customers this quarter, and year-to-date we have more than tripled new customer wins compared to the same time last year. That success is reflected in very strong year-over-year growth in our annual recurring revenue² and a slightly improved outlook for 2021," said John Sicard, President and CEO of Kinaxis. "Supply chain issues continue to be at the centre of boardroom conversations and daily newsfeeds, and we are helping companies navigate the complexities. The sustained, positive momentum in our market gives us confidence in our mid-term target of 23-25% growth in SaaS revenue, including for next year."

 Q3 2021 Highlights

$ USD thousands, except as otherwise indicated	Q3 2021	Q3 2020	Change
Total Revenue	64,436	55,116	17%
SaaS	44,731	39,322	14%
Subscription term license	1,997	1,035	93%
Professional services	14,576	11,492	27%
Maintenance and support	3,132	3,267	(4%)
Gross profit	42,589    66%	36,559    66%	16%
Profit	200    $0.01/diluted share	731   $0.03/diluted share	(73%)
Adjusted EBITDA^(1)	12,384    19%	10,134   18%	22%
Cash from operating activities	11,249	4,497	150%

(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.

Key Performance Indicators
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, 2021.

$USD millions	2021	2022	2023 and later	Total backlog
SaaS	45.4	144.7	168.0	358.1
Maintenance and support	3.1	8.8	5.8	17.7
Total	48.5	153.5	173.8	375.8

The company's Annual Recurring Revenue² (ARR), which includes amounts related to both SaaS and on-premise subscription contracts, rose 23% to $206.6 million at the end of the quarter.

Financial Guidance

$USD millions	2019	2020	Q1 2021	Q2 2021	Q3 2021
Annual recurring revenue^2 Year-over-year growth	159 21%	185 17%	191 18%	200 24%	207 23%

(2)

Annual Recurring Revenue (ARR) is the total annualized value of recurring subscription amounts (ultimately recognized as SaaS, Subscription Term Licenses and Maintenance & 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.

Based on the current business outlook, Kinaxis is updating its fiscal 2021 financial guidance, as follows:

	FY 2021 Guidance
Total revenue	$248-250 million
SaaS	17-20% growth
Subscription term license	$6-7 million
Adjusted EBITDA^(1) margin	14-16%

Beyond 2021, and assuming an ongoing return to 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 September 30, 2021 are available on Kinaxis' website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, November 5, 2021, 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.

CONFERENCE CALL DETAILS

DATE:	Friday, November 5, 2021
TIME:	8:30 a.m. Eastern Time
CALL REGISTRATION:	https://dpregister.com/sreg/10161310/eee2d47ea8
WEBCAST:	https://bit.ly/2YQtUit (available for three months)
REPLAY:	(877)-344-7529
	Available through Friday, November 19, 2021
REFERENCE NUMBER:	10161310

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 September 30,								Nine months ended September 30,
	2021				2020				2021			2020
					(In thousands of USD)
Profit	$	200		$	731				$	1,754		$	15,316
Share-based compensation	6,501				4,732				17,710			12,231
Non-recurring item	–				–				(7,906)			–
Adjusted profit	$	6,701		$	5,463				$	11,558		$	27,547
Income tax expense	1,310				354				2,294			10,094
Depreciation and amortization	4,784				4,500				13,852			11,068
Foreign exchange loss (gain)	(547)				(124)				364			(168)
Net finance expense (income)	136				(59)				506			(884)
	5,683				4,671				17,016			20,110
Adjusted EBITDA	$	12,384		$	10,134				$	28,574		$	47,657
Adjusted EBITDA as a percentage of revenue	19%				18%				16%			28%

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, 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 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; 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)

	September 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	210,382	$	182,958
Short-term investments	30,169		30,180
Trade and other receivables	50,988		82,883
Investment tax credits recoverable	-		1,109
Prepaid expenses	9,291		9,264
	300,830		306,394
Non-current assets:
Property and equipment	44,133		30,746
Right-of-use assets	52,621		15,722
Contract acquisition costs	17,945		16,484
Unbilled receivables	430		2,013
Other receivables	692		752
Deferred tax assets	3,014		2,308
Investment tax credits recoverable	2,260		980
Intangible assets	11,340		13,023
Goodwill	39,988		39,988
	$	473,253	$	428,410
Liabilities and Shareholders' Equity
Current liabilities:
Trade payables and accrued liabilities	$	31,769	$	33,030
Deferred revenue	75,541		94,275
Lease obligations	1,649		4,554
	108,959		131,859
Non-current liabilities:
Lease obligations	51,734		12,065
Deferred tax liabilities	3,607		2,729
	55,341		14,794
Shareholders' equity:
Share capital	183,984		173,104
Contributed surplus	50,861		35,846
Accumulated other comprehensive loss	(473)		(20)
Retained earnings	74,581		72,827
	308,953		281,757
	$	473,253	$	428,410

Kinaxis Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

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

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Revenue	$	64,436	$	55,116	$	182,220	$	169,244
Cost of revenue	21,847		18,557		62,136		50,027
Gross profit	42,589		36,559		120,084		119,217
Operating expenses:
Selling and marketing	15,001		12,881		42,118		37,109
Research and development	16,054		13,664		40,959		33,598
General and administrative	10,502		9,209		32,367		24,249
	41,557		35,754		115,444		94,956
	1,032		805		4,640		24,261
Other income (expense):
Foreign exchange gain (loss)	547		124		(364)		168
Net finance and other income (expense)	(69)		156		(228)		981
	478		280		(592)		1,149
Profit before income taxes	1,510		1,085		4,048		25,410
Income tax expense	1,310		354		2,294		10,094
Profit	200		731		1,754		15,316
Other comprehensive income (loss):
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations	(223)		146		(453)		91
Total comprehensive income (loss)	$	(23)	$	877	$	1,301	$	15,407
Basic earnings per share	$	0.01	$	0.03	$	0.06	$	0.58
Weighted average number of basic Common Shares	27,135,455		26,596,412		27,206,262		26,622,939
Diluted earnings per share	$	0.01	$	0.03	$	0.06	$	0.55
Weighted average number of diluted Common Shares	28,279,754		27,766,505		28,397,945		28,000,655

Kinaxis Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

(Expressed in thousands of USD)
(Unaudited)

					Accumulated
					other
	Share		Contributed		comprehensive		Retained
	capital		surplus		loss		earnings		Total equity
Balance, December 31, 2019	$	140,961	$	30,392	$	(348)	$	59,097	$	230,102
Profit	-		-		-		15,316		15,316
Other comprehensive income	-		-		91		-		91
Total comprehensive income	-		-		91		15,316		15,407
Share options exercised	23,884		(5,988)		-		-		17,896
Share based payments	-		12,231		-		-		12,231
Total shareholder transactions	23,884		6,243		-		-		30,127
Balance, September 30, 2020	$	164,845	$	36,635	$	(257)	$	74,413	$	275,636
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 income (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

Kinaxis Inc.
Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of USD)
(Unaudited)

	For the three months   ended September 30,				For the nine months ended   September 30,
	2021		2020		2021		2020
Cash flows from operating activities:
Profit	$	200	$	731	$	1,754	$	15,316
Items not affecting cash:
Depreciation of property and equipment and right-of-use assets	4,223		3,939		12,169		10,403
Amortization of intangible assets	561		561		1,683		665
Share-based payments	6,501		4,732		17,710		12,231
Net finance and other (income) expense	69		(156)		228		(981)
Income tax expense	1,310		354		2,294		10,094
Investment tax credits recoverable	(420)		-		(171)		-
Change in operating assets and liabilities	(1,641)		(5,219)		11,369		10,474
Interest received	185		596		391		1,658
Interest paid	(251)		(198)		(608)		(487)
Income taxes received (paid)	512		(843)		81		(3,103)
	11,249		4,497		46,900		56,270
Cash flows used in investing activities:
Acquisition of business, net of cash acquired	-		(59,166)		(800)		(61,743)
Purchase of property and equipment	(5,439)		(1,299)		(22,369)		(12,337)
Purchase of short-term investments	(15,005)		(20,150)		(45,165)		(95,452)
Redemption of short-term investments	15,005		65,302		45,165		95,404
	(5,439)		(15,313)		(23,169)		(74,128)
Cash flows from financing activities:
Payment of lease obligations	(1,143)		(1,154)		(3,500)		(2,639)
Common shares issued on exercise of stock options	3,621		6,548		8,185		17,896
	2,478		5,394		4,685		15,257
Increase (decrease) in cash and cash equivalents	8,288		(5,422)		28,416		(2,601)
Cash and cash equivalents, beginning of period	202,771		184,992		182,958		182,284
Effects of exchange rates on cash and cash equivalents	(677)		286		(992)		173
Cash and cash equivalents, end of period	$	210,382	$	179,856	$	210,382	$	179,856

SOURCE Kinaxis Inc.

Investor Relations, Rick Wadsworth | Kinaxis, Tel: [phone], [email protected]; Media Relations, Danielle McNeil Taylor | Kinaxis, Tel: [phone], [email protected]

Related Links

www.kinaxis.com