Kinaxis Earnings Call: Strong Growth and AI Innovations

Kinaxis ((TSE:KXS)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Kinaxis Inc. reflected a predominantly positive sentiment, highlighting the company’s robust performance across several key metrics. The call underscored significant new customer acquisitions and successful product launches, particularly in the AI domain, which have contributed to an upward revision in financial guidance. Despite facing some challenges in professional services margins and subscription term license revenue, these were largely overshadowed by the positive developments reported during the call.

Record New Business Bookings

Kinaxis achieved a remarkable milestone in Q3 by booking the most new business ever for the quarter, doubling the amount from the previous year. This achievement marks the second highest total in the company’s history, only surpassed by the fourth quarter of 2024.

ARR and SaaS Revenue Growth

The company reported an acceleration in Annual Recurring Revenue (ARR) growth to 17%, alongside a 17% increase in SaaS revenue. This growth is a testament to Kinaxis’ strong product leadership and the increasing demand in the market.

Adjusted EBITDA Achievement

Kinaxis reached record levels of Adjusted EBITDA with a margin of 25%, marking the fifth consecutive quarter of Rule of 40 performance. This achievement underscores the company’s operational efficiency and financial discipline.

Strong New Customer Wins

The company expanded its reach across various vertical markets and geographies with notable new enterprise customers such as Renault, Repsol, Seiko Epson, and FasterPak. These wins highlight Kinaxis’ growing influence and appeal in the global market.

AI and Maestro Agents Launch

Kinaxis launched Maestro agents, introducing a new revenue stream and enhancing customer outcomes through AI. The company reported significant productivity gains for its customers, showcasing the potential of AI-driven solutions.

Guidance Increase

Kinaxis raised its fiscal 2025 SaaS revenue guidance for the second consecutive quarter, alongside an increased full-year adjusted EBITDA margin outlook. This reflects the company’s confidence in its growth trajectory and market demand.

Professional Services Margin Pressure

Despite a 4% growth in professional services revenue, the gross margin dropped to 24% from 32% due to competitive pricing pressures in the market. This remains an area of concern that the company is addressing.

Challenges in Subscription Term License Revenue

The transition of certain on-premise customers to SaaS has led to a reduction in subscription term license revenue, impacting total revenue growth by approximately 2 percentage points. This shift is part of the company’s strategic move towards SaaS.

Forward-Looking Guidance

During the earnings call, Kinaxis highlighted its strong financial performance in the third quarter, with a 17% increase in both ARR and SaaS revenue. The company achieved record levels of Adjusted EBITDA with a 25% margin, contributing to its fifth consecutive quarter of Rule of 40 performance. Total revenue reached $134.6 million, an 11% increase from the same quarter last year. Kinaxis also announced a new partnership with Workday and the general availability of its Maestro agents, expected to drive new revenue streams. The company raised its full-year SaaS revenue guidance to 15–17% growth, reflecting strong market demand and execution.

In summary, the Kinaxis earnings call painted a picture of a company on a strong growth trajectory, driven by strategic customer acquisitions and innovative product launches. While challenges in professional services margins and subscription term license revenue were noted, the overall sentiment remained positive, buoyed by increased financial guidance and promising forward-looking statements.