A spate of new contracts continues to drive revenue growth at Ottawa supply chain management software provider Kinaxis, the company said this week.
Kinaxis (TSE: KXS) reported second-quarter revenue of $28.7 million, an increase of 21 per cent compared with the same period in 2015. Kinaxis reports in U.S. currency.
Those figures were buoyed by subscription revenue of $19.9 million from the firm’s cloud-based services, which was up 22 per cent from the second quarter of 2015. Kinaxis attributed the increase to new customer gains over the past 12 months and the expansion of existing customer subscriptions.
The company’s professional services revenue also increased substantially, rising 20 per cent year-over-year to $8.5 million.
The firm reported a gross profit of $20 million, while adjusted earnings were $7.3 million, down from $9.2 million in the same quarter a year earlier – a drop Kinaxis said was the result of higher sales and marketing costs and a falling loonie. Adjusted earnings per share were 20 cents.
“We delivered great results, maintaining consistent top-line growth together with both strong EBITDA and profit, while continuing to make key investments that will accelerate our long-term growth,” CEO John Sicard said in a release.
Mr. Sicard said the company continues to see strong growth potential thanks to new deals with major partners such as Korean electronics giant Samsung, which recently agreed to start using Kinaxis’s RapidResponse, a software-as-a-service product for supply chain planning and analytics.
“Our recent customer announcement with Samsung demonstrates the significant traction RapidResponse is receiving in new markets and the effectiveness of our solution to solve the diverse supply chain problems of the world's largest companies,” he said.
“Our positive customer momentum and progress in developing our strategic partner relationships gives us great confidence in our ability to continue to grow both our top- and bottom-line results while delivering strong cash flow from the business.”
Kinaxis said it now has cash reserves of $114.8 million, up from $99.4 million at the end of 2015. The company is projecting its total revenue for 2016 will be between $112 million and $115 million, a slight increase from its estimates of $108 million to $111 million in the previous quarter. Subscription revenue is now expected to grow between 22 per cent and 24 per cent.
Kinaxis also announced Wednesday that Jill Denham has been appointed to the company’s board of directors.
Among her past roles, Ms. Denham was vice-chair at CIBC Retail Markets and a director of the Ontario Teachers’ Pension Plan Board. She is currently a director of several companies, including National Bank of Canada, as well as the chair of the board of Morneau Shepell.
“With over 20 years’ experience in financial services, Jill brings a diverse skillset to our board,” said Douglas Colbeth, Kinaxis’s chairman. “Jill’s extensive experience in the financial industry and strong business acumen make her an extremely valuable asset to Kinaxis as we continue to grow.”
The company’s shares were up 13 cents to $61.88 in late morning trading on the Toronto Stock Exchange.