Kinaxis Raises Full-Year Guidance After Q3 Revenue Rises 19%

Kinaxis (TSX: KXS ) reported third-quarter financial results on Thursday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Kinaxis Inc. reported strong financial performance, with a 19% increase in total revenue to $160.3 million, driven by a 22% rise in SaaS revenue. The company raised its full-year guidance for total revenue, SaaS revenue growth and adjusted EBITDA margin, citing momentum and strategic execution. Key strategic initiatives include investment in the Maestro platform, advancing AI capabilities, expanding a partner ecosystem and focusing on supply chain operational orchestration.

Operational highlights include signing the largest incremental ACV expansion deal in its history and welcoming new clients like Biogen and Dr. Squatch. Kinaxis is seeing significant traction in its new MAU-based pricing model and agentic AI capabilities, with increased customer engagement and broader use cases. Full Transcript OPERATOR We will now begin the question and answer session.

Please limit yourself to one question. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Thanos Mascopoulos with BMO Capital Markets. Your line is now open.

Please go ahead. Thanos Mascopoulos (Analyst) Hi, good morning. Your Q4 guidance seems quite conservative. If we look at the RPO that you have for Q4 heading into the quarter, is that just a function of—are you expecting a sharp sequential step down in PS revenue, or other factors to call out?

Thank you. Razat Gaurav (Chief Executive Officer) Thanos, just to add one more thing to that, you know, sequentially from Q3 to Q4, just from a seasonality perspective, PS is typically lower in Q4 just given the holiday schedule, which is pretty normal, and we factored that into our guidance. Thanos Mascopoulos (Analyst) Great. Congrats on the strong results for the quarter, and I'll pass the line.

Thank you. OPERATOR Your next question from the line of Doug Taylor with National Bank. Your line is now open. Please go ahead.

Mike Stevens (Analyst) Oh hi, this is Mike Stevens on for Doug. Congrats on a very strong quarter again. Wanted to dig into the MAU and the pricing model. You mentioned a lot of the enterprise wins were including that.

Any sense yet—I know it's early days—on what kind of impact that will have on margins in the future and even, you know, revenue growth? Is that expected to sort of be an accelerant on revenue growth, or any insights into that? Got it. Appreciate the insights.

OPERATOR Next question. Your next question from the line of Kevin Krishnaratni with Scotiabank. Your line is now open. Please go ahead.

Richard (Analyst) Hey, this is Richard on for Kevin. Congrats on another strong quarter. Just a quick question on M&A. So looking ahead to 2027, are you able to talk about capital allocation?

Any thoughts in M&A? You know, are there any key areas of focus or gaps in the portfolio that can be supported by acquisitions, either tuck—ins or transformational ones? OPERATOR Your next question from the line of John Shao with TD Cowen. Your line is now open.

Please go ahead. John Shao (Analyst) Hey, good morning, guys. Thanks for taking my question. I think it's interesting to see a global consumer health company move away from a competitor.

I believe you also won Asahi Beverages. So is this some kind of new normal that you're gaining momentum in the consumer vertical, which has historically been dominated by, you know, competitors like Blue Yonder? Razat Gaurav (Chief Executive Officer) Yeah, we're definitely seeing a lot of traction in the consumer, consumer packaged goods, FMCG, food manufacturing space. So we play on the consumer manufacturing space in general.

We're definitely also seeing a lot of opportunities to replace old legacy systems, old legacy deployments, as organizations aspire to a different paradigm when it comes to supply chain planning, decisioning, and orchestration. So it continues to be a really strong vertical for us and we see continued traction in the space. John Shao (Analyst) That's great color. Thank you.

Razat Gaurav (Chief Executive Officer) Thank you. OPERATOR Your next question from the line of Marc Chapelle with Loop Capital Markets. Your line is now open. Please go ahead.

Marc Chapelle (Analyst) Hi. Thanks for taking my question. Nice job on the quarter, Razat. As customers move into the newer MAU-based pricing model, what are you seeing in terms of adoption and spending?

Is it just making it easier to get more users on the platform and then grow revenue as usage expands, or is it just mainly the benefit of simplifying the initial sale? Razat Gaurav (Chief Executive Officer) Yeah, I think as we are getting into this MAU-based pricing structure, which, by the way, is structurally similar to what a lot of other enterprise software companies are doing, right, what we're finding is it just allows for the customer and for Kinaxis to really be able to service and employ a broad variety of use cases.

What I mean by that is a lot of our deployments now involve automated workflows, agentic capabilities, or in some cases even headless deployments through an MCP server. We're able to meet the customer in the way that they want to deploy our solution and work with our platform and interface with our platform in the way where they're already working. At the same time, we are the system of record for supply chain planning for our customers.

When not only our agents that are developed on our platform are leveraging that data, but also third-party agents that are leveraging the Kinaxis Maestro data are pinging our platform, it allows us a way to really be able to monetize the access to that data. So it's a multifold approach. I don't look at this as a way for us to grow the number of users on our platform necessarily. If anything, supply chain planning and decisioning use cases have never had a very large user or seat-based account, right.

And it just allows us to deploy the solution and be able to monetize and provide predictability to our customers in the world of agentic AI, which is becoming more and more prevalent in the use cases and deployments that our customers are working with us on. Marc Chapelle (Analyst) Thank you, that's helpful. Razat Gaurav (Chief Executive Officer) Thank you. OPERATOR Your next question from the line of Paul Treiber with RBC Capital Markets.

Your line is now open. Please go ahead. Paul Treiber (Analyst) Good morning and thanks for taking the question. Just a question on the sustainability of growth momentum here.

You've seen growth accelerate, ARR growth accelerate, for a number of quarters now. The comps are getting tougher. How do you think about the growth going forward remaining in the 20% plus range? Razat Gaurav (Chief Executive Officer) Yes.

So of course we're not providing guidance for 2027 yet. We will do that on the next earnings call. But what I can tell you is with all the continued volatility and uncertainty in supply chains, it's creating a higher sense of urgency across our customer base to lean in and make investments in Kinaxis, right. And customers are prioritizing the funding and the provisioning of investments in Kinaxis.

And so that's a very encouraging sign. And as we do that and as we invest in our agentic AI platform and we expand further into operational orchestration, we're seeing tremendous interest from across our customer base. For example, we've held hackathons, we've held boot camps at our Connections Barcelona event. We're going to do the same thing at our Connections India event coming up in about a couple of weeks from now.

And these are all oversubscribed. All of those indications point towards the fact that we have a strong demand environment. Our pipelines are continuing to grow. So we feel really good about this.

But our goal here is to do everything possible to continue to sustain really high growth rates while maintaining a disciplined approach to margin performance, right. And we'll definitely provide more details on this in the Q4 earnings call in February. Paul Treiber (Analyst) Thanks for that color. Just on the investments with the raised EBITDA margins to now above, I think previously you had a 25% medium-term target.

Does the performance being better than the target this year—what are the drivers of it? Was it just investments taking a little bit longer to ramp than you expected, or was it outperformance on the term license side? Okay, thanks for taking the questions. OPERATOR Your next question from the line of Suthan Sukumar with Stifel.

Your line is now open. Please go ahead. Suthan Sukumar (Analyst) Good morning, gents, and congrats on a very strong quarter. For my first question, I just wanted to double-click on the FDE model.

Can you share a little bit more about some of the initial traction that you're seeing with this model? And in general, how do contract values for an FDE-led deal compare to a typical deal? Razat Gaurav (Chief Executive Officer) Yeah, no, thank you. Thank you for the question.

You know, we launched the FDE motion just a few months ago and we've been mobilizing the pods in North America, Europe, and in India. And, as I mentioned in my prepared remarks, these pods involve a mix of deep supply chain domain experts, process experts, data engineers, as well as data science and solution development expertise, right. So the interest we are seeing from our customer base is quite significant. We're involved with a number of our existing customers that have deployed Maestro and are now looking to extend beyond the planning and decisioning into how they operationalize those plans.

And supply chain systems and supply chain processes are very complex. They're very fragmented. There are multiple systems of record and as we thread together different outcome flows through our FDE engagement model, we're finding all kinds of opportunities in helping our customers go above and beyond just stopping at planning. So the early indications are very encouraging from our point of view.

And it's also a great opportunity for us to leverage the base we have for Maestro customers where we have the trust, where we have an understanding of the customer supply chain, and then extend beyond that into threading together these outcome flows. So that's what's happening there. Obviously we're working with some of the early adopters and are creating MVP solutions and I'll be sharing a lot more details on some of the example use cases in our Q4 earnings call in February. But early indications are again very, very encouraging.

Suthan Sukumar (Analyst) Okay, thanks for the color. On the net new ARR added this quarter, can you guys speak to the attach rate of AI offerings on these deals? And you guys did flag some encouraging agent and token usage stats in the opening remarks. When do you expect MAU usage—the whole usage component—to become a more meaningful component of this AI monetization?

I believe that AI is still being—your offerings are still being sold as a premium proposition. Herb (Chief Financial Officer) Yeah, this is Herb on that question. It's still early in our transitioning first of clients onto the next-gen pricing, which includes the MAU usage component of the subscription model. So we don't have, right now sitting here, the data points to share with you that says exactly how much uplift has come or resulted from the introduction of this.

We've just started now with every—we talked about it last quarter, but we're still relatively early—every new proposal that's going out is next-gen pricing that has the MAU subscription component. So we'll update as this continues to evolve for us. Razat Gaurav (Chief Executive Officer) Yeah, and just to add a little bit to that, you know, just kind of level-setting here. Right.

We have always been leveraging, in 100% of our customer base, predictive and prescriptive AI. Right. And then more recently we've been adding generative and agentic AI capabilities. So 100% of our customer deployments include AI.

Right. So I just wanted to mention that. Firstly, when it comes to agentic AI, it's becoming a bigger and bigger factor in customers, both net new logos making a selection of Kinaxis is becoming a bigger and bigger factor, and in existing customers expanding with Kinaxis. So we're seeing really good and strong upside uptick in agentic use cases.

There's a whole broad variety of agentic capabilities. We've obviously added a conversational interface to our entire Maestro platform. We've got a Maestro Agent Studio which we launched earlier this year, which creates a composable studio for customers and partners to build agents, and we're seeing a lot of creativity around that. At Connections in Barcelona, several customers like Jabil, like Sanofi and others talked about examples of use cases that they've leveraged our agentic studio for.

And then as we expand beyond planning and decisioning into operational orchestration, they very much lean into leveraging both the semantic intelligence layer, but also agentic capabilities that traverse a context graph. So AI is very native to the Kinaxis platform. And, you know, what I want to make sure people understand is there is no Kinaxis solution without AI. Right.

So we've been AI-native from day one. OPERATOR Your next question from the line of Stephanie Price with CIBC. Your line is now open. Please go ahead.

Sam Schmidt (Analyst) Hi there, it's Sam Schmidt on for Stephanie Price. I wanted to ask around the pipeline. Can you give an update about what you're seeing in terms of pipeline conversion and comment on your level of optimism about RPO levels going forward? I know Q4 is typically seasonally strong for bookings.

Can you share any color on what you're seeing so far? Thanks. Razat Gaurav (Chief Executive Officer) Yeah, thank you for the question. The pipeline is trending strong.

We're definitely seeing, you know, as our sales and go-to-market teams get more and more disciplined, the quality of the pipeline is improving, which shows up in the yield rates. Our win rates have been improving, like I mentioned previously in last quarter's earnings call as well. And so we're really happy with the progress we're making, both in terms of the quantum, but also, as importantly, on the quality of the pipeline.

And the key sort of industry verticals that are driving a lot of the growth in the pipeline include some of our core verticals like in life sciences, especially in pharma and med devices, aerospace and defense, the whole high-tech value chain, as well as in industrial manufacturing and consumer products. So in every one of these key verticals, we're seeing increased traction in our pipeline and also better win rates. I'll let Herb talk about the RPO questions you had. Herb (Chief Financial Officer) Yeah, I think we continue to feel good, just as Razat mentioned, about the demand environment that we see.

The RPO growth that we've seen in the last few quarters, we are very, very pleased with, and we're not giving forward guidance for 2027. And as you know, we don't guide on our forward RPO or ARR. But I'll leave it at we feel good about the overall demand environment, the quality of the pipeline and the win rates that we're seeing. Razat Gaurav (Chief Executive Officer) Yeah.

And look, really proud of the fact that RPO crossed a billion dollars, which is fantastic. Obviously we continue to be focused on signing multi-year committed deals and that hasn't changed and will continue to be the case going forward. Sam Schmidt (Analyst) That's good color. Thank you.

OPERATOR The line is now open for additional questions and follow-ups. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. Please stand by while we compile our Q&A roster.

Your next question from Lachlan Brown with Rothschild and Co, Redburn. Your line is now open. Please go ahead. Lachlan Brown (Analyst) Hi Razat, Herb, congrats on the quarter and thanks for the questions.

I was wondering if you could expand on the Kinaxis Data Fabric a bit further. Specifically, how much does it improve data ingestion and that contextual understanding of supply chain data? And also how are you monetizing? Is it included in the core Maestro platform or is it sold as a separately priced module?

Thanks. Razat Gaurav (Chief Executive Officer) Yeah, Lachlan, thank you for the question. Hope you're doing well. Data Fabric has been an important development initiative.

We've built it on the Databricks platform and, really, there are multiple use cases for Data Fabric. Primarily, of course, it's for the data ingestion and the integration into a variety of systems where we source the data from for our customers' data. Also, Data Fabric is very important as we think about the machine learning pipelines we have that feed into a lot of the algorithmic capabilities that underpin, for example, our demand planning and forecasting solution. And also, Data Fabric is the same data fabric that feeds both our Maestro planning footprint as well as our extending into operational orchestration.

It's the same data fabric, right. So it's an important part of our core platform that enables us to have a common data foundation across everything we do and allows for multimodal ingestion. So what I mean by that is it can, you know, extract, you know, ETL data. It can have, you know, structured data, unstructured data, as well as streaming, right.