Kinaxis is rolling, this analyst says

National Bank Financial analyst Richard Tse maintained Kinaxis (Kinaxis Stock Quote, Chart, News, Analysts, Financials TSX:KXS) as a Top Pick in a May 7 report after stronger-than-expected first-quarter results.

“All in, Q1 showed execution on the efforts laid out over the past year and fortified by new strategic leadership,” Tse said.

Kinaxis reported Q1 revenue of US$165.6-million, ahead of Tse’s US$157.9-million estimate and consensus at US$155.3-million. Adjusted EBITDA was US$53.6-million, well above Tse’s US$43.4-million forecast and consensus at US$43.1-million.

Tse said the beat was helped by Subscription term licence revenue, which rose 111% year-over-year to US$19.1-million. ARR increased 19% in constant currency, while SaaS revenue grew 21%, the company’s strongest SaaS growth rate since Q3 2023.

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Kinaxis maintained its full-year guidance, but Tse said that likely reflects conservatism given record Q1 expansion business, new business ACV about 60% above any prior first quarter and growing adoption of Maestro Agents.

Kinaxis also delivered its strongest Adjusted EBITDA margin in four years at 32.4%, helped by STL revenue recognition, operating expense discipline and gross margin expansion to 69%.

“Bottom line, the results showcased the potential margin power of their operating model,” Tse said.

Tse expects Kinaxis to generate Adjusted EBITDA of US$165.5-million on revenue of US$633.3-million in fiscal 2026, improving to US$193.6-million on revenue of US$720.3-million in fiscal 2027.

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