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ATB Capital Markets analyst Martin Toner says Kinaxis (Kinaxis Stock Quote, Chart, News, Analysts, Financials TSX:KXS) reported a strong Q2, with SaaS growth, enterprise bookings and early AI adoption supporting the outlook.

In an Aug. 7 update, Toner maintained his “Sector Perform” rating and $210.00 target on Kinaxis.

Kinaxis reported Q2 revenue of $158.8-million, up 16% year-over-year and 5% ahead of consensus at $151.6-million. SaaS revenue rose 20% to $106.5-million, while Adjusted EBITDA was $41.4-million, representing a 26.0% margin and 15% above consensus.

Toner said the 4% sequential revenue decline reflected timing in upfront Subscription Term Licence recognition, which fell to $5.7-million from $19.1-million in Q1, rather than weaker operations. Core recurring SaaS revenue grew 4% sequentially.

Annual recurring revenue rose 19% to $465.6-million, while total remaining performance obligations increased 18% to $983.5-million.

Management raised its 2026 guidance for total revenue to $625-million to $640-million and SaaS revenue growth to 18% to 20%, while maintaining its Adjusted EBITDA margin target of 25% to 26%.

Toner said enterprise momentum was strong, with record quarterly expansion annual contract value bookings, up 70% year-over-year, and average deal sizes doubling.

About 10% of Kinaxis customers have adopted Maestro AI agents through trials or paid subscriptions. Toner said the company’s new Forward Deployed Engineering teams in North America, Europe and India should help accelerate adoption by building tailored solutions with enterprise customers.

Management expects FDE revenue to scale through late 2026 and 2027, though the current 2026 guidance does not include any contribution.

Kinaxis generated $30.7-million of operating cash flow in Q2, up 36% year-over-year. It repurchased $46.7-million of shares during the quarter and $108.3-million year-to-date, reducing net share count by 2.9%.

The company ended Q2 with $310.7-million of cash, cash equivalents and short-term investments.

Toner said Kinaxis trades at about 4.4 times his 2027 EV/revenue estimate, broadly in line with mid-cap software peers. He said the valuation balances double-digit SaaS growth and expanding margins against macro uncertainty.

The analyst expects Kinaxis to generate Adjusted EBITDA of $168.6-million on revenue of $640.1-million in fiscal 2026, improving to Adjusted EBITDA of $192.3-million on revenue of $714.4-million in fiscal 2027.

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