Kinaxis shares fell Thursday as the maker of supply chain management software said its revenues are expected to grow at a slower pace in 2024. The Kanata-based company, which keeps its books in U.S. dollars, said its revenues for the fiscal year ending Dec. 31, 2023 were up 16 per cent from the previous year […]
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Kinaxis shares fell Thursday as the maker of supply chain management software said its revenues are expected to grow at a slower pace in 2024.
The Kanata-based company, which keeps its books in U.S. dollars, said its revenues for the fiscal year ending Dec. 31, 2023 were up 16 per cent from the previous year to $427 million. Fourth-quarter revenues rose to $112 million from $98.5 million in 2022.
Kinaxis said it expects sales for the current fiscal year to be in the range of $483 million to $495 million, which would represent an increase of between 13 per cent and 15.9 per cent.
The company’s shares dropped nearly nine per cent by the close of trading on Thursday.
Kinaxis makes software that helps manufacturers and retailers track inventories and shipments in real time while forecasting demand for future inventory. Its sales skyrocketed from $250 million in 2021 to $366 million the following year as pandemic-fuelled supply chain disruptions triggered a flood of interest in the 40-year-old company’s products.
However, that growth has slowed over the past 18 months.
While Kinaxis has started pouring more sales and marketing resources into attracting mid-market customers, global manufacturing and consumer products giants such as Ford and Unilever still account for a major chunk of its revenues.
Kinaxis executives conceded Thursday it’s taking longer to get big-name multinationals to sign on the dotted line than it did a couple of years ago, when supply-chain woes were keeping CEOs around the world up at night.
“They're still in our pipeline,” chief financial officer Blaine Fitzgerald said of enterprise customers. “It’s just they’ve been sitting in our pipeline longer than we had seen in 2022.”
Kinaxis CEO John Sicard noted that many large customers are taking “bite-sized chunks” of the company’s software and delaying further purchases as they look to conserve cash amid lingering economic uncertainty.
“Certainly, there’s competition for dollars in large enterprises,” he told analysts Thursday morning. “That’s one of the challenges we’re seeing.”
Still, Sicard said the company’s sales metrics leave a lot to be bullish about.
