Kinaxis saw “impressive growth in many areas” in its 2015 second quarter, its CEO said late Thursday, prompting the Ottawa-based company to raise its guidance for the fiscal year.
“Given the forward revenue visibility of our business, we have raised our fiscal 2015 professional services revenue guidance to a range of $22 million to $23 million,” president and CEO Doug Colbeth said in a statement.
Increased professional services revenue, combined with an expected 26 per cent to 28 per cent annual growth in subscription revenue, allows the company to upgrade its adjusted EBITDA to between 26 per cent and 29 per cent of total revenue, Mr. Colbeth said.
For the three months ending June 30, the supply chain management solution provider posted revenue of $23.7 million, a year-over-year increase of 32 per cent. Professional services revenue made up $7.1 million of that total, compared with $5 million for the same quarter last year. Subscription revenue of $16.3 million was up 29 per cent from the second quarter of 2014.
The company’s gross profit of $17.4 million, or 73 per cent of total revenue, was up 42 per cent year-over-year. At $9.2 million, its adjusted EBITDA increased 183 per cent. Adjusted diluted earnings were 25 cents per share.
As of June 30, the company had cash or cash equivalents on hand worth $85.2 million, compared with $56.7 million on Dec. 31.
“This is a very strong cash-generating business,” CFO Richard Monkman said in a conference call. “There could be opportunities for M&A, but also it does allow us to continue to invest with confidence in the business.”
Those investments are key as the company prepares for what Mr. Colbeth calls “significant” growth.
“I do believe the marketplace we play in, and some of the dynamics going on in the marketplace, it does allow us to expand growth as long as we make the key investments required and that’s really a major focus that we have internally,” he said. “What are those key investments to enable that stronger growth.”