This story has been updated with the correct fiscal year.
With demand for its supply chain management software soaring during the COVID-19 pandemic, Kinaxis has boosted its fiscal 2020 financial forecasts after posting a massive jump in revenues in the second quarter.
The Kanata tech firm said last week its revenues for the three-month period ending June 30 grew 45 per cent year-over-over to $61.3 million (all figures US). The company says it now expects revenues for the current fiscal year to fall between $216 million and $220 million, up from earlier projections in the range of $211 million and $215 million.
Kinaxis’s RapidResponse software helps some of the world’s largest companies – including automakers Ford and Nissan as well as consumer products giant Unilever – ensure they have the right amount of raw materials on hand to manufacture their goods by tracking demand and inventory in real time.
CEO John Sicard said last week he believes global economic volatility fuelled by the coronavirus pandemic has made his company’s products more valuable than ever as companies respond to ebbs and flows in demand for consumer goods.
“Kinaxis has quite simply never been more relevant,” Sicard said in a statement. “There has never been more attention on global supply chain resilience and the power of concurrent planning to provide the agility needed to respond to daily disruption.”
The firm’s net profit more than doubled to $9 million from $4 million in the second quarter of last year. Revenue from the firm’s subscription-based software – which accounts for most of Kinaxis’s income – rose 26 per cent to nearly $36 million, while the company’s professional services division, which implements Kinaxis software and trains its users, saw its revenues increase 48 per cent to $12.4 million.
Sicard suggested there will be even better days ahead for the company, which expects to make major inroads into the retail market segment after acquiring Toronto-based software-maker Rubikloud two months ago.
Rubikloud uses machine-learning technology to help large-scale retailers in the health and beauty, household goods and grocery sectors predict how much inventory they need to keep their shelves properly stocked and determine sales and pricing strategies, and the deal now makes Kinaxis a force to be reckoned with in a vertical it hadn’t deeply penetrated in the past.
In addition, Sicard said the COVID-19 pandemic delayed some contract signings that should bear fruit in the near future.
Last week, Kinaxis announced the medical systems division of Japanese multinational Fujifilm has signed on to its RapidResponse platform, and Sicard said more deals are in the pipeline.
“We remain confident in our ability to close these opportunities, and interest and engagement from the market remains high and well-balanced across geographies and verticals,” he said.
Kinaxis shares – which have more than doubled in price since late March – were down nearly six per cent to $197.14 in late-afternoon trading on the Toronto Stock Exchange.