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Kinaxis stock rises as supply-chain software usage surges

February 27, 2025

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Kinaxis’s stock was up nearly six per cent Thursday afternoon after the Kanata-based company said usage of its supply-chain management software has soared in the wake of U.S. President Donald Trump’s tariff threats. Kinaxis shares were trading at more than $161 on the Toronto Stock Exchange, a gain of nearly $9 on the day. The bump came as Kinaxis, which keeps its books in U.S. dollars, reported revenues of $123.9 million for the fourth quarter ending Dec. 31, an 11 per cent increase from a year earlier. In a conference call with analysts Thursday morning to announce the company’s fourth-quarter and fiscal 2024 results, interim CEO Bob Courteau said customers concerned about the potential impact of a tariff war are running “what-if” simulations on Kinaxis’s scenario-modelling tools at a rate not seen since the height of the COVID-19 pandemic, when supply chains around the world were snarled. “It’s become a must-have to run your business,” Courteau said, referring to the firm’s AI-powered software, dubbed Maestro. “When you think about what’s going on with tariffs and free trade, the reason that there’s such a spike in scenarios is it’s really, really hard to understand exactly how things are going to play out. This trend is not going to change in the short term. We have the product that people need to operate their business.” The last 12 months have been a period of upheaval for Kinaxis. The company laid off six per cent of its workforce last year, while former CEO John Sicard retired at the end of December, one of a number of key C-suite executives to leave the company as it retooled its leadership team. In addition, a key investor called on the company’s directors to seek a new buyer. In response to an analyst’s question about the search for Sicard’s successor, Courteau said there’s “lots of interest” in the job but did not offer a specific timeline for when a new chief executive will be in place. “We’re making good progress, and we’re working to get it right and set a date,” he said. Despite the recent disruptions, Kinaxis continued to win new customers at a near-record rate in 2024, and its total revenues hit $483 million, up 13 per cent from 2023. Software-as-a-service revenues – a key metric for companies like Kinaxis that specialize in subscription-based products delivered in the cloud – rose 17 per cent from the previous year to $309 million. Overall annual recurring revenues, which include subscription revenues from SaaS and on-premise contracts, were up 12 per cent year-over-year to $360 million. Chief financial officer Blaine Fitzgerald said incremental annual recurring revenues grew at a record pace in the fourth quarter as Kinaxis began to revamp its sales and marketing strategies under new president of commercial operations Mark Morgan, who was hired last fall. “Frankly, it’s the best quarter we’ve ever had,” Fitzgerald said, later telling analysts: “I was not expecting the quarter that we had in Q4, and to be able to execute at that level gives me a lot of confidence in where we’re going in the future.” The firm’s bottom line took a hit in the fourth quarter, however. Kinaxis reported a net loss of $16.3 million, or 58 cents per diluted share, for the three-month period ending Dec. 31, compared with a profit of $4 million, or 14 cents per diluted share, a year earlier. For the year, Kinaxis reported a profit of $56,000, down from $10.1 million in 2023. The company attributed the flood of red ink in the fourth quarter to several one-time charges, including the settlement of an ongoing legal dispute with competitor Blue Yonder. The firms announced earlier this month they had resolved all pending litigation between them, including Blue Yonder’s patent infringement claims and Kinaxis’s trade secret misappropriation counterclaims. “We’re pleased with the result in that this distraction is behind us,” Fitzgerald said of the agreement. Kinaxis said it’s expecting sales to grow at a similar pace for the rest of 2025. The firm is forecasting revenues of between $535 million and $550 million for this fiscal year when currency fluctuations are taken into account, a growth rate of 12 per cent over 2024 at the midpoint, or between $545 million and $560 million in constant currency. The company is projecting adjusted EBITDA margins of between 23 and 25 per cent, up from 22 per cent last year. Courteau said Kinaxis has “done a lot of the heavy lifting” to establish a stronger network of resellers and refine its AI technology in response to growing demand for its products. “The work that we’ve done, the talent that we’ve added to the team, puts us in a great place as we go forward,” he said. “We’ve had a great year of getting organized. The team is fired up; the company is excited. And we’re winning.”