Impact: SLIGHTLY POSITIVE
In-line revenue, EBITDA beats. Revenue of $57.7mm was in-line with estimates
of $57.9mm (TD)/$57.3mm (consensus). EBITDA margin of 15.7% was above our
expectation of 11.1% and consensus at 11.6%. The EBITDA beat was largely driven
by lower-than-expected S&M expenses, which decreased by 17.3% q/q despite the
company continuing to expand its sales and marketing team, and its partner network.
We will try to get more colour on this on the call. EPS of $0.14 beat estimates of
$0.10 (TD)/$0.11 (consensus).
Bookings on track. SaaS bookings grew 40% y/y to generate a book/bill of 118%
in the quarter. This is a deceleration from the 147% achieved in Q4, but still a
strong number. We note that bookings can be quite variable and there could be
some seasonality as well where bookings at the beginning of the year are lower
than at the end of the year. Management noted that the booking environment for
new business continues to improve, consistent with commentary from SAP and IBM.
Kinaxis also won a record number of new customers in a Q1 and saw a record
amount of incremental (not renewal) subscription bookings, supporting future SaaS
growth. We stated last quarter that Kinaxis needs to reach a 2022 SaaS backlog of
$175m by the end of 2021 to return to mid-20% SaaS revenue growth next year.
2022 SaaS backlog increased to $118.6mm, from $104.9mm q/q. We believe Kinaxis
is on track to reaching this hurdle.
Reiterating 2021 guidance. Management is reiterating 2021 guidance. 2021
revenue guidance remains at $242mm-$247mm, in line with us at $244.5mm and
consensus at $246.0mm. SaaS revenue growth guidance remains at 17%-20%,
implying SaaS revenue of $174mm-$179mm, in line with us at $176.5mm. EBITDA
margin guidance continues to be 11%-14%, in line with our 12.4% estimate and
consensus at 12.3%.
Strong balance sheet. Kinaxis generated $16.2mm of FCF to end the quarter with
$229mm of cash, no debt, and access to a C$20mm revolver. We believe Kinaxis is
well-capitalized to execute on its growth initiatives.