Kinaxis Inc revenue jumped on 27.0% in 2016 while EBITDA Margin dropped on 10.4 pp from 28.0% to 17.6%
28.02.2017 • About Kinaxis Inc (
$KXS) • By InTwits
Kinaxis Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kinaxis Inc is a fast growth stock: 2016 revenue growth was 27.0%, 5 year revenue CAGR was 25.0% at 2016 ROIC 22.6%
- Kinaxis Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: 5.8 in 2016, 4.3 in 2015, 3.5 in 2014, 1.4 in 2013, 1.4 in 2012
- The company has highly profitable business model: ROIC is at 22.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kinaxis Inc ($KXS) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 46.7 | 60.8 | 70.1 | 91.3 | 116.0 | 27.0% |
| Gross Profit | 33.5 | 42.8 | 49.3 | 65.5 | 80.2 | 22.4% |
| SG&A | 18.4 | 21.5 | 23.6 | 26.5 | 41.6 | 56.9% |
| EBITDA | 8.7 | 14.0 | 13.4 | 25.5 | 20.4 | -20.2% |
| Net Income | 4.9 | -9.7 | -0.2 | 12.7 | 10.7 | -15.2% |
Balance Sheet
|
|---|
| Cash | 48.8 | 13.8 | 56.7 | 99.4 | 127.9 | 28.7% |
| Short Term Debt | 64.8 | 4.2 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.2 | 75.1 | 0.1 | 0.1 | 0.0 | -71.0% |
Cash flow
|
|---|
| Capex | 1.4 | 1.4 | 3.5 | 4.3 | 5.8 | 33.7% |
Ratios
|
|---|
| Revenue growth | 22.7% | 30.3% | 15.2% | 30.3% | 27.0% | |
| EBITDA growth | -26.9% | 60.8% | -4.2% | 90.2% | -20.2% | |
| Gross Margin | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% | -2.7% |
| EBITDA Margin | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% | -10.4% |
| Net Income Margin | 10.6% | -16.0% | -0.3% | 13.9% | 9.3% | -4.6% |
| SG&A, % of revenue | 39.4% | 35.3% | 33.7% | 29.1% | 35.9% | 6.8% |
| CAPEX, % of revenue | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% | 0.2% |
| ROIC | | 61.8% | 63.6% | 44.0% | 22.6% | -21.4% |
| ROE | | | | 22.6% | 14.0% | -8.6% |
| Net Debt/EBITDA | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x | -2.4x |
Kinaxis Inc ($KXS) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 27 | 29 | 30 | 30 | 37.1% | 21.2% | 26.4% | 25.1% |
| EBITDA | 6 | 5 | 5 | 4 | 24.4% | -33.5% | -30.7% | -24.2% |
| Net Income | 3 | 3 | 2 | 2 | 41.1% | -37.7% | -36.3% | 33.0% |
Balance Sheet
|
|---|
| Cash | 108 | 115 | 112 | 128 | 37.6% | 34.8% | 23.2% | 28.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | -48.0% | -55.8% | -60.0% | -71.0% |
Ratios
|
|---|
| Gross Margin | 70.0% | 69.7% | 68.4% | 68.6% | -0.5% | -3.8% | -2.6% | -3.3% |
| EBITDA Margin | 21.2% | 18.9% | 15.9% | 14.8% | -2.2% | -15.5% | -13.1% | -9.6% |
| Net Income Margin | 12.5% | 11.3% | 8.1% | 5.7% | 0.3% | -10.7% | -8.0% | 0.3% |
Revenue and profitability
Kinaxis Inc's Revenue surged on 27.0%. Revenue growth showed slow down in 16Q4 - it was 25.1% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 10.4 pp from 28.0% to 17.6% in 2016.
Gross Margin decreased on 2.7 pp from 71.8% to 69.1% in 2016. SG&A as a % of Revenue increased on 6.8 pp from 29.1% to 35.9% in 2016.
Net Income marign decreased on 4.6 pp from 13.9% to 9.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
Kinaxis Inc's CAPEX/Revenue was 5.0% in 2016. CAPEX/Revenue increased on 2.7 pp from 2.3% in 2013 to 5.0% in 2016. It's average level of CAPEX/Revenue for the last three years was 4.9%.
Return on investment
The company operates at high and attractive ROIC (22.57%) while ROE is a bit lower (14.02%). ROIC dropped on 21.4 pp from 44.0% to 22.6% in 2016. ROE decreased on 8.6 pp from 22.6% to 14.0% in 2016.
Leverage (Debt)
Debt level is -6.3x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 2.4x from -3.9x to -6.3x in 2016. Debt dropped on 71.0% while cash jumped on 28.7%.
Management team
The company's CEO John Sicard is a founder and has spent 2 years at the company.
Appendix 1: Peers in Technology
Below you can find Kinaxis Inc benchmarking vs. other companies in Technology industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| Espial Group Inc ($ESP) | | -5.5% | 59.4% | 24.2% | 15.3% |
| |
|---|
| Median (11 companies) | | -1.0% | 11.5% | 10.1% | 10.0% |
|---|
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Symbility Solutions Inc ($SY) | 80.6% | 79.9% | 81.0% | 70.7% | |
| |
|---|
| Median (11 companies) | 62.9% | 46.3% | 53.5% | 53.0% | 74.7% |
|---|
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| Espial Group Inc ($ESP) | -6.7% | -16.4% | 11.5% | 6.2% | -12.1% |
| |
|---|
| Median (13 companies) | -6.7% | 2.2% | 4.3% | -1.9% | 6.0% |
|---|
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| Data Group Ltd ($DGI) | 0.6% | 0.7% | 1.0% | 1.4% | 1.0% |
| |
|---|
| Median (13 companies) | 1.1% | 0.9% | 1.2% | 1.1% | 0.9% |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| Espial Group Inc ($ESP) | -14.3% | -27.0% | 9.3% | 1.5% | -8.2% |
| |
|---|
| Median (13 companies) | -7.5% | -20.1% | 0.2% | -7.5% | 6.5% |
|---|
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Intrinsyc Technologies Corp ($ITC) | | | -19.5x | -4.4x | |
| |
|---|
| Median (6 companies) | 0.0x | 1.4x | 0.6x | -0.7x | -4.6x |
|---|
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
