Kinaxis Inc Net Income dropped on 41.2% while Revenue surged on 17.0%
03.03.2021 • About Kinaxis Inc (
$KXS) • By InTwits
Kinaxis Inc reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Kinaxis Inc is a fast growth stock: 2020 revenue growth was 17.0%, 5 year revenue CAGR was 19.7% at 2020 ROIC 7.5%
- Kinaxis Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: $44m in 2020, $44m in 2019, $28m in 2018, $13m in 2017, $8m in 2016
- The company has business model with low profitability: ROIC is 7.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 17.0%. Revenue growth showed slowdown in 20Q4 - it was -2.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.7 pp from 15.3% to 10.7% in 2020.
Gross Margin decreased on 3.2 pp from 71.9% to 68.7% in 2020. SG&A as a % of Revenue increased slightly on 1.2 pp from 37.1% to 38.3% in 2020. During the last 5 years SG&A as a % of Revenue bottomed in 2017 at 32.4% and was growing since that time.
Net Income margin decreased on 6.1 pp from 12.2% to 6.1% in 2020.
Investments (CAPEX, working capital and M&A)
Kinaxis Inc's CAPEX/Revenue was 6.4% in 2020. The company's CAPEX/Revenue decreased slightly on 1.2 pp from 7.6% in 2017 to 6.4% in 2020. Average CAPEX/Revenue for the last three years was 6.9%.
Return on investment
The company operates at low ROIC (7.5%) and ROE (5.4%). ROIC decreased on 6.7 pp from 14.2% to 7.5% in 2020. ROE decreased on 5.9 pp from 11.2% to 5.4% in 2020. ROIC followed a declining trend at -4.0 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -4.6x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt surged on 82.5% while cash showed almost no change in 2020.
Kinaxis Inc has no short term refinancing risk: cash is higher than short term debt (4,017.5%).
Management team
Kinaxis Inc's CEO is John Sicard. John Sicard has 5 years tenure with the company. The company's CFO is Richard Monkman. Richard Monkman has 15 years tenure at the company.
Financial and operational results
FY ended 31.12.2020
Kinaxis Inc ($KXS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 116.0 | 133.3 | 150.7 | 191.5 | 224.2 | 17.0% |
| Gross Profit | 80.2 | 93.5 | 103.7 | 137.7 | 154.1 | 11.9% |
| SG&A | 41.6 | 43.1 | 55.2 | 71.1 | 85.9 | 20.7% |
| EBITDA | 20.4 | 30.3 | 30.1 | 44.4 | 36.3 | -18.1% |
| Net Income | 10.7 | 20.4 | 14.4 | 23.3 | 13.7 | -41.2% |
Balance Sheet
|
|---|
| Cash | 127.9 | 158.4 | 126.1 | 182.3 | 183.0 | 0.4% |
| Short Term Debt | 0.0 | 0.0 | 2.6 | 2.3 | 4.6 | 99.0% |
| Long Term Debt | 0.0 | 0.0 | 6.3 | 6.8 | 12.1 | 77.0% |
Cash flow
|
|---|
| Capex | 5.8 | 10.1 | 12.3 | 11.7 | 14.4 | 23.2% |
Ratios
|
|---|
| Revenue growth | 27.0% | 15.0% | 13.1% | 27.1% | 17.0% | |
| EBITDA growth | -20.2% | 48.8% | -0.7% | 47.3% | -18.1% | |
|
|---|
| Gross Margin | 69.1% | 70.2% | 68.8% | 71.9% | 68.7% | -3.2% |
| EBITDA Margin | 17.6% | 22.7% | 20.0% | 23.2% | 16.2% | -6.9% |
| SG&A, % of revenue | 35.9% | 32.4% | 36.6% | 37.1% | 38.3% | 1.2% |
| Net Income Margin | 9.3% | 15.3% | 9.6% | 12.2% | 6.1% | -6.1% |
| CAPEX, % of revenue | 5.0% | 7.6% | 8.2% | 6.1% | 6.4% | 0.3% |
|
|---|
| ROIC | 22.6% | 24.2% | 12.3% | 14.2% | 7.5% | -6.7% |
| ROE | 14.0% | 19.2% | 9.3% | 11.2% | 5.4% | -5.9% |
| Net Debt/EBITDA | -6.3x | -5.2x | -3.9x | -3.9x | -4.6x | -0.7x |
Kinaxis Inc ($KXS) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 53 | 61 | 55 | 55 | | 15.3% | 44.9% | 16.9% | -2.4% |
| EBITDA | 11 | 19 | 5 | 1 | | -12.4% | 135.1% | -38.0% | -93.3% |
| Net Income | 6 | 9 | 1 | -2 | | -19.9% | 125.0% | -83.9% | -120.3% |
Balance Sheet
|
|---|
| Cash | 158 | 185 | 180 | 183 | | 0.7% | 11.8% | 4.6% | 0.4% |
| Short Term Debt | 2 | 4 | 4 | 5 | | -21.6% | 36.1% | 74.0% | 99.0% |
| Long Term Debt | 6 | 11 | 13 | 12 | | -32.0% | 30.1% | 63.2% | 77.0% |
Ratios
|
|---|
| Gross Margin | 70.0% | 74.5% | 66.3% | 63.4% | | -3.4% | 5.2% | -4.4% | -10.2% |
| EBITDA Margin | 21.4% | 30.5% | 9.6% | 1.8% | | -6.7% | 11.7% | -8.5% | -24.7% |
| Net Income Margin | 10.6% | 14.7% | 1.3% | -2.9% | | -4.6% | 5.2% | -8.3% | -16.8% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Certive Solutions Inc ($CBP) | - | -69.5% | -35.9% | 0.8% | 28.4% |
| |
|---|
| Median (1 company) | 10.0% | -31.1% | -35.9% | 0.8% | 28.4% |
|---|
| Kinaxis Inc ($KXS) | - | 15.0% | 13.1% | 27.1% | 17.0% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Certive Solutions Inc ($CBP) | 29.5% | 17.1% | 22.0% | 1.1% | 15.8% |
| |
|---|
| Median (1 company) | 53.9% | 35.9% | 22.0% | 1.1% | 15.8% |
|---|
| Kinaxis Inc ($KXS) | 69.1% | 70.2% | 68.8% | 71.9% | 68.7% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Certive Solutions Inc ($CBP) | -54.4% | -189.0% | -246.1% | -199.6% | -115.2% |
| |
|---|
| Median (1 company) | 6.0% | -92.4% | -246.1% | -199.6% | -115.2% |
|---|
| Kinaxis Inc ($KXS) | 17.6% | 22.7% | 20.0% | 23.2% | 16.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Certive Solutions Inc ($CBP) | 1.4% | 7.6% | 2.1% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | 1.2% | 4.7% | 2.1% | 0.0% | 0.0% |
|---|
| Kinaxis Inc ($KXS) | 5.0% | 7.6% | 8.2% | 6.1% | 6.4% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Certive Solutions Inc ($CBP) | -71.5% | -102.4% | - | - | - |
| |
|---|
| Median (1 company) | 4.8% | -53.1% | - | - | - |
|---|
| Kinaxis Inc ($KXS) | 22.6% | 24.2% | 12.3% | 14.2% | 7.5% |
