Kinaxis

Kinaxis Q4 2017 EPS $0.30 vs. estimates of $0.23

TSE: KXS
Management Commentary

“Today’s results reflect both strong top line and bottom line growth. We continue to win exciting new customer contracts as a result of our global expansion investments, including Toyota, recently announced” said John Sicard, CEO.

He also added, “We are the only company in our industry uniquely focused on concurrent planning, and that commitment continues to deliver breakthrough business outcomes for our growing global customer list.”

Financial Highlights

-Revenue of $34.4 million, up 14%.

-Profit of $0.21 per diluted share, up 221%.

-Cash from operations of $12.5 million, down 27%.

-FY 17 vs. 16: revenue up 15%, profit up 90%, cash from operations up 8%.

Fiscal Year 2018 Guidance

-Projected revenue between $158 million and $163 million.

-Subscription revenue to grow 23% to 26%.

My Comments

-Kinaxis crushed earnings and met expectations on revenue, a solid quarter from a great business.

-Following any weakness, long term investors should only view that as a buying opportunity.

-Kinaxis has stellar management, as John Sicard has won the 2017 EY Entrepreneur of the Year Award. There is no quantitative metric to measure this, but these factors separate great businesses from average ones.

-Management stated that they are investing in sales which will cause short term EBITDA margin pressure, but in the long run these investments will pay off.

-Currently, Kinaxis has a market share of less than 10%, with a clear path for more clients and continued growth.

-With no debt on their balance sheet and $158 million in cash, their balance sheet is perfect and could make them an attractive acquisition target.

Disclosure

I hold a position in Kinaxis.

Please consult a financial advisor before making investment decisions.

This report represents my views, not actionable advice

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