Kinaxis Inc.

Good morning, ladies and gentlemen, and welcome to the Conexus Incorporated Fiscal 2023 Third Quarter Results Conference Call. Currently, all participants are in a listen mode only. Following the presentation, we will conduct a question and answer session. Instructions will be provided at the time for you to up your questions. I'd like to remind everyone that this call is being recorded today. Thursday, November 2nd, 2023. I would now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinexus Incorporated. Please go ahead, Mr. Wadsworth.

Thanks, Operator. Good morning and welcome to the Kinexus Earnings Call. Today, we will be discussing our third quarter results, which we issued after close of markets yesterday. With me on the call are John Sicard, our President and CEO, and Blaine Fitzgerald, our CFO. Before we get started, I want to emphasize that some of the information discussed on this call is based on information as of today, November 2, 2023, and contains forward-looking statements, including with respect to our recently announced share buyback that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release, as well as in our CDAR filings. During this call, we will discuss IFRS results and non-IFRS financial measures, including adjusted EBITDA. The reconciliation between adjusted EBITDA and the corresponding IFRS result is available in our earnings press release and in our MD&A, both of which can be found on the IR section of our website, canaxis.com, and on CDAR+. Participants are advised that the webcast is live and is also being recorded for playback purposes. An archive of the webcast will be made available on the IR section of our website. Neither this call nor the webcast archive may be re-recorded or otherwise reproduced or distributed without prior written permission from Kinaxis. To begin our call, John will discuss the highlights of the quarter as well as recent business developments, followed by Blaine, who will review our financial results and outlook. Finally, John will make some closing statements before opening the line for questions. We have a presentation to accompany today's call, which can be downloaded from the IR homepage of our website, and it'll let you know when to change slides. I'll now turn the call over to John.

Thank you, Rick. Good morning, everyone, and thank you for joining us today. I'll be starting with slide four. I'd like to highlight some key points for this call, all of which Blaine and I will explore in more detail. First, Q3 financial results were strong, with SAS revenue growth of 26%, total revenue growth of 21% and a healthy adjusted EBITDA of 21%. I'm very pleased with the team's execution despite various challenging macro conditions around the world. Second, we are providing updated annual guidance that notwithstanding an unavoidable shift in revenue classification between SAS and subscription term license would be in line with our original estimates at the start of this calendar year and continues to deliver rule of 40 plus performance for 2023 with an increase in profitability. Third, the last quarter of every year is typically our strongest for building ARR, and we expect it to be as usual this year. We are actively working on some major expansions and some exciting net new additions we hope to be able to share with you very soon. Fourth, Management and the board is pleased to have announced a buyback of up to 5% of our shares starting this Monday, the earliest possible date. At current valuations, this investment is an easy decision, a good use of capital, and in the best interest of the company. Fifth, and most exciting for me, we continue to see compelling evidence that the supply chain management market remains very robust. our pipeline remains very healthy, and our ability to serve it is stronger than ever. Let me expand my comments on this last point, and I'll ask Blaine to go deeper on the rest very shortly. Turning to slide five, with respect to market activity, our pipeline is larger now than it was at this time last year and remains very near record levels. Our business development team which builds pipeline in its earliest stages, booked a record number of meetings for our account executives in Q3 with an over 40% year-over-year increase. This is an encouraging sign and evidence of accelerated interest in supply chain transformation. We have invested heavily in expanding our sales team, now over 30% larger than it was at the start of 2022. and ready to execute on these new opportunities as they mature. I should also note that we are not slowing down our investments in sales and marketing, but rather will continue to expand in both areas through Q4 and through 2024 to ensure coverage of an expanding market. Our win rate against key competition so far this year continues to be strong, and we're pleased to be able to name a sample of our recent customer wins, including in the automotive sector, we added innovator Volvo cars. In our industrial vertical, we welcome Ecolab, a global sustainability leader offering water, hygiene, and infection prevention solutions and services that protect people and the resources vital for life. In life sciences and pharmaceuticals, we welcome several new customers. Cooper Health, a European leader in self-care, including non-prescription medicines, food supplements, and medical devices. Fertin Pharma, a Phillips Morris company, which develops and manufactures innovative systems for delivering oral pharmaceuticals and finally FIS in Italy, one of Europe's leading private manufacturers of active ingredients for the pharmaceutical industry. I'm also pleased to share that the vast majority of new deployments are occurring within our public cloud partners, Microsoft and Google. As I've mentioned in the past, This is an important strategy that will help us scale as we accelerate into the future and ultimately will become our standard method of delivery. In recent periods, we talked about several long-term strategies to expand our addressable market, notably with more focus on targeting small to medium-sized businesses. I'm pleased with our progress to date. For example, just over half of the new customers added this quarter and year to date have been mid-market or smaller companies, and the year-to-date total is higher than in the same period in 2022. In the third quarter, our value-added resellers, or VARs, who sell to smaller companies contributed a record number of wins, and we are anticipating a strong fourth quarter as well. Serving this much broader market increases both our growth opportunities and business resilience. Now, moving to slide six, We launched several new and exciting applications earlier this year, all of which attract new subscription revenue. Our supply chain execution application is targeting a market that a recent industry report sized at over $12 billion in 2023, and that's expected to grow roughly 20% through 2030. Our new enterprise scheduling application is highly differentiated, as the first and only tool on the market to allow companies to create and manage a globally integrated production scheduling strategy. Our sustainable supply chain solution allows companies to embed emission factors in supply chain decisions. Just as requirements around corporate disclosures of GHG emissions are being mandated globally. And finally, demand.ai leverages cutting edge AI provide highly accurate demand forecasts based on insights that human observation alone wouldn't be able to uncover. This offering has been instrumental as our entry point to the quick service restaurant segment of retail, where we are serving one of the world's most recognized brands and will be key in penetrating the broader retail vertical for years to come. I'll now turn the call over to Blaine to cover more details on our financial results.