Kinaxis Inc.

we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. I'd like to remind everyone that this call is being recorded today, Thursday, February 29th, 2024. I will now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Canaxis Inc. Please go ahead, Mr. Wadsworth.

Thanks, operator. Good morning and welcome to the Canaxis earnings call. Today we will be discussing our fourth quarter and year-end results, which we issued after closing markets yesterday. With me on the call are John Scard, our President and Chief Executive Officer, and Blaine Fitzgerald, our Chief Financial Officer. Before we get started, I want to emphasize that some of the information discussed on this call is based on information as of today, February 29, 2024, and contains forward-looking statements that involve risks and uncertainty. Actual results may differ materially from those set forth in such statements. For 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 files. During this call, we will discuss IFRS results and non-IFRS financial measures, including adjusted EBITDA. A reconciliation between adjusted EBITDA and the corresponding IFRS result is available in our earnings press release and 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 Investor Relations 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 Canaxis. To begin our call, John will discuss the highlights of our quarter and year, 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 Investor Relations homepage or our website. We'll let you know when to change slides. I'll 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. Let me start by saying how proud I am of the Kinaxis team. We delivered a very strong annual SaaS growth of 24%, balanced with profitability that came in above expectations. Our adjusted EBITDA margin for the full year was 18%. And we had record free cash flow of over 75 million, more than 70% higher than ever before. In Q4, We experienced SAS revenue growth of 19% and adjusted EBITDA margin of 18%, which allowed us to finish the year within all our updated guidance targets. We had a huge quarter for renewals, a testament to the incredible value our customers derived from leveraging our unique concurrency approach to managing supply chains. As one noteworthy example, iconic consumer products company Bosch was both a renewal in the quarter and a source of significant new ARR thanks to expansion activity. Bosch confirmed their longer-term commitment to Kinaxis as the platform of choice for supply chain planning. Together, our net customer wins, expansion into the base, and renewals activity fueled a record RPO level. both in total and for the SAS element alone. SAS RPO grew 28% from the end of Q3, and its three-year CAGR is a healthy 26%, demonstrating our exciting growth over a period of time. Now moving to slide five, I'm thrilled to say that we won a record number of new customers, both in Q4 and for the full year. This is an impressive accomplishment that reflects, in part, our success across some key growth strategies that I've talked about before. For example, we want a record number of mid-market customers, a growth strategy we initiated just over three years ago and has now become a meaningful part of our business today and is creating great expansion opportunities for our future. We also won a record number of small customers through our value-added reseller channel, which is just over a year old and ramping up quickly. In all, over 40% of our new wins this year came from our mid-market or smaller customers, including through bars. As we've mentioned in the past, we've continued our efforts to moving customers into the public cloud infrastructure, and I'm happy to report that we deployed the majority of our new customers in the public cloud through 2023. In fact, in Q3 and Q4, almost all our new customers were launched from either GCP or Microsoft Azure. Given the economic backdrop in 2023, our focus was to simply win the customer. And I'm extremely pleased we did that at a record pace. On previous calls in 2023, we talked about adding customers like ExxonMobil, Volvo, and Hobby, who is trusted by the world's largest quick service restaurants to handle their supply chain management needs. To that impressive list, you can now add global names like performance running leader Brooks Sports, Switzerland-based global agricultural technology giant Syngenta, which has over 30 billion in sales. France-based global pharmaceutical group Servier, whose 20,000-plus employees make critical cardiology, oncology, and other drugs. Italian cosmetics leader Intercos, who provides behind-the-scenes research and innovation for some of the world's biggest makeup lines. Norma Group, who create the clamps and connectors and systems that keep water and other vital fluids flowing smoothly for industries and for society globally. And finally, Kik Consumer Products, a leading North American private brand manufacturer, delivering top-tier national brand equivalent cleaners, bleach, laundry, and dish care products. Our gross customer retention rate remained at an elite level in 2023, solidly in the 95% to 100% range that we target. And our win rate against our top three competitors remained very strong, closing over 60% of the deals we pursued against them in 2023. And none of the three had a winning record against us. Even with this success, I do see room for improvement as recent additions to our sales team continue to gain tenure with Kinaxis, and as we continue to offer more value through rapid response. I'm on slide six. Today, we are the global leader in supply chain management, empowering businesses of all sizes to orchestrate their end-to-end supply chain network, from multi-tier strategic planning through down to the second execution and last mile delivery. New offerings that we have recently launched, like supply chain execution, enterprise scheduling, sustainable supply chain, and planning.ai offer an additional opportunity for growth in 2024 and ahead. In January, we launched AI and ML power capabilities tailored to help retailers manage the complexity of their operations on a massive scale. including tens of thousands of locations, countless SKUs, constant promotions, and complicated inventory variables. These innovations include a brand new replenishment planning capability for optimal restocking, as well as retail-specific enhancements to demand.ai and demand planning. The retail market is the largest of any we serve in terms of number of potential customers and we're excited to further penetrate this under supported vertical. All these innovations will help us win new customers and expand within our installed base, where we now have a dedicated team focused on driving results. In 2023, additions to our annual recurring revenue were split roughly 60-40 between new customers and expansion with existing customers. We have a massive opportunity to penetrate this rapidly growing group further, and I am pleased to see early success from this team. On to slide seven. I mentioned last quarter that our business development team indicated a record number of initial meetings with prospects, a stage in the funnel development prior to our pipeline. I'm pleased to say that the team hit another all-time high in Q4, helping to drive a new all-time high for our four-quarter rolling pipeline, which has reaccelerated for the first time since early 2023. We're mindful of ongoing uncertainty in the macro environment, but we're encouraged by these green shoots of improvement. As mentioned on our last call, we have been intensifying our focus on profitability and are in great shape to do that. In 2022 and in 2023, we made important investments in sales and other functions that put Kinexis in a much stronger position across our business. In 2024, we will take advantage of ongoing operating leverage to continue to march towards our midterm goal of 25% plus adjusted unit debt. I'll now turn the call over to Blaine to review the financials for the quarter and year and discuss our outlook in detail. I'll conclude with a few remarks after that. Blaine?