Kinaxis Inc.

Good morning, ladies and gentlemen. Welcome to the Connexus Incorporated fiscal 2024 second quarter results conference call. Currently, all participants are in a listen only mode. Following the presentation, 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, August 1, 2024. I will now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Connexus Incorporated. Please go ahead, Mr. Wadsworth.

Thanks, operator. Good morning and welcome to the Connexus earnings call. Today, we will be discussing our second quarter 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. Pardon me. Before we get started, I want to emphasize that some of the information discussed in this call is based on information as of today, August 1, 2024, and contains forward-looking statements that involve risks and uncertainties. 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 Connexus' 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 investor relations section of our website 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 Connexus. 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 concluding statements before opening up the line for questions. We have a presentation on Companies Day's call, which can be downloaded from the IR homepage of our website, canaxis.com. We'll let you know when to change slides. Over to you, John.

Thank you, Rick. Good morning, everyone, and thank you for joining us today. Let's get started on slide four. We delivered solid results for our second quarter, including $75.4 million in SAS revenue, representing 18% growth. Total revenue grew 12% to $118.3 million, an outcome that reflects being in a lower part of the normal term license renewal cycle. We reported almost $22 million in adjusted EBITDA and a 19% margin, a strong result. I'm very pleased with the steps we've taken to enhance our profitability. We added approximately $12 million to our ARR balance despite foreign exchange headwinds and an ongoing choppy buying environment, particularly for large enterprise prospects. It is worthy of note that roughly 75% of our ARR growth this quarter came from new customers, which will provide exceptional fuel for future expansion opportunities. On to slide five. We won a record number of customers for our Q2 and the second highest number of any quarter in our history, a tangible reflection of the strength and persistence of demand for supply chain orchestration and of our superior position in the market. We continue to have strong win rates against all of our key competitors and continue to sustain an elite customer retention rate. Let me share a sample set of those new customers with you now. I'm absolutely thrilled to announce that we were selected to orchestrate the supply chain of Eli Lilly, a medicine company turning science into healing to make life better for people around the world. Our dominance among pharmaceutical companies continues. Today, fully half of the top 20 pharma companies by 2023 revenue are customers of Kinaxis, a truly impressive accomplishment. We recently announced a Q2 win at SenseQuo, an enterprise class specialty chemicals company that contributes to safer, cleaner, and more sustainable products, such as EV battery materials and sustainable technologies in agriculture. The Asia-Pacific team contributed an all-time record quarter for their region, including wins at Brother Industries. You may own one of their well-known printers or sewing machines or other electronics. Kioxia, a leading provider of flash memory products. And Daydome, an agricultural machinery manufacturer. We won Italian mid-market pharmaceutical company Zambon, which manages the production of drugs for Parkinson's, cystic fibrosis, and other challenging diseases. Kimray, a US-based manufacturer of valves and controllers for oil and gas companies, joined the customer base also. We added Arcor, an enterprise class maker of consumer food products, agro-industrial products, and packaging. All these successes and more have been earned in an environment where buying decisions, particularly for the largest enterprise opportunities, continue to be subject to elevated levels of scrutiny. I'm pleased to announce that we've started executing on the go-to-market reinvestment plans we talked about last quarter. For example, we just finalized a new strategic relationship with one of our largest and longest standing consultancy partners. Together, we will co-invest towards significantly expanding our joint go-to-market opportunities in key verticals and create new deployment capacity and expertise for delivering our solutions. Details will come soon. We see this strategic partnership and other similar relationships we're exploring as potential game changers for our market reach and sales capacity. Stay tuned as we expect to formalize and publicly promote these very, very soon. Moving to slide six, Gartner's Supply Chain Top 25 was released in May, and we are extremely proud that the top three have chosen Kinexus as their supply chain orchestration partner, as did half of the top 10. Gartner also reserves an even higher level category called Supply Chain Masters for companies that have maintained top five scores for at least seven of the preceding 10 years. It's an absolute honor that Kinexus serves two of those prestigious companies as well. In short, being the leader in ability to execute is leading us to becoming the trusted choice for supply chain leaders globally. Over the last three years, we've more than doubled the customer base, growing it as a fast-paced 28% cumulative average rate. This simple fact positions us extremely well for the long term as we increase our emphasis on expansion sales to a rapidly expanding base. On to slide seven. Connections, our amazing annual community conference held this past June, is another excellent reflection of both our long-term opportunity and the strength of our current demand. Once again, we experienced record attendance with over 730 attendees, including a healthy number of prospective customers. They made their way to Miami for a jam-packed three days of thought-provoking leadership, networking, and some major announcements. This year, our big announcement at Connections was the introduction of Maestro, the evolution of our flagship product, Rapid Response. Maestro is our AI infused supply chain orchestration platform that provides full real-time transparency and agility across the entire supply chain, fusing together planning and execution and managing everything from multi-year planning horizons to down to the second factory execution and last mile delivery. Just as we broke down silos and supply chain planning functions with Maestro will break down silos across the full supply chain end-to-end. Maestro will be the conductor, taking in data from the full supply chain ecosystem, ultimately including functions like network design, procurement, production, planning, finance, risk management, sustainability, fulfillment, and other areas, and serving the full supply chain community concurrently throughout, as only Connexus can. so that manufacturers have one real-time view of their supply chain network at any moment in time. This is what it takes for a supply chain to be in tune, on time, and orchestrated in total harmony. Through fully integrated AI engine, we will automate the obvious actions, sense issues and opportunities as they arrive, proactively suggest optimum course corrections, and democratize access to the machine learning power behind Maestro to even the most high level of users. A recent IDC study sponsored by Kinexis revealed that 97% of global supply chain leaders agreed that better orchestration would have a positive impact on supply chain performance. So we're thrilled to be leading the industry towards that future. I'll now turn the call over to Blaine to review the financials for the quarter. and discuss our updated outlook in detail. I'll conclude with a few remarks after that. Blaine?