Kinaxis Inc.

as well as in our CDAR Plus filings. 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 in MD&A, both of which can be found on the Investor Relations section of our website, canaxis.com, and on CDAR Plus. The webcast is live and 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 may be re-recorded or otherwise reproduced or distributed without written prior permission from Connexions. To begin our call, Bob will discuss the highlights of our quarter and recent business developments, followed by Blaine, who will review our financial results and outlook and open the line for questions. We have a presentation to accompany today's call, which can be downloaded from the Investor Relations homepage of our website. We will let you know when to change slides. Over to you, Bob.

Good morning. Thank you, Rick, and thanks to all of you for joining us today. We had a great third quarter. Our momentum and financial performance has once again allowed us to increase key targets for 2025. We're winning important large enterprise accounts. We're striking partnerships with leading software vendors that add value to supply chain orchestration, and we're leading the supply chain AI race, having launched fully embedded Maestro agents to our customer base. These agents enable a new revenue stream for Kinexus and allow for faster and better outcomes for our customers. I'll start by highlighting a few key items in our financial performance. We booked the most new business for a Q3, doubling the amount from a year ago. It was the second highest total ever next to the fourth quarter of 2024 when our renewed momentum began. Quite simply, we're winning the big deals in our space. As a result, our AR growth accelerated to 17%, and we'll exit the year with a higher ARR growth rate than we did in 2024. Second, we grew SaaS revenue 17%, a strong result and testimony to our market-leading product, better scalability in our go-to-market team, and approach and enhanced focus on our very best opportunities. Third, thanks to strong growth and efficient management of the business, adjusted eager to hit record levels again, and the margin was 25%, which helped us achieve our fifth consecutive quarter rule of 40 performance. We highly value consistency around this metric. Slide five. We added many exciting new customers in the quarter. Enterprise class companies continue to be the biggest cohort, and we're particularly pleased to have won multiple large enterprise accounts. a sample which demonstrates our broad reach across vertical markets and geographies. Renault is a French multinational automotive manufacturer founded in 1899. It designs, manufactures, and sells a wide range of private and commercial vehicles under brands such as Renault, Alpine, and Mobilize. This was a highly competitive win, and it adds to our enviable list of household name European manufacturers North American, and Asian automakers. We continued our success in our emerging oil and gas vertical with the addition of Repsol. Headquartered in Spain, Repsol is a multi-energy company employing 25,000 people in over 20 countries and serving 24 million customers. We have also had successful deployments at ExxonMobil, Castrol, and others. So we can't help but be optimistic about this market. In our industrial manufacturing market, we were one of the world's leading innovators in material science based in the United States. Enterprise class accounts also include the well-known high tech brand Psycho Epson, a Japanese multinational electronics company specializing in printers, projectors, robotics and much more. BastaPak, a US-based manufacturer of sustainable packaging solutions. Even with all of the success to date, there's still lots of room for growth. There are over 14,000 prospects remaining in the vertical and geographic markets we target. And we've never been in a better position to win them. I'm also pleased that half of our gross additions to ARR came from expansion business, with existing customers, an area where we have made much progress. This success reflects both the value of our recent investments in innovative new product capabilities and validation of the tremendous value and differentiation of our core capabilities that keep supply chains transparent, agile, and in sync through ongoing volatility and disruption. Our 400-plus customers are a huge asset to Conexus and includes some of the largest companies in the world in our vertical markets. For example, in Q3, we also secured a very significant expansion with yet another global top five oil and gas company. Not able to name them right now, but we're very excited about this expansion. Another way we add value for our customers is through key partnerships that enhance supply chain orchestration. Previous this year, we announced exciting relationships with Databricks, a key part of Maestro's data fabric that helps enable AI capabilities platform-wide. And with Infor, where we are now tightly integrated to their Infor Cloud Suite for discrete manufacturing. And in Q3, we announced an exciting new partnership that will combine maestro and workday adaptive planning to give customers a unified view of their operational finance and people data to drive faster, more informed, and confident decisions. Finance data has always been important to Canaxis, but this is a big opportunity to also comprehensively embed workforce data in our planning processes too, in real time. When demand spikes, leaders can weigh margin impact, workforce needs, and production options to make profitable growth decisions in minutes, not weeks. This cross-functional scenario planning will help ensure faster pivots and stronger resilience. Partnerships are an important part of our supply chain orchestration story, and we will continue to build out relationships where it can help Canaxis and our customers the most. Now, I'm thrilled that we made our initial Maestro agents generally available to our customer base, creating the opportunity for a new revenue stream for Kinaxis, enabling faster and better outcomes for our customers. Maestro agents enhance our capabilities, supercharge our existing product differentiation, and represent a major step forwards towards of more autonomous supply chains that boost productivity, democratize access to data, and generate better customer outcomes faster. We've launched the initial agents with a 30-day trial after which customers can subscribe to consumption bundles for the full term of their contract. Our AI strategy is simple and compelling with three key goals to enhance Maestro's core capabilities, to extend our core capabilities within the enterprise, and then to share supply chain data with external functions and integrate external data to achieve fully orchestrated organizational decision-making without silos. Let me talk about each of these in turn. We've been using AI to enhance our core capabilities for some time, embedding machine learning and modules like self-healing supply chain and our AI-powered enterprise demand forecasting and advanced demand forecasting solutions to dramatically improve plan and forecast accuracy. The initial launch of our maestro agents adds to that track record and will dramatically increase user efficiency One example, a top 10 global pharmaceutical company used maestro agents to boost planner productivity tenfold in its work to identify inventory risk, surfacing insights in seconds instead of minutes or hours, and driving significant efficiency gains across planning processes. Additionally, one of the world's largest electronics manufacturers cut 30 hours from monthly reporting processes, and we focused that time on improved on-time delivery and higher customer satisfaction. In short, the benefits of Maestro agents are real and are being experienced in mission-critical supply chains today with some of the biggest brands in the world. Next, we'll be using AI to extend our core capabilities with Maestro Agent Studio, which will allow customers to design and configure agents tailored to their own unique processes and business rules and help them make decisions that are critical to the enterprise. This capability is already in limited availability to early innovators. After more experience here and working with partners, in 2026, we'll introduce a catalog of pre-built agents from across our ecosystem that addresses common supply chain use cases and delivers even more out-of-the-box intelligence for our customers. Finally, we'll share our supply chain data externally and also integrate more with external data by working with a network of third-party agents to enable true, orchestrated, organizational decision making that operates without silos. In this phase, our orchestrator agents will resolve issues by coordinating multiple agents, both within and outside Maestro, to come up with optimal solutions. Our partnership with Workday is an excellent early example of this, where agents will exchange labor, financial, and supply chain data in real time for vastly improved coordinated decision making. Each step in our AI journey will add tremendous incremental value for supply chain practitioners and creates a significant Connexus opportunity. Look, AI is the next evolution of software and a massive opportunity in the supply chain space and particularly for Connexus. In world-class supply chain software, complex logic modeled via tools such as heuristics, optimization, and machine learning is critical for optimizing the design and execution of the supply chain to meet business objectives. The richest and breadth of Maestro's core orchestration algorithms developed through decades of industry experience and the unique and unified proprietary data they generate will remain a massive differentiator for us, even as AI becomes ubiquitous in Maestro. Amongst existing players and any potential new AI platform entrants who are offering custom one-off solutions and lack supply chain experience, we are well positioned. We're starting our AI journey with a tremendous competitive moat We offer proven, hardened AI enhanced software, not a risky custom one-off project. We're already a mission critical trusted partner to globally referenceable big brands, and we're already embedded in the daily workflow of global supply chain teams. And we're already securely integrated with other key enterprise systems, to help in the orchestration of supply chains. So overall, I'm so pleased with our momentum so far in 2025 and super excited about the future. The talent we added and the refined focus we've implemented is helping to deliver quarters consistently and to scale the company. Our product is leader in the market and our AI enhancements are only building on that and growing our opportunity. We have created a tremendous environment to welcome our new CEO. The search is narrow and focused considerably, and we're confident in a great result for Kinexis. We'll update you as we move along, and you can count on ongoing strong execution from the high performance senior team we have in place today. Blaine, over to you.

Thank you, Bob, and good morning. As a reminder, unless noted otherwise, all figures reported on today's call are in U.S. dollars under IFRS. If you move to slide eight, I'm very pleased that our strong momentum continued through Q3. As Bob mentioned, this was a record-breaking third quarter for a new organic business based on average annual contract value. It also marks our second highest quarter on record. behind only Q4 2024, when the impact of our go-to-market restructuring started to take hold. Our ARR growth rate in Q3 left a 17%, both as reported and in constant currency, which is a testimony to our growing product leadership, demand in our space, and our company-wide efforts to achieve scalability and focus on our very best opportunities. Stronger than expected performance year to date enables us to increase fiscal 2025 SAS revenue guidance for the second consecutive quarter, along with our full year adjusted EBITDA margin outlook. I'll provide details momentarily. Our trailing 12-month free cash flow margin also remains on a strong trajectory. Briefly, for the third quarter, and compared to Q3 2024 results, Total revenue was $134.6 million, up 11% or 9% in constant currency. As I'll speak about in a moment, our success moving subscription term license business to SAS lowered total revenue growth by roughly two percentage points. SAS revenue was $92 million, up 17% or 15% in constant currency, thanks to ongoing strong bookings. Now, with respect to subscription term license revenue, certain on-premise customers that want access to exciting new cloud-based product modules, including AI modules, opted to move forward with the renewal and expansion on our hosting offering. This shift meant that starting in Q3, associated revenue is now reported as SaaS. Consequently, subscription term license revenue was only $79,000 in Q3. If you ignore the expansion amount, this is roughly $3 million less than had the renewal been won on premise. Given the level of interest in some of our new cloud-only offerings, we are having more transition discussions like these. We'll alert you to these types of changes, if any, after they happen. For professional services, revenue was $37 million, up 4% and similar to last quarter. As we've discussed, There is a competitive pricing environment for professional services, but work is underway to ensure that our pricing fully reflects the premium services our team offers. We continue to have success working with our systems integrator partners. Over the last four quarters, partners have led or jointly delivered more than 75% of new customer implementations won through our direct sales team. Given that ongoing success, Our own professional services should be a smaller portion of total revenue in the future, while remaining a key enabler of SaaS business. Maintenance and support revenue was $5.5 million, up 7%. Naturally, amounts recognized as maintenance and support revenue from the customers who transitioned to the cloud will be recognized as SaaS revenue ahead, though the impact is small. Our gross profit was up 13%, to $85.9 million for a 64% gross margin compared to 63% in the same quarter last year. The term license to SAS conversion reduced current pure gross margin by roughly one percentage point, ignoring the expansion component. Our software margin was 79%, up from 76% in Q3 last year. Professional services gross margin was 24% compared to 32% consistent with my comments around recent market conditions for these services. Adjusted EBITDA was up 13% to $33.9 million, a record level reflecting our revenue growth, improving gross margin, and despite the $3 million shift from subscription term license revenue to SAS, adjusted EBITDA margin was 25% equals Q3 last year. We continue to focus on profitability and gaining operating leverage as we scale. Our growth and profitability resulted in Rule of 40 performance for the fifth consecutive quarter, calculated by adding SAS revenue growth and adjusted EBITDA margin, our usual approach. We are proud to be consistently performing at this elite level again. Our profit in the quarter was up 150% to $16.9 million, or $0.58 per diluted share, and versus a profit of $6.8 million, or $0.23 per diluted share, a year ago, profit benefited largely from the same factors that supported our adjusted EBITDA performance. Cash flow from operating activities was $33.6 million, up 12% over the $29.9 million in Q3 2024. Cash, cash equivalents, and short-term investments were $334.4 million, up $36 million from the $298.5 million at the end of 2024, despite being active with our NCIB program. On slide 9, our trailing 12-month free cash flow margin remained strong at 19.8%. The one-time payments we made in Q1 2025 relating to tax planning and a litigation settlement reduced the result by 5.4 percentage points. So the normalized result is 25.2%, and we're trending in a positive direction. On slide 10, I'm very pleased that our annual recurring revenue, or ARR, grew by 17% year over year, both as reported and in constant currency. The balance crossed a new threshold to $407 million and grew by $16 million from last quarter, despite a slight foreign exchange headwind. This growth was driven by an outstanding quarter winning new business. Notably, we matched our best quarter ever for contracts exceeding $1 million, including both new customers and expansion deals. As Bob mentioned, we will exit 2025 with a higher ARR growth rate than we did in 2024 in constant currency terms and otherwise. The split of gross additions to ARR was 49 to 51 between new name accounts and expansion business. We remain very pleased with the healthy mix and the recent improvement in our expansion business under our new go-to-market structure. I'm particularly encouraged that applications made up the largest single component of expansion business as it demonstrates the value of our ongoing innovation. If you move to slide 11, our SAS and total RPO balances remain very strong, growing to $810 million and $846 million, respectively, with three-year categories of 18% and 16%. This metric continues to highlight growth in our subscription business and our strong growth customer retention. More details on our RPO can be found in the revenue notes to our financials. On slide 12, I'm very pleased to update our 2025 guidance. We're pleased to maintain total revenue guidance of $535 to $550 million in both as reported and constant currency terms. Our SaaS business is extremely strong, compensating for the effects on total revenue of the professional services market dynamics and the encouraging shifts from subscription term license revenue to SAS. We expect to end 2025 toward the midpoint of the range for the reported results and toward the bottom end in constant currency. For the second consecutive quarter, we're excited to increase our SAS growth guidance in both as reported and constant currency terms. We now expect full year SaaS revenue growth of 15 to 17% and 14 to 16% in constant currency. Now, thanks to the success converting on-premise business to SaaS and despite increasing customer ARR among those transitioning, we're adjusting our subscription term license revenue guidance to 15 to $16 million. More conversions could occur this year, but there's also the possibility that new customers join as hybrid or on-premise. Our current subscription term license revenue and total revenue guidance is based on a status quo. Ultimately, these are accounting details only. All contracts are subscription based and we are focused on winning and expanding with customers in a way that best suits them. After multiple quarters of better than expected performance and profitability, I'm pleased to increase our adjusted EBITDA margin guidance to between 24 and 26%. While our mid-term aspiration has been to hit a normalized adjusted EBITDA margin of 25% by 2026, it is likely we can achieve that goal a year early. Finally, on slide 13, we have continued to be active on our normal course issuer bid. In the first nine months of 2025, we repurchased approximately 467,000 common shares at an average US dollar price of $130.77. for an investment of roughly $61 million. Our NCIB ended November 5th, 2025. Over the full life of the plan, we purchased roughly 707,000 shares and invested approximately $92 million. We've entered into a new plan that allows us to purchase 1.4 million shares with a daily maximum of roughly 14,000 shares over a 12-month period ending November 11th, 2026. Overall, I'm very pleased with the momentum in our business. We've been successful in simultaneously improving both ARR growth and profitability in recent quarters. We've remained confident with our pipeline for the rest of the year and are encouraged by our success winning key deals and our higher pipeline conversion rates under our new go-to-market structure. Our recently launched MyStore agents unlock a new revenue stream, and we're only at the very beginning of that journey. I'm excited to see where the business can go from here. With that, I'll turn the call back to Bob quickly before opening the lines for Q&A.