Q1 2026 Kinaxis Inc Earnings Call

May 7, 2026

Speaker #1: Good morning, and welcome to the Kinaxis Inc. Fiscal 2026 First Quarter Results Conference Call. Currently, all participants are in listen-only mode. Following the presentation, we'll conduct a question-and-answer session, instructions will be provided at that time for you to queue up and ask your question.

Operator: Good morning, and welcome to the Kinaxis Inc. Fiscal 2026 Q1 Results Conference Call. Currently, all participants are in listen-only mode. Following the presentation, we'll conduct a question and answer session. Instructions will be provided at that time for you to queue up and ask your question. I'd like to remind everyone that this call is being recorded today, Thursday, 7 May 2026. I'll now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinaxis Inc. Please go ahead, Mr. Wadsworth.

Speaker #1: I'd like to remind everyone that this call is being recorded today, Thursday, May 7, 2026. I'll now turn the call over to Rick Wadsworth, Vice President of Investor Relations at Kinaxis Inc. Please go ahead, Mr. Wadsworth.

Speaker #2: Thanks, Operator. Good morning and welcome to the Kinaxis Earnings Call. Today we will be discussing our first quarter results, which we issued after close of markets yesterday.

Rick Wadsworth: Thanks, operator. Good morning and welcome to the Kinaxis earnings call. Today, we will be discussing our first quarter results, which we issued after close of markets yesterday. With me on the call are Razat Gaurav, our Chief Executive Officer, and Blaine Fitzgerald, our Chief Financial Officer. Some of the information discussed on this call is based on information as of today, 7 May 2026, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set out 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 SEDAR+ filings. During this call, we will discuss IFRS results and non-IFRS financial measures, including adjusted EBITDA.

Speaker #2: With me on the call are Rizat Garav, our Chief Executive Officer, and Blaine Fitzgerald, our Chief Financial Officer. Some of the information discussed in this call is based on information as of today, May 7, 2026, and contains forward-looking statements that involve risks and uncertainties.

Speaker #2: Actual results may differ materially from those set out in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure and the earnings press release, as well as in our Cedar Plus filings.

Speaker #2: 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 MD&A both of which can be found on the investor relations section of our website, kinaxis.com, and on Cedar Plus.

Rick Wadsworth: The reconciliation between adjusted EBITDA and the corresponding IFRS result is available in our earnings press release and MD&A, both of which can be found on the investor relations section of our website, kinaxis.com, and on SEDAR+. 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 prior written permission from Kinaxis. 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. Finally, I wanna remind you that our user event Kinexions will take place from 1 June to 3 June in Las Vegas. All sessions on the second and third are open to investors.

Speaker #2: 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.

Speaker #2: Neither this call nor the webcast may be rerecorded or otherwise reproduced or distributed without prior written permission from Kinaxis. We have a presentation to accompany today's call, which can be downloaded from the investor relations homepage of our website.

Speaker #2: We will let you know when to change slides. Finally, I want to remind you that our user event connections will take place from June 1 to June 3 in Las Vegas, all sessions on the second and third are open to investors.

Speaker #2: You can review event details at connections.com, and if you're interested in joining us, please reach out to me directly at rwadsworth@kinaxis.com. Before registering, as we have capacity limitations.

Rick Wadsworth: You can review event details at kinexions.com. If you're interested in joining us, please reach out to me directly at rwadsworth@kinaxis.com before registering as we have capacity limitations. Over to you, Razat.

Speaker #2: Over to you, Rizat.

Speaker #3: Thanks, Rick, and good morning all. Turning to slide four. I'm extremely pleased with how the team performed in the first quarter. Momentum from our last year has continued with a record Q1 performance.

Razat Gaurav: Thanks, Rick, and good morning all. Turning to slide 4. I'm extremely pleased with how the team performed in Q1. Momentum from our last year has continued with a record Q1 performance. Our great start to the year is evidenced by performance in our 2 key growth metrics. Our SaaS revenue grew by 21%, a significant jump compared to 16% growth a year ago. This provides us with a tremendous start towards our SaaS growth guidance for the year. Our ARR balance grew by 20%, accelerating from 14% growth in Q1 2025. All this growth translated to significantly improved profitability in Q1. We achieved record quarterly profit and adjusted EBITDA, and our adjusted EBITDA margin was 32%.

Speaker #3: Our great start to the year is evidenced by performance in our two key growth metrics. Our SaaS revenue grew by 21%, a significant jump compared to 16% growth a year ago.

Speaker #3: This provides us with a tremendous start towards our SaaS Growth Guidance for the year. Our ARR balance grew by 20%, accelerating from 14% growth in Q1 2025.

Speaker #3: All this growth translated to significantly improved profitability in the first quarter. We achieved record quarterly profit and adjusted EBITDA. And our adjusted EBITDA margin was 32%.

Speaker #3: Blaine will speak to details soon. Our momentum as the leader in AI-driven supply chain planning and orchestration continues to accelerate in an environment that is characterized by the following: firstly, there's heightened levels of volatility in supply and demand, with ongoing levels of geopolitical and structural shifts.

Razat Gaurav: Blaine will speak to details soon. Our momentum as the leader in AI-driven supply chain planning and orchestration continues to accelerate in an environment that is characterized by the following. Firstly, there's heightened levels of volatility in supply and demand with ongoing levels of geopolitical and structural shifts. Secondly, significant push to create new levels of productivity and working capital efficiencies while improving customer fulfillment service levels. Thirdly, a growing pace of innovation and change in underlying data architectures and agentic AI in an effort to create new levels of intelligence, efficiencies, and automation. Customers are exploring new forms of intelligent decision-making, governance, operating models, and process automation, leveraging a mix of predictive, prescriptive, generative, and agentic AI.

Speaker #3: Secondly, significant push to create new levels of productivity and working capital efficiencies, while improving customer fulfillment service levels. And thirdly, a growing pace of innovation and change in underlying data architectures and agentic AI, in an effort to create new levels of intelligence, efficiencies, and automation.

Speaker #3: Customers are exploring new forms of intelligent decision-making, governance, operating models, and process automation, leveraging a mix of predictive, prescriptive, generative, and agentic AI. Their feedback gives us confidence that Kinaxis is on the right side of an exciting opportunity to transform the ways of working across the entire supply chain and deliver unprecedented levels of value to our customers.

Razat Gaurav: Their feedback gives us confidence that Kinaxis is on the right side of an exciting opportunity to transform the ways of working across the entire supply chain and deliver unprecedented levels of value to our customers. The opportunity ahead is significant. The latest innovations in data architectures and AI are providing us a tremendous tailwind. Turning to slide 5. It was a record Q1 for new business in total. Business from new customers and from expansions with existing customers. Almost double the amount of total new business we signed in Q1 2025. Won 60% more than in any previous Q1, measured by average annual contract value. Our average deal size was over double what we experienced in Q1 last year. Once again, we saw disproportionate strength from contracts with $1 million-plus in average ACV.

Speaker #3: The opportunity ahead is significant, and the latest innovations in data architectures and AI are providing us a tremendous tailwind. Turning to slide five, it was a record Q1 for new business in total.

Speaker #3: Business from new customers and from expansions with existing customers. It was double the amount of total new business we signed in Q1 2025. And won 60% more than in any previous Q1, measured by average annual contract value.

Speaker #3: Our average deal size was over double what we experienced in the first quarter last year. Once again, we saw disproportionate strength from contracts with 1 million-plus in average ACV.

Speaker #3: Winning several more than we did a year ago. Including our largest initial customer contract ever, both by annual and total contract value. We'll provide you with specifics on the number of 1-plus million-dollar deals annually but our early success and pipeline suggest that 2026 could be another strong year in this regard.

Razat Gaurav: Winning several more than we did a year ago, including our largest initial customer contract ever, both by annual and total contract value. We'll provide you with specifics on the number of $1-plus million deals annually, but our early success and pipeline suggests that 2026 could be another strong year in this regard. On to slide 6. Just under half of the new ARR we added in Q1 came from some exciting new customers, most of which were enterprise or large enterprise class. I'll highlight a few wins. In consumer products, we were thrilled to win Pernod Ricard, the world's leader in premium international champagnes and spirits. They have over 200 iconic brands, including Absolut, Beefeater, Chivas Regal, G.H. Mumm, The Glenlivet, Havana Club, and Jameson.

Speaker #3: Onto slide six. Just under half of the new ARR we added in Q1 came from some exciting new customers. Most of which were enterprise or large enterprise class.

Speaker #3: I'll highlight a few wins. In consumer products, we were thrilled to win Pernod Ricard, the world's leader in premium international champagnes and spirits. They have over 200 iconic brands, including Absolut, Beefeater, Chivas Regal, GH Mom, Glenlivet, Havana Club, and Jameson.

Speaker #3: Pernod Ricard is going to be deploying our Maestro platform for end-to-end planning across their global supply chain network in an effort to improve service levels and gain cost efficiencies.

Razat Gaurav: Pernod Ricard is going to be deploying our Maestro platform for end-to-end planning across their global supply chain network in an effort to improve service levels and gain cost efficiencies. In our chemicals vertical, Tesa has become a customer. Tesa develops over 7,000 innovative adhesive solutions and is active in 100 countries. Tesa is looking to leverage Maestro to help shift from regional silos to a centrally governed global supply chain model to support rapid growth, new product launches, and other strategic initiatives. We have continued our amazing run in the energy sector. Last quarter, we won Marathon Petroleum, and now we've added the largest renewable energy company in North America. The company uses a diverse mix of energy sources, including natural gas, nuclear, renewable energy, and battery storage.

Speaker #3: In our chemicals vertical, Tessa has become a customer. Tessa develops over 7,000 innovative adhesive solutions and is active in 100 countries. Tessa is looking to leverage Maestro to help shift from regional silos to a centrally governed global supply chain model, to support rapid growth, new product launches, and other strategic initiatives.

Speaker #3: We have continued our amazing run in the energy sector. Last quarter, we won marathon, petroleum, and now we've added the largest renewable energy company in North America.

Speaker #3: The company uses a diverse mix of energy sources, including natural gas, nuclear, renewable energy, and battery storage. They're expansive asset-based, requires better end-to-end processes to ensure the right parts are in the right place at the right time.

Razat Gaurav: Their expansive asset base requires better end-to-end processes to ensure the right parts are in the right place at the right time. They're also looking to improve demand forecasting using outside-in data and machine learning techniques, so they can quickly respond to new opportunities. The energy sector is undergoing massive investments to support the demands of the new AI economy and the surge in the build-out of data centers. We expect this to remain a strong sector for us ahead. In life sciences, we won a large vital organ therapy company, which for 70 years has driven meaningful innovations in kidney care. They're going to be deploying Maestro for end-to-end intelligent planning capabilities. We also won a couple of mid-market life sciences companies. ALK, an allergy treatment specialist headquartered in Denmark, and Laboratoires Théa, which researches, develops, manufactures, and commercializes a wide variety of eye care products.

Speaker #3: They're also looking to improve demand forecasting using outside-in data and machine learning techniques, so they can quickly respond to new opportunities. The energy sector is undergoing massive investments to support the demands of the new AI economy and the surge in the build-out of data centers.

Speaker #3: So we expect this to remain a strong sector for us ahead. In life sciences, we won a large vital organ therapy company which for 70 years has driven meaningful innovations in kidney care.

Speaker #3: They're going to be deploying Maestro for end-to-end intelligent planning capabilities. We also won a couple of mid-market life sciences companies. ALK and Allergy Treatment Specialists, headquartered in Denmark, and Laboratoire Thérapie, which researches develops manufacturers and commercializes a wide variety of eye care products.

Speaker #3: In industrial manufacturing, we won a significant contract with a global Fortune 500 company. This well-known leader is known to is looking to replace siloed business unit decision-making with our unified platform covering S&OP, demand planning, distribution, inventory, shop floor scheduling, and more.

Razat Gaurav: In industrial manufacturing, we won a significant contract with a global Fortune 500 company. This well-known leader is looking to replace siloed business unit decision-making with our unified platform covering S&OP, demand planning, distribution, inventory, shop floor scheduling, and more. They're also going to be deploying Maestro Agents to gain intelligence, productivity, and automation. In the mid-market tier of high-tech, electronic component distributor White Mills, Inc. There are still dozens of prospects across our vertical market, and we have never positioned to win. Along with success made in Q1, a fifth of our additional came from existing customers. Those of new applicants were the largest single contract customers. Those of new applicants were the largest single contract and distribution and expansion with all time optimization and forecasting. Most of the expand the Q1.

Speaker #3: They're also going to be deploying Maestro agents to gain intelligence, productivity, and automation. In the mid-market tier of high-tech, electronic composure, wide mirrorless, there are still dozen prospects across our vertical market, and we have never visioned to win.

Speaker #3: Along with success, major Q1, fifth of our additional came from excess with. Customers. Still, there's new application with a largest single contraction customers. Still, there's new application with a largest single contraction business.

Speaker #3: And. Contribution in terms of expansion. All-time customization and forecasting, most of the expense in the first quarter. The succession is demonstrated mathematics namely arboristics and machine learning models.

Razat Gaurav: The success demonstrated sophisticated mathematics, namely characteristics and machine learning models, remain at the very heart of customer needs for powering high impact supply chain decisions. Our exciting new generative and agentic AI capabilities make it easier and more effective to leverage these advanced capabilities. Working together, all these technologies provide us with an incredible opportunity to further expand our impact into broader supply chain orchestration use cases. We have over 400 customers, a growing set of capabilities to sell, a highly focused go-to-market team. There's a massive room for expansion within the existing install base. On to slide 7.

Speaker #3: Remain at the very heart of customer needs for hiring high-impact supply chain decisions. Our exciting new generative and agentic AI capabilities make it easier and more effective to leverage these advanced capabilities, but will not working together, all these technologies provide us with an incredible opportunity to further expand our impact into broader supply chain orchestration use cases.

Speaker #3: We have over 400 customers, a growing set of capabilities to sell a highly focused go-to-market team. So there's a massive room for expansion within the existing install base.

Speaker #3: Onto slide seven. While winning business with the world's biggest and best supply chains is the best validation we can receive, it is a tremendous honor to be ranked as a leader in Gartner's Magic Quadrant for the 12th consecutive time.

Razat Gaurav: While winning business with the world's biggest and best supply chains is the best validation we can receive, it is a tremendous honor to be ranked as a leader in Gartner's Magic Quadrant for the 12th consecutive time, and in such a prestigious spot. Gartner published two magic quadrants this time around, one for discrete industries and another for process industries. It is a testament to the powerful flexibility of Maestro that we placed so well in both. The reports support our long-held view that differentiation in our business is not about standalone planning features. It's about how well platforms enable fast, connected, and automated decisions across the supply chain. With respect to AI, the report shows that most vendors in our space leverage it, but with varying impact.

Speaker #3: And in such a prestigious spot, Gartner published two Magic Quadrants this time around, one for discrete industries and another for process industries. It is a testament to the powerful flexibility of Maestro that we placed so well in both.

Speaker #3: The reports support our long-held view that differentiation in our business is not about standalone planning features. It's about how well platforms enable fast connected and automated decisions across the supply chain.

Speaker #3: With respect to AI, the report shows that most vendors in our space leverage it, but with varying impact. The real value is seen as coming when AI is embedded directly into decision flows and execution, rather than fragmented or assistive approaches.

Razat Gaurav: The real value is seen as coming when AI is embedded directly into decision flows and execution rather than fragmented or assistive approaches. We see ourselves positioned well here. Maestro is infused with AI end-to-end and is the world's most sophisticated context and digital representation of the physics of the real-world supply chain. It enables rapid scenario planning, synchronized decision-making, and continuous and concurrent planning. Moving to slide 8. As you will recall, we've already launched Maestro Agents, including out-of-the-box capabilities and Maestro Agent Studio, which gives supply chain teams a no-code way to compose AI agents tailored to their unique needs. Our agents, which embed large language models, including OpenAI's ChatGPT, Google Gemini, and Anthropic's Claude in training and in testing, make it easier for users of any skill level to access the full power of Maestro.

Speaker #3: We see ourselves positioned well here. Maestro is infused with AI, end-to-end, and is the world's most sophisticated context and digital representation of the physics of the real-world supply chain.

Speaker #3: It enables rapid scenario planning, synchronized decision-making, and continuous and concurrent planning. Moving to slide eight. As you will recall, we've already launched Maestro agents, including out-of-the-box capabilities and the Maestro Agent Studio, which gives supply chain teams a no-code way to compose AI agents tailored to their unique needs.

Speaker #3: Our agents, which embed large language models, including OpenAI's ChatGPT, Google Gemini, and Anthropic's Claude in training, and in testing, make it easier for users of any skill level to access the full power of Maestro.

Speaker #3: They also enable automation of processes, that would otherwise be impossible, difficult, or inefficient for human users to undertake. And create a practical foundation for more autonomous supply chain operations, that deliver faster, better decisions with even greater confidence.

Razat Gaurav: They also enable automation of processes that would otherwise be impossible, difficult, or inefficient for human users to undertake and create a practical foundation for more autonomous supply chain operations that deliver faster, better decisions with even greater confidence. In Q1, we more than doubled the number of paying customers for our Maestro Agents, and we're in discussions with many more. The application of AI and agentic AI in supply chain planning, decision-making, and orchestration is moving very rapidly, and there's no shortage of ideas for how to use it. One way we've been able to support customers in helping them prioritize specific high-impact use cases we know will deliver value quickly. For example, we recently offered customers packages for up to 6 agents where deployment and knowledge transfer are supported by our 4 deployed engineers with full implementation done in as few as 4 to 8 weeks.

Speaker #3: In Q1, we more than doubled the number of paying customers for our Maestro agents, and we're in discussions with many more. The application of AI and agentic AI in supply chain planning, decision-making, and orchestration is moving very rapidly.

Speaker #3: And there's no shortage of ideas for how to use it. One way we've been able to support customers in helping them prioritize specific high-impact use cases we know will deliver value quickly.

Speaker #3: For example, we recently offered customers packages for up to six agents where deployment and knowledge transfer are supported by our four deployed engineers. With full implementation done in as few as four to eight weeks.

Speaker #3: The package includes predefined agents that target some critical decisions, ensuring data integrity, and anticipating demand and supply risk, improving forecast accuracy, evaluating demand shifts, and optimizing inventory and supply outcomes.

Razat Gaurav: The package includes predefined agents that target some critical decisions, ensuring data integrity, anticipating demand and supply risk, improving forecast accuracy, evaluating demand shifts, and optimizing inventory and supply outcomes. We also have launched our Maestro Agent Studio to enable composability of agents tailored to our customers' unique needs. Our starter package, combined with four deployed engineers, aims to kickstart that process and quickly demonstrate value by absorbing real planner work, standardizing analysis, creating automations, and accelerating decisions. Our world-class customers move carefully and thoughtfully, and they undeniably move forward. I'm certainly biased, but it's difficult to imagine any customer not using our AI agents in the coming years. As I've described before, the next steps in our AI journey are to add the following: orchestrator agents that coordinate and sequence multiple agents across concurrent supply chain workflows. Secure connections and interoperability between Maestro Agents and external agents and systems.

Speaker #3: We also have launched our Maestro agent studio to enable composability of agents tailored to our customers' unique needs. Our starter package combined with four deployed engineers aims to kickstart that process and quickly demonstrate value by absorbing real plan of work, standardizing analysis, creating automations, and accelerating decisions.

Speaker #3: Our world-class customers move carefully and thoughtfully, and they undeniably move forward. I'm certainly biased, but it's difficult to imagine any customer not using our AI agents in the coming years.

Speaker #3: As I've described before, the next steps in our AI journey are to add the following: orchestrator agents that coordinate in sequence multiple agents across concurrent supply chain workflows.

Speaker #3: Secure connections and interoperability between Maestro agents and external agents and systems. An expanded data context and semantics through an extensible ontology layer that enables composable agents to reason consistently across larger data sets and analytical environments beyond Maestro for true supply chain orchestration.

Razat Gaurav: Expanded data context and semantics through an extensible ontology layer that enables composable agents to reason consistently across larger datasets and analytical environments beyond Maestro for true supply chain orchestration. Initial versions of these initiatives will be available within 2026 and will open a much larger opportunity for Kinaxis. Stay tuned for additional announcements on this front at our Kinexions event in early June in Las Vegas. Lastly, with respect to internal use of AI, we continue to prioritize this usage for improved efficiency, better results, and increased velocity. I'll provide some examples. In R&D, we found that AI-assisted work is 25% faster on average, and over 90% of requests to move code into production now include some AI-assisted elements. Our business development team has dramatically improved efficiency and conversion by using AI for deep research on prospect accounts that could benefit most from Maestro.

Speaker #3: Initial versions of these initiatives will be available within 2026 and will open a much larger opportunity for Kinaxis. Stay tuned for additional announcements on this front at our connections event in early June in Las Vegas.

Speaker #3: Lastly, with respect to internal use of AI, we continue to prioritize its usage. For improved efficiency, better results, and increased velocity. I'll provide some examples.

Speaker #3: In R&D, we found that AI-assisted work is 25% faster on average. And over 90% of requests to move code into production now include some AI-assisted elements.

Speaker #3: Our business development team has dramatically improved efficiency and conversion by using AI for deep research on prospect accounts that could benefit most from Maestro.

Speaker #3: AI identifies the use cases, finds the right contacts, writes emails, and follows up, all referencing the specific prospect context. Our professional services team is using AI to increase our assurance that partner deployments are following all the rigorous standards that get quicker answers to the field, to unique deployment challenges.

Razat Gaurav: AI identifies the use cases, finds the right contacts, writes emails, and follows up, all referencing the specific prospect context. Our professional services team is using AI to increase our assurance that partner deployments are following all the rigorous standards that get quicker answers to the field to unique deployment challenges. We will continue to emphasize the use of AI for innovative ways to improve operations company-wide and transform our internal ways of working. The search for a new CFO is going very well, and we have been working with a top-tier executive search firm to engage with over 200 potential candidates. At this time, we're in our final stretch of decision-making with a very short list of candidates. As it was when I joined Kinaxis, most of these candidates will need some transition time from their current roles. We will provide formal feedback when the process is complete.

Speaker #3: We will continue to emphasize the use of AI for innovative ways to improve operations, company-wide, and transform our internal ways of working. The search for a new CFO is going very well, and we have been working with a top-tier executive search firm to engage with over 200 potential candidates.

Speaker #3: At this time, we're in our final stretch of decision-making, with a very short list of candidates. As it was when I joined Kinaxis, most of these candidates will need some transition time from their current roles.

Speaker #3: We'll provide formal feedback when the process is complete, meanwhile, Blaine is leaving us with a high-functioning finance team to allow for a seamless transition.

Razat Gaurav: Blaine is leaving us with a high-functioning finance team to allow for a seamless transition. As I said on the last call, I can't thank Blaine enough for successfully steering Kinaxis through great growth, opportunity, and change, and to leave us in such a tremendous shape today. Over to you, Blaine.

Speaker #3: As I said on the last call, I can't thank Blaine enough for successfully steering Kinaxis through great growth, opportunity, and change, and to leave us in such a tremendous shape today.

Speaker #3: Over to you, Blaine.

Speaker #2: Thank you, Rizat. I couldn't be more excited than to complete my time here with such a stellar quarter. Like recent periods, Q1 was beyond expectations in several key areas and establishes even greater confidence in meeting or beating our 2026 targets.

Blaine Fitzgerald: Thank you, Razat. I couldn't be more excited than to complete my time here with such a stellar quarter. Like recent periods, Q1 was beyond expectations in several key areas and establishes even greater confidence in meeting up or beating our 2026 targets. If you look at slide 9, turning to the numbers and compared to Q1 2025 results, total revenue was $165.6 million, up 25%, largely driven by very strong SaaS revenue growth and higher than expected subscription term license and professional services revenue. SaaS revenue was $102.9 million, up 21%, thanks to recent strong momentum winning new business, including record levels in Q4 2025 and our strongest Q1 ever. Subscription term license revenue was $19.1 million, up 111%.

Speaker #2: If you look at slide nine, turning to the numbers and compared to Q1 2025 results, total revenue was $165.6 million, up 25%, largely driven by very strong SaaS revenue growth and higher-than-expected subscription-term license, and professional services revenue.

Speaker #2: SaaS revenue was $102.9 million, up 21%, thanks to recent strong momentum winning new business, including record levels in Q4 2025 and our strongest Q1 ever.

Speaker #2: Subscription-term license revenue was $19.1 million, up 111%. The result was a couple million dollars higher than expected as a new customer joined us under the hybrid model.

Blaine Fitzgerald: The result was a couple million dollars higher than expected as a new customer joined us under the hybrid model. Under that model, we deliver Maestro from a hosted environment, but the customer has an option to move the deployment on-premise, which triggers term license accounting. You should adjust your annual term license estimates accordingly. For professional services revenue was $38.7 million, up 16%, and stronger than expected due to higher realized rates as we work to ensure that pricing fully reflects our premium services. We continue to successfully shift services work to systems integrator partners, and we'll continue to focus on that in 2026. The strong Q1 result doesn't currently change our view that professional services revenue will grow in low single digits for the full year.

Speaker #2: Under that model, we deliver Maestro from a hosted environment, but the customer has an option to move the deployment on-premise. Which triggers term license accounting.

Speaker #2: You should adjust your annual term license estimates accordingly. For professional services revenue was $38.7 million, up 16%, and stronger-than-expected due to higher-realized rates, as we work to ensure that pricing fully reflects our premium services.

Speaker #2: We continue to successfully shift services work to systems-integrator partners and will continue to focus on that in 2026. The strong first quarter result doesn't currently change our view that professional services revenue will grow in low single digits for the full year.

Speaker #2: Maintenance and support revenue was $4.9 million, down 11%, due to some contract changes including success moving a couple of large customers from a hybrid hosted model to SaaS.

Blaine Fitzgerald: Maintenance and support revenue was $4.9 million, down 11% due to some contract changes, including success moving a couple of large customers from a hybrid hosted model to SaaS. We mentioned last call that there is ongoing interest in such transitions. As a result, we now expect maintenance and support revenue to decrease slightly and consecutively in the remaining quarters this year. Our gross profit was up by 32% to $114 million, for a 69% gross margin, up from 65%, due to a higher software margin, higher professional services margin, and a more favorable revenue mix as professional services declines as a percentage of total revenue. Our software margin was 81%, up from 80%, largely due to higher subscription term license revenue.

Speaker #2: We mentioned last call that there is ongoing interest in such transitions. As a result, we now expect maintenance and support revenue to decrease slightly and consecutively in the remaining quarters this year.

Speaker #2: Our gross profit was up by 32% to $114 million, for a 69% gross margin, up from 65%, due to a higher software margin, higher professional services margin, and a more favorable revenue mix as professional services declines as a percentage of total revenue.

Speaker #2: Our software margin was 81%, up from 80%, largely due to higher subscription-term license revenue. Professional services gross margin was 27%, compared to 21% reflecting the higher-realized rates in the quarter as mentioned.

Blaine Fitzgerald: Professional services gross margin was 27% compared to 21%, reflecting the higher realized rates in the quarter, as mentioned. Adjusted EBITDA was up 62% to $53.6 million, beating our record from last quarter and reflecting strong revenue growth, higher gross margin, and efficient operations. Adjusted EBITDA margin was 32%, up from 25%, which sets us up well for our full year target. It's important to note that the positive impact from high margin subscription term license revenue decreases substantially in future quarters this year. Our profit in the quarter was a record $29.4 million, higher than any previous quarter, and compared to $15.9 million in Q1 last year. We are very proud of that result. Cash flow from operating activities was $59.1 million, up 87%.

Speaker #2: Adjusted EBITDA was up 62% to $53.6 million, beating our record from last quarter and reflecting strong revenue growth, a higher gross margin, and efficient operations.

Speaker #2: Adjusted EBITDA margin was 32%, up from 25%, which sets us up well for our full-year target. It's important to note that the positive impact from high-margin subscription-term license revenue decreases substantially in future quarters this year.

Speaker #2: Our profit in the quarter was a record $29.4 million, higher than any previous quarter, and compared to $15.9 million in the first quarter last year.

Speaker #2: We are very proud of that result. Cash flow from operating activities was 59.1 million dollars, up 87%. Cash, cash equivalents, and short-term investments were $327.6 million, up from $324.7 million at the end of last year, despite $62 million deployed under our share buyback program this quarter.

Blaine Fitzgerald: Cash, cash equivalents, and short-term investments were $327.6 million, up from $324.7 million at the end of last year, despite $62 million deployed under our share buyback program this quarter. Moving to slide 10. Our trailing 12-month free cash flow margin was extremely strong at 24%. Given timing variations in individual quarters, we believe focusing on the trailing 12-month figure is most suitable. If you look at slide 10, it illustrates our significant progress over the past 3 years. That said, it's worth highlighting that free cash flow margin in Q1 was an incredible 35%. Our organic cash generation muscle is now very well developed. Turning to slide 11, annual recurring revenue grew 20% compared to the Q1 of 2025, and now sits at $447 million.

Speaker #2: Moving to slide 10. Our trailing 12-month free cash flow margin was extremely strong, at 24%. Given timing variations in individual quarters, we believe focusing on the trailing 12-month figure is most suitable.

Speaker #2: If you look at slide 10, it illustrates our significant progress over the past three years. That said, it's worth highlighting that free cash flow margin in Q1 was an incredible 35%.

Speaker #2: Our organic cash generation muscle is now very well developed. Turning to slide 11. Annual recurring revenue grew 20% compared to the first quarter of 2025, and now sits at $447 million.

Speaker #2: We added $14 million to our ARR balance during the first quarter. This is a record for our Q1, even as our conservative approach to measuring ARR left significant committed future amounts out of the calculation.

Blaine Fitzgerald: We added $14 million to our ARR balance during Q1. This is a record for our Q1, even as our conservative approach to measuring ARR left significant committed future amounts out of the calculation. Despite foreign exchange movements in the period, reducing the balance by $2.6 million. As Razat mentioned, ongoing strength in million-dollar-plus ACV contracts helped drive this great result. We also continue to convert very well on opening pipeline in the quarter, and our gross dollar retention remains very strong. On slide 12, SaaS and total RPO balances and growth remain very robust, with SaaS RPO at $905 million and total RPO at $949 million, highlighting the strength and visibility in our business. The balance remains slightly below $1 billion as Q1 is typically a low renewal quarter, which limits RPO growth.

Speaker #2: And despite foreign exchange movements in the period reducing the balance by $2.6 million. As mentioned, ongoing strength in million-dollar-plus ACV contracts helped drive this great result.

Speaker #2: We also continue to convert very well on opening pipeline in the quarter, and our gross dollar retention remains very strong. On slide 12, SaaS and total RPO balances and growth remain very robust, with SaaS RPO at $905 million and total RPO at $949 million, highlighting the strength and visibility in our business.

Speaker #2: The balance remains slightly below $1 billion as Q1 is typically a low-renewal quarter, which limits RPO growth. Over the last three years, SaaS RPO has accumulative average growth rate of 20% and total RPO has a CAGR of 19%.

Blaine Fitzgerald: Over the last 3 years, SaaS RPO has a cumulative average growth rate of 20%, and total RPO has a CAGR of 19%. We look at 3-year growth rates to help normalize for the impact of normal customer renewal cycles. On slide 13, despite total revenue, SaaS revenue, and adjusted EBITDA results coming in ahead of our expectations, we are maintaining all aspects of annual guidance, which we provided only 60 days ago. The political, economic, and foreign exchange environments remain extremely volatile, we feel that the approach is prudent. It's still early in the year, we will gather more information and review our assumptions next quarter. In any case, we exit Q1 even more confident that we will achieve or beat our goals for 2026.

Speaker #2: We look at three-year growth rates to help normalize for the impact of normal customer renewal cycles. On slide 13, despite total revenue, SaaS revenue, and adjusted EBITDA results coming in ahead of our expectations, we are maintaining all aspects of annual guidance, which we provided only 60 days ago.

Speaker #2: The political, economic, and foreign exchange environments remain extremely volatile, so we feel that the approach is prudent. It is still early in the year, and we will gather more information and review our assumptions next quarter.

Speaker #2: In any case, we exit the first quarter even more confident that we will achieve or beat our goals for 2026. Slide 14. We maximize our normal course issuer bid shortly after our last quarterly call, doubling the repurchase limit to approximately $2.8 million shares or 10% of our float at October 31st, 2025.

Blaine Fitzgerald: Slide 14, we maximize our normal course issuer bid shortly after our last quarterly call, doubling the repurchase limit to approximately 2.8 million shares or 10% of our float at 31 October 2025. During Q1, we repurchased 570,204 shares for an investment of approximately $62 million. We see tremendous value in being aggressive on our share buyback program while public markets continue to miss value complex AI-enabled enterprise SaaS companies like ours. As I said last call, Kinaxis business has never been in better shape over my 6 years here. It's hard to imagine that our quarterly revenue is now approaching Kinaxis' full-year revenue in the year before I joined. It's been a privilege to be part of that growth. ARR and SaaS growth are accelerating.

Speaker #2: During the first quarter, we repurchased $570,204 shares for an investment of approximately $62 million. We see tremendous value in being aggressive on our share buyback program while public markets continue to misvalue complex AI-enabled enterprise SaaS companies like ours.

Speaker #2: As I said last call, Kinaxis Business has never been in better shape over my six years here. It's hard to imagine that our quarterly revenue is now approaching Kinaxis' full-year revenue in the year before I joined.

Speaker #2: It's been a privilege to be part of that growth. ARR and SaaS growth are accelerating. RPO is closing in on a billion dollars. And profitability is up and has a higher ceiling in years ahead.

Blaine Fitzgerald: RPO is closing in on $1 billion. Profitability is up and has a higher ceiling in years ahead. Kinaxis is only at the beginning of its AI journey, which I am confident will add even more opportunities for growth. I want to thank again the whole Kinaxis team, which is truly PFA, and all of you, our investors and analysts. I hope to see you again down the road. I will now turn the line over to the operator to start the Q&A session.

Speaker #2: Kinaxis is only at the beginning of its AI journey, which I'm confident will add even more opportunities for growth. I want to thank again the whole Kinaxis team, which is truly PFA.

Speaker #2: And all of you are investors and analysts. I hope to see you again down the road. I will now turn the line over to the operator to start the Q&A session.

Speaker #1: We will now begin the question-and-answer session. If you'd like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again.

Operator: We will now begin the question and answer session. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick your handset up when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Your first line comes from Kevin Krishnaratne. Please go ahead. Your line is open.

Operator: We will now begin the question-and-answer session. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick your handset up when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Your first line comes from Kevin Krishnaratne. Please go ahead. Your line is open.

Speaker #1: We ask that you pick your hand setup when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device.

Speaker #1: Please stand by while we compile the Q&A roster. Your first line comes from Kevin Krishnaratne, please go ahead. Your line is open.

Speaker #3: Hey there. Good morning. A couple of questions on MISTRA. I think, Rizat, you said something about how the release is allowing your customers to do things that were really complex, sometimes impossible.

Kevin Krishnaratne: Hey there. Good morning. A couple questions on Maestro. I think, Razat, you said something about how the release is allowing your customers to do things that were really complex, sometimes impossible. Can you talk about maybe the pricing here? How are customers thinking about the ROI and on their side, are they maybe hiring fewer demand planners or are they just going faster on plans?

Speaker #3: So can you talk about maybe the pricing here? How are customers thinking about the ROI on their side? Are they maybe hiring fewer demand planners, or are they just going faster on plans?

Speaker #4: Yeah. I think it's part of an adoption journey. Kevin and so really, right now, what we're finding is a lot of the focus with our customer base is in gaining efficiencies, productivity, but also on driving working capital efficiencies and cost efficiencies and service level improvements in their supply chain.

Razat Gaurav: Yeah, I think it's part of an adoption journey, Kevin. Really, you know, right now what we're finding is a lot of the focus with our customer base is in gaining efficiencies, productivity, but also driving, you know, working capital efficiencies and cost efficiencies and service level improvements in their supply chain. That's the biggest value proposition in the near term. Clearly in the midterm, there's gonna be opportunities to, you know, further consolidate and scale to a much larger extent with fewer headcount and planners. That doesn't seem to be the initial focus for our customer base.

Speaker #4: That's the biggest value proposition in the near term. Clearly, in the midterm, there's going to be opportunities to further consolidate and scale to a much larger extent And planners, but that doesn't seem to be the initial focus for our customer base.

Kevin Krishnaratne: Gotcha. It certainly seems like a big opportunity, some education and handholding on your side. You talked about the SDEs. I'm just curious to how do you work with your partners and SIs to make sure that you're getting this technology properly deployed and scaled over time?

Speaker #3: Gotcha. And it certainly seems like a big opportunity. Some education and handholding on your side. You talked about the FDEs. I'm just curious too, how do you work with your partners and SIs to make sure that you're getting this technology properly deployed and scaled over time?

Speaker #4: Yeah. Look, we've done a few things there. Firstly, we've almost doubled our investments in training and enablement for our partner ecosystem. That's a really important initiative for us this year.

Razat Gaurav: Yeah, look, we've done a few things there. Firstly, we have, you know, almost doubled our investments in training enablement for our partner ecosystem. That's a really important initiative for us this year. That's really well on track, and we're gonna continue to see us make a lot of investments. That's the first part. Second, you know, we're working with, you know, a fewer set of partner organizations, but we are going deeper in the skill development, the talent development with them.

Speaker #4: And that's really well on track, and we're going to continue to see us make a lot of investments as that's the first part. Second, we're working with a fewer set of partner organizations, but we are going deeper in the skill development, the talent development with them.

Speaker #4: And then thirdly, when partners do lead implementations, which we are perfectly fine with, we are insisting that we have a level of engagement to ensure that we are reviewing the solution design, we are reviewing the integration architecture, we're reviewing the some of the testing and things like that before they go live.

Razat Gaurav: Thirdly, when partners do lead implementations, which we are perfectly fine with, we are insisting that we have a level of engagement to ensure that we're reviewing the solution design, we're reviewing the integration architecture, we're reviewing some of the testing and things like that before they go live. We have a package now we call that the guardian package that we are insisting that every customer uses when they are selecting partners. That's something that is becoming getting a lot of ground. All the mature partners we have, they like our level of engagement in the implementations.

Speaker #4: And we have a package now we call that the Guardian package that we are insisting that every customer uses when they are selecting partners.

Speaker #4: And that's something that is becoming getting a lot of ground. And all the mature partners we have, they like our level of engagement in the implementations, even though they take the bulk of the implementation work, they like to have Kinaxis experts involved in it to make sure we are doing it properly and we're mitigating any risks going forward and ensuring the right outcomes for our customers.

Razat Gaurav: Even though they take the bulk of the implementation work, they like to have Kinaxis experts involved in it to make sure we are, you know, doing it properly, and we're mitigating any risks going forward and ensuring the right outcomes for our customers.

Kevin Krishnaratne: Great. Great. Thanks so much, Razat Gaurav. That's one.

Speaker #3: Great. Thanks so much, Rizat. Last line.

Speaker #4: Thank you.

Razat Gaurav: Thank you.

Speaker #1: Your next question comes from the line of Richard C. at National Bank Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Richard Tse at National Bank Financial Markets. Your line is open. Please go ahead.

Speaker #5: Yes, thank you. Blaine, just wanted to say it's been a pleasure working with you and all the best with your new opportunity here. If I kind of look at the growth here, it's obviously accelerated quite a bit this year versus last year.

Richard Tse: Yes, thank you. Blaine, just wanted to say it's been a pleasure working with you and all the best with your new opportunity here. If I kinda look at the growth here, it's obviously accelerated quite a bit, you know, this year versus last year. How would you contribute, attribute that growth to sort of just the improving sort of macro for supply chain or, is it specific more to Kinaxis and what you've done on the execution side? I'm just trying to kind of gauge where that incremental is coming from.

Speaker #5: How would you contribute that growth to sort of just an improving sort of macro for supply chain or is it specific more to Kinaxis and what you've done on the execution side?

Speaker #5: I'm just trying to kind of gauge where that incremental is coming from.

Speaker #4: Yeah. It's a good question. I think it's a combination of factors. Clearly, there are some structural shifts that are happening geopolitically, from a tariff perspective, just overarching demand and supply volatility that provide us some good tailwind.

Razat Gaurav: Yeah, it's a good question. I think it's a combination of factors. Clearly, there are some, you know, structural shifts that are happening geopolitically from a tariff perspective, just overarching demand supply volatility that provide us some good tailwind. It builds the need and the case for the Maestro platform. That's definitely a factor. I think beyond that, there are, I think, three other factors as well. Firstly, we're seeing a significant push for replacement cycle of old legacy, you know, supply chain planning deployments, where customers are fed up of those old legacy deployments, and they're looking for a more modern solution that is usable and is on a single platform and is really purpose-built for taking them to the agentic era, right?

Speaker #4: It builds the need and the case for the MISTRA platform. So that's definitely a factor. But I think beyond that, I think three other factors as well.

Speaker #4: Firstly, we're seeing a significant push for replacement cycle of old legacy supply chain planning deployments, where customers are fed up of those old legacy deployments, and they're looking for a more modern solution that is usable and is on a single platform and is really purpose-built for taking them to the agentic era, right?

Speaker #4: So there's a significant push for a replacement cycle that is underway. And at the end of last year and in Q1 this year, and as well as in our pipeline, we're seeing continued increase of those replacement opportunities.

Razat Gaurav: There's a significant push for a replacement cycle that is underway. You know, at the end of last year and in Q1 this year, as well as in our pipeline, we're seeing continued increase of those replacement opportunities. That's an important factor. The second one I'll tell you is, you know, I think beyond just the macro tailwinds, we're seeing that the chief supply chain officers are under more and more pressure from their CFOs and their CEOs and their boards to create the next big wave of efficiencies, you know, in terms of working capital efficiencies, you know, because supply chains account for a very large percentage of the balance sheet, and inventories that they carry account for a very large part of the working capital.

Speaker #4: So that's an important factor. The second one I'll tell you is I think beyond just the macro tailwinds, we're seeing that the chief supply chain officers are under more and more pressure from their CFOs and their CEOs and their boards to create the next big wave of efficiencies.

Speaker #4: In terms of working capital efficiencies, because supply chains account for a very large percentage of the balance sheet and inventories that they carry account for a very large part of the working capital.

Razat Gaurav: Also in certain industries where logistics costs are a big part of the percentage of cost goods sold, and with the increase in the fuel prices, there's a lot of pressure for reducing, you know, the cost basis as well. All of these factors are also creating a bigger need for our platform. The third thing I would say is, I think our execution has improved dramatically, you know, we've, you know, really rehauled our overall go-to-market engine. You know, we've added capacity, and we're gonna continue adding capacity through the course of this year in terms of quota coverage. We're just winning more business, you know, including competitive business, and we're expanding within existing accounts as well.

Speaker #4: And also, in certain industries where logistics costs are a big part of the percentage of cost of goods sold, and with the increase in fuel prices, there's a lot of pressure for reducing the cost basis as well.

Speaker #4: So all of these factors are also creating a bigger need for our platform. And then the third thing I would say is I think we are execution has improved dramatically and we've really rehauled our overall go-to-market engine.

Speaker #4: We've added capacity, and we're going to continue adding capacity through the course of this year in terms of quarter coverage. We're just winning more business, including competitive business, and we're expanding within existing accounts as well.

Speaker #5: Okay. And I just have one other quick one in terms of the expanding business. Of the wins today, how many would you say are being kind of influenced by the fact that you've got a pretty progressive roadmap for AI, particularly with sort of MISTRA agents?

Richard Tse: Okay. I just have one other quick one in terms of the expanding business. Of the wins today, like, how many would you say are being kind of influenced by the fact that you've got a pretty progressive roadmap for AI, particularly with sort of Maestro Agents? Is that kind of part of the decision-making, you think, in terms of what you're doing there, or is it still a bit early for that?

Speaker #5: Is that kind of part of the decision-making, you think, in terms of what you're doing there, or is it still a bit early for that?

Speaker #4: Yeah, it's a good question. I'll tell you, in all I mean, obviously, with our existing customers, we are very actively engaged with them, and they're coming on the adoption journey with us.

Razat Gaurav: Yeah, it's a good question. I'll tell you, in all, I mean, obviously, with our existing customers, we are very actively engaged with them, and they're, you know, coming on the adoption journey with us. In net new accounts where there are evaluations happening, you know, the underlying platform capabilities for agentic AI, the underlying capabilities for, you know, being able to have composability for, you know, agents and the out-of-the-box agents we have is playing a bigger and bigger role in the evaluation process. You know, every, you know, pursuit cycle that we're engaging involves demos of these newer capabilities and there's a growing trend where, you know, they become part of the solution set that our customers are buying, even the net new logos.

Speaker #4: But in net new accounts where there are evaluations happening, the underlying platform capabilities for agentic AI, the underlying capabilities for being able to have composability for agents, and the out-of-the-box agents we have is playing a bigger and bigger role in the evaluation process.

Speaker #4: And every pursuit cycle that we're engaging involves demos of these newer capabilities. And there's a growing trend where they become part of the solution set that our customers are buying, even in net new logos.

Speaker #4: So it's becoming a bigger and bigger factor, I would say, in net new accounts.

Razat Gaurav: It's becoming a bigger and bigger factor, I would say, in net new accounts.

Speaker #5: Okay. Great. Thank you.

Richard Tse: Okay, great. Thank you.

Speaker #1: Your next question comes from the line of Stephen Mikhailson at BMO Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Thanos Moschopoulos at BMO Capital Markets. Your line is open. Please go ahead.

Speaker #6: Hi. Thanks for taking my question. And Blaine, it's been great working with you over these years. I want to dig into the spending on environment.

Thanos Moschopoulos: Hey, thanks for taking my question. Blaine, it's been great working with you over these years. I wanna dig into the spending on environment. On one hand, you've got global volatility and oil prices, supply chains underscoring the need for your software. On the other hand, enterprises will often delay decisions during these kinds of periods of uncertainty. What's the dynamic you're seeing with your prospects today? You know, how might that vary across the different verticals and geographies?

Speaker #6: So on one hand, you've got global volatility and oil prices and supply chains underscoring the need for your software. But on the other hand, enterprises will often delay decisions during these kinds of periods of uncertainty.

Speaker #6: What's the dynamic you're seeing with your prospects today and how might that vary across the different verticals and geographies?

Speaker #4: Yeah. There's definitely some differences by industry verticals and geographies there. There are some verticals like the high-tech value chain or the energy sector that is feeding into the surge in the build-out of the AI data centers.

Razat Gaurav: Yeah. There's definitely some differences by industry verticals and geographies there. You know, there are some verticals like the high tech value chain or the energy sector that is, you know, feeding into the surge in the build-out of, you know, the AI data centers, where those needs are very, very urgent and they're not waiting for the macroeconomic uncertainty to sort of settle itself. They're really moving ahead with those investments. There are other industries like, you know, aerospace and defense, where we're seeing similar trends.

Speaker #4: Where those needs are very, very urgent and they're not waiting for the macroeconomic uncertainty to sort of settle itself. They're really moving ahead with those investments.

Speaker #4: There are other industries like aerospace and defense where we're seeing similar trends. And then in industries where there are more chronic disruptions and sort of inflationary cost pressures, our solution and what we at Kinaxis and what MISTRA builds a bigger business case for our sponsors and our champions in these organizations to get additional funding to move ahead with these initiatives, right?

Razat Gaurav: Then in industries where there are more chronic disruptions and, sort of, inflationary cost pressures, you know, our solution and what we at Kinaxis and, you know, what Maestro builds a bigger business case for our sponsors and our champions in these organizations to get additional funding to move ahead with these initiatives. We're frankly not seeing, you know, any delays or inertia in decision-making. I would call out that to be the case, especially in North America. Our North America business, you know, had a fantastic Q4. They've had a fantastic Q1, and the pipeline has tremendous momentum for us in North America. You know, slightly different dynamic in Europe.

Speaker #4: So we're frankly not seeing any delays or inertia in decision-making. Now, I would call out that to be the case, especially in North America.

Speaker #4: North America business had a fantastic Q4. They've had a fantastic Q1. And the pipeline has tremendous momentum for us in North America. Slightly different dynamic in Europe.

Razat Gaurav: You know, Europe, we are seeing. You know, we had a very strong Q4 in Europe. We're seeing good pipeline momentum there. The pace of decision-making doesn't seem to have the same sense of urgency as in North America. In Asia Pacific, you know, it's a different dynamic, you know, based on which country you're talking about between Japan, Taiwan, and India, which is where we operate. In India, we're seeing a lot of deal flow and a lot of momentum in organizations that are looking to scale up and looking to become more competitive, continue to invest in our solutions. You know, it varies by industry and vertical. In general, we have not seen the slowdown with any of the macro issues.

Speaker #4: Europe, we are seeing we had a very strong Q4 in Europe. And we're seeing good pipeline momentum there. But the pace of decision-making doesn't seem to have the same sense of urgency as in North America.

Speaker #4: And then in Asia-Pacific, it's a different dynamic. Based on which country you're talking about, between Japan, Taiwan, and India, which is where we operate.

Speaker #4: In India, we're seeing a lot of deal flow and a lot of momentum. In organizations that are looking to scale up and looking to become more competitive continue to invest in our solutions.

Speaker #4: And so it varies by industry and vertical. But in general, we have not seen the slowdown with any of the macro issues. In fact, if anything, it's been a little bit of a tailwind.

Razat Gaurav: In fact, if anything, it's been a little bit of a tailwind.

Speaker #6: Okay. That's some really helpful color. So I know you've been calling out some of your larger deals, especially this quarter. Did you say that you signed your largest initial deal ever?

Thanos Moschopoulos: Okay. That's some really helpful color. I know you've been calling out some of your larger deals, especially this quarter. Did you say that you signed your largest initial deal ever?

Speaker #4: That's correct. Both in terms of ACV average annual contract value and in terms of total contract value. That's right.

Razat Gaurav: That's correct. Both in terms of ACV-

Thanos Moschopoulos: Okay

Razat Gaurav: average annual contract value and in terms of total contract value. That's right.

Speaker #6: All right. I'm going to go in a different direction. And I just want to was wondering if you could comment on how your ramping up your reseller channel.

Thanos Moschopoulos: All right. I'm gonna go in a different direction. I was wondering if you could comment on how you're ramping up your reseller channel. Like, how has the progress been there, I guess going through the smaller deal size?

Speaker #6: How is the progress been there? I guess going to the smaller deal size.

Speaker #4: Yeah. That's an important area for us because of course, we are adding direct quarter-carrying capacity in our go-to-market engine. But resellers play a really important role, particularly in segments of the market where we don't have our own direct coverage.

Razat Gaurav: Yeah. That's an important area for us because, you know, of course, we are adding direct quota-carrying capacity in our go-to-market engine. You know, resellers play a really important role, particularly in segments of the market where we don't have our own direct coverage. That includes, you know, many countries and regions around the world, as well as, you know, certain segments of the market that are, you know, more down markets. We have a pretty good, robust, global reseller program. We are actively evaluating and recruiting and developing partner relationships where appropriate with them. We do want to continue making investments in training and enabling them and making them more proficient.

Speaker #4: So that includes many countries and regions around the world, as well as certain segments of the market that are more down-market. So we have a pretty good, robust global reseller program.

Speaker #4: We are actively evaluating and recruiting and developing partner relationships where appropriate with them. We do want to make continue making investments in training and enabling them and making them more proficient.

Razat Gaurav: We also have, you know, an offering, you know, a sort of a rapid quick start offering where, you know, it's still our Maestro platform, but we've really, you know, simplified the template and usage for it because a lot of these resellers are selling to customers that are, you know, at a different phase of maturity as organizations, and they want something that can be implemented very quickly, have lower total cost of, you know, total cost of ownership and can lead to more rapid time to value. A combination of the product packaging, as well as the training and enablement, and then our global reseller program is important. You know, we had a pretty good year last year with this program.

Speaker #4: And then we also have an offering a sort of a rapid quick-start offering where it's still our MISTRA platform, but we've really simplified the template and usage for it because a lot of these resellers are selling to customers that are at a different phase of maturity as organizations.

Speaker #4: And they want something that can be implemented very quickly, have lower total cost of total cost of ownership, and can lead to more rapid time-to-value.

Speaker #4: And so a combination of the product packaging, as well as the training and enablement, and then our global reseller program is important. We had a pretty good year last year with this program.

Speaker #4: This year, we're looking to continue that growth momentum with the reseller program as well.

Razat Gaurav: This year, we're looking to continue that growth momentum with the reseller program as well.

Speaker #6: All right. That was really helpful. I'll pass the line now.

Thanos Moschopoulos: All right. That was really helpful. I'll pass the line now.

Speaker #1: Your next question comes from the line of Lachlan Brown at Rothschild & Co Redburn. Your line is open. ahead.

Operator: Your next question comes from the line of Lachlan Brown at Rothschild & Co Redburn. Your line is open. Please go ahead.

Speaker #6: Hi. Thanks for the questions. And Blaine, wishing you all the best on your next opportunity. You added 5.7 million of SaaS revenue in the first quarter, which I believe is your last quarter of SaaS revenue dollars added sequentially.

Lachlan Brown: Hi. Thanks for the questions. Blaine, wishing you all the best on your next opportunity. You added $5.7 million of SaaS revenue in the Q1, which I believe is your last quarter of SaaS revenue dollars added sequentially. I believe this, you know, did come ahead of your initial expectations. Could you just run us through the core drivers behind this? Was it on pricing, cross-selling, commencement of large new contracts, or anything else to call out within that number?

Speaker #6: And I believe this did come ahead of your initial expectations. So could you just run us through the core drivers behind this? Was it on pricing, cross-selling, commencement of large new contracts, or anything else to call out within that number?

Speaker #5: Yeah. Great question. So we had a pretty healthy balance of new name accounts as well as expansion that obviously contributed to that. It was almost at like 50/50 for where we ended up.

Blaine Fitzgerald: Yeah. Great question. We had a pretty healthy balance of new name accounts as well as expansion that obviously contribute to that. It was almost at, like, 50/50 for where we ended up. At the end of the day, it comes down to like execution of that go-to-market team that is doing extremely well. They're converting at a very high clip to a point where, you know, when Razat joined, he said, I've never seen conversion at this. These are levels that are extremely high, which we're obviously very proud on. Obviously, the strength of Q4 really helped us out and put us in a great, so it was, you know, just compounding at this stage.

Speaker #5: At the end of the day, it comes down to execution of that go-to-market team that is doing extremely well to converting at a very, very high clip.

Speaker #5: To a point where when Rizad joined, he said, "I've never seen conversion at this." These are levels that are extremely high, which we're obviously very, very proud on.

Speaker #5: Obviously, the strength of Q4 really helped us out and put us in a great so it was just compounding at this stage. A great Q4 and then a great Q1.

Blaine Fitzgerald: A great Q4 and then a great Q1 is helping us hit those high numbers. It's a situation where as CFOs it's pretty exhilarating to be in a position where you get to go out and have these amazing numbers that you get to brag about. We gave our guidance in a, I think, a fairly prudent way. I'd say we were very confident, more confident probably than we've ever been before, that we're gonna at least hit those numbers. I hope that my successor is gonna be very happy with me giving him a reward to be in a position to potentially give you some, I guess, increases in those guidance in the future.

Speaker #5: It's helping us hit those high numbers. It's a situation where a CFO is pretty exhilarating to be in a position where you get to co-own and have these amazing numbers that you get to brag about.

Speaker #5: And we gave our guidance in a, I think, a fairly prudent way. I'd say we were very, very, very confident, more confident probably than we've ever been before that we're going to at least hit those numbers.

Speaker #5: And I hope my successor is going to be very happy with me giving him a reward to be in a position to potentially give you some I guess increases in those guidance in the future.

Speaker #5: But we've been in a very fortunate position to have some great execution on the go-to-market side. The other piece I would just kind of end with is you asked a question about expansion and AI in the earlier question came from that.

Blaine Fitzgerald: We've been in a very fortunate position to have some great execution on the go-to-market side. The other piece I would just kind of end with is, you know, you asked a question about expansion and AI, an earlier question came from that. We called out Demand.AI and agentic AI. Both of those products are our fastest-growing products right now. There's a lot of high demand. We're in a fortunate position that what we've been innovating for has led to where we're at right now. Maybe one of the unsung kind of metrics that usually a CFO wouldn't want to brag about right now is just the R&D increase. We are investing for the future right now.

Speaker #5: And we called out ADF and Agentic AI. Both of those products are our fastest-growing products right now. And there's a lot of high demand.

Speaker #5: So we're in a fortunate position that what we've been innovating for has led to where we're at right now. And maybe one of the unsung kind of metrics that usually a CFO wouldn't want to brag about right now is just the R&D increase.

Speaker #5: We are investing for the future right now. The innovation that we're doing is what's getting us the wins against all of our competitors and the future competitors because they're seeing that we're investing in our product and making this product top-right of any Gartner MQ that's out there.

Blaine Fitzgerald: The innovation that we're doing is what's getting us the wins against all of our competitors and the future competitors, because they're seeing that we're investing in our product and making this product top rate of any Gartner M-MQ that's out there. We're in a great position.

Speaker #5: So we're in a great, great position.

Speaker #6: Thanks. And the comment on agents ties nicely into my next question. So with the new paying customers on MISTRA agents, how has their usage been?

Lachlan Brown: Thanks. The comment on agents ties nicely into my next question. With the new paying customers on Maestro Agents, how has their usage been? Has that come in, you know, above, below expectations? Has this changed your thinking around how you're bundling MAU usage within subscription?

Speaker #6: Has that come in above, below expectations? And has this changed your thinking around how you're bundling MAU usage within subscription?

Speaker #4: Yeah. No, we're really happy with the traction we're getting with the early adopters of our MISTRA agents. It's been a lot of fun. And actually, there'll be presenting and discussing some of those early wins at our connections event.

Razat Gaurav: Yeah, no, you know, we're really happy with the traction we're getting with the early adopters of our Maestro Agents. It's been a lot of fun and actually, you know, they'll be presenting and discussing some of those early wins at our Kinexions event. It's always exhilarating to hear our planners, you know, who are our users talk really about how they can do things in minutes or seconds, what would take them hours or days. I think that's really on a really good, strong trajectory.

Speaker #4: And it's always exhilarating to hear our planners who are users talk really about how they can do things in minutes or seconds, what would take them hours or days.

Speaker #4: So I think that's really on a really good, strong trajectory. Of course, as we are landing new customers with our agentic capabilities, we want to make sure we're also working with our partners and our forward-deployed engineers to make sure we can think through the outcomes and the use cases and get them the value so that that continues to be a really, really important focus area for us.

Razat Gaurav: Of course, as we are landing new customers, you know, with our agentic capabilities, we wanna make sure we're also working with our partners and our forward-deployed engineers to make sure we can think through the outcomes and the use cases and get them the value. That, that continues to be a really, really important focus area for us. In terms of the MAU pricing, we, as you know, we launched that last quarter in Q1. All new proposals going out to customers and to prospects involve that Maestro activity unit structure, which is a consumption and value and outcome-based pricing structure.

Speaker #4: In terms of the MAU pricing, as you know, we launched that last quarter in Q1. And all new proposals going out to customers and to prospects involve that MISTRA activity unit structure, which is a consumption and value and outcome-based pricing structure.

Razat Gaurav: We've continued to get good feedback from customers and prospects, and we're continuing to refine the details and the minutiae details of the metrics. All the telemetry is in our platform as well, both for ourselves as well as for our customers to track it. Just to remind you, later this year, in July 2024, all renewals we're going to be doing with our customers is also going to involve the MAU pricing structure. It's just a, it's a great, you know, sort of trajectory for us to tie the movement and the emphasis we have around our AI-oriented use cases and roadmap and the agentic capabilities with this MAU-based pricing structure.

Speaker #4: We've continued to get good feedback from customers and prospects. And we're continuing to refine the details and the minutiae details of the metrics. But all the telemetry is in our platform as well, both for ourselves as well as for our customers to track it.

Speaker #4: And then just to remind you, later this year in July, this year, all renewals we're going to be doing with our customers is also going to involve the MAU pricing structure.

Speaker #4: So it's just a great sort of trajectory for us to tie the movement and the emphasis we have around our AI-oriented use cases and roadmap and the agentic capabilities with this MAU-based pricing structure.

Speaker #6: That's very helpful. Thanks.

Lachlan Brown: That's very helpful. Thanks.

Speaker #1: Your next question comes from the line of Paul Triebe at RBC Capital Markets. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Paul Treiber at RBC Capital Markets. Your line is open. Please go ahead.

Speaker #7: Oh, thanks very much and good morning. Just in terms of you mentioned pricing. You also mentioned that you're seeing larger deal sizes. Could you just dig into further on the deal sizes?

Paul Treiber: Thanks very much, and good morning. Just in terms of you mentioned pricing. You also mentioned that you're seeing larger deal sizes. Could you just dig into further on the deal sizes? Does that reflect more so momentum of larger customers, or are you also seeing an increase in the economics per customer? With the changes in your pricing structure with AI, you know, other aspects of your roadmap, how do you think about the average economics per customer going forward?

Speaker #7: Does that reflect more so momentum of larger customers? Or are you also seeing an increase in the economics per customer? And then with the changes in your pricing structure with AI, other aspects of your roadmap, how do you think about the average economics per customer going forward?

Speaker #4: Yeah. Look, I think well, firstly, it's a very good question. And what I'll say is between sort of winning business with large organizations and sort of the deal sizes what I'll say is that both are important factors, right?

Razat Gaurav: Yeah. Look, I think, Well, firstly, it's a very good question. What I'll say is between, you know, sort of winning business with large organizations, and sort of the deal sizes, what I'll say is that both are important factors, right? I mean, I think we are selling to large enterprise organizations that was, you know, a big contributor of our bookings in Q1. You know, some of the large wins were with some of the largest companies in the world. Also, I think the scope of the capabilities we're taking to market is has broadened, right? As we've innovated and brought new capabilities to market.

Speaker #4: I mean, I think we are selling to large enterprise organizations that was a big contributor of our bookings in Q1. Some of the large wins were with some of the largest companies in the world.

Speaker #4: But also, I think the scope of the capabilities we're taking to market is has broadened, right? As we've innovated and brought new capabilities to market, Blaine talked about ADF, which is our machine learning-based forecasting capabilities.

Razat Gaurav: You know, Blaine talked about Demand.AI, which is our machine learning-based forecasting capabilities, that is using outside-in data and using sophisticated machine learning techniques that we feature engineer for, improving our customers' approaches to how they think about demand of the organization. Or, you know, another capability that we introduced, which is our enterprise scheduling capabilities, right? Which is using sophisticated, you know, scheduling genetic algorithms and optimization capabilities to bring efficiencies to the shop floor, of these manufacturing organizations and bring an integrated approach to supply planning with production scheduling. All these expansion capabilities, and of course, now we have these agentic capabilities that we are also adding onto our footprint. All of these capabilities are adding, you know, are creating fantastic opportunities for us to both cross-sell to existing customers.

Speaker #4: That is using outside-in data and using sophisticated machine learning techniques that we feature engineer for improving our customers' approaches to how they think about demand of the organization or another capability that we introduced, which is our enterprise scheduling capabilities, right, which is using sophisticated scheduling, genetic algorithms, and optimization capabilities to bring efficiencies to the shop floor of these manufacturing organizations and bring and integrated approach to supply planning with production scheduling.

Speaker #4: All these expansion capabilities and of course, now we have these agentic capabilities that we are also adding onto our footprint. So all of these capabilities are adding are creating fantastic opportunities for us to both cross-sell to existing customers, but also when we land net new logos, they're becoming a broader footprint.

Razat Gaurav: Also, when we land net new logos, they're becoming a broader footprint. A lot of times customers are working with us because we're able to bring that end-to-end solution with a platform that understands the complexity and the physics of the supply chain, and then we're adding these intelligent algorithms, these intelligent agents on top of them to really be able to create the next wave of value. It's, I think, a combination of larger organizations, but also a broader set of capabilities.

Speaker #4: And a lot of times, customers are working with us because we're able to bring that end-to-end solution with a platform that understands the complexity and the physics of the supply chain and then we're adding these intelligent algorithms, these intelligent agents on top of them to really be able to create the next wave of value.

Speaker #4: So I think a combination of larger organizations, but also a broader set of capabilities.

Paul Treiber: That's helpful and great to hear. The second question, just on, you know, there's obviously a lot of interest for customers to use AI to develop more software internally. Based on the feedback that you've seen or heard from customers, where are they delineating between you know, software for supply chain or within the enterprise that they're looking to build themselves versus what they would use a partner like Kinaxis to provide?

Speaker #7: That's helpful and great to hear. The second question, just on there's obviously a lot of interest for customers to use AI to develop more software internally.

Speaker #7: Based on the feedback that you've seen or heard from customers, where are they delineating between software for supply chain or within the enterprise that they're looking to build themselves versus what they would use a partner like Kinaxis to provide?

Speaker #4: Yeah. Look, this is a good question. And I think most of our customers are still calibrating where they work with a Kinaxis versus where they do in-house development.

Razat Gaurav: Yeah. Look, this is a good question, and I think most of our customers are still calibrating, you know, where, you know, they work with Kinaxis versus where they do in-house development. What I can tell you is, as we are making investments in our underlying platform, we are providing capabilities more and more where customers can both use out-of-the-box capabilities that we embed in our products and our capabilities, but also, we are able to provide extensibility and composability in the underlying platform we have. When there are unique capabilities that our customers need or use cases where we need to extend what we're able to do, we are being able to facilitate that in a very supportable, maintainable, and sustainable way, right?

Speaker #4: What I can tell you is as we are making investments in our underlying platform, we're providing capabilities more and more where customers can both use out-of-the-box capabilities that we embed in our products and our capabilities.

Speaker #4: But also, we're able to provide extensibility and composability in the underlying platform we have so when there are unique capabilities that our customers need, or use cases where we need to extend what we're able to do, we are being able to facilitate that in a very supportable maintainable and sustainable way, right?

Razat Gaurav: Going forward, I think, the ability of our platform to provide for that composability and provide for, you know, all the extensibility will allow both our customers and our partners to develop capabilities on our platform. But when they develop capabilities on the platform, it's not to write custom applications or custom solutions like in the traditional or legacy approach to it. It's really gonna be allowing them to compose solutions, compose agents, compose, you know, micro apps, while taking into account all the different pieces of the Lego blocks that are part of our platform. So that's an important trend that we're seeing. Supply chains, the extended supply chains deal with the minutiae of operational details.

Speaker #4: And going forward, I think the ability of our platform to provide for that composability and provide for all the extensibility will allow both our customers and our partners to develop capabilities on our platform and but when they develop capabilities on the platform, it's not to write custom applications or custom solutions like in the traditional or legacy approach to it.

Speaker #4: It's really going to be allowing them to compose solutions, compose agents, compose micro apps, while taking into account all the different pieces of the Lego blocks that are part of our platform.

Speaker #4: And so that's an important trend that we're seeing. Supply chains, the extended supply chains, deal with the minutiae of operational details. There's a lot of variance in the needs by industry, by vertical, by geography, by country.

Razat Gaurav: There's a lot of, you know, variance in the needs by industry, by vertical, by geography, by country, by operational function. Being able to have a platform that is flexible, extensible, and composable, gives them that ability to leverage all the knowledge we've been able to accumulate over the years and all the reflections we have of the, you know, the digital representation of that physical supply chain and the intelligence library of algorithms we have together with our semantic and ontology layer to really be able to compose applications when needed as well. Our vision is to not only play in out-of-the-box package applications, but to also play a growing role in organizations that do want to innovate and in that DIY space as well.

Speaker #4: By operational function, and so being able to have a platform that is flexible, extensible, and composable gives them that ability to leverage all the knowledge we've been able to accumulate over the years and all the reflections we have of the digital representation of that physical supply chain and the intelligent library of algorithms we have together with our semantic and ontology layer to really be able to compose applications when needed as well.

Speaker #4: So our vision is to not only play in out-of-the-box packaged applications, but to also play a growing role in organizations that do want to innovate, and in that DIY space as well.

Speaker #7: Thanks for taking the questions.

Paul Treiber: Thanks for taking the questions.

Speaker #1: Your next question comes from the line of Stephanie Price at CIBC. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Stephanie Price at CIBC. Your line is open. Please go ahead.

Stephanie Price: Hi. Good morning. I was hoping you could talk a little bit about where you are in the partnership strategy. How should we think about partnerships with companies like Databricks and NVIDIA contributing to growth? Also, how do you think about growth with the traditional SI partners here?

Speaker #8: Hi. Good morning. Hoping you could talk a little bit about where you are in the partnership strategy. How should we think about partnerships with companies like Databricks and NVIDIA contributing to growth and also how do you think about growth with the traditional SI partners here?

Speaker #4: Yeah. It's a good question. So look, I mean, obviously, we've been working with our SI partners for several years, and we're going to continue working with them.

Razat Gaurav: Yeah. It's a good question. Look, I mean, obviously, we've been working with our SI partners for several years, and we're going to continue working with them. They're playing a bigger and bigger role as we scale up the business. You know, like as I mentioned earlier in the call, we're really doubling down and investing in the training and enablement and ensuring that we still have an active involvement in those implementations through the guardian package that we now have with these SI partners. In terms of, you know, the rest of the ecosystem, beyond the SIs, there's some important, you know, ecosystems that we are becoming a part of in a more and more active and strategic way.

Speaker #4: They're playing a bigger and bigger role, as we scale up the business. And as I mentioned earlier in the call, we're really doubling down and investing in the training and enablement and ensuring that we still have an active involvement in those implementations through the Guardian package that we now have with these SI partners.

Speaker #4: In terms of the rest of the ecosystem, beyond the SIs, there's some important ecosystems that we are becoming a part of in a more and more active and a strategic way.

Speaker #4: Of course, we work with two hyperscalers, Google and Azure. And we are actively working with them you'll be hearing some announcements coming up at connections along these lines and some of the more innovative work we're doing with some of these hyperscalers.

Razat Gaurav: Of course, you know, we work with two hyperscalers, Google and Azure, and we are actively working with them. You know, you'll be hearing some announcements coming up at Kinexions along these lines and some of the more, you know, innovative work we're doing with some of these hyperscalers. In addition to the hyperscalers, Google and Azure, you know, we're also working actively with NVIDIA. We had made that announcement in our partnership to innovate our optimization engines and our MIP solvers using NVIDIA's cuOpt, which is, you know, an innovative capability that they've just launched recently. You know, it runs on their GPUs.

Speaker #4: In addition to the hyperscalers, Google and Azure, we're also working actively with NVIDIA. We had made that announcement in our partnership to innovate our optimization engines and our MIPS solvers using NVIDIA's QOpt, which is an innovative capability that they've just launched recently.

Speaker #4: And it runs on their GPUs. And we're getting deeper and deeper into that NVIDIA ecosystem. And then with Databricks, that's an important relationship because we're building out our extensible data fabric.

Razat Gaurav: We're getting deeper and deeper into that NVIDIA ecosystem. With Databricks, that's an important relationship because, you know, we're building out our extensible data fabric. That's a relationship we entered last year. We are continuing to leverage their machine learning pipelines as we enable capabilities, you know, for forecasting and, you know, machine learning-based forecasting for our customers. That component that we are OEM-ing from Databricks is also very important. I envision that the ecosystems like NVIDIA and Google and Azure will become more and more important for us. There's another element, which is, you know, we have, you know, you know, we OEM and we leverage the LLMs as well, right?

Speaker #4: That's a relationship we entered last year. We are continuing to leverage their machine learning pipelines as we enable capabilities for forecasting and machine learning-based forecasting for our customers.

Speaker #4: So that component that we are OEMing from Databricks is also very important. But I envision that the ecosystems like NVIDIA and Google and Azure will become more and more important for us.

Speaker #4: And then there's another element, which is we have we OEM and we leverage the LLMs as well, right? So OpenAI, Google Gemini, as well as Anthropic Cloud.

Razat Gaurav: OpenAI, Google Gemini, as well as Anthropic Claude. There's different ecosystems emerging. We want to, of course, play appropriately in those ecosystems. With the hyperscalers, with the SIs, and in some situations with some of these other folks, we are engaging and partnering in certain accounts as we engage with customers, as we engage with prospects as well. You're gonna see us continue to double down and focus on developing these ecosystem relationships even further going forward.

Speaker #4: So there are different ecosystems emerging. We want to, of course, play appropriately in those ecosystems—with the hyperscalers, with the SIs, and in some situations with some of these other folks. We are engaging and partnering in certain accounts as we engage with customers, as we engage with prospects as well.

Speaker #4: And you're going to see us continue to double down and focus on developing these ecosystem relationships, even further going forward.

Speaker #8: Thank you. Maybe for my question, next question. Obviously, Kinaxis has been doing well in multiple areas and definitely results this quarter were very good.

Stephanie Price: Thank you. Maybe for my question, next question, obviously, Kinaxis has been doing well in multiple areas and definitely results this quarter were very good. Is there anything worrying you, Razat Gaurav, as you now have kind of been in the seat for the few months here? How are you thinking about the business and the evolving landscape here?

Speaker #8: Is there anything worrying you, Rizat, as you now have kind of been in the seat for the few months here? And how are you thinking about the business and the evolving landscape here?

Speaker #4: Well, I worry about everything. But look, the business clearly has a lot of momentum right now. And but we're not being complacent about it, right?

Razat Gaurav: Well, I worry about everything. Look, the business clearly has a lot of momentum right now and, you know, but we're not being complacent about it, right? If I look at it, you know, with all the new wins and the growth we have, we have to stay anchored and focused on ensuring our customers are getting value. We are doing that, you know, you know, with a lot of investments we've made in our delivery organization, in our customer success organization, and with our partner ecosystem, right? I mean, we only retain the right to continue growing as long as we can keep making our customers successful and ensuring that they're getting value from our solutions.

Speaker #4: If I look at it, with all the new wins and the growth we have, we have to stay anchored and focused on ensuring our customers are getting value.

Speaker #4: We are doing that with a lot of investments we've made in our delivery organization, in our customer success organization. And with our partner ecosystem, right?

Speaker #4: So I mean, we only retain the right to continue growing as long as we can keep making our customers successful and ensuring that they're getting value from our solutions.

Razat Gaurav: That's a really important focus for us. Of course, beyond that, you know, we are accelerating our innovation cycles. We've increased our investment significantly in R&D, as Blaine mentioned earlier, you know. The investments in R&D are not from the point of, or a vantage point that there's a great white shark that is coming to eat us. It's really to, you know, really focus on the fundamentals of what are the needs of our customers, what are they trying to achieve, and then map that to all the new and exciting technologies, whether they are new data architectures or new generative and a-agentic AI capabilities. How can we marry those together to create the next wave of value for them? That's a very big focus area is our innovation roadmap.

Speaker #4: That's a really important focus for us. Of course, beyond that, we are accelerating our innovation cycles. We've increased our investment significantly in R&D, as Blaine mentioned earlier.

Speaker #4: And the investments in R&D are not from the point of or a vantage point that there's a great white shark that is coming to eat us.

Speaker #4: It's really to really focus on the fundamentals of what are the needs of our customers? What are they trying to achieve? And then map that to all the new and exciting technologies.

Speaker #4: Whether they're new data architectures or new generative agentic AI capabilities, how can we marry those together to create the next wave of value for them?

Speaker #4: And so that's a very big focus area is our innovation roadmap. And you're seeing us continue to innovate so we can leverage our fantastic core we have, which is Maestro and the end-to-end planning capabilities and that representation of the concurrent supply chain, but also extend beyond that with an extended platform to get into agentic orchestration across the end-to-end supply chain, right?

Razat Gaurav: You're seeing us continue to innovate so we can leverage our fantastic core we have, which is Maestro and the end-to-end planning capabilities and that representation of the concurrent supply chain, but also extend beyond that with an extended platform to get into agentic orchestration across the end-to-end supply chain, right? That's where we are investing the data fabric and the semantic and ontology layer and the knowledge graph and the Maestro Agent Studio. A lot of things to get done, but all exciting. All of that only happens as long as we can retain and attract the best talent and our people, right? The company has a fantastic culture. We are not taking that for granted.

Speaker #4: And that's where we are investing in the data fabric and the semantic and ontology layer and the knowledge graph and the agentic studio. So a lot of things to get done, but all exciting.

Speaker #4: And all of that only happens as long as we can retain and attract the best talents and the people, right? The company has a fantastic culture.

Speaker #4: We are not taking that for granted. We're making sure that we continue to retain the innovation culture, the collaboration culture, the product-centric and customer-centric culture, but we also need to make sure we attract the right talent as we aspire to bigger dreams and bigger goals.

Razat Gaurav: We're making sure that we continue to retain the innovation culture, the collaboration culture, the product-centric and customer-centric culture. We also need to make sure we attract the right talent as we aspire to bigger dreams and bigger goals. Those are the things that I'm working on is making sure we continue delivering on customers, making sure we continue to execute on our innovation roadmap, and continue to make sure we retain and attract the best talent possible.

Speaker #4: So those are the things that I'm working on—making sure we continue delivering on customers, making sure we continue to execute on our innovation roadmap, and continue to make sure we retain and attract the best talent possible.

Speaker #8: Thank you very much.

Stephanie Price: Thank you very much.

Speaker #1: Do you to time we ask that the Q&A roster limit yourself to one question, please. Your next question comes from the line of John Chow at TD Cohen.

Operator: Due to time, we ask that the Q&A roster limit yourself to one question, please. Your next question comes from the line of John Shao at TD Cowen. Your line is open. Please go ahead.

Speaker #1: Your line is open. Please go ahead.

Speaker #9: Thank you. Good morning, guys. Thanks for taking my question. I just want to ask about token cost, which seems a concern for some software investors.

John Shao: Good morning, guys. Thanks for taking my question. I just wanna ask about token costs, which seem a concern for some software investors. I know your pricing model is hybrid and consumption-based, could you still remind us the guardrail you have there to make sure it's not going to be a gross margin headwind? Thanks.

Speaker #9: I know your pricing model is hybrid and consumption-based, but could you still remind us the guardrails you have there to make sure it's not going to be a gross margin headwind?

Speaker #9: Thanks.

Speaker #4: Yeah. That's a great question. And we've heard in a lot of different companies having the worry that tokenized costs and the change in tokenized costs will elevate the amount of cost of goods sold as you go forward.

Blaine Fitzgerald: Yeah, that's a great question. We've heard in, you know, a lot of different companies having the worry that tokenized costs and the change in tokenized costs will elevate the amount of cost of goods sold as you go forward. We're in, I think, just like everyone else, we're still in the early days. We're not seeing that impact at this stage. It will be something we'll have to figure out. At the same time, we're having some almost tokenized pricing that we are, you know, bringing to our customers. We're trying to offset that cost with our own pricing strategy as we go forward. It's still too early to determine how that's gonna play out.

Speaker #4: We are in, I think, just like everyone else, we're still in the early days. We're not seeing that impact at this stage. It will be something we'll have to figure out.

Speaker #4: And at the same time, we're having some almost tokenized pricing that we are bringing to our customers. So we're trying to offset that cost with our own pricing strategy as we go forward.

Speaker #4: But it's still too early to determine how that's going to play out. Just like any other new change we expect that there's going to be a price elevation in the short term, and then it will start to work its way out and be a little bit more efficient as we go forward.

Blaine Fitzgerald: Just like any other new change, we expect that there's gonna be a price elevation in the short term, and then it will start to work its way out and be a little bit more efficient as we go forward. Today it doesn't have any impact on any of our numbers in including in our short-term forecast.

Speaker #4: But today, it doesn't have any impact on any of our numbers. Including in our short-term forecasts.

Speaker #9: Yeah. And just to add a little bit to that, right? So I mean, tokens come into play on two fronts. One, on the internal usage of AI and code assists and other LLM capabilities.

Razat Gaurav: Yeah. Just to add a little bit to that, right? I mean, tokens come into play on two fronts. One, on the internal usage of, you know, AI and code assists and other LLM capabilities. There, now we are allocating a token budget to all our engineering teams and we have seen situations where some of the most productive engineers are blowing through that. Actually, frankly, we're celebrating that to some extent because the numbers are not something we can't manage within our budgetary guidelines and on our forecasts. But what we're seeing in terms of outcomes, in terms of velocity and productivity improvements and speed is just fantastic. That's on the internal side.

Speaker #9: And there, now we are allocating token budget to all our engineering teams and we have seen situations where some of the most productive engineers are blowing through that.

Speaker #9: And actually, frankly, we're celebrating that to some extent because the numbers are not something we can't manage within our budgetary guidelines. And on our forecasts, but what we're seeing in terms of outcomes, in terms of velocity and productivity improvements and speed is just fantastic.

Speaker #9: So that's on the internal side. With our customers, we have put in place a telemetry, like I mentioned. So the MAU construct factors in tokens like Blaine said.

Razat Gaurav: With our customers, we have put in place a telemetry, like I mentioned. The MAU construct factors in tokens, like Blaine said, and we monitor that telemetry. Our customers can monitor that telemetry and when customers reach, you know, the top end of that, we do engage our commercial teams to engage with the customers to see if they need to top up on that, right? We are well protected from that regard. Of course, we are also watching closely what are the pricing trends for unit costs from LLM providers. Obviously we've been beneficiaries of those unit costs coming down in the last 2 years pretty dramatically, but we are watching that pretty closely as we go forward.

Speaker #9: And we monitor that telemetry. Our customers can monitor that telemetry. And when customers reach the top end of that, we do engage our commercial teams to engage with the customers to see if they need a top-up on that, right?

Speaker #9: So we are well protected from that regard. Of course, we are also watching closely what are the pricing trends for unit costs from LLM providers.

Speaker #9: Obviously, we've been beneficiaries of those unit costs coming down in the last two years, pretty dramatically. But we are watching that pretty closely as we go forward.

Speaker #1: Your next question comes from the line of Mark Shappell at Loop Capital. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Mark Schappel at Loop Capital. Your line is open. Please go ahead.

Speaker #10: Hi. Thank you for taking my question. Rizat, there's been considerable recent discussion about kind of the software power center kind of shifting from traditional applications to these orchestration layers.

Mark Schappel: Hi, thank you for taking my question. Razat, there's been considerable recent discussion about kind of the software power center kind of shifting from traditional applications to these orchestration layers, and that seems to be a trend that you guys are embracing. I was wondering if you could just elaborate maybe on how real that shift is you're seeing, and then, also maybe just elaborate on your orchestration capabilities.

Speaker #10: And that seems to be a trend that you guys are embracing. I was wondering if you could just elaborate maybe on how real that shift is you're seeing and then also maybe just elaborate on your orchestration capabilities.

Speaker #4: Yeah. Look, I think the underlying data architectures are shifting. And I'll talk about ourselves a little bit. The key sort of capability we have orchestration is it means different things to different people.

Razat Gaurav: Yeah. Look, I think, you know, the underlying data architectures are shifting and, you know, I'll talk about ourselves a little bit. You know, the key sort of capability we have, you know, orchestration, is it means different things to different people. For us, really what it means is to leverage our underlying platform and our sort of understanding of the physics of the supply chain and to really help our customers plan, make decisions, take actions, and to really be able to achieve the outcomes and then to go through the learning cycles as they go through that. That's the orchestration loop as we think of it, right? Planning, decision-making, actioning, execution, achieving the outcomes and the results, and then going through the learning cycles.

Speaker #4: For us, really, what it means is to leverage our underlying platform and our sort of understanding of the physics of the supply chain, and to really help our customers plan, make decisions, take actions, and to really be able to achieve the outcomes, and then to go through the learning cycles as they go through that.

Speaker #4: That's the orchestration loop as we think of it, right? So planning, decision-making, actioning, execution, achieving the outcomes and the results, and then going through the learning cycles.

Speaker #4: And I think what's most important and frankly, the big effort to achieve this vision is not so much on the underlying technical architectures or the product capabilities or the agentic capabilities.

Razat Gaurav: You know, I think what's most important, and frankly, the big effort to achieve this vision is not so much on the underlying technical architectures or the product capabilities or the agentic capabilities. It's more importantly in working with organizations on how they need to rethink their ways of working. These organizations are, you know, Fortune 1,000 companies that we are working in the seven verticals we work in, right? It requires I mean, there are some use cases that can have a quick hit with, you know, creating productivity and automation and repetitive tasks and things. Those are the low-hanging fruit and easy things to facilitate through agentic workflows.

Speaker #4: It's more importantly in working with organizations on how they need to rethink their ways of working. And these organizations are Fortune 1000 companies that we are working in the seven verticals we work in, right?

Speaker #4: And it requires I mean, there's some use cases that can have a quick hit with creating productivity and automation and repetitive tasks and things.

Speaker #4: Those are the low-hanging fruit and easy things to facilitate through agentic workflows. But to really, truly get into orchestration across functions, across planning horizons of strategic decision-making versus tactical decision-making versus execution, it requires organizations to rethink their fundamental operating models, their underlying processes, how they're organized, how they think about their metrics.

Razat Gaurav: To really truly get into orchestration across functions, across, you know, planning horizons of strategic decision making versus tactical decision making versus execution, it requires organizations to rethink their fundamental operating models, their underlying processes, you know, how they're organized, how they think about, you know, their metrics. That takes time, right? That's why as we, you know, I think in my humble opinion, I think most people are over-expecting what impact, you know, these orchestration capabilities will have in the enterprise in the near term, but I think they're also underestimating the impact in the mid to long term. It's not just a technology-driven approach.

Speaker #4: And that takes time, right? And that's why as we I think in my humble opinion, I think most people are overexpecting what impact these orchestration capabilities will have in the enterprise in the near term.

Speaker #4: But I think they're also underestimating the impact in the mid to long term. But it's not just technology-driven approach. You've got to also make fundamental changes to your organization structure, operating models, processes, metrics, and things like that to really transform your ways of working, right?

Razat Gaurav: You've got to also make fundamental changes to your organization structure, operating models, processes, metrics and things like that to really transform your ways of working, right? That's why, you know, the work we do together with our partners is very critical in achieving the true outcomes from this vision.

Speaker #4: And that's why the work we do together with our partners is very critical in achieving the true outcomes from this vision.

Speaker #10: Thank you.

Mark Schappel: Thank you.

Speaker #1: Your next question comes from the line of Sutan Sukumar at Stifel. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Suthan Sukumar at Stifel. Your line is open. Please go ahead.

Speaker #10: Good morning, Jens. And congrats on a very impressive quarter. We'd stuck to my question. I just had one other chat on the competitive landscape with AI.

Suthan Sukumar: Good morning, gents. Congrats on a very impressive quarter. With respect to my question, I just wanted to chat on the competitive landscape with AI. How are you guys positioning Maestro Agents versus the agentic frameworks that are offered by some of the incumbent underlying platforms, like, let's say, SAP that your customers already use? I was wondering, is this more of a share of wallet discussion at the orchestration layer, or is there a coexistence and interop-

Speaker #10: How are you guys positioning Maestro agents versus the agentic frameworks that are offered by some of the incumbents' underlying platforms like SAP that your customers already use?

Speaker #10: I'm just wondering, is this more of a share of wallet discussion at the orchestration layer? Or is there a coexistence and interoperability here that can be leveraged?

Speaker #10: Thank you.

Speaker #4: Yeah. I think you were cutting out there, but I think I got the gist of the question. Look, I think what I'll say is most organizations are early in the journey to really leverage these agentic orchestration capabilities, right?

Razat Gaurav: Yeah, you, I think you were cutting out there, but I think I got the gist of the question. Look, I think, what I'll say is most organizations are early in the journey to really leverage these agentic orchestration capabilities, right? Customers have done pilots with agents. They have put many agents in production, including with ourselves, and they're seeing good results when it comes to getting productivity and automation, you know, improvements. To really truly do orchestration, I fully expect that, you know, companies will have to have orchestrator agents who work across a very heterogeneous systems landscape, right? In that regard, our philosophy and our approach is to be interoperable, right?

Speaker #4: Customers have done pilots with agents. They have put many agents in production including with ourselves. And they're seeing good results when it comes to getting productivity and automation improvements.

Speaker #4: But to really, truly do orchestration I fully expect that companies will have to have orchestrator agents work across a very heterogeneous systems landscape, right?

Speaker #4: And in that regard, our philosophy and our approach is to be interoperable, right? We're not trying to be everything to everyone, but as we have sort of architected our platform, and as we are making investments in the go-forward roadmaps in our platform, we're really architected in a way that we can be interoperable, right?

Razat Gaurav: We're not trying to be everything to everyone, but as we have, sort of, you know, architected our platform and as we are making investments in the go-forward roadmaps in our platform, we're really architecting the way that we can be interoperable, right? You know, in the end-to-end world of supply chain, you know, any Fortune 1,000 company may have anywhere from 10 to, you know, 100 applications that power that end-to-end supply chain, right? We have to really have the ability to really be able to integrate to those systems and work across those systems. The orchestration use cases that agents can facilitate will also need to traverse a pretty diverse systems landscape.

Speaker #4: In the end-to-end world of supply chain, any Fortune 1000 company may have anywhere from 10 to 100 applications that power that end-to-end supply chain, right?

Speaker #4: And so we have to really have the ability to really be able to integrate to those systems and work across those systems and the orchestration use cases that agents can facilitate will also need to traverse a pretty diverse systems landscape.

Speaker #4: That's where this semantic and ontology layer is very important. Because it provides the context for what these orchestrators do. It provides a common taxonomy and then these agents have a chance of traversing that heterogeneous landscape.

Razat Gaurav: That's where this semantic and ontology layer is very important because it provides the context for what these orchestrators do. It provides a common taxonomy, and then, you know, these agents have a chance of traversing that heterogeneous landscape. And of course, as companies are doing that, they're always looking for opportunities to consolidate that heterogeneous landscape and to simplify them, but they continue to be fairly heterogeneous in that end-to-end supply chain world. Our design principle is really around interoperability and coexistence. At the same time, you know, we expect that, you know, we'll have our own agents that will play the orchestration role.

Speaker #4: And of course, as companies are doing that, they're always looking for opportunities to consolidate that heterogeneous landscape into simplify them. But they continue to be fairly heterogeneous in that end-to-end supply chain world.

Speaker #4: So our design principle is really around interoperability. And coexistence. And at the same time, we expect that we'll have our own agents that will play the orchestration role.

Speaker #4: And at the same time, I expect that there'll be orchestrator agents from third parties where they leverage the Maestro platform for making decisions and for doing computations that we are very good at doing for supply planning, for demand planning, for inventory optimization, for production scheduling, and things like that.

Razat Gaurav: At the same time, I expect that there'll be orchestrator agents from third parties, where they leverage the Maestro platform for making decisions and for doing computations that we are very good at doing, you know. For supply planning, for demand planning, for, you know, inventory optimization, for production scheduling, and things like that. I think it'll work in both ways, and that's how we're architecting our platform.

Speaker #4: So I think it'll work in both ways, and that's how we're architecting our platform.

Speaker #10: Great. Thank you.

Suthan Sukumar: Great. Thank you.

Speaker #1: We've reached the end of the Q&A session. I'll now pass the call back to Rick for closing remarks.

Operator: We've reached the end of the Q&A session. I will now pass the call back to Rick for closing remarks.

Speaker #4: Thank you. Pardon me. Thank you, everyone, for participating on today's call. We appreciate your questions and your ongoing interest and Kinaxis. Look forward to speaking with you again next time when we report second quarter results.

Rick Wadsworth: Thank you. Pardon me. Thank you everyone for participating on today's call. We appreciate your questions and your ongoing interest and support in Kinaxis. Look forward to speaking with you again next time when we report Q2 results. Bye for now.

Speaker #4: Bye for now.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.