Q2 2026 Kinaxis Inc Earnings Call

August 6, 2026

Speaker #1: Good morning, and welcome to the Kinaxis Inc. fiscal Q2 2026 results conference call. Currently all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session.

Operator: Good morning, and welcome to the Kinaxis Inc Fiscal Q2 2026 Results Conference Call. Currently, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. I would like to remind everyone that this call is being recorded today. I will now turn the call over to Victoria Hyde-Dunn, Vice President of Investor Relations at Kinaxis Inc. Please go ahead.

Speaker #1: I'd like to remind everyone that this call is being recorded today. I will now turn the call over to Victoria Hyde Dunn, Vice President of Investor Relations at Kinaxis Inc. Please go ahead.

Speaker #2: Thank you. Good morning, and welcome to the conference call. Joining me today are Razat Gorov, Chief Executive Officer Herb Yeh, Chief Financial Officer and Chief Strategy Officer; and Peter Yaroskovich, Vice President of Financial Planning and Analysis.

Victoria Hyde-Dunn: Thank you. Good morning, and welcome to the conference call. Joining me today are Razat Gaurav, Chief Executive Officer, Herb Yeh, Chief Financial Officer and Chief Strategy Officer, and Peter Yaraskavitch, Vice President of Financial Planning and Analysis. Before we begin, we have a couple of reminders. We will be discussing our Q2 2026 results, which we issued after the close of markets yesterday. The earnings press release and slide presentation are available on the investor relations website at investors.kinaxis.com. Some of the information discussed on this call is based on information as of today, 6 August 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, please review the forward-looking statements disclosure in the earnings press release and in our SEDAR+ filings.

Speaker #2: Before we begin, we have a couple of reminders. We will be discussing our second quarter 2026 results, which we issued after the close of markets yesterday.

Speaker #2: The earnings press release and slide presentation are available on the investor relations website at investors.kinaxis.com. Some of the information discussed on this call is based on information as of today, August 6, 2026, and contains forward-looking statements that involve risks and uncertainties.

Victoria Hyde-Dunn: The earnings press release and slide presentation are available on the investor relations website at investors.kinaxis.com. Some of the information discussed on this call is based on information as of today, 6 August 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, please review the forward-looking statements disclosure in the earnings press release and in our SEDAR+ filings.

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

Speaker #2: Additionally, we will discuss IFRS results and non-IFRS financial measures, including adjusted EBITDA. A reconciliation between adjusted EBITDA and the corresponding IFRS result is available in our earnings press release and MDNA; both of which can be found on the investor relations website and on Cedar Plus.

Victoria Hyde-Dunn: Additionally, we will discuss IFRS results and non-IFRS financial measures, including adjusted EBITDA. A reconciliation between adjusted EBITDA and the corresponding IFRS result is available in our earnings press release and MD&A, both of which can be found on the investor relations website and on SEDAR+. With that, it is my pleasure to turn the call over to Razat.

Speaker #2: With that, it is my pleasure to turn the call over to Razat.

Speaker #3: Thank you, Victoria. And thank you, everyone, for joining us today. Before I begin, I'd like to welcome Herb to his first earnings call with Kinaxis.

Razat Gaurav: Thank you, Victoria, and thank you everyone for joining us today. Before I begin, I would like to welcome Herb to his first earnings call with Kinaxis. Welcome, Herb. We also recently welcomed Kristin Russell as our Chief Marketing Officer. We are excited to have Herb and Kristin on board as we scale and build Kinaxis for the next phase of innovation and growth. I will start today's call with my observations on the quarter, then turn it over to Peter to discuss financial results, and then to Herb to review guidance before the Q&A session. As many of the world's largest enterprises turn to Kinaxis to manage growing demand, volatility, and uncertainty. Second, our vision for operational orchestration and our continued investments in core Maestro capabilities reinforce our commitment to innovation and to supporting the world's most complex supply chains.

Speaker #3: Welcome, Herb. We also recently welcomed Kristen Russell as our Chief Marketing Officer. We're excited to have Herb and Kristen on board as we scale and build Kinaxis for the next phase of innovation and growth.

Speaker #3: I will start today's call with my observations on the quarter, then turn it over to Peter to discuss financial results and then to Herb to review guidance before the Q&A session.

Razat Gaurav: I will start today's call with my observations on the quarter, then turn it over to Peter to discuss financial results, and then to Herb to review guidance before the Q&A session. As many of the world's largest enterprises turn to Kinaxis to manage growing demand, volatility, and uncertainty. Second, our vision for operational orchestration and our continued investments in core Maestro capabilities reinforce our commitment to innovation and to supporting the world's most complex supply chains.

Speaker #3: As many of the world's largest enterprises turn to Kinaxis to manage growing demand, volatility, and uncertainty. Second, our vision for operational orchestration and our continued investments in core maestro capabilities reinforce our commitment to innovation and to supporting the world's most complex supply chains.

Speaker #3: Third, our second quarter performance builds on the strongest first half in Kinaxis history, and we are very pleased to raise our fullier guidance for total revenue and SAS revenue growth.

Razat Gaurav: Third, our Q2 performance builds on the strongest H1 in Kinaxis history, and we are very pleased to raise our full year guidance for total revenue and SaaS revenue growth. Our continued commitment to product innovation, investments in growth initiatives, and focus on customer and partner success remain our North Star. Let me discuss these topics in more detail. Beginning with Q2 results, SaaS revenue increased by 20% year-over-year, ARR grew by 19% year-over-year, and adjusted EBITDA margin of 26% is in line with our full year guidance. Our strong performance reinforces our position as a trusted enterprise partner for the world's most complex supply chains, reflecting continued customer demand for AI-enabled planning and orchestration as organizations navigate an increasingly volatile and unpredictable operating environment. Companies are facing multiple sources of disruption simultaneously.

Speaker #3: Our continued commitment to product innovation, investments in growth initiatives, and focus on customer and partner success remain our north star. Let me discuss these topics in more detail.

Speaker #3: Beginning with second quarter results, SAS revenue increased by 20% year over year, ARR grew by 19% year over year, and adjusted EBITDA margin of 26% is in line with our fullier guidance.

Razat Gaurav: Beginning with Q2 results, SaaS revenue increased by 20% year-over-year, ARR grew by 19% year-over-year, and adjusted EBITDA margin of 26% is in line with our full year guidance. Our strong performance reinforces our position as a trusted enterprise partner for the world's most complex supply chains, reflecting continued customer demand for AI-enabled planning and orchestration as organizations navigate an increasingly volatile and unpredictable operating environment. Companies are facing multiple sources of disruption simultaneously.

Speaker #3: Our strong performance reinforces our position as a trusted enterprise partner for the world's most complex supply chains. Reflecting continued customer demand for AI-enabled planning and orchestration, as organizations navigate an increasingly volatile and unpredictable operating environment.

Speaker #3: Companies are facing multiple sources of disruption simultaneously, trade and tariff uncertainty, geopolitical conflict, energy prices, sourcing challenges, and shifting customer demand are all happening at the same time.

Razat Gaurav: Trade and tariff uncertainty, geopolitical conflict, energy prices, sourcing challenges, and shifting customer demand are all happening at the same time. Given this fluid operating environment, organizations need an enterprise platform that can rapidly scenario plan and help them make better decisions across their concurrent supply chain. We saw global scenario planning activity on our platform increase every month from April through July this year, with July up 30% year-over-year. We are seeing this momentum with customers as we unlock value within a $66 billion addressable market. It was another strong Q2 for new business in total, including business from new customers and expansions with existing customers. Our average deal size was almost double what we experienced in Q2 last year. Once again, we continue to see strong momentum with contracts with 1 million-plus in average ACV, winning three times more than a year ago.

Speaker #3: Given this fluid operating environment, organizations need an enterprise platform that can rapidly scenario plan and help them make better decisions across their concurrent supply chain.

Speaker #3: We saw global scenario planning activity on our platform increase every month from April through July this year, with July up 30% year over year.

Speaker #3: We are seeing this momentum with customers as we unlock value within a 66 billion dollar addressable market. It was another strong second quarter for new business in total, including business from new customers and expansions with existing customers.

Razat Gaurav: We are seeing this momentum with customers as we unlock value within a $66 billion addressable market. It was another strong Q2 for new business in total, including business from new customers and expansions with existing customers. Our average deal size was almost double what we experienced in Q2 last year. Once again, we continue to see strong momentum with contracts with 1 million-plus in average ACV, winning three times more than a year ago.

Speaker #3: Our average deal size was almost double what we experienced in the second quarter last year. Once again, we continue to see strong momentum with contracts with 1 million plus in average ACV.

Speaker #3: Winning three times more than a year ago. Our pipeline conversion rates grew very well. Our partners are sourcing new opportunities and co-selling with us, having contributed a record number of new deals in the second quarter and providing pipeline for the second half of the year.

Razat Gaurav: Our pipeline conversion rates grew very well. Our partners are sourcing new opportunities and co-selling with us, having contributed a record number of new deals in Q2 and providing pipeline for the H2. Sales to existing customers have also accelerated. We set a new company record in ACV bookings for quarterly expansion from existing customers, with over 70% year-over-year growth. These customer expansions were driven by innovative new capabilities, including agentic AI, machine learning-based demand forecasting, advanced inventory optimization, enterprise scheduling, and other supply chain optimization use cases, all part of our Maestro platform. We're also seeing early traction with our Maestro Activity Units usage-based pricing structure. All new proposals to customers and prospects now include MAUs. Beginning in July, select renewals started incorporating MAU pricing bundles.

Speaker #3: Sales to existing customers have also accelerated. We set a new company record in ACV bookings for quarterly expansion from existing customers, with over 70% year over year growth.

Speaker #3: These customer expansions were driven by innovative new capabilities, including agentic AI, machine learning-based demand forecasting, advanced inventory optimization, enterprise scheduling, and other supply chain optimization use cases, all part of our maestro platform.

Razat Gaurav: These customer expansions were driven by innovative new capabilities, including agentic AI, machine learning-based demand forecasting, advanced inventory optimization, enterprise scheduling, and other supply chain optimization use cases, all part of our Maestro platform. We're also seeing early traction with our Maestro Activity Units usage-based pricing structure. All new proposals to customers and prospects now include MAUs. Beginning in July, select renewals started incorporating MAU pricing bundles.

Speaker #3: We're also seeing early traction with our maestro activity unit usage-based pricing structure, all new proposals to customers and prospects now include MAUs. Beginning in July, select renewals started incorporating MAU pricing bundles.

Speaker #3: We've been thoughtful in our phased approach to align pricing with the value we create for our customers. Now, let me share some notable customer wins and use cases.

Razat Gaurav: We've been thoughtful in our phased approach to align pricing with the value we create for our customers. Now, let me share some notable customer wins and use cases. In consumer manufacturing, Lacoste, one of the world's most iconic premium fashion and sportswear brands, selected Maestro to modernize production planning across its manufacturing operations, improving service levels, reducing lead times, and increasing operational agility. In life sciences, Gedeon Richter, one of the Central and Eastern Europe's largest pharmaceutical companies, selected Maestro to replace fragmented planning processes with a single concurrent planning platform, improving visibility, collaboration, and decision-making across its global business. Dechra, a global leader in veterinary, pharmaceuticals, and animal health, selected Maestro to modernize demand, supply, and inventory planning as part of its SAP S/4HANA transformation, creating a unified planning platform across its global operations.

Speaker #3: In consumer manufacturing, Lacoste, one of our one of the world's most iconic premium fashion and sportswear brands, selected maestro to modernize production planning across its manufacturing operations.

Speaker #3: Improving service levels, reducing lead times, and increasing operational agility. In life sciences, Gideon Richter, one of the central and Eastern Europe's largest pharmaceutical companies, selected maestro to replace fragmented planning processes with a single concurrent planning platform, improving visibility, collaboration, and decision-making across its global business.

Razat Gaurav: In life sciences, Gedeon Richter, one of the Central and Eastern Europe's largest pharmaceutical companies, selected Maestro to replace fragmented planning processes with a single concurrent planning platform, improving visibility, collaboration, and decision-making across its global business.

Speaker #3: Decra, a global leader in veterinary, pharmaceuticals, animal and animal health, selected maestro to modernize demand, supply, and inventory planning as part of its SAP S/4HANA transformation.

Razat Gaurav: Dechra, a global leader in veterinary, pharmaceuticals, and animal health, selected Maestro to modernize demand, supply, and inventory planning as part of its SAP S/4HANA transformation, creating a unified planning platform across its global operations.

Speaker #3: Creating a unified planning platform across its global operations. Tsumura, a leading Japanese pharmaceutical company, has become a new customer and eco-lab is expanding their footprint with Nako Water and Europe.

Razat Gaurav: Tsumura, a leading Japanese pharmaceutical company, has become a new customer, and Ecolab is expanding their footprint with Nalco Water and Europe. In industrials Rockwell Automation, a global leader in industrial automation and digital transformation, has become a new customer, and we have a new Fortune 500 company for the machinery sector. We are seeing a significant uptick in needs driven by the surge in data center build-outs. Many customers across the high-tech value chain, including tooling, equipment, storage, semiconductor, power, and energy companies, use our Maestro solution already. Ansaldo Energia, one of Europe's leading power generation equipment manufacturers, selected Maestro to modernize end-to-end planning across its complex manufacturing operations, supporting the growing demand for energy infrastructure, in part driven by AI and data center expansion. Turning to Kinexions North America, our flagship conference was a great success.

Speaker #3: In industrials, Rockwell Automation, a global leader in industrial automation and digital transformation, has become a new customer, and we have a new Fortune 500 company, for the machinery sector.

Speaker #3: We are seeing a significant uptick in needs driven by the surge in data center build-outs. Many customers across the high-tech value chain including tooling, equipment, storage, semiconductor, power, and energy companies use our maestro solution already.

Razat Gaurav: Many customers across the high-tech value chain, including tooling, equipment, storage, semiconductor, power, and energy companies, use our Maestro solution already. Ansaldo Energia, one of Europe's leading power generation equipment manufacturers, selected Maestro to modernize end-to-end planning across its complex manufacturing operations, supporting the growing demand for energy infrastructure, in part driven by AI and data center expansion.

Speaker #3: Ansaldo Energia, one of Europe's leading power generation equipment manufacturers, selected maestro to modernize end-to-end planning across its complex manufacturing operations. Supporting the growing demand for energy infrastructure in part driven by AI and data center expansion.

Speaker #3: Turning to Kinaxis North America, our flagship conference was a great success. We had record attendance from global customers, prospects, and strategic partners, and received very positive feedback on our new operational orchestration vision.

Razat Gaurav: Turning to Kinexions North America, our flagship conference was a great success. We had record attendance from global customers, prospects, and strategic partners, and received very positive feedback on our new operational orchestration vision. This includes interoperable, composable, and extensible building blocks that can supplement Maestro and enable broader operational orchestration solutions, leveraging the latest in semantic architectures and agentic AI.

Razat Gaurav: We had record attendance from global customers, prospects, and strategic partners, and received very positive feedback on our new operational orchestration vision. This includes interoperable, composable, and extensible building blocks that can supplement Maestro and enable broader operational orchestration solutions, leveraging the latest in semantic architectures and agentic AI. Our partnership with Databricks for data fabric is live in Maestro, enabling outside-in signal ingestion and data cataloging. It ingests data from sources like social sentiments, weather, and news feeds, combining it with structured enterprise data. Since our launch at the end of last year, Maestro Agents have progressed from starter trials to early adopters to paid customers. Approximately 10% of our installed customer base is on a paid or trial subscription. We have a significant opportunity to bring the power of Maestro platform and AI agents to a much larger pool of customers.

Speaker #3: This includes interoperable composable and extensible building blocks that can supplement maestro and enable broader operational orchestration solutions, leveraging the latest and semantic architectures and agentic AI.

Speaker #3: Our partnership with Databricks for Data Fabric is live in Maestro, enabling outside-in signal ingestion and data cataloging. It ingests data from sources like social sentiment, weather, and news feeds, combining it with structured enterprise data.

Razat Gaurav: Our partnership with Databricks for data fabric is live in Maestro, enabling outside-in signal ingestion and data cataloging. It ingests data from sources like social sentiments, weather, and news feeds, combining it with structured enterprise data.

Speaker #3: Since our launch at the end of last year, maestro agents have progressed from starter trials to early adopters to paid customers. Approximately 10% of our installed customer base is on a paid or trial subscription.

Razat Gaurav: Since our launch at the end of last year, Maestro Agents have progressed from starter trials to early adopters to paid customers. Approximately 10% of our installed customer base is on a paid or trial subscription. We have a significant opportunity to bring the power of Maestro platform and AI agents to a much larger pool of customers.

Speaker #3: We have a significant opportunity to bring the power of the Maestro platform and AI agents to a much larger pool of customers. While it's still early days, we've seen a broad range of use cases.

Razat Gaurav: While still in the early days, we've seen a broad range of use cases. For example, our data integrity agent has helped identify and prioritize data quality issues. The inventory excess analysis agent compares two scenarios to identify the largest shifts. The demand at-risk analysis agent can pinpoint late purchase orders that risk demand and revenue. Our Forward Deployed Engineering capabilities and ongoing platform investments will unlock new opportunities for Kinaxis. Kinaxis is moving beyond just being a system of record for planning and decisioning to becoming a continuous system of intelligence, action, and learning. FDEs will work directly with customers to solve complex, unique, high-value business problems on our platform. We have a growing list of customers actively engaging with us on AI-driven supply chain transformation. We are beginning discovery with these customers to determine what the FDEs will build and the outcomes to be achieved.

Speaker #3: For example, our data integrity agent has helped identify and prioritize data quality issues. The inventory excess analysis agent compares two scenarios to identify the largest shifts.

Speaker #3: The demand at risk analysis agent can pinpoint late purchase orders that risk demand and revenue. Our forward-deployed engineering capabilities and ongoing platform investments will unlock new opportunities for Kinaxis.

Razat Gaurav: Our Forward Deployed Engineering capabilities and ongoing platform investments will unlock new opportunities for Kinaxis. Kinaxis is moving beyond just being a system of record for planning and decisioning to becoming a continuous system of intelligence, action, and learning.

Speaker #3: Kinaxis is moving beyond just being a system of record for planning and decisioning to becoming a continuous system of intelligence, action, and learning. FDEs will work directly with customers to solve complex, unique, high-value business problems on our platform.

Razat Gaurav: FDEs will work directly with customers to solve complex, unique, high-value business problems on our platform. We have a growing list of customers actively engaging with us on AI-driven supply chain transformation. We are beginning discovery with these customers to determine what the FDEs will build and the outcomes to be achieved.

Speaker #3: We have a growing list of customers actively engaging with us on AI-driven supply chain transformation. We are beginning discovery with these customers to determine what the FDEs will build and the outcomes to be achieved.

Speaker #3: We expect these engagements to actively expand through the end of this year and into 2027. Looking ahead, we are very pleased with the strong year-to-date results and momentum heading into the second half of the year.

Razat Gaurav: We expect these engagements to actively expand through the end of this year and into 2027. Looking ahead, we are very pleased with the strong year-to-date results and momentum heading into the H2 of the year. We are raising our guidance for full-year total revenue and SaaS revenue growth. We are building depth, scale, and performance into the foundation of planning and decision-making for Maestro, and building a composable agentic AI platform to realize our vision for operational orchestration. Importantly, we are managing the business for long-term, durable growth and profitability. As we shared at Kinexions, we are focused on five key strategic initiatives to drive long-term growth. First, continue investing in core Maestro platform. Second, building an agentic framework for operational orchestration. Third, executing on our new FDE customer engagement motion. Fourth, doubling down on training and enablement of our growing partner ecosystem.

Speaker #3: We are raising our guidance for full-year total revenue and SAS revenue growth. We are building depth, scale, and performance into the foundation of planning and decision-making for maestro and building a composable agentic AI platform to realize our vision for operational orchestration.

Razat Gaurav: We are building depth, scale, and performance into the foundation of planning and decision-making for Maestro, and building a composable agentic AI platform to realize our vision for operational orchestration. Importantly, we are managing the business for long-term, durable growth and profitability.

Speaker #3: Importantly, we are managing the business for long-term durable growth and profitability. As we share that connections, we are focused on five key strategic initiatives to drive long-term growth.

Razat Gaurav: As we shared at Kinexions, we are focused on five key strategic initiatives to drive long-term growth. First, continue investing in core Maestro platform. Second, building an agentic framework for operational orchestration. Third, executing on our new FDE customer engagement motion. Fourth, doubling down on training and enablement of our growing partner ecosystem.

Speaker #3: First, continue investing in the core Maestro platform. Second, build an agentic framework for operational orchestration. Third, execute on our new FDE customer engagement motion. Fourth, double down on training and enablement of our growing partner ecosystem.

Speaker #3: Lastly, and most importantly, continuing to stay focused on customer success and delivering value. We believe AI is making our core strengths more valuable, not less.

Razat Gaurav: Lastly, most importantly, continuing to stay focused on customer success and delivering value. We believe AI is making our core strengths more valuable, not less. As the market shifts from experimentation to adoption, customers need trusted intelligence, explainable decisions, and measurable outcomes. That's exactly where Kinaxis is investing, and where we're seeing growing demand from customers and continued business momentum. As I wrap up, thank you to my Kinaxis colleagues, our customers, partners, and shareholders for your support. Let me turn the call over to Peter.

Speaker #3: As the market shifts from experimentation to adoption, customers need trusted intelligence, explainable decisions, outcomes. That's exactly where Kinaxis is investing and where we're re seeing growing demand from customers and continued business momentum.

Razat Gaurav: That's exactly where Kinaxis is investing, and where we're seeing growing demand from customers and continued business momentum. As I wrap up, thank you to my Kinaxis colleagues, our customers, partners, and shareholders for your support. Let me turn the call over to Peter.

Speaker #3: As I wrap up, thank you to my Kinaxis colleagues, our customers, partners, and shareholders for your support. Let me turn the call over to Peter.

Speaker #2: Thank you, Rizat. Let me start with our second quarter 2026 results compared to the prior year. Unless otherwise noted, all figures reported are in US dollars under IFRS.

Peter Yaraskavitch: Thank you, Razat. Let me start with our Q2 2026 results compared to the prior year. Unless otherwise noted, all figures reported are in US dollars under IFRS. Starting with revenue, total revenue was $158.8 million, up 16%, driven by strong SaaS revenue and professional services revenue. Foreign exchange rates negatively impacted total revenue by approximately $900,000. SaaS revenue was $106.5 million, up approximately 20%. This represents 67% of total revenue, up from 65% a year ago. Growth was driven by momentum from new customers, strong net expansion among existing customers, and healthy retention rates. Foreign exchange rates negatively impacted SaaS revenue by approximately $600,000. Subscription term license revenue was $5.7 million, up 13% and above expectations. This was driven by several expansion deals with existing on-premise customers.

Speaker #2: Starting with revenue, total revenue was $158.8 million, up 16%, driven by strong SAS revenue and professional services revenue. Foreign exchange rates negatively impacted total revenue by approximately $900,000.

Speaker #2: SAS revenue was $106.5 million, up approximately 20%. This represents 67% of total revenue, up from 65% a year ago. Growth was driven by momentum from new customers, strong net expansion among existing customers, and healthy retention rates.

Peter Yaraskavitch: SaaS revenue was $106.5 million, up approximately 20%. This represents 67% of total revenue, up from 65% a year ago. Growth was driven by momentum from new customers, strong net expansion among existing customers, and healthy retention rates. Foreign exchange rates negatively impacted SaaS revenue by approximately $600,000. Subscription term license revenue was $5.7 million, up 13% and above expectations. This was driven by several expansion deals with existing on-premise customers.

Speaker #2: Foreign exchange rates negatively impacted SAS revenue by approximately $600,000. Subscription term license revenue was $5.7 million, up 13% and above expectations, this was driven by several expansion deals with existing on-premise customers.

Speaker #2: For the full year, we now expect subscription term license revenue to increase 85% year over year, with the bulk of the remaining revenue recognized in the fourth quarter.

Peter Yaraskavitch: For the full year, we now expect subscription term license revenue to increase 85% year-over-year, with the bulk of the remaining revenue recognized in Q4. This represents an improvement over our previous year-over-year revenue growth estimate of 60%. Professional services revenue was $42.1 million, up approximately 12% and ahead of expectations. This is due to higher than expected realized rates reflecting our premium services. Given our outperformance in H1 of the year, we now expect mid-single digit annual growth for the full year, an increase from our prior low single digit estimate. Additionally, as a direct result of our strategy to shift more implementation and support work to our systems integrator partners, we now expect lower professional services revenue in H2 of the year compared to H1.

Speaker #2: This represents an improvement over our previous year-over-year revenue growth estimate of 60%. Professional services revenue was $42.1 million, up approximately 12% and ahead of expectations.

Speaker #2: This is due to higher-than-expected realized rates reflecting our premium services. Given our outperformance in the first half of the year, we now expect mid-single-digit annual growth for the full year, an increase from our prior low single-digit estimate.

Peter Yaraskavitch: This is due to higher than expected realized rates reflecting our premium services. Given our outperformance in H1 of the year, we now expect mid-single digit annual growth for the full year, an increase from our prior low single digit estimate. Additionally, as a direct result of our strategy to shift more implementation and support work to our systems integrator partners, we now expect lower professional services revenue in H2 of the year compared to H1.

Speaker #2: Additionally, as a direct result of our strategy to shift more implementation and support work to our systems-integrator partners, we now expect lower professional services revenue in the second half of the year compared to the first half.

Speaker #2: This remains a positive development for Kinaxis, as our services partners are an important go-to-market channel and services are an attractive business for those partners.

Peter Yaraskavitch: This remains a positive development for Kinaxis, as our services partners are an important go-to-market channel, and services are an attractive business for those partners. Maintenance and support revenue was $4.4 million, down 20% as expected, due to on-premise to SaaS migrations. As we noted last quarter, we continue to see interest among on-premise customers looking to migrate to our SaaS offerings. These migrations provide us with the opportunity to modernize our customers and grow our SaaS business. Since migrations are driven by timing and customer schedules, we now expect maintenance and support revenue to trend slightly lower in H2 of the year. Turning to remaining performance obligations, SaaS and total RPO balances and growth both remained robust. SaaS RPO was $940.3 million, up 19%, and total RPO grew to $983.4 million, up 18%, highlighting the strength and visibility of our recurring business.

Speaker #2: Maintenance and support revenue was $4.4 million, down 20% as expected, due to on-premise to SaaS migrations. As we noted last quarter, we continue to see interest among on-premise customers looking to migrate to our SaaS offerings.

Speaker #2: These migrations provide us with the opportunity to modernize our customers and grow our SAS business. Since migrations are driven by timing and customer schedules, we now expect maintenance and support revenue to trend slightly lower in the second half of the year.

Peter Yaraskavitch: These migrations provide us with the opportunity to modernize our customers and grow our SaaS business. Since migrations are driven by timing and customer schedules, we now expect maintenance and support revenue to trend slightly lower in H2 of the year. Turning to remaining performance obligations, SaaS and total RPO balances and growth both remained robust. SaaS RPO was $940.3 million, up 19%, and total RPO grew to $983.4 million, up 18%, highlighting the strength and visibility of our recurring business.

Speaker #2: Turning to remaining performance obligations, SAS and total RPO balances and growth both remained robust. SAS RPO was 940.3 million dollars, up 19%, and total RPO grew to 983.4 million dollars, up 18%, highlighting the strength and visibility of our recurring business.

Speaker #2: Over the last three years, SAS RPO has a cumulative average growth rate of 20% and total RPO has a CAGR of 19%. Next, annual recurring revenue increased to $465.6 billion dollars, up 19%, ARR grew 21% year over year on a constant currency basis, excluding a negative impact of approximately $1 million from FX in the quarter.

Peter Yaraskavitch: Over the last three years, SaaS RPO has a cumulative average growth rate of 20%, and total RPO has a CAGR of 19%. Annual recurring revenue increased to $465.6 billion, up 19%. ARR grew 21% year-over-year on a constant currency basis, excluding a -$1 million impact of approximately from FX in the quarter. As Razat mentioned, ongoing strength in our 1 million plus ACV contracts and net expansion with existing customers drove net new ARR growth of $75 million year-over-year and $19 million sequentially. Most of the customer growth came from enterprise or large enterprise customers, reflecting our upmarket focus. I'd like to move on to our Q2 profitability metrics. Gross profit grew 19% to $104.4 million. We delivered a gross margin of 66%, up 1.6 percentage points.

Speaker #2: As Rizat mentioned, ongoing strength in our $1 million-plus ACV contracts and net expansion with existing customers drove net new ARR growth of 75 million dollars year over year, and 19 million dollars sequentially.

Peter Yaraskavitch: As Razat mentioned, ongoing strength in our 1 million plus ACV contracts and net expansion with existing customers drove net new ARR growth of $75 million year-over-year and $19 million sequentially. Most of the customer growth came from enterprise or large enterprise customers, reflecting our upmarket focus. I'd like to move on to our Q2 profitability metrics. Gross profit grew 19% to $104.4 million. We delivered a gross margin of 66%, up 1.6 percentage points.

Speaker #2: Most of the customer growth came from enterprise or large enterprise customers, reflecting our up-market focus. Now, I'd like to move on to our second quarter profitability metrics.

Speaker #2: Gross profit grew 19% to $104.4 million, we delivered a gross margin of 66%, up 1.6 percentage points. This was driven by higher professional services margin and a more favorable revenue mix, as professional services as a percentage of total revenue declined.

Peter Yaraskavitch: This was driven by higher professional services margin and a more favorable revenue mix as professional services as a percentage of total revenue declined. Our subscription software margin was 78%, down from 80% a year ago. This change is partially due to increased hosting costs as we migrate from private data centers to the cloud. A quick update on this. We're exiting our private European data center by the end of 2026. Meanwhile, our North American data center migrations are underway and expected to be completed by the end of 2027. Once completed, Kinaxis will be able to realize the full benefits of cloud infrastructure. Professional services gross margin was 32%, up significantly compared to 23% a year ago, reflecting higher realized rates in the quarter. Operating expenses were consistent with expectations. Adjusted EBITDA was up 23% to $41.4 million, reflecting strong revenue growth, healthy gross margins, and efficient operations.

Speaker #2: Our subscription software margin was 78%, down from 80% a year ago. This change is partially due to increased hosting costs as we migrate from private data centers to the cloud.

Speaker #2: A quick update on this: we're exiting our private European data center by the end of 2026. Meanwhile, our North American data center migrations are underway and expected to be completed by the end of 2027.

Peter Yaraskavitch: Meanwhile, our North American data center migrations are underway and expected to be completed by the end of 2027. Once completed, Kinaxis will be able to realize the full benefits of cloud infrastructure. Professional services gross margin was 32%, up significantly compared to 23% a year ago, reflecting higher realized rates in the quarter. Operating expenses were consistent with expectations. Adjusted EBITDA was up 23% to $41.4 million, reflecting strong revenue growth, healthy gross margins, and efficient operations.

Speaker #2: Once completed, Kinaxis will be able to realize the full benefits of cloud infrastructure. Professional services gross margin was 32%, up significantly compared to 23% a year ago, reflecting higher realized rates in the quarter.

Speaker #2: Operating expenses were consistent with expectations. Adjusted EBITDA was up 23% to $41.4 million, reflecting strong revenue growth, healthy gross margins, and efficient operations. Adjusted EBITDA margin was 26%, up 1.3 percentage points, positioning us well to deliver on our full year outlook.

Peter Yaraskavitch: Adjusted EBITDA margin was 26%, up 1.3 percentage points, positioning us well to deliver on our full year outlook. Profit was up 15% to $21.2 million, with an effective tax rate of 28.8% for the quarter. During the Q2, we repurchased over 450,000 shares for approximately $47 million. Since the program started last November, through the end of the Q2, we've repurchased 1.2 million shares for approximately $134 million. This reduced the total outstanding share count on a net basis by 2.9%. We will remain opportunistic in share repurchases for the remainder of the year. We ended the Q2 in a strong cash position. Cash flow from operating activities was $30.7 million, up 36%. Cash equivalents and short-term investments were $310.7 million, down from $324.7 million at the end of last year, even with $108 million from share repurchases.

Speaker #2: Profit was up 15% to $21.2 million, with an effective tax rate of 28.8% for the quarter. During the last second quarter, we repurchased over 450,000 shares, for approximately $47 million.

Speaker #2: Since the program started last November, through the end of the second quarter, we've repurchased 1.2 million shares for approximately $134 million dollars. This reduced the total outstanding share count on a net basis by 2.9%.

Peter Yaraskavitch: This reduced the total outstanding share count on a net basis by 2.9%. We will remain opportunistic in share repurchases for the remainder of the year. We ended the Q2 in a strong cash position. Cash flow from operating activities was $30.7 million, up 36%. Cash equivalents and short-term investments were $310.7 million, down from $324.7 million at the end of last year, even with $108 million from share repurchases.

Speaker #2: We will remain opportunistic in share repurchases for the remainder of the year. We ended the second quarter in a strong CASP position. Cash flow from operating activities was 30.7 million dollars, up 36%.

Speaker #2: Cash, cash equivalents, and short-term investments for $310.7 million dollars. Down from $324.7 million dollars. At the end of last year, even with $108 million dollars from share repurchases.

Speaker #2: Free cash flow margin for the second quarter was 18%, up 3.8 percentage points year over year. Trailing 12-month free cash flow margin was 25%.

Peter Yaraskavitch: Free cash flow margin for the Q2 was 18%, up 3.8 percentage points year-over-year. Trailing 12-month free cash flow margin was 25%. The combination of higher revenue and reduced share count led to diluted earnings per share of $0.76, up 19% year-over-year. That sums up the Q2 review. For full year modeling purposes, I would like to provide some additional details. We expect foreign exchange rates to remain a headwind for the rest of the year, given the strengthening of the US dollar against the euro, the British pound, and the yen. For the full year, we estimate increased FX-related headwinds to total revenue between $4 million and $4.5 million, and to SaaS revenue between $2.5 million and $3 million.

Speaker #2: The combination of higher revenue and reduced share count led to diluted earnings per share of 76 cents, up 19% year over year. That sums up the Q2 review.

Speaker #2: For full-year modeling purposes, I would like to provide some additional details. First, we expect foreign exchange rates to remain a headwind for the rest of the year, given the strengthening of the US dollar against the euro, the British pound, and the yen.

Peter Yaraskavitch: For full year modeling purposes, I would like to provide some additional details. We expect foreign exchange rates to remain a headwind for the rest of the year, given the strengthening of the US dollar against the euro, the British pound, and the yen. For the full year, we estimate increased FX-related headwinds to total revenue between $4 million and $4.5 million, and to SaaS revenue between $2.5 million and $3 million.

Speaker #2: For the full year, we estimate increased FX-related headwinds to total revenue between $4 million and $4.5 million. And to SAS revenue between $2.5 million and $3 million.

Speaker #2: Second, we expect full-year basic weighted average shares outstanding to be approximately 27.3 million shares, and diluted weighted average shares outstanding to be approximately 27.7 million shares.

Peter Yaraskavitch: Second, we expect full year basic weighted average shares outstanding to be approximately 27.3 million shares, and diluted weighted average shares outstanding to be approximately 27.7 million shares. These share forecasts do not include the impact of any share repurchases that we may pursue in the future. Now, let me turn the call over to Herb.

Speaker #2: These share forecasts do not include the impact of any share repurchases that we may pursue in the future. Now, let me turn the call over to Herb.

Speaker #3: Thank you, Peter. And thank you, Rizat. As a new member of the Kinaxis team, I'm delighted to be here today. Before I address our guidance, I'd like to share why I joined Kinaxis.

Herb Yeh: Thank you, Peter, and thank you, Razat. As a new member of the Kinaxis team, I'm delighted to be here today. Before I address our guidance, I'd like to share why I joined Kinaxis. Supply chain planning and decision making is one of the most complex and mission-critical challenges facing global enterprises. Kinaxis has already built a market-leading platform, deep domain expertise, a strong culture, and an exceptional team with a proven ability to create value for both customers and shareholders. What excites me the most is the opportunity ahead. AI has the potential to expand the scope of what we do, moving beyond planning into a much broader set of decisioning and orchestration opportunities. That expands the value we can deliver to customers, increases our market opportunity, and strengthens our ability to drive sustained long-term growth and shareholder returns. Now, turning to guidance.

Speaker #3: Supply chain planning and decision-making is one of the most complex and mission-critical challenges facing global enterprises. Kinaxis has already built a market-leading platform, deep domain expertise, a strong culture, and an exceptional team with a proven ability to create value for both customers and shareholders.

Herb Yeh: Kinaxis has already built a market-leading platform, deep domain expertise, a strong culture, and an exceptional team with a proven ability to create value for both customers and shareholders.

Speaker #3: But what excites me the most is the opportunity ahead. AI has the potential to expand the scope of what we do, moving beyond planning into a much broader set of decision-making and orchestration opportunities.

Herb Yeh: What excites me the most is the opportunity ahead. AI has the potential to expand the scope of what we do, moving beyond planning into a much broader set of decisioning and orchestration opportunities. That expands the value we can deliver to customers, increases our market opportunity, and strengthens our ability to drive sustained long-term growth and shareholder returns. Now, turning to guidance.

Speaker #3: That expands the value we can deliver to customers, increases our market opportunity, and strengthens our ability to drive sustained long-term growth and shareholder returns.

Speaker #3: Now, turning to guidance. As you heard from Rizat and Peter, we delivered better-than-expected top-line results in the first and second quarter. With this in mind, guidance for the full year ending December 31, 2026, is as follows: we now expect total revenue to be in the range of $625 million to $640 million.

Herb Yeh: As you heard from Razat and Peter, we delivered better than expected top-line results in Q1 and Q2. With this in mind, guidance for the full year ending 31 December 2026 is as follows. We now expect total revenue to be in the range of $625 to 640 million. This represents approximately 14% to 17% year-over-year growth. We now expect SaaS revenue year-over-year growth to be in the range of 18% to 20%. This equates to a range of approximately $427 to 434 million. We're reaffirming our previously issued adjusted EBITDA margin guidance of 25% to 26%. With respect to our balance sheet, we will remain disciplined in capital allocation. We'll maintain a prudent cash and liquidity position to fund day-to-day operations and to navigate any macroeconomic or industry volatility.

Speaker #3: This represents approximately 14 to 17 percent year-over-year growth. We now expect SaaS revenue year-over-year growth to be in the range of 18 to 20 percent.

Herb Yeh: We now expect SaaS revenue year-over-year growth to be in the range of 18% to 20%. This equates to a range of approximately $427 to 434 million. We're reaffirming our previously issued adjusted EBITDA margin guidance of 25% to 26%. With respect to our balance sheet, we will remain disciplined in capital allocation. We'll maintain a prudent cash and liquidity position to fund day-to-day operations and to navigate any macroeconomic or industry volatility.

Speaker #3: This equates to a range of approximately $427 million to $434 million. We're reaffirming our previously issued adjusted EBITDA margin guidance of 25 to 26 percent.

Speaker #3: With respect to our balance sheet, we will remain disciplined in capital allocation. We'll maintain a prudent cash and liquidity position to fund day-to-day operations and to navigate any macroeconomic or industry volatility.

Speaker #3: We will also make thoughtful ROI-driven investments in product innovation and go-to-market initiatives that support strong organic growth while maintaining strong sales efficiency and attractive payback metrics.

Herb Yeh: We will also make thoughtful ROI-driven investments in product innovation and go-to-market initiatives that support strong organic growth while maintaining strong sales efficiency and attractive payback metrics. Any inorganic activity will remain tightly aligned with our product, technology, and go-to-market roadmaps, delivering clear and actionable revenue synergies. Finally, we will opportunistically return excess capital to shareholders through share repurchases. I expect 2026 to be a pivotal year for Kinaxis, and I'm thrilled at the opportunity to be a part of the journey. Thank you to our global team for delivering another strong quarter. I look forward to meeting with analysts and shareholders in the weeks to come. Operator, we're now ready to take questions.

Speaker #3: Any inorganic activity will remain tightly aligned with our product, technology, and go-to-market roadmaps delivering clear and actionable revenue synergies. Finally, we will opportunistically return excess capital to shareholders through share repurchases.

Herb Yeh: Finally, we will opportunistically return excess capital to shareholders through share repurchases. I expect 2026 to be a pivotal year for Kinaxis, and I'm thrilled at the opportunity to be a part of the journey. Thank you to our global team for delivering another strong quarter. I look forward to meeting with analysts and shareholders in the weeks to come. Operator, we're now ready to take questions.

Speaker #3: I expect 2026 to be a pivotal year for Kinaxis, and I'm thrilled at the opportunity to be a part of the journey. Thank you to our global team for delivering another strong quarter.

Speaker #3: I look forward to meeting with analysts and shareholders in the weeks to come. Operator, we're now ready to take questions.

Speaker #1: We will now begin the question-and-answer session. Please limit yourself to one question. If you would like to ask a question, please press star 1 to raise your hand.

Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would 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 up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Thanos Moschopoulos with BMO Capital Markets. Your line is now open.

Speaker #1: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Thanos Muscopolis with BMO Capital Marketers.

Speaker #1: Your line is now open.

Speaker #4: Hi, good morning. Congrats on the strong quarter, and Herb, congrats on your role at Kinaxis. Rizat, can you provide some color on the nature of the pipeline and how it's evolved over the past quarter?

Thanos Moschopoulos: Hi. Good morning. Congrats on the strong quarter, and Herb, congrats on your role at Kinaxis. Razat, can you provide some color on the nature of the pipeline and how it's evolved over the past quarter? It sounds like you're seeing broad-based strength across a number of verticals, but just anything in particular you'd call out in terms of pipeline composition and how that's evolved. Secondly, just given the accelerating growth you're seeing, could implementation capacity become a potential bottleneck at some point, or do you see sufficient capacity in the partner ecosystem to handle the further acceleration? Thank you.

Thanos Moschopoulos: Good morning. Congrats on the strong quarter, and Herb, congrats on your role at Kinaxis. Razat, can you provide some color on the nature of the pipeline and how it's evolved over the past quarter? It sounds like you're seeing broad-based strength across a number of verticals, but just anything in particular you'd call out in terms of pipeline composition and how that's evolved.

Speaker #4: It sounds like you're seeing broad-based strength across a number of verticals, but just anything in particular you'd call out in terms of pipeline composition and how that's evolved?

Speaker #4: And then secondly, just given the accelerating growth you're seeing, could implementation capacity become a potential bottleneck at some point, or do you see sufficient capacity in the partner ecosystem to handle further acceleration?

Thanos Moschopoulos: Secondly, just given the accelerating growth you're seeing, could implementation capacity become a potential bottleneck at some point, or do you see sufficient capacity in the partner ecosystem to handle the further acceleration? Thank you.

Speaker #4: Thank you.

Speaker #2: Yeah, thanks for the question, Thanos. Yes, pipeline continues to trend very positively. As we look ahead, in the future quarters, we look at the forwarding quarter pipeline very frequently.

Razat Gaurav: Thanks for the question, Thanos. Yes, our pipeline continues to trend very positively as we look ahead in the future quarters. We look at the forwarding quarter pipeline very frequently. We're executing on several campaigns to continue to add to the pipeline. What we're finding is that customers are definitely seeing a sense of urgency in their prioritization for supply chain planning, decisioning investments.

Speaker #2: We're executing on several campaigns to continue to add to the pipeline. What we're finding is that customers are definitely seeing a sense of urgency in their prioritization for supply chain planning, decisioning, investments.

Speaker #2: We are seeing a significant surge in demand across the high-tech value chain, just given what's happening with particularly the data center build-out. We're also seeing increasing interest in the aerospace and defense industry that is seeing surging demand.

Razat Gaurav: We are seeing a significant surge in demand across the high-tech value chain, just given what's happening with particularly the data center build-out. We're also seeing increasing interest in the aerospace and defense industry that is seeing surging demand with fairly limited capacity and a very complex bill of materials. We're also seeing changing dynamics in the product portfolios of our consumer products and consumer manufacturing customers as well. Really, we're seeing increasing demand in a lot of different industry verticals, and we're executing on those campaigns. In terms of your question around the implementation capacity, look, this is something that's really important for us. Coming into this year, just to remind everyone, we doubled down on our investments in training and enablement, right? That was all geared towards further building out the trained and the skilled talent pool across our platform, across our partner ecosystem.

Speaker #2: With fairly limited capacity and a very complex bill of materials, we're also seeing changing dynamics in the product portfolios of our consumer products and consumer manufacturing customers as well.

Speaker #2: So really, we're seeing increasing demand in a lot of different industry verticals, and we're executing on those campaigns in terms of your question around the implementation capacity.

Razat Gaurav: Really, we're seeing increasing demand in a lot of different industry verticals, and we're executing on those campaigns. In terms of your question around the implementation capacity, look, this is something that's really important for us. Coming into this year, just to remind everyone, we doubled down on our investments in training and enablement, right? That was all geared towards further building out the trained and the skilled talent pool across our platform, across our partner ecosystem.

Speaker #2: Look, this is something that's really important for us, and coming into this year—just to remind everyone—we doubled down on our investments in training and enablement, right?

Speaker #2: And that was all geared towards further building out the trained and the skilled talent pool across our platform, across our partner ecosystem. That is a very strategic priority for us, and we're continuing to do that.

Razat Gaurav: That is a very strategic priority for us. We're continuing to do that. Of course, in addition to that, we have our own professional services team that supplements what our partners do for us. We're continuing to scale the overall partner ecosystem with talented and skilled resources across the Kinaxis platform.

Speaker #2: Of course, in addition to that, we have our own professional services team that supplements what our partners do for us. And we're continuing to scale the overall partner ecosystem with talented and skilled resources across the Kinaxis platform.

Speaker #4: That's great. I'll pass the line. Thank you.

Thanos Moschopoulos: That's great. I'll pass the line. Thank you.

Speaker #1: Your next question from the line of Kevin Krishnaratney with Scotiabank. Your line is now open.

Operator: Your next question from the line of Kevin Krishnaratne with Scotiabank. Your line is now open.

Speaker #5: Hey, good morning. Congrats on that strong quarter. This is Richard on for Kevin. Just a quick question on Maestro Agents. You noted that it's installed in 10% of the customer base.

[Analyst] (Scotiabank): Hey, good morning. Congrats on a strong quarter. This is Richard on for Kevin. Just a quick question on Maestro Agents. You noted that it's installed in 10% of the customer base. How do you see that evolving over the next several quarters and year-end? Do you have any targets on that?

[Analyst] (Scotiabank): Good morning. Congrats on a strong quarter. This is Richard on for Kevin. Just a quick question on Maestro Agents. You noted that it's installed in 10% of the customer base. How do you see that evolving over the next several quarters and year-end? Do you have any targets on that?

Speaker #5: So how do you see that evolving over the next several quarters and year-end? And do you have any targets on that?

Speaker #2: Yeah, look, Maestro agents are getting a lot of good traction within our customer base, both through trials and paid customers now. And we have a sort of a dual approach there.

Razat Gaurav: Yeah, look, Maestro Agents are getting a lot of good traction within our customer base, both through trials and paid customers now. We have a sort of a dual approach there. We've embedded Maestro Agents within our platform, within the Maestro platform itself, and there we have developed agent skills that are packaged agents that now are getting good usage. In addition to that, we've got Maestro Agent Studio, which provides a composable approach to really being able to compose agents based on different use cases that our customers have, while it has access to all the data and resources across Maestro. That's really leading to all kinds of permutations and combinations of use cases. As our engagement model with our customers grows around agents, we are seeing all kinds of creative agents being designed and developed and composed within Maestro.

Speaker #2: We've embedded Maestro Agents within our platform, within the Maestro platform itself, and there we have developed agent skills that are packaged agents that now are getting good usage.

Speaker #2: In addition to that, we've got Maestro Agents Studio, which provides a composable approach to really being able to compose agents based on different use cases that our customers have, while it has access to all the data and resources across Maestro.

Razat Gaurav: In addition to that, we've got Maestro Agent Studio, which provides a composable approach to really being able to compose agents based on different use cases that our customers have, while it has access to all the data and resources across Maestro. That's really leading to all kinds of permutations and combinations of use cases. As our engagement model with our customers grows around agents, we are seeing all kinds of creative agents being designed and developed and composed within Maestro.

Speaker #2: So that's really leading to all kinds of permutations and combinations of use cases. And as our engagement model with our customers grows, around agents, we're seeing all kinds of creative agents being designed and developed and composed within Maestro.

Speaker #2: Now, beyond Maestro, we've also been investing in our orchestration platform, where we have an extensible data fabric, we have an extensible semantic and ontology layer, and we have the same composable agent infrastructure that can stitch together agents across different outcome threads or outcome flows.

Razat Gaurav: Now, beyond Maestro, we've also been investing in our orchestration platform, where we have an extensible data fabric, we have an extensible semantic and ontology layer, and we have the same composable agent infrastructure that can stitch together agents across different outcome threads or outcome flows. That's also going to lead to further transformation in the ways of working for our customers and create even further value. While it's early days for us, we are definitely seeing a lot of interest and a lot of traction. Of course, this form is a very important part of our innovation roadmap as well.

Speaker #2: And that's also going to lead to further transformation in the ways of working for our customers and create even further value. So while it's early days for us, we're definitely seeing a lot of interest and a lot of traction.

Razat Gaurav: That's also going to lead to further transformation in the ways of working for our customers and create even further value. While it's early days for us, we are definitely seeing a lot of interest and a lot of traction. Of course, this form is a very important part of our innovation roadmap as well.

Speaker #2: Of course, this forms a very important part of our innovation roadmap as well.

Speaker #5: Sounds good. Thank you.

[Analyst] (Scotiabank): Sounds good. Thank you.

Speaker #1: Your next question from the line of Paul Treiber with RBC Capital Markets. Your line is now open.

Operator: Your next question from the line of Paul Treiber with RBC Capital Markets. Your line is now open.

Paul Treiber: Thanks very much, good morning. Just a question for Herb. Just given your background, your strategic advisory background, how do you see yourself, your skill set contributing uniquely to what Kinaxis has had in the past?

Speaker #6: Thanks very much and good morning. Just a question for Herb. Just given your background, your strategic advisory background, how do you see yourself, your skill set contributing uniquely to what Kinaxis has had in the past?

Speaker #2: Yeah. Thank you, Paul. It's a great question. The way I would think about it is this. I will partner certainly very closely and obviously with the entire management team, Rizat, product, go-to-market, to identify what are the areas of potential inorganic activity that could accelerate what is already a part of the plan, the strategy of the company.

Herb Yeh: Yeah. Thank you, Paul. It's a great question. The way I would think about it is this: I will partner certainly very closely and obviously with the entire management team, Razat, product, go-to-market, to identify what are the areas of potential inorganic activity that could accelerate what is already a part of the plan, the strategy of the company, and then to tie it together with the financial outcomes and to shareholder value. I think of it all in the context of my comments around capital allocation. The company has already year-to-date returned more than the free cash flow that they generated in the H1 of the year. We'll continue to evaluate what we do with the balance sheet cash, all with a lens towards value creation and sustainable growth. Does that help?

Speaker #2: And then to tie it together with the financial outcomes and to shareholder value. So I think of it all in the context of my comments around capital allocation.

Herb Yeh: I think of it all in the context of my comments around capital allocation. The company has already year-to-date returned more than the free cash flow that they generated in the H1 of the year. We'll continue to evaluate what we do with the balance sheet cash, all with a lens towards value creation and sustainable growth. Does that help?

Speaker #2: The company has already year to date returned more than the free cash flow that they generated in the first half of the year. We'll continue to evaluate what we do with the balance sheet cash, all with a lens towards value creation and sustainable growth.

Speaker #2: Does that help?

Speaker #6: Okay. Yes, it does. Thanks for taking the question.

Paul Treiber: Okay. Yes, it does. Thanks for taking the question.

Speaker #1: Your next question comes from the line of Mike Stevens with National Bank Capital Markets. Your line is now open.

Operator: Your next question from the line of Mike Stevens with National Bank Capital Markets. Your line is now open.

Speaker #7: So hi, good morning. This is Mike on for Doug Taylor. Congrats on a very strong quarter here. Just wondering on the EBITDA margin guide, the back half does imply a bit of a step down.

Mike Stevens: Hi, good morning. This is Mike on for Doug Taylor. Congrats on a very strong quarter here. Just wondering on the EBITDA margin guide. The back half does imply a bit of a step down. Just wondering the drivers behind that. Is that kind of continuing investment in R&D? Is that a bit of a conservatism here? Just any color around that.

Mike Stevens: Good morning. This is Mike on for Doug Taylor. Congrats on a very strong quarter here. Just wondering on the EBITDA margin guide. The back half does imply a bit of a step down. Just wondering the drivers behind that. Is that kind of continuing investment in R&D? Is that a bit of a conservatism here? Just any color around that.

Speaker #7: Just wondering the drivers behind that. Is that kind of continuing investment in R&D? Is that a bit of a conservatism here or just any color around that?

Speaker #2: Yeah. I think there are two things. One is, if you look at the first quarter, EBITDA margins were obviously higher than I'll call, quote-unquote, "normal" because we did have a strong STL revenue recognition in that quarter.

Herb Yeh: Yeah. I think there are two things. One is, if you look at Q1, EBITDA margins were obviously higher than I'll call "normal" because we did have a strong STL revenue recognition in that quarter. Okay. The second thing is, given the very strong go-to-market momentum that we have, as well as the receptivity from our customers on what we are doing with agents in Maestro, as well as the operational orchestration platform that Razat spoke about earlier, we want to continue to capture that momentum and that opportunity and make sure that we are investing behind that appropriately to capture the market opportunity and the sustainable growth opportunity. For that reason, we're maintaining the EBITDA margin guidance for the full year.

Speaker #2: Okay? The second thing is, given the very strong go-to-market momentum that we have, as well as the receptivity from our customers on what we are doing with agents in Maestro, as well as the operational orchestration platform that Rizat spoke about earlier, we want to continue to capture that momentum and that opportunity and make sure that we are investing behind that appropriately to capture the market opportunity.

Herb Yeh: The second thing is, given the very strong go-to-market momentum that we have, as well as the receptivity from our customers on what we are doing with agents in Maestro, as well as the operational orchestration platform that Razat spoke about earlier, we want to continue to capture that momentum and that opportunity and make sure that we are investing behind that appropriately to capture the market opportunity and the sustainable growth opportunity. For that reason, we're maintaining the EBITDA margin guidance for the full year.

Speaker #2: And the sustainable growth opportunity. So, for that reason, we're maintaining the EBITDA margin guidance for the full year.

Speaker #7: Okay. No, that's pretty helpful. Thank you. And then just another one around the enterprise it seems like ARR is being lifted quite noticeably by the enterprise motion in the last couple of quarters.

Mike Stevens: Okay. No, that's pretty helpful. Thank you. Then just another one around the enterprise. It seems like ARR is being lifted quite noticeably by the enterprise motion in the last couple of quarters. Just wondering, any early learnings on that with regards to sales cycles and what this strength is reflecting and whether you think that this could be sustainable in the quarters ahead?

Speaker #7: Just wondering if there are any early learnings on that. With regards to sales cycles, in what ways is this strength reflected, and do you think that this could be sustainable in the quarters ahead?

Speaker #2: Yeah, look, our enterprise motion continues to gain a lot of momentum and ground. As you know, we've been significantly transforming our go-to-market motion, our sales organization, our demand gen plans.

Razat Gaurav: Yeah. Look, our enterprise motion continues to gain a lot of momentum and ground. As you know, we've been significantly transforming our go-to-market motion, our sales organization, our demand gen plans, and how we're executing on those, both in terms of sales cycles, but also in terms of delivering successfully to customers. One of the things that was very noticeable in Q2 was the tremendous traction we had with existing customers. As we've added additional capabilities to our platform, our cross-selling motion and our expansion opportunity is becoming very prominent, and that's very encouraging. At the same time, in terms of net new logo wins, we are continuing to see opportunities both with customers that are looking to put foundational end-to-end planning and decisioning capabilities in place, but also future-proofing their transformation with a platform that can really bring them into the agentic era, right?

Speaker #2: And how we're executing on those, both in terms of sales cycles, but also in terms of delivering successfully to customers. One of the things that was very noticeable in Q2 was the tremendous traction we had with existing customers.

Razat Gaurav: As we've added additional capabilities to our platform, our cross-selling motion and our expansion opportunity is becoming very prominent, and that's very encouraging. At the same time, in terms of net new logo wins, we are continuing to see opportunities both with customers that are looking to put foundational end-to-end planning and decisioning capabilities in place, but also future-proofing their transformation with a platform that can really bring them into the agentic era.

Speaker #2: As we've added additional capabilities to our platform, our cross-selling motion and our expansion opportunity is becoming very prominent. And that's very encouraging. At the same time, in terms of net new logo wins, we are continuing to see opportunities both with customers that are looking to put foundational end-to-end planning and decisioning capabilities in place, but also future-proofing that transformation with a platform that can really bring them into the agentic era, right?

Speaker #2: And that's where the capabilities we've developed, our strong single unified Maestro platform, combined with all the agentic capabilities and the operational orchestration footprint that we're leaning in with, is becoming a very strong differentiator.

Razat Gaurav: That's where the capabilities we've developed, our strong, single, unified Maestro platform, combined with all the agentic capabilities and the operational orchestration footprint that we're leaning in with, is becoming a very strong differentiator. Our win rates were very high in Q2 and H1. Our pipeline conversion rates are higher than ever before, and we're not stopping at that. We're just starting, and I expect that we'll continue to improve and execute globally.

Speaker #2: So our win rates were very high in Q2 and the first half, our pipeline conversion rates are higher than ever before. And we're not stopping at that.

Speaker #2: We're just starting. And I expect that we'll continue to improve and execute globally.

Speaker #7: Okay. Really appreciate the insights. Cheers.

Mike Stevens: Okay. Really appreciate the insights. Cheers.

Speaker #1: Your next question from the line of Stephanie Price with CIBC. Your line is now open.

Operator: Your next question from the line of Stephanie Price with CIBC. Your line is now open.

Speaker #8: Hi, there. It's Sam Schmidt on for Stephanie Price. Can you talk through puts and takes to the increased revenue guide, as well as your confidence and visibility into the back half?

Sam Schmidt: Hi there, it's Sam Schmidt on for Stephanie Price. Can you talk through puts and takes to the increased revenue guide as well as your confidence and visibility into H2? More specifically, the SaaS growth in H1 was strong versus the guide. How should we think about SaaS growth in H2?

Sam Schmidt: It's Sam Schmidt on for Stephanie Price. Can you talk through puts and takes to the increased revenue guide as well as your confidence and visibility into H2? More specifically, the SaaS growth in H1 was strong versus the guide. How should we think about SaaS growth in H2?

Speaker #8: More specifically, the SaaS growth in the first half was strong versus the guide. How should we think about SaaS growth in half two?

Speaker #2: Yeah. Yeah, thank you for that question. So if you look at the SaaS growth that was delivered in the first half, you're obviously also aware of the RPO that is available for the back half of the year.

Herb Yeh: Thank you for that question. If you look at the SaaS growth that was delivered in H1, you're obviously also aware of the RPO that is available for the H2 of the year. What the guidance reflects is that, as well as our lens into renewals, as well as the strong backlog and pipeline that we have expected to be realized in the H2 of the year. We feel very good about renewals and current pipeline and backlog. What the guide reflects, however, is we think it's prudent to keep in mind FX volatility as well as the overall macro volatility that we're all experiencing through the full year. That's the reason for the SaaS guide. With respect to the full year, Peter mentioned our expectation around services. Services will be slightly down from H1 of the year.

Speaker #2: What the guidance reflects is that, as well as our lens into renewals, and the strong backlog and pipeline that we have, these are expected to be realized in the second half of the year.

Speaker #2: So we feel very, very good about renewals and current pipeline and backlog. What the guide reflects; however, is we think it's prudent to keep in mind FX volatility as well as the overall macro volatility that we're all experiencing through the full year.

Herb Yeh: We feel very good about renewals and current pipeline and backlog. What the guide reflects, however, is we think it's prudent to keep in mind FX volatility as well as the overall macro volatility that we're all experiencing through the full year. That's the reason for the SaaS guide. With respect to the full year, Peter mentioned our expectation around services. Services will be slightly down from H1 of the year.

Speaker #2: So that's the reason for the SaaS guide. With respect to the full year, Peter mentioned our expectation around services. Services will be slightly down from the first half of the year, but we're not expecting anything major changes in terms of our subscription term license that's been realized in the first half.

Herb Yeh: We're not expecting any major changes in terms of our STL. That's been realized in H1, and we're not expecting any meaningful change in terms of the maintenance and support revenue either. When you take all of that together, that's how we thought about the total revenue guide for the full year.

Speaker #2: And we're not expecting any meaningful change in terms of the maintenance and support revenue either. So when you take all of that together, that's how we thought about the total revenue guide for the full year.

Speaker #8: That's helpful. Thank you. And then one more for me on the partnership strategy. How should we think about partnerships with companies like Databricks and NVIDIA contributing to growth, as well as growth from traditional inside partners?

Sam Schmidt: That's helpful. Thank you. One more from me on the partnership strategy. How should we think about partnerships with companies like Databricks and NVIDIA contributing to growth as well as growth from traditional SI partners? I'll pop the line. Thank you.

Speaker #8: And then I'll talk to Line. Thank you.

Speaker #2: Yeah. Thank you for that question. We've got some important technology partnerships and definitely with Databricks and NVIDIA, but also with Google. In all three of those cases, we a lot of our partnership is anchored around doing joint research, engineering, and product development.

Razat Gaurav: Thank you for that question. We've got some important technology partnerships, definitely with Databricks and NVIDIA, but also with Google. In all three of those cases, a lot of our partnership is anchored around doing joint research, engineering, and product development. Our engineering team is working with NVIDIA's, Google's, and Databricks engineering team very closely because we're embedding those capabilities into our Maestro and operational orchestration platform. That's really exciting. We do see an opportunity for us to improve on furthering these partnerships in terms of the joint go-to-market motion, and that's something we're going to be working on later this year, going into 2027 as well.

Speaker #2: Our engineering team is working with the NVIDIA's, Google's, and Databricks engineering team very closely because we're embedding those capabilities into our Maestro and operational orchestration platform.

Razat Gaurav: Our engineering team is working with NVIDIA's, Google's, and Databricks engineering team very closely because we're embedding those capabilities into our Maestro and operational orchestration platform. That's really exciting. We do see an opportunity for us to improve on furthering these partnerships in terms of the joint go-to-market motion, and that's something we're going to be working on later this year, going into 2027 as well.

Speaker #2: So that's really exciting. We do see an opportunity for us to improve on furthering these partnerships in terms of the joint go-to-market motion. And that's something we're going to be working on later this year going into 2027 as well.

Speaker #8: That's helpful. Thanks.

Sam Schmidt: That's helpful. Thanks.

Speaker #1: Your next question from the line of Lachlan Brown with Ross Child & Co. Redburn. Your line is now open.

Operator: Your next question from the line of Lachlan Brown with Rothschild & Co Redburn. Your line is now open.

Speaker #9: Hi, Reza. Peter. Head of Congrats on the CFO position. On your four deployed engineers, what early success are these teams having with accelerating those trial-to-paid conversion rates for Maestro agents?

Lachlan Brown: Hi, Razat, Peter. Herb, congrats on the CFO position. On your Forward Deployed Engineers, what early success are these teams having with accelerating those trial-to-paid conversion rates for Maestro Agents? Just looking ahead, how should we think about the FDE utilization rate and the net impact on gross margins as you continue to scale that team into 2027?

Lachlan Brown: Razat, Peter. Herb, congrats on the CFO position. On your Forward Deployed Engineers, what early success are these teams having with accelerating those trial-to-paid conversion rates for Maestro Agents? Just looking ahead, how should we think about the FDE utilization rate and the net impact on gross margins as you continue to scale that team into 2027?

Speaker #9: And just looking ahead, how should we think about the FDE utilization rate and the net impact on gross margins as you continue to scale that team into 2027?

Speaker #2: Yeah. Hey, Lachlan. Thanks for the question. Look, we launched the FDE motion at our connections event in early June this year. And as we had announced earlier, we hired Manik Sharma who has a significant amount of experience in our domain and through his experience at Palantir and Solonis in really executing and mobilizing an FDE motion.

Razat Gaurav: Yeah. Hey, Lachlan. Thanks for the question. Look, we launched the FDE motion at our Kinexions event in early June this year. As we'd announced earlier, we hired Manik Sharma, who has a significant amount of experience in our domain and through his experience at Palantir and Celonis, in really executing and mobilizing an FDE motion. What we've been busy with is really organizing FDE pods in North America, Europe, and in India. We've been hiring the right skill sets to really populate the capacity we have for FDEs. In parallel, we started engaging with a lot of customers. When we launched this at Kinexions in early June, we received a lot of customer interest. In many situations, our customers are looking for the next wave of productivity and efficiency.

Razat Gaurav: Yeah, Lachlan. Thanks for the question. Look, we launched the FDE motion at our Kinexions event in early June this year. As we'd announced earlier, we hired Manik Sharma, who has a significant amount of experience in our domain and through his experience at Palantir and Celonis, in really executing and mobilizing an FDE motion.

Speaker #2: What we've been busy with is really organizing FDE pods in North America, Europe, and in India. And we've been hiring the right skill sets to really populate the capacity we have for FDEs.

Razat Gaurav: What we've been busy with is really organizing FDE pods in North America, Europe, and in India. We've been hiring the right skill sets to really populate the capacity we have for FDEs. In parallel, we started engaging with a lot of customers. When we launched this at Kinexions in early June, we received a lot of customer interest. In many situations, our customers are looking for the next wave of productivity and efficiency.

Speaker #2: And in parallel, we've started engaging with a lot of customers, when we launched this at connections in early June, we saw we received a lot of customer interest.

Speaker #2: Because in many situations, our customers are looking for the next wave of productivity and efficiency and in a lot of cases, they have pain points and they have outcome aspirations but they don't necessarily know a lot of our customers don't know exactly what features and functions and capabilities they need.

Razat Gaurav: In a lot of cases, they have pain points and they have outcome aspirations, but they don't necessarily know, a lot of our customers don't know exactly what features and functions and capabilities they need. That's where the FDE motion is very critical for us, is engaging with these customers in co-building with them what the features and function capabilities are, leveraging our Maestro platform, leveraging our operational orchestration extensible platform, and utilizing agents where appropriate. We are now engaging with several customers globally. We have interest from customers across North America, Europe, and in India especially. Later this year, we'll also be taking it to other parts of Asia Pacific.

Speaker #2: And that's where the FDE motion is very critical for us is engaging with these customers in co-building with them what the features and function capabilities are, leveraging our Maestro platform, leveraging our operational orchestration extensible platform, and utilizing agents where appropriate.

Razat Gaurav: That's where the FDE motion is very critical for us, is engaging with these customers in co-building with them what the features and function capabilities are, leveraging our Maestro platform, leveraging our operational orchestration extensible platform, and utilizing agents where appropriate. We are now engaging with several customers globally. We have interest from customers across North America, Europe, and in India especially. Later this year, we'll also be taking it to other parts of Asia-Pacific.

Speaker #2: And so we are now engaging with several customers globally. We have interests from customers across North America, Europe, and in India especially. And later this year, we'll also be taking it to other parts of Asia-Pacific.

Speaker #2: So I'm very encouraged with the customer reception and engagement and definitely like we said, in the back half of this year and going into 2027, we see ourselves really executing very well towards this motion.

Razat Gaurav: I'm very encouraged with the customer reception and engagement and, definitely, like we said, in the back half of this year and going into 2027, we see ourselves really executing very well towards this motion. In terms of the impact on gross margin, I'll let Herb comment on that.

Speaker #2: In terms of the impact on gross margin, I'll let Herb comment on that.

Speaker #3: Great. Thank you, Reza. So just to clarify, or reiterate, first, there is not baked into our 2026 guidance and expectation any impact from the new FDE motion.

Herb Yeh: Great. Thank you, Razat. Just to clarify, or reiterate, first, there is not baked into our 2026 guidance and expectation, any impact from the new FDE motion. Okay. As Razat mentioned, we expect these engagements to actively expand through the end of this year and into 2027. We're working very closely with our customers. We're reviewing the accounting treatment, but we expect that revenue generated from the FDE motion will be mostly recognized ratably. The second point around margin is that we're aiming to have the gross margins typical of SaaS for this bundled solution offering.

Speaker #3: As Reza mentioned, we expect these engagements to actively expand through the end of this year and into 2027. We're working very closely with our customers.

Speaker #3: We're reviewing the accounting treatment, but we expect that revenue generated from the FDE motion will be mostly recognized radically and then the second point around margin is that we're aiming to have the gross margins typical of SaaS for this bundled solution offering.

Herb Yeh: We're reviewing the accounting treatment, but we expect that revenue generated from the FDE motion will be mostly recognized ratably. The second point around margin is that we're aiming to have the gross margins typical of SaaS for this bundled solution offering.

Speaker #9: That's very clear. Thanks for the detail. I'll pass along on that.

Lachlan Brown: That's very clear. Thanks for the detail. I'll pass along on that.

Speaker #1: Your next question from the line of John Chow with TD Cowan. Your line is now open. Please go ahead.

Operator: Your next question from the line of John Shao with TD Cowen. Your line is now open. Please go ahead.

John Shao: Good morning, guys, and thanks for taking my question. I also have one related to FDE. At your conference, I believe, Razat, you said, the current FDE team is relatively small across three pods. Could you maybe talk about the kind of trajectory of headcount addition? How long does it take to fully ramp up those new hires?

Speaker #10: Good morning, guys, and thanks for taking my question. I also have one related to FDE. At your conference, I believe, Reza, you said the current FDE team is relatively small across three pods.

Speaker #10: So could you maybe talk about the kind of trajectory of headcount addition and how long does it take to fully ramp up those new hires?

Speaker #2: Yeah. Thanks for the question. So since the conference in early June, we've been ramping up the internal team and very pleased to say that we've added resources across North America, Europe, and India.

Razat Gaurav: Yeah. Thanks for the question. Since the conference in early June, we've been ramping up the internal team and, very pleased to say that we've added resources across North America, Europe, and India. In addition to that, we've started discussions. We also received a lot of interest from our partner ecosystem. Our strategy is to definitely have an in-house capacity for FDE execution, but we'll be scaling this up by leveraging well-defined and well-identified partners that have the right skills for co-building. Just to remind you of the skills needed for the FDEs, it's a combination of process and solution architects with supply chain domain knowledge, data engineers and data scientists, because a lot of our use cases underpin algorithmic capabilities from deep optimization, machine learning, and generative AI.

Speaker #2: In addition to that, we've started discussions. We also received a lot of interest from our partner ecosystem. So our strategy is to definitely have an in-house capacity for FDE execution but we'll be scaling this up by leveraging well-defined and well-identified partners that have the right skills for co-building.

Razat Gaurav: Our strategy is to definitely have an in-house capacity for FDE execution, but we'll be scaling this up by leveraging well-defined and well-identified partners that have the right skills for co-building.

Speaker #2: And just to remind you of the skills needed for the FDEs, it's a combination of process and solution architects with supply chain domain knowledge, data engineers, and data scientists, because a lot of our use cases underpin algorithmic capabilities, from deep optimization, machine learning, and generative AI.

Razat Gaurav: Just to remind you of the skills needed for the FDEs, it's a combination of process and solution architects with supply chain domain knowledge, data engineers and data scientists, because a lot of our use cases underpin algorithmic capabilities from deep optimization, machine learning, and generative AI. Our strategy is to have our internal in-house team, but also scale aggressively with very targeted and focused partners as well.

Speaker #2: And so our strategy is to have our internal in-house team but also scale aggressively with very targeted and focused partners as well.

Razat Gaurav: Our strategy is to have our internal in-house team, but also scale aggressively with very targeted and focused partners as well.

John Shao: That's great color. Thank you.

Speaker #10: That's great color. Thank

Speaker #1: You

Speaker #2: Your next question from the line of Marc Chappelle with Loop Capital Markets . Your line is now open .

Operator: Your next question from the line of Mark Schappel with Loop Capital Markets. Your line is now open.

Speaker #3: Hi . Thank you for taking my questions , and nice job on the quarter . A couple questions around your AI agents First , in terms of the agents , you know , is the entire sales team selling your AI agents today or is it just a select part of the sales team ?

Mark Schappel: Hi, thank you for taking my questions, and a nice job on the quarter. A couple questions around your AI agents. First, in terms of the agents, is the entire sales team selling your AI agents today, or is it just a select part of the sales team? Secondly, nearly every major supply chain planning vendor is now offering AI agents around their platforms. I was wondering if you could just talk a little bit more about how you differentiate your agents from those of, say, your competitors.

Mark Schappel: Thank you for taking my questions, and a nice job on the quarter. A couple questions around your AI agents. First, in terms of the agents, is the entire sales team selling your AI agents today, or is it just a select part of the sales team? Secondly, nearly every major supply chain planning vendor is now offering AI agents around their platforms. I was wondering if you could just talk a little bit more about how you differentiate your agents from those of, say, your competitors.

Speaker #3: And then secondly , you know , nearly every major supply chain planning vendor is now offering AI agents around their platforms . I was wondering , you could just talk a little bit , a little bit more about how you differentiate your agents from those of , say , your competitors

Speaker #4: Yeah , sure . Thanks for the question . , so look , , the first question , definitely our entire sales team is incentivized to take these agentic to market .

Razat Gaurav: Yeah, sure. Thanks for the question. Look, the first question, definitely our entire sales team is incentivized to take these agentic capabilities to market, both Existing customers and with net new logos, right? There's no special, separate quota-carrying sales team. Of course, we've got experts we know who are business consultants and FDE engineers who play a very important role in these sales pursuit cycles to make sure that the customers are able to get a detailed understanding of our agentic capabilities as part of their evaluation processes. I'm really happy to say that, even in Q2, some of the largest wins we had a bundle of agents as part of the deal structure, right? And they were very important parts of the criteria in them selecting Kinaxis. That's on the first question.

Speaker #4: Both with existing customers and with net new logos , right . So , , you know , there's no special separate quota carrying sales team .

Speaker #4: Of course , we've got , you know , experts , you know , who are our business consultants and PhD engineers who play a very important role in these sales pursuit cycles to make sure that the customers are able to get a detailed understanding of our genetic capabilities as part of their evaluation processes .

Speaker #4: And I'm really happy to say that , you know , even in Q2 , some of the largest wins we had had a bundle of agents as part of the deal structure , right ?

Razat Gaurav: I'm really happy to say that, even in Q2, some of the largest wins we had a bundle of agents as part of the deal structure, right? And they were very important parts of the criteria in them selecting Kinaxis. That's on the first question.

Speaker #4: And they were very important parts of the criteria in them selecting Kinaxis . So that's , that's on the first question . On the second question , in terms of our differentiators , you know , , there's three things I would say right ?

Razat Gaurav: On the second question, in terms of our differentiators, there's three things I would say, right? Firstly, for agents within Maestro, again, we have natively developed the agentic infrastructure by building agent skills, building the Maestro Agent Studio to have access to all the data and resources within Maestro with a semantic and ontology context. We are uniquely positioned to leverage all the power of Maestro in terms of access to data, because we are the system of record for planning, as well as leveraging all the architectural differentiation we have within Maestro with versioning that leads to world-class scenario planning and concurrency representation. Our agents are able to leverage all of those capabilities. That's the first part. The second part is, these agents in many use cases are leveraging decisioning algorithms, right?

Speaker #4: Firstly , , for agents within maestro , I mean , again , we have natively developed the genetic infrastructure by building agent skills building , you know , the maestro agent studio to have access to all the data and resources within maestro with a semantic and ontology context .

Speaker #4: So we are uniquely positioned to leverage all the power of maestro in terms of access to data , because we are the system of record for planning as well as leveraging all the architectural differentiation we have within maestro with versioning that leads to world class scenario planning and concurrency representation .

Razat Gaurav: We are uniquely positioned to leverage all the power of Maestro in terms of access to data, because we are the system of record for planning, as well as leveraging all the architectural differentiation we have within Maestro with versioning that leads to world-class scenario planning and concurrency representation. Our agents are able to leverage all of those capabilities. That's the first part. The second part is, these agents in many use cases are leveraging decisioning algorithms.

Speaker #4: And our agents are able to , leverage all of those capabilities . That's the first part . The second part is , , you know , these agents in many use cases are leveraging , you know , decisioning algorithms , right ?

Speaker #4: Which are also part of the planning engines and the models we have within maestro . Right . So think of decisions that are made across demand predictions , supply plans , production plans , inventory , , all of those leverage , , algorithmic decisioning algorithms that we have to enable those decisions again , that are part of maestro that get , you know , instantiated through agent capabilities .

Razat Gaurav: Which are also part of the planning engines and the models we have within Maestro, right? Think of decisions that are made across demand predictions, supply plans, production plans, inventory. All of those leverage algorithmic and decisioning algorithms that we have to enable those decisions, again, that are part of Maestro, that get instantiated through agentic capabilities. The last thing I would say that's differentiated for us is just our deep understanding of the physics of the supply chain that we reflect in our underlying end-to-end supply chain network model. Understanding all the constraints, all the policies, all the interdependencies of the end-to-end supply chain that the agents then can really be able to traverse to make meaningful, intelligent decisions, but also sensible and executable decisions and operationalizing those decisions as well in a way that can really function in the operational environments of our customers.

Speaker #4: And then the last thing I will say that's differentiated for us is just our deep understanding of the physics of the supply chain that we reflect in our underlying end to end supply chain network model .

Razat Gaurav: The last thing I would say that's differentiated for us is just our deep understanding of the physics of the supply chain that we reflect in our underlying end-to-end supply chain network model.

Speaker #4: understanding all the constraints , all the policies , all the interdependencies of the end to end supply chain that the agents then can really be able to traverse to make meaningful , intelligent decisions , but also , you know , sensible and , and , and , you know , executable decisions and operationalizing those decisions as well in a way that can really function in the operational environment of our customers Hopefully that helps you with the understanding .

Razat Gaurav: Understanding all the constraints, all the policies, all the interdependencies of the end-to-end supply chain that the agents then can really be able to traverse to make meaningful, intelligent decisions, but also sensible and executable decisions and operationalizing those decisions as well in a way that can really function in the operational environments of our customers. Hopefully, that helps you with the understanding.

Razat Gaurav: Hopefully, that helps you with the understanding.

Speaker #3: It does . Thank you . That's all for me

Mark Schappel: It does. Thank you. That's all for me.

Speaker #2: Your next question from the line of Suthan Sukumar with stifle your line is now open . Please go ahead

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

Speaker #5: Hey . Good morning guys . This is speaking on behalf of , , just a question on AI adoption . , the 10% adoption rate is very encouraging .

[Analyst] (Stifel): Hey, good morning, guys. This is Esse speaking on behalf of Sutan. Just a question on AI adoption. The 10% adoption rate is very encouraging. My question is on new deals, what has the AI attach rate been, and what changes with regards to AI requirements in those prospect conversations?

[Analyst] (Stifel): Good morning, guys. This is Esse speaking on behalf of Sutan. Just a question on AI adoption. The 10% adoption rate is very encouraging. My question is on new deals, what has the AI attach rate been, and what changes with regards to AI requirements in those prospect conversations?

Speaker #5: And so my question is on new fields , what has the AI actually been and what came with with regards to the AI requirement to prospect compensation

Speaker #4: Yeah . It was it was a little difficult to hear you , but I think your question was related to AI adoption and the attach rates in new deals .

Razat Gaurav: Yeah, it was a little difficult to hear you, but I think your question was related to AI adoption and the attach rates in new deals with AI capabilities. I think that's what your question was. Look, let me first start by saying, everyone has a different definition of what AI means, right? I've always held the belief that we've been AI native from our very inception, right? We've been leveraging predictive and prescriptive AI, from the very start here at Kinaxis in enabling all kinds of planning and decisioning use cases. Those AI capabilities were enabled by advanced machine learning models, deep optimization algorithms, heuristics algorithms. Those are 100% of everything we do. All deals include those capabilities. More recently, of course, we've been adding the generative and agentic capabilities to our AI roster.

Speaker #4: , you know , with , with AI capabilities , I think that's , that's what your question was . , so look , , let me first start by saying , you know , , everyone has a different definition of what AI means , right ?

Speaker #4: And I've always held the belief that we've been AI native from our very inception, right? So we've been leveraging predictive and prescriptive AI from the very start here at Kinaxis in enabling all kinds of planning and decisioning use cases.

Razat Gaurav: We've been leveraging predictive and prescriptive AI, from the very start here at Kinaxis in enabling all kinds of planning and decisioning use cases. Those AI capabilities were enabled by advanced machine learning models, deep optimization algorithms, heuristics algorithms. Those are 100% of everything we do. All deals include those capabilities. More recently, of course, we've been adding the generative and agentic capabilities to our AI roster.

Speaker #4: , those AI capabilities were were enabled by advanced machine learning models , deep optimization algorithms , heuristics , you know , algorithms . So those are 100% of , of everything we do .

Speaker #4: , so all deals include those , those capabilities . More recently , of course , we've been adding the generative and capabilities to our AI roster .

Speaker #4: And I'll tell you almost every major net new logo that we are signing , , is , is involving , , some bundle of agents because , because , , we're seeing growing interest in customers , not just trying to deploy a legacy planning approach , but to really modernize their ways of working .

Razat Gaurav: I'll tell you, almost every major net new logo that we are signing is involving some bundle of agents because we are seeing growing interest in customers not just trying to deploy a legacy planning approach, but to really modernize their ways of working. In doing so, they're leveraging agents. In many cases, some of the net new logos that we're winning, we're replacing old legacy solutions from many years ago. It's really encouraging from my perspective to see the adoption happening and the attach rates are really growing in terms of our agentic capabilities as part of all net new deals.

Speaker #4: And in doing so , they're leveraging agents and in many cases , , some of the net new logos that we're winning , we're replacing old legacy solutions , you know , , from , from many years ago .

Razat Gaurav: In many cases, some of the net new logos that we're winning, we're replacing old legacy solutions from many years ago. It's really encouraging from my perspective to see the adoption happening and the attach rates are really growing in terms of our agentic capabilities as part of all net new deals.

Speaker #4: And so it's really encouraging from my perspective to see the adoption happening and the attach rates are really growing in terms of our capabilities as part of , , all net new deals

[Analyst] (Stifel): Thank you. I'll pass along.

Speaker #5: Thank you . I'll pass it along

Speaker #2: Your next question from the line of Martin Toner with ATB Cormack . Your line is now open

Operator: Your next question from the line of Martin Toner with ATB Cormark. Your line is now open.

Speaker #3: Thanks for taking my question . , my only question is around the , , the AI supply chain . , is it meaningful within your pipeline ?

Martin Toner: Thanks for taking my question. My only question is around the AI supply chain. Is it meaningful within your pipeline? You mentioned that in the prepared remarks.

Speaker #3: , you mentioned that in the prepared remarks

Speaker #4: Yeah . Look , , again , it , , it , it depends on , , what you mean by AI . It's a sort of a , it's interesting because a lot of our agents are , are really responding to sagacious sort of elements of the supply chain , you know , that are complex , that are , you know , , needle in the haystack kind of problems and in unraveling those , those , those decisions , we've been using AI from the very inception , right .

Razat Gaurav: Yeah. Look, again, it depends on what you mean by AI, it's interesting because a lot of our agents are really responding to sagacious set of elements of the supply chain that are complex, that are needle in the haystack kind of problems. In unraveling those decisions, we've been using AI from the very inception, right? I think if your question is more around agentic capabilities, our pipeline for agents is growing, both within our existing customers as well as net new logos. Like I mentioned, the attach rate on the net new logos is really growing very rapidly, and almost every customer is evaluating those capabilities if they're a net new logo for us.

Speaker #4: , I think if your question is more around a genetic capabilities , you know , , our pipeline for agents is growing , , both within our existing customers as well as net new logos .

Razat Gaurav: I think if your question is more around agentic capabilities, our pipeline for agents is growing, both within our existing customers as well as net new logos. Like I mentioned, the attach rate on the net new logos is really growing very rapidly, and almost every customer is evaluating those capabilities if they're a net new logo for us.

Speaker #4: Like I mentioned , the attach rate on the net , new logos , , you know , is , is really growing very rapidly and almost every customer is evaluating those capabilities .

Speaker #4: If there are net new logo for us . , and then also , , as we are getting the PhD motion mobilized and really helping our customers realize the outcomes and helping our customers extend beyond planning and decisioning into broader orchestration , use cases , we can only do those with a strong leverage of AI , right ?

Razat Gaurav: Also, as we are getting the FDE motion mobilized and really helping our customers realize the outcomes, and helping our customers extend beyond planning and decisioning into broader orchestration use cases, we can only do those with a strong leverage of AI, right? AI is very core to our capability and is frankly a big reason why you're seeing the continued momentum and acceleration in our growth path.

Speaker #4: So , , AI is very core to our capability and is frankly , , you know , a big reason why you're seeing the continued momentum and acceleration in our growth path

Speaker #3: That's great . Thanks . That's all for me

Martin Toner: That's great. That's all for me.

Speaker #2: There are no further questions at this time . I will now turn the call back to CEO Razat Gaurav for closing remarks .

Operator: There are no further questions at this time. I will now turn the call back to CEO, Razat Gaurav, for closing remarks.

Speaker #4: Thank you for the questions . We reported a strong second quarter and feel great about our trajectory for the second half of the year .

Razat Gaurav: Thank you for the questions. We reported a strong Q2 and feel great about our trajectory for the H2 of the year. Thank you to our employees, customers, partners, and shareholders. Have a great rest of the day. Thank you so much.

Speaker #4: Thank you to our employees , customers , partners , and shareholders . Have a great rest of the day . Thank you so much .

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

Q2 2026 Kinaxis Inc Earnings Call

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