Kinaxis (TSE: KXS) reported a strong fiscal second quarter for 2026, driven by a 20% surge in SaaS revenue and increased demand for its supply-chain orchestration tools. The company’s total revenue climbed 16% year-over-year to $158.8 million, prompting leadership to raise its full-year financial outlook.
Driving Growth Through SaaS and AI
SaaS business now accounts for 67% of total revenue, up from 65% in the same period last year. Despite a minor impact from foreign exchange fluctuations, the company saw its Annual Recurring Revenue (ARR) climb 19% to $465.6 million. CEO Razat Gaurav attributed this momentum to businesses seeking stability amidst geopolitical conflicts, rising energy costs, and persistent sourcing challenges.
Demand for the company’s Maestro platform is reaching new heights. Scenario-planning activity on the platform grew consistently from April through July, with July showing a 30% increase compared to the previous year. Notably, the average deal size for the quarter nearly doubled compared to Q2 2025.
Expansion and the Rise of Maestro Agents
Kinaxis achieved a record-breaking quarter for expansion bookings, with annual contract values from existing customers rising over 70%. These expansions are largely fueled by the adoption of advanced capabilities, including machine-learning demand forecasting, inventory optimization, and the integration of agentic AI.
The company is seeing significant traction with its Maestro Agents, with roughly 10% of the installed customer base already utilizing paid or trial subscriptions. “Nearly every major new customer agreement now includes some agent capabilities,” Gaurav noted. To further support this AI-driven transition, Kinaxis is establishing “forward-deployed engineering” (FDE) pods in North America, Europe, and India.
Operational Efficiency and Strategic Outlook
Gross profit reached $104.4 million, reflecting a 19% increase, while gross margins improved to 66%. While subscription software margins saw a slight dip to 78% due to ongoing cloud migration costs, the company remains focused on offboarding its private data centers by the end of 2027.
The company’s financial health remains robust, with $310.7 million in cash and short-term investments. This liquidity has supported an active share repurchase program, with 1.2 million shares bought back since November, reducing the total outstanding share count by 2.9%.
Looking ahead, Kinaxis has updated its full-year 2026 revenue guidance to a range of $625 million to $640 million. CFO Herb Yeh emphasized that the company will maintain a disciplined approach to capital allocation, focusing on product innovation and strategic acquisitions that offer clear revenue synergies.