Kinaxis Raises 2026 Outlook As SaaS Momentum And AI Investments Support Supply Chain Planning Growth

Kinaxis reported a solid second quarter for fiscal 2026, underscoring continued enterprise demand for cloud-based supply chain planning and orchestration capabilities. The Ottawa-based software provider delivered double-digit revenue growth, expanded recurring revenue, and raised its full-year outlook as customers continued to invest in tools that improve planning agility amid supply disruption, tariff uncertainty, and geopolitical volatility.

The results are indicative of several key market trends. Manufacturers and supply chain-intensive enterprises are prioritizing scenario planning, execution alignment, and orchestration. SaaS adoption also remains central to vendor growth strategies, and generative and agentic AI are moving from product messaging into early commercial deployment.

Kinaxis delivered second-quarter revenue of $158.8 million, up 16 percent year over year, despite a modest foreign exchange headwind. SaaS revenue remained the primary growth engine, increasing 20 percent to $106.5 million and representing 67 percent of total revenue. Annual recurring revenue grew 19 percent to $465.6 million, while remaining performance obligations increased 18 percent to $983.5 million, providing improved visibility into future contracted revenue.

The company also showed leverage in profitability. Profit increased 15 percent to $21.2 million, diluted earnings per share rose to $0.76, and adjusted EBITDA grew 23 percent to $41.4 million. Adjusted EBITDA margin improved to 26 percent, even as the company continued to absorb costs related to cloud migration and product investment.

Notably, expansion activity within the installed base was strong. Annual contract value bookings from existing customers increased more than 70 percent year over year, suggesting that Kinaxis is benefiting from deeper penetration in large enterprise accounts rather than relying solely on new-logo acquisition.

Management also pointed to higher platform utilization. Multi-scenario planning activity on the Kinaxis platform increased sequentially from April through July, with July activity 30 percent higher than a year earlier. This usage trend aligns with ARC’s view that supply chain planning applications are increasingly valued for their ability to support rapid analysis of alternative sourcing, production, logistics, and customer-service scenarios.

Kinaxis also continued to shift implementation capacity toward its partner ecosystem. Professional services revenue increased 12 percent to $42.1 million, and services gross margin improved to 32 percent. However, management expects services revenue to moderate in the second half as more deployment work moves to independent systems integrators. This transition should support a more scalable software-led model over time, although it will require continued attention to partner enablement and implementation quality.

Beyond customer expansion and partner leverage, product innovation remains an important part of the Kinaxis growth narrative. The company continues to advance its Maestro platform with agentic AI capabilities, including Maestro Agents and Maestro Agent Studio. Approximately 10 percent of the installed base has entered paid or trial subscriptions for these generative AI modules, and management indicated that nearly all major new customer agreements included agent capabilities.

This development is important because AI-enabled planning is moving beyond productivity use cases toward workflow automation, exception management, and decision support. Kinaxis is also establishing a forward-deployed engineering organization in North America, Europe, and India to help large accounts address data engineering and machine learning integration requirements. ARC expects these capabilities to become increasingly important as customers look for measurable business outcomes rather than standalone AI features.

These product investments are occurring alongside broader infrastructure changes intended to improve long-term operating efficiency. Subscription software margin declined from 80 percent to 78 percent in the quarter due to duplicate operating costs associated with migrating customers from private data centers to public cloud infrastructure. The company expects to exit its legacy European private data centers by the end of 2026, with the North American migration expected to continue into late 2027.

The combination of recurring-revenue growth, installed-base expansion, and disciplined margin management supported an improved full-year outlook. Management raised its full-year fiscal 2026 revenue and SaaS revenue growth outlook while reaffirming adjusted EBITDA margin guidance:

Overall, Kinaxis’s second-quarter results suggest a business that is scaling recurring revenue while investing in the capabilities needed for more adaptive supply chain planning. The company’s focus on partner-led implementation, cloud infrastructure, and agentic AI points to a growth model built around broader platform adoption rather than isolated product expansion. For manufacturers and other supply chain-intensive enterprises, the quarter reinforces the strategic value of planning platforms that can support faster scenario evaluation, better cross-functional orchestration, and more resilient responses to market disruption.