If you are looking for a high-quality Canadian tech stock trading at a meaningful discount to its recent highs, Kinaxis (TSX:KXS) deserves your attention right now. I think it is one of the best buying opportunities in the Canadian market today, and here is why.
Kinaxis is an Ottawa-based software company that helps some of the world’s largest organizations manage their supply chains. Its flagship product, called Maestro, is an artificial intelligence-powered platform that lets companies plan, forecast, schedule, and orchestrate their global supply chain operations in real time.
Valued at a market cap of $4.1 billion, the tech stock is down approximately 33% from its peak, allowing you to buy the dip.
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A strong performance in Q1 2026
In Q1, Kinaxis reported total revenue of US$165.6 million, up 25% compared to the same period last year. SaaS (software-as-a-service) revenue, the most important metric for a subscription software company, came in at US$102.9 million, up 21% year over year, a notable acceleration from the 16% growth it posted in the year-ago period.
- Annual recurring revenue (ARR) rose 20% to US$447 million, up from 14% last year.
- Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) reached US$53.6 million in the quarter, up 62% year over year.
- The adjusted EBITDA margin was 32%, compared to 25% a year ago. The company also posted its highest-ever quarterly net profit of $29.4 million.
- Free cash flow margin on a trailing 12-month basis was 24%, and in Q1, it rose to 35%, allowing Kinaxis to end the quarter with $327.6 million in cash.
The bull case for the TSX tech stock
What makes Kinaxis stock exciting for long-term investors is its position in the artificial intelligence landscape.
Supply chains are one of the most complex, data-intensive operations any large business runs. Kinaxis has spent decades building the software intelligence to manage that complexity, and now AI is supercharging what is possible.
In Q1, the company more than doubled the number of paying customers for its Maestro Agents product. These are AI-powered agents that can automate supply chain decisions, flag risks, and run tasks in minutes that would previously take human planners hours or days.
Chief Executive Officer Razat Gaurav said during the Q1 earnings call that Kinaxis won its largest initial customer contract ever in the quarter, in both annual and total contract value.
New business almost doubled compared to Q1 2025, and Kinaxis also won new customers, including Pernod Ricard, the world’s leader in premium champagnes and spirits, as well as companies in the energy, life sciences, and industrial sectors.
Gaurav told investors that in net new account evaluations, the company’s agentic AI capabilities are playing a “bigger and bigger role” in winning deals. Maestro Agents are being bundled into new contracts from day one.
This matters because it means the average deal size is growing. And as more customers adopt AI agents within Maestro, switching costs increase, which should drive future ARR higher.
Kinaxis has been ranked a leader in Gartner’s Magic Quadrant for supply chain planning for 12 consecutive years.
With over 400 enterprise customers across industries, including aerospace and defense, automotive, consumer products, chemicals, life sciences, and high-tech manufacturing, Kinaxis has a broad installed base that it can continue to expand.
The company’s remaining performance obligations, essentially contracted future revenue, stood at US$949 million at the end of Q1. Its SaaS revenue pool, which grows predictably and carries high margins, was US$905 million in backlog at quarter end.
The Foolish takeaway
Bay Street forecasts Kinaxis to expand its free cash flow from US$112 million in 2025 to US$254 million in 2030. If the Canadian tech stock is priced at 20 times forward FCF, it could surge 75% within the next four years.
Kinaxis is a profitable, growing, cash-generating Canadian tech company with a dominant position in a key market.
The stock’s 33% decline from its highs offers investors an opportunity to buy this business at a reasonable valuation. If you are looking for a stock to buy and hold for a decade or more, Kinaxis stock deserves a serious look.
