GICS Sector : Healthcare
kneat.com, inc.designs, develops, and supplies software for data and document management within regulated environments in the United States, Ireland, Canada, and internationally.The company offers Kneat Gx platform, a configurable commercial off-the-shelf application focused on validation lifecycle management and testing for biotechnology, pharmaceutical, and medical device manufacturing industries.
Kneat reported a robust revenue growth of 26% year-over-year, reaching $16.1 million in Q3 2025, compared to $12.8 million in Q3 2024. The company's SaaS revenue grew 33% year-over-year, driven by an expansion of existing customers and new logo signings. Annual recurring revenue (ARR) was $68.6 million, up 37% from $49.9 million as of September 30, 2024. Gross profit was $12.2 million, 25% higher than $9.8 million in Q3 2024. The company's adjusted EPS loss was $0.01, beating estimates of a loss of $0.03.
Publication Date: Nov -23
The company's validation workflow platform, Kneat Gx, continues to be a key driver of growth, supporting all validation workflows while meeting strict data integrity requirements. Management emphasized that Kneat's competitive lead is widening, citing a satisfaction score of 98 out of 100 from software review platform G2. The company continues to innovate, with AI capabilities enhancing usability and global reach.
Kneat ended the quarter with a cash position of $59.8 million. The company's balance sheet remains strong, with a net cash position and no plans for immediate capital allocation, such as M&A or share buybacks. Management highlighted investments in sales and marketing, including expanding the sales team and investing in strategic hires in R&D, particularly in AI and data-centric capabilities.
With a P/S Ratio of 6.91 and an EV/EBITDA of 22.19, the market appears to be pricing in significant growth prospects for Kneat. Analysts estimate next year's revenue growth at 26.7%. The company's focus on profitability and cash flow breakeven later in 2026 is expected to drive future ARR growth and profitability. The adjusted EBITDA margin has improved substantially year-over-year and is expected to continue improving, targeting a range typical of SaaS companies, in the late 20s to early 30s.
Management noted that while there have been some impacts from trade uncertainty and customer budgets, the situation is beginning to stabilize. The pipeline for expansions remains robust, and the company is optimistic about growth prospects. ARR growth was impacted by some deal slippage, but the company expects this to recover in future quarters.
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Kneat.com's 22.2% growth in Software as a Service (SaaS) license fees is driven by increasing adoption of cloud-based solutions, expansion into new industries, and growing demand for digital validation and compliance tools. Additionally, the company's investments in sales and marketing, coupled with a strong partner ecosystem, have contributed to the rapid growth.
Kneat.com's 11.88% growth in Professional Services and Other is driven by increasing adoption of its validation software by life sciences companies, expansion into new markets, and growing demand for digital validation solutions. Additionally, the company's strategic partnerships and investments in sales and marketing have contributed to the segment's growth.
Kneat.com's on-premise license fees growth of 10.14% is driven by increasing adoption of digital validation and verification solutions in the life sciences industry, expansion into new geographic markets, and growing demand for cloud-based alternatives. Additionally, the company's strategic partnerships and investments in R&D have enhanced its product offerings, leading to higher sales and revenue growth.
Kneat.com, Inc.'s 12.08% growth in Maintenance Fees is driven by increasing adoption of its cloud-based validation software, expansion into new markets, and rising demand for regulatory compliance solutions. Additionally, the company's focus on customer success and retention has led to higher renewal rates, contributing to the growth in maintenance fees.
A cloud-based validation lifecycle management platform that enables life sciences companies to manage their validation processes efficiently and effectively.
A comprehensive compliance management platform that helps life sciences companies manage their compliance obligations and reduce the risk of non-compliance.
A quality management platform that enables life sciences companies to manage their quality processes, including document management, training, and corrective actions.
A training management platform that enables life sciences companies to manage their training programs, including employee training, compliance training, and SOP training.
A document management platform that enables life sciences companies to manage their documents, including SOPs, protocols, and reports.
Kneat.com, inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.
Kneat.com, inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are highly specialized, making it difficult for customers to switch to alternative providers.
Kneat.com, inc. relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate favorable terms mitigate this risk.
The industry in which Kneat.com, inc. operates is highly competitive, and new entrants can easily disrupt the market. The company's intellectual property and established customer base provide some barriers to entry, but new entrants can still pose a significant threat.
The industry in which Kneat.com, inc. operates is highly competitive, with many established players vying for market share. The company's strong brand and customer loyalty help to mitigate this risk, but the intensity of rivalry remains high.
| Value | |
|---|---|
| Debt Weight | 60.05% |
| Debt Cost | 3.95% |
| Equity Weight | 39.95% |
| Equity Cost | 8.95% |
| WACC | 5.94% |
| Leverage | 150.32% |
Value: 2.0
Growth: 7.2
Quality: 7.9
Yield: 0.0
Momentum: 9.0
Volatility: 7.7
1-Year Total Return ->
Value: 0.5
Growth: 8.4
Quality: 7.6
Yield: 1.2
Momentum: 9.0
Volatility: 2.7
1-Year Total Return ->
Value: 4.6
Growth: 4.2
Quality: 4.1
Yield: 0.6
Momentum: 9.5
Volatility: 5.0
1-Year Total Return ->
Value: 4.6
Growth: 4.9
Quality: 7.2
Yield: 4.4
Momentum: 1.0
Volatility: 3.0
1-Year Total Return ->
Value: 2.0
Growth: 7.8
Quality: 3.8
Yield: 0.0
Momentum: 7.5
Volatility: 3.0
1-Year Total Return ->
Value: 10.0
Growth: 3.7
Quality: 2.3
Yield: 0.0
Momentum: 2.0
Volatility: 6.0
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