Financial Year 2018
Annual Report 2018
2018 Annual Update
Year to date (January - December 2018)
- License revenue amounted to USD 133 million ('17: USD 109 million),
an increase of 22 percent.
- Maintenance revenue was USD 189 million ('17: USD 167 million),
an improvement of 13 percent.
- Consulting revenue amounted to USD 219 million ('17: USD 200 million),
an increase of 10 percent.
- Cloud and SaaS revenue was USD 60 million ('17: USD 15 million),
an increase of 300 percent.
- Other revenue was USD 6 million ('17: USD 2 million),
an increase of 200 percent.
- Net revenue totaled USD 606 million (‘17: USD 494 million),
an increase of 23 percent.
Since I joined IFS in early 2018, I’ve seen the entire company rally around our vision for a future guided by our customers.
IFS has been on a mission to partner with the challenger customers of the world. Challengers are not afraid to try new approaches, new technologies, and new business models. Challengers are the companies who keep a market on its toes. IFS is for the challengers, our customers.
Throughout the last year, we installed a world-class global leadership team, we created a more globally-structured business, and we brought 5 key products to market designed to address the needs of customers in our focus industries. These are just a few of the initiatives undertaken to support the success of our customers.
Today we are announcing our financial performance for 2018, revealing the fastest total revenue growth in company history. In fact, we outpaced industry growth 3-fold. Our cloud & SaaS revenues saw an increase of +300%, demonstrating our insistence on offering customers choice versus forced migration, was also well received. Our EBITDA increased by 27% YoY to 21%, indicating the business is stable and growing profitably.
I have no doubt: None of these results would have been possible without the trust of our 10,000+ intrepid challenger customers, and our global workforce of 3,500 people devoted to serving them.
As we move into 2019, we are continuing to invest in making our software easier to use, quicker to deploy, and with an overall TCO lower than our competitors. An ever-present commitment of ours will be to provide sensible software solutions for our valued customers.
2018 Q3 Update
Third Quarter (July–September 2018)
- License revenue amounted to SKr 268 million (Q3 '17: SKr 176 million), an increase of 52 percent (43 percent in constant currency).
- Maintenance revenue was SKr 419 million (Q3 '17: SKr 349 million), an improvement of 12 percent in constant currency.
- Consulting revenue amounted to SKr 468 million (Q3 '17: SKr 401 million), an increase of 9 percent in constant currency.
- Cloud and SaaS revenue was SKr 136 million (Q3 '17: SKr 17 million), a sixfold improvement in constant currency.
- Other revenue amounted to SKr 6 million (Q3 '17: SKr 3 million), an increase of 62 percent in constant currency.
- Net revenue totaled SKr 1,296 million (Q3 '17: SKr 946 million), an improvement of 28 percent in constant currency.
When I took the helm of IFS in April, I knew an incredible journey of discovery awaited me. At a packed customer event in Stockholm just this past week, I was reminded of why a technology firm built on trust and authenticity has experienced such significant growth on the foundation of our long-term client relationships.
My team and I have set the bar higher than ever over the past few months. I am proud to say we have surpassed expectations. Despite global macroeconomic headwinds, our strong Q3 results speak for themselves.
While other European firms stand at a crossroads as the details of Britain’s exit from the EU continues to be negotiated, we outpaced our competitors.
We grew our license revenue 52% YoY with 68% coming from new customers to IFS. This was achieved by providing easy to use and quick to deploy solutions for enterprise resource planning (ERP), enterprise asset management (EAM) and service management (FSM) to our targeted industries.
We are crushing competitors in cloud services by giving customers a wider suite of solutions to choose from. This push has paid off, leading to a sixfold growth in this business and has underpinned our increase in net revenue 37% YoY.
Our confidence in the future is further reflected in our total year guidance, which is raised on the back of our strong Q3 results. Our license revenue for the full year 2018 is expected to reach 1102m SEK. That represents a growth rate year on year of 18%. We have also increased our forecasted full year profit which now represents a 28% YoY improvement.
We are not stopping there. I have made strategic appointments to the senior leadership team that will take us further, faster. Among the new hires are Chief Customer Officer Michael Ouissi and Chief Product Officer Christian Pedersen. Joining the company in November are Jane Keith, Global Head of People and Culture, and Milena Roveda, Chief Financial Officer.
Despite these changes, the company’s commitment to our core products and customers is simply unwavering. We will continue to reaffirm our standing as an industry leader in the aerospace and defense industry in addition to the field service management segment. Our pursuit of innovation through business-enabling solutions, such as the IFS IoT Business Connector, is uncompromising. Such tools allow clients to capture data that predicts, automates and analyses their processes.
We accomplished all of this in an uncertain economic environment and are only just getting started.
Looking forward to going on this ride together.
With best wishes,
Chief Executive Officer
2018 Q2 Update
Second Quarter (April–June 2018)
- License revenue amounted to SKr 291 million (Q2 '17: SKr 216 million), an increase of 32 percent in constant currency.
- Maintenance revenue was SKr 404 million (Q2 '17: SKr 354 million), an improvement of 11 percent in constant currency.
- Consulting revenue amounted to SKr 473 million (Q2 '17: SKr 429 million), an increase of 8 percent in constant currency.
- Cloud and other revenue was SKr 158 million (Q2 '17: SKr 26 million), a sixfold improvement in constant currency.
- Net revenue totaled SKr 1,326 million (Q2 '17: SKr 1,025 million), an increase of 27 percent in constant currency.
Customer focus leads to strong growth
Thanks to the solid demand for IFS’s products and solutions, our business grew strongly in the second quarter, with license sales increasing 32 percent in constant currency. The intake of business came from both the winning of new accounts in an increasingly competitive market and from sales to our ever-growing customer base. The addition of new accounts, the high level of retention in our user base, and the remarkable growth of our cloud business resulted in our net revenue growing 27 percent in constant currency.
IFS Applications™ 10 was launched at the biggest and most successful customer event in our history: the IFS World Conference 2018 in Atlanta. The latest version of our enterprise applications suite has further increased the appeal of our product in the market and created additional interest among our customers to upgrade their systems. We also presented two new IFS Maintenix™ software-as-a-service (SaaS) solutions for the commercial aviation industry, as well as major cloud-optimized updates of our offering within field service management (FSM).
While providing our customers with ever greater choice, our network of partners extends our global reach, enables better scalability of resources, and maximizes our local connection. Combined with our customer focus, this increases our appeal and we expect to see continued positive development and further improvements to our strengths in the second half of the year.
2018 Q1 Update
First Quarter (January–March 2018)
- License revenue amounted to SKr 177 million (Q1 '17: SKr 171 million), an increase of 5 percent in constant currency.
- Maintenance revenue was SKr 382 million (Q1 '17: SKr 350 million), an improvement of 11 percent in constant currency.
- Consulting revenue amounted to SKr 411 million (Q1 '17: SKr 429 million), a decrease of 3 percent in constant currency.
- Cloud and other revenue was SKr 121 million (Q1 '17: SKr 19 million), a sixfold improvement in constant currency.
- Net revenue totaled SKr 1,091 million (Q1 '17: SKr 969 million), an increase of 15 percent in constant currency.
IFS continues to execute well on its strategy
It is an honor to be writing my first foreword as IFS’s new CEO. I have joined an amazing business with engaged customers, passionate employees, and enormous potential. This is not something many companies in the enterprise software space can boast!
The excellent results from the first quarter of 2018 are testament to our company’s resilience, customer-focus and ambitious plans for long-term growth. Proving the success of our strategy, net revenue for the quarter was up 15 percent year-on-year, in constant currency while revenue from customer cloud deployments grew sixfold year-on-year. A significant proportion of IFS’s cloud-based revenue comes from our acquisition last year of WorkWave, whose products are nearly all sold as Software-as-a-Service (SaaS).
In the second quarter, new versions of IFS Applications and IFS Field Service Management were unveiled at the biggest and most successful customer event in our history–IFS World Conference 2018. These product launches, combined with a committed and energized workforce, are expected to drive new sales and upgrades throughout the year.