IFS has announced its results for the full year ending 31st December 2022. Total revenues were SEK8.4bn in constant currency (~ €755.4 million), up 19% year over year. Considering that IFS is one of the software vendors with a long tail of legacy on-premises customers, this is impressive growth. The growth in cloud revenue, driven by both net new logos and migrating customers, is even more impressive. It is up 80%, with recurring revenue SEK6.1bn (~€548.6 million) up 44% year-on-year. Impressively recurring revenue is accelerating, in FY2021 it grew by 36%. 2023 is also starting to look like the growth will continue, with ARR up 57% year-on-year.
IFS Chief Financial Officer, Constance Minc, commented, “In 2022, IFS has shown resilience and consistency; despite the macroeconomic headwinds we have accelerated our growth across our key metrics for the group. Growing our cloud revenue at 80% year-on-year and our annual recurring revenue at 57% year-on-year in challenging market conditions demonstrates a level of robustness and reliability that’s a testament to our relevance and customer focus.”
While IFS affirms that this growth is powering global growth, it did not reveal any regional breakdown of the figures to indicate where it is seeing the greatest success. Anecdotally, from the announcements it has made over the last year, the powerhouse is still in Europe with many successes in the Nordics. Success in Asia and North America is less frequent, however, its A&D division is performing well in North America. IFS has had successes across most of its target industries as well, with wins such as Interwell (energy), Nowy Styl (manufacturing), Konica Minolta (field service), Nordkalk (construction), and South West Airlines (A&D). In total, it welcomes 256 net new logos to its customer base.
IFS CEO Darren Roos commented, “For IFS, 2022 was a year characterized by acceleration. We increased our headcount to over 5,900 employees, reached a significant landmark in revenue at $1bn and outpaced our competitors by delivering double-digit growth for the 5th consecutive year. Quarter after quarter, our leadership in capabilities and in time to value enabled us to build on our performance.”
2022 was another momentous year for IFS
IFS seems to be functioning well on all fronts. IFS Cloud continues to win new and even larger enterprises as customers. The twice-annual update, one in April and the second in October, saw significant improvements to the platform. It has also shortened implementations, with customers achieving time to value at around nine and a half months.
The year also saw a significant minority investment from Hg Capital in March, which valued the IFS group at $10 billion (including Workwave). Earlier that same month, it created a joint venture with BearingPoint, Arcwide, a consultancy firm focused on deploying IFS solutions worldwide. While customer stories are yet to emerge, it is partnering with other vendors, such as Silico, to complement its services.
IFS also continued to make strategic acquisitions. In July, it acquired Ultimo, an EAM provider targeted at the mid-market and a natural addition to the portfolio. Enterprise Times asked IFS for an update about its acquisitions and the organic growth percentage, but it declined to respond. It will be interesting to see how Ultimo fits within the IFS platform. Expect further details in the first release of 2023.
The company also held its first physical event, IFS Unleashed, in October, welcoming back 2,500 attendees in person and many thousands more online.
Looking forward
IFS will continue to move its legacy customers to the cloud as and when they choose to do so. For many, this will be a timing issue, and while IFS did not reveal many figures native cloud vendors reveal, such as retention and CSAT, it is presumably quite high.
Looking forward to 2023, IFS hopes to see a surge of growth in the US. It brought on board US-based John Walsh as a non-executive Director and appointed David Spencer as President for IFS North America. IFS’s Chief Revenue Officer, Simon Niesler, commented at the time, “North America is a hugely significant market for us, and we are committed to investing in all areas of the organization.”
Roos concluded, “2023 will be an exciting year as we continue to bring together our employees, our partners and our products and industry expertise across FSM, EAM, and ERP so that our customers can create value faster and deliver their best to their customers when it matters most, at the Moment of Service.”
Moment of Service is also the title of the book Roos recently published, which includes stories from clients of how they have delivered their moments of service to their customers.
Enterprise Times: what does this mean
IFS continues its growth which has no sign of slowing. Unlike some other vendors, there has been no mention of redundancies, and the company continue to grow faster than many competitors, including some cloud vendors.
It also has a continued focus on ESG, helping customers with sustainability, and it continues its efforts in Sri Lanka with the IFS Foundation. In this country, it has over 2,000 employees and is well respected.
There is no doubt that it will continue its growth trajectory in 2023. The big question is whether it will look to acquire again during the year. If so, which service line will it choose to strengthen?
