Results IFS - Image credit Pixabay/GeraltIFS issued its results for H1 2023, and they are impressive. Total revenue rose 38% year over year to €493 million (in constant currency). The second quarter results continued the strong momentum it had in Q1. The company continues to expand its customer base and develop its product. Its latest release enhances the business resilience elements. It also acquired connecter worker vendor Poka. This brought new capabilities to enhance service management and added new customers such as Nestlé, Tetra Pak, Mars, Bosch and Rio Tinto.

Other key metrics from the results announcements included:

  • H1 FY2023 software revenue was €392m, an increase of 44% versus H1 2022
  • H1 FY2023 recurring revenue was €373m, an increase of 49% versus H1 2022
  • H1 FY2023 cloud revenue increased 55% versus H1 2022
  • Software revenue is now 79% of total revenue

Recurring revenue is now 75.6% of total revenue and increased from 71% of H1 2022. The growth of IFS is impressive and shows no sign of slowing down.

Matthias Heiden, CFO of IFS
Matthias Heiden, CFO of IFS (from April 1st 2023)

IFS Chief Financial Officer, Matthias Heiden, commented, “The ongoing macro-economic challenges mean companies are thinking carefully about their technology investments and focus on what will help build business resilience. We see this reflected in the number of customers moving to IFS Cloud and in how customers are prioritizing when and where they extend their IFS footprint.

“With annual recurring revenue up 55 per cent year on year, software revenue up 44 per cent Year on Year and our success services up 68 per cent year on year, our H1 results are signals of a robust outlook. The traction we have seen in the US in the first half of the year points to solid market penetration and that the value IFS is delivering is resonating.”

That outlook should see IFS reach €1 billion in total revenue for the full year.

Challenging times boost cloud revenues.

Over the last five years, IFS has transformed from an ERP vendor to a company with a rich product portfolio across ERP, EAM and FSM. Its industry specialisation means that it can better challenge SAP in several industries in larger firms.

Customer wins and upgrades announced during the recent quarter include Havfram, A J Foyt Racing, Bang & Bonsomer, Tosunoğlu and NCC. The IFS Cloud platform brings together the increasingly important technologies of cloud, AI, VR, RPA and IoT technology, to enable companies to deliver “Moments of Service” to their customers.

IFS continues to develop functionality with AI. It is enhancing the existing automation, prediction, and optimization capabilities. It is also looking to enhance the search capability across the platform using Generative AI.

A recent IDC Brief, Why is shaping the future for manufacturers important, noted that capabilities that improve employee and asset productivity, build business resilience, and deliver faster time to value are more likely to secure the CFO’s share of wallet.

Darren Roos, CEO, IFS (Image credit ifs)
Darren Roos, CEO, IFS

IFS CEO Darren Roos commented, “These results are the culmination of 5 years of hard work in establishing our business as a thought leader and as a partner that has the agility to respond to the needs of its customers. We have consistently been able to adapt faster to market dynamics than much larger competitors. Our 37 per cent, 5-year ARR CAGR, is a validation of our customer intimacy and focus.

“I am proud of the ongoing commitment from our employees and partners and of the trust customers have shown us. The success of our organic and inorganic growth strategies is evidenced by our results and by our rankings as leaders year after year by customers and analysts.”

Enterprise Times: What does this mean?

IFS continues to deliver success at a headline level. While little is said about an industry or geographical breakdown, Heiden’s comment about the US market is telling. It will be interesting to see whether IFS is penetrating the SAP and/or the Oracle market share in that country.

Roos has led IFS through a turbulent era of worldwide economic change. A company with a global presence when he joined. It is now firing on more cylinders as it looks to expand its market share internationally. The momentum seems to be continuing in H2 2023 with a new distribution deal in Asia and the announcement that the iconic Morgan Motor company has upgraded to IFS Cloud.

Morgan Motor company drives digitisation with IFS Cloud

 

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