Icertis has announced that its annual Recurring revenue is $250 million. It shows steady, if not impressive, growth for the company. In March last year, it revealed that it attained $200 million ARR during 2022.
While Icertis does not reveal its total revenue figures, Sacra estimated that it achieved $160 million in 2021, and that figure rose by 41% in 2022. The figure for 2023 is likely above the $250 million figure.
The AI capabilities of the Icertis Contract Intelligence platform have fuelled that growth. Over the last year, Icertis has made several announcements about its AI capabilities. In July it launched two Co-Pilots to further strengthen the AI capabilities of ICI.
AI driving growth
During 2023, 75% of deals included Icertis AI products. Where previously organisations were wary of AI and specifically generative AI, the companies that have built solutions on a strong foundation have flourished. The Icertis Co-Pilots leverage the Microsoft Azure platform, giving assurance to customers that the data is safe and the solution matures.
The Co-Pilots are enabling organisations to leverage generative AI to increase efficiency, reduce risk and lower costs for the management of contracts. In recent months, Icertis has revealed how ALPLA and Valiant Group have selected its platform.
Customers are increasingly adding new AI features to their Icertis solutions. ALPLA, Krones, and Genpact have all selected Icertis Co-Pilots to leverage the generative AI capabilities.
Heather White, Chief Legal Officer, Genpact, commented, “Icertis Co-Pilots are expected to enable Genpact to gain instant insights into key provisions in our contracts and summaries of critical details so that decision-makers can quickly and easily understand the business impacts of each commercial agreement. Coupled with our trust in the core Icertis platform, we hope to realize substantial value by responsibly applying generative AI to improve our contract management.”
Other solutions, such as Discover AI and AI Studio are also being taken up. One customer has used Discover AI to help identify clauses within contracts that enable them to raise pricing by the Consumer Price Index. If rolled out across all customers, the low-margin business would potentially gain $500 million in revenue, significantly helping the top line.
Icertis leading intelligent CLM
Icertis is one of the leading CLM platforms (Gartner) and one of the first to roll out generative AI capabilities. The ICI platform offers a mature and secure platform for enterprises, and more than 70% of its customers are above $1 billion in revenue.
Customers such as Mercedes-Benz, Best Buy, Cognizant, Lamb Weston, Murphy Oil, Qantas, and Johnson & Johnson are leveraging the platform to provide efficient contract management. AI is taking that to the next level, increasing efficiency across the process, insights from the data and improving informed decision making. The measurable benefits are substantice with improved cash flow, financial resilience and compliance. The latter is especially important in a world whose regulations are constantly changing.
Samir Bodas, CEO and Co-founder of Icertis said, “AI presents a once-in-a-generation opportunity for businesses to thrive, but AI is only as good as the data it can access. Icertis equips leaders with unmatched insights by unlocking one of their most powerful sources of enterprise data – the commercial agreements that drive their business.
“Icertis has firmly established contract intelligence as a category of AI software that is an enterprise staple, becoming the first pure-play contract lifecycle management provider to cross the $250 million ARR threshold thanks to our proven history of innovation, long-standing partnerships with Microsoft and SAP, and game changing Icertis Co-Pilots that enable tangible business value in all industries across the globe.”
Enterprise Times: What does this mean
Backed by B Capital, SAP, Eight Roads Ventures, Greycroft, and Penny S. Pritzker (PSP) Partners, Icertis is looking to grab a substantial share of the CLM market. Estimates of that market size vary wildly, with MGI Forecast estimating that it will reach $30 billion by 2026. Other estimates are more conservative with Fortune Business Insights estimates that the market was worth $1.33bn in 2022 and will rise to $3.47 billion by 2030 at a CAGR of 13%. Custom Market Insights released the most recent estimate, indicating the market would reach a valuation of $3.69 billion by 2032.
It is unclear how each of the analysts reached their estimates. Still, considering the ARR and market penetration of Icertis to date, $30 billion seems a better estimate and gives Icertis the potential to reach a significant revenue. Icertis continue to break new ground for its AI capabilities, it will be interesting to see what it unveils in 2024.
