AVEVA today offered a sneak preview of its performance during the September 2011 – March 2012 portion of their fiscal year. Full results will be announced on May 28.
The wording of the announcement makes it a bit difficult to parse, with not-particularly-glowing phrases like “performed well”, “anticipate reporting full year results in line with the Board’s expectations” countering the optimism of “momentum continue[d] to build in the final quarter”and “strong finish”. Without further information, one is left with the conclusion that there was a dip somewhere in the middle that the strong finish helped push over the expected finish line. Since we know how seasonal most software businesses are (as PTC reinforced again just two weeks ago), this isn’t too surprising. The overall tone was optimistic, however, so it would appear that the momentum has carried over into fiscal 2013.
A couple of other nuggets from the announcement: demand was strongest in oil and gas; Latin American was “excellent” while Europe was “strong” and Asia Pac “recovered”, in part driven by AVEVA’s reorganization of its presence in China.
AVEVA is focusing more on its enterprise solutions business, including AVEVA NET, and expanding that business is important to both the company’s financial prospects and to securing its position with customers. AVEVA said that it won a number of new enterprise customers during the period and expanded in existing accounts, but the revenue contribution from some these has “not been recognised [sic] in the year, which has meant that the revenue backlog has grown substantially compared to last year putting us in a good position as we enter FY13.” Revenue backlog is a good thing for software companies: It’s a build-up of sales orders (in this case, probably for implementation services) waiting to be filled. Once the product is delivered or the services are performed, the revenue is recognized.
Investors, however, are lukewarm on the news and have sent AVEVA’s share price down 1% or so even as the broader London Stock Exchange FTSE 100 is up roughly a point.