The technology used to conceive, design and fabricate the objects around us is complicated. It may be difficult to understand if you're not a practitioner, yet businesses routinely entrust their most important processes to these tools. Our Hot Topics blog tries to clear up some of the confusion.
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Happy Monday! Did you remember to change your clock on Sunday? If you’re in the US, you lost an hour of sleep this weekend. If you’re not, please understand that your US colleagues are sleep-deprived and feeling like we’re all an hour behind. We’ll get over it. Coffee helps.
It’s the Economy …
Economic news continues its good/bad cycle. A couple of weeks ago, we learned that Q4 was weaker than expected. Last week we learned that jobs grew by a surprising 175k in February, even as the US unemployment rate went from 6.6% in January to 6.7% in February. One economist calls it a “steady-as-she-goes recovery. Not fast enough, but not easy to derail”. That survey was from the US Labor Department; another, by Action Economics, found that the economy added 157,000 jobs last month.
PLMish Deals, Earnings and Other News
It was a slow earnings week, but there was quite a bit of other news. ExOne, a maker of 3D printing machines and owner of a number of 3D printing centers, announced that it made two acquisition. The first, the Gesellschaft für Industrielle Mikrowellentechnik (MWT), is manufactures industrial grade microwaves that ExOne says will help it expand its 3D sand production systems. These ovens aren’t like the one in your kitchen. They’re big conveyor belt (or table) systems that use high frequency electromagnetic waves to excite the water molecules in sand. This drives moisture out, creating a more perfectly dried core. That improves the casting quality for the molds and improves quality and reduces cost for certain types of components. ExOne has also acquired Machin-A-Mation, a Chesterfield, Michigan, specialty machine shop to complement ExOne’s existing production facility in Troy. ExOne spent $4.8 million for MWT and $5 million for Machin-A-Mation.
Siemens Venture Capital invested $10 million in Polarion Software, creator of “the world’s fastest enterprise scale browser-based ALM solution”. ALM stands for Application Lifecycle Management, the management of the embedded software that powers many (most?) products today. Polarion Software says it has “hundred of Global 1000 companies” as customers and “over 1 million users … daily”.
ALM is a huge issue. We’re all comfortable managing component revs in bills of material. Adding software which may or may not be compatible with a particular hardware rev makes it difficult to ensure consistency and compliance across a fleet of cars, airplanes or iPhones. It’ll be interesting to see if/how Polarion’s products intersect with Siemens PLM‘s PLM solutions.
This week also saw the launch of the Autodesk Foundation to offer financial, software and training support to design-focused nonprofits that address “epic challenges” in climate change, access to water, and healthcare. Grantees so far include KickStart International, MASS Design Group, D-Rev and the Auburn University’s Rural Studio.
US Budget Continues
President Obama continued his focus on manufacturing last week, presenting a 2015 budget to the US Congress that “invests in American innovation and strengthens our manufacturing base”. This includes growing the number of Manufacturing Institutes to 45 over the next ten years (including the ones announced a week ago), and strengthening the commitment to R&D by reforming and making permanent the Research and Experimentation Tax Credit to incentivize private-sector R&D.
This budget is far from a done deal. In fact, Reuters began its news story by saying “U.S. President Barack Obama released his fiscal year 2015 budget request to Congress on Tuesday, and lawmakers will promptly ignore it.” But the President’s proposal does set an agenda and talking points — and manufacturing made it onto the short list.
Link of the Week
Do you read Lifehacker? It’s a site that posts or reposts an awful lot of stuff –everything from desktop wallpapers to how to make a better breakfast to html hacks– designed to streamline our lives. Every so often they post something really thought-provoking, like this piece on how app stores change how we look at software:
Perhaps because mobile came first, cheap app prices naturally translated to our computers. Many costly software titles became notably cheaper, bringing it into the hands of more customers.
But that lower cost hurt developers. While a free, open-source model has created some great things, many popular titles require teams that don’t come cheap. When revenue goes down because people simply decided to stop paying so much for software, it becomes difficult to maintain a well-paid team for the job.
Writer Adam Dachis muses about the effect of app stores on software purchasing, quality, reviews and more — and suggests some improvements. Be sure to read the comments, too. What do you think? Do app stores change how you view software, its pricing and availability? If you manage users, do you see app stores as evil?
That’s it — you’re good to go. Let’s be careful out there* and have an awesome week!
*Hill Street Blues reference
ANSYS keeps rolling along, relying on a mix of products and end-industries to insulate it somewhat from broader macroeconomic winds. The company reported Q4 revenue of $236 million, up 7% from a year ago, with software revenue up 4% to $148 million and maintenance and services revenues of $88 million, up 12%. For the year, revenue was $861 million, up 8%.
That’s pretty good and allows ANSYS to claim that it, once again hit revenue targets (and beat its profit target thanks to a one-time tax thingy). But it’s not great — investors expected slightly better performance and stronger guidance for 2014 and sent the share down 1% or so on the news.
- In Q4, revenue from software licenses was $148 million, up 4%. On a non-GAAP basis, revenue from the lease business was up 6% to $77 million while the perpetual business held steady at $71 million
- Maintenance revenue was up 10% t0 $82 million
- Services revenue was $7 million, up 16%
- By region, revenue from North America was $78 million, up 11% despite what ANSYS terms as “caution in certain markets”. The company says it saw little to no year-end budget flush in 2013 but has a strong sales pipeline going forward.
- Revenue from Europe was up 14% to $84 million. Germany continues to be the best performer, with revenue up 15% as reported to $25 million. ANSYS said it also saw “an increase in business coming from Italy, Spain and Russia.”
- ANSYS’ “General International Area” reported revenue of $71 million, down 6% overall as strength in Korea couldn’t stem the tide against weakness in China, India and Brazil, and a sharp 16% decline in Japan as reported, though Japan was up 2% in constant currency. During the earnings conference call, CEO Jim Cashman said that performance in Asia was both self-inflicted and external; he said that the company recently added new senior sales leadership and expects increasing sales productivity in the region to be a priority going into 2014.
- ANSYS reported 33 orders in excess of $1 million, up nicely from the 22 recorded a year ago, and up, too, from the 15 reported in Q3 2013. For 2013 as a whole, ANSYS reports closing 4 deals in excess of $10 million; I couldn’t find a comparable for 2012
- As per usual, direct sales accounted for 75% of revenue in Q4
ANSYS also tweaked its guidance for 2014 to take into account its acquisition of Reaction Design in January. The company now sees Q1 revenue in the range of $211 million t0 $219 million; for the year, ANSYS now sees revenue between $935 million and $966 million, or $1 million to $2 million higher than earlier stated. Given that Mr. Cashman said Reaction Design had revenue of about $4 million, the company sees the rest of its business a tiny bit more cautiously than it did in November. In any event, the full-year revenue forecast implies growth of 9% to 12%.
What does it all mean? In constant currencies (cc) ANSYS revenue grew 7% in Q4 and 9% for the fiscal year, with cc revenue growth in all 3 of its geographic regions for both periods. That’s just OK and, if ANSYS’ track record is anything to go by, usually precedes a major acquisition. Mr. Cashman, of course, didn’t say that; he said that he’s committed to “driving double-digit organic top line growth” without going into details. ANSYS has a large, impressive portfolio that it can cross-sell into existing accounts, and many types of simulation and price points with which to target new ones, so double-digit growth should be achievable — but it should have been in 2013, too, and that didn’t happen. Perhaps ANSYS management will share more details during its investor day on March 12.
Let’s do a little math, shall we? If we buy software at Staples for $5,000, Staples gets $5,000 and the creator of the software gets maybe $3,000 of that. Assuming we don’t buy any more, in 5 years, the vendor will have gotten just $3,000 from us. If we buy that same license from the vendor’s online store, the vendor gets all $5,000. If they can upsell us on maintenance, they get $5,000 in year one and then something like $1,000 every year thereafter. In return, they owe us updates, support and other benefits under the maintenance program. If we stick with it, the vendor might see $9,000 from us over 5 years.
So far, it works out best for the vendor if we buy perpetual plus maintenance. It may work out best for the user, too, if the maintenance is worthwhile and product updates are meaningful. But that initial, upfront payment is still pretty steep. Autodesk is betting that more people will want to buy more software if each bite costs less, say at a flat $2,000 per year for 5 years. Over the long-term, Autodesk believes that its ability to provide more value to customers will attract subscribers to its platforms, whether desktop, cloud, mobile or social; and to its products, which might be standalone solutions, suites or apps. That may be right in the long run, but it’s proving painful in the short term, as more and more buyers choose the “less out of pocket in year one” option.
In prepared remarks, CEO Carl Bass said “[w]e are at the very beginning of a platform and model transition that will propel Autodesk to the future. We are focused on driving our subscription base, annual subscription value, and billings over the next four years and beyond. As anticipated, our transformation will start gradually and we expect will gain momentum as we go forward.”
Going bigger picture, Mr. Bass said told investors that “the demand environment’s growing stronger and doing so on a fairly consistent basis worldwide [except Southern Europe]. Demand in the US and Japan is strong. By industry, we’re seeing a real pickup in AEC, a real effort around tools and people buying new tools. BIM 360 is close to our fastest growing product ever. Generally speaking, I see good stuff out there right now.”
- Revenue in Q4 (ended January 31, 2014) was $587 million, down 3% year/year (y/y). Full year revenue was $2.3 billion, down 1.6% y/y
- License and other revenue was $321 million, down 12% or $44 million
- Subscription revenue was $266 million, up 10% or $24 million
- The company estimates that customer choices favoring new license options decreased reported license revenue by $30 million, especially in the Americas and in the AEC business, while adding that to the deferred revenue on the balance sheet. The weighting towards the Americas makes sense, since Autodesk typically rolls out new programs here, first. Flagship revenue was down 13% in total, something like 10% more than the planned decline as customers move from standalone Flagship products –AutoCAD and LT, Civil 3D and Plant 3D, Inventor and Revit, etc.– to their Suites counterparts. I suppose this also makes sense, as new suites buyers opt for subscriptions and enterprise licensing agreements
- Autodesk said that, absent the effects of the business model transition, Q4 results would have shown top line revenue growth of 2% and “reflect solid demand in our AEC business segment and in the Americas”.
- CFO Mark Hawkins said that 45% of fiscal 2014 revenue is recurring, up from 41% a year ago. He said that ultimate goal is 70% recurring revenue but that “it’s early days. It’s at the beginning of the beginning.”
- By region, revenue from the Americas was down 6% to $207 million. Without the license model changes, revenue would have been up 6% y/y, with “particular strength in the US.”
- Revenue from EMEA was $229 million, down 4% y/y as reported and down 6% in constant currencies (cc). Mr. Bass said that Europe, in general, has been strong, with building momentum. There is still weakness, “particularly in Spain, France, Italy, Greece. I don’t see the momentum there.”
- Asia Pacific revenue was up 2% (up 10% in cc) to $150 million. Mr. Bass told investors that “Japan has been particularly strong and Korea continues to do well. The data out of China doesn’t always reflect what we see from our business. We’re seeing is a strong China, not overheated. I don’t think it’s at that torrid pace as before, but it doesn’t seem to be weakening either.”
- Revenue from emerging economies held at 15% of total and was $88 million for the quarter, up 5% y/y. Once again, growth in the BRIC countries was led by India
- By business segment, revenue from the Platform Solutions and Emerging Business was down 1% to $196 million as customers continue to migrate to Suites
- AEC revenue was down 5% to $196 million but still came in at the highest point of fiscal 2014. Without the license model change, revenue from AEC would have been up 8% y/y. AEC suites revenue was up 32% y/y. Mr. Bass was a bit giddy about AEC, telling investors that it “had a spectacular quarter to close out a record year. We booked a significant number of $1 million-plus transactions, including the largest transaction in Autodesk history, worth more than $20 million”, a small portion of which was recognized in Q4, and that the company booked more than 20 BIM 360 transactions worth over $100,000, including two new transactions worth over $1 million each
- Manufacturing revenue was flatfish at $154 million, also the highest total for fiscal 2014, with Suites revenue up 4% y/y
- PLM 360 was also highlighted on the call, with Mr. Bass saying that “we had our best [PLM 360] quarter ever, including our largest PLM 360 transaction to date, worth almost $700,000. Almost 25% of [Q4] PLM 360 customers are new to Autodesk and, to date, nearly 1,000 companies have deployed PLM 360.”
- Finally, revenue from the Media and Entertainment business segment was down 12% to $41 million
- Suites revenue was up 15% y/y to $216 million.
I put in the “if the license model transition hadn’t happened” data because Autodesk reported it. But it does lead me to wonder: if the customer bought an Autodesk product because they could get it at a lower cost subscription, they wouldn’t have bought it otherwise. So to treat it as if it had happened some other way makes no sense. But companies do this sort of stuff all the time … and it does allow Autodesk to tell a more positive top line revenue story.
For fiscal 2015, Autodesk expects total revenue to be up 3% to 5%, or $2.234 billion to $2.388 billion. That forecast is based on adding 150,000 to 200,000 new subscriptions (though it’s not clear what type or to what products), which will add to the 2015 top line and create billings growth of between 5% and 8% for future periods. Autodesk says it has grown its subscriber base by 26% to 1.9 million since FY09, or over 5 years; adding 10% in just one year seems aggressive. [On the other hand, one analyst on the earnings call said that he had data showing that Autodesk had added 250,000 subscribers from 2012 to 2013, which would make the fiscal 2015 goal a bit cautious. CFO Mark Hawkins sees his guidance as "prudent".]
For Q1, Autodesk expects total revenue of $560 million to $575 million, which would be more or less flat with a year earlier. This forecast does include a contribution from Delcam, but the company says this “will be muted, especially in Q1, in part due to the typical write down of deferred revenue the first year”.
One interesting thing that I just now caught (forgive me; I think it’s been there for a while). In a world of long-winded lists of brands and attributes, Autodesk positions itself this way:
Autodesk helps people imagine, design and create a better world. Everyone–from design professionals, engineers and architects to digital artists, students and hobbyists–uses Autodesk software to unlock their creativity and solve important challenges. For more information visit autodesk.com or follow @autodesk.
I like it. Simple. Elegant. And, as Autodesk leans further into subscriptions and apps, the lower cost of entry might make Autodesk’s products affordable to almost “everyone”.
Happy Monday! We hope you had an excellent weekend and that your favorite movie won big at the Oscars. Pour a cup and let’s do a quick recap of last week as we warm up to a new one.
It’s the Economy …
A strong “meh” isn’t really the news we want, but that’s what we’re getting. According to CNN, revised data from the US Commerce Department shows that economic growth in Q4 2013 wasn’t as strong as originally thought at only 2.4%. Yet, ”economists call it “impressive” given the federal spending cuts and the government shutdown in October.” Perhaps most worrisome for us is that “[b]usiness investment contributed to growth, albeit at a slower pace than in the previous quarter. ”
PLMish Deals and Earnings
It was a huge week for PLMish earnings, painting a generally positive picture — though more muted than some investors would like. 3D Systems confirmed its preannouncement, saying that Q4 revenue was up 52% to $155 million, on 34% overall organic growth. For the full year, revenue was up 45% to $513 million, on 29% organic growth.
Accelrys, the chemistry and materials modeling and simulation company that Dassault Systèmes is busy acquiring, reported that revenue for the quarter and year ended December 31, 2013 was up 5% to $47 million and up 4% to $169 million for the year, respectively.
ANSYS announced that Q4 revenue was up 7% to $236 million, a slight slowdown as revenue for the full year was up 8% to $861 million.
Autodesk reported that fiscal Q4 revenue was $587 million, down 3%, leading to a 2% decline in revenue for the year, to $2,312 million. Part of that decline is due to buyers choosing subscriptions, and Autodesk offering “flexible license arrangements [to] enterprise customers”; if these customers had bought using traditional methods, revenue would have been up 2% in Q4.
Cimatron announced record revenue for Q4, $12.7 million, up 2% year/year; for the full year of 2013, revenue was up 5% to $44.2 million.
FARO reported that revenue in Q4 was $90 million, up 11% year/year, bringing 2013 annual revenue to $292 million, up 7% .
Mentor Graphics announced that its Q4 (ended January 31, 2014) had revenue of $401 million, leading to full fiscal year revenue of $1.156 billion.
This morning Stratasys reported that MakerBot’s $25 million revenue in Q4 plus 36% organic revenue growth lifted the company to its best quarter ever, with total revenue of $155 million. For the year, total revenue was $484 million.
We’re trying to get caught up on earnings analyses — check back often this week or follow @monica_schnitge on twitter for updates.
Manufacturing Gets Respect — and Some US Government Money
President Obama last week announced two new hubs for high-tech manufacturing that bring together applied research, training and product development to address emerging manufacturing opportunities. With $140 million in Federal money, the public/private partnerships in Detroit (lightweighting and modern metals) and Chicago (digital manufacturing technologies) are intended to create new jobs, re-invigorate manufacturing and lead to economic growth. Mr. Obama said that he doesn’t want the next “big job-creating discovery to come from Germany or China or Japan. I want it to be made here in America …Typically, a lot of research and development wants to be co-located with where manufacturing is taking place … So if all the manufacturing is somewhere else, the lead we’ve got in terms of design and research and development, we’ll lose that too. That will start locating overseas. And we will have lost what is the single most important thing about American economy, and that is innovation.”
The President went on to say that “our manufacturers have added more than 620,000 new manufacturing jobs over the last four years. That’s the first sustained manufacturing growth in over 20 years. But the economy has changed. So if we want to attract more good manufacturing jobs to America, we’ve got to make sure we’re on the cutting edge of new manufacturing techniques and technologies.”
Hence, the hubs. Mr. Obama said that the hub in Chicago will be a consortium of 40+ companies, 23 universities, labs at Northwestern and the University of Illinois, and nearly 200 small businesses. It’s funded by a $70-million award led by the Defense Department, but the state and its businesses raised $250 million in private funding commitments to help win this bid”.
Siemens PLM’s Chuck Grindstaff was at the White House as President Obama made the announcement, since Siemens will be a top tier partner and PLM software supplier for the Chicago lab. (If you have a photo of Chuck in this august company, send it over and we’ll post it!)
Link of the Week
CAD/CAM managers have a tough job. As Robert Green writes in Cadalyst on behalf of CAD managers everywhere,
As CAD managers, we toil in less-than-ideal conditions. We work long hours, deal with irritated users, and have little budget or authority, yet we’re expected to make CAD/building information modeling (BIM) software work all the time. We have to help our companies meet deadlines and profit goals, while keeping all our users trained so that the wheels don’t fall off the CAD bus. It isn’t an easy or glamorous job, yet we do it because we love CAD technology and want our companies to succeed.
Read the rest of his open letter, especially if you’re a vendor. Mr. Green writes eloquently what many others have shared over a beer.
And One More Thing
I just spent a couple of days with the US Navy, US Coast Guard and the naval engineers that make their ships possible. I studied to be a naval architect and had my first real job at Bath Iron Works, so the event was a combination of “my, how much has changed” and “ooh, that’s still the same”. The military side of the US shipbuilding industry seems to be doing OK, budget messes and indecision aside. What’s stunning is the brain drain, as naval architects, engineers and designers look for more consistent work in other industries. Read more here.
That’s it. Have an awesome week!
The image of the President is from the White House blog, taken by by Lawrence Jackson.
Did you know that US shipyards built 1260 ships in 2012? And that 99% of the units were commercial while 60% of the revenue seen by the builders was from the military? Me neither — I had suspected but had no idea it was this imbalanced. I also didn’t know that the US shipbuilding industry operated at a trade surplus in 2012, and has for 6 of the last 10 years. That’s a lot better than I had thought.
Last week I attended the American Society of Naval Engineers (ASNE) annual meeting to learn how much has changed in the (ahem) years since I last worked in the industry. It’s still true that the military and commercial worlds in the US industry don’t often overlap, creating a tiered builder and supplier ecosystem. At the huge end (aircraft carriers, submarines), that’s understandable. No one can sustain the infrastructure needed to build a carrier without certain knowledge of getting that contract. But the industry can’t survive if more contracts aren’t made accessible to the tier 2 and tier 3 yards, on their own or, more likely, under teaming arrangements.
The US military still controls much of the momentum in the industry. It, in turn, is at the whim of legislators in Washington who play with budgets as if they were merely paper things with no consequences. Executives of Bath Iron Works and Ingalls Shipbuilding said that they can’t invest in their facilities, the way a car manufacturer upgrades a production line every couple of years. They can’t assure continued employment to their workers, so have a hard time keeping training levels high. They also don’t see the efficiencies other industries see when they build more than one of something.
“Affordability” was a key theme of the event, as Navy and Coast Guard officers all spoke about maximizing value for taxpayers. A new focus is looking at vessels from the perspective of total cost of ownership, and making decisions early in design to minimize cost over the long term. Over a 50 year life, a ship is planned and designed for 10. She’s under construction for another 3-5 (much longer for aircraft carriers). For 35 years, then, she sails. She’s on a periodic maintenance plan, which may be carried out in a Navy or commercial yard, in the US or overseas. Missions change, as do staffing and many of the onboard systems. The Navy is gathering data required for future tradeoffs, but it’ll be years before their procurement teams can make ship-wide analyses.
Cost is important but, bottom line, each vessel must meet its mission objective — and that’s getting harder to define. Troop carrier today, deliverer of humanitarian aid tomorrow, America’s military muscle someday … The Navy and Coast Guard are looking at building flexible platforms that can be customized to suit changing mission parameters. This modularization affects all phases of design, procurement, construction and maintenance during a ship’s potential 50-year life. Try to think through what you’d want your car to be and do in 50 years, and you get a sense of the problem: too much is completely unknowable, yet these Rear Admirals are charged with giving their command exactly what’s needed, when needed. Mind-boggling.
For the last couple of years Siemens PLM has hosted the Global Shipbuilding Executive Summit (GSES) as an adjunct track to the main ASNE meeting. GSES brings together the military, commercial shipbuilders, equipment suppliers and others to brainstorm about the biggest issues facing the industry. My table included shipbuilders, the US Navy, the US Army (yup) and suppliers. Our challenge was to look at shipyard production from the perspective of material flow optimization and simulation, and tie this to operations and the supply chain. We didn’t solve any problems in the couple of hours we spent together, but suggested areas for further investigation.
Siemens PLM kicked off the GSES with a presentation by Hein van Ameijden, the Managing Director of Damen Schelde Naval Shipbuilding in Holland, who shared his perspective on how the US industry could, and needs to, do better. Mr. van Ameijden told us that the he can build a destroyer for 1/3 of what it costs in the US because Damen Schelde has been investing to lower its price per ton (one measure of efficiency) since the 1990s. Advanced manufacturing methods, parts commonality –even across hulls for different buyers– and a highly trained workforce enable Damen Schelde to be competitive without the government subsidies that prop up the US industry. Mr. van Ameijden encouraged the audience to do cost-based trade-offs as early as possible in the design; look at teaming arrangements to remove a competitive dynamic that can raise prices; consider changing from military standards to commercial class standards for ready availability of everything from steel to spare parts; and streamline military acquisition to remove the burdensome requirements. If you’re not in the industry, it’s probably not obvious, but these are very controversial statements that get at the heart of what may be wrong with how it’s currently done here.
In all, it was a fascinating couple of days. I met with builders, contractors, the Navy, specialist software providers and many others. I’m still trying to process it all but have to highlight two things: First, this budget idiocy has to stop. A continuing resolution means that nothing can cost more than the year before; if a ship needs more repair or refit than the one last year, work stops. With sequestration, when the money runs out, work stops. The president of Ingalls Shipbuilding says he needs to hire 1,000 electricians; who’s going to want that job today, if it could be gone in October with the next budget negotiation?
Second, today’s Navy and Coast Guard rely on sophisticated systems to operate every aspect of their ships. You want mechatronics? Think aircraft carrier. The $15 billion USS Gerald Ford is under construction now at Newport News: 1,100 feet long, 250 feet tall with 25 decks, all powered by a nuclear reactor. Many of the issues are the same as in other industries: getting one system to talk to another without human intervention; keeping it all open enough for government agencies and contractors to work on, yet protected from hackers and espionage; managing software versions across a fleet at different maintenance levels. But then add in the fact that it’s a warship that must keep going even when damaged, powered by a nuclear reactor so the consequences of a failure could be enormous … This complexity dwarfs many others in our PLMish world.
Make no mistake; American shipbuilding is in dire straits. But there do seem to be glimmers of hope that technology can improve its competitiveness on the world stage. Most troubling is that we may have already lost the battle for skilled workers. If Congressionally-mandated, un-economic building can’t keep a critical mass of naval architects, engineers and designers employed, the industry will source designs elsewhere, and that’s what’s happening more and more often. More about that and the commercial side of North American shipbuilding in a post sometime soon.
Note: Siemens PLM graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.
Image is courtesy of the US Navy: U.S. Navy photo by Mass Communication Specialist 1st Class James Kimber/Released.
Earnings news is coming fast and furious this week. This morning, 3D Systems announced that Q4 revenue was up 52% to $155 million, on 34% overall organic growth. But, as preannounced a couple of weeks ago, the product mix was not as anticipated, leading to lower than expected profits for the quarter.
For the full year, revenue was up 45% to $513 million, on 29% organic growth.
CEO Avi Reichental said in prepared remarks that “[c]ompared to our late quarter expectations, we are disappointed that our stronger order book didn’t convert to higher revenue, but instead, resulted in a near doubling of last quarter’s backlog. Despite our higher growth, certain revenue categories fell short of our expectations and the concentration of new product announcements deferred sales and suppressed expected gross profit margin for the quarter.”
Mr. Reichental stuck to his revenue goals, saying that the company plans to “double our revenue over the next couple of years”. For 2014, that translates to expected revenue in the range of $680 million to $720 million.
Lots more after the earnings call.
Last night Autodesk, today ANSYS and Cimatron — oh my. There’s lots more to say about Autodesk’s results but, as a lead-in to Cimatron, Autodesk CEO Carl Bass said the following about its recent acquisition of Delcam: “All of a sudden the manufacturing part of manufacturing is getting interesting again — looking at new ways of manufacturing and getting competitive advantage instead of driving costs out. Delcam is ideally positioned to help with that, to actually drive the machine tools on the factory floor.”
On to Cimatron. The company reported record revenue for Q4, $12.7 million, up 2% year/year; for the full year of 2013, revenue was up 5% to $44.2 million. CEO Danny Haran said in prepared remarks that revenue growth in constant currencies would have been 3.2% for the year. Cimatron provides more details on its earnings call, so I’ll update after I’ve had a chance to listen to it.
ANSYS also reported Q4 and 2013 results this morning. Q4 GAAP revenue was $236 million, up 7% as reported and smack in the middle of its guidance for the quarter. Full year 2013 revenue was $861 million, up 8%. License revenue was $148 million in Q4, up 4%, in Q4 while maintenance and service revenue was $88 million, up 12%. The company usually provides a lot more detail, but that’s not online yet so come back later for more.
ANSYS also revised its guidance for 2014, not looking for Q1 revenue of $211 million to $219 million. For the full year, it now sees GAAP revenue in the range of $935 million to $966 million — that’s a slight tweak from the $934 million to $964 million announced a couple of months ago.
Autodesk just reported that fiscal Q4 revenue was $587 million, down 3% as reported, leading to a 2% decline in revenue for the year, to $2,312 million. Part of that decline is due to buyers choosing subscriptions, and Autodesk offering “flexible license arrangements [to] enterprise customers”; if these customers had bought using traditional methods, revenue would have been up 2% in Q4.
We need to parse that and the rest of the announcement, so there’ll be lots more after the earnings call. In the meantime, the highlights:
- Revenue from suites was up 15% to $216 million
- Revenue in the Americas was down 6% to $207 million; from EMEA, down 4% to $229 million; from Asia Pacific, up 2% to $150 million. Revenue from emerging economies was up 5% to $88 million and represented 15% of total revenue in the fourth quarter.
- Revenue from Platform Solutions and Emerging Business (PSEB) was down 1% to $196 million; from the AEC segment, revenue was down 6% to $196 million; revenue from the Manufacturing business segment was flat at $154 million. Revenue from the Media and Entertainment (M&E) business segment decreased 12 percent to $41 million, compared to the fourth quarter last year.
Growth rates above are as reported, year/year. Autodesk provides constant currency and “if the license model transition weren’t happening” comparisons, too, that paint a muddier picture. More on that tomorrow.
Autodesk forecasts 3% to 5% revenue growth in fiscal 2015, including the Delcam acquisition that closed a few weeks ago. That’s roughly $100 million, right about what Delcam might have seen as an independent company — in other words, without Delcam’s added revenue, Autodesk’s license model change (and perhaps other effects) would have causes an unpleasant decline in total revenue.
For Q1, the company sees revenue between $560 million and $575 million, roughly flat with a year ago.
Stay tuned …
Accelrys, the chemistry and materials modeling and simulation company that’s currently a Dassault Systèmes acquisition target, just announced that revenue for the quarter and year ended December 31, 2013 was up 5% to $47 million and up 4% to $169 million for the year, respectively.
A really bare-bones news release, probably because of the pending deal with DS, and no earnings call. Presumably, we’ll learn more when the acquisition closes.
As you may know, I’ve been blogging over at the PTC Creo website, trying to address the issues CAD users and managers ask about most often. This week’s post explores what to do if you find yourself with too many CAD systems. A surprising number of CAD managers wind up with some of this, some of that and a couple of licenses of a third system sitting on a shelf, just in case a particular customer places an order. What an incredible waste of money and brainpower!
Head on over and get in on the conversation.