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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Autodesk reported results last night that show its transition to subscriptions is picking up steam. Total revenue was up 11% to $618 million, knocking both its own forecast of around $600 million and the investment analyst consensus out of the park. Delcam, acquired roughly a year ago, contributed approximately $14 million but would have been factored into in management’s guidance. It was subscriptions that made the difference, up 15% year/year, adding 121,000 new subscriptions (maintenance, rentals and cloud)in fiscal Q3 and is on-target to add 325,000 to 375,000 net subscribers this year, up from earlier forecasts of 200,000 to 250,000. That’s a 50% overage; I’ll be at AU in a couple of weeks to learn why and when customers are switching to subs. One thing to note: Subscriber data got a one-time bump because Autodesk decided to begin including Delcam subs in its count; that accounts for 25,000 of the company’s 121,000 added in FQ3 — but 96,000 ex-Delcam is still a solid number in any event.
In all, Q3’s strength led the company to raise its forecast for fiscal 2015 (ending January 31). Autodesk now sees revenue growth of between 9% and 10% for the year, as compared to earlier predictions of 7% to 9% growth. That means a Q4 forecast of revenue between $640 million to $655 million.
AEC was the standout segment, with revenue up 17% to $217 million, as suites revenue grew 23% year/year. Manufacturing segment revenue increased 1% to $170 million while revenue from the Media and Entertainment segment declined 2% to $43 million. Finally, revenue from Platform Solutions and Emerging Business segment were up 3% to $188 million.
By geo, revenue from the Americas increased 11% to $231 million; EMEA revenue was up 17% to $238 million and revenue from APAC increased 5% to $149 million (all as reported). Revenue from emerging economies represented 15% of total revenue in FQ3, about on par with earlier quarters.
CEO Carl Bass said in a press release, “Strong billings and revenue growth was driven by strength in several areas including suites, our Architecture, Engineering and Construction (AEC) and Manufacturing business segments, large deal activity, and double-digit growth in all three of our major geographies on a constant currency basis. We continue to make meaningful progress in our transition to a more recurring, subscription-based business, adding approximately 121,000 subscriptions and more flexible enterprise license agreements. As a result, deferred revenue increased significantly to a record $1 billion. These strong results have led us to raise our outlook for billings and revenue for fiscal 2015 for the third time this year.”
I think those flexible enterprise agreements mentioned by Mr. Bass have a lot to do with jumpstarting growth — but more to come once I’ve parsed the details.
What a difference a year makes! At the 2013 NX CAE Symposium, Siemens introduced its LMS acquisition to long-time NX CAE, NX Nastran and Femap users; this year, LMS’ products turned up in nearly every presentation, highlighting the important integration of 1D and 3D simulation with test and PLM. Rather than trying to explain what LMS’ portfolio brings to the table, Siemens let its customers explain how it all fits together for both model-based engineering and the enterprise as a whole.
Presenters spoke about their particular design challenges and integrating simulation earlier and more often into their processes, moving away from digitizing bend-and-break to actually exploring design alternatives early enough for them to have an impact on the final decisions. One company* highlighted the use of LMS Imagine.Lab Amesim in proposal writing, for very early what-if analyses. That’s an awesome idea: Why offer to do something that’s not economically or technically possible? Why spend a lot to figure this out, with more complicated 3D tools, if the contract might not ultimately be awarded to you?
Other speakers covered Model-Based System Engineering (MBSE), a concept which has an official definition but is still a fuzzy, ill-defined idea for many. Everyone can agree, though, that MBSE is a worthy approach, saving time and money and improving quality — if only we can get there. MBSE models are complex and take time to build. One speaker, therefore, suggested his company’s approach: building high-level models to keep “on the shelf”, ready for use when needed. His point: adding details and modifying models is faster than building them from scratch, leading to greater agility and customer responsiveness.
The return on investment in CAE is a function of this reuse, but also of increasing familiarity with the tools offset by the growing complexity of the systems being modeled; that’s too hard to quantify, so most organizations no longer seem to be trying. We used to hear a lot of “didn’t build and crash 5 prototypes so save thousands of dollars” — not this time. Today, CAE is used to be more creative, validate assumptions, reach new opportunities and do it all more quickly. Companies are setting performance targets for their products and then modeling and simulating until they get as close as possible, in a multidomain world that encompasses cost, function, safety, manufacturability and many other factors. These iterations enable engineering teams to make the best possible decisions by knowing the impact of any particular change, well before it’s made in the physical world.
Siemens PLM didn’t make any earthshaking announcements during the event, but did give a further glimpse into its simulation and test product strategy — and it’s just what you’d expect, given the breadth of the portfolio. Jim Rusk, Sr. VP Product Engineering Software told us that we should think of NX as an innovation platform; design, simulation, mechatronics, manufacturing line design and so on, are all apps in that environment. NX 10, available in December, includes
- multiphysics improvements such as structural/thermal interactions with 1-way & 2-way coupling
- enhancements to let users solve coupled problems on the same mesh, with common element types, properties, boundary conditions, and solver controls
- a new expression management system for describing complex boundary conditions, and
- adaptive meshing for improved solution speed and accuracy
among many other things, like a touch interface — go here for a more comprehensive list.
Mr. Rusk laid out a timetable for the integration of NX and LMS tools, but was clear that this was not intended to exclude third-party solutions: “Openness is key, and has been part of our strategy all along. We have good, longstanding relationships with other [commercial] providers.”
Back to the Siemens portfolio. Siemens continues to bring LMS and NX together, and is devoting a lot of resources at areas like complex acoustics and fluid-structure interactions. You may recall that LMS bought Samcef just before Siemens bought LMS; in NX 10, Siemens introduces a new NX CAE environment for the Samcef solver to model composite delamination and calculate ply stresses due to vibration. Even better: integration between NX, Samcef and Fibersim, so that composite models designed in Fibersim can be analyzed in Samcef. The overall plan builds on the LMS Virtual Lab / NX CAE workflows introduced in 2013 (NX 9) and extends out to 2018 (NX 13), and includes the integration of acoustics, MBD, durability and NVH. Said Rusk, “when we’re done, we’ll have market leading capabilities.”
I think Siemens PLM already has market-leading capabilities in many areas, but they’re not yet well integrated where they cross brands. That’s only to be expected — LMS and Siemens co-existed but were not particularly closely aligned before the acquisition and it takes time to bring together such established tool sets. The goal, however, is clear: create a closed-loop, systems-driven product development environment, which defines, validates and tracks performance requirements to make sure that the product that hits the street/shelf/skies is what the customer wants.
One user said it better than I can: “No software will do everything. The ones to choose will work well together and be best at what they do.” Siemens is serious about this, investing in best-of-breed solutions and knitting them together, while making the technology better, more capable and easier to use.
* Siemens PLM asked me not to identify which customer presenter said what. Take a look at the agenda to see, in general, who spoke.
Image above is of the Queen Mary, the venue for the 2014 Siemens CAE & Test Symposium. If you’re in the Long Beach, CA area, the Queen Mary is worth a visit. Much of it is open to the public for free but a $10 tour can make her come alive for you.
Note: Siemens 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.
Cimatron just reported results for Q3. Revenue was up 8% year/year to $11.2 million, making it the 18th consecutive quarter with year/year revenue growth in constant currencies. The company has been pressured to articulate a strategy for additive manufacturing, for competing with Delcam (now part of the Autodesk family), and for using cash for dividends vs. acquisitions — it’s good to see that all of these factors aren’t distractions from growing the business.
CEO Danny Haran said in the earnings press release, “The solid year-over-year revenue growth in the quarter came from both our product lines and from both new license revenues as well as maintenance revenues … Our product rollout for 2014 is progressing as planned. CimatronE version 12 was released in Q3 to growing acclaim for its many new capabilities. The next milestone is the GibbsCAM 2015 release towards the end of the year.”
The company will provide more details during its conference call. I’ll be in the air and will update after I listen to the replay.
We take a break from our earnings and conference coverage for a space update: Rosetta’s little Philae probe has landed! Philae sent back this picture, taken from a height of 3 km just before it landed at around 11AM ET:
All sorts of cool images and video are here: http://new.livestream.com/esa/cometlanding and http://www.esa.int/Our_Activities/Space_Science/Rosetta.
It’s possible that this wasn’t the smooth landing everyone was looking for. CNN says the lander may have bounced — but it doesn’t seem to matter, since Philae is sending data. In fact, the lander is tweeting:
I probably would have taken a nap after such a dramatic arrival, but whatever. If Philae wants to tweet, I’ll tune in.
Why does this landing matter? If we can learn what makes up a comet and how it interacts with solar wind, we can refine our models about the formation of the universe. But it’s even better than that: Because comets apparently pose tough engineering challenges: very low gravity; composed of ice, dust and rocks; irregular shapes; hard to predict. A ten year journey to a tiny dot in space. Even if the landing bounced, this judge gives it a 10. W00t!
Top image courtesy of ESA; bottom is a screen capture of Philae’s twitter account. Not sure how to assign rights to that … If you know, tell me and I’ll fix.
AVEVA today announced fiscal H1 2015 revenue of £86 million, down 21% year/year — basically as announced in October. The good news: no new bad news.
I still need to parse the details, but at a high level:
- The company reported strength in China, India and parts of EMEA, offset by weakness in the key markets of South Korea and Brazil.
- AVEVA Everything 3D (aka E3D) is “now a meaningful contributor to revenue, with an acceleration in larger deals during the period” — hope to find out more about that since customers at AVEVA’s user conference last month showed huge interest but are slow to roll out the new generation product. often alongside PDMS.
- The press release includes this teaser: “Negotiated new multi-year deals with Global Accounts at improved pricing, with AVEVA E3D an important driver”. E3D has premium pricing and it’s great to see that the price held even though AVEVA must have pushed pretty hard to close deals, knowing that H1 was going to massively disappoint investors.
- AVEVA has put in place a cost containment program that is expected to generate about £10 million in savings in H2.
CEO Richard Longdon is quoted in the press release as saying, “Whilst the first half financial performance has been disappointing, the underlying fundamentals of the business have not changed given our market leading technology and long-term customer relationships. Despite the macro-economic environment, there are a number of steps we are proactively taking to ensure that we remain focused on long-term growth in revenue and profitability. We continue to maintain a strong balance sheet, with high levels of cash generation and highly defensible positions in our chosen markets, all of which are underpinned by long-term structural growth drivers. As a result, we anticipate achieving a result in the current fiscal year in line with the Board’s expectations.”
It looks as though London City analysts are modeling revenue of about £220 million for fiscal 2015, which would be a 7% decline year/year. In case you’re wondering how that’s possible, AVEVA’s revenue has historically been weighted very heavily towards H2, enabling it to make up some ground — sales of E3D should also help boost H2.
More when I’ve had the chance to go over the investor materials and briefing.
I’m on a plane, making my way to the Dassault Systèmes 3D Experience Forum in Las Vegas. You, however, have Wifi so connect your speakers and groove to this lovely video:
Bentley showed this last week at the start of the Year in Infrastructures Awards Banquet, and it got the house … happy. The video, commissioned by the Institute of Civil Engineers and Bechtel, shows some of London’s infrastructure projects, including Crossrail, Queen Elizabeth Olympic Park, the Thames Barrier, parts of the London Underground and Kings Cross Station. The point: engineers make a difference and have fun, too. Someone from Bentley told me that the Institute created the video to get young people interested in a career in engineering — some of the “dancers” are actually quite famous in UK civil engineering circles. To me, it’s a bunch of people grooving to “Happy” by Pharrell Williams. How can you not?
Serious content coming soon. Dance while you can!
So, it’s 11 PM here in London, Bentley’s Year in Infrastructure winners have been announced (and they’re partying hard downstairs — congrats to you and all of the finalists; it was a tough, tough contest) but back in the real world, PTC announced results for Q4 and fiscal 2014. There’s no way I’m able to parse this to any level of detail right now , so here are the highlights:
- GAAP revenue in Q4 was $367 million, up 6% year/year
- In Q4, the non-GAAP revenue contribution from acquired businesses Enigma, NetIDEAS, ThingWorx, Atego and Axeda was $16 million. Since GAAP and non-GAAP were within $1 million, this means organic revenue grew about 2%
- Back to a composite view: license revenue in Q4 was $113 million, up 7%
- Services revenue was essentially flat at $72 million
- Support revenue was up 9% to $182 million
- Details on license vs maintenance, geos, etc. to come.
- For the year, GAAP revenue was $1,357 million, up 5% as reported. Acquisitions accounted for $24 million in non-GAAP revenue; excluding those, revenue was up 3% over fiscal 2013.
In the earnings press release, CEO Jim Heppelmann is quoted as saying, “[In Q4] PTC non-GAAP revenue and EPS exceeded the high end of our guidance range, driven by solid performance across multiple businesses and geographic regions. Non-GAAP license revenue of $113 million increased 7% year over year on a constant currency basis. From a geographic perspective, on a constant currency basis, non-GAAP license revenue in Europe was up 28%, in the Americas was up 14%, in Japan was up 7%, and in the Pacific Rim was down 29% … For the second straight quarter we saw strong growth in our core CAD and Extended PLM (EPLM) businesses. EPLM license revenue grew 11% year over year on a constant currency basis driven by growth in our ALM business versus a soft compare in Q4’13. CAD license revenue was up 9% year over year on a constant currency basis, helped by strong growth in sales of Creo modules, eLearning, and a multi-million dollar license purchase of one of our heritage products.” [Might that be my old friend, CADDS?]
PTC also gave guidance for fiscal 2015, saying it sees “indications of a slowdown in manufacturing activity in Europe, Japan, and China, which may result in fewer large deals and mega deals in FY’15 relative to FY’14. These challenges notwithstanding, we are encouraged by an expanding pipeline of opportunities, particularly in our SLM & IoT businesses, which are less tied to macroeconomic trends in the manufacturing space.” Cutting to the numbers, Q1 non-GAAP revenue is projected to be between $310 million and $325 million, while full-year fiscal 2015 revenue is targeted at $1,365 million to $1,385 million, slightly better than flat-ish.
Topic switch. It’s Guy Fawkes night here, when Brits light bonfires and fireworks to commemorate the day in 1605 when (yup) Guy Fawkes and his friends tried to blow up the House of Lords here in London to kill the king and put a Catholic on the throne. The plot failed, and the fireworks are a celebration of the fact that King James I survived (and presumably, the Lords did too). My phone’s weather app has a fog warning for London, as the bonfires and fireworks will create dangerous driving conditions. Who knew??
More to come when there’s time.
ANSYS just announced that revenue for Q3 was $234 million, smack in the middle of its guidance but still below Wall Street expectations, so expect the share to open down a bit today. Also likely to not help with the share price: Q4 guidance of $243.9 million to $251.9 million, versus expectations of over $260 million. In its Q2 earnings release, the company had seen 2014 total revenue of between $937 million and $954 million; today, it lowered that target to GAAP revenue in the range of $926 million to $934 million. Why? A “softening in the Company’s European business, weakness in sales from the Company’s independent channel partner in China and the strengthening of the U.S. Dollar. The strengthening of the U.S. Dollar accounts for approximately half of the fourth quarter revenue guidance reduction.”
I’m in London at the Bentley Year in Infrastructure conference so will have to do a more detailed writeup later, but here are the quick highlights:
- Total revenue was up 10% year/year to $234 million
- Software revenue was up 8% y/y to $140 million
- Maintenance and service revenue as up 13% to $94 million
- In Q3, ANSYS saw “double-digit [revenue] growth in both North America and GIA [the General International Area], offset by weakness in Europe, most notably in Germany. The key financial metrics of the business … were in line with or better than management’s Q3 2014 outlook and continued to demonstrate solid financial performance with the fundamentals of the business model remaining
More when there’s time to listen to the earnings call replay.
Yesterday marked the start of the 2014 edition of Bentley’s Year In Infrastructure conference. COO Malcolm Walter told us that he counted over 100 cranes while looking out the window at Bentley’s London offices –and I can see something like 20 from my hotel room window– so it’s clearly the place to hold a conference on all things building/civil/mining/plant/offshore.
My day started early, as the plant/process/offshore jury revisited the finalist projects in our categories and got ready for the presentation sessions today. Once again, I’m so impressed with how seriously everyone takes this process: the entrants work so hard on their projects and on getting their submissions together. The juries try hard to understand the projects and what makes them unique and creative. Bentley shepherds us all along, trying to keep the process on track. Today, it all comes together as the finalists get one last chance to impress, then we hand over our decisions and wait for tomorrow night’s banquet. It’s a big deal to make it this far, and all finalists are to be congratulated.
Bentley also held a press/analyst briefing yesterday afternoon. You can track it as it happened by checking my Twitter feed (@monica_schnitge) or searching for the #YII2014 hashtag. Highlights included
- a refresh of the Bentley product portfolio under the CONNECT Edition badge that’s a hybrid desktop/cloud/on-premise/mobile computing environment and a cleaner UI, while still supporting the MicroStation V8i DGN file format
- tighter integration with Trimble for construction modeling –temporary works, sequencing, fabrication detailing, workface planning, construction work packaging and so on– to make the design to construction hand-off more efficient
- integration of Bentley’s point-cloud technology with Siemens’ Tecnomatix for realistic simulation of industrial manufacturing plants
- the introduction of MineCycle, new products to help the mining industry with mine planning. Not my area of expertise, but I had breakfast with some of the team today and learned that MineCycle Designer, Survey and Material Handling helps mining engineers figure out how to exploit the natural resource while taking into account all sorts of real and anticipated conditions. The way the product was developed is also interesting: Bentley worked with a syndicate of industry players to direct the project, giving them direct input into the what, how and when of the software’s definition
Lots more to come, but now I’m off to a lot of gnarly project presentations. Good luck to all!
Image courtesy of flickr user DJ Leekee /Lee Smith.
Mensch und Maschine Software, Autodesk’s largest European reseller but also a software developer in its own right, just announced Q3 results that were, well, darned good. Revenue was up 14% year/year (y/y) to €32 million. Revenue from the company’s own software was up 11% for the quarter to €8.6 million, while the VAR business contributed €23.7 million, up 16%.
MuM doesn’t release many details on its proprietary software business but from investor presentations, we can infer that the business is about 80% CAM (Open Mind), which amounts to about 25% of the entire business’ revenue.
As we would expect, the software business is by far the most profitable, contributing half of the company’s gross margin even though it accounts for just over a quarter of total revenue. MuM says the software line typically has margins of 17% to 10%, with a target of 22%; the VAR business, in contrast, typically has margins of under 10%. No surprise, then, that MuM is investing in Open Mind, DATAflor (landscaping) and escad (building automation; licensed back from Autodesk).
MuM CEO Adi Drotleff, MuM CEO said in a prepared statement that the “positive business development during the first 9 months makes us confident that the ambitious targets for fiscal year 2014 should be achievable. So, from this actual point of view, sales are expected to be in the order of magnitude of €140 million (+11%). The Q4 sales target thus is €37 million (+14%).”
MuM represents a decent chunk of Autodesk’s business in Europe. If Autodesk can grow across the board as rapidly as did MuM’s VAR business, that would mean Autodesk, too, had a very good quarter. We’ll know more when Autodesk reports sometime in late November.