ESI Group yesterday reported third quarter revenue of nearly €22 million, an increase of 25% as reported and up 20% in constant currencies. CEO Alain de Rouvray said that growth was “balanced between the various sectors and geographical zones, with a high rate of repeat business.” The majority of the Q3 growth of €4.3 million was organic, as Efield and OpenCFD contributed only €400,000 in revenue for the quarter. (IC.IDO’s revenue now counts towards ESI’s organic growth, since that acquisition closed in August, 2012. ESI doesn’t disclose it, but I believe IC.IDO’s contributes around €1 million in revenue per quarter.) The details:
License revenue was €14 million, up 23% as reported and up 19% in constant currencies.
Services revenue was €8 million, up 27% as reported and up 23% in constant currencies.
Revenue from the various geographies reflected more or less the typical Q3 spread, as Europe, Asia and the Americas respectively accounted for 38%, 41% and 21% of sales as compared with 40%, 39% and 21%of revenue a year ago. ESI notes that the slightly disproportionate increase in Asia was due to the “signing of important contracts in Japan and China in the automotive sector”.
For the year to date, total revenue was €67 million, up 23% as reported and up 18% in constant currencies.
By geography, ESI notes significant growth in Asia (revenue up 22% in constant currency), and in the Americas (up 25% in constant currencies).
ESI says that revenue from transportation customers (including automotive) was up 15%, aeronautical and space was up 35% and heavy industry, up 10%.
ESI doesn’t offer guidance as such, but M. de Rouvray did say in prepared remarks that the third quarter performance demonstrated “substantial revenue momentum across its entire scope … The buoyant revenues growth over the first three quarters of our financial year affirms our conviction that we will be in line with our multi-year development plan.” Analyst consensus is revenue of €112 million for fiscal 2013, an increase of 19% over the €94 million in reported revenue for fiscal 2012 (ended January 31, 2012). I’m thinking that’s cautious: ESI usually has a very strong fourth quarter – sometimes as much as 40% of revenue – and good momentum. But the economy is slowing in Europe, the fiscal cliff looms in North America and other engineering software providers are seeing a slowdown in Asia … Clearly, another “stay tuned”-type of release. But it’s clear that the signs for ESI, with a month into the calendar fourth quarter, are brighter than for some of its peers.
