NewsExa Corporation reported lackluster results for the quarter that ended January 31, 2013, but says that business has already picked up, leading to optimism for fiscal 2014.

CEO Steve Remondi told investors that the budget delays seen in FQ4 are largely behind them and that a significant portion of the revenue expected for FQ1 is already booked.

Exa reports signing 45 new customers in fiscal 2013, including 15 ground transportation OEMs (3 automotive, 2 highway truck, 8 off-highway, and 2 train), a dozen suppliers to ground transportation OEMs and 5 accounts in new market like aerospace.

The details:

  • Q4 revenue was $13.1 million ($13.2 million a year ago) as customers”became guarded in their spending” which led to longer sales cycles towards the end of the calendar year.
  • Revenue came in at the lower end of Exa’s guidance but expenses were up as the company invested to grow its sales and field engineering teams, so the company reported a net loss of $0.3 million.
  • Mr. Remondi said that, while these investments didn’t lead to the expected revenue growth in F13, “we firmly believe that these additional investments position us strongly to improve revenue growth in fiscal 2014 and beyond”.
  • License revenue was $10.6 million, up 5% as reported and up 7% on a constant currency basis.
  • Project revenue was $2.5 million, down 19% from an unusually strong Q4 2012 and up 10% sequentially. That sequential info is unusually important, as Exa typically begins with a new customer by carrying out a project with and for them; license revenue usually follows. A lack of project revenue, therefore, could be bad in the current period and in looking forward at coming quarters. Last quarter’s year/year comparable doesn’t seem particularly significant.
  • On a geo basis, total revenue was split 46% from Europe; 23% from the Americas; and 31% from Asia. That’s pretty much consistent with recent trends. Japan was singled out as “challenged” through year-end, but Exa expects to see a ramp-up as those customers enter their new fiscal year next week.

For the full year, revenue was up 6% to $48.9 million. License revenue was $41.2 million, an increase of 6%, while project revenue was $7.7 million for fiscal 2013, up 8%. The split by geo was 45% from Europe; 24% from the Americas; and 31% from Asia.

Mr. Remondi is optimistic about fiscal 2014, saying that “the expected return of customer spending in the new calendar year appears to be materializing”. He told investors that, of Exa’s top 10 customers, only 1 didn’t increase their usage of Exa’s solutions in Q4 — that, plus the generally high level of renewals leads Mr. Remondi to believe that revenue growth will “reaccelerate” in fiscal 2014.

Exa continues to invest in R&D for new industries like oil & gas, the user experience (automation), optimization, solvers and an enhanced cloud offering across all products. The cloud product is currently in early beta, but will be released later this year.

For FQ1, Exa expects its typical seasonal decline from Q4 to Q1, or revenue in the range of $12.1 million to $12.5 million, which would be an increase of 7% to 11%. For the year, the company expects total revenue of between $55 million and $58 million, up 12% to 19%.