Schnitger Corporation

ESI’s new services strategy pays off; Q1 up 20% as reported

EarningsESI yesterday reported that Q1 revenue was up 20% as reported, with a healthy boost from currency effects. Even so, constant currency growth was strong, with license and services revenue each up 10%.

The company doesn’t offer much color on its results, but this appears to be a significant and positive change from a year ago. Recall that ESI shifted its services focus to helping customers add more simulation into their product development processes. That seems to have led to increased services engagements and to higher license revenue, reversing the Q1 stall seen a year ago to solid growth in Q1 2015/6.

The details for the quarter just ended:

CEO Alain de Rouvray commented in the press release that Q1’s “very good performance, in line with our expectations, attests to the solid sales momentum at the beginning of the fiscal year across all our business activities … Our disruptive offer enables simultaneous multi-domain optimization all the way to the virtual pre-certification of our customers’ innovative products. The continued rollout of our virtual engineering products, combined with our recent, future-oriented acquisitions, gives us confidence in the success
of our short- and medium-term corporate development plans.”

About those acquisitions: ESI announced that it had snapped up Ciespace, CIVITEC and Picviz during the quarter. I’ve asked how these companies contributed, if at all, to the reported growth and will update later with what I find out.

UPDATE 8 June: The acquisitions will be consolidated into the Q2 financial reports.

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