AEC earnings recap: CQ1 was middling to strong

May 18, 2016 | Hot Topics

I’ve been writing about a lot of the PLMish companies that focus on the automotive, aerospace and other discreet manufacturing industries and not devoting enough “ink” to AECish vendors — many of whom are doing incredibly cool things. So here’s a recap of recent AECish earnings that you need to know about:

AspenTech, which makes chemical process simulation and oil industry supply chain modeling solutions, reported results for the March quarter, its fiscal Q3. Total revenue of $119 million was above the high­ end of the company’s earlier guidance. AspenTech started moving its customers towards a subscription model a couple of years ago and so includes a number of its own metrics in the quarterly results; one such is Annual Spend, which is the annualized value of recurring term license and its maintenance business; that stood at $431 million at the end of FQ3, up 5% year/year and flat sequentially — not bad when a huge chunk of the company’s business relies on the oil industry. AspenTech expects FQ4 revenue to be between $111 million to $114 million; for the full year, the company raised the low end of our guidance a bit, to total revenue of $469 million to $473 million since FQ3 turned out OK.

No, as far as I know, Bentley Systems hasn’t IPOed yet. We all continue to stay tuned.

Nemetschek‘s Q1 results were solid, led by continued growth from the acquired Bluebeam brand. Total revenue was €77.7 million in Q1, up 17% (up 16% on an organic basis). Software license revenue was up 17% to €40.3 million, recurring revenue (ie. maintenance) revenue was €33 million, up 16%. Revenue from the Design segment, Nemetechek’s historical strength, was up 12% to €51 million on good contributions from “practically all regions and brands”. Revenue from the Build segment was up 41% to €19.5 million on contributions from the acquired Bluebeam and Solibri brands. The Manage segment reported revenue of €1.5 million, up 13%. Finally, revenue from the Media & Entertainment segment was flat-ish at €5.2 million. Nemetschek reiterated its guidance for 2016 of revenue of about €319 million to€325 million.

What Nemetschek is doing is very, very interesting. It’s reinventing itself from the architectural CAD-to-BIM vendor we’ve all know, the maker of Graphisoft, Allplan and Vectorworks, to offering a much broader set of offerings for the building design/construction/operation market. Each acquisition lets it go back to customers that span some or all of this world, to cross-sell Bluebeam or Solibri products, but now backed by a global parent.

Trimble comes at AEC from the opposite end: instrumenting everything from construction to farm equipment in order to improve yields and outcomes. It reported a mixed quarter, as reflects its end-markets. Q1 revenue was $583 million, flat year/year. Revenue from the Engineering and Construction business was $310 million, up 4%. Mobile Solutions revenue was $136 million, up 6%. Field Solutions revenue was $106 million, down 8%. Advanced Devices revenue was $31 million, down 22%. CEO Steve Berglund told investors that Trimble is seeing “improving trends in transportation and logistics, buildings, heavy civil and agriculture … [Looking to Q2] the month of April [was] more robust than prior years in the seasonal businesses of construction and agriculture.”

One comment made on the earnings call will be interesting to measure against Autodesk’s earnings: Trimble said that the BIM-centric buildings business “stumbled in the quarter [Q1] due in part to the GAAP revenue accounting for delays in receiving customer acceptances which either have arrived after quarter end or are expected in this quarter.” I think that means that Trimble sold some software, booked the cost of sales but wasn’t able to book the revenue because the customer acceptance slipped out of Q1 into Q2. It’s awkward, and I’m sure it happens a lot more often than we realize, but I wonder if Autodesk will say something similar — might AECish firms be cash-strapped, and playing with when they pay their bills? Trimble CFO Robert Painter did say “I kind of shrug my shoulders at that and say okay, I don’t think that is part of the secular story here”, so perhaps not — we’ll see what Autodesk says. Trimble expects Q2 revenue to be between $595 million and $625 million.

We hear from Autodesk on Thursday.