AVEVA continues to roll, we think

Schneider Electric released earnings this morning which now means that AVEVA also does, sort of. AVEVA says that it “made a solid start to the financial year” and that it “maintains a strong balance sheet and saw good cash generation in the [fiscal] first quarter, resulting in net cash of £117 million at 30 June 2018, up from £96m at 31 March 2018”.

It’s hard to know what that means –it’s good to generate cash, but how did it come about?– given that Schneider Electric (SE) was nearly giddy in its remarks about AVEVA a quarter ago. Back then, SE said that “Industrial Software [revenue was] up mid-single digit in sales [while] legacy AVEVA, sales are up double-digit on a currency neutral basis”. In SE’s Q2 press release and investor presentation, the focus was more on the opportunity that AVEVA provides in the greater Schneider Electric context, with cross-selling opportunities, new value propositions and cost-savings across the businesses.

In any event, it’s clear that the March quarter was a good start to AVEVA’s fiscal year. and nothing in the remarks made by either Schneider Electric or AVEVA about the June quarter would point to a serious slowdown. Indeed, the hints were about acceleration in end-markets, joint go-to-market efforts and expanding sales channels and offerings.

We’ll get more info on AVEVA, specifically, at its Capital Market Day in September.