Quickie: ESI’s revenue up 3% in fiscal 2019

ESI just reported revenue for the quarter and year ended 31 January — and the news is good:

• Total revenue for the year was €139 million, up 3% as reported (up 4% in constant currencies, cc)
• For the year, license revenue was €110 million, up 4% as reported and services revenue was flat, at €30 million
• Geographic performance was again dominated by EMEA, where revenue of €69 million was up 8%. Revenue from Asia was €50 million, flat, and from the Americas, €21 million, down 3%. The company continues to struggle in the Americas, and this will likely be a key focus of CEO Cristel de Rouvray in 2019
• You may recall that ESI has been reinventing itself, including beefing up its global account business. The company reports that this is working, with bookings up 12% among its top 20 accounts
• For Q4, license revenue was €50 million, up 2%,while services revenue was €8 million, up 9%, for a total of €58 million, up 3%

In its statement, ESI points out that the bump in every Q4 is due to yearly licenses that are billed at the end of the year. For the year, ESI says that repeat business (which it defines as renewals and add-on sales to existing customers) represented 84% of the license revenues — ESI’s way of saying that it has strong recurring revenue without changing its license model to subscriptions.

CEO Cristel de Rouvray says these results highlight ESI’s strategic importance to its customers. They “choose ESI as their long-term partner, as we transform from selling products to solutions (combinations of several products and services) defined by a proven value proposition to achieve ‘zero real tests and zero real prototypes’. Immediate benefits are of course enormous savings in time and money while accelerating innovation, but the long-term stakes are to help our innovating customers meet growing complexity in technology and regulations while increasing confidence that the asset will perform throughout its whole lifecycle.”

The company didn’t issue forward-looking guidance but recall that this will be a shortened, 11-month “year” as the company gets into a January-December fiscal = calendar rhythm. Remember that when you see forecasts that appear to be declines in revenue!