Nemetschek & RIB report strong Q1, PLMish continues its roll
Nemetschek and RIB continued the PLMish roll this earnings season, with both companies reporting stellar growth in Q1. You may recall that Nemetschek started out as the provider of building information (BIM) solutions Allplan and Graphisoft, but has recently been branching out into digitalizing construction and building operations. RIB Software’s entire business is built (get it?) on the premise that the data in a BIM model has incredible utility in all aspects of turning that CAD model into steel and concrete, and has partnered with Microsoft to get that technology into the hands of project teams around the world.
Let’s start with Nemetschek. The company reported total revenue of €130 million, up 27% as reported and up 23% in constant currencies (cc). Within that total, organic growth was 21% and the rest attribute to the Spacewell acquisition. Software license revenue was €55 million, up 16% (up 12% cc); recurring revenue –maintenance and subscriptions– was up 34% to €68 million and subscriptions revenue alone was up 125% to just under €10 million.
By segment, Nemetschek’s revenue broke out as follows: The Design segment remains the largest, with revenue up 15% (13% cc) to €74 million (note that Solibri has been reclassified from Build to Design, which has been restated for the 2018 period). Nemetschek says that it saw a bump in demand due to BAU, “the world’s leading trade fair for the building sector, which took place in January”. The Build segment recorded the strongest growth, with revenue up 35% (27% cc) to €40 million. Revenue in the Manage segment was up four-fold due to the Spacewell acquisition, to €8 million; organic revenue growth was 12%. Finally, the Media & Entertainment segment reported revenue growth of 24% to €7 million.
Patrik Heider, Spokesman and CFOO of the Nemetschek Group, said of these results, “We’ve made an outstanding start to the year and achieved an exceptionally strong first quarter. Our strategic investments in next-generation solutions and further internationalization are paying off. In addition to our future-oriented investments, our new management structure enables us to act even more decisively in the market and in our various customer segments, meaning we’ve set the course for this strong performance to continue into the future.”
Nemetschek didn’t change its outlook for the year, sticking to a forecast for Group revenue of €540 million to €550 million, or growth of 17% to 19%.
RIB Software reports that total revenue was up 48% in Q1 to €47 million. Software revenue grew by 85% to €22 million, driven in part by a 190% increase in cloud revenues, and recurring revenue was up 68% to €25 million. Services revenue is driven by the number of projects underway, and was up 35% to €9 million. And, very important for investors, RIB says that the number of MTWO/iTWO 4.0 platform users was up 182% to 8,447 users — that’s the partnership with Microsoft kicking in.
One thing RIB, especially, highlights is how ready AEC is for the cloud. In its materials, RIB said that “the number of users of our new cloud-based MTWO and iTWO 4.0 platforms grew by 181.6% to 8,447 users … Of the total users gained, 74.7% came from new customers and 25.3% from existing customers. For 2019, we plan to increase the total number of users from 3,000 in 2018 to 30,000 in 2019, to reach 100,000 in 2020, as already announced … partly through new customer acquisition and partly through the migration of 500,000 existing users from other software applications within our Group.” AEC projects are, by their nature, not in the office; cloud is the only useful way to reach field workers. It remains to be seen if RIB can move 1/5 of its installed base to the cloud by the end of next year — but the trajectory is there to hit 30,000 this year.
RIB also confirmed its outlook for 2019, saying that with the “very successful business development in the first quarter, we confirm our revenue forecast of €180 million to €200 million … The development of the partner network is proceeding according to plan and the acquisition of additional users for our MTWO and iTWO 4.0 platforms runs very promising.”
So, in all, the AEC part of the PLMish universe is doing extremely well. In part, it’s because a lot of project teams are realizing that they can (and, really, must) automate and systematize paper processes in order to be repeatably profitable. It’s also a great way to attract digitally-savvy talent that might otherwise not consider the built assets industry as a career path. And, finally, more and more owners are seeing that BIM isn’t just a techie concept, but a way to get the asset they really want (because of improved communication all along the design process) and the data to build and maintain that expensive asset over its 50 year life.
We’ll see what the rest of the year holds, but it’s shaping up to be a banner year in AEC.