ESI’s 2020 results show continued improvement

Feb 10, 2021 | Hot Topics

ESI yesterday announced preliminary results for its fiscal fourth quarter — and they show sequential improvement that leads CEO Cristel de Rouvray to moderate optimism for the year ahead. First, the results:

In Q4, total revenue was €30 million, down 10% as reported and down 7% in constant currencies, cc. Still in Q4, license revenue was €23 million, down 5% (down 2% cc) while services revenue was €7 million, down 23% (down 21%).

For the year, total revenue was €133 million, down 9% (down 9% cc), with license revenue of €109 million, (down 6%, down 5% cc) and services of €23 million, down 23%, down 22% cc).

The good news is that the year improved consistently from Q2 when license revenue was down 10% cc from the prior year, to Q3, with a decline of 4% cc, to Q4 with a decline of 2%. Indeed, new business (which ESI defines as sales to new customers and/or new products to existing customers) was up 1% cc from in Q4. For the year, revenue from repeat customers held steady in cc, and revenue from the company’s top 20 customers saw license revenue up 1% cc. Positive progress.

For the year, revenue from the regions followed pandemic patterns we’ve seen with other companies in our PLMish universe: revenue from Asia was €50 million, down 5% cc; from, Europe, €63 million, down 11% and from the Americas, €20 million, down 9%. Asia shut down first and reopened first; Europe next and longer.

By vertical, revenue was still dominated by ground transportation at 59% of the total for the year. Still, progress is being made in expanding outwards to heavy industry (trucks, tractors, and so on). The aerospace industry was particularly affected by the stop in travel, but ESI saw a slight uptick in Q4.

Ms. de Rouvray told investors that 2020 was a year of rebuilding ESI, by focusing on areas outside its traditional auto vertical, and focusing the organization on data and customer outcomes. The company has worked hard to tell its story, highlight customers’ successes in ways that enable it to show differentiation, key customer wins, and technological breakthroughs — all positioning it well, she says, for 2021. The company intends to extend its reach, and not just protect its current position.

It should be a very interesting 2021.

ESI will offer more details (and perhaps a forecast for 2021?) with the full release of 2020 results on March 16, 2021.