AVEVA says revenue up 11% in CQ2, excluding OSI

AVEVA gave one of its minimalist earnings updates today, likely because its largest shareholder, Schneider Electric, announced its Q2 results this morning. (Schneider Electric is on a quarterly calendar, with the year ending in December; AVEVA’s fiscal year ends in March and reports every six months. Confusing, no?) Anyway …

AVEVA said it “had a good start to FY22, achieving approximately 11% revenue growth in the first three months of the financial year on a pro forma organic constant currency basis. All of the Group’s revenue lines grew, with Subscription growing in line with overall Group revenue and Perpetual licences increasing significantly“.

That 11% is ahead of the 10% announced for the first 2 months of the quarter during AVEVA’s capital markets day a few weeks ago — and, no surprise, it’s significantly better than the “Overall Group organic constant currency revenue declined 3.5%” from a year ago. So it’s an easy comparable but it does appear that demand is building.

The comment about perpetual licenses is interesting too — recall that just about all software companies are aiming at subscriptions these days. We’ll have to wait until November to hear more about this dynamic, and what customers are opting to buy via perpetuals.

Schneider Electric usually offers a few additional factoids in its materials and added that its Q2 saw that

“[t]he Group’s industrial software offer through AVEVA was impacted by timing of some renewals though continuing to see a good level of underlying demand. Recently closed acquisition OSIsoft performed strongly in its first quarter as part of the Group (included in scope effects for Q2 2021).” This matters because we don’t know how much AVEVA’s reported revenue will have grown in the calendar second quarter — that 11% figure is for organic growth which excludes the “strongly” growing OSI acquisition.

Schneider Electric also said that “[s]trong sales growth in Data Center & Networks continued in the quarter, including Distributed IT, Data Center and non-IT applications. The Group’s unrivalled offering incorporating MV, LV, Secure Power, BMS, services and software (including AVEVA’s Unified Operations Center) coupled with its global presence is relevant for both large and small installations. Localized Data Centers are becoming more relevant due to the need for reduced latency, improved fidelity, and increased data security and sovereignty requirements.” This one matters because we’re seeing more integrated offerings between AVEVA’s software and Schneider Electric’s hardware –part of the rationale for the acquisition–to the benefit of both reporting entities.

AVEVA said that it will report in more detail on half-year results on November 9, when we should learn more about OSIsoft’s contribution and those perpetual sales.