AVEVA gives trading update: all to plan

Feb 17, 2022 | Hot Topics

AVEVA issued another one of its terse trading updates, saying that revenue declined “in the low single digits” from a year ago in the fiscal third quarter of 2022 (ended December 31, 2021), “given a very strong comparator in the prior year that included the benefit of several large contract renewals with point-in-time revenue recognition”. Even so, fiscal Q3 2022 saw the company sign “a large contract renewal and expansion with Schneider Electric”.

ARR, Annualised Recurring Revenue, grew “9.6% year-on-year in the 12 months to 31 December 2021, driven by growth in the annualised value of the Group’s subscription contracts. ARR growth in Q3 FY 2022 was broad based, with increases from key industries, including Food, Manufacturing, Energy, Pharmaceuticals and Mining.”

The integration of OSIsoft continues, with “strong progress towards achieving the targeted revenue synergies.” What might those be? So glad you asked: “excellent progress has been made with product integration, which is key to achieving revenue synergies. AVEVA Data Hub, a product that allows customers to access and share a variety of significant operations and engineering data streams, including [OSI] PI System data, on the Cloud, will be fully available early in the next quarter.” In all, AVEVA thinks OSI will contribute more than $100 million in revenue by fiscal 2026.

Not outlook, but: “[t]he Group’s sales pipeline for the remainder of the financial year is solid, supporting management plans for good revenue growth in the final quarter, giving a revenue outlook for the full year that is in line with expectations”. Those expectations are for annual revenue growth of around 10%, per the last capital markets day.

As have many other companies in our PLMish world, AVEVA announced a few organizational changes. James Kidd, currently AVEVA’s Deputy CEO and CFO and (I think) the highest-ranking longtime AVEVA person still at the company, will become AVEVA’s Chief Strategy and Transformation Officer and “will focus on driving both organic and inorganic growth initiatives”. That leaves the CFO role, which is to be filled by Brian DiBenedetto, transferred from Schneider Electric. James and Brian assume their new roles on 1 March.

Bottom line: all to plan. Nothing to see here, move along. AVEVA will announce results for fiscal 2022 on 27 April 2022.

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