ESI momentum may finally be building: H1 revenue up 6%

ESI Group today reported results for the second quarter and half year ending on June 30th. The details, then some comments:

• Revenue for the first six months of 2022 was €84 million, up 6% as reported and up 4% at constant currencies (cc)
• License revenue was €74 million for H1, up 6% (up 4% cc)
• Recurring revenue was €75 million, up 8% (up 6% cc)
• Perpetual license revenue was down 15% (down 12% cc) to €5 million — a planned decrease that the company believes will lead to higher future growth
• Service revenue was €10 million in H1, up 5% (up 4% cc)
• For Q2, revenue was €26m, up 3% (up 1% cc) due partly to a large deal signed last year with Volkswagen Group. License revenue was 21 mi, up 2% (flat cc)
• ESI said that revenue was up across all geographic regions with cc growth of 6% in the Americas to €14 million in H1. Revenue from Asia was up 4% cc to €29 million, and EMEA, up 3% cc to €42 million, both in H1.
• Finally, license revenue growth was again led by the automotive industry, with “strong growth in aeronautics, mainly driven by the Group’s key customers in the Americas”

For those keeping close track, ESI has removed special projects income from the revenue line, creating a reported revenue decline of around EU2 million from 2021 to 2022. The data above (and in the company’s materials, restates 2021 data to do the same — hence the growth.

CEO Cristel de Rouvray told investors that she believes ESI is building momentum in achieving its OneESI 2024 strategic plan. She sees H1’s revenue growth (especially in recurring revenue) and making ESI more efficient and profitable as absolutely key, with some progress already visible and more to become more apparent in 2023.

The investor call was relatively quick since the company plans to offer much more detail (including updated guidance) at its investor conference. They plan to cover the impact of specific CFD product divestitures announced in July, the effect of Russia sanctions, and progress against the 3-year OneESI plan — all on 27 September 2022.