The enterprise applications provider sees a turnaround in license revenue and expects moderate growth in 2010.
Reflecting what it called signs of general economic recovery, enterprise applications provider IFS AB today reported strong fourth-quarter revenue and earnings results.
The company, which reports its results in Swedish kronor, reported SKr 176 million in license revenue for the quarter ended Dec. 31, 2009, a 21% increase from the same period a year earlier. That increase enabled IFS to report a nearly 1% rise in overall sales despite a drop in consulting revenue for the quarter. Like other enterprise software providers, IFS saw a sudden drop in license revenue early in 2009 as customers coped with the effects of the recession. In the first quarter of 2009, the company’s license revenue fell 49% compared with the fourth quarter of 2008.
In the fourth quarter, IFS’ revenues from maintenance and support were SKr 204 million, up 2% from the like period a year ago. Consulting revenue, however, fell 6% to SKr 366 million.
IFS reported SKr 90 million in net earnings, up 41% compared with SKr 64 million in the same period a year earlier. The company also reduced its direct expenses by 3% to SKr 382 million.
For the full year 2009, IFS reported revenue of SKr 2.6 billion, up nearly 4% over 2008 results. Due largely to poor performance earlier in the year, license revenue for the full year fell 11% to SKr 426 million. Maintenance revenue, however, climbed 12%, while consulting revenue for the year was up 5%.
IFS’ 2009 net earnings of SKr 123 million were up 30% from the year-earlier figure.
“I was pleased with the outcome for 2009,” said IFS President and CEO Alastair Sorbie in remarks to financial analysts today.
While declining to provide specific financial guidance for 2010, IFS said in a prepared statement that it anticipates “moderate growth” in 2010. The company said its license sales pipeline was up 17% at the end of the year compared with 2008 levels.
Owing to the recession, however, IFS said attainment of its long-term financial goals will likely be delayed. The company in 2008 said its goal was to double product revenue and achieve an earnings-before-interest-and-taxes (EBIT) margin of 15% by 2013.
“We now expect this achievement to be somewhat delayed,” IFS said in the statement. “However, our ambition is to achieve the targets in 2013, and this will be achieved by both organic growth and acquisitions.”
