AEC/O software specialist Nemetschek Group has reported double-digit growth in recurring revenues year-on-year for Q1 2024, driven by subscription and SaaS offerings amid an ongoing push for digitalisation in the industry and adoption of new technologies such as digital twins and AI.
Annual recurring revenues (APR) grew by 24.5% (currency adjusted: 25.4%) year-on-year to €743.6m. Nemetschek said APR growth was well above revenue growth, which indicates high growth potential for the next 12 months.
Revenues from subscription and Software-as-a-Service (SaaS) offerings grew by 66.5% (currency adjusted: 68%) to €106.3m compared with January to March 2023.
In line with group strategy, the share of recurring revenues as a percentage of total revenue increased in the first three months of 2024 by 10 percentage points year-on-year to 83%.
Group revenue grew by 9.4% (currency adjusted: 10.3%) to €223.9m in Q1 compared with Q1 2023.
Earnings before interest, taxes, depreciation and amortisation (EBITA) increased by 11.9% (currency adjusted: 8.5%) to €68.3m compared with the first quarter of last year. Consequently, the EBITA margin increased from 29.8% to 30.5%.
Net income for the quarter grew by 17.4% to €42.5m, corresponding to earnings per share of €0.37.
New partnerships to drive digital transformation
Key business developments in the first quarter include two new strategic partnerships.
The first will see Nemetschek partner with Hexagon’s Geosystems Division to support the adoption of digital twins by offering users an integrated end-to-end workflow for building operations.
In addition, Nemetschek recently announced an interoperability agreement with Autodesk. The move will expand interoperability between cloud and desktop products, to improve the efficiency of data exchange for customers in architecture, engineering, construction and operations, as well as media and entertainment.
Pressure to digitalise construction increasing
Yves Padrines, Nemetschek CEO, said: “Nemetschek had a good start to the year 2024. With our performance in the first quarter, we have laid a good foundation to achieve our targets for the full year.
“We see that the pressure to digitalise in the construction industry is steadily increasing, especially in the current challenging market environment. In addition to our consistent focus on the transition to subscription and SaaS, we are systematically driving forward our other strategic focus areas in order to make the best possible use of the huge growth opportunities in our markets. Thanks to new technologies such as digital twins, artificial intelligence and cloud solutions, as well as our intensified go-to-market approach, we have established strong and important growth drivers for the future.”
