LONDON (dpa-AFX) - Software business AVEVA Group plc (AVV) on Thursday announced an eleven percent growth in the Annualised Recurring Revenue in the 12 months to 30 June 2022, driven by growth in the annualised value of the group's Subscription and Cloud contracts.
AVEVA's revenue on a constant currency basis however declined by a mid-single digit rate year-on-year in the first quarter of fiscal 2023. A decline in Perpetual licenses which have upfront revenue recognition, a strong comparator in the prior year and a pull forward of order wins into fourth quarter of fiscal 2022 ahead of the price increase contributed to the decline.
Revenue was flat on a reported currency basis, supported by the strengthening of the US dollar, which accounts for the majority of AVEVA's revenues. The Group saw very strong growth in Cloud revenue, driven mostly by order wins in the prior financial year.
AVEVA expects ARR growth to accelerate during the financial year. The list price increase implemented in April is expected to take effect on more contracts as the year progresses, given the second-half weighted contract renewal cycle.
The Group also expects its focus on Subscription and Cloud to drive increasing ARR in subsequent quarters, which would also typically have a greater weighting than first quarter in terms of new order wins and revenue.
The strong end markets and the solid sales pipeline supports management plans for full-year growth in ARR of around 15 percent.
The constant currency costs are expected to increase in fiscal 2023, due to incremental investments and inflation. The majority of the increases are expected in the first half of the financial year.
Shares of Aveva Group are currently trading at 2330 pence, up 37 pence or 1.61 percent from the previous close.
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