Aconex SaaS growth continues

Impressive 2015 revenue growth underlines Aconex’s AEC SaaS leadership position.

Melbourne, Australia-based SaaS construction collaboration technology provider Aconex has announced an impressive set of half-year results, covering the six months up to 31 December 2015. They show the business grew its global revenues by 46%, from Au$38.1m in 2014 (see A rosy Aconex financial update) to Au$55.7m (c £28.5m or US$40.3m).

It attributes the growth to “continued business expansion across key customer markets, continued product releases and enhancements, and the business acquisition of the INCITE Keystone collaboration business from the CIMIC Group.”

The directors report the company has continued to win significant new projects and new enterprise agreements across regions and industry sectors, with strong revenue growth across all regions led by EMEA and Americas, with 64% and 51% revenue growth respectively, and 39% in ANZ and 29% in Asia. Analysis of the detailed report shows these markets respectively account for 28%, 18%, 43% and 11% of company revenues.

Net profit after tax (NPAT) was $4.6m (c £2.4m or US$3.3m) for the half year ended 31 December 2015.

Aconex says it is developing its connected cost management solution from its July 2015 Worksite acquisition – CEO Leigh Jasper says “We’re already starting to see benefits from the Worksite acquisition. We’ve won a number of deals because of it and some customers are looking for that cost functionality.” And it is integrating the INCITE Keystone collaboration platform into the Aconex platform.

Australian newspapers (eg AFR) report the company is planning further acquisitions in 2016 “to bulk up the company’s capabilities in delivering mobile solutions and building information modelling“.

Predictability and reliability of revenues

Aconex shares had been rising fairly steadily since the December 2014 IPO on the Australian Stock Exchange, but suffered recently from a global pullback on technology shares. These strong results will boost the company’s reputation in not just the Australian financial community, but remind investors worldwide of the predictability and strength of the SaaS revenue model.

Reflecting the company’s BIM strategy, Leigh Jasper’s vision is one in which construction customers will not only get a physical built asset but also its “digital twin” (Sydney Morning Herald, January 2016). This digital model, in my view, will not be just a static archive, but the core of an asset management platform that the asset owner/operator can use throughout its life-cycle.

This adds to the potential value of the Aconex offering. Historically, such SaaS solutions have tended to be focused on the design and construction phases, and therefore prone to the cyclical ups and downs of the construction industry. However, building and other asset owners have to operate their facilities whatever the economic situation, and if Aconex takes on the role of data steward and asset management application provider for the life-cycle of the built assets then it will have more reliable and predictable long-term data-as-a-Service and SaaS revenues.

Competitive scale

By revenue, Aconex is the largest pure SaaS vendor operating in the architecture, engineering and construction market (Autodesk, Bentley and Trimble also have SaaS offerings, but revenues from these are not separately reported alongside their other software applications). Aconex’s six-month revenues already exceed the total annual revenues of Germany’s think project! which reported last week.