Infor Inc.’s purchase last year of online procurement and supply chain technology company GT Nexus is paying off with a major contribution to revenue.
Infor sells enterprise resource planning software that companies use to manage such business operations as inventory and financial records, and its clients include companies in aerospace, pharmaceutical, automotive manufacturers, industrial distributors, retailers, banks and hotels.
By acquiring GT Nexus in 2015 for $675 million, Infor added technology systems that now help its clients better manage information on products and financial records from their suppliers as well as in their own operations, including data on sales and customer orders. This lets companies better collaborate with their suppliers by sharing information on customer demand and production schedules. “In a complex, high-velocity supply chain, all partners need to know what was ordered, when it was built, and where it is in transit,” Infor CEO Charles Phillips says.
For its third fiscal quarter ended Jan. 31, 2016, the need of Infor’s clients to better manage their supply chains resulted in a sharp increase in revenue from GT Nexus fees, Infor says. Although the company didn’t break out GT Nexus’s Q3 revenue, it notes that the supply chain unit was the largest contributor to the company’s 23.1% year-over-year increase in Q3 revenue from software fees, which helped to absorb a decline in other revenue and result in a 2% increase in total Q3 revenue to $671.6 million.
GT Nexus “saw the best performance in SaaS bookings in its history” in the third quarter, its first full quarter as part of Infor since the acquisition in August 2015, Infor says. Under the SaaS business model, clients access Infor’s software through a web browser without having to maintain the software on their own infrastructure.
For the third quarter ended Jan. 31, Infor reported:
- Total revenue of $671.6 million, up 2.2% from $657.4 million a year earlier;
- $159.0 million in revenue from software license fees and SaaS subscriptions, up 23.1% from $129.2 million;
- $349.2 million in fees from software product updates and support fees, down 4.4% from $365.2 million;
- $163.4 million in fees from consulting and other services, up 0.2% from $163.0 million;
- Operating expenses of $606.7 million, up 10.6% from $548.7 million
- A net loss of $45.6 million, compared with net income of $51.3 million. Infor attributed the net loss to increases in the cost of software, such as commissions paid to resellers, and expenses related to interest and other expenses such as restructuring costs and changes in currency exchange rates.
For the nine months ended Jan. 31, Infor reported:
- Total revenue of $1.975 billion, down 0.6% from $2.096 billion a year earlier;
- $419.9 million in revenue from software license fees and SaaS subscriptions, down 7.5% from $454.0 million;
- $1.060 billion in fees from software product updates and support fees, down 4.6% from $1.111 billion;
- Net income of $9.1 billion, down 93.4% from $137.9 billion.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Paul Demery, editor for B2B e-commerce, on Twitter @pdemery.
Follow us on LinkedIn and be the first to know when new B2BecNews publishes new content.