Phocas continues to grow and keeps culture fun and fulfilling
- Growth in revenue of 26% year-on-year
- Won ‘Culture Transformation Award’ from Human Synergistics International
- Top ranking in leading BI reviews
- Existing customers increased licences by 5%
- Licence sales to new customers were up 25% on the prior year
We continue to solve the data problems of manufacturers, distributors and retailers. The fundamental strategy of the business is to acquire, retain and grow customers in these sectors. I am delighted to report that the financial results reflect that this approach is working well. We achieved excellent revenue growth of 26% year-on-year up from 15% last year. On average, existing customers increased their licenses by 5% (more than double the percentage of the prior year), and license sales to new customers were up 25% on the prior year.
We are committed to offering exceptional customer service and industry knowledge which is highlighted by our annual 96% customer retention rate. All three divisions (US, Europe and APAC) performed well with the US division leading the way with an 81% increase in new licence sales in the second half of the year. This growth reflects the success we've experienced selling through a network of partners, an approach which we established in the US. We continue to fund our business developments and investments through internal cash flow.
Product, platform and operations
Our goal is to provide customers with a Software-as-a-Service offering with world-class security, performance and is responsive to ongoing product changes and developments. We work with a number of technology partners to provide this service including Rackspace and Amazon Web Services. This year we made a number of improvements to our core product including new push notifications, enhanced visualizations and real-time dashboards. We are also continuing to invest in making it easier for all people across a business including financial, purchasing, marketing teams to carry-out results-driven analytics and reporting.
Phocas achieved excellent results in the industry-leading 2018 BARC BI survey of 3000+ users. We are very grateful to our customers who participated and helped us achieve top-ranking in 28 categories. Phocas rated highly in the all-important: ease-of-use, customer satisfaction, price-to-value and project success categories.
Three successful face-to-face events were held for customers in Australia and the UK. The audience heard about new developments and got hands-on training to get the most from the software. Our educational PUG.training and webinars are attracting big audiences both live and on-demand.
People and culture
We welcomed 50 recruits during the financial year across all functions and all offices to better serve our customers. Maintaining a healthy culture in the business has always been a priority because we know it leads to a better product and enhanced customer communication. To measure this, we run an organizational culture inventory survey every three years. In the recent survey we achieved fantastic results across the organization and we won a Culture Transformation Award from Human Synergistics for our constructive and positive culture. We improved across all 12 cultural styles from our baseline measure in 2016 (which was already very good).
We have strengthened the executive team over the last 12 months. I'm very pleased to announce that Blair Cassidy has recently joined the Phocas executive in the role of chief product officer. Blair brings many years of experience within the IT arena. In addition, the title of co-founder Myles Glashier has changed from chief strategy officer to joint CEO. Myles and Phil Dodds have effectively been carrying out a joint CEO role for some time, so we are formalizing the teamwork.
Financial year outlook 2019/2020
We are budgeting organic growth of 26% in revenue for the upcoming year and expect to maintain profit at the same level as the 2018/2019 year. We will continue to use our income to invest across the business. We are budgeting for significant increases in the expenditure of 50% or above over last year's spend in 'product and platform', 'marketing' and 'people and culture'.
Business intelligence marketplace
BI continues to be a growth marketplace and there is high demand for industry specific KPI content. Our own research tells us that 65% of customers see data insight as very/extremely important to the success of their business. And a recent Gartner survey states that 87% of organisations still have low BI and analytics maturity, so I am confident that there is a great deal of scope for continued development.
Many ERP software publishers are dropping out of the BI development race and choosing to partner with best-of-breed providers like Phocas. We have seen a number of significant acquisitions across BI providers in the last 12 months and would expect that to continue as the market develops and matures with significant movement into prescriptive analytics.Would you like to keep up to date with data related business tips and Phocas? Subscribe to the blog by clicking here.