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IFS Achieves 22% Growth in Annual Recurring Revenue

IFS, a prominent provider of Industrial AI software, has made headlines by reporting a remarkable 22% growth in its Annual Recurring Revenue (ARR) for FY2025 Year-to-Date (YTD). This encouraging growth underscores a significant trend in the industrial sector where major enterprises have moved beyond mere experimentation with AI technologies and are now deploying them effectively across their crucial operations.

Q3 FY2025 Financial Highlights

The latest financial results reveal not only an impressive ARR increase but also a robust 31% rise in cloud revenue and a 20% growth in overall recurring revenue, which now constitutes 82% of total revenue. This shift highlights the growing confidence of companies in utilizing IFS's AI solutions.

What sets IFS apart from numerous other AI initiatives that seldom deliver tangible results is its track record of generating meaningful, measurable outcomes for its clients. Leading industrial corporations such as Arcelor Mittal, Boralex, Callaway, and Japan Airlines have chosen IFS.ai, driving not only incremental growth in recurring revenue but also facilitating larger deal sizes and enhanced customer expansion.

Why IFS Stands Out in the Industrial AI Space

IFS has tailored its AI capabilities specifically to address the operational complexities inherent in industries involved in manufacturing goods, maintaining critical assets, and overseeing service-heavy operations. This specialized expertise, combined with state-of-the-art AI innovations, allows IFS to offer unique outcomes that traditional providers fail to match.

The IFS.ai platform, seamlessly integrated into IFS solutions, provides industry-specific intelligence that enhances operational processes, optimizes real-time decision-making, and boosts overall efficiency. Unlike generic AI systems, IFS's offerings provide contextual insights these industries critically need to thrive.

A notable engineering accelerator, Nexus Black, has been pivotal in delivering innovative AI products and results within weeks, showcasing IFS's commitment to agile development and customer responsiveness. By involving forward-deployed engineers in transforming customer challenges into viable AI solutions, IFS distinguishes itself in speed and scalability.

Additionally, IFS’s Loops agentic Digital Workers autonomously manage intricate workflows that previously demanded extensive manual input, effectively integrating with any enterprise data source to create seamless operations. Initial deployments have indicated significant improvements in efficiency and expedited decision-making processes.

The recent acquisition of 7Bridges further strengthens IFS’s leadership in Industrial AI, offering sophisticated AI-driven capabilities for supply chain, logistics, and transportation optimization. This move reflects IFS's strategy to broaden its service portfolio and provide end-to-end solutions tailored to client needs.

Insights from Leadership

Mark Moffat, CEO of IFS, expressed, “Our 22% ARR growth and the increase in average deal size stem from our AI investments and signal a significant market shift. The world’s largest industrial enterprises are no longer just experimenting with AI; they are implementing it on a large scale, favoring IFS as a collaborative partner.” He underscored that IFS's AI solutions, crafted specifically for industrial operations, yield measurable and scalable outcomes.

Similarly, Matthias Heiden, CFO of IFS, emphasized, “These results reflect our disciplined execution. With our recurring revenue making up 82% of total, we possess a strong foundation that ensures sustained innovation. As our customers begin to see tangible returns, they are escalating their commitments and expanding their usage faster, enhancing both our model and competitive stance.”

Looking Ahead: Momentum Towards 2026

As IFS aims to further enhance customer impact, the company is continuously expanding its strategic alliances and fostering relentless innovation. The flourishing global partner ecosystem remains a crucial factor in driving ongoing scaling and increasing deal growth throughout FY2025 YTD.

On November 13 in New York, IFS is set to host the “Industrial X Unleashed” event, which will bring together AI leaders from companies like Anthropic, Boston Dynamics, Microsoft, PwC, and Siemens. This event aims to showcase groundbreaking Industrial AI applications and demonstrate how AI, large language models, robotics, and enterprise software are revolutionizing operations in critical industries worldwide.

Moreover, IFS has recently announced several strategic movements:

• - Appointment of Kriti Sharma as CEO of Nexus Black to spearhead next-gen AI initiatives.
• - Acquisition of 7Bridges to enhance supply chain transformations with Industrial AI.
• - Establishment of a partnership with Climatiq to integrate real-time sustainability data into IFS Cloud.
• - Acquisition of TheLoops, marking its entry into agentic AI for mission-critical industries.
• - Recognition as Customers' Choice in the 2025 Gartner Peer Insights Voice of the Customer for Cloud ERP.

With such accomplishments, IFS is well-positioned to continue leading the charge in Industrial AI, promising exciting developments as they push forward into 2026 and beyond.