IFS revenue up 22% as global industry accelerates AI adoption
IFS has reported year-to-date financial results for its fiscal year 2025, highlighting annual recurring revenue growth of 22% compared to the previous year as more global enterprises extend deployment of its Industrial AI software.
According to the company, annual recurring revenue (ARR) increased by 22% year-over-year, while cloud revenue rose by 31% over the same period. Recurring revenue, now making up 82% of total revenue, also rose by 20%.
Adoption and customer impact
IFS stated that its performance this year reflects a market-wide shift as major industrial enterprises transition from initial experimentation with artificial intelligence to full-scale deployment in mission-critical operations. The company noted that customers such as Arcelor Mittal, Boralex, Callaway, Collins Aerospace, Dixstone, Hitachi Energy, Japan Airlines, OFI, TotalEnergies, and Westinghouse have increased investment in IFS solutions. The result has been growth in recurring revenues and larger deal sizes.
IFS attributes its growth to the ability of its technology to generate tangible and measurable outcomes. The company highlighted several aspects of its AI offering, including IFS.ai, which embeds industry-specific intelligence across its solutions to manage operational complexity and optimise real-time decision-making. Nexus Black, described as an AI innovation accelerator, is designed to deliver productised AI solutions to customer challenges rapidly. The IFS Loops agentic digital workers autonomously handle complex and previously manual workflows across diverse enterprise data sources.
The acquisition of 7Bridges earlier this year has added AI-driven capabilities to IFS's offerings, focusing on supply chain, logistics, and transportation optimisation.
Leadership comments
Mark Mofatt, CEO of IFS, commented:
"Our 22% ARR growth and increase in average deal size is driven by our AI investments and reflects a clear market shift: the world's largest industrial enterprises are done experimenting with AI: they're deploying it at scale, and they're choosing IFS to co-innovate with them."
'They're choosing us because Industrial AI purpose-built for their operations delivers outcomes they can measure and scale. That's only possible because of our deep industry expertise that has enabled IFS to stand out in asset and service management. That proven value drives expansion. As they see returns, they invest more, and that dynamic is accelerating."
Matthias Heiden, Chief Financial Officer of IFS, also commented on the importance of recurring revenue for the business model and ongoing innovation.
"These results demonstrate disciplined execution. Our recurring revenue base at 82% of total revenue provides strong visibility and funds continued innovation. As customers realise measurable returns, they're making larger commitments and expanding faster, strengthening both our business model and competitive position."
Continued momentum and partnerships
IFS noted that its momentum has been maintained with the aid of a global partner ecosystem that supports scaling and increased deal sizes. The company's ability to create customer impact is further supported by partnerships, such as the integration of real-time sustainability data with Climatiq, as well as additional acquisitions, including TheLoops, which brings agentic AI workforce solutions for mission-critical industries.
The company recently appointed Kriti Sharma as Chief Executive Officer of Nexus Black, which will focus on new AI innovation. This is in addition to the previously mentioned acquisition of 7Bridges, and the establishment of partnerships with industry players, which IFS says are helping to transform customer supply chains and sustainability strategies with the use of industrial AI.
IFS has also been recognised as Customers' Choice in the 2025 Gartner Peer Insights Voice of the Customer for Cloud ERP, reflecting peer feedback in the cloud enterprise resource planning segment.
An event scheduled to take place in New York will bring together AI leaders from various technology and consultancy firms to showcase the application of artificial intelligence, large language models, robotics, and enterprise software in the industrial sector.
