Brazil. The business management software development company, TOTVS, announced its financial results for the second quarter of 2015 (2Q15). During this period, compared to the same quarter of the previous year, the company recorded a 19% increase in revenue resulting from the subscription sales model, in which the customer pays for a monthly subscription, instead of buying a single license to use. Revenue under this model was R$32.1 million in the period.
The strategy of offering software as a service also resulted in the conquest of 899 new customers in this modality, representing an increase in the base of 32.4%, compared to the same period of 2014, and accounting for 64% of the total number of new customers in the period. The monthly subscription income generated by these new customers was R$686,000, 177% higher than in the second half of 2014.
The subscription sales model was driven, in recent months, by the creation of TOTVS Intera, a new modality of contracting software by monthly signature that offers customers full access to all management systems and verticals of the company and to the productivity and collaboration platform (Fluig). Based on cloud, the subscription includes the availability of all technological, systemic and legal evolutions of the solutions, in addition to technical support and all totvs Distance Education content in an unlimited way.
Sales of the two business models adopted by TOTVS (licensing and subscription) added 5,819 new customers in the last 12 months, 8% higher than the same period before. In 2Q15, 1,399 new customers were acquired from the company's base.
The company's net income rose 2.7% during 2Q15, totaling R$451.4 million. That growth also reflects the 8.8% increase in recurring revenue, which totaled $281.9 million in the second quarter. In the cumulative 12 months, recurring revenue growth was 9.9% and net revenue growth was 5.7%.
"This was a difficult quarter for most Brazilian companies. However, in times like these, the need to seek more efficiency, competitiveness, productivity and cost reduction intensifies, and technology can be a decisive factor in achieving those objectives," said Rodrigo Kede, PRESIDENT of TOTVS.
