EFI has reported its best opening quarter to its financial year, putting the company on a firm footing to achieving the $1 billion status that CEO Guy Gecht has set his eyes on.
And the $240 million of sales reported in the quarter comes despite a drop in revenues from the Fiery division.
In contrast the MIS, or productivity software as EFI prefers, operation increased revenues by 25%. to $44 million. This was a combination of both organic growth and successful closure of a number of deals, some hanging over from the end of 2018.
Nozomi, EFI’s play in the expanding market for digitally printing corrugated boxes, is a highlight. There are nine currently either in operation or in stallion, four shipped in the quarter. The Q2 the company plans to ship five more, seven in Q3 and eight in the last quarter of the year.
Gecht acknowledges that competition will increase, not least from the HP C500, which has just started to sell, but points out that this is a vast market with room for all participants. The company is developing a white ink for the corrugated box press.
Inkjet revenues increased 15% to $142 million including the now-sold Jetrion label press business. Without this revenue was up 16%. The company is planning the launch of a new hybrid ink press platform at Fespa. This will begin to ship in the second half of the year the company says. Volumes of ink for the very thirsty Nozomis have still to have a major impact as the companies buying the machines need to understand fully the capabilities of the press and then to sell this on to their customers.
Revenue from Fiery has been in decline in recent quarters and fell 23% compared to to 2017 in the first three months of 2018. Competition from embedded devices, especially in Asia has been blamed. But if Gecht is concerned about the impact the current battle over the future for Xerox, traditionally EFI’s largest single customer, he is not showing it.
Last year EFI acquired Xerox’s Freeflow server workflow, pledging to continue development. In answer to a question during an call with analysts, Gecht states that the proposed acquisition by Xerox “is a great opportunity for us to play a big role with the combined company if it were to happen”.
Whichever way that goes, EFI is building its future on direct sales to customers, not via OEMs like Xerox, Konica Minolta, Canon and so on.
“Our direct business grew 17% and now comprises 77% of our sales, drove revenues above expectations,” says Gecht.
“We also met our goals for Nozomi in Q1, and with increasing traction in the packaging market, look for sequential growth in unit shipments through the year. With Nozomi and the solid lineup of new products planned for the second half of the year, the entire EFI team is excited and energised about the significant opportunities in 2018 and beyond.”