IFS delivers exceptional FY2025 growth as Industrial AI scales from first deployment to commercial impact

Market-leading ARR growth, margin expansion and net retention underscore accelerating adoption of purpose-built Industrial AI

Key highlights FY2025

• Annual Recurring Revenue (ARR): +23% YoY 
• Cloud Revenue: +30% YoY
• Recurring Revenue: 83% of total revenue
• Net Retention Rate (NRR): 114%
• Operating Margin Expansion: +5pp YoY

LONDON, Jan. 22, 2026 /PRNewswire/ -- IFS, the leading provider of Industrial AI software, today announced its financial results for the fiscal year ending December 31, 2025, delivering 23% year-on-year ARR growth, strong margin expansion and increasing customer expansion as Industrial AI moves decisively from experimentation to scaled operational deployment.

IFS's FY2025 performance reflects a fundamental shift in the industrial software market. The world's largest asset-intensive and service-centric enterprises are no longer asking whether AI works – they are scaling solutions that deliver measurable outcomes across manufacturing, asset maintenance, supply chain, field service and warehouse operations.

Industrial AI delivering real-world outcomes at scale

IFS's Industrial AI platform is delivering production-grade results where generic AI approaches fall short. Customers typically begin with targeted operational use cases, achieve rapid ROI, and then expand deployments across additional sites, assets, and business units.

This expansion dynamic drove:

• 114% Net Retention Rate,
• 14% YoY growth in average deal size, and
• Continued improvement in customer lifetime value, supported by an 87% CSAT score.

IFS's innovation velocity enables customers to realize value quickly:

• IFS Nexus Black™ delivers breakthrough AI capabilities within weeks by turning customer challenges into productized innovation.
• IFS Agent Studio allows enterprises to create and deploy Agentic Digital Workers, embedding automation and intelligence deep into mission-critical operations.

Strategic partnerships with leading innovators including Anthropic, Microsoft, Siemens and Boston Dynamics further accelerate progress toward autonomous operations.

This differentiated approach is why leading companies are scaling their Industrial AI journeys with IFS. Major FY2025 customer wins and expansions include: ArcelorMittal, Cadillac Formula 1 Team, Callaway, Collins Aerospace, Dixstone, Hitachi Energy, Homeserve, Japan Airlines, Tampa Electric (TECO), TotalEnergies, Westinghouse, and William Grant & Sons.

Strategic acquisitions expand Industrial AI leadership

During 2025, IFS significantly expanded its Industrial AI capabilities and market reach through targeted acquisitions:

• TheLoops – delivering the first Agentic AI workforce purpose-built for mission-critical industries, with early deployments demonstrating the potential to unlock up to 10× workforce capacity.
• 7Bridges – adding AI-driven supply chain and transportation optimization, with early customers achieving 8% transport cost reductions and 90% automation of data management tasks.
• Softeon (expected to close in Q1 2026) – extending Industrial AI into warehouse management and robotics integration, enabling end-to-end supply chain orchestration.

Previously acquired businesses including Copperleaf, Poka and Ultimo also contributed materially to FY2025 growth and differentiation.

Profitable growth, disciplined execution

IFS combined strong growth with improved profitability in FY2025. Operating margin expanded by 5 percentage points year-on-year, reflecting disciplined execution, increasing scale benefits and a growing mix of high-quality recurring revenue. 

Mark Moffat, Chief Executive Officer, IFS, said: "FY2025 was the year Industrial AI crossed the chasm. Enterprises have moved beyond pilots and are scaling AI across the operations that matter most. Customers are choosing IFS because our technology is purpose-built for industrial complexity and delivers outcomes at scale - as customers see ROI, they expand faster and commit more deeply. IFS's growth is double that of peers when compared to market growth figures published by respected industry analysts*. We're accelerating as we enter 2026, and the gap is widening."  

Matthias Heiden, Chief Financial Officer, IFS, added: "Our results demonstrate the quality of IFS's growth. ARR increased 23%, NRR reached 114%, and operating margin expanded by 5 percentage points year-on-year. With 83% of revenue now recurring, we have strong visibility and a resilient financial foundation to continue investing in innovation while maintaining profitability."

Market recognition and outlook

IFS's leadership continues to be recognized by industry analysts, including multiple Gartner Peer Insights Customers' Choice awards and leadership positions in Gartner Magic Quadrants and IDC MarketScapes across asset management, field service, and ERP. 

Looking ahead, IFS will build on its FY2025 momentum by embedding Industrial AI more deeply into day-to-day operations – from warehouses and supply chains to field service and asset maintenance – helping customers unlock faster, more predictable outcomes at scale.

Micky North Rizza, Group Vice-President at IDC, said: "IFS's FY2025 results underscore a broader inflection point in the industrial software market, where AI is moving decisively from experimentation to scaled, operational deployment. The combination of strong recurring revenue growth, expanding cloud adoption, and targeted acquisitions signals that industrial enterprises are prioritizing purpose-built platforms that can deliver measurable outcomes across asset-intensive and service-centric operations. This positions IFS well as organizations seek resilient, industry-specific AI capabilities rather than generic enterprise solutions."

*Gartner Market Share Analysis: ERP Software, Worldwide, 2024 (published June 2025)

IFS Press Contacts:

EUROPE / MEA / APJ: Adam Gillbe
IFS, Director of Corporate & Executive Communications
Email: adam.gillbe@ifs.com 

NORTH AMERICA / LATAM: Mairi Morgan
IFS, Director of Corporate & Executive Communications
Email: mairi.morgan@ifs.com 

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