IFS posts 25% ARR growth as industrial AI demand rises

IFS reported 25% year-on-year growth in annual recurring revenue in the first half of 2026, with recurring revenue accounting for 84% of total revenue.

Cloud revenue rose 24% from a year earlier, driven by stronger customer demand for artificial intelligence tools used in manufacturing, maintenance, supply chains, field service and warehouse operations.

The figures suggest customers are increasing spending on software tied to day-to-day industrial processes, rather than limiting AI projects to pilots. That was reflected in growth across IFS's recurring revenue base and in adoption of products designed for operational settings.

Additions in the half included Nexus Black's Resolve for field service, IFS Zero for emissions data collection and the IFS Loops Agentic Platform. IFS said 60% of agentic transactions on that platform were fully automated.

Customer wins in the period included Coca-Cola, China Airlines, Drydocks World, First Solar, Flynn Canada, JVCKENWOOD, Kodiak Gas Services, Miele, ShinMaywa Industries, The Waldinger Corporation and William Grant & Sons. According to IFS, these organisations selected its software to support critical operational workflows.

Supply chain focus

IFS also used the half-year update to highlight its acquisition of Softeon, completed in March 2026. The deal added warehouse management and supply chain execution software at a time when manufacturers and distributors continue to face disruption across logistics networks.

Its broader strategy centres on linking operational, engineering and enterprise data through partnerships with Siemens, AVEVA and NEC. IFS also pointed to work with systems integrators, analysts and research organisations as part of what it described as an industrial AI ecosystem.

The company has been pushing deeper into sectors with asset-heavy operations, where software spending is often tied to uptime, maintenance schedules, workforce deployment and stock movement. That focus has helped differentiate vendors selling AI tools as part of broader operational software suites rather than as standalone products.

IFS also cited recognition from IDC MarketScape, which named it a Leader in its 2026 assessment of worldwide manufacturing AI-enabled asset-intensive enterprise asset management application vendors. Industry rankings are closely watched in enterprise software because they can influence procurement shortlists during long buying cycles.

"Customers are scaling AI across operations onto the factory floor, into the warehouse, and out in the field. As measurable business value is returned, Industrial AI is becoming a clear source of competitive advantage and customers are expanding their use of IFS solutions. Our H1 results reflect the market inflection point we're now seeing," said Mark Moffat, Chief Executive Officer of IFS.

"H1 2026 demonstrates strong execution across all lines of business. With 25% ARR growth, our numbers reflect how deeply customers are scaling AI into operations. These results reinforce the resilience of our business model and our track record of profitable growth," Ryan Courson, Chief Financial Officer of IFS, said.

External commentary in the update also pointed to broader momentum in industrial software.

Micky North Rizza, Group Vice-President at IDC, said, "The first half of 2026 highlights accelerating momentum in the industrial software market, with AI becoming embedded in operational workflows rather than isolated use cases. Growth in recurring revenue and cloud adoption underscores how organizations are prioritizing platforms capable of supporting complex, asset-intensive environments. This positions IFS strongly as enterprises look to scale AI-driven outcomes in a disciplined, value-focused way."

IFS employs more than 7,000 people across 80 countries, and its half-year figures indicate that subscription and cloud income remain central to the business as industrial customers shift software budgets toward recurring models.