Brazilian software firm Totvs has posted its best quarterly performance of the last few years, helped by a surge in cloud subscriptions to its enterprise resource planning (ERP) systems.
The company posted net income of 574,8 million reais ($155 million) for the second quarter of 2018, an increase of 4.4 percent on the same period last year.
Totvs had been suffering from dwindling sales over the last three years - it reported its last income increase, at 6.2 percent, in 2015. The company ended 2017 with only 2 percent growth, following consecutive quarters of poor financial performance.
The growth of the second quarter of 2018, however, is primarily attributed to a surge in cloud subscriptions, which generated income of 97,1 million reais ($26,1 million), up 31.2 percent on Q2 2017.
"We continue to advance in the subscription model, which has already represented more than 25 percent of software revenue this quarter," said the company's chief financial officer, Gilsomar Maia.
"We are focused on Totvs' sustainable growth, with cost control and maintenance of investments in research and development," Maia added.
The shift to cloud provision for the firm, which started around 2016, was expected to cause an initial impact to the financial results, Totvs president Laércio Cosentino said at the time. But the evolution of the subscription base seems to have taken longer than expected.
However, Totvs still holds the pole position in ERP market in Brazil, according to a recent study. The company has a 35 percent market share, followed by SAP with a 31 percent share and Oracle, who has 15 percent of the ERP business in the country.