Dassault Systèmes (DS) reported really good results for its fourth quarter and for fiscal 2011 yet the share price fell, as investors expected a more positive outlook. But let’s close 2011 first, shall we?
For Q4:
• Total revenue was €512 million, up 11% as reported and up 10% in constant currencies
• Software revenue was €462 million, also up 11%/10%
• PLM software revenue was €371 million, up (yup) 11% as reported
• SolidWorks software revenue was €91 million, up 10% as reported and 9% in constant currencies
• CATIA non-IFRS software revenue was up 7% year/year
• DS says that ENOVIA is “seeing strong V6 interest, with non-IFRS software revenue growth of 3%, reflecting a significant amount of deferred revenue related to software development projects in new industries.” I must say that 3% growth is pretty dismal even if it is the result of revenue deferred as DS works to deliver functionality and is definitely something I’ll ask about when I talk with ENOVIA people here at SolidWorks World.
• Other PLM non-IFRS software revenue increased 14%, “led by SIMULIA”.
For FY 2011:
• Total revenue was €1,783 million, up 14% as reported and up 16% in constant currencies.
• Software revenue was €1,617 million, up 15%/16%. New license revenue growth was 20% excluding currency effects.
• PLM software revenue was €1,276 million, up 16% as reported
• SolidWorks software revenue was €341 million, up 9% as reported and 12% in constant currencies. New commercial seats sales were up 14% to 47,905 seats. Number of seats up faster than revenue means the ASP must have declined, and indeed it did, going down just over 1% for the year to €5,386.
• CATIA non-IFRS revenue was up 16%; ENOVIA was up 14% while Other PLM grew 18%; for the year “Other PLM” was led by SIMULIA and DELMIA.
• By geography, revenue in the Americas was flat in Q4 and up 11% for the year as ENOVIA’s deferred revenue affected growth. Europe was up 15% in Q4 and up 17% for the year, as Germany and France were surprisingly strong, as was the automotive industry. Revenue from Asia was up 6% in Q4 and up 14% for the year, on continued strong growth in China and Korea.
• Operating income was €428 million.
• Since we have the data right here: Remember how one of PTC’s new goals is to get to comparable operating margins? They’re in the teens right now; DS reports that its IFRS operating margin was 24%.
DS’ 2011 was great as reported — total revenue up 14%, all of the brands posted revenue growth in the double-digits (ex-currency). But that included a quarter of IBM as a part of DS that wasn’t there a year ago, which would likely shave a couple of points off of everything except SolidWorks. V6 is still ramping up, with 1,000 enterprises added in Q4 for a total of 3,170 for the year, at a rate that I think is slower than the V4-V5 conversion a decade ago. UPDATE: That interpretation of DS’ charts is incorrect. DS is now ”working with over 1,000 V6 enterprise customers to date”. That strengthens my point that the pace of adoption of V6 seems slow. Thanks to Jens Krueger for pointing this out!
DS also gave forecasts for 2012. For Q1, it expects to report non-IFRS total revenue of €425 million to €435 million; for the year. the company’s initial revenue growth objective is 5% to 7% in constant currency, which would be about €1.9 billion. CFO Thibault de Tersant said the cautious outlook reflects “a good level of interest from our customers … [but also] the potential for a more challenging economic backdrop around the world, including tighter credit markets. All in all, we see a year of growth ahead even assuming less favorable market conditions.“ One thing that I think has been missed by many: new license growth was 30% in 2010, 20% in 2011 — yes, IBM factors in there — but it’s also possible that DS and its customers need to take a breather, assimilate what they have and then move forward. Twenty to 30% growth has been unsustainable in this market for more than a year or two; we don’t want DS to flame out.
In addition to financial results, DS also announced the acquisition of Netvibes, a dashboard intelligence technology that will “enrich its 3D Experience platform”. Financial details were not disclosed. I am not familiar with Netvibes, but DS says it has around 4 million active monthly users and over 15,000 developers who have created 250,000 universal webapps for its dashboards. The company was privately-held, with offices in Paris and San Francisco, and all 33 employees have joined DS. CEO Bernard Charlès said that Netvibes would help make DS’ products “so cool and new to use that everyone will know how to use them.”
On the European analyst call, M. Charlès said that DS now sees a world beyond PLM, which he is calling “a 3D experience platform”, 3DEXPERIENCE, that he believes will double the market DS serves. 3DEXPERIENCE is intended for business and for individuals, although V6 is the cornerstone of the platform. M. Charlès told European investors that “DS is a science company delivering software applications”, citing the how SIMULIA fits into this vision but also including CATIA, Exalead and Netvibes, which sit at the “juncture of what people expect and what companies offer”. His examples included everything from refrigerators that know what’s missing, crowdsourcing of innovation, mobility, cloud — it’s a great collection of buzzwords and a very grand concept, with potentially a very large target market. The question is how well DS can reach these new user types without alienating its bread-and-butter automotive and industrial customers.
I need to run to a SolidWorks 2102 briefing — I’ll post more if I find anything worth mentioning as I wade through DS’ Q4 and FY11 details.
