Thursday was a complicated day. PTC and Dassault Systèmes announced earrings for the March quarter and I had to leave midday to catch a flight to Phoenix for COFES. I was able to do an extensive post on PTC’s earnings (here) but will have to defer a longer article on DS’ announcement until after COFES. So much news, so little time …
DS reported total revenue of €502.3 million in Q1, up 4% year/year (y/y) as reported and up 9% in constant currencies (cc). Software revenue was €449 million, up 1% y/y and up 7% in cc. Excluding the Apriso and RTT acquisition and the divestiture of Inceptra, software revenue was up 4% in cc. On a non-IFRS basis, new licenses revenue was up 8% cc in total and 6% cc on an organic basis. DS saw double-digit new licenses revenue growth in Asia and Europe.
By geo, revenue from the Americas was €138 million, up 4% as reported and up 8% in cc; revenue from Europe was €232 million, up 8% as reported and in cc; finally, revenue from Asia was €132 million, down 3% as reported but up 13% in cc on strength in Japan, South Korea and China. This is pretty much the opposite of to PTC reported for the period; I’m still trying to figure out why.
By product line,CATIA revenue was €188 million, down 5% as reported but up 1% in cc. CFO Thibault de Tersant told investors that CATIA performed especially well in Asia; the other regions were weaker and “not yet satisfactory”. However, he added, he believes DS can restore CATIA to growth with new V6 deployments.
Once again, the “Other software” category was the growth standout, with total revenue of €99 million, up 10% as reported and up 16% in cc on an IFRS basis. We don’t have many details, other than that this growth “reflect[s] the addition of Apriso and RTT, and double-digit growth for SIMULIA” per the press release.
ENOVIA revenue was €60 million, up 6% as reported and up 12% in cc. DS chose to highlight this in its press release and prepared remarks, since it showcases “a very significant increase in large deployment and a number of Version 6 Go-lives”. This helped drive new license revenue up 55% in cc, with close to 70% of new licenses coming from V6 deployments.
SolidWorks revenue was €104 million, up 1% as reported and up 5% in cc. The number of units declined 4% from a year ago, to 12,959 even as the average selling price (ASP) went up 4% to € 5,849. DS says the increase in ASP “reflect[s] continuous enrichment of seats sold with new products”. “Solid renewal rates” and “multiproduct sales” drove overall revenue growth in SolidWorks.
M. de Tersant said that DS didn’t record any “very large or mega orders in first quarter. This has been the case now for multiple quarters, it’s the new habit of our customers to not give us mega orders, but order as they go as they need licenses. So there was nothing unique in first quarter at all.” PTC reported more mega deals during the quarter than it has in a while; again, it’s a difference that needs to be examined.
DS also announced that it has received the last regulatory hurdle in its bid to acquire Accelrys and now expects the deal to close “very shortly”. As a result, DS included Accelrys in the revenue and earnings forecast for the rest of the year, saying it will add about €85 million revenue and have a positive impact on EPS of around 4 cents. Add in some new currency estimates, and DS now forecasts Q2 non-IFRS revenue between €555 million and €565 million, which would be growth of 12% to 14%. For the year, DS expects non-IFRS revenue to be up 14% to 15% in constant currencies, or €2,280 million to €2,3000 million.
There’s a lot to parse here, including the different take PTC and DS had on big deal and geos in the March quarter. I’ll update with more detail and insights early next week. Coming to COFES? Let’s talk!