Dassault Systèmes reported today that Q2 revenue fell 5% from a year ago to 310.9 million euros, the high end of its earlier guidance, while net profit fell 41% to 25.7 million euros from 43.2 million euros. On a sequential basis, however, revenue was flat to up slightly, depending on how one views currency effects. Perhaps this is the second signal in two days that the economy may be turning the corner — recall that PTC too saw a sequential flatness.
CEO Bernard Charlès commented "[o]n balance, business conditions during the second quarter were similar to the first quarter with customers remaining cautious with respect to new business investments. We started to see some increase in activity among larger companies, for which design excellence, simulation and compliance were significant drivers. For smaller companies, in general, it was not the case as we observed some slight further weakening from the first three months of the year.” He also said that "… our ongoing cost actions, and based upon our revenue objective, we are targeting a stable to improving sequential performance from earnings and operating margin perspectives for the third quarter."
DS expects a sequential decrease in revenue in Q3 (traditionally a slow quarter) to between 285 million to 300 million euros. DS also narrowed its revenue guidance range but held to a 8% to 6% decline in non-IFRS revenue for the year to revenue between 1.25 billion euros to 1.28 billion euros.
Key earnings factoids:
• Currency helped; DS Q2 revenue was down 11% on a constant currency basis
• Software revenue was down 2.5% as reported; down 9% in constant currency
• New license revenue declined 36% from a year ago but, on a sequential basis, new licenses revenue was up 10%
• The mainstream products and PLM both saw software revenue down 2.4%
• Within the PLM category, CATIA software revenue declined 13% while ENOVIA software revenue was down 15%. SIMULIA, on the other hand, saw double-digit software revenue growth
• On a geographic basis, revenue from the Americas was up less than 1% as reported but down 12% inconstant currencies; Europe was down 8% as reported and in constant currencies while revenue from Asia was down 4% as reported and 18% in constant currencies. The revenue distribution remains remarkably stable when compared to last year — DS is clearly not seeing any greater economic slowdown in any one geography: Europe represents 46% of revenue (47% in H1 2008), Americas, 31% (30%) and Asia 23% (23%).