Dassault Systèmes’ Q1 as pre-announced; 2020 will be tough

Apr 27, 2020 | Hot Topics

DS announced results last week that were pretty much in line with what they had said earlier — but the devil is in the details. If you want ALL of the details, go here. I’ll summarize what I think it important and then riff on what it might mean for our PLMish universe.

The highlights of DS’ announcement:

  • Q1 non-IFRS total revenue was €1.14 billion, up 18% as reported (up 17% in constant currencies, cc). On an organic basis, revenue was down 1% cc
  • Software revenue was €1.01 billion, up 19% (up 17% cc) and down !% on an organic basis cc
  • Software license revenue was €172 million, down 19% as reported and down 20% cc — both as reported and on an organic basis
  • If we look only at subscriptions and recurring support (83% of total software revenue), that was up 32% as reported, up 30% cc and up 5% on an organic basis
  • 3DEXPERIENCE products represented 22% of related software revenue, down 1%

What does that tell us? Pretty much what everyone else has said: subscriptions smooth bumps in the road, upfront license deals (typically bigger) are hard to close right now, and that DS relies on acquired revenue for a lot of its growth. That decline in 3DEXPERIENCE-related software revenue, the company said, was due to postponed enterprise decisions (as well as a tough comparable a year ago). None of that is unique in our PLMish world, and we should expect to hear the same from DS’ competitors.


  • By brand, ENOVIA struggled the most, with revenue down 11% cc in Q1 to €81 million
  • CATIA wasn’t immune, though, reporting revenue down 1% cc to €270 million
  • In general, Industrial Innovation, which includes CATIA, ENOVIA, DELMIA and other brands, saw “good recurring revenue [for CATIA and ENOVIA] offset by a sharp decline of licenses for ENOVIA, and to a lesser extent CATIA”. DELMIA was characterized as having a “strong” Q1
  • DS no longer breaks out simulation, even as a part of the Other bucket- it’s buried in Industrial Innovation which, in total, was down 1% cc to €604 million
  • Revenue from SOLIDWORKS was up 3% cc to €201 million, even as “strong recurring revenue [was] partly offset by [a decline] in license” revenue
  • That which pulled the entire Mainstream business unit up, to grow at 3% cc for Q1. DS also lumps Centric into this bucket and said that Centric saw a “sharp growth slowdown” in Q1
  • Life Sciences, which now included Medidata, revenue was up 384%, which DS said was “in line with plan”. On a standalone basis, Medidata revenue was up 13%.

You can read geo, services, and other breakdowns on DS’ investor website, here.

But, of course, everyone wants to know what DS sees for Q2 and the rest of 2020. It’s one of the few companies so far that has tried to keep a forecast going; we’ll find out later if that was a good idea or a bad one. The company now believes that Q2 non-IFRS revenue will be between €1.04 billion and 1.07 billion, which would be up 9% to 12% cc. For the year, it forecasts total revenue of €4.50 billion to 4.55 billion, up 12% to 13%cc.

What does it all mean?

It looks like 2020 will, at best, be flat on an organic basis. That said, DS believes that its Medidata acquisition will position it very well to help its pharma customers respond to the COVID-19 crisis and that the 3DEXPERIENCE platform will enable all customers to get back to work. Q2 is going to be tough, as countries struggle to get industries back to work; the guidance presumes that there will be a gradual recovery in Q3 and Q4. Both CEO Bernard Charlès and CFO Pascal Daloz said that they’re structuring DS with slowed expenditures on travel, hiring and other costs to adjust to whatever pace develops. They were clear, however, that DS must invest for its future, shifting resources where they can but also hiring from outside to support its life sciences ambitions.

We next hear from Hexagon, PTC and ANSYS (among others) in our PLMish world, and also from lots of high tech and industrial companies. Put that all together, sprinkle on some magic dust, and we might get a view from suppliers and buyers. It’s going to be a rocky week — hang on!