And here we go—it’s the start of the third calendar quarter, which means we’ll hear from the publicly traded PLMish companies about how the second quarter went and what they expect for the rest of 2025.

I admit, I didn’t see this one coming since general trends had seemed positive, but Dassault Systèmes this morning announced preliminary results for Q2 that were below the midpoint of its earlier forecast and lowered its revenue outlook for all of 2024, meaning it’s not going to make up all of that Q2 shortfall.

The details:

• DS pre-announced Q2 total revenue of €1,495 million, below the prior guidance of €1,525 million to €1,555 million — a roughly €45 million miss at the midpoint
• That total revenue figure is still up 4% in constant currencies (cc)
• But the problem is that it’s well below the 7% to 9% cc growth forecast, a significant shortfall
• The company said €30 million of miss is due to delays in closing large deals because of customer “cautiousness regarding a complex geopolitical environment,” specifically in aerospace and defense deals in the US and Europe, during the last weeks of June
• The new forecast has 2024 total revenue up 6% to 8% cc rather than the 8% to 10% cc announced earlier.

Three bright spots: DS said that while some large deals were tough to close, “the number of mid-sized transactions at around €500k was up by 8% in the quarter, which highlights overall healthy and active business activities”. SolidWorks was “in line with our objectives” — go, CAD, go. And, finally, DS believes that Life Sciences will return to growth in the second half of 2024, as Medidata bookings are up.

And I guess a fourth bright spot? “All postponed transactions remain active in our pipeline, however given the unexpected delays and the backend loaded profile of the year, we believe it is prudent to risk adjust our full year outlook, which now reflects 6% to 8% total revenue growth supported by our pipeline of opportunities.”

TL;DR? DS didn’t hit its revenue target for Q2 and revised its 2024 cc revenue growth downwards from 9% to 7% at the midpoint. That implies, again, at the midpoint, that second-half revenue will be up 9% cc.

Investors are not happy with this news and sent DS’ share price down 5% or so today. Not because it said anything similar, but I guess investors only see one shade of grey: PTC shares are down 5%, too.

DS’ announcement leads to so many questions: First, what changed? The wars in Ukraine and the Middle East rage on. US politics are nuts. China and Russia continue to be Western dilemmas. European politics, admittedly, got more confusing quickly towards the end of Q2 but realistically, the end of Q2 wasn’t all that different from the start, so what happened? Second, €15 million of the miss is not covered by the large deals/aero+defense/NA+EU explanation — what happened there, where and why? And, finally, why doesn’t DS feel confident in predicting the close of the slipped deals? DS has been at this a looooong time, with very seasoned sales execs; you know they’re working everything they can to close those deals. What has to change for those deals to close?

We’ll learn more when DS announces full financial details about Q2 2024 on 25 July.