Dassault Systèmes financial results show double digit software revenue growth in Q1 2019

Dassault Systèmes, the developer of 3D design software SOLIDWORKS and the 3DEXPERIENCE platform, has reported its financial results for the first quarter of financial year 2019.

Total revenue for the quarter is up 17% on the comparative period, from €818.7 million to €958.9 million. Of this revenue, Software constitutes €855.3 million for Q1 2019, a €120 million and 16.35% increase on the same period in 2018 which was €735.10 million. The remaining €103.6 million for Q1 2019 is derived from Dassault Systèmes Services, such as consultation and orders through the 3DEXPERIENCE Marketplace. Services revenue for Q1 2019 increased 24.07% on Q1 2018, which was reported at $83.5 million.

Revenue Q1 2019 (millions €) Q1 2018 (millions €) Variance € millions %
Software 855.30 735.10 120 16.35%
Services 103.60 83.50 20 24.07%
Total 958.90 818.60 140 17.14%

Digging deeper into the results by product and industry, Bernard Charlès, Vice Chairman and CEO at Dassault Systèmes, told investors in an earnings call yesterday, “Our revenue results came in the high-end of our objectives. Software revenue increased double-digits in 7 out of the 11 industries we cover, all three core and several of our diversification industries, including High Tech, Life Sciences and Home & Lifestyle included.”

“On a regional basis, we saw strength in all three regions, led by 3DEXPERIENCE and large wins in newer brands as well. We are benefiting from our geo diversification as we continue to build out our market presence in key geographies.”

“Several notable geos in the quarter were China, Southern Europe and North America. 3DEXPERIENCE software revenue increased 26%. 3DEXPERIENCE licenses revenue increased 25% and represented 40% of related licenses in the quarter.”

Dassault Systèmes Q1 2019 revenue by product line

As a multi-product platform, Dassault Systèmes’ 3DEXPERIENCE is a software engine that connects all of the company’s applications from 3D design and simulation, to social & collaboration and information intelligence. The flagship CAD application, SOLIDWORKS is part of the 3DEXPERIENCE family, but it can also be used independently of the other programs offered by Dassault, such as product design platform CATIA, and business modeling and planning app ENOVIA. The idea is that 3DEXPERIENCE is a modular platform that can be added to or changed as required.

The 3DEXPERIENCE solutions compass. Image via Dassault Systèmes
The 3DEXPERIENCE solutions compass. Image via Dassault Systèmes

In a breakdown of Software revenue by product line, CATIA remains Dassault’s highest earner, brought in €270.1 million in Q1 2019. This is followed by SOLIDWORKS, generating €191.4 million in Q1 2019, and then ENOVIA, which reported €92.3 million in the same quarter. Remaining applications from Dassault generated a combined revenue of €301.5 million in Q1 2019.

Geographically, as highlighted by Charlès, Europe was the company’s strongest region in the quarter, providing a Software revenue of €364.9 million. This was followed by the Americas, which also experienced the strongest growth (26%) in the period, reporting €264.9 million in Software revenue for Q1 2019. Asia constituted €225.5 million in Software revenue for Q1 2019.

Revenue by region Q1 2019 (millions €) Q1 2018 (millions €) Variance € millions %
Americas 307.00 311.10 -4.10 -1.32%
Europe 408.40 409.50 -1.10 -0.27%
Asia 243.50 243.50 0.00 0.00%
Total 958.90 964.10 -5.20 -0.54%

For the three months ended March 31, 2019, Dassault Systèmes reported an operating income of €215.8 million, compared to an operating income for the same period in 2018 of €178.7 million. Net income for Q1 2019 was €158 million, compared to €136 million in Q1 2018. The diluted net income per share for Q1 2019 was €0.62, compared to €0.53 in Q1 2018.

The company started the period with €2.8 million in cash and cash equivalents. It ends Q1 2019 with nearing €2.9 million in cash and cash equivalents. For comparison, at the end of Q1 2018, the company had €2.8 million in cash and cash equivalents, after starting the period with €2.5 million.

On track to $0.5 billion business?

In analyst questions at the end of the yesterday’s earnings call, Charlès was also asked about the company’s recent acquisition of enterprise resource planning (ERP) software specialist IQMS which was confirmed in December 2018. With the help of this acquisition, Dassault is persuing plans to become a $0.5 billion dollar business. Commenting on IQMS, Charlès said that “we are on a good start” and the company is hopeful of seeing visible revenue growth from the acquisition before year-end.

In addition, he said:

“The ambition to be a $0.5 billion brand is really a possible ambition. We have no doubts about it.”

Dassault Systèmes full financial results for Q1 2018 can be found online here.

For more of the latest 3D printing financial results subscribe to the 3D Printing Industry newsletter, follow us on Twitter and like us on Facebook. Seeking jobs in engineering? Make your profile on 3D Printing Jobs, or advertise to find experts in your area.

Featured image shows Dassault Systèmes Design in the Age of Experience. Photo by Michael Petch.