- Growth in the Americas was led by ENOVIA and SIMULIA. Year-to-date the Americas are up 14% in constant currency.
- In new Europe revenue increased 11%, Europe was driven good performance in Germany and strong demand from Russia. Year-to-date revenue in Europe was up 11%.
Results in Asia were mixed this quarter we had strong demand in China and a number of other countries in the regions. However, this was more than offset by a lower level of new business activity in Japan. For the quarter Asia was flat and year-to-date it was up 6%. Both data points are in constant currency.
Dassault Systemes is benefiting from its sales and expansion into higher growth countries and regions with the revenue of above 25% in constant currencies this quarter for this group in total.
Recurring software revenue drove the results increasing 18% in constant currencies.
Recurring revenue accounted for 67% of total software revenue in the quarter. Solid recurring revenue growth benefited from several of the key factors. First, Dassault Systemes continued to grow its installed base of customers across the company. Second, growth is coming from higher Solidworks maintenance attachment and annual rate which reflects very steady customer dynamic. And third, the recurring revenue growth was also driven by SIMULIA''s performance as customers continue to increase their use of virtual simulation in the product design and creation process.
New licenses growth slowed in the quarter to 1% growth in constant currency as it was impacted by the economic slowdown. Japan was the major reason behind the lower level of new license growth.
CATIA delivered software revenue growth of 9% in constant currencies in the third quarter and excluding the DSF spin-off perimeter impact, underlying activity is delivering double-digit growth in constant currencies.
CATIA growth rates during the 2008 second half also reflected very different first half, second half comparisons to 2007.
CATIA software revenue growth grew 5% in the first half of 2007, while it increased 23% in the second half of 2007 reflecting the first visibly noticeable benefits of the PLM Value channel transformation as well as the acquisition of ICEM.
CATIA year-to-date growth in 2008 was an increase of 17%.
ENOVIA had a good quarter, demonstrating the success of the company’s diversification strategy into new industries. ENOVIA software revenue increased 19% in constant currencies. To some extent, Dassault Systemes also benefited from a weak year-ago comparison.
SIMULIA software revenue growth was in the double-digits in constant currencies and its growth was well diversified across a broad range of industries.
In the Mainstream 3D market, Dassault Systemes had good performance driven by recurring revenue and sales of Solidworks product data management and analysis software applications, both elements growing above 20% in constant currencies. New seat activity was healthy in both Europe and Asia, but was offset to a large extent by the Americas.
Dassault Systemes had good results in the consulting services this quarter, with solid double-digits revenue growth in constant currencies.
In addition, Dassault Systemes saw some nice improvement in the consulting services margin as well.
Overall, the services and other revenue line item reflect the perimeter effect of winding down historical channel management activities formerly rendered to IBM. A services margin comparison to the year-ago period reflected a much higher mix of CMP fees and the DSF spin-off and therefore is not so meaningful to measure the company’s progress.
The non-GAAP operating income increased 12% in the third quarter.
R&D headcount was up 6% that includes personnel in R&D and cost of software with R&D expenses increasing 5% excluding currencies and benefit income research tax credits. In total, operating expenses increased 9% excluding currency on headcount growth of 8%.
Dassault Systemes continues to improve its non-GAAP operating margin.
Financial revenue improved significantly in the quarter, following two quarters where currency negatively impacted results. Specifically, financial revenue increased to €9.9 million up from €1.7 million in the year ago period. It was comprised of net increased income of €3.4 million and net exchange gains of €6.3 million.
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