Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dassault Systemes SE (DASTF, Financial) reported strong Q4 results with software revenue accelerating to 9% and EPS growing by 11%.
- The 3DEXPERIENCE platform contributed significantly, accounting for nearly 40% of software revenue and showing a 22% rise.
- Major contracts were signed with industry leaders such as Volkswagen Group and Lockheed Martin, expanding the company's footprint.
- The company is leveraging generative AI to create new solutions, enhancing its strategic positioning across various sectors.
- The company's subscription revenue grew by 10%, with recurring revenue now representing 80% of software revenue.
Negative Points
- The automotive sector is facing slowing demand due to lower EV adoption rates, impacting growth potential.
- The aerospace industry is experiencing supply chain disruptions and production ramp-up challenges.
- Medidata's growth was only 1% in Q4, indicating challenges in the life sciences sector.
- Cloud revenue growth excluding Medidata slowed to 19% in Q4, down from 38% in Q3.
- The company anticipates a degree of caution in Q1 2025 due to the timing of certain deal signatures.
Q & A Highlights
Q: Could you share details on the Lockheed Martin and Volkswagen deals? Does the Volkswagen deal include upfront revenue?
A: (Rouven Bergmann, CFO) The Volkswagen deal is a cloud-based agreement, so there is no upfront revenue. It involves milestones that will ramp up over time. The Lockheed Martin deal expanded significantly in scope, particularly in manufacturing, and leaves room for future growth.
Q: Regarding your 2024 outlook, how do you plan to manage headcount growth and efficiency gains from AI technologies?
A: (Rouven Bergmann, CFO) We are focusing on productivity gains through automation, which has allowed us to lower our hiring rate, particularly in G&A. We will continue to invest in R&D and sales, especially in fast-growing areas like Centric. This approach supports our margin expansion into 2025.
Q: What drove the strong performance of SolidWorks in Q4, and what are your expectations for 2025?
A: (Rouven Bergmann, CFO) SolidWorks' growth was broad-based, driven by strong volumes and market share gains. We expect mid-single-digit plus growth for SolidWorks in 2025, with the subscription transition progressing well.
Q: How do you view the cloud growth, especially with the non-Medidata cloud slowing in Q4?
A: (Rouven Bergmann, CFO) For the full year, non-Medidata cloud grew 41%. We signed significant cloud deals in Q4 that will contribute to 2025 growth. We expect cloud growth to accelerate in 2025, supported by large transactions increasingly including cloud components.
Q: Can you elaborate on the implications of the 3D UNIV+RSES announcement for your portfolio?
A: (Pascal Daloz, CEO) The 3D UNIV+RSES introduces new AI-based services that will be integrated into our existing portfolio. It will not increase complexity if approached from an industry-focused perspective. The new services will be priced independently but will complement our current offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
