Shares of French technology company Dassault Systemes (DSY.FR) are trading down today although the financial report turned out to be moderately positive. Management conveyed that the company is on track to meet its annual growth target. The company beat earlier targets in Q2 - the declines can be indirectly linked to profit realization and a slight decline in margins.
The company reaffirmed its target of 8 to 9% revenue growth and earnings per share in the region of €1.18 - €1.20 in 2023. Earnings per share rose 7% y/y with high operating margins above 30%. Free cash flow from operations since the beginning of 2023 was EUR 1.03 billion
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Open account Try demo Download mobile app Download mobile app- Revenues increased by 8%, to €1.45 billion
- Software revenues rose 8%, to €1.31 billion
- License revenues increased 6%, to €278.9 million
- Subscription revenues rose 9%;
- Services revenue rose 7%.a=
North and South America accounted for 40% of the company's revenue (10% year-on-year increase). Results were driven by demand from the aerospace and defense industries. Revenues in Europe grew 9% (36% of software revenues). Management indicated that Germany and France dominated with orders from retailers and transportation. Revenues from Asia achieved 24% y/y growth, driven mainly by rebounding demand in China and India.
Company pointed to strong y/y revenue growth from software business
- IT revenue for industry rose 7% to €686.7 million (52% of software revenue)
- IT revenue for the scientific sector rose 7% y/y to €287.2 million (22% of software revenue).
- IT revenue for government grew 12% to €335.1 million (26% of software revenue)
- Revenue from 3DExperience increased 2% y/y (32% of software revenue)
- Sales in Dassault's cloud computing segment posted double-digit, 11% y/y growth (23% of software revenue)
Dassault pointed to strong growth in orders from the defense and medical sectors. At the same time, however, operating income indicated signs of stagnation (1% y/y growth) at €448.9 million. The operating margin, although very high (31%), fell from 32% in Q2 2023. Operating expenses increased. The company estimates a return to double-digit y/y revenue growth from the medical sector. It highlighted the renewal of key partnerships with the pharmaceutical industry, which is not helped by the slowdown effect after the covid pandemic.
Dassault Systemes (DSY.FR) shares, D1 interval. Source: xStation5
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