Earnings Call Excerpt
Dassault Systemes S.A. (DASTY)
Q3 2006 Earnings Call
October 26, 2006 3:30 am ET
Executives
Thibault de Tersant - EVP and CFO
Presentation
Operator
Thibault de Tersant
[Audio starts abruptly] which helps this morning, it's an important morning.
I think third quarter has been a pretty strong quarter, both on revenue and EPS, as you have seen. Our two acquisitions ABAQUS and MatrixOne have been performing very well and this very comforting, particularly for MatrixOne. The growth drivers that we have, already highlighted to you are in place and are certainly contributing to this performance and we'll end our line later in the presentation. We are concerning our 2006 objectives, in fact we are fine-tuning EPS a little bit to the upside and we are already seeing a very initial view of 2007, which is driven then by macro economy considerations.
Our revenue was $282.3 million in third quarter; this is an increase excluding currency of 36% with a 30% growth excluding currency for software and a better performance in services for third quarter. The operating margin was 22.8% which is just 1 point less than last year. So, the two point dilution coming from MatrixOne was in place. But we are able to confirm just 1 point of it. EPS grew by 25% in the third quarter and 21% if you look at the year-to-date results. And in terms of seats, we have been, we have sold 16,975 seats in third quarter, an 8% growth when combining CATIA and SolidWorks.
The resulting PLM were quite good, 41% increase in PLM revenue, 112% for ENOVIA, and 20% for SolidWorks which is a very consistent performance. From a geo-standpoint, Europe was our best growth in the quarter, at 48%. This is coming on two or three years of modest performance in Europe of course, but it's something very encouraging. Asia had a growth of 24% and Americas 33%.
MatrixOne is the one that I would like to underline for the third quarter. We did deliver EUR26.3 million of revenue for MatrixOne. In dollar, this was a 30% growth, which is a good growth for Matrix's standalone. The cost control was in place. There was no more than 2 points of dilution, so it is exactly as forecasted at the time of the acquisition, and of course we are slightly above the revenue targets.
The keys and the integration is going very well. There is already a very good working relationship between the MatrixOne guys and our geography service teams, and so the cost spending opportunities are building up quite rapidly with MatrixOne. And truly, MatrixOne is bringing us new vertical where there are opportunities for CATIA, very clearly, and vice versa, we have many ENOVIA customers, or CATIA customers that have an interest for the business modeling tools, that MatrixOne can offer, or the integration with legacy data or the integration with the supply chain. For many prospective, MatrixOne can be useful in our install-base; there is no doubt about it.
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