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Dassault Systemes SE ADR DASTY

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Dassault Systemes Posts Strong First Quarter Amid New Cloud Opportunities; FVE Raised to EUR 160

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Dassault Systèmes reported solid first-quarter results that came in at the high end and above management’s guidance. Despite the company’s continuous transition to a subscription model, software licensing revenue was strong, up 25% year over year. Still, cloud offerings underpin Dassault’s innovations across the board, with 95% of on-premises capabilities available as cloud solutions and cloud composing 18.5% of software revenue in the first quarter. We view the underlying goal of growing cloud to one third of software revenue by 2025 as not only doable but crucial to future margin expansion. We are encouraged by the increasing alignment between industry trends and technological demands within Dassault’s core verticals and the company’s platform-driven cloud-based solutions. As a result, we are raising our fair value estimate to EUR 160 ($194) from EUR 156 ($189) but still consider shares to be overvalued.

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Company Profile

Business Description

Dassault Systemes is a leading provider of computer-assisted design and product lifecycle management software, serving customers like Boeing and Tesla throughout the production process. The company’s top line largely depends on the transportation and mobility, industrial equipment, and aerospace and defense industries.

Contact
10, rue Marcel Dassault
Velizy-Villacoublay Cedex, 78140, France
T +33 161626162
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 19,667

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