MCAD Industry View - A DECEMBER 2008 Update




Recent MCAD & PLM News Highlights

On November 18, 2007 Autodesk announced that it has completed the acquisition of substantially all of the assets of Softimage - a developer of 3D technology for the film, television and games markets - for approximately $35 million. On October 23, 2008, Autodesk announced it had signed a definitive agreement to acquire Softimage from Avid Technology, Inc.

On November 24, 2008 Dassault Systèmes launched V6R2009x, the latest release of its new platform. Release 2009x is said to demonstrate the continuing momentum of the V6 portfolio and its production-proven online collaborative platform.



MCAD Vendors' Financial Performances in Q3 2008

As reported above, the G6 MCAD vendors generated combined revenues of $1.593 billion, an increase of almost 15% from the $1.386 billion in the year ago quarter, but a 0.4% decline from the $1.599 billion in the prior sequential quarter. On a year-over-year basis, ANSYS was the clear revenue percentage growth leader at 30%. All the others sported year-over-year increases in the low double digit range.

On a sequential basis, PTC with 10.2% growth edged out ANSYS at 9.9%. ESI-Group was essentially flat in US dollars. The others suffered small percentage declines. Dassault Systemes endured the largest sequential decline at -6.2%. See Table 1.


Figure 1 below provides a bar graph showing the revenue trend for each of the covered vendors, for the periods mentioned in Table 1.


For the third quarter of 2008, Autodesk was the clear revenue share leader of the G6 at 38%, with Dassault Systemes in second place at 30%, followed by PTC at 19%. See Figure 2.


Table 2 reveals that the combined Q3 earnings of the G6 MCAD vendors was $232 million, a still-healthy 29% increase from the $179 million in the third quarter of 2007 and even a 16% increase from the $200 million in the second quarter of 2008. All the earnings-reporting vendors generated net income for the 2008 third quarter. On a year-over-year basis Dassault Systemes had the largest percentage increase at 52%, followed by ANSYS at 39%, and then by Autodesk at 23%. MSC.Software was the only firm to see a drop in earnings.

On a sequential basis, PTC delivered the largest percentage growth in earnings at 152%. Autodesk was a distant second at +16%.




Details on Individual Vendors' Q3 2008 Performances



On November 6, 2008 ANSYS, Inc. reported financial results for the third quarter, the period ended September 30, 2008. Total revenue for the quarter was $122 million, an increase of 30% from the $94 million in the third quarter of 2007 and an increase of nearly 10% from the $111 million in the second quarter of 2008. The $122 million in Q3 revenue was $1 million above the guidance range given last quarter. Software license revenue was $80 million, accounting for 66% of total revenue. This was an increase of over 31% year-over-year, and an increase of 8.5% from the prior quarter. Maintenance and services revenue was $42 million, or 34% of total revenue, an increase of almost 28% from the year ago quarter, and an increase of 12.6% sequentially.

Net income for the quarter was $25.8 million, an increase of nearly 38% from the $18.6 million in the year ago quarter, but a drop of 8.4% from the $28.1 million in the prior quarter.

Jim Cashman, president and CEO, commented on the Company's third quarter 2008 performance, stating, "This quarter was another important milestone in the ANSYS journey as we completed the strategic acquisition of Ansoft. We remain optimistic that today's quarterly report, which includes two months of operations as a combined company, is only the beginning as we continue to focus and execute on our integration plan and long-term strategy for the Company.”



On November 20, 2008 Autodesk, Inc. reported financial results for the third quarter, the period ended September 30, 2008. Total revenue for the quarter was $607 million, a 12.6% increase from the $539 million in the third quarter of 2007, but a 2% drop from the $620 million in the pervious quarter. The Q3 revenue of $607 million was well below the range of $625 million to $635 million given last quarter, but it was at the high end of the revised range given as preliminary results on November 4, 2008. License revenue was $421 million, accounting for 69% of total revenue, an increase of 6.3% year-over-year, but a decrease of 4.4% sequentially. Maintenance revenue was $186 million, or 31% of total revenue. This was a 30% increase over the year ago quarter, and a 3.7% increase from the just prior quarter.

The Platform segment, which accounts for about 44% of total revenue, includes AutoCAD and AutoCAD LT products that service multiple markets. Other segments are AEC (previously two segments: Building and Infrastructure) and Media/Entertainment (previously named Discreet). The Manufacturing segment (which includes the Inventor product lines) accounted for 20% of total revenue and grew 22% year-over-year, but fell 5.3% from the prior quarter. See Table 3.

A “guesstimate” of MCAD revenue for the quarter would be about $250 million.


Design segment revenues increased almost 13% over the third quarter of last year to $527 million, accounting for 87% of total revenue, but fell 3.3% sequentially. Combined revenue from model-based 3D design solutions, including Inventor, Revit, Civil 3D, Moldflow, NavisWorks, and Robobat, increased 26% over the third quarter of fiscal 2008 to $163 million and comprised 27% of total revenue for the quarter. Excluding $12 million from Moldflow, which was acquired earlier this year, revenue from model-based 3D design solutions grew 16% to $151 million. Autodesk shipped approximately 41,000 commercial seats of its model-based 3D design products, including approximately 9,000 commercial seats of Inventor and Moldflow and 32,000 seats of its Architecture Engineering and Construction products - Revit, Civil 3D, NavisWorks, and Robobat.

Revenue from AutoCAD and AutoCAD LT increased 10% and 12%, respectively, compared to the third quarter of last year. Revenue from 2D vertical products decreased 6% year-over-year.

Revenue from emerging economies increased 25% over the third quarter of fiscal 2008 (calendar 2007) to $114 million, and represented 19% of total revenue. EMEA revenue was $258 million, an increase of 27% as reported over the third quarter of last year (+20% at constant currency). Revenue in Asia Pacific was $133 million, an increase of 12% as reported year-over-year, and 9% at constant currency. Revenue in the Americas decreased 1% to $216 million, compared to the third quarter of last year.

Upgrade revenue and maintenance revenue combined increased 22% over the third quarter of fiscal 2008, to $227 million. Total upgrade revenue decreased 4% compared to the third quarter of fiscal 2008. Maintenance revenue increased 31% compared to the third quarter of fiscal 2008, to $186 million, or 31% of total revenue. Deferred maintenance revenue decreased $55 million sequentially, but increased $67 million compared to the third quarter of fiscal 2008.

Net income for the quarter was $104.5 million, a 23% increase from the $84.8 million in the same quarter last year, and a 16% increase from the $89.8 million in the prior quarter.

Autodesk announced December 2, 2008 that it had signed a definitive agreement to acquire the iLogic software and related technology from Canada-based Logimetrix, Inc. iLogic is Logimetrix's desktop rules-based design automation technology. Terms were not disclosed. The agreement is said to demonstrate Autodesk's commitment to providing a comprehensive Digital Prototyping solution to manufacturers of all sizes. iLogic technology will supplement the current Autodesk solution for Digital Prototyping.

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