MCAD Industry View - A DECEMBER 2008 Update


Autodesk instituted a hiring freeze in October 2008 and reduced discretionary expenses for a combined 5% expense reduction. Autodesk is still searching for a replacement for CFO Al Castino, whose departure was announced in May 2008.

Carl Bass, Autodesk president and CEO, said, “The sharp downturn in the global economy had a substantial impact on our results for the quarter. Our business in the United States slowed as a result of the economic climate. In addition, we started to experience headwinds in some of our international markets.”



On October 29, 2008 Dassault Systemes reported financial results for the third quarter, the period ended September 30, 2008. Total revenue for the quarter was $477 million, an increase of 16.5% from the $410 million in the year ago quarter, but a decrease of 6.2% from the $509 million in the previous quarter. The Q3 2008 revenue was above the guidance given last quarter in terms of euros. Software revenue was $415 million, accounting for 87% of total revenue, an increase of 18% year-over-year, but a decrease of 4.4% sequentially. New license revenue was 33% of software revenue, while recurring revenue was 67%. In PLM the recurring revenue figure is even higher at 71%.

Dassault Systemes, a French company, reports its financial results in euros but provides average conversion factors to dollars for each quarter and year. These factors were used to calculate US dollar numbers. Revenue growth in terms of constant currency non-GAAP was 13%, which was the guidance given last quarter.

Revenue from North America at $152 million accounted for 32% of total revenue. This was an increase of over 15.5% year-over-year and an increase of 1.7% sequentially. Revenue from Europe was $219 million accounting for 46% of total revenue. This was an increase of 22% year-over-year, but a decrease of 10.6% sequentially. Revenue from Asia was $106 million accounting for 22% of total revenue. This was an increase of 7.5% year-over-year, but a decrease of 7% from the prior quarter.

The Enovia brand, which includes Enovia, MatrixOne and SmarTeam, generated $66 million in the quarter, or almost 14% of total revenue. This was a 27% increase year-over-year, but a decrease of 2.7% sequentially. Note that MatrixOne was acquired in May 2006 for $410 million. Dassault has now combined SolidWorks and CosmosWorks into Mainstream 3D. This category generated $101 million, accounting for 21% of total revenue. This represented an increase of 19% year-over-year, but a decrease of 2.1% sequentially. CAD generated $184 million, or 38% of total revenue, up almost 16% year-over-year but down 7% sequentially.


Net income for the quarter was $65 million, an increase of 53% from the $43 million in the third quarter of 2007, but a decrease of 2% from the $66 million in the prior quarter.

Joel Lemke, CEO of ENOVIA, will be heading up a new, independent business partner organization focused on new industries. The new CEO for ENOVIA is Michel Tellier. Mr. Tellier has been with DS since 1997, coming from the aerospace industry. He most recently headed up the PLM consulting services organization

Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Dassault Systèmes software revenue growth of 12% in constant currencies during the quarter reflected the increasing momentum of our strategy of diversification into new industries. Further, we saw particular strength coming from our collaboration and simulation software offerings in both the PLM and Mainstream 3D markets. Thanks to our brands and applications strategy, the strengthening of our sales channels, particularly in the mid-market, and growth in our customer base, we were able to deliver third quarter revenue at the high end of our objectives notwithstanding the economic crisis which started to impact our operations early September.

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Our third quarter financial performance came in well in line with our objectives, in fact, at the high end with software revenue up 12% in constant currencies and earnings per share rising 26%, demonstrating the inherent earnings leverage of our business model.”



On September 26, 2008 ESI Group reported financial results for its half-year 2008/2009, the period ended July 31, 2008. The information was provided in euros. The data for the first quarter of 2008/2009 is in terms of sales, not revenue, while the latest report is for half-year revenue. Total revenue for the quarter was $23 million, an increase of 19% from the $19.3 million in the same quarter a year earlier and essentially flat relative to the $22.9 million in the prior quarter. License revenue was $10.5 million or 69% of total revenue. This was an increase of 1% year-over-year but a decrease of 2.8% sequentially. Service and other revenue was $4.1 million.

Alain de Rouvray, Chairman and Chief Executive Officer of ESI Group, states, "We are very pleased to announce these results, which show a strong improvement in profitability. They demonstrate the effectiveness of our strategic decisions with the strengthening of the Services business, and regarding financials, the firm grip on costs and effective currency hedging".



On November 4, 2008 MSC.Software Corporation reported the financial results for the third quarter, the period ended September 30, 2008. Total revenue for the quarter was $63.7 million, an increase of 11.4% from the $57.1 million in the third quarter of 2007, but a decrease 1.1% from the $64.4 million in the second quarter of 2008. Software revenue was $21.5 million, accounting for almost 34% of total revenue, an increase of 8.4% year-over-year and an increase of 2.2% sequentially. Maintenance revenue was $34.6 million, or 54% of total revenue, an increase of almost 9.4% year-over-year, but a decrease of 3.7% from the prior quarter. Services revenue was $7.5 million, or almost 12% of total revenue. This was an increase of 33% from the year ago quarter, and an increase of 2.1% from the previous quarter.

The Americas accounted for 32% of total revenue, Europe for 40%, and Asia Pacific for 28%. Foreign exchange favorably impacted total revenue by $4.6 million in the quarter. Changes in the Euro increased EMEA revenue by $2.6 million in the quarter and changes in the Japanese Yen increased Asia revenue by $2.0 million in the quarter. Foreign currency impacts increased total operating expenses by $1.9 million in the third quarter.


There were 100 bookings in the quarter over $100K, compared to 79 in the same quarter a year ago. The average transaction size was $228,000 versus $193,000 for the same time periods.

In the quarter Engineering applications represented 65% of software revenue, MD 14% and SimEnterprise 21%. From a percentage of software revenue perspective, SimEnterpise has increased it share from 0% to 21% in a year.

Net income for the quarter was only $62 thousand, a steep decline of 97% from the $2.3 million in the year ago quarter and a drop of 94% from $1.0 million in the prior quarter. There was an $870,000 tax benefit in the quarter.

Bill Weyand, CEO and Chairman of MSC.Software, said, “Revenue growth of 11% in the third quarter indicates better acceptance of our business across both SimEnterprise and MD solutions, as well as increases in maintenance revenue and services activities. With our enterprise solutions being deployed under multi-phase, multi-year implementation programs, we believe this can provide a good base of business for us going forward."




On October 28, 2008 PTC reported financial results for its fourth fiscal quarter and for all of its fiscal year 2008, the periods ended September 30, 2008. Total revenue for the quarter was $300 million, an increase of 12% from the $267 million in the same quarter a year ago, and increase of 10% from the $272 million in the previous quarter. The $300 million was just above the guidance range given last quarter. License revenue was $99 million, accounting for 33% of total revenue. This was an increase of 2.5% year-over-year, and an increase of 27% from the $78 million in the prior quarter. Maintenance revenue was $132 million, or 44% of total revenue. This was an increase of 25% year-over-year, and an increase of 1.5% sequentially. Services revenue was $69 million, or 23% of total revenue. This was an increase of 6.5% year-over-year, and an increase of 7.8% relative to the previous quarter.

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