Shares of Dassault Systemes experienced a significant increase on Wednesday as the French software maker posted impressive revenue and operating profit figures for the third quarter. At 0900 GMT, Dassault Systemes shares were trading 6.1% higher at EUR37.13.
Stellar Performance in Q3
Reporting on a non-IFRS basis, the company announced that its overall revenue grew by 11% year-on-year at constant currencies, reaching 1.42 billion euros ($1.50 billion). The software revenue saw a significant boost of 12% to EUR1.29 billion, while services revenue increased by 2% to EUR138 million. These results surpassed analysts' expectations.
Strong Operating Profit and Margin
Dassault Systemes' operating profit also rose to EUR442 million, generating an impressive 31% operating margin. This represents an increase from the previous quarter's operating profit of EUR433.5 million. Analysts at Jefferies noted that the company exceeded consensus estimates for revenue, operating profit, and operating margin.
Promising Projections for Q4 and Full Year
For the fourth quarter, Dassault Systemes anticipates revenue between EUR1.64 billion and EUR1.68 billion, with an operating margin projected to range from 35.8% to 36.6%. Looking ahead to the full year, the company expects revenue to come in between EUR5.95 billion and EUR5.99 billion, with an operating margin of 32.3% to 32.6%.
Industry Standards and Performance Evaluation
It is worth noting that Dassault Systemes, along with several other European software companies, publishes its financial figures using two sets of numbers. The first set adheres to the International Financial Reporting Standards (IFRS), which is a globally recognized accounting method. However, analysts and investors generally focus more on the non-IFRS figures, which omit share-based compensation, restructuring expenses, and acquisition-related charges.
Dassault Systemes' impressive performance in the third quarter highlights its strength in the software industry. The company's ability to exceed expectations bodes well for its continued success moving forward.
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