France’s Dassault to Miss Quarterly Revenue Target on Coronavirus Impact

French software maker Dassault Systemes SE (DASTY) warned that first-quarter revenue growth will be lower than forecast as a result of weaker income from new licences and services activity.

Dassault disclosed that revenue should grow by 14% to 17% at constant currency in its first-quarter, according to preliminary results. This compares with at least 20% in revenue growth Dassault initially expected at constant currency level, it said. As such total revenue would come 2.5% to 5% below the low-end of its guidance.

“This unprecedented SARS-CoV-2 crisis will create tremendous challenges for society at multiple levels,” said Bernard Charlès, Dassault Systemes’ Vice Chairman and Chief Executive Officer. “In this context of great uncertainty, we believe it is good governance to give a preliminary indication of its impact on our revenue for the first quarter 2020.”

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In addition, Dassault forecast that recurring software revenue, representing about 84% of its software revenue during the quarter, was in line with its initial guidance and drove the growth during the period. Overall, total revenue was mainly driven by the good performance of its recently acquired U.S. firm Medidata, the company said. In June last year, Dassault bought Medidata, a U.S. firm focused on clinical trials for $5.8 billion, in a move to build up its life sciences presence.

“We are working extensively with Medidata to identify enhanced and innovative ways to assist pharmaceutical and medical devices companies in analyzing the impact of the pandemic on the clinical trials and leveraging current and developing technologies to mitigate risk through increased use of virtual capabilities,” Pascal Daloz, CFO at Dassault.

On April 23, Dassault will present its financial results and give more details on its annual outlook, the company said.

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