• IFRS total revenue increased 6% and non-IFRS total revenue increased 7% in the 2017 Nine-Month period. Software revenue increased 7% on both an IFRS and non-IFRS basis. Excluding acquisitions, non-IFRS total revenue and software revenue growth was 5%. Non-IFRS service revenue increased 3% in constant currencies led by 3DEXPERIENCE and manufacturing service engagements. (All growth rates in constant currencies.)
• Core Industries represented 68% of non-IFRS software revenue on a year-to-date basis and benefited from growth across all industrial sectors. Diversification Industries represented 32% of non-IFRS software revenue compared to 31% in the prior year period. For the first nine months of 2017, non-IFRS Diversification Industries software revenue growth was led by High-Tech, Consumer Goods & Retail and Consumer Packaged Goods & Retail.
• Non-IFRS software revenue increased 8% in Europe on solid new licenses and recurring revenue performance; it was led by Southern Europe and France. The Company recorded a notable improvement in Russia. In the Americas, non-IFRS software revenue increased 8%, led by strong growth in new licenses revenue in North America and Latin America. In Asia non-IFRS software revenue increased 5% with strong results in Korea and India and mixed results in China and Japan. High Growth countries saw an increase in non-IFRS software revenue of 11%, with double-digit growth in a number of countries offset in part by weak results in China. (All growth rates in constant currencies.)
• Non-IFRS new licenses revenue and other software increased 9% and represented 27% of total non-IFRS software revenue. Core and Diversification Industries represented 63% and 37%, respectively, of non-IFRS new licenses revenue on a year-to-date basis. (All growth rates in constant currencies.)
• Non-IFRS recurring revenue increased 7% in constant currencies and represented 73% of total software revenue for the first nine-months of 2017 similar to the year-ago period. Recurring revenue is comprised of maintenance subscription, rental subscription and initial cloud revenues.
• By product line and on a non-IFRS basis, SOLIDWORKS software revenue increased 14% to €517.1 million led by strong new licenses activity across the globe. CATIA software totaled €716.4 million with growth in the Americas and Europe offset by lower activity in Asia, notably in China. ENOVIA software revenue increased 3%. Other Software totaled €600.2 million and increased 11% reflecting the addition of the CST acquisition. Excluding acquisition impacts, Other Software growth was led by QUINTIQ and SIMULIA. (All growth comparisons are in constant currencies.)
• IFRS operating income increased 1%. Non-IFRS operating income totaled €685.2 million, an increase of 6%. The non-IFRS operating margin was 29.4%, a 20 basis points decrease compared to 29.6% in the year-ago period. Higher investments accounted for 30 basis points partially offset by a favorable currency impact of about 10 basis points.
• The IFRS effective tax rate increased to 32.8% compared to 27.8% for the first nine months of 2016. The non-IFRS effective tax rate increased to 32.6% from 30.7% in the year-ago period. The year-ago period IFRS and non-IFRS effective tax rates benefited from a tax reserve reversal.
• IFRS net income per diluted share increased 3% to €1.22. Non-IFRS net income per diluted share of €1.79 increased 5% or 8% excluding a 5 cents impact from a reversal of tax reserves in the year-ago nine-months period. Currency had a net neutral impact on IFRS and non-IFRS earnings per share growth for the first nine months of the year.

Cash Flow and Other Financial Highlights

Net operating cash flow increased 28% to €671.8 million for the nine months ended September 30, 2017, compared to €525.7 million for the prior year period, reflecting higher net income and working capital improvements.

The Company’s uses of cash for the 2017 nine-month period were principally for cash dividends of €51.3 million (based on the shareholders electing payment of the dividend in cash); share repurchases of €64.0 million; capital expenditures, net of €63.5 million, payment for acquisitions, net of cash acquired of €10.8 million and for acquisition of non-controlling interests of €37.5 million. The Company received cash for stock options exercised of €33.8 million.

Dassault Systèmes’ net financial position totaled €1.79 billion at September 30, 2017, compared to €1.49 billion at December 31, 2016, reflecting an increase in cash, cash equivalents and short-term investments from €2.49 billion to €2.79 billion, with long-term debt of €1.00 billion.

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