Dassault falls after missing Q3 revenue forecast, paring guidance

Dassault (DASTY.PK) fell 10.5% in Paris after reporting preliminary Q3 revenue of €496 ($673M, +4% Y/Y exc. forex), below guidance of €520M. EPS fell 1% €0.88 ($1.19). €12M of the shortfall is blamed on deal slippage (particularly in Asia), €4M on weaker-than-expected services revenue, and €8M on a shift among SMB clients towards rental/subscription licensing relative to up-front payments.

While revenue rose 7% Y/Y in Europe, it only rose 2% in Asia and 1% in the Americas. Importantly, new license revenue (drives future revenue streams) fell 10% Y/Y. Recurring software revenue (77% of total) rose 8%.

In addition, the 3D product design/testing software firm guided on a CC (transcript) for full-year revenue growth of 4%-5%, below a prior 7%-8%. Q4 revenue is expected to total at least €565M ($766M, +5% Y/Y exc. forex), and EPS guidance is set at €0.97.

Full Q3 results arrive on Oct. 24.

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