Thank you Maria. Thank you for joining us on our 3rd quarter earnings conference call with Stene Charles, Vice Chairman and CEO and Pascal Guido, Chief Operating Officer and CFO. This assumes results are prepared in accordance with IFRS. Most of the financial figures discussed on this conference call are on a non IFRS basis, with revenue growth rates in constant currencies, unless otherwise noted. Some of our comments on this call contain forward looking statements that could differ materially from actual results.
Please refer to today's press release and the risk factor section of our 2019 Doctor. Manuel Logistomo in Bessel, our regulatory annual report. All earnings material are available on our website and his prepared remarks will be available shortly after this call. I would like now to introduce Bernard Charles.
Thank you for your authorization and good morning or good to all of you. We hope everyone is keeping well. The pandemic continues to present challenges for people and for companies, of course, with a second wave now affecting a number of countries. I think our results again, highlight our resiliency, especially thanks to our recurring software revenue and operational management. At the same time, our presentation today will display we will display, we bring significant value to the 3 sectors of the economy we serve.
Our key metrics for the quarter came in largely aligned with our expectation. The total revenue was up 20% in third quarter. And represented 91 percent of total revenue, license activity. So an improvement over the second quarter. At the same time, our assessment is that recovery in spending conviction by clients will take longer in general, with decision making visibility, very different across industries and industry segments, thanks to our saving program, as well as, by the way, diversity and diversification, we are able to offset to offset this slower recovery.
The resiliency of our financial model was evident. With recurring revenue up 4% on an organic basis for both the 3rd quarter on a 9 months period, including Medidata software revenue grew 32 percent, well in line with our guidance year to date recurring revenue represented 80 3% of the total revenue. Demonstrating our operational management, both our operating margin on earnings per share came in at or above the high end of our guidance. Looking at the year, we are confirming our EPS objective for 2020 with growth at about 3% to 5% in constant currencies, aligning well to the financial framework that Pascal introduced in April as the pandemic spread across the world. Our work with clients on industry sector demonstrate sectors demonstrate the direction of our investments in our industry solutions, aligned with our strategy.
That is in three words, human centric innovation for passion, for customers as well as for citizens, with the 3DEXPERIENCE platform as one single platform to bring together all aspects of a business. The life science since on Health Industry are mobilizing to accelerate the search on innovation, and the potemic is activating the shift to virtual. It has shown how much digital technology in Health can provide concrete answers for the continuity of clinical trials. In Life Science And Health Care, we bring significant scientific assets with our medidata, biovia, Science Cloud as well as a similar plans. We are benefiting from our competitive strength and increasing relevance as a strategic partner to the life science industry.
Today, I want to share briefly three examples of our work with this Bronze on Industry Solutions. Jensen, a pharmaceutical company within Johnson and Johnson signed, a multiyear extension with Medidata, to use its next generation unified platform for clinical development. This is a significant contract in size, reinforcing the long term relationship between the two companies. In the Americas, world class researchers, at IncoCyte, focused on transforming the treatment of cancer on inflammatory and autoimmune conditions, are using our 1 Lamb Industry solution experience with PIONEER enabling faster innovation by connecting research and develop on our manufacturing teams to simplify technology transfer and optimize biologic processes. Abbott, the third example, is expanding its use of simulator drive increased virtual testing, replacing bench testing, which is more difficult to do at the time of COVID-nineteen and far more expensive.
Historically, simulation has not played a large as a large role in life science as we have seen in other sectors like automotive and aerospace or space at large. Simulius capabilities enable it to simulate the human body medical and surgical equipment as well, as its use. Finally, in addition to our scientific brands, Our coverage of pharmaceutical on medical devices companies benefits from our mainstream market with SOLIDWORKS Innovia and DELMIA brands as well. Moving to Infrastructure And Citi, let me share some updates. In France, SNCF, which is basically the real way in fast food in France, has selected the 3 d experience of Rolling Stock, especially selected the 3DEXPERIENCE platform on the cloud as part of its digital transformation program.
The role is to use big data information from trends in operation. To implement predictive maintenance and increase quality of service. This will allow to rethink its management of rolling stock and increase its reliability by detecting warning signals on malfunctions, thanks to the data collected throughout operations. While we are at the early stage of our long term objective for this sector, our solutions appear well adapted with a number of industry startups adopting adopting our 3DEXPERIENCE Industry Solutions on the cloud, We can become a game changers in construction in Frastricione Cities. These companies include Branch Large Scale 3dprinting, Create Organic Architecture, ecological in spite by nature.
Turning to our manufacturing sector, of course, sector, of course, for us, we are seeing stable to growing year on year software performance in Industrial Equipmentite Tech on one Life side on consumer packaged goods on retail, thanks to our broad market reach within Transportation And Mobility as well aerospace and defense, on space, we have continued strong investment by pure clay electrical vehicle companies and a good dynamic in space. High-tech, beginning with, the STM microelectronic announcement, has adopted the 3DEXPERIENCE platform on Semiconductor Industry Solution Experience. STs, strategic focus is on smart mobility, power and energy on internet of things with, the synergy of the 5G technology. ST's objective is to improve its flexibility and respond faster to these dynamic markets. This new engagement will involve a broad scope of users across multi sites around the globe.
This represents a significant expansion of the scope of our relationship with them and also demonstrating our capacity to be a catalyst for transformation. As we recall, last quarter, we announced that, Ericsson had begun its rollout of the 3DEXPERIENCE platform as part of its 5G efforts. In the Consumer markets. Centric PLM continues to expand its leadership. For example, we are very pleased that jd.com, China's top 1 online retailer on worldwide 20th largest retailer, with annual net revenues close to USD 79,000,000,000.
Last year is adopting Centric P and M, In one of its private label brands to cut time to market, it was cost on drive collaboration. With the increase in e commerce activities as a result of, of course, the current pandemic, companies need to be able to improve the linkage between the product introduction planning on e commerce in order to speed up introduction of new products to consumers, helping to reduce cycle time. Moving to Aerospace on Defense. In the Americas, we are working with Coral Aerospace, a subsidiary of World Corporation. A manufacturer of spacecraft components on instruments for national defense civil space and commercial space applications.
They are selected through the Experience Platform platform as their digital engineering collaborative solution. While the commercial sector of Aerospace is under significant pressure, Our breadth enables us to capture opportunities across all the areas of the industry from space to IO EVs. Moving from industry sector, let me illustrate how our investment are you orienting out our, our, our enhancing our business to improve the human experience as passions, on, as consumers. Maybe data, so its efforts is helping the industry to pre imagine the future of clinical trials. Earlier this month, my Medidata Live became available to give to give researchers and passion a way to engage in remote site visits within the platform of sight on passion, platform of sight, on passion facing technology that are already using on the study.
Medidata is also further extending the patient centric orientation with a recent small acquisition to enable better execution of remote fashion studies today about 10% of the clinical trials are using devices to capture real time information from passions, while they are at home simplifying the life. These devices take multiple forms, including sensors, specific equipments of mobile phones, of course. All these data needs to be collected and recorded in a consistent manner that the software created by MC10, the name of the company is able to do, thanks to its ability to capture data from any type of device. Our own by me brand targets professionals as well as individuals which we wish to redesign the interior. Already Syama, an influencer in the field of interior architecture gives online courses for the use of home by me And thus, contributes to increase the notoriety of the number of users and the brand whose promise is You are going to love designing your own.
Moving to 3 d experience on the cloud. Just as we are advancing with game changing startups in the infrastructure and city sector, our platform is power many of the visionary brands across virtually all of Manufacturing Industries. We continue to make improvements to make buying and using 3D expands on the cloud as simple as the click of the finger to have access to very powerful software. In the mainstream innovation market, served by solid works, we are extending the reach of the 3DEXPERIENCE platform with the 3DEXPERIENCE Works family of solutions that was announced a year ago. This portfolio represents the most comprehensive cloud based portfolio offering on this market deep cell, for example, a non invasive genetic testing company is using SOLIDWORKS and extending now to Innovia Works on the cloud.
Our upcoming virtual events Science in the age of experience on Medidata's next global underscore the deep scientific orientation of the company. A few words on sustainability. We are convinced that Dassault Systemes can be a tremendous lever for sustainable innovation to meet contemporary challenges. We are reducing our footprint with an ambitious CO2 emission addition target extending our footprint, which offers an outsized leverage compared to the footprint in a ratio of 1,000 to 10,000 as reviewed by Harvard's study through sustainable offers for all the industries we address. And we have joined the Ellen MacArthur Foundation to build a circular economy.
With all of that now, let me hand over to the call to Pascal who's going to give you more insights on the numbers.
Thank you, Bernard. Thank you for joining us today. And I hope you and your family are well. Would like to begin my comments with a quick overview of our financial performance. First, total revenue was 1,000,000,000 1,000,000 in Q3.
Revenue increased 17% in constant currency. Software revenue came in at the middle of our while services revenue came in below our estimates with the largest proportion confirming the volatility we are seeing services activity. We continue to manage well our cost reduction efforts, while investing in the key resources for the future. We capture approximately 1,000,000 of savings in Q3 and 1,000,000,000 for the 9 months. We are above our full year target of EUR 170,000,000 as we made adjustment in Q3 to align with the market and customer decisions.
On an organic basis, operating expenses decreased 3% in Q3. Thanks to this performance, our operating margin came in at the 28.2%, about 170 basis points above the high end of our guidance range. For the 1st 9 months, the operating margin was 28.1 percent. Q3 EPS was with a negative $0.02 currency impact. EPS grew 3% as reported and 8% in constant currency.
We were at the high end of our guidance range of revenue by type. 1st, overall, the software revenue result align with our planning increased 22% in the 4th quarter and 17% year to date. On an organic basis, software revenue was flat in Q3 compared with a decrease of 3% for the 1st 9 months. Licenses and other software revenue came in at the higher end of our planning range, decreasing 11%. Notable improvement came from Innovia, Kitia and SOLIDWORKS.
Subscription and support Our recurring software revenue grew 32% in total and represented 82% of the total software in the third quarter. We saw a solid performance for renewals, both regionally and across most of our brand applications. Our subscription performance benefited by the addition of Medidata with double digit subscription growth on a comparable basis. On an organic basis, recurring software revenue increased 4% for both Q3 and year to date. Services revenue decreased 15% in Q3 compared to our expectation for flat to growth of 10%.
As we have highlights, As highlighted, services activity has been volatile as company adjust decisions based on most current information they may be seen. Changes in customer spending plans were small in a month, but taken together, this adjustment added up. A portion of the services variance relates to our decisions in the quarter to continue with some strategic clients' activities in order to maintain the multi year project timeline, keeping our staff in place and absorbing some of these costs. Moving to original software review. Let me share perspective on the impact of the pandemic in Q3 compared to Q2.
Beginning. First, with Asia, software revenue growth improved to 10% in Q3 from 3% in Q2. The best performing deal were China, Korea, Asia Pacific South. And overall, the license revenue decreased high single digit in Q3 compared to the decrease of 21% in Q2, led by a strong recovery in China. Support revenue growth was very solid in Asia except for India.
China account for many of the largest transaction in Asia during Q3, spanning transportation and mobility, iTech, Aerospace And Defense And Marine And Offshore. For China, Q3 display greater depth of all three of our customers' engagement models, seeing solid growth compared to Q2 where direct sales led Turning now to Europe. It had a much better performance in Q3 compared to Q2. Europe software revenue increased 10% in the third quarter compared to a decrease of 4% in Q2. Simulary, on an organic basis, it returned to growth up 2%.
Relative to our planning and in a view of the pumpemic our 5 GEOs performed well. The best performing JUO were France, Southern and Nelson of Europe. We had a good dynamic with 3 d experience with top deals in high-tech, transportation and mobility, aerospace and defense. Life Sciences deals with Medidata were also among the largest transaction of the quarter in Europe. In the Americas, software revenue increased 46% in Q3 in total, with a strong contribution from Medidata.
Similar to the second quarter, North America had the most deals in the top 20. On an organic basis, however, in software revenue decreased 2%. Moving to a view of our software revenue by product lines, We saw a quarter to quarter improvement overall across all the three product lines. Specifically, Industrial Innovation Software Value decreased 2% in Q3. Innovia had a strong quarter with with the overall software growth of 4% and a double digit licenses software growth.
Mainstream innovation displayed a strong improvement compared to Q2 with the software revenue growing 9%, underneath this 10% growth for SOLIDWORKS. Driving this revenue performance was growth in recurring revenue as well as much improved license software performance. This improvement, we are visible in the number of GU around the globe. In Life Sciences, BD Data Total revenue was up 13% in the quarter on a comparable basis, with a solid operating margin performance, and an improved cash flow from operations. The 3rd quarter was an active one with a number of BT years in euros, sign with its largest customers beyond their part value.
Some of them, based upon their estimate start dates, we begin to benefit us in 2021 and thereafter. It's also a quarter with a strong new customers acquisition. It customer base has grown 16% year over year, driven by patient cloud as well as a RAVE product cloud. Zooming in on a comparison of our revenue and operating margin results. Let me share several takeaways.
First, on the revenue side, we came it at 1,000,000,000 1,000,000,000 below the midpoint of our estimate range, with a higher than expected currency headwind of 1,000,000 and a lower services revenue of 1,000,000 adding to the the 1,000,000 gap. Software accounts for 1,000,000. On the operating margin, we made up For this, with our core operations delivering 160 basis points higher contributions, along with about 40 year basis points above plan from recent acquisitions. Currency, had a 10% basis point negative impact. And as a result, we reported a non IFRS operating margin of 28.2% compared to the mid point target of 26.2 percent.
3rd, on an organic basis, our operating margin was stable year on year despite the volatility in services activities. This achievement reflects our ability to adjust quickly in the quarter to the challenging circumstances and at the same time, continue to invest and to support our customers. Our operating cash flow for the 1st 9 months was 1,000,000,000, level with a year ago period. Contract liability totaled for 1,000,000,000, up about 5% in constant currencies and parameters. DSOs remained stable on a constant perimeter spaces.
Our cash continued to grow now EUR 2,500,000,000 at the end of September from EUR 1,450,000,000 at December 2019. This translates to 1,000,000 improvements in our net financial position year to date. Moving to our outlook, this is relatively straightforward discussions. There are 3 takeaways. First, we are confirming our 2020 non IFRS EPS range of to we shared in July, thanks to the resiliency of our European software revenue and the savings programs we have put in place.
Currency is a negative factor by $0.03, which we compare with an equal improvement from operations. 2nd, we are adjusting our revenue growth range by 1 percentage point to 11% to 12% from 12% to 13% in constant currencies. We recited a lower U. S. Dollar in the 4th quarter perspective, from 1.15to1.18 and so negative impact of about 1,000,000 on our non IFRS revenue.
Services, non IFRS revenue should be lower in 2020 by minus 9% and minus 8% to reflect services volatility. This represents a EUR 16,000,000 impact. For software revenue, we continue we confirm our recurring revenue growth perspective for 2020 of about 26% to 27 percent. For licenses, we see a similar trend in Q4 as in Q3. And on a reported basis, this translates to a revenue range of about 1,000,000,000 to 1000000 to 1000000, 1000000 for 2020.
3rd, we increased our savings plan during Q3, expanded it from EUR 170,000,000 to EUR140 1,000,000 To be clear, we continue to maintain our targeted level of investment in research and development, and we will be doing hiring in Q4 preparing 2020 We have outlined in an encouraging press release and presentation our guidance framework for Q4 and 2020. Wrapping up, let me say that we look forward to speaking with many of you at our virtual capital market day. Scheduled next month on November 17th. And we will be beginning at 2 pm, Paris time, I think that's it for me. Bernard and I would like now to take and maybe answering your questions.
Thank
you.
And we are taking the first question from the line of Neil Steer from Redbaum. Please go ahead. Your line is open.
Afternoon, and sorry, I just had a couple of quick questions if I may, Stornhard and Pascal. Firstly, on the services revenue, you obviously spoke earlier on today about reallocating some of the resource. Work with your strategic partners. Can you give us a sense of how many individuals or headcount were involved in that? As though, if we were to assume, for example, that the Medidata services were not significantly part of that, it looks as though the underlying services revenue and something in the range of sort of 35%, 40%.
And is that the correct calculation? And can you roughly quantify the headcount involved?
Hi, Neil. I'll start speaking. Again, we have almost 300 people on the bench right now. Over the more than 2000 people we have. So clearly, not all of them are allocated to support the strategic partners, but at least more than half
of that.
Okay. And just a couple of other quick ones. The gross margin in software or products overall just above 90% was the lowest I can remember for some while. Can you comment on the pricing dynamic as you went through the third quarter, and any, perhaps, discounting that you may have decided to do? And then the final question is on the other items in the P and L, which I presume is sort of a collection of exceptional items, 1,000,000 in Q3, now just below 1,000,000 for the year to date.
Can you just give us a rough breakdown of what those expenditures were for, including any restructuring and where you think that line item may be the full year? Thank you.
Okay. Related to the gross margin, I mean, there is no correlation with the discount policy. I can't justify that on the contrary when it's the tough time. We try to keep the price and the level it should be. The reason maybe you perceive the gross margin being probably slightly below, it's because the percentage of the revenue coming from the cloud is higher.
And it's, specifically due to many data. That's probably the reason why you have this perception. Related to the 7 questions, the short to understand, Neil, what is behind the question you have?
So I'm just trying to get a feel for an understanding of, what proportion of those charges were sort of restructuring related and where possibly, whether back dip for the year or whether those actions will increase or continue as we go into the fourth quarter?
Right now, we did not structure. I mean, that's a commitment we took. At the beginning of the year that we will keep all the workforce we have. For one figure result, because this is difficult to hire people in our industry, and we want to have the measures when the market will be back. So clearly, we do you should not anticipate some restructuring costs The only thing to do, if you look at the improvement.
Ah, yes, there is maybe 16, I mean, I would explain. I would explain. So yes, we're right. I mean, it's not a restructuring. In fact, as part of the of the condition we are giving for the people to be retried, we offer the option for them to leave earlier It's a few years before.
And as you may know, it's something which is important for us because we have to I mean, I should ensure the transition from one generation to another one. So that's the reason why we have put this system in place ecosystem, we have specifically for France. So that's not a big deal. You could consider that you will still have some impact next year, probably on a limited basis because the vast majority of the program was considering being this year. And maybe we will have a couple of candidates being eligible for next year.
The next question is coming from the line of Jay Blushmore from lithium Securities. Please go ahead.
Thank you. Hello, Benorca. Salen Francois. A few questions as always. Pascal, let me start with you over the summer when we spoke You agreed with the expectation that in 2021, 3dx would represent the majority of new PLM life revenue as you've always defined it.
Is that still your expectation? And as that percentage increases and crosses the majority into the majority. What are the implications, if any, for margins and or services utilization as a result of that transition. Then obviously, there's some more questions.
Okay. So So let's go 1 by 1. If you take the direct sales force, the direct revenue we do, It's already the case, the vast majority of the license growth is coming from the 3DEXPERIENCE platform. And it has been the case almost for to last 18 months. Where you have some discrepancy to a certain extent is for the indirect sales channel.
Whereby for SOLIDWORKS is just starting with a new generation of SOLIDWORKS and the power by approach, which consists to connect the large it was installed base with 3DEXPERIENCE platform. And you could expect this trend to accelerate in 2021 and obviously in 2022. And for the second indirect channel, the one selling the processes, we are already I remember, it's a little bit less than the self of the new license, which are coming from the 3DEXPERIENCE platform. And the reason is because, you know, this channel is addressing the supply chain and you still have a large, e5 installed base. And we are, again, coming with the buy approach, which is a way to smooth the transition to the next generation of Katie as well.
Okay.
For you, Bernard, or Pascal, let's talk about the platform in the solid workspace, which you've said more than once is the highest priority or executable for the solidworks business. The question is, what is your ambition for how large a business that might be? Right now you're generating, if my math is right, over EUR 500,000,000 a year in recurring revenue just for the core CAD business, on a base of that's rapidly approaching 600,000 active seats. So assuming some kind of reasonable attach rate, I mean, could you expect that the eventual platform revenues in the SOLIDWORKS base might be similar to the current base of recurring revenue just for the CoreCAD business?
The it's clear that the first of all, the strategic platform that is, connected with, the for SOLIDWORKS, users and SOLIDWORKS community, Jay is cloud only. Only specific very large customers having multiple other Dassault System solutions might be on premise or shortly on what we call Edge cloud She's dedicated cloud. Most of the market, if so it works, it's going to be cloud based through the expense. Number 1. In that context, we expect over time every user of SOLIDWORKS to use what we call the collaborative environment called 3d Suite on the cloud.
You know, it's a 37.5 per user per month For a collaborative integrated environment, it's very competitive, and we don't see any obstacles for this to become the replacement of so many unsecured tools that they might be using those days, like Dropbox and others. Providing, an environment where decolorative environment is fully integrated. So that's clearly the plan. Not the dream, it's the plan. The on and we see this happening, to a point where even where there is, auto cat there, we have customers now, SOLIDWORKS customer, while also sometime you autocat, we are managing the autocat data with 3DEXPERIENCE platform.
We have plugins for that. So the second aspect is the expansion with new roles, not new capabilities, new roles, new material, if you will. We have seen a high interest with similar works, with Innovia Works that was referred in our presentation this morning, worked for SOLIDWORKS desktop users. And also, as you know, we have a full new range of portfolio, which are RED Portfolio is the 3 d experience works. It's the experience of SOLIDWORKS, namely 3 d creator, 3d shape on browsers, which are really native to the platform, which means web based, mobile based, providing a comprehensive environment for all these powerful community of desktop solidworks users.
So I think we've built on a quite elegant growth path for the vibrant solidworks desktop user community. And I will also last with a remark, conclude with a remark, which is the following: a number of startups in the experience labs on in the new startups, in new categories of companies, and also adopting natively the 3 d experience. So we see this as becoming mainstream. And it's not at all the downsizing of large scale customer. The 3DEXPERIENCE platform on the cloud with mobile provide a very affordable efficient environment for collaboration with data awards.
On semantic awareness, basically, to be sure. So it's core. It's very core to the video, so it works. It's about our packaging on yield, so it works now. Is building older future product for the portfolio natively on the 3DEXPERIENCE platform itself.
A couple last questions. Late in the quarter, this is a life sciences question, Biovia had a virtual conference, which was pretty interesting. And there were references, for example, to the adoption of 3Dx in life sciences and even the application of general design to farmer development. So that all was interesting. The question is, could you update us on the the coordination internally within DS among, Biovia, Medidata, Simulia and DELMIA, that's something you spoke of last year, here in New York at the meeting.
And then, perhaps my final question on cloud, you spoke this morning in the morning's webcast of how DS would be reprogramiling or the profile of DS would change. In the context of cloud or cloud infrastructure, how large or much larger do you think your infrastructure might be over the next number of years? So today, the DS verticalized cloud infrastructure is X, where would you be 2, 3, 4 years from now in terms of multiple of X for your infrastructure?
Well, first of all, the, the 3 d experience is architected for cloud first. On mobile and then made available on premise or what we call clouds on the edge dedicated to customers. That's the case for everything we do. The 3DEXPERIENCE platform is not a PDM platform. It's a collaborative platform that in integrates community, conversation, 3 d, ways to understand and navigate things It's very complementary to the old way of doing PDM processes.
It's really the base for everything we do. So all the BioVIA platform solution, only then we are platform appraisal, all, are going to be native 3DEXPERIENCE or on the edge connected, what we call, Powerbike. When it comes to Medidata, it's a data platform at first. It's not the modeling platform. So we are connecting the data platform of Medidata.
With the modeling platform and simulation platform of 3DEXPERIENCE. And we think this is relatively easy to do. And finally, because of cybersecurity, we believe we will not we will continue to have a cloud environment, which is going to be up solidly verticalized for the application we offer, for the solutions, process and roles we offer. I don't believe cybersecurity will be solved with horizontal platform. So in our world, for what we do which is mission critical for so many companies, it's going to be a full vertical integration using our own infrastructure or in the current situation for the time being Amazon as a complementary environment.
But we will have also edge cloud which means cloud managed by us and run inside customers environment for security reason but we will not delegate the administration of the SLA. It will be provided directly to customers because the nature of customers we have acquired that And I don't think many of them will never be solving the cybersecurity without this kind of approach, which we think is very differentiating.
Thank you.
Next question is coming from the line of Jason Salino from KeyBanc Capital Markets. Please go ahead.
Hello. Thank you for taking my call this morning. Bernard, when you mentioned the similarly works and Innovia works for the desktop SOLWorks users. It seems like you're getting some good interest here. What were those type of customers using before on the simulation and maybe the PLM side or what type of customers are you targeting for these?
Well, thank you very much for this question. I think it's a very Good question to understand the dynamic. Basically, today, it's not easy for a SOLIDWORKS desktop customer. User, sorry, or customer, but user, to really integrate all, simulation specifically. Desktop based environment.
So what we have decided with, the team is that every single agent to simulation to collaboration, to project management, Innovia Works, similar works for simulation, will be cloud based only. So the way it works is you subscribe to a 3DEXPERIENCE environment. You buy online a role for simulation. And when you want to simulate SOLIDWORKS design data, you just upload the data on run the simulation. So it's not the opposite.
You upload, run, get the result and keep going. And that's the way we're going. So more and more, we see desktop users using online saas service. To do things in an easy way that are otherwise quite complex for them to do. They need to have interfaces.
They need to to configuration management. They usually don't know how to do it and 5 is not easy for that. So all the SOLIDWORKS base of desktop customer are going to be offered SaaS based native 3DEXPERIENCE services that can consume and swallow design based solidworks best stop to do auto sales. Collaboration project management simulation.
Great. One more for me. In the comment that's beginning and what was discussed on the call earlier this morning, the comment of a slower than expected recovery, I think at least maybe not returning to normal for the end of Q4. But relative to the Q4 software guidance, what products or geographies are you seeing, this more moderated pace?
Okay.
So I was convinced that I almost answered the question this morning. That we agreed against. So if you look at the trends against in Asia, almost in, at least for sure in China, in the Asia Pacific sales and to a sort of the extent in Korea, we see we the recovery. And I mean, in China, we are almost we expect to be at the end of the year, almost where we used to be before the crisis. That's not true for India clearly, where there are still in lockdown, and we will suffer until the end of the year.
In Europe, Europe is split in two different pieces. The south part is really improving significantly the situation. We suffer a lot in Italian spades, as well as France, by the way, in Q2. Q3 has been much better The north of Fluorpe, we were less impacted in Q2 and to a certain extent, the performance is okay for Q3 compared to to the situations. And we are a little bit.
I mean, the softness is coming from from Germany and specifically because in the transportation and mobility, the supply chain has been impacted by the drop of the volume. This is really where the containment is coming. Russia is going well, by the way, in Europe. And, America, it's almost like Asia, LatAm is really suffering. And we do not expect to have a recovery in, in Q4.
And Americas, the U S, has been almost in the same position than Europe in Q2. So the vast majority of the states were in lockdown, and we opened we hope to see the site reopening in many states starting Q4. So that's probably where we have some odds compared to Q3.
Great. Really appreciate the added color. Thank you.
Next question is coming from the line of Estefang Eslowinski from Exane BNP Paribas. Please go ahead.
Yes. Hi. Thank you. Good afternoon. Thanks for taking my question.
Just to follow-up, I guess firstly on that question, Cal, just around the macro environment and that shift that you saw in the services strategy that took place during the quarter, I'm just kind of wondering what kind of happened during the quarter, because at the end of July, you guided for services to be up up to 10% and then it ended up being down 15%. And it sounds like a lot of that was a proactive change in your approach to the market that must have been in reaction to something that changed in the demand environment. So was it just a question of you kind of got into August and maybe early September and things just weren't improving as much as you expected? And then as we look to Q4, obviously, you've maintained a cautious view on Q4 and aren't really seeing a significant improvement But you're saying that this kind of new flexible approach towards services won't extend beyond December. So does that mean you have some visibility in terms of spending, starting in January from some of your large customers?
And that's what gives you some of that confidence that, that won't extend beyond the end of the year. I'm just trying to get an understanding of the cadence of what you've seen in terms of those demand trends. And then as a second question to Bell Now, just to compliment, what you were saying earlier, I was just wondering if you could give us any update on the progress in DELMIA works. Where are you seeing success with what types of customers and how do you see the competitive environment for that product more specifically? Thank you very much.
Thank you Pascal. Okay. So the in fact, you have two questions related to the services. Why, between what we say in August and what we are presenting today, we have a difference because in between Werner and I, we took the decision to support some strategic project we have. We have people on the bench, I think it's much better for them to be allocated to the customer.
It's a valuable resources. Many of our customers are suffering right now, And I think it would have been a mistake not to do it. 1, because on one hand, we are reinforcing the customer relationship with them. We are loyal to them. And 2, because, you know, a services person, the best is for them to continue to work.
To deliver what they are supposed to do. I mean, this is a way they keep their knowledge and their skills. So I think, contrastively, we took the decisions to do it Also, because we know how to absorb these costs without having the revenue in front of. The ID we have and probably the reason you are questioning the timing is because in August, usually we start to think about 2021. We are not waiting December to think about it.
And at that time, we say, okay, what will be the growth drivers for 2021? And it became very obvious that the long term partnership we have with those customers deploying massively the 3DEXPERIENCE platform will be one of the lever for 2021 and he wanted to preserve this. That's the reason of the timing. Nothing changed in terms of, really the economic environment. And the last point, which I commented this morning, maybe it's the new finding, you know, it's We have to wait at the end of the quarter to understand the consequence of new signing and especially for the short projects the one we do usually in a month, at least in a quarter.
And we see some decrease here. That's probably the only point where we was not fully anticipated at that time. Now do we expect to continue to have the same strategy in 2021? No, and why we are with different view. It's because you have seen the license, even if we are not We are not back to the normal, but the situation improved significantly.
And the revenue is intricately linked to the license growth. At least for the services. So if you correlate the 2, we are we have a minus 21 organic growth for Q3, which was almost the organic growth we had decrease we had in H1 for the license. So you have roughly usually 1 or 2 quarter, lifetime between the 2. That's the reason why, Stefan, we are we are moving along those lines for 2021.
Related to the
DELMIA works, First of all, I think we continue to, be convinced that if it was the right move, We have seen, we better understand how the categories of companies where the SOLIDWORKS, DELMIA WORKS, association brings significant value. And we are focusing on these things, especially in plastic. Every company is doing modeling, design modeling and production of plastic equipment. There are a lot of those midsized, on high midsized companies. So we have seen good results.
I don't have in mind Pascal about the result Q3 specifically for the networks plus 6% plus 6%, which for the sector of the economy, which are those small midsized companies, be suffering in many, many areas of the world. We thought we thought that, well, it's not double digit, but it's not it's not bad. It's an increase of 6%. And we are increasing the quality of engagement with the teams so they can target the right customers on how I quickly the value. So I still think very positively about the fact that this is bringing quite interesting ERP functionalities on EMS sorry, MES functionalities to, those types of companies who which was a wise count of 4 existing expensive systems.
Okay. Thank you very much. Welcome.
Next question is sorry.
Okay. So maybe we We have more questions. No more. Okay. Thank you very much.
All of you, I know that the, explanation this morning on the calls were very, very well attended. On the presentation. Thank you. We are always there for you to open with high level of integrity to the concerns or questions you are We are committed for long term stable resilient businesses. This is what we do, and I think our customers launched it.
So that's the way we're going to continue. Thank you very much, and have a good day.