Ladies and gentlemen, thank you for standing by and welcome to today's Dassault System First Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that this conference is being recorded. And I would now like to turn the conference over to your first speaker today, Mr. Francois Bordonado.
Please go ahead, sir.
Thank you. Thank you for joining us on our first quarter earnings conference call with Charlotte, Vice Chairman and CEO and Pascal Daloz, EVP, Chief Operating Officer and CFO. In this very special context, I hope that you and your family are doing well. Please note that Dassault Systemes Resort are prepared in accordance with IFRS. Most of the financial figures on this conference call are presented on a non IFRS basis with revenue growth rate in constant currency unless otherwise noted.
Some of our comments on this call will contain forward looking statements that could differ materially from actual results. Please refer to today's press release and to the risk factors section of our 2019 document originator our regulatory and regulatory report, if you'd prefer. Both the earnings material are available on our website and these prepared remarks will be available shortly after these calls also. I would now like to introduce Bernard Charles.
Thank you, Francois Jose. We appreciate your interest and attention during this difficult global juncture, and we hope you and your families are keeping pace safe. To begin today, I would like to share our perspective with you, Pascal will cover in-depth our financial performance and framework for the year. Each quarter, I keep coming back to our purpose, Lesondet. It's at the art of what drives our passion.
The virtual world improves and extend the real world. We need to place it front and center as business, government Healthcare systems around the Grub model of the Future. The crisis gave clear meaning to what we do, our DNA of science engineering and model based data analytics is there. Post crisis, the world will not be like before, I think. And I believe we will see an acceleration of industry transformation with deep orientation towards sustainability and resilience.
And a deeper appreciation indeed of the power of the virtual twin experience in modeling and simulating predicting for design functions, manufacturing, supply chain and last mile services across all sectors. And all this will need to be done within a broader framework, of course. All our brands are supporting our effort in life science And as I will briefly highlight, our brands are able to be the catalyst to help the world better understand the unknown of this novel coronavirus. In addition, we are also accelerating new product introductions at Medidata. As you may have seen this morning with this morning as announcement, I believe that mine media data could at some in point in time become a true passion journey.
From an operational framework for 2020, we are maintaining or even strengthening our workforce and investing in our people, both in training, selective hiring, redirecting the workforce for highest value. Ensuring the success of Medidata Acquisition is, of course, part of the 2020 program. Life Sciences now closed to 20% of our software revenue, our 2nd largest industry, where continuing in research and development to strengthen our industry and domain leadership and closely supporting our customers We love our customers, and we are working to accelerate the adoption of our 3DEXPERIENCE portfolio on the cloud with different type of models. The 2020X release is, from that standpoint, a major milestone. As it is a natively architected cloud environment.
Finally, We have set a 2020 financial framework, thanks to Pascal's leadership, with the objective of maintaining a 2020 earnings per share stable with 2019, thanks to the 3 critical factors the resilience of our model with the recurring revenue, a continued strong level of operating profitability, on a thoughtful saving plan, enabling investing for the future. With science at the art of Dassault System, let me briefly share with how our solutions are helping companies reveal the invisible on the unknowns surrounding this pandemic. 1st, with Biovia to enable the structural modeling of the SARS CoF IIS protein in order to help accelerate new drug developments. With Simulia, We're able to simulate the Veral dispersion in population systems of complex installation, including us hospitals to prevent customization. Contamination.
More broadly, a number of companies have newly designed medical product under ways to help combat the global pandemic using stimuli as well as CATIA on solidworks. Medidata solutions are being used in an estimated 60% of commercial COVID-nineteen clinical trial underway around the globe. Also due to the COVID-nineteen, Medidata accelerated its planned launch of my Medidata platform. An advanced intuitive platform to enable passions to participate in clinical trials for new medicines and vaccines. This first release of mymeididata includes a research based COVID-nineteen symptom tracker, designed to support research studies on advanced scientific understanding of the virus.
It will be made available to Medidata customers free of charge. PPD, a leading global CRO, on Medidata announced a multi collaboration to accelerate pharmaceutical and medical device tries. With next generation data analytics and predictive modeling. The agreement is designed to address some of the most persistent problems that impeded the clinical development process with the objectives of building solutions to enhance clinical research trial designs optimize site on investigator selection and leverage real time insights for Agile trial execution. Our 3DEXPERIENCE Lab has created an open COVID community worldwide.
Designers, engineers and manufacturers can play a team pandemic, leveraging collective intelligence to source, qualify, design, share, engineer and manufacturer rapid solution during the pandemic. Finally, we are also enlisting our 3DEXPERIENCE Education Cloud to help enable training for the workforce of the future, critically important to advancing the talents that will be needed in the coming decades And as a side note, I will mention that we will do new programs like in 2008 for the people who lost jobs to help them have access to our software. Critical to managing through the pandemics unlikely disruptions until a vaccine is in place. Businesses can continue with a number of critical functions while working from home, thanks to the native architecture of the 3 d experience. It's a cloud, native architecture.
Clients with on premise licenses have asked for cloud licenses. And we can provide on premise, licenses to work from home too. We are providing 24x7 assistance to our customers and our partners. This month, we are making available 3DEXPERIENCE release, what is called 2021X on the cloud, of course, and it will come a little bit later on premise. We have spoken to you about the platform as a system of operation and as a business model with the marketplace.
This release is so powerful and complete that the 3DEXPERIENCE platform is going to become our own channel, connecting us directly with users and clients inclusive to the partnership we have with our partners. Our salespeople can present their complete portfolio with a demo from their smartphones or mobile device. And the demo is not a demo. It's simply the use of the platform itself. With the 3DEXPERIENCE platform, you have a number of capabilities normally delivered by individual software companies enabling collaborative innovate connecting people, ideas, project, tasks, processes.
Many of the fragmented toys that are visible today are integrated in this platform. The virtual work improves and extends the real world. Now let me illustrate that. We're addressing key industry trends with a new approach with new approaches like likely to accelerate as we move through and exit the health crisis of fully sooner than later. In Life Science, we are combining Medidata's clinical testing on data analytics capabilities.
They recently announced a partnership with Selsion to create synthetic control arm. For an important clinical trial in advance ovarian cancer patients. Based on the potential demonstrated by the SCA, synthetic control arm in the phase 1b that was presented to FDA in March of last year, calcium plans to use the synthetic control as part of a breakthrough therapies submission to FDA. Medidata is in a unique position to create fit for purpose synthetic controls because of access to a pool of more than 1,000,000 anonymized passion from nearly 20,000 previous clinical trial over the past speaking about infrastructure on cities, we have, long advocated, bringing construction for 1 and applying the knowledge for advanced manufacturing in construction. The COVID-nineteen crisis revealed the value, time, quality affordability, sustainability of modular construction.
In that regard, We announced that we are working with the Adenden Group to collaborate to develop in China, smartphone connected term K hospital solutions in the fight against COVID 19. I would like to conclude by a final example in Consumer Packaged Goods. I'm sure most of us thing about finding fresh or frozen foods or household goods at the grocery store, what we just expected this item to be there. But in fact, it is indeed quite complex with sudden adjustment to demand, as we see during the health crisis, all critical constraints of business can be modeled in the virtual twin experience of the supply chain. The 3DEXPERIENCE platform generates optimized recommendation in terms of sourcing strategy, production, planning, transportation cost reduction, the service level to customers and consumers.
And this provides new agility Let me turn the call over to Pascal now.
Thank you, Bernard. Hello to everyone. We have a lot of to cover So let me proceed. The global health emergency, which on the fold during the first quarter, underscore the power of 3DEXPERIENCE platform, to run our business from anywhere and to engage digitally with our customers as well as our partners. With only 11 offices opened amongst 187 is give you a good picture of where we stand in Q2.
Moving to our financial results. 1st quarter revenue reached 1,000,000,000, increasing 17% in constant currencies. We came in at about 2.5% below the low end of our guidance range. With the Pandevix prelude across Asia and then into Europe, while arriving later to Americas These two regions saw the strongest impact on new licenses, activities, and certain industries such as transportation and mobility and industrial industrial equipment were more than assets. 3DEXPERIENCE software revenue is essentially flat year over year, also from a mix perspective stable at 20% of the related software revenue.
At the same time, we benefited from Life Science now our 2nd largest industry as well as the resilience of a financial model with recurring software revenue coming in at the high end our 28% to 30% guidance range. With the good cost controls, we all also delivered our operating margin and earning per share near or at the high end of our range. With a strong level of cash flow generation from operations. Now I would like to begin the detailed review with some perspective on our key three strategic sectors. Manufacturing industry represents about 70% of our total software revenue in And in Q1, Aerospace And Defense had a solid performance with key add ons business with large clients and deployments rollouts.
We also saw a good performance in consumer packaged goods retail. However, in Transportation And Mobility, We had already been under pressure for suppliers starting in H2 last year, and we were joined by OEMs this quarter. Despite this, amongst our largest transaction in the quarter, where in Transportation And Mobility in Asia and in the Americas as well. Denia Quintiqs continue to gain traction with a recent win with next logic for port management in Rotterdam. The life science and health care sector now accounts for about 20% of our total software.
And here, We benefited from software revenue up double digit. Hyundai Farm adopted Medidata with an integrating solution with both electronic data capture and electronic trial master file. And this is an interesting case because this one of the few, case where we are facing Veeva, and this was a win against them. In infrastructure and cities, representing about 10% of our business, we also had a double digit growth from energy and material. But on a low comparison base, with current oil prices, a number of transactions were postponed.
Moving to a regional review, With the addition of Medidata, the Americas represented 39% of total software revenue. Europe 37 and Asia 24%. While we call out in Fab the health crisis in China. Over the course of the first quarter, a large part of Asia went into an on lockdown. Within this environment, overhaul software grew 7% in Asia with software on an organic basis, decreasing 1%.
Licenses revenue decreased just under 20% with uniformly good growth for Superbaut's revenues. Towards the end of the quarter, we saw a pickup in activity with large account in China, especially in Transportation And Mobility And High-tech. Entering Q2, everyone has read that moving about continue to be restricted to various degrees. So we expect Q2 to be 3rd quarter of Asia compared to Q1. Further, and for the part of the world under mitigation restrictions, We would expect improvement in business activities in China and elsewhere in Asia to be closely linked with the rest of the world.
In Europe, software revenue increased 2% with a sharper impact on new license activity based on the shutdowns starting in March. On an organic basis, the decrease was 5%. In the America, the impact from the health crisis came later in the quarter, Overall, software revenue increased 46% and on an organic basis increased by 4%. With Medidata large presence and the mix of sales generally, recurring software is highest in these regions compared to the overall level of 83% in Q1. One example is illustrating a growth driver for us in Asia is Medidata.
We are working with a leading CROs on track research organization in China, where it has been it has expanded this partnership with Medidata. Moving to our software revenue by type and product lines. In total, our software revenue increased 17%. Lysion software revenue was up very substantially with the addition of Medidata and representing 19% of the total software. And looking at Medidata as a standalone basis, its software revenue increased 13%, well aligned with the plan, delivering a solid performance in the quarter as seeing the 1500 customer mark and achieving several important competitive displacement, especially against Veeva and Oraker.
Mainstream Innovation software revenue increased 2% and represented 22% of total software. Industrial Innovation Software, revenue decreased 1% with Innovia decreasing 11% and in contrast, DELMIA benefited from deployments underway. The global health crisis led to a significant description of the new licensing activity with a related revenue decreasing 20% overall. Overall, mainstream innovations through a lower impact in Q1, thanks to SOLIDWORKS, with a stronger impact owned brands such as Centric PLM in home and lifestyle due to the large exposure of them with the Chinese market as well as the Chinese super chain. In constructs, Industrial Innovation was more than affected given the high SKU to the end of the March quarter for direct sales.
And enterprise type decisions such as those involving Innovia. Our recurring software represented 83% of the total software in the first quarter, recurring software revenue grew 30% in total, reflecting, the addition of Medidata. Overall, organic recurring software increased 5%. Services, Services revenue in Q1 increased 14 percent to 1,000,000, reflecting the addition of Medidata. On an organic basis, the growth was 1% impacted by lower new licenses activity as well as services works, That was interrupted due to the restrictions such as manufacturing closure, while portion of the services work was able to be done remotely.
The services margin reflecting lower utilizations due to the health restrictions on travel. Moving to operating profitability and margin. For Q1, our non IFRS operating profit increased 6% to EUR 336,000,000. Our operating margin of 29.2 percent came in near the high end of our objective range of 28.5 percent to 29.5 percent. In comparison to our guidance, while recent acquisitions such as Centric and IQMS were slightly below our expectations, improved profitability on the core business and to a lesser extent, currency and media data helped mitigate the impact of shutdowns on license and service revenue.
EPS, EPS increased 9% to $0.95. And we came in at the high end of our guidance with $0.02 benefits from a lower effective tax rate. Benefiting from an improved GeoMx impact and $0.03 from currency and as well with a lower cost helping to offset in a large measure, the loss of revenue due to the impact of the global health crisis. Moving to the cash flow and the balance sheet. Our operating cash flow in Q1 was EUR 458,000,000, a strong level overall.
In comparison to Q1 last year, It was lower by 6% with 2 items, incomes, payables, tax payables and accrued compensation linked to Medidata having the largest impact. All the key items such as contract liability were up about 5% in constant currency and parameters. And the DSO were stable on a constant perimeter basis. With respect to our cash dividends, the Board of Directors is proposing an increase of 8% in the annual dividends to $0.70 per share with respect to the fiscal year 2019. Now let's move to our 2020 financial outlook.
As I introduced at the beginning of my remarks, how does one approach, financial objective within this context of the global pandemic? Within this reality, we have set a framework for what is important to us. And the quick question is, how do we want to finish 2020? So to be clear, our goal is to achieve a stable non IFRS earning per share for 2020 in comparison to 2019. We are assuming that there will be a significant reductions in global GDP with the restriction on the number of industry MR.
With the most dramatic impact in Q2, consistent with what most of the economists are estimating. There may be some timing differentials amongst GEOs, but globally, we would expect that to be the case. Our planning frameworks assume a progressive recovery in Q3 and Q4 based upon the current governmental plans and also the progress in development of therapeutics for COVID-nineteen and encouraging information on vaccine development. Looking at the new license revenue in the first quarter. New licenses software decreased 20% in total.
Entering the quarter, we had an estimated of minus 5 percent to flat evolutions based upon the 2019 Q1 high comparison base and specific hence market softness. Looking forward, we are estimating Q2 new license revenue to decrease in the range of minus 31 to minus 28% and for H2 to decrease between minus 14% to minus 11% at constant currencies. With respect to non IFRS recurring software revenue, overall, we would expect it to maintain a solid resiliency while reflecting lower new license activity and some increased attrition, leading to the growth of the recurring in the range of 26 percent to 27 percent in constant currency for 2020. On a sequential quarterly basis, we would expect a progressive lowering of the organic support revenue growth as From an operating margin perspective, we are targeting to offset about half of the revenue gap from the health crisis as together with our other expectations would enable us to reach a stable EPS. This framework brings us a non IFRS operating margin target for planning purpose of about 29.5%.
To be clear, We are investing for the future, and we do not plan any workforce reductions. This investment include ensuring we retain our sales resources as they will otherwise be more impacted given their compensation structure. We are updating our estimated non IFRS effective tax rate lowering it about 25.2 percent from 26% previously, updating it to reflect our geo mix for tax purposes, with a large share from United States. The final point is that we are maintaining our exchange rate assumptions unchanged for Q2 to Q4. We have provided in the earning presentation on our website several charts, summarizing the changes from our initial guidance prior to the global pandemic.
Now let me summarize what we are targeting based upon the framework I have shared with you. Our revenue growth range is now 12 percent to 13% in constant currency, with a midpoint of our range now at EUR 4,525,000,000. From EUR 4,865,000,000,000 previously. For your information, in Q1 currency had a positive impact of EUR 30,000,000, offset by a negative impact from the health crisis at least EUR 46,000,000 at the midpoint of Q1 revenue range. Adding together, The expected Q2 and Q4 impact bring us to a total estimated reduction in revenue on the order of EUR 3 17,000,000.
Looking at the impact of the health crisis by revenue, we expect new license revenue move from 5% to 10% to a decrease of 17% to 20% and an impact of about 1,000,000. For recurring software revenue, we are assuming about 1.5 points of gross reductions. Bringing it to 26 percent to 27 percent, about EUR 55,000,000 impact. And for the services, gross to up 5% to 7% from about 19% an impact of about 1,000,000. Finally, Let me share some details of our saving plans with a target of about EUR 170,000,000.
We capture a EUR 35,000,000 in Q1. This was offset in part by the currency headwinds of EUR 20,000,000. But for Q2 and Q4, we are estimating saving of $135,000,000 coming from improved personal utilizations redirections of some of the core activities, reducing outside cost and selective irings, also containing the travel and even related savings, as well as other costs such as third party or royalties. We respect our non IFRS EPS. The midpoint of our objective frameworks moved to EUR 3.69 per share from EUR 4.17.
About EUR 58, come from off sorry, from the disruption to business from health crisis. On the positive side, Q1 currency uplift of 3% and for the rest of the year, an estimated 7% sorry, benefit from tax and minority interest adjustments. For our detail with respect to Q2 and the full year, please refer to Q1 earnings press release and presentation in the EIIAR sections on our website. Before opening the Q And A sessions, Let me share several key investor relation activity we're going to do in the coming weeks. 1st, We will be participating to a number of virtual roadshows and conferences over the next 2 months, reaching investor in Europe, North America and Asia.
And of course, there are a number of call on the calendars as always with the investor relations teams. If you have not been contacted and you would like to attend one of the virtual events, please feel free to send an email to our investor relations. 2nd, due to the health crisis, we will be holding our annual meeting behind closed doors. The date, still the same, May 26. Within today's earnings press release, we have information for shareholders for connecting to the live event.
Serve with respect to our Capital Market Day, which we had expected to hold in Paris in June 12. We have decided to move it to the fall, targeting November 17th. With the investor relations events on the calendar, I believe we have a high level of communication activities with shareholders and the analysts. We hope you understand that the best use of our time at this stage of the pandemic is to manage your business and looking ahead to the fall the Capital Market Day will be used at the occasions to review our long term objectives. Bernard and I now would like to answer to your questions.
Yes, ladies and gentlemen, we will then begin the question and answer session. You. Please hold at a moment, sir, where the operator is getting today, participant.
I see 4 question on the, on the queue.
Yes, sir. The operator are still getting the name of the participants. Okay, sir. Our first question comes from the line of James Goodman. Your is now open.
Good
afternoon. Thank you for taking my questions. And if I could start with a question just if you could provide us any insight, additionally into the structure of the large multiyear deals we've been discussing for the past quarters. You made some comments, I think, on this morning's call, around how potentially lower RAM First I think Boeing wouldn't be in your guidance. But I wondered if you could just help us a little bit with anything that tells us how resilient these contracts are to any sort of renegotiation or usage step downs?
I think that would be very helpful for for modeling? And just secondly, on the share based compensation expense, we've discussed the step up that that's taken as a of the MedData acquisition and I recall there's some differences in the policy. I think I'm right in saying you've materially reduced the share based payment guidance for this year. So I'm interested in whether that's a reduction in the core Dassault side given the revised outlook or whether you've lowered the Medidata share based comp?
For the multi years, you know, most of them are contractually Duke, which is usually the way we engage. So to a certain extent, we have good protections against any but on shorter reductions given the situation. Having said that, as I stated clearly this morning, some of our customers are really in a difficult situation. And we are trying to find a way to ease their situations. But the key points in many, many cases, and you can take Boeing as a good example, because I clearly express the situation this morning.
In fact, they have to produce the updates. So what we do is core for them. So whatever is happening to a certain extent, the situation is at the end accelerating the deployment of our projects because it's a way for many industries, many of our customers to restart. And what we do also when sometimes our customers are closing their facilities We use this time as a way to upgrade their system to the latest versions. So the net of what I'm saying is If you look at our contracts, if you look at our services, meaning what we bring through the license, all of our customers, they can't continue to work.
For the one having their people at home, we gave the authorization to use a license from home. So we have developed a complete programs in order to help them to continue to work, to ensure the business continuity and when they are facing real financial problems. The way to discuss usually is related to the payments, the term payments, more than the discount of reductions on the bill. That's what I can say at this stage. Ready to the compositions, I mean, as I explained this morning, what we did at the time of the close is, the vast majority of the long term incentive plan due to Medidata.
We convert it into Dassault System Shares, keeping the same vesting periods. Basically means the management team and many managers will have some vesting in 2020, 2021 and also 2023. So what we did, given the situations, we did some share buyback at the beginning of the quarter in order to cover the those plan and being able to distribute properly the shares. That's the only thing we did, in the 1st weeks of the quarters.
Okay. Thank you. I didn't see that this morning. So that, that accounts for the reduction in the full year expenditure by saying that the compensation. Okay.
Thank you.
You're welcome.
Next question, please.
Okay. Our next question comes from the line of Jade Lee Hover. Your line is now open.
Thank you. Good afternoon, Bernard and Pascal. Hope you're well. Good morning or good afternoon. A few things from me.
Let me ask 2 related financial and structural questions. Number 1, I appreciate the magnitude of your recurring revenue and the resilience that you noted. However, According to the Doctor. Raf, you entered 2020 with, revenues that you knew were going to come off the balance sheet about EUR 780,000,000, which at the time was less than 20% of your estimated revenue for 2020. A lower percentage of visibility in that respect than your principal competitors have in their models.
So my question there is what can you do structurally to increase that degree of visibility or proportion of estimated revenue coming out of what we now call RPO or backlog. And then similarly, Bernard, you talked about the inevitability of transformation. The world will not be different than how you yourselves are going to accelerate your cloud deployments. Could you talk about perhaps any larger ambitions you may have as a company vis a vis cloud that is do you see yourselves being more of a cloud services platform beyond just 3dx and supporting your own DS brands. With your own cloud infrastructure, do you see yourselves becoming a wider or larger provider in that respect?
Thank you, Jay. Thanks, Pascal.
Good morning to you, Jay. So to answer to the first question, you know, if you look at the numbers you are referring to, the vast majority are coming from the subscriptions. And the more we move to the subscription based model, the more the backlog will be a key indicator for us. Until now, the vast majority is coming, as you know, from similar as well as Medidata now. And for both of them, the if I look at the coverage within the year, If I look at the backlog we have for the year and the revenue we have to do, usually the backlog is covering more than 90, between 90% 92%, which is usually what you have seen, what you are seeing in this case.
And again, I'm talking about only the yearly backlog. I'm not talking about the multiyear backlog. So my answer to your question is the more we move to subscription to a certain extent, the better it is on this side.
Related to the cloud ambition, It's basically, there are multiple facet of cloud because we do plan to provide also highly dedicated cloud for specialized things with very large customers. So in that context, however, It's not going to be only IAS and PAS. It's going to be the platform for business or operation. What is happening is that the 3DEXPERIENCE platform is very different this year than what it was, even 2 years ago or 3 years ago. There are customers now managing their businesses with it, We ourselves are now using the platform for, the entire end to end what we call if we loop which means delivery, interaction, customer relationship, service on selling to our clients with our partners.
So it's really a business platform from that standpoint. But we don't plan to be to say what we don't plan to do. We don't plan to provide just a basic cloud infrastructure without the value of the collaborative process in two ways, industry processes. What we call collaborative Industry Innovation And Collaborative Business Innovation. However, we see more and more clients asking us to do the infrastructure for them about business innovation, not only industry innovation.
Okay. Turning to SolidWorks, The company has identified about 6 priorities for the SOLIDWORKS business. Would it be fair to say that, proliferating 3Dx in the solid workspace starting with the 3 new configurations coming in July that you talked about solidworks world are your highest priority of those 6? And if so, what then would be perhaps, how would you the next priorities, among your list? And then a short term question, would it be correct to calculate new SOLIDWORKS licenses in the quarter were down about 20% year over year.
Related to the priorities with SOLIDWORKS, 1st, we have, as you know, Jay, community with SOLIDWORKS. They do a lot with it. They love the product. They love the desktop version. Our priorities is to make sure that the SOLIDWORKS experience is available through a web browser.
And John Paulo is very clear. He said that he wants he wants ultimately all SOLIDWORK capabilities through a browser on the cloud through mobile device. This is happening. So this is the priority number 1 to expand the SOLIDWORKS territory with mobile browser based access not depending on Windows only. The second one is really related to the collaborative environment of it.
Mainly, where customers are using Dropbox, or, even slack, all those kind of things, they are not integrated. They put their data at risk And for $37.5 per user per month, we can provide, which by the way, is less than what they would pay if they sum up all the toys they are using, they can have an integrated secure environment on and they love it. I think the SOLIDWORKS community has not seen it enough yet, but those what cover it, loves it and consider it's a very, very high value. And then the 3rd is really to expand with new portfolio because we believe that, for example, DELMIA works on simulation works are our project works Innovia works. Are so important for them.
It's a new discovery. It's the next 20 years of, growth path in value for those SOLIDWORKS lovers, those are basically the core focus area that Manish and John Paulo and team are working on right now with, of course, the team from Danielle Works.
Gerard related to the questions of the quarterly growth for SOLIDWORKS compared to last year. For the new license, it's not minus really percent. It's minus 11%. And the recurrent revenue was relatively good this quarter. So that's the reason why at the end, we are lending with 3% growth.
And if you look at the details, the vast majority of the decrease is coming from Asia. So especially China and Korea and the south part of Europe. That's where we are.
Okay. And then finally, if I may, your cost saving initiatives internally have been apparent for the last month or 2. When we look at the reduction over the last couple of months in the DS numbers of openings, which, as you know, if I was calling, we'd look at closely and talk about However, on the metadata side, it looks like the number of open positions has been steadily increasing for the last number of months. Particularly for what they call technology and analytics and client services. The question is, would you have been doing that anyway, opening up that aperture of hiring for metadata anyway or has that been accelerated because of the current situation?
I mean, it's there are two way to answer to your questions. The point number 1, we are, as I say, we are investing in the domain where the business is TD. And Medidata is basically every one of them. So that's the reason why you have many open positions still many data. On the other hand, you know, we are, I am controlling, relatively strictly the net hiring to be April at the end of the year compared to where we are at the beginning of March.
Beginning of March, if you look at the number of people overall at Dassault Systemes. Compared to last year, we are 3% higher. And I will keep this number the way it is. And the way I am planning to do it is by managing the attritions in kind of managing the hiring process in conjunction with the attrition. That's the way I'm planning to do it.
In some domain, I would expect to redirect some of Dassault System people into the media activities. But, you know, I cannot do it for all the different open opposition and medidata because it's an industry knowledge also. We are willing to develop within Dassault System. And some of our people do not have the domain expertise neither the industry knowledge. So that's the reason why I cannot fulfill all these positions only with Dassault System people.
Very good. Thank you very much.
Thank you, Jay. Thank you, Jay.
Next question, please.
Okay. Our next question comes from of Jason Celina. Your line is now open.
Hello. Can you hear me okay?
Yes, we can hear you now.
Bernard, your comment about customers asking for cloud licenses to work from home. For what products did you hear feedback from the most? And are there any programs or initiatives that you're implementing to help with that?
It's mainly for the the collaborative process. We are basically 2 types of customers. Those who are for security reasons, limits in their VPN in fast structure. In fact, unfortunately, we saw many customers having weak VPN in infrastructure to ensure security of the data on process that they do. So what they do basically is that they complement with a non VPN infrastructure to collaborate on less sensitive environment.
That's one category. The second category are those who are having the right infrastructure, if I may say so, from a protection standpoint, security standpoint, they really use what we call in our jar the power buy, which means to, they upload on the cloud in a secure way. The data that they need to work on from home and from mobile situation. And I think it's providing very good result as a matter of fact. We think that this method is going to be accelerated in the months to come.
And for one question for Pascal, if licenses were down 20% for the quarter, what product areas did you see the greatest level of decline? Months?
I would say all the product being related to large enterprise deals. And the product line being the most affected has been Innovia on this front.
Okay, great. Thank you.
And probably last question.
Yes. Our next question comes from the line of Andrew DeGasperi. Your line is now open.
Good afternoon and thanks for taking my question. I just had 2 quick ones. Can you hear me?
Yes, we can hear you well, Andrew.
Okay. Thank you. Thank you. First on, I just wanted to make sure If I understood correctly with the call this morning, the small and mid market, the lower near market to your products, I understand you gave us some percentages on what you think that is from a recurring revenue standpoint, but I just wanted to broadly understand how that's been forming in March and so far in April? And how do you think that pans out for the rest of the year?
Because I feel a lot of your comments were on the large enterprise side And I just want to understand mostly how the small businesses are doing with that.
So I think Andrew, I have been relatively explicit this morning because I say that, in my guidance, I took some consciousness for what we call the mainstream market. Validate to the maintenance and support, increasing the churn by one point. And 2, what I already what I also said, you know, in the recurrent revenue, you have the subscription spot. And the vast majority of the subscriptions is coming from the large companies, more than the mainstream market. And for those, I will say you have, the on the for the subscriptions, you have almost 20% of the of the revenue coming from the increase to a certain extent of this existing subscription.
And this one will follow the same pattern than the new license. And for the remaining piece, we expect this to be renewed, you know, maybe with some delays in term of payments, but to, but, I do not expect them to cancel the renewal. That's what I see.
Got it. And then on the simulation products, Amelia, specifically and also on the manufacturer's How's that been performing? As you see an uptick since people might be moving from physical to virtual prototyping?
The simulations business, in fact, to answer to your questions, we have to go buy verticals. So in many industry, except the auto sectors and the industrial equipment, the simulation business is steady in term of new growth, whatever it's a license or subscriptions, But for the 2 core industry I just mentioned, it was under pressure for this quarter.
Got it. Great. That's it for me. Thank you.
You're welcome. With that, we conclude the So, Cole, and thank you very much for your interest on participation. And of course, Pascal mentioned that they will be multiple shows And we are always there for you, if you have any further questions. Thank you very much on, Nick Care, because are not over with the virus. Bye bye.
Okay. That does conclude our conference for today. Thank you for participating. You may all disconnect.