Ladies and gentlemen, thank you for standing by, and welcome to the Dassault Systèmes 2019 third quarter earnings investors call. At this time, all participants are in a listen-only mode. There will be a speaker presentation, after which there will be a question and answer session. To ask a question, please press star and one on your telephone keypad and wait for your name to be announced. I must advise you that the conference is being recorded today, Thursday, the 24th of October, 2019. I would now like to hand the conference over to your first speaker today, François-José Bordonado, Vice President of Investor Relations. Please go ahead, sir.
Thank you very much, Emma. Thank you for joining us on our earnings conference call with Bernard Charlès, Vice Chairman and CEO, and Pascal Daloz, Executive VP, CFO, and Corporate Strategy Officer. Dassault Systèmes results 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 rates in constant currencies, unless otherwise noted. Some of your comments and 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 factor section of our 2018 Document de Référence. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call also. I would now introduce Bernard Charlès.
Thank you. Thank you for joining us today, both in London and with this call. I would like to begin our call a little differently and share my personal perspective from my several conversations with clients. Today, we see industries with tremendous opportunities to change our lives, and at the same time, significant challenges, engineering, scientific, business, and financial, to successfully bring these opportunities to reality. It is very clear that sustainable innovation in customer experiences and business models is a strategic imperative of the 21st century, and all of the companies are talking about it. Dassault Systèmes is recognized as a leading player in this transformation, from ideation to design, to supply, to manufacturing, to go to market, to use on operation, across all industries. I believe that the 3DEXPERIENCE platform is coming at just the right time for that.
Whether in sectors where we have had a long history or those where we are now establishing multi-year partnerships with industry leaders, we are there to work closely with these companies and to be part of these journeys. You have all seen our figures for Q3 2019, with revenue up 10% and EPS up 20%, and similarly strong performance year to date. What is the story behind it? The first one is a strong dynamic around recurring revenue, which represents 75% of our total software revenue. The addition of Medidata, all subscriptions, will further enhance this. Second, from an industry perspective, software revenue grew 10% in our core industries, with transportation and mobility up 9%, aerospace and defense up 25% for the first nine months. Diversification industries increased 9%, with good growth for High-Tech, marine offshore, as well as an excellent dynamic in home and lifestyle with Centric PLM.
Third, 3DEXPERIENCE software revenue grew 32% in the first nine months of this year. Our 3DEXPERIENCE platform is establishing a very strong position in the aerospace and defense industry as a powerful catalyst and enabler of sustainable growth models. In transportation and mobility, despite difficulties in the sector, especially on the volume side, companies are investing in transformation, therefore engineering a future portfolio. Fourth, we are advancing our purpose with life sciences now becoming one of our core industries with the completion of the Medidata acquisition. We received final clearance last night, as you now know. Finally, we are very well positioned to reach our five years goal of doubling EPS to EUR 3.50 in 2019, based on the 2014 plan, and this is really before adding Medidata. Let's talk about transportation and mobility briefly.
Moving to this industry review, I would like to begin, of course, to mention the Toyota Motor Corporation adopting 3DEXPERIENCE platform with what we call the POWER'BY solutions. We have built a long-standing relationship with Toyota over multiple decades and see this expanding into the future in a very meaningful manner with the 3DEXPERIENCE platform. There will be one single truth from design to manufacturing. Our 3DEXPERIENCE platform will replace internal systems, legacy systems at Toyota, similar to what occurred when, several years ago, Toyota selected CATIA V5. This will be a very wide deployment involving more than 40,000 users overall across a multi-year timeframe, spanning multiple branch application, depending on the user's role. We are very happy to share this news, which probably will influence the entire sector.
In the world of specialized racing car, Spark Racing Technology, a motorsport manufacturer specialized in the development and engineering of high-performance e-mobility cars and modules, has adopted the 3DEXPERIENCE platform on several of our industry solutions. In a separate press release issued this morning, we announced that Lockheed Martin Aeronautics is standardizing on the 3DEXPERIENCE platform on leveraging multiple industry solutions for all new advanced development programs. This is a multi-year partnership agreement encompassing engineering and manufacturing, a software solution, of course. The objective includes improving affordability and manufacturability. This was a very competitive win, but more importantly, it's a very significant transformation for the company. We have a broad presence in aerospace, working with many companies under associated ecosystem.
Using our DELMIA Quintiq solutions, SATS, Asia's leading food services supplier to airlines, is creating a 3DEXPERIENCE twin of a kitchen, industrial kitchen, basically, that pairs virtual and physical operations to provide data-driven analytics for better resource planning. Moving to consumer packaged goods and retail, L'Occitane, a leading health and beauty company, has selected our 3DEXPERIENCE platform, leveraging our DELMIA Apriso application to improve its production planning. In home and lifestyle, Centric PLM is truly leading the way. Working with more than 1,000 brands worldwide, well-known brands, it's helping companies increase incomes on sales, improve inventory management, and reduce logistic cost, translating into more new product for the collection, increased efficiency, faster time to market, and more importantly, improved sustainability, thanks to less waste. We have now passed our one-year anniversary since the acquisition.
Centric PLM's leadership in home and lifestyle is evident, with strong growth in booking new clients acquisitions on revenue growth. Moving to the world of construction, cities and territories, let me share two customer examples. CRCC, China Railway Construction Corporation, is the China's leading railway company. It has adopted our 3DEXPERIENCE platform on multiple industry solutions to improve its collaboration among stakeholders and increase its design efficiency, leading to more productive construction process by testing in the full virtual world experience before building the real world. In the U.S., CO Architects selected our 3DEXPERIENCE platform because it helps increase architects' creativity by creating a tighter collaboration between the architect and builder, working better together, reduced waste and inefficiencies from design to construction. Their name, CO, C-O, signifies their belief in tight collaboration. Could not be a better reference. Now, I would like to move to the world of health.
Italy's largest independent partner research organization for drug discovery on preclinical development, a company called IRBM, has selected the 3DEXPERIENCE platform on the Designed to Cure industry solution experience. IRBM has built a world-class drug discovery partner to the pharmaceutical companies since its original established as the Italian site of Merck Research Labs in the year 2000. In South Korea, GC Pharma, specialize in the development and commercialization of pharmaceutical products for use in the fields of oncology and infectious disease, has adopted our Designed to Cure industry solution on the 3DEXPERIENCE platform to take full advantage of their resources and optimize them from initial research development to manufacturing. We are preparing to close the acquisition of Medidata very shortly and look forward to seeing many of you at our Life Sciences Day in New York on November 13th.
We will share our perspectives in great detail, but let me briefly highlight some key points here today. Health is now core. We have a simple dream to bring the right treatment to the right patient at the right time. In the age of precision medicine and new patient experiences. Combined together, we bring a new unified end-to-end approach to research on discovery, development, clinical testing, manufacturing, and commercialization of new therapies on health technologies. The 3DEXPERIENCE platform becomes the only platform to combine modeling, simulation, data science, AI, artificial intelligence, and collaboration in the virtual world to achieve sustainable innovation in life science. From a customer perspective, the opportunity is significant, with a potential reach to 4,500 pharmaceutical and biotech companies and over 50,000 medical devices companies. Finally, with Medidata, we are adding a software portfolio which is 100% SaaS and subscription, growing double digits.
It will be a specific brand in our information intelligence domain on great talents joining Dassault Systèmes, which we are delighted to welcome. Pascal, you now have the floor.
Thank you, Bernard. Hello, and thanks for joining us today. Let's start with an overview of our financial performance. Beginning with Q3, I will qualify Q3 as a solid quarter. Revenue up 10%, operating margin expanding 140 basis points, and an EPS up sharply. Zooming in, we deliver strong performance across subscriptions, recurring software, services led by 3DEXPERIENCE deployments, and operating margin, culminating in EPS growth of 20%. The key disappointment is coming from the slippage at the end of the quarter, having in mind that Q3 is our smallest quarter for licenses, and we have not been able to fully compensate those slippage. With respect to our nine-month performance, all figures, revenue, software, operating margin, and earning per share, delivered very good results. On an organic basis, the growth was broad-based, with revenue, software, and recurring software all up at high single digits.
We saw strong progress with 3DEXPERIENCE software, revenue up 19% in Q3 and 32% year-to-date. From a license revenue perspective, a similar dynamic with 3DEXPERIENCE licenses software up 21% in Q3 and up 40% for the first nine months, representing 43% of the related license mix. Finally, cash flow from operation were also very strong, up 34%, crossing the EUR 1 billion milestone for the first nine months period. Let's zoom to our regional software performance. The highest growth was in the Americas, with software revenue up 19% on strong licenses and recurring revenue results. Americas also grew double digits on an organic software basis. In Europe, three of our geos performed well, Northern, Southern of Europe and France, offset in part by the macro weakness in Germany, bringing Europe software growth to 5% for Q3.
In Asia, our two largest market, Japan and China, showed a good financial results, both, in fact, with software revenue up 10%. Overall, Asia grew 4% in Q3, reflecting weaker results in Korea and India. On a year-to-year basis, software revenue grew 17% in the Americas, 9% in Europe, and 7% in Asia. Let's move to the revenue backgrounds. Following to a strong first half for CATIA, where license revenue was up double digits, we encountered some softness in the automotive supply chain in Q3. In contrast, 3DEXPERIENCE adoption is progressing well with OEMs transformations driven by the product range electrification. This is also evidenced by No Magic good performance as part of our CATIA Cyber Systems strategic initiative for CATIA. Overall, CATIA software revenue grew 5% in Q3, while year-to-date CATIA software revenue has increased 8%. CATIA 3DEXPERIENCE software revenue is up sharply for the nine months. Sorry.
Similarly, following the strong first half, ENOVIA software growth slowed to 3% in Q3, principally reflecting several large slipped deals. Overall, for the first nine months, ENOVIA software revenue increased 10%. SOLIDWORKS software revenue increased 7% in the quarter, above the 5% for the nine months. It continued to show a strong growth in Asia, up double digits, and some improvement in Europe and the Americas. Its recurring software revenue performance continued to demonstrate a very stable renewal rates, and we are benefiting from the high level of license growth in year 2018, as clients renew their support revenue. Looking at the market opportunity for SOLIDWORKS, today, we work with about 22% of the target company in this space, with more available in both the 2D worlds as well as the 3D worlds.
On top of this, with 1 million cumulative commercial seats sold, we have a significant opportunity to expand our footprint with SOLIDWORKS customers, thanks to both the 3DEXPERIENCE platform and the 3DEXPERIENCE.WORKS solutions portfolio. Other software grew 17% for Q3 and 19% year-to-date. On an organic basis, other software grew double digits led by DELMIA and SIMULIA. Our manufacturing solutions continue to gain traction. We are pleased to share that Ericsson is expanding its use of 3DEXPERIENCE platform, and second, more specifically, broadening its usage to our solutions to manufacturing engineering, leveraging DELMIA as well as ENOVIA applications. 5G represents a significant new opportunity for companies. Challenge include time to market on the one hand, and highly complex configurator products on the others.
Therefore, it is critical to be able to manage a process from design to manufacturing, including and ensuring that for a lower volume, high configurations product company needs to be able to seamless manage plan reconfiguration. Zooming quickly on our revenue results. In more details, we are benefiting from an improved recurring revenue dynamic, driving both our software as well as total revenue growth. In each of the 3 quarters to date in year 2019, recurring software has grown at a higher rate than licenses. As it represents 75% of our total software, this is a very good dynamic. Second, it is also driving growth for our total revenue and software revenue on an organic basis, throughout the high single digits, with an organic revenue higher by 8% in Q3 and 9% year to date.
Software revenue, if you look at the recurring software and license and other software, zooming in more details, what do we see? We see an organic basis license and other software decrease by 1% in Q3 on a slipped deal and weakness in the automotive supply chain. For the nine months period, license revenue increased 5%. Recurring software revenue increased 10% in Q3 and 9% year-to-date on an organic basis, with a double-digit growth for subscriptions and a very solid support growth across all customer channels. On an organic basis, services revenue increased 16% in Q3 and 14% year-to-date, led by 3DEXPERIENCE deployments. On a nine-month basis, the services growth margin was 9%. On the operating and profitability and margins, we continue to deliver strong operational results. Our operating margin for the first nine periods at 31.3%, up 140 basis points.
We had an organic improvement of 200 basis points compared to acquisition dilution of 100 basis points. Currency had 40 basis points. EPS came in the high end of our guidance at EUR 0.78, increasing 20% in Q3 and 19% year-to-date. Strong growth in earnings per share came from our operations, revenue operating margin expansion. Excluding currency, EPS was up mid-double digits for both the three and the nine months periods. Zooming on the cash flow and the balance sheets, our net operating cash flow crossed the billion EUR milestones for the first nine months of year 2019, increasing 34%, up 28%, excluding the IFRS 16 lease implementation effect.
The principal contributors were growth in the net income and non-cash items, accounts receivable management, and a lower tax down payment in year 2019, where we are now benefiting from a U.S. tax change on a foreign driven intangible asset enacted in year 2018. Unearned revenue, now called contract liability, increased 7% at constant currency and the same perimeters. Zooming to the financing of the cash acquisition. Few words. In September, we completed our Eurobond financing in the amount of EUR 3.65 billion, to fund a large proportion of the financing of Medidata acquisition. The offering was well-received. We also refinanced a EUR 650 million Eurobond loan, set to mature in year 2022. The Eurobond financing has four maturities from three years to 10, translating to an average term of seven years with an effective borrowing rate of 16 basis points.
Looking at our borrowings, our net estimated financial expense are about EUR 9 million for Q4 and EUR 41 million for 2020. I would like to move to our guidance. I would like first highlight the key full year 2019 figure for DS on a standalone basis. Point number one, we are reaffirming our total revenue growth objective of 10%-11% at constant currency. Our revenue objective takes into account the strong dynamics we had with the recurring software, representing the large majority of our software revenue. At the same time, our revenue output also reflects the potential for continued volatility in license activity in Q4. We updated our currency for Q3 actuals and Q4 updated outlook, leading to a total revenue range of EUR 3.912 billion to EUR 3.952 billion.
We are also confirming our earlier EPS objectives and updated for currency for both Q3 and Q4, bringing our non-IFRS EPS objective range up EUR 0.05 to EUR 3.50-EUR 3.55, representing growth of 12%-14%. With these objectives, I think we are well-positioned to reach our five years goal to double EPS to EUR 3.50 by year 2019. With the expected closing no later than October 31st, we are adding Medidata to our Q4 and full year guidance, assuming a two months contribution. For Q4, we are estimating a non-IFRS revenue contribution of about EUR 103 million and about EUR 0.02 of our non-IFRS earnings per share. Just remind that we have been carrying interest expense on the related funding debt starting in September.
With respect to the year 2019 on a combined basis, we are targeting total revenue of 13%-14% at constant currency, translating to a revenue range of EUR 4.05 billion-EUR 4.055 billion. The non-IFRS operating margin of about 32%, and a non-IFRS earning per share of EUR 3.52-EUR 3.57, up 13%-14%. Further details on the fourth quarter are in our earning press release and in our earnings presentation on our website. In term of currency rate, we are assuming a U.S. dollar to EUR rate of 1.50 and a Japanese yen to EUR rate of 125 before hedging for Q4. To conclude, we are advancing our purpose across product, nature, and life. Our platform strategy and our science-based DNA is really starting to be visible from the outside.
From a financial perspective, recurring software revenue is moving front and center as a key enabler for our strengthening organic growth. Looking forward, we are focused on continuing to improve our executions. We have a strong financial model and a significant runway of opportunities thanks to our growth drivers. We hope to see many of you in N.Y. on November 13th for our Life Science Day. We will now be happy to take your questions. Thanks again for your participation on this call and our earlier webcasted meeting held in London. Operator, Emma, we're ready to take questions.
Thank you. Ladies and gentlemen, we'll now begin the question and answer session. As a reminder, it's star and one on your telephone if you would like to ask a question. If you'd wish to cancel your request, it's the hash key. Once again, it's star and one. Our first question comes from the line of Jay Vleeschhouwer from Griffin Securities. Please ask your question.
Thank you. Good afternoon, Bernard and Pascal.
Yes, good afternoon.
Good afternoon. I'll save the metadata questions until we see you here in New York in a few weeks. I'd like to start with my first question concerning the BT business. You noted the Toyota and Lockheed Martin news, and the question there is, those are among two of the oldest, most established customers in the industry, of course, for your kind of software. Those selections or decisions now were perhaps years in the making. The question is, what other large customers of that kind are you seeing perhaps in the process of reconsidering or potentially retooling deployment decisions that were made five or 10 or even 15 or more years ago? How have the selection criteria changed for these kinds of decisions versus the original criteria?
In the meantime, when you are doing large BT renewals in your core markets, what are you seeing or trying to achieve in terms of pricing or incremental pricing versus the prior contracts? A couple of follow-up questions.
Thank you for the question.
There is a wrong perception that we need to resolve with existing customer. What was announced, I will be explicit on that just to help clarify. In the context of those customers, they have been long-lasting customers of Dassault Systèmes in a certain scope of usage. Mainly CATIA V5, sometime manufacturing DELMIA. Here, for example, with Toyota, if you read carefully the press release, it's not about what we do now. It's about the total new core infrastructure to replace a gigantic legacy system that are many years old. That's the case of so many companies, even existing clients. Whether it's legacy PDM or multiple information systems, where the unification is changing the core system for everything. It's not even PDM, it's the next generation integrating single version of truth across all discipline. That's the case of Toyota.
Basically, still to be announced will be the next generation of product solutions in many domains of application specialization. Same for Lockheed Martin. Those companies are doing highly sophisticated processes, High-Tech systems. There are a lot of legacy application on systems. In the case of Lockheed Martin, they authorized us to communicate the fact that they use on the power of all the product design, simulation, production from one single platform. Again, a new scope of coverage, which really addresses the specialized audience, but much broader, all people involved in the collaborative process. This is what is happening. In many clients, Ericsson is another example of what we have announced. They have hundreds of information database that they want to remove and replace by one single version of truth. This has never been done.
Again, here it's a new scope. I think we see that more and more with clients. The net of all this is the size of the business we could do with those giant is at least x2 or more. In fact, as proven with the giant contract that we signed two years ago with Boeing, where the scale of the contract had nothing to do what we did for the past 20 years. That's, Jay, what is behind those announcement. It's changing also, of course, their ecosystem, because the nature of the products they are doing is evolving. They are creating new generation of vehicles for e-mobility connected vehicles. Electronics is part of it. Software connection configuration is part of it. This is why this is really not only a new game, but game changer.
Keep in mind, a long-lasting, fully committed Dassault Systèmes client, having done great business with us, and us having done great business with them, we can multiply by 2x to 3x the potential business with them.
Adding few comments on the pricing, Jay. As Bernard said, at an equivalent scope, knowing that the purpose is to expand the scope. Let's zoom on the equivalent scope. You have the price of the platform coming in addition. Okay. It's EUR 1,000 per users. You have the maintenance and support rate increasing from 18% to 21%. The goal is really what Bernard explained, is to expand the scope either on the upstream, on the downstream, using the platform. That's really where we are creating the value and how we do it.
The second question has to do with your cloud ambitions. I watched your webcast two days ago, that you presented at Bernard on your cloud offerings. We talked about this a bit a quarter ago when I asked you about your relationship with Microsoft, for example, vis-à-vis cloud. The question has to do with your internal investments on your own cloud infrastructure, and whether in the long run, the most prudent thing to do is to be largely, if not mostly, dependent on your own internal infrastructure, in this case, the Outscale, versus working more with the hyperscale companies to pursue your cloud ambitions, just in terms of achieving better economies of scale as your customers presumably will adopt more and more cloud, not only for CAD, but for the other businesses. My final question after that. Thanks.
Yeah. Thank you for participating to our cloud seminar. I think the testimony from customers were quite impressive in terms of how they are using cloud for new projects. You're right. I think the reason why Outscale is becoming 3DS Outscale, a core brand, is because we believe that our customers value the fact that there is a fully controlled stack on security, on efficiency, on optimization, delivering the service to them. The number of clouds we have around the world is increasing significantly. As you know, one of the things we have done, which is unique, is we have done our own PLM to manage our own multiple clouds. We offer 3 types of cloud, public, private, dedicated cloud, based on the customer needs. We have a good relationship with Amazon, we use them for elasticity.
There is no doubt that our customers wants to have the guarantee of total service and also alignment fiscally and legally on their territory. Your point is well taken, and we agree with it, and we continue to develop our own cloud infrastructure to differentiate. Basically, as Pascal said this morning, from a profitability standpoint, all in all, whether it's with PLC, ALC, basically upfront on the annual license charge or subscription-based, for us, the operational margin is the same, which is a performance because it's not the case for many companies.
The final question has to do with your management of the portfolio. That is to say, the existing DS portfolio is quite complex in terms of numbers of roles and apps and the large number of what you call trigrams. We've sort of gone back and forth over the years in terms of the portfolio growing, then you try to simplify, and so forth. Where are you in terms of that complexity and managing the very large number of roles, but at the same time doing so at scale and profitably so that the portfolio isn't, so to say, overbuilt? We've sometimes seen in your industry almost an inverse relationship sometimes between complexity and growth. Perhaps you could address that issue.
Well, the reality is that with the number of industries we cover, number of process we cover, or number of segments we cover, what will continue to happen is the number of roles, meaning type of champions we want to serve, the number of process, meaning teams, and solutions, meaning the outcome for the companies, is going to grow because we want to be highly dedicated to the segments we serve. The reality is that it's very easy for a startup company and small company to understand what they want and what they need. For an analyst to look at the total portfolio is one thing, but a customer is in one industry and is covering a limited number of process. When you go and instantiate that for a given customer, it's very simplified.
That's a unique approach that we have because most of the other players are based on functionalities, and we don't want to sell functionalities. We want to sell outcome, excellence, or virality of the roles. Outcome of the solution, performance of the process, virality of the roles. On the testimony from our cloud-based customer, and we have a quite large install base of cloud-based customer. We have a very large install base of education student, schools, very large base, probably much bigger than some of the latest announcement from what I've seen last night in terms of acquisition.
Far bigger. It's simpler for them to provision the roles, and it takes just a few hours. That's the reality and the feedback of what they say.
Okay. Thanks very much.
Thank you. Our next question comes from the line of Andrew DeGasperi from Berenberg. Your line is now open.
Thanks for taking my question. First, I guess on the SOLIDWORKS growth, is there any scenario that you see returning to that double-digit range in the near midterm? Maybe broadly speaking, given there's a potential that the market becomes more competitive, do you think the product is adequately priced at this point?
May I say two things, Pascal, before you provide the insight? You have to know that now with the SOLIDWORKS family, it's becoming a family. We announced what we call 3DEXPERIENCE.WORKS at the beginning of the 3DEXPERIENCE World. I want to explain briefly the following. There are 3 type of things we offer to the SOLIDWORKS type of clients. Number 1, SOLIDWORKS desktop. Solution number 1. Number 2, SOLIDWORKS desktop powered by the 3DEXPERIENCE platform on the cloud. That's why we have seen similar growth for SOLIDWORKS customer recently, because they use similar directly on the cloud. Number 3, web-based native mobile application natively on the 3DEXPERIENCE cloud. It was called xDesign, during the field test on the customer test that we ran for almost 12 months. It's going to be delivered to the market and available to the market under the name of 3D Creator.
On that category, web-based, no apps on the device, is extremely well-received. Ultimately, this will have the same functionality as the SOLIDWORKS desktop, but everything through a web browser. Progress are being done. Those under the SOLIDWORKS line, all this will appear to be the evolution of revenue. With that in mind, Pascal.
I think the element of the answer of how competitive is the products against the different solutions you have on the market. No one can claim to have this scope of solutions and at the same time, the same level of integrations between them. Point number one. Point number two, if we zoom only on the traditional SOLIDWORKS, I still believe the reservoir for growth is still there. You still have 40% of the market still being in 2D, and you still have a migration from 2D to 3D. It's almost 4%. The 1.5 million companies, 40% of them being still in 2D, migrating into 3D every year. For SOLIDWORKS, this is what I say this morning, it's 40,000 new licenses every year. Okay.
For 3D to 3D, as you may know, we are now winning market share in the 3D space using SOLIDWORKS. We are replacing some of the incumbents with a well-priced and very functional solutions, so-called SOLIDWORKS. I look at the track record, we are almost gaining 1 point market share in the 3D space with SOLIDWORKS every year for the mainstream market. You still have the large install base we have. As you know, many customers are growing, and they continue to buy on a regular basis, new licenses. When you do the math, if you combine all the growth drivers we have described by Bernard, plus the one I just gave to you, I'm still convinced we can go back to double-digit growth.
Great. Thank you.
Thank you. Our next question comes from the line of Jason Celino from KeyBanc Capital. Your line is now open.
Hey, guys. Thanks for taking my question. Just one from me today. Can you just provide a little bit more color on some of the business dynamics you're seeing in Europe and Asia? Maybe what products, what industries, and how this compares to maybe prior times when business demands weren't as robust.
A few insights. China is a major driver of Asia, as well as Japan, by the way. China being a significant double digit with 20% growth.
10 for this quarter.
10 for this quarter on.
20 for the first nine months.
20% for the first nine months. Thank you, Pascal. There was a lot of concern about the sectors like automotive mobility, is it slowing down? It is in some way in volume, but in terms of product portfolio on the bench to be developed through engineering and design for a new electrified vehicle, it's a huge number of programs around the globe. That's one thing that should be noticed. Aerospace was at 25%, so it's a strong dynamic. Also a new scope for us because it's about rate production as well as supply production. Related to the supply chain, what we see is that the startups in the sector, in both domain, by the way, for e-fly or e-mobility at large, incredible number of new startups.
Most of them, I can claim, we can claim, are based on the 3DEXPERIENCE cloud solutions or on-premise. It's 3DEXPERIENCE in almost all cases. In the middle, you have what we call tier 1, tier 2 large suppliers. They initiated the adoption of 3DEXPERIENCE before the OEMs. On this quarter, there was a certain slowdown in that subsegment of the market. We don't think it's a trend because they are creating a lot of innovations. Think about Valeo, Delphi, and many others. That's basically the feeling we have. Pascal mentioned this morning that the pipeline is good for Q4. I think our visibility for 2022, he will speak about it.
If we look at what we call the diversified industry, not the core, we are also observing some key trends. The life science sector is going well, at last. Europe, Asia, as well as U.S. Home and lifestyle segments is also going very well. We continue to gain market share in this company, even if they are suffering to a certain extent, but they are so far behind in term of digitalization. They are investing a lot to catch up. The High-Tech sector also is going well because with all those new equipment, with the IoT, this is driving a lot of the demands. Last but not least, believe it or not, the shipbuilding is also a domain where we see a lot of growth and especially coming from Asia.
I think we are building the Asian standard for shipbuilding. Replacing legacy system, simply said. Next question, please.
Thank you. Your next question comes from the line of Michael Briest from UBS. Your line is now open.
This is Michael Briest .
Yeah. Thank you. Good afternoon. A couple from me. Just in terms of SOLIDWORKS, I think you walked through some of the drivers of unit growth this morning, Pascal. Around 80,000 being the target. Can you talk a little bit about the unit volumes in Q3? I think the comparatives are reasonably hard for Q4. Do you think you can sustain that 7% growth?
That's the goal. That's really the goal.
In Q3, units?
I do not have the exact unit number in mind for Q3. Usually if you apply the seasonality of the revenue, you will find it's relatively correlated to this.
To the growth. Yeah.
Yeah, to the growth.
Okay. There's a useful slide on 31, looking at the proportion of business coming from 3DEXPERIENCE. You're now a little over a quarter of total on 3DEXPERIENCE from total software. Can you maybe say on CATIA, where you're up to on that transition?
Last time I look at it, you have more than 20% of the install base CATIA being under 3DEXPERIENCE platform.
Oh, my.
Whatever is native or through the POWER'BY approach.
Are there any standout sectors which are either ahead or behind that 20%?
All the new sectors for CATIA.
Yeah
obviously are starting directly with 3DEXPERIENCE platform.
Construction.
Yep.
Architecture construction. All new startups in e-mobility. All native, directly. As you said, all new sectors are directly going through the 3DEXPERIENCE native zero customization on provisioning the service that they need.
Yeah. The aerospace also is moving very fast with CATIA on 3DEXPERIENCE platform. The automotive sector were probably the one being more difficult to move. As Bernard said, with the electrification of the car, we are seeing the acceleration because you need the new generation of CATIA to do it.
Cyber, what we call CATIA Cyber.
Okay. Thank you, just finally, on the guidance of Medidata, I think there was a question this morning around this. If I take the consensus of EUR 196 million, apply your exchange rate and take two-thirds, I come to about EUR 113 million. That's about EUR 10 million more than you. It's a cloud business, so presumably the 85% of revenues from cloud are locked and loaded. Why are you being so conservative on what you expect to get from the business?
Your computation is probably a little bit extreme. Nevertheless, I say it explicitly this morning, I took some cautiousness. Again, believe me, when we do this kind of move, you take the risk to defocus the company for a few weeks. This is the situation I would like to avoid, and that's the reason why we are taking some cautiousness. Again, I'm not talking about only Medidata, I'm also talking about Dassault Systèmes. The time we spend as an executive with the Medidata teams, are the time we are not spending with our current customers. Maybe you can blame me to take too much cautiousness, but I'm fine with it. Michael. It's less than what you stated.
Okay. Well, I'll go back and have a look at that. Thank you very much.
Welcome.
Thank you.
Thank you. There are no other questions at this time. Please continue.
Okay. Thank you very much for participating this morning and this afternoon for some of you. We are always there to address your questions. We wish you a good day. Thank you very much.
Thank you for-
See you mid-November.
Thank you for participating. That does conclude our conference for today. You may all disconnect.