Good morning, everyone. I'm Francois Gordon Hadaux from Dassault System, Investor Relations team. From the company, we have Bernard Charles, our Vice Chairman, Chief Executive Officer and Pascal Delo's Executive Vice President, Chief Financial Officer and Chief Strategy Officer. I would like to welcome you to Dassault System First Quarter 2018 Earnings Presentation. Which is also being webcasted.
At the end of the presentation, we'll take questions from the audience and from participants, no webcast's call. Later today, we will also hold a conference call. Dassault stem financial results are prepared in accordance with IFRS. During 2018, the first which is the 1st year of implementation of IFRS 15, we will provide IFRS financial information on both an IFRS 15 and IAS 18 basis. So all figures and comparisons during the presentation are under IS 18 and are on a non IFRS basis with revenue growth figure in constant currency unless otherwise noted.
We have provided supplemental IFRS 15 and IS18 non IFRS financial information and IFRS non IFRS reconciliation schedule in our earnings press release. Some of the 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 2017 reference. Just a word before giving the floor to this gentleman, I would like to invite you on June Friday 15th for our Capital Market Day which will be held in Dassault System Campus.
Let me now introduce Bernard Harris.
Thank you, Francois Jose. Good morning. Please to talk to you again and thank you for your continued interest on Dassault System. I'm sure you have read what we have announced I would have loved to have Thibault's 3DEXPERIENCE twin with me. Monday, one day, we will have Thibault of Monte Reality says hello to all of you.
And he was part of course of the preparation for what we are communicating today. So it's going well. And he's very busy, more than ever, as many topics point. Anyway, so Q1, as we, as you can notice, we are We are on a good start with good software revenue margin as well as the EPS. To really deliver on the full year.
As you may have noticed already, the organic license revenue is up 14%. And with a very strong 3DEXPERIENCE license dynamic up to 3%. I'm speaking with, excluding exchange rates, so it gives you comparable. Strong license growth on the 3 sales channel, with almost this being the case for almost all the brands on 9 of the 12 GEOs. And you can see also that there are core industries, which are double digit growth.
And we continue to have double digit growth on new industries, like natural resources on what we call CG Retail, on AC where I stated to you that there is something to do in that sector. It could take some time, but we're going to do something. PASCAL wanted to have the tallow's signature on the way we report. So there are a few minor presentation changes, but there are you will see there. It's not a revolution.
It's consistent. So he wanted to mention that, yes, we do focus on implementing our strategy, social industry experience. The key point for social this quarter is the adoption of cloud, which is really very strong and also the announcement of the new portfolio that supplement solidworks to make it really powered by 3 d experience on the cloud. And the SOLIDWORKS World Event was very key event this year, and things were extremely welcomed by the users on the sellers. On the industry side, we continued to really focused on the mover on shakers.
If you look at the industry, you have traditional players and there are more and more new movers on shakers in those industries. And the number of those companies is exponential. The nature of those companies I will come back to it are very interesting small, but all users are using our system. In the past, big companies limited population within the big companies. But I believe that this is a very strong argument for the more conservative companies to open their eyes about the fact that something is happening.
I will come back on that topic. Experience with really new approaches in terms of solutions around customer simplicity when you create new product lines. How you create the experience for the customers, the consumers of the citizens. We'll see that also. We reconfirm our full year guidance.
And Pascal will come on that topic. So here is the way I see the evolution of the industry, 12 industries, seventy segments, we look at the industry reference we have, and we look at the new shakers coming in, and we look at all the numbers of those companies around the world and we target maximum footprint for their adoption. Which means that there are not big installation at the beginning, but the penetration in those companies is high, up from on I don't know if you realize, but there are more than 600 new companies doing immobility those days. I'm not talking about the existing in the world. People probably have in mind 10, 15, but when you sum up.
It's a significant number. And it's true in many, many sectors. They have illustrated the year with the, of course, air transportation, ground mobility, but also constructions. So there is, I think, something happening. And it's a good timing because with the cloud we provide affordable solutions with low CapEx at the beginning and model, which is a very sustainable model going forward.
Our KPIs are very simple for cloud. It's number of users on data And I know that number of users on data volume is there, revenue will come. Talking about the industry, I believe we are going far beyond the industry 4.04 beyond with several key showcase alliance because it's not about only the production side of the industry. It's about the ideation site to create new categories of products. Clearly in many of those sectors, there are new categories of products being invented.
And it's changing the way the ideation process work It's also changing the way you serve the product on the market, even to sell how you sell it on market. And of course, We continue to increase our penetration with market, but with the makers on innovators. We are in the 1200 innovation centers, hublabs in the world, and we are also doing that now, even for life science So there is, I believe, at the beginning of this 21st century, I think, a new dynamic in terms of what are the future categories of products that will serve consumers cities on customers. And I think that a company like Tesla has demonstrated to a very conservative AB industry that new categories make sense because it's a new set of services. And this is happening also in Air Transport mobility with job deviation on many users.
And you have seen many of those, including those we cannot yet mentioned. The 3 d experience is now complete in terms of scope. It's an operating system for our solutions. It's also an operating system, not in the sense of IT. It's an operating system in terms of what it means.
Operating your company on the solutions. And it's also expanded now to do power buy. So we can connect legacy application to it. On the other side with the marketplace, it's becoming a new business model. How do you buy?
How do you produce on how do you sell. And as you know, on January 20th, we opened the marketplace after 1 year of test, and I will come back on this. But it's a new business model from that standpoint. When we plan to use marketplace for 2 things, for users, building communities, but also for companies using the marketplace inside so they can change with that marketplace the way they trade with their value networks. Dynamic pulse 3 d experience is good.
As you see, 53% up, excluding exchange rates. And we continue to focus on the 3 dimension of this strategy and more to come, in fact, this year. Few concrete illustrations, before I give the floor to Pascal, well known company, at least for many, many of us, in Germany, and they have adopted the 3DEXPERIENCE platform on the cloud. And when you do that, you reach new nature of users, including sales, marketers, because all is there. You just have to connect.
You just need an ID to connect on sewer browser. You can see product configuration. And the quality of what is represented now on screens tablet and so on is so high, you cannot really make the difference between a picture on what you see in terms of real data. So, they have made that decision. It's a significant one because first of all, it's not a start And it's a real industrial company and have made this to reduce our product development costs, but also to integrate all the production system.
They have a plan to use it for based on marketing, really to promote easily to the marketers in the world, but distribute during the world, the products they are doing. So it works well. We announced 5 things. We announced social car battery services online. We announced SOLIDWORKS PLM Services for SOLIDWORKS.
Users. They were PDM centric before managing their part. SOLIDWORKS product designer, which is really the use of technology from the CATIA world. SOLIDWORKS X Designer, which is basically SOAR Browser Anytime and you can use a browser based tool for design on 3dexperience marketplace remember 3 or 4 years ago, where I got some question from you about new startups in this area that I will not name. They have almost disappeared.
I don't know, I think this is going to be. This is a groundbreaker because it's the power apps that it works through a browser. On the marketplace for me, on parts supply. Transportation And Mobility, we are focused on three core things, the, not the electrification, much more important, the new vehicle architecture. Because those vehicles are not verification versus testing because they are discovering what has been we have been doing in aerospace for 30 years the difference between testing and certifying, and it's a big difference because you need to prove, and then the cost on quality, of course, because the value chain for an electrical vehicle is very different.
They are not getting the profit from the same. Things before the engine was making a lot of the difference, but now the battery is the engine, not the engine, that the battery is the engine of those things. Evolocity, this is a new start up significant startup, they are creating new type of immobility and they are really starting with our entire solution upfront with the experience platform on the cloud. Unless we have been able to see at which speed they could start. The speed at which they could start has never been achieved with implementation of software on premises.
Aerospace And Defense, we focus on production rate. The backlog is so huge that and basically, our digital manufacturing solution are more involved in the industry standard in aerospace. Their backlog is so huge that their top line is coming from the capacity to deliver. And that's the case for most of the players in this area. Because of the sophistication on the customer experience.
If you look at, it's interesting if you want to have industry focus in terms of analysis, if you look at the annual report of those companies and you look at the projected revenue in service for parts, supply maintenance, There is a game changer aspect going on in this industry as we speak. They are changing the nature of what are the service on this. Tens of billions of future revenue made on things which are service online for the operators. More to come on this area also. We continue to work on the supply to value chain optimization with Quintiq on, this is a good illustration with Lufthansa Cargo where they have been optimizing the full flow using Quintiq.
So So we are changing the boundaries of even what PLN is about because we want to optimize the full value flow. BioPharma, as you remember, we invested a lot in the past years in the biotech. I think the biotech and the bioscience will change the manufacturing world, and we should have underestimated to look at the hub in Boston for 82 bio, not only for life science, for material science and for the future of making physical goods, things are changing in this area. I think it's as important as what chemical was at the beginning of the previous century. So passion centric innovation, we deliver experience.
So it's not about only small molecule, going big molecule, but it's about the process by which you go with treatment, which means equipment on personalized equipments. So it's we are connecting things, which have never been connected before, Gillette Science Adaptive Biovia in and it's a very, very interesting showcase. And it's more than Biovia, it's Biovian, of course, the year. The Experience platform. And with that, Pascal, I'll let you comment the numbers.
Thank you very much.
Thank you, Bernard. So welcome to all of you. It's a pleasure to start with a good quarter. In my new role. And if I look at basically, we were expecting a good start of the year continuing the strength we have seen in Q4, and this is the case.
This is really the case. And not only this growth is solid, but it's a broad based growth. So Bernard seats, we saw the growth across the three channels, 9 of the 12 GEOs, most of our core industry as well as the diversified industry and in all the major brands. So this is basically the key point for this Now, if I look at a little bit more on the numbers, so the revenue reported is 171,000,000 you remember, the guidance we gave to you was 7 50 to 7 70. So we are in this range.
The growth, including current effect at 9%. So it's the middle because we gave to you 8% to 10%. So it's 9%. But we are in the high end of the and growth because we had a 10% growth. And if you remember, we gave to you this high end in the guide So basically, the gap is coming from the services, and I won't give more detail about it.
If you look at the operating margin, 27% operating margin against high end of the guidance and a significant improvement because it's we are talking about 80 basis points compared to last year. And EPS at $0.59, which is against higher than the guidance we gave to you because it was the high end was at 57%. So 11% growth taking into account the currency effect, excluding the currency effect, 26%. So I think we can qualify this as a good quarter and a good momentum. From a software standpoint by region, so we had significant good growth in Americas with 11% and it's coming from Nam North America as well as LatAm.
So that's a good point. In Europe, and it's I mean, it's the growth is also coming from all the major brands. So in Americas. For Europe, 6% growth. I want you to keep in mind that last year, Europe was growing at 11 on.
So basically, we have a comparison based FX, just not explain everything, but at least it's a good point. And Europe growth is driven by France and the southern of Europe, essentially as well as Russia. The good news are really coming from Asia with a strong growth in Asia across all the major countries, including Japan, China, Korea, South Korea, in India. And if you remember, Japan was a little bit weak last year. So based see we are recovering the situations, the good weather in Japan.
And China, we are back on track what we used to have is close to 20% growth. So Casia grows 5% on the software side. If I look at the new license, it's a double digit growth and it's driven by Asia. It's led by Asia at large. And it's also led by Americas and also indirect channels globally.
Innovia, which is also the good news for this quarter, remember, Q4 Innovia was a little bit weak and the 3DEXPERIENCE was having a good momentum So here, we have an Eluvia being aligned with a good momentum with 3 external platform as well. So plus 11%, which means in terms of new license, 36% growth. So clearly, it's a good dynamic. And the dynamic is coming from Asia and Europe, to the large extent and also North America as well. Solid works, so we could you the good right plus 13%.
So the budgeted license growth, probably from basically also geos, And the other software, I would like to mention 3 of them. So SIMilia against good performance on SIMilia, and I will come back little bit more in detail just after. DELMIA and GeoVIA are basically growing on a new license more than 20%. So clearly, good dynamic. And again, demonstration that it's a broad based growth.
It's not only 1 or 2 product lines driving it. Let's zoom out see on simulations and simulation, why I want to make this room? Because, again, probably the first time we are disclosing to you the weight for CIBDA in our revenue. So it's 15%. And again, I'm not talking about all the simulation activities we have inside the S because this is not taking into account what we do, for example, in Life Sciences or what we do also the manufacturing side.
So it's really the core product simulations, which is equivalent to our peers. If you look at the ongoing software and growth up 9%. And it's driven by the core industry, I would say, transportation and mobility, but also the diversification, I take and life sciences, especially the medical devices. We had a strong performance of EXHAR this quarter, and this is good because you remember, Last year, before the acquisition was an intermittent suffering, some of growth. And we have been able to reestablish a good dynamic And just for you to do overall, the growth for Cibilia this year is 26%.
So if I take into account the exact performance, and 9% organic growth. And the key point I want to mention, we are really expanding the market leadership in simulation I know with all the acquisition we did, we are covering 70% of the market in terms of coverage, if I take the fleet dynamics structural analysis, the high frequency as well. And when we do the pro form a and we compare with others, we are definitively the number 2. We are not yet the number 1. We still have a big competitor in front of us.
But if you look at all the acquisitions, our competition, they did in the simulation space. We are still number 2, and we have a well established position to this space. So keep an
eye on
simulations because this will continue to grow at a significant pace. Tooming on the financials. For the software and growth, I spoke about it 10%, which is the high end of the guidance, and the organic growth at 8% if you exclude the currency effects. If you split the software grows by the new license and the subscription and support. So an organic growth on the new license of 14%.
Which is very, very good dynamic. And I really want to draw the attention on this. And this new license growth is really coming from 3DEXPERIENCE platform. Bernardo said it's 53% growth for this quarter. We need some significant momentum And we still have a good momentum with SOLIDWORKS.
Even if, for the second half of the year, I really want you to consider the moderate pace for the for selling works. The good news is really coming also from the subscription and support. Because if you remember, we shared with you a range between 6.5% to 8% growth on the recurrent part And we are at 9%. So it's exceeding not only the consensus, but also our guidance. And this is affecting Renee's renewal rates at large.
And if you look at a little bit more in deep, the improvement is coming from the subscription. We had, on a pro form a basis, an organic growth, which is higher than 10% for the subscription for this quarter, sorry. Moving to services. So we are flat excluding the currency effects. So it means a $6,000,000 gap.
The point is clearly, the following is, if I look at the nature of the services, the gap is not coming from all the services related to 3DEXPERIENCE platform. You remember, all the big projects we signed last year are really delivering growth on the services. The gap is coming from the the brand services and especially a 3Dx site where, see, we are still suffering. The purpose for Q2 is much better. So clearly, we expect a recovery for Big X side and to a mix result on others.
But again, we are talking about the 6,000,000,000 gap, and this gap is largely offset by the performance of the software, either on the new license and the recurring cost. On the operating margin, significant lever, as you can see, 240 basis points improvement organically. And it's basically the direct contribution of bigger recurrent revenue because it's almost pure margin and also tight control costs we have put in place for Q1 in order to basically have the discipline. So this has been offset by the currency effects of 110 basis points And the acquisitions of XR contribute to 50 basis points dilution for this quarter. So overall, 80 basis points improvement, so a good lever.
And at the end, we are delivering the high range of the the EBIT margin of 27%. On the EPS, so $0.59, 0 point 0 $2 higher than basically the consensus and also the guidance. A growth excluding the currency effect at 26%. And it's a direct contribution of the margin expansions and also a lower tax rate compared to what we share with you. So one sense is coming from the tax rate.
Okay. Cash is king and, look, the beautiful cash flow statement.
$407,000,000,
driven by 17% compared to last year. At the end, we are lending with a net financial position at 1,845,000,000. So significant cash position. And if you zoom a little bit, the improvement is coming from the good collection. And also the increase in the another revenue, which is consistent with basically the any growth of the recurrent revenue.
So basically the again, the cash flow is really solid. Now, let's zoom on the objective for the full year. So we are reconfirming the full year objectives. And just as a reminder, 8% to 9% growth with Life excluding currency effects and a license growth between 8% to 10% and operating margin between 31% to 31.5% and an EPS in a range of 2.83% to 0 point 88% and a growth as reported between 6% to 8%. We are not changing the our assumptions for the exchange rate.
So we are still keeping, basically, for H2, one point $20 for the dollar $135 for the yen. If we have to do it we will do it in Q2. Now if I assume on the full year under Q2, So for the full year, again, the only changes is coming from the services whereby I shared with you last quarter last quarterly call, basically the 12% growth for the full year, which was the initial guidance. We are slightly reducing it to 9 percent. But again, it's still a good number because services are back on track.
And again, largely compensated by the better recurring revenue on the software side. So no significant impact. And I think from a mix standpoint, it's much better. So which basically means for the full year, the total revenue growth between 8% to 9%, so no changes. And the license between 8% to 10%.
The recurring between 7% to 8%, the operating margin gains between minus 1 and 0.5 points, which is coming from the dilution of the acquisitions for 60 basis points and the currency effects for 40 basis points. Tax rate at 29.7 percent, no change in EPS in, in the same range. For Q2, we are targeting a revenue range between 1,000,001,501,001,000,000, which is a growth, excluding currency effect, between 8% to 10% So, to an operating margin, which is stable, at least on the high end of the guidance, and an EPS, which is in the range of $0.65 to $0.68 is a growth at reporting growth between 5% to 10% and including the currency effects, the growth between 16% to 22% So clearly, Q2, which is a good, a good and solid one. And in the almost in line with what we have seen until now and in the perspective of the full year. That's it for today.
I think we are ready to take the questions with them. We'll take first question from the room and after we will take questions from the call.
Great. Thank you. You've now done 3 consecutive quarters of double digit organic license growth. For Q2, Pascal, you're sort of indicating kind of 10% more at the upper end. I think your comments on pipeline activity still seem to be pretty good.
So should you read anything into that? And how do you expect sort of the year to develop everything sort of points fundamentally in the kind of right direction. So am I reading too much into this from a cautionary standpoint?
Oh, but,
again, I gave you the range and, obviously, we are targeting the high end the range. So we still want to have a 10% growth on the new license. And the pipeline is here to deliver it So there is no specific synergy behind this. And again, if you combine Q1 and Q2 for H1 it means that basically, we will land close to 12% growth for the new license. She's exceeding the double digit growth.
For the rest of the year, the pipeline is solid. Q3, we have a relatively good visibility. Q4 a little bit early because even if the pipeline is here, it's difficult to assess the maturity. So, no, nothing specific, to say on this.
And at the same time, we don't want you to conclude on over estimate. We want to continue to build to build a traffic on which we can deliver. So we we are careful about not creating the overall expectation that are always difficult to manage on unities that in what Pascal and I presented, we put a lot of attention on new clients, on new, I would say new situation, new setup for the evolution of the market because the cycle at which the existing companies are transforming themselves is not only dependent about our sales efficiency. They have cycles. So we want to grow as quickly as possible the footprint because that provides a long term visibility.
And it's about assigning resources probably.
And obviously you signed in middle of to the Boeing deal. And I think it wasn't the Boeing deal that excited you, but the implications of that. So sort of 9 months on Can you give us an update on how that's perhaps changed the conversation you're having with many existing but also potential new customers? And and the strategic engagements that you're having, not just in aerospace, but in all toes and
the other verticals. Yes, we were astonished ourselves with the effect of this announcement, while we have not said so much I think what was astonishing for the market is the scale of it. But not only that, it's also the wide from the scope, of what is called the Boeing, I mean, that was discussed with, Millenberg, the CEO, Millenberg, about what they call the Boeing Seguin Suntory. CallBoeing to CES in this program, it's centered on industry experience platform. It does turn the behavior of many large clients in terms of looking under done in the scope, from manufacturing ideation, of course, engineering simulation, but also using the platform for service.
So the conversation is different, which is good for the midterm. We have to walk straight things properly. One thing that we did not mention, but I think we are pleased with the evolution of the behavior of the key CSI consulting and system integration companies. I think it's becoming a topic on the agenda. And we need our capacity were deployed.
Quick question on the other software growth running at 14%. How much of that was Exa?
So if you look at Simulier, I'm say, you, similar represent 15% of the total revenue. The growth for similar for this quarter is 26%. And if you exclude, Exa, we have 9%. We'll be able to compute the number.
And then on, solid worst growth. What was the split volume and pricing?
The in terms of unit, the growth is at 8% of the unit. And the
balance coming from the pricing. There was also another topic of attention, if I may, at Pascal. As you know, the, subscription attachment level for solid work is lower than what it is for all the other software we have. And we are putting a lot of attention on this contributes to the recurring part of it on that topic, because it's a good preparation for subscription with cloud services. So, we still have levers to
use here. In a positive sense,
I mean, to provide them the flexibility for them to use basically either or desktop or and as you may remember, we have not spent too much time maybe
in mid of the year, we will.
Consumers or customers who are, subscribing to the subscription on, we don't say maintenance anymore. It's a subscription they get a lot of evolutions of product, but they get also many, many compounds which are available on my solid works. Training and so on, which is almost reaching 1,000,000 user subtraction So it's becoming a visible line in terms of potential of development, especially with what I told you about the new 3DEXPERIENCE based services for SOLIDWORKS desktop. If they are connected already, it facilitates the adoption of broader set of services. So in short, focusing our channel for increasing the attachment rate on the existing installed base for
Thanks. A couple for me for Pascal and 1 for you, Bernard. Pascal, just on Catier, there was sort of 5% growth overall double digit license. Can you tell say is there a mix shift here from rent till to upfront licensing or what's going on with the recurring? And is this led by V5 now you've got the power buy offering or is it actually V6 adoption?
And then just on solid work for the second half, I think maybe Bernard was alluding it to that. Are you now teeing us up for a more significant 19? Or is this just the tougher comparatives? Bernard, as Mohit said, 3 quarters strong growth. Do you think this is about sales execution or more where the product maturity is now post Boeing with PowerBuy, etcetera.
Okay. So while we start with KCR, I will give you a statistic which will be, I think, straightforward. Half of the large deal we have for CATIA, our own 3DEXPERIENCE platform. I think it's really taking off. And for fully words, no, I think the point is not the one related to the massive cloud adoption.
And this is the reason why we are we will be more cautious for the second half is really because the base of comparisons is significant. So this is the point.
Related to the visible double digit growth we still have a long way to go to improve our sales system. We have improved it, but there's a lot more that we are doing. I'm not saying about additional investment. It's about the value engagement itself. It's making sure we don't spend too much time year on year engagement because, so what basically what is happening is 3 d experiences on the agenda.
Not only for our clients but for prospect. So it's feasible now. Before it was something like what is it as compared to PLN. Now the visibility is much higher. So the time we spend to explain what it is and why it is game changer, it's much less.
But the other factors you mentioned in your question, we still have room to improve because basically, we have, you have seen in some of the showcase, we have proof points, which are very significant in terms of value. Another cost of the software, but the value that it brings on the quality in which our sales globally can explain to clients here is what you are going to be able to save It's improving and this is facilitating the engagement and also the negotiation of what they are going to acquire. So that's basically where we are. So I think that in the next year, we still have in the next quarters we still have a lot of levers to exploit.
Hi. Thanks for taking the question. Pascal, could you maybe just talk through the bridge to the margin guidance for the full year of minus 1 to -1.5 points. Obviously, you've had a good performance this quarter. Could be flat next quarter.
Just maybe talk about the phasing of costs. That means that margin is down overall for the year, firstly. And then secondly, on SOLIDWORKS, I think historically, you have been pretty generous with the commissions that you paid to resellers. I think you're up in the mid, even high 40% level versus competitors in the mid market paying more like 30% or so as a commission. Do you have room to be less generous on the commissions to the SOLIDWORKS channel or maybe adjusting it in some way?
Thanks. Okay. So I will start with the first question So remember for the full year, for the for the EBIT margin, we say that the currency effect will count for 40 basis points. 3rd dilutions coming from the acquisitions, mainly Exhar from 60 basis points. And we are still targeting an improvement, which is half a point, which is 50 basis points organically speaking.
So this is what we have in the guidance. Now, we started slowly hiring people for this quarter, and we expect to accelerate, which is usually what's happened in Q1. It's not a normal with all the key for the new organization to put in place. So we will accelerate a little bit on the Q2 and Q3. So clearly, we are still on this related
to the, if I may or no, I think it's a lot engineering that Pascal is doing on the second part of your question. Of course, we'll keep holding on the team about the model, the right model for resellers. The first statement I want to say is unlike most of not for our indirect channel is significant. In fact, we believe that the 2 indirect channel will create more growth that our direct channel on the efficiency of the model took us years to set it up is very good. And I insist to say unlike most of the players.
So related to your question without revealing too much too many secrets because it's a little bit early. Our priority number 1, as you might strategy is to make sure that those resellers for volume channel or value partners for BS, transition to cloud. We are not going to do cloud without them. Because we know they can provide a lot. The nature of what they're going to provide is different.
Because they are also going to use the marketplace. So basically, in some way, instead of installing software, I talk in the old way of on premise. They will provide indirect service, direct output results to their clients. So that's a very, I think, differentiating model. And there is a lot of potential because in some way, our marketplace calls for more players to provide service on it, but application.
Service. Our application world in the marketplace is not application. It's the service. Like, and YouTube is design for me, please? Can it be ready by tomorrow morning 8 o'clock or how much?
Or can you make this three d printing or how much when? Or can you do laser cutting or etcetera, etcetera? So you, the nature of this is going to be the seller on the door of the services. We plan to leverage our powerful networks of partners, again, unlike most of the players in Israel.
We'll take now question from the call.
Thank you for taking the question. Sorry, I couldn't quite make it there today. But 3 for me, first of all, how much of the Boeing contract is flowing into 2018. And I understand you won't be able to give an exact amount, but could we just get a sense of timing of the ramp up and flow over the next few years? Second question, you said 3 d experienced software revenues up 26% and the cloud activity up significantly.
Again, can you give us an idea of the actual size of these two numbers or order of magnitude percentage of revenues, that kind of thing? And then third, and kind of a follow on to that on the cloud, just to make sure that I understand, can you tell us which products are, so what products are the cloud revenues mainly coming from? And how much of Katia is in the cloud?
Okay. I will start with the first one. So the Boeing distribution for next year for 'eighteen or sorry, I would remind that 'nineteen because usually this is a question. Is less than 10000000. I will not give you the exact number.
And for next year, it's having an impact of the point. But with this, I think you have a good round of closing the number for the cloud. And I think Bernard made the statement in introduction, which is at the end, the revenue is a consequence of Subsea Health. So something else is the footprint and the way we measure the footprint is by the number of users and the volume of activities don't users are doing. This is basically the KPIs we have right now.
And as far as I remember, we shared with you at the last presentations, the number. I was expecting to ask some questions, but we have 15,000,000 connected users. Slide that all of them are on the cloud. So it's also as part of this number, it's not only the professional, you have also the consumer side from buying it. But nevertheless, it gives you an indicator about footprint we are talking about.
And we will probably provide a little bit more June meeting. The point is, there are 2 surprising remarks. One is fairly no churn. When you start into that. On the second remark is the impressive data volume And, the last is most of the projects are not for trial.
They do the job, which is not very frequent with software on the cloud the type of, when I talk about software use, not for consumers but for enterprises. So the those are not evaluation. There are your programs going on. On, I think we have now very, very robust. 2 weeks ago, we did, we do We do major evolution every 3 months, and it goes smoothly.
Very smoothly. 0 duration. And we are learning how to go from 3 months to 2 months. We'll go to 1 month So they can do full benefit real time. So the infrastructure now is, has reached a level of extreme robustness, and it's very critical because unlike many startups in the cloud, for us, if they aren't doing cars or planes or culture.
I mean, they are going to build the next product lines on our system. That's the work. It's not just for evaluation. So those are very interesting special characteristics that, I think made the bar to entry very high.
Amit Hartan Nandy of Citigroup. Please go ahead.
Good morning, everyone. Ahmed Vurchandani for Citi, and thanks for taking my questions. 2, if I may. My first question really relates to the growth you have seen in the 3 d experience platform. You talked about very strong new license numbers there.
Could you maybe help me understand a bit more how should we think about this level going forward, particularly also the drivers that you see? For example, is it coming more installed base versus new customers? Any comments in terms of regional or adoption in different industries. That would be helpful to get a better understanding of the drivers. And secondly, if I may, which talked about cloud Computing, could you help me get your perspective on the adoption in case of hybrid versus public cloud as it relates to your solutions and what are you sharing with your customers and what are the kind of discussions you're having?
Okay. So I will answer to the first questions. So you're right. I mean, the dynamic the new license for 3DEXPERIENCE platform is exceeding 50%. For this quarter, it's 53% to be precise Keep in mind that the last for the last quarter, we gave to you the numbers, which was 25 percent of the software.
The total software revenue is coming from a 3DEXPERIENCE platform. And from an adoption standpoint, clearly, what is the difference we are seeing the last few quarters. For the last few years, the traction was really coming from the applications. So all the new industry starting from scratch, basically the way I adopting day 1, the 3DEXPERIENCE platform. Now since few quarters, we are seeing massive adoptions of the car industry.
And this is the reason why for at least the last two quarters, we are saying to you, not only we have a good new license growth, but it's coming from transportation and mobility. It's coming also from aerospace And Defense. So clearly, this is the shift we are really seeing over the last few quarters others. And this is also accelerating, thanks to the power buy, because we just released the power buy early this year. And we already have customers adopting it.
And we, again, basically shared with you that a large photo company has adopted the power by products and it's in our book for this quarter. And if I look at the pipeline for the full year, it's already exceeding 10,000,000 and it's and it's reflected in the end of the numbers. So basically, the to answer to your question, the 3DEXPERIENCE dynamic is coming now from
the multiple industry. Related to the call, if I understood well, your question related to the conversation topic on the cloud. It's relatively easy in fact. You have, new categories of players to basically know our reputation in terms of the power the software, whether it's Katya, Singrya and others. And they just say, okay, we go on, we go on the cloud direct We announced a few of them today, I mean, capture of Evolocity on others.
And those guys are doing real loss scale program, joby Aviation we talked about in the past. So that's one category. It's basically the category where they know they are having access to the power of when we provide to big companies, and they can do it quickly, so an extremely easy deployment. There is, as you remember, we also provide our own end to end infrastructure in addition to Amazon because we want do very specific things related to security on the entire stack from the hardware. Up to the service.
And we will continue to do so. The second is our large companies, once to do in a semi open innovation. And basically, they have already on premise. Whether on V5, whether on the new experience platform, and they want to establish ecosystem of innovators around them on the they really evaluate, they will not evaluate, they use the cloud to do that. That's the second.
And the third factor for us are new sectors like Ace in AC, on architecture, this is a game changer because there is little And they can start quickly, Kungu Kumar, you will mention many of them already show of New York and Gugumo and Japan and others. So those are proof points. But they have started and they don't stop. They continue to expand. And we see the data volume for is quite interesting, in terms of dynamic as well as the user or a number.
It's, and again, we've So that's the topic. The last one, certain customers for us are basically the size of the country. To take the ecosystem. Those very big ones are really asking us to prepare IV Cloud for them, subject to be discussed at a lot of point in time. And the reason for that is not only for the power buy, it's also for the marketplace.
Because they are going to massively simplify their transaction management with suppliers. Today is very complex. You have a supply chain system, You have an ERP system. You have to consolidate the between different units. And we have a proposal where we say we take care of transaction ourselves.
We do everything for you end to end. We do everything, one shot, and we trace everything. This is game changer, or to discuss on that topic. Okay. Thank you very much for participating to this call.
Once again, we are always available for you, of course. And as you may notice, I think we are starting with a good smile for 2018. So I'll see you in June And we see a lot of you on the campus because I think there is a lot of interesting topics that we will cover at this point in time.
Market day to which you are all invited.
Thanks.