Good day, and thank you for standing by. Welcome to the Dassault Systèmes 2023 Fourth Quarter and Full Year Earnings Presentation Call. At this time, all participants are in listen- only mode. After the speaker's presentation, there will be the question- and- answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star one one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Béatrix Martinez. Please go ahead.
Thank you, Nadia, and thank you for joining our Fourth Quarter and Full Year 2023 Earnings Conference Call with Bernard Charlès, Executive Chairman, Pascal Daloz, Chief Executive Officer, and Rouven Bergmann, Chief Financial Officer. Dassault Systèmes results are prepared in accordance with IFRS. The financial figures discussed on this conference call are on a non-IFRS basis, with revenue growth rates on a constant currency basis, unless otherwise noted. Some of the comments on this call contain forward-looking statements that could differ materially from actual results. Please refer to today's press release and the risk factors section of our 2022 universal registration document. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call. I would like now to hand over to Pascal Daloz.
Thank you, Béatrix. Good morning, good afternoon to everyone. Thank you for joining us today, and it's always a pleasure to be with you at this time of the year. Let's start first with the 2023 results. We have delivered the revenue growth of 9%, built momentum in subscription revenue with an increase of 16%, accelerating over the year. We delivered on our profitability objectives, achieving an operating margin of 32.4%, all the while, at the same time, by continuing to invest in our future growth with a net hiring of 1,300 people. On top of this, we have achieved an EPS of 1.2 EUR, up 12%. If we step a little bit back and beyond this financial achievement, I think this today marks a special moment, and let me share a few key points.
Firstly, 2023 reflects the successful delivery of our 2018-2023 five-year plan, doubling our EPS to EUR 1.2. This performance was achieved as originally planned, despite the pandemic and the geopolitical instability we faced during this period. Secondly, it has provided a very solid platform for us to embark on our new five-year plan to double EPS again to reach EUR 2.4 in 2028. Thirdly, this moment marks an evolution in our governance and the expansion of our horizons. In other words, today marks the beginning for an exciting new chapter for our companies. First, I'm really honored to take on the role of Chief Executive Officer on January 1, 2024, this year, and I'm very proud to build on the heritage of Bernard Charlès.
Bernard has been the inspiration behind Dassault Systèmes' strategic move, transforming all the industry at large, and he has guided our company from a start-up to a global leader. We have been working together for almost 25 years now. I have learned a lot from Bernard in my different positions, from Strategy to Brands, to Finance, to Chief Operating Officer, to deputy CEO, and I thank him for his trust. I think we share the same visions of virtualizing the world to help customers to harmonize product, nature, and life, and we are committed to making it happen for all the industry we serve. Bernard is now Dassault Systèmes Executive Chairman, and every day, you can count on him to energize the company with his amazing talent to imagine and shape the future. Bernard, would you like to say a few words?
Yes, with great pleasure. Thank you, Pascal. Hello, everyone. I am super excited with Pascal taking over as Chief Executive Officer. Really, it's a well-prepared transition on a top leadership. I think what we share with Pascal is the obsession to bring continued value to the gigantic customer base that we have. Since inception, Dassault Systèmes has been built on solid, long-lasting foundation, on a long-term view, while reacting each time as a startup company when new opportunities emerged. Pascal and his executive team approach the next decade in the same way, I observe, making the most of our legacy to extend the company's leadership. Based on my benchmark with Serge Dassault and Charles Edelstenne, it looks like I am on track to follow their footsteps, by the way.
So, what will I do in my new role? As Pascal said, first, as an executive chairman of the board of directors, I will ensure that the executive team enjoys the same freedom to pursue innovative strategies, as I have had. I will also coach our strategy and research team or share ideas with them. They will decide, of course, and we'll help develop Dassault Systèmes' business and reputation by connecting with global institutions on selected historical customers with whom I have built strong, friendly relationships. The trust is there for the long term. So I am happy to continue with Pascal, in a duo that I did for 40 years with our founder, Charlie Edelstenne. Over the years, my professional journey has been motivated by a constant commitment to inspiring significant transformation in the industry.
We did what we said, and we continue to do so. While it has driven progress in crucial sectors such as health, mobility, or even energy, it now needs to adopt a reimagined approach that balance innovation with responsibility towards nature and society. We have been, and we always be a key player in this industry renaissance, which is needed to make the world more sustainable. Our legacy, combining science and industrial knowledge, is crucial for the upcoming, what we call, and what Pascal calls, the metamorphosis that we need to enable for all industries to create sustainable innovations. The genius of Dassault Systèmes lies on its ability to translate a dream into reality. We have invented market space and fulfill them, and to drive science-guided imagination. This is more to be. There is more even to be invented to advance our mission.
In the past three years, Pascal and I have worked very hard together to draw the path for a long term, what we call the 20/40 horizon, and I am very excited to see the agility of Dassault Systèmes, this collection of amazing startups in one integrated company, to fulfill the dream that now Pascal is planning to fulfill with excellent execution. Pascal, thank you again, and back to you.
Thank you, Bernard. You're right, 2024 marks an important stage in our strategy, as we are introducing what we call the Generative Economy , which is our next horizon for 20/40. In fact, we anticipate that the global economy is entering in a new era, as the Experience Economy and the sustainable economy are converging, and we aim to be the catalyst and the enabler of this new Generative Economy . For Dassault Systèmes and our customers, this will create new possibilities in term of market, audience, and portfolio, just as the 3DEXPERIENCE did a decade ago. Remember, in 2012, we stated that product is not longer enough, and we open up the Experience Economy centered on the usage, on the product usage. We define experience as an extended view of the products, taking their context of use into account.
In 2020, we went a step further. We declared that industry has to shift from things to life, and we extended the Virtual Twin Experience to living organisms, including human beings, and this opened up new market for us. In 2024, the time has to come to accelerate this shift to life of the things, and we also need to better the life of things. And this is the driving principle of what we call the Generative Economy y. So what does generative means? It's not generative AI. It's in fact, what, it's the method of life, let's call it this way. Imagine, imagine a self-healing materials. Imagine customers can grow products rather than manufacture them. Imagine net positive business model giving as much back to the society as they take. And we see generative as a solution to consumptions.
The consumption model is not sustainable because customers cannot afford to consume resources and energy that tend to be scarce or at high price. We believe that the industry can be the solution to sustainability. It's not only the problem, as soon as it provide, in fact, a new balance or it reach a new balance. All the industry will have to go through this metamorphosis, and I think we are mission-critical for business to imagine, create, deliver generative experience to their consumer, patient, workers, citizens, and the society at large. This metamorphosis can only be achieved by leveraging virtual worlds, to improve the real worlds, and we believe that virtualization is the catalyst and the enabler of the Generative Economy . Now we want to push our Virtual Twin Experience approach further, and let me give you some example.
When you speak about mobility, it's not only about devices. It's about environment, involving passenger, vehicles, building, air quality, and many, many other things. When we are speaking about cancer, it's not just about the cells, it's an effect on an organic process. So for all of this, what we have to do is to connect many Virtual Twin together, and this is what we call universes. Each universe is a combination of family or Virtual Twin Experiences. And universes, uni, in fact, unify multiple Virtual Twin s. They unify the stakeholders, they unify the knowledge and the know-how. And unlike the Metaverse, I think we do not create a parallel world. Unlike the Omniverse, our goal is not to create a world of controlling everything. With universes, we unify the real and the virtual to relieve, to relieve the world of possibilities and generate experiences.
So your question at this stage is probably, what will be our levers? And I can sum it up in only one word, what we call the infinity loop. The infinity loop is our method for building up universes. You remember for 40 years, Dassault Systèmes has powered the spiral of innovation, guiding innovation from design and manufacturing. Today, we are extending this journey into an infinite loop by seamlessly connecting the virtual and the real with the real-world data. This is opening up new possibilities, such as giving life to the things or generating multiple life of things. Giving life to the thing means that we power by the real world of data, our Virtual Twin s, and to a certain extent, we are transforming these physical objects into augmented objects.
Imagine a car monitored and optimized in real time through their virtual counterparts. That's an example. In addition, I think we are also giving possibility for things to have multiple lives, as waste become resources for new products. In fact, this is what we call the PLM of the first, the twenty-first century. Dassault Systèmes invented the product life cycle in the '80s. Now, I think we generate multiple cycle of life of things. By doing so, we aim to leverage the power of the numbers, broaden our value proposal and our audience, reaching all business users, not only the people in the engineering or in the manufacturing, the consumer, the patients, the citizens at large. This will substantially broaden our addressable market and serve as a catalyst for accelerating our top line growth.
Let's now move on to the successful delivery of the 2018-2023 five-year plan of doubling EPS and the fundamental transformation that occurred over the last, past, five years. First, we double our EPS to EUR 1.2, with two-thirds attributed to the organic growth. Again, this performance was achieved in five years as originally planned. With regard to the organic growth, the 3DEXPERIENCE platform revenue has doubled over the period. For the cloud, the combination of Medidata and the strong organic acceleration has allowed us to increase the revenue from EUR 30 million to EUR 1.2 billion, coming from the cloud solutions. We have embraced the subscription model and multiplied by 4 the subscription revenue to reach EUR 1.9 billion, creating, I think, a strong baseline for the future growth.
And finally, we are now fully deleveraged, which is important as we embark our new plans, and it gave us room to maneuver. What we did also during this period is to act as a game changer for key industries, and this is probably more important than the financials. Why so? Because as a result, we either establish leadership positions or assume stronger position in promising segments. It's very visible in the EV segment, where we have now a stronger presence than we used to have in the traditional thermal vehicles. In life sciences, we remember we had a limited presence; now we are becoming dominant. And in infrastructures and cities, while we are still the challenger, I think we hold strong position in a high-growth segment, such as nuclear, for example.
Now, I think it's time to step up in the Generative Economy , and we are betting on significant transformation in the three sectors of the economy for the next 20 years. Starting with manufacturing industry, I think this sector represents a volume of over 14 million company worldwide. This market is enormous and far from being saturated, despite what you can hear from many of our competitors. Just to give you an idea, we have one of the largest install base, three hundred and fifty thousand company, our customers, and in the manufacturing space, it's 300,000, which almost represent 2% penetration. So could imagine that we still have a lot of room to conquest in front of us.
The second thing, which is, I think, important for you to keep in mind, is by 2030, more than 1.3 billion people will move into the upper class, which is a good thing for the, for the humanity. However, this growth has a downside, which is the environmental impact. And that's the reason why it's an imperative for the manufacturing sector to transform itself, to continue offering product and experiences, affordable way, in an affordable way, while we are preserving the environment at the same time. Now, zooming in life sciences and healthcare, our mission is really to align with the preciousness of the life itself. With 8 billion people on Earth, our goal extends beyond treating illness to sustainable overall health. So in another world, it's moving from cure to care.
In the era of the Generative Economy , I think this is presenting an immense opportunity to forge new partnership, leveraging data science in therapeutic innovations, and pioneer groundbreaking medical care experiences, addressing complex challenges such as the chronic disease, the aging populations, the global health issues, and I think we can really redefine this still fragmented market through a game-changing approach. In the infrastructure and city sectors, the paramount challenge is really the decarbonization, given that these areas currently contribute to two-thirds of the global carbon emissions. As a consequence, sustainability has gained prominence in government and corporate agendas, and I think this is a way to treat, to at least accelerate investment in a clean energy, to foster the innovation in materials, to triple the nuclear capacity, and also to, you know, to develop new building techniques poised to enhance the energy efficiency.
We stand ready to contribute significantly to achieving this ambitious goal in this sector. To just illustrate this, I have some recent customer case I want to share with you. The first one, we will start with the manufacturing industries, and we will zoom in transportation and mobility, where our 3DEXPERIENCE platform has gained strong momentum and unquestionably winning market share. In 2023, you remember, we signed significant contracts with Jaguar Land Rover, Renault, Stellantis, Ford, even General Motors, Honda, just to name a few. This quarter, I think we're extremely proud to announce that BMW selected the 3DEXPERIENCE platform for its future engineering platform. And it's an important point because we have a long-standing relationship with them, but we will extend, contractually speaking, for 10 years.
This is a major success, especially considering that these clients remain in Germany, a pioneer in the enterprise-wide adoption of our 3DEXPERIENCE platform. The net of this is, this strategic move involves a substantial increase in the number of users, from 3,000 CATIA V5 users to 17,000 3DEXPERIENCE users over the time. And this number clearly evident that we are expanding their engineering platform across multiple disciplines. Another game changers lie in addressing the complexity of the connected autonomous vehicle engineering through cutting-edge Virtual Twin E xperience. And remember, it's sometimes something I really using to explain how it's different to develop an EV compared to a traditional car. You only have 10% common pieces between the two. So in addition, I think, BMW is aiming also to reduce the engineering-to-manufacturing cycle time.
And during the evaluation, and we did a significant evaluations benchmark with almost all the different solution on the markets, and we were able to demonstrate that, for instance, within the chassis development, the cycle time could be dramatically reduced from 4 days to 3 minutes. So it's really creating a barrier to entry, which is high for many of our competitors. But behind this, I think behind this promising deal from, from a financial standpoint, it is clearly, again, the demonstration that we are a game changer for the software-defined vehicles, and the automakers are adopting our 3DEXPERIENCE platform to create personalized experiences. And the value we provide with the platform goes far beyond the collection of functionalities. It's driven by the key business goals, such as the global modular architectures, the smart, safe, and connected approach, as well as the efficient multi-energy platform.
Those are the names of the solutions we are promoting on the market, but they are reflecting the value we bring to this industry. The same phenomenon is starting to happen in the life sciences, and I think we are starting to be a witness of groundbreaking application of the Virtual Twin in the drug development. And you remember, that was the bet at the time when we come together with Medidata. A good example of this is what we do with the American biotech company, Biogen, and they have chosen the 3DEXPERIENCE platform on the cloud to develop the new drug for neurological disease. The interesting thing is, in fact, this is involving the modeling and simulating drug delivery to the brain through the injections.
The step includes creating a Virtual Twin of the brain and the spinal columns to understand the drug delivery via the cerebral spinal fluids. To avoid, in fact, preclinical in vivo testings, what we do, we are developing and connecting two Virtual Twins, one for the drugs and the other one for the brain. It's enough to validate the effects and not to have to do the pre-clinical testing. So I think it's an amazing example of what the universes I was talking about is in fact a reality. Moving to infrastructures and cities, a notable win this quarter come from the steel industry, and still being ubiquitous, it's a prime example of the material with significant environmental impact. You know, steel is used in various industries such as constructions, automotive, and steel productions contribute significantly to the carbon emissions.
This is why H2 Green has chosen us to become the backbone for their steel production, reducing by 95% their CO2 footprint. This clearly underscores the role of the decarbonization as a driving force for these sectors to adopt our solutions. So in conclusion, before handing over to Rouven, let me wrap up. We embark on a new five-year plan to once again double our EPS by 2028. We are convinced we are strategically well positioned to leverage the vast market, creating new opportunities for the future. We are unique because I think we are combining our scientific approach with industrial know-how, and we are also coupling our modeling and simulation technology with the generative AI. This sets us apart to play a critical role in the Generative Economy .
I think now it's time to focus on Q4 and the full year performance and the outlook for Q1. Rouven, you have the floor.
Thank you, Pascal, and welcome from my side. Thank you for joining us, and good afternoon to the US, and good afternoon to Europe, and good morning to the US. Let me turn the discussion now to our fourth quarter performance across our geos and product lines. Europe had an excellent quarter, and the year, and also for the year, with 15% and 14% growth, respectively. The growth was broad-based, driven across industries and multiple end markets, with double-digit growth in Euro West, Euro Central, and also in Euro North. Specifically, this quarter in Germany, we saw a strong positive shift in momentum of 3DEXPERIENCE adoption, driven by BMW and Bosch, extending our relationships in Q4. In the Americas, revenue in 2023 was up 7% for the year, but Q4 growth was rather muted due to strong baseline comparison.
The growth dynamic in the Americas remained resilient, and they were evidenced with strong growth in T&M and aerospace, with Ford signing a new 3DEXPERIENCE deal and Lockheed Martin expanding their usage. In 2023, the Americas region shifted path to embrace the subscription model, and in fact, subscription revenue has now surpassed upfront license revenue by a factor of almost two on top of Medidata. This is providing a strong basis for future expansions. In Asia, revenue growth was 3% for the year, mainly impacted by the volatility that we experienced in China in the first half of 2023. In the second half, despite continued challenging macroeconomic conditions, growth re-accelerated in China. It is evidenced by an upwards trend of 6% growth in Q3 and a strong 14% growth in the fourth quarter. For the year, the growth in China was resilient at 5%.
India delivered strong 18% growth in 2023, while Japan and Korea were rather soft. Now let's review our product line performance. Industrial innovation delivered outstanding results with double-digit growth for the year and in Q4, and is now representing 54% of total software revenue. As evidenced by this, by these strong numbers, 3DEXPERIENCE is delivering the multiplier effect, accelerating the growth in CATIA, SIMULIA, and DELMIA, which are all up double digits during the period. While our data science business is accelerating to more than 20% growth for the year. In 2023, the subscription revenue surpassed the growth contribution from upfront license revenue for the industrial innovation product lines. Within mainstream innovation, we reported 7% growth, and it now represents 24% of total software revenue. I would like to draw your attention here on two key drivers. First, to SolidWorks.
The business model here is accelerating the shift to subscription and is highlighted by almost triple-digit growth year-over-year. The annual run rate for subscription has now reached EUR 100 million in revenue, and is at a speed to double again. Second, we are redefining the PLM category for the consumer industries. The momentum of Centric PLM is gaining strength again in Q4, delivering a record 2023. We are now signing large enterprise-level deals. We spoke about Aldi and Decathlon in previous calls. This quarter, we signed multimillion-dollar deals with iconic brands such as Wilson, FILA, and Petit Bateau. In life sciences, software revenue rose 6% for the year, which now accounts for 22% of total software revenue. In the quarter, the 2% growth is mainly associated with two effects.
First, there's a high comparison base, and secondly, the slowdown in study starts, as discussed previously. However, important to note, the total revenue of Medidata for the full year 2023 was up 10%. This includes services revenue that is adding about three points of growth on top of the software. These are high value-added services related to the design, launch, and conduct of studies, including operating decentral clinical trials. It's a kind of service as a software model. It's a model which we put in place during COVID to scale mega trials. We continue to support sponsors such as Moderna and partners in this model. Now, let's zoom to discuss the volume impact of the clinical trial starts. Let's zoom in here a little bit more, and what are the associated market share implications?
This should help you to better frame the path of how we will re-accelerate towards double-digit growth in 2025. Overall, since the peak of COVID, volumes in clinical trial starts have declined by about 5% in 2022, and 10% in 2023. Essentially, we are now back on the trend line of 2019 growth, and the COVID bubble is behind us. Important to highlight, in this period of volume compression, we actually gained market share of approximately one point on average for new study starts, and about four points for the large-scale phase III trials. However, despite these ongoing market share gains, the strong volume reductions in 2022 and 2023 impacts the overall growth of Medidata, which is visible in the 2023 software revenue number.
As we project 2024, we expect volumes to return to normal pre-pandemic growth levels. However, as for the revenue growth, we still need to absorb the volume compression resulting from the COVID bubble, because changes in volume of study starts typically convert to revenue with a 6-12 months delay. In 2025, this volatility will be behind us, and we are set to return to double-digit growth. We have a strong basis. We are winning market share for phase III. We're science-based, and we offer the most comprehensive platform to design, launch, and conduct advanced clinical trials. On top, we are expanding our share of wallet through AI, decentralized trials, and integrated data management within the larger health ecosystem.
This positions us clearly as the leader, as evidenced by the fact that 75% of novel drugs have been developed with our technology, as you heard from Pascal before. Now, let's zoom to our mainstream opportunity. In 2023, Centric PLM continued its path of establishing its global leadership position. With 120 customer wins in 2023, including the largest two deals in its history in 2023, with Aldi and Decathlon. Centric PLM has confirmed its strong diversification, which now goes way beyond fashion and apparel, with strong wins in outdoor and sports, food and beverage, cosmetics, and consumer electronics. By expanding from brands to retailers, it has also opened the path to future expansion towards communities. As you can see, we are well positioned to continue to execute on our strategy of building a significant growth opportunity.
Centric PLM is not just collection management. We're expanding to a business platform that serves as the backbone of e-commerce. Consequently, the growth potential for Centric PLM is significant, with a path of creating a billion-dollar-plus business in a new category of PLM. Now, let's review the financials for the company of the quarter and the full year. We delivered on all our financial targets in 2023. Total revenue grew 9% and EPS 12%, which shows the anticipated acceleration in the second half. It is evidenced by Q4 recurring revenue up 12%, driven by the strong momentum in subscription revenue of 22% in the period. These results underscore our commitment to evolve our business model towards subscription, aiming to increase the share of predictable revenue.
In fact, subscription revenue now accounts for 44% of the total recurring revenue, up 3 points, and we expect this share to continue to increase at this rate, as discussed during our Capital Market Day. It also reflects that we are focused on executing our strategy to expand the value of 3DEXPERIENCE as a platform for innovation and business, applying the subscription model. In 2023, we saw this trend accelerating, led by an increasing share of large 3DEXPERIENCE wins, with broad-based adoption across geos and industries, as well as an acceleration of the transition to subscription at SolidWorks. Consequently, recurring revenue for the full year now accounts for 80% of total software revenue, increasing the share of predictable revenue from 78% last year.
Upfront license revenue was 2% for the year, highlighting that the subscription transition is progressing fast and versus a strong comparison base of 2022. Together, upfront license and subscription are up double-digit 11% versus last year, reflecting a solid organic growth. Services revenue was in line with the overall trend, up 10% versus last year. Throughout 2023, we focused on improving our profitability, and we finished strong in Q4 with an operating margin of 35.9%, up strong 160 basis points ex FX, year-on-year.
Our EPS was €0.36 and represents an increase of 40% year-on-year. As a result, we delivered an operating margin of 32.4%, which highlights the disciplined resource management throughout the year, which most importantly will continue to provide the flexibility for future investments. And we will be able to do that without costly restructuring plans. As for EPS, Pascal highlighted the 2018 to 2023 plan achievement earlier this morning, doubling EPS to €1.20 compared to 2018. Now, let's review briefly our performance related to our objectives in 2023. Total revenue was in line with our guidance. It was slightly below the midpoint by €3 million, excluding the impact of currency of €10 million. Lower software revenue was offset by higher growth in services.
Operating margin was 32.4% at the midpoint, excluding the impact from currency. More importantly, we continued to invest to support our strategic initiatives with a net headcount growth of 1,300 for the full year. This sets a strong basis for continued margin improvement in the future. As mentioned earlier, we achieved €1.20 EPS, which reflects solid operating performance and a good financial income in Q4. To summarize, the financial model of Dassault Systèmes is working well, and the transition to subscription and cloud is well underway and set to further accelerate in line with our five-year plan. Now to the growth drivers. As highlighted, we are accelerating our path to subscription revenue, and hence, you know, this provides greater visibility and resiliency. 3DEXPERIENCE revenue rose 21% in Q4 at constant currency.
This marks a new all-time record, with the share of 3DEXPERIENCE revenue at 42% of the eligible software revenue. For the full year, 3DEXPERIENCE revenue grew 19%, representing a share of 36%. Over two-thirds of the growth is driven by deals larger than EUR 3 million, and this is highlighting the strong value of potential in our install base. Cloud revenue grew 12% in 2023. As anticipated, while Medidata growth contribution remained lower this quarter, 3DEXPERIENCE cloud continued with a fast growth in Q4, building a run rate of reaching out over EUR 200 million. The growth in 3DEXPERIENCE cloud reflects a strong contribution in new customer wins. Cloud is now representing 24% of our full year software revenue.
As you can hear from us, we are confident that we will further capitalize on the momentum of our growth drivers to continue to capture market share in 2024 and beyond. Now, let's switch to the cash flow and balance sheet items. Cash and cash equivalents totaled EUR 3,568 million, compared to EUR 2,769 million at the end of 2022, reflecting an increase of EUR 799 million. At the end of the quarter, our net cash position totaled EUR 578 million, an increase of EUR 803 million, versus net financial debt of EUR 227 million on December 31, 2022. This clearly highlights a disciplined and efficient capital allocation and the strong path to the leverage since the acquisition of Medidata.
Now, let's look at what is driving our cash position at the end of the fourth quarter. We generated EUR 1,565 million operating cash flow for the full year, an increase of 3% versus last year. The changes in operating working capital reflect the growth in business and timing of invoicing, which we will expect to catch up in 2024. For the non-operating working capital, were slightly less favorable due to the timing of cash tax payments and one-off effects related to cash tax payments. This will have a reverse positive effect in the next years.
To sum up, operating cash flow was mainly used for the cash dividend paid in Q2 of EUR 276 million, the net purchase of treasury shares totaling EUR 162 million, investment in CapEx of EUR 134 million, and the repayment of lease liabilities of EUR 89 million. Lastly, to note, total FX impact was about EUR 68 million versus last year, higher. Now with this, let's turn to our fiscal year 2024 outlook. For the full year 2024, we initiate our objectives with a growth rate of 8%-10% for both software revenue and total revenue. This reflects an acceleration of subscription revenue growth at 17%-19%. As you see evidenced in our 2023 performance, the shift to subscription is broad-based, and we are—and is well aligned with the growth drivers that we have put in place.
Our first value up is leveraging the 3DEXPERIENCE platform and large transformational deal activity, which returned strongly in 2022, 2023, with JLR, Ford, BMW as examples, and is on our pipeline to continue in 2024. Centric PLM, based on a powerful diversification and platform expansion strategy, which is set to continue at high double-digit growth rates. And lastly, we're taking into account in our guidance, the temporary slower contribution from our life sciences business. Precisely, we expect the software revenue contribution from Medidata to be low single digit to flat, before returning to double-digit growth in 2025. Consequently, we will continue to take market share and expand to virtualize the entire drug life cycle, as highlighted by the Biogen and Amgen cases of 2023.
On this basis, we expect double-digit growth of our recurring revenue in 2024, in the range of 10%-11%. We expect our upfront license revenue to be in the range of -1% to +3%, and services revenue growth is expected at 9%-10%, in line with our business growth overall. We further expect the full year operating margin to be in the range of 32.5%-32.8%. A year-over-year improvement of 30 to 50 basis points, ex FX, reflecting a continued disciplined OpEx policy, while investing to sustain our growth ambition. Essentially, with this outlook, we are returning to the level of the 2022 operating margin level, ex FX. Considering the above, we target our diluted EPS to grow between 10%-12%, ex FX.
Now for Q1, let me provide you some additional insights that will help you to model the starting point. We target growth at constant currency between 7%-8%, assuming subscription growth of 14%-15%, and upfront license revenue between -3% to +2% growth. In terms of profitability, we expect the operating margin to be in the range of 30.6%-30.7%, improving marginally year-over-year, and a double-digit growth of our diluted EPS of €0.29-€0.30. For additional information, and to review what we've just discussed, I refer you to today's earnings presentation. Now, to conclude, we have achieved all our key financial objectives in 2023. Our strategy is working, demonstrated by the momentum in subscription revenue growth and the margin acceleration.
It is putting us back on track to deliver consistent cash flow and operating leverage in the years to come. And in 2024, we will continue to focus our investments on executing our strategy to sustain strong revenue and EPS growth. This is what we are committed to deliver, and it is reflected in our next five-year financial objective. So with this, I would like to thank you again for joining us, this afternoon in, in Europe and this morning in the U.S. And now Bernard, Pascal, and I are looking forward to take your questions.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one one again. To ensure everyone has the opportunity to ask a question today, please limit yourself just to one question. Just give us a moment and we will start taking the questions. The first question comes from the line of Jay Vleeschhouwer from Griffin Securities. Your line is open. Please ask your question.
Thank you. Good morning or good afternoon. Starting with 3DX, you did about 36% of eligible revenue for the year, 42% for the quarter. How are you thinking about the proportionate contribution of 3DX for this year? Do you think you might get closer to half, if not more, of eligible revenue in 2024, perhaps by 2025? Secondly, one of the things that I think Dassault could speak of that would be very helpful is your expectations for your various channels this year, CSE, CPE, and CRE, and any margin or other evolutions that you are factoring in. And then finally, of course, I should ask my usual questions on SolidWorks.
If you finally, in 2023, surpassed the prior record of annual unit volume for WORKS, and how the 3DEXPERIENCE Works adoption rate ended up for the year? Thank you.
Well, you want to start with the first one?
Thank you. Yes, definitely. Thanks, Pascal. Thanks, good morning, Jay, for the question. So to clarify, maybe quickly, the eligible revenue, the share of revenue on 3DEXPERIENCE for the full year is 36%, and it's up 3 points. Year-over-year, it was 33% in 2022. So we've advanced strongly. For Q4, it's over 40%, and here it's growing 5 points year-over-year, based on 21%, 20-ish% growth overall. So I think right now we are on the trajectory of increasing the share between 3-5 points per year. We see, as I said before, when you look into our pipeline for 2024 and reflect on what we saw in 2023, you compare the two starting points coming into the year, last year versus this year, we definitely see the momentum picking up on our installed base, adopting the 3DEXPERIENCE platform, multi-domain.
And that's why the, the value of transactions is so much up, that two-thirds of our 3DEXPERIENCE revenue growth comes from deals larger than EUR 3 million from our installed base. So, you know, we can do the math of when we will be at 50%, but we are building a strong, track record of accelerating this adoption, so that over the next few years, we'll reach the 50%. I think we are at the rate of 3%-5%, 3-5 points of growth per year. We'll, we'll approach 40% in 2024, and then probably be either 2-3 years, 2-2.5 years to get to 50%. That's a normal rate if we don't get to the next inflection point, which is possible, huh? That we can further accelerate.
But if we stay on the current trend, which is between 3-5 points, that's what it would suggest. Of course, possible to further accelerate.
The second question, Jay, was related to the perspective for 2024 per engagement model. One way to answer to this question is to look at 2023. The vast majority of the growth was coming from the direct sales in 2023, I mean, growing at double digits. And it's really the result of the contribution of the last transaction we signed, and the penetration of the 3DEXPERIENCE platform within the installed base. Another way also to make the comment, if I was looking the new sales, whether it's new subscriptions or new license for the direct sales, the vast majority now is related to 3DEXPERIENCE platform. I mean, it's exceeding 60%, which is not the case yet for the indirection.
So last year, what we call the customer process was growing at 7%, and the mainstream, I mean, the major resellers networks for SolidWorks, they were growing at a little bit more than 5%. We do expect a much more balanced growth in 2024. At least we are expecting more contributions from the wholesale networks. And we are quite confident with this, because when I was looking at the opening pipeline, we are in a much better position compared to last year. And if you remember last year, we were impacted by the slow start, if not the decrease, especially in China. And as you know, we have a certain exposure with SolidWorks and on the license model in SolidWorks.
And this year, we are in a much better positions. So in the range of the 8%-9% growth, which is the guidance Rouven gave, at least we do expect to be more balanced in 2024 compared to what we have. Now, coming back to the SolidWorks things, by the way, I didn't check the numbers, I mean, the number of seats. I don't know if, Rouven, you have it close to you. But the point I could share with you, Jay, is the following: I think the growth of the subscriptions part of SolidWorks, which is also linked to the Works family and also the cloud, is growing at triple digits.
And we are close now to be, I mean, to EUR 100 million, which is exceeding, I would say, the 10% mark of the total revenue coming from SolidWorks. That's a way to, you know, to plan the dynamics, and I think, I think we are on a good track. I know Béatrix has the time to check, so this year we did a little bit more than, 80,000 , new license or new seats, let's call it this way, whether it's subscription or upfront, with SolidWorks. Which is the ratio I have in mind. Usually, we do, we do a little bit more than twenty thou- twenty thousand per quarter.
Right. Okay, consistent with our model. Thank you very much, Pascal.
You're welcome. Hey, Jay, I was expecting a question related to Ansys and Synopsys.
Oh, well, go ahead.
I know it's one of your favorite topics. Maybe a few comments, anyway. I just want to make the statement that neither Ansys and Synopsys were a target for us.
For different reasons. One, it's because, Ansys with SIMULIA, we have significant overlap, and we are competing end to end, and I think we have differentiation. I do appreciate it's a good company, and what they do is also relevant for the market, but I think we are following a different path. And Synopsys is really dedicated to the EDA, and you know, it's still my strategy to partner more than to basically expand inorganically into this space. Now, my take beside the, you know, the price and the valuation, which is extremely high, because 13.5 x the revenue and $19 billion in cash on top of $17 billion in shares, not millions, billions. I think it's a lot of money, given that the combined company cash flow will be a little bit less than $3 billion.
So it's a significant number of years before to re-onboard. But nevertheless, I think the rationale behind this deal is really to reinforce Synopsys' focus on the semi industry, more than the capacity for the two of them to expand outside of this. And the reason is, you know, it's because the semi industry is evolving to a new, toward to a new generation, which is what they call the multi-die. Which is not anymore layers of silicon, it's layer of silicon in conjunction with an assembly of different micro components. We call it the MEMS. And this is changing a lot of the design process, but also the assembly process. The design, because you have to do multi-physics simulations, and I think that's probably the purpose of the combination of the two.
From a manufacturing standpoint it's not anymore a layering system, it's becoming an assembly system. Which is the reason why, by the way, we have significant market share in this industry, by doing the assembly design, if you want, of the manufacturing processes for this industry. So the net of this for us is this is creating an ability to continue to expand where Ansys is strong, because the key focus will be really on the semi, more than something else. That is my view, Jeff.
Okay. Very good. Thank you again.
Thank you. Now, we will take our next question. Just give us a moment. And the next question comes from the line of Frederic Boulan from Bank of America. Your line is open, please ask your question.
Hey, good afternoon, Bernard, Pascal, and Rouven. Thank you very much. If I can ask, possibly two. Firstly, on the free cash flow dynamics. If we look at free cash flow, post CapEx and leases here, you generated a bit more than EUR 1,300 million. That's about 83% of net income. How do you think about conversion going forward, in particular, working capital with negative EUR 129 million? How should we think about that in the coming years? And you mentioned as well, Rouven, the reversal of a cash tax impact. So can you discuss how negative that was this year, and what we should expect going forward?
And then, if possible, on the M&A topic that you kind of opened up about just now, maybe if you could give us an update on your pipeline and priorities for the coming years. Thank you.
Thank you, definitely. Thank you. Thank you for the questions. So on the cash, the situation is the following: 2023 reflects an operating cash flow, which is in line with the operating income. Growth, which is between 2%-3%, 2% operating income, excess X growth. Remember, coming into the year 2023, we had to absorb, a lot of expense carryover from the catch-up we had to do post-COVID. We have done this successfully. We accelerated the operating margin, the operating income in the back half of 2023, and hence we drove also positive operating cash flow in Q4, from an operating and net income standpoint. Of course, the working capital is a separate story, and I come to this in a moment.
So I think overall, very aligned operating income cost with operating cash flow growth. Now, what do I expect, going forward? Because you started with the conversion rate. I expect CapEx to be in line with the CapEx and business cost we have. I do not, foresee much change on, lease properties. And on operating income, we expect to grow next year 10%, and we expect that 10% also reflected in the operating cash flow growth. So there is an expansion, to be expected. Now, to the operating, working capital and non-operating working capital. On the operating side, in fact, the trades receivables, they were, increasing less this year than last year, and that's because we had, solid collections, in 2023. The DSOs are flat.
Where we have, on the operating side, some fluctuation or variability is in the contract liabilities and the deferred revenue, where the timing of invoicing and the timing of renewals had an adverse effect in 2023, and that will rebound in 2024. Yeah, and that's at the tune of approximately, I would say EUR 60-80 million, around EUR 80 million of negative impact in 2023. Which, just for that effect, isolated reverses in 2024, of course, there can be other effects on top. We'll discuss that when we are in 2024. On the cash tax part of the non-operating working capital, there are two effects. Mainly, it's the cash tax payments in the United States and in France that have to be made in advance.
They have been quite elevated in the U.S. because of the R&D structure . And that, together, France and the US, again, is an impact of about EUR 70 million in 2023. Now, we also had prepayment of cash tax in 2022, but at a much lower level. So, there's an unfavorable comparison year-over-year. And then there was a second effect on SolidWorks. You know, we decided in 2023 to simplify the business structure of SolidWorks and implement the SolidWorks business, which was run globally from the United States to the local countries and entities, and transfer the IP to all the distribution entities. And there was a cash tax payment required in the US for this asset transfer, which we will recover over years from the local entity.
So there's a timing delay of this to net. But there's a lot of positive advantages from a business standpoint and operational standpoint related to this, and that was an impact of about EUR 25 million. So I think this gives you all the details. We have a detailed reconciliation in our tables that we disclosed this morning. You see these effects listed there. So we are fairly confident on the cash side to see an expansion. There's nothing abnormal. And the timing can vary, effects can vary from time to time and year over year.
I think my answer for the M&A would be probably shorter. No, I think, I, you know, we are the leverage. We are generating at a minimum EUR 1.5 billion cash every year. That's the minimum, and, we will continue to grow. And if you look at over the period, I think, we are much more close to EUR 2 billion than EUR 1.5 billion. So in the next five years, most of, the cash we are generating will be reinvested. You know, our policy is a minimum of two-thirds. So clearly, we are creating the conditions for the move. Related to the pipeline, we have a pipeline. Right now, the pipeline, at least short term, is much more based on the bottom than the large transactions.
But nevertheless, I think for in all the different sectors, I was mentioning, whether it's the manufacturing, the life sciences, and infrastructure and cities, we have clearly identified targets, and we are giving the time for us to build the right case. Because at the end, for us, it's a way not to fulfill the plan we just defined. It's a way to create the formation to continue to expand our addressable market, and more importantly, to create value on top of it. And if I look at the recent movement, the recent merge, or the recent acquisitions, they are still trading on a very high multiple. Despite the quality of the company, I mean, but more than 10 x the revenue, I think the business case, investment case is not an easy one.
That's what I can say.
Thank you, Frederic.
Thank you very much.
Thank you. And now we're gonna take our last question for today. And the question comes to line of Adam Wood from Morgan Stanley. Your line is open. Please ask your question.
Hi, Pascal and Rouven, and good afternoon. This is, it's actually George Webb from the Morgan Stanley side. Just a couple, one long one, very short. Just on, on, on Medidata, appreciate there's a few different types of end customer, big, big pharma, clinical research organizations and biotechs, and perhaps also some differences in the, the revenue models or the products in there between what's perhaps more impacted by trial numbers and some which are more trial based. Can you just help us with a simple way to think about the exposures to the different types of end customers you have at Medidata, and which areas or which customers are more or less exposed to those trial numbers? And then the, the short question, a small technical one.
When we look at the EUR 40 million of net other operating expenses in Q4, what does that refer to, please? Thank you.
I can start with this one. This is related to an impairment of, y ou will see that in our URD that we publish. It's an impairment related to the brand GEOVIA, where the business outlook has changed, mainly related to the discontinuation of the business in Russia. And in addition, there with ESG, we have restructured our portfolio, and we discontinued part of it. So that's what's driving this impairment at GEOVIA, and that was EUR 36 million to be precise. And that will be disclosed in the URD to be filed. Now, coming back to your question on Medidata and the different business segments, I start, and Pascal, if you have things to add, please. And thank you for the opportunity to clarify this.
So you're right. There are various segments that have different economics and different duration in terms of contracts. If you look at, start with our sponsors, the pharma companies, which are the large enterprise pharma companies, they typically have five years contracts with us. They are fixed, they are subscription contracts. On top, they might have services engagements, which is essentially a standard. We support them in study conduct services, where we build studies for those pharma companies. And here, we provide the infrastructure to be clear, where we are contracting directly with the pharma companies. That's an important element.
If you go down to the mid-market and smaller biotech, the contract durations could be shorter, between three years, because their visibility is probably less than a big pharma company that has a large portfolio. But also here, we, it is a committed contract, subscription-based, and everything ratable in terms of revenue recognition and less, and there's no volatility to changes in volume during the contract period. Of course, at the end, when you are renewing, there can be variation. However, our track record is that we increase the contract value, annualized contract value, at the time of renewal, at an average of 20%-22%, and that we have done over a long decade, over multiple decades. Now to the CROs and the single study business.
This is where we are working with CROs to address the single study market. So where there are individual trials that are started, typically by small biotech firms, where they are looking for various CROs to run those clinical trials, and then together with the CRO, Medidata or Dassault Systèmes offers the infrastructure, typically Rave Plus products, depending on the clinical requirement. And here, of course, we are exposed to volumes. If these single trials, they had a strong increase during the COVID surge because there was a strong level of investment of biotechs starting new clinical trials. And of this market growing, we probably captured 80% of that growth during this period.
Traditionally, the mix of revenue between the sponsors, where we have subscription contracts, be it at the top end with large pharma and mid-market, versus CROs, traditionally has been a mix of 30/70. So 30% CRO volume business, 70% subscription-based, multi-year, with mid-market or large pharma companies. During the COVID surge, this ratio has shifted to 40/60, and now as we are in the upswing of that cycle with volume, we are going back to 30/70. So to summarize, we have a solid visibility and strong track record of increasing contract value with the pharma companies, where we have a duration of 3-5 years contract. With CROs, we have more volatility because we are bidding for single studies.
It has the advantage that if the market is positive, we can capture a lot of cost. We can equip a lot of biotechs with our technology, and based on that, we have many cases where these biotech firms later on expanded to an enterprise subscription contract, multi-year. And Moderna is, for example, an example of that, yeah. Early on, pre-COVID, they were running single trials and before they then worked with us on an enterprise contract, and this, we know the story. So this is how it works. And these are the main building blocks.
That's very clear. Thank you.
Thank you.
I think it's, I think it's time to conclude. I really want to thank all of you participating to this call. I look forward seeing you for Q1 results, and in the meantime, I think, Rouven, you will be on the road to meet with some of you, and hopefully all of you. I wish you a good end of week. See you soon!
That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.