Good day and thank you for standing by. Welcome to the Dassault Systèmes 2022 Q2 and first half earnings presentation call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to slowly press star one and then one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand over to the speaker, Béatrix Martinez, Vice President, Investor Relations. Please go ahead.
Thank you, Risa. Thank you for joining us on our Q2 2022 earnings conference call with Pascal Daloz, Chief Operating Officer, and Rouven Bergmann, Chief Financial Officer. Dassault Systèmes results are prepared in accordance with IFRS. Most of the financial figures discussed on this conference call are on a non-IFRS basis, with revenue growth rates in constant currencies, unless otherwise noted. Some of our comments on this call contain forward-looking statements that could differ materially from actual results. Please refer to today's press release and the Risk Factors section of our 2021 universal registration document. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call. I would now like to introduce Pascal Daloz.
Thank you, Béatrix. Good morning, good afternoon to all of you. Thank you for joining us. Real pleasure to be with you today. Bernard will not be joining us for the second quarter today. He was recently presented at our Capital Market Day and attending our governance roadshow. Be sure he will be back with us to share his visions and perspective on the industry in the future. I will have the pleasure with Rouven to do the call and to answer to your questions. Let's start. I think we are pleased with the Q2 results. I think we deliver a strong second quarter and half year results, putting us on the trajectory to achieve 2022 objectives.
Our good performance was driven by a broad-based growth across geographies, product lines and industry, and I think we have demonstrated once again the resilience of our strategy against the challenging macroeconomic and geopolitical backdrop, with an impact from Russia and China. Total revenue grew organically 11%, with both subscription and support and license up double digits. Earnings per share increased 21% to EUR 0.26, outperforming our objectives. We continue to support our long-term growth initiative with headcount increase 8% overall and 10% in R&D. For our full-year 2022 objectives, we are reaffirming our revenue growth target of 9%-10% at constant currency, factoring in some volatility in license revenue driven specifically by China. We increase also our EPS objective to 14%-16% growth from 9%-11% previously.
I think it's clear from our results that our clients continue to invest in innovations, both to address challenges posed by the current environment, but as well as to prepare for the future. I think our industry solutions are really mission critical to make it happen. Rouven will discuss more in detail our financial results later in the call. Now I would like to share some perspective on our strategy as well as review our operating performance. As you know from our recent Capital Market Day, we have a significant ambition for our next horizon to 2040. As in the past, you know, when we look at the future, we begin laying out the foundation for our success. If you remember, in 2012, we unveiled our vision for the experience economy and shift from product to experiences.
I think you have seen this validated by the transition to sustainable mobility experience, for example. We also introduced our 3DEXPERIENCE platform to start preparing then to support our clients with differentiated technology today. In 2020, following the Medidata acquisition, we repositioned the company along the three sectors of the economy: manufacturing industries, life sciences and healthcare, and infrastructures and cities. We also announced our extension of the virtual twin from things to life. In 2022, we are introducing the circularity within our 3DEXPERIENCE platform. We call it IFWE Loop. It represent a true paradigm shift in our strategy. Why now? I think it's because the experience economy and the circular economy are converging, and this will mark the coming decades.
As we look to our next horizons, industry will no longer develop products, but sustainable experiences centered around the consumer, patient, and citizen. We believe the experience economy goes hand in hand with circularity, as it require designing the entire life cycle upstream, integrating use with end of life. Circularity is also about frugality, using only what's necessary and appreciating all the things created by humankind will have an end. Whatever the raw materials that compose them could be repurposed, reused, and recycled. This will revolutionize the designs and open up a significant new possibility we cannot yet imagine. Our 3DEXPERIENCE, if we look, in fact, connect value creations with value experience to cover the full experience life cycle. This allows innovator to participate to the recycling of the product of their design and manufacturing to quantify the environment impacts and optimize circularity.
As a consequence, our 3DEXPERIENCE platform is not only a way to be game changer and displays the competitive landscape, it's also a multiplier to expand the value proposal and to expand the audiences by connecting people that have ideas from industry professionals, the ones we are serving for the last 40 years, to all the business communities and ultimately to the consumers, patients and citizens. This will be our next frontier. Now, we have been talking about the next 20 years. Let's come back to how we are helping the client in the present today. Today, challenging environment, you know, whatever, it's inflation to raw material shortage and meeting sustainability imperatives, I think reveals the value and mission-critical nature of the industry solutions we provide to the market.
Our strong customer adoption across all the three sectors of the economy offers many proof points this quarter, and I want to share with you some examples. Let's start with the consumer industry. We are expanding our value propositions to new audiences, reaching the business community. I think the virtual twin experience as a means of operations could help specifically the retailers to increase efficiency, resiliency, and meet sustainability imperatives. This quarter, we have established a new partnership with Asda, one of Britain's largest retailers, serving 18 million people and 98% of the U.K. homes every week. Asda has chosen to utilize DELMIA Quintiq to rethink the entire value network to increase operational efficiency, you know, saving millions, capitalize on those efficiency gains to offset inflation and lower consumer prices.
I think this is very different compared to what Walmart did. As you have seen, you know, they're being hurt by these inflations, and we see more and more retailers willing to do savings in order to maintain low prices for the consumer. Improve the customer experiences as well with the last-mile delivery and to advance its sustainability goal by reducing the empty mileage. I think we are pleased to support Asda, and we will continue to build upon significant legacy. If we zoom in life sciences, I think we have been the pioneering in incredible innovations over the last 20 years, changing the game for many of our clients. Medidata is the number one trusted partner and the gold standard in clinical trials. You know, without our investment, we would not have electronic data capture as a standard for all clinical trials.
With the decentralized trials becoming the new best practice, we would not have synthetic control arm as a groundbreaking way to speed up evidence generation and time to market. I think without these innovations, our client would not have been able to develop the COVID vaccine in a record time. The pandemic exposed also many vulnerability within these industries. Remember, it took only one year to develop the vaccines, but it took more than two years to manufacture it at scale. This industry was not capable of producing different therapeutics in a short time for reasons. Addressing these issues is becoming a paramount and will require significant reconfiguration and investment in the coming decades. This quarter, we are expanding our long-standing partnership with Sanofi, and Sanofi has decided to adopt the 3DEXPERIENCE Made to Cure for biopharma solutions to enable modular and more flexible manufacturing.
I think our technology will help Sanofi develop and deliver vaccines at the pandemic speed, and it will also accelerate the new facility and drug launches, enabling the production of multiple vaccines concurrently. In addition, Sanofi will also leverage our technology to reduce water consumption, which is a big topic in these industries, supporting its net zero carbon objectives. We look forward to continuing to support Sanofi's effort to improve patients' outcomes. I think, and I believe, in fact, only Dassault Systèmes has the innovation, technology and scale to provide the life science sector with the end-to-end solutions. We hope our work with Sanofi serves as a catalyst to accelerate industry adoption and advance the patient journey. Now, turning to transportation and mobility, there is a rapid transformation to sustainable mobility experience underway, requiring a tremendous amount of science across many disciplines.
Again, I think it's something only that the system can provide at scale. A good example is hopium with a H, right? It's a startup funded by a professional car racer, and they have designed an innovative fuel cells that transform air and hydrogen into energy, emitting nothing but water, while at the same time, you know, reaching a speed of 230 km per hour, which is the performance of the sport cars, traveling for more than 1,000 km, you know, similar to a long-haul truck, and refilling in three minutes, which is far less than your phone. If you combine all those contradictions to a certain extent, you need a lot of science to make it happen.
I think that's what Hopium reached with deploying the 3DEXPERIENCE platform solution on the cloud. They have been able to create their first prototype in only eight months. This example are really a testimony of the mission-critical nature of our industry solutions in addressing resiliency on one hand and sustainability, as well as to provide value we bring to our relationships. Now shifting gears, let's turn to the review of our operational performance. We'll start with the geos. The Americas grew 8% during this quarter, driven by a strong performance in subscriptions. From an industry perspective, life sciences and industrial equipment were key contributors to the performance. Europe accelerated to 13% growth in Q2, and performance was broad-based. Northern Europe, France, Southern Europe delivered an excellent result driven by transportation and mobility as well as aerospace.
Asia Pacific grew 13% this quarter, showing strong resilience in the face of the China COVID-19 restrictions. We were expecting lockdown to at least, you know, few weeks, but instead, they have lasted months. Nevertheless, I think we have been able to largely offset this with Japan, South Asia Pacific and India growing double digits. Just to be noticed that China, despite the, you know, the lockdown, grew low single digits. If you remember, we had a strong comparison base compared to last year. Now zooming on the product line performance. Industrial innovation software revenue rose 11%. Again, the performance was really broad-based across multiple brands. CATIA, ENOVIA, DELMIA, and NETVIBES grew double digits. CATIA. To be noticed also that CATIA Cyber Systems demonstrated excellent performance in this quarter, reflecting the differentiated value proposition of our technology.
DELMIA also benefited from a strong interest in manufacturing transformations as clients seek to increase efficiency, resiliency, and connect operation with the platform approach. In life sciences, revenue grew 13%. In life sciences, you know, Medidata maintained their velocity, growing 15% on the back of a high comparison base also, and continued to experience strong momentum across its product portfolio, including Medidata Rave, Medidata AI, and Medidata Patient Cloud, as well as across the end markets, including pharma and biotech, as well as contract research organizations. Medidata also experienced a good traction in medical devices, which is, you know, an expansion we are doing since the merger with Dassault Systèmes, and also in the mid-market in Europe, where, if you remember, the footprint was not the same compared to North America. I think this is demonstrating the durability of the Medidata growth profile for the future.
More broadly, if we look at the life sciences engagement, you know, the dedicated channel we have built in order to address the sector at large with all the solutions we have, I think we continue to gain 3DEXPERIENCE reference wins, and I think Sanofi is a good example of this. Moving to mainstream innovations, software revenue increased 8% compared to 27% growth in Q2 last year. I think SOLIDWORKS grew mid-single digits, sorry, against a strong baseline effect of 25% growth last year. SOLIDWORKS was really the one being impacted by the China COVID-19 restrictions, which have lasted longer than expected. I think we view this as transitory issues, and when the situation normalize, we expect to return to the trend line growth, which is between 8%-9%.
Zooming on Centric PLM, you know, we continue to experience a strong momentum with revenue increasing high double digits. I think Centric PLM accelerates innovation and time to market by improving the quality and the organization. This is a mission critical for consumer companies. Looking forward, I think we have significant opportunity to leverage Centric's strong momentum by reaching new audiences and providing new value proposal. If you remember, Centric PLM starting in the domain of the fashion, and now we are expanding into new industries such as food and beverage, cosmetic and personal care. Historically, the Centric customer base were primarily large international brand. While today the company is having a good early success with retailers and SMBs. Additionally, our strategy is to expand Centric PLM value proposal beyond collection management to business planning, for example, and analytics, as well as e-commerce.
Because the product reference show is becoming, if you want, the primary source for marketing materials when we are thinking about e-commerce. Ultimately, there are a numerous vector of growth to drive significant expansion for Centric PLM and well into the future. As we are continuing, you know, to invest in innovations for the benefit of our customers organically, we also continue to do it through acquisitions. For this quarter, we are pleased to welcome a startup. We acquire a French-based French company, leading players in connecting VR to on the shop floor and in the field. This is a nice complement to the DELMIA offering to accelerate the expansion into the quality control, compliance and the work instructions. The name of the company is Diota.
It combines, in fact, advanced interactive visualization technology with augmented reality and AI technology with a data-centric approach, incorporating the real-world evidence, whatever is coming from the machine or the connected equipment. The company solutions utilize virtual technology in the field, a kind of industrial metaverse, if you want, to maximize the traceability and the productivity throughout the complex manufacturing inspection and certification and maintenance processes. While a small startup with EUR 2 million in revenue, Diota offer a proven technology, a great team and an impressive customer roster. I think we are delighted to have Diota joining us and welcome the team on board. I think now it's time for me to hand over the presentations to Rouven to discuss our financial performance and 2022 objectives. Rouven, the floor is yours.
Thank you, Pascal. Hello, everyone. It's great to speak to you today. As you heard from Pascal, we had an excellent second quarter across the board. This demonstrates the strength and durability of our business model. It also gives us the confidence to reaffirm our 2022 objectives for the year, while at the same time, we also acknowledge the macroeconomic uncertainty. In the second quarter, we delivered on the key initiatives which we communicated to you during our Capital Market Day. First, we saw an acceleration of recurring revenue growth to double digits, driving overall software revenue growth of 11%, and we delivered strong earnings growth with EPS up over 20%, which was well supported by a 32% operating margin in the middle of our targeted range. Now, let's take a closer look at the proof points with the review of our Q2 non-IFRS results.
Total revenue grew 11% year-over-year and EUR 15 million above the midpoint of our guidance. This was driven by accelerating recurring revenue growth of 10% above the high end of our guidance. Recurring revenue represented 78% of software revenue during the period. The license revenue increased solid double digits at 14% this quarter. The license growth was negatively impacted by China's COVID-19 restrictions, as Pascal already pointed out too. Coming into this quarter, we initially expected this confinement to last up to a few weeks. However, the lockdown of over two months attributed about 3 percentage points of headwind to the license growth. Despite this, we delivered a good performance, highlighting the resiliency of our model. Contributing to the overall strong momentum, our services revenue rose 14%, also above our targeted corridor.
Now let me comment on our business model evolution as reflected in our 3DEXPERIENCE and cloud growth momentum. A growing list of customers, both new entrants and incumbents, are expanding their relationships with Dassault Systèmes. 3DEXPERIENCE and Cloud are critical for enabling resiliency and for helping clients to scale rapidly as they capitalize on the benefits of adopting all our domains. This is reflected in our second quarter results. We continue to see strong momentum in 3DEXPERIENCE, with revenue growing 30% year-over-year to a share of 33% of software revenue, an increase of four points relative to last year. Our cloud revenue rose 23%, driven by continued strength in life sciences and 3DEXPERIENCE. Cloud now accounts for 22% of our software revenue, up over two points versus last year.
We see large customers in core industries, such as aerospace and defense, transportation and mobility and industrial equipment, deploying 3DEXPERIENCE cloud solutions. Now let's discuss our operating margin performance versus objective. We reported an operating margin of 32% in the center of our targeted range. When factoring in the overachievement in revenue, the net impact of higher expenses versus guidance was only 2 basis points. Relative to last year, expenses were up 12%, reflecting our confidence to continue to invest in our long-term growth opportunity. Indeed, we hired over 1,200 people during the quarter, representing more than 420 net new team members. We grew headcount by 8% overall and 10% within R&D versus last year.
These investments will allow us to further expand our reach and capabilities from managing transactions to driving transformations with our clients when we engage with 3DEXPERIENCE platform, Medidata and Centric PLM. We also saw more active travel and marketing activity compared to a lower 2021 base, of course, which accounted for about 20% of the increase. As you can see, we are investing in growth. Our subscription and cloud revenue are growing at the highest rate, and we are not compromising our profitability. Now, turning to EPS. For the second quarter, we delivered strong earnings per share growth of 21% to EUR 0.26 as reported, above the objective range of 11%-16% growth.
The growth in EPS benefited this quarter from a more favorable FX conversion, driven by the strengthening of the U.S. dollar versus euro with an impact of EUR 0.011. A higher operating income contributing EUR 0.002 and a lower tax rate contributing EUR 0.002 as well. Let me briefly comment on the non-IFRS tax rate for the quarter of 20.8% versus our guidance of 21.2%, highlighting that we continue to benefit from the higher FDII tax deductions in the United States. I'd also like to comment briefly on the reconciliation to IFRS EPS.
As you know, at the end of May this year, the long-standing tax dispute covering the fiscal years of 2008 to 2013 was concluded by the ruling of the Court of Cassation, resulting in a one-time tax charge of EUR 145 million. There was no cash impact this quarter or nor will there be any in 2022, as all payments were made between the years 2014 and 2020. This dispute has been reported in our financial statements since 2014 and is now closed. Now turning to cash flow and balance sheet items. Cash and cash equivalents totaled EUR 3,157 million compared to EUR 2,979 million at the end of last year, an increase of EUR 178 million.
Our net financial debt at June 30th, 2022, decreased by EUR 405 million- EUR 485 million, compared to EUR 889 million at December 31st, 2021. This puts us well ahead of our schedule on our deleveraging objective. Now let me provide some additional color of what's driving our cash position this quarter. First, cash from operations totaled EUR 1,048 million for the first six months, an increase of 1% relative to last year on the back of a very strong comparison base. Remember, last year was up 21%. Just looking at Q2, operating cash flow was up a strong 7% year-over-year.
This quarter, cash from operations was used for treasury stock repurchase of EUR 75 million, contributing to the EUR 378 million for the first six months, and we paid the dividend to our shareholders of EUR 224 million. Lastly, we had a benefit of EUR 116 million from FX, with EUR 90 million coming from Q2 only. Now let me quickly transition to some key drivers of the second quarter operating cash flow performance. First, net income adjusted for non-cash items, it was up 32%. We saw an increase in contract liabilities, which reflects our business activity in line with recurring revenue growth at 10% constant currency. The decrease in income tax payable is driven by higher tax payments in the U.S. related to the mandatory capitalization of R&D expenses for tax purposes only.
Consequently, the deductibility of these expenses will be delayed, resulting in an increase of cash taxes we pay. Lastly, the decrease in accrued compensation is due to lower social charges on stock-based compensation expenses from a lower share price in Q2 2022 versus the same time last year. Now let's turn to our fiscal 2022 objectives. As we look to the remainder of the year, we feel optimistic about our business momentum. At the same time, we are mindful of the macroeconomic backdrop characterized by some mixed sentiments. In this context, it's important to highlight that within our full year objective, we already offset the revenue impact from the wind down of operations in Russia, which accounts for about EUR 21 million of revenue for the year. This we discussed in Q1.
Now, taking all of this into account, we are reaffirming our 2022 total revenue growth objective of 9%-10%, and also reflect a higher absolute range of now EUR 5,485 million-EUR 5,535 million, versus EUR 5,355 million-EUR 5,405 million previously. Incorporating an update to the U.S. dollar rate from 1.14 - 1.10 for the remainder of 2022. This adjustment to our currency assumption, along with the second quarter FX benefit, has an impact of about EUR 123 million on our total revenue objective.
Now, in addition to this, we are also reflecting half of the Q2 overperformance, and the remainder is contributing to de-risk the rest of the year, marked by the increasing uncertainty, more specifically in China. We are reflecting this adjustment mainly in the outlook and license growth, which we now project at 9%-11% for the full year growth. Next, let me turn to the operating margin. We are reconfirming our full year objective of 33.4%-33.7%, reflecting our continued investment in our long-term growth initiatives, including maintaining our momentum in achieving our hiring objectives. Now turning to EPS. We are raising our 2022 diluted EPS objective to 14%-16% growth as reported, reaching EUR 1.08 - EUR 1.10.
This compares to 9%-11% growth, reaching EUR 1.04-EUR 1.06 previously. The delta versus our previous target is driven by a EUR 0.026 FX benefit, a EUR 0.004 revenue impact offset by EUR 0.007 from an increase in operating expenditures. Finally, a EUR 0.021 benefit from a lower tax rate. The updated tax rate reflects the higher FDII tax deduction for the second half of the year in the U.S. as well as the lower tax rate in France, both contributing approximately a similar weight. Now let's review our 2022 objectives by revenue type.
Software revenue growth is reaffirmed at 9%-10%. Recurring revenue growth is reaffirmed at around 9%. As mentioned, licenses and other software revenue growth is now at 9%-11% from the 10%-12% previously for the reasons I outlined before. Services revenue is targeted at 8%-10% growth. Before closing, let me briefly share our objectives for the third quarter. Total revenue and software revenue growth of 8%-10%, with recurring revenue at approximately 9%, license revenue in the range of 6%-10%, and services revenue up 11%-13%. The operating margin of 31.1%-31.8% and diluted EPS growth of 6%-11% to EUR 0.24 to a range of EUR 0.24-EUR 0.25. Now let me conclude my section.
In conclusion, for the full year 2022, we reaffirm our growth objectives for total and software revenue of 9%-10% growth, driven by good momentum in subscription and cloud revenue growth. We raise our outlook for total revenue, reflecting half of the Q2 overperformance in our full year objective and at the same time de-risk some of the macro factors, specifically adjusting the license growth attributed to the volatility in China. Finally, we raise our EPS target to reach now 14%-16% growth. We expect a solid third quarter, and we look forward to keeping you informed about our progress over the second half of the year. Thank you. Back to you, Pascal.
Thank you, Rouven. Thank you also for the confidence you put into the guidance. If we step back a little bit from the quarter, I think, what could we say? We can probably continue to say that the clients, you know, they are continuing to invest in innovations to both address today current challenges, but as well as to prepare for the future. Resiliency and sustainability are really the top priorities for many of them. Our industry solutions are mission-critical to make it happen. I think we also noticed that we have significant and durable competitive advantages to leverage in each of the three sectors of the economy we serve. Last but not least, you have seen during the Capital Market Day, we have a vision for 2040, and we are laying the foundations for our success well in advance.
Finally, I think I want to take the opportunity to thank both our clients for their continued trust as well as our team around the world for their passions and their dedication to our successes. Before to conclude, I want to say a few words about my friend François-José, and I want to congratulate him, you know, because he will retire, you know, next year. Béatrix, I want also to congratulate you on your promotions. You know, you are leading the Investor Relations now. Just a few words for François, and I'm sure all of you will be with me on this. You know, François is with us for the past 30 years, and you did a lot, you know, to build the trust and the integrity with the investor community.
You did it with your style, which is the kindness, the humor, and also a lot of disciplines maybe you are not seeing on your side. I can testify this is really happening. I think, again, for everything, I really want to thank you. It was really a pleasure to work with you. When I took my CFO positions a few years ago, you were really the one guiding me just to avoid some mistakes. Béatrix, no need to, you know, to welcome you on board because you are with us for a long time, and you have been working with François together for several years. I think we are lucky to have you leading investor relations. No doubt you will continue what François built.
I think Rouven and I are happy and ready to take your questions. Back to you, operators.
Thank you. As a reminder to ask a question, you will need to slowly press star one and then one on your telephone and wait for your name to be announced. Once again, it's star one and then one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. This will take a few moments. We are going to proceed with the first question. Please stand by. The first questions come from the line of Amit Harchandani from Citi. Please ask your question.
Thank you. Good afternoon. Amit Harchandani from Citi. I've got two questions, if I may. My first question goes to the topic of visibility that you may have in terms of the deals within your pipeline. Clearly a lot of commentary out there about macro, lengthening sales cycles. And I was curious to know, when you look at the deals yourself, what are some of the KPIs, what are some of the metrics that you focus on in terms of gauging whether these deals are going to close or not? And to what extent do you look at the visibility today in comparison to, say, a quarter ago, and whether that gives you confidence for the rest of this year, or does the visibility even extend into subsequent years? That would be my first question, and then I have a second one.
Okay. If you are okay, Rouven, I will take the first one. It's a good question. You know, to assess the pipeline, we have a methodology. We call it Value Engagement, which is nothing more than a stage gate. At each stage we have a certain deliverable we need to, you know, produce. That's basically the way we assess the pipelines. What could I say relative to the pipelines? If I compare to last year, we have exactly the same level of maturity. There is no improvement, neither decrease of the level of maturity of the pipeline. We have not seen large project or large program decision being postponed.
We had some discussion with specifically North American customers, you know, where they were, probably they are the one anticipating the recession, and they had the discussion, the internal discussion, how they should put the priority for the second half of the year in terms of investment. To be noticed that what we do is, for many of them, mission critical, and that's the reason why it's still part of the priority. To give you a proof of what I'm saying is, if you look at the performance of the direct sales force, you know, which is really the one handle the large accounts and the large contracts, we grew by more than 15% this quarter.
Clearly, we are seeing good traction, and the vast majority of the 3DEXPERIENCE platform projects, you know, Rouven was highlighting, is really coming from this. To a certain extent, I would say, we still have this visibility. Again, what we do, is usually between nine months to 12 months sales cycle for the vast majority of the solutions we are promoting. I think, we have enough visibility to have a certain level of confidence for the rest of the year. Speaking about the industry, which is maybe also another angle to look at it, I was checking if the pipeline was, you know, weighted the same way compared to last year. I think we are seeing an equivalence in terms of weight on the aerospace and defense, knowing that this industry is having a good cycle.
You know, the cycle is driven by the defense and space. We see more and more of the commercial being back. Last week we had the Farnborough exhibitions, you know, the largest U.K. air show, and we had an ability to meet with many of our customers, including Boeing and Airbus. You have seen all of them, they publicize the fact that their order book is going back to what it used to be. Clearly they have the visibility to invest and also to drive the supply chain with it, which is something extremely important. The auto sector is probably the one where I had some cautiousness, right? If I compare to last year, the weight is almost the same, so there is, we are not overexposed.
The reality is, in fact, this industry, despite the volume dropping, the price increase on the vehicles, you know, is giving them the margins and the ability to continue to invest, to transition from the thermal to the electric engine of the autonomous car, and this is really driving the cycle for us. This is reflected, by the way, in the good performance you have with CATIA Cyber Systems, because there is no way you can do an electrification of the car without these product lines. Life sciences is still going extremely well, still representing 22%-23% of the pipelines, which is consistent with the revenue. We have, you know, a good visibility, and the renewal we did is also giving some room to expand.
To a certain extent, if I look at the major industry we serve, the visibility is enough. Where we took some cautiousness on the volatility on the licenses is really on the SOLIDWORKS, the mainstream markets. It's really coming from China because you know, when you have a confinement, the resellers usually cannot visit anymore their customers. Especially in Asia, it's a business you still do face to face. That's the reason why, you know, we took some few millions cautiousness in the guidance. That's what I can say. You have a second question, right, Amit?
Yes. Yes, I do. Thank you for the comprehensive answer to the first one. For the second one, I was looking at growth in North America or Americas more broadly, and I was then looking at the growth in your life sciences business, which my understanding is majority does come from Americas. So if I'm trying to look at growth within Americas outside life sciences, it seems relatively muted in the second quarter, and indeed also appears to be the case for the first quarter. So if you could please confirm if my understanding is correct. If so, what would explain that kind of trajectory outside life sciences, within the Americas and specifically North America? Thank you.
Yeah, Amit, let me start and of course, Pascal, please add from your point of view as well. Maybe in order to answer your question, let's decompose this a little bit and give you a better understanding of the momentum of Medidata. You know, traditionally it's just the growth has been in the United States, but over the last two years, the growth contribution has really picked up outside the United States. Pascal mentioned the success we are having in Europe in the European mid-market as well as in large pharma. You saw the Sanofi example that we were talking about. Medidata has really picked up steam and picked up momentum in Europe and in Asia.
China has always been an engine of growth, but that has further accelerated. Japan has started to become back to growth, which was for many years, Medidata more flat, and hard for us to grow. This is progressing. If you put this together, I would say the U.S. market has been more mature and already more better served at Medidata. We continue to grow with you know, with customers like Moderna. Yeah. This is one that we developed throughout the pandemic to one of our largest clients today. We have these success stories also outside the United States.
I do not want you to have the impression that the growth of Medidata is more pointed towards North America or the Americas than to other regions. Right now, it's really coming more from outside the United States and the Americas. I think if I take this to the side and I look at the performance of our Dassault Systèmes North America business outside of Medidata, we see really good performance in our ability to renew and expand with large clients. We are increasing our footprint in the auto sector as well as in industrial equipment. We of course know our success with Boeing to name a few.
I think our business in North America has continued to grow at around double digits for software revenue. It's always a mix of the license part and the subscription part, and I think this leads me to the third point of the answer to your question, is we see, since a few quarters now, a stronger and stronger growth in the subscription revenue versus the upfront license revenue, which, you know, has an impact on the total software revenue. Because if you are able to recognize your revenue upfront versus you recognize it ratably over a period of time, it has an impact on your growth profile.
Nevertheless, we have been growing the Americas. I would say in the range between 8%-10%+ on software in aggregate between software support and subscriptions. I hope this gives you a better understanding of how we see North America and what's the different contributors of growth.
It does. Thank you very much.
Thank you.
We are going to proceed with the next question. We have the next question coming from the line of Jay Vleeschhouwer from Griffin Securities. Please ask your question.
Thank you. Good afternoon, everyone. Let me start with a sales channel question. Pascal, in your earlier answer, you referred largely to what you used to call the BT channel. Could you comment as well on your results and expectations for what you used to call the VS channel? Then some follow-up questions to that. Thanks.
Okay. Overall, just for those who are not familiar with the different channels we have, we have three different channels. The BT is really the direct sales model for us, and it accounts for almost half of the revenue. Then the other half is covered by two indirect channels. One is promoting SOLIDWORKS and the other one is promoting the rest of the portfolio. The one we are talking about, the VS, is really the one which is covering most of the supply chain of the large industry we are covering. Specifically aerospace and defense, auto sectors, industrial equipment, marine and offshore. This channel, in fact, made a lot of progress on the adoption of the 3DEXPERIENCE platform because that was, I would say, the major point, right?
They are also doing a good job for the adoption of the cloud. I think, we are extremely pleased with what happened since the beginning of the year, because, you know, they started almost from nothing a few years ago. Now, I would not say it's becoming the standard, but it's more and more becoming the standard. Overall, the performance is, I would say, a little bit better than a mid-single digit growth from the Value Solutions channel. I think really the most important for us was we need to have all the resellers transforming themselves in order to be able to, along with us, you know, deploy the 3DEXPERIENCE platform in the entire value network in the large industry we serve. I think this is really happening.
We had a chance to have all of our partners with us a week ago, a little bit more than a week ago, and clearly, they are walking the talk. I'm extremely pleased with what I've seen. The level of commitment and the level of investment is really happening. That's for VS.
Thank you, Pascal. With regard to SOLIDWORKS, a couple of things. Regarding the new units, would it be fair to say that in the second quarter, new SOLIDWORKS CAD license volume was down slightly year-over-year and perhaps sequentially as well from Q1? And if so, would that have been mostly or entirely due to China? And then secondly, more broadly with regard to SOLIDWORKS, could you update us on how 3DEXPERIENCE Works adoption is going within the SOLIDWORKS space? And to the extent you've had adoption thus far over the last year or more, how are you seeing the average seats per customer adoption versus the 3-4 average number of seats for SOLIDWORKS itself?
In other words, is the SOLIDWORKS or the 3DX Works customer on average deploying more seats of 3DX Works than they are perhaps of SOLIDWORKS itself?
Yep. Let's start with the first question, Jay. You are right, but something happened in fact this year. As you may know, we increased the prices. It was, I would say a certain level of increase because it was aligned in some countries with the level of inflation. What's happened, which is something which is unusual, usually, you know, at least if you look at last year, Q2 was a larger quarter compared to Q1. This year it's the opposite. Again, I'm speaking about the number of units. We have a much bigger Q1 than Q2 in terms of numbers units. Why so? Because many of our retailers, they have anticipated the price increase, because it's effective April the first. That's what's happened.
To give you an order of magnitude, you know, for Q1, we were close to 20,000, a little bit more than 20,000 units, right? For Q2, we are roughly seventeen, I do not have exactly the number in mind, but it's 17,000-18,000 units, which is against what's happened. I will not draw the wrong conclusions because to a certain extent, we had more units in Q1 compared to the traditional pattern, and we have a little bit less in Q2. That's for the units. Now, for the number of seats, you're right. I mean, the vast majority of the customers have between two- three seats of SOLIDWORKS.
When we deploy the 3DEXPERIENCE Works family, depending on the product line, we have a different ratio. If you look at the ENOVIA Works, usually the ratio is mostly 3 x, between 3-4x bigger. If you have two seats, at the end, you have 10 seats for the ENOVIA Works. That's on average. For the SIMULIA Works, I would say it's probably 1x. If you have three or two, you have only one. So the penetration rate is less. If we are speaking about the manufacturing side and specifically to the DELMIAWorks, this is really where we have an expansion in terms of number of users.
Because you remember with DELMIAWorks, we are targeting a company in the range of not bigger than EUR 200 million revenue, having at least two manufacturing sites. Usually you have, I don't know, between 30-40 people to be equipped, which give you a sense of ratio between 3-30, if not 50. This is how we multiply the footprint inside the SOLIDWORKS install base, leveraging the works family.
Right. Adding all of that up this year, do you think that 3DEXPERIENCE Works in totality could be a mid to high eight-figure business in terms of revenue? In other words, a substantial multiple of what it was in 2020 and 2021.
For DELMIAWorks, the answer is yes. We had, by the way, a good performance this quarter, at least it's visible. For SOLIDWORKS, depends on the quarter. We had a good Q1. Q2 is a little bit more smooth. ENOVIA works is really taking off. This is where we see progressively the traction coming. I mean, it's much more regular.
Okay. Finally, a corporate development question. You and I have talked over the last couple of years about your cloud strategy with regard to its being vertically integrated. With that in mind, and particularly given the growth you've now reported for your cloud business, including Medidata, could you talk about the increase in your cloud infrastructure or your capacity to deliver your cloud services and how you decide on the expansion of that cloud business? I've heard, and maybe this isn't entirely correct, that it's more customer driven locality by locality. You don't necessarily have a global expansion strategy for your own data centers. It's more bespoke, let's say, as customers circumstantially might need the capacity.
Let's start with the different questions. If I look back at all the internal usage, for example, what the research and development they do at Dassault Systèmes, we are relying on our own capacity. If I put this aside and I look at only the capacity we are using to serve our customers, we are relatively balanced between 3DS OUTSCALE, our own infrastructure as a service, and AWS, which is the one we are using, you know, as an external provider. From a capacity standpoint, I think we still have room to grow because we have invested. Fortunately, we did it before the shortage of component, you know? Because right now it's relatively difficult to be furnished, to receive the materials and the hardware you are ordering.
We have definitively enough capacity for the rest of the year, I think. 2023, we probably need to enrich a little bit the capacity, specifically on the storage, which is a good sign. It means that people are working extensively with our solutions. Related to how we expand, you are right. I mean, the way we did it, we have put the data centers first, where we have most of the install base being located, right? If we have to expand in countries where the footprint is limited compared to the larger install base we have, we do it case by case with, you know, a certain business case. It's relatively easy for us. With less than EUR 5 million revenue committed for the next three years, it's better for us to use AWS.
If it is more, it's much better for us to set up our own data centers and operate globally the systems. You remember, we have three different offers for the cloud infrastructure. We have the international one, which usually you are calling public cloud, but we prefer to call it international, because it's really giving the ability to connect everyone from any place around the world and share basically the infrastructures with others. We have really the sovereign one, which is the private one, when you want to comply with certain regulations or certain, you know, tax rules, for example. We have the dedicated when the cloud is on-premises, you know, for certain customers for security reasons, and we operate on their behalf the entire infrastructure.
That's basically our offer, and it's relatively balanced across the different products, the different solutions, and the different offers we have.
Okay. Thank you very much, Pascal.
You're welcome, Jay.
We are going to proceed with the next questions. The next question come from the line of Frédéric Boulan from Bank of America. Please ask your question.
Hi. Good afternoon. Two questions on my side. First, just to follow up on the previous question around cloud. Considering the current environment, are you seeing the uncertainties getting your clients to change their preferred ways to buy your product, and accelerating a little bit the move from a traditional license model to the subscription, or it's not really changing that behavior? Secondly, if you can give us a quick update on your M&A pipeline. I think this morning you said we should not expect anything major this year.
If you can share with us your main priorities or opportunities you see across your different segments, and what's driving that timing that seems to be extending versus what you had in mind probably, you know, six to 12 months ago. Thank you.
Okay.
Frédéric, cool. Let me start with your first question around the cloud and subscription. What we really see right now, as I mentioned before, the subscription revenue is growing very fast and recurring overall up 10%. Of course, this includes support revenue, which if you extract that, the subscription revenue obviously is growing much faster. Yeah. Medidata, we said, is growing at around 15%. You can assume that for everything else than Medidata, which is subscription-based, we are growing around 20%. What's really driving this? From a product perspective, we see that 3DEXPERIENCE has a large share of subscription revenue growth, which is larger than license.
We really see from a growth perspective that this momentum is picking up and that more and more of our customers who are using 3DEXPERIENCE are also expanding and shifting with us their business model. Of course, this drives our cloud revenue because a lot of the 3DEXPERIENCE installations are cloud based. This is how it's connected. From a geo perspective, we mentioned earlier this morning that in the Americas cloud revenue and subscription revenue is growing faster than license, and this trend is existing since a number of quarters. We have seen also a stronger subscription revenue growth in EMEA in Europe. You know, we grew Europe overall 13% in software revenue growth. Subscription really grew very strong.
There is more and more a shift towards subscription. That's very evident. I wouldn't attribute it necessarily to the macro environment. I think I attribute it more to the preference in terms of the ability to connect to cloud, the ability to you know, to expand through all of our domains and really be able to scale up and scale down, which the subscription model nicely allows you to do. These are, for me, the main drivers of the growth that we see right now in subscription. Pascal, I don't know if you have any points to add.
No, I think, for the subscription and the cloud, you answer. Coming back to the M&A, two things. First of all, I always been clear on the timing. We want to be leveraged before to consider another transformational move, I think, and we are not yet fully leveraged, even if we are close. I think it's relatively consistent with what I said. Second thing related to the different opportunity, you know, again, if we are talking about big move, it's the move which could change the profile of the company, right? That's what we are talking about. When we did Medidata, we have articulated and repositioned the company around the three sectors of the economy. Clearly, we have rooms and opportunity in all the three sectors. If you take the manufacturing space, for example, we do little in the process industries, right?
It's really a room where we could expand easily. In the life sciences and healthcare, we do a lot in life sciences, not too much in healthcare. Definitely, a domain where we could expand. Infrastructures and cities, it's we are the challenger, so clearly there is a vast majority of opportunity for us to continue to expand. The most important for you to understand is if we want to change the profile of the company, we have to be on the right path of the IFWE Loop. Meaning, we want to be on the how you capture the usages, how you capture the data, how you extract insight from it. That's really where I think the core is coming.
If you want to understand maybe our potential next move, that's basically the way you should look at it. It's becoming, again, extremely important for us to be connected intimately with the patient, the citizen, and the consumer, because they are part of the platform, right? They are one of the stakeholders we need to connect to the platform. This is really where we are. I think, again, we have opportunity in the three sectors of the economy as a way to expand what we do, not to fill the gap for the revenue growth, right? That's always been what we do, what we are doing.
Perfect. Thank you very much.
That's it for the M&A.
Thanks a lot.
You're welcome.
We are going to take the next question. Please stand by. It will be the last question. We have the last question coming from the line of Jason Celino from KeyBanc Capital Markets. Please ask your question.
Great. Thank you for fitting me in. You know, on China, you mentioned SOLIDWORKS performance was negatively impacted by the lockdown. Were there other segments like CATIA or SIMULIA or other business that felt this impact?
No. In fact, not really. I mean, the confinement for China was really hurting, first of all, the mid-size mainstream market on both sides. First of all, for the company, you know, unlike what you have in the U.S. or in Europe, you do not have some specific measures to help those companies when something is happening. The government is not putting in place some aids or funding. Clearly, those small and mid-size companies, they are focusing right now their energy to restart their businesses, and this is consuming a lot of their cash and their energy. That's the reason why, you know, from a demand standpoint, it was relatively smooth in Q2.
On the supply side, if we do not have the ability for our resellers to, you know, to visit their customers, it's usually the way it happened in China, it's something relatively difficult, you know, in terms of how you do business with these types of companies. The rest of what we do is really touching the large state-owned company or the large international company being based in China, and I think we didn't face the same issues at all.
Okay. You said, you know, return to 8%-9% for SOLIDWORKS. You know, some of these lockdowns have been lifted. I guess when do you think you could return back to that more normal rate?
We do expect to be back in Q3, right? Despite the fact that, as Rouven was explaining, we took some cautiousness in the guidance just to avoid to be short.
Mm.
The cautiousness we took was around EUR 7 million, which was almost the impact we have seen in.
In Q2.
In Q2. We do not expect to have this being higher for the H2. Right.
Okay. Perfect. Thank you. Thanks for fitting me in.
You're welcome.
Thank you. I think it's time to thank you for attending this call. Rouven and I, we are wishing you a good summer break and hope to see you, when we are back on the road, early September. Have a nice summer.
See you soon.
Goodbye.
See you soon.
Goodbye.
Bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.