PARIS—(BUSINESS WIRE)—October 29, 2008— Regulatory News:

Dassault Systèmes (DS) (Paris:DSY) (NASDAQ:DASTY) reported U.S. GAAP unaudited financial results for the third quarter and nine months ended September 30, 2008. These results have been reviewed by the Company’s Board of Directors.

Third Quarter 2008 Summary Financial Highlights

• Q3 GAAP software revenue up 12% and GAAP total revenue up 10%, both in constant currencies
• Q3 non-GAAP software revenue up 12% and non-GAAP total revenue up 10%, both in constant currencies
• Q3 GAAP EPS up 38% to €0.36; Q3 non-GAAP EPS up 26% to €0.49;
• 2008 non-GAAP Objectives: Continuing to target software revenue growth objective of 12% in constant currencies; Raising EPS objective.

Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Dassault Systèmes software revenue growth of 12% in constant currencies during the quarter reflected the increasing momentum of our strategy of diversification into new industries. Further, we saw particular strength coming from our collaboration and simulation software offerings in both the PLM and Mainstream 3D markets. Thanks to our brands and applications strategy, the strengthening of our sales channels, particularly in the mid-market, and growth in our customer base, we were able to deliver third quarter revenue at the high end of our objectives notwithstanding the economic crisis which started to impact our operations early September.

“Based upon our year-to-date performance and fourth quarter outlook, Dassault Systèmes is positioned for solid growth in software revenue and earnings for 2008 reflecting the valuable and measurable benefits our software applications bring to an increasingly diverse group of customers throughout the world. Our goal remains the same – to be a strategic partner to all our customers, in order to help them enhance their products and product innovation processes.”

Third Quarter 2008 Financial Highlights

• GAAP and non-GAAP total revenue increased 10% in constant currencies.
• By geographic region and in constant currencies, total GAAP revenue in Europe was up 12% (non-GAAP up 11%), the Americas increased 15% (non-GAAP up 16%), and Asia increased 1% (non-GAAP flat) on lower results in Japan. Revenue grew above 25% in constant currencies in the faster growing markets comprised primarily of China, India, Brazil, Eastern Europe and Russia.
• GAAP and non-GAAP software revenue increased 12% in constant currencies. Non-GAAP software revenue growth of 12% reflected non-GAAP recurring software revenue growth of 18% and new licenses revenue growth of 1% (all figures in constant currencies). Recurring software revenue accounted for 67% of total software revenue in the quarter.
• GAAP and non-GAAP PLM software revenue increased 11% in constant currencies. In non-GAAP, ENOVIA software revenue increased 19% in constant currencies, SIMULIA software revenue was up double-digits in constant currencies and CATIA software revenue increased 9% in constant currencies.
• Mid-market PLM growth was healthy reflecting the Company ’ s continued progress in the transformation and expansion of its PLM mid-market sales channel.
• GAAP Mainstream 3D software revenue increased 14% in constant currencies. Non-GAAP Mainstream 3D software revenue increased 13% in constant currencies on growth in SolidWorks installed base recurring revenue and sales of SolidWorks design, product data management and analysis software.
• DS consulting services revenue delivered double-digit revenue growth in constant currencies and operating margin improvement in the third quarter. In total, Services and other revenue, representing 13% of total revenue, was flat in constant currencies during the third quarter, principally reflecting the effect of winding down certain historical channel management activities.
• GAAP operating margin was 16.7%. Non-GAAP operating margin expanded to 23.7%, up from 22.5% in the year-ago quarter on non-GAAP operating income growth of 12%.
• Financial revenue and other improved in the third quarter in relation to both the second quarter and the year-ago third quarter. Specifically, financial revenue and other increased to € 9.9 million in the third quarter, up from € 1.7 million in the year-ago period. Third quarter 2008 financial revenue and other was principally comprised of net interest income of € 3.4 million and net exchange gains of € 6.3 million.
• GAAP earnings per diluted share increased 38% to € 0.36. Non-GAAP earnings per diluted share increased 26% to € 0.49 primarily reflecting an increase in non-GAAP operating income of 12% as well as a strong increase in financial revenue and other principally due to end-of-period foreign currency translation impacts.
• New business activity by industry included, among others:

• Consumer Packaged Goods: Procter & Gamble in the Americas;
• High Tech: Panasonic and Toshiba in Asia; L-3 Communications in the Americas;
• Business Services: TUV Rheinland in Europe and American Bureau of Shipping in the Americas;
• Industrial Machinery: Komatsu and Sanyo Machine Works in Asia and Stara S.A. in the Americas;
• Automotive and Aerospace: EDAG and Piaggio Aero in Europe.