(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is non-IFRS adjustment to the relevant measure for only one of the periods under comparison, the non-IFRS increase (decrease) compares the non-IFRS measure to the relevant IFRS measure.

(3) Based on a weighted average 259.3 million diluted shares for Q1 2018 and 257.3 million diluted shares for Q1 2017.

Summary of Principal Differences of IFRS 15 Compared to IAS 18

The Company has adopted IFRS 15 as of January 1, 2018 using the modified retrospective transition method (also called the cumulative effect method). Under this method, the transition effect is accounted for within the consolidated equity at the date of initial application, i.e. January 1, 2018, without any adjustment to the prior year comparative information. See also the Company’s 2017 Document de Référence (Annual Report) for further information.

• Recurring software: Recurring software is comprised of subscription and support revenue. IFRS 15 has an impact on the timing of the quarterly recognition of subscription revenue but on a full year basis there is essentially no difference between IFRS 15 and IAS 18 for subscription contracts of one year in length. For the 2018 first quarter, recurring software revenue was €557.9 million under IFRS 15 and was €50.8 million higher compared to the prior IAS 18 standard. Previously, under IAS 18, we showed a ratable quarterly amount based upon the annual contract level of our on-premise subscription software. Under IFRS 15, for new contracts entered into or for contracts renewing, we have assigned an upfront value as required which is recognized in the first quarter of the contract, and the remainder which is recognized ratably during the four quarters. We continue to report both of these amounts within recurring revenue, specifically as subscription revenue (previously called periodic revenue). Historically, a higher proportion of subscription contracts are renewed in the first quarter of the year than in the other three quarters of the year.
• Operating expenses and sales commissions: The Company continues to expense sales commissions under the IFRS 15 standard as was done under IAS 18. Therefore, there are no capitalized sales commissions. As a result, the Company’s operating expenses are identical under IFRS 15 and IAS 18.
• One-time permanent difference: The implementation of IFRS 15 on January 1, 2018 resulted in a one-time permanent difference between IFRS 15 and IAS 18, where the deferred portion of rental agreements concluded in prior years will not be recognized into revenue. As a result, the corresponding amount of €80 million, net of taxes (€110 million before) was recorded in stockholders’ equity as of January 1, 2018.
• Initial impact on unearned revenue: At March 31, 2018 unearned revenue on the Balance Sheet under IFRS 15 is not directly comparable to the year-ago March 31, 2017 balance sheet under the prior standard IAS 18. This is due to the fact that the March 31, 2018 balance sheet line item unearned revenue has been reduced by €158 million, reflecting mainly (i) the one-time permanent difference of €110 million, and (ii) the higher amount of recurring revenue recognized in the first quarter under IFRS 15 compared to IAS 18 in the amount of €49.4 million.

DASSAULT SYSTEMES RECONCILIATION P&L NON-IFRS IAS 18 vs IFRS 15 (unaudited; in millions of Euros)
In millions of Euros, except per share data and percentages		2018 Non-IFRS
		QTD		Difference		QTD
		IFRS15				IAS18
Total Revenue		€ 820.6		(€ 49.4)		€ 771.2
Total Revenue breakdown by activity
Software revenue		737.0		(49.4)		687.6
Licenses and Other software revenue		179.1		1.4		180.5
Subscription and Support revenue		557.9		(50.8)		507.2
Recurring portion of Software revenue		76%		(0.0)		74%
Services revenue		83.5				83.5
Total Software Revenue breakdown by product line
CATIA software revenue		250.7		(13.8)		236.9
ENOVIA software revenue		74.7		(1.8)		72.9
SOLIDWORKS software revenue		169.9		3.2		173.1
Other software revenue		241.7		(37.0)		204.7
Total Revenue breakdown by geography
Americas		239.0		(13.8)		225.2
Europe		362.6		(36.1)		326.5
Asia		219.0		0.4		219.4
Total Operating Expenses		(€ 562.8)				(€ 562.8)
Share-based compensation expense		-				-
Amortization of acquired intangibles		-				-
Other operating income and expense, net		-				-
Operating Income		€ 257.8		(€ 49.4)		€ 208.3
Operating Margin		31.4%		-4.4pts		27.0%
Financial revenue & other, net		5.2				5.2
Income tax expense		(75.6)		14.0		(61.6)
Non-controlling interest		0.3				0.3
Net Income attributable to shareholders		€ 187.6		(€ 35.4)		€ 152.2
Diluted Net Income Per Share		€ 0.72		(€ 0.13)		€ 0.59
		2018 Non-IFRS
In millions of Euros		2018		Difference		2018
		IFRS15				IAS18
Cost of revenue		(119.3)				(119.3)
Research and development		(140.4)				(140.4)
Marketing and sales		(246.6)				(246.6)
General and administrative		(56.5)				(56.5)

DASSAULT SYSTEMES RECONCILIATION BALANCE SHEET NON-IFRS IAS 18 vs IFRS 15 (unaudited; in millions of Euros)
In millions of Euros		IFRS15 Basis				IAS 18 Basis
		March 31,		Difference		March 31,
		2018				2018
ASSETS
Cash and cash equivalents		2,803.8		-		2,803.8
Short-term investments		41.3		-		41.3
Accounts receivable, net		749.7		-		749.7
Other current assets		215.1		-		215.1
Total current assets		3,809.9		-		3,809.9
Property and equipment, net		164.4		-		164.4
Goodwill and Intangible assets, net		2,899.2		-		2,899.2
Other non-current assets		273.3		14.3		287.6
Total Assets		€ 7,146.8		€ 14.3		€ 7,161.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable		128.9		-		128.9
Contract liabilities - Unearned revenues		842.8		158.2		1,001.0
Other current liabilities		486.2		(29.2)		457.0
Total current liabilities		1,457.9		129.0		1,586.9
Long-term debt		1,000.0		-		1,000.0
Other non-current obligations		499.4		-		499.4
Total long-term liabilities		1,499.4		-		1,499.4
Non-controlling interests		1.6		-		1.6
Parent shareholders' equity		4,187.9		(114.7)		4,073.2
Total Liabilities and Shareholders' equity		€ 7,146.8		€ 14.3		€ 7,161.1

DASSAULT SYSTEMES RECONCILIATION CASH FLOW NON-IFRS IAS 18 vs IFRS 15 (unaudited; in millions of Euros)
In millions of Euros		Three months ended March 31, 2018
		IFRS 15		Difference		IAS 18
Net Income attributable to equity holders of the parent		136.3		(35.5)		100.8
Non-controlling interest		(0.3)		0.0		(0.3)
Net Income		136.0		(35.5)		100.5
Depreciation of property & equipment		13.7		-		13.7
Amortization of intangible assets		43.9		-		43.9
Other non cash P&L items		16.7		-		16.7
Changes in working capital		196.6		35.5		232.1
Net Cash provided by operating activities		€ 406.9		€ 0.0		€ 406.9
Additions to property, equipment and intangibles		(11.9)		-		(11.9)
Payments for acquisition of businesses, net of cash acquired		-		-		-
Sale (purchase) of short term investments, net		(40.1)		-		(40.1)
Investments, loans and others		(0.1)		-		(0.1)
Net Cash provided by (used in) investing activities		(€ 52.1)		€ 0.0		(€ 52.1)
(Purchase) Sale of treasury stock		8.4		-		8.4
Proceeds from exercise of stock-options		12.3		-		12.3
Net Cash provided by (used in) financing activities		€ 20.7		€ 0.0		€ 20.7
Effect of exchange rate changes on cash and cash equivalents		(31.1)		0.0		(31.1)
Increase (decrease) in cash and cash equivalents		€ 344.4		€ 0.0		€ 344.4
Cash and cash equivalents at beginning of period		€ 2,459.4		€ 0.0		€ 2,459.4
Cash and cash equivalents at end of period		€ 2,803.8		€ 0.0		€ 2,803.8

IFRS 15 DASSAULT SYSTEMES NON-IFRS IFRS 15 FINANCIAL INFORMATION (unaudited; in millions of Euros, except per share data, headcount and exchange rates)
In millions of Euros, except per share data and percentages		Three months ended
		March 31, 2018
Non-IFRS-IFRS15 Revenue		€ 820.6
Non-IFRS-IFRS15 Revenue breakdown by activity
Software revenue		737.0
of which licenses and other software revenue		179.1
of which subscription and support revenue		557.9
Services revenue		83.5
Non-IFRS-IFRS15 software revenue breakdown by product line
CATIA software revenue		250.7
ENOVIA software revenue		74.7
SOLIDWORKS software revenue		169.9
Other software revenue		241.7
Non-IFRS-IFRS15 Revenue breakdown by geography
Americas		239.0
Europe		362.6
Asia		219.0
Non-IFRS-IFRS15 operating income		€ 257.8
Non-IFRS-IFRS15 operating margin		31.4%
Non-IFRS net income attributable to shareholders		€ 187.6
Non-IFRS-IFRS15 diluted net income per share		€ 0.72
Closing headcount		16,067
Average Rate USD per Euro		1.23
Average Rate JPY per Euro		133.2

IFRS 15 DASSAULT SYSTEMES CONDENSED CONSOLIDATED STATEMENT OF INCOME (IFRS) (unaudited; in millions of Euros, except per share data)
In millions of Euros, except per share data and percentages		Three months ended
		March 31,
		2018
Licenses and Other software revenue		179.1
Subscription and Support revenue		556.0
Software revenue		735.1
Services revenue		83.5
Total Revenue IFRS15		€ 818.7
Cost of software revenue (excluding amortization of acquired intangibles)		(40.9)
Cost of services and other revenue		(79.4)
Research and development		(152.7)
Marketing and sales		(253.0)
General and administrative		(69.7)
Amortization of acquired intangibles		(41.8)
Other operating income and expense, net		(2.5)
Total Operating Expenses		(639.9)
Operating Income		€ 178.7
Financial revenue and other, net		4.7
Income before income taxes		183.5
Income tax expense		(47.5)
Net Income		€ 136.0
Non-controlling interest		0.3
Net Income attributable to equity holders of the parent		€ 136.3
Basic net income per share		0.53
Diluted net income per share		€ 0.53
Basic weighted average shares outstanding (in millions)		256.9
Diluted weighted average shares outstanding (in millions)		259.3

IFRS 15 DASSAULT SYSTEMES CONDENSED CONSOLIDATED BALANCE SHEET (IFRS) (unaudited; in millions of Euros)
In millions of Euros		March 31,
		2018
ASSETS
Cash and cash equivalents		2,803.8
Short-term investments		41.3
Accounts receivable, net		749.7
Other current assets		215.1
Total current assets		3,809.9
Property and equipment, net		164.4
Goodwill and Intangible assets, net		2,899.2
Other non-current assets		273.3
Total Assets		€ 7,146.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable		128.9
Contract liabilities		842.8
Short-term debt		0.0
Other current liabilities		486.2
Total current liabilities		1,457.9
Long-term debt		1,000.0
Other non-current obligations		499.4
Total long-term liabilities		1,499.4
Non-controlling interests		1.6
Parent shareholders' equity		4,187.9
Total Liabilities and Shareholders' equity		€ 7,146.8

IFRS 15 DASSAULT SYSTEMES CONDENSED CONSOLIDATED CASH FLOW STATEMENT (IFRS)
In millions of Euros		Three months ended
		March 31, 2018
Net Income attributable to equity holders of the parent		136.3
Non-controlling interest		(0.3)
Net Income		136.0
Depreciation of property & equipment		13.7
Amortization of intangible assets		43.9
Other non cash P&L items		16.7
Changes in working capital		196.6
Net Cash provided by operating activities		€ 406.9
Additions to property, equipment and intangibles		(11.9)
Payments for acquisition of businesses, net of cash acquired		-
Sale (purchase) of short term investments, net		(40.1)
Investments, loans and others		(0.1)
Net Cash provided by (used in) investing activities		(€ 52.1)
Acquisition of non-controlling interests		-
(Purchase) Sale of treasury stock		8.4
Proceeds from exercise of stock-options		12.3
Cash dividend paid		-
Net Cash provided by (used in) financing activities		€ 20.7
Effect of exchange rate changes on cash and cash equivalents		(31.1)
Increase (decrease) in cash and cash equivalents		€ 344.4
Cash and cash equivalents at beginning of period		€ 2,459.4
Cash and cash equivalents at end of period		€ 2,803.8

IFRS 15