Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Dassault Systèmes had an excellent second quarter and first half reflecting the contribution of our PLM solutions to product competitiveness and innovation. In particular, we had an excellent dynamic in software across our leading brands with new wins and additional business in many of our verticals, including automotive, aerospace, high tech, energy, apparel and life sciences among others.

“We benefited from strong growth across our sales channels as we continue to focus on working closely together with our partners, improving our sales coverage and providing high value to our customers. In particular, our PLM Business Transformation channel delivered a strong performance this quarter thanks to IBM PLM as well as our direct sales force.”

Second Quarter Financial Highlights

• GAAP total revenue increased 13% in constant currencies and non-GAAP total revenue increased 12% in constant currencies.
• By geographic region and in constant currencies as applicable, total GAAP revenue in Europe was up 12% (non-GAAP up 11%), the Americas was higher by 19% (non-GAAP up 17%), and Asia increased 10% (non-GAAP up 9%).
• GAAP software revenue increased 17% in constant currencies. Non-GAAP software revenue increased 15% on new licenses revenue growth of 12% and non-GAAP recurring software revenue growth of 18% (all figures in constant currencies).
• GAAP PLM software revenue increased 17% in constant currencies. Non-GAAP PLM software revenue growth of 16% in constant currencies was led by CATIA with non-GAAP software revenue growth of 20% in constant currencies. ENOVIA non-GAAP software revenue increased 11% in constant currencies. SIMULIA software revenue increased double-digits in constant currencies in the second quarter.
• GAAP Mainstream 3D software revenue increased 14% in constant currencies. Non-GAAP Mainstream 3D software revenue increased 13% in constant currencies on strong growth in maintenance revenue, new SolidWorks seat growth of 9% and growth in sales of Mainstream 3D product data management and analysis software.
• Services and other revenue, representing 15% of total revenue, decreased 2% in constant currencies. As noted in the first quarter, services and other revenue growth trends during 2008 largely reflect the winding down of historical channel management activities formerly rendered to IBM. DS consulting revenue delivered solid growth in constant currencies in the second quarter.
• GAAP operating margin was 19.8%. Non-GAAP operating margin expanded to 25.1%, up from 23.4% in the year-ago quarter.
• GAAP earnings per diluted share increased 16%. Non-GAAP earnings per diluted share increased 10% to €0.46 principally reflecting an increase in non-GAAP operating income of 13% offset in part by a significant reduction in financial revenue principally due to end-of-period foreign currency translation impacts.

Cash flow and other financial highlights

Net operating cash flow was up sharply in the 2008 second quarter to €105.7 million compared to €68.8 million in the year-ago quarter. Cash and short-term investments totaled € 739.7 million and long-term debt totaled € 202.0 million at June 30, 2008.