Software maker Dassault Systèmes shares fall after Q4 earnings
HANGZHOU, CHINA – JUNE 14, 2024 – A guest walks past the logo of the 2024 Dassault Systemes Automotive and Transportation Industry Summit Forum in Hangzhou, China’s Zhejiang province, June 14, 2024. (CFOTO/Future Publishing via Getty Images should be written on the photo)
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Shares of the French software giant Dassault Systems It fell as much as 21% in early trading Wednesday, putting the stock on track for its worst trading day ever.
As of 9.30am in London, Paris-listed shares were trading around 18% lower, recouping deeper losses after trading in the stock was briefly suspended at the open.
Dassault Systemes share price
The announcement comes after the company released fourth-quarter earnings on Wednesday morning that showed revenue from software fell 5% in the final three months of last year.
Total revenue for the full year was weaker than expected at 6.24 billion euros ($7.43 billion), and software revenue grew only marginally at 5.64 billion euros.
Analysts expected total revenue to reach 6.3 billion euros, according to LSEG data.
The company also forecast revenue growth in the range of 3% to 5% for 2026.
Dassault Systèmes will “lead the Industrial AI transformation” through industrial AI offering 3D UNIV+RSES, CEO Pascal Daloz said in a statement alongside the results.
“This is not a short-term goal. It is a long-term commitment to redefine how industries innovate, operate and compete,” he said. “In 2025 and 2026, we are focused on disciplined execution, aligning resources around our strategic priorities to deliver measurable, industry-defining impact.”
‘SaaS apocalypse’
Software companies were on the stage AI fears are at the center of markets, as Anthropic’s new AI tools triggered a sell-off in software-as-a-service and data provider shares last week. During the week, Dassault Systèmes shares lost more than 4% of their value.
Dassault Systèmes’ sharp decline on Wednesday is the latest example of the so-called “SaaS apocalypse” trade, said Aoifinn Devitt, senior investment adviser at Moneta.
“There’s real concern right now about some of the winners who led the charge last year,” Devitt told CNBC’s “Squawk Box Europe.”
The earnings report was a “weak result and weak guidance” for the company, analysts at UBS said in a note Wednesday.
“[Dassault] “They talk about ‘aligning the organization to focus on execution,’ they said. “After setting a target of at least 7% growth per year from 2024-29, the guidance means: [the company] “It now needs to grow 8.2-8.9% in 2027-29.”
— CNBC’s Hugh Leask contributed to this article.
