Good afternoon. Thank you for standing by, and welcome to the Dassault Systèmes 2021 Q1 Earnings Investors Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session, during which, if you would like to ask a question, please press star one on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance at any point, please press star zero. I would now like to hand the conference over to your first speaker today, François Bordonado. Please go ahead. Thank you, Shanice. Thank you for joining us on our first quarter earnings conference call with Bernard Charlès, Vice Chairman and CEO, and Pascal Daloz, Chief Operating Officer and CFO. 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 2020 registration document. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call. I would like now to introduce Bernard Charlès. Thank you for joining, and good morning and good afternoon to all of you. Before moving to my formal presentation, I would like to share a few words on the COVID-19 health crisis. If a number of countries are somewhat in the post-COVID-19 situation, this is not the case everywhere, especially in India, where we are worried about our colleagues, clients, and partners. I offer them our most sincere sympathies and thoughts. Moving to the presentation, let me share some observations. We are in a very profound period in human history. The entire world has now experienced lockdowns. We've had restrictions affecting normal family, work, leisure, and social activities for more than one year. For some, there has been human tragedy resulting directly and indirectly from the pandemic. The health crisis has forced companies, industries, and governments to adjust to these new circumstances. On each of us, individually, and acting together, we can have a positive impact. With the real world held in suspension to some degree, we have to turn more the virtual to help the real world be improved. Dassault Systèmes has resonated and has a big play in this area. This time frame, on shared experience, have brought a new perspective on the future. What does it mean? We are entering a new accelerated period of innovation. I'm not alone in thinking this. It is very clear from discussions with our top clients and partners that industries are entering a new cycle of innovation driven by sustainability and truly characterized by a preoccupation on a human-centric approach. Most companies want to move faster. Change is going to happen on a new and remarkable timetable. Further, innovation has a much broader definition. We speak about new products, new use, and new experiences, and less impact on the planet. Science-based innovation, modeling and simulation, coupled with real-world evidence, the data, is game-changer. This accelerated pace of innovation is required in the three sectors of the global economy we are addressing. Manufacturing, life science, and healthcare, as well as infrastructure and cities, can only be achieved by continued platformization, virtualization of the industry. With our 3DEXPERIENCE platform, coupling, modeling, simulation, and extensive data science capabilities, we are very well positioned to help customers reset their value chain, thanks to a wide platform adoption within their ecosystem. Moving briefly to the first quarter, we delivered a very solid start on 2021, with results underscoring our strategic positioning. Our software revenue increased 10%, EPS grew 20%, and recurring software revenue represented 81% of total revenue. The 2021 Q1 results demonstrate the momentum and strong growth outlook for life sciences. It begins with Medidata platform performance, the life sciences industry more broadly, and with the life sciences global sales organization we established this past quarter. In mainstream innovation, we had a strong Q1 performance with our largest brands, SOLIDWORKS and Centric PLM, great results. In February, our 3DEXPERIENCE World event for SOLIDWORKS global community was held, with the focus 100% on the future, which is now the exploitation of the 3DEXPERIENCE platform through the new portfolio that we call 3DEXPERIENCE Works. We are seeing positive momentum, especially in the simulation domain. All these, of course, on the cloud. Customer engagements confirm the critical value of the 3DEXPERIENCE platform on industry solutions, clearly to provide an avenue for desktop users to go cloud. Looking at the financial perspective for 2021, we are confirming our revenue objectives on upgrading our EPS growth objectives to 12%-14% or 17%-18% at constant currency. Now, let me move to some updates on our business. Addressing industries within three sectors of the economy, our objective is to be, as I said, a game changer, providing new experiences, new value networks, and new ways of working, the workforce of the future. For example, in life sciences, we have spoken about the shift to a human-centric approach with what we call patient-centric innovation. When companies in the industry use the virtual world to help and improve real-world patient experiences, the results are improved outcomes. Continuous monitoring with devices, sending information, virtual surgeries, next-generation precision medicines are such examples and great examples. We bring significant assets to this industry, where we are number one in the world. We estimate that 50% of drugs on medical devices are designed with our solutions. In clinical trial, for example, more than 50% of new clinical trials use our Dassault Systèmes Medidata solutions. Our presentation details many more metrics that Pascal will cover. We are mission-critical to addressing these key challenges, creating precision medicine platforms, deploying digital and AI in developing therapeutics. Three, helping the healthcare industry deliver value-based care. Let me share two examples. BioNTech, well-known now, a beautiful European company, utilizing their mRNA technology platform to develop rapidly COVID-19 vaccine, has now adopted the 3DEXPERIENCE platform on our ONE Lab industry solution from BIOVIA, with modeling and simulation capabilities to analyze the different COVID-19 variants, a key preoccupation right now, and potential new ones that could arise. BioNTech has been a large client of Medidata's clinical trials software. Another example is Karyopharm, developing novel therapeutics in oncology, has extended its multi-year agreement with Medidata. A fast-growing company, we are supporting them selling one product in 2014 to now 10 solutions in 2021. Similarly, as they have extended the number of trials they do. Among the new products are AI, artificial intelligence, for machine learning. On machine learning, by the way. Moving to the manufacturing industry, as many of you know, we are the world leader in the automotive industry with global car manufacturer on supply chain. We have expanded our market presence, working with virtually all of the new EV startups, strengthening our position in electrical. Now we continue again with large OEMs standardizing with us as they advance their timelines on their next-generation vehicles portfolio. Moreover, we are doing the same with the new players becoming part of the EV value network. This is happening because our portfolio well matches the needs of this industry. Data centric is a key element of the 3DEXPERIENCE platform. In that regard, we are pleased to share that Jaguar Land Rover is expanding its use of the 3DEXPERIENCE platform. We will be supporting the global strategy, Reimagine, under the leadership of their CEO, Thierry Bolloré. Our industry solutions will help them reach critical objectives, including a net zero carbon business by 2039, a Jaguar all-electric luxury brand from 2025, and the first all-electric Land Rover model, as announced by them in 2024. Clean hydrogen fuel cell power development and collaboration with the value network. Our work is around several axes, creating a unique experience for its customers, advancing its electrification initiatives, improving efficiency. With respect to the value network for electrical cars, recomposing the actors. In order to achieve these objectives, JLR has selected several industry solution experience, notably data centric role, representing half of the new investment, underscoring our strengths in the critical area of investment by companies on the 3DEXPERIENCE platform for data science and data analytics as an enterprise platform for all type of function in the company. Turning to the world of retailing, Gautier turned to our HomeByMe for Home Retailers 3D planning cloud solutions. This helps Gautier from two important perspective. First, the nature of the client experience, providing a truly unmatched experience for customers. Second, strengthening the client relationship by changing the nature to an advisory role for Gautier. "We will let you imagine and create your dream home environment," is their statement. By the way, I'm also extremely pleased with the strong dynamic of growth with Centric PLM, in this area. In infrastructure and cities, we are pleased to announce the extension of our strategic partnership with Bouygues Construction. The success of our current project with Bouygues Construction calls for an accelerated and an extended cooperation by bringing the virtual twin experience to the construction site for this industry. We are introducing new sustainable experiences never seen before, all on the cloud, all mobile-enabled, enabling all actors of the value chain, from site workers to suppliers, to collaborate and innovate. The initial target number of users within Bouygues Construction is about 15,000 users, and more so with the ecosystem, of course. With respect to the cloud, with our two diversification sectors, we prioritize cloud. For manufacturing, we have a full cloud portfolio, but we'll go at the pace of our clients, including specific solutions like private cloud. I would like to draw your attention to some of our initiatives in sustainability. We have become a signatory of the UN Global Compact, and we are a founding member of the European Green Digital Coalition. From the on-prem perspective, we have initiated plans to have 2/3 of our new license from products providing a sustainability impact. Last quarter, we were included in the Global Clean200, the largest 200 publicly traded companies ranked by green revenue. One example of our work with BMW as a catalyst for sustainable innovation is a good illustration of that. They are expanding their use of SIMULIA for electric vehicles on hybrid systems. An important area of simulation is how to design the most efficient energy management system while taking into account range requirements and user comfort. Thanks to the 90%-95% of the analysis being completed using virtual twin of simulation, this reduces significantly the number of physical prototypes by BMW. With that, let me pass the floor to Pascal. Thank you, Bernard. Thank you to all of you for joining us today. Let's start with the financial performance first. Total revenue increased 8% at the high end of our 6%-8% range, at EUR 1.174 billion. Software revenue growth of 10% came in above our range of 7%-9%. From a profitability standpoint, lower than planned expenses, combined with the high end of the guidance for the revenue, led to a significant outperformance at the operating margin and EPS level. In fact, our operating margin came in at 33.9% versus the midpoint of our guidance of 30.7%. In fact, the revenue result contribute to 70 basis points of the upside and the lower operating expenses to 250 basis points. Finally, EPS came in at EUR 1.14, growth of 3% versus our guidance of 3%-8%. Let's zoom on the component of the revenue. First, license and other software increased 25% versus our guide of 0% - 5%. About five point of this growth came from a CapEx preference coming from our customers, of course, and the other contributions to the upside came from results in strong performance in China and SOLIDWORKS, as well as large 3DEXPERIENCE transaction, especially in transportation and mobility. Subscription and support revenue increased 7% versus our guide to 8% - 10%. During the quarter, about one point of the estimated recurring revenue growth outlook moved to a CapEx purchase. However, subscription revenue increased double digits, and the churn is really consistent with what we have seen last year and early this year. With respect to services, we were able to improve our gross margin to 12.1% from 2.9% last year, thanks to all the work we completed over the last 12 months. Despite a revenue decrease of 9% compared to our range of -2% to +2% due to the extended lockdown, in fact, in many countries. Moving to a regional software review. In Asia, first, software revenue increased 10% in Q1. China was by far the best performing geo, up sharply, reflecting strong growth across all the engagement models. It had the highest growth both for software licenses as well as for the recurring software revenue. Korea saw the beginning of a recovery, and we had key wins for 3DEXPERIENCE platform in both China and Korea. In Japan, we also saw a strong performance in our indirect engagement model, and all our major 3DEXPERIENCE engagements are proceeding as planned, such as Toyota. Today, we are equipping 18,000 people, and the 3DEXPERIENCE platform has been deployed to 14 programs. In India, despite the very difficult situations and environments today, we saw some year-over-year improvement, and for that, I should thank the team who did it. In Europe, we are still seeing a mixed environment with software revenue up 6% in total. Northern and Southern Europe were the best performing geo, and improved activity in transportation and mobility, both with large mobility players as well as the automotive players. In the Americas, software revenue increased 14%, with a strong growth in life sciences and in transportation and mobility. Now let's move to a view of our software revenue by product line. In fact, we continue to increase the reach and the balance. If you look at what we did over the last few years, during the first quarter, the mainstream innovation represent 23% of the software revenue. Life sciences was 20%. Within the industrial innovations, CATIA accounts for about one-quarter of our total software, with complementary brands adding to 32%. In industrial innovation, we saw strong momentum with these brands, notably SIMULIA, ENOVIA, DELMIA, and NETVIBES. While CATIA 3DEXPERIENCE software increased 12%, overall activity led to a decrease of 1% for CATIA. In total, the software revenue increased 4% in industrial innovations. For life sciences software revenue increased 16%. We are seeing strong momentum led by Medidata, where software revenue increased 20% in Q1, driven by Rave in clinical data management, Patient Cloud, and Acorn AI. Medidata had also a solid operating margin performance and a strong cash flow from operations this quarter. BIOVIA is also shifting to subscriptions with its clients and to the cloud. One example is Abzena, a contract development and manufacturing organization involved in the manufacturing of biological drugs including COVID-19-related agents. They had adopted the 3DEXPERIENCE platform with our License to Cure for biopharma and our ONE Lab solutions on the cloud. This is an interesting case because we see more and more traction on the manufacturing side in this industry. Again, our ONE Lab solution is really suitable for this market. Moving to mainstream innovation software revenue, increased by 20% in Q1 on a strong growth for SOLIDWORKS and Centric PLM. SOLIDWORKS software revenue grew 18% in Q1 on both licensed software and recurring revenue strength. Software was up double digits in all the three regions. We saw a record attendance at our virtual 3DEXPERIENCE World events. Our partners are also seeing good traction with the 3DEXPERIENCE Works portfolio, with role leveraging our strengths in collaboration and simulations especially. Moving to Centric PLM, software and services revenue were up sharply in Q1, sustaining a recovery begun in Q4 with record bookings and a strong new customer acquisitions, at least multiplied by three. It shows an improvement in the key geographic markets including Asia, with a notable expansion in China. Finally, in addition to its leading market position in home and lifestyle with global brands in fashion, it's seeing early attractions in diversification and retail and food and beverage. To be noticed that the acquisition of Centric PLM will be completed at the end of Q2. I wanted to share one of our SOLIDWORKS customer, KYE Plastic, who has adopted DELMIAWorks. This engagement, I think, illustrates very well our ability to address a large scope of our client's needs. This is what we call value up. In this example, KYE Plastic is able to quickly scale and manage multiple production sites at the same time. It's important because it's part of the COVID-19 swab testing products. Given the time constraint, having this ability to deploy on the multiple sites in a very short period of time, it's a key advantage. Let's cover some strategic trends in the industry sectors. While we have covered a number of our industry indirectly, let me share some of the Q1 performance highlights to give you a sense of activity by industry as we start the year. Beginning with manufacturing industry, we had a double-digit growth revenue in transportation and mobility, marine and offshore, and home and lifestyle. Looking at transportation and mobility, this growth came from the strengths across a number of domains, including simulation as well as data analytics and artificial intelligence with NETVIBES. We are starting to see a recovery with the automotive suppliers and some acceleration of investment by OEMs as they advance their mobility initiatives. Centric PLM drove the double-digit growth in home and lifestyle, of course. In the life science and healthcare sectors, life sciences software revenue grew 16%, benefiting from growth in life science product line as well as from increased customer activity for SOLIDWORKS in the medical devices company, as well as SIMULIA. This is also important because you remember when we completed the acquisition of Medidata, I told you that we have a lot of levers we could expand, the footprints, specifically in the medical devices, and now you start to see the benefit of this. We are also seeing an increased customer sales engagement in manufacturing with life sciences company. In the infrastructure and city sectors, constructions increased double digits led by our activity in China this past quarter. How are we progressing against our growth objectives? You remember at our capital market day in Q4 last year, we discussed our growth goals and strategy to reach them. Regarding 3DEXPERIENCE platform adoptions, we have two growth axes. First one, so-called value up. Increasing the value we bring to our existing customers, our large install base, through a broader adoption of all the domain of expertise. The second, so-called value wide, is to extend 3DEXPERIENCE to new customers, including the mainstream market adoptions. Both value up and value wide will bring 3DEXPERIENCE to represent about 2/3 of our software revenue by 2025. In addition to this, you remember that the cloud adoption is an opportunity for us to bring new category of users and new category of usages, not to substitute our existing footprint. Now, let me recap some key metrics on 3DEXPERIENCE and cloud progressions. First of all, on 3DEXPERIENCE, our non-IFRS software revenue increased 18%, 1/8, with licenses and other software revenue up sharply 57%, which is almost twice the growth of the license overall. The largest license deal in Q1 were more heavily weighted toward Asia and especially China. Cloud, looking at our cloud contribution, it represent about 18.5% of the total software, a two-point increase from one year ago. Based upon our end market sectors, we set the goal last year to reach EUR 2 billion in cloud software revenue by 2025, which would represent an estimated 1/3 of our total software, compared to 17% in 2020. Our cloud strategy is set to meet our clients wherever they are in the context of their industry. Our strategy is not to have one size fits all, but a cloud path for all. For that, we have three different paths. The native one, people, especially for the newcomers, they start from scratch and they start immediately on the cloud. An extended one on the edge, when you have a larger on-premise install base and you want to complement with additional set of solutions using the cloud advantages for collaborations, for simulations, to connect also with the value network. That's usually the type of situation we see this path. The last one, the connected, when you have on-premise software solutions connected to our 3DEXPERIENCE platform on the cloud for collaboration specifically, and big data as well, and this is what we call the POWER'BY strategy. In term of capability with Release R2021x, 95% of our portfolio on-premise capability are available as cloud solutions. With the one coming this year, we will have more solutions on the cloud than we have on-premise. Moving to cash flow. We had a very strong Q1, up 40% to EUR 642 million. Net income and non-cash items grew 18%, with working capital evolutions, in particular, non-operating working capital up sharply. Our net financial debt position at the end of March was EUR 1.5 billion, which is very consistent with the de-leverage plan we communicated to you, and we are still targeting to be at one times EBITDA at the end of the year. Turning now to our 2021 financial objectives. The updates following Q1 are straightforward, taking into account the OpEx upside and maintaining our revenue at constant currency. We are first increasing our non-IFRS diluted EPS objective to EUR 4.24- EUR 4.28, leading to an expected growth of about 12%-14% or about 17%-18% in constant currency, capturing the earning upside from Q1. At the midpoint of the range, this represent an upgrade of EUR 0.14, comprised of EUR 0.02 contributions from the revenue and EUR 0.12 from lower operating expenses, coming from Q1 obviously, and also Q2 adjustment, because we do not expect to have the deconfinement in all the country in Q2, and we will still have some restriction in term of travel and marketing spending. Similarly, we increase the operating margin 90 basis points to about 31.7% at the midpoint from 30.8%. We see a higher contribution mix from software revenue as Q1 lockdowns show on-site services work on one hand, as well as the expense timing ramp up around travel hires on the other side. This is important because one of the explanation of the good performance on the operating margin is coming from the fact that we had an attrition starting again. We were not in a position to hire sufficiently to compensate, to fit to our plan. Nevertheless, starting Q2, we will accelerate in order to recover. I'm sure you notice that we are still increasing the number of people we have in research and development, which is really the core of our investment. We are reconfirming our revenue objective range of 9%-10% in constant currency. Inside this, we shift up by one point of growth our previous software range, bringing it to 10%-11% growth. For services, we shift down, bringing the services growth range to 4%-6% growth, removing about EUR 21 million. The top line growth this year is essentially all organic, with the growth levels aligned with our mid-term plan we share at the Capital Markets Day last year. With respect to Q2, you will find our guidance in the earnings press release and presentations. To summarize, we had a solid start to 2021 in financial terms. Looking at the growth of our largest industry, the strength in two of the three product lines and improving dynamic in some of our largest geos is really giving confidence for the year. We look forward to speaking with many of you in the coming days and weeks for virtual roadshow and conferences. Now, I think Bernard and I would like now to take and answer your questions. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. If you want to withdraw that question, it's the pound or hash key. Once again, to ask a question, it's star one on your telephone. Your first question comes from the line of James Goodman, calling from Barclays. Please go ahead. Your line is open. Good afternoon. Thank you very much for taking my questions. Firstly on Medidata, another outstanding quarter, + 20%, same as Q4. Just wanted to come back to the guidance for the full year. I think last time we spoke, you guided to 14% this year for Medidata. Wondered where your expectation was now for the business. Just secondly on M&A, I think you've made some comments earlier this year about stepping back perhaps towards another large deal. Clearly, Medidata has been a big success. You're probably down to hardly any debt end of next year. Wondered if you could make a comment there around your M&A strategy. Finally, just really a sort of clarification actually on topic that you discussed this morning, and again, just now in terms of this preference for CapEx versus recurring that you're seeing in your customer base. Is that specific clients within auto which are taking license rather than recurring deals? Are you talking more to sort of coincidentally you're seeing more demand for license in some industries and slightly less for recurring in others? Thank you very much. Pascal? You want me to start first with the Medidata guidance? You notice that I had EUR 20 million software revenue in the guidance. I think I'm already capitalizing on the good momentum with Medidata. Now, you have to take into account that you are right. We had a good performance in Q4. We continue to have a good performance in Q1, the base will not help on the second half of the year. That's the reason why I would say 15% is probably the right way to land. M&A, I think there are so many things we need to do. We'll discuss that later. I think there is no comment at this point in time. CapEx, Pascal? I would say it's maybe a coincidence. That's basically the customer we have engaged this quarter are the one having a preference for the CapEx. I do not see a strong pattern except that last year it was almost the opposite. The vast majority of the people willing to invest just to be secure, the vast majority of them, they have a preference for the subscriptions because it was a way to go without having too much commitment. The fact that they have been selective in their investment, they have rethink their strategy. I think for some of them, makes more sense to be CapEx-based, and this is what we are seeing. To a certain extent, we will have much more rebalance compared to last year. That's my only message. That clarifies a lot. Thank you. Thank you. Thank you for coming. Thank you. Your next question comes from the line of Jay Vleeschhouwer calling from Griffin Securities. Please go ahead, your line's open. Yeah. Thank you. Hello, Bernard. Hello, Pascal. I think you will be both pleased to know I have only five or six questions this morning. Pascal, you alluded to your headcounts and your hiring. Yeah A year ago, you made the commitment to keep DS's headcount flat in 2020, which you did. For a number of months, Dassault had the smallest number of openings within your peer group. All of your competitors had also cut for the most part, but you had fewer than they. Now, as it turns out, you have the most number of openings within your peer group, so a pretty steep recovery there, including in sales. The question is, how do you think about your additional headcount vis-a-vis your margin assumptions? If you were to add every one of your current openings, can you absorb that within your current margin outlook? Yeah. The way we have developed it, Jay, is relatively simple. If you do the math in term of attrition, we are talking about a little bit less than 500 people per quarter. It was almost half last year. At the same time, we are hiring in average between 600, 700 people. We need to obviously improve the situations, and our goal is to hire much more close to 800 people per quarter. If you do the reverse engineering of the operating margin, you will find that approximately, that's the order of magnitude of the number of people we are talking about. Right. Okay. Thank you. Secondly, with respect to cloud, thank you for sharing the percentage of revenue. The question has to do with your cloud capacity. When we spoke about this last summer, you committed to your vertically integrated approach to 3DEXPERIENCE Cloud. My question is, how has your cloud services provisioning or capacity evolved over the last 6-12 months? How much larger is your capacity, and how do you see that capacity evolving over the next one or two years to sustain the growth you foresee in cloud services revenue? First of all, the strategy we have adopted is working. It's not a limiting factor right now. As you know, we have a balance between an external operator on our own cloud. We just opened our new cloud infrastructure in Japan. We probably will have, different kind of solutions for China, but, things are also progressing to be a local operator in China for the Chinese customers. I think the second remark I would do on this is, at this point in time, we are quite agile in setting up a dedicated center. I think it's a fast path process, and we continue to keep the flexibility of elasticity, of using a commercial cloud in case a customer needs our solution and we would not be ready to provision them on our own cloud, we can start with a commercial cloud and then migrate to our own transparently without even them noticing it. It's a highly flexible environment. We master it well. I think for cybersecurity, we think we have an interesting case here, as well as for private cloud. More to be seen as the customer demand evolve with the specificity that we have with our own customers, because they do very sensitive things with our system, huh? On SOLIDWORKS and relatedly 3DEXPERIENCE Works, first SOLIDWORKS had what appeared to be its first up quarter in licenses in nine quarters. That was consistent with what we had expected, and you'll have easy comps for the rest of this year. Looking past 2021, what do you think is the sustainable growth rate for SOLIDWORKS new licenses? Relatedly on 3DEXPERIENCE Works, my understanding is that last year, which was just a few months of availability, 3DEXPERIENCE Works or SOLIDWORKS cloud revenues were less than EUR 10 million. When do you think this might become a EUR 100 million or more business? Could that be as soon as this year, or do you think that's more likely next year or beyond? The dynamic for SOLIDWORKS, clearly, double-digit growth is sustainable. There is no doubt about it. The proof of what I'm seeing, if you look at the performance for this quarter, only in volume, you have a double-digit growth in term of units. Not taking into account that the fact that with the Works family, we are also increasing the value. Yeah. The dynamic for the 3DEXPERIENCE Works family is to supplement desktop with cloud only. SIMULIA is cloud only. Project management is cloud only. The future of DELMIAWorks is cloud only. As we expand the portfolio around SOLIDWORKS with cloud only, we can eat lean. We provide two great levers of opportunities for clients. At first, a true collaborative native cloud environment, fully mobile through web browser, which we think is high performance. On the keeping for the vivid community of desktop users, what they like, taking advantage of the cloud for things which are complex to do on a desktop, like SIMULIA. Many of them are now migrating from legacy competitor solutions to our SIMULIA solution because it's extremely well integrated. That has been a good factor that I'm sure Gian Paolo mentioned that at the 3DEXPERIENCE World. We don't see this slowing down, but it's the other way around. All future portfolio is cloud. Okay. Lastly, Bernard, on the fourth quarter call, you made some very interesting comments with regard to your internal or cross-segment initiatives, particularly as it relates to life sciences with DELMIA, for example, or manufacturing, and SIMULIA. Do you have an update on that particular cross-segment work that's going on? Are there any other examples you can give, not necessarily related only to life sciences, where you're coordinating internally among your various segments? Clearly, it's happening on life sciences for manufacturing systems. We are pleased with that. It's happening in construction, with the WIC showcase, which is cloud-only, mobile-only, zero-code development. It's all parameterization on what we call business methods on business experience on top of the platform. We do a construction lean construction. The lean construction is a derivative of a business experience from a lean manufacturing and extremely successful for construction site. We have more and more of those good examples. Another example for construction project setup, when you have 40, 60 suppliers all connected online on the platform in a native mode, I think this is unprecedented in this industry because even the current player don't offer native cloud at this scale. That's why WIC said that they will easily reach 15,000 users in a short time period. By the way, we took the opportunity to provide a DraftSight based on the 3DEXPERIENCE platform to replace AutoCAD LT, which is quite interesting. Why that? Not because only of DraftSight, but because the platform phenomenon. Everything is connected on a consistent data environment for the working people on the field. I think this is a significant illustration. Analytics, same thing. When you do cost analytics in different sectors, it can be shared across both sector of the economy as well as industries. When you do supply management, same thing. It's only about doing a business experience that speaks the language of the people, but the infrastructure on the services for data science and data analytics are the same. Thank you very much. Welcome. Welcome, Jay. Thank you. Your next question comes from the line of Jason Celino calling from KeyBanc Capital Markets. Please go ahead. Your line is open. Hello. Strength in SIMULIA. This is a segment we don't hear from much, but is the strength more on the SIMULIA Works side, or is it more broad-based? Secondly, is the strength in transportation and mobility, or is it also in other sectors? On the SIMULIA work, if I understand well the question. A lot of SOLIDWORKS customers have been using legacy system on their PCs, basically, on their desktop. It's complex, the number of users has not been what it should be, the number of simulation users. They are discovering cloud-based simulation. They love it. I think Gian Paolo presented it with Manish very well at the 3DEXPERIENCE World online a few weeks ago. We believe that for the type of SOLIDWORKS community cloud simulation as well as manufacturing, by the way, with DELMIAWorks, as well as project management, all this will become cloud native, and that people are replacing. We have, I think, 14 partners today who have been selling another competitor solutions that I will not name, and they have decided to stop to sell this competitor solution and to really replace it by the native cloud solution. The dynamic is a positive dynamic, and I think this is a high value for them in terms of simplicity, adoption, and ease of use. The second part of your question, was it related to T&M? Pascal, do you want to make a- It was. Sure I guess the first part of my question was more about the prepared remarks for SIMULIA. It was mentioned that it was strong in the quarter. Was it for the standalone business or was the comment more related to the 3DEXPERIENCE Works, part of it? The SIMULIA growth is coming from both sides. We still have the larger Abaqus install base. We have consuming additional capacity. Also we have more and more customers using our integrated solution in terms of simulations, because there is a lot of value to have all those applications, those roles being integrated with the platform, because it's a way to do multi-physics, multi-scale simulation, which is difficult to do if you do not have this. Transportation and mobility, aerospace and defense, industrial equipments, life sciences as well. This is where we are seeing the traction, and high-tech. Med tech. Med tech also. It's really relatively broad where for SIMULIA, where the growth was coming from. Great. My second question for Pascal. Last quarter you outlined how the recovery might be more gradual or at least that's what you were building in to your guidance. The license performance for Q1 and the guidance for Q2 suggests it might be more of a pronounced bounce back. Any update to your framework here? No. You notice that I didn't change the revenue target, even if the mix has more software in it. Why so? Because there is something we were not expecting, frankly speaking. Usually, the last transaction are happening in Q4. We saw big transaction happening in Q1, especially in transportation and mobility. I will not say it's unusual, but it's rare. When I look at the pipeline, the pipeline didn't grow significantly compared to last time we spoke. That's the reason why I think we are doing some pull forward, which is good because we are securing, to a certain extent, the guidance. We are de-risking the guidance for the full year. At this stage, we are still in Q1. I will not look forward to improve the revenue target, to be clear. Okay. Excellent. No, that is actually quite helpful. Thank you. You're welcome. Thank you. Your next question comes from the line of Michael Briest, calling from UBS. Please go ahead. Your line is open. Thanks. Good afternoon. A couple of follow-ups from me. Just on the cost side of things, Pascal, obviously very good performance in Q1 and particularly Q2, partly because of the hiring situation. How should we think about margin progression next year and out to 2024? Are the savings this year sustainable or does it sort of dampen the level of margin expansion we should get next year? Just in terms of the recurring revenues, helpful to get that 17% for 2020 of cloud revenues. I think that means it's 21% of recurring revenues. What's the breakdown of the rest of recurring between maintenance and subscription, so we can get a feel for what's driving each of those? Okay. Let's start with the first question on the margin, Michael. No, I think, we took some actions to contain the spending last year because we were facing the pandemic. Our model is requesting to invest, especially if you look at the broad scope of things we do. There is no reason for us to push the margin at a higher level. Clearly, next year, you should consider that we will come back to the nominal margin we used to have. We still have some improvement expecting from Medidata, because you know we have this plan to gain almost two points, EBIT margin every year over the next additional two years. That's really what is going to drive the margin. Related to the recurring revenue, it's not because I want to hide something. I do not want to give you the precise split. It's because you guys, you try to sometimes do complex calculations. At the end, what is the most important, what is the level of recurring revenue we have, whatever is coming from the maintenance or the subscriptions. If it is really recurrent, you will have almost the same level next year, and you could expect to have some growth. Nevertheless, what I could say to you is, in the past, we used to have 2/3 coming from the maintenance and support and 1/3 coming from subscriptions. Since the acquisitions of Medidata, we are much more close to 60/40. Okay. Thank you. subscriptions. Thank you. Thank you. That's all. We'll take the last question. Okay, your last question comes from the line of Laurent Daure, calling from Kepler Cheuvreux. Please go ahead. Your line is open. Yes, thank you. Good afternoon. Three short questions from me. The first is on the life science business. I understand Medidata is still driving the growth, the other activity seems to be heading to a better trend. Do you expect, over the medium term, to match the Medidata growth from the other healthcare activity? That's the first one. The second one is just a clarification. The services revenue of the first quarter, do they just reflect the low licenses of last year, do you still have issues to build like you had last year with Boeing? My final question is on the second half margins, which implicitly are calling to be down year-on-year. I was just wondering what kind of hypothesis you have built in the model on top of the headcount addition. Do you expect travel already to come back, marketing to be spent more aggressively? Any granularity on that would be useful. Thank you. Let's start with your first questions. Are we willing to have all the pipeline we have in life sciences converging with the performance of Medidata? The answer is yes. You have to take into account it's a different model for BIOVIA. The beauty with Medidata is really related to the number of clinical trials. For BIOVIA, it's a little bit different. It's really related to the number of new research projects they are doing, which is to a certain extent not having the same dynamicity. Nevertheless, what we are doing right now, we are, again, migrating as much as we can BIOVIA to subscriptions and to the cloud because we want to have a consistent way to engage. We want to have, to a certain extent, one contractual framework with all the customers we have. We could expect that the two will align because we will maybe not split, on the long run, the revenue between Medidata and BIOVIA. It will be through the solution and the solutions combining the two. That's what I can say. On the services side, thank you for the question, Laurent, because you are right, I should have been probably more explicit about this. Definitively, the free services we did last year for some of our largest clients is not something we are doing in 2021, for sure. The EUR 10 million gap is only coming from the fact that some of our services activities cannot be completed because it has to be done on site. Just because we still have customers not opening their site, it's not something we can do. That's as simple as that. As you may know, when you miss a services activity, it's difficult to recover over the year because we have a limited capacity. Nevertheless, I think you notice that we did great to re-profile our services organization in order to deliver the margin and to have a much better utilization rate. The fact that we have been able to move from 3% - 12% margin, it's basically the proof of what I'm saying. Related to the H2 margin, yes, you are right. You could assume that the margin will be down compared to last year, but I just want to remind you that last year, we almost cut all the spending. We freed the hiring. The growth will come from on both sides. As I was explaining previously, I will accelerate the hiring, because we need to reinforce some of the organizations in order to have the muscle to continue to basically to do what we do, and especially to prepare in a proper way 2022. The second thing is the more countries are deconfining, the more the travel will start again, and also the marketing and events will start again. That's really what is factored into the guidance for H2. Okay, great. Very clear. Thank you, Pascal. Thank you, Laurent. With that, thank you very much for participating to this call. We are always here for you. Don't hesitate to call us for any further question. Thank you very much again, and hope to talk to you soon. Have a great day. Thank you. That concludes today's conference call. Thank you for participating. You may all disconnect.