Good day, thank you for standing by. Welcome to the Dassault Systèmes 2023 Q1 earnings presentation call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Beatrix Martinez. Please go ahead. Thank you, AD. Thank you for joining us on our first quarter 2023 earnings conference call with Bernard Charlès, Chairman of the Board and Chief Executive Officer, Pascal Daloz, Deputy Chief Executive Officer and Chief Operating Officer, and Rouven Bergmann, Chief Financial Officer. 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 factor section of our 2022 universal registration document. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call. I would now like to introduce Bernard Charlès. Thank you, Beatrix. Good morning and good afternoon, everyone. Thank you for joining us today. It's always a pleasure to be with you. It was a solid start to the year. While total revenue was at 7%, recurring revenue increased 10%, driven by strong subscription revenue growth of 14%. We delivered on our profitability objectives with an operating margin of 31%, while at the same time continued to invest in our future growth, increasing head count by 8%. We generated record operating cash flow up 24%. We are now fully de-leveraged, nearly one year ahead of schedule. Looking at the remainder of the year, we are on track to achieve our EPS objective of EUR 1.20. As you can see, we are delivering on our financial commitment. Pascal and Rouven will discuss our performance in more detail in a moment. Just as important, I like to talk about advancing our purpose on how we continue to create sustainable value for all stakeholders. For 40 years, we have been empowering clients to overcome challenges, imagine new frontiers, and achieve their ambition. This is all possible by revealing the power of the virtual world to improve the real one. Our long-term relationship with customers, in many cases spanning decades, are a testament of our deep commitment to clients. Our legacy of success together is the outcome of this cooperation, trust, and game-changing innovation. As a scientific company, we are driven to anticipate the future needs of our customers and innovate well in advance. Each decade, we have disrupted the status quo. The virtual twin of the Boeing 777 was one of them. They say we couldn't do it. It was, and it is now, a world standard for the industry. The virtual twin of Toyota's production system is now a world standard, too. Platforming the industry is becoming a world standard. The virtual twin of human body will become a world standard. Life science are the next inspiration for sustainable innovation. In fact, we are just getting started laying the foundation of our next horizon, 2040. We are enabling clients to pioneer a profound metamorphosis across all sectors of the economy. Our heritage as a purpose-driven company will continue to guide our great ambition to foster a human-centric and truly sustainable economy. We will have more to share about this next horizon. I'm looking forward to see you at the Capital Markets Day in June, this coming June. We spoke about the future. Let's come back to the present. Recently, AI has captured the attention of the world. Today, with science-based virtual twin experiences, we are already elevating our customers' IP with machine learning on generative design, not only for large enterprises, but also for the mainstream innovators.Early this year, we held our 3DEXPERIENCE World event, bringing together a community of over 7 million designers, entrepreneurs, and students. We introduced a whole new approach to the future of design and manufacturing. It was inspiring to see so many startups using our technologies for sustainability. To remove CO2 from the atmosphere, clean our ocean, and power electric vehicles with recycled batteries. This is all made possible by cloud-based 3DEXPERIENCE. With our entire portfolio available on the cloud, we make the power of our technologies available to everyone, anywhere, anytime. We had a good dynamic with new logos this quarter. Customers from mainstream disruptors to established players across geos as well as industries are adopting our product on solutions, by the way, on 3DEXPERIENCE Cloud to leverage data science collaboration and capture knowledge on know-how. We are further supporting cloud with our 3DS OUTSCALE brand. It's a unified cyber governance to provide experience as a service. We offer three levels of trusted cloud, dedicated, private, and international. We are operating at the highest standards of global security. We have indeed invested significantly to democratize innovation. Now, I want to focus on the side of the purpose. The experience economy and the circular economy are converging. Customers see reinventing a sustainable economy as both a challenge and an opportunity to differentiate. We empower customers with an holistic approach to innovation on the ability to seamlessly link value creation with value experienced. Design and usage in short to cover the full experience life cycle. Our early adopters demonstrate the value of experience-based product creation and confirm the importance of expanding product lifecycle management to material circularity. In this context, packaging is a critical topic. Customers are turning to Dassault Systèmes to redefine packaging for circularity. We have a good example with PepsiCo. The company is using our technology to reduce raw materials usage and achieve full circularity. We have this as a real case using the virtual twin experience powered by the platform, the 3DEXPERIENCE platform, that offer a unique combination of science, including material science, biology, mechanics, electronics, and chemistry, modeling and simulation, as well as AI-based data science. With increased adoption of our technology, we can imagine a world where packaging never becomes waste. Indeed, this would be a better world for consumers, passions, and citizens. I think it's clear we walk the talk. Now I will hand the floor over to Pascal to continue the discussion. Please go ahead, Pascal. Thank you, Bernard. Hi, everyone. It's great to be with you today. Let's start with your comments related to the customer. It's clear from our conversations with customers that their business environment remain volatile. The reality is an opportunity for us. It's an opportunity to increase the agility and their profitability with real-time analysis of the raw materials and the part substitutions, as well as reshaping the entire value network. This in a context whereby the regulation is also constraining them to do it, which being an example for you in Europe. Now, let's zoom on a few examples for this quarter. Starting with manufacturing industries, in the new mo bility, we are driving the electrification, propelling the industry forward with innovations that can only be achieved with our deep science and platform-based virtual twin experiences. This quarter, we have a good proof point with Ford, a long-time partner. Ford company is transforming to advance the development of its electric and connected vehicles. What do they want to do? They want to achieve the agility of a startup because we are only at the first generation of the electric car. A new battery, new generation of battery will come, and this will have an impact. You need to keep this agility to introduce new things on a regular basis. At the same time, it's a high volume production ramp-up constraint because we are in a volume business. It's not anymore a premium business, it's becoming mainstream. Look what happened with Tesla dropping the prices by 20%. I mean, this is putting a lot of constraint on many, many OEMs to be able to be efficient from a cost standpoint. This is where the 3DEXPERIENCE platform is the arm, if you want, for them to do it. As a result, Ford Motor Company is standardizing all their EV programs on the 3DEXPERIENCE platform. If we step back a little bit and we look at what's happened in the last decades in the EV space you remember we started 10 years ago with a newcomer, today we are also helping the large incumbents to evolve. Look at the numbers. The top 10 EV newcomers, all of them, they are standardized on 3DEXPERIENCE and the Dassault Systèmes technologies. While 72% of the light vehicles were designed and engineered with CATIA, 85 of the electric vehicles are developed with platform. We are penetrating much deeper and faster this industry, taking the benefit of this trend. As a result, 70% of the OEM have already adopted the platform, and I think we are well positioned to benefit from continued EV expansion. I think it is clear that today we are the de facto standard in this industry. Now turning to life sciences. I think the use of the data and AI is becoming mainstream, in fact. You know, there is no one single day where we receive requests to get access to our massive set of data to do trial designs, to do site selections, patient enrollments, and also Synthetic Control Arm. We go a step further because now we are capable to do some kind of synthetic patient, if you want. We have built algorithms with high accuracy in predicting adverse events. That's the trend toward the AI. This quarter, Verastem has adopted a Medidata AI Synthetic Control Arm to support its rare disease oncology trial. This is a unique capability in the market. Not only to accelerate innovation, reduce costs, and mitigate the risk profile of the trial, but also to enable research when the control group is difficult to recruit or retain. This is essential for many of the rare disease to have this capability. Ultimately, I think we are fostering the human-centric approach, ensuring the patients to have access to the most promising treatments. Same thing, if we step back a little bit and we look at the footprint we have been able to establish in life sciences sector, you notice that we publish a press release recently. I don't think that we reach an unprecedented milestone with 30,000 trials and 9 million study participants. I think it's a milestone in a sense, where together with all of our customers and partners, we are transforming the life sciences industry to scale clinical development globally, and this with a continuous flow of innovation over the last 20 years. As a consequence, leveraging this volume of trial, patient and data, Medidata delivers unmatched results in this industry. Keep in mind that in 2022, nearly 75% of the FDA-approved drugs have been developed with Medidata and Dassault Systèmes solutions. I think we are incredibly thankful to support the 9 million trial participants who choose the clinical trial as part of their healthcare journey with us to advance the human health and also the patient diversity. This is just a starting point. I mean, we are just getting started. Now, let's move to infrastructures and cities. Water is a precious resource vital to sustain, obviously, product, nature and life. The overconsumption of the fresh water is one of the greatest threats of the planet's face. You know that in 2025, almost two-third of the world population may face water shortages. If you go on the website, you can read a lot about our act for water and consumptions, whereby Dassault Systèmes is outlining how we are planning to address this challenge. This quarter, I think we are pleased also to announce that Ecolab is leveraging the 3DEXPERIENCE platform to reformulate its product to use less water, and turn enabling its customer across many industry life sciences, transportation and mobility, aerospace, to reduce their global water footprints. Again, we are pleased to support Ecolab's effort and foster our purpose. Now let's move to our operational review, and let's start first with the revenue by geographies. In the Americas, the revenue grew 6%, benefiting from a strong performance in life sciences, high tech and good results in mainstream innovation. We expect to see an acceleration in Americas throughout the year as we execute against our pipeline. In Europe, we are seeing an incredible momentum, with the growth accelerating to 12%. This was driven essentially by a good result in the west and Southern of Europe, also driven by, from an industry standpoint, by transportation and mobility, aerospace and defense. In Asia, the revenue declined by 3%, impacted by China down 8%. The operating environment in China was a little bit more challenging than expected in the first two months of the quarter, we start to see the green shots in March, with business activities increasing and materializing in our pipeline with a good momentum. This give us confidence in the potential for sustained recovery over the course of the year. The impact of the China, unfortunately, this quarter, was not fully offset by a very strong momentum in India with a double-digit growth. That's what we can say from a geo standpoint. Now let's zoom on a product line performance and start with industrial innovation software. The revenue rose 4% thanks to a double-digit growth in subscriptions, driven by a strong momentum in CATIA and ENOVIA. This is highlighting the progressive evolution in our core industries through our subscriptions. SIMULIA and NETVIBES are also delivering strong results during this period, and it's a good point because in many of the cases we are displacing competition. In life sciences software, revenue grows 11%, driven by Medidata, which continued to experience a strong momentum growth with 13%. Turning now to mainstream innovation, revenue increased 4% and SOLIDWORKS reporting the single-digit growth, offsetting the continued impact from China and, again, a relatively high comparison base last year. Centric PLM performed well, benefiting from its leading position and successful diversification strategy. Continuing on this topic, I think we can say that Centric PLM today is used by over 12,500 brands and has a significant footprint on the market. The opportunity is much larger, and we believe Centric PLM has really the potential to become a billion-dollar business for Dassault Systèmes. Why so? We have multiple access to expand what we do. The first one is from an industry standpoint or sub-segment industry standpoint, we are addressing fashion and apparel, but we are expanding in new verticals such as food and beverage, cosmetics and personal care, home and furniture, and consumer electronics. From a target standpoint, from the customer we want to serve, we are also expanding from the brands, which are really the core, to the retailers, the manufacturers, and the consumer tomorrow. From a geo standpoint, we have reinforced significantly the coverage of Centric PLM, especially in Asia. From a product standpoint the Centric PLM solution is really the de facto standard for collection management for fast moving goods. This is also becoming the business platform as it serve as the backbone for e-commerce. With capabilities such as dynamic pricing, which are really critical for e-commerce, Centric PLM is really disrupting this market. This is the reason why we are convinced that we are well-positioned to continue to execute our strategy and to be the global leader and a significant business in the next coming years. I think it's time for me to hand over the presentation to Rouven to discuss revenue profitability and our objective for 2023. Rouven, you have the floor. Thank you, Pascal. Welcome and thank you all for joining our call today. We had a solid start of the year as we remained focused on the fundamentals of our business model, increasing the share of predictable revenue with strong growth in subscription and cloud revenue, up 14% and 17% respectively, while we stayed focused also on delivering on the profitability targets. Total revenue grew 8% as reported and 7% at constant currency, in line with our objectives and relative to a high comparison base. Recurring revenue rose 10% and now represents 84% of software revenue. Adding to these strong fundamentals, we generated a record high cash from operations up 24% to EUR 783 million. As expected, we are now deleveraged nearly one year ahead of schedule. Clearly, this highlights our trusted customer relationships, the value we deliver, and our discipline when it comes to spending and capital allocation policy. As you heard from Bernard and Pascal, our long-term structural growth drivers across industries remain strong. As such, we continue to invest, hiring more than 300 net new team members in Q1. At the same time, we are focused on the profitability with diluted earnings per share of $0.28 and an operating margin of 31%, both in line with our target range. Now let's look at our results in more detail. Software revenue rose 6% at constant currency, slightly below the objective. This was due to the lower contribution from upfront licensed revenue that was down -10% year-over-year relative to the low end of the guidance, which was set at -7%. This shortfall can be attributed to the lower than expected performance in China. As we've discussed, the operating environment there has been difficult over the last several quarters. To briefly recap, we experienced a soft performance in the second half of 2022 during the lockdown period with software revenue growth of 3%-4% and flat license growth. This was our baseline assumptions that growth would remain muted in Q1 as well, in line with this trend, while expecting a progressive recovery throughout the remainder of the year. However, in Q1 turned out to be much lower at -8% software revenue growth in China. More specifically, in the first two months of the quarter, as the economy and production cycles were preparing the restart, investment levels in innovation remained low. This lag contributed about 3-4 points to the upfront license decline. Only in March, investments and innovation started to return, materializing in our pipeline. While we remain focused, we believe that this progressive trend is raising the potential for recovery and gives us the confidence for the rest of the year. Services revenue was very strong this quarter, up 21%, driven by the completion of milestones and outcome-based services, mainly in life sciences. More specifically, we are seeing a few biotech customers who are turning to Medidata to deliver end-to-end study build services for the purpose of accelerating the time to start enrolling patients. While we continue to shape this offering, we do expect this trend to normalize throughout the year. Recurring software revenue rose 10% to 84% of total software revenue, up a strong 310 basis points. As mentioned, this growth is driven by an acceleration in the subscription revenue, up 14% versus 10% at the same time last year. Consequently, the increasing share of predictable revenue provides greater visibility and resiliency. Our strategic growth drivers of 3DEXPERIENCE and Cloud are at the center of the shift to subscription. As highlighted by the customer examples that Pascal just talked about, clients, both large incumbents transforming and new entrants disrupting, are adopting 3DEXPERIENCE and Cloud to leverage the full potential of our technologies to increase agility, scale, and accelerate innovation and growth. As such, 3DEXPERIENCE revenue grew 10% at constant currency. This reflects 31% of 3DEXPERIENCE addressable software revenue and is up 1 point relative to last year's performance. Cloud revenue rose 17% at constant currency to 24% of software revenue, an increase of 3 points, driven by strong continued momentum of Medidata as well as strong growth in 3DEXPERIENCE Cloud. We're confident that we will continue to capitalize on our leading position in key industries, capturing above market growth with 3DEXPERIENCE and Cloud. Now, let's review how we performed relative to the objectives we set for the first quarter. Total revenue of EUR 1,434 million was EUR 3 million higher than the midpoint of our target range. We reported software revenue of EUR 1,288 million, up 6%, which is EUR 25 million below the midpoint and EUR 10 million below the low end of the guidance. We expect to recoup this gap throughout the remainder of the year, which I will discuss further in the objective section. As mentioned, this shortfall was driven by the decline in software revenue in China, which explains the gap to the low end of the software range or one point of growth. We reported services revenue above the midpoint by EUR 11 million, which essentially offsets this gap at the total revenue level. We benefited from an FX impact of EUR 17 million during the period. We reported an operating margin of 31%, in line with the objective. As you can see from the numbers, we delivered on our profitability targets by continuing to invest, adding over 300 net new employees during the quarter. As we look to the remainder of the year, we will continue to take a disciplined and balanced approach to hiring and investing for the future. As such, we expect the overall OPEX increase to slow down, highlighting the fact that we are on track to absorb the cost run rate from 2022 carrying forward to 2023. Turning to the earnings per share. We reported EUR 0.28 as reported, well aligned with our objective range of EUR 0.27-EUR 0.28. The non-IFRS tax rate for the quarter of 20.7% is well aligned with our guidance of 21%. Let me turn to the cash flow and balance sheet items. Cash and cash equivalent totaled EUR 3,468 million, compared to EUR 2,769 million at the end of 2022, which represents an increase of EUR 699 million. At the end of the quarter, our net financial position totaled EUR 459 million, an increase of EUR 686 million, versus a net financial debt of EUR 227 million at December 31st last year. We are now deleveraged, nearly one year ahead of schedule. Let's look at what is driving our cash position at the end of the first quarter. Operating cash flow rose 24% to a record high of EUR 783 million. As expected, strong collections in Q1 contributed to a favorable change in operating working capital of EUR 350 million. Operating cash flow was mainly used for CapEx of EUR 33 million and repayment of lease liabilities of EUR 25 million, slightly up versus last year. Of note, we had a negative FX impact of EUR 44 million during the first quarter. Let's turn to our fiscal year 2023 objectives. We are maintaining our guidance. The key takeaway is that we are well positioned and on a good trajectory to our long-term financial objective to achieve EUR 1.20 earnings per share. Total revenue growth between 8%-9% at constant currency remains unchanged and is adjusted in absolute terms for a favorable FX impact by EUR 17 million to a range of EUR 5.94 billion-EUR 5.99 billion. This assumes that we expect a positive impact driven by an increasing contribution from large deals in our pipeline starting to materialize in Q2. We also expect to return to low to mid-single-digit growth in China throughout the year as more and more investments are directed towards innovation and science. Finally, we reaffirm the operating margin range of 32.3%-32.6%. Before moving to the Q2 objectives, I would like to emphasize that the unchanged full year revenue guidance assumes that we maintain growth rates at constant currency for software revenue of 8%-9% and service revenue of 5%-7%. We continue to expect recurring revenue growth of 10%-11%, with strong subscription revenue increasing in the range of 17%-18%. In spite of the lower performance in upfront license revenue in Q1, we remain confident for the full year on the range of 2%-5%. Now let's turn to our Q2 objectives. We are targeting total revenue growth 7%-9% at constant currency, with recurring revenue increasing 9%-10%, driven by strong subscription growth of 16%-18%. We are forecasting upfront license revenue growth of 0%-5%. This reflects structurally improving pipeline, assuming three main elements. One, an acceleration in North America. Two, continued momentum in Europe across key industries. Three, return to mid-single-digit growth in China with the benefit of a lower baseline effect. For services revenue, we are predicting a normalized 6%-8% growth. In terms of profitability, we are forecasting the operating margin of 30%-30.5% and a diluted EPS of EUR 0.27-EUR 0.28. As usual, for additional information and to review what we've just discussed, I refer to today's earnings presentation for more detail. In conclusion, we've had a solid start to 2023 with well-aligned fundamentals supported by our strategic drivers of 3DEXPERIENCE and Cloud. Our first quarter results demonstrate that our technologies have never been more relevant and critical for our clients, as strongly evidenced in Europe. We are focused on execution to deliver sustainable growth across all geos throughout the year, and as such, remain confident in our ability to advance towards our EPS objective of EUR 1.20. In closing, I want to remind you that we are planning our road shows in London, Paris, and later in Q2 in New York and in Boston. I want to highlight and ask you to join us at our Capital Markets Day, where we will discuss our next horizon. This will take place this coming June at our headquarters in Paris. Now Bernard, Pascal and I are happy to take your questions. Thank you. As a reminder to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will take our first question. Our first question comes from the line of Jay Vleeschhouwer from Griffin Securities. Please go ahead. Your line is open. Yeah, thank you. Hello, Bernard, Pascal and Rouven. Let me start with a nearer term question. What effect on customer buying behavior might you expect from the price increases you're planning to implement in July? Might there be some anticipatory buying, for instance, in the second quarter before the price increase? In addition, perhaps you could talk about your expectations for the CPE and CRE channels for the remainder of the year, particularly in light of the various channel margin changes that you're implementing. How might that affect the channel sales productivity? A couple more questions, of course. Okay, I will start with the first one. I think the only part of the market which is usually sensitive to the price increase and doing some anticipation is the mainstream. We saw it last year. If there is one impact we could see is probably, you're right, probably in Q two on the mainstream. That's really where we have anticipated some effects. For the rest, I think for the vast majority of our contracts that are long-term, as you may know, we have some clause specifically indexing the price increase on certain index. I think it's already well anticipated. Bernard, you want to say a few words about CPE and CRE, or you want me to continue? Well, I think that I don't remember, Jay, if you were at the 3DEXPERIENCE World, but I think we had a high quality Gian Paolo on the team, Manish, CEO of SOLIDWORKS, had very detailed work planning in the past 9 months with our key partners, were all very positive about looking at how to create value work for the clients on how to approach their large install base with the 3DEXPERIENCE as a collaborative infrastructure. I think they know very well their partners, the clients. It's a mutual joint conclusion that was taken, which I think is a very good practice to basically find ways, what we call value-up and value-wide. I trust it will be accepted as we move on. For the CP-CPE, the jargon that we have, which is really process engagement, I think the challenge is more on the training of the workforce to really understand the specialized roles and solutions that they need to be able to provide to clients. On the second thing, of course, which is continues to be an important factor is there are learning curve to understand how to sell cloud on platform for the existing customer. I think the trend are good. The motivation is high on all the current customer contact on discussion with with partners are going in the right direction from that standpoint. Okay. You mentioned the 3D EXPERIENCE conference. One of the interesting bits of data that come out of that conference was that as of the end of last year, only about 3% of the active SOLIDWORKS space, or the equivalent of 3% was on 3DEXPERIENCE Works, 15,000 licenses, I think the number was. What do you think a realistic 3DEXPERIENCE Works adoption rate or penetration rate might be for the end of this year? For the end of this year. Pascal, I don't know if we want to double between six to seven. Okay. Okay. Couple last things. Your comments, Pascal. Again, Jay. Sorry. One thing. Keep in mind that the most important for us with the new generation of SOLIDWORKS is to continue to expand the footprint. The footprint meaning to continue to attract new logo, it's not to substitute an existing install base, which is the first priority. The reason why in the KPI of success for us, the most important is really the ability to continue to expand, to reach users and company we were not capable to touch previously, more than substituting the existing install base. At the end, what we are trying to do is an incremental revenue stream. It's not a substitution of the revenue stream. Right. Right. No, I understand. I understand that. Your comments, Pascal, about Ford, corroborated the fact of that selection. My question is, to what extent does your guidance for the year, for example, for industrial innovation, anticipate additional such selections, for example, among European car companies? Is that a factor in the growth expectation for this year? You're right. I mean, one of the key points for this quarter is we do not have too much large transactions, right? They are existing in the pipeline, of course. They are much more backloaded than up front-loaded. To just give echo to what you say, you're right, Jay. I mean, there are a significant number of transactions, especially in transportation and mobility, where we have the ability to expand significantly what we do with 3DEXPERIENCE platform. We have some in Germany, we have others in the U.S., right? Including a GM, by the way. It's maybe a surprise for you guys, but again, electrification and the new battery game is changing the landscape. This is opening door, which has been closed for some time, many years for us. Yes, we have a decent number. Not all of them are fully factoring the guidance. Why so? As you know, we usually not compromise the value of what we do. That's the reason why I prefer sometimes to be a little bit short for one quarter, but keep the entire value of the deal and the transactions for us. I guess couple last things. I have to ask my usual question about SOLIDWORKS units. When we think about the upfront and term licenses together, given the tough comparisons last year, would it be fair to say that combined new units for SOLIDWORKS were down about 10% or so versus Q1 of last year? Lastly, a completely separate question, at the DS conference in Miami last week, there were a couple of very interesting sessions on your cloud business, specifically about migrating customers to the DS cloud. To what extent are you seeing this in your services engagement or services pipeline for that kind of migration work? The first point is I do not have the units in front of me, but to make it simple, overall, the license, the upfront license is down by 10% for SOLIDWORKS this quarter. The subscription is up close to more than 30%-35%. That's the number I have in mind, right? If you do the sum. From a unit standpoint, I would expect it's slightly below 10%, probably in the range of 8%. Right. Okay. It's, again, it's mainly due to China and it's not a loss. I think I do expect to recover within the year. Could you remember 4 points of the miss on the license is coming from China. Will be interesting to compute the number at the end of the year to see if we have been able to recover, but I'm pretty confident we will do it. Coming back to the, this migration to the cloud. Yes, I think it's a good point. It's something we are doing at scale for the large customers with our own services capacity. Right, it's something we have to elevate with our retailers. Not all of them, they have the practice to do this kind of migrations. It's not a migration per se, it's a different way to re-architect the system. That's against, we have the practice. It's very well formalized. We start to deploy it within the channel, within the resellers. The time for them to ramp up and to reskill also their people is taking time. Okay. We have a pretty good number, especially in the U.S. You're right. Okay. Very good. Thank you. I'll see you in June. Jay, thank you for the kind words, you sent to us about Bruno. We appreciate it. Of course. Thank you. We will take our next question. The next question comes from the line of Laurent Daure from Kepler Cheuvreux. Please go ahead. Your line is open. Yes, thank you. Good afternoon, gentlemen. I do have three questions. The first one is, if you could give us a brief update on the labor market and how fast you see wages moderating. My second question will be regarding M&A. We understand that you could spend as much as EUR 10 billion in the next 1-2 years, potentially. I was just wondering if you were to compete for a very strategic deal, how much of a compromise would you be ready to take? In other words, would you be ready to go for a deal that might be EPS neutral for 1 year or 2, or is it something that you would completely exclude? My last question is on the cloud growth. I think Michael had a question this morning or so on it. It seems like ex Medidata growth rate was very strong last year, had like 70% or 80%. When I try to do the math in the first quarter, growth rate seems to be way behind what you had last year. I'm a bit lost on this, and if you could help, that would be very helpful. Thank you. Thank you for our question. Let me take Pascal, if you okay. The M&A one. Yeah. On the M&A side. First, we are long term. On, I think we have the characteristics of having a strong investor for long term. We don't look at acquisition truly from, at first from the dilution effect at all. We look at it from the perspective of how first, number one, how well does it fit in our ambitious plan for 2040. As you may remember, we have really widely expanded this ambition with the three sector of the economy, 12 industry, 64 segments. The second thing is really related to our capacity to transform what we buy to create the next generation game changer for the sector or the domain this acquisition would serve, and of course, the complementarity. If you think about the last big move that you mentioned, Medidata, we had BIOVIA before. Someone who would have understood this strategy would have understood that we were doing the front-end research on biologic and chemistry on that if we were to do research, we would do development, we would do lab, we would do clinical trial, and we'll do manufacturing plant for biologics. Maybe the life cycle will be even expanded to couple it to MedTech, which is really part of our long-term strategy. Something that was perceived as really surprising, may I say so, in fact was very well architected and prepared for years. We have many of those topics, of course, in our roadmap. The question is more this fitting with those three or four parameters I mentioned. After, of course, the capacity for us to make it happen, more from a transaction standpoint and people standpoint fitting. Clearly when it looks, the story of Medidata shows that we have been able to really leverage it at scale, it's just the beginning. That's basically the thought process. We will probably come back on that topic at the Capital Markets Day, but we will not provide list of candidates for sure. But a framework which is really with the current situation, which has a lot of good positive things because really it has come down from from the way valuation are done. Unfortunately, also, the interest rate are higher. All in all, we will try to do and apply this policy in a consistent way. I know the new team in charge is going to really, fully leverage this long, learning curve that we have been practicing. Cloud? Yeah. To your cloud question, and then you had the first question which I wanted to clarify, but I can, we can do this after my response to the cloud. Where we can have some, I would call it, seasonality or fluctuation on the cloud growth number is for large clients, we have private cloud installations. When we deliver them, and we deliver them ahead of schedule, there can always be some catch-up that we recognize at a certain period. It's correct, in Q1 last year, we had one large implementation of a private cloud of a large OEM that's transforming completely to 3DEXPERIENCE Cloud. That had some revenue impact in the first quarter that was not recurring in that way. You know, the comparison year-over-year has an impact from that, which I would characterize about 3 points. You know, there's nothing else than that. The last, the first question you asked on the, on the market, the market update, which market were you referring to? Can you repeat it please? No, it was the, recruiting. Uh. If it was, you still have to pay. No, no. To find the candidates or if it was starting to ease massively. Yeah. I think the good news here is the attrition is coming down significantly. We're below the 2019 levels. We have taken a very disciplined approach to hiring last year, and we continue with that. Our pipeline is strong and we continue to follow that. Also, the other good news is we continue to hire when the entire industry is laying off. It's the right time to pick the good candidates. The great profiles. Yes. The great profile, I think it's obvious. It's very good. This is what we do. Great. Thank you, guys. Welcome. Thank you. We will take our next question. The next question comes from the line of Derric Marcon from SG. Please go ahead. Your line is open. ntlemen. Thank you for squeezing me in. I've got two, if I may. The first one is on the EUR 25 million shortfall on software revenue. Is it fair to assume that your subscription revenue was perfectly in line with the midpoint of the guidance? In addition to the miss on new license sales, does it mean that support revenue was also slightly below the midpoint you had in mind when you started the quarter? A follow-up on that, when I look to the acceleration that you expect from subscription revenue in Q2, overall, the recurring revenue is flattish or slightly down in term of growth compared to Q1. Does it mean here also that support revenue will grow less in Q2 versus Q1? That's my first question Second question is about M&A. Will you, or should we assume that you will include, future M&A and contribution to EPS in your new 5-year EPS target that you will disclose at the next Capital Markets Day? Thank you very much. Hey. Thank you, Derric. Thanks for the comprehensive question. I start on the first two. On the software revenue shortfall of EUR 25 million, that is related to the midpoint of the guidance. I just wanted to clarify that point. To the low end, we are actually EUR 10 million below. You're right, it's EUR 25 to the midpoint. You're also correct in saying that subscription is perfectly in line with the midpoint. The license miss was of course the main contributor to the, to being below the software. For the support we assumed around 6%-7%. We came in at 6%. Also here, that's related to lower performance and contribution from China. When we say that the software revenue was down in China by -8%, for licenses it was actually down -13%. Then you do the math, you see that there is a few million eur that we were also below in the support revenue in China, which is related simply to the situation of restarting and catching up. We believe that we will be able to catch this up throughout the year. We have shown that we do this before, and we have also the discipline to do that. Now, as we move forward into Q2 on the subscription line you're right. For the recurring revenue, we are going to 9% to 10%, whether it's the 10% that we delivered in the first quarter. I would say it's in line with the first quarter. We continue to see acceleration in subscription, as you rightfully say, versus Q2 of last year. Sequentially, it's actually a little bit lower than the growth. I mean, sequentially it's almost in line with Q1. You know, we have seasonality in our subscription revenue. Please keep that in mind. The support revenue will be around 6% as it was in Q1. That's what's behind this. Related to the future long-term plan, if you may, you just have to wait June 9 to get the details. There is no value at this point to disclose what we're gonna do. Correct me if I'm wrong. If you remember. You did the first one. The acquisition is part of our model. Has always been. Yes. 'Cause you were the one doing this first in 2018, if I remember well. Yes. The EUR 1 per share before split was included in the guidance, while Medidata was not closed at that time. Agreed. Yeah, of course. We have been doing the five years plan several time in the last 26 years after the IPO. It's third or fourth time we do it. It's part of our practice because we want to associate that retention to the long-term mindset of the company. We'll be back on this on June ninth. Thank you, gentlemen. Thank you very much. Thanks, Eric. Thank you. We will take our next question. The next question comes from the line of Jason Celino from KeyBanc Capital Markets. Please go ahead. Your line is open. Great. Thanks for fitting me in. Bergmann, I think you've highlighted, in Americas acceleration in the coming quarters. It sounds like a lot of this confidence is based on your large deal pipeline. What are you baking in terms of macro in this framework? Again, the vast majority of the last transaction we are referring to are already engaged. They are part of a large transformation program we initiate with many of them. It's true in aerospace and defense, in life sciences, and also in high-tech. remember the large, the giant tech in the U.S. are also our customers, and we have a pretty good visibility on how they are moving forward. It does not mean we are completely immune, but I think we have enough conviction and proof point that it will happen this year. Okay. Perfect. This large deal pipeline, is it mostly renewals, or it sounds like there might be a few potential competitive deals. I guess, how would you characterize the types of large deal demand that you're seeing? No, it's a balance between program expansion we already have, and also a new, certain win back. We have, the win rate is high. It's really high. In the U.S., by the way, it's higher than 80%. Higher than 80% of the win rate. Our challenge is to be there, coverage. Sure. Yes. last quick clarification. I think we've talked at length on the China impact on SOLIDWORKS. I think as a, on an overall license basis, you've mentioned 3-4 point impact. For SOLIDWORKS specifically, how fast would that have grown this quarter, ex-China? Over mid-single digits. Yep. Okay. Perfect. Great. Thank you. Thank you. We will take our next question. Please stand by. Your next question comes from the line of Frederic Boulan from Bank of America. Please go ahead. Your line is open. Hi, good afternoon. Thanks for taking the question. Question is on Medidata and Dynamics with Veeva. I've got two very quick clarification on numbers disclosed during this call. If you can comment, I mean, Veeva is making some claim that they've won a number of top 20 clients for EDC, and they're having a good track record in clinical trials. This morning you showed this slide that you're very dominant, 75% of the approvals. If you can share with us a little bit your perspective on that claim and your overall competitive position versus Veeva. Two very quick follow up clarification. On cloud revenue, you said you had a 3% impact, or 3 percentage point drag, I think, Rouven, on some of those private cloud installs. Should we assume that, adjusted for that, your growth in cloud would have been about 20% in Q1? Is this what you meant? Yes. Then, yes. Okay, great. Then secondly, on that China question, any more color you can share with us around% of China in your total revenue and licensed revenue would be, very useful. Thank you. I start with the competitive landscape. Again, I gave the numbers to you because at the end I want you to ask these questions to Veeva. How many trials do they have, and how many patients they have enrolled in their trial, right? At the end, that's the footprint, the real footprint. The fact that you can claim you do one trial with one customer does not mean you are the standard. That's the trap you have to be careful not to fall in, right? especially we are extremely active on the phase three. That's also the reason why you have so much new drugs coming on the market, which have been approved following our processes and platforms to make it happen. Again, I encourage you to go onto our website to read all the testimonials we have from partners, from sponsors, from biotechs, who are basically extremely clear on this. The last point I will make on this, we are also entering in an interesting phase whereby there are certain customers where Veeva was having a good relationship with them, two years ago, and we are starting to take back them from home. Like Medidata. For example. We take, we rescue. We rescue some of them. There are some of them which are opening the door, and they have been considered being the standard. Veeva was considered being the standard. What I'm saying is the footprint is such that I think, you have all the information to make your mind. As far as we are concerned, I think we are relatively confident on the fact that we continue to gain market share, especially on the new trial. We are diversifying with Medidata AI, which is something if you do not have the set of data, you cannot provide such a value. On the DCT, on the decentralized clinical trial we are by far the most robust solutions for the market. The growth engine is really in place, and that's the reason why, by the way, each time we renew the contracts, we are also uplifting the value of those contracts by almost 20%-25%. Okay. Final question on China. Frederic. You asked, the percentage of the total software revenue is approximately 7%. For the license this can depend by quarter because it's quite seasonality in the license number. So that is between 15%-20% max. Thank you. Maybe just to follow up on Medidata. We had a reasonably soft Q1 in terms of trends versus what Medidata used to deliver in the last few years. Is this temporary? Is this starting to comp some high numbers post-COVID? I mean, how should we think about growth prospects for Medidata going forward? Well, I think, the precise number is 13.5% growth, by the way. Right. 14% last quarter. You know, it's. You have only one or two trials starting, this quarter or the following quarter. This is making the change. No, it's pretty consistent. By the way, if you take into account the services part, it's 17% growth, the total Medidata revenue growth. I think. Excellent. The numbers are speaking by themselves. Okay. Thank you. Thank you, Frederic. Thank you. There are no further questions. I would like to hand back for closing remarks. Okay. Thank you very much again. Thank you for those of you who are already connected with us this morning or connected in London. Thank you for being here this afternoon. We will continue to be able to answer your question. We are looking forward to see you at June ninth at the Dassault Systèmes campus. You're also welcome, of course, at the dinner the day before. Will be a very nice dinner on a way to reconnect and discuss about the future commitment of the new team around Pascal Daloz, future CEO of this company, because he has to commit for the next five years, and I will watch, like you, how he's performing. Thank you very much and enjoy your day. This concludes today's conference call. Thank Thank you for participating. You may now disconnect.