Hello, and welcome to the Dassault Systèmes 2025 Q2 and Half-Year Earning Presentation. My name is George. I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be in the listen-only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing Star 1 on your Telco keypad to register your question. If you require assistance at any point, please press Star 0, and you will be connected to an operator. I'd like to hand the call over to your host today, Ms. Beatrix Martinez, to begin today's conference. Please go ahead. Thank you, George. I'm Beatrix Martinez, Dassault Systèmes VP Investor Relations, and from the company, we have Pascal Daloz, CEO, and Rouven Bergmann, CFO. I would like to welcome you to Dassault Systèmes' second quarter and first half 2025 webcast presentation. At the end of the presentation, we will take questions from participants. Later today, we will also hold a conference call. Dassault Systèmes results are prepared in accordance with IFRS. Most of the financial figures in this conference call are presented on a non-IFRS basis, with revenue growth rates in constant currencies unless otherwise noted. For an understanding of the differences between the IFRS and the non-IFRS, please see the reconciliation tables included in our press release. Some of the comments we will make during today's presentation will contain forward-looking statements which could differ materially from actual results. Please refer to our risk factors in our 2024 Document d'Enregistrement Universel published on March the 18th. Now, I will hand over to Pascal Daloz. Thank you, Beatrix, and good morning, everyone. It is, as usual, a great pleasure to be with you to walk through our second quarter and first half results. Let's get right into it. We had a solid Q2, well-aligned. Revenue growth picked up compared to Q1, driven by a strong performance in both subscriptions and 3DEXPERIENCE. Just some quick highlights: total and software revenue grew 6%. Subscription revenue was up 10%. 3DEXPERIENCE grew 20%, and EPS came at EUR 0.30, which is very well aligned. Given this solid performance, we are keeping our full year 2025 guidance unchanged, which means revenue growth between 6%-8% and EPS growth between 7%-10% XFX. Before I hand it over to Rouven for the financial deep dive and outlook, I really want to quickly call out three big takeaways for the quarters. First, our customers are facing more complexity than ever. Whether it is scaling up, driving innovations, managing costs, or rebalancing activity from one country to another one due to the tariff, I think our platform is increasingly at the center of how our customers are navigating their challenge. Second, I think we are seeing resilience in transportation and mobility and a strong momentum in fast-growing areas such as space, defense, energy, and AI-driven cloud infrastructure. This kind of diversification makes us stronger and opens new doors. Third, AI is really creating new growth paths. This quarter alone, we saw real traction in two areas: the regulatory compliance and the software-defined productions. We are not just talking about AI; we are really making a difference. With that, let's zoom into what has happened across the sectors. Starting with manufacturing, the first half of the year confirmed the resilience of transportation and mobility and industrial equipment. A mid-single-digit growth in transportation and mobility was led by France, Germany, and Japan, as well as the expansion with the battery manufacturers in China and India, where we are helping them to scale up their gigafactory fast. We are also seeing manufacturers rethinking their global strategy with tariffs in play. That is a space where we are really well-positioned to help them move faster, make better decisions across the supply and the demand. Aerospace and defense had a strong start too, up 15% year-to-date, with a great momentum coming out from the Paris Air Show. The pressure is on to ramp up productions, to move to the next-gen aircraft, but also to develop a strong new space model. I think we are right there helping them to make it happen. High-tech is also growing steadily. High-double-digit growth for the semester, thanks to our work in areas such as electromagnetics for simulation for consumer electronics, the productivity solution at large for the semiconductor manufacturing, and more sustainable infrastructure for the cloud data centers. I will come back on this topic later. Now, life science is still feeling the effect of the market contraction in clinical trials. However, we are seeing a shift. The investment is moving from R&Ds and clinical into manufacturing and supply, partially due to the global trade pressures. That plays to our strengths. There is a rising demand for platforms that connect the research and development directly to the manufacturing. We call it the lab-to-plant. And our PLM portfolio is really growing nicely as a result, up to the mid-teens for the first half. In infrastructure, there is a clear trend towards sovereignty infrastructure, and we are leaning into that opportunity. The energy transition, especially nuclear, is still a top priority, but sovereignty now goes beyond energy. It includes defense, cybersecurity, and AI capabilities through the national data centers. And we are accelerating in our expansions into these fields. Now, let's look at some key wins this quarter. Let me give you some concrete examples. We recently signed a strategic partnership with Thales Alenia Space. It is a joint venture between Thales and Leonardo. They are right at the center of Europe's effort to build sovereign space capabilities. If you remember. The war in Ukraine showed just how dependent Europe is on the non-European satellite systems, such as Starlink, for the critical communications. Now, I think Europe is moving fast to build its own low Earth orbit. Constellations for the defense and the ground use. And Thales Alenia Space is scaling up big time, from producing a few thousand, a few dozen satellites per year to hundreds per year now. And they have chosen the 3DEXPERIENCE to help them to do it. Not only for the design, the simulations, and the validations of this, but also to operate the complex space missions at speed. I think it's a strong vote of confidence in us. And it's in our role of helping Europe to build its technological independence. Now, let's move to life sciences. As I mentioned earlier, our PLM portfolio is a strong growth driver now. And another great story comes from Asia-Pacific. Nihon Kohden, a leader in cardiovascular diagnostic. Selected the 3DEXPERIENCE overseas a few years ago to drive their product development. Now, they are expanding into manufacturing with a clear focus on quality by design. That means better traceability, better quality, full compliance. Everything with only one platform. And I think this is a great example of how we can support the food product lifecycle in life sciences. Now, let's shift to infrastructure. You know that we are addressing this market with a specific focus because we are building the leadership. In some way on the most complex high-value added systems. We started with the nuclear and the rail, and now we are expanding into the data centers. This is a big space. A EUR 650 billion market, growing at 15% annually. But it's not without challenges. You know that the AI boom is really driving the massive infrastructure demand on one hand, but the energy cost is enormous. Just to give you an example, supporting AI in the U.S. alone. Could require nearly 100 new nuclear plants. Almost none are being built today. This is where we come in. With our system approach, we are helping the hyperscalers, the colocation providers, and the enterprises to design more sustainable infrastructure and run it more efficiently, reducing emissions, energy use, and water consumption. I think we are extremely well-positioned to lead in this critical growth area, and we are already seeing the contribution in our Q2 results. Now, let's talk about AI, and specifically, as I was mentioning, the regulatory compliance. This topic is quickly becoming one of the biggest bottlenecks in highly regulated industries. For us, it's a EUR 100 billion opportunity doubling every five years. Do you know that in aerospace, an aircraft certification can take five to three years and involve a minimum of 10,000 requirements to be fulfilled? This with only one authority for the regulations. In pharma, it's almost the same story. The submission for one drug can be over 100,000 pages, and each day of delay costs EUR 1 million. In banking, it's even worse because updates are constant, and with EUR 15 billion in fines just in 2024, last year. I think with our unique approach, which consists of what we call the AI for virtual twin, we are really turning compliance into a strategic advantage, transforming documents—millions of documents, in fact—into dynamic knowledge and automatically verifying the design. It's really compliance by design. What used to take months now takes minutes. What used to slow down your process and your calendar, your timing, now helps you to move faster. I think if we do well, we can move the compliance being a cost center to a competitive edge. We are building these solutions to make it possible. We have already launched our first AI for roads and virtual companions with more than rolling out soon. Lastly, let me touch on a recent acquisition. In Q2, we acquired Ascon Qube technology, a startup in factory automation based in Germany, the nation of automation. What do they do? They work with major players such as BMW and others, and their software is now part of our DELMIA brand to enlarge and to complement our manufacturing offer. The factory automation is really a large market. It's dominated by the hardware. In fact, 90% of the EUR 13 billion market is hardware and requesting a lot of professional services for the programming. That's going to change with AI. We believe the software will drive two-thirds of the value in the coming years. Why so? Because with the rise of the software-defined products, now we are seeing the need for software-defined production systems—flexible, cost-effective, and fully traceable. This is the future we are building. AI is making this possible because, again, we can, from the virtual twin of the products, automatically generate the programming of the production systems. To close things out, I think we are operating in a world of growing complexity. This is exactly where we add value. Our 3DEXPERIENCE platform helps customers to move faster, smarter, and adapt with confidence. I think if we step back a little bit, we are creating deep and long-term value for our customers, and we are just getting started. Thank you again for your participation. Now over to Rouven for more financial and guidance. Thank you, Pascal. Welcome to our call today from my side. Thank you for joining us. Q2 was a solid quarter. As you heard, it was well aligned with our objectives. What I am particularly pleased about is the resilient performance across the manufacturing industries, mainly driven by the outstanding performance of our brands, SIMULIA, ENOVIA, and CATIA. Regarding operational efficiency, we continue to focus our investments on capturing long-term value while protecting EPS. As you heard, in this quarter, we acquired Ascon, an innovative startup with the mission to make software-defined manufacturing industrial scale ready. We see the world of software-defined products and software-defined manufacturing coming together. It is an exciting move that positions us very strategically with AI in manufacturing automation. Now, let's review the Q2 performance and the first six months in more detail. In Q2, total revenue and software revenue were both up 6%, excluding currency, driven by subscription revenue growth at a rate of 10%. The engine of growth remains the very positive momentum in 3DEXPERIENCE, up 20% in Q2. We had a good quarter in upfront license revenue, up 5%, due to strong growth in China and multi-year subscription contracts. The operating margin was 29.3%. It was impacted by 50 basis points of negative currency headwinds when compared to last year. Additionally, when excluding the dilutive impact from acquisitions, the operating margin was up 10 basis points. EPS was EUR 0.30, up 4%, excluding FX. Now, looking at the first six months, total revenue was EUR 3.96 billion, up 5%. Service revenue was lower in H1. However, we expect Q2 improvements to continue in H2, in line with our full-year objectives. To conclude this section, I want to highlight the progress in the shift of our business model and the lifetime value reflected in our recurring revenue base, growing at 7%, driven by subscription revenue, up a strong 13% year to date. The recurring revenue now represents 83% of our software revenue. This provides increasing visibility as our client base continuously expands the trusted long-term relationships. Now, turning to our growth drivers. In Q2, we saw very good 3DEXPERIENCE performance, up 20%. As a result, the share of software revenue now represents 41%, up 5 points. New 3DEXPERIENCE deals in the quarter show a healthy distribution across many industries such as high-tech, auto, and aero and defense. This highlights the growth potential of 3DEXPERIENCE Cloud and comes at an increasingly critical time for our customers who need to transform their business model leveraging GenAI. Cloud revenue grew 6% in the quarter and 7% year to date. In 3DEXPERIENCE Cloud, we saw 26% growth in H1, driven by strong customer adoption of cloud, and we are encouraged by the early adopters testing AI use cases. Now, let me briefly review the Q2 actuals versus our objectives. Total revenue came in at EUR 1. 523 billion in the quarter, and it was EUR 12 million above the midpoint of our guidance in constant currency. However, currencies did move more than expected in the quarter, resulting in a negative headwind of EUR 38 million. The operating margin was 29.3%. It was below the guidance midpoint due to a negative currency effect of 30 basis points. Now, looking at the operating income in Q2, it was up 5%, excluding FX, with an OpEx growth of 6%. Looking into H2, we expect to maintain a similar expense run rate as we will make focused investments to support our growth strategy. EPS was EUR 0.30, and it was within the guidance range thanks to a solid operating performance and slightly better financial income, while the tax rate at 18% was in line with our projections for the quarter. Now, let's focus on our geographies and product lines. Europe was up 10% in Q2, led by France and Southern Europe. We saw good growth across multiple end markets such as automotive, aerospace, and defense, as well as high-tech. Subscriptions provided a very strong tailwind in the quarter. Americas was 2% in Q2, with good performance in industrial equipment and high-tech. They were both up double-digit in the Americas. And we also saw very resilient growth in aerospace and defense over the first six months. Asia was up 6% in the quarter, and it was led by strong double-digit growth in China, which was driven by high-tech, industrial equipment, and a solid performance in TNM. Meanwhile, India and Korea showed resilient performance, up mid-single digits in the first six months. Now, over to our product lines. Industrial innovation software revenue had an outstanding quarter, as earlier mentioned, growing 9%. And it was led by strong growth in SIMULIA and good performance from CATIA and ENOVIA. The life sciences growth was flat in Q2, with Medidata continuing to be impacted by a weak CRO segment. While the enterprise segment was performing well at mid-single digit growth, the mid-market was resilient despite lower clinical trial volumes. Conversely, we see an increasing momentum when it comes to the shift from lab to manufacturing and supply, as Pascal highlighted. In fact, 3DEXPERIENCE is a platform to connect all domains across the enterprise to accelerate bringing drugs and medical devices to patients at lower cost while providing best-in-class regulatory standards. Combining the revenue driven by 3DEXPERIENCE solutions in the life sciences industry, we saw growth in the mid-teens at a revenue run rate over EUR 200 million plus. It is a meaningful business. This quarter, we had several wins such as Amgen, Vertex, Corcept, and, as highlighted by Pascal, Nihon Kohden in medtech. They have all one thing in common: we are winning with the 3DEXPERIENCE platform. An additional comment on Medidata. We are confident in our momentum with large pharma, as evidenced by our strong renewals over the last quarters, as well as our pipeline. With regards to the clinical trial market, the volumes have stabilized. However, the market has continued to shift to smaller trials and a lower share of phase three. At the same time, Medidata maintained its market share globally. With Rave Lite, as you know, we are more competitive in the price-sensitive domains and regions. Reflecting this on our outlook, we expect modest growth for Medidata in H2. Moving to mainstream innovation. Growth for the segment was moderate. SOLIDWORKS was up mid-single digits with volume acceleration, and the shift to subscription was well underway. Centric had a softer quarter than expected in Q2 due to the timing of some renewals. Overall, we see Centric very well positioned and expect renewed growth in H2, supported by the tailwinds of renewals and very concrete upsell potential and a good pipeline. Centric's compelling AI-infused PLM portfolio, including pricing, inventory, and now boosted by Centric product experience management, helps fashion and retail customers to optimize design, production, and the distribution of collections in real time. It is a top priority when operating in constantly changing market dynamics. Let me turn to cash flow and some balance sheet items. Cash and cash equivalents totaled EUR 4.84 billion as of Q2, and it compares to EUR 3.953 billion at the end of 2024, an increase of EUR 131 million. Reported on a euro basis, cash and cash equivalents were negatively impacted by the weakening of the US dollar to euro over the period, with an impact of EUR 274 million as of H1. At the end of the quarter, our net cash position totaled EUR 1.506 billion, an increase of around EUR 50 million versus the net cash of EUR 1.459 billion as of December 31st, 2024. Now, let's take a look at what was driving our cash position at the end of the first half. We generated EUR 1.147 billion in operating cash flow for the first six months versus EUR 1.130 billion last year. This is a 2% increase year over year. While we had seasonally strong Q1 cash generation driven by good collection on contracts signed in Q4 last year and improvements in operating working capital, Q2 was mainly impacted by the timing of billings and some payments and the negative currency translation impact. Net of currency, operating cash flow would have been up 4% year to date compared to the 2%. For the first six months, cash conversion from non-IFRS operating income was 1.23 times, similar to last year. Now, for any additional information, you will find the operating cash flow reconciliation in our presentation published this morning. To sum up, operating cash flow in H1 was mainly used for investments, EUR 332 million, of which EUR 240 million was for acquisitions, with the remainder in CapEx of EUR 95 million to support our cloud growth and our facility infrastructure. We paid EUR 343 million in dividends and made net repurchase of treasury shares of EUR 84 million. Now, what to expect for the full year? We now expect operating cash flow to be flat for the full year. The main reason for this change is that in the current volatile business context, it was important for us to secure long-term customer contracts in H1 that include payment terms with collections early next year. The bottom line is we have a timing impact on our operating cash flow in 2025. However, we are securing the long-term value of our customer relationships. The other element impacting the year-on-year operating cash flow growth is related to non-recurring tax payments as well as social charges, which will mainly materialize in the third quarter. This includes the impact of the rate increase on social charges for share-based compensation and the exceptional contribution surtax in France. All of this together is an impact of EUR 65 million-EUR 70 million. This was already factored in our previous estimates. The DSO improved by 14 days versus the beginning of the year, and we want to continue this effort, and we will continue this effort in the second half. Now, looking at our financial objectives, we maintain our full year 2025 guidance range for both total and software revenue to grow 6%-8%, excluding currency, and EPS to grow 7%-10%, excluding currency. That means recurring revenue to be 7%-8% growth, and within that, subscription growth in the range of 13%-15%. As some of you have already reflected in your models, we also adjusted our FX assumptions to reflect recent currency movements, particularly the depreciation in the U.S. dollar. This impacts our revenue and EPS in absolute terms. Thus, we are now expecting to report total revenue for full year 2025 in the range of EUR 6. 410 billion -EUR 6.510 billion. Likewise, there is an impact on our operating profit margin, which we expect to be in the range of 32.2%-32.4%. At the EPS level, we now guide for the full year to EUR 1.32-EUR 1.35, with currencies causing a 4% negative impact. This is all based on our new FX assumptions for an average rate for the year of euro to dollar at 1.13 and euro to yen of 166. Briefly for Q3, let me provide a bit more insight to help you refine your models. We expect Q3 revenue growth in the range of 5%-8%, with software growing 5%-9% and subscriptions 10%-15%. Operating margin is expected to be in the range of 29.7%-29.9%, and EPS growth of 5%-9%, excluding currency, to reach EUR 0.29-EUR 0.30 for the quarter. In conclusion, as I reflect on the full year. You already saw our revenue growth accelerating from 4% in Q1 to 6% in Q2. That was despite the volatile global environment and tariff uncertainties. You can see the momentum building, and we expect H2 to continue in a positive direction. At the low end of the guidance, this reflects a two percentage points of acceleration from H1 to H2. The building blocks are broad-based, supported by our pipeline, including the momentum of 3DEXPERIENCE. In industrial innovation, but not only. The gradual improvement we expect for SOLIDWORKS as well as life sciences. Plus the return of Centric to double-digit growth. Finally, before I finish, I want to highlight that we continue to invest right for innovation for our customers and shareholder value. Everything we do is guided by a single principle: creating long-term value and sustainable value for our clients, our shareholders, and the diverse industries we serve. Now, Pascal and I look forward to taking your questions. Thank you. Thank you very much, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press star one on your telephone keypad and just make sure that your line is not muted to allow your signal to reach your equipment. Our very first question this morning is coming from Adam Wood, colleague from Morgan Stanley. Please go ahead. Hey, good morning. Thanks for taking the question. Maybe just a couple if I could. Maybe just first of all, there's obviously been a lot of discussion around the uncertainty in the markets and the difficulties of getting deals closed. Could you maybe just talk a little bit about the linearity of the quarter with the disruption more kind of weighted to April when that was the kind of peak uncertainty in the market, or has it continued right through the quarter? How did that impact large deal signings in Q2? Then maybe secondly, as we look to the rest of the year, you've talked about some of the drivers to hit the low end of the guidance, but obviously, I think street sits a little bit below the low end of your guide now, and there's an acceleration required, especially in Q4, which has a tough base comp. Could you maybe just talk us through a little bit what would get you to a bit better than the low end in terms of the big deal pipeline, in terms of what you need to see in the bread and butter of the business improving? Maybe if there's any insight you could give on what you're assuming on conversion rates of pipe versus what you saw, especially in Q4 last year. Thank you. Thank you, Adam. I start. I'm sure Pascal has a few things to add. To the uncertainty in the market, you're right. The volatility in the market is persistent. It was there in Q2. We see it probably the most in the U.S. market. If I reflect on Q2, the large deals that we signed in H1, they're very well managed. They have a certain plan in order to close them. Typically, it always goes to the end of the quarter. April for sure was the beginning into the quarter, is when you really formalize and finalize all your plans. Of course, the Liberation Day in April was not helpful in this, creating a lot of discussions, and that was probably not expected so much. I think we managed that well throughout the quarter, and we were able to close what we expected to close pretty much in Q2. There are, however, deals that moved from the first half into the second half, which brings me to your second part of your questions, Adam. Our deal pipeline for H2, when I compare H1 versus H2, as I said, there is a two points of acceleration required to the low end of the guidance. We are now on a trajectory with a midpoint for Q3 to be between 6%-7%, which will then give us around 7%-8% for Q4 to reach the low or 8%-9% to reach the midpoint. Our pipeline is weighted towards Q4. That is right. That's traditionally the case. As I mentioned, we have some deals that came from H1 into H2 that are giving us confidence and visibility into Q3. There are multiple sectors, not dependent on one sector. I think we have a good solid roadmap for the second half of the year, which assumes moderate acceleration quarter to quarter. Q3 also has a favorable base effect, which we want to leverage. We know Q4 was a better quarter last year, but our pipeline is well balanced to manage that. Not only from an industry perspective, I feel it's balanced, it's also balanced from a geo perspective. As we have seen, we had a very good Q1 in the Americas. We have now a strong Q2 in Europe. We had resilient performance across Asia with good performance in China. That is a good starting point as we transition to H2. Any final comments, Adam, I can make? Pascal speaking. At the end, the question you are asking is really related to the Q4. The Q4 pipeline is exceeding 2.5 times, which is a good pipeline. You're right to mention that last year was a good quarter, Q4. The pipeline is really there. As Rouven was saying, it is well diversified from an industry and from a geo standpoint, but also relatively well balanced between large deal and small deal. It is not only concentrating on one or two large deals to basically make the number. The second comment I want to make is the way we build the guidance is very simple. If the volatility stays what it is, what we have seen in H1, we are basically in the low to mid. If the volatility is improving, I think we have enough material to be between the mid and the high. It is as simple as that. That is very clear. Thank you. Thank you very much. Thank you, Adam. Thank you, Adam. Ladies and gentlemen, if your question has been answered, you can remove yourself from the queue by pressing star two. We will now move to Michael Briest of UBS. Please go ahead. Your line is open. Yes, thank you. Good morning. Just in terms of the cloud performance, I appreciate there is volatility quarter to quarter, but 15% growth in 3DEXPERIENCE Cloud is quite a big slowdown from Q1. Obviously, you have an ambition to get to half of the revenues over the next few years. Can you talk about what your longer-term discussions, I guess, are with customers that are giving you that optimism or confidence in that mixed shift and why customers are not adopting to cloud today? Maybe that relates to universes as well. Then, Rouven, just on the back on the cash flow, you made some comments about Q3 and some charges. Can you talk about Q3 cash specifically, what we should expect in terms of year-on-year or year-to-date? Do you think you will catch up, if you like, the flat cash flow performance this year in 2026 with a better than operating profit growth rating operating cash flow? Thank you. When I take the first one, maybe feel free to add whatever you want. Michael, the cloud performance of the 3DEXPERIENCE is relatively linked to the last transaction. That is basically, if I go straight to the point, this is reflecting the fact that in Q2 we did not have one or two large transactions driving or accelerating the revenue on the cloud. Now, why it is linked to the large transactions for the time being? Because most of the large companies have planned to move to the cloud. The reason for them, there are multiples. One is in our space to decommission many, many legacy systems they have. You could not imagine if you take an automaker, an aerospace company, a high-tech company, in the PLM space, how many proprietary software they still have, how many heterogeneous systems. The cloud is really a way to rationalize it in a much better way, assuming you have one common platform for all the applications. This is what we are providing to them. The second benefit, most of the large engagement we do are multi-years, as you know. This is giving for them the flexibility to move the capacity from the design to manufacturing to simulation when it's needed. The level of commitment is secure. However, we are giving this flexibility, and it's not only a business model flexibility. It's also an easy way to provide and to give the services to different users. This is the second reason. The third reason, as you mentioned, is related to AI and with 3D universes. Because if you want to get the benefit of what we do, it's easier to do it if it's on the cloud. Because our engine can automatically work on the datasets and provide through the virtual companion of the generative experiences the capability at the fingertips, if you want, or maybe tomorrow at the speech tips, we should say, because you are speaking to the systems, for all the different users we are targeting. If we project ourselves, I think all the large customers we have in the different industry embarking with 3DEXPERIENCE are projecting themselves on the cloud. The question is after on the mainstream and the mid-market. What we see with the mainstream, the SOLIDWORKS or the Works family, the cloud is really accelerating. I think the primary reason is coming from the AI, because many of those users are looking for productivity tools in order to be more efficient and to do more with almost less. It's relatively affordable for them. Where it's still a little bit lagging behind is on the mid-market, the tier two, tier three suppliers. Why so? Because they have to serve multiple large OEMs, and usually they have different setups for all the OEMs. They do not, I found already their way, if you want, to navigate with one single instance. We are working on it because, as you know, in the auto sector and aerospace sector, we have most of the large OEMs. Them moving to the cloud is definitely opening the door to create what we call suppliers up, and it will happen. It's just lagging a little bit behind. Long answer, Michael, but I think I'm pretty confident on the cloud trajectory in the coming quarters and years. Yeah. Now to the cash flow, Michael. I go specifically to Q3. What's driving the Q3 situation, which I want to make sure you are reflecting that for the next quarter? I see, come straight to the point, the operating cash flow to be down around EUR 120 million year- over- year. That's driven by three factors. The first factor is high payments for social charges related to share-based compensation, and they're significantly higher this year than last year because the contribution rate in France has increased from 20% to 30%. The significant vesting event is in Q3 of our share-based compensation, so that drives an impact. Of about EUR 40 million-EUR 50 million alone to increase. The second impact, as I referred to before, is the timing effect. You mentioned that the contract liabilities are lower than what you would expect. It is because of what I mentioned. We have signed large deals with terms to collect the cash beginning of next year. This timing effect, of course, impacts Q3 compared to the years before in terms of the structure. Of that overall effect, I attribute about one-third of this effect to the third quarter. The timing effect overall, as I mentioned, is about EUR 100 million to make the operating cash flow year over year flat. So one-third of that is impacting Q3. We also have an FX impact on the quarter. To add those three effects together, it is around EUR 120 million. That is what I expect to be lower year- over- year in Q3. Now, Q4, I expect to be improved year over year slightly to reach the flat outlook for the year. Thank you. Will you have a catch-up next year? Yes. Yes. Yes. Of course. There will be the catch-up at the beginning of the year. I expect the majority of it in Q1 because we will have the invoicing at the end of this year and then the collection. We typically have 90-day terms, so we will collect in Q1. Okay. Understood. Thank you. Thank you, Michael. Thank you very much for your questions, sir. I am with Mohammed Moawalla of Goldman Sachs. Please go ahead. Great. Thank you. Hi, Pascal. Hey, Rouven. Two from me. Firstly, maybe, Rouven, just as we think of larger deal impacts, how should we think of the assumptions at the low and the high end of the kind of Q3 outlook? I know you have got larger deals, which tend to be back and loaded, but do you need sort of larger deals to kind of hit at least the lower half of the Q3 guide? Secondly, Pascal, obviously you have seen quite a bit of volatility over the past 18 months, not helped by all the kind of tariff noise. How big of a kind of transformative effect can you see around your visibility or your conversion rates once some of this noise subsides, particularly with regards to bringing some of these larger strategic opportunities over the line? Thank you. Thank you Mo for your questions. Specifically on Q3 guide, between the low and the high, the 5%-8%, I think how we build the guidance for the third quarter is really factoring in the moderate acceleration expected in mainstream for SOLIDWORKS and also the acceleration on Centric in the third quarter. The momentum we have on 3DEXPERIENCE is then going to play out whether we will be the mid to the high or whether we will stay at the mid. We have 3DEXPERIENCE deals, larger ones, fairly advanced. That moves into the second half. We will see if we can close them within September or they will become Q4. Of course, we see Q3 another way for us to de-risk the year. We will be very focused on closing those deals in the third quarter. For now, I really want to make sure the focus of the guidance for Q3 and the expectation should be around the 6%-6.5% growth for Q3. Which really requires to deliver the acceleration on SOLIDWORKS, mainstream, on Centric. We expect a moderate acceleration also in life sciences. The 3DEXPERIENCE momentum with mid-size deals is well underway. The large deals will make the difference. On the volatility, Mo. The best way for me to answer to your question is to tell you that since the beginning of the year, from one quarter to another one, we have two times more deals in numbers and in amounts shifting from one quarter to another one. Usually, we have, let's say, between EUR 25 million-EUR 40 million shifting, depending the quarter, from one quarter to another one. Now it's two times more. Where it's happening. Specifically in the U.S. Why so? Because this is really the geo where we have most of the dependency on the large deals. This is also, and you can see in our quarterly result, we had an outstanding performance in Q1. Q2 in the U.S. is smooth. At the end, it's still a good performance for each one. From one quarter to another one, you have this volatility. That's my best answer I can give to you. The way, again, we have built the guidance, we have taken this into account. Got it. Thank you. Thank you, Mo. Our next question will be coming from Mr. Laurent Daure of Kepler Cheuvreux. Please go ahead, sir. Yes. Thank you. Good morning, Pascal and Rouven. Two for me as well. The first question is back on your comment on the CMD and the EUR 1 billion of revenue long-term on AI. If you could share with us, just for the first half of 2025, how concrete is it today in terms of revenue and the ramp-up and the acceptance, the very early acceptance of customer? My second question is back to the second quarter. I understand that most of the margin shortfall is FX-related. Even without the FX, it seems like it's biased to the low end of what we were expecting. I'm trying to get what kind of costs or maybe the mix of revenue has slightly changed from your expectation into the quarter. Thank you. Okay, Laurent. Thank you for the questions. On the capital market day, I think for you, what's most important to take away is that engagements are going very well. They're very strategic. We are making a lot of advancements and gaining traction. This will help us to. Clearly define and refine the models we are going to apply to capture the value. We are very pleased with where we are. It is strategic and top to top. I think the strategy is resonating very well, and the expectations are high, and that is good. I also want to draw your attention to the fact that the acquisitions that we have made year to date in 2025, starting with Contentserv and now with Ascon, we really have AI at the center. We are bringing this at scale to our clients. We are opening new growth territories, as Pascal was highlighting, in areas where we bring a lot of experience because regulated industries are at the core of our main clients. They are facing real problems that can be very different. They become competitive advantages if you leverage AI and our platform. We have a real opportunity to reposition and drive value in the future compared to where we are today, where we are already very important to them, but our importance will only increase. I think we are doing it from an organic perspective to summarize, but also from an inorganic perspective to enter and conquer new territories of growth. AI automation is a big one that we have talked about today. Of course, from now on, we will have to see this also translating into business and growth, but this is to come. I do not know, Pascal, if you want to add something to this. Maybe, Laurent, I can give you much more qualitative those things. If I look at since the beginning of the year, since basically the announcement of 3D UNIV+RSES, I think we have a collection of engagements being centered around AI. It is not an extension of what we do, it is centered, with a significant change of order of magnitude of what we are talking about. There are certain engagements where the multiplying factor is around five times. That is the order of magnitude. The question is a little bit different, in fact, for us right now. If you look at all the companies promoting AI, all of them, they are losing money. All of them on earth. Why so? Because it is a very difficult thing to price. We have defined the pricing principles. You remember, I explained it. It is a question we had during the Capital Market Day. Now we are confronting this to the reality of the customers. It takes time for them to mature. It takes time for them also to plan it and to predict it for the future. We are right in the middle of this kind of conversation right now. It is not only one or two. I think it is a lot of large engagement we have really centered around this one. In all the sectors: auto, aerospace, industrial equipment, high-tech for sure, and also life sciences. It's maybe not answering completely to the question because what you are looking for is a number for each, too. What I'm trying to be is very transparent with you. The problem is not the number of engagements we have. The number is not the value because the value is really demonstrated. The question is how we are converging on a price which is relevant for our customers and relevant for us as well. That's the real topic. Okay. On the margin side? Of course, Laurent. The margin. We don't forget the margin. Yeah. You're right. To categorize the results, the margin was probably at a lower, it was more of a low light, to be below. It's impacted by currency of 50 basis points. There's another impact related to the dilution from acquisitions, which was around 20-30 basis points. If you exclude that effect, the margin would have been up 10 basis points. Slight improvement year over year. That's one part. Another part is we also had some one-time effects last year in our margin, which made the comparison a bit more challenging. However, of course, this was known coming into the quarter. I expect it to be around, probably more around the low end of the guide, of the margin, which, excluding the acquisitions, is where we are. Now, looking forward, I think, which is more important, I expect the OpEx cost to stay around the 6%. With the acceleration we see in H2, at the low end, 2 points, of course, more compared to H1, we will see the margin expansion in the second half and also contribute to the full year as expected. I hope that addresses your point. Yes, yes. I was just wondering because the impact from acquisition, were you surprised? I'm wondering what's new versus two or three months ago. What surprised you? Because I guess you probably had already the acquisition contributing negatively, the effect from last year. The FX is new. The rest, you should already have it in your forecast. I was really wondering if there was something you were not expecting. No. No. I I was expecting to be more at the lower end of the range to come in. Yeah. The acquisition of Ascon, of course, was new. We also couldn't anticipate how Ascon would close because at the end, it was an asset deal where we acquired a part of the company. There was some restructuring related to this as well. All of that contributed to the slight miss below the low, but I think this was anticipated. This acquisition has been consolidated for the full quarter? Almost. Okay. I see. I understand better now. Thanks. Thank you. Thank you very much, Mr. Daure. Ladies and gentlemen, due to time constraints, this will end today's question-and-answer session. I will now turn the call back over to the hosts for any additional opposing remarks. Thank you. Thank you so much for your participation. Rouven and Beatrix will be on the road, so we expect to see you in person in the coming days. If not, see you after the summer break for the good things. Bye-bye. Thank you very much.