Good day, and thank you for standing by. Welcome to the Dassault Systèmes 2025 fourth quarter and full year earnings presentation call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during this session, you need to press star one one on your telephone keypad. You will then hear an automatic 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 our first speaker today, Marie Dumas. Please go ahead. Hello, and thank you for joining our fourth quarter and full year 2025 earnings conference call. I'm Marie Dumas from Dassault Systèmes, and I'm with Pascal Dalloz, Chief Executive Officer, and Rouven Bergmann, Chief Financial Officer. Dassault Systèmes results are prepared in accordance with IFRS. The financial figures discussed on this conference call are on a non-IFRS basis, with revenue growth rates on a constant currency basis, unless otherwise noted. Some of the comments on this call contain forward-looking statements that could differ materially from actual results. Please refer to today's press release and the risk factors section on our 2024 Universal Registration Document. All earnings material are available on our website, and these prepared remarks will be available shortly after this call. I would like now to hand over to Pascal Dalloz. Thank you, Marie. Good morning or good afternoon, everyone. Thank you again for joining us today to review Dassault Systèmes performance for the fourth quarter and the full year of 2025. Let me start with some opening comments. You know, at Dassault Systèmes, I think we don't only manage for the quarter, we build platform for at least decades. I think if I have to qualify 2025, 2025 was a year of transition, and 2026 will be the year of execution. So they are foundational years, years when we prepare the next cycle of growth, scale, and long-term value creation. Now, let's start with the facts. 2025 was a disappointing year for you, but also for us. We finished at the low end of our objective with 4% growth, FX. I think this performance does not meet the standard we set for ourselves as part of our long-term plan. We own that. Now, having said that, I think we are moving the company forward. We are... What moves forward? First, through the experience and the cloud. We delivered significant wins this year, and we did also a lot of competitive displacements. And in 2026, we will build on this momentum. Second, Medidata and Centric PLM, they faced challenges in 2025, and they weighed our results. I think we are seeing early sign of recovery at Centric, and for Medidata, we are investing for the long term because life science is, in a way, undergoing a fundamental transformation from an efficient document-based processes to an AI-powered virtual twin. This is a shift which is structural, and these structural changes are taking time. The third element is, in 2025, we have introduced 3D Universes. It's a new environment where Virtual Twins and AI converge, connecting the virtual and the real world together in a seamless dynamic loop. In 2026, we want to turn this vision into concrete value. And finally, we remain disciplined on our costs, then we give some detail about it. Why? Because we want to continue to invest in our future growth. So execution matters, but return as well. As we are entering in 2026, you know, we are scaling our transformation plan along three strategic pillar. The first one is a product offerings. We are really reshaping our portfolio, accelerating toward the 3D Universes. And really, you should keep in mind that AI is not an extension of what we do, is a redefinition of the entire portfolio, the same way we did almost 15 years ago with 3DEXPERIENCE platform. Second, the go-to-market. We are transforming the go-to-market executions with a targeted end-to-end engagements, especially in licenses for the top largest 50 accounts and consumer industry, more precisely to the formulated products. We are also transforming our partner ecosystem to generate demands, not only to distribute license. Third, as our customers accelerate their adoption to subscription and cloud, we are introducing the annual run rates, ARR, reporting in 2026. Why we do this? Because I think subscription is now representing half of the recurring revenue, and this is giving a better visibility into health and the momentum of our recurring revenue base. In parallel, we are also evolving beyond seed-based pricing toward value-based model for the AI-powered solutions. Now, let's step back and look at the market realities. You know, in every industry we serve, manufacturing, life sciences, infrastructure, and cities, most of them are under intense pressure. Supply chain volatility, rising regulation, aging infrastructure, and there is an urgent need for breakthrough innovations. These are not only constraints, they are catalysts, and this is where Dassault Systèmes step in. So in manufacturing, we see two realities. Traditional sector face margin pressure and demand uncertainty, at the same time, defense and high-tech are making bold investments where complexity and collaboration are the new normal. And here is really where the 3DEXPERIENCE platform is becoming the de facto standard.... Reducing program timelines to under 18 months in transportation and mobilities, delivering 25%-40% efficiency gains in aerospace and defense, and cutting error by more than a third to half in high-tech through a pre-bridge simulations. In life sciences, the pressure is also intense. Tighter regulation, rising R&D costs, and a shift toward precision medicine. So the customer, they need a new operating model. With our lab-to-manufacturing solution, we help them reduce operating costs by over 30%, while we are turning compliance into a competitive advantage. In infrastructures and cities, demand for autonomous use and resilient system is also accelerating. So the data center demand will double by 2030. The nuclear infrastructure requires safe decommissioning in many countries, and city needs resilience by design. Now, across every sector, our customer prove one things: we don't, we don't just talk about AI, I think we deliver it. Valeo is a great example in transportation and mobility. You know, you know all of them. They are global leaders in automotive technology, from ADAS to electrical systems. Together, we are pushing the boundary with Generative Experience. Here, AI does not assist, it co-creates. By training virtual twins on synthetic data, we generate thousands of design alternatives optimized for performance, cost, and compliancy. And we do this before one single prototype is built. In life sciences, our partnership with Catalyst shows how industry can be reinvented. By moving from static document to data-driven virtual twins, Catalyst is really redefining the zero models. With, you know, clinical trial becoming more agile, patient centricity, and continuously optimized. In infrastructure, with TechnicAtome, we are redefining how next-generation nuclear systems are designed and operated, using virtual twin to connect the entire ecosystems, ensuring the traceability and the compliancy by design. Now, let's move to 3D Universes. Remember, last year, we introduced 3D Universes, but what does it means in practice? 3D Universes are not application the way you know, you know, what Dassault Systèmes is doing. They are knowledge factory. This is really how you would see them, where knowledge could be enriched, when the know-how is scale, and where result can be trusted. And AI is the engine. But it's not an LLM's story. It's not about large language models, because the LLMs, they don't know how to build drones, they don't know how to design humanoids, they don't know how to discover cell therapies. And this is precisely what our customers, they do, and we help them to certify it. So what we are doing, we are building industry world models. Models that understand how the real world works, and also how you built it. And why? Because it's built on physics, it's trained on decades of industrial knowledge, continuously validated by our Virtual Twins, and the result is explainable, certifiable, and trusted. So this is why our partnership with NVIDIA matters. Together, we are combining the Virtual Twin with the AI Factory and an accelerated computing. Launch the video, please. Yeah, speakers? Let's see if the video goes through. Okay, so I hope you had a chance to see the video. I'm not sure, because I'm blind here in my conference room. But in case you have not, you know, the video was basically presenting the purpose of the partnership with, by the way, the voice of Jensen. Jensen was on stage with me last week at the 3DEXPERIENCE World we had in Houston, a very, very successful event. And why this is important? Because we are building the foundation of industrial AI to enable, in fact, three things. You know, in research and innovations, we need to create foundational model who understand the causality, not only just the correlation with the statistical approach. It doesn't work. Second, for the factory of the future, we need to invent software-defined autonomous factories, continuously optimize through the simulations. And last but not least, for the designer, for the engineers, we need to develop skilled virtual companion, not chatbot, but industry-trained experts. So that's what we do, and in 2026, we are turning this into a reality with our new category of solutions. The first one, the Virtual Companions. They are not assistants, they are experts. They scale the knowledge, they democratize the expertise, they turn complexity into productivity.... The second one, the Generative Experiences, is really where AI encodes, if you want, the best practices. Whatever the best practices is coming from the science, the manufacturing, the engineering, and more importantly, we are compliance by default. The third one is the Virtual Twin as a Service. Here, we are not selling any more of the software, the tools. We are selling the end results, which is the Virtual Twins, and it becomes an outcome. So in parallel of this introduction of the new categories, we are also evolving our business model from seat-based licensing to value-based monetizations. Why? Because we want to use these new generative solutions as a way to unlock three powerful levers. The first one is expanding the adoption with the Virtual Companions, mainly building a usage-based business model. We want to monetize the know-how with the Generative Experiences, and as I was saying, we want to sell the outcome with the Virtual Twin as a Service. So now I would like to leave you with one message before to hand over to Rouven. Dassault Systèmes is really undergoing a profound transformation of its business model, transitioning decisively toward a subscription-driven future. The chief, the shift is powered by not only the acceleration of the cloud platform strategy, but also, and probably above all, by the evolution of our offering with 3D Universes. The new category of solution I just mentioned, the Virtual Companion, the Generative Experience, and the Virtual Twin as a Service. This transformation is not incremental, it's a fundamental one. But it's also highlighting one thing, the resiliency of our model, because we continue to grow at a moderate pace, yes, but with a sustained momentum. And you should remember that in our industry, many of our peers, they struggle in such a transformation. We are executing, we are innovating, and we are advancing, and I think our guidance for 2026 is reflecting not only the conviction we have, but also the confidence we have. Now it's time for me to hand over to you, Rouven. Thank you, Pascal, and also welcome from my side. And to all of you on this call, this welcome. Have a good afternoon, and good morning, depending on where you are. Before reviewing the numbers in more detail, I would also like to share three key themes that define 2025. The first one is our core industrial business was resilient in 2025, with strategic client wins. However, we faced a backdrop of tough comps and a complex macro environment in the fourth quarter. We are focused on strengthening our growth model and operational excellence, and we have identified the challenges, and we will now execute to deliver. The second message is centered around the business model evolution. The 3DEXPERIENCE platform continues to drive the transition towards cloud and subscription, with an increasing share in recurring revenue. As AI adoption accelerates, our business model is evolving beyond the traditional seat-based pricing towards usage and value-based models. To better reflect this shift, we will begin reporting an annual run rate, or ARR, and I will talk about this in more detail later. Third, as Pascal said, 2026 will be a year of execution, where we will strengthen our foundation. Our full year guidance for total revenue growth of 3%-5% provides us the room to navigate current challenges, as well as to prepare the organization for a new era of course. With this in mind, let's review the financials for the quarter and the full year in a bit more detail. In Q4, total revenue rose 1% ex-FX, to EUR 1,682 million, with software revenue up slightly, plus 3, plus 0.3%. We navigated a complex macro environment with weakness in France and Germany, mainly in the auto sector, plus headwinds at Medidata and Centric. We have taken the actions to address these issues, which also I will cover shortly. Recurring revenue rose 3% in Q4, with 4% subscription growth, and services was up 11%. Operating profit for the quarter was EUR 622 million, with a healthy operating margin of 37%, up 90 basis points ex-FX, thanks to productivity gains across the group, which we had initiated entering in the year. EPS was EUR 0.40, up 9% ex-FX. For the full year 2025, we saw total revenue at EUR 6,240 million, along with software revenue growing at 4%. Recurring revenue grew 6%, and it's making up now 82% of our software revenue. Subscription was up 11%. We delivered good profitability in 2025, with an operating profit of nearly EUR 2 billion and an operating margin of 32%, achieving 40 basis points of improvement versus last year. The EPS was EUR 1.31, and it was up 7%. Now turning to the growth drivers. The 3DEXPERIENCE platform is at the core of our growth strategy and the foundation to reveal the power of AI for industry. 3DEXPERIENCE revenue grew 10% for the full year, and it's making up almost 41% of eligible software revenue.... As expected, the fourth quarter was impacted by a strong year-on-year comparison. On top, we faced a weak auto sector in Europe. However, important to highlight, we signed several strategic 3DEXPERIENCE deals that have the potential to further expand over the course of 2026 and 2027. This will generate future revenue, and it helps to build the momentum in ARR, which I will come back to shortly. Cloud revenue at the group level grew 9% in Q4 and 8% for the full year. The 3DEXPERIENCE cloud grew a strong 38% and 32%, respectively. This strong growth highlights the value of our platform for clients, where transformation is critical, as is the need to leverage AI. Now, looking at the geos and product lines. The Americas grew 3% in Q4, with a good performance in high tech and transportation mobility. For the full year, the Americas was up 5%, and it was impacted by the weakness in life sciences and home and lifestyle. Now, for the core industries in the Americas, the growth was 10%. Europe declined -5% in Q4, but it was up 2% for the full year. The weakness in the quarter was against a strong comparison base, and with softness in France and Germany, which, as mentioned before, was mainly driven by the challenges in the automotive sector that we encountered in Q4. Meanwhile, Southern Europe was resilient, and Northern Europe gained momentum with strong performance in high tech. The performance in Asia was robust. It was up 6% in the quarter and 5% for the full year. The growth was driven by transportation, mobility, and high tech, with strong momentum in Korea and India, while Japan delivered solid growth. China had a softer quarter on a backdrop of tough comps. Now to the product lines. Industrial innovation was up 1% in Q4 and 6% for the full year. As noted, the quarter was impacted by the lower growth in 3DEXPERIENCE and the particular challenges in Europe. But overall, the full year saw good momentum, led by solid traction with our brands, SIMULIA and ENOVIA, and continued solid growth with CATIA. We are confident on the resilience of our core business, which is led by the cycle of 3DEXPERIENCE adoption, while at the same point, we are preparing for the next wave of growth with AI-based virtual twins and companions. On mainstream innovation, Q4 was up 1% and 2% for the full year. Growth again was driven by the strong momentum of SolidWorks, which was up high single digits in Q4. And as expected, Centric was down double digits in Q4 on a high comparison base. Two effects played a role here for Centric. First, we had some shifted renewals, and second, we saw an acceleration on move to cloud. We expect a marked recovery this year in 2026, with new management in place and a robust pipeline that's building going forward. For life sciences, the growth was lower than expected. Revenue was down -4% in Q4 and -2% in for the full year, as we faced continued headwinds for Medidata, which I will cover in more detail shortly. Outside of this, Medidata signed several strategic account win backs over the course of the year. This included the likes of Novartis, Merck KGaA, AbbVie, and Gilead. It highlights our competitive advantage as we build a strong foundation and expand our footprint within the large pharma enterprise. Now, as we look ahead, we believe, and we're convinced, that the time has come to transform the biopharma industry from a document-based approach to virtual twin-based operations. It is our life sciences vision for the long term. Therefore, let's take a holistic view on our life sciences industry software revenue as it is today. So this first includes Medidata, as well as the 3DEXPERIENCE portfolio adopted by pharma and med tech. And in order to better highlight the growth dynamics, we are differentiating the direct model and the indirect go-to-market model. The direct enterprise business accounts for about 70% of our total life sciences revenue, and this business grew 3% in 2025. Within that direct enterprise business, Medidata enterprise grew 1%. However, this growth was impacted by Moderna, one specific client, which was adjusting its runway to reflect lower study volumes. If we exclude this, this adjustment, on the Moderna renewal, the enterprise business for Medidata was up 6%. Meanwhile, the 3DEXPERIENCE business grew 7% in the enterprise segment. Now, let's take a look at the, at what we call the indirect business or volume business, where we are selling through CROs. This accounts for the remaining 30% of our life sciences business as of today, and this one is declining by 5% year-over-year. Our market saw a lower study start, volume of -7% year-over-year in 2025. Now, the revenue was down -5% in this segment on a, on a reduction of study start of -7% across the industry. Now, importantly, we continue to expand our market share in this segment of phase two and phase three trials. So what actions are we taking to reinvigorate the growth? To address the enterprise, we are setting in motion dedicated account teams to focus on pharma transformation with platform and AI. These teams are formed and in action across all the geos. And for the indirect volume business, the goal is to reduce our exposure to volatility in the volume business. To this end, we are evolving our pricing model and terms and conditions to monetize continued data access. Now, in order to leverage AI models, this is necessary. When you want to optimize the design of clinical trials, you need to be able to access the data and the platform. Now turning to the cash flow and balance sheet items. Let's start with the operating cash flow. We generated EUR 1.63 billion in operating cash flow year to date, up 1% compared to last year on a constant currency basis. Indeed, despite a challenging environment marked by FX headwinds and new tax regulations, we saw resilience in cash generation. As previously discussed, we absorbed approximately EUR 40 million in 2025, driven by equally the hike in employer contributions on share-based compensations and the new exceptional tax contributions for large companies in France. Excluding this operating cash flow grew 3% ex FX. In the first half of 2026, we expect the working capital to be positively impacted by the collection from large subscription deals that we signed last year. Now to the free cash flow. It was up 2% ex FX. CapEx investments were lower by approximately EUR 30 million, due to lower investment in leasehold improvements versus 2024, while investment in cloud and IT infrastructure was stable. Cash conversion remains a top priority. We reached 82% for the full year 2025, versus 84% last year. This—the year before, 2024. This is ahead of our previous estimates, mainly due to higher collections. In 2026, we expect cash conversion rates to improve, driven by cash collections and better alignment of billing to revenue. Now, to complete the picture, cash and cash equivalents totaled EUR 4.125 billion at the end of 2025, which compares to EUR 3.953 billion at the end of 2024. This increase of EUR 173 million includes a negative full year currency impact of EUR 263 million, which is mainly due to the weakening of the US dollar to euro over the period. The net cash position reached EUR 1,530 million at the end of Q4 2025. Now, any additional information you will find in the operating cash flow reconciliation in our presentation, which we published earlier today. Now, let's transition to the ARR disclosures. As we previewed, as we previewed with you at our Capital Market Day in June 2025, we are now introducing an annual run rate. We are now introducing the annual run rate, ARR, as a key metric to reflect our continued transition towards a subscription and cloud-based business model. We believe that ARR provides a consistent view of the underlying run rate and the health of our recurring revenue base, while eliminating the volatility from revenue recognized. As such, ARR is a snapshot reflecting the 12-month recurring value derived from all the active contracts at period end. This includes software subscriptions, Cloud SaaS hosting, as well as support, and it excludes future commitments. In the appendix, you will find a detailed definition of the ARR and how the methodology is applied in three illustrative examples. Growing at an average of 6% over the last two years, the ARR highlights the consistent execution in growing subscription and cloud, driving the growth of our recurring business. It also- it is also more closely tied to invoicing and cash flows from those deals. Now, in Q4 2025, ARR reached almost EUR 4.5 billion, with EUR 104 million of net new ARR in the quarter. This highlights the consistent performance in signing new cloud and subscription contracts, while, as mentioned before, the revenue is highly dependent on the timing of revenue recognition. In 2026, we are establishing this new metric in our reporting and plan to guide starting in 2027. During the Capital Market Day, which will be scheduled for November this year, we will outline the steps in the context of our 2029 financial plan. As we look ahead, it's clear that the trajectory to accelerate growth is linked to the shift in business model. Now, let me discuss very briefly the levels of ARR first of ARR growth with you. First, the mix effect, which is driven by the faster growth of subscription versus the maintenance ARR. The second growth level is the growth in 3DEXPERIENCE and cloud, as AI-powered virtual twins and virtual companions boost our 3D Universes portfolio. Third, within life sciences, we expand the footprint, and we create the next generation clinical trial platform powered by AI. And finally, with Centric, the ARR growth has a long runway ahead. Now, with this, let me turn to the financial objectives for 2026. We expect the total revenue and software revenue growth of 3.3%-5% ex FX for 2026... Importantly, this guidance marks a tipping point. In 2026, the share of subscription revenue will surpass the maintenance revenue. Hence, we are providing also the ARR to better reflect the growth dynamics, not yet as a guidance, but to show the momentum. The operating margin is expected to achieve a 40-80 basis points improvement ex FX, which takes us to the range of 32.2%-32.6%. As we continue to balance investments and margin expansion, leveraging our operating productivity gains, we see EPS growing at 3%-6% ex FX, or EUR 1.30-EUR 1.34. This is all based on FX assumptions and an average rate for the full year of USD to EUR at 1.18 and JPY to EUR of 170. Now, turning to Q1. We expect 1%-5% growth for both total and software revenue, and operating margin is expected in the range of 29.2%-30.7%, and EPS in a range of EUR 0.28-EUR 0.31. Now, finally, I would like to share some key assumptions, which are underlying our guiding framework for 2026. We expect 3DEXPERIENCE and cloud momentum to remain broadly in line with last year, driven by continued expansion within our installed base and ongoing market share gains. We're also focused on entering into the new markets and accelerating the monetization of Virtual Companions and Virtual Twins. From a geographic and industry standpoint, the demand in Americas remains healthy, while Asia continues to show resilience. In Europe, we see a solid pipeline development in southern and northern regions, which is partially offset by continued weakness in the automotive sector, which we mainly observe in Germany and France. This could potentially impact the timing of decision-making within quarters. The defense sector represents potential upside. Now, within our mainstream business, SOLIDWORKS continues to deliver mid- to high single-digit growth in both revenues and users. For Centric, we expect a return to low teens growth, supported by execution against a strong pipeline and a higher mix of cloud revenues. Life Sciences is facing a transition year, with actions underway to position the business to return to growth starting 2027. On margins, we expect continued improvements driven by productivity gains from AI initiatives and operational excellence. These initiatives are focused on increasing the flexibility and reallocating investments towards top-line growth. In conclusion, in 2025 and 2026, we're laying the foundation for our next phase of growth. I want you to remember three things: First, 3DEXPERIENCE Platform is at the core of industry transformation, creating a long runway of growth. Second, on AI, we are introducing new categories of solutions, which goes beyond productivity gains. It's about creating new possibilities. And third, we are taking actions to scale our operations with one single goal in mind: to generate sustainable growth. And now, with this, Pascal and I look forward to take your questions. Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A queue. This will take a few moments. Now we're going to take our first question. It comes to the line of Frédéric Blanc from Bank of America. Your line is open. Please ask your question. Hey, good afternoon, Pascal and Rouven. Two questions, please. First of all, on M&A, clear message this morning around appetite. Can you share a bit more around your thinking here? Are you thinking bolt-on, or is appetite for larger deals, any specific gaps in capabilities that you need to address or want to address? And then second, more broadly, when we look at the execution problems we've seen in the last two years, can you discuss some of the main priorities and changes you're implementing from management or KPI perspective, anything around compensation criteria for management that you can share with us? I mean, particularly, do you think the-- you're gonna focus on non-adjusted EPS is the right criteria to align your long-term strategy with value creation for shareholders? Thank you. Okay. So thank you, Frédéric, for your questions. So related to the M&A, again, we have different scenarios. But, but, but I would say, between the last transaction, the way we did, at the time of Medidata and the bolt-on we used to do, acquiring company doing EUR 10 million-EUR 20 million, there is something in between. And this is the in-between we are targeting. That's to answer to the first part of your questions. The second one is, you know, the M&A for us is, again, is not a way to bridge the gap for growth. It's to build the foundations to sustain the growth over the time. So if I step back a little bit and I look at the different phases we had from an M&A standpoint, you know, 15 years ago, we were using the external growth as a way to build the product lines. ... This is how we have created the brands, combining the external growth with our organic development. We will continue to do this, and we have opportunity to complement the domain expertise with some extension. Then after, we did some major move to be much more industry-focused. This is how we, you know, we lead the decisions to acquire Medidata and Centric, to build a presence in the diversified industry, to rebalance, if, in a way, the portfolio of customers, not to have too much dependency on aerospace, autos, and industrial equipments, but to be more diversified in the consumer-related industry, as well as in the life sciences. By the way, both sectors spending a lot in innovation right now. Third element is, what's next? What's next is 3D Universes, right? 3D Universes is about how we are leveraging artificial intelligence in conjunction with industrial data sets. This is what is driven, what is driving our thinking process. And again, as a capital allocation, I want to use the capital as a way to not only accelerate the organic growth, but also to build and to expand and to create barrier to entry in everything we do. So that's the answer. The second topic related to the management and KPI. There are certain decisions we have taken. So if I look at what didn't work in 2025, let's start with Centric. But you know the story. We basically have rebuilt the management, starting with appointing a new CEO. And now, if I look at the management team, almost half of them are new. So clearly, I think it has been done last year. Now, if I look at life sciences and Medidata, the point where we want to accelerate the changes is on the go-to-markets. And I think Rouven's explanation about the performance we have in the large enterprises, in conjunction with the situation we need to fix with the volume business linked to the CROs, is requesting, anyway, a different go-to-market. So that's the reason why, for the large enterprises, we are combining the two go-to-markets, the traditional one of Dassault Systèmes, in conjunction with, you know, the Medidata one, in order to have one single team, one client executive to take care of the top 50 largest accounts we have. And the reason is because in everything we have, we have the ability to position our solution at the enterprise-wide level, not only at the domain or the department level. That's one thing. The second one, we are also changing the leadership for the sales, and we have a newcomer who gonna take this responsibility starting Q2. He's already with us. He's coming from AWS, and he was in charge of the life science sector for the entire AWS worldwide. Now speaking about the next topic, which is the indirect channels, because you notice that the growth where we are growing mid-single digit versus the high single digit, it's basically the indirect part. So I have appointed two senior executive in order to help me to accelerate the transformations. One is an operational officer, in order to accelerate basically the efficiency to redesign basically the ecosystem, because with the new solutions coming, anyway, we need a different kind of ecosystem to continue to expand. The second one is, we need also to invent the frameworks, the new terms and conditions, the new contractual terms, the new commissioning systems. This is the reason why I've also appoint a transformation officer, a guy coming from McKinsey. He used to run, basically, the practice in Europe for the high-tech and media sectors, so he is very aware about all the benchmark, and he has this knowledge to put in place. That's concrete example of what we do from a management standpoint. Now, from a KPI standpoint, I mean, my number one objective is to, again, accelerate the transition to subscription. That's the reason why Rouven is basically coming with this new KPI, the ARR, because without it, you will have a hard time to understand the performance of Dassault Systèmes. The proof of what I'm saying is, look at Q4. Q4, you will conclude that we grew only 1%, flattish on the software side, and if you look at the ARR, it's EUR 105 million plus amounts of EUR 1.5 billion software revenue, which is 7% growth. You need to have this ARR as a way to understand the dynamics and the growth trajectory we are building. That's point number one. Point number two, I'm sensitive to the cash conversion as well, right? Again, the subscription model is changing the equations. When we used to be mainly a license, we were up-fronting most of the revenue. Now, we have to take into account the fact that with the cloud, we spread the revenue, and then after, you have the ramp-up from a user adoption standpoint. That's also another indicator which is becoming something important. We are also incentivizing not only the finance, Rouven and his team on this, but also some of the geo leaders who are running the business. I hope with this you have a clear understanding of what we do. ... Thank you very much. Thank you. Now we're going to take our next question. The question comes from the line of Nicolas David from Oddo BHF. Your line is open. Please ask your question. Yes, good afternoon, Pascal and Rouven. Thank you for taking my question. I have two as well. The first one is, could you help us reconcile the fact that you plan to accelerate the move to subscription, going forward, and the fact that in your guidance for this year, in the end, you expect a very robust license sales, actually better than in 2025. And oppositely, subscription growth, slower than than 2025, in 2026. I understand that you don't expect maybe that to weigh more in 2026 than 2025. So it would be interesting to understand why you don't expect a better subscription growth and weaker license. And by the way, about license, I'm also quite impressed by how narrow is the guidance here, in the context of this transition. For instance, in Q4, you had a very wide guidance range. So, could you help us understand why this time you were able to guide very narrowly? And the second question is regarding AI. Could you help us understand if you see AI as a factor which is lengthening the time it takes from clients to sign contracts because it includes another viability, another variable, or another angle of discussion beyond cloud, beyond subscription, and so on? And is it something which is a good opportunity for you, but in the short term, lengthening the sales cycle? Thank you. Okay. So thank you, Nicolas, for your question. I will start, Rouven, and feel free to add whatever you want. So the first part is... So let me tell you the things. You notice, by the way, we put the guidance in the appendix, and the reason is the following. You know, yes, we are accelerating on subscriptions, but and then after, we need to guide the market with concrete KPIs we have and basically some early indicators we have in our systems. So what do we have? We have the pipelines. And in the pipelines, many of the opportunity we have are still declared as a license opportunity. And we know that when we are transactioning and when we are contractualizing, this license is usually turning to subscriptions. So, that's something you have to keep in mind, right? So now, you know, Rouven and I, we have to build the system on something which is credible. It's not something coming from our hat, if you want. So there is a twist here. The second one, there is a mix effect. Why there is a mix effect? Because, you know, if you look at the different geos, we are massively overall—I mean, the subscription is much bigger in Americas than the license right now. This is also true in Europe, but this is not true in Asia. And just because we are anticipating a slowdown in Europe right now, given basically the uncertainty we have on the auto sector, automatically, Asia is overweight. So there is also a second twist here. And last but not least, you have the rev rec topic. Because, again, when we have some customers contractualizing, you know, subscription, multi-year, on-prem versus cloud or versus hybrid, this could have also an impact in which line we recognize the revenue. So that's basically the reason why I think we were communicating on the convictions on the software growth. The split between the two, you still have some moving parts. Nevertheless, the ARR is calling for an acceleration of the subscriptions. So I hope I give you reasons for you to reconcile, if you want, the guidance with what is happening. Now, on the AI. In fact, it's the opposite, Nicolas. I think AI is helping us to shorten the cycle. Why so? Because it's automatically on the cloud. It's relatively hot in many engagements we have right now. And AI is calling for very short return on our investments. So I think this is, my view, a way we can use as a way to accelerate certain transaction more than to slow down, if you want, the decision process. So that's the reality we are seeing, and this is my experience for the last, let's say, nine months, is with the new solutions we are bringing on the market. That's clear. Thank you very much. Thank you. Now we're going to take our next question. The next question comes to the line of Jay Vleeschhouwer from Guggenheim Securities. Your line is open. Please ask your question. Thank you. Hello, Pascal, Rouven, and Marie. Pascal, I'd like to start with some corporate or strategic questions. You noticed some changes in management and go-to-market for Centric and Life Sciences specifically, but for the remainder of the business, the bulk of the business that we would call engineering software, are there any other changes that you've considered? What I have in mind, for example, is that you have an unusual structure with regard to the brand CEOs. It's unlike what we see elsewhere in the industry. You know, perhaps there are more disadvantages than advantages to having that structure, that something ought to be considered. Then similarly, with regard to go-to-market, is there anything that you're thinking of doing with regard to CPE and/or CRE, with regard to the engineering software markets? A couple of other strategic questions, please. Okay. So let's start. First of all, good morning, Jay. Let's start with the first one. Why do we have brand CEO? It's because if you look at domain by domains, we do not have the same competition. And if I want to keep the focus to stay at basically the best of breeds in everything we do, I need to have a leadership with having the clear focus on the domain expertise. And you will basically accept my comments. If you look at the diversity of the domain we are addressing, you do not have one single competitor. None of whatever, it's Siemens, PTC, or now maybe the EDA players in the simulation space, none of them they have exactly the same scope of what we are covering. Between life sciences, between manufacturing, between engineering, between simulations, between life cycle management. So this is the primary reasons why we are keeping this. It's not creating complexity, as you imply. The reality, it's the best, let's say, coordination mechanisms I have with the research and developments. Right. Because... And you remember, last week, Jensen, when he was on stage, he was joking about the brand, right? About the diversity and the funny name we have. But at the same time, he was recognizing the extremely, specialization of them, which has a lot of value in this new AI game. So this is my answer to the first part. The second one is, yes, we have two indirect channels. And I heard many time, why you are not converging them? Let me explain to you why it's a bad idea. There are two fundamental reasons. One is because we are not asking them to do the same thing. Theory is about volume, it's about footprint, it's about short cycle of time, it's about cloud, it's about packaged products. So this is what theory is about, right? Today we have 400,000 customers. We are more than 45 million users worldwide. A vast majority of them are coming from this machine, which is a volume base. Why this is important? Because as soon as you have the footprint, you can build on top of this. You can diversify in term of products. You could accelerate in term of transformations. You could bring the services on top of this. This is the reason why we have a second indirect model, which is so-called CPE, because they are the one who are building the roadmap to value up this large install base we have, especially in the ecosystem of the large OEMs. Because as you may know, with the direct sales, we are addressing almost 4,000 accounts worldwide. This is important to capitalize on the ecosystem of Boeing, Ford, you know, JLR, all the big OEMs we have. The ecosystem is not only the tier one and the tier two, it's really all the ecosystem. This is where CPE is extremely instrumental to do that. I have no intent to merge this. The second reason, the business model is different by nature. Because if you are volume-based, it's a high velocity, low touch, and the cost of sales should be relatively limited. CPE, it's almost the opposite. It's high touch, low volume, but it has to be extremely skilled. The cost of sales is obviously not the same, and this is the reason why you cannot merge the two together. This is the second reasons. And last but not least, depending the industry, we have different way to tackle. If you take the core industry, clearly, auto, aerospace, CPE is almost an extension of the direct sales. And if you look at the very fragmented industry, like industrial equipments, med devices, you know, constructions, clearly, CRE is really the engine to tackle this market. Long answer, but I think with this, you have the strategic thinking, sure. Okay. Secondly, the NVIDIA partnership is perhaps more comprehensive than any partnership we've seen DS announce previously. It covers, you know, a variety of technologies and ambitions. What are the executables as you see it for you, and particularly as it relates to R&D, in terms of making sure that this partnership works? And then as well, four weeks earlier, NVIDIA was on stage with your counterpart at Siemens. How do you distinguish your relationship from that relationship? And then finally, on the strategic front, there were some questions earlier about M&A. Perhaps you could be a little bit more specific about that. You have, I think, two strategic needs or dilemmas, perhaps in terms of the completeness of the portfolio. So when we think about, on the one hand, your needs in simulation, where the competitive environment has materially changed, and then on the other, infrastructure and cities, which of those two do you think might be more important for you to solve? And then, not, not quite the same question, which do you think might be easier to solve? Okay, cool. A lot of questions, but, I will start with NVIDIA. So I think there is some differences, by the way, there are some differences compared to what we do with NVIDIA and some of our peers. And by the way, if you look at the keynotes I did last week, I asked this question to Jensen, and he gave some answers. The first one is from a research and development standpoint, we are building the world model together. And, you know, the next generation after the large language model will be the model who understand the physics, who understands, you know, the world we live in, but also how to create this world. So you need to understand the physics on one hand, and the engineering and the manufacturing on the other hand. I think we are by far the best partner combining both, by far. So one element we are doing together, we will co-develop the world model to for us to be able to build the industrial part on top of it. And for that, we are reusing some of the pre-compute model NVIDIA has already built. This is one thing. The second one, there is a difference between the agent and the virtual companions. The agent is really a way to optimize the workflow. The companion are the one to explore the different alternative and all the different options. So to do that, we need a specific computing infrastructure, and we are again specifying what we are what we need to NVIDIA for them to deliver it in order for us to scale. Last but not least, we also have a common go-to market. You know that NVIDIA, they are not selling direct. At least they are selling, especially in the industry; they are selling indirect. So nevertheless, they are widely used already in our installed base. So we are also aligning our forces in order to tackle some specific accounts in order to scale. And my last comment, you notice that NVIDIA is not only a partner, but it's also a customer. Because they bought our Virtual Twin for their AI factories. And this is extremely important because, as you may know, it's a gigantic investment that the entire planet is ready to do with, a factory which is at a level of complexity, which is far beyond now what the nuclear plant is about, and with less maturity on the technology. So you need this virtual world in order to connect all the different pieces together, the computing power with the energy supply, with the supply chain, with the, basically the buildings and so on. So it's a very complex ecosystem you have to aggregate, and without the virtual twin, in fact, most of those projects will be at risk. And that's one of the reasons why, you know, NVIDIA is investing on our solutions in order to build the virtual twin of their AI factory, including the blueprint. And this blueprint will be used by the entire NVIDIA ecosystem to deploy their technology in all the AI factory around the world. Now, M&A. The choice between simulations and, you know, cities and constructions. At the end, I will consider both, but probably with a different approach. Let me explain to you why. I think AI is also changing the simulation world, because with what we call the Virtual Twin of the behavior, which are nothing more than, you know, an extension of the surrogate model, we have a way to democratize the simulations. It's something obviously we started to develop organically, but there are startups around the world we could acquire in order to accelerate and to speed up basically the completeness of the portfolio for all the different disciplines. And this is extremely important, Jay, because we, as you may know, for a few years, we are combining modeling and simulation together. Which is pretty unique, because if we use a surrogate, we have basically a generative approach in order to use the simulation and to use the simulation as a way to create the 3D, not the opposite, to create the 3D and then after, to run the simulations. Which is simulation proof, if you want, by design. So this is something we are doing. Again, keep in mind, we will continue to invest and there are probably startups, teams around the world who could nicely complement what. Infrastructure and cities, the topic is different. We have the solution, but we do not have the go-to market. At least we have a certain go-to market. Now, the way, and you know, the way I have approaching it, I do not want to be the general purpose, channel. I want to be specialized by domain. I want to sub-segment this market. In a way, I think what is important, I want to have dedicated team for the complex, capital-intensive projects, whether it's a nuclear plant, an energy systems, civil engineering infrastructure, right? But I also want to, a data center or an AI factories, right? And you need to verticalize, and you need to bring basically, not only the software, but the expertise which goes with it. And for the volume, remember that most of what you have in the building, whatever is the windows, you know, the walls, the roof, has been designed with our software. And most of it, by the way, is coming from SOLIDWORKS. So we also need to have an approach, which is how could we capitalize on all the parts, all the contents, all the equipment, which has been designed with our systems and could be repurposed, if you want, in the context of the buildings. And I think with AI, we have a way to change the game. So. But again, I still need to probably have more people, more expertise on the market in order to accelerate the penetration of this sector, which is extremely fragmented, by the way. Okay. Thank you, Pascal. Thank you, Jay. Now we're going to take our final question for today. It comes from the line of Balaji Tirupati from Citi. Your line is open. Please ask your question. Thank you. Thanks for taking my questions. Couple of questions from my side as well. You have mentioned the business evolution from seed-based pricing to value-based pricing model, which obviously is quite important in the age of AI and agents. Could you tell us how compressed this transition could be? And what changes in offering and go-to-market motion you are required to make, given the ongoing subscription transition is already underway? And lastly, where are your customers in readiness to accept changes in pricing model without seeking certainty in pricing? Thank you. Okay, so I spent time to explain this morning, but I will try to summarize it. First of all, the new category of solution is not an extension of what we do. It's a new category of solutions. Meaning, if you have a Virtual Companion, the Virtual Companion will continue to use CATIA. It will continue to use SIMULIA. It will continue to use DELMIA. So why I'm saying this, it's because we have to segregate in a way, the value independently of the tools for those companions. And this is the reason why we came with what we call units value. Many of my customers, the biggest problem they have is what? Either they struggle to hire people, right? They will be extremely, extremely, happy to have Virtual Companions, having the highest degree in mechanical engineering, the highest degree in electronic design, and the highest degree in, basically, advanced computing and simulations. So that's what the Virtual Companion is about first. The second one, we have many customers, they have, you know, a capacity in engineering who needs to be a little bit flexible, because when they have a lot of project, they need extra, and when basically they have less project, they need to adjust. It's a way to give for them the flexibility from a human standpoint. Why I'm saying this? Because at the end, we are not forcing the customer to buy the Virtual Companions, right? They are free to decide if they want to buy it in conjunction with CATIA or if they want to basically stay with what they have. The fact that the two values are completely separated is much more easier to articulate in a way. The last nine months is, in all the engagement we have been in, I think we have been able to prove that the value is real, and we have been able to prove that we can price it independently of what we do. Now, it's probably a little bit early to conclude that everything is set, because we need to have this approach in all the industry we serve, in all the domain we serve. But the framework and the model is in place in order for our go-to-market people, I mean, the people on the field, to make proposal with prices, with terms and conditions. Thank you, Pascal. So, would it be fair to understand that your existing tools in CATIA, ENOVIA, et cetera, they would continue to be having the same pricing model, they will not be moving towards more consumption-based pricing? No, no, because let me tell you why. Because I think what I want the user base is basically the companions. And why? Because, again, it's a way to—for me to accelerate the adoption. If you look at my biggest constraint right now, if you take CATIA, for example, there are certain domain where the number of people who have the expertise to use the software is quite limited. And believe me or not, this is one of the biggest obstacle we need to remove. The virtual companion is an answer to this, and I think it's very sane not to mix the two, which will give me the two legs. The one which is the user-best centric approach, with the traditional or role-... process and solutions, and the users-based approach, which is much more AI-based. Right. I think the value is the combination of the two. Very clear. Thank you. Thank you so much. Thank you so much, Balaji. Thank you. They run out for the questions for today, and I would like now to hand the conference over to Pascal Daloz for any closing remarks. Again, thank you very much for your participation and for your engagement today. Again, if we step back a little bit, the real question right now in our industry is, AI is fundamental, and this is changing a lot of things. The question will be, who are the winner? Who are the losers? I think with what we started to show to you today, we are building the foundations, we are putting the execution in place, and we have the determination to win. Not just to compete, but really to lead the industrial AI. That's the reason why in November this year, we want to have a capital market day. Usually, we do it every two years, but I took the decision to have one this year, and not in June, but more in November timeframe, to link, in fact, these visions we just crafted last year and how to connect it with the long-term plan we have. I think this is an essential, and we will provide a lot of details and information on this. In the meantime, I think Rouven and the investor relations are looking forward to see you on the road when they will do the road show. As far as I'm concerned, I will see you no later than the next quarter. Thank you so much. This concludes our conference call. Thank you for participating. You may now all disconnect. Have a nice day.