(Reuters) - French software company Dassault Systemes said on Wednesday fourth-quarter revenue topped its guidance on a strong performance by its flagship software platform, sending its shares up over 7 percent.
The company, which in December announced the acquisition of California-based IQMS as part of a strategy to expand the use of its 3DExperience to small and medium-sized companies, said revenue from the platform increased by 24 percent in 2018.
“2018 was a remarkable year, with a record level of large 3DExperience transactions including important decisions within our core industries of aerospace, automotive and industrial equipment,” Chief Executive Bernard Charles said in a statement.
Dassault Systemes’ 3DExperience software platform includes applications for design, engineering and process management that are used by companies in sectors such as energy, construction and consumer goods.
Fourth-quarter revenue came in at 1.04 billion euros ($1.19 billion) versus guidance of 982 million to 1 billion euros.
Its operating margin was 37.4 percent, beating the company’s guidance of about 36.5 percent.
Shares in Dassault Systemes were up 7.4 percent at 1006 GMT.
The company also announced a five-year Memorandum of Agreement (MOA) with Airbus, under which the plane-maker will deploy the 3DExperience platform.
In the next two years the agreement will generate tens of millions of euros for Dassault Systemes, Chief Financial Officer Pascal Daloz told reporters on a conference call.
“We believe investors should be very pleased with the consensus beat and strong performance in Q4, plus the Airbus deal showing continued good momentum with the 3DExperience platform,” analysts at JP Morgan said in a note
For 2019 the company is targeting revenue growth of 10 to 11 percent, with an operating margin of about 32 to 32.5 percent, up from the 31.8 percent reported for full year 2018.
“We see a slowdown in the economy but for us the principle cyclical element is linked to the adoption of technology, and there we are rather in a ramp-up phase,” Daloz said.
($1 = 0.8776 euros)
Reporting by Alan Charlish in Gdynia; editing by Sherry Jacob-Phillips/Jason Neely and Emelia Sithole-Matarise