Hangzhou, China – June 14, 2024 – A guest walks past the logo of the 2024 Dassault Systèmes Automotive and Transportation Industry Summit Forum in Hangzhou, Zhejiang Province, China on June 14, 2024. (Photo credit: CFOTO/Future Publishing via Getty Images)
Photo | Future Publishing | Getty Images
Stock price of French software giant Dassault Systèmes Shares plunged as much as 21% in early trading Wednesday, on track for their worst trading day on record.
By 9:30 a.m., Paris-listed shares were trading about 18% lower, escaping deep losses after trading in London was suspended due to the crisis.
Dassault Systèmes stock price
The announcement comes after the company released fourth-quarter results on Wednesday morning, showing a 5% decline in revenue from software in the final three months of last year.
For the full year, total revenue was flat at 6.24 billion euros ($7.43 billion), lower than expected, and software revenue barely increased at 5.64 billion euros.
Analysts had expected total sales to reach 6.3 billion euros, according to LSEG data.
The company also set 2026 sales growth guidance in the range of 3% to 5%.
Dassault Systèmes is “leading the transformation of industrial AI” through its industrial AI offering 3D UNIV+RSES, CEO Pascal Daloz said in a statement accompanying the results.
“This is not a short-term goal; it is a long-term commitment to redefining how the industry innovates, operates and competes,” he said. “In 2025 and 2026, we will align our resources with our strategic priorities and focus on disciplined execution that delivers measurable, industry-defining impact.”
“SaaS Apocalypse”
Software companies were at the center of the market’s AI concerns last week, as Anthropic’s new artificial intelligence tools caused a slide in software-as-a-service and data provider stocks. Dassault Systèmes’ stock has fallen more than 4% of its value in one week.
Aoifhine Devitt, senior investment advisor at Moneta, said Wednesday’s plunge in Dassault Systèmes was just the latest example of the so-called “SaaS apocalypse” trade.
“There are real concerns right now about some of the winners who were in the lead last year,” David said on CNBC’s “Squawk Box Europe.”
Analysts at UBS said in a note Wednesday that the earnings report was a “weak finish and weak guidance” for the company.
“[Dassault]talks about ‘aligning the organization to focus’ on execution,” they said. “We have set a target of at least 7% annual growth from 2024 to 2029, but guidance means (the company) needs to grow by 8.2% to 8.9% from 2027 to 2029.”
—CNBC’s Hugh Leask contributed to this article.
