Good afternoon. Thank you for standing by and welcome to the Dassault Systèmes 2021 Q1 Earnings Investors Call. At this time, all participants are in listen-only mode. After the seeker presentation, there will be a question and answer session. [Operator Instructions] I would now like to hand the conference over to our first speaker today. Francois Bordonado. Please go ahead.

Thank you. Shane. Thank you for joining us on our First Quarter Earnings Conference Call with Bernard Charles, Vice Chairman and CEO; and Pascal Daloz, Chief Operating Officer and CFO. Dassault Systèmes results are prepared in accordance with IFRS. Those of the financial figures discussed on this conference call are on a non-IFRS basis with revenue growth rates in constant currencies unless otherwise noted. Some of our comments on this call contain forward-looking statements that could differ materially from actual results. Please refer to today's press release and the risk factors section of our 2020 registration documents. All earnings materials are available on our website and these prepared remarks will be available shortly after this call. I would like now to introduce Bernard Charles.

Thank you for joining. Good morning and good afternoon to all of you. Before moving to my former presentation, I would like to share a few words on the COVID-19 as crisis. If a number of countries are in somewhat in the first COVID-19 situation, this is not the case everywhere, especially in India where we are worried about our colleagues, clients and partners. I offer them our most sincere sympathies on thoughts. Moving to the presentation, let me share some observations. We are in a very profound period in human history. The entire world has now experienced lockdowns. We've had restrictions affecting our normal family, work, leisure, or social activities for more than one year. For some, there has been human tragedy resulting directly and indirectly from the pandemic. The health crisis has forced companies, industries and governments to adjust to these new circumstances on each of us individually. On acting together, we can have a positive impact. With the real world, and in the function to some degree we have to turn more the virtual to the real world be improved. Dassault Systèmes as a result of that has a big play in this area. This time frame on shared experience brought a new perspective on the future. What does it mean? We are entering a new accelerated period of innovation. I'm not alone in thinking this. It is very clear from discussion with our top clients and partners that industries are entering a new cycle. New cycle of innovation driven by sustainability on truly characterized by the occupation on the human centric approach. Most companies wants to move faster. Change is going to happen on a remarkable timetable. Further innovation as a much broader definition. We speak about new products you used on new experiences on less impact on the planet. Science-based innovation, modeling and simulation coupled with real world evidence, the data is game-changer. This accelerated pace of innovation is required in the industry sector of the global economy we are addressing manufacturing Life Science on healthcare, as well as infrastructure on cities can only be achieved by continued platformization, virtualization of the industry with our 3D EXPERIENCE platform. Coupling, modeling, simulation on extensive data science capability. We are very well-positioned to help customers reset the value chain sums to a wide platform adaption within the ecosystem. Moving briefly to the first quarter, we delivered a very solid start on 2021 with results from the scoring our strategic positioning. Our software revenue increased 10%, EPS grew 20% on recurring software revenue represented 81% of total revenue. The 2021 Q1 results demonstrate the momentum on strong growth outlook for Life Science. It begins with MEDIDATA's platform performance. The Life Science industry more boldly on with the Life Science Global sales organization we established this past quarter. In mainstream innovation, we had a strong Q1 performance with our largest brands SOLIDWORKS on Centric PLM, great results. In February, I was really experience world event for SOLIDWORKS global community was held with the focus 100% on the future, which is now the exploitation of the 3D EXPERIENCE platform. Through the new portfolio that we call 3D EXPERIENCE WORKS. We are seeing positive momentum, especially in the simulation domain on all these, of course on the cloud. Customer engagements confirmed the critical value of the 3D EXPOERIENCE platform or in this case solutions, clearly to provide an avenue for desktop users to go cloud. Looking at the financial perspective of 2021, we are confirming our revenue objectives on upgrading our EPS growth objectives to 12% to 14%, or 17 to 18% at constant currency. Now, let me move to some update on our business. Addressing industries within three sectors of the economy. Our objective is to be, as I said, a game-changer providing new experiences, new value networks, on new ways of working, workforce or the future. For example in Life Science, we have spoken about the shift to a human centric approach with what we call passion centric innovation. When companies in the industry use the virtual world to help and improve real-world passion experiences. The results are improved outcomes, continuous monitoring with devices sending information, we have to have surgeries, next generation precision medicines are such great examples. We bring significant assets to this industry where we are number one in the world. We estimate that 50% of drugs on medical devices are designed with our solutions. In clinical trial, for example, more than 50% of new clinical trials use our Dassault Système MEDIDATA solutions. Our presentation details many more matrix that Pascal will cover. We are mission-critical to addressing these key challenges, creating precision medicine platforms, deploying digital on AI in developing therapeutics and three, helping the healthcare industry delivering value-based care. Let me share two example: BioNTech, well-known now, a beautiful European company utilizing their ML and AI technology platform to develop rapidly COVID-19 vaccine has now adapted the 3D EXPERIENCE platform on our ONE Lab industry solutions on BIOVA with modeling on simulation capabilities to analyze the different COVID-19 variants, the key occupation [ph] right now and potential new ones that could raise. BioNTech has been a large client of MEDIDATA's clinical trial software. And also example is CARRY on for developing novel therapeutics in oncology has expanded its multi-year agreement with MIDIDATA. A fast growing company, we have supporting them selling one product in 2014 to now 10 solutions in 2021. Similarly, as they have expanded the number of trials they do among the new products are AI, artificial intelligence for machine learning -- machine learning by the way. Moving to the manufacturing industry. As many of you know, we are the world leader in the automotive industry with global car manufacturer on supply chain. We have expanded our market presence working with literally all of the new EV startups, strengthening our position in electrical and now we continue again with large OEM standardizing with us as they advance their time lines on their next generation vehicles portfolio. Moreover, we are doing the same with the new players becoming part of the EV value network. This is happening because our portfolio well-matches the needs of this industry. That does some trick [ph] is a key element of the 3D EXPERIENCE platform. In that regard, we are pleased to share that Jaguar Land Rover is expanding its use of the 3D EXPERIENCE platform. We will be supporting the global strategy, reimaging under the leadership of their CEO, Thierry Bolloré. Our industry solutions will help them reach critical objectives including a net zero carbon business by 2039, a Jaguar, all electric luxury brand from 2025 on the first all-electric Land Rover motor as announced by them in 2024. Clean hydrogen fuel cell power development and collaboration with the value network. Our work is around several axes creating a unique experience for it's customers advancing it's telecommunication initiatives improving efficiency and with respect to the value network for integral cost recomposing reactors. In order to achieve these objectives, JLR are selecting several industry solution experience, notably data centric role representing health of the new investment underscoring our strengths in the critical area of investment by companies, and the 3D EXPERIENCE platform for data science and data analytics as an enterprise platform for all types of function in the company. Turning to the world of retailing, go check around to our home buy me for home retailers 3d planning cloud solutions; this helps Gucci [ph] from two important perspective. First, the nature of the client experience providing a truly unmatched experience for customers. And second strengthening the client relationship with -- by changing the nature to an advisory hole for Gucci [ph]. We will let you imagine, create your dream or hope environment is the statement. By the way, I'm also extremely pleased with the strong dynamic of growth we have something PLM in this area. In infrastructure and cities, we are pleased to announce the extension of our strategic partnership with Boeing -- with construction. The success of our current project with reconstructions cost for an accelerated and an extended cooperation by bringing the virtual twin experience to the construction site. For this industry, we are introducing new sustainable experiences never seen before; all in the cloud, or mobile enabled, enabling all actors of the value chain from side workers to suppliers to collaborate and innovate. The initial target number of users within Boeing was the boy construction is about 15,000 users. And more so we've [indiscernible] ecosystem of course. With respect to the cloud, with our two diversification sectors we priotalized cloud on full manufacturing, we have a full cloud portfolio. But we go at the pace of our clients including specific solutions like pilot cloud; I would like to draw your attention to some of our initiatives in sustainability. We have become a signatory of the UN Global Compact and we are a Founding Member of the European Green Digital Coalition. From the unprint perspective, we initiated plans to two-thirds of our new license from products providing a sustainability impact. Last quarter, we were included in the Global Clean 200, the largest 200 publicly-traded companies ranked by green revenue. One example of our work with BMW as a catalyst for sustainable innovation is a good illustration of that, they are expanding their use of SIMULIA for electrical electric vehicles on hybrid systems. An important array of simulation is how to design the most efficient energy management system while taking into account branch requirements and user comfort, sums to 90 to 95 of the analysis being completely using virtual simulation, just a twin [ph] for simulation. This reduces significantly the number of physical prototypes by BMW. With that, let me pass the floor to Pascal.

Thank you, Bernard. Thank you to all of you for joining us today. Let's start with the financial performance, first. So total revenue increased 8% at the high end of our six to eight branch at EUR1.174 billion. Software revenue growth of 10% came in above our range of 7% to 9%. From a profitability standpoint, lower than planning expenses combined with the high-end of the guidance for the revenue led to a significant outperformance at the operating margin and EPS level. In fact, our operating margin came in at 33.9%, we assumed the midpoint of our guidance at 30.7%. Results; in fact, the revenue results contribute to 70 basis points on the upside and the lower operating expenses to 250 basis points. Finally, EPS came in at EUR1.14, growth of 20% versus our guidance of 3% to 8%. Let's zoom on the components of the revenue. First, license and other software increased 25% versus our guide of 0% to 5%. About 5 point of this growth came from a capex preference coming from our customers, of course, and the other contributions to the upside came from results in strong performance in China in civil works [ph], as well as large 3D EXPERIENCE transaction, especially in transportation and mobility. Subscription and support revenue increased 7% versus our guide to 8% to 10%. And during the quarter about one point of the activity, the recurring revenue growth outlook moved through a capex purchase. However, subscription revenue increased double-digit and the churn is really consistent with what we have seen last year and early this year. With respect to services; we were able to improve our gross margin to 12.1% from 2.9% last year, thanks to all the work we completed over the last 12 months. Despite a revenue decrease of 9% compared to our range of minus 2% to plus 2% due to the extended lockdown, in fact, in many countries. Moving to a regional software review. In Asia, first; software revenue increased 10% in Q1. China was by far the best performing geo, up sharply reflecting strong growth across all the engagement models. It had the highest growth, both for software licenses as well as for the recurring software revenue. Korea saw the beginning of a recovery and we had key wins for our 3D EXPERIENCE platform in both, China and Korea. In Japan -- in Japan, sorry, we also saw a strong performance in our indirect engagement model, and all our major 3D EXPERIENCE engagements are proceeding as planned, such as the Toyota, today we are equipping 18,000 people, and the [indiscernible] has been deployed to 14 programs. In India, despite the very difficult situation and environment today, we saw some year-over-year improvement and for that I should thank the team, we did it. In Europe, we are still seeing a mixed environment with software revenue up 6% in total. Northern and Southern Europe, we have the best performing geo and improved activity in transportation and mobility, both with large mobility players as well as utility players. In America, software revenue increased 14% with a strong growth in Life Sciences and in transportation and mobility. Now, let's move to a view of our software revenue by product line. In fact, we continue to increase the reach and the balance. If you look at what we did over the last few years, during the first quarter, the mainstream innovation represents 23% of the software revenue, Life Sciences with 20%. Within the industrial innovations CATIA accounts for about one quarter of our total software, with complimentary brands adding to 32%. In industrial innovation, we saw strong momentum with these brands, notably SIMULIA, ENOVIA, DELMIA, and NETVIBES. While CATIA 3D EXPERIENCE Software increased 12%. Overall activity lead to a decrease of 1% for CATIA. In total, software revenue increased 4% in industrial innovation. For Life Sciences, software revenue increased 16%. We are seeing strong momentum led by MEDIDATA, where software revenue increased 20% in Q1 driven by raise in clinical data management, patient cloud and ACORN AI. MEDIDATA also had solid operating margin performance and a strong cash flow from operations this quarter. BIOVIA is also shifting to subscriptions with its clients and to the cloud. One example is Adzuna, a contract development and manufacturing organizations involved in the manufacturing of biological drugs including COVID-19 related agents. They had adopted the 3D EXPERIENCE platform with our license to cure from pharma and our one lab solutions on the cloud. This is an interesting case, because we see more and more traction on the manufacturing side in this industry and against our one lab solution is really suitable for this market. Moving to mainstream, innovation software revenue increased by 20% in Q1 and strong growth for SOLIDWORKS and Centric PLM. SOLIDWORK software revenue grew 18% in Q1 on both licensed software and recurring revenue stream. Software was up double digit in all the three regions and we saw a recovery patterns at our virtual 3D EXPERIENCE world events. Our partners have also seen good traction with the 3D EXPERIENCE works portfolio with role leveraging our trends in collaboration and simulation, especially. Moving to Centric PLM, software and services revenue were up sharply in Q1 sustaining the recovery began in Q4 with record booking and a strong new customer acquisitions at least multiplied by three. It shows an improvement in the key geographic markets, including Asia, with a notable expansion in China. Finally, in addition to its leading market positioning Home & Lifestyle with global brands in the fashion, it seems early attractions rate in diversification and retail and food and beverage. To be noticed that the acquisition of Centric PLM will be completed at the end of Q2. I wanted to share with one of our SOLIDWORKS customer plastic [ph] works. This engagement I think illustrates very well our ability to address a large scope of our client's needs. This is what we call value added. In this example, plastic [ph] is able to quickly scale and manage multiple production sites at the same time, and it's important because it's part of the COVID-19 swab testing products, and given the time constraint and having this ability to deploy on multiple sites in a very short period of time, it's a key advantage. Let's cover some strategic trends in the industry sectors. While we have covered a number of our industry directly, let me share some of the Q1 performance highlights to give you a sense of activity by industry as we start the year. Beginning with manufacturing industry, we had delivery gross revenue in transportation and mobility marking in offshore [ph] and Home & Lifestyle. Looking at transportation and mobility, this growth came from the strength across a number of domain, including simulation as well as data analytics and artificial intelligence with Netvibes. We are starting to see a recovery with the automotive suppliers and some acceleration of investment by our brands [ph] as they advance their mobility initiatives. Centric PLM drove the double-digit growth in Home & Lifestyle, of course. In the life science and healthcare sectors, licensed software revenue grew 16% benefiting from growth in life science product line as well as from increased customer activity for selling wares in the medical devices company as well as SIMULIA. So, this is also important because you remember when we completed the acquisition of MEDIDATA, I told you that we have a lot of levers to expand this footprint, specifically the medical devices and now you start to see the benefit of this. We are also seeing increased customer engagement in manufacturing with life sciences company. In the infrastructures and city sectors, constructions increased double digit led by our activity in China this past quarter. Now, how were we progressing against our growth objectives? You remember, at our capital market day in Q4 last year, we discussed our growth goals and strategy to reach them. Regarding 3D EXPERIENCE platform adoptions, we have two growth axes. First one so called value up. In fact, increasing the value we bring to our existing customers, our largest [indiscernible] through a broader adoptions of all the domain of expertise. Second one is so called value wide. To extend 3D EXPERIENCE to new customers, including the mainstream market adoptions. Both value up and value wide we bring 3D EXPERIENCE to represent about 2/3rd of our software revenue by 2025. In addition to this, you remember that the cloud adoption is an opportunity for us to bring new category of users and new category of usages, not to substitute our existing footprint. Now, let me recap some key metrics on 3D EXPERIENCE and cloud progressions. First of all, on 3D EXPERIENCE, our non-IFRS software review increased 18%, with licenses and other software revenue up sharply 57%, which is almost twice the growth of the license overall. So the largest license deal in Q1 were more evenly weighted throughout Asia and especially China. Cloud, looking at our cloud configuration, it represents about 18.5% of the total software, a 2 point increase from one year ago. Based upon our end-market sectors, we set the goal last year to reach EUR2 billion in cloud software revenue by 2025, which will represent an estimated 1/3 of our total software compared to 17% in 2020. Our cloud strategy is set to meet our clients wherever they are in the context of their industry. Our strategy is not one to have one size fits all, but a cloud path for all. For that, we have three different paths. The basic one, people -- especially for the newcomers, they start from scratch and they start immediately on the cloud. An extended one, on the edge, when you have a larger on-premise system and you want to compliment with additional set of solutions using the cloud advantages for collaborations, for simulations, to connect also with the value network. That's usually the type of situation we see this path. The last one, [indiscernible] when you have on-premise software solutions connected to our 3D EXPERIENCE platform on the cloud for collaborations specifically, and this is what we call the poor buy [ph] strategy. In terms of capability, with release 21x, 95% of our portfolio on-premise capability are available as cloud solutions and with the one coming this year, we will have more solutions on the cloud than we have on-premise. Moving to cash flow, we had a very strong Q1 at 40% to EUR642 million, net income and noncash items grew 18% with working capital evolutions in particular of non-operating working capital up sharply. Our net financial debt position at the end of March was EUR1.5 billion, which is very consistent with the delivery plan we communicated to you and we are targeting to be at one times EBITDA at the end of the year. Turning now to our 2021 financial objectives, the updates following Q1 are straightforward, taking into account the OPEX upside and maintaining our revenue at constant currency. We are first increasing our non-IFRS duty [ph] objective to EUR4.24 to EUR4.28 leading to an expected growth of about 12% to 14% or about 17 to 18% in constant currency capturing the earning upside from Q1. At the midpoint of the range, these represented a grade of EUR0.14 comprised of EUR0.2 contributions from the revenue and EUR0.12 from the lower operating expenses coming from Q1 obviously and also Q2 adjustment, because we do not expect to have the confinement in all the country in Q2 and we still have some restriction in terms of travel and marketing spending. We increased the operating margin 90 basis points to about 31.7% at the midpoint from 30.8%. We see a higher contribution mix from software revenue as Q1 lockdowns show on-site services work on one hand as well as the expense timing ramp up around to other hires on the other side. This is important because one of the explanations of the good performance the operating margin is coming from the fact that we had an attrition staffing again and we were not in a position to hire sufficiently to compensate to fit to our plan. But nevertheless, starting Q2, we will accelerate in order to be covered and I'm sure, you noticed that we are increasing the number of people we have in research and development, which is really the core of our investment. We are reconfirming our revenue objectives range of 9% to 10% in constant currency. Inside this, we shift up by one point of growth our previous software range, bringing it to 10% to 11% growth. For services, we shift down bringing the services growth range to 4% to 6% growth, removing about EUR21 million. The top line growth this year is essentially all organics. With growth levels aligned with our midterms plan, we share at the capital market day last year. With respect to Q2, you will find our guidance in the earnings press release and presentation. To summarize, we have a solid start to 2021 in financial terms and looking at the growth of our largest industry, strength in two of the three product lines and improving dynamic is some of our largest view is really giving confidence for the year. We look forward to speaking with many of you in the coming days and weeks for virtual conferences. And now, I think I would like now to answer your question.

Thank you. [Operator Instructions] First question comes from the line of James Goodman calling from Barclays. Please go ahead. Your line is open.

Good afternoon. Thank you very much for taking my questions. Firstly, on MEDIDATA, another outstanding quarter, plus 20%, same as Q4. Just wanted to come back to the guidance for the full year. I think last time we spoke, you guided to 14% this year for MEDIDATA. So, I wondered where are your expectation was now for the business? Secondly, on M&A, I think you've made some comments earlier this year about stepping back perhaps towards another large deal, clearly MEDIDATA has been a big success, you probably down to hardly any debt end of next year. So, I wonder if you could make comment there on your M&A strategy? Finally, clarification actually on topic that you discussed this morning and again, just now in terms of this preference for CapEx versus recurring that you're seeing in your customer base, is that specific clients within auto which are taking license rather than recurring deals or are you talking more to sort of coincidentally you're seeing more demand for license in some industries and slightly less so recurring and others? Thank you very much.

You'll notice that I had EUR20 million software revenue in the guidance. So, I think, I'm already capitalizing on the good momentum with MEDIDATA. Now, you have to take into account that you are right. I mean, we had a good performance in W4. We continue to have a good performance in Q1, but the base will not help on this one type of the year. So that's the reason why I would say 15% is probably the right way to land.

M&A, I think, it's so many things we need to do. We discuss that later. I think there is no comment at this point in time in CapEx, Pascal?

Yes, I would say it's maybe you consider more than that's basically the customer we have engaged this quarter of the one having a preference for the CapEx. I do see a strong pattern. Except that last year, it was almost the opposite. The vast majority of the people willing to invest just to be secure. The vast majority of them, they had a preference for the subscriptions. Because it was a way to grow without having too much commitment. Now, the fact that they have been selective in their investment, they are racing their strategy. I think for some of them, it makes more sense to be CapEx based and this is what we are seeing. To a certain extent, we will have much more rebalance compared to last year. That's my only message.

That clarifies a lot. Thank you.

Thank you. Your next question comes from the line of Jay Vleeschhouwer, calling from Griffin Securities. Please go ahead, your line is open.

Thank you. Hello, Bernard. Hello, Pascal. I think you'll be both pleased to know I have only five or six questions this morning. So, Pascal, you alluded to your headcount and your hiring and a year ago, you made the commitment to keep DS's headcount flat in 2020, which you did. For a number of months Dassault had the smallest number of openings within your peer group, all of your competitors had also cut for the most part, but you have fewer than they. Now, as it turns out, you have the most number of openings within your peer group. So, a pretty steep recovery there, including themselves. The question is, how do you think about your additional headcount, vis-à-vis your margin assumptions, if you were to add every one of your current openings, do you absorb that within your current margin outlook?

Yes, the way we have developed it, Jay, is relatively simple. If you do the math in terms of attrition, we are talking about a little bit less than 500 people a quarter. It was the most highest last year. At the same times, we are hiring in average between 600 to 700 people. So, we need to obliviously improve the situations and our goal is to hire much more close to 800 people per quarter. If you do reverse engineering of your printing machine, you will find that approximately, that's the order of magnitude of the number of people we are talking about.

Okay, thank you. Secondly, with respect to cloud, thank you for sharing the percentage of revenue. But the question has to do with your cloud capacity. When we spoke about this last summer, you committed to your vertically integrated approach to DS cloud. My question is, how has your cloud services provisioning or capacity evolved over the last six to 12 months? How much larger is your capacity? How do you see that capacity evolving over the next one or two years to sustain the growth you foresee in cloud services revenue?

First of all, the strategy we have adopted is working. It's not a limiting factor right now. As you know, we have a balance between an external operator on our own cloud. We just open our new cloud infrastructure in Japan. We probably will have different kind of solutions for China, but things are also progressing to be your local operator in China for the Chinese customers. So, I think the secondary market we do at this point in time, we are we are quite agile in setting up dedicated center. I think it's a fast path process and we continue to keep the flexibility and elasticity of using commercial cloud too in case a customer needs our solution and will not be ready to provision them or on our own cloud, we can we can start with our commercial cloud and then migrate to our own transparently without even them noticing it. So, it's a highly flexible environment. We mastered it well. I think for cybersecurity, we think we have an interesting case here as well as for pilot cloud. So we want to be seen as a customer demand evolve with the specificity that we are with our own customers, because they do very sensitive things with our system.

On SOLIDWORKS and relatedly, 3DX Works. First, SOLIDWORKS had what appeared to be its first up quarter in licenses in 9 quarters. So that was consistent with what we had expected. You'll have easy comps for the rest of this year. But looking past 2021, what do you think is the sustainable growth rate for SOLIDWORKS's new licenses? Then relatedly on 3DX Works, my understanding is that last year, which was just a few months of availability, 3DX Works or XCEL [ph] cloud revenues were less than $10 million. When do you think this might become $100 million or more business? Could that be as soon as this year or do you think that's more likely next year or beyond?

The dynamic for SOLIDWORKS, clearly double-digit growth is sustainable. There is no doubt about it. The proof of what I'm seeing, if you look at the performance for this quarter, only in volume, you have a double-digit growth in terms of units. Now taking into account that the fact that with works the did we are also increasing the value.

And the dynamic for WORK family is to supplement with cloud-only; so simulation is cloud-only, our Project management is cloud only, our -- the future of their networks is cloud-only. So as we expand the portfolio around SOLIDWORKS with cloud-only, we can -- we provide two great levels of opportunities for clients. First, a true collaborative native cloud environment fully mobile through web browser, which we think is high performance and keeping for the vivid community of desktop users, what they like taking advantage of the cloud for things which are complex to do on a desktop like simulation. Many of them are now migrating from legacy competitor solutions to our SIMULIA Solution, because it's extremely well integrated and that has been a good factor that I'm sure, John Paolo mentioned that at the 3D EXPERIENCE Works. We don't see it slowing down but it's the other way around. So our future portfolio is cloud.

Lastly, Bernard, on the fourth quarter call, you made some very interesting comments with regard to your internal or cross-segment initiatives, particularly as it relates to life sciences with DELMIA for example our manufacturing and SIMULIA? Do you have an update on that particular cross segment work that's going on? And are there any other examples you can give? Not necessarily related only to the Life Sciences where you're coordinating internally among your various segments.

Well clearly, it's happening on Life Science for manufacturing systems and we are pleased with that. It's happening in construction. We showcase which is cloud only, mobile only, zero code development. It's all parameterization on what we call methods on business experience on top of the platform. We do construction lean -- lean construction and the lean construction is a derivative of a business experience from our lean manufacturing on extremely successful for construction site. So, we have more and more of those good examples and also example for construction project setup. When you have 40-60 supplier all connected online on the platform, native mode, I think this is unprecedented in this industry because even the current player don't offer native cloud at this scale. That's why we said that we easily range 15,000 users in a short time period. Which, by the way, we took the opportunity to provide a DAAS [ph] site based on this 3D EXPERIENCE platform to replace AutoCAD LT, which is quite interesting. On why is that, not because only of the upside, but because platform phenomenon. So, everything is connected on a consistent data environment for the working people on the field. So, I think this is significant illustration. Analytics, same thing, when you do cost analytics in different sectors, it can be shared across both economy sector of the economy as well as industries. When you do supply management, same thing. So, it's only about doing a business experience that speaks the language of the people, but the infrastructure on the services while data science and data analytics are the same.

Thank you very much.

You're welcome.

You're welcome, Jay.

Thank you. Your next question comes from the line of Jason Celino calling from KeyBanc Capital Markets. Please, go ahead. Your line is open.

Hello. Strengthen SIMULIA, this is a segment we don't hear from much, but is the strength more on that SIMULIA works side, or is it more broad based? And then secondly, as you strengthen transportation mobility, or is it also on other sectors?

On the SIMULIA work, if I understand well the question, a lot of SOLIDWORKS customers have been using legacy system on their PCs, basically on their desktop. It's complex. So the number of users and has not been what it should be -- the number of simulation users. They are discovering cloud-based simulation. They love it. I think Gian Paolo presented it with Manish very well at the 3D EXPERIENCE world online a few weeks ago. So, we believe that for the type of SOLIDWORKS community, cloud simulation as well as manufacturing -- and by the way DELMIA works as well as project management, all these will become cloud native and that people are replacing. We have I think 14 partners today. We've been selling and those are competitor solutions that I will not name and they decided to stop to sell these competitor solution on to really replace it by the native cloud solution. So, the dynamic is a positive dynamic. I think this is a high value for them in terms of simplicity, adaption, on ease of use. The second part of your question, was it related to TNN? Pascal, you want to make a comment about that [ph]?

I guess the first part of my question was more about the prepared remarks personally. I think it was mentioned that it was strong in the quarter. Was it for the standalone business? Or was the comment more related to the 3D EXPERIENCE works part of it?

The SIMULIA growth is coming from both side. So, we still have the larger bank install base, we have consumed our additional capacity. But also we have more and more customers using our integrated solution in terms of simulations. Because there is a lot of value to have all those supplication, those roles, being integrated with the platform, because it's a way to do multi-physics, multi-scale simulation, which is difficult to do if you do not have it. So, transportation and mobility, aerospace and defense industrial equipments licensees as well; this is where we have seen the traction and med tech also. So, it's really all actively broad where possibly where the growth was coming from.

Great. And then my second question for Pascal. Last quarter, you outlined how recovery might be more gradual, or at least that's what you were building in to your guidance? But the license performance for Q1 and the guidance for Q2 suggests it might be more of a pronounced bounce back. Any update to your framework here?

Oh, you noticed that I didn't change the revenue targets, even if the mix has more software in it. And why so? Because there is something we were not expecting, frankly speaking. Usually, the last transaction are happening in Q4. And we saw big transaction happening in Q1, especially in transportation and mobility. I will not say it's unusual, but it's rare. And when I look at the pipeline, the pipeline didn't grow significantly, compared to last time we spoke. So that's the reason why I think we are doing some pull-forward which is good because we are securing to a certain extent the guidance. We are de-risking the guidance for the full year. But at this stage, we are still in Q1, we will not look for what to improve the revenue target, to be clear.

Okay, excellent. No, that is actually quite helpful. Thank you.

You're welcome.

Thank you. Your next question comes from the line as Michael Briest calling from UBS. Please, go ahead. Your line is open.

Thanks. Good afternoon. A couple of follow ups from me. Just on the cost side of things. Pascal, obviously very good performance in Q1 and certainly Q2 partly because of the hiring situation. How should we think about margin progression next year and out to 2024? Are the savings this year sustainable? Or does it sort of dampen the level of margin expansion we should get next year? And then just in terms of the recurring revenues. Helpful to get that 17% for 2020 of cloud revenues. I think that means it's 21% of recurring revenues. So, what's the breakdown of the rest of recurring between maintenance and subscription? So we can get a feel for what's driving each of those.

Okay, so let's start with the first question on the margin, Michael. No, I think you know, we took some actions to contain the spending last year because we are facing the pandemic. Our model is requesting to invest especially if you look at the broad scope of things we do. There is no reason for us to push the margin at a higher level. So clearly, next year you should consider that when we will come back to the nominal margin we used to have and -- and we still have some improvement expecting from MEDIDATA, because you know, we have this plan to gain almost 2 points EBIT margin every year over the next two years -- additional two years. So, that's really what's going to drive the margin. Related to the recurring revenue, it's why it's not because I want to hide something. I do not want to give you the precise split. It's because you try to sometimes do complex kind of predictions, because at the end, what is the most important, which is the level of recurring revenue we have. Whether it's coming from the maintenance or the subscriptions. Because if it is really recurrent, you will have almost the same level next year and you do as you could expect to have some growth. So nevertheless, what I could say to you is in the past, we used to serve coming from the maintenance and support and what oneself coming from, subscriptions and things, the acquisitions of MIDIDATA, we are much more close to 60-40.

Okay. Thank you.

Thank you.

You're welcome.

Thank you.

We'll take the last question.

Okay. And your last question comes from the line of [indiscernible]. Please go ahead. Your line is open.

Yes, thank you. Good afternoon. Three short questions from me. The first is on the Life Science business. I understand MIDIDATA is still driving the worse [ph], but the other activity seems to be heading toward a better trend. Do you expect over the medium term too much? The MIDIDATA growth from the other healthcare activity? That's the first one. The second one, it's just a clarification. The services revenue of the first quarter. Do o the address reflect the law [ph] licenses of last year? Or do you still have issues to bill like your last year with Boeing? And my final question is on the second half margins, which implicitly, going to be down year-on-year. So, I was just wondering what kind of hypotheses you were building the model on top of the competition? Do you expect travel already to come back and marketing to be spent more aggressively? Any granularity on that would be useful. Thank you.

Okay, so let's start with your first question. Are we willing to have all the other client we have in Life Sciences converging with the performance of MIDIDATA? The answer is yes. Now, you have to take into account, it's a different model for BIOVIA. The beauty with MIDIDATA is really related to the number of clinical trials. For BIOVIA, it's going to be different. It's really audited to the number of new research projects they are doing, which is to some extent not having the same dynamicity. Nevertheless, what we are doing right now, we are against migrating as much as we can BIOVIA to subscriptions and to the cloud because we want to have a consistent way to engage. We want to have to some extent, one contractual framework with all the customers we have. And we could expect that the two will align because we will maybe not split on the long run. The revenue between MIDITA and BIOVIA, it will be through the solution and solutions combining the two. That's what I can say. On the services side, thank you for the question because you're right, I should have been probably more explicit about this. So definitively, the free services we did last year for some of our largest clients is not something we are doing in 2021 for sure. So the gap, the EUR10 million gap is only coming from the fact that some of our warehouse services, activities cannot be completed, because this has to be done on site. And just because we still have customers not opening their site, it's not something we can do. That's as simple as that. And as you may know, when you miss a services activity, it's difficult to recover over the year. Because we have a limited capacity. Nevertheless, I think you notice that we did great to re-profile our services organization in order to deliver the margin and to have a much better utilization rate. And the fact that we have been able to move from 3% to 12% margin needs dedicated proof of what I'm saying. Related to the H2 margin, yes, you are right. You could assume that the margin will be done compared to last year, but I just want to remind you that last year, we almost cut all the spending. We frayed the hiring and the growth will come on both sides. As I was explaining previously, I will accelerate the hiring because we need to reinforce some of the organizations in order to have the muscle to continue to physically to do what we do and especially to prepare in the proper way 2022. And the second thing is, the more countries are confining, the more the travel will start again and also the marketing and events will start again. So that's really what is factored into the guidance for H2.

Okay, great. Very clear. Thank you, Pascal.

You're welcome.

With that, thank you very much for participating to this call. We are always here for you. Don't hesitate to call us for any further question. Thank you very much again and hope to talk to you soon. Have a great day.

Thank you. That concludes today's conference call. Thank you for participating. You may all disconnect.