The Capital Cycle Podcast Dassault Systèmes
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Feb 28, 2025 Jordane Guillot, an investment analyst at Marathon Asset Management, dives into Dassault Systèmes, a leading French technology firm. He discusses the company's current valuation challenges while highlighting its crucial role in industrial design. The conversation covers unique capital cycles in engineering software and strategic acquisitions that bolster market position. Guillot also addresses the impact of the shift from license-based to subscription models and the significance of advancements like virtual pre-testing in drug development.
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Dassault Systèmes' Origins
- Dassault Systèmes originated from Dassault Aviation, a French defense company known for fighter jets.
- Initially an internal tool for 3D plane visualization, it became a profitable product sold even to Boeing.
Profitability of Dassault Systèmes
- Dassault Systèmes, with its high software margins (80% gross, 30% operating), thrives on unique intellectual property.
- This profitability makes it more valuable than its parent company, Dassault Aviation.
Engineering Software's Unique Cycle
- Engineering software companies, unlike consumer-facing tech, experience less competitive pressure and different economic cycles.
- They aren't driven by viral adoption and see less venture capital interest due to potentially slower returns.