• In constant currencies, IFRS total revenue increased 18% (24.0% as reported) and non-IFRS total revenue increased 20% (25.9% as reported) on in-line new licenses revenue performance and higher than anticipated growth in recurring software revenue.
• IFRS new license revenue increased 23.1% and 17% in constant currencies. Second quarter new licenses revenue and growth comparisons reflected some delays in transaction closings in the Company’s PLM business segment, as anticipated in relation to its integration of the IBM PLM organization.
• IFRS recurring software revenue increased 30.0% and 24% in constant currencies. Non-IFRS recurring software revenue increased 33.0% and 27% in constant currencies. The growth reflected a further improvement in subscription revenue trends as renewal rates are back to historical levels across the Company. In addition, second quarter recurring software results also included some one-time, catch-up payments by customers for maintenance renewals.

• Representing approximately 10% of total revenue, service and other revenue, which normally lag the improvement in new activity, decreased 6% (non-IFRS) in constant currencies, compared to a decrease of 14% in the 2010 first quarter. The non-IFRS service and other revenue gross margin was 9.2%, representing a significant sequential improvement.
• IFRS PLM software revenue increased 30.0% and 24% in constant currencies and non-IFRS PLM software revenue increased 32.8% and 27% in constant currencies.
• Mainstream 3D (IFRS and non-IFRS) software revenue increased 20.4% and 14% in constant currencies. New seats licensed increased 20% to 9,770 and the average SolidWorks seat price increased 3% in constant currencies.
• The Company’s IFRS operating margin expanded 510 basis points. The non-IFRS operating margin increased 600 basis points to reach 27.9% from 21.9% in the 2009 second quarter. The operating margin came in above the Company’s objective principally reflecting higher than anticipated revenue results, higher cost control and a one-time reclassification caused by a taxation change in France.
• IFRS earnings per diluted share increased 82% to €0.40 up from €0.22 in the 2009 second quarter. Non-IFRS earnings per diluted share increased 57% to €0.58 compared to €0.37 in the year-ago period, principally due to strong revenue growth and operating margin expansion, offset in part by a higher non-IFRS effective income tax rate.

2010 First Half Financial Summary