Dassault Systèmes (DSY) Q2 2026 Investor call earnings summary

Executive summary

• Q2 2026 revenue grew 4% year-over-year to €1.56 billion, with subscription revenue up 8% and EPS up 8%, reflecting disciplined execution and strong performance in Manufacturing Industries and 3DEXPERIENCE and cloud solutions.

• The company reaffirmed its full-year guidance and highlighted strategic expansion in Life Sciences through the acquisition of ArisGlobal, positioning itself as a leader in AI-driven platforms.

• Customers across industries are accelerating digital transformation, standardizing on the 3DEXPERIENCE platform and cloud to enable AI-powered operations.

• Annual Run Rate (ARR) rose 6% year-over-year, highlighting the strengthening subscription-based business model.

• Launch of agentic AI-native solutions and virtual companions (AURA, LEO, MARIE) to drive industrial AI adoption.

Financial highlights

• Q2 total revenue reached €1.556 billion, up 4% year-over-year; subscription revenue grew 8%, services revenue up 6%.

• H1 2026 revenue was €3.065 billion, up 3% at constant currencies; operating margin improved to 30.1% non-IFRS and 23.0% IFRS; EPS was €0.61 non-IFRS, up 6%.

• Operating profit rose 7% with a margin of 30%, up 90 basis points; IFRS diluted EPS increased 33% to €0.22, non-IFRS EPS up 8% to €0.31 in Q2.

• Annualized recurring revenue (ARR) reached €4.44 billion, with over 70% of net increase driven by SaaS growth in industrial business.

• Operating cash flow for H1 was €1.24 billion, up 11% year-over-year; free cash flow up 13% ex FX.

Outlook and guidance

• Full-year 2026 non-IFRS revenue guidance: €6.296–€6.416 billion (3–5% growth ex FX), operating margin 32.2–32.6%, and EPS €1.30–€1.34 (3–6% growth ex FX).

• Q3 2026 revenue expected at €1.497–€1.537 billion, operating margin 31–31.1%, and EPS €0.30–€0.31.

• H2 expected to show improved performance, especially in Medidata, with ARR growth acceleration as subscription overtakes maintenance.

• Tax rate projected at ~17.1%; FX assumptions: $1.17/€ and JPY177.1/€.

• Software revenue growth expected at 3–5%, services at 2–6%.