Dassault Systèmes posts 4% revenue growth as subscription sales accelerate

Dassault Systèmes posted Q2 revenue of EUR 1.56 billion, up 4% and above consensus, as subscription growth accelerated and the French software maker announced a $1.8 billion acquisition in life sciences.

"The results reflect the disciplined execution we had," Chief Executive Pascal Daloz said on the earnings call. "Customers are no longer asking whether AI will transform engineering or manufacturing. They are asking how fast they can deploy it."

Earnings per share came in at EUR 0.31, up 8% from a year earlier, while operating margin improved 90 basis points to 30%. Subscription revenue rose 8%, now representing half of all recurring revenue, as cloud adoption and multi-year deals drove annualized recurring revenue to EUR 4.44 billion, up EUR 73 million sequentially. The Americas grew 5% and Asia rose 8%, led by India, Korea and Japan, while Europe was flat. Medidata revenue fell 3% in the quarter, though management said ARR has returned to growth and the Moderna headwind is mostly behind the company after the first half.

Shares rose 3% to $18.30 in premarket trading, though they remain about 45% below the 52-week high of $33.16. The company confirmed full-year guidance for revenue of EUR 6.30 billion to EUR 6.42 billion, representing 3% to 5% growth, and EPS of EUR 1.30 to EUR 1.34. The ArisGlobal acquisition, valued at $1.8 billion in cash plus up to EUR 200 million in AI-related earnouts, is expected to close in late third quarter or early fourth quarter and be accretive to both revenue growth and EPS in the first year after closing.

The guidance raise shows management expects subscription momentum and AI-driven productivity to sustain growth. Investors will watch the Q3 earnings call for updates on ArisGlobal integration and Medidata's recovery, with the unit's ARR returning to growth after a Moderna-related headwind largely passed in the first half.

This article is for informational purposes only and does not constitute investment advice.