Dassault Systèmes (DSY) Q1 2026 Investor Call earnings summary

Executive summary

• Q1 2026 revenue grew 3% year-over-year at constant currency, meeting objectives and supported by execution on strategic priorities.

• Recurring software revenue comprised 85% of total software revenue, with ARR up 6% year-over-year to €4.37 billion.

• Operating cash flow increased 22% to €949 million, reflecting strong business model and earnings quality.

• Mainstream Innovation, led by SOLIDWORKS and CENTRIC, delivered strong growth, while Life Sciences faced headwinds.

• Full-year 2026 objectives and guidance confirmed, with focus on AI, operational efficiency, and scaling industrial AI offerings.

Financial highlights

• Total Q1 revenue reached €1.51 billion, up 3% year-over-year at constant currency.

• Mainstream Innovation software revenue grew 14% year-over-year, while Industrial Innovation was flat and Life Sciences declined 3%.

• Operating margin (non-IFRS) was 30.3%, with EPS up 4% to €0.30 (non-IFRS).

• Operating cash flow was €949 million, up 22% year-over-year; free cash flow rose 27%.

• Americas software revenue down 1%, Europe up 7%, Asia up 3% year-over-year.

Outlook and guidance

• Full-year 2026 non-IFRS revenue guidance: €6.29–€6.41 billion, 3–5% growth in constant currencies.

• Operating margin expected at 32.2–32.6%, EPS of €1.30–€1.34 (3–6% growth in constant currencies).

• Q2 2026 non-IFRS revenue guidance: €1.518–€1.568 billion, up 2–5% in constant currencies.

• H2 2026 expected to improve over H1, with positive run rate growth entering 2027.

• Tax rate expected at ~17.8% for FY26; currency assumptions: $1.18/€ and JPY 173.37/€.