Dassault Systèmes (DSY) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered 3% revenue growth at constant currency, meeting objectives, with total revenue at €1.51 billion and strong performance in Mainstream Innovation, especially SOLIDWORKS and CENTRIC.

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

• Growth was driven by 3DEXPERIENCE and Cloud, with 3DEXPERIENCE software revenue up to 42% of eligible software revenue and Cloud revenue up 8%.

• Life Sciences and Consumer industries showed resilience despite sector headwinds, with tangible AI solutions launched across product lines.

• Full-year 2026 non-IFRS objectives confirmed, leveraging Q1 achievements and focusing on accelerating the transition to subscriptions and industrial AI.

Financial highlights

• Total revenue reached €1.51 billion, up 3% ex FX; software and services revenue both up 3% ex FX.

• Operating cash flow was €949 million, up 22% ex FX, and free cash flow rose 27% ex FX to €899 million.

• Upfront license revenue increased 9% ex FX due to significant multi-year deals.

• Net cash position at €2.40 billion; cash and equivalents at €4.87 billion as of March 31, 2026.

• IFRS operating margin at 23.0%; non-IFRS operating margin at 30.3%.

Outlook and guidance

• Full-year 2026 non-IFRS revenue guidance: €6.29–6.41 billion (3%-5% growth ex FX), operating margin 32.2%-32.6%, EPS €1.30–1.34 (3%-6% growth ex FX).

• Q2 2026 revenue expected at €1.518–1.568 billion (2%-5% growth ex FX), operating margin 29.5%-29.9%, EPS €0.29–0.31.

• Acceleration in H2 expected, driven by improved year-over-year comparisons and pipeline strength in Americas and Asia.

• Assumptions include EUR/USD at 1.18 and EUR/JPY at 173.37 for FY26.