Dassault Systèmes (DSY) Q2 2024 Investor Call earnings summary

Executive summary

• Q2 2024 total revenue grew 4% year-over-year to €1.50 billion, with non-IFRS EPS up 8% to €0.30; H1 revenue up 5% to €3.00 billion, non-IFRS EPS up 10% to €0.60.

• Robust pipeline and operational efficiency measures maintained despite customer decision delays and late-quarter volatility.

• Strong demand for 3DEXPERIENCE and cloud solutions, with significant wins in manufacturing, life sciences, and infrastructure.

• Recurring revenue comprised 80% of software revenue in Q2 and 82% in H1, with subscription revenue up 8% in Q2 and 9% in H1.

• Operating cash flow for H1 reached €1.13 billion, up 10% year-over-year.

Financial highlights

• Q2 software revenue up 3% to €1.35 billion; recurring revenue made up 80% of software revenue.

• 3DEXPERIENCE software revenue up 18% in Q2 and 23% in H1; cloud revenue up 10% in Q2 and 8% in H1.

• IFRS operating margin for Q2 was 18.4%; non-IFRS margin was 29.9% in Q2 and 30.5% in H1.

• Net income (IFRS) for Q2 was €262.7 million (+18% YoY); H1 net income at €548.4 million (+15% YoY).

• Cash and cash equivalents at €4.03 billion, net cash position at €1.04 billion as of June 30, 2024.

Outlook and guidance

• Full-year 2024 non-IFRS revenue guidance: €6.26–€6.335 billion (+6–8% YoY); software revenue up 7–8%.

• Non-IFRS operating margin expected at 32–32.4%; EPS growth of 8–11% (€1.27–€1.30).

• Q3 2024 non-IFRS revenue guidance: €1.466–€1.506 billion, up 3–7% year-over-year.

• H2 revenue expected to ramp by €300 million over H1, with two-thirds from seasonality and one-third from delayed deals and back-end loaded contracts.

• Growth acceleration anticipated in H2, especially in core industries and with 3DEXPERIENCE and MEDIDATA.