Dassault Systèmes (DSY) Q2 2024 earnings summary

Executive summary

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

• Recurring software revenue represented 82% of software revenue in H1, with subscription revenue up 9% and strong cloud and 3DEXPERIENCE momentum.

• Operating margin (non-IFRS) was 29.9% in Q2 and 30.5% in H1; IFRS operating margin improved to 20.0%.

• Growth was driven by robust demand for 3DEXPERIENCE and cloud solutions, with notable wins in manufacturing, life sciences, and infrastructure.

• Customer decision delays and volatility impacted Q2 and late June, but a strong pipeline is expected to drive a robust H2.

Financial highlights

• Q2 software revenue up 3%, subscription revenue up 8–9%, and upfront license revenue down 1%.

• H1 software revenue reached €2.70 billion (+5%), with Industrial Innovation up 6%, Mainstream Innovation up 9%, and Life Sciences down 2%.

• Operating cash flow for H1 was €1.13 billion, up 10% year-over-year; cash and cash equivalents at €4.03 billion, net financial position at €1.04 billion.

• Non-IFRS net income for H1 was €794 million (+7%); IFRS net income was €548 million (+15%).

• Q2 closing headcount was 25,811, up 3% year-over-year.

Outlook and guidance

• Full-year 2024 non-IFRS revenue guidance: €6.26–€6.335 billion (6–8% growth); software revenue expected to grow 7–8%, recurring revenue 8–9%, subscription revenue 13–15%.

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

• Q3 2024 non-IFRS revenue guidance: €1.466–€1.506 billion, with EPS of €0.28–€0.29.

• H2 revenue growth expected at 9% sequentially, with two-thirds from seasonality and one-third from delayed deals and back-end loaded contracts.

• Guidance assumes US$/€1.09 and JPY/€159.7 for FY 2024.