Dassault Systèmes (DSY) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered 5% revenue growth and a 30.1% operating margin, with EPS up 10% to €0.29, driven by strong subscription and recurring revenue, especially in Industrial Innovation and 3DEXPERIENCE.

• Recurring revenue reached 84% of software sales YTD, with subscription revenue up 16% and 3DEXPERIENCE cloud revenue up 36% in Q3.

• Major contract wins included Ford, Stellantis, and AbbVie, with new AI and cloud offerings accelerating growth.

• Full-year EPS growth target of 7–10% reaffirmed, while revenue growth outlook was adjusted to 4–6% due to Medidata softness and macro volatility.

• Key growth drivers include momentum in cloud, AI-driven solutions, and SaaS adoption.

Financial highlights

• Q3 2025 total revenue was €1.461 billion, up 5% in constant currency, with software revenue at €1.32 billion and operating margin at 30.1%.

• Recurring revenue accounted for 84% of software revenue YTD; subscription revenue grew 16% in Q3.

• Non-IFRS diluted EPS was €0.29 in Q3, up 10% year-over-year; net income (non-IFRS) for Q3 was €389.6M.

• Cash and cash equivalents stood at €3.91 billion, with net cash position at €1.32 billion as of September 30, 2025.

• Operating cash flow for the first nine months was €1.334 billion, with a cash conversion ratio above 90%.

Outlook and guidance

• FY25 revenue growth outlook revised to 4–6% (from 6–8%), with non-IFRS EPS growth target maintained at 7–10%.

• Q4 2025 revenue expected between €1.697–1.817 billion, with operating margin of 37.2–38% and EPS of €0.41–0.45.

• Operating margin guidance for FY25 is 32.0–32.4%.

• Cash conversion expected to improve to 84% in 2026 as SaaS adoption increases.

• Tax rate assumptions: ~16.2% for Q4 and 17.3% for FY25.