Dassault Systèmes: Revenue Up 5% in Third Quarter, Above Expectations, Margin at 31.6%
Dassault Systèmes posted third-quarter 2026 revenue of €1.55 billion, up 5% at constant exchange rates, and non-IFRS diluted earnings per share of €0.32, up 8%. Analysts had expected €1.52 billion and €0.31 respectively.
Non-IFRS operating margin gained 150 basis points to 31.6%. This publication comes as the stock showed a 27% decline over one year on October 2, 2026, and the group has just completed the acquisition of ArisGlobal in life sciences.
Revenue Up 5%, Adjusted Margin Increased to 31.6%
Software revenue grew 5% at constant rates to €1.39 billion, a level the group places at the upper end of its objectives. Licenses and other software revenue increased 14% to €219 million, subscription and support revenue by 3%, and services by 7% to €158 million.
The annualized value of active recurring contract revenue (ARR) increased 6% to €4.50 billion at constant rates. The 3DExperience platform revenue grew 25% and cloud revenue 14%, with the latter representing 28% of software revenue.
Non-IFRS operating income reached €490 million, up 10% at constant rates, yielding a margin of 31.6% versus 30.1% a year earlier. Under IFRS standards, operating income stood at €325 million (+8%) and margin at 20.9%, versus 20.7%.
Over nine months, operating cash flows increased 20% at constant rates to €1.57 billion, with a cash conversion rate of 111%, versus 97% a year earlier. They primarily financed ArisGlobal for €1.5 billion net of cash acquired, and €357 million in dividends.
Asia and Europe Up, Americas Down 3%
The quarter's growth rests on two regions. Asia, which accounts for 23% of software revenue, grew 12%, with double-digit growth in China, and Europe (38%) by 9% in non-IFRS. The Americas, the group's leading market with 39% of software revenue, declined 3%.
The group attributes this decline to a high comparison base, and the region remains up 1% over nine months. By product lines, Industrial Innovation grew 5% to €753 million, and Mainstream Innovation by 8% to €375 million, with Solidworks and Centric.
Life sciences (19% of software revenue over nine months) increased 1% in the third quarter to €266 million, after a decline of 2% over nine months.
According to Chief Financial Officer Rouven Bergmann, Medidata, stable over the quarter, has improved compared to the previous quarter and is on track to deliver growth starting in the fourth quarter.
Annual Margin and Earnings Per Share Targets Raised
ArisGlobal, whose acquisition was finalized in the second half of September, had no significant impact on fourth-quarter revenue. The group has placed Dr Ashwini Zenooz in charge of its Life Sciences & Healthcare division and will provide further details at its investor day on November 17, 2026.
For the fourth quarter, Dassault Systèmes anticipates revenue between €1.782 and €1.842 billion, up 5% to 8% at constant rates, including 2 points from ArisGlobal. For the year, the range of €6.399 to €6.459 billion is above the €6.356 billion target published with annual results on April 7, 2026.
Annual growth guidance is narrowed to 4% to 5% at constant rates, versus 3% to 5% previously, including ArisGlobal's contribution. The non-IFRS operating margin target is raised to a range of 32.5% to 32.7%, and earnings per share growth guidance to 6% to 7% at constant rates.
