Dassault Systèmes raises its 2026 targets as 3DEXPERIENCE software grows 25%
The French industrial software group grew revenue at the top of its own range, improved margins and raised its full-year objectives for the first time in two years. Europe grew 9% despite weakness in Central and Southern Europe.
Dassault Systèmes, the French maker of design and simulation software such as CATIA and SOLIDWORKS, reported third-quarter 2026 results on Wednesday 28 October. Revenue rose 5% in constant currencies to €1.55 billion, at the top of its own forecast, and the non-IFRS operating margin rose 150 basis points to 31.6%.
The company also raised its full-year objectives. It now expects 2026 revenue of €6.399 billion to €6.459 billion, or growth of 4% to 5% in constant currencies, compared with 3% to 5% before. Reuters reported that it was the first upgrade of the group's targets in two years.
The quarter
According to the company's release, total revenue in the three months to 30 September was €1,551.9 million under IFRS, against €1,460.1 million a year earlier. Software revenue rose 5% to €1.39 billion. Licence revenue grew 14% to €219 million, services revenue grew 7% to €158 million, and recurring revenue made up 84% of software revenue.
Annual run rate (ARR), the yearly value of active subscription and support contracts, grew 6% to €4.50 billion. Non-IFRS operating income rose 10% in constant currencies to €490 million, and non-IFRS diluted earnings per share rose 8% to €0.32. Under IFRS, diluted earnings per share were €0.22, against €0.20 a year earlier.
Cash generation was strong. Operating cash flow for the first nine months rose 20% to €1.57 billion, and cash conversion was 111%, compared with 97% last year.
Platform and cloud
The fastest growth came from the company's own platform. Revenue from 3DEXPERIENCE software rose 25% and now makes up 46% of eligible software revenue, up from 40% a year ago. Cloud software revenue rose 14% and represents 28% of software revenue.
By product line, Industrial Innovation, which includes CATIA, ENOVIA and SIMULIA, grew 5% to €753 million. Mainstream Innovation, with SOLIDWORKS and the fashion and retail software CENTRIC, grew 8% to €375 million. Life Sciences, which includes the clinical trials software MEDIDATA, grew 1% to €266 million. MEDIDATA was flat but improved on the previous quarter, and the company said it is on track to grow from the fourth quarter.
Regions
Asia was the strongest region, with software revenue up 12% and double-digit growth in China. Europe, which makes up 38% of software revenue, grew 9% on a non-IFRS basis. The company said this was a strong quarter despite weakness in Central and Southern Europe. The Americas fell 3% against a strong prior-year quarter.
ArisGlobal and the outlook
In September Dassault Systèmes completed the acquisition of ArisGlobal, a provider of software for drug safety and regulatory work in life sciences. It also appointed Dr. Ashwini Zenooz as executive vice president and CEO of Life Sciences and Healthcare. In the nine months the company paid about €1.5 billion, net of cash acquired, for the deal.
For the fourth quarter, Dassault Systèmes expects revenue growth of 5% to 8% in constant currencies, including about 2 percentage points from ArisGlobal. For the full year it raised its non-IFRS operating margin objective to 32.5% to 32.7%, and its earnings-per-share growth objective to 6% to 7% in constant currencies. Reuters noted that the previous margin range was 32.2% to 32.6%.
"Industries are undergoing a fundamental transformation: they are becoming AI-native," chief executive and chairman Pascal Daloz said in the release. Chief financial officer Rouven Bergmann said: "With improved visibility, we are confident in our full-year objectives." The company will hold a capital markets day on 17 November.
What it means for European founders and investors
Dassault Systèmes is one of Europe's largest software companies, with around 27,000 employees and software used by carmakers, aircraft makers and manufacturers worldwide. Its results are a useful signal for the industrial economy. Growth of 9% in Europe, at a time when German carmakers such as Mercedes-Benz are cutting costs, suggests that manufacturers are still investing in digital design, simulation and virtual twins.
For startups in industrial AI, simulation and engineering software, the quarter shows that large customers are moving to platforms and to the cloud. That creates room for specialised tools that plug into these platforms, and also makes established vendors active buyers, as the ArisGlobal deal shows. Investors should watch whether Dassault Systèmes sets out new medium-term goals at its capital markets day.
More technology coverage is on our AI and tech page, including NXP's third-quarter results. Investor documents are available on Dassault Systèmes' investor site.
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