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Dassault Systemes S.A. (ADR) (DASTY)
OTHER OTC:DASTY
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Dassault Systemes SA
(OTC:DASTY)
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Rating:64Neutral
Price Target:
$22.50
▼(-19.61% Downside)
Action:DowngradedDate:02/18/26
The score is supported by strong underlying financial quality (profitability, cash generation, and improving leverage) and a cautiously constructive outlook featuring margin expansion, ARR/subscription momentum, and early AI traction. It is held back most by very weak technicals (downtrend across moving averages and negative MACD) and near-term growth risks reflected in conservative guidance and business headwinds (MEDIDATA/Centric and end-market softness).
Positive Factors
Strong cash generation & margins
Dassault Systemes consistently converts earnings into cash: gross margins ~83–84% and free cash flow ran ~0.88–0.94x net income through 2021–2024. This durable cash generation supports R&D, cloud investment and balance sheet flexibility, making capital allocation resilient over cycles.
Recurring revenue / ARR & cloud momentum
High recurring revenue and an emerging ARR base (~€4.5bn) signal durable revenue stickiness. Ongoing subscription and cloud growth (3DEXPERIENCE Cloud +32% Q4) improves revenue visibility, increases lifetime value and supports margin leverage as on‑prem maintenance declines.
Strategic AI positioning & partnerships
Investment in AI-native products and a strategic NVIDIA partnership create structural differentiation: virtual twins, generative experiences and virtual companions can embed Dassault in mission-critical workflows, opening new recurring monetization and cross-sell opportunities over multiple years.
Negative Factors
Near-term revenue softness & conservative guidance
Slower organic top-line growth reduces the pace at which scale benefits and new cloud/AI revenue materialize. Conservative 2026 guidance narrows near-term upside, increases reliance on productivity improvements for EPS growth, and constrains visibility into medium‑term revenue acceleration.
Life sciences / key-account concentration risks
Material exposure to large life‑science clients creates lumpy, idiosyncratic revenue risk. Significant contract reductions at a single account can depress reported growth, making recovery timing uncertain and undermining predictability of ARR conversion in a sector prone to volatile study volumes and consolidation.
Monetization & ARR-to-revenue timing uncertainty
Shifting to consumption and outcome-based pricing for AI products introduces execution and recognition risk. Early-stage monetization and unclear RPO bridges can cause volatile revenue conversion from ARR, making near-term revenue and cash trends more lumpy and harder to forecast reliably.
Dassault Systemes SA (DASTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.57B
Dividend Yield1.07%
Average Volume (3M)79.53K
Price to Earnings (P/E)20.0
Beta (1Y)0.59
Revenue Growth5.22%
EPS Growth6.27%
CountryUS
Employees26,225
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.47
Shares Outstanding1,341,456,000
10 Day Avg. Volume227,689
30 Day Avg. Volume79,533
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)3.56
Price to Sales (P/S)5.02
P/FCF Ratio21.30
Enterprise Value/Market Cap0.81
Enterprise Value/Revenue3.56
Enterprise Value/Gross Profit4.25
Enterprise Value/Ebitda10.68
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.58
Revenue Forecast (FY)$7.53B
Dassault Systemes SA Business Overview & Revenue Model
Company DescriptionDassault Systèmes SE provides software solutions and services worldwide. It offers SOLIDWORKS design software for 3D design, electrical and printed circuit board design, product data management, simulation, manufacturing, and technical communication; CATIA, an engineering and design software for product 3D computer-aided design; GEOVIA for modeling and simulating the earth; and BIOVIA that provides the scientific community with advanced biological, chemical, and materials experiences. The company also provides SIMULIA that delivers realistic simulation applications; DELMIA, which enables global industrial operations; 3DVIA that provides 3D space planning solutions; and ENOVIA that enables to plan and track the definition of success for customer. In addition, it offers Centric PLM, a product lifecycle management software solution; 3DEXCITE, a real-time 3D visualization software; NETVIBES, which enables organizations to gather, align, and enrich big data; 3DEXPERIENCE platform that provides organizations a holistic and real-time view of their business activities and ecosystem, as well as connecting people, ideas, data, and solutions together in a single environment; and MEDIDATA, a clinical research study software that provides evidences and insights to pharmaceutical, biotech, medical device, and diagnostic companies, as well as academic researchers. Further, the company provides consulting, deployment, outcome based, and training services. It primarily serves companies in the transportation and mobility; industrial equipment; aerospace and defense; high-tech; life sciences and healthcare; energy and materials; home and lifestyle; construction, cities, and territories; consumer packaged goods and retail; marine and offshore; and business services sectors through distributors and resellers. Dassault Systèmes SE was incorporated in 1981 and is headquartered in Vélizy-Villacoublay, France.
How the Company Makes MoneyDassault Systemes generates revenue through a combination of software licenses, subscription services, and consulting services. The primary revenue stream comes from the sale of software licenses for its 3DEXPERIENCE platform and its various applications, which are often sold under a subscription model. Additionally, the company earns significant revenue from maintenance and support services for its software products. Consulting services also contribute to the revenue, as Dassault Systemes assists clients in implementing and optimizing their solutions. Strategic partnerships with major corporations and industry leaders enhance its market presence and drive additional revenue opportunities, particularly in sectors like aerospace and automotive, where digital transformation is increasingly critical.
Dassault Systemes SA Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The call delivered a mixed but constructive message: the company has strong fundamentals—profitability, cash generation, cloud and ARR momentum, and strategic positioning in industrial AI with credible partnerships and early commercial traction. However, 2025 underperformed relative to targets, with notable headwinds from MEDIDATA, Centric and European auto weakness; management provided conservative 2026 guidance and flagged timing/recognition mismatches while rolling out new monetization models that carry execution risk. The balance of solid financial resilience and strategic progress against material near-term growth challenges results in cautious optimism.Q4-2025 Updates
Positive Updates
Full Year 2025 Revenue and Profitability
Total revenue for FY2025 was EUR 6,240 million; software revenue grew 4% (ex-FX). Operating profit was EUR 1,994 million with an operating margin of 32% (+40 bps YoY). EPS for FY2025 was EUR 1.31, up 7%.
Q4 2025 Results and Margin Expansion
Q4 revenue was EUR 1,682 million, up 1% ex-FX; software revenue was roughly flat (+0.3%). Q4 operating profit was EUR 622 million and operating margin was 37% (up 90 bps ex-FX). Q4 EPS was EUR 0.40, +9% ex-FX.
Recurring Revenue Strength and Subscription Momentum
Recurring revenue grew 6% for the year and represented 82% of software revenue. Subscription revenue grew 11% for FY2025 and 4% in Q4; services were up 11% in Q4. Management expects subscription share to surpass maintenance in 2026.
ARR Introduction and Growth
Company introduced an annual recurring revenue (ARR) metric for 2026 reporting. ARR reached nearly EUR 4.5 billion in Q4 with ~EUR 100 million net ARR addition in the quarter; ARR has grown about 6% on average over the last two years.
3DEXPERIENCE & Cloud Momentum
3DEXPERIENCE revenue grew 10% for FY2025 and now represents ~40% of software revenue. 3DEXPERIENCE Cloud grew ~38% in Q4 and 32% for the full year; overall group Cloud revenue grew 9% in Q4 and 8% for the year.
Cash Flow and Balance Sheet Resilience
Operating cash flow was EUR 1,630 million (up 1% ex-FX) and free cash flow rose ~2% ex-FX. Cash conversion was 82% for 2025 (ahead of previous estimates). Cash & cash equivalents were EUR 4,125 million and net cash was EUR 1,530 million.
Strategic AI Positioning and Partnerships
Launched 3D UNIV+RSES and new AI-native categories (Virtual Companions, Generative Experiences, Virtual Twin-as-a-Service). Strategic partnership with NVIDIA highlighted; management reported early commercial traction and a roughly EUR 50 million backlog for new AI products within ~6 months of launch.
Product & Industry Wins / Market Position
Management highlighted competitive displacements and strategic 3DEXPERIENCE deals with potential multi-year expansion; cited wins and traction in high-tech, transportation & mobility, aerospace & defense and resilient performance in Asia (Q4 +6%, FY +5%).
Operational Productivity
Productivity gains contributed to margin expansion (Q4 margin +90 bps ex-FX) and management expects continued margin improvement (2026 operating margin +40–80 bps ex-FX guidance).
Centric & MEDIDATA Actions and Enterprise Wins
Centric has new management, ContentServ integration completed, and management expects a marked recovery / return to low-teens growth in 2026. MEDIDATA won back large enterprise clients (Novartis, Merck, AbbVie, Gilead) and MEDIDATA enterprise (excluding Moderna) was reported up ~6%.
Negative Updates
Below-Target Growth in 2025
Management acknowledged 2025 was disappointing, finishing at the low end of objectives with ~4% growth (ex-FX), missing internal long-term plan targets.
Life Sciences Headwinds (MEDIDATA) and Client Impact
Life Sciences software was down 4% in Q4 and down 2% for FY2025. MEDIDATA was a material drag; a major client (Moderna) reduced contract run rate (reported >50% reduction), materially affecting growth and causing management to be cautious about near-term recovery.
Centric Decline and Transition
Centric declined double digits in Q4 2025 due to renewals shifting and cloud transition; management expects recovery but Q4 performance was a significant headwind to topline growth.
European Auto Market Weakness
Europe declined 5% in Q4 (though +2% for the year), with pronounced weakness in France and Germany tied to the automotive sector; management trimmed exposure in pipeline and lowered near-term expectations for auto demand.
Revenue Recognition / Timing Mismatch vs. ARR
Despite ARR growth and a EUR 100 million net ARR add in Q4, revenue growth remained modest (Q4 software +0.3%), reflecting timing/recognition differences and potential near-term volatility between ARR and reported revenue.
Conservative 2026 Guidance
Management issued cautious guidance for 2026 (total & software revenue growth 3–5% ex-FX), explicitly excluding mega deals and not assuming MEDIDATA recovery—investors flagged guidance as conservative.
FX & One-off Cash Headwinds
Currency headwinds reduced cash by ~EUR 263 million year-over-year; operating cash flow absorbed ~EUR 40 million hit from higher employer contributions and new exceptional tax in France. Cash conversion slipped to 82% from 84%.
Uncertainty Around New Monetization Models
Transition to value- and usage-based pricing for AI solutions (Virtual Companions, outcome-based revenue) is at an early stage; management provided high-level unit concepts but revenue visibility and predictability for consumption/outcome models remain uncertain.
Geographic and Product Pockets of Softness
China had a softer quarter (tough comps), and the CRO/volume part of Life Sciences (indirect business) declined ~5% YoY due to fewer study starts; these pockets add execution risk to near-term growth targets.
RPO / Remaining Performance Obligation Ambiguity
Management did not provide a clear bridge or guidance for remaining performance obligation (RPO) dynamics tied to revenue guidance; RPO timing variability could affect revenue comparability and near-term visibility.
Company Guidance
Management guided 2026 to a derisked total- and software-revenue growth range of 3–5% ex FX, with operating margin expected to improve 40–80 bps ex FX to 32.2–32.6% and EPS up 3–6% ex FX to EUR 1.30–1.34 (FX assumption USD/EUR 1.18, JPY/EUR 170). Q1 guidance is for 1–5% revenue growth, a margin of 29.2–30.7% and EPS EUR 0.28–0.31; management reiterated the shift to subscription (subscription to surpass maintenance in 2026) and will start reporting ARR in 2026 with formal guidance from 2027. Key 2025 and near-term metrics cited to frame the outlook: ARR ≈ EUR 4.5bn at Q4’25 (net ARR +~EUR 100m in Q4; ARR avg growth ~6% over two years), 2025 total revenue EUR 6,240m, Q4 revenue EUR 1,682m (+1% ex FX), recurring revenue +6% FY (recurring = 82% of software revenue), subscription +11% FY (+4% Q4), cloud +8% FY (+9% Q4) and 3DEXPERIENCE revenue +10% FY (3DEXPERIENCE Cloud +32% FY); Q4 operating profit was EUR 622m (margin 37%, +90 bps ex FX) and FY operating profit EUR 1,994m (margin 32%, +40 bps) with FY EPS EUR 1.31.Dassault Systemes SA Financial Statement Overview
Summary
High-quality profitability and cash generation (very high gross margins, solid EBIT and improved net margins) with manageable and improving leverage. The main drag is the near-term top-line softness highlighted by the 2025 revenue decline and slight cash flow contraction.Income Statement
Profitability remains strong for a software model, with consistently high gross margins (~83–84%) and solid operating profitability (EBIT margin ~21–24% in recent years). Net margins improved from ~11% (2020) to ~19% (2024), showing good cost discipline and scale benefits. The key weakness is growth: revenue expanded steadily from 2020–2024, but 2025 shows a slight revenue decline (-4.9%), suggesting near-term demand or currency/headwind pressure despite earnings holding up.74
Positive
Balance Sheet
Leverage looks manageable and has improved materially over time: debt-to-equity declined from ~0.96 (2020) to ~0.34 (2024), while equity remains sizable (~€9.1B in 2024). Returns on equity are consistently healthy (~12–13% in 2022–2024), indicating effective use of capital. A watch item is that total debt is still meaningful in absolute terms (about €2.6–€3.6B across recent years), and equity dipped modestly in 2025 versus 2024.78
Positive
Cash Flow
Cash generation is a clear strength, with free cash flow consistently high and close to net income (roughly ~0.88–0.94 in 2021–2024), supporting financial flexibility. Free cash flow was broadly stable through 2024 and only slightly down in 2025 (-4.3%), which is relatively resilient given the revenue softness. The main drawback is that operating cash flow as a share of sales is not particularly high (low-to-mid single-digit hundreds in the provided coverage figures), implying working-capital or timing effects can dilute reported cash conversion in some periods.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.24B | 6.21B | 5.95B | 5.67B | 4.86B |
| Gross Profit | 5.22B | 5.20B | 4.98B | 4.75B | 4.07B |
| EBITDA | 1.90B | 1.92B | 1.81B | 1.94B | 1.59B |
| Net Income | 1.20B | 1.20B | 1.05B | 931.50M | 773.70M |
Balance Sheet | |||||
| Total Assets | 15.06B | 15.55B | 14.62B | 14.26B | 14.22B |
| Cash, Cash Equivalents and Short-Term Investments | 4.13B | 3.95B | 3.57B | 2.77B | 2.98B |
| Total Debt | 2.60B | 3.06B | 3.60B | 3.58B | 4.47B |
| Total Liabilities | 6.26B | 6.47B | 6.78B | 6.94B | 8.01B |
| Stockholders Equity | 8.79B | 9.07B | 7.83B | 7.31B | 6.20B |
Cash Flow | |||||
| Free Cash Flow | 1.47B | 1.47B | 1.42B | 1.39B | 1.51B |
| Operating Cash Flow | 1.63B | 1.66B | 1.57B | 1.53B | 1.61B |
| Investing Cash Flow | -404.30M | -191.70M | -161.60M | -213.90M | -160.40M |
| Financing Cash Flow | -789.40M | -1.21B | -536.70M | -1.59B | -711.90M |
Dassault Systemes SA Technical Analysis
Negative
27.99
Price Trends
26.46
Negative
28.12
Negative
31.44
Negative
Market Momentum
-2.02
Positive
26.69
Positive
20.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DASTY, the sentiment is Negative. The current price of 27.99 is above the 20-day moving average (MA) of 24.25, above the 50-day MA of 26.46, and below the 200-day MA of 31.44, indicating a bearish trend. The MACD of -2.02 indicates Positive momentum. The RSI at 26.69 is Positive, neither overbought nor oversold. The STOCH value of 20.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DASTY.
Dassault Systemes SA Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $18.27B | 22.51 | 23.34% | ― | 19.18% | 96.62% | |
71 Outperform | $9.82B | 39.06 | 24.16% | 0.72% | 11.12% | -26.24% | |
68 Neutral | $29.12B | 48.16 | ― | ― | 15.91% | 29.42% | |
66 Neutral | $34.25B | 51.54 | 7.34% | ― | 13.35% | -60.76% | |
64 Neutral | $27.57B | 20.03 | 13.77% | 1.07% | 5.22% | 6.27% | |
64 Neutral | $46.83B | 43.64 | 40.33% | ― | 15.62% | 2.59% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
DASTY
Dassault Systemes SA
21.27
-18.23
-46.14%
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FICO
Fair Isaac
1,300.94
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WDAY
Workday
133.15
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-48.90%
PTC
PTC
154.11
-8.64
-5.31%
BSY
Bentley Systems
32.48
-11.29
-25.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.