on 20-Feb-2026 20 February 2026 European Technology/Software AI disruption radar - Want to try it yourself? Richard Nguyen +33 1 42 13 54 22 richard.nguyen@bernsteinsg.com Mark L. Moerdler, Ph.D. +1 917 344 8506 mark.moerdler@bernsteinsg.com Derric Marcon +33 1 58 98 06 30 derric.marcon@bernsteinsg.com Specialist Sales Kiran Shah +44 20 3547 1533 kiran.shah@bernsteinsg.com This report includes minor clarifications following recent feedback from companies and investors. See the Disclosure Appendix of this re ...

Core Insights - Dassault Systèmes is a leading French software company specializing in 3D design, digital mock-up, and product lifecycle management (PLM) software, competing with major players like Siemens and Autodesk [1] Leadership Changes - The appointment of Pascal Daloz as both CEO and Chairman of the Board is a strategic decision aimed at enhancing the company's governance and strategic direction, reflecting confidence in his leadership [2] Financial Performance - On February 11, 2026, Dassault Systèmes reported earnings per share of $0.474, exceeding the estimated $0.47, and revenue of approximately $1.99 billion, surpassing the estimated $1.53 billion, indicating strong financial performance under Daloz's leadership [3] Stock Performance - The current stock price of DASTY is $20.33, showing a decrease of 0.85% with a change of $0.18, and has fluctuated between a low of $20.19 and a high of $20.40 today; over the past year, the stock reached a high of $44.18 and a low of $19.18, indicating volatility [4] Market Capitalization - Dassault Systèmes has a market capitalization of approximately $26.76 billion, with a trading volume of 222,214 shares on the OTC exchange, positioning the company well for future growth in the competitive software industry [5]

Summary of Dassault Systèmes Conference Call Company Overview - **Company**: Dassault Systèmes - **Industry**: Software, specifically focusing on Industrial AI and 3D modeling solutions Key Points and Arguments 1. **Governance Transition**: Bernard Charlès has stepped down as Executive Chairman, and Pascal Daloz has been appointed as both Chairman and CEO, marking a significant governance transition for the company [1][4] 2. **Vision for the Future**: The company aims to lead the Industrial AI transformation through its 3D UNIV+RSES initiative, which is described as a long-term commitment to reinventing how industries innovate and operate in the Generative Economy [2][4] 3. **Focus on Long-term Stability**: The leadership change is positioned as a strategic move for long-term planning rather than short-term gains, emphasizing the importance of consistency and alignment [3][5] 4. **Role of Bernard Charlès**: Despite stepping down, Bernard Charlès will remain engaged as a strategic advisor, focusing on product and technology innovations, similar to Bill Gates' role at Microsoft [16][22] 5. **Management Changes**: Significant changes in management have been made, including the restructuring of the leadership for Centric and Medidata, with new hires from AWS and McKinsey to enhance capabilities and accelerate transformation [23][24] 6. **3D UNIV+RSES Development**: The company plans to introduce approximately 60 new companions and 440 new Generative Experiences this year, aiming to create a critical mass of solutions for targeted industries [25] Additional Important Content 1. **Independence of Governance**: The board's decision to appoint a dual role of Chairman and CEO is strategic, with 50% of directors being independent, ensuring compliance with governance standards [11] 2. **Customer Relationships**: Bernard Charlès will maintain some customer relationships, ensuring continuity in client engagement while the company is structured to operate independently of his involvement [22] 3. **Challenges Ahead**: The company acknowledges potential challenges in AI development as it continues to focus on the 3D UNIV+RSES initiative [21][25] 4. **Commitment to Innovation**: The transition is framed as a commitment to both continuity in core values and acceleration towards new technological advancements, particularly in Generative AI [28]

Core Viewpoint - Dassault Systèmes announces the resignation of Bernard Charlès as Executive Chairman and Board member, effective immediately, for personal reasons [1] Company Leadership Changes - The Board of Directors has unanimously decided to appoint Pascal Daloz, the current Chief Executive Officer, as both Chairman and Chief Executive Officer [1]

Core Viewpoint - Dassault Systèmes announces the appointment of Pascal Daloz as President and CEO, succeeding Bernard Charlès, who stepped down for personal reasons, effective immediately [2][7]. Group 1: Leadership Transition - Bernard Charlès has informed the board of his resignation as Chairman and director for personal reasons, and the board unanimously appointed Pascal Daloz as President and CEO effective February 21, 2026 [2][6]. - Pascal Daloz expressed honor in succeeding Bernard Charlès and emphasized a shared vision of pushing the boundaries of science and imagination to improve lives through virtual worlds [3][4]. - Bernard Charlès highlighted his confidence in Daloz's leadership, noting their 25 years of collaboration and Daloz's capability to lead the company and organize the board's work [5][7]. Group 2: Company Vision and Strategy - The company aims to lead the transformation of industrial AI through its 3D UNIV+RSES initiative, committing to long-term innovation and competitiveness in the generative economy [5][8]. - Daloz is committed to ensuring Dassault Systèmes has the freedom to act as a catalyst for transformation and to accelerate its growth [5][6]. - The transition reflects the continuity and strength of governance, which is essential for maintaining client trust globally [6][8]. Group 3: Acknowledgment of Contributions - Bernard Charlès is recognized for transforming Dassault Systèmes from a startup into a global leader, fostering a culture of continuous innovation and sustainability [4][8]. - The board expressed gratitude for Charlès's leadership, which has established Dassault Systèmes as a recognized leader in product lifecycle management (PLM) across industries [8].

Core Viewpoint - Dassault Systèmes announces the appointment of Pascal Daloz as both Chairman and Chief Executive Officer following the resignation of Bernard Charlès for personal reasons, ensuring continuity in leadership and governance [2][8]. Leadership Transition - Bernard Charlès has stepped down as Executive Chairman and member of the Board, effective immediately, and has expressed his confidence in Pascal Daloz to lead the company [2][8]. - Pascal Daloz has been with Dassault Systèmes for 25 years and shares a vision with Charlès to push the boundaries of science and innovation [3][4]. Company Vision and Strategy - The company aims to lead the transformation powered by Industrial AI through its 3D UNIV+RSES initiative, which is a long-term commitment to redefine industry innovation and competition in the Generative Economy [5][8]. - Daloz emphasizes the importance of maintaining the freedom necessary for Dassault Systèmes to remain a game-changer and accelerate growth [5][6]. Legacy and Future Direction - Bernard Charlès, as a co-founder, has been instrumental in guiding Dassault Systèmes from a startup to a world leader, fostering a culture of innovation and sustainability [4][9]. - The transition is seen as a strong foundation for the continued development of Dassault Systèmes, with a focus on high-quality standards and the successful engagement of the next generation of AI-based industry solutions [9].

Core Viewpoint - Dassault Systèmes announces the appointment of Pascal Daloz as both Chairman and Chief Executive Officer following the resignation of Bernard Charlès for personal reasons, ensuring continuity in leadership and governance [2][8]. Leadership Transition - Bernard Charlès has stepped down as Executive Chairman and member of the Board, effective immediately, citing personal reasons [2][8]. - Pascal Daloz, currently the CEO, will take on the additional role of Chairman, effective February 21, 2026, as recommended by the Compensation and Nomination Committee [2][3]. Vision and Strategy - Pascal Daloz expressed gratitude towards Bernard Charlès for his leadership and shared vision of transforming industries through innovation, particularly in the realm of Industrial AI and the 3D UNIV+RSES initiative [3][5]. - The company aims to redefine industry operations and competition in the Generative Economy, emphasizing a long-term commitment to innovation and growth [5][8]. Legacy and Future Direction - Bernard Charlès, as a co-founder, has been instrumental in guiding Dassault Systèmes from a startup to a global leader, fostering a culture of innovation and sustainability [4][9]. - The transition is seen as a strategic move to maintain trust among clients and ensure the company's successful development moving forward [6][9].

Market Overview - US equity futures resumed their selloff after a brief bounce, with S&P 500 futures down 0.5% and Nasdaq 100 contracts falling 1.0%, driven by concerns over AI disruption [1] - All major tech stocks in the "Magnificent 7" are lower, with notable declines in Nvidia (-0.9%) and Alphabet (-1.5%) [3] - Energy, financials, industrials, and defensive sectors showed pockets of outperformance amid the broader market decline [1] Corporate News - Activist investor Elliott has built a significant stake in Norwegian Cruise Line, leading to a rise of over 7% in its shares [4] - Apple is set to hold a product launch on March 4, which may impact its stock performance [3] - ImmunityBio shares rose 6% after receiving encouragement from the Saudi Food and Drug Authority to submit a regulatory package for its bladder cancer therapy [4] - Masimo shares surged 34% following reports of a nearly $10 billion acquisition deal by Danaher [4] AI and Technology Sector - Investors are cautious about the profitability of AI spending, with concerns about competition and potential disruptions to various industries [6][7] - A record number of investors believe companies are overspending on AI, with 25% citing an "AI bubble" as a top market risk [10] - Despite selloff concerns, two-year forward earnings estimates for software stocks have risen, indicating resilience in the sector [11] Economic Indicators - Upcoming economic data includes the ADP employment change, Empire State manufacturing survey, and NAHB housing market index for February, which could influence market sentiment [1][22] - The UK unemployment rate rose to 5.2%, leading to increased expectations for a Bank of England rate cut [16] Commodities and Geopolitical Factors - Oil prices rose due to geopolitical tensions, particularly military drills by Iran in the Strait of Hormuz, impacting Brent crude prices [13][48] - Gold prices have declined, with spot gold dropping toward $4,900 an ounce amid a risk-off sentiment [1][48]

Core Insights - Dassault Systèmes shares fell approximately 20%, marking their worst day on record, following disappointing fourth-quarter results and a weak outlook for 2026 [1][7] Financial Performance - Fourth-quarter revenue was €1.68 billion (about $2 billion), a 4% decline year-on-year and below expectations of €1.74 billion to €1.75 billion [2] - At constant currencies, growth was only 1%, at the lower end of the company's guidance range [2] - Software revenue remained flat, with transactional license sales decreasing by 7% [3] - Recurring revenue increased by only 3%, missing internal targets, while specific segments like Life Sciences and Medidata saw declines of 4% and 7% respectively [3] - Full-year revenue totaled €6.24 billion, slightly below the consensus estimate of €6.3 billion [4] Guidance and Market Reaction - For 2026, Dassault projected revenue growth of 3% to 5%, falling short of analyst expectations of around 6% [5] - The company also guided for a non-IFRS operating margin of 32.2% to 32.6% and EPS of €1.30 to €1.34 [5] - The market reacted negatively, with shares dropping as much as 22% intraday, resulting in a loss of approximately €6 billion in market value [7] Industry Context - Dassault Systèmes is central to European industrial software, providing tools for 3D design and simulation used in various sectors including aerospace and automotive [8] - The company has been viewed as a beneficiary of digital transformation, but current market dynamics raise questions about its future in the context of advancing generative AI [9] - The software market is experiencing a divide, with AI infrastructure providers thriving while traditional software as a service companies face challenges related to pricing power and revenue erosion [9]

Core Viewpoint - Dassault Systèmes reported disappointing fourth-quarter revenue growth and 2026 revenue guidance, leading to a significant drop in share price, with shares down approximately 20% [1][2]. Group 1: Financial Performance - Fourth-quarter revenue growth was only 1%, significantly below sell-side consensus of around 3% and even below bearish buy-side expectations of 2% [1][2]. - Full-year 2025 revenue reached €6.24 billion, reflecting a 4% increase at constant currency [3]. - The company's 3DExperience platform and cloud offerings grew by 10% and 8% respectively for the year, driven by major contracts [3]. Group 2: Revenue Guidance - The 2026 revenue growth guidance of 3-5% at constant currency fell short of investor expectations, which were around 4-6% or 5-7% [2]. - Analysts expressed concerns about the achievability of the 3-5% guidance given the weak fourth-quarter growth [3]. Group 3: Segment Performance - The life sciences division, which includes the Medidata clinical trials business, experienced a revenue decline of 2% for the year due to reduced study starts by pharmaceutical companies [4]. - Revenue from the industrial innovation software segment grew by 6%, continuing to be the company's primary growth driver [4]. Group 4: Future Projections - For 2026, Dassault Systèmes forecasts an operating margin between 32.2% and 32.6%, with earnings per share projected to be between €1.30 and €1.34 [4].