Chairman and Chief Executive Officer, Dassault Systèmes SE
Dassault Systèmes: "The average cost of developing a molecule is 2 billion" (P. Daloz)
Pascal Daloz, CEO of Dassault Systèmes, was Sandra Gandoin's guest on French Tech this Thursday, July 23rd. He discussed his software company's second-quarter results and the acquisition of publisher ArisGlobal on Good Morning Business. Catch the show Monday through Friday and listen to the podcast.
#dassault #business #france
---------------------------------------------------------
👋 Welcome to the official YouTube channel of BFM Business, France's leading business and financial news channel.
📺 Every day, follow all the latest business, stock market, entrepreneurial, and financial news in...
About Pascal Daloz
Pascal Daloz, Chairman and CEO of Dassault Systèmes, appeared on BFM Business on July 23, 2026, to discuss the company's second-quarter results and its acquisition of ArisGlobal. He reported total revenue growth of 4% and subscription growth of 8%, attributing the results to the industry shift toward subscription models and continued investment by manufacturing industries. Daloz also highlighted 14% growth in 3DExperience software and cloud revenue. During the interview, Daloz discussed the life sciences sector as a growth area for the company. He stated that the average cost of developing a molecule is $2 billion and that only one in ten molecules reaches the market. He said Dassault Systèmes aims to replace physical testing with virtual testing to shorten development cycles and reduce costs. Daloz also mentioned work with Bel Group on substituting animal protein with plant protein in products like Babybel, using virtual modeling and AI to test combinations.
Transcript (25 segments)
I
Interviewer0:00
I told you this morning, there are many results. Good morning Pascal Daloz.
P
Pascal Daloz0:03
Good morning.
I
Interviewer0:04
CEO of Dassault Systèmes with us, publisher of design and modeling software, and you are presenting today the second quarter results with total revenue growth of 4%. Um, the markets seem to appreciate it, up 1% in pre-market trading this morning. Explain these results to us, what drove this increase? They are solid results, huh, you have signified it.
P
Pascal Daloz0:29
[clears throat] It was driven by the shift towards subscription. As you know, all software publishers are progressively moving to subscription models. And this quarter, our subscription growth is +8%.
I
Interviewer0:42
+8% indeed. Also 14% growth in 3DExperience software revenue and cloud. Um, it is supported by manufacturing industries.
P
Pascal Daloz0:53
Exactly, huh, it may seem surprising but it is resilient. These are industries that in any case need to invest to transform themselves, and the 3DExperience platform is, I would say, the foundation for them to accelerate these transformations.
I
Interviewer1:09
Forecasts for the rest of the year, we are at mid-2026. What do you hope for the end of the year?
P
Pascal Daloz1:17
We confirm our objectives as stated, i.e., growth between 4 and 6%.
I
Interviewer1:24
We will also obviously talk about this confirmation, you confirmed it this morning, the acquisition of AIS Global which works in life sciences. Explain to us already what this platform, this company does.
P
Pascal Daloz1:40
This platform, you know when you put a drug on the market, you have regulatory and safety obligations to track all adverse effects that have been reported worldwide following the use of this drug. So this company, what it does, it gives health agencies and pharmaceutical, biotech, and medical equipment industries the ability to track all these adverse effects. It's important. It's important. Why? Because you may not know it, but the third cause of death in the world is medical error. Hmm hmm. So the more we can capitalize on this information and feed it back into the innovation cycle, the more we can anticipate all these adverse effects. And that's what Aris Global does.
I
Interviewer2:22
Are you going to bring them to you? You are going to tell us? Aris Global says that life sciences organizations operate with fragmented systems and disconnected healthcare environments. And that's where you will intervene.
P
Pascal Daloz2:38
Exactly. And you have very rightly said it. AI plays a key role in this industry, huh, because these are experimental processes and therefore collected data is at the core. Today, data is in research systems, scientific data, in clinical systems, testing or in regulatory systems typically at Aris Global and also in production systems. Our platform is unifying all of this with an AI system that allows globally when there is a quality problem to understand if it comes from the formulation, if it comes from a production deficiency. So it allows this unification within the company.
I
Interviewer3:18
We are talking about an amount of 1.8 billion, is that right?
P
Pascal Daloz3:22
Yes. In dollars.
I
Interviewer3:22
In dollars of course. Life sciences is an interesting growth driver for Dassault Systèmes.
P
Pascal Daloz3:28
It is for a very simple reason. You know, this industry has a real paradox. It is the one that spends the most on research and development. Yeah. And the average cost of developing a molecule is 2 billion dollars. And you have to keep in mind that only 1 out of 10 molecules reaches the market. So they spend a lot and ultimately the result may seem a bit disappointing. The reason is very simple, it is an industry that only does physical experimentation. We test on humans, we have machines in laboratories that try all possible combinations on molecules. What we propose is to replace this physical test with virtual test. It shortens the cycle, it lowers the cost, and it allows to do basically all validations in the virtual world before doing them in the physical world.
I
Interviewer4:17
Saving time and money absolutely essential in healthcare. Indeed, I would like us to talk very quickly about the European digital strategy under construction. What do we need today, you who have a global view obviously of this sector to compete on equal footing with our international competitors? What could give us the advantage? AI precisely, that is what will advance us.
P
Pascal Daloz4:39
AI is one of the axes but there is a specificity in Europe. It is no coincidence that the largest ERP company in the world is European. That the largest industrial software company is European, Dassault Systèmes. What is our specificity? It is the intersection between industry trades and technology. And that is where we make the difference. The large blocs, whether Chinese or American, are very strong at making horizontal technologies that serve the mass market. We have the possibility to differentiate ourselves and we have the ecosystem today to do so. That is in my opinion where Europe must focus.
I
Interviewer5:18
It is often said in the world of work that artificial intelligence is a threat. With your type of activity, does it constitute a threat or not really in the end? Because in software, one might think it is one of the first sectors affected, but in fact not so much.
P
Pascal Daloz5:34
Well look, give me a country where we don't say we lack engineers. In all countries. So for us, AI is a way to augment the engineer, to have more capacity to invent, produce, certify. [clears throat] That is what AI allows. You know, trades evolve but at bottom industrial knowledge and know-how remain. Um, a good example of this is look at the automotive industry and Renault is a good case. Difficulty in a historical market. Yes. Repositioning in the civil drone market. Why? Because Renault knows how to produce objects on a large scale of a certain complexity and in regulated trades. What did they do? They used all that knowledge to put it at the service of other things. So once again, trades evolve but industrial know-how remains and that is the core business of our clients.
I
Interviewer6:29
I saw that 41% of your investments at Dassault Systèmes go to research and development. What are you working on for example for the future?
P
Pascal Daloz6:37
We are working on, um, helping to understand new molecules in the food domain. For example, a nice example, we work with the company Bel that you all know.
I
Interviewer6:48
Yes.
P
Pascal Daloz6:48
The Bel cheese company, Baby Bel. This company has undertaken for several years now a major scientific program to substitute animal protein with vegetable protein. Easy to say, quite complicated to do because in the end the texture of Baby Bel must be the same, its taste must be the same, it must obey regulations on toxicity. So how do we do it? We take all this knowledge that has been accumulated, we virtualized it, we put it into modelers and AI machines that automatically look at all possible combinations on vegetable proteins in order to reproduce as much as possible everything I just told you. There is a concrete example of a new sector, a new domain for Dassault Systèmes.
I
Interviewer7:34
Thank you very much Pascal Daloz for coming to see us this morning.