This article about Dassault Systemes' Q2 earnings report was originally published on July 23, 2015. Click here for a article on the company's Q3 earnings report in October, or check out all of the Fool's coverage on Dassault Systemes here

Engineering and design software company Dassault Systemes (OTC:DASTY) has had a strong year so far in 2015, with the stock price up 26% year to date. Moreover, its second-quarter results confirmed the company's growth prospects, and for the second quarter in a row, management upgraded its full-year guidance.

Let's take a look at four key takeaways from the results.

Favorable currency movements
While U.S. companies have reported the negative currency effects of a strengthening U.S. dollar, France's Dassault Systemes is seeing the benefits. When the euro weakens against the U.S. dollar, companies that report in euros will see a boost from the translational value of their sales in U.S. dollars. The impact is amplified because many Asian countries peg their currency to the U.S. dollar.

In fact, on a non-IFRS basis -- IFRS, or International Financial Reporting Standards, is an international accounting standard -- the company's total revenue increased 27% in the second quarter. But don't get too excited -- total revenue was only up 14% in constant currency.

Geographic growth
Currency effects played a part, but Dassault Systemes' growth looks pretty balanced, with growth in constant currency looking strong across all regions. As you can see below, Asia was the standout performer in the second quarter.

Source: Dassault Systemes presentations. All figures in constant currency. 

Guidance increase
Following a quarter in which non-IFRS revenue increased 27% and non-IFRS EPS rose 25% compared to last year, it wasn't a surprise to see management increase its full-year guidance for the second quarter in a row. At the start of the year, company guidance was for full-year non-IFRS EPS to increase 12%-15%, only to be increased to 15%-17% at the time of the first-quarter results. Fast-forward to the second quarter, and management promptly increased non-IFRS EPS guidance to 18%.

Full-year non-IFRS EPS is now expected to be around 2.15 euros from a previous estimate of around 2.10 euros-2.13 euros, with management attributing half the increase to favorable currency effects, and half to increased sales activity.

With regard to the third quarter, management expects:

  • Non-IFRS constant currency revenue growth of 7%-9%
  • Non-IFRS EPS growth of 11%
  • Non-IFRS operating margin of around 29%-29.5%

Incidentally, the full-year target for non-IFRS operating margin is 30%.

New licenses revenue growth
As you can see in the pie chart below, new licenses revenue only made up around 25% of revenue in the quarter.

Source: Dassault Systemes presentations. All figures in millions of euros.

However, as the next chart shows, increasing new licenses sales is the key to growing total company revenue. The good news is that new licenses revenue grew 17% -- indicating future growth in periodic licenses, maintenance, and other software revenue.

Source: Dassault Systemes presentations.

While the company has achieved some of its new licenses growth due to acquisitions, its organic growth rate remains strong, with organic, constant-currency growth of 9% in the second quarter, and 11% in the first half.

Furthermore, on the earnings call, CFO Thibault de Tersant outlined his positive expectations for future new licenses revenue growth: "Finally, as our upgraded 2015 guidance implies, we expect to maintain a similar pace of organic new licenses revenue growth in constant currencies in the second half, even with a very significant H214 base of comparison."

The bottom line
All told, this was another strong set of earnings from Dassault Systemes. Favorable currency movements are somewhat flattening the company's revenue and earnings, but its underlying growth remains strong. Moreover, its revenue increase is somewhat balanced across all geographic regions.

New licenses revenue growth indicates more overall revenue growth to come, and management's outlook for new licenses revenue implies that Dassault Systemes will carry its earnings momentum into future quarters.