PLM earnings check: AI, tariffs, and longer sales cycles

Earnings season kicked off last week. No true PLM heavyweights yet, but enough software and industrial results to start looking at sales and demand trends. And some interesting bits and pieces. Fasten your seatbelts.

SAP reported Q4 revenue of €9.68 billion, up 3% year/year, y/y (up 9% in constant currencies, cc). Management cited geopolitical uncertainty—sanctions, export controls, regulation—rather than lower demand as lengthening some deal cycles. AI remains central to both its offer and sales successes: SAP Business AI appeared in two-thirds of Q4 cloud orders. SAP’s Joule copilot users grew nine-fold y/y and management reiterated expectations for accelerating cc revenue growth through 2027. Much more here https://www.sap.com/investors/en.html 

Microsoft reported fiscal Q2 revenue of $81.3 billion (up 17% as reported, up 15% cc), with record bookings and continued Copilot momentum. Read more on the results here https://www.microsoft.com/en-us/Investor/earnings/FY-2026-Q2/press-release-webcast .

Microsoft’s earnings release has many notable datapoints, but there’s one I want to focus on: The company said that only ~3% of Office seats actively use Copilot today. Investors and the company, of course, see this as “97% of users don’t yet use Copilot” —  a huge opportunity. To me, that 3% Copilot number says that much of the “everyone uses AI” hype is just wrong. Microsoft makes it as frictionless as possible to use AI, and people still resist. Why/how does SAP see nine-fold growth while Microsoft is at only 3%? I think it’s two things:

1. SAP has 300 million or so cloud users of its highly structured HR, legal, finance, etc., solutions, and the data to train Joule is likely already stored in SAP databases. In the AI world, that’s low-hanging fruit. Solve the easy cases first, prove success, and people will pay to get in on it.
2. Microsoft, on the other hand, sells Office to over a billion knowledge workers worldwide. What we do is much more free-form, and the value of what we produce is often harder to quantify. Yes, Copilot can “make a powerpoint out of this paragraph”, but how much is that worth to us? So far, apparently only 3% of us (although that is still, frankly, a staggering number.)

Of course, it’s also possible that we’re not all counting the same things. Do we mean “actual users of Joule and Copilot” or “people who have access as part of the bundle they purchased”?

Anyway, back to earnings in our little part of the IT landscape,

Nemetschek released preliminary Q4 2025 results. FY 2025 revenue rose 23% cc to €1.2 billion (including GoCanvas), surpassing €1 billion for the first time — 2024 revenue was just-shy-of-a-billion €996 million. Q4 2025 revenue was €325 million (up 17% cc), driven by strong performance in the Build division (that’s Bluebeam, among other brands). Management highlighted digitalization in construction and AI as long-term growth drivers. Full results arrive on March 19. Read more here: https://ir.nemetschek.com/en/news/nemetschek-group-closes-a-very-successful-fiscal-year-2025-with-strong-performance-and-well-achieving/59445110-cfa8-4dca-a281-6f0f3dd0f6dd 

Sandvik reported Q4 organic revenue growth of 12%, driven by Mining; Machining & Intelligent Manufacturing (where the CAM products live) grew 11%, with double-digit growth in software. Read more here: https://www.home.sandvik/en/investors/ 

Interestingly, Sandvik also discussed the impact of tariffs on its business, noting that “Tariff surcharges had a +1.4% impact on orders and on revenues” in the Machining and Intelligent Manufacturing segment. That’s the first time I’ve seen quantified the impact of tariffs (but, then, Sandvik is one of the few companies I follow that sells physical goods); the company said that it was “taking measures to limit the financial impact” of “announced tariff levels of 15% between Europe and the US, and tariffs between the US and other regions … Sandvik has implemented surcharges, re-routed production flows and, to a limited extent, moved production capacity into the US. The potential indirect tariff impact of a weaker global economy is a risk for Sandvik that could have a material impact.” A quick recap: prices went up for Sandvik’s customers, the company had to change how and where it makes some of its products, and, to a limited extent, moved production to the US and sees greater volatility as a result of all of this. I genuinely don’t see how this is a win for anyone.

And just today, Sandvik announced that it has acquired the Mastercam-related business of MLC CAD Systems for an undisclosed amount. Mr Widing said the acquisition strengthens Sandvik’s direct sales channel and regional presence in the US (MLC is based in Texas).

And finally, Hexagon on Friday reported December-quarter organic growth of 3% (organic cc, occ). Autonomous Solutions revenue grew 23%; Manufacturing Intelligence rose 1% as customer decisions slipped into 2026; Geosystems fell 1% occ “as a result of a proactive decision to not restock channels in some more challenging markets, particularly in Asia and China … Destocking in Geosystems will continue into Q1 2026, but will result in a more robust business beyond that”. Octave revenue was up 2% occ; SaaS revenue was up double-digit occ but offset by lower project-driven subscription activity. The sale of Hexagon’s Design & Engineering software (fka MSC Software) to Cadence remains on track to close this quarter, and Octave’s spinout is still scheduled for the first half of this year. You can see much more here: https://investors.hexagon.com/ 

Bottom line? Sales cycles are getting longer as uncertainty slows buying decisions. AI remains top of mind, but perhaps more as a vendor-push than a buyer-pull right now for general users of generic tools. Everything I see says that targeted AI solutions that help with productivity, provide guard-rails for inexperienced designers or help with compliance are in demand and, as they go to commercial release, being implemented. When that trns into revenue is the big question.

Watch this space — it looks like a bumpy earnings season ahead.