Ansys simulation solutions optimized mission planning and lunar lander design, increasing likelihood of success / Key Highlights Ansys multiphysics and digital mission engineering (DME) solutions enabled Astrobotic to predict many categories of the spacecraft's performance indicators throughout all phases of the mission, from plotting the orbital trajectory to analyzing communication system performance Astrobotic's Peregrine lunar lander will carry 20 payloads from seven nations, and five NASA payloads in s ...

Key PointsAnsys stock surged 18% on Synopsys acquisition news.Fellow software maker Altair, also seen as a potential acquisition target, advanced 11.48%.Analysts predict a 2024 M&A surge, despite potential antitrust challenges.5 stocks we like better than ANSYSShareholders of engineering simulation software maker Ansys Inc. NASDAQ: ANSS got a holiday gift as the stock rallied more than 18% on December 22 on news that Synopsys Inc. NASDAQ: SNPS was in discussions to acquire the company. According to a report ...

Core Viewpoint - Synopsys is in discussions to acquire Ansys, potentially creating a significant design-software entity and marking a notable merger in the new year [1] Group 1: Company Performance - Synopsys shares have increased over 70% this year, driven by investor interest in companies poised to benefit from the artificial intelligence boom [1] Group 2: Acquisition Details - Ansys has a market value of nearly $30 billion, and the acquisition could be finalized in early 2024 [1] - There is a possibility that the acquisition talks may not succeed, and other potential buyers could emerge [1]

ANSYS, Inc. (NASDAQ:ANSS) Q3 2023 Earnings Conference Call November 2, 2023 8:30 AM ET Company Participants Kelsey DeBriyn – Vice President-Investor Relations Ajei Gopal – President and Chief Executive Officer Nicole Anasenes – Chief Financial Officer Conference Call Participants Jay Vleeschhouwer – Griffin Securities Joe Vruwink – Baird Jason Celino – KeyBanc Capital Markets Ken Wong – Oppenheimer & Company Steven Tusa – JPMorgan Mike Richards – Stifel Tyler Radke – Citi Operator Ladies and gentlemen, than ...

[Part I - Financial Information](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's total assets were $6.67 billion as of September 30, 2023, a slight decrease from $6.69 billion at year-end 2022, with revenue increasing to $1.46 billion and net income decreasing to $225.7 million for the nine months ended September 30, 2023, while operating cash flow rose to $484.4 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $1,542,499 | $1,664,122 | | **Total Assets** | **$6,673,520** | **$6,687,945** | | **Total Current Liabilities** | $634,431 | $794,836 | | **Total Liabilities** | $1,666,720 | $1,822,094 | | **Total Stockholders' Equity** | **$5,006,800** | **$4,865,851** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $458,795 | $472,511 | $1,464,841 | $1,371,438 | | **Gross Profit** | $393,538 | $410,544 | $1,263,592 | $1,182,224 | | **Operating Income** | $69,816 | $123,384 | $293,135 | $332,557 | | **Net Income** | $55,502 | $95,975 | $225,650 | $265,763 | | **Diluted EPS** | $0.64 | $1.10 | $2.58 | $3.04 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $484,400 | $457,031 | | **Net cash used in investing activities** | ($220,166) | ($258,622) | | **Net cash used in financing activities** | ($232,600) | ($197,978) | | **Net increase (decrease) in cash** | $24,951 | ($35,158) | | **Cash and cash equivalents, end of period** | $639,342 | $632,509 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail revenue disaggregation, showing a shift in license types and strong maintenance growth, alongside two acquisitions totaling $222.4 million, an increase in goodwill to $3.77 billion, a $755.0 million term loan, $196.5 million in stock repurchases, and a potential $7.1 million Indian service tax liability - For the nine months ended Sep 30, 2023, subscription lease license revenue grew to **$386.5 million** from **$363.0 million** YoY, while perpetual license revenue declined to **$200.0 million** from **$212.4 million** YoY, and maintenance revenue showed strong growth, increasing to **$820.4 million** from **$742.6 million**[29](index=29&type=chunk) - In 2023, the company completed the acquisitions of Diakopto for **$83.3 million** and DYNAmore for **$139.2 million**, with total cash consideration of **$217.4 million**, adding **$113.5 million** to goodwill[35](index=35&type=chunk)[37](index=37&type=chunk)[53](index=53&type=chunk) - As of September 30, 2023, the company had **$755.0 million** of borrowings outstanding under its term loan, with a carrying value of **$753.8 million**, and an interest rate of **6.37%** in effect for Q4 2023[69](index=69&type=chunk)[70](index=70&type=chunk) - The company repurchased **650,000 shares** for a total cost of **$196.5 million** during the nine months ended September 30, 2023, with **1.1 million shares** remaining available for repurchase as of the period end[75](index=75&type=chunk) - A potential contingency exists from several pending service tax audits in India, which could result in tax charges and liabilities of **$7.1 million**, though no reserve has been recorded as the charge is not considered probable at this time[83](index=83&type=chunk) [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 6.8% GAAP revenue increase for the first nine months of 2023, driven by maintenance and subscription lease growth, though Q3 revenue declined 2.9% YoY due to U.S. export restrictions, while Annual Contract Value (ACV) grew 10.4% in constant currency in Q3, and operating expenses increased, leading to lower operating and net income for both the three and nine-month periods [Business Overview and Strategy](index=19&type=section&id=Business%20Overview%20and%20Strategy) Ansys develops and markets engineering simulation software globally, with its 'Pervasive Insights' strategy focusing on deepening and extending simulation use across the product lifecycle, driven by expanding product offerings, increasing user base, and handling more complex computations, fueled by key market trends such as electrification, autonomy, connectivity, IIoT, and sustainability - Ansys's business strategy, 'Pervasive Insights,' aims to expand simulation use through three growth vectors: more products, more users, and more computations[87](index=87&type=chunk) - Market growth is driven by customer needs for innovation and efficiency, fueled by key industry trends such as electrification, autonomy, connectivity, the industrial internet of things, and sustainability[89](index=89&type=chunk) [Financial Performance Overview](index=20&type=section&id=Financial%20Performance%20Overview) In Q3 2023, GAAP revenue decreased by 2.9% and operating income fell by 43.4% YoY, while for the nine-month period, GAAP revenue grew 6.8% but operating income declined 11.9%, with performance affected by new U.S. export restrictions on China, which negatively impacted Q3 revenue and ACV by $20 million, despite Annual Contract Value (ACV) growing 10.4% in constant currency in Q3 GAAP & Non-GAAP Performance vs. Prior Year | Metric | Q3 2023 (GAAP) | Q3 2023 (Non-GAAP) | 9 Months 2023 (GAAP) | 9 Months 2023 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | (2.9)% | (3.1)% | 6.8% | 6.3% | | **Operating Income** | (43.4)% | (19.5)% | (11.9)% | 0.6% | | **Diluted EPS** | (41.8)% | (20.3)% | (15.1)% | (1.0)% | - New U.S. Department of Commerce restrictions on sales to certain Chinese entities negatively impacted revenue and Annual Contract Value (ACV) by **$20.0 million** in Q3 2023, with an expected full-year headwind of **$25.0 million**[96](index=96&type=chunk) Annual Contract Value (ACV) Growth (in thousands) | Period | ACV (Actual) | ACV (Constant Currency) | YoY Change (Actual) | YoY Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | **Q3 2023** | $457,549 | $451,779 | 11.8% | 10.4% | | **9 Months 2023** | $1,345,305 | $1,355,529 | 10.8% | 11.7% | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) For Q3 2023, total revenue decreased 2.9% YoY to $458.8 million, driven by declines in subscription lease and perpetual licenses, partially offset by increased maintenance revenue, while for the nine-month period, revenue grew 6.8% to $1.46 billion, led by maintenance revenue, with operating expenses rising due to higher personnel and stock-based compensation costs, resulting in lower operating income and a decreased effective tax rate for both periods Q3 Revenue by Type (in thousands) | Revenue Type | Q3 2023 | Q3 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription lease licenses | $103,573 | $136,489 | (24.1)% | | Perpetual licenses | $58,849 | $72,417 | (18.7)% | | Maintenance and service | $296,373 | $263,605 | 12.4% | | **Total Revenue** | **$458,795** | **$472,511** | **(2.9)%** | Nine-Month Revenue by Type (in thousands) | Revenue Type | 9M 2023 | 9M 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription lease licenses | $386,494 | $362,977 | 6.5% | | Perpetual licenses | $199,977 | $212,355 | (5.8)% | | Maintenance and service | $878,370 | $796,106 | 10.3% | | **Total Revenue** | **$1,464,841** | **$1,371,438** | **6.8%** | - Q3 selling, general, and administrative (SG&A) expenses increased **11.0%** YoY to **$194.6 million**, and R&D expenses increased **14.0%** to **$123.2 million**, primarily due to higher salaries and stock-based compensation[125](index=125&type=chunk) - The effective tax rate for Q3 2023 was **11.3%**, down from **18.7%** in Q3 2022, and for the nine-month period, the rate was **15.6%**, down from **16.7%** in the prior year[130](index=130&type=chunk)[148](index=148&type=chunk) [Non-GAAP Results](index=35&type=section&id=Non-GAAP%20Results) The company provides non-GAAP metrics to supplement GAAP results, adjusting for items like stock-based compensation, amortization of acquired intangibles, business combination expenses, and historical deferred revenue write-downs, with non-GAAP diluted EPS at $1.41 for Q3 2023 (vs GAAP $0.64) and $4.85 for the nine months (vs GAAP $2.58), aiming to provide a clearer view of ongoing operational performance - Non-GAAP results exclude items such as stock-based compensation, amortization of acquired intangibles, and expenses related to business combinations to better reflect ongoing operational performance[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) GAAP to Non-GAAP Reconciliation Highlights (Q3 2023) | Metric (in thousands) | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Operating Income** | $69,816 | $86,421 | $156,237 | | **Net Income** | $55,502 | $67,395 | $122,897 | | **Diluted EPS** | $0.64 | $0.77 | $1.41 | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company held $639.5 million in cash, cash equivalents, and short-term investments, with net cash from operations for the nine-month period at $484.4 million, primarily used for $197.8 million in acquisitions and $196.5 million in stock repurchases, and the company believes existing liquidity, including its $755.0 million term loan and $500.0 million revolving credit facility, is sufficient to meet needs for at least the next twelve months - Cash and cash equivalents increased to **$639.5 million** at Sep 30, 2023 from **$614.6 million** at year-end 2022, with **48.9%** of this cash held by foreign subsidiaries[169](index=169&type=chunk)[171](index=171&type=chunk) - For the nine months ended Sep 30, 2023, cash from operations was **$484.4 million**, cash used in investing was **$220.2 million** (primarily for acquisitions), and cash used in financing was **$232.6 million** (primarily for stock repurchases)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - The company believes existing cash, cash from operations, and access to its **$500.0 million** revolving loan facility will be sufficient to meet working capital and capital expenditure requirements for at least the next twelve months[182](index=182&type=chunk) [Market Risk Disclosures](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency exchange risk and interest rate risk, with currency fluctuations having a mixed impact on operating income, and a hypothetical 10% strengthening of the U.S. Dollar decreasing nine-month revenue by $63.6 million, while a 100 basis point increase in interest rates on its $755.0 million variable-rate term loan would raise annual interest expense by $7.7 million - The company is exposed to foreign currency risk, where a hypothetical **10%** strengthening of the U.S. Dollar would have decreased revenue by **$63.6 million** and operating income by **$22.6 million** for the nine months ended September 30, 2023[188](index=188&type=chunk) - The company is exposed to interest rate risk on its **$755.0 million** of variable-rate debt, where a hypothetical **100 basis point** increase in interest rates would increase annual interest expense by **$7.7 million**[190](index=190&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the third quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[192](index=192&type=chunk) - No changes in internal control over financial reporting occurred during Q3 2023 that materially affected, or are reasonably likely to materially affect, internal controls[194](index=194&type=chunk) [Part II - Other Information](index=46&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and legal proceedings in the ordinary course of business, with management believing the resolution of pending matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows - The company states that the resolution of pending legal matters is not expected to have a material adverse effect on its financial condition[196](index=196&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) The company highlights a significant risk related to expanding U.S. trade restrictions, particularly export controls to China, which have already limited sales to certain Chinese entities, elongated transaction cycles, and could continue to adversely affect business and financial results, with potential violations leading to significant penalties - The company is subject to expanding U.S. export control restrictions, particularly regarding China, which have limited and could continue to limit its ability to sell products and services to certain customers[199](index=199&type=chunk) - These trade restrictions have led to elongated transaction cycles and may result in reduced sales or delays in delivery, adversely affecting business and financial statements[199](index=199&type=chunk) - Violations of trade restrictions can result in significant penalties, including monetary fines, denial of export privileges, and reputational harm[201](index=201&type=chunk)

ANSYS, Inc. (NASDAQ:ANSS) Q2 2023 Earnings Conference Call August 3, 2023 8:30 AM ET Company Participants Kelsey DeBriyn - VP, IR Ajei Gopal - President and CEO Nicole Anasenes - CFO Conference Call Participants Joe Vruwink - Baird Jay Vleeschhouwer - Griffin Securities Andrew Obin - Bank of America Tyler Radke - Citi Andrew DeGasperi - Berenberg Steve Tusa - JPMorgan Operator Ladies and gentlemen, thank you for standing by, and welcome to the ANSYS Second Quarter 2023 Earnings Conference Call. With us toda ...

Revenue Performance - Total revenue for the six months ended June 30, 2023, was $1,006,046 thousand, compared to $898,927 thousand for the same period in 2022, representing an increase of 11.9%[20] - Total revenue for the six months ended June 30, 2023 was $1,006.046 million, a 12% increase from $898.927 million in 2022[39] - Revenue growth for the three months ended June 30, 2023 was 4.8% GAAP and 4.4% non-GAAP, while for the six months ended June 30, 2023, it was 11.9% GAAP and 11.2% non-GAAP[103] - Revenue for the quarter ended June 30, 2023 increased by 4.8% (5.5% in constant currency) to $496.6 million compared to the same period in 2022[123] - Revenue for the six months ended June 30, 2023, increased by 11.9% to $1,006,046 thousand compared to the same period in 2022, with subscription lease license revenue growing by 24.9%[145] - Total GAAP revenue for the period was $473.85 million, with a gross profit of $411.36 million, representing a gross margin of 86.8%[167] - Non-GAAP revenue for the period was $475.89 million, with a non-GAAP gross profit of $433.10 million, representing a non-GAAP gross margin of 91.0%[167] - For the six months ended June 30, 2023, total GAAP revenue was $1.01 billion, with a gross profit of $870.05 million, representing a gross margin of 86.5%[169] - Non-GAAP revenue for the six months ended June 30, 2023 was $1.01 billion, with a non-GAAP gross profit of $916.41 million, representing a non-GAAP gross margin of 91.1%[169] Net Income and Earnings - Net income for the six months ended June 30, 2023, was $170,148 thousand, slightly higher than $169,788 thousand for the same period in 2022[20] - Net income for the six months ended June 30, 2023 was $98.8 million, compared to $70.988 million for the same period in 2022[30] - Net income for the six months ended June 30, 2023, was $170.1 million, with basic and diluted earnings per share of $1.96 and $1.95, respectively[57] - Net income for Q2 2023 decreased to $69,526 thousand, compared to $98,800 thousand in Q2 2022, with diluted earnings per share declining from $1.13 to $0.80[143] - Net income for the first six months of 2023 was $170.15 million, with diluted earnings per share of $1.95, compared to $169.79 million and $1.94 per share in the same period in 2022[162] - Total GAAP net income was $98.80 million, with diluted EPS of $1.13, while non-GAAP net income was $154.58 million, with non-GAAP diluted EPS of $1.77[167] - Total GAAP net income for the six months ended June 30, 2023 was $170.15 million, with diluted EPS of $1.95, while non-GAAP net income was $301.09 million, with non-GAAP diluted EPS of $3.45[169] Operating Income and Expenses - Operating income for the three months ended June 30, 2023 decreased by 25.3% GAAP and 6.8% non-GAAP, but increased by 6.8% GAAP and 12.1% non-GAAP for the six months ended June 30, 2023[103] - Operating income for Q2 2023 decreased by 25.3% to $95,624 thousand compared to Q2 2022, primarily due to increased operating expenses[136] - Operating income grew by 6.8% to $223.32 million in the first six months of 2023, with an operating margin of 22.2%, down from 23.3% in the same period in 2022[154] - Total GAAP operating income was $128.01 million, representing an operating margin of 27.0%, while non-GAAP operating income was $193.63 million, representing a non-GAAP operating margin of 40.7%[167] - Total GAAP operating income for the six months ended June 30, 2023 was $223.32 million, representing an operating margin of 22.2%, while non-GAAP operating income was $383.46 million, representing a non-GAAP operating margin of 38.1%[169] Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended June 30, 2023, was $323,632 thousand, slightly lower than $329,880 thousand in the same period in 2022[26] - Net cash provided by operating activities decreased by $6.2 million (1.9%) to $323.6 million for the six months ended June 30, 2023[188] - Net cash used in investing activities decreased by $36.0 million (14.3%) to $215.6 million for the six months ended June 30, 2023[189] - Net cash used in financing activities increased by $36.4 million (17.5%) to $244.0 million for the six months ended June 30, 2023, primarily due to increased stock repurchases[190] - Cash, cash equivalents, and short-term investments decreased by $136.6 million (22.2%) from $614.6 million as of December 31, 2022, to $478.0 million as of June 30, 2023[184] - Domestic cash holdings decreased to 29.9% of total cash, while foreign cash holdings increased to 70.1% as of June 30, 2023[186] Acquisitions and Intangible Assets - The company completed the acquisition of Diakopto for $83.3 million and DYNAmore for $139.2 million in 2023 to expand its simulation portfolio[45] - Acquisition-related expenses for the six months ended June 30, 2023 were $4.3 million[46] - The fair value of consideration for the combined acquisitions in 2023 was $222.448 million, including $217.392 million in cash[47] - Developed software and core technologies acquired in 2023 have a weighted-average useful life of 5 years and were valued using the relief-from-royalty or multiperiod excess earnings method[51] - Trade names acquired in 2023 have a weighted-average useful life of 5 years and were valued using the relief-from-royalty method with a royalty rate of 1.0% to 2.0%[51] - The company completed acquisitions totaling $401.7 million in 2022, with a net purchase price of $390.8 million after deducting cash acquired[52] - Intangible assets subject to amortization totaled $883.7 million as of June 30, 2023, with estimated future amortization expenses of $53.3 million for the remainder of 2023 and $112.0 million for 2024[60] - Goodwill increased from $3.66 billion at the beginning of 2023 to $3.79 billion by June 30, 2023, due to acquisitions and currency translation adjustments[63] Foreign Currency Impact - Foreign currency translation adjustments for the six months ended June 30, 2023, were $21,287 thousand, compared to a loss of $70,735 thousand in the same period in 2022[22] - The company's revenue and operating income were negatively impacted by a stronger U.S. Dollar, with adverse impacts of $3.452 million on revenue and $1.740 million on operating income for the three months ended June 30, 2023[105] - The U.S. Dollar was 1.5% stronger against foreign currencies in Q2 2023 compared to Q2 2022, resulting in a $3.5 million adverse currency impact[123][124] - The impact of currency fluctuations resulted in a $17,343 thousand adverse effect on revenue for the six months ended June 30, 2023, with the Japanese Yen contributing the largest negative impact[147] - The U.S. Dollar was 4.0% stronger against foreign currencies for the six months ended June 30, 2023, resulting in a $17.3 million adverse impact on revenue[200][201] - A hypothetical 10% strengthening in the U.S. Dollar would decrease revenue by $43.8 million and operating income by $15.2 million for the six months ended June 30, 2023[202] Stock-Based Compensation and Share Repurchases - Stock-based compensation expense for the six months ended June 30, 2023, was $100,472 thousand, up 33.7% from $75,149 thousand in the same period in 2022[26] - The company repurchased 650,000 shares during the six months ended June 30, 2023 at an average price of $302.34 per share, for a total cost of $196.5 million[84] - The company repurchased 650,000 shares at an average price of $302.34 per share, totaling $196.5 million, during the six months ended June 30, 2023[194] - Stock-based compensation expense for the six months ended June 30, 2023 was $100.47 million, representing 10.0% of revenue[169] Legal and Regulatory Matters - The company is subject to various legal proceedings, including commercial disputes, labor matters, and intellectual property claims, which could have adverse financial or reputational impacts[210] - Resolution of pending legal matters is not expected to have a material adverse effect on the company's financial position, results of operations, or cash flows[210] Market and Strategic Outlook - The company's strategy of Pervasive Insights focuses on deepening the use of simulation in its core market, extending accessibility to a broader set of users, and driving growth through more products, users, and computations[96] - The engineering simulation software market is growing, driven by trends such as electrification, autonomy, connectivity, the industrial internet of things, and sustainability[98] - The company plans to continue its strategic and disciplined acquisition strategy to grow its business and extend simulation into other ecosystems and customer R&D workflows[99] Regional Revenue Performance - Revenue from the United States for the six months ended June 30, 2023 was $457.1 million, up from $384.8 million in the same period in 2022[88] - Americas region revenue grew by 12.5% (12.5% in constant currency) for the three months ended June 30, 2023[114] - Asia-Pacific region revenue decreased by 3.2% but grew by 0.3% in constant currency for the three months ended June 30, 2023[114] - International revenue accounted for 57.6% of total revenue in Q2 2023, down from 60.5% in Q2 2022[127] - International revenue accounted for 54.6% of total revenue in the first six months of 2023, down from 57.2% in the same period in 2022, while domestic revenue increased to 45.4% from 42.8%[150] Cost of Sales and Gross Profit - Total cost of sales for Q2 2023 was $68,340 thousand, representing 13.8% of revenue, an increase of 9.4% compared to Q2 2022[132] - Gross profit for Q2 2023 was $428,259 thousand, an increase of 4.1% compared to Q2 2022, driven by higher revenue partially offset by increased cost of sales[132] - Total cost of sales increased by 6.9% to $135.99 million in the first six months of 2023, driven by higher software license costs ($3.6 million increase in third-party royalties) and amortization expenses ($5.03 million increase due to newly acquired intangible assets)[152] - Gross profit increased by 12.7% to $870.05 million in the first six months of 2023, with a gross margin of 86.5%, up from 85.8% in the same period in 2022[152] Research and Development Expenses - Research and development expenses for the six months ended June 30, 2023, were $245,358 thousand, up 14.5% from $214,215 thousand in the same period in 2022[20] - Research and development expenses increased by 14.8% to $125,023 thousand in Q2 2023, driven by higher salaries and stock-based compensation[136] Tax and Interest Expenses - The effective tax rate for Q2 2023 decreased to 17.2% from 19.6% in Q2 2022, primarily due to lower U.S. federal tax expense on foreign earnings and increased R&D credits[142] - The effective tax rate increased to 16.9% in the first six months of 2023, up from 15.5% in the same period in 2022, primarily due to decreased benefits related to stock-based compensation[160] - Interest income increased significantly to $7.5 million in the first six months of 2023, compared to $0.8 million in the same period in 2022, driven by higher interest rates[156] - Interest income was $7.5 million, and interest expense was $22.3 million for the six months ended June 30, 2023[203] Lease and Debt Obligations - The company's lease liability cost for the six months ended June 30, 2023, was $14.1 million, with total lease costs reaching $16.7 million[72] - Operating cash flows from operating leases for the three months ended June 30, 2023 were $(6.9 million), compared to $(6.6 million) in the same period in 2022[73] - The weighted-average remaining lease term of operating leases as of June 30, 2023 was 6.6 years, down from 7.3 years as of June 30, 2022[73] - Total future lease payments as of June 30, 2023 were $142.7 million, with a present value of $128.5 million after discounting[74] - The company had $755.0 million in borrowings outstanding under the term loan facility as of June 30, 2023, with a carrying value of $753.7 million[79] - The weighted average interest rate under the 2022 Credit Agreement was 5.88% for the three months ended June 30, 2023, up from 1.90% in the same period in 2022[78] - Outstanding term loan borrowings of $755.0 million as of June 30, 2023, with variable interest rates based on Term SOFR or base rate plus applicable margin[204] - A hypothetical 100 basis points increase in interest rates would result in an additional $7.7 million in interest expense over the next twelve months[204] Employee and Workforce - The company employed 6,000 people as of June 30, 2023, up from 5,600 as of December 31, 2022[95] Financial Controls and Reporting - Disclosure controls and procedures evaluated as effective by the Chief Executive Officer and Chief Financial Officer[206] - Financial statements and other financial information fairly present the company's financial condition, results of operations, and cash flows[207] - No changes in internal control over financial reporting during the three months ended June 30, 2023, that materially affected financial reporting[208] Capital Spending and Market Risk - The company plans capital spending of $28.0 million to $38.0 million during fiscal year 2023, compared to $24.4 million spent in fiscal year 2022[189] - No material changes in market risk since December 31, 2022[204] Deferred Revenue and Backlog - Deferred revenue balance as of June 30, 2023 was $396.506 million, compared to $383.622 million in 2022[41] - Total revenue allocated to remaining performance obligations as of June 30, 2023 was $1,295.798 million, with $810.219 million expected to be recognized in the next 12 months[42] - Deferred revenue and backlog as of June 30, 2023, totaled $1,295,798 thousand, with $810,219 thousand classified as current and $485,579 thousand as long-term[129] Maintenance and Service Revenue - Maintenance and service revenue for the six months ended June 30, 2023, was $581,997 thousand, an increase of 9.3% from $532,501 thousand in the same period in 2022[20] - Maintenance revenue grew by 10.5% (11.1% in constant currency) to $273.7 million, driven by existing customer base[123] - Maintenance revenue for the six months ended June 30, 2023, increased by 9.6% to $542,285 thousand, driven by growth in maintenance associated with lease licenses[145] - Service revenue increased by 4.5% (4.3% in constant currency) to $18.0 million in Q2 2023[123] Software Licenses Revenue - Software licenses revenue for the six months ended June 30, 2023, was $424,049 thousand, up 15.7% from $366,426 thousand in the same period in 2022[20] - Perpetual license revenue decreased by 5.5% (4.9% in constant currency) to $69.9 million due to a 4.5% decrease in deal volume and 1.0% decrease in average deal size[123] - Subscription lease licenses revenue remained stable at $135.0 million, with a 1.1% increase in constant currency[123] Comprehensive Income and Other Financial Metrics - Comprehensive income for the six months ended June 30, 2023, was $191,435 thousand, significantly higher than $99,053 thousand in the same period in 2022[22] - The company's Annual Contract Value (ACV) for the three months ended June 30,

ANSYS, Inc. (NASDAQ:ANSS) Q1 2023 Earnings Conference Call May 4, 2023 8:30 AM ET Company Participants Alex Di Ruzza - Investor Relations Manager Ajei Gopal - President & Chief Executive Officer Nicole Anasenes - Chief Financial Officer & Senior Vice President-Finance\ Conference Call Participants Jay Vleeschhouwer - Griffin Securities Jason Celino - KeyBanc Capital Markets Steve Tusa - JPMorgan Ken Wong - Oppenheimer Mike Richards - Stifel Joe Vruwink - Baird Blair Abernethy - Rosenblatt Securities Josh Ti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 0-20853 ANSYS, Inc. | --- | --- | --- | |---------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Q4 2022 was the largest quarter in ANSYS's history, exceeding financial guidance across all key metrics including ACV, revenue, operating margin, and earnings per share [5][20] - Full year 2022 ACV reached $2.032 billion, surpassing the $2 billion target set in 2019, with a growth of 14% in constant currency [6][24] - Q4 total revenue was $694.7 million, growing 10% in constant currency, while full year revenue was $2.073 billion, growing 13% in constant currency [27][28] - Operating margin for Q4 was 48%, with a full year operating margin of 42% [28][29] - EPS for Q4 was $3.09, and for the full year, it was $7.99 [28][29] Business Line Data and Key Metrics Changes - Subscription lease ACV grew 18% or 24% in constant currency, crossing over $1 billion to $1.2 billion, representing 57% of total ACV for the full year [26] - Recurring ACV grew 9% or 15% in constant currency year-over-year, accounting for 81% of total ACV [26] Market Data and Key Metrics Changes - The Americas region recorded over $1 billion in ACV for the first time, contributing to strong overall performance across all regions [7] - Growth was broad-based across industries, with significant contributions from high-tech, semiconductor, aerospace, defense, and automotive sectors [6][21] Company Strategy and Development Direction - ANSYS aims for 12% constant currency ACV compounded annual growth from 2022 to 2025, with a focus on subscription leases as a key growth driver [33][34] - The company is investing in five key areas: numerics, AI and machine learning, high-performance computing, cloud and experience, and digital engineering [55][58] - Recent acquisitions are expected to enhance product offerings and address complex customer challenges, particularly in the automotive and aerospace sectors [16][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve future milestones despite economic uncertainties, citing robust end markets and strong customer relationships [21][22] - The outlook for 2023 includes expectations for ACV growth between $2.265 billion and $2.335 billion, reflecting continued demand across customer segments [33][34] Other Important Information - ANSYS was named one of America's most responsible companies for 2023, highlighting its commitment to sustainability and efficiency [18] - The company repurchased approximately 725,000 shares for around $206 million in 2022, indicating a strong capital return strategy [31] Q&A Session Summary Question: What are the underlying drivers for growth in the aerospace and defense segment? - Management noted that aerospace customers face complex challenges, including trends in lightweighting, energy efficiency, and innovation in electric engines, contributing to robust demand [40][41] Question: Can you elaborate on the unlevered operating cash flow guidance? - Management indicated that the strong cash flow performance in 2022 reflects operational momentum, with expectations for continued growth in 2023 [42][44] Question: What are the drivers of ACV growth in 2022 and 2023? - Management highlighted broad-based growth across customer types and geographies, with significant contributions from subscription leases and acquisitions [46][49] Question: How do you view the mix of simulation being done on public cloud versus traditional setups? - Management stated that there is a clear trend towards public cloud usage for high-performance computing applications, with ongoing investments in cloud capabilities [72][74] Question: What are the drivers behind the strong performance in Germany and Japan? - Management attributed the outperformance to deep relationships with automotive customers and ongoing innovations in electronic motor design [76]