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]

Customer and Revenue Distribution - No single customer accounted for more than 5% of the company's revenue in 2022, 2021, or 2020[51] - International revenue represented 54.9% of total revenue in 2022, with the largest geographic revenue bases being the United States, Germany, and Japan[94] - Channel partners accounted for 23.9%, 23.7%, and 22.2% of revenue in 2022, 2021, and 2020, respectively, with significant dependence in APAC and EMEA regions[123] Strategic Partnerships and Alliances - The company has strategic alliances with leading CAD vendors like Autodesk, PTC, and Siemens Digital Industries, enabling direct data transfer between CAD systems and its products[53] - A partnership with Microsoft was executed to develop Ansys Access powered by Azure, enabling customers to launch Ansys products using Azure and connect third-party tools[54] - Ansys Gateway powered by AWS was launched in 2022, facilitating seamless access and deployment of Ansys products on AWS[55] - The company has technical relationships with Intel and AMD, optimizing solver performance and scalability, with AMD GPU acceleration providing speedups of up to 8x or 14x depending on the application[56] - The company has over 350 technology partnerships, extending the depth and breadth of its technology offerings across various solution areas[57] Financial Metrics and Risks - Deferred revenue and backlog as of December 31, 2022, totaled $1,416,846 thousand, with $846,312 thousand classified as current[71][72] - Outstanding borrowings of $755.0 million under a term loan facility maturing on June 30, 2027, with a $500.0 million revolving loan facility including a $50.0 million sublimit for letters of credit[155] - Consolidated net leverage ratio must not exceed 3.50 to 1.00, with a temporary increase to 4.00 to 1.00 allowed for qualified acquisitions of at least $250.0 million[155] - U.S. Dollar was 11.4% stronger against foreign currencies in 2022 compared to 2021, resulting in a net adverse impact of $112.7 million on revenue[261][262] - Currency fluctuations decreased operating income by $63.7 million in 2022 compared to 2021[262] - A hypothetical 10% strengthening in the U.S. Dollar would decrease revenue by $99.2 million and operating income by $47.9 million[263] - Interest income was $5.7 million and interest expense was $22.7 million for the year ended December 31, 2022[264] - A hypothetical 100 basis point increase in interest rates would increase interest expense by $7.7 million based on outstanding borrowings of $755.0 million[266] Workforce and Employee Engagement - As of December 31, 2022, the company employed 5,600 people, with 45% located in the Americas, 28% in EMEA, and 27% in APAC[74] - The company's global employee gender diversity as of December 31, 2022, was 75% male, 23% female, and 2% other/not indicated[76] - The company's U.S.-based employee racial/ethnic diversity as of December 31, 2022, was 55% White, 25% Asian, 2% Hispanic or Latino, 2% Black or African American, 1% Other, and 15% Not Indicated[78] - Annual turnover rate for 2022 was 10%, with voluntary turnover at 8%[81] - Employee engagement score in 2022 remained steady compared to 2021, exceeding external norms across all dimensions of engagement[86] - 92% of employees responded favorably to managing work responsibilities with flexibility in a remote and hybrid work environment[85] - Over half of employees receive equity grants annually, aligning long-term financial interests with stockholders[83] - Global internship, co-op, and new college graduate programs emphasize hiring emerging talent, with outreach events doubled in volume over the last year[79] - Annual talent reviews, succession planning, and leadership development programs were implemented in 2022, including individualized coaching and high-potential assessments[80] Operational and Compliance Risks - Compliance with global data privacy laws requires substantial resources and may increase costs due to evolving regulations[106] - Non-compliance with privacy laws could result in monetary penalties, reputational damage, and increased expenses to achieve compliance[107] - The company operates in high-risk environments for corruption, exposing it to financial and reputational risks despite having anti-corruption compliance programs[109] - COVID-19 has led to remote and hybrid work arrangements, increasing risks of cyber incidents and potential delays in work due to limited access to technology[111] - Acquisitions may pose risks such as integration challenges, failure to achieve synergies, and potential impairment of goodwill or intangible assets[126] - The company is undergoing digital transformation, but delays or failures in implementation could lead to increased costs and write-offs of capitalized expenditures[129] - The software business faces long sales cycles, making accurate short- and long-term sales forecasts challenging and subject to external economic factors[133] - Product quality issues or non-compliance with ISO 9001 standards could result in reputational damage and adverse impacts on financial statements[132] - The company faces competitive pressures, including price reductions and increased operating costs, which could lower revenues, margins, and net income[117] - Research and development expenses may not correlate with revenue, potentially leading to declines in operating profits if investments do not yield expected returns[120] - Global market disruptions may significantly impact the accuracy of sales forecasts, potentially leading to variations between actual sales and forecasts, which could adversely affect the company's business and financial statements[135] - The company relies on intellectual property protection, but software piracy and inadequate enforcement in certain countries may lead to revenue loss[138] - Cybersecurity risks, including cyberattacks and data breaches, could result in reduced revenue, increased costs, and reputational damage[142] - The company uses third-party service providers for cloud-based products, exposing it to risks such as service interruptions and security vulnerabilities[147] - Foreign exchange rate fluctuations, particularly involving the Euro and Japanese Yen, may adversely affect the company's consolidated financial statements[149] - Changes in tax laws, including the OECD's Pillar Two proposals, could impact the company's tax provision, net income, and cash flows[152] - The company faces risks related to third-party software licenses, including potential disruptions in product development and customer usage if licenses are not renewed or obtained on reasonable terms[141] - The company has experienced cybersecurity attacks in the past, and while none have had a material impact, future attacks could disrupt operations and harm financial performance[145] Environmental, Social, and Governance (ESG) - The company has established greenhouse gas emission reduction targets, but achieving these targets is subject to external factors such as evolving regulations, technological developments, and financing availability[136] - Environmental, social, and governance (ESG) considerations are increasingly important to stakeholders, and failure to meet ESG targets or comply with regulations could result in legal proceedings and reputational harm[137] Trade and Export Control Risks - Trade restrictions and export control regulations, particularly involving China, could limit the company's ability to sell products and services to certain customers[97]

Financial Data and Key Metrics Changes - Q3 ACV was $409.3 million, growing 12% year-over-year or 20% in constant currency [17] - Total revenue for Q3 was $473.7 million, an increase of 6% or 15% in constant currency, exceeding guidance [18] - Operating margin for Q3 was 41%, better than guidance, with gross margin at 91.1% [19] - Q3 EPS was $1.77, also better than guidance [19] - Operating cash flows totaled $127.2 million for Q3, with unlevered operating cash flows at $132 million [20] Business Line Data and Key Metrics Changes - The largest contract in Q3 was a $59 million agreement in the high tech and semiconductor space [7] - Recurring ACV grew 16% in constant currency year-over-year, representing 79% of total ACV in Q3 [18] - Strong revenue growth was reported from Asia Pacific and EMEA, with double-digit growth in constant currency [19] Market Data and Key Metrics Changes - ANSYS has a balanced geographic distribution, with nearly 50% of business from the Americas and strong growth from Asia Pacific and EMEA [8] - The company reported strong performance across various industries, including high tech, aerospace, and automotive [6][8] Company Strategy and Development Direction - ANSYS is focusing on three vectors of growth: more products, more users, and more computations [10] - The company is enhancing its product portfolio and expanding its cloud offerings, such as the ANSYS Gateway powered by AWS [14] - ANSYS aims to attract new customers and displace competitor technology through its diverse product offerings and strong customer relationships [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's resilience and growth potential, citing strong customer demand and a robust product portfolio [16][20] - The company is operationally raising its full-year guidance for ACV, revenue, EPS, and operating cash flow due to strong Q3 performance [20][21] - Management noted that despite macroeconomic challenges, customers continue to invest in R&D, relying on ANSYS for product development [51][52] Other Important Information - ANSYS has been recognized as the 13th most loved workplace in the US, reflecting its strong company culture [16] - The company has a significant presence in over 1,600 universities, promoting simulation technology among students [56] Q&A Session Summary Question: How does ANSYS capture the value from increased computational power used by customers? - ANSYS monetizes through product licensing, providing access to technology and high-performance computing capabilities [28] Question: What factors contributed to the company's ability to exceed guidance despite macro challenges? - The transformation of the business model and strong product capabilities have allowed ANSYS to maintain resilience and support customer needs [30][31] Question: Can you elaborate on the competitive displacement opportunities? - Competitive displacements are challenging but are driven by the strength of ANSYS's portfolio and recent innovations [32][34] Question: What is the outlook for Q4 given the strong Q3 performance? - Q4 guidance reflects normal quarter-to-quarter dynamics, with no significant macroeconomic issues impacting the outlook [45][50] Question: How is ANSYS encouraging broader engineering adoption of simulation software? - ANSYS has made products easier to use, invested in academic partnerships, and leveraged high-performance computing to broaden user adoption [55][57]

ANSYS, Inc. (NASDAQ:ANSS) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Kelsey DeBriyn - VP-IR Ajei Gopal - President and CEO Nicole Anasenes - CFO Conference Call Participants Ken Wong - Oppenheimer Joe Vruwink - Baird Jay Vleeschhouwer - Griffin Securities Blair Abernethy - Rosenblatt Securities Tyler Radke - Citi David Ridley-Lane - Bank of America Saket Kalia - Barclays Adam Borg - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to the ANSYS ...