Core Insights - Ansys and NVIDIA have introduced a new technology framework aimed at enhancing cardiovascular research through AI, advanced simulation, and visualization, making simulation more accessible to non-experts [2][7] - The collaboration focuses on creating tailored solutions that empower clinicians to analyze human heart anatomies in detail, facilitating better decision-making in patient care [2][5] Technology Framework - The framework combines Ansys and NVIDIA's open-source technologies, allowing for customized workflows and improved collaboration among users [2][7] - PyAnsys, a collection of open-source Python libraries, enables users to run simulations and process results automatically, bridging Ansys tools with Python scripting [3][4] Application in Healthcare - The demonstration at NVIDIA GTC showcased how the framework can assist in predicting outcomes for cardiovascular disease, which is the leading cause of death globally [5] - Clinicians can utilize the "PyAnsys-Heart" library to generate specific anatomical models for patients, enhancing visualization and insights that were previously difficult to access [5][6] Future Developments - Ansys and NVIDIA plan to leverage their collaboration to develop high-fidelity, multi-modality simulations for healthcare applications, including the NVIDIA Isaac for Healthcare platform [6][8] - The integration of advanced GPU computing and AI is expected to significantly impact personalized healthcare and medical imaging [8]

Group 1 - Ansys (NASDAQ: ANSS) shares are believed to have a slight upside of 8% when evaluated separately from a potential merger with Synopsys [1] - The analyst has extensive experience in private banking, corporate finance, and strategic advisory across multiple continents, including managing cross-border M&A transactions in Indonesia [1] - The goal is to provide well-researched commentary on various industries and asset classes, focusing on high-growth technology equities, undervalued blue-chip stocks, and niche market opportunities [1] Group 2 - The article does not contain any stock, option, or similar derivative positions in the companies mentioned, nor does it plan to initiate any such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not receiving compensation from any company mentioned [2] - Seeking Alpha clarifies that past performance is not indicative of future results and that no investment recommendations are being made [3]

Core Points - ANSYS, Inc. reported fourth-quarter 2024 earnings of $4.44 per share, exceeding the Zacks Consensus Estimate by 11% and reflecting a year-over-year increase of 12.7% [1] - Revenues reached $882.2 million, surpassing the Zacks Consensus Estimate by 1%, with a year-over-year growth of 9.6% on a reported basis and 11% on a constant currency basis [2] - The company announced a $35 billion acquisition deal with Synopsys, with shareholders receiving $197 in cash and 0.3450 Synopsys shares per ANSS share, which has received regulatory approvals in several jurisdictions [3][4] Financial Performance - Subscription lease revenues, accounting for 50% of total revenues, increased by 12.1% year over year to $441.1 million, while perpetual licenses revenues rose 1.7% to $102.3 million [6] - Maintenance revenues climbed 13.8% year over year to $319.4 million, while service revenues decreased by 1.2% to $19.4 million [6] - Total deferred revenues and backlog amounted to $1,718.3 million, reflecting a year-over-year increase of 16.7% [8] Operational Metrics - The Americas contributed 51.9% to total revenues, with a year-over-year increase of 11.5% to $457.8 million, while EMEA revenues grew 16.3% to $269.1 million [8] - Non-GAAP gross margin improved by 30 basis points to 94.6%, and non-GAAP operating margin increased to 53.3% from 53% in the prior-year quarter [10] - Cash from operations rose by 10.9% to $258 million compared to $232.7 million in the prior-year quarter [11] Market Performance - ANSS shares increased by 2.3% in after-market trading on February 19, 2025, with a 5.6% gain over the past year, compared to the Zacks Computer - Software industry's growth of 9.5% [5]

Company Performance - Ansys reported quarterly earnings of $4.44 per share, exceeding the Zacks Consensus Estimate of $4 per share, and up from $3.94 per share a year ago, representing an earnings surprise of 11% [1] - The company posted revenues of $882.17 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.98%, and an increase from $805.11 million year-over-year [2] - Over the last four quarters, Ansys has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Future Outlook - The sustainability of Ansys's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $1.70 on revenues of $527.9 million, and for the current fiscal year, it is $11.28 on revenues of $2.77 billion [7] - The estimate revisions trend for Ansys is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Computer - Software industry, to which Ansys belongs, is currently in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Ansys's stock performance [5]

Core Viewpoint - Ansys delivered strong Q4 2024 earnings, exceeding expectations despite regulatory and geopolitical challenges [1][2] Financial Performance - Revenue for Q4 2024 reached $882.2 million, surpassing analysts' projections of $867 million, reflecting a year-over-year increase of 9.6% from $805.1 million [2][7] - Non-GAAP EPS was reported at $4.44, exceeding the estimate of $3.95 and showing a 12.7% increase from $3.94 in Q4 2023 [3][8] - Non-GAAP operating margin improved slightly to 53.3%, up from 53.0% a year ago [3][8] - Annual Contract Value (ACV) grew by 14.6% to $1,094.6 million compared to $955.2 million in the previous year [3][7] Business Overview - Ansys specializes in engineering simulation, providing essential modeling and simulation solutions for industries such as high-tech, aerospace, automotive, and healthcare [4] - The company emphasizes technological leadership and innovation, investing $528 million in R&D in 2024 to maintain its competitive edge [5][9] Strategic Initiatives - Ansys is pursuing strategic mergers, including a pending merger with Synopsys, which is expected to enhance its capabilities despite anticipated regulatory hurdles from EU authorities [6][10] - The company is focusing on market expansion, particularly driven by the automotive sector's demand for electrification and autonomous technologies [6][7] Future Outlook - Management anticipates strong double-digit growth in ACV for 2025, driven by advancements in AI and machine learning technologies [11] - Investors are advised to monitor developments regarding the Synopsys merger, which may provide synergies in semiconductor design and technological integration [12]

Revenue and Financial Performance - No single customer accounted for more than 5% of the company's revenue in 2024, 2023, or 2022[74]. - As of December 31, 2024, deferred revenue was $536.3 million, an increase from $479.8 million in 2023, while backlog rose to $1.18 billion from $992.8 million[92]. - The impacts from currency fluctuations resulted in a decreased operating income of $19.6 million for the year ended December 31, 2024, compared to the previous year[308]. - A hypothetical 10% strengthening in the U.S. Dollar against other currencies would have decreased revenue by $105.3 million and operating income by $46.0 million for the year ended December 31, 2024[309]. - Interest income for the year ended December 31, 2024, was $51.1 million, while interest expense was $47.8 million[310]. - The outstanding term loan borrowings amounted to $755.0 million as of December 31, 2024[311]. - A hypothetical increase of 100 basis points in interest rates would result in an increase in interest expense of $7.7 million over the next twelve months[313]. Workforce and Employee Engagement - The company employed 6,500 people as of December 31, 2024, with 43% located in the Americas, 29% in EMEA, and 28% in APAC[95]. - As of December 31, 2024, the company's self-identified gender diversity was 74% male and 23% female among global employees[97]. - The company is committed to attracting and retaining talent through various recruitment and development strategies, including partnerships with universities and engineering societies[98]. - For the year ended December 31, 2024, the annual turnover rate was 6%, with a voluntary turnover rate of 5%[101]. - The compensation program includes competitive annual salaries, annual cash incentives, and long-term equity incentives, with over half of employees receiving equity grants each year[102]. - Health and welfare benefit programs include a mix of company-provided benefits, focusing on providing choice and value to employees[103]. - Employee feedback mechanisms include leadership roundtable events and new employee surveys to improve the employee experience[105]. Strategic Partnerships and Collaborations - The company has established over 350 technology partnerships to enhance its software solutions across various simulation areas[81]. - Strategic alliances with Microsoft and AWS have been formed to enhance cloud-based engineering simulations, including offerings like Ansys Access powered by Azure and Ansys Gateway powered by AWS[77][78]. - The company collaborates with leading CAD and EDA software companies to facilitate data transfer between systems, enhancing product integration[76]. - The company has expanded its collaboration with NVIDIA to advance AI-infused simulation solutions and 6G communication systems[80]. Seasonal Revenue Patterns - The company reported that subscription lease and maintenance contract renewals are typically highest in the fourth quarter, indicating seasonal revenue patterns[91]. Skill Development and Training - The company expanded its Ansys digital academy to support emerging skills such as AI and ML[100].

Financial Performance - Q4 2024 revenue reached $882.2 million, a 10% increase in reported currency and 11% in constant currency compared to Q4 2023[4] - FY 2024 revenue grew by 12% in reported currency and 13% in constant currency, totaling $2,544.8 million[4] - Q4 2024 diluted earnings per share were $3.21 (GAAP) and $4.44 (non-GAAP), compared to $3.14 and $3.94 in Q4 2023, respectively[4] - Annual Contract Value (ACV) for Q4 2024 was $1.1 billion, contributing 43% of the full year 2024 ACV of $2.6 billion, with a 15% growth in Q4 and 11% for FY 2024[4][5] - Operating cash flows for Q4 2024 were $258.0 million, with unlevered operating cash flows of $266.8 million, reflecting a 10.9% and 9.9% increase year-over-year, respectively[5][12] - Total revenue for Q4 2024 reached $882,174, representing a 9.6% increase compared to $805,108 in Q4 2023[30] - For FY 2024, total revenue was $2,544,809, up 12.1% from $2,269,949 in FY 2023[30] - Net income for Q4 2024 was $282,688, compared to $274,762 in Q4 2023, reflecting a slight increase[31] - Earnings per share (diluted) for FY 2024 was $6.55, up from $5.73 in FY 2023[31] - Q4 2024 total GAAP revenue reached $809,486 thousand, a 10.1% increase from Q4 2023's $735,059 thousand[43] - For the twelve months ended December 31, 2024, total GAAP revenue was $2,264,990 thousand, a 13.3% increase from $1,998,651 thousand in 2023[44] - Non-GAAP net income for the twelve months ended December 31, 2024, was $959,252 thousand, with an EPS of $10.91, compared to $8.80 in 2023[44] Revenue Composition - Subscription lease revenue for FY 2024 increased by 20.7% year-over-year, accounting for 37.3% of total revenue[18] - Direct revenue as a percentage of total revenue increased to 79.7% in Q4 2024 from 74.5% in Q4 2023[22] - Current deferred revenue as of December 31, 2024, was $504,527, an increase from $457,514 on December 31, 2023[23] - Current backlog as of December 31, 2024, was $524,617, up from $439,879 a year earlier[23] - The Americas region contributed $1,297,367 in revenue for FY 2024, a 17.3% increase from $1,106,242 in FY 2023[30] - Germany's revenue increased by 5.3% to $209,714 in FY 2024 from $199,068 in FY 2023[30] Operational Metrics - The company reported a gross margin of 91.8% for Q4 2024, slightly up from 91.3% in Q4 2023[8] - Non-GAAP gross profit for Q4 2024 was $834,961 thousand, representing a gross profit margin of 94.6%, compared to 94.3% in Q4 2023[43] - Operating income for Q4 2024 was $470,295 thousand, which is 53.3% of revenue, up from 53.0% in Q4 2023[43] - Net cash provided by operating activities for Q4 2024 was $257,973 thousand, an increase from $232,722 thousand in Q4 2023[44] Future Outlook - The company expects double-digit ACV growth for FY 2025[4] - The proposed transaction with Synopsys is expected to bring potential benefits, but is subject to risks including regulatory approvals and operational disruptions[64] - Future capital spending plans are in place, with an emphasis on customer relationship management and research and development activities[67] Strategic Initiatives - Ansys has entered into a definitive agreement with Synopsys for acquisition, with the transaction expected to close in the first half of 2025, pending regulatory approvals[6] - The company is focused on developing new products that incorporate artificial intelligence and machine learning to address rapidly changing technology demands[67] - The company is investing in global sales and marketing organizations to enhance its distribution capabilities through channel partners[67] - The company emphasizes the importance of high renewal rates for annual subscription lease and maintenance contracts to maintain revenue stability[67] - The company is committed to executing strategies related to environmental, social, and governance matters, adapting to evolving regulatory standards[67] Risk Factors - The company experienced a negative impact of $11,822 on Q4 2024 revenue due to currency fluctuations[25] - The company faces various risks including macroeconomic conditions, geopolitical uncertainties, and the ability to recruit and retain key personnel in a competitive labor market[67] Non-GAAP Measures - The company continues to utilize non-GAAP measures to provide a clearer view of operational performance and to set internal targets[46] - The company utilizes unlevered operating cash flows as a non-GAAP measure to evaluate its core operating business, excluding cash paid for interest[54] - Non-GAAP financial measures are provided alongside GAAP measures to give investors a clearer view of the company's financial performance[55] - The company employs constant currency results to evaluate financial performance, adjusting for foreign currency fluctuations to compare period-to-period results[57]

Core Insights - ANSYS, Inc. reported Q4 2024 revenue of $882.2 million, a 10% increase in reported currency and 11% in constant currency compared to Q4 2023 [2] - For FY 2024, revenue grew by 12% in reported currency and 13% in constant currency compared to FY 2023 [2] - The company reported diluted earnings per share of $3.21 (GAAP) and $4.44 (non-GAAP) for Q4 2024, compared to $3.14 and $3.94 for Q4 2023 [2][6] - Annual Contract Value (ACV) for Q4 2024 was $1.1 billion, contributing 43% to the full year 2024 ACV of $2.56 billion, with an expected double-digit growth for FY 2025 [2][6] Financial Performance - Q4 2024 GAAP operating profit margin was 40.3%, while non-GAAP operating profit margin was 53.3% [6] - FY 2024 GAAP diluted earnings per share increased to $6.55 from $5.73 in FY 2023, while non-GAAP diluted earnings per share rose to $10.91 from $8.80 [2][6] - Operating cash flows for Q4 2024 were $258.0 million, with unlevered operating cash flows at $266.8 million [6] Growth Metrics - The company achieved ACV growth of 15% in Q4 2024 and 11% for FY 2024 in reported currency, or 16% and 13% in constant currency, respectively [2][6] - Cumulative unlevered operating cash flows from FY 2022 to FY 2024 reached $2.2 billion, with FY 2024 unlevered operating cash flows of $834.6 million [10] Acquisition Update - ANSYS entered into a definitive agreement with Synopsys, Inc. for acquisition, with regulatory reviews ongoing in various jurisdictions [3] - The transaction is expected to close in the first half of 2025, pending regulatory approvals [3] Revenue Breakdown - Q4 2024 revenue by license type included $441.1 million from subscription leases (50% of total revenue), $102.3 million from perpetual licenses, and $319.4 million from maintenance [15] - For FY 2024, subscription lease revenue was $948.8 million, accounting for 37.3% of total revenue [15] Geographic Revenue Distribution - In Q4 2024, revenue from the Americas was $457.8 million (51.9% of total), while Germany contributed $98.5 million (11.2%) [16] - For FY 2024, the Americas accounted for 51.0% of total revenue, with a significant increase of 17.3% compared to FY 2023 [17]

Core Viewpoint - ANSYS Inc (ANSS) is set to report its fourth-quarter earnings for 2024 on February 19, with expectations of a slight increase in earnings per share and revenue growth compared to the previous year [1][2][3]. Financial Performance - The Zacks Consensus Estimate for earnings per share (EPS) is $4.00, reflecting a 1.5% increase from the same quarter last year [2]. - Revenue is expected to reach $873.6 million, indicating an 8.5% growth year-over-year [3]. - ANSS has outperformed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 11.15% [3]. Market Dynamics - Increased sales of simulation solutions across key sectors such as aerospace and defense, high tech, automotive, industrial equipment, and energy are driving revenue growth [4]. - The aerospace and defense sector is experiencing growth due to advancements in the space industry and digital transformation, positively impacting ANSS's software solutions [5]. - The automotive industry is benefiting from higher demand for electric vehicles and advanced driver-assistance systems, contributing to revenue growth [5]. - Developments in artificial intelligence and machine learning are enhancing simulation software capabilities, creating new revenue opportunities [5]. Strategic Developments - ANSS is currently undergoing a pending acquisition by Synopsys, valued at nearly $35 billion, expected to close in the first half of 2025 [7]. - The company anticipates double-digit growth in its annual contract value (ACV) for 2024 [7]. - Recent collaborations with technology suppliers and hardware vendors are expected to act as catalysts for growth [8]. Recent Collaborations - In January 2025, ANSYS partnered with Sony Semiconductor Solutions to enhance validation for Advanced Driver Assistance Systems and Autonomous Vehicles [11]. - In November 2024, ANSYS Government Initiatives secured a deal to provide digital engineering solutions to the Microelectronics Commons, a government and industry initiative [12].

Core Insights - Ansys and Concepts NREC have expanded their partnership to integrate computational fluid dynamics (CFD) analysis software into turbomachinery design tools, creating an automated workflow that enhances design efficiency and predictive accuracy [2][4][7] Group 1: Partnership and Integration - The collaboration aims to connect design tools with robust analysis tools for turbomachinery applications, allowing for quicker evaluation of machine performance [2][4] - The integration of CFX into AxCent enables a seamless workflow where parameters for blade rows are automatically created, reducing time delays and computational resource requirements [3][4] Group 2: Benefits of the New Technology - The new technology allows engineers to verify turbomachinery designs rapidly using Ansys' solvers, which is crucial for optimizing design efficiency and meeting safety and environmental standards [4][6] - The "one-click" approach to CFD simulation significantly shortens design cycles, enabling faster development of complex products like jet engines [7][8] Group 3: Industry Impact - Companies like AtmosZero are leveraging this integration to innovate in decarbonization technologies, showcasing the practical applications of the partnership in reducing carbon footprints [5][6] - The expanded capabilities are expected to include a broader variety of fluids and features to capture dynamic behaviors, further enhancing the design process in turbomachinery [6][7]