Company Overview - Ansys (ANSS) shares have increased by approximately 2.8% since the last earnings report, which is underperforming compared to the S&P 500 [1] Earnings Estimates - Estimates for Ansys have trended upward over the past month, with the consensus estimate shifting by 5.02% [2] VGM Scores - Ansys has a Growth Score of B and a Momentum Score of A, but it received an F for Value, placing it in the bottom 20% quintile for this investment strategy. The overall aggregate VGM Score is B [3] Outlook - The upward trend in estimates for Ansys appears promising, and the company holds a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [4] Industry Performance - Ansys is part of the Zacks Computer - Software industry, where SAP has also gained 2.8% over the past month. SAP reported revenues of $9.48 billion for the last quarter, reflecting a year-over-year increase of 8.6% [5] - SAP's expected earnings for the current quarter are $1.62 per share, representing a year-over-year change of 37.3%, with a recent estimate change of 0.5% [6]

Core Viewpoint - Synopsys (SNPS.US) reported better-than-expected Q2 results for fiscal year 2025, but its stock experienced volatility due to ongoing concerns over U.S. export restrictions [1][3] Financial Performance - Q2 Non-GAAP diluted earnings per share were $3.67, a year-over-year increase of approximately 22.33%, exceeding market expectations [1] - Revenue for Q2 reached $1.604 billion, up 10.28% year-over-year, surpassing the anticipated $1.599 billion [1] - Revenue breakdown: Automation Design segment generated $1.122 billion, while the IP Design segment brought in $482 million [1] Analyst Ratings and Outlook - Wells Fargo maintains a "Hold" rating on Synopsys with a target price of $520, noting a "clean" earnings report ahead of the planned acquisition of ANSYS (ANSS.US) [1] - Morgan Stanley holds an "Overweight" rating with a target price of $590, highlighting that Q2 sales met expectations and earnings outperformed, although Q3 guidance was weaker than anticipated [3] - Analysts express confidence in Synopsys's ability to complete the acquisition of ANSYS in H1 2025 despite geopolitical tensions [3] Market Conditions and Challenges - The U.S. Federal Trade Commission (FTC) is requiring Synopsys and ANSYS to divest certain assets to facilitate their $35 billion merger [2] - Reports indicate that the U.S. Department of Commerce has requested EDA companies to halt sales to China, creating market uncertainty [3][4] - Despite a soft demand in the non-AI market, there are signs of stabilization in the industrial and automotive sectors [3]

Core Viewpoint - Synopsys' shares rose by 5.5% following the U.S. Federal Trade Commission's conditional approval of its $35 billion acquisition of Ansys, with the deal expected to enhance Synopsys' capabilities in semiconductor design and analysis [1][2][3]. Group 1: Acquisition Details - The acquisition of Ansys has received approval from the European Commission and is now pending approval from China, with a potential closing date in the second half of 2026 [2]. - The deal is significant as it positions Synopsys to lead in the evolving semiconductor market, where the complexity of products is increasing [3][5]. Group 2: Strategic Importance - The integration of Ansys' simulation and analysis software with Synopsys' electronic design automation tools will enable companies to design and analyze semiconductor products more effectively [3][5]. - This acquisition aligns with broader industry trends, as seen with Siemens' recent acquisition of Altair, indicating a shift towards more comprehensive simulation and analysis capabilities in the sector [6]. Group 3: Investor Sentiment - The conditional approval from the FTC is likely to boost investor confidence in Synopsys, as it represents a step closer to realizing long-term growth opportunities from the acquisition [6][7]. - Investors are optimistic about the completion of the Ansys deal, viewing it as a critical component of Synopsys' investment case [6][7].

Core Viewpoint - Synopsys has received formal approval from the FTC for its $34 billion acquisition of Ansys, marking a significant consolidation in the EDA software industry [1][2]. Group 1: Acquisition Details - Synopsys plans to sell its optical and photonic software tools business to Keysight Technologies as part of the acquisition agreement [1]. - Ansys will also divest a power analysis product to Keysight [1]. - The acquisition was initially announced in early 2024 and has undergone global antitrust scrutiny, pending approval from China [1][6]. Group 2: Market Impact - The acquisition is considered a "century acquisition" in the EDA software sector, significantly enhancing Synopsys's market position against its main competitor, Cadence Design Systems [2]. - By acquiring Ansys, Synopsys aims to strengthen its capabilities in chip design simulation, particularly in system-level and integrated simulation tools [2]. - This move is expected to better serve major clients like Nvidia, AMD, and Broadcom, addressing complex design requirements in emerging technologies such as 6G, next-gen AI chip architectures, and quantum computing [2]. Group 3: Financial Performance and Client Base - Synopsys's recent financial results and strong outlook indicate growing demand for its EDA software, driven by major tech companies accelerating AI chip development [3]. - Key clients include top semiconductor firms like Nvidia, AMD, Qualcomm, and Apple, as well as cloud computing giants like Amazon and Microsoft [3]. - Synopsys's tools are crucial for semiconductor manufacturers like TSMC and Samsung, aiding in optimizing chip design and accelerating new process node development [3]. Group 4: Regulatory Environment - The agreement with the FTC reflects a shift towards resolving merger cases through settlements rather than litigation, contrasting with the Biden administration's previous stance [4]. - The FTC plans to release new guidelines on how it will evaluate merger settlements [4]. - The acquisition's approval process is complicated by geopolitical tensions, particularly regarding U.S. restrictions on technology sales to China [6].

据智通财经消息，美国联邦贸易委员会(FTC)称，新思科技和工业软件公司Ansys必须出售资产以推进合 并。 ...

Market Capitalization Changes - Tesla's market capitalization increased by 6.75% to $1,025.4 billion [3] - TSMC's market capitalization rose by 5.93% to $969.7 billion [3] - Tencent's market capitalization grew by 4.66% to $609.8 billion [3] - Netflix's market capitalization decreased by 2.65% to $472.3 billion [3] - Oracle's market capitalization increased by 4.58% to $440.8 billion [3] Notable Performers - Shopify saw a significant increase of 13.7% in market capitalization, reaching $136.2 billion [4] - AppLovin experienced a remarkable rise of 89% to $1.177 billion [4] - AMD's market capitalization increased by 5.13% to $175.3 billion [5] - Uber's market capitalization rose by 6.39% to $184.2 billion [5] Decliners - Pinduoduo's market capitalization fell by 6.14% to $165.2 billion [4] - Xiaomi's market capitalization decreased by 2.11% to $163.4 billion [4] - Spotify's market capitalization declined by 4.23% to $127.3 billion [4] Other Companies of Interest - Adobe's market capitalization increased by 3.3% to $168.7 billion [4] - Qualcomm's market capitalization rose by 4.78% to $167.0 billion [4] - Intel's market capitalization increased by 3.55% to $96.7 billion [5] - Airbnb's market capitalization grew by 5.64% to $828 million [5]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1] Zacks Style Scores - Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank [3][8] - Each stock is rated from A to F, with A indicating the highest potential for outperforming the market [4] Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score assesses a company's financial health and future outlook, considering projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook, using metrics like one-week price change and monthly earnings estimate changes [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive rating that highlights stocks with attractive value, strong growth forecasts, and promising momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to assist investors in building successful portfolios [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] Stock Example: Ansys (ANSS) - Ansys Inc, based in Canonsburg, PA, develops engineering simulation software and is currently rated 3 (Hold) with a VGM Score of B [12] - The company is considered a potential growth investment, with a Growth Style Score of B and a forecasted year-over-year earnings growth of 6.1% for the current fiscal year [13] - Recent upward revisions in earnings estimates and an average earnings surprise of 17.7% further support Ansys as a strong candidate for investors [13]

Core Insights - ANSYS, Inc. reported first-quarter 2025 earnings of $1.64 per share, missing the Zacks Consensus Estimate by 6.3%, but showing an 18% year-over-year increase [1] - Revenues of $504.9 million also missed estimates by 4.6%, yet grew 8.2% year over year on a reported basis and 9.9% on a constant currency basis, driven by growth in maintenance, service, and subscription lease revenues [1] Financial Performance - Subscription lease revenues accounted for 19.2% of total revenues, increasing 4% year over year at constant currency to $96.9 million [4] - Perpetual licenses revenues, making up 12.5% of total revenues, decreased 2.9% at constant currency to $63 million [4] - Maintenance revenues, which comprised 64.2% of total revenues, rose 13.9% year over year at constant currency to $324.4 million [5] - Service revenues increased 22.5% at constant currency to $20.4 million [5] - Total deferred revenues and backlog reached $1,627.7 million, up 18.9% year over year [6] Regional Performance - The Americas contributed 45.6% to revenues, with a year-over-year increase of 10.5% at constant currency to $230.4 million [6] - EMEA contributed 23.5% to revenues, with a 2.6% increase at constant currency to $118.9 million [6] - Asia-Pacific contributed 30.8% to revenues, with a 15% increase at constant currency to $155.7 million [6] Operating Metrics - Non-GAAP gross margin improved by 30 basis points year over year to 91.2% [7] - Total operating expenses rose 5.3% year over year to $373.4 million, primarily due to increased selling, general and administrative, and research and development expenses [7] - Non-GAAP operating margin increased by 130 basis points to 33.5% from 32.2% in the prior-year quarter [9] Balance Sheet and Cash Flow - As of March 31, 2025, cash and short-term investments totaled $1.8 billion, up from $1.5 billion as of December 31, 2024 [10] - Long-term debt was $754.3 million, showing a slight increase from the previous quarter [10] - Cash from operations increased by 41% to $398.9 million from $282.8 million in the prior-year quarter [10] Acquisition Update - Ansys and Synopsys announced a $35 billion acquisition deal, with Ansys shareholders set to receive $197 in cash and 0.3450 Synopsys shares per ANSS share [2] - The deal has received regulatory clearance from multiple jurisdictions, including the Israeli Competition Authority and the U.K. Competition and Markets Authority [3] - The acquisition is expected to close in the first half of 2025, and Ansys has suspended its earnings calls and guidance due to the pending acquisition [3]

Company Performance - Ansys reported quarterly earnings of $1.64 per share, missing the Zacks Consensus Estimate of $1.75 per share, but showing an increase from $1.39 per share a year ago, representing an earnings surprise of -6.29% [1] - The company posted revenues of $504.89 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.64%, compared to year-ago revenues of $466.61 million [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 the company's earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $2.54 on revenues of $640.43 million, and for the current fiscal year, it is $11.36 on revenues of $2.76 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 top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenue for the three months ended March 31, 2025, increased by 8.2% compared to the same period in 2024[89] - GAAP operating income for the same period rose by 35.9%, while non-GAAP operating income increased by 12.5%[89] - GAAP diluted earnings per share grew by 47.5%, and non-GAAP diluted earnings per share increased by 18.0%[89] - Total revenue for the three months ended March 31, 2025, was $504.9 million[107] - Net income for the three months ended March 31, 2025, was $51,865 thousand, resulting in diluted earnings per share of $0.59, compared to $34,778 thousand and $0.40 in the same period of 2024, marking an increase of 49.1% in net income[123] - Non-GAAP net income for the three months ended March 31, 2025, was $144,149 thousand, with a diluted earnings per share of $1.64, compared to $121,996 thousand and $1.39 in the same period of 2024[126] Revenue Breakdown - Maintenance revenue grew by 12.1%, or 13.9% in constant currency, driven by a $35.1 million increase, primarily from existing customers[107] - Service revenue increased by 21.2%, or 22.5% in constant currency, mainly due to increased consulting work in the EMEA region[107] - Subscription lease license revenue rose by 2.2%, or 4.0% in constant currency, with the increase largely attributed to sales to existing customers[107] - Perpetual license revenue decreased by 3.8%, or 2.9% in constant currency, due to a 13.8% drop in deal volume[107] Cash Flow and Investments - Cash, cash equivalents, and short-term investments increased by $331,042 thousand, or 22.1%, from $1,497,517 thousand on December 31, 2024, to $1,828,559 thousand on March 31, 2025[135] - Net cash provided by operating activities rose by $116,118 thousand, or 41.1%, from $282,817 thousand for the three months ended March 31, 2024, to $398,935 thousand for the same period in 2025[138] - Net cash used in investing activities decreased by $3,749 thousand, or 10.9%, from $(34,436) thousand in Q1 2024 to $(30,687) thousand in Q1 2025[139] - Net cash used in financing activities decreased by $13,406 thousand, or 24.5%, from $(68,049) thousand in Q1 2024 to $(54,643) thousand in Q1 2025[140] Operating Expenses - Total operating expenses were $373,429 thousand, which is 74.0% of revenue, an increase of $18,830 thousand or 5.3% from the previous year[116] - Research and development expenses increased to $137,292 thousand, representing 27.2% of revenue, an increase of $8,481 thousand or 6.6% compared to the prior year[116] - The company experienced a net increase in maintenance and service costs of $3,631 thousand, primarily due to increased salaries and stock-based compensation[115] Market Trends and Strategic Initiatives - The engineering simulation software market is experiencing strong growth driven by the need for rapid, quality innovation and increased product complexity[77] - Key industry trends include electrification, autonomy, connectivity, and the industrial internet of things (IIoT)[78] - Investments in AI capabilities across the simulation portfolio are enhancing customer experience and accelerating simulation processes[76] - The company continues to focus on sales improvement activities, including hiring and customer engagement initiatives[100] Currency Impact - The company reported a total adverse impact from currency fluctuations on revenue of $7,679 thousand for the three months ended March 31, 2025[152] - The U.S. Dollar was 3.5% stronger against foreign currencies on average for the three months ended March 31, 2025, compared to the same period in 2024[151] - A hypothetical 10% strengthening in the U.S. Dollar would have decreased revenue by $22.2 million and operating income by $5.7 million for the three months ended March 31, 2025[153] Debt and Interest Rates - The carrying value of the term loan as of March 31, 2025, was $754,300 thousand, with no principal payments due in the next twelve months[142] - The interest rate under the 2022 Credit Agreement was 5.25% as of March 31, 2025, following an amendment for a Sustainability Rate Adjustment[143] - Outstanding term loan borrowings amounted to $755.0 million as of March 31, 2025, with interest rates based on Term SOFR or base rate plus applicable margin[155] - A hypothetical increase of 100 basis points in interest rates would increase interest expense and decrease cash flows by $7.7 million over the next twelve months[157]