ANSYS(ANSS) - 2024 Q4 - Annual Results

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]