ANSYS(US:ANSS)2021-11-04 18:56Financial Data and Key Metrics Changes - Q3 ACV was $365.4 million, growing 20% year-over-year or 19% in constant currency [21] - Total revenue for Q3 was $445.4 million, representing a 21% increase or 20% in constant currency [22] - Operating margin for Q3 was 39.7%, exceeding guidance, with a gross margin of 89.9% [22][23] - Q3 EPS was $1.59, also above the high-end of guidance [23] - Cash flow from operations in Q3 totaled $157.8 million [23] - The company ended the quarter with $1,081.4 million in cash and short-term investments [24] Business Line Data and Key Metrics Changes - Strong performance across customer types, with recurring sources representing 76% of total ACV [21] - The high-tech and semiconductor, aerospace & defense, and automotive sectors were the largest contributors to revenue [8] - SMB customers showed recovery, increasing their investment in ANSYS simulation [11] Market Data and Key Metrics Changes - The Americas led in performance, followed by Asia Pacific, with expectations for strong Q4 results [9] - Asia Pacific saw a 21% growth in constant currency, with several seven-figure contracts contributing to this growth [40] Company Strategy and Development Direction - The company is focused on making simulation pervasive across the product lifecycle and expanding its multiphysics product leadership [8] - ANSYS is investing in optical simulation as a key growth area, with recent acquisitions enhancing its capabilities [12][15] - Partnerships with companies like Autodesk and TSMC are being expanded to enhance product offerings and market reach [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the newly increased outlook for 2021, citing a robust deal pipeline and strong Q4 sales expectations [20] - The company is optimistic about the long-term tailwinds from customers rethinking their supply chains and investing in R&D [61] Other Important Information - ANSYS acquired Zemax for $399.1 million, expected to contribute $6 million to $8 million in Q4 [24][75] - The company is committed to environmental, social, and governance initiatives, including a report on the role of simulation in developing autonomous vehicles [18][19] Q&A Session Summary Question: How does the current growth composition compare to the original budget? - Management noted that while core businesses continue to grow, newer areas like optical simulation are becoming significant contributors [32][33] Question: What is driving the significant outgrowth in the U.S.? - The U.S. has been a strong performer due to deep customer relationships and successful execution of the business model [38][40] Question: Can you discuss trends in SMB customers? - SMBs have shown improvement over the last four quarters, contributing to overall confidence in the business outlook [46][47] Question: What enabled the raised ACV guidance? - The raised guidance reflects improved momentum across various industries and customer types [51][52] Question: How is the company addressing supply chain constraints? - ANSYS is not directly affected by supply chain issues as its software is tied to R&D and product design rather than manufacturing [59][60] Question: What are the plans for investments in technical support and consulting? - The company continues to invest in technical support and consulting to enhance customer relationships and product development [65][71]