ANSYS(US:ANSS)2022-11-03 18:22Financial 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]