PITTSBURGH, Aug. 6, 2020 — ANSYS, Inc. reported second quarter 2020 GAAP and non-GAAP revenue growth of 5% in reported currency, or 5% and 6%, respectively, in constant currency. For the second quarter of 2020, the Company reported earnings per share of $1.11 and $1.55 on a GAAP and non-GAAP basis, respectively, compared to $1.28 and $1.61 on a GAAP and non-GAAP basis, respectively, for the second quarter of 2019.

“Q2 was a very strong quarter for Ansys, with revenue, operating margins and earnings exceeding the high end of our financial guidance. I’m excited that during the quarter we closed both the largest deal in our 50-year history as well as our largest sales agreement for new business. These results demonstrate the strength and resilience of our business and give us confidence for the future,” said Ajei Gopal, Ansys president and CEO.

Gopal further stated, “Our recent launch of Ansys 2020 Release 2 delivers enhanced functionality across the simulation portfolio to help customers generate larger, more complex designs easier and faster than ever. And we recently hosted Simulation World, the largest virtual simulation event ever held, to build excitement for those world-class products.”

“Our continued focus and ability to adjust our execution against the real-time operating realities of the current business environment yielded strong financial results. These reflect the resiliency of both our business model and our team. Our stronger than expected revenue performance drove operating margins and earnings that were also above the high end of our guidance. Our financial results included growth in both ACV and operating cash flows, while 83% of ACV was from recurring sources in the second quarter. We also reported a record second quarter balance of deferred revenue and backlog of $846 million, an increase of 18% over the second quarter of 2019. While we continue to plan for a challenging market environment in the near term, we remain confident that Ansys is very well positioned with a combination of a strong balance sheet, cash flow from operations and ample liquidity for our ongoing operations and to support future growth aspirations. As we look ahead into the second half of the year, we will continue to balance fiscal discipline with the need to continue to invest in our business to maintain our leadership and to pursue our strategy of making simulation pervasive,” stated Maria Shields, chief financial officer of Ansys.

Financial Results

Ansys’ second quarter and YTD 2020 and 2019 financial results are presented below. The 2020 and 2019 non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets, transaction expenses related to business combinations, and adjustments related to the transition tax associated with the Tax Cuts and Jobs Act.

GAAP and non-GAAP results are as follows:

 

The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2020 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and six months ended June 30, 2020 and 2019, and for the 2020 financial outlook, can be found in the condensed financial information included in this release.

Other Financial Metrics

 

ACV is a metric the Company uses to better understand the business. There is no GAAP measure comparable to ACV. ACV is composed of the following:

• the annualized value of maintenance and lease contracts with start dates or anniversary dates during the period, plus
• the value of perpetual license contracts with start dates during the period, plus
• the annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plus
• the value of work performed during the period on fixed-deliverable services contracts.

Management’s 2020 Financial Outlook

The Company’s third quarter and fiscal year 2020 revenue and diluted earnings per share guidance is provided below. The Company is also providing its fiscal year 2020 guidance for ACV and operating cash flows. The revenue and diluted earnings per share guidance is provided on both a GAAP and non-GAAP basis. Non-GAAP financial measures exclude the income statement effects of acquisition adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets and acquisition-related transaction expenses.

The financial guidance below reflects the Company’s current estimates of the adverse impacts of the global pandemic. This guidance is based on certain assumptions made by the Company and the Company’s evaluation of factual information it has determined to be relevant. Additional details related to the Company’s financial guidance, including assumptions and economic impacts of COVID-19, are detailed in its prepared remarks document.

Third Quarter 2020 Guidance

The Company currently expects the following for the quarter ending September 30, 2020:

Fiscal Year 2020 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2020:

In the third quarter and fiscal year 2020 guidance reflected above, the expected impacts of non-GAAP adjustments associated with the acquisition accounting for deferred revenue are $2.1 million and $11.3 million, respectively.