PITTSBURGH, Nov. 7, 2019 — ANSYS, Inc., today reported third quarter 2019 GAAP and non-GAAP revenue growth of 19% and 18%, respectively, or 20% and 19%, respectively, in constant currency. For the third quarter, the Company reported consistent diluted earnings per share on a GAAP basis and growth in diluted earnings per share of 8% on a non-GAAP basis.
“Once again we delivered an outstanding quarter, with double-digit ACV and revenue growth and strong operating income,” said Ajei Gopal, ANSYS President & CEO. “Our Pervasive Simulation strategy is working. With a growing market, world-class products, deep customer relationships and robust execution, we continue to make excellent progress towards our goal of $2 billion in ACV by 2022.”
“Our Q3 product releases included new capabilities across our portfolio, with notable capabilities including ANSYS Autonomy, which enables engineers to develop safer autonomous vehicles, and ANSYS Minerva, a new platform that improves engineering productivity by providing simulation process and data management, process integration, and design optimization capabilities,” Mr. Gopal continued. “We were also busy with M&A: in the past week, we have closed the Q3 announced acquisition of our long-term technology partner, Livermore Software Technology Corporation, the premier provider of explicit dynamics and other advanced finite element analysis technology, and we announced and closed the acquisition of Dynardo, which will enhance ANSYS Minerva with advanced process integration and design optimization capabilities.”
Maria Shields, ANSYS CFO, stated, “Our strong Q3 revenue performance drove bottom-line results well ahead of the high end of our Q3 2019 EPS guidance, positioning ANSYS for a strong finish to 2019. In addition, deferred revenue and backlog grew to $650 million, an increase of 19% over the same period in 2018. Other financial highlights for the quarter include annual contract value (ACV) growth of 14% in constant currency and total operating cash flows of $120 million, a 9% increase compared to Q3 2018. To reflect the near-term operating strength that we see in our business, we are raising our guidance for 2019, and we remain confident in our ability to drive double-digit constant currency ACV growth and achieve our 2022 long-term targets.”
On November 1, 2019, ANSYS acquired LSTC for a purchase price of $779.9 million. The combined strengths of ANSYS and LSTC in simulation for structures, fluids, electromagnetics, optics, safety and machine learning will deliver a powerful solution for autonomous and electric vehicles to global automotive manufacturers and their suppliers.
The Company also announced and closed the acquisition of Dynardo, a leading provider of multidisciplinary analysis and optimization technology, for a purchase price of approximately €30.0 million. This acquisition gives ANSYS customers access to a full suite of process integration and robust design tools — empowering users to identify optimal product designs faster and more economically.
ANSYS’ third quarter and YTD 2019 and 2018 financial results are presented below. The 2019 and 2018 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 costs related to business combinations, and adjustments related to the transition tax associated with the Tax Cuts and Jobs Act.
The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2019 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and nine months ended September 30, 2019 and 2018, and for the 2019 financial outlook, can be found in the condensed financial information included in this release.
Other Financial Metrics
ACV is a financial performance metric that ANSYS introduced in 2018. The Company believes this measure is an improved metric as compared to the historically provided bookings metric because it adjusts the sales bookings metric to reflect only the annual value of a contract and also adjusts to reflect the sales booking at the date of the contract inception or renewal. 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 2019 Financial Outlook
The Company’s fourth quarter and fiscal year 2019 revenue and diluted earnings per share guidance is provided below. 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, acquisition-related transaction costs and adjustments related to the transition tax associated with the Tax Cuts and Jobs Act.
The financial guidance below is adjusted for the impacts of the Company’s acquisitions that closed during the fourth quarter. For the impacts of Q4 acquisitions on key guidance metrics, refer to “ANSYS 3Q 2019 Prepared Remarks” that can be accessed by clicking News & Events, then Presentations on our website at https://investors.ansys.com.
Fourth Quarter 2019 Guidance
The Company currently expects the following for the quarter ending December 31, 2019:
|(in millions, except per share data)||GAAP||Non-GAAP|
|Revenue||$449.6 – $475.2||$454.1 – $479.1|
|Diluted earnings per share||$1.44 – $1.67||$1.87 – $2.05|
Fiscal Year 2019 Guidance
The Company currently expects the following for the fiscal year ending December 31, 2019:
|(in millions, except per share data)||GAAP||Non-GAAP|
|Revenue||$1,479.3 – $1,504.9||$1,490.0 – $1,515.0|
|Diluted earnings per share||$4.78 – $5.01||$6.20 – $6.38|
In the fourth quarter and fiscal year 2019 guidance reflected above, the expected impacts of non-GAAP adjustments associated with the acquisition accounting for deferred revenue, including an estimate for the Company’s Q4 acquisitions, range from $3.9 million to $4.5 million and $10.1 million to $10.7 million, respectively. The Company has not yet performed a valuation of the acquired deferred revenue for its Q4 acquisitions. Until such valuation is completed, the expected impacts on revenue will remain preliminary estimates that are likely to change.
|(in millions)||Other Financial Metrics|
|ACV||$1,460.0 – $1,480.0|
|Operating cash flows||$485.0 – $510.0|
Read the full results here: https://investors.ansys.com/news-and-events/press-releases/2019/06-Nov-19-211017178
About ANSYS, Inc.
If you’ve ever seen a rocket launch, flown on an airplane, driven a car, used a computer, touched a mobile device, crossed a bridge or put on wearable technology, chances are you’ve used a product where ANSYS software played a critical role in its creation. ANSYS is the global leader in engineering simulation. Through our strategy of Pervasive Engineering Simulation, we help the world’s most innovative companies deliver radically better products to their customers. By offering the best and broadest portfolio of engineering simulation software, we help them solve the most complex design challenges and create products limited only by imagination. Founded in 1970, ANSYS is headquartered south of Pittsburgh, Pennsylvania, U.S.A. Visit https://www.ansys.com for more information.
Source: ANSYS, Inc.