ANSYS, Inc. reported third quarter 2021 GAAP and non-GAAP revenue growth of 20% and 21% in reported currency, respectively, or 20% in constant currency, when compared to the third quarter of 2020. For the third quarter of 2021, the Company reported diluted earnings per share of $0.97 and $1.59 on a GAAP and non-GAAP basis, respectively, compared to $0.87 and $1.36 on a GAAP and non-GAAP basis, respectively, for the third quarter of 2020.
"Ansys recorded excellent third quarter results, in which we exceeded our financial guidance across all key metrics. Our double-digit growth thus far in 2021 is further evidence of our multiphysics product leadership and strong customer relationships, which are furthering our strategy of making simulation pervasive across the product lifecycle. In October, we added to our market-leading portfolio with the acquisition of Zemax, expanding the scope of Ansys’ solution offering. With the addition of Zemax technologies, the industry-leading Ansys product portfolio will offer customers comprehensive, end-to-end solutions for simulating next-generation optical and photonics products,” said Ajei Gopal, Ansys president and CEO.
Nicole Anasenes, Ansys CFO, stated, “Our strong Q3 performance reflects the strength of our core business and continued momentum across our enterprise and small- and medium-sized customers. During Q3, Ansys recorded ACV growth of 20% and revenue growth of 20% and 21% on a GAAP and non-GAAP basis, respectively. The Q3 results further contributed to the strong year-to-date performance, reflecting ACV growth of 17% and revenue growth of 18% and 19% on a GAAP and non-GAAP basis, respectively."
Anasenes further stated, "Our year-to-date results indicate we are tracking to our business model of double-digit growth with industry-leading margins. Looking towards the end of the year, we continue to see a robust deal pipeline and momentum in the business, bolstering our confidence to raise full-year financial guidance above and beyond the impact of our strong Q3 top-line performance."
/ Financial Results
Ansys' third quarter and year-to-date (YTD) 2021 and 2020 financial results are presented below. The 2021 and 2020 non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets, and transaction expenses related to business combinations.
GAAP and non-GAAP results are as follows:
|
|
GAAP |
|
Non-GAAP |
||||||||||||||||||
|
(in millions, except percentages and per share data) |
Q3 QTD 2021 |
|
Q3 QTD 2020 |
|
% Change |
|
Q3 QTD 2021 |
|
Q3 QTD 2020 |
|
% Change |
||||||||||
|
Revenue |
$ |
441.2 |
|
|
$ |
367.0 |
|
|
20 |
% |
|
$ |
445.4 |
|
|
$ |
369.1 |
|
|
21 |
% |
|
Net income |
$ |
85.3 |
|
|
$ |
75.6 |
|
|
13 |
% |
|
$ |
140.3 |
|
|
$ |
118.3 |
|
|
19 |
% |
|
Diluted earnings per share |
$ |
0.97 |
|
|
$ |
0.87 |
|
|
11 |
% |
|
$ |
1.59 |
|
|
$ |
1.36 |
|
|
17 |
% |
|
Operating profit margin |
24.4 |
% |
|
24.5 |
% |
|
|
|
39.7 |
% |
|
39.8 |
% |
|
|
||||||
|
|
GAAP |
|
Non-GAAP |
||||||||||||||||||
|
(in millions, except percentages and per share data) |
Q3 YTD 2021 |
|
Q3 YTD 2020 |
|
% Change |
|
Q3 YTD 2021 |
|
Q3 YTD 2020 |
|
% Change |
||||||||||
|
Revenue |
$ |
1,251.0 |
|
|
$ |
1,057.6 |
|
|
18 |
% |
|
$ |
1,270.1 |
|
|
$ |
1,067.7 |
|
|
19 |
% |
|
Net income |
$ |
251.5 |
|
|
$ |
218.3 |
|
|
15 |
% |
|
$ |
401.8 |
|
|
$ |
324.9 |
|
|
24 |
% |
|
Diluted earnings per share |
$ |
2.86 |
|
|
$ |
2.50 |
|
|
14 |
% |
|
$ |
4.56 |
|
|
$ |
3.73 |
|
|
22 |
% |
|
Operating profit margin |
21.9 |
% |
|
22.4 |
% |
|
|
|
38.6 |
% |
|
37.9 |
% |
|
|
||||||
The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2021 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, 2021 and 2020, and for the 2021 financial outlook, can be found in the condensed financial information included in this release.
/ Other Performance Metrics
|
(in millions, except percentages) |
Q3 QTD 2021 |
|
Q3 QTD 2020 |
|
% Change |
|
% Change in Constant Currency |
||||||
|
ACV |
$ |
365.4 |
|
|
$ |
305.3 |
|
|
20 |
% |
|
19 |
% |
|
Operating cash flows |
$ |
157.8 |
|
|
$ |
94.5 |
|
|
67 |
% |
|
|
|
|
(in millions, except percentages) |
Q3 YTD 2021 |
|
Q3 YTD 2020 |
|
% Change |
|
% Change in Constant Currency |
||||||
|
ACV |
$ |
1,115.4 |
|
|
$ |
950.8 |
|
|
17 |
% |
|
15 |
% |
|
Operating cash flows |
$ |
447.8 |
|
|
$ |
373.5 |
|
|
20 |
% |
|
|
|
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 2021 Financial Outlook
The Company's fourth quarter and fiscal year 2021 revenue and diluted earnings per share guidance is provided below. The Company is also providing its fiscal year 2021 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 impacts of the global pandemic and trade restrictions. This guidance is based on the Company's evaluation of factual information it has determined to be relevant and the application of certain assumptions made by the Company. Please refer to the Company's prepared remarks document for additional information regarding the Company's financial guidance, including its assumptions regarding overall business dynamics and the economic impacts of COVID-19 and trade restrictions.
In addition, the financial guidance includes the expected impact of the Company's acquisition of Zemax, which closed on October 1, 2021. The acquisition is not expected to have a meaningful impact on the Company's 2021 results.
/ Fourth Quarter 2021 Guidance
The Company currently expects the following for the quarter ending December 31, 2021:
|
(in millions, except percentages and per share data) |
GAAP |
|
Non-GAAP |
||||
|
Revenue |
$609.3 |
- |
$649.3 |
|
$614.9 |
- |
$654.9 |
|
Revenue Growth Rate |
(2.3 %) |
- |
4.1 % |
|
(2.1 %) |
- |
4.3 % |
|
Revenue Growth Rate — Constant Currency |
(0.7 %) |
- |
5.9 % |
|
(0.4 %) |
- |
6.0 % |
|
Diluted earnings per share |
$1.88 |
- |
$2.25 |
|
$2.48 |
- |
$2.81 |
/ Fiscal Year 2021 Guidance
The Company currently expects the following for the fiscal year ending December 31, 2021:
|
(in millions, except percentages and per share data) |
GAAP |
|
Non-GAAP |
||||
|
Revenue |
$1,860.3 |
- |
$1,900.3 |
|
$1,885.0 |
- |
$1,925.0 |
|
Revenue Growth Rate |
10.6 % |
- |
13.0 % |
|
11.2 % |
- |
13.5 % |
|
Revenue Growth Rate — Constant Currency |
10.0 % |
- |
12.4 % |
|
10.6 % |
- |
12.9 % |
|
Diluted earnings per share |
$4.74 |
- |
$5.11 |
|
$7.05 |
- |
$7.38 |
The difference between the GAAP and non-GAAP revenue guidance presented above is a result of the expected impact of the application of the fair value provisions applicable to the accounting for business combinations in the amount of $5.6 million for the fourth quarter and $24.7 million for FY 2021, which are inclusive of the expected impact from the Zemax acquisition.
|
(in millions, except percentages) |
Other Financial Metrics |
||
|
ACV |
$1,825.0 |
- |
$1,860.0 |
|
ACV Growth Rate |
12.9 % |
- |
15.1 % |
|
ACV Growth Rate — Constant Currency |
12.6 % |
- |
14.7 % |
|
Operating cash flows |
$505.0 |
- |
$535.0 |
The FY 2021 ACV and revenue guidance assumes approximately $6 to $8 million of contribution from Zemax. This contribution is offset by an incremental headwind of approximately $6 to $8 million of negative currency impact relative to our guidance initiated in August. The currency headwind has an adverse impact of approximately $0.05 per share on FY 2021 earnings per share guidance and an approximately $3 to $5 million adverse impact on FY 2021 operating cash flow guidance. The contribution from Zemax has an immaterial impact to FY 2021 earnings per share and operating cash flow guidance.
Additionally, as Q3 2021 ACV was in-line with internal expectations, the raise to FY 2021 ACV is driven by increased confidence in the Q4 2021 sales pipeline.
/ Conference Call Information
Ansys will hold a conference call at 8:30 a.m. Eastern Time on November 4, 2021 to discuss third quarter results. The Company will provide its prepared remarks on the Company’s investor relations homepage and as an exhibit in its Form 8-K in advance of the call to provide stockholders and analysts with additional time and detail for analyzing its results in preparation for the conference call. The prepared remarks will not be read on the call, and only brief remarks will be made prior to the Q&A session.
To participate in the live conference call, dial 855-239-2942 (US) or 412-542-4124 (Canada & Int’l). The call will be recorded and a replay will be available within two hours after the call. The replay will be available by dialing (877) 344-7529 (US), (855) 669-9658 (Canada) or (412) 317-0088 (Int’l) and entering the passcode 10159509.
