ANSYS, Inc. reported fourth quarter 2021 GAAP and non-GAAP revenue growth of 5% in reported currency, or 8% in constant currency, when compared to the fourth quarter of 2020. For FY 2021, GAAP and non-GAAP revenue growth was 13% and 14%, respectively, in both reported and constant currency, when compared to FY 2020. For the fourth quarter of 2021, the Company reported diluted earnings per share of $2.30 and $2.81 on a GAAP and non-GAAP basis, respectively, compared to $2.46 and $2.96 on a GAAP and non-GAAP basis, respectively, for the fourth quarter of 2020. For FY 2021, the Company reported diluted earnings per share of $5.16 and $7.37 on a GAAP and non-GAAP basis, respectively, compared to $4.97 and $6.70 on a GAAP and non-GAAP basis, respectively, for FY 2020. Additionally, the Company reported ACV growth of 16% for FY 2021, in both reported and constant currency.
“Our robust performance in 2021 reflects our strong customer relationships and simulation portfolio leadership – ranging from best-in-class multiphysics solvers to powerful mathematical analytics and modeling capabilities as well as our comprehensive simulation platform. From this foundation, we achieved double-digit ACV and revenue growth while delivering industry-leading margins. We added to our market-leading portfolio with the acquisitions of Phoenix Integration and Zemax. And we recently released the latest version of our product portfolio, Ansys 2022 R1, which is enabling customers to save time and money while spurring innovation. With our unrivaled product portfolio, broad and deep customer relationships, and strong execution, I am excited about our success in 2022 and beyond,” said Ajei Gopal, Ansys President and CEO.
Nicole Anasenes, Ansys CFO, stated, “Q4 capped an outstanding year and demonstrated the strength of our business model as we beat our financial guidance across all key metrics for both the quarter and the full-year. Q4’s outperformance resulted in full year 2021 ACV growth of 16% and revenue growth of 13% and 14% on a GAAP and non-GAAP basis, respectively. In FY 2021, our growth was wide-ranging across geographies and industries, and we achieved new company records across key financial metrics, including ACV, revenue and operating cash flow. We are entering 2022 with momentum and a strong backlog driven by the broad-based strength of our product portfolio. This bolsters our confidence in our 2022 guidance, which exceeds the 2022 ACV target of $2 billion outlined at our 2019 investor day.”
Financial Results
Ansys' fourth quarter and FY 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, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, transaction expenses related to business combinations and adjustments for the income tax effect of the excluded items.
GAAP and non-GAAP results are as follows:
|
|
GAAP |
|
Non-GAAP |
||||||||||||||||||
|
(in millions, except per share data and percentages) |
Q4 QTD 2021 |
|
Q4 QTD 2020 |
|
% Change |
|
Q4 QTD 2021 |
|
Q4 QTD 2020 |
|
% Change |
||||||||||
|
Revenue |
$ |
655.7 |
|
|
$ |
623.7 |
|
|
5 |
% |
|
$ |
661.4 |
|
|
$ |
627.8 |
|
|
5 |
% |
|
Net income |
$ |
203.2 |
|
|
$ |
215.6 |
|
|
(6 |
)% |
|
$ |
247.5 |
|
|
$ |
259.7 |
|
|
(5 |
)% |
|
Diluted earnings per share |
$ |
2.30 |
|
|
$ |
2.46 |
|
|
(7 |
)% |
|
$ |
2.81 |
|
|
$ |
2.96 |
|
|
(5 |
)% |
|
Operating profit margin |
|
36.4 |
% |
|
|
41.6 |
% |
|
|
|
|
46.8 |
% |
|
|
51.6 |
% |
|
|
||
|
|
GAAP |
|
Non-GAAP |
||||||||||||||||||
|
(in millions, except per share data and percentages) |
FY 2021 |
|
FY 2020 |
|
% Change |
|
FY 2021 |
|
FY 2020 |
|
% Change |
||||||||||
|
Revenue |
$ |
1,906.7 |
|
|
$ |
1,681.3 |
|
|
13 |
% |
|
$ |
1,931.5 |
|
|
$ |
1,695.5 |
|
|
14 |
% |
|
Net income |
$ |
454.6 |
|
|
$ |
433.9 |
|
|
5 |
% |
|
$ |
649.3 |
|
|
$ |
584.6 |
|
|
11 |
% |
|
Diluted earnings per share |
$ |
5.16 |
|
|
$ |
4.97 |
|
|
4 |
% |
|
$ |
7.37 |
|
|
$ |
6.70 |
|
|
10 |
% |
|
Operating profit margin |
|
26.9 |
% |
|
|
29.5 |
% |
|
|
|
|
41.4 |
% |
|
|
43.0 |
% |
|
|
||
The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2022 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and twelve months ended December 31, 2021 and 2020, and for the 2022 financial outlook, can be found later in this release.
Other Performance Metrics
|
(in millions, except percentages) |
Q4 QTD 2021 |
|
Q4 QTD 2020 |
|
% Change |
|
% Change in Constant Currency |
||||
|
ACV |
$ |
755.4 |
|
$ |
665.5 |
|
14 |
% |
|
16 |
% |
|
Operating cash flows |
$ |
101.7 |
|
$ |
173.8 |
|
(42 |
)% |
|
|
|
|
(in millions, except percentages) |
FY 2021 |
|
FY 2020 |
|
% Change |
|
% Change in Constant Currency |
||||
|
ACV |
$ |
1,870.7 |
|
$ |
1,616.3 |
|
16 |
% |
|
16 |
% |
|
Operating cash flows |
$ |
549.5 |
|
$ |
547.3 |
|
— |
% |
|
|
|
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 2022 Financial Outlook
The Company's first quarter and FY 2022 revenue, diluted earnings per share and ACV guidance is provided below. The Company is also providing its FY 2022 guidance for 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.
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.
First Quarter 2022 Guidance
The Company currently expects the following for the quarter ending March 31, 2022:
|
(in millions, except percentages and per share data) |
GAAP |
|
Non-GAAP |
||||||||||||
|
Revenue |
$ |
391.6 |
|
- |
$ |
416.6 |
|
|
$ |
395.0 |
|
- |
$ |
420.0 |
|
|
Revenue Growth Rate |
7.8 % - 14.7% |
|
6.1 % - 12.9% |
||||||||||||
|
Revenue Growth Rate — Constant Currency |
10.7 % - 17.6% |
|
8.9 % - 15.8% |
||||||||||||
|
Diluted earnings per share |
$ |
0.42 |
|
- |
$ |
0.65 |
|
|
$ |
1.05 |
|
- |
$ |
1.22 |
|
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 $3.4 million for the quarter ending March 31, 2022.
|
(in millions, except percentages) |
Other Financial Metrics |
||||||
|
ACV |
$ |
328.0 |
|
- |
$ |
348.0 |
|
|
ACV Growth Rate |
2.7 % - 9.0% |
||||||
|
ACV Growth Rate — Constant Currency |
5.8 % - 12.2% |
||||||
Fiscal Year 2022 Guidance
The Company currently expects the following for the fiscal year ending December 31, 2022:
|
(in millions, except percentages and per share data) |
GAAP |
|
Non-GAAP |
||||||||||||
|
Revenue |
$ |
2,032.6 |
|
- |
$ |
2,102.6 |
|
|
$ |
2,040.0 |
|
- |
$ |
2,110.0 |
|
|
Revenue Growth Rate |
6.6 % - 10.3% |
|
5.6 % - 9.2% |
||||||||||||
|
Revenue Growth Rate — Constant Currency |
8.5 % - 12.2% |
|
7.4 % - 11.1% |
||||||||||||
|
Diluted earnings per share |
$ |
5.13 |
|
- |
$ |
5.74 |
|
|
$ |
7.64 |
|
- |
$ |
8.10 |
|
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 $7.4 million for the fiscal year ending December 31, 2022.
|
(in millions, except percentages) |
|
Other Financial Metrics |
||||||
|
ACV |
|
$ |
1,990.0 |
|
- |
$ |
2,050.0 |
|
|
ACV Growth Rate |
|
6.4% - 9.6% |
||||||
|
ACV Growth Rate — Constant Currency |
|
8.3% - 11.5% |
||||||
|
Operating cash flows* |
|
$ |
580.0 |
|
- |
$ |
620.0 |
|
|
*Operating cash flows guidance above includes additional income tax cash outflows related to timing impacts of research and experimental expenditure capitalization, effective January 1, 2022, of |
($60.0) - ($80.0) |
|
|
|
||||
*Section 174 of the Internal Revenue Code was amended by the Tax Cuts and Jobs Act of 2017 to require research and experimental (R&E) expenditures to be capitalized and amortized starting in tax years on or after January 1, 2022. The requirement to capitalize the R&E expenditure results in a timing impact of cash flow by deferring the majority of the annual deduction to future periods. This has no bearing on our ability to operationally generate cash flow.
This change in the Internal Revenue Code will require us to capitalize our annual deduction for R&E, whereas in the past we elected to deduct R&E expenditures in the current year. This change results in an increase to tax payments of $60.0 - $80.0 million in 2022 based on a capitalized R&E deduction schedule, whereas in the past, we would have avoided the increase to tax payments with a full R&E expenditure deduction in the current year.
Conference Call Information
Ansys will hold a conference call at 8:30 a.m. Eastern Time on February 24, 2022 to discuss fourth quarter and FY 2021 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 10162011. The archived webcast can be accessed, along with other financial information, on Ansys' website.
