ANSYS, Inc. reported third quarter 2022 GAAP and non-GAAP revenue growth of 7% and 6% in reported currency, respectively, or 16% and 15% in constant currency, respectively, when compared to the third quarter of 2021. For the third quarter of 2022, the Company reported diluted earnings per share of $1.10 and $1.77 on a GAAP and non-GAAP basis, respectively, compared to $0.97 and $1.59 on a GAAP and non-GAAP basis, respectively, for the third quarter of 2021. Additionally, the Company reported third quarter 2022 ACV growth of 12% in reported currency, or 20% in constant currency, when compared to the third quarter of 2021.
“Ansys delivered another outstanding quarter, exceeding our financial guidance across all key metrics. We once again had double-digit ACV and revenue growth in constant currency both in the quarter and year-to-date. Our strong Q3 ACV performance was broad based across customer types, geographies and industries in constant currency, which is further evidence of the essential nature of our market-leading simulation portfolio, multiphysics product leadership and deep customer relationships. Looking to the remainder of 2022 and beyond, I am confident in our ability to execute against our outlook,” said Ajei Gopal, Ansys president and CEO.
Nicole Anasenes, Ansys CFO, stated, “Our robust Q3 performance reflects the strength and resiliency of our core business and the sustained importance of simulation to our customers. During Q3, Ansys drove 20% constant currency ACV growth and constant currency revenue growth of 16% and 15% on a GAAP and non-GAAP basis, respectively. Both our Q3 and year-to-date results continue to deliver against our business model of double-digit growth with industry-leading margins. This consistent and strong operational performance bolsters our confidence in achieving our full-year financial guidance.”
/ Financial Results
Ansys' third quarter and year-to-date (YTD) 2022 and 2021 financial results are presented below. The 2022 and 2021 non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue from business combinations closed prior to 2022, stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, 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) |
Q3 QTD |
Q3 QTD |
% Change |
Q3 QTD |
Q3 QTD |
% Change |
|||||||||||||||
|
Revenue |
$ |
472.5 |
$ |
441.2 |
7 |
% |
$ |
473.7 |
$ |
445.4 |
6 |
% |
|||||||||
|
Net income |
$ |
96.0 |
$ |
85.3 |
12 |
% |
$ |
154.7 |
$ |
140.3 |
10 |
% |
|||||||||
|
Diluted earnings per share |
$ |
1.10 |
$ |
0.97 |
13 |
% |
$ |
1.77 |
$ |
1.59 |
11 |
% |
|||||||||
|
Operating profit margin |
26.1 |
% |
24.4 |
% |
41.0 |
% |
39.7 |
% |
|||||||||||||
|
GAAP |
Non-GAAP |
||||||||||||||||||||
|
(in millions, except per share data and percentages) |
Q3 YTD |
Q3 YTD |
% Change |
Q3 YTD |
Q3 YTD |
% Change |
|||||||||||||||
|
Revenue |
$ |
1,371.4 |
$ |
1,251.0 |
10 |
% |
$ |
1,378.2 |
$ |
1,270.1 |
9 |
% |
|||||||||
|
Net income |
$ |
265.8 |
$ |
251.5 |
6 |
% |
$ |
428.5 |
$ |
401.8 |
7 |
% |
|||||||||
|
Diluted earnings per share |
$ |
3.04 |
$ |
2.86 |
6 |
% |
$ |
4.90 |
$ |
4.56 |
7 |
% |
|||||||||
|
Operating profit margin |
24.2 |
% |
21.9 |
% |
38.9 |
% |
38.6 |
% |
|||||||||||||
/ Fourth Quarter 2022 Guidance
The Company currently expects the following for the quarter ending December 31, 2022:
|
(in millions, except percentages and per share data) |
GAAP |
Non-GAAP |
|
|
Revenue |
$621.3 - $656.3 |
$621.8 - $656.8 |
|
|
Revenue Growth Rate |
(5.2%) - 0.1% |
(6.0%) - (0.7%) |
|
|
Revenue Growth Rate — Constant Currency |
2.5% - 7.8% |
1.7% - 6.9% |
|
|
Diluted earnings per share |
$1.91 - $2.28 |
$2.58 - $2.90 |
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 closed prior to 2022 in the amount of $0.5 million for the quarter ending December 31, 2022.
|
(in millions, except percentages) |
Other Financial Metrics |
|
ACV |
$761.3 - $786.3 |
|
ACV Growth Rate |
0.8% - 4.1% |
|
ACV Growth Rate — Constant Currency |
8.1% - 11.4% |
/ 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 |
$1,992.7 - $2,027.7 |
$2,000.0 - $2,035.0 |
|
|
Revenue Growth Rate |
4.5% - 6.3% |
3.5% - 5.4% |
|
|
Revenue Growth Rate — Constant Currency |
11.1% - 13.0% |
10.1% - 11.9% |
|
|
Diluted earnings per share |
$4.95 - $5.31 |
$7.48 - $7.80 |
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 closed prior to 2022 in the amount of $7.3 million for the fiscal year ending December 31, 2022.
|
(in millions, except percentages) |
Other Financial Metrics |
|
ACV |
$1,975.0 - $2,000.0 |
|
ACV Growth Rate |
5.6% - 6.9% |
|
ACV Growth Rate — Constant Currency |
12.0% - 13.4% |
|
Operating cash flows |
$570.0 - $600.0 |
Despite an ongoing volatile macroeconomic environment, the updated FY 2022 guidance reflects an operational raise on ACV, revenue, diluted EPS and operating cash flows driven by the underlying strength of our business model and market position. Offsetting this outlook, persistent and meaningful U.S. Dollar strengthening in exchange rates continues to drive unprecedented headwinds. As a result, the guidance assumes additional incremental adverse impacts from currency, primarily driven by substantial weakening in the Euro and Japanese Yen.
The impact of currency on our results continues to be significant and driven by the macroeconomic environment. The underlying foundation of our business remains strong, and we continue to see momentum. The chart below captures the drivers of the update to our last guidance provided in early August:
|
(in millions, except per share data) |
Mid-point of |
Incremental |
November mid- |
Currency |
November mid- |
||||
|
ACV |
$2,000 |
$8 |
$2,008 |
($20) |
$1,988 |
||||
|
Revenue |
$2,030 |
$12 |
$2,042 |
($24) |
$2,018 |
||||
|
Diluted earnings per share |
$7.69 |
$0.12 |
$7.81 |
($0.17) |
$7.64 |
||||
|
Operating cash flows |
$590 |
$2 |
$592 |
($7) |
$585 |
Additionally, when compared to the 2021 currency rates, our full-year 2022 guidance is negatively impacted on ACV by approximately $120 million and on operating cash flow by approximately $40 million.
/ Conference Call Information
Ansys will hold a conference call at 8:30 a.m. Eastern Time on November 3, 2022 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 2575039. The archived webcast can be accessed, along with other financial information, on Ansys' website at https://investors.ansys.com/events-presentations/events.
