ANSYS, Inc. today reported third quarter 2017 GAAP and non-GAAP revenue growth of 12% in constant currency. Recurring revenue, which is comprised of lease license and annual maintenance revenue, grew by double digits in constant currency and totaled 75% of revenue for the third quarter on both a GAAP and non-GAAP basis. The Company also reported 9% and 11% growth in diluted earnings per share on a GAAP and non-GAAP basis, respectively.
Ajei Gopal, ANSYS President and CEO, commented, “The ANSYS strategy of Pervasive Simulation is resonating with our customers and partners. We continue to build new and expand existing relationships with customers around the world. During Q3, we closed 25 seven-figure deals, including a three-year deal of over $45 million, the largest in the Company’s history. Our focus on sales execution has resulted in another quarter of excellent financial performance. Our third quarter success was led by double-digit revenue growth in both North America and Asia-Pacific. We also saw improved performance in Europe, which rose 5% in constant currency. Overall, our results demonstrate the continued progress we are making toward achieving our goal of sustainable, double-digit top line growth by 2020.”
Maria Shields, ANSYS CFO, stated, “Our Q3 financial results are validation that our continued focus on execution and disciplined investing in our business is yielding measurable results. The strong business performance exceeded the high end of our expectations as evidenced by double-digit growth in revenue, non-GAAP EPS, and deferred revenue and backlog. Our operating margin and earnings results were both well above the high end of our guidance, driven primarily by the overperformance in revenue. Due to our increased confidence in the fourth quarter, as well as the overperformance in the third quarter, we are raising our Q4 and FY 2017 revenue guidance by $6 million and $20 million at the midpoint, respectively.”
Financial Results
ANSYS' third quarter and year-to-date 2017 and 2016 financial results are presented below. The 2017 and 2016 non-GAAP results exclude the income statement effects of acquisition adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets and acquisition-related transaction costs. The 2017 non-GAAP results also exclude restructuring charges.
Management's 2017 Financial Outlook
The Company's fourth quarter and fiscal year 2017 revenue and earnings per share guidance is provided below. The Company last provided its guidance on August 2, 2017. The previously provided fiscal year 2017 guidance has been updated to reflect the Company's performance during the first nine months of 2017, as well as adjustments to operational and economic expectations, including changes in currency exchange rates, for the remainder of the year. The revenue and earnings per share guidance is provided on both a GAAP and a 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, restructuring charges and acquisition-related transaction costs.
Fourth Quarter 2017 Guidance
The Company currently expects the following for the quarter ending December 31, 2017:
GAAP revenue in the range of $283.0 - $292.0 million
Non-GAAP revenue in the range of $284.0 - $293.0 million
GAAP diluted earnings per share of $0.78 - $0.86
Non-GAAP diluted earnings per share of $0.99 - $1.05
Fiscal Year 2017 Guidance
The Company currently expects the following for the fiscal year ending December 31, 2017:
GAAP revenue in the range of $1.076 - $1.085 billion
Non-GAAP revenue in the range of $1.079 - $1.088 billion
GAAP diluted earnings per share of $3.17 - $3.25
Non-GAAP diluted earnings per share of $3.93 - $3.99
As discussed at the Company’s Investor Day in September, the Company expects to issue its guidance for 2018 after the completion of its annual planning process, which is currently underway, and commensurate with the reporting of its fourth quarter earnings in February 2018.
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