ANSYS (ANSS) Q2 Earnings Beat Estimates, Revenues Up Y/Y

ANSYS Inc. ANSS reported second-quarter 2022 earnings of $1.77 per share, beating the Zacks Consensus Estimate by 9.94%. The bottom line decreased 4.3% year over year.

Non-GAAP revenues of $475.9 million surpassed the Zacks Consensus Estimate by 1.97%. The top line increased 5% (up 12% at constant currency or cc) from the year-ago quarter.

High-performance computing, 5G, and sustainability boosted high-tech and semiconductor industry growth in the Europe, Middle East, and Africa (EMEA) and Asia-Pacific regions. The company saw double-digit growth for its electrification and advanced driver assistance systems business segment in the Americas and the Asia-Pacific region. Deferred revenues and backlogs were $1.179 billion, up 27.2% year over year.

Following the announcement, shares of the company were up 2.1% in the pre-market trading on Aug 4, 2022. In the past year, shares of ANSYS have lost 24.3% compared with the industry’s decline of 12.5%.

ANSYS, Inc. Price, Consensus and EPS Surprise

ANSYS, Inc. Price, Consensus and EPS Surprise

ANSYS, Inc. price-consensus-eps-surprise-chart | ANSYS, Inc. Quote

Quarter in Detail

Subscription lease revenues (28.4% of non-GAAP revenues) increased 12.4% at cc to $135 million. Perpetual licenses’ revenues (15.5%) decreased 9.3% year over year at cc to $73.9 million.

Maintenance revenues (52.5%) increased 17.7% at cc to $249.7 million. Service revenues (3.6%) rose 33.1% year over year to $17.2 million.

Direct and indirect channels contributed 73.7% and 26.3%, respectively, to non-GAAP revenues.

Annual contract value or ACV increased 6.9% year over year (up 13.2% at cc) to $460.3 million.

On a geographic basis, non-GAAP revenues from the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 41.4%, 25.9% and 32.7% to non-GAAP revenues, respectively.

Non-GAAP revenues from the Americas were down 10.9% to $196.8 million at cc. Revenues from EMEA increased 29.2% to $123.4 million at cc. Revenues from the Asia-Pacific increased 36.2% to $155.6 million at cc.

Strength in the industrial and energy industries, high-tech, and automotive sectors increased overall revenues.

Operating Details

The non-GAAP gross margin expanded 100 basis points (bps) on a year-over-year basis to 91%.

Total operating expenses increased 6.6% year over year to $283.3 million due to higher research and development; and selling, general and administrative expenses.

The non-GAAP operating margin contracted 100 bps on a year-over-year basis to 40.7%.

Balance Sheet & Cash Flow

As of Jun 30, 2022, cash and short-term investments amounted to $517.6 million compared with $657.8 million as of Mar 31, 2022.

As of Jun 30, 2022, the company’s long-term debt stood at $753.4 million compared with $744.5 million as of Mar 31, 2022.

In the quarter under review, cash from operations remained flat at $118.9 million compared with the prior-year quarter.

In the quarter under review, the company did not repurchase shares. As of Jun 30, 2022, it had 2 million shares remaining under the share buyback program.

Guidance

For third-quarter 2022, ANSYS expects non-GAAP earnings of $1.56-$1.70 per share. The Zacks Consensus Estimate is pegged at $1.62.

Non-GAAP revenues are anticipated to be between $455 million and $475 million.
Management projects a non-GAAP operating margin of 37.8-39.4%.

For 2022, ANSYS expects non-GAAP revenues of $2.005-$2.055 billion. The Zacks Consensus Estimate is pegged at $2.05 billion.

Management expects a non-GAAP operating margin of 41-42% for 2022.

Non-GAAP earnings are envisioned to be $7.50-$7.88 per share. The Zacks Consensus Estimate for earnings is pegged at $7.79 per share.

ACV is anticipated to be between $1.98 billion and $2.02 billion, while the operating cash flow is projected between $570 million and $610 million for 2022.

Zacks Rank & Stocks to Consider

ANSYS currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology space are Badger Meter BMI, InterDigital IDCC and Cadence Design Systems CDNS. Cadence Design Systems and  Badger Meter sport a Zacks Rank #1 (Strong Buy) whereas InterDigital carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.

Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have jumped 20.4% in the past year.

The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 7% in the past 60 days.

Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 3.1% of their value in the past year.

The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.76 per share, declining 15.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 15%.

InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 141.1%. Shares of IDCC have declined 9% in the past year.

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