Ansys Announces Q1 2020 Financial Results

Meets Q1 Revenue and Earnings Guidance

Company Initiates Q2 2020 Outlook and
Revises FY 2020 Outlook in Connection with COVID-19 Developments*
Completes Acquisition of Lumerical Inc.

*Additional details related to our financial guidance, including assumptions and economic impacts of COVID-19, are detailed in our prepared remarks document.

Key Highlights - Q1 2020

  • GAAP revenue of $305.0 million and non-GAAP revenue of $308.9 million
  • GAAP diluted earnings per share of $0.53 and non-GAAP diluted earnings per share of $0.83
  • GAAP operating profit margin of 11.2% and non-GAAP operating profit margin of 29.3%
  • Operating cash flows of $147.4 million
  • Deferred revenue and backlog of $835.0 million at March 31, 2020
  • Repurchased 0.7 million shares in the first quarter at an average price of $233.48 per share

PITTSBURGH, May 06, 2020 (GLOBE NEWSWIRE) -- Despite a more challenging global environment as a result of the COVID-19 pandemic than we expected at the time of our February 2020 financial guidance, ANSYS, Inc.'s (NASDAQ: ANSS) first quarter revenue, earnings and operating margin landed toward the middle of the guidance ranges. First quarter 2020 GAAP and non-GAAP revenue came in at $305.0 million and $308.9 million, respectively, a decrease of 4% and 3% in reported currency, respectively, or 3% for each in constant currency, when compared to the first quarter of 2019. For the first quarter of 2020, the Company reported earnings per share of $0.53 and $0.83 on a GAAP and non-GAAP basis, respectively, compared to $1.01 and $1.29 on a GAAP and non-GAAP basis, respectively, for the first quarter of 2019.

Ajei Gopal, Ansys President & CEO, stated, “I am very proud that the Ansys team has come together, despite working remotely, to close deals and to continue providing outstanding support to our customers. That effort, in the face of uncertain global economic conditions, has led to Ansys delivering financial results near the midpoint of our guidance. We have also continued to drive innovation across our multiphysics portfolio through organic product development seen in Ansys 2020 Release 1 as well as through acquisitions.

Despite the market uncertainties, we believe that our strategy of making simulation pervasive across the product lifecycle remains more relevant than ever. That strategy accelerates customers’ key research and development initiatives - which are often less impacted by economic slowdowns - including emerging areas like electrification, autonomy, 5G, and the industrial internet of things. These companies understand the need for continued investment to maintain, or even build upon, their competitive advantage. So we will continue to focus on executing this strategy while prudently investing in growth opportunities that put us in a stronger position for the long term.”

Maria Shields, Ansys CFO, stated, “Although the current economic environment will continue to have a negative impact on our revenue and ACV growth, we entered into the COVID-19 crisis fiscally disciplined and with the benefit of a strong financial position and a high level of recurring sources comprising our ACV. Despite the challenging backdrop, key Q1 results reflect the strength and resiliency of our business model with cash of $718 million and deferred revenue and backlog of $835 million, an increase of 24% over the year-ago period. Given the high level of near-term economic uncertainty, we will continue to be fiscally disciplined by closely managing our discretionary spending. At the same time, we will continue to try to strike the right balance between short- and long-term strategic investments that we believe will position us well for the future. Our 50 year history as a leader in engineering simulation, best-in-class product portfolio and long-standing customer relationships that have been built over decades give us confidence that we will emerge from this crisis better positioned to respond to the needs of our customers and to capitalize on our long-term growth aspirations.”

On April 1, 2020, Ansys acquired Lumerical Inc. (Lumerical), a leading developer of photonic design and simulation tools, for a purchase price of approximately $107.5 million, paid in cash. The acquisition adds photonic products to the Company's multiphysics portfolio, providing its customers with a full set of solutions to solve their next-generation product challenges.

Financial Results

Ansys' first quarter 2020 and 2019 financial results are presented below. The 2020 and 2019 non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets, transaction costs related to business combinations, and adjustments related to the transition tax associated with the Tax Cuts and Jobs Act.

GAAP and non-GAAP results are as follows:

(in millions, except percentages and per share data) Q1 2020  Q1 2019  % Change  Q1 2020  Q1 2019  % Change
Revenue $ 305.0  $317.1  (4)%  $ 308.9  $319.9  (3)%
Net income $ 46.1     $ 86.2     (47 )%   $ 72.3     $ 110.7     (35 )%
Diluted earnings per share $ 0.53     $ 1.01     (48 )%   $ 0.83     $ 1.29     (36 )%
Operating profit margin 11.2 %   30.2 %       29.3 %   42.9 %    

The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2020 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three months ended March 31, 2020 and 2019, and for the 2020 financial outlook, can be found in the condensed financial information included in this release.

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