The technology used to conceive, design and fabricate the objects around us is complicated. It may be difficult to understand if you're not a practitioner, yet businesses routinely entrust their most important processes to these tools. Our Hot Topics blog tries to clear up some of the confusion.

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Hot Topics

Earnings update, 3D printer edition — looks good!

http://cubify.com/This earnings season has been incredibly busy and I have fallen far, far behind in summarizing the highlights. To try to catch up a bit, I’ll be grouping these companies by general product category for you, since that’s so much more useful than chronologically by reporting date.

Look for reports on the AEC-specific companies (Hexagon, Nemetschek and Trimble) to come sometime soon

ExOne disappoints investors, reports loss as revenue grows

3D printer company ExOne reported that higher operating expenses led to a first quarter loss of $1.9 million, even as revenue jumped to $7.9 million (from $2.7 milllion a year ago and WHAT last quarter), fueled by the sale of four 3D printing machines during the quarter. Even so, the company continuous its expansion plans,

CEO Kent Rockwell sees this as a bump in the road: “We continue to be very encouraged with the opportunities that present themselves for our 3D printing capability… [W]eakness in Europe slowed the purchase decisions of our customers in that region, while customer demand in Japan is clearly strengthening with the economy. And in North America, we also received our first order for an M-Flex machine in the quarter.”  The company now ExOne said it expects full-year revenue of $48 million to $52 million, with two-thirds of that coming in the second half.

3D Systems buoyed by acquisitions, printer sales

3D Systems is a much more complex company, since it sells 3D printer, printer supplies and, increasingly, software. 3D Systems reported first quarter results on April 30, with revenue grew 31% year/year to $102 million as printer and other product revenue grew 61% and unit sales were up 81%. Within that product total, printer revenue was up 43% to $32 million. Software products contributed $4.2 million in the quarter (and Geomagic only for 1 month).

CEO Abe Reichental told investors that the company saw 38% renveue growth in Europe and 45% in Asia, “some of it obviously is aided by the recent software acquisitions, but what we’re seeing generally is that even in some of these more uncertain economies, the demand for our products and services remains very high. It’s primarily related to very robust R&D spending by the companies that within our universe and a greater demand for our systems and services for outright advanced manufacturing applications.”

Since the earnings report, 3D Systems has ben incredibly busy. They’ve rebranded a number of products to carry the Geomagic label and announced that the company and some employee shareholders plan to sell $250 million in shares. The proceeds will be used for yet more acquisitions and to fund normal operations.

Stratasys/Objet merger ahead of plan

Fresh off its acquisition of Objet, Stratasys reported that non-GAAP revenue was $98 million, up 18% over the revenue of the combined companies a year ago. [This is confusing to many since most companies report acquired revenue as if it were new. Stratasys has opted for a much useful approach, adding together Stratasys and Objet for the last year. --Ed.] Unit sales were up 5%, even as hardware revenue went up 15%, indicating that customers are buying higher ASP products.

Mr. Reis said that he was”pleased with our record first quarter results. We generated strong revenue growth while continuing to focus on the major task of merger integration. We continue to integrate our sales and marketing organization and we are ahead of schedule and cross-training our combined reseller channel and dealer network.”

Stratasys guided to revenue of $430 million to $445 million for the year, also backweighted – but, for once, not because of the economy. According to David Reis, CEO, ”revenue growth is expected to be stronger toward the end of the year as Stratasys progresses with its integration plan and realizes revenue synergies from selling the combined product portfolio.”

OK. That’s it for now. I’m off to the SIMULIA Community Conference in Vienna and am looking forward to keynotes from the company, BMW and Ethicon; as well as dozens of other presentations. I believe the Twitter hashtag for the event is #SIMULIA13 but I’ll update once I know for sure.

Image courtesy of Cubify, in honor of the latest, (terrific) Start Trek.


Autodesk links PLM and ERP, buys Tinkercad

Roopinder;s photo of Carl BassPLM 360 + NetSuite = Control for SMBs?

Last week, Autodesk and NetSuite announced that they had entered into a strategic partnership to link Autodesk PLM 360 and NetSuite ERP, with the aim of offering PLM and ERP to small and medium-sized companies that might have neither. PLM is all about product –design, manufacturing, quality– while ERP helps run the company –financials, HR, inventory, suppliers, customers. By creating bi-directional links, data from either environment is used to advantage in both. Imagine designing a widget in Inventor, for example. Its design is controlled in PLM 360, with an eventual release to manufacturing. But nothing is ever static, so a change order is opened that requires action from both design and manufacturing. Connecting PLM and ERP ensures that both parts of the enterprise are fully informed and can collaborate on factors such as cost, quality, speed and demand forecasting. Wider visibility should yield a better result, from both a product perspective and that of the broader enterprise.

I think this partnership is fascinating. Can’t speak yet to its actual utility, but I like the idea. Autodesk says that 70% of the companies starting a PLM 360 implementation didn’t have a PLM before, and I’d bet that many of them didn’t have an ERP either. By implementing both as software-as-a-service, targeted at solving specific business problems, Autodesk and NetSuite offer a low total cost of ownership, easy entry and, through this partnership, a relatively painless integration. It’s another way Autodesk differentiates itself: It could have partnered with SAP, whose cloud-based ERP offering seems to be selling very well, but that would have sent the wrong signal. SAP has, after all, been (rightly or wrongly) blamed for many a failed ERP implementation because it was just so darned big and complicated. Autodesk wants to be seen as nimble, targeted, big-value-for-not-big-bucks; SAP might have had more initial clout, but would have been the wrong partner.

What do you think? Do you have any experience with NetSuite?

Autodesk acquires Tinkercad

Proving just how many things Autodesk can do at once, this weekend the company announced that it is acquiring Tinkercad, a low-cost, browser-based 3D design app that had been around for a couple of years. Then, in March, Tinkercad announced that it would shut its doors and that its developers would instead focus on their new Airstone Labs venture to turn “batch simulation into a real-time environment where the user can interactively test different product designs” on an “integrated software and hardware service, built from the ground up to utilize massive high performance supercomputers with hundreds of thousands of CPU cores”. The Tinkercad developers were moving on, leaving dedicated users behind.

With this acquisition, Autodesk intends to merge some of the Tinkercad technology and user experience into the Autodesk 123D products and will keep the Tinkercad service available as part of its consumer portfolio. Exact details TBD; the acquisition should close in about a month. Wired magazine reports that the Tinkercad developers will not be joining Autodesk.

On a related note, Autodesk’s CEO Carl Bass spent Saturday at Maker Faire in San Francisco. Roopinder Tara wrote this about Mr. Bass’ session on CAD for Kids (that’s Mr. Bass, in the picture above):

How often does a CEO of a billion dollar company give up a Saturday to guide kids? Carl Bass, CEO of Autodesk, is doing just that. Before a standing room only crowd at Maker Faire, he delivers a heartfelt plea for one and all, the young and their parents, to use his company’s software, to help make things, some thing, anything — whatever their heart might desire, it seems. To help them, he’ll make his software, some of it sold to professionals for thousands of dollars, available for free –or really cheap. … 

The tools he has offered are substantial and generous. What is he hoping to gain? To me, it seem nothing less than a resurgence of creativity and productivity, starting with the young, but applied on a scale that Autodesk address, this could be BIG! Give me your kids, I’ll give them the means…starting with software, but with 3D printing, a lot more. Let’s see that they can make. Why can’t they make anything they want? Including making America great again.

Image courtesy of CAD Insider.


Autodesk: Q1 was “tough”, no plan to end perpetual sales

EarningsAutodesk reported results last night that highlighted how tough the economy is, and perhaps will be for a bit longer than earlier-reporting companies had hoped. Until now, just about everyone pointed to tepid demand that got worse as we moved from January into February and March. That seems to have worsened in April, as CEO Carl Bass said that Autodesk’s “weak April led to a disappointing finish to the quarter”. If April continued the weak streak, how will that affect everyone’s Q2 results? We’ll have to wait and see but let’s take a look at what happened during Autodesk’s quarter ended April 30, 2013.

The big headline, of course, is that total revenue in Q1 was $570 million, a drop of 3% percent year/year, and at the very bottom end of earlier guidance of revenue between $570 million and $590 million (and below the analysts’ consensus of $584 million). In February, Autodesk had guided to overall revenue growth of about 6% for fiscal 2014; last night, that was pulled back to 3% growth. As CEO Carl Bass told investors, “The macro sentiment was just tougher in general [in Q1, it was] just a tougher selling environment.”

He didn’t say that Autodesk is seeing anything unusual in a competitive way, but did say that customers are starting to think about how they buy software: “The news from Adobe during the quarter about ending perpetual licenses, and the lead-up to that, certainly has our customers asking questions about it. There’s clearly a decline in desktop PCs but, on the other hand, our customers still need workstation-quality devices in order to do their day jobs. They continue to buy software and hardware to do it. But I think there is some doubt about the business models, the delivery models, and the platforms going forward. It’s too early for me to declare that this is an ongoing thing, but I do think there are a number of points in there like that.”

Some of the earnings details (look here for the complete package of material):

Autodesk is taking “what we saw in April [and] don’t try to assume that things are going to get better. We think it’s more prudent to plan with what we see” and now forecasts revenue of $550 million to $570 million; for the year, a 3% increase would be about $2,380 million.

All of this presumes a stronger-than-normal second half, which CFO Mark Hawkins says is possible because of relatively weak comparables to last year, growth from Suites and LT and the focus on subscription. Mr. Bass added that the company’s major account business is becoming increasingly back-end loaded, “not a characteristic I particularly love, it just happens to be a fact. It has somewhat to do with our end of year, and our customers’ end of year spend”.

Performance in Q1 and that outlook are sure to drag the stock down at the opening bell this morning (it’s down 6% as I write this at 7AM ET). But mitigating the forecast are improvements in the company’s sales execution and other reactions to the Q1 results. The company had been talking about changes it had made that caused confusion and lowered productivity. Mr. Bass told investors that the after-effects of these changes are “diminishing … we probably saw slightly more effect from overall macro and less from our internal sales things, but there’s probably still some lingering effects”.  Too,  Mr. Bass said, “we’re not particularly pleased with the results this quarter, and we put in a bunch of plans already to rectify it. So, we see kind of small incremental improvements we can make to drive better results for the rest of the year, and so, we will continue to tweak those.”

What does it all mean? Some teeth-gnashing, as we all wait for governments to get their finances in order, industrial demand to pick back up, and nerves to steady. But it’ll smooth back out. Autodesk is taking risks to position itself on the cutting edge of both user experience and tech platform — but they’re measured risks that are likely to pay off once customers resume more normal buying habits.


PTC channel doing well, DS/SIMPOE update

EarningsIt’s going to be another busy week, with earnings from Hexagon, Cimatron and Stratasys today and then CENIT, ExOne and Autodesk later in the week. Before we start on those, however, there are a couple of bits of old business to handle, too. If “old” means last week and last month, that is …

 

 

PTC channel is doing well, thank you very much

I had a quick call with PTC CFO Jeff Glidden to clear up some lingering questions about PTC’s March quarter results. I had gotten it into my head that PTC’s channel revenue grew 2% year/year during the quarter and wondered why the channel was struggling: were they feeling competitive pressure, suffering from a lack of focus, serving customers more affected by macro economy … Turns out, they’re not struggling at all. In prepared remarks, PTC said that CAD channel revenue was up 2%; Mr. Glidden told me that PTC’s channel revenue across all product areas was up 7% in constant currency (versus total revenue up 5% across all channels). So the channel actually did better than the direct sales force, and particularly well in PLM, in FQ2.

SIMPOE leverages DS channels, support resources

Last week, Dassault Systèmes announced that it was buying partner company SIMPOE for its mold design and analysis solutions. SIMPOE-Mold is the standalone product; it’s also rebranded as SolidWorks Plastic and has plugins for non-DS brands like PTC’s Creo and Siemens’ SolidEdge. Today, I spoke with Peter Rucinski, the product manager for SolidWorks Plastics about what this all means for SIMPOE and DS.

First off, Mr. Rucinski says that DS has no plans to alter any partner plug-ins or SIMPOE-Mold. DS acquired SIMPOE because of the success of SolidWorks Plastics and doesn’t want to jeopardize the brand — if anything, it sees the brand growing to be sold with CATIA and, perhaps, SIMULIA. (But, as with FE-Design, it’s entirely possible that SIMPOE’s partners will decide that they don’t want to rely on a piece of DS technology in their offerings.) Too, Mr. Rucinski says that he could foresee expansion of the SolidWorks Plastics offering to include a version that is, essentially, SIMPOE-Mold; today, the Professional and Premium versions contain some, but not all, of its capabilities. It’s early days, but it sounds as though we are likely to see continued expansion of SolidWorks Plastics, as well as the possible emergence of a “CATIA Plastics”.

Mr. Rucinski spent much of last year training internal and partner resources in SolidWorks Plastic and estimates that there are now 400 support people in place, who can act as local resources during a wider expansion of the SIMPOE offering. This support network will enable DS to scale sales of SIMPOE much more quickly than the company could have done as a standalone. As he put it, “SIMPOE’s technology is very good, but this acquisition leverages all of the trained expertise already in place, both internal and external in our channel partners.”

You may now get on with your week.


News you can use, 10 May 2013

news headlinesA quick digest to keep you up to speed on what’s happening in our end-markets and the world at large.

It’s the Economy, Stupid

The Harvard Business Review examines how Chinese government subsidies changed the global economic landscape, and ponders what will happen as the government tinkers with its policies. Bottom line: look for more bankruptcies as certain industries like solar panel manufacturing have to learn to do business without subsidies but “don’t interpret [the withdrawal of some subsidies] as a reversal of its overarching policy of aggressively subsidizing targeted industries in order to dominate global markets.”

Many of the engineering software suppliers mentioned cautious buying by their customers, especially late in the March quarter and anticipated that this hold on spending would continue into the second quarter. Some of their customers, however, are actually doing well. CNN reports that the major U.S. auto makers reported the strongest April for U.S. sales in at least five years, with GM adding that sales in China in April were up 15% over last year. The mixed signals still lead economists to expect modest  growth in the US economy in 2013, with 1.5% to 2% second quarter growth rebounding a bit to 2.5% by the fourth quarter.

Whatever else may be happening, the world’s appetite for energy is insatiable. Sources of energy that were once un-economical are becoming more so, as extraction technology improves and prices remain high enough to ensure a profit. Shale oil, trapped in rock, is found in huge supply in North America and causing an oil boom –one report says the US may surpass Saudi Arabia as the world’s leading oil producer by 2020– that could see $5 trillion invested in U.S. shale and other “unconventional” energy developments by 2035.

The Business of Business

In “PLM Needs To Be Viewed As Strategic Corporate Asset“ Kevin Prendeville writes that CEOs often view PLM as an engineering department black box and argues that this must change, that management must view “PLM as a strategic corporate asset, a cross-functional, enterprise-wide business discipline that augments innovation, helps drive significant revenue growth, and reduces costs of activities ranging from engineering rework to regulatory compliance.”

Do you use Facebook to reach out to customers and prospects? Facebook just published a guide for media companies that want to using the social network to share content. The tips are good (if a bit obvious), and worth a look if you think your target audience hangs out on Facebook. MIT’s Sloan School has some great ideas on building brand awareness on Facebook, but I’m still wondering how well Facebook works for our industry. One Forbes writer is pretty much convinced that Facebook isn’t worth it; are your ‘Likes” and “Followers” turning into revenue?

Meanwhile, in the World of Engineering …

Adobe made major news this week, as the Interwebs mistook a license model change (perpetual -> subscription) for moving-all-products-to-the-cloud. I wrote about it here. Lost in the kerfuffle was perhaps a more important announcement, that Adobe has come up with two devices (yes, hardware) that could change the way we all iterate between paper and digital. Josh Mings over at SolidSmack writes a great piece about how “using a pen to transfer data instead of a scanner to bring in the data, which would then be traced over or refined, is a delightful reduction in the amount of work and stress of completing a project”. Worth a read.

Finally, a $750 million project airport project caught our eye. At Bentley’s Be Inspired conference last year, we learned that Tokyo International Airport extended a runway into the ocean to add capacity, solving engineering challenges to do with earthquake-prone foundations, airplane loads at taxi, takeoff and landing and the fatigue caused by doing this hundreds of times per day over many years. The Fort Lauderdale-Hollywood (Florida, US) International Airport is taking a slightly different tack, lengthening a landing strip into a runway by taking it up and over a highway and rail line. In case you’re wondering, too, the new runway will be 150 feet wide, level for about the first 2,400 feet, then “it begins to slope upward, to a maximum of 1.31% before flattening out to 0.8% just before the bridge structures. Over that stretch, the runway gains roughly 55 ft in height”. Yikes.

Did you find this useful? Please let us know in the comments what other areas interest you; we’ll add those topics to future editions. To answer one of your questions: We link to sites like CNN and MarketWatch because the fee-based services we use put all the good stuff behind a paywall. The paid sites have more analysis, but the basic news is the same on the free sites.

Image courtesy flickr user RambergMediaImages.


SIMULIA shines the spotlight on topology optimization

Abaqus ATOM topology optimization in actionDassault Systèmes recently announced the acquisition of FE-DESIGN Group, makers of TOSCA for topology optimization. DS’ SIMULIA brand had already released a TOSCA-based Abaqus product, Abaqus ATOM, and the relationship between SIMULIA and FE-DESIGN was good, so why the acquisition? Why now? What can DS/SIMULIA do that FE-Design on its own couldn’t do? Why isn’t topology optimization used more often?

I spoke with SIMULIA’s Steve Levine and Matt Ladzinski about these and other topics and came away with one very clear impression: SIMULIA believes in topology optimization and that it should be employed far earlier in the design process, by designers, not analysts. DS plans to use its considerable reach to expand the user footprint of TOSCA and push its use into the design workflow, rather than just targeting analysts.

Topology optimization is incredibly cool, a gentle nibbling away of excess material until a design concept meets the design specifications. Here’s a video of Abaqus ATOM in action that shows how the designer sets up optimization of the feet of a clothes washer to use less material, yet meet the vibration and weight loads of a full, rotating washer drum.  The optimization yields a mathematically correct result but a designer needs to get in there and figure out how to manufacture or source the optimized components and whether other factors (like aesthetics) should affect the design. Optimization creates a jumping-off point, a concept, and probably not a final design.

TOSCA isn’t the only topology optimization solution on the market. Altair Optistruct, FEMtools Optimization, INTES Permas, LSTC LS-OPT and MSC Software Nastran SOL 200 are among the commercial offerings out there, and there are many more in the open-source domain, too. (ANSYS Topology Optimization and Siemens Femap Optimization are based on FE-DESIGN’s TOSCA.) Then there are fluid flow optimizers, like TOSCA Fluid and RBF Morph. Given so many offerings, why isn’t optimization more common?

Mr. Levine believes that optimization hasn’t been more widely adopted because many simply aren’t yet aware that it’s possible — and relatively easy.  It requires a bit of know-how to set up and some serious compute power to run but conference papers by FE-DESIGN customers like Audi, BMW, Daimler, General Motors and Volkswagen (and, now, DS’ marketing machine) will drive awareness. Declining CPU prices/HPC centers/cloud computing makes it more affordable to run.

That leaves the user experience and the cost of software licenses for running optimizations, both of which DS intends to address. DS believes (and I completely agree) that the whole point of optimization is to discover new design concepts early in the design process. How can you build a lighter yet stronger design if you’re simulating failure modes just before you release the design to production? TOSCA/ATOM automates early stage exploration of design concepts so that designers, working mainly in CAD, can explore alternatives before it’s too late.

To do that, SIMULIA needs to rework TOSCA’s focus a little bit, improving the user experience and making it more suitable for designers who have basic FEA experience but are not experts. This means streamlining the optimization setup and making the results easier to interpret. Mr. Levine said that ATOM is a good start at this, but that there is more work to be done. I would imagine that TOSCA could find its way into both DS designer brands, CATIA and SolidWorks, over time. Exactly when and how are TBD at this point.

SIMULIA’s global support organization has spent the last two years learning ATOM and can use that background as a springboard to a wider roll-out of TOSCA, within and alongside of the Abaqus base — Mr. Levine says that DS intends to continue support for all of FE-DESIGN’s partners. But he’s a realist and acknowledges that some of them may not want to work with SIMULIA — as the R&D teams look at ways to integrate TOSCA into 3D Experience bundles.

One of the most common objections to optimization has been its cost, since companies may only use the tools a couple of times a year, not enough to justify a large license fee. Mr. Levine says that DS is looking at ways to bundle TOSCA into its offerings to make it more attractive to occasional users.

Bottom line: We’ve got to work on cost, usability, workflow and capability before optimization becomes more widely used. With DS’ backing, and once partners have announced their intentions, TOSCA should be able to grow in a way that was impossible on its own. Does the acquisition make sense? It’s super-green!

Almost all of the above was written before DS announced its acquisition of SIMPOE for its mold analysis software. But many of the reasons that make the FE-DESIGN acquisition a good one apply to SIMPOE as well: better, earlier integration into the design workflow; the potential of more attractive pricing; improved usability. DS is clearly on a mission to build Experience offers that use simulation as a core component rather than an optional add-on.

Image courtesy of 3ds.com.


Quickies: Adobe drops perpetual, DS buys SIMPOE

EarningsIt’s not even 8AM and there’s already lots of news, so let’s get right to it.

Adobe announced late Monday that it will no longer sell its Creative Suite software and focus instead on its $50/month Creative Cloud and other subscription plans.

Scott Morris, senior director of product marketing for Creative Cloud at Adobe told CNET, “We have no current plans to release another perpetual release of the CS tools and suites. Creative Cloud is going to be our sole focus moving forward.”

This isn’t a shocker. Adobe launched Creative Cloud last year and believes its customers prefer the more frequent product updates, the smaller initial investment of a subscription and the flexibility of variable-term commitments. Moving to subscriptions was Adobe plan all along since it creates a ratable business; no big up-front deals, but a nice, steady, predictable revenue stream.

What is surprising –and what the engineering software world will do well to pay attention to– is the reaction to this move among Adobe customers. Immediately, people began tweeting, blogging and commenting that this is Adobe-on-the-cloud and how difficult it will be to work with large Photoshop files while transferring data to and from the Internet. And what happens if the Internet connection goes down??

That’s not it. At all. This is a licensing model change. Users will need to connect online periodically to let Adobe confirm that access is still allowed but the software will live locally. Users need to figure out their break-even point to see if a subscription is more affordable to them than a perpetual buy (they’re usually even at around 3 years but Adobe has so many deals and discounts that YMMV). Some may decide that the break-even isn’t to their advantage and look at Corel, Quark and other competing solutions.

The lesson: vendors need to better articulate what these changes mean to users. Adobe certainly created confusion naming this whole thing “Cloud” and buries statements like “creatives will be set up to download and use these latest cloud-enabled innovations from Adobe“(my emphasis) in the middle of press releases. It may also have been better to let the perpetual model die a natural death by boosting the financial incentives for the subscriptions. Adobe needed to be further ahead of this story than it apparently was.

In completely unrelated news, Dassault Systèmes today announced that it acquired SIMPOE, maker of plastic injection molding simulation software, a long-time partner and the technology behind SolidWorks Plastics. The DS press release says that SIMPOE has more than 3,000 active users. Transaction details were not disclosed, but I don’t believe SIMPOE was large enough to move the needle of DS’ revenue.

Simpoe-Mold is the company’s stand-alone plastic injection simulation solution but the company is also a gold-level partner for non-DS brands like PTC’s Creo and Siemens’ SolidEdge. I’ve asked for clarification, but believe that DS’ general policy is to leave these products intact. It is then up to DS’ competitors to decide whether they want to grant partner status to a DS company. I’ll update if warranted.

Wonder what the rest of the day will bring?


ANSYS beats some expectations, lowers others

EarningsANSYS is in a no-win situation: reporting the best first-quarter revenue in its history, within its guidance for the first quarter but lower than some financial analysts had expected. Too, like many other tech companies, ANSYS lowered its revenue forecast for the rest of 2013 as customers slowdown spending in an uncertain end-buyer climate. Taken together, it’s not all that bad and certainly not a reason to overreact. Investors didn’t see it that way; ANSYS’s share got hammered on Wall Street last week, dropping 7% even as the Dow and NASDAQ hit record highs.

This quote, from CEO Jim Cashman, describes how he sees Q1:

“Our Q1 results reflect a resilient business in a less than robust and somewhat unpredictable global economy. Most major metrics of the business performed as anticipated, highlighted by solid margins and earnings, a record deferred revenue and backlog balance of $399 million, and all-time high first quarter cash flows from operations of $95 million… We entered the year with cautious optimism and throughout the quarter we focused on those aspects of the business that we could control. While we continued to deliver on a number of key financial metrics, we also see opportunities as 2013 continues to unfold.”

Focusing on what we can control, performing as anticipated, deliver on key metrics: To me, that sounds like a company that knows what it’s doing, but decide for yourself if ANSYS is in trouble. The full earnings release is here; I found the following to be the most interesting:

Given how Q1 ended more slowly than it began, ANSYS lowered its forecast for 2013 to GAAP revenue of $850 million to $870 million, from the $875 million and $900 million target set earlier this year. Roughly half of the decrease is due to the weakening Japanese Yen, the rest to the caution its customers exhibited at the end of Q1, which also led to a more cautious forecast for Q2, which is expected to see GAAP revenue in the range of $205 million to $211 million.

You may remember that ANSYS recently brought onboard a Chief Product Officer who comes from outside the world of CAE. Mr. Cashman said that the CPO will add a new perspective that is critical in the world ANSYS now finds itself in, with new delivery models; mobile, cloud and other devices; and installations that have grown, on average, from a couple of seats/customer to, in some cases, thousands/customer. He looks to the CPO to manage these new models of delivering enterprise computing but made clear that the product direction and vision are not changing though this new model may require strengthening of individual products and portfolio unification in a “rational manner”.

What does it all mean? ANSYS may be slowing down a bit, which usually means a major acquisition is coming to boost perceived growth to higher levels, though the company gave no hints about this at all. None. Pure speculation based on its history with Fluent, Ansoft, Apache … But even without acquiring growth, ANSYS is doing just fine, and with far better prospects than many investors seem to believe.


Quickies: Uncertain economy drags down March quarter

NewsIt’s a busy week for earnings reports from engineering software companies. While I work on longer-form reports, here are a few quotes from my notes. Note that these are not 100% representative of the company’s March quarter reports — in other words, the full results may be better or worse than these little snippets indicate — so tune in later for the details.

“…[A] less than robust, and somewhat unpredictable, global economy.” — ANSYS CEO Jim Cashman

“We definitely felt continued pressure in the [March] quarter.” — FARO CEO Jay Freeland

“The … market seems to be in an in-between state, expressing neither alarm nor much exuberance.” – Trimble CEO Steven Berglund

“Despite ongoing regional economic uncertainties, we experienced robust growth in all geographic regions… We expect 2013 to be our most exciting and most productive new product introduction year in the history of the company.” — 3D Systems CEO Abraham Reichental

“We are seeing solid demand across each of our geographies in major verticals, … [and] have not seen any material change in customer-buying patterns on a global basis. During the third quarter, energy, chemicals and engineering and construction continue to represent 90% or more of the company’s business.” — Aspen Tech CEO Mark Fusco

“[W]e are experiencing an economic environment that is not improving. This weakness contributed to all product lines, segments and geographic regions underperforming their targets in the first quarter.” — Accelrys CEO Scipio Carnecchia

“Indicators for 2013 are in line with expectations, which are quite positive.” – Nemetschek CEO Tanja Tamara Dreilich

It looks as though AEC-focused companies may actually be better off right now, possibly because their expectations were lower going into 2013. 3D Systems is clearly the outlier here as their business should grow because of its acquisitions, almost disregarding broader economic concerns.

We’ll parse it all in longer posts starting tomorrow.


ESI falters, costs outpace revenue at year end

News

ESI yesterday provided more details on its results for the fiscal year ended January 31, 2013. As we posted after the preliminary announcement last month, total revenue was up 16% year/year to €109 million. However, the company’s cautious outlook and higher-than-expected expenses led its share price to tumble 17% in mid-day trading on the Paris Bourse. Said CEO Alain de Rouvray in prepared remarks, “the[se] results are below our expectations, impacted by an unexpected slowdown in growth at the end of our financial year and the continuation of M&A marketing and integration investments. The economic context leads to more cautious growth prospects and tighter control over operating costs. ”

The preliminary report was a bit short on details, so here’s what we learned with this new report (the annual report isn’t published yet, and will likely contain even more information):

ESI highlighted 4 main points in its approach to the market in calendar 2013:

ESI Group didn’t give details on its cost containment efforts. Analysts are now modeling total revenue of €117 million, which would be an increase of 7% over fiscal 2013.