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ANSYS reports mixed Q2 and lower 2009 forecast

ANSYS reported second quarter results today that highlight the difficulties certain parts of the global economy continue to face. For Q2, ANSYS reported total GAAP revenue of $122.0 million, up 10% from $111.2 million in the second quarter of 2008 and up 5% sequentially. CEO Jim Cashman said in a prepared statement that “the ANSYS organic business [is] stable in constant currencies”, implying that the Ansoft business (acquired in July 2008, so after the end of the second quarter 2008) didn’t do as well as expected. Ansoft, which sells mainly into the electronics sector and gets almost half of its revenue from Asia, last reported revenue of $19.9 million for the quarter ended July 31, 2007 — so, if organic revenue was stable, then Ansoft performed very poorly indeed, with revenue perhaps half of what it was.

This carried through to the revenue items listed in the press release. Software revenue in Q2 2009 was $73.1 million, down 1% from a year ago (so lower including Ansoft in Q2 2009 than ANSYS without Ansoft a year ago) but up nearly 4% when compared to the first quarter of this year. Maintenance and services revenue was up 31% from a year ago and up 7% from the first quarter.

ANSYS also updated its guidance for the remainder of 2009. For Q3, the company forecasts GAAP revenue in the range of $123.4 million to $129.4 million and for the year, GAAP revenue between $501.9 million and $519.9 million. This is a significant tightening of the range for 2009 as well as lowering of the average: back in May, ANSYS had forecast GAAP revenue in the range of $502 million to $552 million.

Questions ANSYS may therefore address during the earnings call later today: what’s going on with Ansoft? How was business on a geographic basis and by product category? What led to the 5% sequential growth? Why did ANSYS so drastically lower guidance?

Stay tuned …

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