By now, you’ve undoubtedly seen ANSYS’ Q3 results. To quickly recap, revenue was $128.2 million, up 5% from a year ago and at the high end of guidance — but disappointing nonetheless as organic revenue (without Ansoft) fell 5.5% and total software license revenue declined 5% from a year ago. The contribution from the Ansoft business overall continues to be below expectations because it derives a higher percentage of revenue from sales of perpetual licenses. Even so, ANSYS forecast Q4 revenue of revenue between $136 million and $142 million, for a 2009 total of between $502 million to $508 million or an increase of about 6%, and initiated guidance of 8% to 13% GAAP-basis revenue growth for 2010.

Both the 2009 and 2010 growth figures are low for ANSYS, which had produced profitable revenue growth that averaged over 20% per year for the last decade. Over that time, ANSYS has acquired growth whenever trailing patterns started to lag: When growth dropped from the teens to 7% in 2002, ANSYS acquired CFX; when it declined from the 20s to teens in 2005, it acquired Fluent and, most recently, when growth fell from over 40%, ANSYS acquired Ansoft. Given the company’s current growth forecasts, it may be time for ANSYS to fire up the acquisition engine again — but what to buy? Too, the company is still integrating the underperforming Ansoft acquisition and dealing with $230 million in debt still on the books from that deal. Of course, ANSYS has been husbanding (hoarding?) cash, leading to nearly $300 million in cash and short-term investments as of September 30, 2009 that provide it the flexibility to purchase growth if it feels the need to do so. The question of what to buy, though, is problematic. Unlike its competitors, ANSYS has never really spoken about “technology tuck-ins” or used other euphemisms to refer to a smaller, cheaper acquisition to help plug a technological gap — it has usually gone for the grand gesture and made a substantial buy. A substantial buy, profitable, fills a product or distribution gap …. Hmm ….

But first to deconstruct Q3: ANSYS reported software license revenue of $76.4 million, down 5.5% from last year. Software license revenue is further broke down into $31 million in paid-up license fees (down 12%) and $45 million in lease payments (essentially flat). In a bit of disingenuous reporting, ANSYS provides data comparing 3 months of Ansoft contributions to Q3 2009 to 2 months’ contributions in 2008 (since the acquisition was closed on 31 July 2008); this makes it look like Ansoft revenue is growing nicely. Guessing at a third month in Q3 2008 paints a less rosy picture — but not necessarily an accurate one, so we’ll stick to reporting core ANSYS data: core/organic ANSYS revenue was down 8%, only partly offset by a 6% increase in maintenance. Services, the smallest component in ANSYS’ overall revenue picture, declined by 37% from a year ago.

From a geo perspective, ANSYS is successfully bringing Ansoft products to a wider audience. Again comparing 3 months of Q3 2009 to 2 months of Q3 2008, Ansoft revenue was up nearly 50% in North America and 21% in Europe — both largely new to Ansoft — and even showed growth in Asia, where it has always been strong. Trying to create and apples-to-apples comparison shows growth, but not nearly as strong. Organic ANSYS had difficulty across the board, with flat results in North America not offsetting a 7% decline in Europe and a decline of 11% in Asia.

As is the case for all other software companies, slowing sales of new paid-up seats will slow the future revenue from profitable software maintenance, a factor in ANSYS’ announced decision to continue its cost-cutting initiatives. So far in 2009, ANSYS has trimmed 8% of total headcount, or about 130 people. R&D spend is down 4% from a year ago (to 16% of total revenue YTD 2009) while sales, general, and administrative costs are down 12%. Both serve to highlight ANSYS’ focus on bottom-line profitability, something that makes investors very, very happy and contributes cash to the company coffers. (For those keeping score, ANSYS has 16% of its total assets in cash and short-term investments as of September 30, 2009, on par with PTC but well below Dassault Systèmes in September 2009.)

It will be interesting to see how ANSYS adjusts its 2010 forecast in the coming months: will it be boosted by an acquisition to reduced, if need be, to a more modest level. But ANSYS is typically cautious in providing outlook, so I’d bet on the former.