Schnitger Corporation

ANSYS hits Q4 targets, but plans to do better

EarningsANSYS keeps rolling along, relying on a mix of products and end-industries to insulate it somewhat from broader macroeconomic winds. The company reported Q4 revenue of $236 million, up 7% from a year ago, with software revenue up 4% to $148 million and maintenance and services revenues of $88 million, up 12%. For the year, revenue was $861 million, up 8%.

That’s pretty good and allows ANSYS to claim that it, once again hit revenue targets (and beat its profit target thanks to a one-time tax thingy). But it’s not great — investors expected slightly better performance and stronger guidance for 2014 and sent the share down 1% or so on the news.

The details:

ANSYS also tweaked its guidance for 2014 to take into account its acquisition of Reaction Design in January. The company now sees Q1 revenue in the range of $211 million t0 $219 million; for the year, ANSYS now sees revenue between $935 million and $966 million, or $1 million to $2 million higher than earlier stated. Given that Mr. Cashman said Reaction Design had revenue of about $4 million, the company sees the rest of its business a tiny bit more cautiously than it did in November. In any event, the full-year revenue forecast implies growth of 9% to 12%.

What does it all mean? In constant currencies (cc) ANSYS revenue grew 7% in Q4 and 9% for the fiscal year, with cc revenue growth in all 3 of its geographic regions for both periods. That’s just OK and, if ANSYS’ track record is anything to go by, usually precedes a major acquisition. Mr. Cashman, of course, didn’t say that; he said that he’s committed to “driving double-digit organic top line growth” without going into details. ANSYS has a large, impressive portfolio that it can cross-sell into existing accounts, and many types of simulation and price points with which to target new ones, so double-digit growth should be achievable — but it should have been in 2013, too, and that didn’t happen. Perhaps ANSYS management will share more details during its investor day on March 12.

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