ANSYS Q3 near top of guidance; sees 9% growth in 2016

Nov 5, 2015 | Hot Topics

ANSYS just announced that GAAP-basis revenue in Q3 was $238 million, up 2% as reported and up 9% in constant currencies — and near the top end of its earlier guidance. Software license revenue was $140 million, flat year/year as reported, while Maintenance and Service revenue was $98 million, up 4% as reported.

CEO Jim Cashman said in prepared remarks that the Q3 results “demonstrate the Company’s ability to execute effectively and to continuously drive growth. Despite currency headwinds and varying macroeconomic conditions around the world, our diversified business model and predictable, recurring revenue streams enabled us to produce solid top and bottom line results. Our non-GAAP earnings per share surpassed the high end of the range of our expected results for the quarter.”

ANSYS also provides commentary on a non-GAAP basis, including the following nuggets:

  • Q3 saw “top line, double-digit, constant currency growth in North America, Germany, Japan and India” but “weakness in the UK, France, South Korea and Taiwan”.
  • Perpetual revenue was up 10% in cc while lease revenue was up 4% cc
  • Q3 saw 18 orders over $1 million, versus 22 a year ago. This is probably a timing issue rather than a trend to worry about, since the company reported that it signed 85 such deals in 2014 and 2015 through the first 9 months
  • ANSYS repurchased 1.25 million shares of common stock at an average price of $91.23/share in Q3, for a total of $114 million

ANSYS also tightened its guidance for the rest of the year. The company now sees Q4 GAAP revenue of $252 million to $260 million, which means FY15 GAAP revenue between $943 million and $951 million. That’s quite a bit below Wall Street consensus of $957.4 million, so expect some tough questions on the earnings call. As I write this (8AM ET) pre-market trading is essentially flat.

For 2016, is forecasting revenue of $1.01 billion to $1.05 billion, which would be GAAP growth of around 9%.

More after I’ve had a chance to listen to the earnings call.