Schnitger Corporation

ANSYS says, oops, there weren’t as many of those deals

ANSYS says, oops, there weren’t as many of those deals

Aug 10, 2018 | Hot Topics

ANSYS announced results earlier this week, highlighted by a lot of big deals. In the company’s prepared remarks it said this:

 

For the second quarter, we had 35 customers with cumulative orders over $1 million, including one customer with cumulative orders over $30 million. This compares to 28 customers with orders over $1 million in the second quarter of 2017. For year-to-date 2018, we had 73 customers with cumulative orders over $1 million. This compares to 67 customers with cumulative orders in excess of $1 million for year-to-date 2017.

Today, the company reissued those remarks, and they now say,

For the second quarter, we had 27 customers with cumulative orders over $1 million, including one customer with cumulative orders over $16 million. This compares to 28 customers with orders over $1 million in the second quarter of 2017. For year-to-date 2018, we had 66 customers with cumulative orders over $1 million. This compares to 67 customers with cumulative orders in excess of $1 million for year-to-date 2017.

 

That’s still not bad –from 35 to 27 deals and from $30 million to $16 million for the largest– but it’s not as good as the first report. So, what happened?

In an SEC filing today, ANSYS said that it’s all Excel’s fault and that “human error” overstated the quantities and amounts. [I would not want to be that human.]

But the important part of the filing  is this:

The changes to the Prepared Remarks document do not have an impact on the Registrant’s financial statements or its financial guidance.

This was apparently a one-shot oops and we can be pretty confident that this will be double-checked going forward.

So, does it matter that there were fewer big deals than we originally thought? And that the biggest was smaller? Yeah, actually, it sorta does. ANSYS has been betting on its portfolio approach –that selling a customer 3 things is only marginally more expensive than selling them 1, and that its broad set of solvers lets it expand its footprint in existing accounts. The fact that number of big deals closed in Q2 2018 isn’t as far ahead of last year means that this is slower to roll out that we thought a few days ago. Of course, this doesn’t invalidate the strategy, just its trajectory.

But it is important to note, again, that this news didn’t affect anything in ANSYS’ financial statements for Q2 or its outlook for the rest of the year. ANSYS’ share price is down a tad just before the close today, so investors aren’t weighing this too heavily,

The moral: check those spreadsheet formulas!

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