ANSYS Announces Q4 Results
PITTSBURGH, Mar. 1, 2019 -- ANSYS, Inc. has reported fourth quarter 2018 GAAP and non-GAAP revenue growth of 11% and 12%, respectively, or 13% and 14%, respectively, in constant currency. For FY 2018, GAAP and non-GAAP revenue growth was 11% and 12%, respectively, or 10% and 11% in constant currency. For the fourth quarter, the Company reported growth in diluted earnings per share of 70% and 30% on a GAAP and non-GAAP basis, respectively. For FY 2018, the Company reported growth in diluted earnings per share of 39% and 32% on a GAAP and non-GAAP basis, respectively.
Ajei Gopal, ANSYS President and CEO, commented, “Q4 was an outstanding quarter capping a stellar 2018. We grew double-digits across all key financial metrics for the quarter and the year. I am confident we are tracking towards our 2020 objective of sustained, double-digit revenue growth at industry leading margins.”
In addition, Gopal stated, “I am looking forward to 2019. Our vision of making simulation pervasive across the product lifecycle is resonating with customers and partners. With a product portfolio that is stronger than ever, I am proud that we can solve many of the challenging problems faced by our customers as they bring next-generation products to market. With our continued focus on transforming our go-to-market, and with new partnerships with leading companies who are licensing ANSYS technology, we are unlocking future opportunities. I am excited about our growth prospects in 2019 and beyond.”
Maria Shields, ANSYS CFO, stated, “Our outstanding financial performance reflects the strength of our core business and our continued dedication and focus on execution, both during the fourth quarter and for the entire year. We set new company records across all key financial metrics including our Q4 and full year 2018 revenue, ACV, earnings and operating cash flows. To achieve both our near-term and longer-term growth objectives, we will move forward with investments in our core products, high-growth adjacent markets and our business infrastructure to continue building the platform to scale our business.”
Financial Results
ANSYS' fourth quarter and fiscal year 2018 and 2017 financial results are presented below. The 2018 and 2017 non-GAAP results exclude the income statement effects of acquisition adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets, acquisition-related transaction costs, restructuring charges and measurement-period adjustments related to the 2017 Tax Cuts and Jobs Act.
| GAAP and non-GAAP results under ASC 606: | |||||||
| GAAP | Non-GAAP | ||||||
| (in millions, except percentages and per share data) | Q4 2018 | Q4 2018 | |||||
| Revenue | $ | 415.4 | $ | 418.0 | |||
| Net income | $ | 153.2 | $ | 182.1 | |||
| Diluted earnings per share | $ | 1.79 | $ | 2.13 | |||
| Operating profit margin | 43.3 | % | 51.6 | % | |||
| GAAP | Non-GAAP | ||||||
| (in millions, except percentages and per share data) | FY 2018 | FY 2018 | |||||
| Revenue | $ | 1,293.6 | $ | 1,303.1 | |||
| Net income | $ | 419.4 | $ | 513.9 | |||
| Diluted earnings per share | $ | 4.88 | $ | 5.98 | |||
| Operating profit margin | 36.8 | % | 47.4 | % | |||
GAAP and non-GAAP results under ASC 605:
| GAAP | Non-GAAP | ||||||||||||||||||||
| (in millions, except percentages and per share data) | Q4 2018 | Q4 2017 | % Change | Q4 2018 | Q4 2017 | % Change | |||||||||||||||
| Revenue | $ | 335.9 | $ | 302.3 | 11 | % | $ | 340.1 | $ | 303.4 | 12 | % | |||||||||
| Net income | $ | 88.6 | $ | 52.6 | 68 | % | $ | 118.6 | $ | 92.8 | 28 | % | |||||||||
| Diluted earnings per share | $ | 1.04 | $ | 0.61 | 70 | % | $ | 1.39 | $ | 1.07 | 30 | % | |||||||||
| Operating profit margin | 29.9 | % | 33.3 | % | 40.5 | % | 42.6 | % | |||||||||||||
| GAAP | Non-GAAP | ||||||||||||||||||||
| (in millions, except percentages and per share data) | FY 2018 | FY 2017 | % Change | FY 2018 | FY 2017 | % Change | |||||||||||||||
| Revenue | $ | 1,216.5 | $ | 1,095.3 | 11 | % | $ | 1,232.1 | $ | 1,098.1 | 12 | % | |||||||||
| Net income | $ | 356.9 | $ | 259.3 | 38 | % | $ | 455.7 | $ | 347.9 | 31 | % | |||||||||
| Diluted earnings per share | $ | 4.15 | $ | 2.98 | 39 | % | $ | 5.30 | $ | 4.01 | 32 | % | |||||||||
| Operating profit margin | 32.8 | % | 35.7 | % | 44.4 | % | 46.4 | % | |||||||||||||
The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2019 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and twelve months ended December 31, 2018 and 2017, and for the 2019 financial outlook, are included in the condensed financial information included in this release.
| Other Financial Metrics |
|||||||||||||
| (in millions, except percentages) | Q4 2018 | Q4 2017 | % Change | % Change in Constant Currency |
|||||||||
| Annual contract value (ACV) | $ | 480.5 | $ | 380.7 | 26 | % | 28 | % | |||||
| Operating cash flows | $ | 132.9 | $ | 103.5 | 28 | % | |||||||
| (in millions, except percentages) | FY 2018 | FY 2017 | % Change | % Change in Constant Currency |
|||||||||
| ACV | $ | 1,325.2 | $ | 1,123.9 | 18 | % | 17 | % | |||||
| Operating cash flows | $ | 486.4 | $ | 430.4 | 13 | % | |||||||
ACV, or Annual Contract Value, is a financial performance metric that we introduced in 2018. We believe this new measure is an improved metric as compared to the historically provided bookings metric because it adjusts the sales bookings metric to reflect only the annual value of a contract and also adjusts to reflect the sales booking at the date of the contract inception or renewal. There is no GAAP measure comparable to ACV. ACV is composed of the following:
- the annualized value of maintenance and lease contracts with start dates or anniversary dates during the period, plus
- the value of perpetual license contracts with start dates during the period, plus
- the annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plus
- the value of work performed during the period on fixed-deliverable services contracts.
Management's 2019 Financial Outlook
The Company's first quarter and fiscal year 2019 revenue and diluted earnings per share guidance is provided below. The revenue and diluted earnings per share guidance are provided on both a GAAP and a non-GAAP basis, in accordance with ASC 606. Non-GAAP financial measures exclude the income statement effects of acquisition adjustments to deferred revenue, stock-based compensation, amortization of acquired intangible assets and acquisition-related transaction costs.
The financial guidance below includes the impact of the Company's acquisitions of Granta and Helic, which closed during the first quarter of 2019.
First Quarter 2019 Guidance
The Company currently expects the following for the quarter ending March 31, 2019:
| (in millions, except per share data) | GAAP | Non-GAAP | |
| Revenue | $286.0 - $308.0 | $290.0 - $310.0 | |
| Diluted earnings per share | $0.61 - $0.82 | $0.98 - $1.11 | |
Fiscal Year 2019 Guidance
The Company currently expects the following for the fiscal year ending December 31, 2019:
| (in millions, except per share data) | GAAP | Non-GAAP | |
| Revenue | $1,400.0 - $1,465.0 | $1,410.0 - $1,470.0 | |
| Diluted earnings per share | $3.98 - $4.61 | $5.55 - $6.00 |
| (in millions) | Other Financial Metrics |
| ACV | $1,410.0 - $1,465.0 |
| Operating cash flows | $470.0 - $510.0 |
During Q1 2019, we acquired Granta and Helic for a combined purchase price of approximately $261.5 million. The acquisition of Granta, the premier provider of materials information technology, expands the Company's portfolio into this important area, giving customers access to material intelligence, including data that is critical to successful simulations. The acquisition of Helic, the industry-leading provider of electromagnetic crosstalk solutions for systems on chips, combined with our flagship electromagnetic and semiconductor solvers, will provide a comprehensive solution for on-chip, 3D integrated circuit and chip-package-system electromagnetics and noise analysis.
Conference Call Information
ANSYS will hold a conference call at 8:30 a.m. Eastern Time on February 28, 2019 to discuss fourth quarter and fiscal year 2018 results. The Company will provide its prepared remarks on the Company’s investor relations homepage and as an exhibit in its Form 8-K in advance of the call to provide shareholders and analysts with additional time and detail for analyzing its results in preparation for the conference call. The prepared remarks will not be read on the call, and only brief remarks will be made prior to the Q&A session. The Company also posted a complementary investor presentation titled "4Q 2018 Investor Presentation" that can be accessed by clicking News & Events, then Presentations on our website at https://investors.ansys.com.
To participate in the live conference call, dial 855-239-2942 (US) or 412-542-4124 (Canada & Int’l). The call will be recorded and a replay will be available within two hours after the call. The replay will be available by dialing (877) 344-7529 (US), (855) 669-9658 (Canada) or (412) 317-0088 (Int’l) and entering the passcode 10128385. The archived webcast can be accessed, along with other financial information, on ANSYS' website at https://investors.ansys.com/news-and-events/events-calendar.
Source: ANSYS
