ANSYS (ANSS) Q4 Earnings Beat Estimates, Revenues Up Y/Y
ANSYS Inc ANSS reported fourth-quarter 2022 earnings of $3.09 per share, beating the Zacks Consensus Estimate by 10.8%. The bottom line increased 10% year over year.
Non-GAAP revenues of $694.7 million surpassed the Zacks Consensus Estimate by 7.5%. The top line increased 5% (up 10.2% at constant currency or cc) from the year-ago quarter.
The company’s solutions continue to witness strong demand in high-tech, aerospace and automotive, along with strong growth across all regions. Deferred revenues and backlogs were $1.417 billion, up 12.6% year over year.
In the past year, shares of ANSYS have lost 10.1% compared with the sub-industry’s decline of 8.1%.
Image Source: Zacks Investment Research
Quarter in Detail
Subscription lease revenues (46.7% of non-GAAP revenues) increased 11.6% at cc to $324.7 million. Perpetual licenses’ revenues (12.8%) decreased 2.4% year over year at cc to $89 million.
Maintenance revenues (37.8%) increased 13.3% at cc to $262.3 million. Service revenues (2.7%) were up 12.7% year over year to $18.9 million.
Direct and indirect channels contributed 80.7% and 19.3%, respectively, to non-GAAP revenues.
Annual contract value or ACV increased 8% year over year (up 13% at cc) to $818 million.
On a geographic basis, non-GAAP revenues from the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 51.7%, 28.8% and 19.5% to non-GAAP revenues, respectively.
Non-GAAP revenues from the Americas were up 16.4% to $359.2 million at cc. Revenues from EMEA increased 3.4% to $199.8 million at cc. Revenues from the Asia-Pacific increased 6.9% to $135.7 million at cc.
ANSYS, Inc. Price, Consensus and EPS Surprise
ANSYS, Inc. price-consensus-eps-surprise-chart | ANSYS, Inc. Quote
Strength in the aerospace and defense, high-tech and automotive sectors increased overall revenues.
Operating Details
The non-GAAP gross margin expanded 170 basis points (bps) on a year-over-year basis to 94%.
Total operating expenses increased 7.1% year over year to $372.6 million due to higher research and development, and selling, general and administrative expenses.
The non-GAAP operating margin expanded 120 bps on a year-over-year basis to 48%.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and short-term investments amounted to $614.6 million compared with $668.1 million as of Dec 31, 2021.
As of Dec 31, 2022, the company’s long-term debt was $753.6 million compared with $753.6 million as of Dec 31, 2021.
In the quarter under review, cash from operations increased 71% year over year to $174 million.
In the quarter under review, the company repurchased 225,437 shares for $50 million. In 2022, the company repurchased 725,437 shares for $205.6 million. As of Dec 31, 2022, it had 1.7 million shares remaining under the share buyback program.
Guidance
For first-quarter 2023, ANSYS expects non-GAAP earnings of $1.53 - $1.71 per share.
Non-GAAP revenues are anticipated to be between $482.5 million and $507.5 million. Management projects a non-GAAP operating margin of 35.3-37.3%.
For 2023, ANSYS expects non-GAAP revenues of $2,242 - $2,322 million. Management expects a non-GAAP operating margin of 41-42% for 2023.
Non-GAAP earnings are envisioned to be in the range of $8.34-$8.86 per share.
ACV is anticipated to be between $2,265 million and $2,335 million while operating cash flow is projected between $673 million and $723 million for 2023.
Zacks Rank & Stocks to Consider
ANSYS currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks ANET, Perion Network PERI and Pegasystems PEGA, each sporting a Zacks Rank #1 (Strong Buy), presently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.76 per share, which has risen 11% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in all the past four quarters, the average being 14.2%. Shares of ANET have rallied 14.4% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, which has risen 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have gained 62.5% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.31 per share, rising 111% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 39.5% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ANSYS, Inc. (ANSS) : Free Stock Analysis Report
Perion Network Ltd (PERI) : Free Stock Analysis Report
Pegasystems Inc. (PEGA) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
