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ANSYS (ANSS) Q4 Earnings and Revenues Surpass Estimates

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ANSYS ANSS reported fourth-quarter 2021 non-GAAP earnings of $2.81 per share, which beat the Zacks Consensus Estimate by 4.9%, However, the bottom line declined 5.1% year over year.

Non-GAAP revenues of $661.4 million surpassed the Zacks Consensus Estimate by 4%. The top line increased 5.4% (up 8% at constant currency or cc) from the year-ago quarter’s levels.

Strength in product portfolio and improving performance in most of the verticals boosted the top line.

Deferred revenues and backlog were $1.258 billion, up 30% on a year-over-year basis.

For 2021, ANSYS reported non-GAAP earnings of $7.37 per share compared with $6.70 reported in 2020. Non-GAAP revenues of $1.932 million. The top line increased 13.9% (up 13.7% at constant currency or cc) from the year-ago quarter’s levels.

Following the announcement, shares of ANSYS are trading down 2.9% in the premarket trading on Feb 24. In the past year, shares of ANSYS have declined 12.4% compared with the industry’s return of 12.5%.

ANSYS, Inc. Price, Consensus and EPS Surprise

ANSYS, Inc. Price, Consensus and EPS Surprise
ANSYS, Inc. Price, Consensus and EPS Surprise

ANSYS, Inc. price-consensus-eps-surprise-chart | ANSYS, Inc. Quote

Quarter in Details

Lease licenses revenues (45.7% of non-GAAP revenues) increased 18.4% at cc to $302.4 million. Perpetual licenses revenues (14.5%) declined 17.5% year over year at cc to $95.7 million.

Maintenance revenues (37.2%) increased 9.5% at cc to $245.8 million. Service revenues (2.6%) increased 7% year over year to $17.5 million.

Direct and indirect channels contributed 80.7% and 19.3%, respectively, to non-GAAP revenues.

Annual contract value or ACV increased 13.5% year over year (up 16.4% at cc) to $755.4 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 46.8%, 31.6% and 21.6% to non-GAAP revenues, respectively.

Non-GAAP revenues from the Americas were down 3.7% to $309.6 million at cc. Revenues from EMEA increased 18.1% to $209.2 million. Revenues from Asia-Pacific increased 24% to $142.6 million.

Strength in the aerospace and defense, high-tech, automotive sectors led to increases in overall revenues.

Operating Details

Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis to 92.3%.

Total operating expenses increased 17.4% year over year to $347.8 million due to higher research and development as well as selling, general and administrative expenses.

Non-GAAP operating margin contracted 480 bps on a year-over-year basis to 46.8%.

Balance Sheet & Cash Flow

As of Dec 31, 2021, cash and short-term investments amounted to $668 million (the United States contributed 55%) compared with $1.081 billion (the United States contributed 69%) as of Sep 30, 2021.

As of Dec 31, 2021, the company’s long-term debt stood at $753.6 million.

The company generated cash from operations of $101.7 million in the fourth quarter compared with $157.8 million in the prior quarter.

The company repurchased 250,000 shares worth $98.7 million in the fourth quarter. The company repurchased 346,800 shares worth $134.7 million in 2021. As of Dec 31, 2021, it had 2.5 million shares remaining under the share buyback program.

Guidance

For first-quarter 2022, ANSYS expects non-GAAP earnings in the range of $1.05-$1.22. The Zacks Consensus Estimate is currently pegged at $1.22 per share.

Non-GAAP revenues are anticipated between $395 million and $420 million. The Zacks Consensus Estimate is pegged at $401.7 million.

Management projects non-GAAP operating margin in the range of 29.1-31.9%.

For 2022, ANSYS now expects non-GAAP revenues of $2.04-$2.11 billion. The Zacks Consensus Estimate is pegged at $2.08 billion.

Management expects a non-GAAP operating margin in the range of 41-42% for 2022.

Non-GAAP earnings are now envisioned in the range of $7.64-$8.10 per share. The Zacks Consensus Estimate for earnings is pegged at $7.98 per share.

ACV is now anticipated between $1.99 billion and $2.05 billion while operating cash flow is projected between $580 million and $620 million for 2022.

Zacks Rank & Stocks to Consider

ANSYS currently carries a Zacks Rank #3 (Hold).

Some other top-ranked stocks worth considering from the broader technology sector include Broadcom AVGO, Apple AAPL and Texas Instruments TXN. Apple sports a Zacks Rank #1 (Strong Buy), while Broadcom and Texas Instruments carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.15 per share. The long-term earnings growth rate of the company is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 21% in the past year.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.

Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 28.4% in the past year.

The Zacks Consensus Estimate for Texas Instruments for 2022 earnings is pegged at $9.09 per share. The long-term earnings growth rate of the company is pegged at 9.3%.

Texas Instruments’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.4%. Shares of TXN have declined 5.4% in the past year.


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