Ansys Announces Financial Results With Record Q3 ACV and Revenue
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Ansys Announces Financial Results With Record Q3 ACV and Revenue

Increases FY 2022 Outlook on ACV and Revenue in Constant Currency

Details related to our financial guidance, including assumptions, are included in our prepared remarks document.

   

/ Key Highlights - Q3 2022

   

PITTSBURGH, Nov. 02, 2022 (GLOBE NEWSWIRE) -- ANSYS, Inc. (NASDAQ: ANSS), today reported third quarter 2022 GAAP and non-GAAP revenue growth of 7% and 6% in reported currency, respectively, or 16% and 15% in constant currency, respectively, when compared to the third quarter of 2021. For the third quarter of 2022, the Company reported diluted earnings per share of $1.10 and $1.77 on a GAAP and non-GAAP basis, respectively, compared to $0.97 and $1.59 on a GAAP and non-GAAP basis, respectively, for the third quarter of 2021. Additionally, the Company reported third quarter 2022 ACV growth of 12% in reported currency, or 20% in constant currency, when compared to the third quarter of 2021.

“Ansys delivered another outstanding quarter, exceeding our financial guidance across all key metrics. We once again had double-digit ACV and revenue growth in constant currency both in the quarter and year-to-date. Our strong Q3 ACV performance was broad based across customer types, geographies and industries in constant currency, which is further evidence of the essential nature of our market-leading simulation portfolio, multiphysics product leadership and deep customer relationships. Looking to the remainder of 2022 and beyond, I am confident in our ability to execute against our outlook,” said Ajei Gopal, Ansys president and CEO.

Nicole Anasenes, Ansys CFO, stated, “Our robust Q3 performance reflects the strength and resiliency of our core business and the sustained importance of simulation to our customers. During Q3, Ansys drove 20% constant currency ACV growth and constant currency revenue growth of 16% and 15% on a GAAP and non-GAAP basis, respectively. Both our Q3 and year-to-date results continue to deliver against our business model of double-digit growth with industry-leading margins. This consistent and strong operational performance bolsters our confidence in achieving our full-year financial guidance.”

   

The non-GAAP financial results highlighted, and the non-GAAP financial outlook for 2022 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and nine months ended September 30, 2022 and 2021, and for the 2022 financial outlook, can be found later in this release.

   

/ Financial Results

Ansys' third quarter and year-to-date (YTD) 2022 and 2021 financial results are presented below. The 2022 and 2021 non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue from business combinations closed prior to 2022, stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, expenses related to business combinations and adjustments for the income tax effect of the excluded items.

GAAP and non-GAAP results are as follows:

 GAAP Non-GAAP
(in millions, except per share data and percentages)Q3 QTD
2022		 Q3 QTD
2021		 % Change Q3 QTD
2022		 Q3 QTD
2021		 % Change
Revenue$472.5  $441.2  7% $473.7  $445.4  6%
Net income$96.0  $85.3  12% $154.7  $140.3  10%
Diluted earnings per share$1.10  $0.97  13% $1.77  $1.59  11%
Operating profit margin 26.1%  24.4%    41.0%  39.7%  


 GAAP Non-GAAP
(in millions, except per share data and percentages)Q3 YTD
2022		 Q3 YTD
2021		 % Change Q3 YTD
2022		 Q3 YTD
2021		 % Change
Revenue$1,371.4  $1,251.0  10% $1,378.2  $1,270.1  9%
Net income$265.8  $251.5  6% $428.5  $401.8  7%
Diluted earnings per share$3.04  $2.86  6% $4.90  $4.56  7%
Operating profit margin 24.2%  21.9%    38.9%  38.6%  

/ Other Performance Metrics

(in millions, except percentages)Q3 QTD 2022 Q3 QTD 2021 % Change % Change in
Constant
Currency
ACV$409.3 $365.4 12% 20%
Operating cash flows$127.2 $157.8 (19)%  
Unlevered operating cash flows$132.0 $160.0 (18)%  


(in millions, except percentages)Q3 YTD 2022 Q3 YTD 2021 % Change % Change in
Constant
Currency
ACV$1,213.7 $1,115.4 9% 15%
Operating cash flows$457.0 $447.8 2%  
Unlevered operating cash flows$467.0 $454.9 3%  

ACV is a metric the Company uses to better understand the business. There is no GAAP measure comparable to ACV. ACV is composed of the following:

/ Management's 2022 Financial Outlook

The Company's fourth quarter and updated FY 2022 revenue, diluted earnings per share and ACV guidance is provided below. The Company is also updating its FY 2022 guidance for operating cash flows. The revenue and diluted earnings per share guidance is provided on both a GAAP and non-GAAP basis. Non-GAAP financial measures exclude the income statement effects of acquisition adjustments to deferred revenue, stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, acquisition-related expenses and adjustments for the income tax effect of the excluded items.

This guidance is based on the Company's evaluation of factual information it has determined to be relevant and the application of certain assumptions made by the Company. Please refer to the Company's prepared remarks document for additional information regarding the Company's financial guidance, including its assumptions regarding overall business dynamics.

/ Fourth Quarter 2022 Guidance

The Company currently expects the following for the quarter ending December 31, 2022:

(in millions, except percentages and per share data)GAAP Non-GAAP
Revenue$621.3 - $656.3 $621.8 - $656.8
Revenue Growth Rate(5.2%) - 0.1%
 (6.0%) - (0.7%)
Revenue Growth Rate — Constant Currency2.5% - 7.8%
 1.7% - 6.9%
Diluted earnings per share$1.91 - $2.28 $2.58 - $2.90

The difference between the GAAP and non-GAAP revenue guidance presented above is a result of the expected impact of the application of the fair value provisions applicable to the accounting for business combinations closed prior to 2022 in the amount of $0.5 million for the quarter ending December 31, 2022.

(in millions, except percentages)Other Financial Metrics
ACV$761.3 - $786.3
ACV Growth Rate0.8% - 4.1%
ACV Growth Rate — Constant Currency8.1% - 11.4%

/ Fiscal Year 2022 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2022:

(in millions, except percentages and per share data)GAAP Non-GAAP
Revenue$1,992.7 - $2,027.7 $2,000.0 - $2,035.0
Revenue Growth Rate4.5% - 6.3% 3.5% - 5.4%
Revenue Growth Rate — Constant Currency11.1% - 13.0% 10.1% - 11.9%
Diluted earnings per share$4.95 - $5.31 $7.48 - $7.80

The difference between the GAAP and non-GAAP revenue guidance presented above is a result of the expected impact of the application of the fair value provisions applicable to the accounting for business combinations closed prior to 2022 in the amount of $7.3 million for the fiscal year ending December 31, 2022.

(in millions, except percentages)Other Financial Metrics
ACV$1,975.0 - $2,000.0
ACV Growth Rate5.6% - 6.9%
ACV Growth Rate — Constant Currency12.0% - 13.4%
Operating cash flows$570.0 - $600.0

Despite an ongoing volatile macroeconomic environment, the updated FY 2022 guidance reflects an operational raise on ACV, revenue, diluted EPS and operating cash flows driven by the underlying strength of our business model and market position. Offsetting this outlook, persistent and meaningful U.S. Dollar strengthening in exchange rates continues to drive unprecedented headwinds. As a result, the guidance assumes additional incremental adverse impacts from currency, primarily driven by substantial weakening in the Euro and Japanese Yen.

The impact of currency on our results continues to be significant and driven by the macroeconomic environment. The underlying foundation of our business remains strong, and we continue to see momentum. The chart below captures the drivers of the update to our last guidance provided in early August:

(in millions, except per share data)Mid-point of
Guidance in
August		 Incremental
Operational
Performance		 November mid-
point of
Guidance at
August
Exchange Rates		 Currency
Fluctuations
from August to
November
Guidance		 November mid-
point of
Guidance at
Current
Exchange Rates
ACV$2,000 $8 $2,008 ($20) $1,988
Revenue$2,030 $12 $2,042 ($24) $2,018
Diluted earnings per share$7.69 $0.12 $7.81 ($0.17) $7.64
Operating cash flows$590 $2 $592 ($7) $585

Additionally, when compared to the 2021 currency rates, our full-year 2022 guidance is negatively impacted on ACV by approximately $120 million and on operating cash flow by approximately $40 million.

/ Conference Call Information

Ansys will hold a conference call at 8:30 a.m. Eastern Time on November 3, 2022 to discuss third quarter 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 stockholders 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.

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 2575039. The archived webcast can be accessed, along with other financial information, on Ansys' website at https://investors.ansys.com/events-presentations/events.

/ GAAP Financial Statements

ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)September 30, 2022 December 31, 2021
ASSETS:   
Cash & short-term investments$632,703 $668,028
Accounts receivable, net 602,607  645,891
Goodwill 3,532,459  3,409,271
Other intangibles, net 739,202  763,119
Other assets 654,669  838,005
Total assets$6,161,640 $6,324,314
LIABILITIES & STOCKHOLDERS' EQUITY:   
Current deferred revenue$334,901 $391,528
Long-term debt 753,495  753,576
Other liabilities 529,559  695,162
Stockholders' equity 4,543,685  4,484,048
Total liabilities & stockholders' equity$6,161,640 $6,324,314


ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
 Three Months Ended Nine Months Ended
(in thousands, except per share data)September 30, September 30, September 30, September 30,
2022202120222021
Revenue:       
Software licenses$208,906 $200,394 $575,332 $547,820
Maintenance and service 263,605  240,774  796,106  703,228
Total revenue 472,511  441,168  1,371,438  1,251,048
Cost of sales:       
Software licenses 8,425  8,289  25,370  23,960
Amortization 17,281  15,189  51,947  45,163
Maintenance and service 36,261  39,268  111,897  119,884
Total cost of sales 61,967  62,746  189,214  189,007
Gross profit 410,544  378,422  1,182,224  1,062,041
Operating expenses:       
Selling, general and administrative 175,283  165,368  515,421  471,993
Research and development 108,056  102,023  322,271  303,381
Amortization 3,821  3,403  11,975  12,244
Total operating expenses 287,160  270,794  849,667  787,618
Operating income 123,384  107,628  332,557  274,423
Interest income 1,345  541  2,141  1,544
Interest expense (6,092)  (2,943)  (13,668)  (9,594)
Other (expense) income, net (656)  (1,328)  (2,126)  14,008
Income before income tax provision 117,981  103,898  318,904  280,381
Income tax provision 22,006  18,556  53,141  28,925
Net income$95,975 $85,342 $265,763 $251,456
Earnings per share – basic:       
Earnings per share$1.10 $0.98 $3.05 $2.89
Weighted average shares 87,063  87,239  87,062  87,072
Earnings per share – diluted:       
Earnings per share$1.10 $0.97 $3.04 $2.86
Weighted average shares 87,418  88,169  87,496  88,069

/ Reconciliations of GAAP to Non-GAAP Measures (Unaudited)

 Three Months Ended
 September 30, 2022
(in thousands, except percentages and per share data)Revenue Gross Profit % Operating
Income		 % Net Income EPS -
Diluted1
Total GAAP$472,511 $410,544 86.9% $123,384 26.1% $95,975  $1.10 
Acquisition accounting for deferred revenue 1,162  1,162 —%  1,162 0.2%  1,162   0.01 
Stock-based compensation expense —  2,621 0.5%  46,970 9.9%  46,970   0.55 
Excess payroll taxes related to stock-based awards —  37 —%  260 0.1%  260   — 
Amortization of intangible assets from acquisitions —  17,281 3.7%  21,102 4.4%  21,102   0.24 
Expenses related to business combinations —  — —%  1,210 0.3%  1,210   0.01 
Adjustment for income tax effect —  — —%  — —%  (11,958)  (0.14)
Total non-GAAP$473,673 $431,645 91.1% $194,088 41.0% $154,721  $1.77 

1 Diluted weighted average shares were 87,418.

 Three Months Ended
 September 30, 2021
(in thousands, except percentages and per share data)Revenue Gross Profit % Operating
Income		 % Net Income EPS -
Diluted1
Total GAAP$441,168 $378,422 85.8% $107,628 24.4% $85,342  $0.97 
Acquisition accounting for deferred revenue 4,256  4,256 0.1%  4,256 0.7%  4,256   0.05 
Stock-based compensation expense —  2,753 0.6%  44,144 9.9%  44,144   0.49 
Excess payroll taxes related to stock-based awards —  38 —%  626 0.1%  626   0.01 
Amortization of intangible assets from acquisitions —  15,189 3.4%  18,592 4.2%  18,592   0.21 
Expenses related to business combinations —  — —%  1,716 0.4%  1,716   0.02 
Adjustment for income tax effect —  — —%  — —%  (14,358)  (0.16)
Total non-GAAP$445,424 $400,658 89.9% $176,962 39.7% $140,318  $1.59 

1 Diluted weighted average shares were 88,169.

 Nine Months Ended
 September 30, 2022
(in thousands, except percentages and per share data)Revenue Gross Profit % Operating
Income		 % Net Income EPS -
Diluted1
Total GAAP$1,371,438 $1,182,224 86.2% $332,557 24.2% $265,763  $3.04 
Acquisition accounting for deferred revenue 6,758  6,758 0.1%  6,758 0.3%  6,758   0.08 
Stock-based compensation expense —  7,448 0.5%  122,119 8.9%  122,119   1.40 
Excess payroll taxes related to stock-based awards —  481 —%  5,530 0.5%  5,530   0.06 
Amortization of intangible assets from acquisitions —  51,947 3.8%  63,922 4.6%  63,922   0.73 
Expenses related to business combinations —  — —%  5,376 0.4%  5,376   0.06 
Adjustment for income tax effect —  — —%  — —%  (40,929)  (0.47)
Total non-GAAP$1,378,196 $1,248,858 90.6% $536,262 38.9% $428,539  $4.90 

1 Diluted weighted average shares were 87,496.

 Nine Months Ended
 September 30, 2021
(in thousands, except percentages and per share data)Revenue Gross Profit % Operating
Income		 % Net Income EPS -
Diluted1
Total GAAP$1,251,048 $1,062,041 84.9% $274,423 21.9% $251,456  $2.86 
Acquisition accounting for deferred revenue 19,075  19,075 0.2%  19,075 1.1%  19,075   0.22 
Stock-based compensation expense —  9,834 0.8%  122,148 9.7%  122,148   1.38 
Excess payroll taxes related to stock-based awards —  1,085 0.1%  12,080 1.0%  12,080   0.14 
Amortization of intangible assets from acquisitions —  45,163 3.5%  57,407 4.5%  57,407   0.65 
Expenses related to business combinations —  — —%  5,007 0.4%  5,007   0.06 
Adjustment for income tax effect —  — —%  — —%  (65,334)  (0.75)
Total non-GAAP$1,270,123 $1,137,198 89.5% $490,140 38.6% $401,839  $4.56 

1 Diluted weighted average shares were 88,069.

 Three Months Ended Nine Months Ended
(in thousands)September 30, 
2022		 September 30, 
2021		 September 30, 
2022		 September 30, 
2021
Net cash provided by operating activities$127,151  $157,845  $457,031  $447,829 
Cash paid for interest 5,894   2,697   12,192   8,721 
Tax benefit (1,061)  (512)  (2,195)  (1,657)
Unlevered operating cash flows$131,984  $160,030  $467,028  $454,893 


ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending December 31, 2022
 Earnings Per Share
- Diluted
U.S. GAAP expectation$1.91 - $2.28
Exclusions before tax:   
     Acquisition adjustments to deferred revenue$0.01
     Acquisition-related amortization$0.24 - $0.25
     Stock-based compensation and related excess payroll tax$0.51 - $0.56
     Expenses related to business combinations$0.02
Adjustment for income tax effect($0.16) - ($0.17)
Non-GAAP expectation$2.58 - $2.90


ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2022
 Earnings Per Share
- Diluted
U.S. GAAP expectation$4.95 - $5.31
Exclusions before tax:   
     Acquisition adjustments to deferred revenue$0.08
     Acquisition-related amortization$0.97 - $0.98
     Stock-based compensation and related excess payroll tax$1.98 - $2.03
     Expenses related to business combinations$0.08
Adjustment for income tax effect($0.62) - ($0.64)
Non-GAAP expectation$7.48 - $7.80

/ Use of Non-GAAP Measures

We provide non-GAAP revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income, non-GAAP diluted earnings per share and unlevered operating cash flows as supplemental measures to GAAP regarding our operational performance. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. A detailed explanation of each of the adjustments to such financial measures is described below. This press release also contains a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure.

We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance as well as our performance relative to our competitors, (b) to set internal sales targets and spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, (e) to assess financial discipline over operational expenditures and (f) as an important factor in determining variable compensation for management and employees. In addition, many financial analysts that follow us focus on and publish both historical results and future projections based on non-GAAP financial measures. We believe that it is in the best interest of our investors to provide this information to analysts so that they accurately report the non-GAAP financial information. Moreover, investors have historically requested, and we have historically reported, these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.

While we believe that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all our competitors and may not be directly comparable to similarly titled measures of our competitors due to potential differences in the exact method of calculation. We compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

The adjustments to these non-GAAP financial measures, and the basis for such adjustments, are outlined below:

Acquisition accounting for deferred revenue. Historically, we have consummated acquisitions in order to support our strategic and other business objectives. Under prior accounting guidance, a fair value provision resulted in acquired deferred revenue that was often recorded on the opening balance sheet at an amount that was lower than the historical carrying value. Although this fair value provision has no impact on our business or cash flow, it adversely impacts our reported GAAP revenue in the reporting periods following an acquisition. In 2022, we adopted accounting guidance which eliminates the fair value provision that resulted in the deferred revenue adjustment on a prospective basis. In order to provide investors with financial information that facilitates comparison of both historical and future results, we provide non-GAAP financial measures which exclude the impact of the acquisition accounting adjustment for acquisitions prior to the adoption of the new guidance in 2022. We believe that this non-GAAP financial adjustment is useful to investors because it allows investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our past and future reports of financial results as the revenue reduction related to acquired deferred revenue will not recur when related subscription lease licenses and software maintenance contracts are renewed in future periods.

Amortization of intangible assets from acquisitions. We incur amortization of intangible assets, included in our GAAP presentation of amortization expense, related to various acquisitions we have made. We exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by us after the acquisition. Accordingly, we do not consider these expenses for purposes of evaluating our performance during the applicable time period after the acquisition, and we exclude such expenses when making decisions to allocate resources. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our past reports of financial results as we have historically reported these non-GAAP financial measures.

Stock-based compensation expense. We incur expense related to stock-based compensation included in our GAAP presentation of cost of maintenance and service; research and development expense; and selling, general and administrative expense. This non-GAAP adjustment also includes excess payroll tax expense related to stock-based compensation. Although stock-based compensation is an expense and viewed as a form of compensation, we exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance. Specifically, we exclude stock-based compensation during our annual budgeting process and our quarterly and annual assessments of our performance. The annual budgeting process is the primary mechanism whereby we allocate resources to various initiatives and operational requirements. Additionally, the annual review by our board of directors during which it compares our historical business model and profitability to the planned business model and profitability for the forthcoming year excludes the impact of stock-based compensation. In evaluating the performance of our senior management and department managers, charges related to stock-based compensation are excluded from expenditure and profitability results. In fact, we record stock-based compensation expense into a stand-alone cost center for which no single operational manager is responsible or accountable. In this way, we can review, on a period-to-period basis, each manager's performance and assess financial discipline over operational expenditures without the effect of stock-based compensation. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors' operating results.

Expenses related to business combinations. We incur expenses for professional services rendered in connection with business combinations, which are included in our GAAP presentation of selling, general and administrative expense. Beginning in the second quarter of 2022, we have updated this non-GAAP measure to include, in addition to professional services rendered in connection with business combinations, other expenses directly related to business combinations, including compensation expenses and concurrent restructuring activities, such as employee severances and other exit costs. These costs are included in our GAAP presentation of selling, general and administrative and research and development expenses. The additional expenses were not material in the current or comparable period. We exclude these acquisition-related expenses for the purpose of calculating non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance, as we generally would not have otherwise incurred these expenses in the periods presented as a part of our operations. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors' operating results.

Non-GAAP tax provision. We utilize a normalized non-GAAP annual effective tax rate (AETR) to calculate non-GAAP measures. This methodology provides better consistency across interim reporting periods by eliminating the effects of non-recurring items and aligning the non-GAAP tax rate with our expected geographic earnings mix. To project this rate, we analyzed our historic and projected non-GAAP earnings mix by geography along with other factors such as our current tax structure, recurring tax credits and incentives, and expected tax positions. On an annual basis we will re-evaluate this rate for significant items that may materially affect our projections.

Unlevered operating cash flows. We make cash payments for the interest incurred in connection with our debt financing which are included in our GAAP presentation of operating cash flows. We exclude this cash paid for interest, net of the associated tax benefit, for the purpose of calculating unlevered operating cash flows. Unlevered operating cash flow is a supplemental non-GAAP measure that we use to evaluate our core operating business. We believe this measure is useful to investors and management because it provides a measure of our cash generated through operating activities independent of the capital structure of the business.

Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

We have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures as listed below:

GAAP Reporting MeasureNon-GAAP Reporting Measure
RevenueNon-GAAP Revenue
Gross ProfitNon-GAAP Gross Profit
Gross Profit MarginNon-GAAP Gross Profit Margin
Operating IncomeNon-GAAP Operating Income
Operating Profit MarginNon-GAAP Operating Profit Margin
Net IncomeNon-GAAP Net Income
Diluted Earnings Per ShareNon-GAAP Diluted Earnings Per Share
Operating Cash FlowsUnlevered Operating Cash Flows

Constant currency. In addition to the non-GAAP financial measures detailed above, we use constant currency results for financial and operational decision-making and as a means to evaluate period-to-period comparisons by excluding the effects of foreign currency fluctuations on the reported results. To present this information, the 2022 results for entities whose functional currency is a currency other than the U.S. Dollar were converted to U.S. Dollars at rates that were in effect for the 2021 comparable period, rather than the actual exchange rates in effect for 2022. Constant currency growth rates are calculated by adjusting the 2022 reported amounts by the 2022 currency fluctuation impacts and comparing the adjusted amounts to the 2021 comparable period reported amounts. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our reported results to our past reports of financial results without the effects of foreign currency fluctuations.

/ About Ansys

When visionary companies need to know how their world-changing ideas will perform, they close the gap between design and reality with Ansys simulation. For more than 50 years, Ansys software has enabled innovators across industries to push boundaries by using the predictive power of simulation. From sustainable transportation to advanced semiconductors, from satellite systems to life-saving medical devices, the next great leaps in human advancement will be powered by Ansys.

Take a leap of certainty … with Ansys.

/ Forward-Looking Information

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that provide current expectations or forecasts of future events based on certain assumptions. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements.

Forward-looking statements use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “project,” “should,” “target,” or other words of similar meaning. Forward-looking statements include those about market opportunity, including our total addressable market. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.

The risks associated with the following, among others, could cause actual results to differ materially from those described in any forward-looking statements:

Ansys and any and all ANSYS, Inc. brand, product, service and feature names, logos and slogans are registered trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All other brand, product, service and feature names or trademarks are the property of their respective owners.

Visit https://investors.ansys.com for more information.

ANSS-F

Contact:  
Investors: Kelsey DeBriyn
  724.820.3927
  kelsey.debriyn@ansys.com
Media: Mary Kate Joyce
  724.820.4368
  marykate.joyce@ansys.com



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