ANSYS Posts Rosy Second Quarter Results

ANSYS is doing well again, in line with its industry peers. But does it deserve such a high stock price given the larger market?

Second quarter results for ANSYS, Inc. (NASDAQ: ANSS) show recovery in line with other engineering IT vendors. Double-digit revenue growth was spread across all major geographic regions, all major product lines and a broad array of industries.

Total revenue for the quarter ending June 30, 2010 was $137.8 million, up 12% when measured in constant currencies. Software license revenue was $81.7 million, up from $73.1 million a year earlier. Maintenance revenue in the quarter was $56 million, up from $48,890 a year earlier.

Net income in the second quarter was $35.5 million, compared to $27.1 million in the second quarter of 2009.

ANSYS expects third quarter 2010 revenue in the range of $137 to $142 million, and full year 2010 revenue in the range of $565 million to $580 million.

Cash on hand is now $415 million, for a cash per share of $4.59 on June 30, 2010. Cash per share in March 2010 was $4.34. The former serial acquirer has not bought a company since the Ansoft acquisition, which closed July 31, 2008.

What We Think
Without acquisitions, the formerly torrid ANSYS growth rate has moderated. The overall revenue increase of 11% compares well with PTC’s desktop new license revenue growth of 14% and SolidWorks growth of 12%. This is a good showing, but does it justify ANSYS’ relatively high stock price? It closed today at 43.96 after hitting a 52-week high of 46.88 yesterday.

Four charts follow.

Contributing Analyst L. Stephen Wolfe, P.E. provided research for this report.

It has been almost 18 months since ANSYS acquired a company; cash is building up.
Sales are more evenly spread across regions than its peers.
Maintenance revenue shows stronger recovery than industry peers.
Recurring revenue continues to grow as a percentage of total income.