Ansys revenue up 23% in third quarter, sets all-time record

The newly acquired Apache Design Systems accounted for part of the total. High-performance computing is taking off among Ansys customers.

It was another buoyant quarter for engineering analysis software vendor ANSYS, Inc. (NASDAQ: ANSS), as revenue was up year-over-year by 23% to $172.9 million. Revenue beat the previous single-quarter record of $166.5 million set in 4Q’10.

This was the first quarter that revenue from the recently acquired Apache Design Systems was included in Ansys results. Without the Apache boost, revenue would still have been up almost 20%. Ansys stock was up 6.8% to 58.04 in trading just after the news.

Net income in the quarter (ending September 30, 2011) was $45.5 million, up 26% from 3Q’10.

Software license revenue in 3Q’11 was $104.5 million, up 26.5% from $82.6 million in 3Q’10. Maintenance and service in 3Q’11 was $68.4 million, up 19.6% from $57.2 million in 3Q’10.

Revenue by region:

  • North America revenue was $56.9 million, up 22%; the strongest markets in North America were electronics; oil and gas; unmanned air and land vehicles technology for commercial and military use; and nuclear.
  • Europe revenue was $58.2 million, up 23%; Germany was particularly strong, growing 25% on an organic basis or 17% in constant currency.
  • Rest of World revenue was $56.8 million, up 26%. Japan, the second largest global market for Ansys, grew 27% organically, 20% in constant currency; Ansys says many Japanese customers have made positive strides in getting back to business as usual following the devastating earthquake.

During Q3 Ansys booked orders from 14 customers in excess of $1 million. The orders included elements of both new and renewal business.

For the fourth quarter of 2011 Ansys is forecasting revenue in the range of $189.3 – $195.3 million.

During the presentation of results to analysts, Ansys commented on the rapid growth in high-performance computing (HPC) among its customers. “This wider availability of HPC systems is enabling important trends in engineering simulation. Simulation models are getting larger—using more computer memory and requiring more computational time—as engineers include greater geometric detail and more realistic treatment of physical phenomena. HPC systems make higher-fidelity simulations practical by yielding results within the engineering project’s required time frame. A second important trend is toward more simulations—enabling engineers to consider multiple design ideas, conduct parametric studies and even perform automated design optimization. HPC systems provide the throughput required for completing multiple simulations simultaneously.”

Goodwill, the accounting value that takes into consideration the intangible value of business beyond physical assets, grew by $185 million from the second quarter. The most likely explanation is the close of the Apache acquisition and the premium Ansys paid.  By comparison, Ansys’ goodwill is now double that of Autodesk and roughly the equal of Dassault Systèmes, which has 4x Ansys’ revenues.  Another impact of the acquisition is cash on hand, down substantially to $4.41 on September 30, 2011, from $6.86 three months earlier.

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L. Stephen Wolfe, PE, a contributing analyst for Jon Peddie Research, provided research for this report.