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ANSYS (ANSS) Up 1.8% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for ANSYS, Inc. (ANSS - Free Report) . Shares have added about 1.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ANSS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
ANSYS delivered fourth-quarter 2017 non-GAAP earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 3 cents. The figure increased 9.2% year over year and was better than management’s guidance of 99 cents to $1.05 per share.
Revenues increased 12.1% (9.1% in constant currency) from the year-ago quarter to $303.4 million, surpassing the Zacks Consensus Estimate of $291 million and management’s guidance of $284-$293 million.
Year-over-year growth was driven by 9.3% increase in software license revenues and 15.2% growth in maintenance and service revenues.
As of Dec 31, 2017, deferred revenues and backlog increased 20.7% year over year to $769.7 million.
Segment Revenue Details
At constant currency, lease license revenues grew 7.4% to $97.7 million, while maintenance revenues increased 10.9% to $116.5 million in the reported quarter. Perpetual license revenues increased 6.7% to $79.6 million. Service revenues surged 30% to $9.7 million.
Direct and indirect businesses contributed 74% and 26%, respectively, to quarterly revenues. During the quarter, the company had 49 customers with orders in excess of $1 million, including six customers with orders in excess of $5 million and three customers with orders of more than $10 million.
Recurring revenues base was 71%. Bookings declined 10.8% from the year-ago quarter to $400.2 million.
Region wise, North America, Europe and Asia-Pacific revenues increased 10%, 10.5% and 7%, respectively, at constant currency.
North America had 24 customers with orders above $1 million, including three customers with orders in excess of $5 million and seven with orders of more than $10 million. The strength in North America reflected strong demand for ANSYS’s solutions in the aerospace & defense, electronics/semiconductors, automotive and energy industries.
Europe, Italy and the UK, each delivered double-digit constant currency revenues growth. This strength was partially offset by weak performance in Germany. Europe had 16 customers with orders above $1 million.
ANSYS remains focused on rebuilding sales organization in the region, which management believes will help growth to rebound in 2018.
Asia-Pacific revenues benefited from strong performance in China and Taiwan.
Operating Details
Non-GAAP gross margin came in at 90.1% during the quarter.
Operating expenses (excluding amortization), as a percentage of revenues, increased 340 basis points (bps) from the year-ago quarter and came 52%. The increase was driven by higher selling, general & administrative expenses and research & development expenses.
Consequently, non-GAAP operating margin contracted 250 bps on a year-over-year basis to 42.6% in the reported quarter.
Balance Sheet & Cash Flow
ANSYS exited the quarter with cash and short-term investments of $881.8 million (of which 64% was held in the United States), down from $926.6 million in the previous quarter. The company generated cash from operations of $103.5 million compared with $88.9 million in the quarter.
Further, the company repurchased 0.8 million shares in the reported quarter. As of Dec 31, 2017, the company had 2.8 million shares remaining in the authorized share repurchase program.
Guidance
For first-quarter 2018, ANSYS expects non-GAAP earnings in the range of 90 cents to $1.05 per share.
Net revenues are anticipated in the range of $261-$281 million.
Management projects non-GAAP operating margin to be in the range of 39-42% for the first quarter.
For 2018, ANSYS now anticipates revenues of $1.152-$1.232 billion and earnings in the range of $4.41-$5.04 per share.
Non-GAAP operating margin is expected to be in the range of 42% and 45% for the full year.
ANSYS expects operating cash flow for fiscal 2018 to be in the range of $430-$470 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter.
At this time, ANSS has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise ANSS has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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ANSYS (ANSS) Up 1.8% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for ANSYS, Inc. (ANSS - Free Report) . Shares have added about 1.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ANSS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
ANSYS delivered fourth-quarter 2017 non-GAAP earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 3 cents. The figure increased 9.2% year over year and was better than management’s guidance of 99 cents to $1.05 per share.
Revenues increased 12.1% (9.1% in constant currency) from the year-ago quarter to $303.4 million, surpassing the Zacks Consensus Estimate of $291 million and management’s guidance of $284-$293 million.
Year-over-year growth was driven by 9.3% increase in software license revenues and 15.2% growth in maintenance and service revenues.
As of Dec 31, 2017, deferred revenues and backlog increased 20.7% year over year to $769.7 million.
Segment Revenue Details
At constant currency, lease license revenues grew 7.4% to $97.7 million, while maintenance revenues increased 10.9% to $116.5 million in the reported quarter. Perpetual license revenues increased 6.7% to $79.6 million. Service revenues surged 30% to $9.7 million.
Direct and indirect businesses contributed 74% and 26%, respectively, to quarterly revenues. During the quarter, the company had 49 customers with orders in excess of $1 million, including six customers with orders in excess of $5 million and three customers with orders of more than $10 million.
Recurring revenues base was 71%. Bookings declined 10.8% from the year-ago quarter to $400.2 million.
Region wise, North America, Europe and Asia-Pacific revenues increased 10%, 10.5% and 7%, respectively, at constant currency.
North America had 24 customers with orders above $1 million, including three customers with orders in excess of $5 million and seven with orders of more than $10 million. The strength in North America reflected strong demand for ANSYS’s solutions in the aerospace & defense, electronics/semiconductors, automotive and energy industries.
Europe, Italy and the UK, each delivered double-digit constant currency revenues growth. This strength was partially offset by weak performance in Germany. Europe had 16 customers with orders above $1 million.
ANSYS remains focused on rebuilding sales organization in the region, which management believes will help growth to rebound in 2018.
Asia-Pacific revenues benefited from strong performance in China and Taiwan.
Operating Details
Non-GAAP gross margin came in at 90.1% during the quarter.
Operating expenses (excluding amortization), as a percentage of revenues, increased 340 basis points (bps) from the year-ago quarter and came 52%. The increase was driven by higher selling, general & administrative expenses and research & development expenses.
Consequently, non-GAAP operating margin contracted 250 bps on a year-over-year basis to 42.6% in the reported quarter.
Balance Sheet & Cash Flow
ANSYS exited the quarter with cash and short-term investments of $881.8 million (of which 64% was held in the United States), down from $926.6 million in the previous quarter. The company generated cash from operations of $103.5 million compared with $88.9 million in the quarter.
Further, the company repurchased 0.8 million shares in the reported quarter. As of Dec 31, 2017, the company had 2.8 million shares remaining in the authorized share repurchase program.
Guidance
For first-quarter 2018, ANSYS expects non-GAAP earnings in the range of 90 cents to $1.05 per share.
Net revenues are anticipated in the range of $261-$281 million.
Management projects non-GAAP operating margin to be in the range of 39-42% for the first quarter.
For 2018, ANSYS now anticipates revenues of $1.152-$1.232 billion and earnings in the range of $4.41-$5.04 per share.
Non-GAAP operating margin is expected to be in the range of 42% and 45% for the full year.
ANSYS expects operating cash flow for fiscal 2018 to be in the range of $430-$470 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter.
ANSYS, Inc. Price and Consensus
ANSYS, Inc. Price and Consensus | ANSYS, Inc. Quote
VGM Scores
At this time, ANSS has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise ANSS has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.