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What to Expect Ahead of ANSYS' (ANSS) Q2 Earnings Release?

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ANSYS, Inc. (ANSS - Free Report) is scheduled to report second-quarter 2021 results on Aug 4.

The company expects non-GAAP earnings in the range of $1.43-$1.67 per share for the second quarter. The Zacks Consensus Estimate is pegged at $1.51 per share, unchanged in the past 30 days. The figure indicates a decline of 2.6% from the year-ago quarter’s reported figure.

Non-GAAP revenues are anticipated between $415 million and $445 million. The consensus mark for revenues is pegged at $432.6 million, which suggests growth of 11% from the prior-year quarter’s levels.

The company has a trailing four-quarter earnings surprise of 22.8%, on average.

ANSYS, Inc. Price and EPS Surprise

 

ANSYS, Inc. Price and EPS Surprise

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

 

Factors to Note

ANSYS’ simulation solutions are expected to have witnessed incremental adoption in the verticals like aerospace & defense, high tech, ground transportation and automotive as lockdown restrictions ease across several parts of the world. This is expected to have contributed to the momentum in recurring revenues and driven the company’s second-quarter top line.

Increases in chip designing activity in the semiconductor space are expected to have benefited the company in the second quarter.

Strong channel distribution along with improving business conditions at small and medium sized customers is likely to have aided annual contract value (ACV) and revenues in the to-be-reported quarter. Expanding customer base and robust pipeline is expected to have contributed to ACV in the quarter under review. The deal wins in defense vertical across North America and EMEA also remain noteworthy.

Incremental business gains stemming from its collaborations with Microsoft (MSFT - Free Report) and Rockwell Automation are likely to have helped the company acquire more customers. This, in turn, is expected to have positively impacted second-quarter performance.

Increasing clout of digital twins and process optimization solutions is likely to have acted as a tailwind.

Synergies from the buyout of Analytical Graphics are likely to get reflected in second-quarter top line. Analytical Graphics specializes in providing analysis and simulation solutions for defense and aerospace verticals including critical missions like satellite launches.

In May 2021, ANSYS acquired Phoenix Integration for undisclosed sum. Phoenix is a software-maker specializing in model-based engineering (MBE) and model-based systems engineering (MBSE) software solutions.

The Zacks Consensus Estimate for Maintenance and service revenues is pegged at $243 million, which indicates growth of 12.5% from the year-ago quarter’s levels.

The consensus mark for Software licenses revenues is pegged at $177 million, which suggests an improvement of 4.7% from the prior-year quarter’s levels.

Continued weakness in the oil and gas industry, owing to the pandemic might have negatively impacted second-quarter performance. Increasing costs on product enhancements, acquisitions, and research and development (R&D) are likely to have exerted pressure on margin expansion in the quarter to be reported.

Several countries across the globe like India have been grappling with intense spike in COVID-19 infections, resulting in stringent lockdowns. This might have affected the company’s business performance in the to-be-reported quarter.

What Our Model Says

Our proven model does not predict an earnings beat for ANSYS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

ANSYS has an Earnings ESP of +0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:

Avnet (AVT - Free Report) has an Earnings ESP of +9.82% and a Zacks Rank #1, at present. You can see the complete list of today's Zacks #1 Rank stocks here.

CyberArk Software (CYBR - Free Report) has an Earnings ESP of +37.93% and a Zacks Rank #2, presently.


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