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What's in the Offing for ANSYS' (ANSS) Q3 Earnings Release?

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ANSYS, Inc (ANSS - Free Report) is scheduled to report third-quarter 2021 results on Nov 3.

The company expects non-GAAP earnings in the range of $1.22-$1.39 per share for the third quarter. The Zacks Consensus Estimate is pegged at $1.34, unchanged over the past 30 days. The figure indicates a decline of 1.5% from the year-ago quarter’s reported figure.

Non-GAAP revenues are anticipated between $400 million and $425 million. The consensus mark for revenues is pegged at $415 million, which suggests growth of 12.4% from the prior-year quarter level.

The company has a trailing four-quarter earnings surprise of 20%, 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 the COVID-19 situation eases across several parts of the world.

Acceleration in chip designing activity in the semiconductor space also bodes well. These factors are expected to have contributed to the momentum in recurring revenues and positively impacted the company’s top-line performance in the third quarter.

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

Improving business conditions at small and medium-sized customers are likely to have aided revenues in the to-be-reported quarter.

Strong channel distribution, go-to-market momentum, increasing customer base and a robust pipeline are expected to have contributed to annual contract value (ACV). The deal wins in the defense vertical across North America and EMEA also remain noteworthy.

Business gains derived from its various collaborations, including the likes of Microsoft (MSFT - Free Report) and Rockwell Automation are likely to have helped the company acquire more customers and boost its quarterly performance.

In September 2021, ANSYS collaborated with Rockwell Automation to integrate the latter’s Studio 5000 Simulation Interface with ANSYS digital twins’ platform. This combination will provide the automation and process engineers with innovative ways to utilize simulation to enhance industrial operations' design, deployment, and performance.

Synergies from the buyout of Analytical Graphics and Phoenix Integration are likely to get reflected in the third-quarter top line.

Analytical Graphics specializes in providing analysis and simulation solutions for defense and aerospace verticals, including critical missions like satellite launches, while Phoenix is a software-maker specializing in model-based engineering and model-based systems engineering software solutions.

In August 2021, ANSYS inked an agreement with EQT Private Equity to acquire Zemax, LLC. The acquisition, subject to regulatory and customary approvals, is expected to conclude in the fourth quarter of 2021. Terms of the transaction have not been divulged.

The Zacks Consensus Estimate for Maintenance and service revenues is pegged at $243 million, which indicates growth of 8% from the year-ago quarter’s levels.

The consensus mark for Software licenses revenues is pegged at $167 million, which suggests an improvement of 17.6% from the prior-year quarter’s levels.

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.

Pandemic-driven supply chain constraints, component shortages and logistics bottlenecks witnessed globally are likely to have affected the company’s performance.

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:

HP Inc (HPQ - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Synaptics Incorporated (SYNA - Free Report) has an Earnings ESP of +0.38% and a Zacks Rank #2.

In-Depth Zacks Research for the Tickers Above

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Microsoft Corporation (MSFT) - free report >>

HP Inc. (HPQ) - free report >>

Synaptics Incorporated (SYNA) - free report >>

ANSYS, Inc. (ANSS) - free report >>

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