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ANSYS (ANSS) to Report Q4 Earnings: Here's What to Expect
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ANSYS Inc (ANSS - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 21.
The company expects non-GAAP earnings per share (EPS) in the range of $3.48-$3.89 as announced in November 2023. The Zacks Consensus Estimate for EPS is pegged at $3.70, unchanged in the past 60 days. The figure indicates an increase of 19.7% from the year-ago quarter’s reported figure.
Non-GAAP revenues are anticipated between $769.2 million and $819.2 million as announced in November 2023. The Zacks Consensus Estimate for revenues is pegged at $791.6 million, suggesting a rise of 14% from the prior-year quarter’s levels.
The company has a trailing four-quarter earnings surprise of 11.6%, on average.
ANSS’ performance in the fourth quarter is likely to have gained from higher adoption of the company’s simulation solutions in various verticals like aerospace and defense (A&D), high-tech and automotive and ground transportation sectors.
The company is likely to have benefited from rapid growth for its high-fidelity simulation solutions, led by ongoing development in artificial intelligence and machine learning. In the automotive sector, higher demand for electric vehicles and advanced driver assistance systems solutions is likely to have favored the top line in the to-be-reported quarter.
Ongoing momentum in the A&D sector, owing to the evolving space sector and digital transformation, bodes well for the company’s software solutions. The company is also likely to benefit from secular growth trends in the industrial equipment industry, which include electrification, Industrial Internet of Things devices and workflow automation.
Continued momentum in subscription lease licenses is likely to have aided the fourth-quarter revenue performance, owing to customers shifting from perpetual licenses to subscription leases.
In the last reported quarter, ANSYS was notified by the U.S. Department of Commerce of incremental approval processes and export restrictions, including sales to some Chinese entities. This resulted in a $20 million headwind to both annualized contract value (ACV) and revenues for the third quarter of 2023.
Management highlighted that these new restrictions and processes are likely to elongate transaction cycles, causing delays in the closing of certain deals in the fourth quarter. Therefore, it tempered its outlook for 2023. It expects these additional restrictions and processes to be a $25 million headwind to 2023 ACV and revenues compared with the previous forecast.
The company projects non-GAAP revenues in the range of $2.234-$2.284 billion (as announced in November 2023) compared with the earlier prediction of $2.257-$2.327 billion. Management suggests non-GAAP operating margin in the band of 41-42%.
Geopolitical instability, forex volatility and global macroeconomic weakness remain additional headwinds.
Recent Developments
Ansys recently launched a web-based technology, Fluent Web UI, that helps customers control and monitor simulations on the cloud or on-premises high-performance computing clusters.
In January 2024, Ansys and Synopsys officially announced their entry into a definitive agreement, paving the way for the latter to acquire ANSS. The terms of the agreement outline that ANSS’ shareholders will receive $197 in cash, along with 0.3450 shares of Synopsys common stock for each Ansys share.
This deal, valued at approximately $35 billion, reflects an implied per-share consideration of $390.19 and represents a premium of about 29% over Ansys' closing stock price on Dec 21, 2023. ANSS’ shareholders are likely to own approximately 16.5% of the combined company (on a pro forma basis).
The deal is anticipated to close in the first half of 2025 and is subject to approval by Ansys shareholders, regulatory approvals, and customary closing conditions. Synopsys intends to fund the $19 billion cash consideration through a combination of its cash on hand and debt financing, having obtained $16 billion of fully committed debt financing.
Back then, ANSS had provided preliminary results for the ACV metric. ACV for 2023 was $2 billion. ANSYS noted that the figure could change once the company completes the preparation of its financial results.
What Our Model Says
Our proven model does not conclusively 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. However, this is not the case here.
ANSS has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
The Zacks Consensus Estimate for CDXS’ to-be-reported quarter’s revenues is pegged at $19.31 million. The consensus estimate is pegged at a loss of 16 cents per share.
Wayfair Inc (W - Free Report) has an Earnings ESP of +13.64% and a Zacks Rank #2 at present. W is set to post fourth-quarter 2023 results on Feb 22.
The Zacks Consensus Estimate for Wayfair’s to-be-reported quarter’s revenues is pegged at $3.11 billion. The consensus estimate is pegged at a loss of 22 cents per share.
Floor & Decor Holdings, Inc (FND - Free Report) has an Earnings ESP of +4.87% and carries a Zacks Rank #3 at present. FND is slated to release fourth-quarter of 2023 numbers on Feb 22.
The Zacks Consensus Estimate for FND’s to-be-reported quarter’s earnings and revenues is pegged at 27 cents per share and $1.01 billion, respectively. Shares of FND have jumped 17.4% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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ANSYS (ANSS) to Report Q4 Earnings: Here's What to Expect
ANSYS Inc (ANSS - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 21.
The company expects non-GAAP earnings per share (EPS) in the range of $3.48-$3.89 as announced in November 2023. The Zacks Consensus Estimate for EPS is pegged at $3.70, unchanged in the past 60 days. The figure indicates an increase of 19.7% from the year-ago quarter’s reported figure.
Non-GAAP revenues are anticipated between $769.2 million and $819.2 million as announced in November 2023. The Zacks Consensus Estimate for revenues is pegged at $791.6 million, suggesting a rise of 14% from the prior-year quarter’s levels.
The company has a trailing four-quarter earnings surprise of 11.6%, on average.
ANSYS, Inc. Price and EPS Surprise
ANSYS, Inc. price-eps-surprise | ANSYS, Inc. Quote
Factors to Note
ANSS’ performance in the fourth quarter is likely to have gained from higher adoption of the company’s simulation solutions in various verticals like aerospace and defense (A&D), high-tech and automotive and ground transportation sectors.
The company is likely to have benefited from rapid growth for its high-fidelity simulation solutions, led by ongoing development in artificial intelligence and machine learning. In the automotive sector, higher demand for electric vehicles and advanced driver assistance systems solutions is likely to have favored the top line in the to-be-reported quarter.
Ongoing momentum in the A&D sector, owing to the evolving space sector and digital transformation, bodes well for the company’s software solutions. The company is also likely to benefit from secular growth trends in the industrial equipment industry, which include electrification, Industrial Internet of Things devices and workflow automation.
Continued momentum in subscription lease licenses is likely to have aided the fourth-quarter revenue performance, owing to customers shifting from perpetual licenses to subscription leases.
In the last reported quarter, ANSYS was notified by the U.S. Department of Commerce of incremental approval processes and export restrictions, including sales to some Chinese entities. This resulted in a $20 million headwind to both annualized contract value (ACV) and revenues for the third quarter of 2023.
Management highlighted that these new restrictions and processes are likely to elongate transaction cycles, causing delays in the closing of certain deals in the fourth quarter. Therefore, it tempered its outlook for 2023. It expects these additional restrictions and processes to be a $25 million headwind to 2023 ACV and revenues compared with the previous forecast.
The company projects non-GAAP revenues in the range of $2.234-$2.284 billion (as announced in November 2023) compared with the earlier prediction of $2.257-$2.327 billion. Management suggests non-GAAP operating margin in the band of 41-42%.
Geopolitical instability, forex volatility and global macroeconomic weakness remain additional headwinds.
Recent Developments
Ansys recently launched a web-based technology, Fluent Web UI, that helps customers control and monitor simulations on the cloud or on-premises high-performance computing clusters.
In January 2024, Ansys and Synopsys officially announced their entry into a definitive agreement, paving the way for the latter to acquire ANSS. The terms of the agreement outline that ANSS’ shareholders will receive $197 in cash, along with 0.3450 shares of Synopsys common stock for each Ansys share.
This deal, valued at approximately $35 billion, reflects an implied per-share consideration of $390.19 and represents a premium of about 29% over Ansys' closing stock price on Dec 21, 2023. ANSS’ shareholders are likely to own approximately 16.5% of the combined company (on a pro forma basis).
The deal is anticipated to close in the first half of 2025 and is subject to approval by Ansys shareholders, regulatory approvals, and customary closing conditions. Synopsys intends to fund the $19 billion cash consideration through a combination of its cash on hand and debt financing, having obtained $16 billion of fully committed debt financing.
Back then, ANSS had provided preliminary results for the ACV metric. ACV for 2023 was $2 billion. ANSYS noted that the figure could change once the company completes the preparation of its financial results.
What Our Model Says
Our proven model does not conclusively 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. However, this is not the case here.
ANSS has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Codexis, Inc (CDXS - Free Report) has an Earnings ESP of +81.25% and a Zacks Rank #2 at present. CDXS is scheduled to report fourth-quarter fiscal 2023 earnings on Feb 28. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDXS’ to-be-reported quarter’s revenues is pegged at $19.31 million. The consensus estimate is pegged at a loss of 16 cents per share.
Wayfair Inc (W - Free Report) has an Earnings ESP of +13.64% and a Zacks Rank #2 at present. W is set to post fourth-quarter 2023 results on Feb 22.
The Zacks Consensus Estimate for Wayfair’s to-be-reported quarter’s revenues is pegged at $3.11 billion. The consensus estimate is pegged at a loss of 22 cents per share.
Floor & Decor Holdings, Inc (FND - Free Report) has an Earnings ESP of +4.87% and carries a Zacks Rank #3 at present. FND is slated to release fourth-quarter of 2023 numbers on Feb 22.
The Zacks Consensus Estimate for FND’s to-be-reported quarter’s earnings and revenues is pegged at 27 cents per share and $1.01 billion, respectively. Shares of FND have jumped 17.4% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.