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ANSYS (ANSS) Beats on Q1 Earnings & Revenues, Shares Surge
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ANSYS Inc. (ANSS - Free Report) reported first-quarter 2017 non-GAAP earnings (excluding stock-based compensation) of 89 cents per share, up 15.6% year over year. Earnings (including stock-based compensation) were 81 cents, which beat the Zacks Consensus Estimate by four cents.
Revenues increased 12.2% (13% at constant currency) from the year-ago quarter to $253.5 million, surpassing the Zacks Consensus Estimate of $242 million.
Shares advanced more than 9% in the last couple of trading sessions. We note that ANSYS has underperformed the Zacks Computer Software industry on a year-to-date basis. While the stock gained 31%, the industry witnessed an increase of 16%.
Segment Revenue Details
At constant currency, lease license revenues grew 15.5% to $93.8 million, while maintenance revenues increased 12.3% to $104.4 million in the reported quarter. Perpetual license revenues grew 9.4% to nearly $48.3 million in the quarter. Service revenues increased 15.1% to $7.1 million.
Direct and indirect businesses contributed 76% and 24%, respectively, to the quarterly revenues. During the quarter, the company had 31 customers with orders in excess of $1 million, including five customers with orders in excess of $5 million.
Recurring revenue base was 78%. Bookings surged 19.4% year over year to $263.9 million.
Region wise, North America, Europe and Asia-Pacific revenues increased 17.3%, 5.3% and 15.1%, respectively, at constant currency. North America had 20 deals above $1 million closed in the quarter, the majority of which were lease transactions.
Operating Details
Gross margin excluding amortization contracted 30 basis points (bps) from the year-ago quarter to 89%.
Operating expenses (excluding amortization) as a percentage of revenues increased 510 bps from the year-ago quarter driven by higher research & development (up 170 bps) and selling, general & administrative (up 340 bps) expenses.
Consequently, non-GAAP operating margin (including stock-based compensation) contracted 100 bps on a year-over-year basis to 42.3% in the reported quarter.
Balance Sheet & Cash Flow
ANSYS exited the quarter with cash and short-term investments of $866.6 million (of which 72% was held in the U.S.), up from $822.9 million in the previous quarter. The company generated cash from operations of $125.9 million as compared with $96.2 million in the quarter.
Further, ANSYS repurchased 1 million shares in the reported quarter. As of Mar 31, 2017, the company had 4.5 million shares remaining in the authorized share repurchase program.
Guidance
For second-quarter fiscal 2017, ANSYS expects non-GAAP earnings in the range of 88–93 cents per share. The company expects to incur additional charges of $2–$4 million ($1.3–$2.8 million, net of tax), primarily in the quarter, related to additional realignment charges.
Net revenue is anticipated in the range of $254–$263 million. ANSYS expect gross margin in the range of 88–89% and operating margin between 45% and 46% for the second quarter.
For full-year 2017, ANSYS now anticipates revenues of $1.030–$1.058 billion (up from $1.010–$1.045 billion) and earnings in the range of $3.68–$3.85 (up from $3.63–$3.83) per share.
Gross margin is anticipated in the range of 88–89% and operating margin between 46% and 47% for the full year.
ANSYS currently plans on total capital expenditure in the range of $15–$20 million for 2017.
Long-term earnings growth rate for ACI, DST and Adobe are pegged at 11.5%, 10% and 16.6%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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ANSYS (ANSS) Beats on Q1 Earnings & Revenues, Shares Surge
ANSYS Inc. (ANSS - Free Report) reported first-quarter 2017 non-GAAP earnings (excluding stock-based compensation) of 89 cents per share, up 15.6% year over year. Earnings (including stock-based compensation) were 81 cents, which beat the Zacks Consensus Estimate by four cents.
Revenues increased 12.2% (13% at constant currency) from the year-ago quarter to $253.5 million, surpassing the Zacks Consensus Estimate of $242 million.
Shares advanced more than 9% in the last couple of trading sessions. We note that ANSYS has underperformed the Zacks Computer Software industry on a year-to-date basis. While the stock gained 31%, the industry witnessed an increase of 16%.
Segment Revenue Details
At constant currency, lease license revenues grew 15.5% to $93.8 million, while maintenance revenues increased 12.3% to $104.4 million in the reported quarter. Perpetual license revenues grew 9.4% to nearly $48.3 million in the quarter. Service revenues increased 15.1% to $7.1 million.
ANSYS, Inc. Price, Consensus and EPS Surprise
ANSYS, Inc. Price, Consensus and EPS Surprise | ANSYS, Inc. Quote
Direct and indirect businesses contributed 76% and 24%, respectively, to the quarterly revenues. During the quarter, the company had 31 customers with orders in excess of $1 million, including five customers with orders in excess of $5 million.
Recurring revenue base was 78%. Bookings surged 19.4% year over year to $263.9 million.
Region wise, North America, Europe and Asia-Pacific revenues increased 17.3%, 5.3% and 15.1%, respectively, at constant currency. North America had 20 deals above $1 million closed in the quarter, the majority of which were lease transactions.
Operating Details
Gross margin excluding amortization contracted 30 basis points (bps) from the year-ago quarter to 89%.
Operating expenses (excluding amortization) as a percentage of revenues increased 510 bps from the year-ago quarter driven by higher research & development (up 170 bps) and selling, general & administrative (up 340 bps) expenses.
Consequently, non-GAAP operating margin (including stock-based compensation) contracted 100 bps on a year-over-year basis to 42.3% in the reported quarter.
Balance Sheet & Cash Flow
ANSYS exited the quarter with cash and short-term investments of $866.6 million (of which 72% was held in the U.S.), up from $822.9 million in the previous quarter. The company generated cash from operations of $125.9 million as compared with $96.2 million in the quarter.
Further, ANSYS repurchased 1 million shares in the reported quarter. As of Mar 31, 2017, the company had 4.5 million shares remaining in the authorized share repurchase program.
Guidance
For second-quarter fiscal 2017, ANSYS expects non-GAAP earnings in the range of 88–93 cents per share. The company expects to incur additional charges of $2–$4 million ($1.3–$2.8 million, net of tax), primarily in the quarter, related to additional realignment charges.
Net revenue is anticipated in the range of $254–$263 million. ANSYS expect gross margin in the range of 88–89% and operating margin between 45% and 46% for the second quarter.
For full-year 2017, ANSYS now anticipates revenues of $1.030–$1.058 billion (up from $1.010–$1.045 billion) and earnings in the range of $3.68–$3.85 (up from $3.63–$3.83) per share.
Gross margin is anticipated in the range of 88–89% and operating margin between 46% and 47% for the full year.
ANSYS currently plans on total capital expenditure in the range of $15–$20 million for 2017.
Zacks Rank & Key Picks
ANSYS carries a Zacks Rank #3 (Hold). ACI Worldwide (ACIW - Free Report) , DST Systems and Adobe (ADBE - Free Report) are better-ranked stocks worth looking in the sector. While ACI and DST sport a Zacks Rank #1(Strong Buy), Adobe carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for ACI, DST and Adobe are pegged at 11.5%, 10% and 16.6%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>