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Ansys (ANSS) Up 3.3% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Ansys (ANSS - Free Report) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ansys due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ansys Q2 Earnings Beat Estimates
ANSYS reported second-quarter 2024 earnings of $2.50 per share, beating the Zacks Consensus Estimate by 28.9%. The bottom line increased 56.3% year over year.
Revenues of $594.1 million beat the Zacks Consensus Estimate by 7.9%. The top line rose 20% (up 22% at constant currency or cc) year over year. This revenue growth was driven by two major multi-year contracts worth $210 million, secured in the automotive and high-tech industries during the quarter in the Americas region.
In January 2024, Ansys and Synopsys announced a definitive agreement, per which the latter will 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, is anticipated to close in the first half of 2025. During the quarter ended Jun 30, 2024, the transaction was approved by Ansys shareholders.
Given the pending acquisition, Ansys has suspended quarterly earnings conference calls and no longer provides a financial outlook. It expects double-digit ACV and revenue growth in the second half of the year and expects 2024 ACV to grow in double-digits.
Quarter in Detail
Subscription lease revenues (36.8% of total revenues) were up 64.4% year over year at cc to $218.6 million. Perpetual licenses revenues (10.9%) declined 6% at cc to $64.6 million.
Maintenance revenues (49.5%) climbed 9.3% year over year at cc to $293.8 million. Service revenues (2.9%) were down 4.5% at cc to $17.1 million.
Direct and indirect channels contributed 76% and 24%, respectively, to total revenues. ACV grew 6.6% year over year (up 9.3% at cc) to $520.5 million.
On a regional basis, the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 54.6%, 22% and 23.4% to revenues, respectively.
Revenues from the Americas were up 47.3% year over year at cc to $324.4 million. EMEA revenues were up 4.4% at cc to $130.8 million. Revenues from the Asia-Pacific decreased 1.6% at cc to $138.9 million.
Total deferred revenues and backlog was $1,394.0 million, up 7.6% year over year.
Operating Details
Non-GAAP gross margin was up 170 basis points (bps) on a year-over-year basis to 92.7%.
Total operating expenses jumped 10.4% year over year to $367.4 million, primarily due to increased acquisition and personnel costs.
Non-GAAP operating margin increased 850 bps on a year-over-year basis to 44.9%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash and short-term investments amounted to $1119.3 million compared with $1070.6 million as of Mar 31, 2024.
As of Jun 30, 2024, the company’s long-term debt was $754 million, unchanged from Mar 31, 2024.
In the quarter under review, cash from operations came in at $80.7 million compared with $62.9 million in the prior-year quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted -7.63% due to these changes.
VGM Scores
Currently, Ansys has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise Ansys has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Ansys is part of the Zacks Computer - Software industry. Over the past month, Cadence Design Systems (CDNS - Free Report) , a stock from the same industry, has gained 1.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Cadence reported revenues of $1.06 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $1.28 for the same period compares with $1.22 a year ago.
Cadence is expected to post earnings of $1.44 per share for the current quarter, representing a year-over-year change of +14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
Cadence has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Ansys (ANSS) Up 3.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Ansys (ANSS - Free Report) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ansys due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ansys Q2 Earnings Beat Estimates
ANSYS reported second-quarter 2024 earnings of $2.50 per share, beating the Zacks Consensus Estimate by 28.9%. The bottom line increased 56.3% year over year.
Revenues of $594.1 million beat the Zacks Consensus Estimate by 7.9%. The top line rose 20% (up 22% at constant currency or cc) year over year. This revenue growth was driven by two major multi-year contracts worth $210 million, secured in the automotive and high-tech industries during the quarter in the Americas region.
In January 2024, Ansys and Synopsys announced a definitive agreement, per which the latter will 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, is anticipated to close in the first half of 2025. During the quarter ended Jun 30, 2024, the transaction was approved by Ansys shareholders.
Given the pending acquisition, Ansys has suspended quarterly earnings conference calls and no longer provides a financial outlook. It expects double-digit ACV and revenue growth in the second half of the year and expects 2024 ACV to grow in double-digits.
Quarter in Detail
Subscription lease revenues (36.8% of total revenues) were up 64.4% year over year at cc to $218.6 million. Perpetual licenses revenues (10.9%) declined 6% at cc to $64.6 million.
Maintenance revenues (49.5%) climbed 9.3% year over year at cc to $293.8 million. Service revenues (2.9%) were down 4.5% at cc to $17.1 million.
Direct and indirect channels contributed 76% and 24%, respectively, to total revenues.
ACV grew 6.6% year over year (up 9.3% at cc) to $520.5 million.
On a regional basis, the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 54.6%, 22% and 23.4% to revenues, respectively.
Revenues from the Americas were up 47.3% year over year at cc to $324.4 million. EMEA revenues were up 4.4% at cc to $130.8 million. Revenues from the Asia-Pacific decreased 1.6% at cc to $138.9 million.
Total deferred revenues and backlog was $1,394.0 million, up 7.6% year over year.
Operating Details
Non-GAAP gross margin was up 170 basis points (bps) on a year-over-year basis to 92.7%.
Total operating expenses jumped 10.4% year over year to $367.4 million, primarily due to increased acquisition and personnel costs.
Non-GAAP operating margin increased 850 bps on a year-over-year basis to 44.9%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash and short-term investments amounted to $1119.3 million compared with $1070.6 million as of Mar 31, 2024.
As of Jun 30, 2024, the company’s long-term debt was $754 million, unchanged from Mar 31, 2024.
In the quarter under review, cash from operations came in at $80.7 million compared with $62.9 million in the prior-year quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted -7.63% due to these changes.
VGM Scores
Currently, Ansys has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise Ansys has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Ansys is part of the Zacks Computer - Software industry. Over the past month, Cadence Design Systems (CDNS - Free Report) , a stock from the same industry, has gained 1.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Cadence reported revenues of $1.06 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $1.28 for the same period compares with $1.22 a year ago.
Cadence is expected to post earnings of $1.44 per share for the current quarter, representing a year-over-year change of +14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
Cadence has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.