Ansys Announces Q4 and FY 2024 Financial Results

/ Q4 2024 Results Revenue of $882.2 millionGAAP diluted earnings per share of $3.21 and non-GAAP diluted earnings per share of $4.44GAAP operating profit margin of 40.3% and non-GAAP operating profit margin of 53.3%Operating cash flows of $258.0 million and unlevered operating cash flows of $266.8 millionAnnual contract value (ACV) of $1,094.6 million /FY 2024 Results Revenue of $2,544.8 millionGAAP diluted earnings per share of $6.55 and non-GAAP diluted earnings per share of $10.91GAAP operating profit margin of 28.2% and non-GAAP operating profit margin of 45.7%Operating cash flows of $795.7 million and unlevered operating cash flows of $834.6 millionACV of $2,563.0 millionDeferred revenue and backlog of $1,718.3 million on December 31, 2024 PITTSBURGH, Feb. 19, 2025 (GLOBE NEWSWIRE) -- ANSYS, Inc. (NASDAQ: ANSS), today reported fourth quarter 2024 revenue of $882.2 million, an increase of 10% in reported currency, or 11% in constant currency, when compared to the fourth quarter of 2023. For FY 2024, revenue growth was 12% in reported currency, or 13% in constant currency, when compared to FY 2023. For the fourth quarter of 2024, the Company reported diluted earnings per share of $3.21 and $4.44 on a GAAP and non-GAAP basis, respectively, compared to $3.14 and $3.94 on a GAAP and non-GAAP basis, respectively, for the fourth quarter of 2023. For FY 2024, the Company reported diluted earnings per share of $6.55 and $10.91 on a GAAP and non-GAAP basis, respectively, compared to $5.73 and $8.80 on a GAAP and non-GAAP basis, respectively, for FY 2023. Additionally, the Company reported fourth quarter and FY 2024 ACV growth of 15% and 11% in reported currency, respectively, or 16% and 13% in constant currency, respectively, when compared to the fourth quarter and FY 2023. Fourth quarter 2024 ACV of $1.1 billion contributed 43% of the full year 2024 ACV while Q1, Q2 and Q3 each contributed 16%, 20% and 21%, respectively. The Company expects double-digit FY 2025 ACV growth. As previously announced, on January 15, 2024, Ansys entered into a definitive agreement with Synopsys, Inc. ("Synopsys") under which Synopsys will acquire Ansys. As previously announced by Synopsys, Ansys and Synopsys have received conditional clearance from the European Commission. The U.K. Competition and Markets Authority provisionally accepted our remedies towards a transaction approval in Phase 1. The State Administration for Market Regulation of the People’s Republic of China has officially accepted our filing, and its review of the proposed transaction is in process. We continue to work with the regulators in other relevant jurisdictions to conclude their reviews. The transaction is anticipated to close in the first half of 2025, subject to the receipt of required regulatory approvals and other customary closing conditions. As previously announced, in light of the pending transaction with Synopsys, Ansys has suspended quarterly earnings conference calls and no longer provides quarterly or annual guidance. The non-GAAP financial results highlighted represent non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures can be found later in this release. / Summary of Financial Results Ansys’ fourth quarter and fiscal year (FY) 2024 and 2023 financial results are presented below. The 2024 and 2023 non-GAAP results exclude the income statement effects of stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, expenses related to business combinations and adjustments for the income tax effect of the excluded items. Our results are as follows: GAAP(in thousands, except per share data and percentages)Q4 QTD2024 Q4 QTD2023 % Change FY2024 FY2023 % ChangeRevenue$882,174 $805,108 9.6% $2,544,809 $2,269,949 12.1%Net income$282,688 $274,762 2.9% $575,692 $500,412 15.0%Diluted earnings per share$3.21 $3.14 2.2% $6.55 $5.73 14.3%Gross margin 91.8% 91.3% 89.0% 88.0% Operating profit margin 40.3% 41.4% 28.2% 27.6% Effective tax rate 21.3% 15.4% 19.8% 15.5% Non-GAAP(in thousands, except per share data and percentages)Q4 QTD2024 Q4 QTD2023 % Change FY2024 FY2023 % ChangeNet income$391,044 $345,317 13.2% $959,252 $769,308 24.7%Diluted earnings per share$4.44 $3.94 12.7% $10.91 $8.80 24.0%Gross margin 94.6% 94.3% 93.1% 92.2% Operating profit margin 53.3% 53.0% 45.7% 42.6% Effective tax rate 17.5% 17.5% 17.5% 17.5% Other Metrics(in thousands, except percentages)Q4 QTD2024 Q4 QTD2023 % Change FY2024 FY2023 % ChangeACV$ 1,094,552 $ 955,161 14.6% $ 2,563,029 $2,300,466 11.4%Operating cash flows$ 257,973 $ 232,722 10.9% $ 795,740 $ 717,122 11.0%Unlevered operating cash flows$ 266,777 $ 242,848 9.9% $ 834,582 $ 755,129 10.5% / Key Long-Term Metrics The Company’s long-term outlook covering the years 2022 through 2025 provided at the 2022 Investor Update has been suspended given the pending transaction with Synopsys. Below is a summary of key metrics covering the years 2022 through 2024. Consistent double-digit ACV growth with a 2022 through 2024 CAGR of 12.3% at actual exchange rates and 13.0% at 2022 exchange rates.Unlevered operating cash flows grew faster than ACV with a 2022 through 2024 CAGR of 13.5%.With FY 2024 unlevered operating cash flows of $834.6 million, cumulative 3-year unlevered operating cash flows (FY 2022 to 2024) are $2.2 billion.Note: 2024 unlevered operating cash flows includes $28.2 million of cash outflows primarily associated with the pending transaction with Synopsys. Supplemental Financial Information / Annual Contract Value (in thousands, except percentages)Q4 QTD2024 Q4 QTD 2024 in Constant Currency Q4 QTD2023 % Change % Change in Constant CurrencyACV$ 1,094,552 $ 1,110,711 $ 955,161 14.6% 16.3% (in thousands, except percentages)FY2024 FY 2024 in Constant Currency FY2023 % Change % Change inConstant CurrencyACV$ 2,563,029 $ 2,593,819 $ 2,300,466 11.4% 12.8% *Subscription lease ACV includes the bundled arrangement of time-based licenses with related maintenance.**Perpetual and service ACV includes perpetual licenses, with related maintenance, and services. Recurring ACV includes both subscription lease ACV and all maintenance ACV (including maintenance from perpetual licenses). It excludes perpetual license ACV and service ACV. / Revenue (in thousands, except percentages)Q4 QTD2024 Q4 QTD 2024 in Constant Currency Q4 QTD2023 % Change % Change in Constant CurrencyRevenue$ 882,174 $ 893,996 $ 805,108 9.6% 11.0% (in thousands, except percentages)FY2024 FY 2024 in Constant Currency FY2023 % Change % Change in Constant CurrencyRevenue$ 2,544,809 $ 2,570,207 $ 2,269,949 12.1% 13.2% REVENUE BY LICENSE TYPE (in thousands, except percentages)Q4 QTD2024 % of Total Q4 QTD2023 % of Total % Change % Change in Constant CurrencySubscription Lease$ 441,120 50.0 % $ 399,556 49.6% 10.4% 12.1%Perpetual 102,295 11.6 % 102,721 12.8% (0.4)% 1.7%Maintenance1 319,381 36.2 % 283,130 35.2% 12.8% 13.8%Service 19,378 2.2 % 19,701 2.4% (1.6)% (1.2)%Total$ 882,174 $ 805,108 9.6% 11.0% (in thousands, except percentages)FY2024 % of Total FY2023 % of Total % Change % Change in Constant CurrencySubscription Lease$ 948,831 37.3 % $ 786,050 34.6% 20.7% 22.1%Perpetual 315,085 12.4 % 302,698 13.3% 4.1% 5.1%Maintenance1 1,209,217 47.5 % 1,103,523 48.6% 9.6% 10.6%Service 71,676 2.8 % 77,678 3.4% (7.7)% (7.4)%Total$ 2,544,809 $ 2,269,949 12.1% 13.2% 1Maintenance revenue is inclusive of both maintenance associated with perpetual licenses and the maintenance component of subscription leases. REVENUE BY GEOGRAPHY (in thousands, except percentages)Q4 QTD2024 % of Total Q4 QTD2023 % of Total % Change % Change in Constant CurrencyAmericas$ 457,752 51.9 % $ 410,681 51.0% 11.5% 11.5% Germany 98,527 11.2 % 81,828 10.2% 20.4% 24.2%Other EMEA 170,541 19.3 % 155,023 19.3% 10.0% 12.2%EMEA 269,068 30.5 % 236,851 29.4% 13.6% 16.3% Japan 52,294 5.9 % 61,243 7.6% (14.6)% (11.1)%Other Asia-Pacific 103,060 11.7 % 96,333 12.0% 7.0% 10.1%Asia-Pacific 155,354 17.6 % 157,576 19.6% (1.4)% 1.8% Total$ 882,174 $ 805,108 9.6% 11.0% (in thousands, except percentages)FY2024 % of Total FY2023 % of Total % Change % Change in Constant CurrencyAmericas$ 1,297,367 51.0 % $ 1,106,242 48.7% 17.3% 17.3% Germany 209,714 8.2 % 199,068 8.8% 5.3% 6.6%Other EMEA 445,791 17.5 % 406,719 17.9% 9.6% 9.8%EMEA 655,505 25.8 % 605,787 26.7% 8.2% 8.8% Japan 184,547 7.3 % 203,013 8.9% (9.1)% (2.1)%Other Asia-Pacific 407,390 16.0 % 354,907 15.6% 14.8% 16.9%Asia-Pacific 591,937 23.3 % 557,920 24.6% 6.1% 10.0% Total$ 2,544,809 $ 2,269,949 12.1% 13.2% REVENUE BY CHANNEL Q4 QTD 2024 Q4 QTD 2023 FY2024 FY2023Direct revenue, as a percentage of total revenue 79.7 % 74.5% 75.2 % 73.9%Indirect revenue, as a percentage of total revenue 20.3 % 25.5% 24.8 % 26.1% / Deferred Revenue and Backlog (in thousands)December 31, 2024 September 30,2024 December 31, 2023 September 30,2023Current Deferred Revenue$ 504,527 $ 427,188 $ 457,514 $ 349,668Current Backlog 524,617 475,604 439,879 424,547Total Current Deferred Revenue and Backlog 1,029,144 902,792 897,393 774,215 Long-Term Deferred Revenue 31,778 24,150 22,240 20,765Long-Term Backlog 657,345 536,855 552,951 410,697Total Long-Term Deferred Revenue and Backlog 689,123 561,005 575,191 431,462 Total Deferred Revenue and Backlog$ 1,718,267 $ 1,463,797 $ 1,472,584 $ 1,205,677 / Currency The fourth quarter and FY 2024 revenue, operating income, ACV and deferred revenue and backlog, as compared to the fourth quarter and FY 2023, were impacted by fluctuations in the exchange rates of foreign currencies against the U.S. Dollar. The currency fluctuation impacts on revenue, GAAP and non-GAAP operating income, ACV, and deferred revenue and backlog based on 2023 exchange rates are reflected in the tables below. Amounts in brackets indicate an adverse impact from currency fluctuations. (in thousands)Q4 QTD 2024 FY2024Revenue$ (11,822) $ (25,398)GAAP operating income$ (9,057) $ (19,588)Non-GAAP operating income$ (9,076) $ (19,335)ACV$ (16,159) $ (30,790)Deferred revenue and backlog$ (38,306) $ (40,993) The most meaningful currency impacts are typically attributable to U.S. Dollar exchange rate changes against the Euro and Japanese Yen. Historical exchange rates are reflected in the charts below. Period-End Exchange RatesAs ofEUR/USD USD/JPYDecember 31, 2024 1.04 157 December 31, 2023 1.10 141December 31, 2022 1.07 131 Average Exchange RatesThree Months EndedEUR/USD USD/JPYDecember 31, 2024 1.07 153 December 31, 2023 1.08 148 Average Exchange RatesTwelve Months EndedEUR/USD USD/JPYDecember 31, 2024 1.08 151 December 31, 2023 1.08 140 / GAAP Financial Statements ANSYS, INC. AND SUBSIDIARIESCondensed Consolidated Balance Sheets(Unaudited)(in thousands)December 31, 2024 December 31, 2023ASSETS: Cash & short-term investments$ 1,497,517 $ 860,390Accounts receivable, net 1,022,850 864,526Goodwill 3,778,128 3,805,874Other intangibles, net 716,244 835,417Other assets 1,036,692 956,668Total assets$ 8,051,431 $ 7,322,875LIABILITIES & STOCKHOLDERS’ EQUITY: Current deferred revenue$ 504,527 $ 457,514Long-term debt 754,208 753,891Other liabilities 706,256 721,106Stockholders’ equity 6,086,440 5,390,364Total liabilities & stockholders’ equity$ 8,051,431 $ 7,322,875 ANSYS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Income(Unaudited) Three Months Ended Twelve Months Ended(in thousands, except per share data)December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023Revenue: Software licenses$ 543,415 $ 502,277 $ 1,263,916 $ 1,088,748 Maintenance and service 338,759 302,831 1,280,893 1,181,201 Total revenue 882,174 805,108 2,544,809 2,269,949 Cost of sales: Software licenses 12,947 10,909 45,367 40,004 Amortization 21,801 20,586 88,560 80,990 Maintenance and service 37,940 38,554 145,892 150,304 Total cost of sales 72,688 70,049 279,819 271,298 Gross profit 809,486 735,059 2,264,990 1,998,651 Operating expenses: Selling, general and administrative 314,009 269,857 995,340 855,135 Research and development 134,259 126,288 528,014 494,869 Amortization 5,623 5,914 23,748 22,512 Total operating expenses 453,891 402,059 1,547,102 1,372,516 Operating income 355,595 333,000 717,888 626,135 Interest income 14,636 7,199 51,131 19,588 Interest expense (10,924) (12,551) (47,849) (47,145)Other expense, net (14) (2,876) (3,132) (6,440)Income before income tax provision 359,293 324,772 718,038 592,138 Income tax provision 76,605 50,010 142,346 91,726 Net income$ 282,688 $ 274,762 $ 575,692 $ 500,412 Earnings per share – basic: Earnings per share$ 3.23 $ 3.16 $ 6.59 $ 5.76 Weighted average shares 87,455 86,888 87,313 86,833 Earnings per share – diluted: Earnings per share$ 3.21 $ 3.14 $ 6.55 $ 5.73 Weighted average shares 88,137 87,541 87,895 87,386 / Glossary of Terms Annual Contract Value (ACV): ACV is a key performance metric and is useful to investors in assessing the strength and trajectory of our business. ACV is a supplemental metric to help evaluate the annual performance of the business. Over the life of the contract, ACV equals the total value realized from a customer. ACV is not impacted by the timing of license revenue recognition. ACV is used by management in financial and operational decision-making and in setting sales targets used for compensation. ACV is not a replacement for, and should be viewed independently of, GAAP revenue and deferred revenue as ACV is a performance metric and is not intended to be combined with any of these items. There is no GAAP measure comparable to ACV. ACV is composed of the following: the annualized value of maintenance and subscription lease contracts with start dates or anniversary dates during the period, plusthe value of perpetual license contracts with start dates during the period, plusthe annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plusthe value of work performed during the period on fixed-deliverable services contracts. When we refer to the anniversary dates in the definition of ACV above, we are referencing the date of the beginning of the next twelve-month period in a contractually committed multi-year contract. If a contract is three years in duration, with a start date of July 1, 2024, the anniversary dates would be July 1, 2025 and July 1, 2026. We label these anniversary dates as they are contractually committed. While this contract would be up for renewal on July 1, 2027, our ACV performance metric does not assume any contract renewals. Example 1: For purposes of calculating ACV, a $100,000 subscription lease contract or a $100,000 maintenance contract with a term of July 1, 2024 – June 30, 2025, would each contribute $100,000 to ACV for fiscal year 2024 with no contribution to ACV for fiscal year 2025. Example 2: For purposes of calculating ACV, a $300,000 subscription lease contract or a $300,000 maintenance contract with a term of July 1, 2024 – June 30, 2027, would each contribute $100,000 to ACV in each of fiscal years 2024, 2025 and 2026. There would be no contribution to ACV for fiscal year 2027 as each period captures the full annual value upon the anniversary date. Example 3: A perpetual license valued at $200,000 with a contract start date of March 1, 2024 would contribute $200,000 to ACV in fiscal year 2024. Backlog: Deferred revenue associated with installment billings for periods beyond the current quarterly billing cycle and committed contracts with start dates beyond the end of the current period. Deferred Revenue: Billings made or payments received in advance of revenue recognition. Subscription Lease or Time-Based License: A license of a stated product of our software that is granted to a customer for use over a specified time period, which can be months or years in length. In addition to the use of the software, the customer is provided with access to maintenance (unspecified version upgrades and technical support) without additional charge. The revenue related to these contracts is recognized ratably over the contract period for the maintenance portion and up front for the license portion. Perpetual / Paid-Up License: A license of a stated product and version of our software that is granted to a customer for use in perpetuity. The revenue related to this type of license is recognized up front. Maintenance: A contract, typically one year in duration, that is purchased by the owner of a perpetual license and that provides access to unspecified version upgrades and technical support during the duration of the contract. The revenue from these contracts is recognized ratably over the contract period. / Reconciliations of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended December 31, 2024(in thousands, except percentages and per share data)Gross Profit % of Revenue Operating Income % of Revenue Net Income EPS - Diluted1Total GAAP$ 809,486 91.8 % $ 355,595 40.3 % $ 282,688 $ 3.21 Stock-based compensation expense 3,635 0.4 % 73,016 8.2 % 73,016 0.83 Excess payroll taxes related to stock-based awards 39 — % 1,272 0.2 % 1,272 0.01 Amortization of intangible assets from acquisitions 21,801 2.4 % 27,424 3.1 % 27,424 0.31 Expenses related to business combinations — — % 12,988 1.5 % 12,988 0.15 Adjustment for income tax effect — — % — — % (6,344) (0.07)Total non-GAAP$ 834,961 94.6 % $ 470,295 53.3 % $ 391,044 $ 4.44 1 Diluted weighted average shares were 88,137. Three Months Ended December 31, 2023(in thousands, except percentages and per share data)Gross Profit % of Revenue Operating Income % of Revenue Net Income EPS - Diluted1Total GAAP$ 735,059 91.3% $ 333,000 41.4% $ 274,762 $ 3.14 Stock-based compensation expense 3,413 0.4% 63,358 7.9% 63,358 0.73 Excess payroll taxes related to stock-based awards 4 —% 271 —% 271 — Amortization of intangible assets from acquisitions 20,586 2.6% 26,500 3.3% 26,500 0.30 Expenses related to business combinations — —% 3,664 0.4% 3,664 0.04 Adjustment for income tax effect — —% — —% (23,238) (0.27)Total non-GAAP$ 759,062 94.3% $ 426,793 53.0% $ 345,317 $ 3.94 1 Diluted weighted average shares were 87,541. Twelve Months Ended December 31, 2024(in thousands, except percentages and per share data)Gross Profit % of Revenue Operating Income % of Revenue Net Income EPS - Diluted1Total GAAP$ 2,264,990 89.0 % $ 717,888 28.2 % $ 575,692 $ 6.55 Stock-based compensation expense 14,313 0.6 % 270,900 10.7 % 270,900 3.08 Excess payroll taxes related to stock-based awards 506 — % 8,643 0.3 % 8,643 0.10 Amortization of intangible assets from acquisitions 88,560 3.5 % 112,308 4.4 % 112,308 1.28 Expenses related to business combinations — — % 52,841 2.1 % 52,841 0.60 Adjustment for income tax effect — — % — — % (61,132) (0.70)Total non-GAAP$ 2,368,369 93.1 % $ 1,162,580 45.7 % $ 959,252 $ 10.91 1 Diluted weighted average shares were 87,895. Twelve Months Ended December 31, 2023(in thousands, except percentages and per share data)Gross Profit % of Revenue Operating Income % of Revenue Net Income EPS - Diluted1Total GAAP$ 1,998,651 88.0% $ 626,135 27.6% $ 500,412 $ 5.73 Stock-based compensation expense 13,337 0.6% 221,891 9.9% 221,891 2.54 Excess payroll taxes related to stock-based awards 307 0.1% 5,541 0.2% 5,541 0.06 Amortization of intangible assets from acquisitions 80,990 3.5% 103,502 4.5% 103,502 1.18 Expenses related to business combinations — —% 9,422 0.4% 9,422 0.11 Adjustment for income tax effect — —% — —% (71,460) (0.82)Total non-GAAP$ 2,093,285 92.2% $ 966,491 42.6% $ 769,308 $ 8.80 1 Diluted weighted average shares were 87,386. Three Months Ended Twelve Months Ended(in thousands)December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 December 31, 2022Net cash provided by operating activities$ 257,973 $ 232,722 $ 795,740 $ 717,122 $ 631,003 Cash paid for interest 10,671 12,274 47,081 46,069 20,844 Tax benefit (1,867) (2,148) (8,239) (8,062) (3,752)Unlevered operating cash flows$ 266,777 $ 242,848 $ 834,582 $ 755,129 $ 648,095 / Use of Non-GAAP Measures We provide non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income, non-GAAP diluted earnings per share and unlevered operating cash flows as supplemental measures to GAAP regarding our operational performance. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. A detailed explanation of each of the adjustments to these financial measures is described below. This press release also contains a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure, as applicable. We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance as well as our performance relative to our competitors, (b) to set internal sales targets and spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, (e) to assess financial discipline over operational expenditures and (f) as an important factor in determining variable compensation for management and employees. In addition, many financial analysts that follow us focus on and publish both historical results and future projections based on non-GAAP financial measures. We believe that it is in the best interest of our investors to provide this information to analysts so that they accurately report the non-GAAP financial information. Moreover, investors have historically requested, and we have historically reported, these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results. While we believe that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all our competitors and may not be directly comparable to similarly titled measures of our competitors due to potential differences in the exact method of calculation. We compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. The adjustments to these non-GAAP financial measures, and the basis for such adjustments, are outlined below: Amortization of intangible assets from acquisitions. We incur amortization of intangible assets, included in our GAAP presentation of amortization expense, related to various acquisitions we have made. We exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by us after the acquisition. Accordingly, we do not consider these expenses for purposes of evaluating our performance during the applicable time period after the acquisition, and we exclude such expenses when making decisions to allocate resources. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our past reports of financial results as we have historically reported these non-GAAP financial measures. Stock-based compensation expense. We incur expense related to stock-based compensation included in our GAAP presentation of cost of maintenance and service; research and development expense; and selling, general and administrative expense. We also incur excess payroll tax expense related to stock-based compensation, which is an additional non-GAAP adjustment. Although stock-based compensation is an expense and viewed as a form of compensation, we exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance. Specifically, we exclude stock-based compensation during our annual budgeting process and our quarterly and annual assessments of our performance. The annual budgeting process is the primary mechanism whereby we allocate resources to various initiatives and operational requirements. Additionally, the annual review by our Board of Directors during which it compares our historical business model and profitability to the planned business model and profitability for the forthcoming year excludes the impact of stock-based compensation. In evaluating the performance of our senior management and department managers, charges related to stock-based compensation are excluded from expenditure and profitability results. In fact, we record stock-based compensation expense into a stand-alone cost center for which no single operational manager is responsible or accountable. In this way, we can review, on a period-to-period basis, each manager’s performance and assess financial discipline over operational expenditures without the effect of stock-based compensation. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors’ operating results. Expenses related to business combinations. We incur expenses for professional services rendered in connection with acquisitions and divestitures, which are included in our GAAP presentation of selling, general and administrative expense. We also incur other expenses directly related to business combinations, including compensation expenses and concurrent restructuring activities, such as employee severances and other exit costs. These costs are included in our GAAP presentation of selling, general and administrative and research and development expenses. We exclude these acquisition-related expenses for the purpose of calculating non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance, as we generally would not have otherwise incurred these expenses in the periods presented as a part of our operations. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors’ operating results. Non-GAAP tax provision. We utilize a normalized non-GAAP annual effective tax rate (AETR) to calculate non-GAAP measures. This methodology provides better consistency across interim reporting periods by eliminating the effects of non-recurring items and aligning the non-GAAP tax rate with our expected geographic earnings mix. To project this rate, we analyzed our historic and projected non-GAAP earnings mix by geography along with other factors such as our current tax structure, recurring tax credits and incentives, and expected tax positions. On an annual basis we re-evaluate and update this rate for significant items that may materially affect our projections. Unlevered operating cash flows. We make cash payments for the interest incurred in connection with our debt financing which are included in our GAAP presentation of operating cash flows. We exclude this cash paid for interest, net of the associated tax benefit, for the purpose of calculating unlevered operating cash flows. Unlevered operating cash flow is a supplemental non-GAAP measure that we use to evaluate our core operating business. We believe this measure is useful to investors and management because it provides a measure of our cash generated through operating activities independent of the capital structure of the business. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. We have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures as listed below: GAAP Reporting MeasureNon-GAAP Reporting MeasureGross ProfitNon-GAAP Gross ProfitGross Profit MarginNon-GAAP Gross Profit MarginOperating IncomeNon-GAAP Operating IncomeOperating Profit MarginNon-GAAP Operating Profit MarginNet IncomeNon-GAAP Net IncomeDiluted Earnings Per ShareNon-GAAP Diluted Earnings Per ShareOperating Cash FlowsUnlevered Operating Cash Flows Constant currency. In addition to the non-GAAP financial measures detailed above, we use constant currency results for financial and operational decision-making and as a means to evaluate period-to-period comparisons by excluding the effects of foreign currency fluctuations on the reported results. To present this information, the 2024 period results for entities whose functional currency is a currency other than the U.S. Dollar were converted to U.S. Dollars at rates that were in effect for the 2023 comparable period, rather than the actual exchange rates in effect for 2024. Constant currency growth rates are calculated by adjusting the 2024 period reported amounts by the 2024 currency fluctuation impacts and comparing the adjusted amounts to the 2023 comparable period reported amounts. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our reported results to our past reports of financial results without the effects of foreign currency fluctuations. / About Ansys Our Mission: Powering Innovation that Drives Human Advancement™ When visionary companies need to know how their world-changing ideas will perform, they close the gap between design and reality with Ansys simulation. For more than 50 years, Ansys software has enabled innovators across industries to push boundaries by using the predictive power of simulation. From sustainable transportation to advanced semiconductors, from satellite systems to life-saving medical devices, the next great leaps in human advancement will be powered by Ansys. / Forward-Looking Information This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are statements that provide current expectations or forecasts of future events based on certain assumptions. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. Forward-looking statements use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “project,” “should,” “target,” or other words of similar meaning. Forward-looking statements include those about market opportunity, including our total addressable market, the proposed transaction with Synopsys, including the expected date of closing and the potential benefits thereof, and other aspects of future operations. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. The risks associated with the following, among others, could cause actual results to differ materially from those described in any forward-looking statements: our ability to complete the proposed transaction with Synopsys on anticipated terms and timing, including completing the associated divestiture of our PowerArtist RTL business and obtaining regulatory approvals, and other conditions related to the completion of the transaction with Synopsys; the realization of the anticipated benefits of the proposed transaction with Synopsys, including potential disruptions to our and Synopsys’ businesses and commercial relationships with others resulting from the announcement, pendency, or completion of the proposed transaction and uncertainty as to the long-term value of Synopsys’ common stock; restrictions on our operations during the pendency of the proposed transaction with Synopsys that could impact our ability to pursue certain business opportunities or strategic transactions, including tuck-in M&A; adverse conditions in the macroeconomic environment, including inflation, recessionary conditions and volatility in equity and foreign exchange markets; political, economic and regulatory uncertainties in the countries and regions in which we operate; impacts from tariffs, trade sanctions, export controls or other trade barriers, including export control restrictions and licensing requirements for exports to China; impacts resulting from the conflict between Israel and Hamas and other countries and groups in the Middle East, including impacts from changes to diplomatic relations and trade policy between the United States and other countries resulting from the conflict; impacts from changes to diplomatic relations and trade policy between the United States and Russia or between the United States and other countries that may support Russia or take similar actions due to the conflict between Russia and Ukraine; constrained credit and liquidity due to disruptions in the global economy and financial markets, which may limit or delay availability of credit under our existing or new credit facilities, or which may limit our ability to obtain credit or financing on acceptable terms or at all; our ability to timely recruit and retain key personnel in a highly competitive labor market, including potential financial impacts of wage inflation and potential impacts due to the proposed transaction with Synopsys; our ability to protect our proprietary technology; cybersecurity threats or other security breaches, including in relation to breaches occurring through our products and an increased level of our activity that is occurring from remote global off-site locations; and disclosure or misuse of employee or customer data whether as a result of a cybersecurity incident or otherwise; volatility in our revenue due to the timing, duration and value of multi-year subscription lease contracts; and our reliance on high renewal rates for annual subscription lease and maintenance contracts; declines in our customers’ businesses resulting in adverse changes in procurement patterns; disruptions in accounts receivable and cash flow due to customers’ liquidity challenges and commercial deterioration; uncertainties regarding demand for our products and services in the future and our customers’ acceptance of new products; delays or declines in anticipated sales due to reduced or altered sales and marketing interactions with customers; and potential variations in our sales forecast compared to actual sales; our ability and our channel partners’ ability to comply with laws and regulations in relevant jurisdictions; and the outcome of contingencies, including legal proceedings, government or regulatory investigations and tax audit cases; uncertainty regarding income tax estimates in the jurisdictions in which we operate; and the effect of changes in tax laws and regulations in the jurisdictions in which we operate; the quality of our products, including the strength of features, functionality and integrated multiphysics capabilities; our ability to develop and market new products to address the industry’s rapidly changing technology, including the use of artificial intelligence and machine learning in our products as well as the products of our competitors; failures or errors in our products and services; and increased pricing pressure as a result of the competitive environment in which we operate; investments in complementary companies, products, services and technologies; our ability to complete and successfully integrate our acquisitions and realize the financial and business benefits of such transactions; and the impact indebtedness incurred in connection with any acquisition could have on our operations; investments in global sales and marketing organizations and global business infrastructure, and dependence on our channel partners for the distribution of our products; current and potential future impacts of any global health crisis, natural disaster or catastrophe; the actions taken to address these events by our customers, our suppliers, and regulatory authorities; the resulting effects on our business, the global economy and our consolidated financial statements; and other public health and safety risks and related government actions or mandates; operational disruptions generally or specifically in connection with transitions to and from remote work environments; and the failure of our technological infrastructure or those of the service providers upon whom we rely including for infrastructure and cloud services; our intention to repatriate previously taxed earnings and to reinvest all other earnings of our non-U.S. subsidiaries; plans for future capital spending; the extent of corporate benefits from such spending including with respect to customer relationship management; and higher than anticipated costs for research and development or a slowdown in our research and development activities; our ability to execute on our strategies related to environmental, social, and governance matters, and meet evolving and varied expectations, including as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, and changes in carbon markets; and other risks and uncertainties described in our reports filed from time to time with the Securities and Exchange Commission (the SEC). Ansys and any and all ANSYS, Inc. brand, product, service and feature names, logos and slogans are registered trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All other brand, product, service and feature names or trademarks are the property of their respective owners. Visit https://investors.ansys.com for more information. ANSS-F Contact: Investors: Kelsey DeBriyn 724.820.3927 kelsey.debriyn@ansys.com Media: Mary Kate Joyce 724.820.4368 marykate.joyce@ansys.com Photos accompanying this announcement are available at https://www.globenewswire.com/NewsRoom/AttachmentNg/771cf00e-f710-44a2-8ccc-01eb3722147f https://www.globenewswire.com/NewsRoom/AttachmentNg/463dbc35-5aba-4a20-b2cb-2f5ed540482e https://www.globenewswire.com/NewsRoom/AttachmentNg/37428910-76eb-46be-b869-77a96fa55c58 https://www.globenewswire.com/NewsRoom/AttachmentNg/37a46a1f-16f4-49b3-b28b-7074ac1615f3 This press release was published by a CLEAR® Verified individual.

Ansys Announces Q4 and FY 2024 Financial Results

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