DEF 14A: Ansys Reports Record Revenue and ACV Growth in 2023, Anticipates Synopsys Transaction

Ansys achieved record revenue and ACV growth in 2023, driven by strong performance across major industries and geographies, while also preparing for an impending merger with Synopsys.

Summary

• Ansys reported record revenue of $2,269.9 million in 2023, a 10% increase compared to 2022.
• Annual contract value (ACV) reached a record $2,300.5 million, up 13% from the previous year.
• The company saw ACV growth across major industries, including high tech, semiconductor, aerospace and defense, and automotive.
• Strong performance was observed in all geographical regions and across direct and indirect channels.
• GAAP operating margin was 27.6%, while non-GAAP operating margin was 42.6%.
• Operating cash flows reached a record $717.1 million for the year.
• Ansys repurchased 650,000 shares during the year at an average price of $302.34 per share.
• The company expects the momentum from 2023 to continue into 2024 as it prepares for a transaction with Synopsys.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with record financial results and strategic initiatives, but also acknowledges potential risks and uncertainties.

Positives

• Record revenue and ACV growth indicate strong business performance.
• Broad-based ACV growth across industries, geographies, and customer types suggests a diversified and resilient business.
• Continued investment in product innovation and strategic acquisitions enhances the company's portfolio.
• Commitment to employee talent and engagement is reflected in high rankings and employee engagement scores.
• Achievement of scope 1 and scope 2 emissions reduction goal demonstrates a commitment to corporate responsibility.

Risks

• The proxy statement mentions risks and uncertainties that could cause actual results to differ materially from expectations.
• These risks are detailed in the company's Forms 10-K and 10-Q and include macroeconomic conditions, political uncertainties, and cybersecurity threats.

Future Outlook

Ansys expects the momentum from 2023 to carry into 2024 and is preparing for the impending transaction with Synopsys, which is expected to close in the first half of 2025.

Management Comments

• The Ansys mission statement is to power innovation that drives human advancement.
• We expect the momentum from 2023 will carry into 2024 as we continue to enable our customers transformations and help them to design and develop the most cutting-edge products imaginable.
• By joining forces, our two organizations will combine each company's highly complementary capabilities to meet the evolving needs of today's engineers and to drive new levels of customer innovation.

Industry Context

The engineering software simulation market is strong and growing, driven by customer needs for rapid, quality innovation in a cost-efficient manner. Key industry trends fueling customers' increasing needs for simulation include electrification, autonomy, connectivity, the industrial internet of things (IIoT), and sustainability.

Comparison to Industry Standards

• The document compares Ansys's total stockholder return (TSR) to the NASDAQ Composite Stock Market Index, the NASDAQ 100 Stock Market Index, the S&P 500 Stock Index and an industry peer group of seven companies (Autodesk, Inc., PTC Inc., Cadence Design Systems, Inc., Synopsys, Inc., Altair Engineering Inc., Aspen Technology, Inc. and Dassault Systemes SE).
• Ansys ranked at the 38th percentile on revenue, 54th percentile on 30-day average market cap, 12th percentile on number of employees and 93rd percentile on operating margin within its peer group.

Management Changes

Related Party Transactions

• There were no Related Party Transactions requiring disclosure under SEC rules in 2023 or 2024 year-to-date.

Stakeholder Impact

• The proposed merger with Synopsys is expected to benefit stockholders by providing them with cash and stock in the combined company.
• Employees may be impacted by the merger, but the company is committed to employee talent and engagement.
• Customers will benefit from the combined capabilities of Ansys and Synopsys, leading to new levels of innovation.

Next Steps

• The company intends to file a definitive proxy statement relating to a special meeting of stockholders in connection with the transactions contemplated by the Merger Agreement.
• The company will continue to invest in its product portfolio and partner with industry leaders.

Key Dates

Keywords

ACV, revenue, simulation, Synopsys, financial results, proxy statement, Ansys