Engineering simulation software and services provider Ansys, Inc. (ANSS) delivered a better-than-anticipated first-quarter performance on both its top-line and bottom-line fronts. Additionally, the company has also bolstered its electric machine design expertise with the acquisition of Motor Design Ltd.
Revenue rose 15.2% year-over-year to $428.6 million, beating estimates by $19.4 million. Earnings per share at $1.36 came in ahead of expectations by $0.20.
Notably, Ansys delivered an annual contract value (ACV) constant currency growth of 11% during this period. Ansys President and CEO, Ajei Gopal, commented, “Our customers continue to rely on Ansys simulation to drive innovation across their next-generation products. Looking to the remainder of 2022 and beyond, I am confident in our ability to execute against our model.”
Moreover, buoyed by the present environment of robust demand, the company increased its guidance for fiscal 2022. Revenue is expected to grow at a rate of 9% to 12.2% as compared to earlier guidance of 8% to 11.1% growth.
The company sees earnings per share land between $5 and $5.54 on revenue of $1.1 billion and $2.06 billion.
Motor Design Acquisition
With the acquisition of Motor Design Ltd., Ansys has expanded its footprint in electrification and strengthened its electric machine design offerings, which help the company’s customers bring more efficient electric machines to market.
Shane Emswiler, Senior Vice President of Products at Ansys, stated, “Motor-CAD is the leading electric machine design tool. Bringing its technology into the Ansys family of multiphysics analysis software solutions will allow us to deliver tighter integrations and seamless workflows for all aspects of electric machine design.”
Deal terms remained undisclosed, and the transaction is not anticipated to have a substantial impact on Ansys’ consolidated financials for 2022.
Analyst’s Take
Robert W. Baird analyst Joseph Vruwink has reiterated a Hold rating on the stock alongside a price target of $337.
Overall, the Street has a Hold rating on the stock based on three Buys, six Holds, and three Sells. The average Ansys price target of $335.55 implies a potential upside of 16.2%.
Retail Investors Remain Positive
TipRanks data indicates investor sentiment remains Very Positive about Ansys. The number of portfolios holding Ansys has increased by 4.3% in the last 30 days alone.
Closing Note
Ansys has delivered a resounding performance during this quarter. Double-digit growth in ACV bodes well for the company, and the strategic addition of Motor Design significantly bolsters the company’s electronics portfolio.
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