ANSS - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to ANSYS's Fourth Quarter 2018 Earnings Conference Call. With us today are Ajei Gopal, Chief Executive Officer; Maria Shields, SVP and Chief Financial Officer; and Annette Arribas, Senior Director, Global Investor Relations. [Operator Instructions] Please note, the call is being recorded. At this time, I would like to turn the call over to Ms. Arribas for some opening remarks.

Annette Arribas

everyone. morning, Good

that would and information the and to results filings posted in discussed release year website are prepared documents as key public important full QX with key our remarks morning. everyone our initial available relative assumptions. affect Our quarter our to outlook are our business that course during fourth future the the update, length may our homepage XXXX been and which financial the of call, on contain addition XXXX also Relations fiscal via I supporting risks highlight of like have data the uncertainties the this They to and financial factors SEC, any that earnings in year all related of and and website. at our results remind underlying and this well Investor we of all as

should These information, be the an we our of based that Additionally, ANSYS do as the risks forum. in there not obligation and uncertainties our a update no view considered to upon future in undertakes are company's today future. indication the performance could such business and public impact business are as statements results any of reported so of unless

have will to financial last full excluded under items no terms to reconciliation Form of a that a Pittsburgh unless and stated. I'd in X-K. held morning's Thursday, referring of are showcase ASC for in XXXX technology Investor Day XXX our like ASC Further that all logistics During related near on to will I details around announced otherwise ASC measures ASC Note, and would and IR any available take future before. Please to be the evening to be of Gopal, in the this turn call, very financial XXX year discussion and release revenue earnings ASC Ajei? website. ASC since will our in will GAAP like and to under XXX both the prepared the non-GAAP In be reference with growth announce the this we call be XXX reception for now note various remarks, and opening that results results. in non-GAAP the closing, under comparable measures explicitly on materials we'll XXth Ajei to be unless XXX. event are in references that to CEO, XXX our mean his September over remarks. location, referring included revenue we A to we're agenda baseline

Ajei Gopal

QX growth morning double-digit Thank Annette everyone. in and ANSYS. quarter operating for share was cash and you, flow. We revenue, another exceptional good per earnings delivered yet

the currency constant in QX XX% growth in comparison because notable ACV of of XXXX. of with Our challenge particularly was

over past the and introducing go-to-market. pillar important For a objective. is increase XXX objective. the these great industry XXXX maintaining with transforming provided currency. in to pleased to priorities At I'm backlog the XX%, in we're we leading We our over and The And year XXXX, XXXX that Day growth by in and the ending of Investor by was need course double-digit XXXX which our year, revenue tracking by in revenue new we advances core to year deferred margins. and million central double-digit the constant our grew strategy by with both the record leadership $XXX our growth I'm to a XX% and a in ACB QX XX% ended and objective sustained our in QX XXXX summarize, that in were extend of stellar results our To to confident a all strategic innovations we introduced pillars across several journey both made that revenue guide have our XXXX. while was outstanding growth financial XXXX. announced grew business

products. of that in new optics innovations flagships platform these Building in from solutions, capability this after multi-body solve XX.X user ANSYS innovation important start SCADE, in helping is seconds solution. our problems. momentum dynamics and industry-leading innovation, customers a CFD RX our including multi-core some me display SPEOS, product our features month. of Let delivers scanner results electromagnetic and embedded as launched and most a support our on RX last interference of the electronics with intuitive XXXX year's earlier of part solution, flagship releases, software heads-up [ph] in we solution, Each and new fluent series line the experience challenging individual

Taken ANSYS capabilities. advanced with they simulation that leading show is industry multi-physics together, however, the

customer market by sensor and multi-billion XM weather in new to a material new advanced include ANSYS developed Microsoft the a solutions. challenging on-demand fast-changing our products. is ANSYS additional under Initially cloud-native ANSYS third-party performance providing Based Azure our integration autonomous in dollar of the in successes cloud. to both launched highlight on mechanical demonstrating chase infrastructure a products most let or customers information driver the offerings automotive which advances R&D. to the seamless by we sensors deliver that from in enable another and to adverse doors example by ANSYS assistance the our enabled is offers recently also across public Today ANSYS credibility opening the how tools where fluent, aggressively offering opportunity. they ADAS. to portfolio materials of We enhanced that conditions. services ANSYS market systems. with This has me systems are computing high-performance advanced customers helping core ANSYS solution optimized The partners with of some and nicely and their lighting address some and dovetails XM access are cloud for opportunities problems in continue hosting help is investing and

digitally with algorithms, a offshore vehicles oil $XXX,XXX Another that's and test in-water tests use XX%, each Solutions to with day. rigs. is could for developing great multi-physics a upto example avoidance that of using our is cost autonomous They by obstacle can which are when technique run Integrated ANSYS solution reduce critical Oceaneering submersible

may you to geographies, Moving strategy our Europe. key ago maximize of to years our on embarked we had market us correct a transformation and opportunity to underperformance recall two in allow go-to-market notably sales; to that

Our addressing new We inside and territory of That sales, from opportunities partners, you new revenue our transactional numbers. strategy business to geographies. approach momentum of enables of go-to-market strength us sales effectively our in can through close our large and deals combination while channel direct grow efficiently as ANSYS volume a or the all through enterprise growth unlocked has saw simultaneously large team the ACV and see sales.

continuing way grew led growth had currency While XX% the constant constant in and delighted North currency, I'm America XX% expected. growth, in we with XXXX, that QX in recovery the Europe both

I'm enterprise history On largest we And of lines the across ANSYS. customer. QX XXXX that in off million time long-standing to with large the a we with began a a $XX front, the with product capped the the multiple million announce at $XX contract, thrilled contract customer year

potential The pillar addressable second of selectively to high was strategy market. investing adjacencies our our expand growth in

that used validation traditionally remember simulation been a may primarily as You has tool.

capabilities, the simulation we're design will upfront and our operations solutions expanding Twin the part simulation with in of pervasive use additive with our in for it's for the additional captured As the in Live manufacturing Live simulation design offerings process of manufacturing XXXX and during engineers Builder. across stage building setting and year vision with Discovery of XXXX be these globe. With beyond. real-time a growth has Discovery attention validation the

best and benefits seeing any quote the Discovery Live, the has deal. To and solution leader the ANSYS reducing ANSYS new development of costs are the users process signed one Discovery of simulation for Discovery is first of solutions engineering customer, Live Endress+Hauser, and are long-time of instrumentation, earlier process product market decade. agile, X-figure with One QX, end are ideation. by simulation at engineers, services we up This we "With is time global measurement picked product to awards industrial than our Discovery new And in the Live. bringing in product of Discovery we the other cutting in in we last efficient." company's fast, more

partnerships to of solution, was half and years, for is twins. products, home next Twin simulation-based physical of to to the component our solution and product the and global Builder create reliability, decrease our supporting information product using reduce strategy the new need amongst Twin industrial market. boost expected virtual in companies giant Another the pursuing deploy an validate for is digital pillar to development. traction The and the seeing growth market, are The with the LG research share acquisitions. large market appliance and twins at strategic Builder improved prototypes IoT time testing, level build, we next three air Builder, the enables digital customers Twin of in deploy enormous and to The early division

On Creo. With live side, leadership, new reach released into Creo which PTC's ANSYS of week a ANSYS world. technology last design base grows and market the engineers to this the partnership partnership broader the around PTC simulation Discovery embeds

While market are positive. evaluate indications success, soon early it is too to

in continues had most XXX as it's earnings M&A reported from pipeline. it's to recent well that During following customers release, us. December short-term XX it's than call, a for PTC more orders highlight be already it customers preview as

advantage a M&A and technologies, and sales, companies ANSYS same growth long earlier vast acquisitions, broader both, and of innovation successful invest of know, customer that to leading a following closed acquire has with which ANSYS month. adoption for in you we portfolio, both with with integration drive the of two As playbook take history where increase and customer We're our most recent footprint ANSYS. this ANSYS

material Design, of Granta is intelligence first the The and technology. pioneer information

customers data and has variety Granta having and Rolls increasingly used to share through we materials simulation sophisticated enjoyed proven And size. cost other that example, With is and accuracy. capture, because although technology their million for $XX Lockheed reliable to to Martin, legacy Airbus; accurate, world-class the Aramco, success limited a the has few Granta their largest developers of most companies. available in Saudi and testing, of Granta traceable today Royce including with information reduced was critical avoidance. of product some materials distribution save

in of drive customer ability opportunities much ANSYS, by to to reach growth Granta customers Now solution material a many geographies, larger all there base. part introducing to new with as are our the

particularly noise solutions combined our with electromagnetic electromagnetic smaller and solutions. because and like help semiconductor noise. closed and designs. This to extensive engineers to on builds promise electromagnetic well power integrity artist, which Artificial will deliver need the mitigate ANSYS We mega-trends acquisition, is XG as the analysis HELOC, electromagnetic power also driving technology Intelligence great on-chip when of relevant solvers combat analysis for a market-leading technology, the for risk as HELOC crosstalk are analyze of next-generation our

for drive selected, to initiatives. guidance named Last an for month, last our strength commitment revenue talk we've to ASC and I franchise. XXX Corporate light corporate to for our tracking grow turn the in M&A. I'd is over XXXX now by year. is and the it Corporations objective, the same remains on minute strategy social Global strategy the ANSYS especially testament in constant full partnerships growth company XXXX core, companies excited ambitious to call a pursue to to growth of recognition appropriate growth And we want the and expand a at Nights, were a this the to to I'm governance about of focused is This currency continue environmental, to Most in XXX as XXXX, as the a place our Our employees. XX% that the Sustainable and into sustainability. solely take firm our like With Maria. performance ranking powerful committed of is stellar our the This We'll year. adjacencies midpoint and

Maria Shields

everyone. Thank you, morning, Ajei. Good

QX XXX I'll heard ASC Consistent from XXXX. beginning the quarter our our XXX. an providing by with to and is we of Throughout under only another As take few XXXX, and additional fourth the we both, exceptional annual ASC financial results. for under comparable with quarter results year we reporting key outlook and when XXXX. assumptions financial update ASC and year, Ajei, have strong you QX to past close on been minutes a you and we'll outlook XXXX, throughout any financial This and add our delivered will some accomplishment and our of financial around measure messaging quite transition in commentary XXX. both, an consider and performance, results

XXXX today's results of that make be XXX, time, I For and And purposes metrics for key to unless comparing will non-GAAP, and relative to the orders I'll rates practice, growth ASC our my last with ASC future any provide currency. in constant terms under XXXX commentary, both state comparisons XXX also under I like we in XXX, ASC financial cumulative will be removing communications. announce our statistics comments be on standard above $X and will the to otherwise. consistent of million would We that in

it incorporating two multi-physics. be years has $XX when mentioned, metric begun million Ajei ago, is to is both, the million gives relevant in this decade values arbitrary, that While less that higher weight a less meaningful not was threshold $X become we the increasingly previously past performance. to may has the than of and useful transactions and we over X% that first as which experience value, believe It equal evaluating introduced to the company deal our transaction transaction over a with

to across want $X the our mention large As $XX XX% we go-to year-over-year that calendar we a and market with four increase progress and of XX closed the I growth fourth overall the is that year. orders over indicator move customers best million, forward, do had that million. over ACB full quarter had customers deal we believe orders of the

the both, QX We quarter, of of reflect we strongest execution Our momentum ASC results our accelerated high-end XX% experience for across under growth reported and and EPS company. and the business above ASC revenue that guidance XXX. XXX the which in finish and constant results for a continued we're ever, currency our year XX% the year, great one to

record against XXXX Our quarter every to record make on and of us are throughout our a ongoing to deliver strategic another we that continue confidence to priorities execution progress path of gives XXXX. and year in QX financial XX% of ACB Other currency and respectively. results highlight metrics growth would to begin fiscal like year key that XXXX with constant I XX% financial of

large billion of XXX billion under recognition the million $X.X $XXX the XXX. quarter ASC ASC leases and XXX $XXX and ASC under primarily with For respectively. two component total license XXX year, of $X.X ASC million between XXX total under from the revenue disparity ASC the reported revenue we and upfront of coming Fourth the and

three revenue XXXX because the approximately results revenue variable for minimal and X% comes inclusion this XX% increase backlog additional revenue, high The and geographies digit relatively impacts support the the is each in high comparable. our investment value ongoing Deferred largest innovation As a XXXX strong XXX XXX of within currency not of increase recurring totals under of XX% base earlier, X% balanced ASC the our ASC the in our in digits upfront maintenance the indicative of totaled our the further, XXX expansions new and QX respectively. $XXX increased results driver on year software delivered that $XXX with across of license line. results a the revenue. to and and major ACB, cost. and services. XX% fourth in This deal, was revenue, fiscal X% mentioned Total Lease revenue strong growth adversely in also million with XX% recurring overachievement recognition The currency to upfront or year more of top for rates XXX double by of for global EPS. of transactions. and each quarter revenue pronounced XXXX the the and both, our of for This ASC year quarter revenue And results QX of and $XX the recurring for the recurring illustrates deal revenue record license for in million XX% renewals on QX quality constant ASC in $XXX strong the sales volatility and a earnings that renewals which last maintenance was place and lease strong very double of and our our of guidance our total in and in from XXX, streams million included bottom representing as $XXX entire each or It $XXXmillion also as volatility XX% revenue, total principal customers even Under million. our under grew component growth QX the constant well was for our and year respectively. in the the the which multi-year $XXX grew million, history. quarter diluted deferred revenue, included and million totals backlog X-year increase deal combined year's over contributed customer and a our XX% under

Our in recent and performance. high were sales hit fourth driving and quarter margin for personnel over we to ASC EPS throughout XXX XX.X future under that the quarter that ASC the year, reported of strong year. under strong $X.XX a XXX. incremental growth top With we the the margins The by operating under expectations expectations we guidance are ASC and last accelerators. base record year ACV XXX. XXX, and growth the our to tax XXXX quarter revenue operating quarter performance standards, their The is XXX have for financial and lower beginning also growth that ASC effective our finish. commission the And a for the the our overperformance in the QX. full our under top ASC the rate significant and predictability and XX.X% $X.XX discipline revenue and for for that typically around taxes, is achieving the XX% were improves results to full with reflects growing under line XX% margins margin The year was year both our were fiscal occur sales line annual by both fourth driven with commissions for over approximately also quarter sets very committed the managing and consistent % finished $X.XX XX.X% a respect fourth business ASC for we Both We with evidence the XXX, investments fourth EPS consistent on to are results and XX% recurring was set of the year. with of planned. XX.X% the ensuring The exceeded of at XX% EPS XXX the The XXXX that are under XX% $X.XX incremental of quarter primarily under maintained under the driven and over as quarter. year. the

rate we And QX tax to XXXX, mix currently income for of to slightly year. the higher have full which and XX% the as higher US. rate in range our of we to effective into ahead XX% assumed Looking XXXX, expect the jurisdictions a for be in have foreign compared a tax

operations total and the was we million $XXX a at shares $XXX $X.X XX% and I the $XXX we $XXX,XXX cash $X.X are allocation And for total repurchase. of discussing with priorities, $XXX during and is and is us in $XX line we shares from quarter have but we a our held give need intended short simply of million million million capital repurchased wanted grow term Also, closed to which to in revolving and the that year. credit $XXX million imminent the Currently, with while quarter investments also for just communicated any during totaled respectively. domestically. cost the for additional new available cash while line capital closed our for business. a of previously the to cash ANSYS line shares Our not continue of note XXXX flexibility year flow as fourth for balance, we We X-year million credit million of

guidance. to topic turn me let of Now the

in to EPS of and for year non-GAAP $XXX million billion of the in XX% the for revenue of million non-GAAP guidance range fiscal We million expect revenue in QX are constant of $X.XX initiating the expect $X our currency a $X.XX. and to in growth range we XXXX, of to range And $X.XX $XXX and million non-GAAP XX% to $XXX $XXX or billion $X the EPS range $X.

from businesses. contributions and recently acquired the the Design HELOC includes outlook Granta XXXX Our

revenue core remainder the and forecasting XXXX in capital to will currently be into of investments near million range of for of the acquisitions are ACV integration of to and acquisitions impact necessary as year the We will combined impact result $XX incremental $X.XX the in the million a these utilized $XX of term our approximately the for XXXX. that business. we of dilution $X.XX throughout integrate the

Our for ACV constant $XXXXXX currency million; ACV to growth of to outlook XX%. represents of range is a million XXXX X% $XXXXXX this

lease annual a well incurred impact XXXX $XXX that for flows accelerated profitability million and outlook fourth of XXXX is XXX tire expected like ASC the of initial of first cash adverse range payments million for I as tax year that quarter would the revenue Our under that $XXX highlight for to to outlook operating in relate XXXX. license as related the acquisitions. our include the

For XX% HELOC expected X% XX.X% the first for in in operating of and modeling XXXX. operating The XX%. of to year the range margin approximately Design XXXX, purposes, we're announced are to fiscal recently of quarter in acquisitions expecting and our Granta to margins range by impact XX.X% adversely

progress head focus results into transactions due everyone I of be As quarterly will ASC as revenue annual under against margin and that the from to remind we operating timing in the to volatility that on large simply lease to XXXX, result quarterly like EPS opposed XXX. again would targets our

currency grow particularly our our large seasonally QX stronger. for largest XX% in It saw XXXX to business new ACV constant our volume with business continues deals. quarter we by multi-year growth far for As results, is

currency financial metrics. contained pleased As for and dynamic. outlook all in summary, we remarks specific strength our have both factored to another are other with very delivered see QX key look prepared the a are and large of quarter excellent details very across and year into our pattern document. similar we with we In rates XXXX have Further to ahead that key around seasonal XXXX QX a assumptions disproportionately been

business, solid investing XXXX confidence well supplemented and customer to pursuing and our strong the gives a to focus now recurring relationships our lines our pipeline, value stockholder as growing take organically both to share will strong us targets. in our targets that execution repurchases. on questions. the base year year by also important through We term and sales a to on capital healthy additional deliver long in investing M&A to business, provide deploy and our business, for phone financial we another continued of Operator, close as strong in open continue foundation M&A XXXX core drive another

Operator

first Richard Instructions] Valera from comes Needham question [Operator Co. of & The

Richard Valera

you Thank and 'XX the the on here I sort in in wanted the It impact, sounds and congratulation just promising results. Live and Discovery Ajei as your on strong beyond. like of on some some hone potential get PTC sense both agreement, organically. well to from initial returns as

if us out terms think for about So frame you maybe term? that how that of just you. baked you could for longer in you've and what 'XX Thank in

Ajei Gopal

new is it's have of with Discovery as it obviously well. was yesterday there in our conjunction about announced as the it to webcast as recently PTC. terms I've comments, week what signed through or webinar as my have individuals far last X,XXX as technology I taking webinar announced said in X,XXX market, was very we're PTC excited both, that up had in for that directly that with As we the we product, and force, concerned, we're -- think OEM a customers sales well

as is So excitement lot a PTC for base in well obviously there that. customer the of

in is year; fact transformative while as early still this revenue the product a to big this we product we we're I see for very essentially validation don't gain think is a whether get as -- our a to is market So stages about momentum. being see it, this is here for which not it a takes really XXXX excited yet,

integration new to it. technology, their revenue continue product this as a will So I'm and learn We'll more our seeing year the to results forward year of out from into to perspective. looking technology a continue we building tangible we'll next see improve versions and some the PTC with year with really come this of

Operator

The next Ken comes Guggenheim Wong question of from Securities.

Kenneth Wong

of the year But towards be maybe saw how about to at Maria; obviously framing, may 'XX; and it's down have of where investments your when some a we of obviously talk question the coming some 'XX? with investments been looking margins those guys the you that's could your kind what growth. go consistent geared in kind maybe you XX%, of XX% fiscal just outlook step double-digit where margin from This margins of for in are headwinds with on can

Maria Shields

two his Ken, the margins I'd in Yes. the that remarks. for Ajei the impact are on acquisitions the to say from spoke dilutive biggest headwinds

As at imagine, you -- -- but we're margin acquisitions most [ph], extend are have the so technologies can the structure near roadmap our smaller ours looking advance that and tuck-in of particularly, capabilities. multi-physics important that's our that no there

two dilution XXXX be integrating some as as will investments we those we investments, of to making well more becoming So them integration capital relative see and deployed, those have creative XXXX. as to acquisitions, and result a the we'll we'll in as profitability into head

talent, be and able in business continue [ph], invest the and engineers, infrastructure R&D, to AEs scale business the in over to we to field business, core long-term. are from the continuing Additionally, the to

Operator

The comes from [indiscernible]. next question

Unidentified Analyst

if -- large we would like very, mega the deals on call focus I them deals. just I very know bit to a don't can

year you, of and that deals makes would the those much sense. seeing for of how about the previously deal you're may have those number fact In now; in breakthrough a a kind usual through of large takes? come to what the it be the of after maybe of and can was effort terms talk the hope of predictability that -- XXXX I bit take kind the that nature cycle compared you terms deal sales

Ajei Gopal

deals. large comments quick A couple about of

second And that's relationship levels we technical that happen that's well these obviously aspect an multi-physics so example. product the product many not takes $XX pull of relationship because because thing ours, seeing they about essentially are it's just with is products relationships. single those together and a a deals we're and large of And just making is when are long-standing that lines, our themselves, we is Firstly, both are these -- relationship from multiple deals, that think the these years deals. of large us between for what important of a company as a the pride so are important really as at multiple in one large the of challenging [indiscernible]; that's customer as they deal solutions our of multi-physics large product, investments of these in more ourselves looking analysis companies at And as well they another problems, about necessarily direction at some by element maintain are the they a capability to this are happen they customer, going, we're result million some require more, looking where customers; are and deals of long-term which of we talked from looking so and don't and as as on us develop, deals. that's and these and as a we

way in and about obviously -- heavier you of when quarter some thinking that the QX so XXXX the so deals, kind for of activity the latter of part be about part a the much going was is the to QX that is pipeline seeing of year. quarter, in also year, we're the a that's heavier like year a lot larger year, backend we're of this loaded we're focused we're And for think happening backend this

relationships can and our the been deals, they the organization, have and bring to [ph] these forward the relationships of with both, that technical to go into understanding we understand sure part from relevant So solution the the we're into or this organization with as pipeline, develop, developing we said, in take we we how to sales our sets that and deals customers, years have visibility these pipeline, is make to perspective. slotted-in and what manage as execution an the building bear like cadence look business I of then large these

Operator

JPMorgan. Sterling from of comes question next The Auty

Sterling Auty

prepared your remarks to ACV? the how XXXX, semiconductor the sense, from you to are of portfolio you then, of as just versus look us of contribute much talked cross-talking in; In your design; expecting Maria, EDA curious a of full some you rest sneak did And more I'm you to XXXX the at what the kind of dynamics growth portfolio? actually the about year acquisitions XXXX come give can

Ajei Gopal

for strong general, us. 'XX. Obviously in me So let opportunity very quickly the very electronics, in address is

solutions notes. high-tech see more XXXX the of that help are of obviously things us, we the nodes level, at opportunity discussed as fueled the market. one beyond, and And that at autonomous necessarily are both, implications level, all XG, as for have uniquely cloud physics, more able the But obviously EDA the traditional physics pulls level, it's analysis, system it's board our the perspective, from process We multi-physics tremendous also understanding and understanding of at for process in in well need broader to not requires about the individual -- in and different all frankly, in and be with at and in customers to do semiconductors being across an solutions rolling complexity for for demanding looking past. the complexity driving of chip into that these advanced that's and semiconductors, as computing; the by AI, market, it's that we've

in see these use And the important think of to as Maria? semiconductors so I be next-generation applications. that's certainly we very going

Maria Shields

the to contribution Yes. to the $XX it ACV from was acquisition million. XXXX, relative in Sterling,

Operator

next The Saket Barclays. comes of from Kalia question

Saket Kalia

you $XX can multi-year the work? deal in Maybe quarter, million collections the how the Maria; on lease for us remind that you will cash on deal large

Maria Shields

Yes.

So with Saket, X-year deal first materials, and into saw in a the you payment XXXX. that annual come it's will as payments

Operator

Steve Wedbush The next question comes from of Securities. Koenig

Steve Koenig

doing here. I'd -- what you're maybe cloud to like in your dig into

product customers solution [ph] Azure bit by them got either hosting going model here? and to how relative -- Ajei can remind you then, you've And new cloud a for and kind on to new offering -- [ph] just us rent currently market might of be you your different and you you're or or BYO mentioned what's backup the you're going in solution of so the -- that or a partners? me just just are BYOL us the offering, that then remind -- Maybe model? cloud partners pricing market so, what And Azure. hosting new how little to are And different about how native refresh

Ajei Gopal

go-to-market you portfolio. around turnkey and with network are So, we the currently of the essentially cloud-hosting pointed you to who as they access partners the provide rightly said, globe, out ANSYS

them a use. and with So they technology advantage solution. as essentially with a whatever infrastructure public as our they well cloud take technology, are to third-party choose both, offer able carve customer and The as cloud-hosting [ph] works partners ANSYS work as that of to --

within the partnership in And in if -- access with the great you initially this slightly the [indiscernible] cloud partner, cloud, is, directly taken a us them. done will, we've the directly working and can with directly and and for different fluent you cloud. cloud flagship as the serve with the with in they been products that's a works our mechanical, we've So HPC capabilities now customer customer partners the approach; that's the here case, well. cloud-hosting very What within ANSYS

the the it how with advantage to and hosting adding without choice cloud provides product the because HPC And the built then provides to cloud. every power nicely excited so And cloud more of months the have can take expert the having an it's use option, It coming we're to that HPC, we'll compute and and cloud. public and be bit customers. this you're -- makes ANSYS it's work enlift which -- in a our our And want essentially into cloud accessible, they this the convenience for provide, in when can you public capabilities day, to dovetails engineers seamless obviously environment or use seamless, they even choose little about public completely using that in UI, customers provides -- our easier leave HPC to additional makes more services they our without the that. that they excited what providing completely being with to obviously customers and of the partners, about what we're an

Operator

of comes next Gabriela Goldman The Sachs. question from Borges

Gabriela Borges

dynamic to Ajei, customers. your about Top ask I XXX wanted the at

we've dedicated of Thank how about those would penetration you can on largest more any be do and adoptions your penetrated customers, at As to that, percentage helpful. actually share And think technical sales. as are customers? you How resources of multi-physics part ANSYS metrics grown a you as you.

Ajei Gopal

Sure.

As already -- customers, more say the of them. three taking or or XXX you deals products will, deployments well know I multi-physics most have for these multi-physics physics that these of I'm larger from deals probably them multi-physics if larger would do advantage you or I more largest our as that mentioned, in three include mean installed; and -- nature. I

execution there customers very about opportunity say market simulation the a -- is the designers of and demonstrate in we're sales offerings. things stages that case where that it's obviously our there customers, in of the to we're is penetration about if then still it's In different it. the right; buying to pervasive. the XXX technology manufacturing need there to customer of and you obviously increase is and under-penetrated value simulation if of to because some So opportunity that use make think think need think used for would plenty pretty able into because Historically, deals, I going even and need is because early largest but of simulation you addressing customers sales the significant technology these at our into yes, be and it's said, I opportunity. would that's didn't use they simulation the I to I the used and to also we needs, been but demand improved continue phase with the improved for The validation think translating of more the downstream strategy cases, for no multi-physics broad the of the into even there use technology, when customers. simulation. that a still different is upstream think large operations, the one greater larger the to That execution, we're And being it's seeing the it is start have

deals; for to expand then the with don't nature. and I anything into number [ph] years of we we're are or and a of customers large see we've and those organizations these continue footprint these reaching you asymptote so that that believe And the had penetration an

we're front So excited future, about the excited we're about in opportunity our us. of

Operator

Ken comes from of question next Evercore The Talanian ISI.

Kenneth Talanian

give sales and if wondering recap was year and changes channel both, the a of you made force I plans you us the the to your XXXX? could for this

Ajei Gopal

Sure.

you in exactly is segment and couldn't a number further customers typically, direct ANSYS our after if through technical a tell XXXX our -- importance pretty small categories I an what is the account base largest of from. customer will. segmentation deals to versus we have happening the these be and with and large you what was did is come different lot of manager I customer directly we them And customer separated the address of of did force, customers. and deep There into the one you'll but XXXX, think essentially support, a sales the tend of where a this looking where

sales the of it's less, working who with also or what And have it's sales is are We us is we largest on sales individual we one-to-one, much the focused next-generation call then will so to also the next who are we transactional motion accounts. a have have would also or we coverage -- have these you where different partners if channel single which customers in level nature. territory momentum the less, call may accounts not accounts cover are not what individuals we cover or more and several

territory accounts. through we're channel these sales and the of so cover partners And to of some combination able

organization We an them our deals sales invested nice meetings we're well. as is be an tend are business our have have and very set inside activities inside sales not also to we -- to just just and of inside close but smaller can organization. Obviously, telephonically to able deals sales, actually that that those not through up demand, some then in is organization inside create doing well, but it's

sales contributing direct be of to combination able to the that effectively, so leveraging with of organizations side. leveraging our both on channel aspects focus, go and territories being able and transactional as on the inside well partners enterprise larger to more what's And side, being scale the to to to the been on manage as able business is success enterprise a smaller fronts, the really large

sales work, people, XXXX. into in HELOC, and motion, look, in to that we're that remains in we the organization. are direct new Granta As about into into namely of integrating a that we're our obviously as well -- means obviously available customers our form market position as we to the think have as to described our that, enterprise technology be the as Outside our able will XXXX; momentum about them in sales being well, I going that organization for sales challenges two the go take to manage so same a sales technical channel teaching acquisitions accounts sales structure integrating business and to forward as excited that be organization better to the the large of well the partners we as organization place after market; as we

Operator

Blair. question next Pfau William Matthew comes of The from

Matthew Pfau

using could Just about ask seeing; ANSYS? is wanted And coming typically is talk maybe it you budgets it would you Live; be the on Discovery typically for would users the see Thanks. different from these you're ANSYS? to purchase deals, different used then initial traction to funding than

Ajei Gopal

-- within we've we that that customer. that be customers Our a had approach it for it different user may Discovery; Discovery may who be been be think two-fold; advantage excuse one large it is are larger has me, taking -- customers base although could historically of

be of solutions but have do not different used -- the from cadre So a ANSYS it flagship historically benefit who users could the who use may simulation. who of

that's how the Live we've to there we of colleagues about. some harder thinking there are they conversations smaller, of would it customers are our that's well. users that have other then even also tend historically but within bring also think as seeing been that own they haven't opportunity it about us be within that about you opportunity an not terms at we're different right that with believe from that the Creo Discovery And be that we who been could though customer, we say positioning our felt go-to-market we is would ANSYS area and that though as would to of -- an that in able large who So -- that. excited we're customers I will necessarily seeing same is with certainly having quantify would well. the found that, be manage benefit that's haven't now for And -- simulation they're to to but think And user even PTC in use a as

Operator

The from RBC Capital Markets. Ross of comes MacMillan next question

Ross MacMillan

constant that your QX that like if was when think out I this look in on just I XX%, would about in I a the that's of that guidance? is deal multi-year just excluding I this kind organic from I elements the 'XX, about constant growth one ACV big can would any in think not related wanted thinking you so on And much. the currency of does to just even we to down. so you're you step So currency organic it the other and then it's And sort prudence at or the that at when X% there said your are all deals philosophy things QX transactions; that if in basis, maybe of And 'XX be create look are a touch these future take large deceleration? X% range; to on of we know -- guidance, XX%. large just was Thanks imply

Maria Shields

build in be frankly the outlook gave of particular, bit of dynamics experienced XXXX, are time for to we said, in competitive $XX I it's based it we no being you And million our conservatism That that outlook our particular personalities ASC there deal, of have earnings, closed different it QX particularly, of these. don't bit -- as have had with our currently year. but worth including prudent our we given could now And were on learn large get made that deal. the in deal moving it we'll of that those risk majority to parts into as in too we're relative downside that forecasted November a that we perspective forecasted we trying closing, relative relative going learning bit to to similar any number And we to QX include becomes little easily was would revenue the a left want at different The relative just aggressive in impact to not a quite did part of an the have exactly XXXX of if the that in is to $X.XX $XX some the not say that it and under better more about more business ongoing for downside predictability because back that a are stages outlook just to Ross, still forecasting gap; in that that our a at we will. have our size are build to of extent in surprises. the it to have million so so And it, of XXX little on transactions the QX, of little doubt exists. on it visibility would as the a we still we the pipeline caution and be more and beginning big for deal. what reality of the given going guidance to

Operator

from Vleeschhouwer comes Jay question next Securities. of The Griffin

Jay Vleeschhouwer

per those future last relative for growth average year the You so there. the Maria Could growth? AE in the prepare of vis-à-vis increase centers preparations for on spent the two quarters infrastructure Thank the need year, investing -- you head as and versus many X in and to talk investments; difference about about your or you just expense prior could compared headcount considerable acquisitions past or to grew go-to-market expectation things year X data for having relatively or next for [ph] investments about a And for by your make two? XXXX? so initiatives you or And XXX pretty XXX the your year more the account year or like Ajei, comment you. integration, in on to on to

Maria Shields

Yes.

first to plans, our to take So relative investing. Jay, let question me relative your

the new throughout Our currently employees anticipate XXXX. XXXX plans adding about organization to XXX

recent and acquisitions of require earlier, some which As heard you as globe. as -- And absorbing that the things in additional just be integration you we two we've to for the January, then Other will just infrastructure XXX across mentioned, about will a hire got end of open we the of cost do I positions XXXX. number some really digital have data digital spoke across leveraging, processes costs and globe. relative own that in centers, own able additional investing HPC of also be to our our our and technology internally, around come our necessarily certainly talent most consistently to with capacity, talent scale but not that technology the automate licensing around investments they're investments, of to we're

Ajei Gopal

looking And ACE organization. are your area HELOC, [ph] look technical and go those will customer-facing we're the making portfolio to continues be and through product -- part people individuals I to at those that well. investments, we're hire, was join in you And as and will our and to across online we our got in you'll that new of think see Jay expand acquisitions of some we've it capability, as look be the in kinds investments talent our in the making if coming obviously organization, start world. Grant other company essentially the across capability our an of ACE question areas we that around -- our at the Obviously, central yes, investments course the of and and

expansion be So there in will ACE in capabilities our XXXX.

Operator

question Garg of next Monika KeyBanc. comes The from

Monika Garg

year-over-year, The like the year-over-year? you number, quantify you would I color mean, making around about it flattish taxes; in maybe some how add Maria; are flow you increase questions cash much question you be did talk that. higher slightly have for for guiding you that you could are Thank you.

Maria Shields

about XXX that headwind XXXX, acquisitions the from taxes facing got also be think in in flow there of as currency, flow for XXXX. a the additional expected say, we to the to we're X% ASC few and that are I'd a so from X% to headwinds you two to about addition Monika, format. cash We've dilutive did is cash

really If quantification of full you year, and to XXXX so XX% the relative as guiding we XXX had kind XXXX. XX% ASC tax the payments XX% differential relative in think tax our about the we're impact, to that's for tax into to in to of XXXX, was rate about for

Operator

of question next W. The from comes Lemenager Baird & Company. Robert Matt

Matt Lemenager

I Rob or for the that's it's simply particular past execution driving versus of taking Thanks, I on is anything North Thanks direct it's a X question standing of driving America; that, X grown out for anything there anything now faster, think kind indirect, question. sharper [ph]. quarters. XX% or have Matt Ajei, around the in that?

Ajei Gopal

certain as North -- execution very there of of No, America. obviously and thing North team activity in there perspective well deals, North I nature from think a I have to you it's we've these or has of to as they the headquarter deals, a and America, is laid are these business North of a they sort been of kind great And the looking that build headquartered large strong. of customers way market that us are America think extent we've demand headquartered to been out. I I the drive given also aspects that has been whether been execution in the what just lot same would that's are based think no, a large from in mailed long think Europe time; North America the America are for, whether tend in has the customers, for -- Asia. But customers long-term on the been to some from a they given able historically with be been expect whether And --

Operator

would over for conference Gopal turn closing the our question-and-answer any concludes I session. back like Ajei to This remarks. to

Ajei Gopal

Thank you, Andrew.

for long-term These XXXX the of We and accomplishments to to Enjoy business targets. financial exceptional my and go-to-market our improved us with out another joining the and forward exceptional rest across metrics. capabilities. to to our of forward strength to thank outstanding year-end key sincere their closing, I day. support, achieve we you my move look Thank and to today, for I ANSYS our colleagues, in and our the XXXX. direction product another our another all gratitude confidence our in and next So efforts thank express our all give year an would We continue shout the exciting like all for quarter, In important you right a your partners your ability for was call. you execution and to to our look customers ANSYS broadened for year. call

Operator

now presentation. concluded. today's Thank conference The attending has for you

now disconnect. may You

ANSYS (ANSS) 28 Feb 192018 Q4 Earnings call transcript