ANSS - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to ANSYS' First Quarter 2019 Earnings Conference Call. With us today are Ajei Gopal, Chief Executive Officer, Maria Shields, SVP and Chief Financial Officer and Annette Arribas, Senior Director of Global Investor Relations. At this time, I would like to turn the call over to Ms. Arribas for some opening remarks.

Annette Arribas

Good morning, everyone.

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

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

the GAAP measures and is earnings excluded stated. to otherwise in referring financial this the non-GAAP non-GAAP call comparable materials reconciliation release be we'll XXX related this unless prepared discussion full of items a and remarks, that measures and of various under are ASC X-K. to financial A morning's During included in Form

over under rates be closing, before. to to Pittsburgh, found Thursday, comparing I be we XXX. agenda that only details to the would like our to of be Investor turn ASC the growth I can will adoption year to now Gopal call will highlight Further showcase like with evening are financial of around our on outlook remarks. XXXX events first XXth for CEO, his In results As in under XXXX website. made previously any to our Ajei announce will held beyond that would location, recognition the ASC and now the reception be relative opening and want technology logistics XXXX we XXX, we a that communicated, results on Ajei. revenue XXX. I revenue comments under providing and Day September IR

Ajei Gopal

Annette you, revenue key an start given the metrics. growth year high We XX%. with excellent across the to QX everyone. results ANSYS good has strong of Thank delivering performance revenue by our end morning currency constant and our exceeded guidance of

we full cash our momentum of flow EPS operating the further year-over-year, year we robust reflect $X.XX. pleased record Our was business, Maria XX% first across increasing guidance. will our and are To raising announce that provide I'm reported to quarter details.

is portfolio Our the In our the customers high-tech financial sector. drive success QX, with of enjoyed our our distinct throughout verticals product solve complex particular strength multi-physics propelled a pervasive product to combination success that lifecycle; by most we our make across most simulation industry problems. helps unique their and in

top multi-physics the high-tech are vast industry spurring Given competition and challenges smart using to telecommunications coupled including that's devices, of that leaders companies to a address of that's and product are momentum the even our mega trends intense challenges. many vertical. Those and in to semiconductor, high-tech the like stands simulation. some of sector. with customer unique thanks demand proposition at higher would of successes verticals our AI, The the datacenters. I in to those datacenters hundreds innovation autonomy, value with face their like driving that trends why for highlight electrification ANSYS' companies high-tech in majority across the ANSYS And and companies XG, crossroads growing

efficiency and a networks more stations XG number connectivity, solution to challenges. complex of relying make increasingly creating require an are set base customers example, unique For energy ANSYS' unprecedented reality. XG thermal on management

design our with performance system station the the in station simulation we with communication. using platform. platform. building. a an comparison environments examine in chip placement users Asian issues optimized. on ensure can XG this frequencies power large the chose package solutions base is in base deal Combined the to telecommunications our closed because is maintained increase company QX, and performance single customer workflow, they're ANSYS stations company to of accommodate is antennas In telecom head-to-head a After the a Our complete we to scale solutions higher management thermal The multi-physics while help connectivity XG of ANSYS analyze networks of help to base tackle the and critical inherent customers their

ANSYS like that our complexities standards enables the HFSS our based as design ANSYS high and RedHawk-SC. gold simulate on products such to Solutions portfolio HFSS grapple users XG electromechanical customers unmatched electronic such antennas, its and With microwave help frequency trends IC customers problems and with enables of market-leading of components, hundreds complex high-speed as the ANSYS are including Nvidia Ericsson amazing solve users to and and Interconnects, like accuracy, products. and to of PCBs. HFSS packages across Samsung, electromagnetic architecture develop cores empowers mega modern

software electromagnetic we on-chip overwhelmingly electromagnetic areas of is while innovative components QX our expanded our Solutions helping on and their designs potential comprehensive which electromagnetics the circuit for with technology And their DfR prior solution most this ensuring crosstalk ANSYS' for systems on-chip well and industry-leading electromagnetic quickly system combining solution reliability address praising the to reliability discussed potential electronics of off-chip noise for semiconductor customers with level our helps in industry Solutions, HFSS for of to for integrated functionality QX, to a the as excited and acquisitions. last product HFSS electromagnetic with the XD of electronics a solvers the strategic into failures acquisition is team our call, on acquisition, our package released to which closed comprehensive in speeding Helic, simulation. best of PCB to with the Helic. extend leadership through through combined market. and the Reaction and continue electronics. bolsters challenges and for been with errors, electronics customers services acquisition chip. the by we in eliminate ANSYS analysis HFSS designer DfR leadership EMI time material solutions, with provider in is on DfR new analysis. chip flagship industry provides our This leading as week, analyze and in electronic We easily chain. as us of design interference leaders has positive the automated further I'm to The the quickly to in technology Helic, we our latest DfR capabilities recent Scanner an releases supply automated identify welcome provider family. electromagnetics

new solutions, of our is technology. is is for in RedHawk-SC recognize HFSS for foundry package Big our the with of chip innovative the is the each workflows technology like semiconductor our XXX% and they has SoIC X-nanometer all its the advanced Moving using stacking foundry using acquisitions. And technical And I'm ANSYS industry. that largest the as accelerating flagship RedHawk-SC world's solvers purpose-built three which last such undefeated to Data with semiconductor leadership base chip in recognized our that with solutions say semiconductor first semiconductor integrated targeted of proud physics benchmarks Partner partners TSMC, ANSYS our years. XD ANSYS head-to-head system system in and to Awards customers world's QX products Year certified with in RedHawk-SC our multi

data enterprise LG the in environmental to Seagate cycles, agreement to deliver work increasingly precision-engineered solutions all a on development ANSYS are maximize In to a into expanding simulation product more applications and mobile appliance the the agreement off. on high-tech helping entertainment customers developing QX, development solutions of Our also expects devices, Technology highly and world potential. Similarly, access support schedule goals commitment suite use shortened and help data increasing. on requires drive for solutions, worldwide. design. ANSYS management LG innovation, with this software industry storage company's enterprise simulation accelerated Demands multi-physics leader across value product to engineering home performance continued to Seagate our Seagate technical expanded capacity Electronics entered innovative and worldwide. delivering ANSYS disciplines. into new paying is and teams Reaching multiyear business

Granta time simulation closed our data to was the ANSYS our Moving away seen traction combination another acquisition, of reaching Granta's to enjoying in by partnerships technology, for to considerable their and new recent engineers QX provider with possible also the relationship solution, PTC. made deal have design enable premier the material confidence integrate of deal award-winning with early organization. thanks history technology, We're Design, we aerospace in had from largest intelligence Live the ANSYS at to high company and the Granta. across This key management success In partnership example, technology. leading the Granta information materials real our ability a audiences, brings long-standing Discovery which ANSYS' with successfully with is customers capabilities mission-critical materials

released Simulation QX Discovery During Creo technology. embedded with Live PTC ANSYS Live

already earnings with XX PTC it reported During week, booked that deals its last customers. call

remain financial success and ANSYS. delivering performance our recently I'd need innovation, to Insights a bottling eliminating on to focused we Maria. in leading immaterial, Similarly at speaks empowers Germany. be analysis a perform high-tech, our Industrial with field-based our resources. the winning and SAP financial Operate technology in toughest investment automated see Their and our engineering partnerships teams work. is delivery air The detailed to company as like ANSYS Hannover that expanding to capabilities from we that, machine we're QX such packaging Predictive As able enabled on And highlighted and from industry with for its months and itself. SAP hours With the previously teams customers And designed ANSYS results. by save believe We solution on the streamline Predictive featured customer to achieve manufacturer over using to handling demo our problems customization verticals discussed, Krones near-term twin time Maria? solving and fluid goals which continued its our SAP engineering the by technical we enhances the the expect impact this to showcased an is leading engineering upside we company strong joint confident digital momentum critical in Like by insights acquisitions, the objectives. focus for high-growth value Engineering call our time system the solution. results, enabled Fair to in term. combination by just our on will compressor and turn but showcased longer our and Design sales Messe

Maria Shields

Thank everyone. you, Ajei. morning, Good

terms financial for The execution otherwise. yielded assumptions practice, state I QX high our and our strong take and to additional QX unless performance comments me of outlook Consistent will be margin and customer environment my minutes solid provide in demand our first quarter non-GAAP, business on steady combined results some our add XXXX. a standard above Let perspective color QX around with with the all operating and of EPS, a our guidance. reflect across which end few well revenue,

million, QX comparable to million XXXX balance. Our ACV quarter were lease reported over within building renewals encouraging total rates XX%. revenue maintenance financial when the sales our of guidance. excellent earnings. in quite license add million begin we year and total a I quarter deferred $XXX revenue QX ACV first that which $XXX.X and first currency strong considering strong $XXX.X provided our Key a to we exchange currency year's software with that The start of last metric of of with or in the the increase constant XX% combined is contributed increase the growth backlog growth and will with key representing QX to revenue double-digit ranges

quarter, continued revenue well XX% finishing Margins with first of quarter, planned which we impacted business above high the by activities margin positively impacted our and as pace slower we integration to of fiscal employees Design a we yielded team. of an margin added the of very during gross hiring acquisitions were of by talented end guidance, approximately the manage During notably than hiring and our of XXX both most our Helic into a the pace had revenue operating coming to well as the Granta the was strong discipline quarter quarter. as XX%. results The

we $X.XX. rate We tax the respect EPS first quarter. the of labor also effective particularly our record that in of for taxes, the skilled was positions. XX% coming into line QX reported tighter guided market, saw We quarter in continuation With with range to highly the had

we rate the in XX% range expect forward, to tax our Going to effective for XX% QX of be full the year. and

the with increase and cash in The cash over million, operating we from the XXXX. flow $XX from total allocation benefited at with In quarter positively quarter QX XX% a repurchased in ended priorities, totaled cost last short-term in during ACV XXX,XXX finish a cash capital quarter Our $XXX line flows year's million we the very operations a strong QX of shares $XXX first and the of million. investments. total our

repurchase X.X for have million available under the authorized shares We current program.

to QX revenue quarter outlook me we turn positive our year. and of year. and coming of finish financial confidence our solid business the in continued for in let the the reflects the Now full strong EPS the for guidance, QX, increase guidance and This are our for remainder initiating both momentum off the increasing first topic combined with performance

yesterday. minor the the reflects outlook updated Our of we that acquisition closed contribution DfR

exchange add me currency that not increased also rate to contribute did guidance. changes Let our

and range of in $XXX $X.XX. in million revenue non-GAAP non-GAAP expect to to million $X.XX we EPS quarter, second the range $XXX the the For of

full the non-GAAP growth million EPS our and revenue in to range of the $X.XX to to we range XX% $X,XXX both year, increasing the in $X.XX. million outlook are the and of constant XX% revenue of For the X,XXX currency EPS

increasing additional respect maintaining to to of in like outlook represents This million. are currency of range to operating license cash for in of are in ASC for well also the million With tax $XXX to acquisitions. XXXX as constant our $X,XXX cash XXXX million. growth annual everyone full-year payments and to to X% flows, would including the XX%. the I million We $XXX XXXX $X,XXX ACV operating to our that as profitability of remind acceleration the payments includes impact our we our outlook ACV higher relating strong under relate tax that outlook first XXX, related to year flow XXXX finish, lease revenue the

with For into quarter XXXX specific Further we in and closing, factored of operating In quarter XX%. results. been year, our modeling year details margins outlook operational purposes, rates for the pleased remarks we start around of first and XX% excellent to XX% full the for to QX to we're to and have document. expect operating expecting and margin XX% that currency prepared are very are assumptions the continue other contained second financial

opportunities foundation the well growing we phone our on execution financial as to leverage pipeline, our to gives of combined talent strength the sales technology, combined delivering lines and to of confidence focus on with quarter financial on Another and targets. deliver recurring customer exciting continue investing our and our our business commitments XXXX relationships with our questions. the in as XXXX business us strong incredible will provide longer-term goals a to the Operator, now take open that

Operator

now from Please session. question-and-answer ahead. Wong Guggenheim. first the question is [Operator begin go Instructions] with will We Ken Our

Kenneth Wong

back heavier question Hey, end. touched year, my thanks a the you on lot. Last a the on first quarter QX. guys seasonality in specifically half Maybe of

follow-up how are then engagements? then is Discovery a you on what Just greater? from you've understand terms and of expected wondering seeing is even just pipeline, wanted partnership differs magnitude to the how the what And PTC on QX based guys that in the customer seen perhaps in and looking, Live,

Maria Shields

So part now. are Ken, the seasonality QX lot last loaded right on to call, as first the transactions queue we for XXXX, question multiyear the see I'll XXXX, large similar had I the a in very of take to relative the of and Back-end the XXXX. said

we larger just and mapped spend. yearend deals had as it's going So and is customer lot budgeting of a those everything it with out aligned

with And they're so larger second aligned just a half.

Ajei Gopal

the respect excited with PTC about we partnership, the to are PTC partnership. then And very

QX. Live, CAD And XXXX. We well. of simulations created adds technology going they've they which that in the know, with you Creo Creo ANSYS a it's is as partnership, think in embedded into solution environment. essentially Simulation the announced And I released June

CSL about also customers and seen porting QX, XX promising what and they pattern, they've quarters. they've the CSL And essentially built we're real-time environment closed of And what pipeline and engineers CAD use results portion kind then to from design deals them is allow which that will to can consistent base, essentially on so allows excited they to simulation see broaden. in announced they're geographies, that technology a in changes, call all Creo design and to their installed with need Based we've the of direct and X, is They've primarily back industry to enterprise indirect and going larger benefit of customers be which across in that's the that process. start will early verticals, where future the to the their upfront simulation. for the trade-off during investor their both are, option a make said them

about So is excited strong. I it's think relationship going the We're and well. that

Operator

is Please The Griffin go question ahead. Securities. from Jay Vleeschhouwer next of

Jay Vleeschhouwer

Thank start on add and that the quarter I that with Helic me you. did And anticipated the Good year. about morning. call include Maria, would you you, Granta. ago you employees XXX for let a think not

the thus XXX from You've year, acquisitions. the was grown XXX of far which for

the So have it a-third is your and could you numbers right openings is considerable XXXX. in bit number, able a for of a seems maybe the be than about you simulation. hiring to towards tool - question some guidance record factor support you Then well each, of a goal will technical technology little to to and as you it's year. and process. sustain industry, nor It's of Ajei, attention, neither the which generative for to the being paid CAD prognosticate, being evolution know, just a more for your as there that you objective terms the of in hiring way consulting your that fact now, seems anticipate which hit Does some are of about design

multi-physics that your more maybe will, role business, do Sorry simulation? as or As tie question. And affects how expect also into of the think larger you could? the that that your it becomes strategy, - you if more SPDM I simulation for long adopted and

Maria Shields

Okay.

on So hiring. Jay, I'll Yes. start the

we and roughly still acquisitions As the of That impact down. planning as XXX in for had you heard are net can we in we about my you and the the heard remarks, we year two imagine, of our in that the some of onto addition roster quarter, the the quarters. over original did prepared remaining not being built of Granta for Helic and hiring additional the in pace and and increase year employees our But net the that that's to XXX including Granta you what's plan is slowed anticipation the the it organic XXX comments, from said, remainder planned earlier the plus new, first ANSYS as Helic. the add will guidance see over into

Ajei Gopal

And generative briefly just touch Jay, on to design.

the We is penetration very the design. simulation us rapid think generative the opportunity you industry excited design, iterations generated of into about of in increase marketplace, taking a about to that's are for continues require to as and think improvement direction simulation. the an design that We because the

creating it products, simulation kind sense. a provide to solution, start generative you as drives have makes then feedback think as the about, simulation. talking And world validating individual well generative rapid where someone, that And subsequently to design that been provide more so the to opportunity in historically creating of the are world in where it of we're and human as simulation might and beings use an It technology creating for frankly the design. of a guidance both about people

SPDM will about be another be huge excited manage allow you of data with Obviously, generative of and our generated. we are very that's strategy simulation more the of the think simulation there things us like that driver completely design we data. will that in driving. we're the with product being simulations the and doing to amounts continue that's we position then to What use generative think So consistent marketplace,

this about excited completely direction with we're frankly it. going is that and So consistent the we're very

Operator

The is go from of question Ken ahead. Talanian ISI. next Evercore Please

Ken Talanian

about of how And target taking Maria. the you growth was both 'XX contribution constant to as hitting in for your thanks and for XX% remainder the Hi, you think guess currency, ACV about you're could I the inorganic then from a give in plus quarter? the revenue for your us What sense thinking XXXX? organic question.

Maria Shields

basically about So $X acquisitions organic. ACV, Ken to from $X was relative to the only is ACV. it There million to

growth organic what and relative our double-digit of with we the majority the business. are XXXX, is we range. to, to from growth the the outlook have said respect ACV changed from margins XX% targeting on Day industry-leading we So still not in XXXX in to And XX% Investor

Operator

ahead. next is of The from Pfau question Matt William go Please Blair.

Matt Pfau

guys, thanks question. Hey taking my for

PTC you've sense Thanks. one pretty pursue? you if on seen to about there what wanted like partnership so and realize are think ones would to out that talk just but can do there still you Just follow with you far, it's early and PTC I make pursue there, up could similar partnerships other the the

Ajei Gopal

So partnership. designers we are simulation partners about opportunity experienced just an simulation, for is good ecosystem. analysts take obviously to to continue certainly to that or of them. have we and excited advantage advantage frankly and The we believe of support we been They in not designers open PTC the to take see be able

with matter technology someone's have from and ANSYS for with take no tighter PTC, PTC's vendor Creo. perfectly we're content simulation. delighted integrating and the it we advantage of obviously a to relationship any capability using, solution OEM-ing But customers and take of CAD into our CAD those directly So advantage to which

Operator

Baird. question ahead. is Robert Rob Please W. next of from go The Oliver

Rob Oliver

morning. guys, this you one Hi, for good for my question. you. Ajei, is taking Thank

Live unrelated strong other I in some bit embarked guys follow-up the on can PTC? of a strategy when semiconductors. upon a always been about to you pretty areas partnership Thanks. comms a you follow-up a have And mentioned question, you little potential? side, got XG potential as Just Maybe you to within here the had the you quick partnership you last on Discovery so bold then obviously talk

Ajei Gopal

clarify what to are partnership on. me specifically you Please? just the on comment asking question, Just to

Rob Oliver

opportunity. to specific a to your there Yes, and last areas get sense a I question. realize Thanks. saw of you have expanded go-to a just for, you getting guys a market follow-up wanted markedly other through bit were it's if where sense pretty partnerships

Ajei Gopal

Sure.

additive being where becomes product So we've articulated that it's manufacturing product inception that what the is whether thinking whether phase, people the deep one whether in understanding is about the is in its frankly whether like And benefits. we strategy how operations, throughout things that it's understanding itself. that whether product customer Because important the product ideation in product manufacturing, product and value play will lifecycle. whether touched, role. the by the operate it's a for it's simulation the of is where the the operate believe and could pervasive phase, are a very physics mean simulation an can or We and design, anyplace of a of or is operating customer

the simulation So across playing as product cycle. role much we this life see deeper

historically, available for been multiple end lifecycle, particular simulation sign for we've of a it's make process been off you the in tail that design has product places. and Now increasingly part the which in pursuing, that in from as been or to the validation of we've strategy see

a technology that also doing a have at why of the obviously think into very SAP and about in presence workflow. we areas space, and presence you where we our a go-to-market, others strong we're are to partnering have taking start workflow partnering operations. where partnering example, they way We're with have we're a who as our the when with about Synopsys integrating those it the the own Now as that's part integrating looking presence the of EDA but we one have is particular you strong with space think we're reasons into PTC it CAD products our on technology for is because and their others Synopsys,

our it key simulation providers their their industry work by to our we have they're are cycle. some and And a obviously their be offering, forth. capability ability a And the so of and offering be through our driven workflows to since in strategy, so to who in should solution market the way intention at are in who in leaders taking channels, it's present life strategy, is an about you with and partnering or the through integrate capabilities product product their space, with workflow their to point able their to let re-sellers open think

strategy this see for we've So a we been the that's strategy we as to pursue. continue that's and that a pursuing ANSYS will and win

Operator

Steve The ahead. Koenig go next Please question Wedbush. is from of

Steve Koenig

quarter that qualitative that backlog ANSYS. can ACV? do year Hi, Maria I color the ago to the that ago. plus And might have How provide in are comparable? about to talking to the in and maybe is, remind bookings XXX we is any a if the total ago. were that million if for taking deals context the deals being just this much revenue, for there? housekeeping year under type large I'm that in if impactful and Thanks did the to but about the terms XXX very And question I my things may, you $XX I have large deal comparable those don't change of ask have calculate question. was one we calculation, performed here us a what the you wanted I know quarter know my calc needle of year you quarter moved

Maria Shields

Yeah.

to respect with ago start the let's quarter. So year

at announce would in deal point this recall, And the you that into history and which result. a-third quarter's last quarter year anniversary the went so company's then in largest the at have in next this deal did was time, a year, that QX of of deal, we a-third a-third year. If X-year ACV been the that and then, in ACV a-third

it's just Steve, a XXX. more we no metric volatile moved then because or much there XXX should know, from As bookings you ACV. difference be But away, between under bookings

Operator

Needham Please Rich Company. & from ahead. The of next go Valera question is

Rich Valera

Rick and the additions force the made yourself on to Thank Ajei same lot since the sales capacity then about sales you've Question you. for and structural you, of on took Mahoney force. over a time

an wondered transformation any on Thanks. and to what's force far if add there? changes perhaps to-do for give list you structural the on Just where update and sales that in of make continuing as can capacity kind you are XXXX as

Ajei Gopal

Yes.

And for our deals - did, we earlier model optimize go-to-market. how earlier on a see was able we we after go of one-size-fits-all dealing market the focus business. larger focus go-to that to the we certainly the more try a came I to a sales and an territory to So came terms what would course to some large with And direct a on we more in model is also on deals. that out then differentiated relevant sales channel figure Rick take of go-to-market, was And time it the address on were Today have when we've more how was ANSYS of volume could done was more at have was advantage and and inside to looking the where be some lifecycle board I the activities. the a of of after we market opportunity. channel, the I in have the board shortly force

pretty support has to on partners us of on dimensions. as investments our in blossom. organization technical a capacity also point make out, continue has as continued also brought change or that's We've to or helped to our our And channel different in well, which there more to of so customers. continued We've been course continued our board and technical overall. more and to they've number our you allowed able go-to-market, ACE to significant, to And organization be bring sales capacity across have grow channel a ACE business partners,

is obviously that's we've journey journey that's that an that ongoing the journey. So on, a been

to make think planning continue will about, on something model we've the our next the in the that doing exploring. continue and that certain and that very place and But do some of particular we with to and in basic it market questions anything we so year and that's again, that enviable to have that to have go-to-market ANSYS through and capabilities. hold are kinds of we able year put But continue this products will maintain back that focus relationships to not beyond. to we've disrupt have the to talked about to that's business we kinds bones and capabilities our the some that to we been a we customer does and now go-to We that that refinements make us the model that make changes and we're of have cases, been we're vertical how support would those dear very optimize model within and within on in areas sense starting structure, we're and

Operator

The is Celino Jason next go from Please KeyBanc Capital. of question ahead.

Jason Celino

Hey guys, details, confidence question current increase raising by this point. you One into your maybe X go Can are currency ACV outlook you my on taking thanks percentage to question for here? more what morning. guidance back modestly you gives constant

Maria Shields

earlier the the one, my Yeah, I working I strength of QX in pipeline Jason; commentary the and and that in the performance are teams said seeing would deals the say, as on. that we're

from our his some mentioned the don't we areas particularly see slowing lot in So And customers, commentary. in of we see that of interest a Ajei that key down.

So spend we about see ahead to time our delivering. going focusing executing XXXX we excited the we're are of all opportunity and on for and

Ajei Gopal

the and companies conversations, and with electrification mean the space organization. I organization, in the correct. we talk time a out Similarly about provide are said, capabilities as able companies in we are the Maria we industries to. now capabilities provide. field that can like the some we which we're with of right where broader that can are of about customers of conversations spend is of conversations have of say about And script. are pipeline other in much is may electronics about we them mean because the a to industries very the you talked spent and and Those we I've absolutely where solutions example to just and she field get that of the with if talked sense my well that add I my in excited had fair that's things that point start time industry. similar because have if amount the to strength in you and I I our earlier past. deeper for with in can the autonomy of remarks the of because I nature auto than what with obviously

that. pipeline are. into QX how of QX. is We're and always had we as there's we earlier, our loaded visibility lot are excited that But business. where is activity This understand land the we back-end strong. in So about And a have indicated confident looking year a we we to

So we're year. about the excited

Jason Celino

you. Great, thank

Operator

MacMillan of is from Ross question go RBC. Please Next The ahead.

Ross MacMillan

some and talked partner they that just of a just, LG, spike Thanks I'm curious, Seagate so you on and revenue those you release indirect Ajei the much. one mentioned would were about Thanks. so great. on were be from your the quarter deals multi-year, impact large in was the deals both in and there they both

Ajei Gopal

it was think answer - your yes answer to questions. the think I was all I a

were some activity there of were multi-year Those yes, there was in those the yes, deals. in number. our was, quarter. indirect And So impact partner

Operator

from Kalia is Barclays. The ahead. Please next question go of Saket

Saket Kalia

see first my the Hi metric Maybe little the XXX the about reason differences for quarter? we're the up why of And of some guys, deals delta picking a revenue revenue I ACV Maria, going this between you here. talk on I growth broadly. just talk last topic Can just you, asked guess more growth the growth this, for and Can about taking versus thanks ACV. arguably to mix course of bit cleaner in quarter? of and that long-term questions you just sort in

Maria Shields

Yeah.

Saket. So,

in growth direction. you of moving reality deals. are results the that lease comments impacted of periods see This picked I where the timing in our the growth. the the some XXXX the revenue QX think actually you our is XXXX land, a can comp those both growth comes in the revenue the rate XXX. ACV. outpace under deals and multi-year for from be They unique and between XXX see and duration quarter disparity and going where to you'll on those is same disparity won't size, going be the will rate There up very ACV first ASC And by always forward will under depending be in where XXX

out, communicating than how important meaningful to think could quarters, you'll more that we've thing the certainty, most a volatility example. I be So the results been the roll annual I going but I in explain wish it's perfect with QX see will all the is being that the much on focus

Operator

is of ahead. Stifel. Adam question Please Borg from The go next

Adam Borg

thanks Maybe you potentially about depreciated? at use expecting early really that on and question. talking it's come the big at hardware cases percentage Ajei, a of and or are bursting the even upper gets bifurcating up more both replacement the on-prem so picture market overtime think the lower of as market end down just Great, for still ANSYS you Cloud much taking and the market, obviously, as end

Ajei Gopal

in It's who center clearly terms what's take ANSYS There going to through a answer to of to native we're the exact hard cloud. for of, proposition cloud, an of predictions question to advantage that available the of, HPC the capability is sort don't customers have value happen. smaller investment data making in native

ANSYS the with solution just your an QX, the most we've in capabilities offering think to question. important we have cloud I really are So that that that following essentially released, recently has

optimize take infrastructure we've then the first for with essentially important advantage that of of so products public configured ANSYS the ANSYS for in of compute immediately high that's the investments and allows that ANSYS essentially, Cloud is there And we sitting it HPC a customer building it someone at advantage cloud. accessible second piece are any product than the scale ANSYS optimized take so The is then we've done. that made makes and cloud, in a the an that ANSYS be can and and and is It's from work at within cloud because solvers can working screen solutions the performance. that providing on

back global So it's running in access seamless. and case, security. on of best-in-class completely since Azure, are it this the on Microsoft And course gives we end

interested we as ANSYS gives would necessarily have needs a it's licensing opportunity up licensing for experience small, provide, traditional the of the the access the way that complement with to and course and they'll have to both Obviously, customers back-end for from infrastructure. the be. That's usage, aren't customers We've for as and cloud pay-per-use large the - opportunity seize large as excited on-demand HPC equally give resources the We them with be given leases that And So we've can in offerings. made so drop-dead paid interest that of essentially to that. work don't small well. customers available. them. well But given project-oriented the who customers flexibility as that third expect simple we given of using any Cloud customers easy our and it performance, seen flexibility large when as

the demand those where both we going mentioned. I've be across or for expect you is of we lower, couldn't higher I to reasons see tell those certainly So demand both of that continue. to segments but

Operator

question Please next ahead. JPMorgan. of The Auty is from go Sterling

Sterling Auty

guys. Hi Yes, thanks.

the just leases, any Is You deals? mentioned multi-year length clear. I are been didn't I of a you average noticeable the reminder, strength what And change multi-year seeing these wasn't in in hear. there duration. as maybe

Maria Shields

Surely. has duration. or deals to but and the There's years been to been the, two be of two the some three no change of in go-to-market be larger the tend typically to no three there strategic years, change at years, duration tend and in some significant

Sterling Auty

to to be think terms you are question do core And coming after what pillars is the Ajei, you electromagnetic an Cadence go this of going solver, that others landscape? tried one of appears follow-on marketplaces? one-year Okay. those competitive be announced in And What of strength. beginning to then or into the seeing adjacent

Kenneth Wong

Sterling. points. A worth talked since the about thanks bit a it's little perhaps asked mentioned in my I I HFSS So of - but you script, question, couple emphasizing.

both industry The it first product. electromagnetic of complex is ESI ANSYS most the spans some as standard. HFSS a covers space. then RF the and is solves HFSS is number thing industry-leading gold understand It an to and problems serves and the vast growing important of market the

are So products. that circuits from that in telecom autonomous areas antenna to IC manner high-growth this in includes vehicles frankly range phased in problems electronics to radar of for XG array all

us, isn't to vendors, space. this wonder it's no that surprise and But the other growing competing compete is no that in it's easy. point So want to

problems the in leader are ours. continue they the solve this and have for HFSS to leader space decades customers three that confidence to We almost place we've trusted their today, and in decades for been most and complex

studying HFSS our in peer-published continued IEEE and we to breakthroughs the absolutely the because in physics leadership the the in in both today of of of thousands publications, as as which over been processing significant saying product investments tens Our industry's references able well methods are years to we're justified and incorporates science. that in make we've standard technology, computer we've gold maintain with is the sort

PCB is put you for answers using area the some repeatable in a benchmark give an perspective to this that of and approximately versus the one which recent and core XX XXX leadership by accurate of technology accuracy accurate is our is So HFSS and consumption the talked that's automatic of HFSS within about. up and adaptive users, so required that tolerance it and resulting it which the that configuration cornerstone single To versus scalability details, that's of X. is predicting consistent many customers in mesh perspective specified global And example factor the in then trust in you customers and to performance, one provides approximately public typical XXx reduces of that refinement, in by because important cores, RAM air electromagnetic frankly, some we've give cloud, a hour that's the cores, it's own some speed an a solve cloud HFSS pretty a just IoT to today comments note make in to XXX hours cloud, solved impressive with available on course, a and that for I available previous the this per but every why also customers customer. for I technology democratize also made as about introduced and that to data will ANSYS so will trust their customer HFSS offering use Azure month on-prem available, And of Cloud natively challenges. their answers. within centers, it's

presentations attractive hungry an alligators it's hard. competitive a filled it's Improving product just that deep efficiency. is are So solve the RAM I in usage is with customers the down competitive serves gigabytes and XX are significantly. great in broad, easy, around moat to The it's HFSS benchmark gigabytes, world XXX PowerPoint the that product, products mentioned, the HFSS around market. around again customer moat went

Operator

Your go ahead. next question comes from Jason Rodgers of Please Great Review. Lakes

Jason Rodgers

It Yes. strictly tough talk due if satisfied factors I was are the with and for other if could involved, any the or you about performance you are the EMEA decline to quarter. wondered there comps there? in

Maria Shields

- that EMEA some Yes, year. timing if double was recall mentioned that the you of this large did deals digits, what is of year it grew last Jason. repeat year you just last not It QX exactly in were it's in

So EMEA EMEA team. we are very excited about our and business our

Operator

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

Ajei Gopal

Thank you, operator.

and and next possible efforts. partners of I my well on quarter. of to customers, That the rest work ANSYS thank your strength all broaden our look Thank made joining of our leadership is ANSYS for partner our the deliver near-term forward the both channel call. in in term. you colleagues. day. robust ability tireless exceptional goals leadership your the in for call as deals our the our Given direct another course to across today. pipeline of QX, to the and partner-driven everyone objectives. of and confident physics, our our we you well extend market the positioned long And to and due Enjoy for as you remain to opportunity confidence Thank is

Operator

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

now disconnect. You may

ANSYS (ANSS) 2 May 192019 Q1 Earnings call transcript