On November 1, 2023, Ansys Inc (ANSS, Financial) announced its financial results for the third quarter of 2023. The company reported GAAP and non-GAAP revenue of $458.8 million, a decrease of 3% in reported currency, or 4% in constant currency, compared to the third quarter of 2022. The company also reported diluted earnings per share of $0.64 and $1.41 on a GAAP and non-GAAP basis, respectively.
Financial Performance
Ansys Inc (ANSS, Financial) reported a GAAP operating profit margin of 15.2% and a non-GAAP operating profit margin of 34.1%. The company's operating cash flows were $160.8 million, and unlevered operating cash flows were $170.6 million. The company's deferred revenue and backlog stood at $1,205.7 million as of September 30, 2023.
Impact of Export Restrictions to China
The company's third quarter results were negatively impacted by incremental approval processes and export restrictions, including additional restrictions on sales to certain Chinese entities, which created a $20 million headwind to ACV and revenue. Despite these developments, Ansys delivered a strong quarter, marked by double-digit growth in ACV.
Management's Outlook
Ansys reaffirmed its long-term outlook from 2022 to 2025 of 12% constant currency ACV growth, including tuck-in M&A, and $3 billion of cumulative unlevered operating cash flows. However, the company expects the incremental export restrictions and processes to mute its growth in China in 2023 and 2024.
Financial Tables
The company's GAAP and non-GAAP results for Q3 2023 and Q3 2022 were presented in the earnings report. The 2023 and 2022 non-GAAP results exclude the income statement effects of stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, expenses related to business combinations and adjustments for the income tax effect of the excluded items.
Future Outlook
Looking ahead, Ansys expects the updated export restrictions and incremental processes to mute its ACV and revenue growth in China in 2024, after which it expects its growth in China to return to steady-state. Despite these headwinds, the company still expects to initiate full year 2024 guidance with ACV of around 10% constant currency growth excluding tuck-in M&A, which is consistent with its model.
Explore the complete 8-K earnings release (here) from Ansys Inc for further details.
