ANSYS 2025 Q1 Earnings Misses Targets as Net Income Rises 49.1%

ANSYS (ANSS) reported its fiscal 2025 Q1 earnings on April 30th, 2025. The company fell short of expectations with its earnings per share (EPS) of $1.64, missing the Zacks Consensus Estimate of $1.75. Despite this, net income showed a robust 49.1% increase, reflecting strong underlying financial health. Due to the pending acquisition by Synopsys, ANSYS has halted its quarterly earnings calls and guidance. The company anticipates completing the merger in the first half of 2025, pending regulatory approvals.

Revenue

ANSYS's total revenue for Q1 2025 climbed 8.2% to $504.89 million compared to $466.61 million in the same quarter of the previous year. The software licenses segment contributed $159.96 million, while maintenance and services generated $344.94 million. There was no revenue reported from amortization, maintaining the total at $504.89 million.

Earnings/Net Income

The earnings per share for ANSYS rose significantly by 47.5%, reaching $0.59 in Q1 2025 from $0.40 in Q1 2024. Net income experienced a substantial growth of 49.1%, reaching $51.87 million compared to $34.78 million in the previous year. The EPS growth indicates a positive performance.

Price Action

The stock price of ANSYS has edged up 1.92% during the latest trading day, has climbed 4.30% during the most recent full trading week, and has edged up 1.57% month-to-date.

Post-Earnings Price Action Review

Following the earnings report, ANSYS stock displayed short-term volatility, but the overall trend suggests that positive earnings metrics can boost investor confidence, potentially leading to higher stock prices. The backtest data reveals that revenue-focused earnings reports typically have a higher win rate over 10 and 30 days, indicating a medium-term positive influence on stock prices. In contrast, net income and EPS-focused reports show lower immediate impacts but hold promise for medium-term appreciation. The analysis underscores that while short-term fluctuations may occur, investor sentiment and stock trends are more likely shaped by the company’s financial health reflected in these metrics.

CEO Commentary

Ajei Gopal, CEO of ANSYS, expressed confidence in the company's performance, highlighting a revenue increase of 8% year-over-year, driven by the robust demand across various sectors. He acknowledged the challenges posed by the pending acquisition by Synopsys, which has led to the suspension of quarterly earnings calls. Gopal emphasized the strategic priority of integrating Synopsys' electronic design automation capabilities with ANSYS' simulation portfolio to enhance market positioning. He noted that the first quarter results met expectations, reinforcing the leadership outlook as optimistic, particularly with anticipated double-digit annual contract value growth for FY 2025.

Guidance

ANSYS continues to expect double-digit fiscal year 2025 annual contract value (ACV) growth. Due to the pending acquisition, the company has suspended providing detailed quarterly or annual guidance; however, it anticipates completing the transaction in the first half of 2025, subject to regulatory approvals.

Additional News

In a significant development, ANSYS is moving forward with its acquisition by Synopsys, having received regulatory clearances from several authorities, including the UK, Turkey, Japan, Korea, and Taiwan. The merger is anticipated to close in the first half of 2025, aiming to combine Synopsys' semiconductor electronic design automation with ANSYS' simulation portfolio. Additionally, ANSYS has strengthened its collaboration with TSMC, focusing on advanced node processes and 3D-IC multiphysics design solutions. This partnership enhances AI-assisted workflows and tool certifications, crucial for high-performance computing and AI applications. The strategic collaborations and pending acquisition signal ANSYS's commitment to expanding its market footprint.