A month has gone by since the last earnings report for Ansys (ANSS). Shares have lost about 3.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ansys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

ANSYS’ Q3 Earnings Surpass Estimates

ANSYS reported third-quarter 2024 earnings of $2.58 per share, beating the Zacks Consensus Estimate by 37.2%. The bottom line also increased 83% year over year.

Revenues of $601.9 million beat the Zacks Consensus Estimate by 13.3%. The top line rose 31.2% year over year on both reported and constant currency basis. This revenue growth was driven by solid multi-year lease growth. The company closed an $88 million contract in the high-tech industry in the region of the Americas in the third quarter. This contributed to multi-year lease growth.

In January 2024, Ansys and Synopsys announced a definitive agreement, per which the latter will acquire ANSYS. The terms of the agreement outline that Ansys’ shareholders will receive $197 in cash, along with 0.3450 shares of Synopsys common stock for each of its share.

This deal, valued at approximately $35 billion, is anticipated to close in the first half of 2025. Ansys added that it along with Synopsys has received foreign direct investment approvals for the anticipated transaction in almost all of the relevant jurisdictions. On Oct. 9, 2024, the company also received an unconditional clearance from the Israeli Competition Authority. 

Given the pending acquisition, Ansys has suspended quarterly earnings conference calls and no longer provides a financial outlook. It expects 2024 annual contract value or ACV to grow in double-digits.

Quarter in Detail

Subscription lease revenues (32.3% of total revenues) were up 87.4% year over year at cc to $194.3 million. Perpetual licenses revenues (13.7%) were up 39.9% at cc to $82.6 million.

Maintenance revenues (51%) climbed 10.5% year over year at cc to $306.7 million. Service revenues (3%) were down 0.3% at cc to $18.3 million.

Direct and indirect channels contributed 74.6% and 25.4%, respectively, to total revenues. ACV grew 18.1% year over year to $540.5 million. The figure was up 17.8% at cc.

On a regional basis, the Americas, EMEA (comprising Germany, the United Kingdom and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 50.9%, 22.8% and 26.3% to revenues, respectively.

Revenues from the Americas were up 40.4% year over year at cc to $306.5 million. EMEA revenues were up 10.7% at cc to $137 million. Revenues from the Asia-Pacific increased 35% at cc to $158.4 million.

Total deferred revenues and backlog was $1,463.8 million, up 21.4% year over year.