ANSYS, Inc. reports 61.8% Net Income growth in 2018 and almost no change in EBITDA Margin of 41.4%
02/27/2019 • About ANSYS, Inc. (
$ANSS) • By InTwits
ANSYS, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- ANSYS, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $127m in 2018, $111m in 2017, $50m in 2016, $46m in 2015, $38m in 2014
- In the last 5 years the company invested considerably less than D&A: $96m vs. $356m. In 2018 this situation was still the same: CAPEX was 22 while D&A was 59
- The company has highly profitable business model: ROIC is 19.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 18.1%. Revenue growth showed acceleration in 18Q4 - it increased 37.4% YoY. During the last 5 years Revenue growth bottomed in 2015 at 0.72% and was accelerating since that time. EBITDA Margin showed almost no change in 2018. EBITDA Margin stuck to a declining trend at -1.3 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.7 pp from 86.3% to 87.9% in 2018. Gross Margin grew at 1.1 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 1.1 pp from 30.9% to 32.0% in 2018. SG&A as a % of Revenue stuck to a growing trend at 1.5 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 1.6 pp from 4.9% to 6.4% in 2018. SBC as a % of Revenue followed a growing trend at 0.94 pp per annum in 2014-2018.
Net Income margin increased on 8.7 pp from 23.7% to 32.4% in 2018. The efficient tax rate was 13.9% in 2018 while the average for the last five years was 26.2%.
Investments (CAPEX, working capital and M&A)
ANSYS, Inc.'s CAPEX/Revenue was 1.7% in 2018. ANSYS, Inc.'s CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 1.6%.
Accounts receivable as a % of Revenue jumped on 13.2 pp from 11.4% to 24.6% in 2018. Accounts payable as a % of Revenue increased slightly on 1.1 pp from 4.0% to 5.1% in 2018.
ANSYS, Inc. has spent
$283m on M&A in 2018 which accounts for 21.9% of revenue.
Return on investment
The company operates at good ROIC (19.5%) and ROE (17.1%). ROIC increased slightly on 1.7 pp from 17.8% to 19.5% in 2018. ROE increased on 5.5 pp from 11.6% to 17.1% in 2018. ROIC grew at 0.92 pp per annum in 2014-2018.
Leverage (Debt)
The company has no debt. Cash dropped on 11.8%.
Valuation and dividends
The company's trades at EV/EBITDA 26.2x and P/E 35.4x.
Management team
ANSYS, Inc.'s CEO is Ajei S Gopal. Ajei S Gopal is a founder and has 2 years tenure with the company. CEO total compensation was
$10,164,184 in 2018 which included
$768,750 salary and
$210,000 annual bonus. The company's CFO is Maria T Shields. Maria T Shields has 20 years tenure at the company.
Insider ownership is 1.1%. Insider ownership didn't change in 2018.
At the end of financial year the company had 1,700 employees. Average revenue per employee in 2018 was
$760,962.
Financial and operational results
FY ended 12/31/2018
ANSYS, Inc. ($ANSS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 936 | 943 | 988 | 1,095 | 1,294 | 18.1% |
| Gross Profit | 783 | 796 | 842 | 945 | 1,138 | 20.4% |
| SG&A | 246 | 254 | 270 | 339 | 414 | 22.1% |
| EBITDA | 429 | 431 | 446 | 458 | 536 | 16.9% |
| EBIT | 347 | 354 | 376 | 391 | 477 | 22.0% |
| Interest expence | 1 | | | | | |
| Tax | 93 | 104 | 115 | 136 | 68 | -50.4% |
| Net Income | 255 | 253 | 266 | 259 | 419 | 61.8% |
| Stock Based Compensation | 22 | 34 | 33 | 53 | 83 | 56.8% |
Balance Sheet
|
|---|
| Cash | 788 | 784 | 822 | 882 | 777 | -11.8% |
| Accounts Receivable | 101 | 92 | 107 | 125 | 318 | 154.9% |
| Accounts Payable | 3 | 5 | 7 | 6 | 8 | 31.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 26 | 16 | 12 | 19 | 22 | 13.6% |
| Acquisitions | 103 | 46 | 8 | 64 | 283 | 343.0% |
Ratios
|
|---|
| Revenue growth | 8.7% | 0.7% | 4.8% | 10.8% | 18.1% | |
| EBITDA growth | 6.7% | 0.5% | 3.4% | 2.8% | 16.9% | |
|
|---|
| Gross Margin | 83.6% | 84.4% | 85.1% | 86.3% | 87.9% | 1.7% |
| EBITDA Margin | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% | -0.4% |
| EBIT Margin | 37.1% | 37.5% | 38.1% | 35.7% | 36.8% | 1.2% |
| SG&A, % of revenue | 26.3% | 26.9% | 27.3% | 30.9% | 32.0% | 1.1% |
| SBC, % of revenue | 2.4% | 3.6% | 3.4% | 4.9% | 6.4% | 1.6% |
| Net Income Margin | 27.2% | 26.8% | 26.9% | 23.7% | 32.4% | 8.7% |
| CAPEX, % of revenue | 2.8% | 1.7% | 1.3% | 1.7% | 1.7% | -0.1% |
|
|---|
| ROIC | 15.7% | 16.1% | 17.3% | 17.8% | 19.5% | 1.7% |
| ROE | 11.7% | 11.4% | 12.1% | 11.6% | 17.1% | 5.5% |
| Net Debt/EBITDA | -1.8x | -1.8x | -1.8x | -1.9x | -1.5x | 0.5x |
People
|
|---|
| Insider ownership | 1.1% | 1.1% | 1.1% | 1.1% | 1.1% | 0.0% |
| Employees | 2,700 | 2,800 | 2,800 | | 1,700 | |
| Revenue/Employee, th. $ | 347 | 337 | 353 | | 761 | |
ANSYS, Inc. ($ANSS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 283 | 306 | 289 | 415 | | 11.6% | 15.9% | 5.0% | 37.4% |
| EBITDA | 112 | 126 | 107 | 192 | | 9.4% | 9.5% | -13.4% | 62.0% |
| Net Income | 84 | 93 | 89 | 153 | | 33.1% | 32.8% | 21.3% | 191.3% |
Balance Sheet
|
|---|
| Cash | 885 | 696 | 729 | 777 | | 2.2% | -18.9% | -20.7% | -11.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 86.2% | 86.8% | 87.5% | 90.4% | | 0.8% | 0.5% | 0.5% | 3.8% |
| EBITDA Margin | 39.5% | 41.1% | 36.8% | 46.2% | | -0.8% | -2.4% | -7.8% | 7.0% |
| Net Income Margin | 29.8% | 30.3% | 30.9% | 36.9% | | 4.8% | 3.8% | 4.1% | 19.5% |
Peers in Application Software
Below you can find ANSYS, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| ANSYS, Inc. ($ANSS) | | 0.7% | 4.8% | 10.8% | 18.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.7% |
|---|
| ANSYS, Inc. ($ANSS) | 83.6% | 84.4% | 85.1% | 86.3% | 87.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| Intelligent Systems Corporation ($INS) | -51.1% | -54.5% | -5.4% | -12.8% | 33.6% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| ANSYS, Inc. ($ANSS) | 2.8% | 1.7% | 1.3% | 1.7% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| ANSYS, Inc. ($ANSS) | 15.7% | 16.1% | 17.3% | 17.8% | 19.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.2x | -0.9x | -0.9x | -0.8x | -0.6x |
|---|
| ANSYS, Inc. ($ANSS) | -1.8x | -1.8x | -1.8x | -1.9x | -1.5x |
