10-Q 1 anss-20240930.htm 10-Q anss-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 0-20853
ANSYS, Inc.
(Exact name of registrant as specified in its charter)
Delaware
04-3219960
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2600 ANSYS Drive,
Canonsburg,
PA
15317
(Address of Principal Executive Offices)
(Zip Code)
844-462-6797
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareANSSNasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   ☒ No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  ☒     No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  ☐   No  ☒
The number of shares of the Registrant's Common Stock, $0.01 par value per share, outstanding as of November 1, 2024 was 87,449,954 shares.


ANSYS, INC. AND SUBSIDIARIES
INDEX
  
Page No.

2
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements:

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)September 30,
2024		December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents$1,246,057 $860,201 
Short-term investments49,212 189 
Accounts receivable, less allowance for doubtful accounts of $16,500 and $20,700, respectively
782,674 864,526 
Other receivables and current assets270,135 324,651 
Total current assets2,348,078 2,049,567 
Long-term assets:
Property and equipment, net87,134 77,780 
Operating lease right-of-use assets106,727 116,980 
Goodwill3,818,560 3,805,874 
Other intangible assets, net756,712 835,417 
Other long-term assets276,551 273,030 
Deferred income taxes214,311 164,227 
Total long-term assets5,259,995 5,273,308 
Total assets$7,608,073 $7,322,875 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$16,394 $22,772 
Accrued bonuses and commissions107,926 170,909 
Accrued income taxes26,781 22,454 
Other accrued expenses and liabilities176,201 215,645 
Deferred revenue427,188 457,514 
Total current liabilities754,490 889,294 
Long-term liabilities:
Deferred income taxes55,704 75,301 
Long-term operating lease liabilities88,830 100,505 
Long-term debt754,128 753,891 
Other long-term liabilities126,145 113,520 
Total long-term liabilities1,024,807 1,043,217 
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 2,000,000 shares authorized; zero shares issued or outstanding
— — 
Common stock, $0.01 par value; 300,000,000 shares authorized; 95,267,307 shares issued
953 953 
Additional paid-in capital1,750,243 1,670,450 
Retained earnings5,576,346 5,283,342 
Treasury stock, at cost: 7,843,557 and 8,361,447 shares, respectively
(1,427,128)(1,474,110)
Accumulated other comprehensive loss(71,638)(90,271)
Total stockholders' equity5,828,776 5,390,364 
Total liabilities and stockholders' equity$7,608,073 $7,322,875 

The accompanying notes are an integral part of the condensed consolidated financial statements.
3

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months EndedNine Months Ended
(in thousands, except per share data)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Revenue:
Software licenses$276,948 $162,422 $720,501 $586,471 
Maintenance and service324,944 296,373 942,134 878,370 
Total revenue601,892 458,795 1,662,635 1,464,841 
Cost of sales:
Software licenses11,067 8,692 32,420 29,095 
Amortization21,890 20,707 66,759 60,404 
Maintenance and service36,152 35,858 107,952 111,750 
Total cost of sales69,109 65,257 207,131 201,249 
Gross profit532,783 393,538 1,455,504 1,263,592 
Operating expenses:
Selling, general and administrative233,065 194,552 681,331 585,278 
Research and development132,320 123,223 393,755 368,581 
Amortization5,860 5,947 18,125 16,598 
Total operating expenses371,245 323,722 1,093,211 970,457 
Operating income161,538 69,816 362,293 293,135 
Interest income13,292 4,909 36,495 12,389 
Interest expense(12,318)(12,276)(36,925)(34,594)
Other (expense) income, net(1,257)96 (3,118)(3,564)
Income before income tax provision161,255 62,545 358,745 267,366 
Income tax provision33,063 7,043 65,741 41,716 
Net income$128,192 $55,502 $293,004 $225,650 
Earnings per share – basic:
Earnings per share$1.47 $0.64 $3.36 $2.60 
Weighted average shares87,399 86,817 87,266 86,814 
Earnings per share – diluted:
Earnings per share$1.46 $0.64 $3.34 $2.58 
Weighted average shares87,885 87,381 87,814 87,335 

The accompanying notes are an integral part of the condensed consolidated financial statements.
4

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months EndedNine Months Ended
(in thousands)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Net income$128,192 $55,502 $293,004 $225,650 
Other comprehensive income (loss):
Foreign currency translation adjustments48,714 (32,834)18,357 (11,547)
Unrealized gains on available-for-sale securities, net of tax361 — 276 — 
Comprehensive income$177,267 $22,668 $311,637 $214,103 

The accompanying notes are an integral part of the condensed consolidated financial statements.
5

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended
(in thousands)September 30,
2024		September 30,
2023
Cash flows from operating activities:
Net income$293,004 $225,650 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization107,328 99,016 
Operating lease right-of-use assets expense17,175 17,625 
Deferred income tax benefit(72,395)(74,426)
Provision for bad debts1,353 2,442 
Stock-based compensation expense197,884 158,533 
Other692 1,252 
Changes in operating assets and liabilities:
Accounts receivable66,649 168,958 
Other receivables and current assets52,907 61,203 
Other long-term assets6,629 (5,897)
Accounts payable, accrued expenses and current liabilities(105,137)(105,197)
Accrued income taxes3,697 6,327 
Deferred revenue(30,379)(65,242)
Other long-term liabilities(1,640)(5,844)
Net cash provided by operating activities537,767 484,400 
Cash flows from investing activities:
Acquisitions, net of cash acquired(1,586)(197,786)
Capital expenditures(32,261)(16,541)
Purchases of short-term investments(48,745)(117)
Other investing activities(3,438)(5,722)
Net cash used in investing activities(86,030)(220,166)
Cash flows from financing activities:
Purchase of treasury stock— (196,494)
Restricted stock withholding taxes paid in lieu of issued shares(83,994)(60,827)
Proceeds from shares issued for stock-based compensation10,446 26,015 
Other financing activities(2,922)(1,294)
Net cash used in financing activities(76,470)(232,600)
Effect of exchange rate fluctuations on cash and cash equivalents10,589 (6,683)
Net increase in cash and cash equivalents385,856 24,951 
Cash and cash equivalents, beginning of period860,201 614,391 
Cash and cash equivalents, end of period$1,246,057 $639,342 
Supplemental disclosure of cash flow information:
Income taxes paid$113,709 $100,135 
Interest paid$36,410 $33,795 
Non-cash consideration in connection with acquisitions$— $5,056 

The accompanying notes are an integral part of the condensed consolidated financial statements.


6
ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
 Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockAccumulated
Other
Comprehensive (Loss) Income		Total
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 2024
95,267$953 $1,670,450 $5,283,342 8,361 $(1,474,110)$(90,271)$5,390,364 
Acquisition activity of previously acquired businesses1,818 (8)719 2,537 
Stock-based compensation activity
(30,455)(382)34,443 3,988 
Other comprehensive loss, net of tax effects(22,024)(22,024)
Net income34,778 34,778 
Balance, March 31, 2024
95,267$953 $1,641,813 $5,318,120 7,971$(1,438,948)$(112,295)$5,409,643 
Stock-based compensation activity48,070 (79)7,174 55,244 
Other comprehensive loss, net of tax effects(8,418)(8,418)
Net income130,034 130,034
Balance, June 30, 202495,267$953 $1,689,883 $5,448,154 7,892$(1,431,774)$(120,713)$5,586,503 
Stock-based compensation activity60,360 (48)4,646 65,006 
Other comprehensive income, net of tax effects49,075 49,075 
Net income128,192 128,192
Balance, September 30, 202495,267$953 $1,750,243 $5,576,346 7,844$(1,427,128)$(71,638)$5,828,776 
    
 Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockAccumulated
Other
Comprehensive (Loss) Income		Total
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 2023
95,267$953 $1,540,317 $4,782,930 8,317 $(1,335,627)$(122,722)$4,865,851 
Treasury shares acquired, including excise tax650 (197,416)(197,416)
Stock-based compensation
  activity		(34,529)(356)34,350 (179)
Other comprehensive income13,284 13,284 
Net income100,622 100,622 
Balance, March 31, 2023
95,267$953 $1,505,788 $4,883,552 8,611$(1,498,693)$(109,438)$4,782,162 
Treasury shares acquired, including excise tax343 343 
Stock-based compensation activity44,365 (105)10,013 54,378
Other comprehensive income8,003 8,003
Net income69,526 69,526
Balance, June 30, 202395,267$953 $1,550,153 $4,953,078 8,506$(1,488,337)$(101,435)$4,914,412 
Treasury shares acquired, including excise tax264 264 
Stock-based compensation activity62,116 (77)7,340 69,456
Other comprehensive loss(32,834)(32,834)
Net income55,502 55,502
Balance, September 30, 202395,267$953 $1,612,269 $5,008,580 8,429$(1,480,733)$(134,269)$5,006,800 

The accompanying notes are an integral part of the condensed consolidated financial statements.

7
ANSYS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)

1.Organization
ANSYS, Inc. (Ansys, we, us, our) develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.
As defined by the accounting guidance for segment reporting, we operate as one segment.
Given the integrated approach to the multi-discipline problem-solving needs of our customers, a single sale may contain components from multiple product areas and include combined technologies. We also have a multi-year product and integration strategy that will result in new, combined products or changes to the historical product offerings. As a result, it is impracticable for us to provide accurate historical or current reporting among our various product lines.
Pending Acquisition
On January 15, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Synopsys, Inc., a Delaware corporation (Synopsys), and ALTA Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Synopsys (Merger Sub), under which Synopsys will acquire Ansys. The transaction is anticipated to close in the first half of 2025, subject to the receipt of required regulatory approvals and other customary closing conditions.

2.Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information for commercial and industrial companies, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2023 (2023 Form 10-K). The condensed consolidated December 31, 2023 balance sheet presented is derived from the audited December 31, 2023 balance sheet included in the 2023 Form 10-K. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any future period.
Accounting Guidance Issued and Not Yet Adopted
Segment reporting: In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 requires enhanced disclosures related to segment information, including for entities with one reportable segment. It does not change the determination of reportable segments. The enhanced disclosures in accordance with the new guidance are required to be reported in the annual period beginning after December 15, 2023. Early adoption is permitted. The standard only impacts footnote disclosures.
Income tax disclosures: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires disclosure of greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The standard only impacts footnote disclosures.
8
Cash, Cash Equivalents and Short-Term Investments
Cash and cash equivalents consist primarily of highly liquid investments such as deposits held at major banks and money market funds. Cash equivalents are carried at cost, which approximates fair value. Our money market fund balances are held in various funds of a single issuer at September 30, 2024.
Short-term investments consist of available-for-sale debt securities with remaining maturities greater than three months at the date of purchase and time deposits. Investments in debt securities with remaining maturities greater than three months at the date of purchase are designated as short-term available-for-sale securities, as we may convert these investments into cash at any time, including to fund general operations. We invest in debt securities that have an effective maturity term of less than three years. The debt securities are carried at fair value, with unrealized gains and losses included in the condensed consolidated balance sheets as a component of accumulated other comprehensive (loss) income. For available-for-sale debt securities in an unrealized loss position, we evaluate whether a current expected credit loss exists based on available information relevant to the credit rating of the security, current economic conditions and reasonable and supportable forecasts. The allowance for any credit loss will be recorded in other (expense) income, net, on the condensed consolidated statements of income, not to exceed the amount of the unrealized loss. Any excess unrealized loss other than the credit loss is generally recognized in accumulated other comprehensive loss. The cost of securities sold is based on the specific identification method and realized gains and losses are included in other (expense) income, net. To date, we have not recorded any credit loss or realized gains or losses.


3.Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes revenue:
Three Months EndedNine Months Ended
(in thousands, except percentages)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Revenue:
Subscription lease licenses$194,322 $103,573 $507,711 $386,494 
Perpetual licenses82,626 58,849 212,790 199,977 
Software licenses276,948 162,422 720,501 586,471 
Maintenance306,670 278,108 889,836 820,393 
Service18,274 18,265 52,298 57,977 
Maintenance and service324,944 296,373 942,134 878,370 
Total revenue$601,892 $458,795 $1,662,635 $1,464,841 
Direct revenue, as a percentage of total revenue74.6 %73.5 %72.8 %73.7 %
Indirect revenue, as a percentage of total revenue25.4 %26.5 %27.2 %26.3 %

Our software license revenue is recognized up front, while maintenance and service revenue is recognized over the term of the contract.
9
Deferred Revenue
Deferred revenue consists of billings made or payments received in advance of revenue recognition from customer agreements. The timing of revenue recognition may differ from the timing of billings to customers. Payment terms vary by the type and location of customer and the products or services offered. The time between invoicing and when payment is due is not significant.
The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the nine months ended September 30, 2024 and 2023 were as follows:
(in thousands)20242023
Beginning balance – January 1$479,754 $435,758 
Acquired deferred revenue— 7,910 
Deferral of revenue1,634,160 1,399,367 
Recognition of revenue(1,662,635)(1,464,841)
Currency translation59 (7,761)
Ending balance – September 30$451,338 $370,433 

Total revenue allocated to remaining performance obligations as of September 30, 2024 will be recognized as revenue as follows:
(in thousands) 
Next 12 months$902,792 
Months 13-24343,105 
Months 25-36146,030 
Thereafter71,870 
Total revenue allocated to remaining performance obligations$1,463,797 

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes both deferred revenue and backlog. Our backlog represents deferred revenue associated with installment billings for periods beyond the current quarterly billing cycle and committed contracts with start dates beyond the end of the current period. Revenue recognized during the nine months ended September 30, 2024 and 2023 included amounts in deferred revenue and backlog at the beginning of the period of $742.8 million and $706.2 million, respectively.

4.Acquisitions
During the three and nine months ended September 30, 2024, we incurred acquisition-related expenses of $13.2 million and $39.9 million, respectively, primarily consisting of costs related to the Merger Agreement with Synopsys. Acquisition-related expenses are recognized as selling, general and administrative and research and development expenses on the condensed consolidated statements of income.
On December 5, 2023, we entered into an agreement to make a strategic equity investment in Humanetics in the amount of $300.0 million, subject to receipt of regulatory approvals among other customary closing conditions. As a result of our interactions with regulators, the parties mutually agreed to terminate the investment agreement in July 2024.
2023 Acquisitions
On January 3, 2023, we completed the acquisition of DYNAmore for a purchase price of $140.8 million, or $128.0 million net of cash acquired. The acquisition expanded our position as a simulation solution provider within the automotive industry. The effects of the acquisition were not material to our condensed consolidated results of operations.
Additionally, during the year ended December 31, 2023, we completed other acquisitions to expand our solution offerings and enhance our customers' experience. These acquisitions were not significant, individually or in the aggregate. The combined purchase price of these acquisitions during the year ended December 31, 2023 was approximately $94.4 million, or $88.3 million net of cash acquired.
10
The operating results of each acquisition have been included in our condensed consolidated financial statements since each respective date of acquisition. The effects of the acquisitions were not material to our condensed consolidated results of operations.

5.Other Receivables and Current Assets
Our other receivables and current assets comprise the following balances:
(in thousands)September 30,
2024		December 31,
2023
Receivables related to unrecognized revenue$176,725 $253,646 
Income taxes receivable, including overpayments and refunds29,034 22,104 
Prepaid expenses and other current assets64,376 48,901 
Total other receivables and current assets$270,135 $324,651 

Receivables related to unrecognized revenue represent the current portion of billings made for customer contracts that have not yet been recognized as revenue.

6.Earnings Per Share
Basic earnings per share (EPS) amounts are computed by dividing earnings by the weighted average number of common shares outstanding during the period. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive equivalents outstanding. To the extent stock awards are anti-dilutive, they are excluded from the calculation of diluted EPS.
The details of basic and diluted EPS are as follows:
 Three Months EndedNine Months Ended
(in thousands, except per share data)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Net income$128,192 $55,502 $293,004 $225,650 
Weighted average shares outstanding – basic87,399 86,817 87,266 86,814 
Dilutive effect of stock plans486 564 548 521 
Weighted average shares outstanding – diluted87,885 87,381 87,814 87,335 
Basic earnings per share$1.47 $0.64 $3.36 $2.60 
Diluted earnings per share$1.46 $0.64 $3.34 $2.58 
Anti-dilutive shares— 73 18 257 

7.Goodwill and Intangible Assets
Intangible assets are classified as follows:
 September 30, 2024December 31, 2023
(in thousands)Gross
Carrying
Amount		Accumulated
Amortization		Gross
Carrying
Amount		Accumulated
Amortization
Finite-lived intangible assets:
Developed software and core technologies
$1,151,665 $(619,558)$1,146,022 $(557,359)
Customer lists271,859 (88,541)289,874 (89,800)
Trade names 190,607 (149,677)190,203 (143,880)
Total$1,614,131 $(857,776)$1,626,099 $(791,039)
Indefinite-lived intangible asset:
Trade name$357 $357 
Finite-lived intangible assets are amortized over their estimated useful lives of two years to seventeen years.
11
As of September 30, 2024, estimated future amortization expense for the intangible assets reflected above was as follows:
(in thousands) 
Remainder of 2024$27,689 
2025116,232 
2026117,102 
2027120,311 
2028113,810 
202999,816 
Thereafter161,395 
Total intangible assets subject to amortization756,355 
Indefinite-lived trade name357 
Other intangible assets, net$756,712 

The changes in goodwill during the nine months ended September 30, 2024 and 2023 were as follows:
(in thousands)20242023
Beginning balance – January 1$3,805,874 $3,658,267 
Acquisitions and adjustments(1)
841 113,502 
Currency translation11,845 (2,448)
Ending balance – September 30$3,818,560 $3,769,321 
(1) In accordance with the accounting for business combinations, we recorded adjustments to goodwill for the effect of changes in the provisional fair values of the assets acquired and liabilities assumed during the measurement period (up to one year from the acquisition date) as we obtained new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.
During the first quarter of 2024, we completed the annual impairment test for goodwill and the indefinite-lived intangible asset and determined that these assets had not been impaired as of the test date, January 1, 2024. No events or circumstances changed during the nine months ended September 30, 2024 that would indicate that the fair values of our reporting unit and indefinite-lived intangible asset are below their carrying amounts.
12
8.Cash Equivalents and Short-Term Investments
During the nine months ended September 30, 2024, we invested in available-for-sale debt securities, which are included in short-term investments in the condensed consolidated balance sheets. As of September 30, 2024, our cash equivalents and short-term investments were as follows:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized Losses Less Than 12 Continuous Months
Estimated Fair Value(1)
Cash equivalents:
Money market funds$246,657 $— $— $246,657 
Total cash equivalents246,657 — — 246,657 
Short-term investments:
Corporate debt securities26,855 244 — 27,099 
Municipal bonds16,746 117 (8)16,855 
U.S. agency bonds5,062 17 (4)5,075 
Other short-term investments183 — — 183 
Total short-term investments48,846 378 (12)49,212 
Total cash equivalents and short-term investments$295,503 $378 $(12)$295,869 
(1) See Note 9, "Fair Value Measurement" for further discussion on fair values.
Of the $27.1 million corporate debt securities, $0.5 million are in a loss position at September 30, 2024. Of the $16.9 million municipal bonds, $4.5 million are in a loss position at September 30, 2024. Of the $5.1 million U.S. agency bonds, $2.0 million are in a loss position at September 30, 2024.
The unrealized losses presented above are primarily attributable to changes in interest rates. We believe that we have the ability to realize the full value of these investments upon maturity.
The following table outlines maturities of our available-for-sale debt securities as of September 30, 2024:
(in thousands)Amortized CostFair Value
Less than 1 year$15,551 $15,599 
1-3 years33,112 33,430 
Total$48,663 $49,029 
13
9.Fair Value Measurement
The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:
•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or
•Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.
A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Our debt is classified within Level 2 of the fair value hierarchy because these borrowings are not actively traded and have a variable interest rate structure based upon market rates. The carrying amount of our debt approximates the estimated fair value. See Note 11, "Debt", for additional information on our borrowings.
The following tables provide the assets carried at fair value and measured on a recurring basis:
  Fair Value Measurements at Reporting Date Using:
(in thousands)September 30,
2024		Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets
Cash equivalents:
Money market funds$246,657 $246,657 $— $— 
Short-term investments:
Corporate debt securities$27,099 $— $27,099 $— 
Municipal bonds$16,855 $— $16,855 $— 
U.S. agency bonds$5,075 $— $5,075 $— 
Other short-term investments$183 $— $183 $— 
Deferred compensation plan investments$2,434 $2,434 $— $— 
Equity securities$698 $698 $— $— 
  Fair Value Measurements at Reporting Date Using:
(in thousands)December 31, 2023Quoted Prices in
Active Markets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets (Liabilities)
Cash equivalents:
Money market funds$170,821 $170,821 $— $— 
Short-term investments:
Other short-term investments$189 $— $189 $— 
Deferred compensation plan investments$2,337 $2,337 $— $— 
Equity securities$634 $634 $— $— 
Forward contracts$(412)$— $(412)$— 

The cash equivalents in the preceding tables represent money market funds, valued at net asset value, with carrying values which approximate their fair values because of their short-term nature.
14
The short-term investments in the preceding tables represent available-for-sale debt securities and time deposits.
The deferred compensation plan investments in the preceding tables represent trading securities held in a rabbi trust for the benefit of non-employee directors. These securities consist of mutual funds traded in an active market with quoted prices. As a result, the plan assets are classified as Level 1 in the fair value hierarchy. The plan assets are recorded within other long-term assets on our condensed consolidated balance sheets.
The equity securities represent our investment in a publicly traded company. These securities are traded in an active market with quoted prices. As a result, the securities are classified as Level 1 in the fair value hierarchy. The securities are recorded within other long-term assets on our condensed consolidated balance sheets.
The forward contracts represent currency hedges to mitigate exchange rate exposure. These contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments. The liabilities associated with the forward contracts are recorded at fair value in other accrued expenses and liabilities in our condensed consolidated balance sheets.

10.Leases
Our right-of-use assets and lease liabilities primarily include operating leases for office space. Our executive offices and those related to certain domestic product development, marketing, production and administration are located in a 186,000 square foot office facility in Canonsburg, Pennsylvania. The term of the lease is 183 months, which began on October 1, 2014 and expires on December 31, 2029. The lease agreement includes an option to renew the contract through August 2044. No options are included in the lease liability. Absent the exercise of options in the lease, our remaining base rent (inclusive of property taxes and certain operating costs) is $4.5 million per annum through 2024 and $4.7 million per annum for 2025 - 2029.
The components of our global lease cost reflected in the condensed consolidated statements of income are as follows:
 Three Months EndedNine Months Ended
(in thousands)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Lease liability cost$7,016 $7,097 $21,472 $21,207 
Variable lease cost not included in the lease liability(1)
1,454 1,523 4,096 4,134 
     Total lease cost$8,470 $8,620 $25,568 $25,341 
(1) Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate.
Other information related to operating leases is as follows:
 Three Months EndedNine Months Ended
(in thousands)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Cash paid for amounts included in the measurement of the lease liability:
     Operating cash flows from operating leases$(7,208)$(7,288)$(21,362)$(20,993)
Right-of-use assets obtained in exchange for new operating lease liabilities$1,771 $2,192 $8,184 $7,508 
As of September 30,
20242023
Weighted-average remaining lease term of operating leases
5.7 years6.5 years
Weighted-average discount rate of operating leases
3.3 %3.4 %

15
The maturity schedule of the operating lease liabilities as of September 30, 2024 is as follows:
(in thousands) 
Remainder of 2024$7,295 
202527,488 
202623,101 
202718,930 
202817,493 
Thereafter30,222 
     Total future lease payments124,529 
Less: Present value adjustment(10,882)
     Present value of future lease payments(1)
$113,647 
(1) Includes the current portion of operating lease liabilities of $24.8 million, which is reflected in other accrued expenses and liabilities in the condensed consolidated balance sheets.
There were no material leases that have been signed but not yet commenced as of September 30, 2024.

11.Debt
On June 30, 2022, we entered into a credit agreement (as amended, the 2022 Credit Agreement) with PNC Bank, National Association, as administrative agent, swing line lender, and an L/C issuer, the lenders party thereto, and the other L/C issuers party thereto. The 2022 Credit Agreement refinanced our previous credit agreements in their entirety. Terms used in this description of the 2022 Credit Agreement with initial capital letters that are not otherwise defined herein are as defined in the 2022 Credit Agreement.
The 2022 Credit Agreement provides for a $755.0 million unsecured term loan facility and a $500.0 million unsecured revolving loan facility, which includes a $50.0 million sublimit for the issuance of letters of credit. The revolving loan facility is available for working capital and general corporate purposes. Each of the term loan facility and the revolving loan facility matures on June 30, 2027.
Borrowings under the term loan and revolving loan facilities accrue interest at a rate that is based on the Term SOFR plus an applicable margin or at the base rate plus an applicable margin, at our election. The base rate is the highest of (i) the Overnight Bank Funding Rate, plus 0.500%, (ii) the PNC Bank, National Association prime rate, and (iii) Daily Simple SOFR plus an adjustment for SOFR plus 1.00%. The applicable margin for the borrowings is a percentage per annum based on the lower of (1) a pricing level determined by our then-current consolidated net leverage ratio and (2) a pricing level determined by our public debt rating (if available).
On September 29, 2023, the 2022 Credit Agreement was amended to provide for an interest rate adjustment (Sustainability Rate Adjustment) based upon the achievement of certain environmental, social and governance key performance indicators (KPIs). The Sustainability Rate Adjustment range is +/- 0.05% and will be adjusted annually based on the KPIs of the preceding year.

The 2022 Credit Agreement also provides for the option to add certain foreign subsidiaries as borrowers and to borrow in Euros, Sterling, Yen and Swiss Francs under the revolving loan facility, up to a sublimit of $150.0 million. Borrowings under the revolving loan facility denominated in these currencies will accrue interest at a rate that is based on (a) for Euros, €STR, (b) for Sterling, SONIA, (c) for Yen, TONAR and (d) for Swiss Francs, SARON, plus an applicable margin calculated as described above.
Under the 2022 Credit Agreement, the weighted average interest rate in effect for the three and nine months ended September 30, 2024 was 6.25% and 6.27%, respectively, as compared to 6.22% and 5.89% for the three and nine months ended September 30, 2023, respectively. The rate in effect as of September 30, 2024 and for the fourth quarter of 2024 under the 2022 Credit Agreement is 5.53%.
The 2022 Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The 2022 Credit Agreement also contains a financial covenant requiring us and our subsidiaries to maintain a consolidated net leverage ratio not in excess of 3.50 to 1.00 as of the end of any fiscal quarter (for the four-quarter period ending on such date) with an opportunity for a temporary increase in such consolidated net leverage ratio to 4.00 to 1.00 upon the consummation of certain qualified acquisitions for which the aggregate consideration is at least $250.0 million.
16
As of September 30, 2024, we had $755.0 million of borrowings outstanding under the term loan, with a carrying value of $754.1 million, which is net of $0.9 million of unamortized debt discounts and issuance costs. The total amount was included in long-term debt. As of September 30, 2024, no borrowings were outstanding under the revolving loan facility.
As of December 31, 2023, we had $755.0 million of borrowings outstanding under the term loan, with a carrying value of $753.9 million, which is net of $1.1 million of unamortized debt discounts and issuance costs. The total amount was included in long-term debt. As of December 31, 2023, no borrowings were outstanding under the revolving loan facility.
We were in compliance with all covenants under the 2022 Credit Agreement as of September 30, 2024 and December 31, 2023.

12.Income Taxes
Our income before income tax provision, income tax provision and effective tax rates were as follows:
 Three Months EndedNine Months Ended
(in thousands, except percentages)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Income before income tax provision$161,255 $62,545 $358,745 $267,366 
Income tax provision$33,063 $7,043 $65,741 $41,716 
Effective tax rate20.5 %11.3 %18.3 %15.6 %

The increase in the effective tax rate for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was a result of an increase in U.S. federal tax expense on foreign earnings and an increase in non-deductible expenses related to business combinations.
13.Stock Repurchase Program
There have been no share repurchases in 2024. For the nine months ended September 30, 2023, 650 thousand shares were repurchased at an average price of $302.34 per share, with a total cost of $196.5 million. As of September 30, 2024, 1.1 million shares remained available for repurchase under the program.

14.Stock-Based Compensation
Total stock-based compensation expense and its net impact on basic and diluted earnings per share are as follows:
 Three Months EndedNine Months Ended
(in thousands, except per share data)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Cost of sales:
Maintenance and service$3,653 $3,568 $10,678 $9,924 
Operating expenses:
Selling, general and administrative44,074 32,907 117,043 89,006 
Research and development24,603 21,586 70,163 59,603 
Stock-based compensation expense before taxes72,330 58,061 197,884 158,533 
Related income tax benefits(13,051)(12,993)(50,340)(41,848)
Stock-based compensation expense, net of taxes$59,279 $45,068 $147,544 $116,685 
Net impact on earnings per share:
Basic earnings per share$(0.68)$(0.52)$(1.69)$(1.34)
Diluted earnings per share$(0.67)$(0.52)$(1.68)$(1.34)

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15.Geographic Information
Revenue to external customers is attributed to individual countries based upon the location of the customer. Revenue by geographic area is as follows:
 Three Months EndedNine Months Ended
(in thousands)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
United States$292,364 $204,824 $806,867 $661,953 
Japan46,737 40,956 132,253 141,770 
Germany38,717 37,901 111,187 117,240 
China and Hong Kong34,516 19,548 107,288 91,128 
South Korea29,193 27,928 80,210 75,868 
Other Europe, Middle East and Africa (EMEA)98,303 83,719 275,250 251,696 
Other international62,062 43,919 149,580 125,186 
Total revenue$601,892 $458,795 $1,662,635 $1,464,841 

Property and equipment by geographic area is as follows:
(in thousands)September 30,
2024		December 31,
2023
United States$62,856 $56,421 
India6,077 5,057 
France5,553 4,771 
Other EMEA7,091 6,924 
Other international5,557 4,607 
Total property and equipment, net$87,134 $77,780 

16.Contingencies and Commitments
We are subject to various claims, investigations, and legal and regulatory proceedings that arise in the ordinary course of business, including, but not limited to, commercial disputes, labor and employment matters, tax audits, alleged infringement of third parties' intellectual property rights and other matters. In our opinion, the resolution of pending matters is not expected to have a material adverse effect on our consolidated results of operations, cash flows or financial position. However, each of these matters is subject to various uncertainties and it is possible that an unfavorable resolution of one or more of these proceedings could materially affect our consolidated results of operations, cash flows or financial position.
Our Indian subsidiary has several service tax audits pending that have resulted in formal inquiries being received on transactions through mid-2012. We could incur tax charges and related liabilities of $7.3 million. As such charges are not probable at this time, an estimated liability has not been recorded on the condensed consolidated balance sheet as of September 30, 2024. The service tax issues raised in our notices and inquiries are very similar to the case, M/s Microsoft Corporation (I) (P) Ltd. Vs. Commissioner of Service Tax, New Delhi, wherein the Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) issued a favorable ruling to Microsoft. The Microsoft ruling was subsequently challenged in the Supreme Court of India by the Indian tax authority and a decision is still pending. We can provide no assurances on the impact that the present Microsoft case's decision will have on our cases, however, an unfavorable ruling in the Microsoft case may impact our assessment of probability and result in the recording of a $7.3 million estimated liability. We are uncertain as to when these service tax matters will be concluded.
We sell software licenses and services to our customers under contractual agreements. Such agreements generally include certain provisions indemnifying the customer against claims, by third parties, of infringement or misappropriation of their intellectual property rights arising from such customer's usage of our products or services. To date, payments related to these indemnification provisions have been immaterial. For several reasons, including the lack of prior material indemnification claims, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto for the nine months ended September 30, 2024, and with our audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the 2023 Form 10-K filed with the Securities and Exchange Commission (SEC). The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (GAAP).
Business
Ansys, a corporation formed in 1994, develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction. Headquartered south of Pittsburgh, Pennsylvania, we employed 6,400 and 6,200 people as of September 30, 2024 and December 31, 2023, respectively. We focus on the development of open and flexible solutions that enable users to analyze designs on-premises and/or via the cloud, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing, validation and deployment. We distribute our suite of simulation technologies through direct sales offices in strategic, global locations and a global network of independent resellers and distributors (collectively, channel partners). It is our intention to continue to maintain this hybrid sales and distribution model. We operate and report as one segment.
When visionary companies need to know how their world-changing ideas will perform, they close the gap between design and reality using Ansys simulation. For more than 50 years, Ansys software has enabled innovators across industries to push the boundaries of product design by using the predictive power of simulation. From sustainable transportation and advanced satellite systems to life-saving medical devices, Ansys powers innovation that drives human advancement.
Our strategy of Pervasive Insights seeks to deepen the use of simulation in our core market, to inject simulation throughout the product lifecycle and extend the accessibility to a broader set of users and use cases. Our business has three vectors of growth:
•More products. Our broad and deep multiphysics portfolio enables us to grow with customers as they use simulation to solve more complex problems across a broad set of industries.
•More users. Investments in simulation education and user experience simplification has made simulation more accessible to a broader user base.
•More computations. Larger and more complex simulations drive more computation, requiring customers to use more Ansys licenses to complete their simulations.
Through decades of investments in the academic community and enhanced user experiences, our solutions have become accessible and relevant beyond our core "engineering" end user, to reach more users upstream and downstream from our core, which is the product validation process. Our multiphysics solutions enable our customers to address increasingly complex research and development (R&D) challenges from the component through the system and mission level of analysis. Our products seamlessly enable access to high performance compute capacity to run simulations, on-premises or in the cloud, which means our customers' R&D teams are unencumbered by compute capacity limitations that can hinder R&D cycle times. Our investments in artificial intelligence (AI) capabilities across our simulation portfolio and technical support services enhance the customer experience, democratize simulation and further next-generation innovation.
The engineering simulation software market is strong and growing. The market growth is driven by customers' need for rapid, quality innovation in a cost efficient manner, enabling faster time to market for new products and lower warranty costs. Increasing product complexity is driving sustained demand for simulations. Key industry trends fueling customers' increasing needs for simulation include:
•Electrification;
•Autonomy;
•Connectivity;
•The industrial internet of things; and
•Sustainability, including minimizing waste and physical prototyping, and improving circularity and development time.

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We have been investing and intend to continue to invest in our portfolio to broaden the range of physics and enable customers to analyze the interactions among physics at the component, system and mission level. Our strategy of Pervasive Insights is aligned with the near-term market growth opportunities and is laying the foundation for a future where simulation can be further democratized to broader classes of end users and end-use cases. In addition, we have and expect to continue to partner with industry leaders to extend simulation into other ecosystems and customer R&D workflows.

We license our technology to businesses in a diverse set of industries, educational institutions and governmental agencies. We believe that the features, functionality and integrated multiphysics capabilities of our software products are as strong as they have ever been. The software business is generally characterized by long sales cycles which increase the difficulty of predicting sales for any particular quarter. We make many operational and strategic decisions based upon short- and long-term sales forecasts that are impacted not only by these long sales cycles, but also by current global economic conditions. As a result, we believe that our overall performance is best measured by fiscal year results rather than by quarterly results.

We address the competition and price pressure that we face in the short- and long-term by focusing on expanding the breadth, depth, ease of use and quality of the technologies, features, functionality and integrated multiphysics capabilities of our software products as compared to our competitors; investing in research and development to develop new and innovative products and increasing the capabilities of our existing products; maintaining a diverse industry footprint and focusing on customer needs, training, consulting and support; and enhancing our distribution channels. We also evaluate and execute strategic acquisitions to supplement our global engineering talent, product offerings and distribution channels.

Synopsys Merger Agreement
On January 15, 2024, we entered into the Merger Agreement with Synopsys and Merger Sub. The Merger Agreement provides for the merger of Merger Sub with and into Ansys, with Ansys surviving as a wholly owned subsidiary of Synopsys. Our Board of Directors and stockholders have approved the Merger Agreement. If consummated, our common stock will be delisted from the Nasdaq Global Select Market and deregistered under the Exchange Act. The completion of the merger is subject to customary closing conditions, including, among others, approval under certain applicable antitrust and foreign investment regimes. We expect the transaction to close in the first half of 2025.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the Merger Agreement, which was filed as Exhibit 2.1 to our Current Report on Form 8-K filed on January 16, 2024.

Overview
Overall GAAP and Non-GAAP Results
This section includes a discussion of GAAP and non-GAAP results. For reconciliations of non-GAAP results to GAAP results, see the section titled "Non-GAAP Results" herein.
The 2024 and 2023 period 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.
Our GAAP and non-GAAP results for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 reflected the following variances:
Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Revenue31.2 %13.5 %
GAAP Operating income131.4 %23.6 %
Non-GAAP Operating income76.3 %28.3 %
GAAP Diluted earnings per share128.1 %29.5 %
Non-GAAP Diluted earnings per share83.0 %33.4 %
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Our results reflect an increase in revenue during the three and nine months ended September 30, 2024 due to growth in subscription lease license, maintenance and perpetual license revenue. We also experienced increased operating expenses during the three and nine months ended September 30, 2024, primarily due to increased personnel and acquisition costs. Acquisition costs primarily consist of costs related to the Merger Agreement with Synopsys. Quarterly dynamics may not be representative of the momentum in our business given the shifting mix of license types and renewal cycles that can be volatile quarter to quarter. This further highlights the importance of measuring our results based on our fiscal year rather than individual quarters.
This section also includes a discussion of constant currency results, which we use for financial and operational decision-making and as a means to evaluate period-to-period comparisons by excluding the effects of foreign currency fluctuations on the reported results. All constant currency results presented in this Item 2 exclude the effects of foreign currency fluctuations on the reported results. To present this information, the 2024 period results for entities whose functional currency is a currency other than the U.S. Dollar were converted to U.S. Dollars at rates that were in effect for the 2023 comparable period, rather than the actual exchange rates in effect for the 2024 period. Constant currency growth rates are calculated by adjusting the 2024 period reported amounts by the 2024 period currency fluctuation impacts and comparing to the 2023 comparable period reported amounts.
Impact of Foreign Currency
Our comparative financial results were impacted by fluctuations in the U.S. Dollar during the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. The impacts on our revenue and operating income as a result of the fluctuations of the U.S. Dollar when measured against our foreign currencies based on 2023 period exchange rates are reflected in the table below. Amounts in parenthesis indicate an adverse impact from currency fluctuations.
(in thousands)Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Revenue$133 $(13,576)
GAAP Operating income$(418)$(10,531)
Non-GAAP Operating income$(320)$(10,259)

In constant currency, our variances were as follows:
Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Revenue31.2 %14.4 %
GAAP Operating income132.0 %27.2 %
Non-GAAP Operating income76.5 %30.2 %


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Other Key Business Metric
Annual Contract Value (ACV) is a key performance metric and is useful to investors in assessing the strength and trajectory of our business. ACV is a supplemental metric to help evaluate the annual performance of the business. Over the life of the contract, ACV equals the total value realized from a customer. ACV is not impacted by the timing of license revenue recognition. ACV is used by management in financial and operational decision-making and in setting sales targets used for compensation. ACV is not a replacement for, and should be viewed independently of, GAAP revenue and deferred revenue as ACV is a performance metric and is not intended to be combined with any of these items. There is no GAAP measure comparable to ACV. ACV is composed of the following:

•the annualized value of maintenance and subscription lease contracts with start dates or anniversary dates during the period, plus
•the value of perpetual license contracts with start dates during the period, plus
•the annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plus
•the value of work performed during the period on fixed-deliverable services contracts.

When we refer to the anniversary dates in the definition of ACV above, we are referencing the date of the beginning of the next twelve-month period in a contractually committed multi-year contract. If a contract is three years in duration, with a start date of July 1, 2024, the anniversary dates would be July 1, 2025 and July 1, 2026. We label these anniversary dates as they are contractually committed. While this contract would be up for renewal on July 1, 2027, our ACV performance metric does not assume any contract renewals.

Example 1: For purposes of calculating ACV, a $100,000 subscription lease contract or a $100,000 maintenance contract with a term of July 1, 2024 – June 30, 2025, would each contribute $100,000 to ACV for fiscal year 2024 with no contribution to ACV for fiscal year 2025.

Example 2: For purposes of calculating ACV, a $300,000 subscription lease contract or a $300,000 maintenance contract with a term of July 1, 2024 – June 30, 2027, would each contribute $100,000 to ACV in each of fiscal years 2024, 2025 and 2026. There would be no contribution to ACV for fiscal year 2027 as each period captures the full annual value upon the anniversary date.

Example 3: A perpetual license valued at $200,000 with a contract start date of March 1, 2024 would contribute $200,000 to ACV in fiscal year 2024.
During the three and nine months ended September 30, 2024 and 2023 our ACV was as follows:
 Three Months Ended September 30,
(in thousands, except percentages)20242023Change
ActualConstant CurrencyActualActualConstant
Currency
AmountAmount%Amount%
ACV$540,527 $538,963 $457,549 $82,978 18.1 $81,414 17.8 
 Nine Months Ended September 30,
(in thousands, except percentages)20242023Change
ActualConstant CurrencyActualActualConstant
Currency
AmountAmount%Amount%
ACV$1,468,477 $1,483,108 $1,345,305 $123,172 9.2 $137,803 10.2 
Recurring ACV includes both subscription lease license and maintenance ACV and excludes perpetual license and service ACV. Our trailing twelve-month recurring ACV, converted from the functional currency to U.S. Dollars at the 2023 period monthly average exchange rates, was as follows:
 
Twelve Months Ended September 30,
Change
(in thousands, except percentages)20242023Amount%
Recurring ACV at 2023 monthly average exchange rates$2,046,306 $1,801,066 $245,240 13.6 
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Industry Commentary:
During the third quarter of 2024, ACV growth was supported by our core industries of aerospace and defense (A&D), high-tech and automotive. Our A&D customers increasingly rely on and invest in digital engineering to create autonomous attritable and expendable systems, place satellites for communications and imaging, develop electric vertical take-off and landing and improve sustainability within commercial aviation. Growth in the high-tech industry was driven by customer demand for semiconductor and electronics intelligence solutions that advance 3D-IC chip technology, further system-on-chip complexity in mobile phones, increased chips in automobiles and embedded AI at the edge. The combination of our multiphysics platform, AI/machine learning technologies and cloud and high-performance computing solutions empower our high-tech customers to achieve higher product performance and reliability while reducing development time and cost. Additionally, high-tech customers invest in our products to balance sustainability and carbon neutrality goals with demand for advanced chip design for AI, Cloud, smart phones and other devices. Within the automotive industry, customers continue to invest in our software to reduce development time and cost across the entire electrified power system. As automakers face the challenges of new regulations, stalled customer demand and profitability pressures, they are forced to diversify their electrification line-up and bolster development of hybrid electric vehicles.
Geographic Trends:
The following table presents our geographic revenue variances using actual and constant currency rates during the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023:

Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
ActualConstant CurrencyActualConstant Currency
Americas40.4 %40.4 %20.7 %