10-Q 1 anss-20220930.htm 10-Q anss-20220930
FALSE2022Q3000101346212/31121212310000010134622022-01-012022-09-300001013462exch:XNGS2022-01-012022-09-3000010134622022-10-28xbrli:shares00010134622022-09-30iso4217:USD00010134622021-12-31iso4217:USDxbrli:shares0001013462us-gaap:LicenseMember2022-07-012022-09-300001013462us-gaap:LicenseMember2021-07-012021-09-300001013462us-gaap:LicenseMember2022-01-012022-09-300001013462us-gaap:LicenseMember2021-01-012021-09-300001013462us-gaap:ServiceMember2022-07-012022-09-300001013462us-gaap:ServiceMember2021-07-012021-09-300001013462us-gaap:ServiceMember2022-01-012022-09-300001013462us-gaap:ServiceMember2021-01-012021-09-3000010134622022-07-012022-09-3000010134622021-07-012021-09-3000010134622021-01-012021-09-3000010134622020-12-3100010134622021-09-300001013462us-gaap:CommonStockMember2021-12-310001013462us-gaap:AdditionalPaidInCapitalMember2021-12-310001013462us-gaap:RetainedEarningsMember2021-12-310001013462us-gaap:TreasuryStockMember2021-12-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001013462us-gaap:TreasuryStockMember2022-01-012022-03-3100010134622022-01-012022-03-310001013462us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001013462us-gaap:RetainedEarningsMember2022-01-012022-03-310001013462us-gaap:CommonStockMember2022-03-310001013462us-gaap:AdditionalPaidInCapitalMember2022-03-310001013462us-gaap:RetainedEarningsMember2022-03-310001013462us-gaap:TreasuryStockMember2022-03-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100010134622022-03-310001013462us-gaap:AdditionalPaidInCapitalMemberanss:AnalyticalGraphicsIncMember2022-04-012022-06-300001013462us-gaap:TreasuryStockMemberanss:AnalyticalGraphicsIncMember2022-04-012022-06-300001013462anss:AnalyticalGraphicsIncMember2022-04-012022-06-300001013462us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001013462us-gaap:TreasuryStockMember2022-04-012022-06-3000010134622022-04-012022-06-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001013462us-gaap:RetainedEarningsMember2022-04-012022-06-300001013462us-gaap:CommonStockMember2022-06-300001013462us-gaap:AdditionalPaidInCapitalMember2022-06-300001013462us-gaap:RetainedEarningsMember2022-06-300001013462us-gaap:TreasuryStockMember2022-06-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000010134622022-06-300001013462us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001013462us-gaap:TreasuryStockMember2022-07-012022-09-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001013462us-gaap:RetainedEarningsMember2022-07-012022-09-300001013462us-gaap:CommonStockMember2022-09-300001013462us-gaap:AdditionalPaidInCapitalMember2022-09-300001013462us-gaap:RetainedEarningsMember2022-09-300001013462us-gaap:TreasuryStockMember2022-09-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001013462us-gaap:CommonStockMember2020-12-310001013462us-gaap:AdditionalPaidInCapitalMember2020-12-310001013462us-gaap:RetainedEarningsMember2020-12-310001013462us-gaap:TreasuryStockMember2020-12-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001013462us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001013462us-gaap:TreasuryStockMember2021-01-012021-03-3100010134622021-01-012021-03-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001013462us-gaap:RetainedEarningsMember2021-01-012021-03-310001013462us-gaap:CommonStockMember2021-03-310001013462us-gaap:AdditionalPaidInCapitalMember2021-03-310001013462us-gaap:RetainedEarningsMember2021-03-310001013462us-gaap:TreasuryStockMember2021-03-310001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100010134622021-03-310001013462us-gaap:CommonStockMemberanss:AnalyticalGraphicsIncMember2021-04-012021-06-300001013462us-gaap:AdditionalPaidInCapitalMemberanss:AnalyticalGraphicsIncMember2021-04-012021-06-300001013462anss:AnalyticalGraphicsIncMember2021-04-012021-06-300001013462us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001013462us-gaap:TreasuryStockMember2021-04-012021-06-3000010134622021-04-012021-06-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001013462us-gaap:RetainedEarningsMember2021-04-012021-06-300001013462us-gaap:CommonStockMember2021-06-300001013462us-gaap:AdditionalPaidInCapitalMember2021-06-300001013462us-gaap:RetainedEarningsMember2021-06-300001013462us-gaap:TreasuryStockMember2021-06-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000010134622021-06-300001013462us-gaap:AdditionalPaidInCapitalMemberanss:AnalyticalGraphicsIncMember2021-07-012021-09-300001013462us-gaap:TreasuryStockMemberanss:AnalyticalGraphicsIncMember2021-07-012021-09-300001013462anss:AnalyticalGraphicsIncMember2021-07-012021-09-300001013462us-gaap:TreasuryStockMember2021-07-012021-09-300001013462us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001013462us-gaap:RetainedEarningsMember2021-07-012021-09-300001013462us-gaap:CommonStockMember2021-09-300001013462us-gaap:AdditionalPaidInCapitalMember2021-09-300001013462us-gaap:RetainedEarningsMember2021-09-300001013462us-gaap:TreasuryStockMember2021-09-300001013462us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-30anss:segment0001013462us-gaap:CashMember2022-09-30xbrli:pure0001013462us-gaap:CashMember2021-12-310001013462us-gaap:MoneyMarketFundsMember2022-09-300001013462us-gaap:MoneyMarketFundsMember2021-12-310001013462anss:LeaseLicenseRevenueMember2022-07-012022-09-300001013462anss:LeaseLicenseRevenueMember2021-07-012021-09-300001013462anss:LeaseLicenseRevenueMember2022-01-012022-09-300001013462anss:LeaseLicenseRevenueMember2021-01-012021-09-300001013462anss:PerpetualLicenseRevenueMember2022-07-012022-09-300001013462anss:PerpetualLicenseRevenueMember2021-07-012021-09-300001013462anss:PerpetualLicenseRevenueMember2022-01-012022-09-300001013462anss:PerpetualLicenseRevenueMember2021-01-012021-09-300001013462us-gaap:MaintenanceMember2022-07-012022-09-300001013462us-gaap:MaintenanceMember2021-07-012021-09-300001013462us-gaap:MaintenanceMember2022-01-012022-09-300001013462us-gaap:MaintenanceMember2021-01-012021-09-300001013462us-gaap:TechnologyServiceMember2022-07-012022-09-300001013462us-gaap:TechnologyServiceMember2021-07-012021-09-300001013462us-gaap:TechnologyServiceMember2022-01-012022-09-300001013462us-gaap:TechnologyServiceMember2021-01-012021-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001013462anss:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelThroughIntermediaryMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-3000010134622022-10-012022-09-3000010134622023-10-012022-09-3000010134622024-10-012022-09-3000010134622025-10-012022-09-300001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-01-012022-09-300001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-09-300001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001013462us-gaap:CustomerRelatedIntangibleAssetsMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-09-300001013462us-gaap:TradeNamesMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-09-300001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:ComputerSoftwareIntangibleAssetMember2022-01-012022-09-300001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMembersrt:MinimumMemberus-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001013462srt:MaximumMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMemberus-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001013462us-gaap:TradeNamesMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-01-012022-09-300001013462us-gaap:TradeNamesMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMembersrt:MinimumMember2022-09-300001013462us-gaap:TradeNamesMembersrt:MaximumMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-09-300001013462us-gaap:CustomerRelatedIntangibleAssetsMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-01-012022-09-300001013462anss:ZemaxLLCMember2021-10-010001013462anss:ZemaxLLCMember2021-10-012021-10-010001013462us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-01-012021-12-310001013462us-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001013462us-gaap:ComputerSoftwareIntangibleAssetMember2021-12-310001013462us-gaap:CustomerRelatedIntangibleAssetsMember2022-09-300001013462us-gaap:CustomerRelatedIntangibleAssetsMember2021-12-310001013462us-gaap:TradeNamesMember2022-09-300001013462us-gaap:TradeNamesMember2021-12-310001013462us-gaap:TradeNamesMember2022-09-300001013462us-gaap:TradeNamesMember2021-12-310001013462srt:MinimumMember2022-01-012022-09-300001013462srt:MaximumMember2022-01-012022-09-300001013462us-gaap:FairValueInputsLevel1Member2022-09-300001013462us-gaap:FairValueInputsLevel2Member2022-09-300001013462us-gaap:FairValueInputsLevel3Member2022-09-300001013462us-gaap:FairValueInputsLevel1Member2021-12-310001013462us-gaap:FairValueInputsLevel2Member2021-12-310001013462us-gaap:FairValueInputsLevel3Member2021-12-310001013462anss:CanonsburgOfficeNewCompanyHeadquartersMember2022-09-30utr:sqft0001013462us-gaap:RevolvingCreditFacilityMember2022-09-300001013462us-gaap:LetterOfCreditMember2022-09-300001013462us-gaap:BaseRateMember2022-01-012022-09-300001013462us-gaap:RevolvingCreditFacilityMember2021-12-310001013462us-gaap:EmployeeStockMember2022-09-300001013462us-gaap:EmployeeStockMember2022-01-012022-09-300001013462us-gaap:ServiceMember2022-07-012022-09-300001013462us-gaap:ServiceMember2021-07-012021-09-300001013462us-gaap:ServiceMember2022-01-012022-09-300001013462us-gaap:ServiceMember2021-01-012021-09-300001013462us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001013462us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001013462us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001013462us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001013462us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001013462us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001013462us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001013462us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001013462country:US2022-07-012022-09-300001013462country:US2021-07-012021-09-300001013462country:US2022-01-012022-09-300001013462country:US2021-01-012021-09-300001013462country:JP2022-07-012022-09-300001013462country:JP2021-07-012021-09-300001013462country:JP2022-01-012022-09-300001013462country:JP2021-01-012021-09-300001013462country:DE2022-07-012022-09-300001013462country:DE2021-07-012021-09-300001013462country:DE2022-01-012022-09-300001013462country:DE2021-01-012021-09-300001013462country:KR2022-07-012022-09-300001013462country:KR2021-07-012021-09-300001013462country:KR2022-01-012022-09-300001013462country:KR2021-01-012021-09-300001013462country:CN2022-07-012022-09-300001013462country:CN2021-07-012021-09-300001013462country:CN2022-01-012022-09-300001013462country:CN2021-01-012021-09-300001013462us-gaap:EMEAMember2022-07-012022-09-300001013462us-gaap:EMEAMember2021-07-012021-09-300001013462us-gaap:EMEAMember2022-01-012022-09-300001013462us-gaap:EMEAMember2021-01-012021-09-300001013462anss:OtherInternationalMember2022-07-012022-09-300001013462anss:OtherInternationalMember2021-07-012021-09-300001013462anss:OtherInternationalMember2022-01-012022-09-300001013462anss:OtherInternationalMember2021-01-012021-09-300001013462country:US2022-09-300001013462country:US2021-12-310001013462country:IN2022-09-300001013462country:IN2021-12-310001013462country:DE2022-09-300001013462country:DE2021-12-310001013462us-gaap:EMEAMember2022-09-300001013462us-gaap:EMEAMember2021-12-310001013462anss:OtherInternationalMember2022-09-300001013462anss:OtherInternationalMember2021-12-310001013462anss:IndiaServiceTaxAuditMember2022-09-300001013462us-gaap:SubsequentEventMemberus-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-11-012022-11-01

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, 2022
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 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 filerAccelerated filer
Non-accelerated filerSmaller 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 October 28, 2022 was 87,112,235 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,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$632,509 $667,667 
Short-term investments194 361 
Accounts receivable, less allowance for doubtful accounts of $14,600
602,607 645,891 
Other receivables and current assets214,566 324,655 
Total current assets1,449,876 1,638,574 
Long-term assets:
Property and equipment, net77,748 87,914 
Operating lease right-of-use assets123,511 120,881 
Goodwill3,532,459 3,409,271 
Other intangible assets, net739,202 763,119 
Other long-term assets214,648 279,676 
Deferred income taxes24,196 24,879 
Total long-term assets4,711,764 4,685,740 
Total assets$6,161,640 $6,324,314 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$17,353 $10,863 
Accrued bonuses and commissions80,282 163,182 
Accrued income taxes16,461 8,410 
Other accrued expenses and liabilities160,693 204,509 
Deferred revenue334,901 391,528 
Total current liabilities609,690 778,492 
Long-term liabilities:
Deferred income taxes48,357 105,548 
Long-term operating lease liabilities109,706 104,378 
Long-term debt753,495 753,576 
Other long-term liabilities96,707 98,272 
Total long-term liabilities1,008,265 1,061,774 
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 capital1,500,330 1,465,694 
Retained earnings4,524,983 4,259,220 
Treasury stock, at cost: 8,178,940 and 8,188,331 shares, respectively
(1,294,098)(1,185,707)
Accumulated other comprehensive loss(188,483)(56,112)
Total stockholders' equity4,543,685 4,484,048 
Total liabilities and stockholders' equity$6,161,640 $6,324,314 

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,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenue:
Software licenses$208,906 $200,394 $575,332 $547,820 
Maintenance and service263,605 240,774 796,106 703,228 
Total revenue472,511 441,168 1,371,438 1,251,048 
Cost of sales:
Software licenses8,425 8,289 25,370 23,960 
Amortization17,281 15,189 51,947 45,163 
Maintenance and service36,261 39,268 111,897 119,884 
Total cost of sales61,967 62,746 189,214 189,007 
Gross profit410,544 378,422 1,182,224 1,062,041 
Operating expenses:
Selling, general and administrative175,283 165,368 515,421 471,993 
Research and development108,056 102,023 322,271 303,381 
Amortization3,821 3,403 11,975 12,244 
Total operating expenses287,160 270,794 849,667 787,618 
Operating income123,384 107,628 332,557 274,423 
Interest income1,345 541 2,141 1,544 
Interest expense(6,092)(2,943)(13,668)(9,594)
Other (expense) income, net(656)(1,328)(2,126)14,008 
Income before income tax provision117,981 103,898 318,904 280,381 
Income tax provision22,006 18,556 53,141 28,925 
Net income$95,975 $85,342 $265,763 $251,456 
Earnings per share – basic:
Earnings per share$1.10 $0.98 $3.05 $2.89 
Weighted average shares87,063 87,239 87,062 87,072 
Earnings per share – diluted:
Earnings per share$1.10 $0.97 $3.04 $2.86 
Weighted average shares87,418 88,169 87,496 88,069 

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,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Net income$95,975 $85,342 $265,763 $251,456 
Other comprehensive loss:
Foreign currency translation adjustments(61,636)(16,304)(132,371)(31,351)
Comprehensive income$34,339 $69,038 $133,392 $220,105 

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,
2022
September 30,
2021
Cash flows from operating activities:
Net income$265,763 $251,456 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and intangible assets amortization86,239 80,500 
Operating lease right-of-use assets expense17,356 16,896 
Deferred income tax benefit(63,560)(22,459)
Provision for bad debts2,476 827 
Stock-based compensation expense122,119 122,148 
Gain on equity investment (15,139)
Other4,986 1,940 
Changes in operating assets and liabilities:
Accounts receivable66,369 86,098 
Other receivables and current assets96,641 57,992 
Other long-term assets(3,121)(2,548)
Accounts payable, accrued expenses and current liabilities(111,039)(58,520)
Accrued income taxes9,751 (18,997)
Deferred revenue(28,203)(46,467)
Other long-term liabilities(8,746)(5,898)
Net cash provided by operating activities457,031 447,829 
Cash flows from investing activities:
Acquisitions, net of cash acquired(242,613)(105,141)
Capital expenditures(15,227)(18,133)
Other investing activities(782)(382)
Net cash used in investing activities(258,622)(123,656)
Cash flows from financing activities:
Principal payments on long-term debt (45,000)
Purchase of treasury stock(155,571)(35,993)
Restricted stock withholding taxes paid in lieu of issued shares(62,035)(92,143)
Proceeds from shares issued for stock-based compensation20,918 26,321 
Other financing activities(1,290)(50)
Net cash used in financing activities(197,978)(146,865)
Effect of exchange rate fluctuations on cash and cash equivalents(35,589)(9,142)
Net (decrease) increase in cash and cash equivalents(35,158)168,166 
Cash and cash equivalents, beginning of period667,667 912,672 
Cash and cash equivalents, end of period$632,509 $1,080,838 
Supplemental disclosure of cash flow information:
Income taxes paid$42,055 $59,973 
Interest paid$12,192 $8,721 
Fair value of unpaid consideration in connection with acquisitions$3,391 $ 

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 LossTotal
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 2022
95,267$953 $1,465,694 $4,259,220 8,188 $(1,185,707)$(56,112)$4,484,048 
Treasury shares acquired500 (155,571)(155,571)
Stock-based compensation activity
(50,287)(403)36,865 (13,422)
Other comprehensive loss(22,092)(22,092)
Net income70,988 70,988 
Balance, March 31, 202295,267$953 $1,415,407 $4,330,208 8,285$(1,304,413)$(78,204)$4,363,951 
Acquisition of Analytical Graphics, Inc.511 (3)300 811 
Stock-based compensation activity
34,631 (33)3,205 37,836 
Other comprehensive loss(48,643)(48,643)
Net income
98,800 98,800 
Balance, June 30, 2022
95,267$953 $1,450,549 $4,429,008 8,249$(1,300,908)$(126,847)$4,452,755 
Stock-based compensation activity49,781 (70)6,810 56,591 
Other comprehensive loss(61,636)(61,636)
Net income95,97595,975 
Balance, September 30, 202295,267$953 $1,500,330 $4,524,983 8,179$(1,294,098)$(188,483)$4,543,685 
    
 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive (Loss) Income
Total
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 2021
95,266$953 $1,434,203 $3,804,593 8,694 $(1,124,102)$(17,775)$4,097,872 
Stock-based compensation activity
(87,602)(565)48,565 (39,037)
Other comprehensive loss(19,264)(19,264)
Net income72,398 72,398 
Balance, March 31, 2021
95,266$953 $1,346,601 $3,876,991 8,129$(1,075,537)$(37,039)$4,111,969 
Acquisition of Analytical Graphics, Inc.1 328 328 
Stock-based compensation activity
34,661 (63)5,327 39,988 
Other comprehensive income4,217 4,217 
Net income93,716 93,716 
Balance, June 30, 2021
95,267$953 $1,381,590 $3,970,707 8,066$(1,070,210)$(32,822)$4,250,218 
Acquisition of Analytical Graphics, Inc.454 (2)152 606 
Treasury shares acquired97 (35,993)(35,993)
Stock-based compensation activity46,375 (106)9,000 55,375 
Other comprehensive loss(16,304)(16,304)
Net income85,342 85,342 
Balance, September 30, 202195,267$953 $1,428,419 $4,056,049 8,055$(1,097,051)$(49,126)$4,339,244 

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, 2022
(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 of software 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.
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, 2021 (2021 Form 10-K). The condensed consolidated December 31, 2021 balance sheet presented is derived from the audited December 31, 2021 balance sheet included in the 2021 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, 2022 are not necessarily indicative of the results that may be expected for any future period.
Recently Adopted Accounting Guidance
Business combinations: In October 2021, the Financial Accounting Standards Board issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. We adopted the standard effective January 1, 2022. Under the prior guidance, such assets and liabilities were recognized by the acquirer at fair value on the acquisition date. The standard does not impact acquired contract assets or liabilities from business combinations that occurred prior to the effective date of adoption, and the impact in current and future periods will depend on the contract assets and contract liabilities acquired in business combinations after the effective date of adoption.
Accounting Guidance Issued and Not Yet Adopted
It is not expected that the future adoption of any recently issued accounting pronouncements will have a material impact on our financial position, results of operations or cash flows.
8

Cash and Cash Equivalents
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 cash and cash equivalents balances comprise the following:
 September 30, 2022December 31, 2021
(in thousands, except percentages)Amount% of TotalAmount% of Total
Cash accounts$399,971 63.2 $580,047 86.9 
Money market funds232,538 36.8 87,620 13.1 
Total$632,509 $667,667 

Our money market fund balances are held in various funds of two issuers.

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,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenue:
Subscription lease licenses$136,489 $120,516 $362,977 $315,387 
Perpetual licenses72,417 79,878 212,355 232,433 
Software licenses208,906 200,394 575,332 547,820 
Maintenance247,678 223,872 742,554 655,843 
Service15,927 16,902 53,552 47,385 
Maintenance and service263,605 240,774 796,106 703,228 
Total revenue$472,511 $441,168 $1,371,438 $1,251,048 
Direct revenue, as a percentage of total revenue74.8 %74.4 %73.7 %74.0 %
Indirect revenue, as a percentage of total revenue25.2 %25.6 %26.3 %26.0 %

Our software license revenue is recognized up front, while maintenance and service revenue is generally 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, 2022 and 2021 were as follows:
(in thousands)20222021
Beginning balance – January 1$412,781 $388,810 
Acquired deferred revenue1,032 746 
Deferral of revenue1,343,122 1,202,547 
Recognition of revenue(1,371,438)(1,251,048)
Currency translation(30,779)(8,591)
Ending balance – September 30$354,718 $332,464 

Total revenue allocated to remaining performance obligations as of September 30, 2022 will be recognized as revenue as follows:
(in thousands) 
Next 12 months$674,142 
Months 13-24270,106 
Months 25-36121,553 
Thereafter43,087 
Total revenue allocated to remaining performance obligations$1,108,888 

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 installment billings for periods beyond the current quarterly billing cycle. Revenue recognized during the nine months ended September 30, 2022 and 2021 included amounts in deferred revenue and backlog at the beginning of the period of $608.7 million and $507.0 million, respectively.

4.Acquisitions
During the nine months ended September 30, 2022, we completed various strategic acquisitions to expand our solution offerings and enhance our customers' experience. The effects of the acquisitions were not material to our condensed consolidated results of operations individually or in the aggregate. The combined purchase price of the acquisitions completed during the nine months ended September 30, 2022 was approximately $251.5 million, or $246.0 million net of cash acquired.
During the three and nine months ended September 30, 2022, we incurred acquisition-related expenses of $1.2 million and $5.4 million, respectively. Acquisition-related expenses are recognized as selling, general and administrative and research and development expenses on the condensed consolidated statements of income.
The assets acquired and liabilities assumed in connection with the acquisitions have been recorded based upon management's estimates of their fair market values as of each respective date of acquisition. The following tables summarize the fair value of consideration transferred and the fair values of identified assets acquired and liabilities assumed for the combined 2022 acquisitions at each respective date of acquisition:
10

Fair Value of Consideration:
(in thousands)
Cash$248,102 
Consideration not yet paid3,391 
Total consideration$251,493 


Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
(in thousands)
Cash$5,540 
Accounts receivable and other tangible assets2,873 
Developed software and core technologies 60,030 
Customer lists126 
Trade names1,304 
Accounts payable and other liabilities(5,195)
Deferred revenue(1,032)
Net deferred tax liabilities(10,720)
Total identifiable net assets$52,926 
Goodwill$198,567 
The goodwill, which is not tax-deductible, is attributed to intangible assets that do not qualify for separate recognition, including the assembled workforces of the acquired businesses and the synergies expected to arise as a result of the acquisitions.
The fair values of the assets acquired and liabilities assumed are based on preliminary calculations. The estimates and assumptions for these items are subject to change as additional information about what was known and knowable at each respective acquisition date is obtained during the measurement period (up to one year from the acquisition date).
We determined the fair value of our intangible assets using various valuation techniques, including the relief-from-royalty method and the multi-period excess earnings method. These models utilize certain unobservable inputs classified as Level 3 measurements as defined by ASC 820, Fair Value Measurements and Disclosures. The determination of fair value requires considerable judgment and is sensitive to changes in underlying assumptions, estimates and market factors. Estimating fair value requires us to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include, but are not limited to: selection of a valuation methodology, royalty rate, discount rate and attrition rate.
The weighted-average useful life, valuation method and assumptions used to determine the fair value of the intangible assets acquired in 2022 are as follows:
Intangible AssetWeighted-Average Useful LifeValuation MethodAssumptions
Developed software and core technologies8 yearsMulti-period excess earnings
Discount rate: 9.5% - 10.0%
Trade names9 yearsRelief-from-royalty
Royalty rate: 1.0%
Discount rate: 10.0% - 10.5%
Customer lists7 yearsMulti-period excess earnings
Attrition rate: 10.0%
Discount rate: 9.5%
11

On October 1, 2021, we acquired 100% of the shares of Zemax, a leader in high-performance optical imaging system simulation, for a purchase price of $411.5 million, paid in cash, or $399.1 million net of cash acquired from Zemax. The acquisition expanded the scope of our optical and photonics simulation portfolio by giving users comprehensive solutions that can drive innovation in healthcare, autonomy, consumer electronics and the industrial internet of things (IIoT).
Additionally, during the year ended December 31, 2021, we completed several other acquisitions to expand our solution offerings and enhance our customers' experience. These acquisitions were not individually significant. The combined purchase price of these acquisitions during the year ended December 31, 2021 was $110.7 million, which was paid in cash.
The operating results of each acquisition have been included in our condensed consolidated financial statements since each respective date of acquisition.
See Note 16, Subsequent Event, for information on our recent acquisition completed subsequent to the end of the period covered by this report.
5.Other Receivables and Current Assets and Other Accrued Expenses and Liabilities
Our other receivables and current assets and other accrued expenses and liabilities comprise the following balances:
(in thousands)September 30,
2022
December 31,
2021
Receivables related to unrecognized revenue$129,721 $200,888 
Income taxes receivable, including overpayments and refunds31,411 71,332 
Prepaid expenses and other current assets53,434 52,435 
Total other receivables and current assets$214,566 $324,655 
Accrued vacation38,084 35,879 
Consumption, VAT and sales tax liabilities25,741 52,630 
Accrued expenses and other current liabilities96,868 116,000 
Total other accrued expenses and liabilities$160,693 $204,509 

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,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Net income$95,975 $85,342 $265,763 $251,456 
Weighted average shares outstanding – basic87,063 87,239 87,062 87,072 
Dilutive effect of stock plans355 930 434 997 
Weighted average shares outstanding – diluted87,418 88,169 87,496 88,069 
Basic earnings per share$1.10 $0.98 $3.05 $2.89 
Diluted earnings per share$1.10 $0.97 $3.04 $2.86 
Anti-dilutive shares54 32 366 30 

12

7.Goodwill and Intangible Assets
Intangible assets are classified as follows:
 September 30, 2022December 31, 2021
(in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Finite-lived intangible assets:
Developed software and core technologies
$1,028,973 $(464,227)$985,685 $(422,797)
Customer lists191,742 (65,705)203,072 (57,175)
Trade names 180,876 (132,814)182,554 (128,577)
Total$1,401,591 $(662,746)$1,371,311 $(608,549)
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.
As of September 30, 2022, estimated future amortization expense for the intangible assets reflected above was as follows:
(in thousands) 
Remainder of 2022$20,702 
202389,581 
202491,442 
202590,950 
202691,270 
202793,004 
Thereafter261,896 
Total intangible assets subject to amortization738,845 
Indefinite-lived trade name357 
Other intangible assets, net$739,202 

The changes in goodwill during the nine months ended September 30, 2022 and 2021 were as follows:
(in thousands)20222021
Beginning balance – January 1$3,409,271 $3,038,306 
Acquisitions and adjustments(1)
197,173 79,905 
Currency translation(73,985)(16,588)
Ending balance – September 30$3,532,459 $3,101,623 
(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 2022, 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, 2022. Given the adverse economic and market conditions in the third quarter, we considered a variety of qualitative factors to determine if an additional quantitative impairment test was required subsequent to our annual impairment test. Based on a variety of factors, including the excess of the fair value over the carrying amount in the most recent impairment test, we determined it was not more likely than not that an impairment existed as of September 30, 2022. No other events or circumstances changed during the nine months ended September 30, 2022 that would indicate that the fair values of our reporting unit and indefinite-lived intangible asset are below their carrying amounts.

13

8.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 10, "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,
2022
Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Cash equivalents$232,538 $232,538 $ $ 
Short-term investments$194 $ $194 $ 
Deferred compensation plan investments$1,599 $1,599 $ $ 
Equity securities$1,309 $1,309 $ $ 
  Fair Value Measurements at Reporting Date Using:
(in thousands)December 31, 2021Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Cash equivalents$87,620 $87,620 $ $ 
Short-term investments$361 $ $361 $ 
Deferred compensation plan investments$1,602 $1,602 $ $ 
Equity securities$2,500 $2,500 $ $ 

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.
The short-term investments in the preceding tables represent deposits held by certain foreign subsidiaries. The deposits have fixed interest rates with original maturities ranging from three months to one year.
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.
14

9.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 options to renew the contract through August 2044, an option to lease additional space in January 2025 and an option to terminate the lease in December 2025. No options are included in the lease liability as renewal is not reasonably certain. In addition, we are reasonably certain we will not terminate the lease agreement. 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,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Lease liability cost$6,960 $