ANSYS's (NASDAQ:ANSS) Q4 Sales Top Estimates

Jabin Bastian /
2024/02/21 4:44 pm EST

Engineering simulation software provider Ansys (NASDAQ:ANSS) reported results ahead of analysts' expectations in Q4 FY2023, with revenue up 16% year on year to $805.1 million. It made a non-GAAP profit of $3.94 per share, improving from its profit of $3.09 per share in the same quarter last year.

Is now the time to buy ANSYS? Find out by accessing our full research report, it's free.

ANSYS (ANSS) Q4 FY2023 Highlights:

  • Revenue: $805.1 million vs analyst estimates of $795.9 million (1.2% beat)
  • EPS (non-GAAP): $3.94 vs analyst estimates of $3.70 (6.5% beat)
  • Gross Margin (GAAP): 91.3%, down from 93.7% in the same quarter last year
  • Market Capitalization: $28.85 billion
  • The company has been acquired

Used to help design the Mars Rover, Ansys (NASDAQ:ANSS) offers a software-as-a-service platform that enables simulation for engineering and design.

Design Software

The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.

Sales Growth

As you can see below, ANSYS's revenue growth has been unremarkable over the last two years, growing from $655.7 million in Q4 FY2021 to $805.1 million this quarter.

ANSYS Total Revenue

This quarter, ANSYS's quarterly revenue was up 16% year on year, above the company's historical trend. On top of that, its revenue increased $346.3 million quarter on quarter, a strong improvement from the $37.8 million decrease in Q3 2023. This is a sign of acceleration of growth and very nice to see indeed.

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.


What makes the software as a service business so attractive is that once the software is developed, it typically shouldn't cost much to provide it as an ongoing service to customers. ANSYS's gross profit margin, an important metric measuring how much money there's left after paying for servers, licenses, technical support, and other necessary running expenses, was 91.3% in Q4.

ANSYS Gross Margin (GAAP)

That means that for every $1 in revenue the company had $0.91 left to spend on developing new products, sales and marketing, and general administrative overhead. Significantly up from the last quarter, ANSYS's excellent gross margin allows it to fund large investments in product and sales during periods of rapid growth and achieve profitability when reaching maturity.

Key Takeaways from ANSYS's Q4 Results

It was good to see ANSYS slightly improve its gross margin this quarter. We were also happy its revenue narrowly outperformed Wall Street's estimates. Zooming out, we think this was a decent quarter, showing that the company is staying on target. The stock is up 1.3% after reporting and currently trades at $333.08 per share.