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Q1 Earnings Roundup: ANSYS (NASDAQ:ANSS) And The Rest Of The Design Software Segment


Radek Strnad /
2024/06/12 3:32 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the design software industry, including ANSYS (NASDAQ:ANSS) and its peers.

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.

The 7 design software stocks we track reported a weaker Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 3.1% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and design software stocks have had a rough stretch, with share prices down 5.6% on average since the previous earnings results.

Weakest Q1: ANSYS (NASDAQ:ANSS)

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

ANSYS reported revenues of $466.6 million, down 8.4% year on year, falling short of analysts' expectations by 15.9%. It was a weak quarter for the company, with a decline in its gross margin and a miss of analysts' average contract value estimates.

ANSYS Total Revenue

ANSYS delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 0.4% since the results and currently trades at $320.

Is now the time to buy ANSYS? Access our full analysis of the earnings results here, it's free.

Best Q1: Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.42 billion, up 11.7% year on year, outperforming analysts' expectations by 1.3%. It was a decent quarter for the company: Autodesk narrowly topped analysts' revenue expectations. On the other hand, its billings unfortunately missed analysts' expectations and its gross margin decreased. Next quarter's revenue guidance was roughly in line with expectations and both full year revenue and operating margin guidance was reaffirmed, showing that the company is on track with no major surprises.

Autodesk Total Revenue

The stock is down 0% since the results and currently trades at $211.5.

Is now the time to buy Autodesk? Access our full analysis of the earnings results here, it's free.

Cadence (NASDAQ:CDNS)

With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.

Cadence reported revenues of $1.01 billion, down 1.2% year on year, falling short of analysts' expectations by 0.9%. It was a weak quarter for the company, with a miss of analysts' billings estimates and a decline in its gross margin.

The stock is up 3.7% since the results and currently trades at $295.81.

Read our full analysis of Cadence's results here.

Procore Technologies (NYSE:PCOR)

Used to manage the multi-year expansion of the Panama Canal that began in 2007, Procore Technologies (NYSE:PCOR) offers a software-as-service project, finance and quality management platform for the construction industry.

Procore Technologies reported revenues of $269.4 million, up 26.2% year on year, surpassing analysts' expectations by 2.5%. It was a weaker quarter for the company, with a miss of analysts' billings estimates and decelerating customer growth.

Procore Technologies delivered the fastest revenue growth and highest full-year guidance raise among its peers. The company added 231 customers to reach a total of 16,598. The stock is down 1.5% since the results and currently trades at $67.24.

Read our full, actionable report on Procore Technologies here, it's free.

Unity (NYSE:U)

Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences.

Unity reported revenues of $460.4 million, down 8% year on year, surpassing analysts' expectations by 6.2%. It was a solid quarter for the company, with a significant improvement in its gross margin and a narrow beat of analysts' billings estimates .

Unity pulled off the biggest analyst estimates beat among its peers. The stock is down 25.3% since the results and currently trades at $18.05.

Read our full, actionable report on Unity here, it's free.

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