Thursday, August 14, 2008

ANSYS, Inc. Investor Conference Call

For those of us who make our living off of the ecosystem created by ANSYS, Inc., you follow the health of the company as closely as you can. I'm not much of one of "wall street speak" and all the second guessing involved in the whole world of investments. But a few years ago I started listening the quarterly conference calls that Jim Cashman (CEO) and Maria Shields (CFO) do every quarter right after they release their quarterly numbers. If I kind of glaze over the the financial minutia and the difference between GAAP and non-GAAP multi-year distribution of acquisition costs, there is some useful information there.

I just listened to the 2Q call and thought it would be a good blog topic, and I'm running a little CFX model on my machine so about all I have the horsepower for right now is typing in this editing window... Hopefully others listened to it and can add their observations as comments. Let me state: These are my oppinions, not PADT's or ANSYS, Inc.'s.. yada... yada... yada.

The first thing that struck me about this call was that Jim Cashman's normal high level of enthusiasm was at almost the giddy level. For those of you who don't know, Jim is an engineer. He may be the CEO of what is now a major company, but he is still an engineer and he is stoked about features coming in 12, the further integration of FLUENT with other ANSYS products and the ANSOFT acquisition. I think his enthusiasm for the product is fantastic and the fact that he was most enthusiastic about the high-end capabilities is what made me the happiest.

The numbers were good, continued strong growth that beat what the rest of the industry is doing, and growth across geography and product line. They have gotten back to the level of operating efficiency that they had before the FLUENT purchase (FLUENT had a more people and expenses per dollar of revenue than ANSYS, Inc. did before the merger). But what do numbers mean to those of us who count on ANSYS, Inc. technology to make our living? Well basically more money for R&D.

I really think this is true for two reasons: 1) in the past they have always kept a high level of spending on R&D, often around the 20% range, and 2) what seems to be selling and giving the ANSYS, inc. product line its advantage is the breadth and depth of capability that is offered. We see this in our sales here in the Southwest as well. People want a tool that works and has no dead ends or limitations. FLUENT, CFX, ANSYS all deliver on that and the Board of Directors and senior management seem to be stressign high-end capability and integration of high-end tools more and more.

So, the little lines on my convergence graph have flattened out, which is as close to "finished" as a CFD run can get... so in conclusion take a listen to the confernece calls. I think they give some great insight into why ANSYS, Inc. makes the decisiosn they make and even gives some pointers to what their technical direction is. Just don't listen when you are tired - the numbers can get a bit booring.

The older calls are archived on the ANSYS, Inc. investor relations site:
phx.corporate-ir.net/phoenix.zhtml?c=118715&p=irol-presentations

And you can get the latest from any of the standard portals like iGoogle, myYahoo, etc...
I use the "Events" section of the Google Finance page for ANSYS:
finance.google.com/finance?client=ig&q=ANSS

The Q2 call can be found at:
web.servicebureau.net/conf/meta?i=1113059403&c=2343&m=was&u=/w_ccbn.xsl&date_ticker=ANSS



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