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Q2 2013 Earnings Call
August 01, 2013 10:30 am ET
James E. Cashman - Chief Executive Officer, President, Director and Member of Strategy Committee
Maria T. Shields - Chief Financial Officer, Principal Accounting Officer and Vice President of Finance & Administration
Steven M. Ashley - Robert W. Baird & Co. Incorporated, Research Division
Daniel T. Cummins - B. Riley Caris, Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
David E. Hynes - Canaccord Genuity, Research Division
Ross MacMillan - Jefferies LLC, Research Division
Mark W. Schappel - The Benchmark Company, LLC, Research Division
Steven R. Koenig - Wedbush Securities Inc., Research Division
Matthew L. Williams - Evercore Partners Inc., Research Division
Barbara Coffey - S&P Capital IQ Equity Research
Saket Kalia - JP Morgan Chase & Co, Research Division
Previous Statements by ANSS
» Ansys Management Discusses Q1 2013 Results - Earnings Call Transcript
» Ansys Management Discusses Q4 2012 Results - Earnings Call Transcript
» Ansys Management Discusses Q3 2012 Results - Earnings Call Transcript
I would now like to turn the conference over to Jim Cashman, President and CEO. Please go ahead.
James E. Cashman
Well, good morning, everybody, and thanks for joining us. We're going to discuss our 2013 second quarter financial results. So actually, well, bookkeeping consistent with the standard protocol what we've been using for a number of quarters now, all of the key financial information and the supporting data relative to Q2 and the first half of 2013 business results, and also, as well as our current Q3 and fiscal year 2013 outlook, and the underlying assumptions are included in the earnings release and the related prepared remarks document that we posted on the homepage of our Investor Relations website this morning. So that's all there for your perusal.
But before we get started, I'd like to introduce Maria Shields, our CFO, and have her go through our Safe Harbor statements. So, Maria, if you would?
Maria T. Shields
Okay, thanks, Jim. Good morning, everyone. I'd like to remind you that in addition to any risks and uncertainties that we highlight during the course of this call, important factors that may affect our future business results are discussed at length in our public filings with the SEC, all of which are also available via our website. Additionally, the company's reported results should not be considered an indication of future performance as there are risks and uncertainties that could impact our business in the future. These statements are based upon our view of the business as of today and ANSYS undertakes no obligation to update any such information unless we do so in a public forum.
During the course of this call and in the prepared remarks, we'll be making reference to non-GAAP financial measures. A discussion of the various items that are excluded and a full reconciliation of GAAP to comparable non-GAAP financial measures are included in this morning's earnings release materials and the related Form 8-K.
So, Jim, I'll turn it back over to you for some comments.
James E. Cashman
Okay. Well, yes, thanks, Maria. And before we open up the call for Q&A, I'd like to just briefly provide a little commentary about our Q2 results and our Q3 and fiscal year 2013 outlook. So basically, from our perspective, Q2 was a very productive quarter yielding strong results. They were above the high end of our range on both revenue and earnings. In addition, we largely focused on our own internal sales execution initiatives and spending disciplines as a result of Q1 and the things that we said during that call. Of course, not surprising to those of you who've followed the ANSYS historical performance over many years and many quarters, the strength of the revenue overperformance resulted in operating leverage and the margins that were also beyond what we had guided coming into the quarter.
So overall for Q2, we achieved double-digit revenue growth in both recorded and constant currency, constant currency at around 13%. This performance was the outcome of double-digit constant currency growth in each of our 3 major geographies, as well as in the perpetual software license and maintenance and service revenue lines. The recurring revenue aspect of our business remained healthy at 69% for the quarter, even off of a strong paid-up license growth. The combination of new and renewal business and leases and maintenance yielded a new Q2 record high deferred revenue and backlog balance of over $386 million. So all of this, of course, yielded superior margins and cash flows from operations of over $87 million, which is a 16% increase over Q2 of last year.
At our recent Investor Day, we said we'd be looking for attractive uses of capital and opportunities to return value to our stockholders. And during the quarter, we repurchased just over 988,000 shares, leaving about 2 million shares remaining in the authorized pool.
Okay, so the result of all this is that we've increased our outlook for fiscal year 2013. This translates into a Q3 non-GAAP revenue in the range of $210 million to $216 million, and EPS of $0.73 to $0.76. And revenue for the full year in the range of $860 million to $875 million, with an EPS of $3 to $3.07.
Before we wrap up, I'd like to provide some qualitative context around the guidance. First and foremost, the fundamentals of our business, the customer interest and the long-term market opportunity remain intact. Our outlook at this time factors in a continuation of the general macro uncertainty around the predictability, timing, composition of deals. That's a reality that we've been dealing with over the course of the past several years and throughout the first half of 2013. And we've been cognizant of this, and actually, therefore, built it into our guidance for the remainder of the year.