ANSYS, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the ANSYS second quarter 2019 earnings conference call. With us today are Ajay Gopal, Chief Executive Officer, Maria Shields, SVP and Chief Financial Officer, and Annette Arriba, Senior Director, Global Investment Relations. At this time, I would like to turn the call over to Ms. Arriba for some opening remarks.

Good morning, everyone. Our earnings released in the related prepared remarks document have been posted on the homepage of our investor relations website this morning. They contain all the key financial information and supporting data relative to our second quarter financial results and business update, as well as our Q2 2019 outlook and the key underlying assumptions. I would like to remind everyone that in addition to any risks and uncertainties that we highlight during the course of this call, important factors that may affect our future 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 this call and in the prepared remarks, we'll be referring to non-GAAP financial measures unless otherwise stated. Please take any reference to revenue to mean revenue under ASC 606. A discussion of the various items that are excluded and a full reconciliation of GAAP to comparable non-GAAP financial measures under ASC 606 is included in this morning's earnings release materials and related form 8K. In closing, I would like to remind everyone that our 2019 Investor Day will be held on Thursday, September 12th in Pittsburgh with a reception and technology showcase event the evening before. Further details around location, logistics, agenda, and registration can be found on our IR website. I would now like to turn the call over to our CEO, Ajay Gopal, for his opening remarks. Ajay?

Thank you, Annette, and good morning, everyone. Q2 was another record-setting quarter for ANSYS. We surpassed the high end of our guidance in revenue, as well as earnings per share, setting new Q2 records in each category. Our ACV growth was excellent, coming in at mid-teens for the quarter in constant currency. Based on our outstanding financial performance and the strength of our pipeline, I'm excited to announce that we're raising our 2019 revenue, EPS, and ACV guidance for the second time this year. Maria will provide the details shortly. Our success over the past several quarters is due to a number of factors, including our strategy of making simulation pervasive across the product lifecycle. That strategy is driving more simulation and therefore larger deals. We're operating across two vectors to increase the size of our deals. First, by enabling deeper penetration of a single physics through new use cases and users. And second, cross-selling our broad multi-physics portfolio to help customers address modern product challenges. Let me give you an example of the first vector. In Q2, we closed a $49 million deal, the third largest in our history, with a South Korean high-tech leader. This, the largest single physics deal in our history, demonstrates that we can significantly increase the size of our transactions with the power of our gold standard solutions. Moving to the second vector, as products become more complex, companies are increasingly addressing product challenges that involve multiple physics. That creates significant opportunities across our market-leading multi-physics portfolio. In Q2, we closed a large multi-physics deal with a U.S. Department of Defense prime contractor. In addition to our flagship physics solutions, our materials intelligence solution from this year's Granta Design Acquisition, coupled with the additive manufacturing applications built on a foundation from the 3DSIM acquisition, were key considerations in the deal to help them modernize their workforce and accelerate the development of complex systems. This is just one of many examples that demonstrates our technology leadership and the broad moat that separates us from our competitors. On the partnership side, I was excited to discuss our alliance with SAP and the value that we're jointly bringing to customers during a presentation at SAP's Sapphire Now conference. During the conference, we heard how SAP's predictive engineering insights enabled by Ansys has helped the customer to streamline its order timeline from months to days. SAP representatives also joined me during June's Paris Airshow, where we showcased the benefits of digital twin technology with leaders from the aerospace and defense industry. Our partnership with PTC, where Ansys Discovery Live has been embedded into PTC's new Krivio Simulation Live, is also gaining momentum. During its most recent earnings call, PTC reported that it had closed 76 transactions with an average deal size above the previous quarter's level. Our two companies collaborated at the defense contractor I mentioned earlier, resulting in PTC landing the largest ever Creo simulation live deal and the Ansys team closing a substantial discovery live order. That contractor is noteworthy because it intends to deploy both Creo simulation live and answers Discovery Live to potentially thousands of users across multiple business units. That demonstrates the opportunity for Discovery Live at some of the largest enterprises, where it complements traditional simulation and CAD offerings and drives even more value for users. Staying with Discovery Live for a moment, I'm excited that this new product continues to garner accolades from the market as well as the media. The most recent recognition was from Fast Company, which in its September issue named Ansys as one of the 50 best workplaces for innovators for our development of this groundbreaking product. In past earnings calls, I've highlighted specific products or solution areas in the Ansys portfolio. For example, during our Q1 call, I spoke about how our gold standard solutions like Ansys HFSS and Ansys RedHawk are driving success in their respective markets. In Q2, I'd like to highlight the ANSYS solutions that are making autonomous vehicles a reality. With an estimated $7 trillion impact on the global economy by 2050, the financial implications of autonomous vehicles are considerable and will dramatically impact OEMs in the entire supply chain. Given the sophistication, complexity, and safety-critical nature of these products, it is clear that they cannot be developed without the extensive use of simulation. As a result, we are seeing increased interest from automotive OEMs, A&D companies, and their entire supply chains to make these next-generation vehicles a reality. And while there may be speculation around the timing of when truly autonomous vehicles will take to our roads and airways, the simulation work around autonomy is paying dividends in the form of ongoing improvements in vehicle safety, features, and efficiency. ANSYS's best-in-class multiphysics products coupled with leading technologies that we've obtained through our recent acquisitions, including Medini and Optus, are enabling automakers and aircraft manufacturers to virtually test their products to ensure safety and reliability for these future transportation systems. In Q2, we announced a landmark deal with automotive leader BMW to create what we believe to be the industry's first holistic simulation tool chain for developing autonomous vehicle technologies. The toolchain will optimize valuable test data by providing a development framework around rigorous safety planning, efficient test space exploration, and data analytics in a virtual driving environment. Using this solution, the company expects to launch its highly automated BMW iNext in 2021. As part of this agreement, Ansys will also assume exclusive rights to the BMW developed portion of this toolchain for commercialization to the wider market. Autonomy will affect multiple industries, including automotive and aerospace and defense. In Q2, we also announced an agreement with Airbus Defense and Space, which will use ANSYS SCADE solutions to enable safety-critical controls with sophisticated artificial intelligence, with the goal of fully autonomous flight by 2030. Airbus plans to use our solutions to link traditional model-based software development with new AI-based workflows. Their goal is to drive the development and certification of drone flight control software to accelerate time to market and cut associated expenses. We further expanded our product leadership in the simulation of autonomous systems with the Q2 release of ANSYS 2019 R2. In R2, we've expanded the capabilities of our VR experience driving simulator to prepare advanced scenarios and run simulations with complete and accurate multi-body vehicle dynamics. This innovation is already being used by automotive leader Renault to reduce physical testing, shorten time to market, and ensure safety for its autonomous vehicle initiatives. R2 also dramatically enhances capabilities crucial to the design and analysis of radar used in autonomous vehicles. Our new innovation around accelerated Doppler processing provides more than 100x speedup for the time it takes to simulate radar systems. This new breakthrough capability delivers gold standard accuracy and enhances collaboration between radar sensor designers and the OEMs that incorporate the sensors on vehicles. Autonomous vehicles have the potential to fundamentally reshape the way we think about safety, mobility, land use, and our environment. With our powerful multi-physics solutions and partnerships, I am excited that ANSYS is well positioned strategically and can play a role in making the dream of autonomous vehicles a reality. This represents a significant long-term market opportunity for ANSYS. Switching gears, I'd like to welcome Lynn Ledwith as our Vice President of Marketing. Lynn has more than 30 years of experience and brings an outstanding track record across digital and field marketing, as well as corporate branding. She has held marketing leadership positions at worldwide clinical trials, Qlik Technologies, SunGuard, Siemens, and HP, amongst others. Lynn brings a fresh approach to how we market that will open new avenues to build demand and to branding. In summary, I'm proud of what we've accomplished in Q2. Our excellent financial performance, coupled with the increased functionality of our gold standard solutions and our ability to help customers take advantage of megatrends like autonomy, electrification, 5G, IoT, and others, give us confidence in our ability to achieve our goals for the remainder of 2019 and beyond. And with that, I'd like to turn the call over to Maria. Maria?