ANSYS, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the ANSYS Third Quarter 2021 Earnings Conference Call. With us today are Ajay Gopal, President and Chief Executive Officer, Nicole Anacinas, Chief Financial Officer and Senior Vice President of Finance, and Kelsey DeBrian, Vice President, Investor Relations. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, today's event is being recorded. At this time, I would now like to turn the conference over to Mr. Bryan for opening remarks. Please go ahead.

Good morning, everyone. Our earnings release, the related prepared remarks document, and the link to our third quarter form 10Q have all been posted on the homepage of our investor relations website. They contain the key financial information and supporting data relative to our third quarter financial results in business update, as well as our Q4 and updated fiscal year 2021 outlook and the key underlying quantitative and qualitative assumptions. Today's presentation contains forward-looking information, important factors, that may affect our future results are discussed in our public filings with the SEC, all of which are available on our corporate website. We note that uncertainty regarding the impacts of the COVID-19 pandemic on our performance could cause actual results to differ materially from our projections. Forward-looking statements are based upon our view of the business as of today, and ANSYS undertakes no obligations to update any such information. During this call, we will be referring to non-GAAP financial measures, unless otherwise stated. A discussion of the various items that are excluded and reconciliations of GAAP to the comparable non-GAAP financial measures are included in our earnings release materials. I would now like to turn the call over to our President and CEO, Ajay Gopal, for his opening remarks.

Ajay? Good morning, everyone, and thank you for joining us. Q3 was another excellent quarter for Ansys, where we beat our financial guidance across all key metrics. With strong ACV growth in the quarter, I'm delighted that, year to date, we're on our stated goal of double-digit ACV growth with tuck-in acquisitions. Our accomplishments thus far in 2021 are further evidence of the success of our strategy of making simulation pervasive across the product lifecycle, our multi-physics product leadership, and our strong customer relationships. Those factors, combined with customers' continued investment in R&D initiatives, are driving demand for Ansys' multi-physics solutions. With a robust deal pipeline and momentum in the business bolstering our confidence, we are raising our full-year financial guidance above and beyond the impact of our strong Q3 top-line performance. Nicole will have the details in a few minutes. From vertical and geographical perspectives, our Q3 results came in as expected. The high tech and semiconductor, aerospace and defense, and automotive and ground transportation sectors were again our largest contributors. Looking at our major geographies, the Americas again led the way, followed by Asia Pacific. We expect each region to have its largest quarter in Q4, with the quarterly skew to be more pronounced in Q4 for Europe. One of Q3's highlights was a three-year, $58 million agreement with a North American high-tech customer. From an ACV perspective, this deal was the second largest multi-year contract in our history. This customer was already using solutions from across the ANSYS multi-physics portfolio and is now expanding its number of simulation users. It is using ANSYS for diverse applications, ranging from ensuring the reliability of radio frequency systems to meeting sustainability goals across its product line and to chip packet system analyses for power and signal integrity. Another key deal in Q3 was a multi-year agreement with Seagate Technology, a leader in mass data storage solutions. Seagate is a longtime Ansys customer, and this new contract broadens the company's use of multi-physics simulation to address next-generation product challenges faced by its global customer base. For example, Seagate is using Ansys multi-physics products to assess thermal effects and acoustics to create a seamless workflow to enable higher capacity hard drives and to streamline process integration for heat-assisted magnetic recording. The company also now has access to our optical suite of products to drive further innovations. As we have discussed, our small and medium-sized customers, or SMBs, were disproportionately affected by the pandemic. However, during the last few quarters, we're seeing a recovery, and SMB customers have increased their investment in Ansys simulation. Our ongoing increase in sales from our SMB customers gives me further confidence as we plan for Q4 and beyond. During these calls, I typically give you some insights into various aspects of the Ansys business. In the past, I've discussed our best-in-class electromagnetic solutions, our unparalleled product scalability, and the extreme accuracy of our structural solutions. As you heard me discuss with Seagate, optical simulation is becoming increasingly important for our customer base. In fact, in Q3, about 5% of our agreements included an optical simulation product in the order. Given that, as well as our recent closing of the ZMAX acquisition, I would like to spend some time today discussing our offerings for optical simulation. Three years ago, Ansys did not have any optical simulation products in our portfolio. Today, though, companies can rely on Ansys for an end-to-end solution spanning the gamut from photons to electrons based on three product lines. The first, Ansys Lumerical, empowers users to design and analyze integrated photonic components and systems and model challenging product problems, including interacting optical, electrical, and thermal effects. The second product line, Ansys Spios simulates the system's optical performance and evaluates the final illumination effect by enabling high fidelity visualization based on human vision and camera sensing capabilities. Third is our recent acquisition of ZMAX, which enables customers to accurately model the behavior of light through complex optical lens systems. Instead of working independently as a siloed offering, our optical simulation suite operates as part of a complete multi-physics workflow. Taken together, the ANSYS optical solution is used for a diverse set of applications ranging from camera and LiDAR arrays found in autonomous vehicles, to telecommunications and mobile phone cameras, to medical equipment and other visual aids. For example, in Q3, Sandia National Lab signed an agreement leading to expanded use of numerical technologies. Sandia develops leading-edge integrated photonic and nanophotonic solutions for quantum computing, imaging, and sensing. The lab uses numerical tools to design, model, and simulate custom photonic components and their behavior in a circuit environment. In the automotive sector, industry leader Ford uses Ansys products, including SPIOS and the Ansys Vehicle Headlight Solution, in the styling and design of its predictive smart headlamps. and to optimize and validate headlight performance. Our headlight solution features real-time physics-based optical simulation and driver-in-the-loop functionality to replicate the physical world with a high degree of predictive accuracy. Automotive giant Mazda is also increasing its use of SPIOS for internal and exterior lighting, head-up displays, and cameras, thanks to a sales agreement in Q3. In aerospace and defense, an ANSYS customer is using all three of our optical product lines across multiple applications. The customer relies on Lumerical for creating photonics integrated circuits. It uses SPIOS for detecting radiation leaks from aircraft enclosures. And this customer is also using ZMAX to study lens deformation. While still new to our portfolio and a relatively small contributor to our overall financial results, These optical solutions fit squarely into our go-to-market motion, and our sales team understands how to market these products. Based on the ANSYS strategy of pervasive simulation, our optical customers can easily access products across our portfolio to perform true multiphysics analysis. We saw an excellent example of that with another aerospace and defense customer that was challenged with a winged camera that was capturing blurry images. By using a combination of ANSYS Optical and ANSYS Fluids products, the customer was able to correct the problem and deliver crisp images even at extreme speeds in bad weather. Moving to our partners, I'm excited that we are expanding our relationship with Autodesk by embedding ANSYS's electromagnetic simulation capabilities to explore and validate printed circuit board designs within the Fusion 360 workflow. This first-of-a-kind Autodesk Fusion 360 extension will enable CAD users to perform near real-time PCB analyses and to retrieve real-time insights into their electromagnetic performance to accelerate the development of next-generation products. We have also expanded connectivity of ANSYS TwinBuilder to industrial control systems through Rockwell Automation's enhanced Studio 5000 simulation interface. Users can connect digital twins to emulated controllers to optimize production at the design stage, or physical controllers to enhance equipment performance in real time, for example, in predictive maintenance. I am pleased that we have expanded our partnership with TSMC to create a comprehensive thermal analysis solution for multi-die semiconductor designs. Using Ansys RedHawk SE Electrothermal and Ansys IcePak, Along with TSMC's silicon stacking and advanced packaging technologies, users can analyze complete chip and package systems with high fidelity results. We are also collaborating with Fujitsu to enable more sustainable product development for our customers. Ansys LS Dyna now supports Fujitsu's energy efficient prime HPC supercomputers, which will help customers reduce energy consumption and cost by offloading simulation workloads to a more energy efficient machine. Keeping with our environmental, social, and governance initiatives for a moment, we recently published our simulation product handprint for autonomous vehicles. This report illustrates the role that simulation plays in the development of autonomous vehicles, including in sensors, automated driving software, and safety testing. Using simulation to develop autonomous vehicles will lead to significant societal and environmental benefits, ranging from a drop in traffic fatalities to a reduction in emissions. We have also submitted our initial report with a climate disclosure project and expect results by the end of the year. Similarly, we have begun working on our report to the Task Force on Climate-Related Financial Disclosures which focuses on governance, strategy, risk management, and metrics and targets. In summary, Q3 was another remarkable quarter for Ansys. We beat guidance across all key financial metrics and have met our goal of delivering double-digit growth year-to-date. We are also expanding our product leadership and our core solutions, as well as in important emerging areas, such as optical simulations. These factors, combined with a strong Q4 sales pipeline and outstanding execution, give me further confidence in our ability to meet our newly increased outlook for 2021. And with that, I'll turn the call over to Nicole. Nicole?