ANSYS, Inc.

Ladies and gentlemen, good morning, and thank you for standing by, and welcome to the ANSYS First Quarter 2022 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 DeBrien, Vice President, Investor Relations. All participants will be in a 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 and then one on your telephone keypad. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Bryan for opening remarks. Ma'am? Please go ahead.

Good morning, everyone. Our earnings release, the related prepared remarks document, and the link to our first quarter 2022 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 first quarter financial results and business update, as well as our Q2 and updated fiscal year 2022 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. 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 gap to the comparable non-gap 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. I'm happy to report that Q1 was another great quarter for ANSYS. We again beat across all our key metrics, and grew ACV by nearly 11% in constant currency. We believe that this continued momentum combined with our strong customer relationships and leading multi-physics product suite will set the tone for Q2 and the rest of the year. These strong results came in the midst of continued disruptions caused by the ongoing COVID-19 pandemic, which has spurred additional lockdowns in certain regions, as well as geopolitical dynamics. As we have previously announced, we have suspended all new and ongoing business with Russia and Belarus and removed them from our 2022 forecast. ANSYS has contributed to the Ukrainian relief efforts, and our hearts go out to all those affected by these tragic events. We're not only absorbing the headwinds from sanctions, but based on the strength of the forecast and the ongoing demand for our multi-physics solutions, we are increasing our operational outlook on ACV, revenue, EPS, and operating cash flow for the full year. Nicole will have the details in a few minutes, including a discussion of the impact of global currency exchange rates on our outlook. Focusing now on Q1, from a revenue perspective, we saw good growth as expected across all our geographies, led by the Americas and the Asia Pacific. The demand for ANSYS simulation has been relatively consistent across industries for the last several years. Given recent events and market conditions, We are now seeing an increased activity in energy and sustainability initiatives, which I will discuss in a few minutes, and in aerospace and defense accounts. Our largest contract of the quarter was a three-year $44 million agreement with a North American defense contractor. This longtime customer is using our broad solution set to power its digital transformation through integrated digital engineering, multidisciplinary design optimization, and digital mission engineering. The customer is realizing a strong return on its investment in Ansys by helping it to win new government contracts while driving costs out of its organization. On these calls, I typically highlight a specific aspect of our business. Over the past several calls, I have discussed the unparalleled scalability of our best-in-class fluid products. I highlighted the critical role that Ansys solutions are playing in the development of next-generation semiconductors, and I reviewed our leading suite of optical simulation products. For this call, I would like to discuss the critical role that ANSYS plays in sustainability. Sustainability is a crucial and complex topic that crosses industries and one that plays to ANSYS' strengths in multi-physics simulation. ANSYS simulation has traditionally enabled companies to save resources and energy before physical products are ever built, thanks to virtual prototyping. Today, though, through the use of our broad multi-physics portfolio, we can enable a number of our customers' sustainability initiatives. Too many, in fact, to mention on this call. Let me give you just three representative examples so you have a sense as to the role that simulation is playing in sustainability. First, in increasing fuel efficiency. Next, in driving electrification. And finally, in decreasing the rates of emissions. Let me start with fuel and energy efficiency, where a variety of ANSYS multiphysics products are being used to solve challenges ranging from engine effectiveness to electric battery design. The outcomes from these initiatives are reducing dependence on pollution-producing fossil fuels. We announced earlier this week that we are working with Saffron Aircraft Engines to support its aviation sustainability efforts while advancing productivity and cost efficiency. Using ANSYS' structural and thermal solutions for an advanced open fan architecture, new materials, and hybrid electrification capabilities, the company expects to reduce fuel consumption and carbon dioxide emissions by more than 20% when compared to today's most efficient engines. Similarly, in Q4, we announced a new five-year enterprise license agreement with LG Electronics to support the company's sustainability initiatives. Ansys' multi-physics solutions are enabling more resource-efficient production that makes product development more sustainable by significantly reducing material use, costs, and multiple redesigns. For example, Ansys' virtual model offers 1D to 3D coupling to support the development of the compressors used in LG's home appliances. As a result, LG Electronics can introduce its next-generation products faster than ever while accelerating its digital transformation and decreasing its carbon footprint. Turning to electrification, customers are employing Ansys solutions to improve the efficiency of electric motors, which today consume over 45% of the world's electricity. For example, in Q1, we signed a multi-year contract with Turntide Technologies, which develops solutions that accelerate electrification and sustainable operations for energy-intensive industries. Turntide is a longtime Ansys user, And this new contract broadens the company's use of multi-physics simulation to optimize product and engineering efficiency while reducing the need for physical prototyping, as well as cutting development time and costs. On past calls, I've discussed the use of ANSYS solutions in the development of electric cars. In Q1, the TAG Heuer Porsche Formula E team won the top two spots at the Mexico City E-Prix with the help of a customized powertrain developed with ANSYS technologies. Working with ANSYS, Porsche motorsport engineers accelerated the virtual testing of design concepts to provide the best powertrain solution without using physical prototypes. The powertrain innovations used on the racetrack will spur development of energy-efficient, affordable, and sustainable commercial vehicles at Porsche. To complement the ANSYS electric machine design offering, we recently acquired Motor Design Limited. By combining Motor Design's MotorCAD product with the rest of the ANSYS portfolio, we will offer customers the most comprehensive multiphysics workflow for electric machine design. This end-to-end solution will enable customers to not only design more efficient electric machines, but also apply them to more applications which will reduce the environmental impact as well as the cost. Motor Design is an established ANSYS OEM partner and is already integrated seamlessly into our go-to-market motion. Moving to emissions, ANSYS Simulation is helping customers reduce their carbon footprint through the development of renewable energy sources, including wind and solar power. We recently announced that we are working with leading renewable energy company Vestas to deliver safer and more sustainable power management solutions for its wind turbine control systems. These controllers are responsible for optimizing power performance and preventing component damage across a range of wind conditions. Using our model-based software development environment, Vestas merged data from multiple sensors and created control algorithms to drive better turbine designs at lower costs. We also announced that we're working with ANSYS startup program member, Synhalion, to convert carbon dioxide and water into synthetic fuels, including gasoline, diesel, and jet fuel. Synhalion uses mirrors to concentrate sunlight onto a solar receiver that drives the thermochemical reactor that produces these sustainable fuels. Using ANSYS, this innovative company can simulate the thermofluid dynamics needed to design and validate the equipment, despite the intense conditions caused by the searing temperatures. As I mentioned earlier, these are just a few of the examples of how ANSYS simulation is fueling the sustainability initiatives of some of the most innovative organizations on the planet. You will hear even more real-world sustainability use cases during our upcoming Simulation World event on May 18th. During Simulation World, you'll also learn about the launch of Earth Rescue, our online series that will showcase other ANSYS customers' use of simulation in combating the climate crisis. I encourage you to attend and to learn more about these remarkable use cases of ANSYS simulation. Moving to ANSYS' own sustainability initiatives, in Q1, we released our corporate responsibility report. In this annual update, we focused on our core pillars of advancing sustainability through our leading multi-physics products, by investing in our employees, by operating responsibly and through our collaboration with various stakeholders. As an example of our growing ecosystem stakeholders, the University of Colorado Boulder will give engineers hands-on experience by incorporating ANSYS multi-physics solutions into its new master's program in high-speed digital engineering. These students will join their peers in more than 3,300 universities in 90 countries who are developing industry-ready simulation skills thanks to ANSYS products. To summarize, Q1 was another great quarter for Ansys and one that will set the tone for the rest of 2022. Our continued momentum, our strong customer relationships, and our best-in-class multi-physics product suite will help us drive even further success in 2022 and beyond. Before I turn the call over to Nicole, I'm excited to announce that long-time Ansys executive Walt Hearn is now leading our global sales and customer excellence teams replacing industry veteran Rick Mahoney. Walt has an unparalleled track record of success at Ansys and most recently has led our largest and fastest growing region, the Americas. He has personally overseen some of the largest contracts from our enterprise accounts and has led the modernization of our go-to-market motion. With his energy, industry knowledge, deep customer relationships, and mastery of our complete product portfolio, Walt is the right executive to assume leadership of this next phase of our go-to-market journey. And with that, I will turn the call over to Nicole. Nicole?