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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 0-20853
ANSYS, Inc.
(Exact name of registrant as specified in its charter)
Delaware
04-3219960
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2600 ANSYS Drive,
Canonsburg,
PA
15317
(Address of Principal Executive Offices)
(Zip Code)
844-462-6797
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common Stock, $0.01 par value per shareANSSNasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No  
The number of shares of the Registrant's Common Stock, $0.01 par value per share, outstanding as of April 30, 2022 was 86,990,120 shares.



ANSYS, INC. AND SUBSIDIARIES
INDEX
  
Page No.

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Table of Contents
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements:

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)March 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$657,421 $667,667 
Short-term investments344 361 
Accounts receivable, less allowance for doubtful accounts of $14,600
513,738 645,891 
Other receivables and current assets278,375 324,655 
Total current assets1,449,878 1,638,574 
Long-term assets:
Property and equipment, net84,678 87,914 
Operating lease right-of-use assets130,274 120,881 
Goodwill3,399,897 3,409,271 
Other intangible assets, net739,059 763,119 
Other long-term assets227,383 279,676 
        Deferred income taxes22,014 24,879 
Total long-term assets4,603,305 4,685,740 
Total assets$6,053,183 $6,324,314 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$17,102 $10,863 
Accrued bonuses and commissions30,646 163,182 
Accrued income taxes7,065 8,410 
Current portion of long-term debt9,125  
Other accrued expenses and liabilities184,663 204,509 
Deferred revenue386,019 391,528 
Total current liabilities634,620 778,492 
Long-term liabilities:
Deferred income taxes99,439 105,548 
Long-term operating lease liabilities114,238 104,378 
Long-term debt744,575 753,576 
Other long-term liabilities96,360 98,272 
Total long-term liabilities1,054,612 1,061,774 
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 2,000,000 shares authorized; zero shares issued or outstanding
  
Common stock, $0.01 par value; 300,000,000 shares authorized; 95,267,307 shares issued
953 953 
Additional paid-in capital1,415,407 1,465,694 
Retained earnings4,330,208 4,259,220 
Treasury stock, at cost: 8,285,245 and 8,188,331 shares, respectively
(1,304,413)(1,185,707)
Accumulated other comprehensive loss(78,204)(56,112)
Total stockholders' equity4,363,951 4,484,048 
Total liabilities and stockholders' equity$6,053,183 $6,324,314 

The accompanying notes are an integral part of the condensed consolidated financial statements.
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Table of Contents

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
(in thousands, except per share data)March 31,
2022
March 31,
2021
Revenue:
Software licenses$157,445 $132,604 
Maintenance and service267,632 230,622 
Total revenue425,077 363,226 
Cost of sales:
Software licenses8,436 7,606 
Amortization17,252 14,949 
Maintenance and service39,072 39,548 
Total cost of sales64,760 62,103 
Gross profit360,317 301,123 
Operating expenses:
Selling, general and administrative169,755 146,215 
Research and development105,274 100,479 
Amortization4,125 4,407 
Total operating expenses279,154 251,101 
Operating income81,163 50,022 
Interest income527 517 
Interest expense(2,967)(3,315)
Other (expense) income, net(694)399 
Income before income tax provision (benefit)78,029 47,623 
Income tax provision (benefit)7,041 (24,775)
Net income$70,988 $72,398 
Earnings per share – basic:
Earnings per share$0.81 $0.83 
Weighted average shares87,122 86,808 
Earnings per share – diluted:
Earnings per share$0.81 $0.82 
Weighted average shares87,750 87,986 

The accompanying notes are an integral part of the condensed consolidated financial statements.
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Table of Contents

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
(in thousands)March 31,
2022
March 31,
2021
Net income$70,988 $72,398 
Other comprehensive loss:
Foreign currency translation adjustments(22,092)(19,264)
Comprehensive income$48,896 $53,134 

The accompanying notes are an integral part of the condensed consolidated financial statements.
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Table of Contents

ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
(in thousands)March 31,
2022
March 31,
2021
Cash flows from operating activities:
Net income$70,988 $72,398 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and intangible assets amortization29,080 27,082 
Operating lease right-of-use assets expense5,553 5,699 
Deferred income tax benefit(861)(3,564)
Provision for bad debts2,326 18 
Stock-based compensation expense35,651 35,119 
Other919 975 
Changes in operating assets and liabilities:
Accounts receivable180,259 159,038 
Other receivables and current assets43,479 (12,071)
Other long-term assets(5,983)(1,909)
Accounts payable, accrued expenses and current liabilities(143,883)(80,050)
Accrued income taxes(1,119)(20,954)
Deferred revenue455 1,204 
Other long-term liabilities(5,928)(11,878)
Net cash provided by operating activities210,936 171,107 
Cash flows from investing activities:
Acquisitions, net of cash acquired(4,915)(10,783)
Capital expenditures(5,062)(5,045)
Other investing activities13 (35)
Net cash used in investing activities(9,964)(15,863)
Cash flows from financing activities:
Purchase of treasury stock(155,571) 
Restricted stock withholding taxes paid in lieu of issued shares(59,196)(86,049)
Proceeds from shares issued for stock-based compensation10,122 11,892 
Other financing activities (51)
Net cash used in financing activities(204,645)(74,208)
Effect of exchange rate fluctuations on cash and cash equivalents(6,573)(6,281)
Net (decrease) increase in cash and cash equivalents(10,246)74,755 
Cash and cash equivalents, beginning of period667,667 912,672 
Cash and cash equivalents, end of period$657,421 $987,427 
Supplemental disclosure of cash flow information:
Income taxes paid$3,566 $20,641 
Interest paid$2,626 $2,956 

The accompanying notes are an integral part of the condensed consolidated financial statements.


6

Table of Contents
ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Treasury StockAccumulated Other Comprehensive LossTotal
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 202295,267$953 $1,465,694 $4,259,220 8,188 $(1,185,707)$(56,112)$4,484,048 
Treasury shares acquired500 (155,571)(155,571)
Stock-based compensation activity
(50,287)(403)36,865 (13,422)
Other comprehensive loss(22,092)(22,092)
Net income70,988 70,988 
Balance, March 31, 202295,267$953 $1,415,407 $4,330,208 8,285$(1,304,413)$(78,204)$4,363,951 
    
 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Treasury StockAccumulated
Other
Comprehensive Loss
Total
Stockholders'
Equity
(in thousands)SharesAmountSharesAmount
Balance, January 1, 202195,266$953 $1,434,203 $3,804,593 8,694 $(1,124,102)$(17,775)$4,097,872 
Stock-based compensation activity
(87,602)(565)48,565 (39,037)
Other comprehensive loss(19,264)(19,264)
Net income72,398 72,398 
Balance, March 31, 202195,266$953 $1,346,601 $3,876,991 8,129$(1,075,537)$(37,039)$4,111,969 

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

Table of Contents
ANSYS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(Unaudited)

1.Organization
ANSYS, Inc. (Ansys, we, us, our) develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare, and construction.
As defined by the accounting guidance for segment reporting, we operate as one segment.
Given the integrated approach to the multi-discipline problem-solving needs of our customers, a single sale of software may contain components from multiple product areas and include combined technologies. We also have a multi-year product and integration strategy that will result in new, combined products or changes to the historical product offerings. As a result, it is impracticable for us to provide accurate historical or current reporting among our various product lines.
2.Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information for commercial and industrial companies, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K). The condensed consolidated December 31, 2021 balance sheet presented is derived from the audited December 31, 2021 balance sheet included in the 2021 Form 10-K. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for any future period.
Recently Adopted Accounting Guidance
Business combinations: In October 2021, the Financial Accounting Standards Board issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08). ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. We adopted the standard effective January 1, 2022. Under the prior guidance, such assets and liabilities were recognized by the acquirer at fair value on the acquisition date. The standard does not impact acquired contract assets or liabilities from business combinations that occurred prior to the effective date of adoption, and the impact in current and future periods will depend on the contract assets and contract liabilities acquired in business combinations after the effective date of adoption.
Accounting Guidance Issued and Not Yet Adopted
It is not expected that the future adoption of any recently issued accounting pronouncements will have a material impact on our financial position, results of operations or cash flows.
8

Table of Contents
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of highly liquid investments such as deposits held at major banks and money market funds. Cash equivalents are carried at cost, which approximates fair value. Our cash and cash equivalents balances comprise the following:
 March 31, 2022December 31, 2021
(in thousands, except percentages)Amount% of TotalAmount% of Total
Cash accounts$572,768 87.1 $580,047 86.9 
Money market funds84,653 12.9 87,620 13.1 
Total$657,421 $667,667 

Our money market fund balances are held in various funds of two issuers.

3.Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes revenue:
Three Months Ended
(in thousands, except percentages)March 31,
2022
March 31,
2021
Revenue:
Subscription lease licenses$91,457 $65,077 
Perpetual licenses65,988 67,527 
Software licenses157,445 132,604 
Maintenance247,241 213,674 
Service20,391 16,948 
Maintenance and service267,632 230,622 
Total revenue$425,077 $363,226 
Direct revenue, as a percentage of total revenue72.4 %71.8 %
Indirect revenue, as a percentage of total revenue27.6 %28.2 %

Our software license revenue is recognized up front, while maintenance and service revenue is generally recognized over the term of the contract.
9

Table of Contents
Deferred Revenue
Deferred revenue consists of billings made or payments received in advance of revenue recognition from customer agreements. The timing of revenue recognition may differ from the timing of billings to customers. Payment terms vary by the type and location of customer and the products or services offered. The time between invoicing and when payment is due is not significant.
The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the three months ended March 31, 2022 and 2021 were as follows:
(in thousands)20222021
Beginning balance – January 1$412,781 $388,810 
Acquired deferred revenue84  
Deferral of revenue423,649 362,043 
Recognition of revenue(425,077)(363,226)
Currency translation(6,317)(6,898)
Ending balance – March 31$405,120 $380,729 

Total revenue allocated to remaining performance obligations as of March 31, 2022 will be recognized as revenue as follows:
(in thousands) 
Next 12 months$746,037 
Months 13-24251,667 
Months 25-36139,907 
Thereafter65,564 
Total revenue allocated to remaining performance obligations$1,203,175 

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes both deferred revenue and backlog. Our backlog represents installment billings for periods beyond the current quarterly billing cycle. Revenue recognized during the three months ended March 31, 2022 and 2021 included amounts in deferred revenue and backlog at the beginning of the period of $244.6 million and $209.3 million, respectively.

4.Acquisitions
During the quarter ended March 31, 2022, we completed an acquisition for a purchase price of $5.1 million to enhance our solution offerings. The effects of the business combination were not material to our consolidated results of operations.
On October 1, 2021, we acquired 100% of the shares of Zemax, a leader in high-performance optical imaging system simulation, for a purchase price of $411.5 million, paid in cash, or $399.1 million net of cash acquired from Zemax. The acquisition expands the scope of our optical and photonics simulation portfolio by giving users comprehensive solutions that could drive innovation in healthcare, autonomy, consumer electronics and the industrial internet of things (IIoT).
Additionally, during the year ended December 31, 2021, we completed several other acquisitions to expand our solution offerings and enhance our customers' experience. These acquisitions were not individually significant. The combined purchase price of these acquisitions during the year ended December 31, 2021 was $110.7 million, which was paid in cash.
The operating results of each acquisition have been included in our condensed consolidated financial statements since each respective date of acquisition.
See Note 16, Subsequent Events, for information on our recent acquisitions.
10

Table of Contents
5.Other Receivables and Current Assets and Other Accrued Expenses and Liabilities
Our other receivables and current assets and other accrued expenses and liabilities comprise the following balances:
(in thousands)March 31,
2022
December 31,
2021
Receivables related to unrecognized revenue$139,441 $200,888 
Income taxes receivable, including overpayments and refunds68,962 71,332 
Prepaid expenses and other current assets69,972 52,435 
Total other receivables and current assets$278,375 $324,655 
Accrued vacation41,882 35,879 
Payroll-related accruals37,597 21,507 
Consumption, VAT and sales tax liabilities25,867 52,630 
Accrued expenses and other current liabilities79,317 94,493 
Total other accrued expenses and liabilities$184,663 $204,509 

Receivables related to unrecognized revenue represent the current portion of billings made for customer contracts that have not yet been recognized as revenue.

6.Earnings Per Share
Basic earnings per share (EPS) amounts are computed by dividing earnings by the weighted average number of common shares outstanding during the period. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive equivalents outstanding. To the extent stock awards are anti-dilutive, they are excluded from the calculation of diluted EPS.
The details of basic and diluted EPS are as follows:
 Three Months Ended
(in thousands, except per share data)March 31,
2022
March 31,
2021
Net income$70,988 $72,398 
Weighted average shares outstanding – basic87,122 86,808 
Dilutive effect of stock plans628 1,178 
Weighted average shares outstanding – diluted87,750 87,986 
Basic earnings per share$0.81 $0.83 
Diluted earnings per share$0.81 $0.82 
Anti-dilutive shares65 27 

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7.Goodwill and Intangible Assets
Intangible assets are classified as follows:
 March 31, 2022December 31, 2021
(in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Finite-lived intangible assets:
Developed software and core technologies
$983,973 $(437,282)$985,685 $(422,797)
Customer lists200,957 (60,700)203,072 (57,175)
Trade names 182,025 (130,271)182,554 (128,577)
Total$1,366,955 $(628,253)$1,371,311 $(608,549)
Indefinite-lived intangible asset:
Trade name$357 $357 
Finite-lived intangible assets are amortized over their estimated useful lives of two years to seventeen years. Amortization expense for the intangible assets reflected above was $21.4 million and $19.4 million for the three months ended March 31, 2022 and 2021, respectively.
As of March 31, 2022, estimated future amortization expense for the intangible assets reflected above was as follows:
(in thousands) 
Remainder of 2022$62,556 
202388,738 
202489,805 
202588,387 
202686,831 
202785,813 
Thereafter236,572 
Total intangible assets subject to amortization738,702 
Indefinite-lived trade name357 
Other intangible assets, net$739,059 

The changes in goodwill during the three months ended March 31, 2022 and 2021 were as follows:
(in thousands)20222021
Beginning balance – January 1$3,409,271 $3,038,306 
Acquisitions and adjustments(1)
1,961 8,215 
Currency translation(11,335)(9,738)
Ending balance – March 31$3,399,897 $3,036,783 
(1) In accordance with the accounting for business combinations, we recorded adjustments to goodwill for the effect of changes in the provisional fair values of the assets acquired and liabilities assumed during the measurement period (up to one year from the acquisition date) as we obtained new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.
During the first quarter of 2022, we completed the annual impairment test for goodwill and the indefinite-lived intangible asset and determined that these assets had not been impaired as of the test date, January 1, 2022. No other events or circumstances changed during the three months ended March 31, 2022 that would indicate that the fair values of our reporting unit and indefinite-lived intangible asset are below their carrying amounts.

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8.Fair Value Measurement
The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or
Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.
A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Our current and long-term debt is classified within Level 2 of the fair value hierarchy because these borrowings are not actively traded and have a variable interest rate structure based upon market rates. The carrying amount of our current and long-term debt approximates the estimated fair value. See Note 10, "Debt", for additional information on our borrowings.
The following tables provide the assets carried at fair value and measured on a recurring basis:
  Fair Value Measurements at Reporting Date Using:
(in thousands)March 31,
2022
Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Cash equivalents$84,653 $84,653 $ $ 
Short-term investments$344 $ $344 $ 
Deferred compensation plan investments$1,600 $1,600 $ $ 
Equity securities$2,313 $2,313 $ $ 
  Fair Value Measurements at Reporting Date Using:
(in thousands)December 31, 2021Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Cash equivalents$87,620 $87,620 $ $ 
Short-term investments$361 $ $361 $ 
Deferred compensation plan investments$1,602 $1,602 $ $ 
Equity securities$2,500 $2,500 $ $ 

The cash equivalents in the preceding tables represent money market funds, valued at net asset value, with carrying values which approximate their fair values because of their short-term nature.
The short-term investments in the preceding tables represent deposits held by certain foreign subsidiaries. The deposits have fixed interest rates with original maturities ranging from three months to one year.
The deferred compensation plan investments in the preceding tables represent trading securities held in a rabbi trust for the benefit of non-employee directors. These securities consist of mutual funds traded in an active market with quoted prices. As a result, the plan assets are classified as Level 1 in the fair value hierarchy. The plan assets are recorded within other long-term assets on our condensed consolidated balance sheets.
The equity securities represent our investment in a publicly traded company. These securities are traded in an active market with quoted prices. As a result, the securities are classified as Level 1 in the fair value hierarchy. The securities are recorded within other long-term assets on our condensed consolidated balance sheets.

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9.Leases
Our right-of-use (ROU) assets and lease liabilities primarily include operating leases for office space. Our executive offices and those related to certain domestic product development, marketing, production and administration are located in a 186,000 square foot office facility in Canonsburg, Pennsylvania. The term of the lease is 183 months, which began on October 1, 2014 and expires on December 31, 2029. The lease agreement includes options to renew the contract through August 2044, an option to lease additional space in January 2025 and an option to terminate the lease in December 2025. No options are included in the lease liability as renewal is not reasonably certain. In addition, we are reasonably certain we will not terminate the lease agreement. Absent the exercise of options in the lease, our remaining base rent (inclusive of property taxes and certain operating costs) is $4.5 million per annum through 2024 and $4.7 million per annum for 2025 - 2029.
The components of our global lease cost reflected in the condensed consolidated statements of income are as follows:
 Three Months Ended
(in thousands)March 31,
2022
March 31,
2021
Lease liability cost$6,971 $7,001 
Variable lease cost not included in the lease liability(1)
1,084 1,282 
     Total lease cost$8,055 $8,283 
(1) Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate.
Other information related to operating leases is as follows:
 Three Months Ended
(in thousands)March 31,
2022
March 31,
2021
Cash paid for amounts included in the measurement of the lease liability:
     Operating cash flows from operating leases$(7,018)$(6,827)
Right-of-use assets obtained in exchange for new operating lease liabilities$16,318 $587 
As of March 31,
20222021
Weighted-average remaining lease term of operating leases
7.3 years7.1 years
Weighted-average discount rate of operating leases
2.9 %3.1 %

The maturity schedule of the operating lease liabilities as of March 31, 2022 is as follows:
(in thousands) 
Remainder of 2022$20,230 
202322,610 
202420,417 
202518,625 
202616,537 
Thereafter53,139 
     Total future lease payments151,558 
Less: Present value adjustment(15,081)
     Present value of future lease payments(1)
$136,477 
(1) Includes the current portion of operating lease liabilities of $22.2 million, which is reflected in other accrued expenses and liabilities in the condensed consolidated balance sheets.
There were no material leases that have been signed but not yet commenced as of March 31, 2022.
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10.Debt
In February 2019, we entered into a credit agreement for a $500.0 million unsecured revolving credit facility, which includes a $50.0 million sublimit for the issuance of letters of credit (Revolving Credit Facility), with Bank of America, N.A. as the Administrative Agent. The Revolving Credit Facility becomes payable in full on February 22, 2024 and is available for general corporate purposes, including, among others, to finance acquisitions and capital expenditures. The Revolving Credit Facility has never been utilized.
In connection with a 2019 acquisition, we amended our credit agreement (Amended Credit Agreement) on October 16, 2019. The amendment provided for a new $500.0 million unsecured term loan facility to partially finance the acquisition. The term loan was funded on November 1, 2019 and matures on November 1, 2024. Principal on the term loan is payable quarterly at a rate of 1.25% in 2022 and 2.50% thereafter. We repaid $75.0 million of the unsecured term loan balance in January 2020 prior to the scheduled maturity dates in 2022 ($25.0 million) and 2023 ($50.0 million). In June 2021, we repaid $26.0 million of the unsecured term loan balance prior to the scheduled maturity dates in 2024.
In connection with a 2020 acquisition, we entered into a credit agreement (2020 Credit Agreement) on November 9, 2020, with Bank of America, N.A. as the Administrative Agent. The 2020 Credit Agreement provided for a new $375.0 million unsecured term loan facility to finance a portion of the cash consideration for the acquisition. The term loan was funded on December 1, 2020 and matures on November 1, 2024. Principal on the term loan is payable quarterly at a rate of 1.25% in 2022 and 2.50% thereafter. We repaid $19.0 million of the unsecured term loan balance in June 2021 prior to the scheduled maturity dates in 2022 ($18.8 million) and 2023 ($0.2 million).
Borrowings under the Amended Credit Agreement and the 2020 Credit Agreement (collectively, the Credit Agreements) accrue interest at the Eurodollar rate plus an applicable margin or at the base rate, at our election. For the quarter ended March 31, 2022, we elected to apply the Eurodollar rate. The base rate is the applicable margin plus the highest of (i) the federal funds rate plus 0.500%, (ii) the Bank of America prime rate and (iii) the Eurodollar rate plus 1.000%. The applicable margin for these borrowings is a percentage per annum based on the lower of (1) a pricing level determined by our then-current consolidated leverage ratio and (2) a pricing level determined by our debt ratings (if such debt ratings exist). This results in a margin ranging from 1.125% to 1.750% and 0.125% to 0.750% for the Eurodollar rate and base rate, respectively.
The weighted average interest rate in effect for the three months ended March 31, 2022 and 2021 was 1.35% and 1.45%, respectively. As of March 31, 2022, the rate in effect for the Credit Agreements was 1.58%.
The Credit Agreements contain language in the event the Eurodollar rate is not available due to LIBOR changes. If this occurs, the base rate will be used for borrowings. However, we may work with the Administrative Agent to amend the Credit Agreements to replace the Eurodollar rate with (i) one or more rates based on the Secured Overnight Financing Rate (SOFR); or (ii) another alternative benchmark rate, subject to the lenders' approval.
The Credit Agreements contain customary representations and warranties, affirmative and negative covenants and events of default. The Credit Agreements also each contain a financial covenant requiring us to maintain a consolidated leverage ratio of indebtedness to earnings before interest, taxes, depreciation and amortization not exceeding 3.50 to 1.00 as of the end of any fiscal quarter (for the four-quarter period ending on such date) with an opportunity for a temporary increase in such consolidated leverage ratio to 4.00 to 1.00 upon the consummation of certain qualified acquisitions for which the aggregate consideration is at least $250.0 million.
As of March 31, 2022, the carrying value of the term loans was $753.7 million, of which $9.1 million is included in current portion of long-term debt and $744.6 million is included in long-term debt and is net of $1.3 million of unamortized debt issuance costs. As of December 31, 2021, the carrying value of the term loans was $753.6 million, which is net of $1.4 million of unamortized debt issuance costs and the total amount is included in long-term debt. We were in compliance with all covenants as of March 31, 2022 and December 31, 2021.


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11.Income Taxes
Our income before income tax provision (benefit), income tax provision (benefit) and effective tax rates were as follows:
 Three Months Ended
(in thousands, except percentages)March 31,
2022
March 31,
2021
Income before income tax provision (benefit)$78,029 $47,623 
Income tax provision (benefit)$7,041 $(24,775)
Effective tax rate9.0 %(52.0)%

Tax expense (benefit) for the three months ended March 31, 2022 and 2021 benefited due to deductions related to stock-based compensation, many of which were recognized discretely. These benefits were partially offset by non-deductible compensation. Discrete deductions relating to stock-based compensation were significantly higher for the three months ended March 31, 2021.

12.Stock Repurchase Program
Under our stock repurchase program, we repurchased shares as follows:
Three Months Ended
(in thousands, except per share data)March 31,
2022
March 31,
2021
Number of shares repurchased500 
Average price paid per share$311.14 $ 
Total cost$155,571 $ 

As of March 31, 2022, 2.0 million shares remained available for repurchase under the program.

13.Stock-Based Compensation
Total stock-based compensation expense and its net impact on basic and diluted earnings per share are as follows:
 Three Months Ended
(in thousands, except per share data)March 31,
2022
March 31,
2021
Cost of sales:
Maintenance and service$2,563 $3,562 
Operating expenses:
Selling, general and administrative20,444 17,223 
Research and development12,644 14,334 
Stock-based compensation expense before taxes35,651 35,119 
Related income tax benefits(24,888)(42,625)
Stock-based compensation expense, net of taxes$10,763 $(7,506)
Net impact on earnings per share:
Basic earnings per share$(0.12)$0.09 
Diluted earnings per share$(0.12)$0.09 

Stock-based compensation was a net benefit for the three months ended March 31, 2021 as the tax benefits on stock-based compensation exceeded the gross stock-based compensation expense due to increased excess tax benefits recognized related to awards issued in prior periods that were either exercised or released in the period.
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14.Geographic Information
Revenue to external customers is attributed to individual countries based upon the location of the customer. Revenue by geographic area is as follows:
 Three Months Ended
(in thousands)March 31,
2022
March 31,
2021
United States$197,561 $152,701 
Japan37,871 42,015 
Germany30,586 31,346 
China23,208 14,452 
South Korea21,940 22,398 
Other Europe, Middle East and Africa (EMEA)74,437 71,929 
Other international39,474 28,385 
Total revenue$425,077 $363,226 

Property and equipment by geographic area is as follows:
(in thousands)March 31,
2022
December 31,
2021
United States$60,909 $62,880 
India6,104 6,144 
Germany3,840 4,434 
Other EMEA8,752 9,215 
Other international5,073 5,241 
Total property and equipment, net$84,678 $87,914 

15.Contingencies and Commitments
We are subject to various claims, investigations, and legal and regulatory proceedings that arise in the ordinary course of business, including, but not limited to, commercial disputes, labor and employment matters, tax audits, alleged infringement of third party's intellectual property rights and other matters. In our opinion, the resolution of pending matters is not expected to have a material adverse effect on our consolidated results of operations, cash flows or financial position. However, each of these matters is subject to various uncertainties and it is possible that an unfavorable resolution of one or more of these proceedings could materially affect our consolidated results of operations, cash flows or financial position.
Our Indian subsidiary has several service tax audits pending that have resulted in formal inquiries being received on transactions through mid-2012. We could incur tax charges and related liabilities of $7.4 million. As such charges are not probable at this time, a reserve has not been recorded on the condensed consolidated balance sheet as of March 31, 2022. The service tax issues raised in our notices and inquiries are very similar to the case, M/s Microsoft Corporation (I) (P) Ltd. Vs. Commissioner of Service Tax, New Delhi, wherein the Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) issued a favorable ruling to Microsoft. The Microsoft ruling was subsequently challenged in the Supreme Court by the Indian tax authority and a decision is still pending. We can provide no assurances on the impact that the present Microsoft case's decision will have on our cases, however, an unfavorable ruling in the Microsoft case may impact our assessment of probability and result in the recording of a $7.4 million reserve. We are uncertain as to when these service tax matters will be concluded.
We sell software licenses and services to our customers under contractual agreements. Such agreements generally include certain provisions indemnifying the customer against claims, by third parties, of infringement or misappropriation of their intellectual property rights arising from such customer's usage of our products or services. To date, payments related to these indemnification provisions have been immaterial. For several reasons, including the lack of prior material indemnification claims, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.
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16.Subsequent Events
In May 2022, we completed various strategic acquisitions for a combined purchase price of $249.0 million. These acquisitions were funded with existing cash balances. Due to the limited time since the acquisition dates, the initial accounting for these business combinations is incomplete. As a result, we are unable to provide the amounts recognized as of the acquisition dates for the major classes of assets acquired and liabilities assumed. We do not expect the operations to contribute meaningfully to our current year’s financial results.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto for the three months ended March 31, 2022, and with our audited consolidated financial statements and notes thereto for the year ended December 31, 2021 included in the 2021 Form 10-K filed with the Securities and Exchange Commission (SEC). The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (GAAP).
Business:
Ansys, a corporation formed in 1994, develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare, and construction. Headquartered south of Pittsburgh, Pennsylvania, we employed 5,200 people as of March 31, 2022. We focus on the development of open and flexible solutions that enable users to analyze designs directly on the desktop and/or via the cloud, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing and validation. We distribute our suite of simulation technologies through direct sales offices in strategic, global locations and a global network of independent resellers and distributors (collectively, channel partners). It is our intention to continue to maintain this hybrid sales and distribution model.
Our strategy of Pervasive Engineering Simulation™ seeks to deepen the use of simulation in our core, to inject simulation throughout the product lifecycle and to embed simulation into our partners' ecosystems. The engineering software simulation market is strong and growing. The market growth is driven by customers' need for rapid, quality innovation in a cost efficient manner, enabling faster time to market of new products and lower warranty costs. We are investing in solutions to help engineers deal with increasing product complexity in:
Electrification, including electric vehicles;
Autonomy, including self-driving vehicles;
5G and telecommunications; and
IIoT.
In the longer term, we are also investing in opportunities around digital twins and simulation for additive manufacturing. Our strategy of Pervasive Engineering Simulation is aligned with the market growth.
To support our strategy of Pervasive Engineering Simulation, we will continue to follow a series of pillars that we believe will drive future growth. We will reinforce and extend our leadership in core and the high-growth solutions. We will build and grow our offerings and expertise in adjacencies to our current core competencies. We will also continue to pursue a smart and strategic acquisition strategy to grow our business, and we will partner with other industry leaders to broaden pervasive simulation into other ecosystems. Importantly, we will continue to win in the right way, built on a culture of and commitment to diversity, equity, inclusion and belonging.
We license our technology to businesses, educational institutions and governmental agencies. We believe that the features, functionality and integrated multiphysics capabilities of our software products are as strong as they have ever been. However, the software business is generally characterized by long sales cycles. These long sales cycles increase the difficulty of predicting sales for any particular quarter. We make many operational and strategic decisions based upon short- and long-term sales forecasts that are impacted not only by these long sales cycles, but also by current global economic conditions. As a result, we believe that our overall performance is best measured by fiscal year results rather than by quarterly results.
Management addresses the competition and price pressure that it faces in the short- and long-term by focusing on expanding the breadth, depth, ease of use and quality of the technologies, features, functionality and integrated multiphysics capabilities of our software products as compared to our competitors; investing in research and development to develop new and innovative products and increase the capabilities of our existing products; supplying new products and services; focusing on customer needs, training, consulting and support; and enhancing our distribution channels. We also evaluate and execute strategic acquisitions to supplement our global engineering talent, product offerings and distribution channels.

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Overview:
Update on the Impact of the COVID-19 Pandemic
We continued to employ measures intended to mitigate the effects of the COVID-19 pandemic on our business in the first quarter. Remote access remained the primary means of work for much of our workforce. Remote work arrangements have not adversely affected our ability to maintain effective financial operations, including our financial reporting systems, internal controls over financial reporting and disclosure controls and procedures. Our direct and indirect sales and support teams continue to use collaborative technology to access both Ansys’ data centers and the public cloud, and to meet virtually with customers to mitigate disruptions to our sales pipeline. Our sales team continues to engage with customers around the world in a mix of virtual and in-person meetings, depending on the location specific guidelines and customer preferences. They continue to deliver customer value and generate business momentum.
Please see "Forward-Looking Information" herein and "Risk Factors" in Part I, Item 1A of our 2021 Form 10-K for discussion on additional business risks, including those associated with the COVID-19 pandemic.
Overall GAAP and Non-GAAP Results
This section includes a discussion of GAAP and non-GAAP results. For reconciliations of non-GAAP results to GAAP results, see the section titled "Non-GAAP Results" herein.
The non-GAAP results exclude the income statement effects of the acquisition accounting adjustments to deferred revenue from business combinations closed prior to 2022, stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, transaction expenses related to business combinations and adjustments for the income tax effect of the excluded items.
This section also includes a discussion of constant currency results, which we use for financial and operational decision-making and as a means to evaluate period-to-period comparisons by excluding the effects of foreign currency fluctuations on the reported results. Constant currency is a non-GAAP measure. All constant currency results presented in this Item 2 exclude the effects of foreign currency fluctuations on the reported results. To present this information, the 2022 results for entities whose functional currency is a currency other than the U.S. Dollar were converted to U.S. Dollars at rates that were in effect for the 2021 comparable period, rather than the actual exchange rates in effect for 2022. Constant currency growth rates are calculated by adjusting the 2022 reported revenue and operating income amounts by the 2022 currency fluctuation impacts and comparing to the 2021 comparable period reported revenue and operating income amounts.
Our GAAP and non-GAAP results for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 reflected the following variances:
Three Months Ended March 31, 2022
GAAPNon-GAAP
Revenue17.0 %15.2 %
Operating income62.3 %19.3 %
Diluted earnings per share(1.2)%21.4 %
Our results reflect an increase in revenue during the three months ended March 31, 2022 due to growth in subscription lease licenses, maintenance and service revenue. We also experienced increased operating expenses during the three months ended March 31, 2022, primarily due to increased personnel costs, partially offset by decreased costs related to foreign exchange translation due to a stronger U.S. Dollar.
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Impact of Foreign Currency
Our comparative financial results were impacted by fluctuations in the U.S. Dollar during the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The impacts on our GAAP and non-GAAP revenue and operating income as a result of the fluctuations of the U.S. Dollar when measured against our primary foreign currencies are reflected in the table below. Amounts in brackets indicate an adverse impact from currency fluctuations.
Three Months Ended March 31, 2022
(in thousands)GAAPNon-GAAP
Revenue$(11,325)$(11,389)
Operating income$(4,494)$(5,071)

In constant currency, our increases were as follows:
Three Months Ended March 31, 2022
GAAPNon-GAAP
Revenue20.1 %18.2 %
Operating income71.2 %23.4 %
Other Key Business Metric
Annual Contract Value (ACV) is one of our key performance metrics and is useful to investors in assessing the strength and trajectory of our business. Given that revenue is more volatile due to the upfront revenue recognition of perpetual licenses and multi-year subscription lease license sales, we provide ACV as a supplemental metric to help evaluate the annual performance of the business. Summed over the long term, ACV and revenue are equal. However, there will be years in which ACV growth lags revenue growth and other years in which ACV growth leads revenue growth. It is used by management in financial and operational decision-making and in setting sales targets used for compensation. ACV should be viewed independently of revenue and deferred revenue as ACV is a performance metric and is not intended to be combined with any of these items. There is no GAAP measure comparable to ACV. ACV is composed of the following:
the annualized value of maintenance and subscription lease contracts with start dates or anniversary dates during the period, plus
the value of perpetual license contracts with start dates during the period, plus
the annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plus
the value of work performed during the period on fixed-deliverable services contracts.
Our ACV was as follows:
 Three Months Ended March 31,
(in thousands, except percentages)20222021Change
ActualConstant CurrencyActualActualConstant
Currency
AmountAmount%Amount%
ACV$344,145 $353,792 $319,382 $24,763 7.8 $34,410 10.8 

Our trailing twelve-month recurring ACV was as follows:
 Twelve Months Ended March 31,Change
(in thousands, except percentages)20222021Amount%
Recurring ACV*
$1,529,385 $1,319,384 $210,001 15.9 
*All periods are converted from the functional currency to U.S. Dollars at the 2021 monthly average exchange rates.
Recurring ACV includes both subscription lease license and maintenance ACV, and excludes perpetual license and service ACV.
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Industry Commentary:
The industry trends from 2021 carried into the first quarter of 2022 as high-tech, automotive, and aerospace and defense continue to be our leading industries. Our leading product portfolio remains attractive to customers as they continue investing in simulation to reduce costs and time-to-market while advancing digital transformation and sustainability initiatives. In the high-tech and semiconductor industry, growth was driven by customers seeking advanced simulation tools for 5G, high-performance computing, IoT and increasingly complex chip designs. Digital transformation initiatives continue to be a tailwind for simulation, particularly in the defense sector, where model-based systems engineering and our core solvers support defense modernization.
Geographic Trends:
The following tables present our GAAP and non-GAAP geographic revenue variances using actual and constant currency rates during the three months ended March 31, 2022 as compared to the three months ended March 31, 2021:
Three Months Ended March 31, 2022
GAAPNon-GAAP
ActualConstant CurrencyActualConstant Currency
Americas28.3 %28.4 %23.4 %23.4 %
EMEA1.7 %7.4 %2.2 %7.9 %
Asia-Pacific14.8 %20.2 %15.0 %20.3 %
Total17.0 %20.1 %15.2 %18.2 %
The value and duration of multi-year subscription lease contracts executed during the period significantly impact the recognition of revenue. As a result, revenue may fluctuate significantly, particularly on a quarterly basis, due to the timing of such contracts, relative differences in duration of long-term contracts from quarter to quarter and changes in the mix of license types sold compared to the prior year. Large swings in revenue growth rates are not necessarily indicative of customers' software usage changes or cash flows during the periods presented.
To drive growth, we continue to focus on a number of sales improvement activities across our geographic regions, including sales hiring, pipeline building, productivity initiatives and customer engagement activities.
Trade restrictions limited our ability to deliver products and services to customers in Russia and Belarus and certain entities in China. For context, the combined 2021 revenue for all customers in Russia and Belarus was $15.1 million, less than 1% of our total 2021 revenue. Additional restrictions or a further deterioration in the trade environment in China or other parts of the world could have a material adverse impact on our business, results of operations or financial condition. China's 2021 revenue represented 4.3% of our total 2021 revenue. Refer to additional details in Part I, "Item 1A. Risk Factors" in our 2021 Form 10-K and Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of additional business risks, including those associated with the Russian invasion of Ukraine.
Use of Estimates:
The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to contract revenue, standalone selling prices of our products and services, allowance for doubtful accounts receivable, valuation of goodwill and other intangible assets, useful lives for depreciation and amortization, acquired deferred revenue, operating lease assets and liabilities, fair values of stock awards, deferred compensation, income taxes, uncertain tax positions, tax valuation reserves, and contingencies and litigation. We base our estimates on historical experience, market experience, estimated future cash flows and various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Forward-Looking Information:
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that provide current expectations or forecasts of future events based on certain assumptions. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements.
Forward-looking statements use words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "outlook," "plan," "predict," "project," "should," "target," or other words of similar meaning. Forward-looking statements include those about market opportunity, including our total addressable market. We caution readers not to place
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undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise.
The risks associated with the following, among others, could cause actual results to differ materially from those described in any forward-looking statements:

adverse conditions in the macroeconomic environment, including high inflation, and volatility in equity and foreign exchange markets; political, economic and regulatory uncertainties in the countries and regions in which we operate (including the Russian invasion of Ukraine);

our ability to timely recruit and retain key personnel in a highly competitive labor market for skilled personnel, including potential financial impacts of wage inflation;

impacts from tariffs, trade sanctions, export license requirements or other trade barriers (including impacts from changes to diplomatic relations and trade policy between the United States and Russia (or the United States and other countries that may support Russia or take similar actions) due to the Russian invasion of Ukraine);

constrained credit and liquidity due to disruptions in the global economy and financial markets, that may limit or delay availability of credit under our existing or new credit facilities, or that may limit our ability to obtain credit or financing on acceptable terms or at all;

current and future impacts of a natural disaster or catastrophe, including the COVID-19 pandemic and actions taken to address the pandemic by our customers, suppliers, regulatory authorities, and our business, on the global economy and our business and consolidated financial statements, and other public health and safety risks; and government actions or mandates surrounding the COVID-19 pandemic;

declines in our customers’ businesses resulting in adverse changes in procurement patterns; disruptions in accounts receivable and cash flow due to customers’ liquidity challenges and commercial deterioration; uncertainties regarding demand for our products and services in the future and our customers’ acceptance of new products; delays or declines in anticipated sales due to reduced or altered sales and marketing interactions with customers; and potential variations in our sales forecast compared to actual sales;

increased volatility in our revenue due to the timing, duration and value of multi-year subscription lease contracts; and our reliance on high renewal rates for annual subscription lease and maintenance contracts;

our ability to protect our proprietary technology; cybersecurity threats or other security breaches, including in relation to an increased level of our activity that is occurring from remote global off-site locations; and disclosure and misuse of employee or customer data whether as a result of a cybersecurity incident or otherwise;

the quality of our products, including the strength of features, functionality and integrated multi-physics capabilities; our ability to develop and market new products to address the industry’s rapidly changing technology; failures or errors in our products and services; and increased pricing pressure as a result of the competitive environment in which we operate;
investments in complementary companies, products, services and technologies; our ability to complete and successfully integrate our acquisitions and realize the financial and business benefits of the transactions; and the impact indebtedness incurred in connection with any acquisition could have on our operations;

investments in global sales and marketing organizations and global business infrastructure; and dependence on our channel partners for the distribution of our products;

operational disruptions generally or specifically in connection with transitions to and from remote work environments; and the failure of our technological infrastructure or those of the service providers upon whom we rely including for infrastructure and cloud services;

our ability and our channel partners’ ability to comply with laws and regulations in relevant jurisdictions; and the outcome of contingencies, including legal proceedings, government or regulatory investigations and service tax audit cases;

our intention to repatriate previously taxed earnings in excess of working capital needs and to reinvest all other earnings of our non-U.S. subsidiaries;

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plans for future capital spending; the extent of corporate benefits from such spending including with respect to customer relationship management; and higher than anticipated costs for research and development or slowdown in our research and development activities;

uncertainty regarding income tax estimates in the jurisdictions in which we operate; and the effect of changes in tax laws and regulations in the jurisdictions in which we operate; and

other risks and uncertainties described in our reports filed from time to time with the SEC.
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Results of Operations
The results of operations discussed below are on a GAAP basis unless otherwise stated.
Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
Revenue:
 Three Months Ended March 31,
(in thousands, except percentages)2022