ANSYS(ANSS)2023-02-21 16:00Customer and Revenue Distribution - No single customer accounted for more than 5% of the company's revenue in 2022, 2021, or 2020[51] - International revenue represented 54.9% of total revenue in 2022, with the largest geographic revenue bases being the United States, Germany, and Japan[94] - Channel partners accounted for 23.9%, 23.7%, and 22.2% of revenue in 2022, 2021, and 2020, respectively, with significant dependence in APAC and EMEA regions[123] Strategic Partnerships and Alliances - The company has strategic alliances with leading CAD vendors like Autodesk, PTC, and Siemens Digital Industries, enabling direct data transfer between CAD systems and its products[53] - A partnership with Microsoft was executed to develop Ansys Access powered by Azure, enabling customers to launch Ansys products using Azure and connect third-party tools[54] - Ansys Gateway powered by AWS was launched in 2022, facilitating seamless access and deployment of Ansys products on AWS[55] - The company has technical relationships with Intel and AMD, optimizing solver performance and scalability, with AMD GPU acceleration providing speedups of up to 8x or 14x depending on the application[56] - The company has over 350 technology partnerships, extending the depth and breadth of its technology offerings across various solution areas[57] Financial Metrics and Risks - Deferred revenue and backlog as of December 31, 2022, totaled 846,312 thousand classified as current[71][72] - Outstanding borrowings of 500.0 million revolving loan facility including a 250.0 million[155] - U.S. Dollar was 11.4% stronger against foreign currencies in 2022 compared to 2021, resulting in a net adverse impact of 63.7 million in 2022 compared to 2021[262] - A hypothetical 10% strengthening in the U.S. Dollar would decrease revenue by 47.9 million[263] - Interest income was 22.7 million for the year ended December 31, 2022[264] - A hypothetical 100 basis point increase in interest rates would increase interest expense by 755.0 million[266] Workforce and Employee Engagement - As of December 31, 2022, the company employed 5,600 people, with 45% located in the Americas, 28% in EMEA, and 27% in APAC[74] - The company's global employee gender diversity as of December 31, 2022, was 75% male, 23% female, and 2% other/not indicated[76] - The company's U.S.-based employee racial/ethnic diversity as of December 31, 2022, was 55% White, 25% Asian, 2% Hispanic or Latino, 2% Black or African American, 1% Other, and 15% Not Indicated[78] - Annual turnover rate for 2022 was 10%, with voluntary turnover at 8%[81] - Employee engagement score in 2022 remained steady compared to 2021, exceeding external norms across all dimensions of engagement[86] - 92% of employees responded favorably to managing work responsibilities with flexibility in a remote and hybrid work environment[85] - Over half of employees receive equity grants annually, aligning long-term financial interests with stockholders[83] - Global internship, co-op, and new college graduate programs emphasize hiring emerging talent, with outreach events doubled in volume over the last year[79] - Annual talent reviews, succession planning, and leadership development programs were implemented in 2022, including individualized coaching and high-potential assessments[80] Operational and Compliance Risks - Compliance with global data privacy laws requires substantial resources and may increase costs due to evolving regulations[106] - Non-compliance with privacy laws could result in monetary penalties, reputational damage, and increased expenses to achieve compliance[107] - The company operates in high-risk environments for corruption, exposing it to financial and reputational risks despite having anti-corruption compliance programs[109] - COVID-19 has led to remote and hybrid work arrangements, increasing risks of cyber incidents and potential delays in work due to limited access to technology[111] - Acquisitions may pose risks such as integration challenges, failure to achieve synergies, and potential impairment of goodwill or intangible assets[126] - The company is undergoing digital transformation, but delays or failures in implementation could lead to increased costs and write-offs of capitalized expenditures[129] - The software business faces long sales cycles, making accurate short- and long-term sales forecasts challenging and subject to external economic factors[133] - Product quality issues or non-compliance with ISO 9001 standards could result in reputational damage and adverse impacts on financial statements[132] - The company faces competitive pressures, including price reductions and increased operating costs, which could lower revenues, margins, and net income[117] - Research and development expenses may not correlate with revenue, potentially leading to declines in operating profits if investments do not yield expected returns[120] - Global market disruptions may significantly impact the accuracy of sales forecasts, potentially leading to variations between actual sales and forecasts, which could adversely affect the company's business and financial statements[135] - The company relies on intellectual property protection, but software piracy and inadequate enforcement in certain countries may lead to revenue loss[138] - Cybersecurity risks, including cyberattacks and data breaches, could result in reduced revenue, increased costs, and reputational damage[142] - The company uses third-party service providers for cloud-based products, exposing it to risks such as service interruptions and security vulnerabilities[147] - Foreign exchange rate fluctuations, particularly involving the Euro and Japanese Yen, may adversely affect the company's consolidated financial statements[149] - Changes in tax laws, including the OECD's Pillar Two proposals, could impact the company's tax provision, net income, and cash flows[152] - The company faces risks related to third-party software licenses, including potential disruptions in product development and customer usage if licenses are not renewed or obtained on reasonable terms[141] - The company has experienced cybersecurity attacks in the past, and while none have had a material impact, future attacks could disrupt operations and harm financial performance[145] Environmental, Social, and Governance (ESG) - The company has established greenhouse gas emission reduction targets, but achieving these targets is subject to external factors such as evolving regulations, technological developments, and financing availability[136] - Environmental, social, and governance (ESG) considerations are increasingly important to stakeholders, and failure to meet ESG targets or comply with regulations could result in legal proceedings and reputational harm[137] Trade and Export Control Risks - Trade restrictions and export control regulations, particularly involving China, could limit the company's ability to sell products and services to certain customers[97]