Why Shares in Ansys Soared Today
Shares of engineering simulation software company Ansys (NASDAQ: ANSS) have risen by more than 10% as of midday today. The move comes after an impressive set of earnings released after the close of trading yesterday.
In common with many other software companies, Ansys is moving toward more subscription lease contracts as opposed to perpetual licenses. The shift has an initial "valley of death" associated with it whereby upfront revenue and cash flow (typically generated by perpetual license sales) are forgone in favor of long-term annual subscription revenue.
So looking at Ansys' 10% non-GAAP (adjusted) revenue growth (constant currency) in the quarter isn't the best way to judge the company's growth. Instead, Ansys encourages investors to look at its annual contract value (ACV), which rose an even more impressive 13% in the quarter in constant currency.
Source Fool.com
