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ANSYS 2013 INVESTOR DAYExecutive Summary

March 14, 2013

ANSYS 2013 Investor Day March 14, 2013 Pittsburgh, PA

2 © 2013 ANSYS, Inc. PROPRIETARY & CONFIDENTIAL Created for ANSYS by BullsEye Resources

TABLE OF CONTENTS

Session Session Title Speaker(s) Page

Key Themes 3

1 CEO Message: The ANSYS Principles of Success

Jim Cashman, President and CEO 5

2 Key Initiatives Driving Revenue Josh Fredberg, VP, Marketing 8

3 ANSYS 14.5 Highlights Steve Pilz, Senior Product Manager 11

4 Sales and Support Update Joe Fairbanks, VP, World Wide Sales and Support

13

5 Apache Update Andrew Yang, VP, President, Apache 16

6 Financial Update Maria Shields, CFO and VP, Finance and Administration

18

7 Question and Answer Session Annette Arribas, Director, Global Investor Relations and Insurance Members of ANSYS’ Management Team

20

Poster Sessions 23

Biographies 27

Important Factors Regarding Future Results The Company cautions investors that its performance is subject to risks and uncertainties. Some matters that will be discussed throughout this presentation may constitute forward‐looking statements that involve risks and uncertainties which could cause actual results to differ materially from those projected. These risks and uncertainties are discussed at length, and may be amended from time to time, in the Company’s Annual Report to Stockholders and its filings with the SEC, including our most recent filings on Forms 10‐K and 10‐Q. We undertake no obligation to publicly update or revise any forward‐looking statements, whether changes occur as a result of new information or future events, after the date they were made. THESE SUMMARIES REFLECT BULLSEYE RESOURCES, INC.’S SUBJECTIVE CONDENSED SUMMARIZATION OF THE ANSYS, INC. 2013 INVESTOR DAY CONFERENCE, AND THERE MAY BE MATERIAL ERRORS, OMISSIONS OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE SESSIONS. IN NO WAY DOES ANSYS, INC. OR BULLSEYE RESOURCES ASSUME ANY RESPONSIBILITY FOR THE INFORMATION CONTAINED HEREIN, OR ANY DECISIONS MADE BASED UPON THE INFORMATION PROVIDED IN THIS DOCUMENT.



Key Themes

Overview

ANSYS continued to perform well in 2012 and is well positioned

for future growth. ANSYS’ results are attributable to a relentless

focus on its first principles of success: customers, people, and

products. ANSYS partners with its customers to continuously

improve current products and develop next‐generation ones.

ANSYS’ talented people provide a competitive advantage. And

ANSYS has both leading individual simulation components and

the most comprehensive simulation suite.

With these fundamentals in place, ANSYS is continuing to invest

in people, products, marketing, infrastructure, and strategic

acquisitions, such as Apache and Esterel. These actions broaden

ANSYS’ product portfolio, strengthen customer relationships,

and position ANSYS well for the future. ANSYS sees significant

growth potential through increasing the number of users, and

increasing the density and intensity of simulation usage.

Context ANSYS 2013 Investor Day was held on March 14, 2013, in

Pittsburgh, Pennsylvania. CEO Jim Cashman and other members

of the ANSYS management team reviewed results from 2012

and discussed the outlook for 2013, described the Company’s

vision and product strategy, reviewed key initiatives and

Release 14.5, provided an update on sales and support,

discussed the progress in integrating the Apache acquisition,

and explained the rationale and fit of the Esterel acquisition.

Key Themes

ANSYS continued to perform well in 2012 and anticipates continued growth in 2013.

In 2012, the Company’s non‐GAAP revenue, earnings per share,

and margins all exceeded the original outlook for the year.

These results were achieved while continuing to invest in the

future by increasing the investment in R&D, while also investing

in marketing and infrastructure, consummating another

strategic acquisition, continuing to repay debt, and

repurchasing 1.5 million shares.

For 2013, assuming relative macroeconomic stability, ANSYS

anticipates constant currency non‐GAAP revenue growth of

11% to 14%, gross margins around 87%, and operating margins

around 47%. ANSYS will continue to invest for the future with

R&D projected at around 16% of revenue. This translates into

an outlook for EPS in the range of $3.00 to $3.12.

ANSYS’ success comes from a focus on first principles.

A major theme throughout ANSYS 2013 Investor Day was that

ANSYS’ past and future success is based on fundamentals and

first principles, which are customers, people, and products.

• Customers. ANSYS builds long‐term, value‐based customer

relationships and partners with customers to help solve

their most difficult product development problems.

• People. ANSYS has the most talented, most experienced

people in the simulation industry, including more than 600

PhDs. This is a differentiator and a competitive advantage.

• Products. ANSYS has the best, most comprehensive suite

of simulation tools in existence and is investing heavily to

constantly improve its products.

“Everything we do revolves around first principles: our

amazing people, our revolutionary products, and the more

than 40,000 valued customers we have around the globe.” – Annette Arribas

With product development as critical to customers’ success, the role of simulation continues to grow.

Companies in all industries are under intense pressure to

develop new products more quickly and less expensively. These

products are increasingly complex, but they must be reliable

and work as intended. Increasingly, companies’ future business

success depends on their product development capabilities.

In this context, the traditional method used by product

developers of creating physical prototypes is too slow,

expensive, and unreliable. Increasingly engineers and product

developers in all industries are changing their paradigm to rely

on simulation. In fact, as companies design increasingly

complex smart products, they want to engage in multiphysics

simulation and simulations of entire systems. Thus, the needs

of customers and the evolution of the market are consistent

with ANSYS’ vision and are in ANSYS’ sweet spot.

ANSYS continues to see tremendous opportunities along multiple dimensions.

A major theme reiterated throughout the 2013 Investor Day

was the tremendous opportunities that ANSYS sees. The frame‐

work that ANSYS uses to think about these opportunities is:

• Growing the number of users. Even with the maturation of

simulation, a low percentage of engineers currently use

simulation, even among ANSYS’ largest customers.

Growing the number of simulation users represents a big

opportunity.



• Increasing the intensity of usage. ANSYS is seeing

significant growth along this dimension as organizations

design increasingly complex products and expect even

more from their current engineers. An increasing number

of customers are engaging in robust design and are using

high‐performance computing (HPC), which increases the

intensity of simulation usage. This has many benefits for

customers, particularly a dramatic reduction in the time

required to run simulations—often from days to minutes

or hours.

• Increasing the density of usage. As engineers design more

complex products, they increasingly need to engage in

multiphysics simulation. Going from single physics to

multiple physics increases the density of simulation usage.

ANSYS’ product initiatives fit with the major trends taking place in the market.

ANSYS Release 14.5 has numerous enhancements and new

features including greater integration of multiphysics, easier

data sharing, an improved ability for organizations to

standardize on best practices, and greater ease of use.

Other major market initiatives (shown below) are based on

trends in the marketplace that include the growth of smart

products, a desire to increase product integrity through robust

design, the need to amplify engineering, pressure for the most

cost‐effective and scalable IT, and the focus of companies on a

platform for open collaboration. These trends bode well for

ANSYS as ANSYS’ products enable multiphysics simulation, end‐

to‐end simulation of entire systems, and easy sharing of data

and knowledge in an organization.

Recent acquisitions have strengthened ANSYS’ product portfolio.

ANSYS’ strategy has been to look for acquisitions that are a

strategic fit with ANSYS’ product direction and that have the

ability to integrate into the Workbench™ platform. Size is not

the determining factor in assessing potential acquisitions. The

keys are proven technology, talent, and a synergistic customer

base and sales channels.

Both Apache (acquired in August 2011) and Esterel (acquired in

August 2012) fit perfectly with ANSYS’ criteria. Both have

outstanding technology that meshes with ANSYS’ product

direction of end‐to‐end system simulation. Both have customer

bases that complement ANSYS’ and provide cross‐selling

opportunities.

Since acquiring Apache, which focuses on power management

for semiconductors and chips for mobile devices, Apache’s

revenues and margins have both exceeded expectations.

Esterel is a leader in embedded software simulation, and

automatic code generation and certification. The Company

initially focused on the aerospace, defense, and nuclear

industries. But its solutions are now being adopted in other

industries that rely on certified embedded software, such as

the automotive industry.

Both of these acquisitions further strengthen ANSYS’ product

portfolio. They bring ANSYS new technology, new customers,

and new talent, all of which will help accelerate ANSYS’ growth.



CEO Message: The ANSYS Principles of Success Speaker: Jim Cashman, President and CEO

Overview

ANSYS continued to deliver strong results in 2012 and is making

significant investments to drive longer‐term growth. The keys

to ANSYS’ success include forging collaborative, long‐term

partnerships with customers; having outstanding people; and

producing market‐leading, next‐generation products. These

products enable product developers in all industries to

engineer the impossible.

As adoption of simulation matures, ANSYS is well positioned to

continue to grow by increasing the number of simulation users,

the intensity of usage, and the density of usage. While the total

addressable market for simulation is unknown, it is likely to be

far greater than most people believe.

Context

ANSYS President and CEO Jim Cashman described how ANSYS is

enabling companies in all industries to engineer the impossible

and outlined the Company’s first principles of success. He also

reviewed ANSYS’ performance in 2012 and discussed the

enormous growth opportunities that still exist.

Key Takeaways

ANSYS enables companies in all industries to engineer the impossible.

Isaac Asimov said, “Science can amuse and fascinate us all, but

it is engineering that changes the world.” Science is knowledge;

engineering brings science to life. ANSYS helps engineers in all

industries engineer the impossible. Engineers at the leading

companies in the aerospace, medical, automotive, consumer

products, and energy industries all use ANSYS to assist them in

developing amazing, cutting‐edge products.

In an environment of increasing complexity and demands,

increasing government mandates, and greater pressure than

ever to bring new products to market quickly and have them

work reliably, simulation is more important than ever.

Companies must develop products that deliver on their

promises, perform properly, and do not fail unexpectedly.

“You’ve heard me say this many times and it’s even more

true now. The value of being right has never been greater,

and the cost of being wrong has never been greater.” – Jim Cashman

Understanding the enormous pressure that companies and

engineers are under, and the complexity of the environment,

ANSYS helps engineers develop products that deliver on their

promises with the most robust, accurate, and flexible

simulation platform available.

ANSYS’ success is grounded in fundamentals.

Delivering on ANSYS’ vision of Simulation‐Driven Product

DevelopmentTM and achieving sustained business success is

based on the following fundamentals:

• Customers. ANSYS has built long‐term relationships with

world‐leading companies. In total, ANSYS has more than

45,000 customers, including 96 of the top 100 industrial

companies and 96 of the 100 most innovative companies

in the world. These customers are trusted partners with

whom ANSYS works closely in continuously improving its

current products and developing new products.

“By partnering with those leaders, we’re getting the next‐

generation view of the problem and getting a huge amount

of industry expertise.” – Jim Cashman

• People. ANSYS’ people are the Company’s core

competency and provide a competitive advantage. Among

ANSYS’ 2,400 people, about 2,200 have a bachelor’s

degree or higher, roughly 1,200 have a master’s degree or

higher, and more than 600 have a doctorate. These are

talented individuals who have a deep understanding of

engineering algorithms and know how to turn their

knowledge into production‐level software. They are also

extremely experienced, spending more than 10 years on

average at ANSYS and having more than 16,000 years of

combined simulation experience. ANSYS’ talented people

produce large quantities of intellectual property, including

patents and trade secrets.

• Products. ANSYS’ people, with input and collaboration

from customers, produce industry‐leading individual

simulation components as well as the most comprehensive

simulation suite on the planet. ANSYS simulation solutions,

which can be deployed throughout the entire innovation

lifecycle, provide customers the ability to engage in

simulation‐driven product development.

Other fundamentals include working with customers to help

them solve their toughest problems first, and continuing to

invest for growth with ongoing investments in people,

marketing, and infrastructure.



In 2012, ANSYS continued to perform well and continued to invest for the future.

Shown below are ANSYS’ non‐GAAP outlook for 2012 and the

Company’s actual results. By all measures—revenue, gross

margin, investment in R&D, operating profit margin, and EPS—

ANSYS had a strong year and exceeded the outlook.

ANSYS has geographic diversity, with roughly one‐third of

revenue coming from North America, one‐third from Europe,

and one‐third from GIA. The Company also has tremendous

industry diversity, selling to multiple industries, with no

industry accounting for more than 20% of revenue. ANSYS also

has a broad customer base, with no customer representing

more than 5% of revenue and with the top 100 customers

representing only about 33% of sales. Other key

accomplishments in 2012 included:

• Continuing to invest for the long term, with investments in

R&D (people), marketing, infrastructure and business

systems, and capital.

• Focusing on the business fundamentals. This includes

sustaining high renewal rates to maintain the strong base

of recurring revenues; continuing to secure, extend, and

elevate customer relationships; investing in organizational

development; and pursuing continual product innovation,

reflected in Release 14.5.

• Deploying capital strategically. In 2012, ANSYS acquired

Esterel. This acquisition (discussed in more detail on pages

9 and 10) fits extremely well with ANSYS’ long‐term vision

of creating virtual prototypes early in the design process to

predict how the entire system will perform. This

acquisition recognizes that software is a key component of

a system, particularly for makers of smart products.

Esterel also brings experienced talent, and a synergistic

customer base and global channel.

Other important uses of capital include repayment of debt

and opportunistic stock repurchases. In 2012 ANSYS

repurchased 1.5 million shares; the board has since

authorized repurchase of up to 3 million more shares.

There remain tremendous opportunities for growth along multiple dimensions.

In recent years, simulation technology has matured greatly, as

has the adoption of simulation. In the early days, simulation

was a set of individual advanced technologies, used within

separate organizational silos.

Led by ANSYS, simulation products have evolved to incorporate

multiphysics, and engineers today are using simulation for

virtual prototyping. This takes time as organizations have to

develop new processes, skills, and mindsets.

The most experienced customers are going a step further

through process compression. These customers are solving

problems holistically and transforming their entire product

development processes. Beyond that, ANSYS is working on

tools in the area of dynamic CAE collaboration. Process

compression and dynamic CAE collaboration are emerging

markets that are starting to accelerate.

The growing adoption of simulation points to three distinct

dimensions of opportunity that ANSYS sees, all of which show

significant promise.



These dimensions of opportunity are:

• Increasing the number of simulation users. As the

democratization of simulation occurs, more engineers are

engaging in simulation. The opportunities here are

significant, as fewer than 10% of those who could benefit

from simulation are using it, even at ANSYS’ largest

customers.

• Increasing the intensity of simulation usage. As companies

look to get more out of their existing talent, they are

engaging in robust design and high‐performance

computing, which increases the intensity of simulation

usage. A single user might simultaneously use a multitude

of modules. ANSYS is seeing significant growth in the

intensity of simulation usage.

• Increasing the density of usage. An increasing number of

users, especially those working on smart products, are

using more simulation modules.

Each of these dimensions represents a significant opportunity,

and at different times, each one will be slightly stronger than

the others.

Based on these significant opportunities, ANSYS is often asked

about the TAM (total addressable market). There is no specific

answer to this question. Historically, TAM estimates for the

simulation market have been far too low, and that is almost

certainly the case now.

“The bottom line is that it’s [the TAM] an order of

magnitude greater than what we envision now, and it could

be much greater than that when you take into account

high‐performance computing and full multiphysics used by

a broad range of people.” – Jim Cashman

ANSYS isn’t particularly concerned about whether the TAM

turns out to be 10x or 30x the current market. The fact is that

the TAM is far greater than the current market.

With ANSYS’ technology, people, and investments in the

future, the company is extremely well positioned.



Key Initiatives Driving Revenue Speaker: Josh Fredberg, VP, Marketing

Overview

ANSYS’ future growth will come not just from incremental

innovations, but from major disruptive innovations. And those

disruptive innovations will come from understanding and being

ahead of major trends in the market. ANSYS sees and is in front

of at least five major trends which include smart products that

require a systems‐engineering approach; product integrity

through robust design; amplifying engineering; and better

management of simulation IP. For each of these trends, ANSYS

is leveraging its products and positioning to drive growth.

An important way that ANSYS has strengthened its positioning,

particularly for customers that are designing and building smart

products, is through the acquisition of Esterel. Esterel

specializes in simulating embedded software and then

automatically generating certified code. This extends ANSYS’

ability to meet customers’ needs to simulate complete systems.

Context

Josh Fredberg described five major trends that ANSYS sees in

the marketplace and explained how ANSYS is well positioned to

capitalize on each of them. He also discussed the acquisition of

Esterel and detailed how ANSYS and Esterel fit together.

Key Takeaways

ANSYS’ major initiatives are driven by key trends in the marketplace.

The graveyard is full of technology companies that became

obsolete because they were focused only on incremental

innovations, but missed breakthrough disruptive innovations.

ANSYS aims to do both through a balanced approach. This

means continually improving its products through incremental

innovations, while identifying major changes in the industry,

and creating disruptive innovations.

Some of the key trends that will drive disruptive innovation and

how ANSYS is taking advantage of these opportunities are

described below.

Trend #1: Smart products require a systems‐level approach.

Smart products are complex products that react to users,

environments, and even other smart products. They are made

smart through a complex set of technologies—hardware,

software, and electronics—all coming together. ANSYS sees

companies taking a systems‐engineering approach to

developing smart products. Systems engineering involves:

• Understanding requirements, cascading them into

functional models, and developing behavioral models.

Customers are using ANSYS tools to simulate these models

very early in the product development process.

• Detailed design and optimization. Simulation has been

used here for years, but the next realm of innovation is

combining technologies for true multiphysics simulation.

• Validation and verification. Historically this has been done

through physical tests, but leading companies are now

using computers to do verification at each stage.

As leading smart products companies embrace a systems‐level

approach, ANSYS is well positioned. ANSYS already has best‐of‐

breed solutions in each area and ANSYS makes it easy to do

multiphysics, which provide far more accurate product

performance predictions. ANSYS already has technologies that

span different areas of engineering, physics, and parts of the

lifecycle. This broad presence creates significant growth

opportunities for ANSYS.

Trend #2: Product integrity through robust design.

Companies are acutely aware of the risks of being wrong in

product design and need to have total confidence in the

products brought to market. But having total product confi‐

dence is extremely difficult, given variations in operating

conditions, manufacturing processes, and material properties.

So, historically, companies have had a choice: either ignore the

risks and have failures or build safety factors into everything,

which drags down efficiency and slows the pace of innovation.

With simulation, companies can ensure safety, drive out waste,

and have total product confidence.

In terms of best practices, companies are using computers not

just to build one and do multiphysics for one design point, but

to do multiple design points. Ultimately, companies are doing



multiple design points and experiments. This improves product

performance and decreases the risks.

As companies move in this direction, they realize they need a

“platform for simulation.” This is because it is very difficult to

pull together various independent product solutions. A

platform is needed to do multiphysics across a wide range of

parameters. This platform needs to scale, work across multiple

design points at the same time, automate runs, and work with a

high‐performing computing environment.

“You need a platform that allows you to do multiphysics

across a wide range of parameters . . . This is what we’ve

built, and this is really a differentiator.” – Josh Fredberg

Trend #3: Amplify engineering.

Companies, and engineering organizations, are under extreme

pressure to do more with less. Companies are not hiring

engineers as they once did; many are fiscally constrained and

often struggle to find the talent they need. The result is that

they need to get more out of their current engineering staff.

Best practices that ANSYS has seen among leading companies

include standardizing on how simulation is done, documenting

best practices, automating more steps, and democratizing

simulation by putting in place simulation systems that enable

those who don’t normally do simulation—such as novices and

design engineers—to conduct reliable simulations.

A key is to have one simulation platform across the entire

enterprise that is both powerful and flexible and that can scale

across physics and to HPC.

“We want to be that single [simulation] vendor that the IT

organization can be comfortable with and know that the

results are accurate.” – Josh Fredberg

Trend #4: Engineering IT is evolving to centralized HPC and

cloud, with users remote.

Companies are developing products on a global basis at the

same time that a massive consolidation is taking place with

computing infrastructure. Sometimes engineers are located

near high‐performance computing environments—and

sometimes they are not. Still, as computing resources are

consolidated, engineers need to be able to tap into that

infrastructure, regardless of where the computing center is and

regardless of where the engineer is. Engineers need to be able

to manage and access data to run simulations, scale up

dramatically on a global basis, control the jobs, and tap into the

cloud for excess capacity.

This increasingly complex environment plays to ANSYS’

strengths. That’s because ANSYS is way ahead in thinking about

and planning for scalability and HPC. For example, in fluid

dynamics, ANSYS’ closest competitor can scale up into a few

hundred cores at 90% efficiency. ANSYS products can scale into

3,000 cores at 90% efficiency. This is an order of magnitude

difference, which matters greatly to customers.

Also, ANSYS has always had an open, multi‐vendor approach.

This provides the ability to support customers as they build out

their infrastructure to support their next‐generation IT

environment.

Trend #5: R&D globalization and IT challenges call for better

management of simulation IP.

As companies are going global and doing more design

interventions, the amount of simulation is growing exponen‐

tially, as is the amount of data. A dramatic evolution is taking

place in how companies manage this data:

• Federated network. Organizations are moving from

localized data management toward a more federated

network of data. This provides visibility across an entire

enterprise and greater efficiency in the use of hardware.

• Creation of knowledge. A key is not just the use of data; it

is the creation of organizational knowledge. This could be

best practices or insights related to decision support. This

is an advantage for ANSYS in that ANSYS allows customers

to manage their data while also creating and systematizing

institutional knowledge and best practices. An example

was shared in which Petrobras took knowledge from its

engineering organization and made it available to field

engineers around the world. The access to this knowledge

increased simulation throughput by 20%, reduced process

development costs, and reduced organizational risk.

The acquisition of Esterel strengthens ANSYS’ ability to simulate entire systems.

Esterel is a leading embedded software simulation and

automatic code generation and certification company. Esterel

has around 100 employees and has revenues of about $20

million. The primary industries targeted by Esterel have been

aerospace and defense because those industries were the most

mature in having embedded software requiring certification.

Esterel has an amazing customer base of companies generating

complex smart products.

Embedded software is the code embedded into products,

including cars, planes, industrial equipment and other modern,

smart products. Embedded software acquires data from

sensors in a product and monitors and controls the behavior of

the product. It has intelligence so it can react to its

environment; it is dynamic and real time.



Increasingly, embedded software is how companies are

innovating and differentiating themselves. John Deere has said

that it is hiring more software engineers than mechanical

engineers and Ford has said that 70% of its innovations are

electronics and software‐based.

Because of embedded software’s critical role, it is important to

understand how it will work with the rest of a product. Thus, it

is necessary to simulate embedded software, and do so early in

the design process. This is exactly what Esterel does.

Specifically, Esterel’s solutions focus on three areas:

• Embedded system and software architecture and

simulation. Esterel has modules (show to the right) that

allow users to build out and define their architecture along

with a functional model of their system.

• Embedded control code simulation, design, and

development. This allows customers to model what the

software is going to do and then generate the code. This is

Esterel’s bread and butter.

• Graphical user interface (GUI) code simulation. This allows

customers to build out the actual graphical interface of the

software.

“Esterel is a simulation company plus an automatic code

generation company . . . the beauty of this technology is

that it’s all automated. You hit a button and out comes the

software and it’s certified.” – Josh Fredberg

What makes Esterel special is that it has been granted safety

certification credentials by more than 10 worldwide

certification authorities. Competitors do not have these

certifications because unlike Esterel, their code is not

deterministic. (Deterministic means that what the model says is

exactly what the software produces.) This is a distinctive

competency and a competitive advantage.

Esterel’s portfolio has four pieces:

• SCADE Suite® is the code generation and simulation.

• SCADE SystemTM is the architecture and system verification

module.

• SCADE LifecycleTM allows users to plug into other systems,

like PLM systems or application website management.

• SCADE Display® is the GUI module.

Customers say that the combination of ANSYS and Esterel

makes sense because this better enables simulation‐driven

product development of a complete system, including

embedded software.

“This has accelerated by a quantum leap our ability to

simulate an entire system.” – Jim Cashman



ANSYS 14.5 Highlights Speaker: Steve Pilz, Senior Product Manager

Overview

ANSYS Release 14.5 has numerous new features and

enhancements. Among them are greater integration of

multiphysics, greater ease of use, an improved ability for

organizations to share data and standardize on best practices,

and the ability to use HPC (high‐performance computing) as

part of robust design to identify not just good, but the best

design.

In providing even greater value to customers, Release 14.5 will

help ANSYS along each of the Company's dimensions of

opportunity: increasing the number of users, the intensity of

usage, and the density of usage.

Context Steve Pilz described how ANSYS goes about improving its

products and shared highlights of Release 14.5. He noted that

Release 14.5 has so many new features and capabilities that

describing them all in just a few minutes is impossible. His hope

was to give a general sense of these enhancements.

Key Takeaways

ANSYS improves its products and gets ideas for new products

by closely listening to and working with its customers.

ANSYS sees opportunities for growth along three dimensions:

increasing the density of usage, the intensity of usage, and the

number of users.

A case study illustrates how ANSYS gets ideas to improve its

products and is realizing opportunities for growth along all

three dimensions.

Case Study: Maker of Large Agricultural Machinery

The traditional standard at this company has been physical

prototyping, which is slow and expensive ($200,000 per week in

testing costs). Prototyping was done at the company’s $20

million test facility, which was overbooked and had a three‐

month backlog. This delay in testing caused a delay in bringing

new products to market.

Frustrated by the delay, a company engineer had the idea of

using ANSYS’ Rigid Body Dynamics product to digitally simulate

the company’s physical testing environment. This existing

ANSYS product had 95% of the functionality this engineer

needed; a top ANSYS engineer worked with the client to

address the remaining 5%.

Using this solution, the client actually simulated the physical

simulation that would have been done in the company’s test

facility. Doing so showed that a particular product design idea

was “good enough.” Use of ANSYS simulation software

accelerated the design cycle by three months and saved two

weeks of test facility time, at an estimated cost of $400,000.

But there is more to the story. Beyond just determining if the

design is good enough, ANSYS tools can be used as part of a

robust design process to identify the best possible design. This

can involve using HPC packs (which increases the intensity of

usage). ANSYS 14.5 also provides the ability to look at the

viability of composite materials (which increases the density of

usage). Increasing the number of users comes when an

organization makes processes such as simulating their test

facility a corporate standard.

This example illustrates that by listening to and working with

clients, ANSYS evolves its products and finds new ways to

leverage products to solve significant customer problems. This

example also shows that the dimensions of opportunity are not

in conflict. ANSYS can simultaneously increase the density of

usage, the intensity of usage, and the number of users.

“This interaction shows we can push all three areas at one

time. We can push the number of users if the corporate

standard is encapsulated. . . . We can increase the density

of usage as they investigate different materials if they look

at multiphysics . . . we can increase the intensity of usage by

getting into a non‐deterministic, more robust design.” – Steve Pilz



Release 14.5 solves critical customer problems and helps

ANSYS address all of its dimensions of opportunity.

ANSYS Release 14.5 has tremendous improvements in areas

including electronics, fluids, structures, and multiphysics.

Several examples were shared of improvements in Release 14.5

and how they align with the ANSYS dimensions of opportunity.

Density of Usage

One key to driving greater density of usage is enabling different

engineering groups, which work on different types of physics,

to perform better multiphysics simulations through easier data

sharing. An example is to put multiple physics together—such

as fluids, structures, and electromagnetics—to solve

electromagnetic thermal challenges in motor design.

Another enhancement in 14.5 involves advancement in

composite modeling. Engineers can run simulations asking

questions such as, “What if we converted from a traditional

material to a composite?” Companies can look at the

implications of using materials that might be lighter weight,

more durable, and more fuel efficient.

For the turbine industry, which is worried about blade flutter

that degrades compressor performance and lifespan, direct

simulation is possible, but is too complex and time consuming.

Release 14.5 provides a pragmatic solution to predict blade

flutter quickly and accurately.

Release 14.5 also couples existing ANSYS technologies, such as

SimplorerTM, with Esterel’s SCADE Suite. This integration

enables companies to validate mechatronic systems earlier in

their design process. (A poster session, summarized on page 26,

focused on this integration.)

Also, 14.5 links Apache products to other simulation products

so designers can update and conduct broader simulations. This

provides an overall system view through a chip‐package‐

system (CPS) development methodology that is multiscale,

multiphysics, and multiuser.

All of these examples are ways that Release 14.5 brings

multiphysics together to solve complex challenges. In doing so,

Release 14.5 will drive greater density of usage.

“Release 14.5 enables customers to use ANSYS multi‐

physics to solve bigger challenges.” – Steve Pilz

Intensity of Usage

The intensity of usage can be increased by giving customers the

ability to use HPC to answer a range of non‐deterministic

“what‐if” questions.

Previously, ANSYS introduced a way to work with graphics

processing unit (GPU) technology, which is often faster than

CPU technology. But the limit was one GPU per machine. With

Release 14.5, multiple GPUs can be used per machine. This

enables solving a complex problem quickly and fairly

inexpensively. Also, Release 14.5 includes HPC parametric packs

that enable users to engage in greater product exploration and

faster optimization.

Number of Users

As a way to increase the number of users in an organization,

ANSYS is providing an Application Customization Toolkit (ACT)

as part of Release 14.5. This allows customers to grab the

engineering knowledge and expertise in the organization,

encapsulate it, and make it a corporate standard, which enables

knowledge to easily be shared with others. This capturing and

sharing of knowledge is particularly important due to an aging

engineering workforce and a tight engineering labor market.

Information capture and standardization can drive

democratization of simulation, increasing the number of

simulation users.

“When you've got expertise, don't let it out the door.

Capture it. Put it in and make that a competitive advantage

for you.” – Steve Pilz

Also, Release 14.5 offers a code‐free drag‐and‐drop user

interface design and prototype tool. This makes ANSYS easier to

use for even more people.



Sales and Support Update Speaker: Joe Fairbanks, VP, World Wide Sales and Support

Overview

ANSYS’ sales and support organization is charged with growing

the Company’s top line and realizing the significant opportunity

that exists. The key is building long‐term, value‐based customer

relationships. By securing, extending, and elevating these

relationships, ANSYS can increase the number of users and the

density and intensity of usage. This focus on long‐term

relationships permeates ANSYS’ go‐to‐market strategy, sales

model, sales execution strategy, and sales enablement

initiatives, which aim to strengthen the readiness of the sales

and support organization.

The market remains rich in opportunity, and ANSYS’ sales and

service organization is already making good progress. In 2012,

ANSYS grew the number of million‐dollar customers by 39% and

increased sales to these customers by 60%.

Context Joe Fairbanks restated ANSYS’ opportunity, discussed the

readiness of ANSYS’ sales and support organization in capturing

this opportunity, and described the Company’s progress thus

far in realizing this opportunity.

Key Takeaways

ANSYS’ opportunity involves helping customers in entirely new ways.

ANSYS’ sales and support organization sees macro

opportunities that include driving the number of users through

greater adoption of simulation; improving an organization’s

work and speed by increasing the intensity of usage; and

increasing the density of usage by driving innovation, product

quality, and reliability.

However, through interacting with customers, the sales and

support organization has another perspective. The main

simulation model in use today involves single physics. But there

is a clear move into multiphysics and growing adoption of the

ideas and concepts of simulation‐driven product development.

For organizations, this shift entails a change in mindset and

culture, new processes, new skills, and new capabilities.

Customers want best‐in‐class technology today, because they

have an important job to do right now. At the same time,

customers see the long‐term potential of simulation and realize

that they are making a critical long‐term decision.

“Customers want great capabilities now, but they also want

a safe choice for the future . . . They want a partner they

can team up with over the long term.” – Joe Fairbanks

ANSYS can grow the number of users and the density and

intensity of usage by providing customers the simulation

capabilities they need now, while helping them make the

transition to simulation‐driven product development.

ANSYS continues to strengthen its readiness to capture these opportunities.

ANSYS’ readiness is based on the basics of its go‐to‐market

strategy, its proven sales model, its sales execution strategy,

and sales enabling initiatives to strengthen the sales and

support organization.

Go‐to‐Market Basics

ANSYS basic structure is geographic, to ensure the greatest

coverage and relationships. The geographies are the Americas,

Europe, and Asia. Each geographic group has all core functions,

including sales, field marketing, and support and services.

ANSYS go‐to‐market strategy is predicated on having a single

face to the customer that delivers a consistent vision and

strategy. Having a single face (which does not mean one

person) is designed to scale, evolve, and add new applications

and markets.

Importantly, ANSYS differentiates itself by forging long‐term

value‐based relationships. ANSYS isn’t focused on transactions

or selling based on price; the keys are relationships and value. A

key to building relationships is providing insight to customers

about how to apply simulation technology.

“One of the fundamentals of our success is providing insight

to customers about the application of simulation technol‐

ogy that they wouldn’t otherwise have . . . That’s a key

differentiator for us.” – Joe Fairbanks

Also critical to ANSYS’ go‐to‐market strategy is leveraging the

best of both direct and indirect elements. This includes long‐

standing channel partners with tremendous capabilities.

Sales Model

ANSYS’ sales model has been in place for more than 10 years.

As shown below, it starts with customers and with Customer



Sales, which is charged with understanding each customer’s

business perspective so ANSYS can create value for them.

“We don’t think in terms of transactions; we think in terms

of long‐term relationships with customers.” – Joe Fairbanks

With a single face to the customer and a long‐term, value‐

based, relationship‐driven sales organization, it is essential to

have a strong Technology Sales function, which ANSYS does.

The Industry Sales organization provides information to the rest

of the sales organization to position ANSYS solutions in the

context of industry trends and opportunities. This enables the

sales team to understand the value being delivered to

customers as well as the business impact.

At the base of this model are Technical Support and ANSYS

Services. These groups provide reactive support when

necessary. They also provide higher‐value proactive support,

which includes sharing best practices, helping customers

develop better methods and processes, and increasing the

value derived by customers from simulation technology. The

support and services organization also provides training, helps

customers develop new skills, and is involved in creating new

products.

ANSYS has developed a five‐year support and services plan to

support scalability and optimization. This will include

automating some aspects of support, enabling customers to

better help themselves, improving documentation, and making

ANSYS tools even easier to use. The intent is to spend more

time on the high‐value proactive support that will benefit

customers and to identify new opportunities for ANSYS.

This sales model is successful based on collaboration and

linkages between different parts of the sales organization.

Sales Execution Strategy

The sales execution strategy has three components:

• Secure. The starting point is an explicit commitment to

secure existing relationships, which represent recurring

revenues and opportunities for growth in the number of

users and the intensity of use.

• Extend. After existing relationships are secure, the focus

becomes to extend the relationship across the enterprise.

This includes extending into IT to create environments that

enable high‐performance computing and robust design, as

well as leveraging relationships to move into mechanical,

electrical, and software engineering. Doing so can increase

the number of users and the density and intensity of

usage. When extending, the conversation involves IT and

business directors and becomes less about the technology

and more about process.

• Elevate. As the amount of value increases, ANSYS has an

opportunity to elevate within an organization to focus on

business impact by linking simulation technology to clear

business objectives. This will further drive the density and

intensity of usage.

Sales Enabling Initiatives

The selling environment has become more challenging. The

uncertain economic environment has raised the bar for new

technology investments. The buying process now receives more

scrutiny and more people are involved in purchasing decisions.

At the same time, the role of simulation is growing, as are the

number and complexity of requirements for simulation.

In this environment, effective sales people and sales

organizations must be committed to evolution. They have to

embrace change and be highly collaborative.



To equip its sales organization to be even more successful,

ANSYS is engaging in several sales enabling initiatives. These

include:

• The ANSYS High Performer. ANSYS has developed a profile

of a high‐performing sales person, detailing the

competencies a high performer needs and then assessing

each person against these competencies.

• Sales Academy. This involves closing the competency gaps

and building the skills of sales reps through intense

training.

• Strategic Account Management. This is a single, consistent

methodology for managing the most strategic accounts. It

enables and forces higher‐level strategic thinking and

focuses sales reps on building relationships.

• ANSYS Synchronized Sales Process (ASSP). This is a

consistent sales process used across ANSYS that is mapped

to the customers’ buying process. It enables ANSYS to

engage with customers earlier and shape the

opportunities.

ANSYS’ sales and support organization is making good progress.

The slide to the right shows that in 2012, ANSYS made good

progress in growing the number of accounts investing more

than $1 million with ANSYS. Including Apache, the number of

customers spending $1 million or more increased by 39% and

total sales to these customers increased by 60%. Even stripping

out Apache, the number of million‐dollar customers increased

by 15% and sales to them increased by 20%. ANSYS also

increased the number of customers purchasing $500k to $1

million, $100k to $500k, and $50k to $100k.

The 11,000 smallest customers, who spend less than $100k per year with ANSYS, represent about one‐third of the Company’s total sales. These are an important pipeline of opportunity. Recognizing this, ANSYS will be increasing its focus on these customers to grow and replenish them. An area showing particular progress over the past few years has been high‐performance computing, which has grown at least 24% per year each of the past three years, and should continue its significant growth.

“The Strategic Account Management methodology, the

ANSYS High Performer Profile, the sales process we’ve put

in place, continue to help us succeed.” – Joe Fairbanks



Apache Update Speaker: Andrew Yang, VP, President, Apache

Overview

Apache is a great fit with ANSYS because of a shared vision of

chip‐package‐system convergence. Over the past year, this

merger has been well executed. Apache’s revenues have

grown, margins have increased significantly, and cross‐selling

activities have taken place that benefit both Apache and ANSYS.

In 2013 and beyond, Apache is focused on the semiconductor

and mobile markets, selling to the top players in each segment.

Apache’s value proposition is delivering energy efficiency as

customers design for power, being the key sign‐off before

manufacturing as clients design for performance, and helping

customers be cost competitive.

Context Andrew Yang explained why Apache fits with ANSYS, described

the progress Apache has made in the past year, and laid out

Apache’s growth drivers and key initiatives.

Key Takeaways

ANSYS and Apache were brought together through a shared vision.

ANSYS acquired Apache in August of 2011. This marriage is

based on a common vision. As the slide below shows, over the

past decade, ANSYS has been expanding its core from structural

mechanics to fluid dynamics and electromagnetics.

During the same period, Apache focused on low‐power

simulation, low‐power analysis optimization for core semi‐

conductor IC, expanding to chip‐package power, and extending

into the micro‐architectural level of electronics. Through this

merger, ANSYS goes deeper into microelectronics and Apache

can continue on its roadmap.

Execution of the ANSYS/Apache merger has gone smoothly and Apache has continued to perform well.

The marriage of ANSYS and Apache has gone well. There was

no disruption to Apache’s business and Apache’s revenue

growth and operating margins both exceeded targets.

Revenue growth was boosted by strong growth in the mobile

market, where Apache’s booking growth in North America

increased by 55%, in EMEA by 58%, and in AsiaPac by 32%.

ANSYS and Apache are working to further boost revenue

through aggressive cross‐selling, with 24 cross‐selling customer

engagements in the past year. Of those, 12 involve cross‐selling

Apache to existing ANSYS customers and another 12 involve

cross‐selling ANSYS to existing Apache customers, all in Israel.

The key drivers of increased margins are: 1) as top‐line revenue

increases, much of this revenue passes through to the bottom

line; and 2) shared services, which allows Apache to benefit

from the marriage to ANSYS by realizing economies of scale.

Also, customers are extremely satisfied by the merger. Around

90% say that Apache meets or exceeds their expectations in

terms of products and technology as well as customer support.

This satisfaction translates into loyalty.

The semiconductor and mobile markets are Apache’s focus.

These two segments are where Apache’s high‐value customers are. Currently, 19 of the top 20 semiconductor companies use Apache’s solutions for power sign‐off, as do 9 of the top 10 cell phone IC vendors. The mobile market is particularly dynamic, growing 18% in the past year. It is a highly competitive market, with market share changing significantly in the past five years. Mobile processors have become incredibly complex. Now, numerous functions, such as GPS, wifi, CPU, GPU, and more are integrated into a single chip. All of these activities are



connected to a battery, which must be energy efficient, and there must not be thermal dissipation.

“Because of the fierce competition, customers must use the

best‐in‐class tool. If they don’t, they will be weeded out.” – Andrew Yang

The drivers for Apache’s business are energy efficiency, performance, and enabling cost competiveness.

The key business drivers for 2013 are unchanged. The keys to

success are enabling customers to:

• Design for power and energy efficiency. There is a high and

growing demand for power, especially with chips for

mobile devices, but chip makers face battery and thermal

limits. Apache enables customers to use simulation to

design for power by providing an accurate estimate of

power early in the design process. This increased and early

visibility shortens the feedback and development cycle.

“We can actually give customers an accurate power

estimate at the micro‐architectural level. That’s the goal for

our solution at this level—to give customers early predictive

solutions for power estimation.” – Andrew Yang

Customers use Apache’s solutions to perform design

trade‐offs about what architecture provides better power

behavior. Customers can check whether a block is using

more or less power than is budgeted and can identify

power bugs and hot spots that could cause a chip to fail.

When power bugs or areas in which power is wasted are

identified, Apache solutions can reduce the power that is

needed. Also, customers can run daily regression to check

power over the design cycle.

• Design for performance. Power and performance are tied

together. For example, chips for mobile devices might

have one billion transistors and each of them needs the

right amount of energy in order to perform properly. (It is

like packing the world population into a small area and

needing to ensure that everyone receives enough to eat so

not a single person goes hungry.) If any core or transistor

lacks the proper energy, it can’t perform fast.

Chip manufacturers need to know that a chip will behave

as predicted in terms of power and performance. As part

of the process of assuring performance, Apache tools are

used for go/no‐go sign‐off decisions.

• Design for cost. A key part of designing for cost is providing

an end‐to‐end solution that includes the IC package

(shown below on the left side) and the board system and

memory interface (right side). The convergence of ANSYS

and Apache provides, for the first time, an end‐to‐end

solution that enables customers to design the chip and

package together.

“We have all the multiphysics capabilities from semi‐

conductor physics to electromagnetic to structural

mechanics so we can give customers complete visibility and

optimize the system behavior against the cost. This is really

our value proposition.” – Andrew Yang

The trends driving Apache’s growth will continue in 2013 and beyond.

The market for mobile technology will continue to grow and

will split into different areas, including a high end, a low end, a

server market, and more. As the market expands, there will be

new players and more designs, which will continue to drive

Apache’s growth. Also, there appears to be no slowdown in

Moore’s law. Companies continue to pack more transistors

onto chips and need to manage the power.

In this environment, Apache will continue to focus on the

highest‐value customers: the top 20 semiconductor makers and

the top 10 mobile IC companies. Apache will continue to

position itself as the sign‐off of choice, further integrate with

ANSYS as an end‐to‐end CPS solution, invest in R&D to stay two

years ahead of the curve, and continue to build its support

team. Apache will also continue its time‐based licensing model,

with a goal of a greater than 95% renewal rate.



Financial Update Speaker: Maria Shields, CFO and VP, Finance and Administration

Overview

ANSYS once again performed well in 2012. The outlook for 2013

is continued constant currency non‐GAAP revenue growth of

11% to 14%, strong margins and cash flow, high rates of

recurring revenue, and continued growth in deferred revenue

and backlog.

ANSYS sees much opportunity ahead, has a solid core growth

plan for 2013, will continue to invest in the long‐term organic

growth of the core business, and will look for strategic

acquisitions, like Apache and Esterel.

Context ANSYS CFO Maria Shields summarized ANSYS’ results from 2012

and explained the factors that drove these results. She shared

ANSYS’ outlook for 2013, outlined the key assumptions, and

described how ANSYS will invest to drive long‐term growth.

Key Takeaways

2012 was another strong year of growth for ANSYS.

ANSYS’ incredible talent and technology differentiate the

Company and are responsible for the results achieved in 2012.

“ANSYS is really about incredible technology and is a

company built on incredible talent. That is what really

differentiates us from anyone else in our space.” – Maria Shields

These results include double‐digit non‐GAAP earnings and

revenue growth (+15%), continued strong margins, integration

of the Apache and Esterel acquisitions, and continued strong

cash flows of almost $300 million, which provide the ability to

continue to invest in the business.

Important results from 2012 include:

• Geographic diversity. ANSYS’ revenue is equally divided

with one‐third coming from North America, one‐third from

Europe, and one‐third from GIA. ANSYS continues to invest

across the globe to take advantage of being in all

geographies in which customers are growing and in which

potential customers will be over time.

• Recurring revenues. ANSYS continues to invest in support

and technology to keep customers coming back. In 2012,

recurring revenue—in leases and maintenance—

represented 69% of ANSYS’ total revenue.

• Deferred revenue and backlog. Helped by Apache’s

traditional model, which involves multi‐year contracts,

ANSYS continues to build its deferred revenue and

backlog, which reached almost $380 million in 2012, up

from $177 million in 2009. Deferred revenue and backlog

represent future contractual commitments; this is real

revenue and real cash flow that will come into the

business. This provides visibility into future years.

For 2013, ANSYS sees continued growth and will continue to invest in the business.

ANSYS outlook for 2013 continues to show strong growth.

Important aspects of this (non‐GAAP) outlook include:

• Revenue. The outlook is for 11% to 14% constant currency

non‐GAAP revenue growth, which translates into revenue

of $880 to $905 million.

• Margins. ANSYS anticipates continued strong margins,

with gross margins of 87% to 88% and non‐GAAP

operating profit margins of 47% to 48%. Slightly lower

operating margins in 2013 than in 2012 reflect plans to



continue to invest in the core business, along with a full

year of Esterel, which has lower operating margins.

• R&D. ANSYS plans to continue to make significant

investments in R&D, planned at around 16% of revenue.

This outlook translates into anticipated EPS of $3.00 to

$3.12. Key assumptions on which this outlook is based

include:

• Economic stability. ANSYS assumes relative stability in the

macroeconomic environment, similar to what existed in

the second half of 2012.

• Continued investment for the long term. ANSYS plans to

continue to invest in the organic growth of the core

business. This includes continuing to hire and invest in

people as well as long‐term investments in infrastructure

and business systems, and in capital and facilities.

“We think it’s important [to make investments] because we

look at this as a long‐term opportunity. We don’t want to

underinvest, which may constrain our ability to capture that

opportunity in the future.” – Maria Shields

• Revenue composition. ANSYS is assuming a 64/36% split

between software licenses, and maintenance and services.

ANSYS is continuing to plan for a strong base of recurring

revenue, accounting for 67% to 68% of revenue.

• Strategic acquisitions. ANSYS has not assumed any

acquisitions in its financial outlook, but will continue to

look for acquisitions like Apache and Esterel that are a

great technology, are a strategic fit with ANSYS’ product

direction, and can integrate into ANSYS’ Workbench™

platform. Such acquisitions are recognized leaders in their

space, have great customer relationships, expand the

breadth and depth of ANSYS’ business, and bring a pool of

experienced talent. Also, ANSYS looks for acquisitions that

provide synergies with ANSYS’ customer base and global

channel, and that are financially accretive in a reasonable

time frame.

• Capital deployment. In addition to continuing to invest for

future organic growth and looking for strategic

acquisitions, ANSYS will continue to repay its debt and

engage in opportunistic stock repurchases. As of the 2013

Investor Day, ANSYS had $53 million in debt, but plans to

repay all debt by the end of the second half. Should the

opportunity present itself, ANSYS will use cash to

repurchase shares. In the past year ANSYS repurchased 1.5

million shares and the board has authorized repurchase of

up to 3 million shares.

There remains much opportunity ahead.

ANSYS is optimistic about the future, seeing much opportunity.

Solid growth will continue to come from ANSYS’ core business,

as the democratization of simulation increases. There will be

new users in new industries helping create and use new

products. More users will take advantage of high‐performance

computing. ANSYS will continue to leverage and expand its

global channel, while looking for opportunities like Apache and

Esterel to expand the breadth and depth of ANSYS’ portfolio.

“Every single one of the presentations has tried to articulate

that we think there is so much opportunity ahead, and

we’ve got a solid growth plan for 2013.” – Maria Shields



Question and Answer Session Moderator: Annette Arribas, Director, Global Investor Relations and Insurance

Respondents: Members of ANSYS’ Management Team

Overview

Members of ANSYS’ management team responded to questions

on a wide range of topics. In particular, attendees were

interested in the key factors that will drive ANSYS’ future

growth, with particular interest in the Apache and Esterel

acquisitions.

Questions & Answers

ANSYS Business and Growth

Q. Are any customers approaching 5% of ANSYS’ revenue?

A. No, there are no customers approaching 5% of revenue.

Q. Are ANSYS’ largest customers still the fastest growing?

A. Yes, that remains true. ANSYS continues to see the fastest

growth from customers within the current install base.

Q. While ANSYS is doing well among larger customers, it isn’t

having the same success among smaller customers. Why?

A. Overall, ANSYS’ number of accounts and the revenue per

account have both grown. In some instances, accounts have

grown in size, so companies that were once small accounts

have become mid‐sized and mid‐sized customers have become

larger.

ANSYS realizes that small and medium enterprises are critical to

the Company’s success, and is putting more attention into

these enterprises. Even if these companies don’t initially

represent a huge ROI, it is an important seeding process.

Companies often begin by using one product as a bridging

strategy that allows them to put their toe in the water. They

then often migrate to greater use. An issue in the current

economic cycle has been fewer start‐ups.

Q. Of the three dimensions for growth—increasing number of

users, density of usage, and intensity of usage—it seems that

the biggest driver lately has been intensity of usage. It seems

that growing the number of users is not as strong. Please

elaborate what you are doing in the dimension.

A. There are numerous factors that affect growth. These three

dimensions are just an attempt to convey how growth occurs in

a manageable framework. The drivers of growth tend to

change. Ten years ago, most growth came from increasing the

number of users. Over the past few years, hiring of engineers

has been a bit slow, but at the same time, intensity and density

are increasing. The good news is that ANSYS is well positioned

along all dimensions of potential growth.

While ANSYS can’t necessarily push for growth, there are steps

that ANSYS is taking to decrease the barriers to entry and

expedite multiphysics usage. For example, ANSYS can help with

the sharing of best practices between companies and can help

companies avoid common pitfalls and avoid replicating

mistakes. ANSYS can also expedite training by having Company

experts on site.

ANSYS also sees future growth coming from newly educated

engineers. A generation ago, engineering students didn’t do

simulation in school. Today, in 2,500 academic institutions,

simulation involving ANSYS tools is now part of the classroom.

This is driving the democratization of simulation.

Financial

Q. Do the numbers provided for 2013 include acquisitions?

A. No. The numbers are the organic business.

Q. What is ANSYS’ sustainable long‐term, top‐line organic

growth rate?

A. In a good economy, ANSYS can still grow in the mid‐teens,

and can then supplement that growth through acquisitions.

However, the current economy can’t be considered robust or

dynamic. So, ANSYS sees 11% to 14% constant currency non‐

GAAP growth in the core business. If the economy improves in

the second half of 2013, which some experts are predicting it

might, then there could be an opportunity for ANSYS to

perform better.

Q. What is the revenue per active license?

A. ANSYS does not track revenue per license. The Company

tracks renewal rates, trends in leases, trends in existing

renewals, and how the Company is doing against the existing

opportunity.

Q. In looking at the 10‐K, it looks like Apache and Esterel

represented about three quarters of ANSYS’ incremental

profitability last year and ANSYS’ core business was one

quarter. Guidance for this year suggests similar incremental

profitability. Please explain more about this.

A. ANSYS has a developed platform and an established global

sales channel. This means that Apache and Esterel don’t need

to invest to build their own platform and channel; they can



leverage what ANSYS has invested to build. That makes these

additions to ANSYS much more profitable. Continuing this

pattern is ANSYS’ plan.

Q. Is ANSYS seeing longer‐duration contracts, which would

affect long‐term deferred revenue and backlog?

A. ANSYS has had one contract that is longer in duration than

the typical two to three years and would love to continue to

engage in a larger and expanding presence with customers,

where they made commitments up to five years. The nice thing

about showing long‐term deferred revenue and backlog is that

these are real contractual commitments from companies that

intend to continue deploying the technology and paying ANSYS.

Q. With ANSYS stock at an all‐time high, is there consideration

of a stock split?

A. No, a split is not planned. Feedback from large institutional

investors has been that splitting the stock would increase the

cost of trading in the stock. With 97% of ANSYS stock held by

large institutions, ANSYS is receptive to that feedback.

Esterel

Q. Does Esterel have an industry concentration?

A. Esterel currently has about 250 customers. The company

initially started in and focused on aerospace and defense, as

well as nuclear, and has a heavier concentration in those

industries. The reason is that these industries were the first to

regulate embedded software and drive safety standards. As

other industries have become regulated, Esterel followed.

Q. Why wouldn’t a company want what Esterel does—

automatically generating certified code?

A. Esterel’s focus has been on safety‐oriented applications in

which embedded software requires certification. If the

software doesn’t require certification, Esterel’s value

proposition has not been as significant. However, there is high

value in being able to quickly generate reliable code. There is a

natural latency in organizations when presented with

implementing something new at the enterprise level. ANSYS is

working to overcome that latency to drive future growth.

Apache

Q. It was mentioned that Apache is critical for sign‐off. What

does this mean?

A. This is different than with Esterel where a sign‐off may be

necessary for regulatory certification. Related to Apache, sign‐

offs aren’t mandated for regulatory purposes. But before

sending a new product to a foundry to be manufactured, a

company will require that a simulation has been run using

Apache products to look at electrical behavior and power. If a

simulation has not been run and signed off upon, a project will

be delayed and not sent to a foundry.

Competition

Q. What is ANSYS’ perspective on open source? Is it a threat?

A. The idea of free can be compelling. There previously was

some interest in open source, but that was more than a few

years ago and it seems to have largely abated. The key reasons

are cost and quality. In looking at the fully loaded costs of

running simulation—including hardware, people, and

software—software is not a dramatic cost. Also, with open

source, it can be hard to assure quality processes, and

sometimes code can be inserted that doesn’t belong, which can

be concerning— especially when simulation is relied on for

mission‐critical applications and is used to solve extremely

difficult problems. When used, open source has been for single

physics. But with customers increasingly needing multiphysics

simulations, open source is limited. Free isn’t always a great

value.

Q. What is ANSYS’ perspective on Dassault’s simulation

business?

A. Dassault may be strong in some areas, but ANSYS rarely runs

into them. When ANSYS does run into Dassault, ANSYS tends to

fare well.

Q. Please talk about competition for Apache from companies

such as Mentor Graphics and Cadence.

A. For Apache, the best way to think about competition is to

look at customer renewal. Presently, about 97% to 98% of

Apache’s customers renew and these renewals often come

with growth. Apache rarely sees competitive engagements

among existing customers. In the critical area of power, Apache

is what customers prefer. Regarding design flow, ANSYS has

good integration of layout tools and doesn’t see the companies

mentioned as strong competitors.

High‐Performance Computing

Q. What percent of ANSYS customers are using high‐

performance computing to run thousands of simulations

concurrently? How does ANSYS charge for this? Where could

HPC go in the next few years?

A. Currently, fewer than 10% of ANSYS customers use HPC but

the Company sees it growing rapidly and expects this rapid

growth to continue. As multiphysics and simultaneous design

points get adopted, the need for HPC will only increase. ANSYS’



pricing model for HPC is based on the marginal benefit a

customer receives for running additional analysis/simulations.

Disaster Prevention

Q. Could ANSYS prevent some of the catastrophes that have

been seen (with nuclear, oil spills, batteries, etc.)? Is this an

opportunity for ANSYS?

A. In looking at recent disasters, such as the Fukushima nuclear

plant in Japan, it is important to consider the state of the art

when something was created. At the time, parts used at

Fukushima were difficult to simulate, but those that were

simulated performed well. Increasingly, ANSYS is seeing

customers use best practices and build simulation into the

design cycle. Also, today the vast majority of ANSYS customers

use robust design for mission‐critical applications. As a result,

companies have fewer and fewer failures in critical products,

like turbines in aircraft engines, because they use ANSYS

software to prevent failures.

An additional use for ANSYS tools that is being considered by

some automotive companies is to use simulation to identify

possible failure modes. By identifying when failure could occur,

it is then possible to put together a mitigation plan. The idea is

to use simulation to fail early, fail fast, and then fix early.

Q. Are OEMs mandating the use of ANSYS to all participants in

their supply chains?

A. This happens but more common is for an OEM to provide a

spec for a specific component. The supplier then must provide

components that meet the spec. OEMs don’t necessarily dictate

how the supplier must meet that spec.



Poster Sessions In a series of poster presentations, ANSYS highlighted the depth

and breadth of the Company’s innovative technologies.

Industry Solutions Josh Fredberg, Vice President, Marketing, and Sin Min Yap, Vice

President, Industry Strategy & Marketing, prepared poster

presentations that described ANSYS solutions for several

important target segments.

Aerospace & Defense Industries

The aerospace and defense industry designs, manufactures, and sustains some of the most complex and highly engineered hardware and software systems on earth. While there is some commonality of technology between the aero, space, and defense sectors, each has its own trends, business priorities, and initiatives. Each sector represents significant opportunity for the full portfolio of ANSYS technology.

ANSYS Distinctive Competency ANSYS has been the engineering modeling and simulation leader for decades, and our products are deeply embedded across the full spectrum of A&D engineering disciplines.

Industry leaders such as Airbus and SpaceX rely on and publicly acknowledge the value of ANSYS to their businesses—not just as a technology provider, but as a strategic partner.

The ANSYS strategy and vision are unique in the modeling and simulation industry to empower our customers to efficiently solve not only today’s product development challenges but the complete, coupled hardware and embedded software systems of tomorrow.

Automotive Industry Major engineering in the automotive industry focuses on design and development of various automotive systems, such as chassis, body, powertrain, electronics, and others. ANSYS has identified a number of target segments that have the highest immediate opportunity based on ANSYS product readiness as well as current market investments in these segments. Target segments include car and light truck OEMs, Tier 1 suppliers, off‐highway OEMs, and motorsports and motorcycles.

ANSYS Distinctive Competency

For decades ANSYS has singularly focused on equipping auto‐

motive companies with simulation tools. These enable

organizations to innovate extensively upfront in the product

design cycle with streamlined, automated, and repeatable

parametric simulation and best‐in‐class, high‐performance

computing; study a component extensively throughout

numerous real‐life operating conditions via realistic

multiphysics; and optimize the entire system via integrated

system and component co‐simulation.

High Tech Industry

The high tech industry designs and manufactures electronic components as well as end‐products necessary to store, organize, and transmit data. Their components are also used in other industries, such as automotive, avionics, automation, and medical devices. Driven by smart products and the addition of electronic components in every product, the HT industry is enjoying continuous growth but is also facing the challenge of ensuring proper interaction among the numerous components. Specific HT target segments include computers and storage, consumer electronics, networking equipment, and semiconductors and equipment.

ANSYS Distinctive Competency ANSYS is the only vendor that provides a complete solution for electronics. In addition, ANSYS technology is best in class due to its accuracy, which is critical to building high‐performance electronic devices. Our products are deeply embedded across the full spectrum of high tech engineering disciplines. Industry leaders rely on the value of ANSYS to drive their businesses— not just as a technology provider, but as a strategic partner.

Medical Device Industry

The medical device industry designs, manufactures, and maintains implantable (e.g. orthopedic prosthesis, pacemaker, and insulin pump) and non‐implantable (e.g. catheter, MRI, scanner, beds, mask, and hearing aid) devices related to medical applications. Innovation and reliability are the key market drivers for this industry. Target segments include orthopedic, cardiovascular, diagnosis and personalized medicine, and medical equipment.

ANSYS Distinctive Competency ANSYS has been this industry’s engineering simulation leader for decades thanks to the integration of key medical device physics (structure, fluid, and electromagnetics) into a single environment, facilitating the creation of realistic multiphysics models. Collaboration among industrial R&D groups, regulatory agencies, and clinical players drives the development of meaningful solutions involving the import of patient‐specific geometries, databases, goal‐driven optimization, and design of experiment (DoE) solutions in a computationally effective HPC environment.

Oil & Gas Industry

The oil and gas industry is a $3 trillion business and includes some of the world largest companies. The upstream segment involves the most innovative projects and over 80% of capital expenditures. The goal is to find, drill, and produce oil and gas from new fields in deep waters, the Arctic, and other unconven‐tional resources. Other segments are midstream (storage and



transport) and downstream (refining and petrochemicals). The ANSYS value proposition is most aligned with companies that drill, produce, transport, and refine oil and gas.

ANSYS Distinctive Competency ANSYS provides engineering simulation software uniquely for the entire range of design and analysis requirements of the oil and gas supply chain. Our global presence, experience, and full portfolio enable oil and gas companies to engineer their entire system across disciplines, geographical locations, and engineer‐ing complexity. ANSYS solutions include hydrodynamic, fluids, structural, electromagnetic (low and high frequency), electronic cooling, code check, and sea‐keeping applications.

Turbomachinery Industry

Turbomachinery is more an application than an industry, as relevant equipment spans and is vital to virtually all industries: aerospace, oil and gas, power generation, chemical, process, heating ventilating and air conditioning, automotive, marine, and even medical. ANSYS software is used extensively to improve and accelerate the development of the full spectrum of turbo‐machinery types.

ANSYS Distinctive Competency ANSYS provides engineering simulation software for the entire range of design and analysis requirements uniquely for the turbomachinery supply chain. Our global presence, experience, and full portfolio offering enable turbomachinery companies to engineer their products across disciplines, geographical locations, and engineering complexity. ANSYS solutions include fluids, thermal, structural, dynamics, electromagnetic (low and high frequency), control as well as turbomachinery‐specific preliminary and geometrical design.

High‐Performance Computing with ANSYS 14.5 In this poster presentation, Win Slagter, Lead Product Manager, and Barbara Hutchings, Director, Strategic Partnerships, described how ANSYS is helping customers adopt HPC.

High‐performance computing (HPC) is an enabler of high‐fidelity (bigger, more detailed, more accurate, more complete, system‐level) simulation, which is critical for organizations that want to rely on simulation to support product innovation. HPC also enables design exploration that can make the engineering process more productive and lead to early identification of optimized designs.

ANSYS is being deployed at different levels of HPC adoption,

from individual desktop computers and multi‐core workstations

to clusters of computers in an HPC datacenter.

This poster shows how ANSYS 14.5 helps customers adopt HPC

more easily, accelerate HPC scale‐up, and ensure their return

on investment in HPC:

New HPC capabilities in ANSYS HFSS enable electrically

larger and more complex problems to be solved up to five

times faster.

Our plan is for a partner‐enabled, turnkey ANSYS Cloud

solution that is partner built, owned, and maintained, but

is tested, supported, and sold by ANSYS.

ANSYS 14.5 supports design exploration with a more

complete and robust set of tools for simultaneous sub‐

mission of multiple parametrically linked simulation jobs.

ANSYS 14.5 extends GPU acceleration technology to sup‐

port multiple GPUs per machine, resulting in an increase in

scalable performance versus use of a single GPU.

Important takeaways are that ANSYS 14.5:

Improves the process of HPC and robust design exploration by providing more capable and robust job submission/scheduling.

Will be able to help customers be more productive with

optimized desktop HPC.

Will be able to help customers optimize their solving speed

with HPC.

Also, ANSYS has the commitment, expertise, and support

(including from our partners) to ensure that customers’ return

on investment in HPC is maximized—now and into the future.



Application Customization Toolkit (ACT) To capture an expert's know‐how and deploy simulation to a larger community of users, companies need to customize their simulation environment. ACT allows for user‐friendly, application‐level customization of ANSYS Mechanical at R14.5.

ACT provides means for expert users to capture their expertise

and their company’s know‐how so as to provide simulation

tools to a broader community of potential users. It also helps

users migrating from older generation interfaces to ANSYS’

latest Workbench interface.

ACT allows enterprises to introduce new pre‐ or post‐

processing capabilities that reflect a company’s best practices

and specific requirements for their simulation. Customers can

embed all of the tools required to analyze a given product

under a single interface.

ANSYS’ software partners can also use ACT to integrate their

solutions in ANSYS’ Workbench Mechanical to provide users a

seamless user experience within a single, common user

interface.

By customizing the ANSYS environment using ANSYS ACT, Oticon was able to make advanced physics accessible to designers and integrate the company’s best practices directly into the ANSYS interface. As a result, 75% of the work traditionally done by expert users is now done by the designers. This makes the experts available for full system modeling leading to improve product integrity and accelerate the pace of innovation. (Oticon is William Demant’s business unit designing hearing aids.)

Important Highlights:

Release 14.5 provides customization tools that create addi‐

tional menus or buttons that are easy for non‐experts to use.

As a result, more engineers can leverage simulation tools at early stages of the design process and can still take into account their company's specifics. Also, the use of menu‐driven custom extensions improves the quality of the simulation performed by non‐experts by enforcing proper use of the underlying procedures.

System and Embedded Software Development with SCADE By combining systems‐functional engineering, software development, and detailed design with 3‐D multiphysics, ANSYS and Esterel provide engineers a comprehensive solution for designing and verifying complex systems and software.

System and software engineers use Esterel SCADE® solutions to

graphically design, verify, and automatically generate critical

systems and software applications with high dependability

requirements. SCADE solutions easily integrate, allowing for

development optimization and increased communication

among team members.

The SCADE product family includes:

SCADE Suite® for Control and Logic Application Development

SCADE Display® for

Display and HMI

Development

SCADE SystemTM for System Architecture Design

SCADE LifeCycleTM for Application Lifecycle Management

SCADE Solutions for ARINC 661 Compliant Systems ‐ ARINC 661 compliant Avionics Display Development

SCADE Suite and Display Code Generators have been

qualified/certified at the highest level of safety across six

market segments by more than 10 safety authorities.

Together, the ANSYS and Esterel product portfolio provides engineering organizations an open and integrated platform to design and simulate their complete product following best‐in‐class system engineering practices and standards.

ANSYS Icepak: CFD for Electronics Gokul V. Shankaran prepared a poster presentation on ANSYS Icepak: CFD for Electronics. ANSYS Icepak’s Multiphysics connects with all major ANSYS products. Through its multiphysics links, ANSYS Icepak R14.5 enables thermal‐to/from‐other physics analysis. These links enable analysis from die‐scale to system and super‐system scales. We demonstrate the breadth of coverage around ANSYS Icepak in terms of multiphysics and multi‐scales, even as we continue to go deeper into the thermal management of electronics.

Important takeaways include:

Icepak is a CFD tool dedicated to the thermal

management of electronics.

Icepak is a best in‐class automatic mesher.



There is easy porting of CAD models into ANSYS Icepak

through DM and AnsoftLinks.

Icepak has multiphysics connections with ANSYS

Mechanical, HFSS, Maxwell, SIwave, and Simplorer.

There is also System Aware Chip Design (SACD) through

co‐simulation with Apache products.

ANSYS Apache Electronics in modern automobiles are much more complex than those of predecessors. In addition, the sheer number of electronics that reside inside an automobile has grown exponentially, driving energy efficiency, system reliability, emission compliance, and cost management as key design metrics.

Meeting system validation and optimization requirements calls for a comprehensive end‐to‐end chip‐package‐system (CPS) design solution. ANSYS/Apache tools provide a system‐aware approach to automotive electronic design and verification. ANSYS and Apache's products and methodologies enable power, signal, electromagnetic interference (EMI), and thermal integrity on the chip, in the package, and across the system.

Simplorer ANSYS provides the simulation technology to support the mechatronics systems design process, enabling multiphysics‐ based component modeling, integration, and co‐simulation to circuit and design systems.

NVIDIA GPUs for ANSYS HPC Solutions NVIDIA provides GPU acceleration of ANSYS solvers for faster HPC simulations.

ANSYS and IBM: Accelerating Engineering Solutions ANSYS and IBM are working together to take the complexity out of complex solutions.



BIOGRAPHIES Annette N. Arribas

Director, Global Investor Relations and Insurance

Annette N. Arribas has been the ANSYS Investor Relations and

Global Insurance Officer since November 2007. Prior to joining

ANSYS she was the Vice President, Investor Relations,

Compliance, and Treasurer of an electric utility in Maine. Ms.

Arribas also held various positions in banking with KeyCorp and

assisted in the establishment of a de‐novo bank. Ms. Arribas

holds a Bachelor of Arts degree in Management and a Masters

of Business Administration from the University of Maine, and is

a Certified Treasury Professional.

James E. Cashman III President and Chief Executive Officer

James E. Cashman III has been our President since 1999 and our

Chief Executive Officer since February 2000. Mr. Cashman

served as our Senior Vice President of Operations upon joining

the Company in September 1997 until April 1999. Prior to

joining the Company, Mr. Cashman was Vice President of

Marketing and International Operations at PAR Technology

Corporation, a computer software and hardware company

involved in transaction processing, from 1995 to September

1997. From 1992 to 1994, he was Vice President of Product

Development and Marketing at Metaphase Technology, Inc., a

product data management company, which was a joint venture

of Structural Dynamics Research Corporation and Control Data

Systems. Prior to joining Metaphase, Mr. Cashman was

employed by Structural Dynamics Research Corporation, a

computer aided design company, from 1976 to 1992, in a

number of sales and technical positions. Mr. Cashman is also

Chairman of the Pittsburgh Technology Council and a past

Board member of the Carnegie Museum of Natural History. Mr.

Cashman's experience includes senior responsibilities in

technology, product and market strategy management, as well

as sales, operational, and international functions prior to his

general management role with the Company for the past 15

years. His long‐standing vision and well‐diversified background

are key components of the Company's board structure and

effectiveness.

Joseph C. Fairbanks, Jr. Vice President, World Wide Sales and Support

Joseph C. Fairbanks, Jr. has been our Vice President, Worldwide

Sales and Support since October 2001. Prior to joining the

Company, Mr. Fairbanks was President and Chief Operating

Officer for Black Oak Computer Services Incorporated from

August 2000 to October 2001. Prior to this position, Mr.

Fairbanks was the Vice President, Sales and Marketing for the

IBM Business Unit of Avnet Hallmark, an IBM distributor, from

August 1997 to August 2000. Prior to August 1997, Mr.

Fairbanks was the Director of Sales Operations for Aspen

Technology, a chemical engineering software company. Mr.

Fairbanks majored in Computer Sciences at West Chester

University.

Joshua Fredberg Vice President, Marketing

Joshua Fredberg joined ANSYS in 2009, bringing a rich, diverse

background in engineering and technology to the leadership

team. Before joining ANSYS, Fredberg was Senior Vice President

of Product and Market Strategy at Parametric Technology

Corporation (PTC), where he worked on industry strategy,

marketing, and business development. Prior to joining PTC, he

held leadership roles with both ARIBA and Andersen Consulting

Strategic Services. He holds a B.S. in electrical engineering from

Tufts University, an M.S. in systems engineering from the

University of Pennsylvania, and an M.B.A in finance from The

Wharton School.

Steve Pilz Senior Product Manager

Steve Pilz is a Senior Product Manager in the Geometry area of

the Central Business Unit at ANSYS. He has been with ANSYS for

more than 22 years, and during that time has held positions in

Application Engineering, Documentation and Training, Product

Marketing, and Product Management of Rigid and Flexible

Dynamics, Explicit Dynamics, and Geometry products. He holds

a B.S. in Mechanical Engineering from the University of

Pittsburgh.

Maria T. Shields Chief Financial Officer and Vice President, Finance and Administration

Maria T. Shields has been our Chief Financial Officer and Vice

President, Finance and Administration since September 1998.

Previously, she served as our Corporate Controller since

September 1994 and as a Vice President since May 1998. Prior

to joining the Company, Ms. Shields held various positions as a

CPA with Deloitte and Touche LLP, including that of Audit

Manager. Ms. Shields serves as Director of the First National

Bank Pittsburgh Community Board and the Washington County

Chamber of Commerce, and as a member of the Board of

Trustees of the Anglican Diocese of Pittsburgh. Ms. Shields

holds a Bachelor of Science degree in Accounting from

Pennsylvania State University.



Andrew Yang, Ph.D. Vice President and General Manager; President, Apache Design Solutions

Andrew Yang joined ANSYS in 2011 when the Company

acquired Apache Design Solutions, which Yang founded in 2001.

Prior to his work at ANSYS, Yang was an active entrepreneur

and EDA investor, founding Anagram and serving as Chairman

and CTO until its acquisition by Avant! Corporation. Yang also

served as Lead Investor in several successful technology

companies including CADMOS Design Technology (now

Cadence Design Systems), InnoLogic Systems (now Synopsys),

Ultima Interconnect Technology (now Cadence Design

Systems), and Mojave (now Magma Design Automation). A

former tenured Professor at the University of Washington, Yang

holds a B.S. in electrical engineering from the University of

California, Berkeley and M.S. and Ph.D. degrees from the

University of Illinois.

Documents

ANSYS 2013 INVESTOR DAY - Investor Relations – Ansysinvestors.ansys.com/.../A/Ansys-IR/presentations/2013-investor-day.pdf · IN NO WAY DOES ANSYS, INC. OR BULLSEYE RESOURCES ASSUME