Closing quote from Nobel Prize-winning economist Joseph Stiglitz at a congressional hearing on February 28, 2008: “Because the Bush administration actually cut taxes as we went into the current Iraq war, when we were already running huge deficits, this war has, effectively, been entirely financed by deficits. The national debt has increased by some $2.5 trillion since the beginning of the Iraq war, and of this, almost $1 trillion is due directly to the Iraq war itself ... By 2017, we estimate that the national debt will have increased, just because of the war, by some $2 trillion.”
MCAD Vendors' Financial Performances in Q4 2007
As a group, the G7 MCAD vendors generated combined revenues of $1.584 billion, an impressive increase of over 17% from the $1.351 billion in the fourth quarter of 2006, and a healthy boost of over 13% from the $1.4 billion in the just prior quarter. See Table 1 below. All of the G7 firms delivered year-over-year revenue growth. ANSYS was the percentage revenue growth leader at 30%. Autodesk and Moldflow were next at 20% and 19%, respectively. Dassault and ESI Group also had double digit growth.
On a sequential quarterly basis, PTC and ESI Group were the only companies to suffer declining revenues. In the traditionally strong fourth quarter, Dassault, Moldflow and MSC provided sequential growth in excess of 20%, followed by ANSYS at 18%.
Figure 1 below provides a bar graph showing the revenue trend for each of the covered vendors, for the quarterly periods mentioned in Table 1.
For the quarter, Figure 2 below clearly shows that Autodesk remained the market share leader at 39% of the G7, followed in order by Dassault Systemes and PTC at 33% and 15%, respectively. The others had low single digit share with ANSYS creeping up, now number four at 7%.
(As always, it's useful to point out that unlike the other vendors in this report, Autodesk earns a major portion of its revenue outside of the pure MCAD space. Autodesk does not break out its mechanical contribution. Also, both Autodesk and Dassault Systemes sell mostly through third parties, while PTC sells mostly direct. The figure of course excludes UGS, which did not report revenue for the quarter separately from Siemens AG).
While Q4 2007 G7 earnings growth year-over-year was not nearly as spectacular as percentage revenue growth, the combined Q4 2007 earnings of the G7 was nevertheless $253 million, up 6.3% from the $238 million in the fourth quarter of 2006. Q4 2007 G7 earnings did recover nicely from the much lower figure in the just prior quarter, up 42% from $178 million in Q3 2007. See Table 2.
The six out of the seven MCAD vendors that reported earnings all had net income. On a year-over-year basis, ANSYS had the largest percentage earnings gain at 148%, with Moldflow a strong second at 111%. MSC.Software and PTC had declining earnings at minus 8.9% and minus 5%, respectively. On a sequential quarterly basis, all reporting firms had improved earnings except PTC, whose earnings declined 67%. Moldflow and Dassault were the sequential quarterly percentage gain leaders at 190% and 161%, respectively. ANSYS was a strong third at 57%.
Details on Individual Vendors' Q4 2007 Performances
On February 21, 2008 ANSYS, Inc. reported financial results for its fourth quarter and calendar year 2007, the periods ended December 31, 2007. Total revenue for the fourth quarter was $111 million, a whopping increase of 30.5% from the $85.2 million in the fourth quarter of 2006, and a significant increase of 18.3% from the $94 million in the just prior quarter. The $111 million in revenue for Q4 was at the top of the $99 million to $111 million given as guidance last quarter. Software license revenue was $75.6 million, or 68% of total revenue. This was a remarkable 42% increase year-over-year, and a 24% increase over the pervious quarter. Maintenance and services revenue was $36.7 million, or 32% of total revenue. This was a year-over-year increase of 11% and a sequential increase of 8.3%. Maintenance was up over 20% year-over-year while services revenue was down.
In the fourth quarter, there were five customer deals in the seven figure range. Typically there would be one such mega-deal.
Revenue from North America increased 17% year-over-year, from Europe +27%, and from General International +26% (which included a 19% increase from Japan). European revenue had a favorable currency conversion impact of $3.2 million. Direct revenue was 70% of total revenue and indirect 30%. Software leases accounted for 27% of the business.
Net income for the quarter was $29.2 million, an increase of 139% from the $12.2 million in the fourth quarter of last year, and a 57% increase from the $18.6 million in the prior quarter. There was also a $3 million tax benefit in the quarter.
ANSYS President & CEO Jim Cashman, said, “We are pleased to report the strongest quarterly and annual performance in our Company's history, including our first quarter of over $100 million in revenue. With solid contributions from all aspects of our business, we exceeded our growth and profitability plans for both the fourth quarter and for the year.”
He added, “We began 2007 with strong business and customer momentum and are pleased that we were able to leverage that momentum throughout the year to close out the fourth quarter with double-digit growth in all major geographies.”
On February 26, 2008 Autodesk Inc reported financial results for the fourth quarter and the year, the periods ended December 31, 2007. Total revenue for the quarter was $599 million, a vigorous increase of 20% from the $497 million in the year ago quarter, and an increase of 11% form the $538 million in the just previous quarter. License revenue of $446 million, accounting for 74% of total revenue, was an increase of 19% year-over-year, and an almost 13% increase sequentially. Maintenance revenue was $153 million, an increase of 25% year-over-year and a 7.4% increase over the prior quarter.
The Platform segment, which accounts for about 44% of revenue, includes AutoCAD and AutoCAD LT products that service multiple markets. Other segments are AEC (previously two segments: Building and Infrastructure) and Media/Entertainment (previously named Discreet). The Manufacturing segment (which includes the Inventor product lines) accounted for 20.5% of total revenue and grew 25.5% year-over-year and 20.6% from the prior quarter. A “guesstimate” of MCAD revenue would be about $230 million for the quarter.
Design segment revenues increased 21.6% over the fourth quarter of fiscal 2007 to $523 million, accounting for 87% of total revenue. Combined revenue from the Company's model-based 3D products -- Inventor, Revit, Civil 3D and NavisWorks software -- increased 21% over the fourth quarter of fiscal 2007 to $146 million. Autodesk shipped approximately 21,000 commercial seats of Revit and NavisWorks, over 17,000 commercial seats of Inventor and over 7,500 commercial seats of Civil 3D.
Compared to the fourth quarter of 2007, revenue in EMEA increased 38% to $262 million. Revenue in Asia Pacific increased 24% year-over-year to $131 million. Revenue from the emerging economies in Asia Pacific, EMEA and Latin America increased 52%, and were 19% of total revenue. Strong growth in these international geographies was offset by miniscule Q4 2007 revenue growth in the Americas of only 2% over the fourth quarter of 2006. See Table 4 .