Nicole Anasenes
Chief Financial Officer and Senior Vice President, Finance at ANSYS
Thank you, Ajei. Good morning, everyone. Let me start off by saying that financially, 2021 was our strongest year ever. And we are optimistic about 2022, given the momentum in our business. For both the fourth quarter and full year 2021, we beat our financial guidance across all key metrics. And this is especially noteworthy as we raised our full year guidance for ACV, revenue, EPS and operating cash flow for all three quarters throughout the course of the year.
Additionally, in 2021, we achieved new company records across key financial metrics, including ACV, revenue, EPS and operating cash flow. As Ajei mentioned, our growth was broad-based in 2021, with each of our customer segments and geographic regions growing double digits. Despite the lingering uncertainties around the pandemic, we saw growth across all industries as well as all product lines. Our wide-ranging growth is evidence of the critical capabilities our products deliver to our customers. 2021 was an outstanding year, and we are entering 2022 with momentum and a strong backlog.
Now let me take a few minutes to add some additional perspective on our fourth quarter and full year financial performance, and then I will provide our outlook and key assumptions for 2022 and Q1. Beginning with the ACV, we delivered $755.4 million in Q4, which grew year-over-year 14% or 16% in constant currency. For the full year, we recognized $1.9 billion in ACV, growing 16% in both reported and constant currency. We saw strong performance across customer types, geographies and industries. For the full year, ACV from recurring sources represented 81% of the total. Q4 total revenue was $661.4 million and grew 5% or 8% in constant currency, which exceeded the high end of our guidance.
Full year revenue was $1.9 billion and grew 14% in both reported and constant currency. We had strong top line performance in 2021, with ACV and revenue both growing double digits at 16% and 14%, respectively. At our 2019 Investor Day, we outlined our business model of double-digit growth, including tuck-in M&A. In both the fourth quarter and full year, we executed against this business model. We closed the quarter with a total balance of GAAP deferred revenue and backlog of $1.3 billion, which grew 30% year-over-year. During the quarter, we continued to manage our business with financial discipline.
This yielded a solid fourth quarter gross margin of 92.3% and an operating margin of 46.8%, which was better than our guidance. We had full year gross margin of 90.5% and operating margin of 41.4%. Operating margin was positively impacted by outperforming revenue. The result was fourth quarter EPS of $2.81, which was also better than our guidance. For the full year, EPS was $7.37. Similar to operating margin, EPS benefited from strong revenue results. Our effective tax rate in the fourth quarter and full year was 19%. Our cash flow from operations in the fourth quarter totaled $101.7 million, which benefited from strong collections.
For the full year, we had operating cash flows of $549.5 million. We ended the quarter with $668 million of cash and short-term investments on the balance sheet. In line with our capital allocation priorities, we repurchased approximately 250,000 shares during the quarter for around $99 million. For the full year, we repurchased approximately 347,000 shares for around $135 million. We have 2.5 million shares available for repurchase under the current authorized share repurchase program. Now let me turn to the topic of guidance. We expect the momentum we saw in 2021 to continue, which gives us confidence as we look ahead to 2022.
As Ajei mentioned, our 2022 full year ACV guidance surpasses the $2 billion goal we laid out at our 2019 Investor Day. We are also on our model of double-digit growth, including tuck-in M&A with industry-leading margins. Let me start with our full year 2022 guidance. We expect our full year ACV outlook to be in the range of $1.99 billion to $2.05 billion. This represents growth of 6.4% to 9.6% or 8.3% to 11.5% in constant currency. We have a balanced and diversified business, which is driving the broad-based performance and double-digit ACV growth at constant currency that we expect to see in 2022.
We expect revenue to be in the range of $2.04 billion to $2.11 billion, which is growth of 5.6% to 9.2% or 7.4% to 11.1% in constant currency. Let me touch on some of the assumptions considered in our full year guidance. We continue to expect broad-based growth and continued momentum from our large enterprise customers and SMB customers. We also assume that, going forward, we have a more normalized mix of business with our subscription lease licenses growing faster than perpetual licenses. As a result, ACV is expected to grow faster than revenue as the business model shift to subscription lease licenses continues. Additionally, our full year guidance is based on how we see our book of business and pipeline today.
As a result, we have assumed a neutral inflationary impact to our top line. However, we have assumed a moderate impact from inflation on expenses. This brings me to our operating margin guidance. We expect our full year operating margin to be in the range of 41% to 42%. As a result, we expect our full year EPS to be in the range of $7.64 to $8.10. We expect our full year effective tax rate to be 18%, which is one point lower than the 19% rate we had in 2021, due to recurring tax savings expected from tax planning initiatives. Now let me turn to our full year operating cash flow guidance. Our 2022 outlook is a range of $580 million to $620 million.
We expect to see significant growth in operating cash flow levels year-over-year, driven by strong operating leverage in our business model. However, our cash guidance absorbs the negative impact of approximately $60 million to $80 million in additional cash income taxes. This is driven by R&E capitalization tax legislation and other law changes that impact tax years starting January 1, 2022. Although our overall 2022 tax rate is expected to be lower, the effect of the law changes the timing of cash tax payments, which creates near-term cash flow headwinds that will normalize through the amortization dynamics that occur over time.
While there is still a possibility that legislation will be enacted that defers the requirement to capitalize R&E, we are including higher cash taxes in our current outlook as we will be required to make these payments, unless the existing law is amended. This legislation impacts timing of cash flow. It has no impact on our ability to operationally grow cash flow and does not create any incremental expense obligation. We remain optimistic about our cash generation in both the short and the long term.
As you can calculate from our guidance, our current outlook absorbing the timing impact expects operating cash flow to grow faster than ACV in 2022. Additionally, since quarterly operating cash flow can be volatile, growth in our full year cash outlook continues to be the best measure of success. We have seen significant currency volatility so far in 2022. When compared to the 2021 currency rates, our 2022 guidance is negatively impacted on ACV by approximately $34 million and on operating cash flow by approximately $12 million. Further details around specific currency rates, changes in tax legislation and other assumptions that have been factored into our outlook for 2022 and Q1 are contained in the prepared remarks document.
Now turning to guidance for the first quarter. This year, we will provide quarterly ACV guidance to help with your modeling. As a reminder, annual ACV is the best metric to observe the momentum in our business. We expect first quarter ACV in the range of $328 million to $348 million, revenue in the range of $395 million to $420 million, operating margin in the range of 29.1% to 31.9% and EPS in the range of $1.05 to $1.22. Heading into 2022, we have a strong pipeline, diversified business model and a high level of recurring ACV, all of which contribute to our confidence in our outlook.
I would like to thank the ANSYS team for another outstanding quarter topping off a fantastic year. Despite a continued challenging macro environment, we delivered broad-based growth. The team's exceptional operational discipline and customer-centricity enables us to meet or exceed our internal models across every geography and customer segment and deliver extraordinary value to our customers across the globe. We continue to build on that momentum, invest in our business while executing against our strategic priorities, and we are well positioned to deliver on our 2022 outlook.
Operator, we will now open the phone lines to take questions.