President and Chief Executive Officer at ANSYS
Good morning, everyone, and thank you for joining us. Q3 was yet another excellent quarter for ANSYS, where we, once again, beat across our key metrics, including ACV, revenue, operating margin and earnings per share. This gives us further confidence in the business, and has enabled us to operationally raise our full year guidance for ACV, revenue, EPS and operating cash flow. Nicole will have the details in a few minutes. As we have previously discussed, the strength and the resilience of the ANSYS business come, in part, because of the number and the diversity of customers we serve. ANSYS has tens of thousands of customers across multiple industries, including high-tech and semiconductor, aerospace and defense and automotive and ground transportation.
Those three sectors were, again, our largest contributors in Q3. Our largest contract for the quarter was in the high-tech and semiconductor space, a $59 million three-year agreement with an international electronics company. This global brand has been challenged by the increasing complexity of its products, as semiconductor chips continue to get smaller which has led to issues such as voltage drop.
By continually enhancing our solutions for semiconductor and other areas of physics, we would not only able to stave off any competitive challenges in this long-term account, but we increased the number of ANSYS products the customer uses, the number of end users as well as the amount of computations performed. This new contract broadens our existing footprint, which included products from across our multiphysics portfolio, such as structures, fluids, electromagnetics and materials.
This is a perfect example of our discussion at our recent investor update, that ANSYS is growing across three vectors: more products, more users and more computations. ANSYS is also well balanced across geographies, with a little less than 50% of our business coming from the Americas and the remainder roughly split between EMEA and Asia Pacific. This diversity in our customer base means that we can harness growth from a wide variety of sources. It also means that we are resilient to the business or economic dynamics of any specific customer or industry or country. In Q3, I'm excited to report that, from a geographic perspective, we saw very strong revenue growth from both Asia Pacific and EMEA, while the Americas came in as expected.
Adding to the strength of our business is our broad and deep product portfolio, which includes flagship products in structures, fluids, electromagnetics, semiconductors, optics and mission. As such, we are not overaligned on any individual product line, which further contributes to ANSYS' resilience. Additionally, our proven portfolio enables us to attract new customers as well as to displace competitive technology.
For example, our start-up program is continuing to grow as these nascent companies take advantage of ANSYS solutions. The program has had over 1,600 customers across 53 countries. While members of our start-up program represent a small piece of our overall business, they are aggressive users of our products. And with the program's high graduation rates, more and more of these customers become active contributors to the ANSYS business.
While it can be difficult to replace an incumbent in our space, we have also grown our customer base by displacing competitors. For example, in Q3, we won a contract with an industrial tool manufacturer that was a key account at one of our competitors. That customer is now using ANSYS' structural, fluids and electronic solutions for the development of its power tools. On these calls, I often highlight a specific aspect of our business. Over the past several calls, I have discussed the unparalleled scalability of our best-in-class fluid products. I highlighted the critical role that ANSYS solutions play in sustainability, I discussed how customers are using our solutions in the development of next-generation semiconductors, and I reviewed our leading suite of optical simulation products.
For this call, I would like to reiterate some of the key takeaways from our recent investor update. During the update in August, we discussed how typical enterprise software companies have only two vectors of growth, more products and more users. ANSYS, however, has a third, more computations. Let me briefly discuss each of them. Traditionally, simulation involves a single user, leveraging a single ANSYS product for each individual simulation.
Today, as we partner with our customers to solve more complex R&D challenges, there is an increased demand for multiple physics, including structures and fluids, electronics, photonics and others to work together. By transcending individual physics to connect workflows that solve complex multiphysics problems, our customers can simulate and analyze the physical world at a system and a mission level.
Addressing these complex new use cases inherently requires the use of multiple physics solvers, leading to an increased number of multiproduct sales. In Q3, we signed a seven-figure contract with a long-time Space 2.0 company that has standardized on ANSYS' multiphysics solutions across all of its engineering departments to develop safer and more reliable launch vehicles. With this new agreement, the company is now expanding its ANSYS footprint to include our material intelligence solution as its central materials database. We have also invested in the overall user experience, which is driving more end users of ANSYS solutions. Remember that in the past, only expert engineering analysts could take advantage of simulation.
Today, ANSYS simulation is being used by all levels of engineers, thanks to our automated workflows and integrations with other systems that make ANSYS solutions more intuitive and easier to use. That means that different types of engineers can fully take advantage of the benefits of ANSYS simulation, and it is driving the expansion of simulation usage to more users upstream and downstream of the validation process.
In Q3, ANSYS calls the largest health care contract in our history, a seven-figure agreement that will dramatically expand the number of users at an American eye care company. Realizing the benefits of simulation, this existing customer has launched a digital twin and digital engineering initiative that will triple the number of users of engineering simulation technology in the next 18 to 24 months.
The third vector of our growth is through more computations. ANSYS is able to monetize customers' workloads as they run the larger, more complex calculations needed to solve next-generation product challenges. A single ANSYS user can leverage multiple products and can run hundreds of simulations across thousands of cores in parallel, which is a critical functionality as even the most common products become more complex.
We provide our customers with open, scalable offerings, supported by the major cloud platforms to enhance and extend our industry-leading simulation portfolio. This flexibility enables our customers to maximize the value they realized from simulation, while scaling up to address the increasing complexity of next-generation product development. We recently announced the launch of our ANSYS Gateway, powered by Amazon Web Services. With this addition to our comprehensive cloud offering, customers can easily access, subscribe and configure ANSYS applications from a single location. ANSYS Gateway powered by AWS allows broader access to high-performance computing by bringing down the traditional hardware barriers that have limited innovation for many of our customers.
Our focus on expanding the portfolio of physics, on creating a platform to enable and manage complex multiphysics solutions, and on expanding simulation use cases, unlocks greater customer value, which enables all three vectors of growth for ANSYS. The application of ANSYS simulation technologies can be manifested in varied and distinct ways. For example, last time, I discussed the multiple roles ANSYS solutions played in the testing, launch and deployment of the James Webb Space Telescope. Keeping with the applications of ANSYS's space, I'd like to briefly highlight the role that we played in NASA's recent DART Mission. As you may recall, in September, NASA smashed an unmanned spacecraft into an asteroid in an attempt to alter its orbit.
The Johns Hopkins Applied Physics Lab extensively used ANSYS STK throughout mission planning process from formulating DART's trajectory through the asteroid system as well as to visualize relevant vectors and altitudes. The thermal team used STK's full mission environment when checking the location of the sun relative to the satellite during critical maneuvers. NASA has announced that the DART mission exceeded its highest expectations by shortening the asteroid's orbit by 32 minutes. This marks the first time humanity has changed the orbit of a celestial object, and I would like to congratulate the team at Johns Hopkins and NASA for their success in this inspirational and potentially life-saving mission.
This example demonstrates the range of use cases as well as the impact of ANSYS solutions. Next, I'd like to highlight the thousands of ANSYS employees around the world. They are, of course, what makes ANSYS so special. So I'm very proud that Newsweek Magazine has ranked ANSYS as 13th amongst the Most Loved Workplaces at U.S. companies. The ranking considers employee survey responses, external ratings and interviews with company leaders. This recognition is just one more testament to ANSYS' unique culture and the impact we have on the world. In closing, Q3 was another excellent quarter for ANSYS, one that provides momentum as we close out the year and look ahead to 2023. With our product leadership, proven performance and resilient business model, I am more confident than ever in the future of ANSYS and the innovations we are helping our customers to drive.
And with that, I'll turn the call over to Nicole. Nicole?