Ladies and gentlemen, thank you for standing by, and welcome to the Ansys 2022 Investor Update. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions via telephone. At this time, I would like to turn the presentation over to Kelsey DeBriyn, Vice President of Investor Relations. Ms. DeBriyn, please go ahead. Thank you for joining us, and welcome to the Ansys 2022 Investor Update. I am Kelsey DeBriyn, Vice President of Investor Relations. With me today to provide an update on our business are Ajei Gopal, President and Chief Executive Officer, Nicole Anasenes, Chief Financial Officer, Shane Emswiler, Senior Vice President of Products, and Walt Hearn, Vice President of Global Sales and Customer Excellence. A supplemental slide presentation has been posted on our investor relations website. This presentation contains today's agenda and the key financial information and assumptions for our long-term outlook. Today's presentation will be about 1 hour and 15 minutes in length and will be followed by around 30 minutes of Q&A. Ajei will begin by discussing Ansys' role as the leader in engineering simulation and how we are expanding our leadership to help customers solve their most difficult product challenges. Nicole, Walt, and Shane will discuss the three growth factors of our business model, more users, more products, and more computations. Next, Nicole will discuss the strength of our core simulation market and the opportunity to expand simulation to future use cases. Ajei will describe our track record of execution. Shane will provide an update on our product strategy, and you will hear from customers like Medtronic, Sub-Zero, and others as they discuss how Ansys' simulation products are crucial to their product development. Walt will then address our go-to-market strategy and ecosystem of customers, partners, students, and academics. You will hear from some of our partners, such as PTC, Synopsys, and NVIDIA. Nicole will discuss our financial model and provide our long-term financial outlook. Ajei will conclude the presentation and discuss the power of simulation today and in the future. Before we begin, I would like to direct your attention to our cautionary statement regarding forward-looking and non-GAAP financial information. Today's presentation contains forward-looking information. Important factors that may affect our future results as well as more information on our forward-looking statements are discussed in our public filings. Forward-looking statements are based upon our view of the business as of today, and Ansys undertakes no obligations to update any such information. During this presentation, we will be referring to non-GAAP financial measures unless otherwise stated. A discussion of the various items that are excluded and reconciliations of GAAP to the comparable non-GAAP financial measures are included in our investor materials. We are excited to share with you Ansys' long-term strategy and financial outlook. Let's begin the presentation. Ansys is a remarkable company. For over 50 years, customers have relied on Ansys to help them create transformational products. Going all the way back to our work in the nuclear power industry in the 1970s, to today's leading-edge innovations in electric vehicles, in space exploration, in the development of green energy. When companies are trying to understand how their products will behave in the real world, when they're looking for the truth, they come to Ansys. That's because for half a century, physics-based simulation has been our core business. With those five decades of experience, with the deepest, the broadest, the most accurate suite of solutions in the market, delivered both on premises and in the cloud, with our thousands of simulation experts around the world, Ansys is the best in the business. Those factors, combined with our deep customer relationships and our strategic go-to-market model, put us in a unique position to understand our customers' requirements and deliver unprecedented value to them. Our customers rely on Ansys in both good times and bad. We saw this during the pandemic. Even while some companies were shutting down factories and furloughing workers, their research and development initiatives continued unabated. Ansys is a key driver of that innovation. That's because physics-based simulation saves time and saves money while providing unprecedented insights into product functionality and even into the business itself. What is physics-based simulation? Well, some people get confused, and they think it's like what you see in a video game, but what we do is worlds apart. Let me explain using just one of many potential examples. Every time that a new automobile platform is developed or is modified, it has to undergo crash testing to ensure that it meets stringent safety standards. A single crash test can cost upwards of $1 million and can take several months to perform and analyze. Frankly, that's not sustainable even for the largest of automakers. Performing physical crash tests is sometimes not possible in a platform's early design phase, which means that any changes informed by those tests will require expensive redesigns. Virtual crash testing, which is made possible with simulation, can take place at every stage of development. Those simulated crash tests can be performed in a matter of days, and a large number of different concepts can be tested at once. The analysis requires high-fidelity, multi-physics solvers from Ansys that have been developed over many decades to ensure the highest levels of accuracy. Simulated crash testing has saved the automotive industry billions of dollars and helped to drive drastic increases in safety. Since the 1980s, the size, the complexity, the fidelity of virtual crash testing has increased dramatically. Today, thousands of virtual tests precede any physical tests, which leads to shorter R&D cycles, reduced R&D costs, and many, many saved lives. That's just one example of simulation in action. You'll hear real-world stories about Ansys simulation helping to develop high-end consumer appliances. You'll see how Ansys is making the most sustainable aircraft on the planet. You'll learn the role that Ansys plays in designing and testing life-saving medical devices. In other words, simulation is essential, and Ansys is pushing the bounds of what is possible. Today, over the course of a typical day, we encounter maybe 1,000 products that have benefited from Ansys simulation. The mobile devices that never leave our side, the airplanes that whisk us from location to location, even the food we eat. Tomorrow, though, we may encounter simulation 10,000x a day as we interact with products, with processes, with decisions all made possible through simulation. The outcomes from those encounters will provide us with something unprecedented. The pervasive use of simulation will deliver unmatched insights into almost everything that we do. Those pervasive insights will help our customers transform the way they design, they develop, and they even use their products, while at the same time helping them to transform their entire businesses. That is the power of Ansys. We are enabling our customers to develop and deliver the most innovative products on the planet. As they are creating those next-generation products, more users are taking advantage of more of our portfolio and using more computational methods in the process. That dynamic is at the heart of what drives our business model. Typical enterprise software companies only have two vectors of growth, more products and more users. Unlike those companies, our business model has three vectors of growth. Ansys not only drives growth from more users using more products, but additionally monetizes customers' workloads that run larger, more complex computations. It starts with our superpower: simulation. Simulating the physical world is our core business. Traditionally, that involved a single user leveraging a single Ansys product for each individual simulation. Today, as we partner with our customers to solve their most complex R&D challenges, there's an increasing demand for multiple physics to work together. Even a single use case like analyzing a speaker involves more than one physics to model the outcome. In this case, fluids, structural, and acoustic analysis. We've extended our capabilities to transcend individual physics to connect workflows that solve complex multi-physics problems. That enables our customers to simulate and analyze the physical world at a system and mission level. Addressing these new complex use cases inherently requires the use of multiple physics solvers, leading to an increasing number of multi-product sales. In addition to the work we've done to enable these new use cases, we've also invested in the overall user experience. In the past, only expert engineering analysts could use simulation. Today, Ansys simulation is being used by all levels of engineers. Our automated workflows and integration with other systems make Ansys solutions more intuitive and easier to use than ever. That means even non-expert users 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. Our decade-long investment in propagating simulation in academia, combined with our product innovation, significantly extends the addressable use cases and user base for simulation. As a result, we believe that in the future, nearly any professional will be able to use the power of simulation to solve everyday challenges. Today's product design teams need to work more effectively together than ever before. Their engineering tools should inherently support this and work seamlessly with other tools across the enterprise. This is why Ansys Discovery now has collaboration built-in and integrated with Microsoft 365. Let's take a look at how this helps Christine develop her new design for a wireless router. Leveraging Ansys Discovery's breakthrough interactivity, ease of use, and speed, she sets up an initial analysis and shares it with Eric to tap into his expertise. Eric is traveling, but reviews the simulation using the Ansys Discovery web application, where he uses built-in commenting to give feedback on the setup in context within the application, all facilitated by the Microsoft identity platform, the Microsoft Graph, and Teams sites. Back at the office, Christine uses the rich discovery application to update her simulation and shares the results with her manager. Tom asks for more design alternatives to better understand the optimal product configuration. Easily setting up parameters for exploration, Christine sends the job off to the cloud, and in mere minutes, she gets thousands of design variations, produces a Word document, and shares it with the team. Getting engineering insights has never been easier, faster, or more collaborative. Our investments in our core products, in physics, in AI, in digital mission engineering, in model-based engineering, in HPC in the cloud, they are all key enablers to amplify our opportunity. Continuous innovation in HPC has lowered the barriers to adoption by empowering customers to run larger, more complex simulations faster and more affordably. That is a tailwind driving significantly more computations. Over the years, we have not only built highly scalable products, but also a highly scalable business model. A single Ansys user can use multiple products and run hundreds of simulations across thousands of cores in parallel. The increasing complexity of what it takes to build even simple products amplifies our ability to grow because complexity means more computation. Our focus on expanding the portfolio of physics from the component all the way to the mission on creating a platform to enable complex multi-physics solutions and on expanding simulation use cases unlocks greater customer value, enabling all three vectors of growth and ultimately drives more ACV to Ansys. In addition to a robust business model, Ansys operates in a strong core market that is continuing to grow. Our core market is largely comprised of traditional use cases. However, new and emerging use cases which leverage the same core solvers in a more interconnected and multi-physics manner are the tailwinds to overall market growth. Electrification, autonomy, next generation connectivity, industrial Internet of Things, and sustainability are examples of the new use cases stemming from increasing complexity involved in developing products today. The core market has delivered consistent growth through the pandemic and is expected to accelerate beyond 2021 as it grows at a high single-digit to low double-digit CAGR through 2025. With a sterling reputation and the broadest and deepest simulation capabilities, Ansys is the leader in the approximately $8 billion simulation market. Since 2017, we have outgrown the core market, and as that market accelerates in the future, we again expect to outpace the market's growth as new use cases emerge and mature. In addition to our strong core market, which positions us well to drive near-term growth, there are longer-term emerging opportunities to further democratize the power of simulation to a broad class of end users. Our core market addresses hundreds of thousands of potential end users across thousands of use cases. These future use cases extend the impacts and power of simulation to create a new market where it can be used by tens of millions of potential end users across millions of use cases. We have a vision to expand simulation to a whole new class of use cases which embrace the power of our core solvers used in our current products, but expose them through simpler user experiences to a broad class of end users who may not be simulation experts. We have already started incubating this concept. Examples such as simulating the human heart to predict the best surgical strategy or uploading a CAD diagram to certify the frequency compliance of mobile charging devices are all early proof points of how powerful simulation can be to solve a wide array of problems that challenge the physical world. It is still very early days, and the shape of this opportunity will continue to develop and evolve. However, the opportunity is massive. Over the next 10+ years, we expect the core market to approximately double, and we expect the combined market opportunity for our core market plus additional future use cases to nearly triple over the same time period as we put the power of simulation in the hands of tens of millions of end users across millions of use cases, driving a massive acceleration of computation. When I became CEO in 2017, I publicly committed and challenged the entire team that Ansys would grow by double digits. We stepped up, and we made it happen to the tune of growing ACV by over 66% since 2017. In 2019, we challenged ourselves once again, this time to achieve $2 billion in ACV by the end of 2022 while maintaining industry-leading margins. That is exactly what we've done. We transitioned our business model to a highly recurring subscription lease license model that provides a strong annuity to support future growth. We've been making highly disciplined investments to expand our portfolio and our underlying platform to accelerate our customers' ability to solve complex multi-physics problems. We also developed and implemented a strategic selling model, which has deepened our relationships with enterprise customers at all levels in their organizations. We're delivering value to our expert users while having multi-year roadmap conversations with members of the C-suite. That investment in relationship building has paid off for us. Before 2017, a $1 million deal was exceptional. Today, it's ordinary. We codified and we shared those best practices in our enterprise model to drive considerable success in our strategic and volume accounts. Whether through our own sales team or through our channel partners, we are enabling our customers to deliver on the promise of their products while increasing their reliance on Ansys simulation. As we shared with our recent guidance, we expect to achieve our $2 billion ACV goal in 2022, which translates to sustained double-digit growth with industry-leading margins. That is a remarkable achievement, especially given the challenges brought on by the pandemic. We kept our focus on our customers and on our promise to our investors. We set out an ambitious business model transition with aggressive growth goals and transformational implications to our portfolio. We made prudent investments in our product and our go-to-market model. We executed exceptionally, and we delivered. You heard earlier that we've been continually reinvesting in our product portfolio to extend our leadership in the market. That investment is expanding our customers' ability to address new complex use cases while driving new users across more products to run more simulations. In just under three years, we have advanced the state-of-the-art in simulation dramatically. First, we've advanced the underlying platform that connects our physics, enabling complex use cases and access to location-independent, unconstrained computing. Second, we've significantly expanded our physics portfolio with a host of new offerings such as best-in-class explicit solvers and multi-body dynamics, as well as photonics, optical, and aerospace simulation. We've also added entirely new simulation categories to our portfolio with new offerings around mission and model-based engineering, enhancing our ability to connect multiple physics into a system model and to simulate situational outcomes while reaching a much broader set of users. Finally, we've pushed the boundaries of advanced computing, solving larger problem sizes with higher fidelity and finer optimization while delivering predictive insights from AI ML techniques and other next-generation technologies. Our core business is strong, thanks to our customers' heavy reliance on our growing portfolio of physics-based simulation. In addition to expanding our portfolio's breadth, we have innovated to deepen functionality in our core products. For example, a new dedicated aerospace workflow in Ansys Fluent, expanded GPU solving capabilities in multiple physics solvers, our new Phi Plus mesher in Ansys HFSS, and 3 nanometer support in our semiconductor solutions. All of these represent improvements in productivity, performance, and accuracy for our users. We have also accelerated our investments in the cloud, enabling customers to seamlessly access compute resources anywhere, driving the use of HPC significantly. I encourage you to visit the Simulation World Cloud track to learn more about our cloud strategy and how it will be a key enabler of growth for Ansys by making our technology more accessible. Medtronic is driven by the Medtronic mission, which is to strive without reserve for unsurpassed quality. We help guide surgical procedures with navigation technologies with surgical robots, as well as ear, nose, and throat therapies. Really 70 conditions all over the body. Some very short term, some very long term. Medtronic designs products that have to have very high reliability. We also design a wide variety of products. We have to develop different materials, different use condition challenges for us. Simulation has essentially become a requirement for us. We have to anticipate such a wide variety of clinical conditions. There's no practical way to do that ahead of time without actually using simulation. Ansys is, I think, the perfect partner for us because they continue to grow, to acquire new technologies, and they help us bring technologies that are developed for other industries and other products into the medical device space, which is a huge asset for us. It's almost unthinkable in terms of how we would move forward at today's pace with expectations we have around our product cycle times, if we didn't have the opportunity to do this in the simulation environment. I think over time, simulation will become a standard for Medtronic as well as the industry as far as how we actually evaluate our products. We do have products we've looked at historically where we can confidently estimate that simulation has saved us years of development costs or $10s of millions of dollars of expense based on the alternatives we had to get those answers. I firmly believe that the work we're doing with simulation modeling with Ansys is helping us get there. Sub-Zero is a family-owned company and been in existence since 1945. Ansys is the top simulation company, and we associate ourselves with those top companies. We are the high-end leading manufacturer of appliances. We have a product that has to last 20 years. The complexity of our designs, the complexity of technology, and what our customer expects and experiences is constantly changing. Our lifeblood of our company is new product development and innovative products. It's critical for us to be as close to right as we can the first time, and providing that certainty that the simulation products such as Ansys can to our engineering group is critical. If we were not using simulation, it's very much a trial and error, multiple product builds, multiple iterations, testing, extensive testing. Obviously, it helps us make quicker decisions, better decisions upfront. Reduces our number of physical models that we have to actually generate, and that's invaluable as we try to decrease our time to markets. In the next five to 10 years, we see simulation, which is used approximately by 5%-10% of our engineers, being used across the board by all our engineers. Simulation as a tool and as a process will be used in the future by all companies. It'll be a requirement to be successful in this ever-changing technology world we live in areas where we probably can't even imagine today. As customer product development challenges continue to become even more complex, new use cases for simulation constantly emerge. In areas like electrification, autonomy, next generation network and connectivity, the industrial Internet of Things, and sustainability. The complexity of these long-term technology trends requires more simulation, spanning more physics and encompassing more users. It goes beyond individual components to the system, to the entire mission. Managing this complexity with both speed and accuracy is imperative to nearly every industry. To address these customer needs, we have invested in two key areas. First, our platform makes it easier to bring together industry workflows across multiple physics while leveraging the new advanced computational methods we are continually driving into our products. Those methods, such as advanced data analytics, multi-scale modeling, isogeometric analysis, along with various AI ML techniques. Our platform does all of this while giving users the option to seamlessly access simulation solve capacity in the cloud. Second, new disciplines such as mission-level analysis and model-based system engineering enable greater collaboration and better decision-making throughout the entire product design and development process. All of these ongoing investments in our already best-in-class simulation portfolio have contributed to our success and have driven deeper adoption of our portfolio. We are confident that our investments set the stage for our next chapter of growth. Motorsport is a part of our DNA and always played a significant role in the history of Porsche. Formula E is the first series really on a highly professional level, and it doesn't only look at the electrification, it's about efficiency, it's about sustainability. We have the same challenges as another race series. You wanna finish first. That's still the same. It's about performance. It's about getting every little bit and piece right. If you have an efficient car, if you manage to be efficient throughout the race, you will win the race. To do quick lap times with the smallest amount of energy, I think that's the special challenge about the Formula E. We've chosen Ansys because it's a global partner, so they get everything to support our team, to support the engineers to develop the most efficient powertrain, and therefore to be successful in the series we are racing. That's what it is about, that's our goal, and therefore we clearly chosen the right partner. Ansys is helping us to win by providing the technology, by providing tools and the skills of the people working with us. They give a lot of input to the methodology, how we approach things. Especially in the Formula E, you are very much restricted in testing time. Therefore, it's really important that you do most of the development work with simulation. Ansys provides all the simulation modules, but at the same time, we have been improving to simulate and optimize the entire system. You have to do a lot of simulation because you can't go testing, and that is really the benefit they bring to the team. They help us a lot to do in the simulation before we put the car together, before we develop the parts, before we hit the track. That is really the big benefit, and it's absolutely necessary in this series, because if you don't have this very early-stage simulations, you won't be able to be competitive. No way. This is also the benefit that Ansys brings to the road cars, because everything that we learn, everything that we achieve will be exchanged with our colleagues. Simulation will be more and more important in the future. To me, that's absolutely clear. It's getting more and more complex. Therefore we need simulation. We really have to try and do as much in the virtual world, in the virtual development as we can. That's exactly the benefit that this partnership between Porsche and Ansys is about. Embraer is a world leader in aviation and bringing new innovative products to market. Every area where we compete, we try to offer the best and more competitive products. We are working on autonomous flight here at Embraer, and we do believe this is a marathon, it's not a sprint, and we do need the best partners along this run to build it with us. Autonomy is not something that will just happen. We need to offer something that is not equal, but actually better in terms of safety and efficiency. Partnering with Ansys is really critical for us in the sense that help us accelerate and more than build a product, help us build a process that will ensure we get to the safety levels we want. Ansys has a very interesting and very powerful approach with physics-based simulation. For autonomy, we are exploring something new for our products, right? They don't see the environment. They don't see the world. Without simulation, definitely we would take more time to develop new products, more sustainable products. Even worse, I do believe that we wouldn't be able to to develop the optimized product for the future. Simulation and virtual testing is key for us in terms of offering for the market, the right product in the right timing. We definitely see simulation increasing in usage as well as relevance to build the processes that will allow us to be efficient and effective at the end of the day. A relevant point is for Embraer to always be on the edge of these technologies, not only because of everything we already talked about, efficiency and reaching really the point in where we have great products, but also to be able to attract new talent. Young engineers are trained in universities using software, using simulation. I do believe the partnership we have with Ansys, a long time relationship, is very strong. We're doing a good job together, and for the future, I see even stronger relationship with Ansys and the tools provided by Ansys and the products that we can provide to the world. Our broad and deep portfolio puts us in a unique position of helping our customers to solve a vast array of product development challenges. Our vision is to make simulation pervasive and embedded into millions of everyday decisions that impact our world. Our long-term strategy to evolve to a more componentized and connected portfolio of physics exposed to a broad new set of end users has the potential to create entirely new markets for simulation. Today, our portfolio has the potential to touch hundreds of thousands of users across thousands of use cases. We have a bold vision of the future in which the power of Ansys can positively impact tens of millions of users across millions of use cases. Essentially, wherever there exists an opportunity for simulation to add value. While this is a long-term vision, that will not materially impact our near-term top-line growth. We started to incubate, test, and learn. Those learnings are helping us to evolve our solutions to make them usable for a wide array of software developers, and at the same time inform us as to which use cases can scale. The core enabler of this vision is extending our platform to feature a cloud-first development environment and a set of platform services to extend the reach of our solvers and enable a broad ecosystem of software developers to build a wide variety of new simulation-based, cloud-deployed workflows and applications. It's still early days, but I'm excited about this emerging development ecosystem. Based around our package of open source Python software tools called PyAnsys. PyAnsys will open many new doors for Ansys technology. We envision that over time, a whole new class of industry applications will emerge where experts and non-experts can benefit from the power of our simulation portfolio to address challenges that we can only imagine today. We've already seen early examples of this, including a new app for understanding the noise and vibration generated by electric motors in various settings. This solution combines our mechanical, electromagnetics, and acoustics technologies into a single easy-to-use interface to solve a specific industry application. We've also seen it in Optimeyes, which brings the power of simulation to optical medicine. These innovations leverage our existing core solver technology while dramatically simplifying and contextualizing their user experience so non-experts can harness the value of Ansys simulation. I'm happy to share with you today how we collaborate with Ansys in order to integrate our digital twin technology with structural simulation to bring next-generation surgery planning to eye care. Every day, there is more than 75,000 cataract surgeries taking place worldwide. This is more than 30 million a year. A big portion of these patients have treatable astigmatism. The state-of-the-art is to use average statistical nomograms to plan the treatment. This results in too often suboptimal results. It has to be treated with a retreatment or a second operation, or the patients have to wear spectacles. We integrate Ansys Mechanical with our optimized digital twin technology. By doing so, we form a digital copy, an identical copy of the patient's eye inside the computer. On this digital twin, we can optimize the surgical parameters for the individual patient. This is how we can expect improved results. In eye surgery, it's literally micrometers that can make the difference between a successful operation and suboptimal outcome. We integrate, optimize with Ansys Mechanical in order to simulate the effects of physical interference with the eye soft tissues. This we do in order to enhance the outcome for the patient. Optimo Medical, together with Ansys, we're paving the way for large-scale adoption of engineering solution within the eye surgery industry. The precise role the cloud plays in simulation depends on the customer use case. Our core applications are highly compute-intensive, and users can generate terabytes of data from a single simulation. Given the immense challenges of manipulating these large data sets and the latency associated with highly intensive compute requirements, the role of the cloud for simulation is much different than that for traditional SaaS applications. From traditional to more complex use cases, many customers today use on-premise workstations coupled with a combination of on-premise and cloud HPC capacity to run their simulations. As compute costs continue to decline, customers are choosing to run more and more of their solves in the cloud to remove hardware barriers and to accelerate time to value. The Ansys cloud strategy provides our customers with open, scalable offerings supported by the major cloud platforms to enhance and to extend our industry-leading simulation portfolio. A combination of existing, newly developed, and acquired Ansys cloud capabilities enable our customers to run their simulations in a location and a device-independent manner, seamlessly and optimized for their specific workloads. This flexibility allows our customers to maximize the value they realize from simulation while scaling up when needed to address the increasing complexity of next-generation product design and development. It also makes the power of simulation available to every organization, regardless of size or industry, by eliminating traditional hardware and IT support requirements. As we continue to enhance our platform by extending the ability to access our solver capabilities in new ways, we are defining a new paradigm around engineering automation, collaboration, and simulation-driven insights with cloud at its center. One that enables our customers, our partners, and a whole new set of software developers to leverage the power of our core Ansys solvers to create new solutions that address industry's toughest challenges. Again, this is still very early. The platform and the business models will continue to evolve in the years ahead, but it is the start of something truly transformative. Our product strategy is driven by the needs of our customers and the growth vectors of our business. Our 50+ years of leadership in this space, combined with a host of long-standing and strategic new investments, position us to deliver game-changing uses of simulation that increase our long-term growth potential. Our focus on extending Ansys' leadership in simulation, coupled with the power of a new developer-driven ecosystem built on an industry-leading cloud platform, positions us to redefine simulation for years to come. Ansys has made the strategic decision to focus on simulation and be the best-in-class at it. As a result, we're an open platform that agnostically connects to any customer's R&D workflow. We've built an ecosystem of customers, partners, students, and academics who are collectively pushing the boundaries of what's possible through the power of simulation. That ecosystem helps to expand simulation capabilities across the product life cycle. It helps to lower the barrier to simulation adoption, and it enables Ansys to build and grow a vibrant community of end users who will employ Ansys simulation in new and exciting ways. Our efforts to make simulation truly pervasive begin with the academic community, where we have worked to make simulation available to the next generation of engineers. Today, over 3,300 universities in 90 countries use simulation for teaching and research. For example, Cornell University teaches a massive open online course on how to use Ansys simulation that has attracted more than 234,000 registered students. More than 2 million students have downloaded our student software. We've also expanded our digital learning to include engagement opportunities that complement those licenses. Over 300,000 people have learned about simulation from more than 200 free innovation courses that Ansys offers. Over a million users engage with Ansys experts and peers through our learning forum. As our customers hire new engineers to solve their most complex challenges, many of them are already familiar with Ansys thanks to these efforts. Those customers come from leading organizations around the world, from multinational corporations to startups, as well as research labs, nonprofits, and universities that are taking advantage of the breadth and depth of our portfolio. The extensibility of our products enables us to leverage the same core applications to solve the needs of industries as diverse as energy to healthcare. High tech, automotive, and aerospace and defense are our largest customer set, representing almost 70% of our ACV in 2021. We are helping these customers solve the world's most challenging product development problems, from building satellites and the rockets that carry them to designing microprocessors that power tomorrow's technology, to producing products with a reduced carbon footprint, to creating a future with autonomous and electrified vehicles. Autonomy at BMW is a field of potential differentiation against competitors and a field to show our power on technical innovations to the customer. For the BMW Group, automated driving is an absolutely key topic, and Ansys is also interested in solving that. We try to offer the best experience for the customer related to safety, to comfort, and convenience. The technical solution for automated driving is such a complex task that it's very interesting for the BMW Group, which always stand for technology and innovation. The engineering challenges combine simulation with statistics and scenario analysis to overcome the big amount of efforts you need for the validation. The development of autonomous driving is a development of thousands of engineers working on one product, on one big software repository, and on varieties of scenarios which you have to handle on the street. When we talk about a concrete product offer to the customer, it's highly relevant to answer the question. When can it be used? Can it be used in the darkness? Can it be used in the rain with cold temperatures? Where in the world can it be used? The answer can only be done based on our simulation, and therefore you need a powerful ecosystem to work data-driven together. With this ecosystem, there is a clear need for an end-to-end tool chain supporting the real development work day by day. We choose Ansys as a partner for BMW because there is a strong background on simulation itself over several domains and with a combination also of engineering know-how. With this, there can be a clear business model for Ansys and a clear solution for us as an OEM. It's a strategic fit in our common approach. In the startup community, we're working with innovators and market disruptors who are building simulation-first businesses. As these startups grow, Ansys is already entrenched in their product development processes. Over 1,400 companies have joined our Ansys Startup Program, and more than 230 startups have already graduated. With lower software costs and the availability of high-performance computing on the cloud, even the smallest companies can use and benefit from sophisticated simulations across hundreds or thousands of cores. While startups are a small part of our business today, our success with these customers is a testament to the impact our multiphysics simulation technology has on the future of innovation. We have also worked diligently to expand our reach to customers beyond those we serve directly, building out a strategic partner ecosystem that enables us to extend the use of our core technology into new markets. Since 2017, we have grown our global technology partnerships by almost 70%. We now have joint solutions with 350 market-leading partners. Companies like Microsoft, AWS, PTC, Autodesk, Synopsys, NVIDIA, and Rockwell Automation are playing a key role in expanding our reach to new users and embedding simulation directly into their product development workflows. Ansys simulation helps our partners create more value for their customers, so everyone wins. PTC is an industrial software company, and we really provide a broad range of solutions that follow the product life cycle. We help customers to engineer products, we help customers to manufacture products, and then to service and support those products in the field. Customers have always turned to PTC for innovation. This company invented the modern concept of 3D CAD that you see in the industry everywhere. Customers really want digital transformation, and they see PTC as having really a nice collection of innovative building blocks. Our customers are designing products and manufacturing and supporting products. Understanding behavior of those products before you commit to building them is, of course, critical to having a good design. Design and simulation are like peas in a pod. Ansys brings this whole dimension of simulation that's best in class. Together we can provide a seamless experience that kind of represents the best of what Ansys is capable of doing and the best of what PTC is capable of doing, working together almost as if it came from one company. Ansys, I think, has had a strategy for some time to move more upstream. To not analyze designs after they're created but actually guide the creation of them. This opens up a whole new set of users, which by the way, is multiple times larger than the analysts who would check the design after it's done. It definitely provides Ansys with access to a broader market of users and to PTC, a highly differentiated product capability. We're putting out software that's developed together and deeply integrated. You know, the Creo Simulation Live capability is the Ansys code running inside the PTC code and delivering to the customer something they've never seen before. I think the customer reaction has been great, and I would offer up the performance of our Creo CAD business over the last four years as proof. I mean, that business has been on a tear, growing about twice the speed of the market. I think one of the reasons is because customers view Creo as having best-in-class simulation. Maybe simulation was a concern before and now it's viewed as a real strength thanks to the partnership with Ansys. We have a real opportunity to take this partnership to the cloud, and there's a lot of conversations happening there. You know, the cloud brings, obviously elastic compute and a whole lot of advantages. For PTC, that means both our Creo software and our Onshape software. We feel like we can offer to the customer more and more simulation capabilities as part of our closed loop product lifecycle suite by putting those capabilities in the cloud and not having to deliver them through and set them up at the customer site. I think cloud is of interest to Ansys, it's of interest to PTC, and it'll be very important to the partnership. Synopsys is the silicon-to-software solution company. When we talk about silicon-to-software, we have solutions that go into the deep physics at the silicon level. We aspire to be at the heart of enabling innovation of the most amazing electronics product that every human touches. In terms of opportunities, there are tons of future opportunities between the two companies I absolutely see in different market verticals. One great example actually that is disrupting chip design is the multi-die stacking or 3D IC. It's introducing physical effects, thermal effects, power integrity, electromagnetic integrity. Synopsys is leading with the 3D IC solution in terms of design and validation. In the collaboration with Ansys, with the thermal analysis and all the other physical effects are integrated and co-optimized along the development of the chiplet into a single package, which is something I do not believe any other company can offer it on its own. You look at the map of what's out there in the ecosystem, Ansys is the right partner. NVIDIA makes the most advanced computers in the world. Our computers are used for artificial intelligence, for physics simulation, for video games of course. All of our customers are trying to discover their iPhone moment, to reinvent themselves, to revolutionize their industry, to become software-defined. Our partnership with Ansys solves problems for our customers neither one of us could do alone and bring solutions to customers that is impossible otherwise. We're at a point now where we're about to simulate at a million times higher performance than something we were able to do 10 years ago. A million times. Our collaboration enables a new frontier. Ansys and ourselves are pioneering this future in digital twins, which is really a simple way of saying the next phase, the next wave of artificial intelligence when robotics makes possible. Imagine every single product in the world with a digital twin that's running alongside it all the time. A billion cars, tens of millions of factories and plants and warehouses, fleets of robots all over the place all have digital twins. These digital twins allow the engineers to improve the artificial intelligence, improve the software, maintain the fleet, improve its throughput and capability and reliability for as long as the products live. That's completely transformative for our customers. We couldn't do it ourselves. Ansys together with us can really solve the problems for our customers. Our go-to-market model is a key driver of our success and is based on strong execution against the plan that we shared in 2019. At that time, we emphasized leveraging the value and power of our physics portfolio to build deeper, longer-term relationships with our customers. We also recognize the critical importance of investing in our dedicated network of channel partners to enable us to reach thousands of additional accounts that can benefit from Ansys technology. The segmented approach to enterprise, strategic, and volume customers helped us achieve our double-digit ACV growth. Our strategy and portfolio have allowed us to drive much broader and more impactful relationships with our largest customers, where we partner to develop integrated multi-physics solutions. With enterprise customers, we have a dedicated sales and technical team supported by an Ansys executive sponsor. This team of industry simulation experts works directly with our customers to help them solve their toughest product development challenges. This high-touch approach has helped to create deep, lasting relationships that have enabled us to expand to more users using more products, which drives more computations. As a result, the number of deals over $1 million has almost doubled since 2017, and the dollars from those deals has nearly tripled in the same time. Since putting this strategy in place in 2018, our ACV from enterprise accounts has grown faster than our overall business. Our volume accounts are the main source of new logos. That's thanks primarily to our global network of committed channel partners, which have more than doubled since 2017. The pandemic had an outside impact on many of our smaller customers. The diligence of our channel partners, coupled with the powerful value proposition of our technology to lower cost and accelerate innovation, has enabled us to grow our ACV from channel by double digits in 2021. Our channel partners are a seamless extension of our direct sales team. Just as we develop lasting relationships with our customers, we work hard to develop that same level of trust with our channel partners, and it pays off in their stellar sales and high retention rates. While we are constantly evaluating our needs and strategically adding channel partners to support our customers, we have had many channel partners who have been part of Ansys for decades. SimuTech Group is the largest Ansys Elite Channel Partner in North America. We offer Ansys simulation software and services related to it. I like to think that Ansys and SimuTech are pretty synonymous, in that one doesn't necessarily end or begin at the other. We work very cohesively together. For the customer, what they get is this leading-edge technology with Ansys and all the resources that come with that. We have over 3,000 customers, and those customers either work with us in Ansys software or with us on consulting projects, training or testing, optimizing their products or trying to get ahead of competition. It's really exciting to be a part of the engine that's generating the new logos that are using Ansys, because it's getting in at the ground level in many cases with companies that are just getting started up or are developing cutting-edge products that we get to be a part of. Part of why we believe so firmly and so strongly in partnering with Ansys is the ability to really see limitless growth as a company, and our goal is to stay on pace and on par so that we can grow alongside the Ansys ecosystem. If a competitor came to us and said that we could do a lot better with them instead of Ansys, I would tell them they're crazy. When they need to simulate their products, there's not a better choice than Ansys, especially if it's something that's complex, which most things that are being designed and built today are complex, and that's where Ansys shines. We want to bring the best possible simulation product to our customers, and that's Ansys. With our combined focus on direct business, a strong and dedicated channel community, a rich ecosystem of academics, customers, and strategic partners, we have a tremendous amount of confidence in our go-to-market strategy. Our execution against this model has been foundational to our success, and it stands as a source of strength for us to build upon in 2022 and beyond. We have a strong business that is diversified, balanced, and resilient, and a track record of execution which all contribute to the momentum of our business. Before we discuss our outlook, I'd like to take a quick look back at our business and how we've transformed the business model since our last investor day in 2019. In 2019, we laid out our operational plan to shift away from a departmental transactional sales motion to a strategic enterprise selling model. We focused on aligning to our customers' R&D roadmaps, driving more subscription leases, and accelerating the adoption of multi-year and multiphysics agreements by our customers. We have executed that plan and delivered against those objectives. As a result, we now have deeper long-term relationships with our customers, a highly recurring ACV financial model, and market leadership beyond single physics use cases to strategic integrated multiphysics use cases. This successful transformation provides a strong foundation for future value creation and growth. We also committed to a target of $2 billion of ACV by 2022 with a business model of double-digit growth, including tuck-in acquisitions and industry-leading margins. We are tracking to deliver on those commitments with exceptional execution, despite meaningful headwinds in the past couple of years from a global pandemic, trade sanctions, and other macro challenges. The success of our multi-year transformation was driven by making substantial investments in broadening and deepening our portfolio and platform, transforming our go-to-market model, and building our infrastructure for future scalability. We were able to make all of these investments while maintaining industry-leading margins. These transformational initiatives created a robust financial model and annuity business to drive future growth. As a result of our new strategic selling model, our business has shifted away from the perpetual license financial model towards a highly recurring subscription lease model. Now, unlike typical business model transitions that purely shift value from one model to another, resulting in depressed short-term growth, we executed this business model transition while sustaining double-digit top-line growth. ACV performance was fueled by accelerating growth in subscription leases, which more than doubled in size since 2017, with subscription lease ACV near $1 billion in 2021. As subscription leases accelerated, we still maintained mid-single-digit annual growth in the perpetual business model. Robust market demand, coupled with our strong value proposition and the exceptional execution of our go-to-market strategy were the critical success factors of our financial model transition. As a result, in our business today, over half of our ACV comes from subscription leases. Now, that's up from just over a third in 2017. The acceleration of our subscription leases is the underlying driver of the strong annuity that has been building over time and will continue to be a foundation for future growth. Recurring ACV is the metric we use to capture the value of that annuity. It includes the ACV from our subscription leases, as well as the maintenance ACV from our perpetual business. Our recurring ACV has grown faster than our overall business since 2017, with strong growth from our subscription leases and low single-digit compounded annual growth from the maintenance annuity from our perpetual business, given the transition away from perpetual licenses. We now have 81% of our business coming from that recurring ACV, which represents a strong annuity to support our next chapter of growth. In addition to our robust financial model, Ansys operates in a strong core simulation market that continues to grow. Historically, the core simulation market has grown mid- to high single digits, with strong tailwinds coming from new use cases which support customers' more complex product development. Over the last few years, we have made investments to significantly increase our addressability of this faster-growing portion of the market for those new use cases. Our investments support long-term technology trends, driving more users across more products to run more computations than ever before, as users evaluate and validate complex product development all the way from the individual components to the system and even the entire mission level. Our organic and inorganic portfolio expansion has increased our ability to provide solutions which address new complex use cases by 3x since 2017. The core simulation market is expected to accelerate and grow at an 8%-10% compounded annual growth rate from 2021 to 2025, with the market for new use cases again expected to grow even faster. Our focused investment, market leadership, and world-class team of thousands of simulation experts allow us to address more of the market than was possible in 2017. As a result, we expect to continue to outgrow the core simulation market and remain the simulation market leader. Beyond the $8 billion core simulation market, we see the opportunity to extend the power of simulation to a broad class of end users by significantly expanding the use of simulation to millions of users and use cases far beyond the thousands of users and use cases in our core market. Our strong market position and broad and deep portfolio uniquely position us to make these new markets and realize the potential of our pervasive insight strategy. We are optimistic on the long-term size and growth potential of this opportunity and intend to invest in building this new market, given the sheer size and scope of impact we expect it to have on our longer-term growth. However, we expect the contribution from this new business area to be an immaterial contributor in growth over the next three to five years. Overall, the demand for simulation is strong and accelerating. Over the next 10+ years, we expect the $8 billion core market opportunity to approximately double. While the near-term impact of future use cases is minimal, given the nascency of the opportunity, we expect those use cases to drive long-term tailwinds. As a result, we expect the combined market opportunity for our core market plus additional future use cases to nearly triple over the next 10+ years. Now, let's turn to our future financial outlook. As a reminder, the accounting change to ASC 606 caused the timing of revenue recognition in the P&L to become more volatile and disconnected from the true operational dynamics of our business, as reflected in our key top-line metric, annual contract value, or ACV. Our cash collections are also more closely aligned to ACV versus revenue. As a result, we think the best indicators of our financial momentum are ACV and operating cash flow. As we mentioned, we expect to outgrow the core simulation market over the next few years. Annual ACV growth continues to be the best metric to observe the momentum in our business, and we are confident in our model of double-digit ACV, including tuck-in M&A. As we mentioned in our Q2 earnings call last week, we expect our constant currency ACV growth to be in a range of 11.3%-13.5% in 2022. Today, we're initiating our 2022-2025 ACV outlook and expect ACV to accelerate and grow at a 12% constant currency compounded annual growth rate. With this outlook, we expect annual tuck-in M&A to represent 1-2 points of growth. We expect the percentage of ACV from subscription leases to grow beyond the 53% of ACV we generated in 2021. As we continue the shift towards subscription leases, we also expect recurring ACV growth to continue to outpace overall ACV growth over the next few years. We have strong operating leverage in our business, which has low variable cost and consistently delivers gross margins over 90%. The investments we've made in our portfolio, the transformation of our go-to-market model, and the scalability of our infrastructure provide a strong foundation for the next chapter of growth. In our outlook, we will continue to invest in our portfolio and, in particular, the roadmap to realize the long-term strategy of pervasive insights to capture the emerging opportunity around future use cases. We believe we are uniquely positioned to define and lead this new chapter of simulation, and the strength of our financial model enables us to invest towards that long-term strategy while maintaining industry-leading margins and accelerating the cash generation of our business. As I mentioned, we have strong operating leverage in the business, which will fund investments in our pervasive insight strategy to capture the long-term market opportunity. As we made our business model transition, we invested for growth, and operating expense growth outpaced revenue, ACV, and cash flow growth. Our outlook considers continuing to prudently invest in our future. However, we expect the rate of investment growth to be relatively lower in the future than in the prior four years during the early stages of our go-to-market and financial model transitions. Over the next few years, we expect operating expenses to grow in line with revenue, which implies operating margins to remain relatively stable at industry-leading margin levels. Additionally, you will see operating leverage in our financial model as we expect ACV growth to outpace revenue growth and operating cash flow growth to outpace ACV growth. This translates into an accelerated operating cash flow outlook in the future versus our last four years. We have already provided an operating cash flow guidance range of $570 million-$610 million for 2022. Our future cash generation is expected to be substantially higher than the approximately $2 billion of operating cash flow we generated over the past four years. We expect to generate $3 billion of cumulative unlevered operating cash flow from 2022 to 2025. We are optimistic about our future financial outlook. In aggregate, our outlook reflects a rule of fifty business model that is differentiated given our three vectors of growth to expand simulation usage across users, products, and computations. At the same time, we have a highly recurring subscription lease model and considerable operating leverage, which enables us to both invest towards realizing future growth and drive strong financial returns through accelerating operating cash flow generation. For more details on the underlying assumptions of our future outlook, please refer to the supplemental materials on our investor relations website. Our strong cash generation will continue to enable us to invest strategically. We continue to believe the strongest returns can be driven through strategic M&A to accelerate growth, enhance customer value, and extend our leadership position. Since the beginning of 2017, we've acquired over 14 companies. Over that same timeframe, we have increased the breadth and depth of our portfolio by growing our product lines by over 3x through a combination of M&A investments and building up our organic portfolio with over $1 billion of R&D spending. Over the past five years, we have exceeded virtually all of our acquisition business case targets and delivered strong returns. We are highly selective in our acquisition strategy and invest for growth versus consolidation. We intend to continue this strategy with the same level of discipline we have always had. We will also continue to manage our capital structure prudently and return capital to shareholders. Since the beginning of 2017, we've returned over $1 billion to shareholders through share repurchase. As a balanced capital allocation policy, we will continue to return capital to shareholders by repurchasing shares in lieu of holding cash when higher return investments are not imminently available. The time has never been better for simulation, and we've never been better positioned for the future. We are the market leader in the growing simulation market, which is expected to grow 2-3x over the next decade. We are well-positioned to address traditional use cases and have expanded our addressability for the fastest-growing portion of the market, which is fueled by new use cases and the trends of electrification, autonomy, connectivity, industrial Internet of Things, and sustainability. We have delivered against our 2019 Investor Day commitments while transforming our financial model with our 2022 outlook expected to achieve 2 billion of ACV with industry-leading margins. We have expanded our portfolio and transitioned to a new strategic selling model by increasing our portfolio of solutions by 3x from the component to the mission level and by building deeper long-term relationships with our customers by supporting their traditional and new multiphysics use cases. We have a highly recurring financial model with three levers of growth, more users, more products, and more computations. Our outlook is strong and reflects an acceleration of our financial position with a 12% ACV CAGR from 2022 to 2025 and robust operating leverage, which gives us the capacity to invest and build the future of pervasive insights while delivering $3 billion of cumulative unlevered operating cash flow from 2022 to 2025. Our track record of execution, combined with market tailwinds and industry-leading technology, position us well for sustained value creation in the short and long term. As I said, Ansys is a remarkable company. It begins with our multiphysics product suite, the broadest and deepest solution set on the market. Our highly differentiated business model is supported by three distinct growth vectors, new users, new areas of physics, and new computational methods. Our strategic go-to-market model ensures that we have tight relationships with organizations of all sizes, from the largest and most iconic brands on the planet to the most innovative startups that are looking to disrupt industries and change the world. Of course, those customers are why we're here. The innovations that they're driving, passenger airplanes that fly themselves, green sources of power, digital replicas of entire cities, these are powering new use cases for simulation. As the market leader in simulation, only Ansys has the foresight and the financial strength to invest in the technologies required to drive those innovations. That is further powering our growth in new users, physics areas, and computational methods. Don't just take our word for it. Listen to our customers. Listen to those who are reshaping reality with Ansys simulation. I can't imagine how we could do the products we do today without simulation because we just don't have the time. Simulation has saved us years of development costs or tens of millions of dollars. These visionaries are creating a future that was once the stuff of science fiction. Omniverse is about digital twins. It's about virtual worlds. It's about being able to simulate products in virtual worlds before you deploy it into the real world. That future is really at the intersection of the work that Ansys does. They are pioneering a safer, more sustainable world for everyone. Simulation and virtual testing is key for us in terms of offering more sustainable products, the right product optimized for the future. As they think about tomorrow, they are rethinking how they do business today. Simulation in the past has definitely been underappreciated in the design process, and today that's different. It's now a tool that every engineer and every designer needs to use. Ansys is helping us with our roadmap for simulation in the future. These thought leaders don't consider Ansys to be just another vendor, but rather a true business partner. We really have to try and do as much in the virtual world, in the virtual development as we can. That is really the reason why we've chosen Ansys as a partner. Simulation will be more and more important in the future. To me, that's absolutely clear. Simulation is the lifeblood of innovation. As humanity prepares for a future where we travel to Mars or we ride in autonomous and electric vehicles, a future where we save lives through personalized medicine, Ansys will be there leading the way. That's why we believe the future for Ansys is brighter than it's ever been. 2022 investor update presentation. We invite you to dial in by telephone with your questions. The question and answer session will begin in 3 minutes. Please stand by. The question-and-answer session will begin in 2 minutes. Please stand by. The question-and-answer session will begin in 1 minute. Please stand by. Welcome back to the Ansys 2022 investor update. At this time, we are ready to begin the question-and-answer portion. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. In order to give as many people as possible the opportunity to ask questions, we do ask that you please limit yourself to one question and one follow-up. We will pause momentarily to assemble the roster. Our first question today will come from Ken Wong with Oppenheimer & Co. Please go ahead. Great. Thank you for taking my question. Fantastic presentation today, guys. Thanks for doing that. Just a quick question first, for Nicole. When I think about this new profitability outlook, I calculate a roughly 15% CAGR for cash flow based on what you guys laid out. It and that generates a roughly 30% cash flow margin relative to ACV. Is that the approximate feeling we should be thinking about for cash flow? I think a lot of investors have gotten used to a really high EBIT margin. Just trying to figure out what the puts and takes might be that could maybe keep you from maybe reestablishing those high watermarks. Yeah. Thanks for the question, Ken. Maybe it will help by starting to break down the key elements of the long-term growth we gave today to help people understand kind of how to think about the cash model. We told you that ACV growth was gonna grow at around a 12% CAGR, and that was gonna grow faster than revenue. Now, ACV is the largest driver of cash inflows, and it ties most closely to collections. Now, from an outflow standpoint, our largest outflows are the non-GAAP operating expenses, and we said our OpEx would grow in line with revenue, and both of which would grow slower than ACV. Then last, as you point out, the $3 billion cumulative unlevered cash flow outlook. When you take the largest outflow, the largest inflows growing faster than the largest outflows, and you pair that with the $3 billion unlevered operating cash flow outlook, you can kind of see the operating leverage that we're talking about, which the CAGR you calculated kind of gives that indicator, the 12% ACV growth, compared to the CAGR that you've done the calculation on. What I would say, though, is to your point on, you know, individual year margin, there are other while these are the biggest inflows and the biggest outflows, the timing of things like tax payments can impact timing in an individual year on overall operating cash flow. But those would smooth out over longer periods of time. I think, you know, most importantly, I think that when you look at the guidance, you really can see the strength of our optimism in the financial model that we've built over the past five years, which I think the management team did a great job kind of explaining where we came from and where we're going to, and the confidence of that future cash generation. Got it. Thank you for that, Nicole. If I could, just a quick follow-up for Ajei. As I think about that 12% growth CAGR, like a big component of the last few years has been your execution across big deals. How should we think about what kind of runway you still have to drive incremental growth of some of those really large contracts you have with your best customers? I'm gonna kick it off, and then I'm gonna ask Walt to jump in here and make some comments. As I've said in the past, we originally started off with a relatively small number of what we call enterprise customers. We've had more focus on those customers, and we've increased the number of enterprise customers. Those are not the only source of our large deals. In many of these customers where we have an opportunity for large deals, we're very under-penetrated. We have significant opportunity in front of us to move along the two or three different vectors that we've talked about to add more users, for example, more projects, more activity, to sell them more products as projects become more complex. Frankly, the complexity is also driving greater use of computation. All of those three vectors are still open to us in some of the largest accounts we've been very successful already. I'm gonna let Walt add a little bit more color about how we think about the enterprise business and some of our larger customers. Yeah, no, thanks. Look, over the past several years, you know, you've heard on many of the earnings calls that we've closed large seven- and eight-figure deals, right? This is a direct result of our high-touch approach, which has helped us create these deep and long-lasting relationships. You know, because of this approach, what you heard me say earlier is the number of deals over $1 million has almost doubled since 2017, and the value of those has nearly tripled. You know, not only have we made the transition to the large deals, but this is pretty normal to our go-to-market today. You know, as an example of this high-touch approach with our enterprise segment, we have a very focused technical and sales resources that unlock the value of simulation by getting real close to our customers. We've also made the transition to multiyear lease, which is really helping our customers. Because the Ansys technology at this level, it's really not a one-year investment anymore. You know, our customers, they continue to push the boundaries of product design, and development, and they need a multiyear investment to sustain their own innovation and growth. As we look out into the future, we'll continue to see a big deal pipeline actually across all of our industries and all of our geographies. We're really excited about that in the future. Great. Thank you, Walt. Thank you, Ajei. Again, if you would like to ask a question, please press star then one. Our next question will come from Jay Vleeschhouwer with Griffin Securities. Please go ahead. Yeah. Thank you. Good morning. Ajei, one of the important changes that you undertook five years ago was not only to increase R&D as a percent of revenue, which I expect you'll continue, but also you spoke in detail at the time of the apportionment of R&D. So here five years later, maybe we can get an update on your thinking of that apportionment of R&D. You didn't depict it today, but on other occasions, the company has shown its long-term strategy, which has 12 elements to it, some of which you did talk about today, such as AI HPC, for example. Maybe you could update us on how you're thinking about that apportionment of your total spend over the next number of years. For the second question, on growth, you have now more business units than you've had in the past. You've got the core business, of course, but you have newer businesses like materials and the semiconductor business unit and so forth. Within the context of your total CAGR, how are you thinking about the relative growth of some of your newer business units, you know, materials, SPDM, so on and so forth? Jay, as you know, we don't talk about growth by product line, so I can't tell you specifically growth by business unit or by product line. But let me try to address your questions, and I'm gonna ask Shane as well to jump in here and answer some of the points that he needs to as well. Look, as far as the core product is concerned, as you know, the investments that we've made, we're making investments to continue to improve our product lines and to continue to improve the physics of the individual product line. That is an important aspect of what we've done in the past, and we will continue to do to make sure that we have the most accurate, the most effective products in the market individually. We've also made significant investments, as you know, to be able to integrate the portfolio together and provide some common capabilities around a simulation platform, including things like data management and things like materials. Of course, we've continued to make investments in moving to the cloud and taking advantage of new compute capabilities like the GPU, like the GPUs that are available. We have multiple different vectors. I'm gonna turn it over to Shane now to describe a little bit more about how we make the decisions to trade off between one and the other. Yeah. Hey, Jay. Good to talk to you again. When it comes to the overall percentage of development cost as a percent of revenue, I know you mentioned it's gonna continue to go up, but I think we're probably at the stage now where I'd expect that to stay at probably a comparable level. The way that I think about that R&D investment is what Ajay said. It is in our core. It involves pushing the envelope on problem size, speed of solves, accuracy. More importantly, it's been focused on workflows and pulling those products together. Those workflows, I know you talked about a portion and how things were done before. Those workflows and pulling those things together with our core physics. Tying in some of our new acquisitions really address our traditional, our new, and our future use cases through that. That's how I think about one bucket. That is key. That's obviously our biggest push. We've also been continuing to invest in our Ansys experience, whether it be consistency across our product portfolio. I think you've probably heard through channels sometimes, you know, when we do acquisitions, it takes some time to get this common look and feel. We now have a methodology that we use across our product portfolio to get a common look and feel, leveraging our new Discovery interface. That look and feel is something that we've extended to OnScale here recently with a web UI toolkit, to give it a look and feel as we look down the road and see the opportunity to expose Ansys to simulation solvers in that web experience. That is, like, a key and an important element of our development. Then we're gonna continue to invest in the cloud, because it's obviously important. It's the way we see a way to expand our user base. Investing in the cloud isn't just the cloud platform itself, which we get through OnScale and some of the organic development, but it involves each of our product areas containerizing the elements of each of those products to make this consumable in an easier fashion such that workflows can scale out, and we can touch additional users. We're gonna continue to look at M&A. M&A's been critical for us in terms of expanding our core, our adjacency, and we've been successfully able to target number one players in the market. A good example of that is what we've done over the last couple years with Lumerical and with Zemax adding to Speos to create the best optical solution there is in the market. Okay. Shane, quick clarification from your prepared remarks, earlier. You made an interesting reference to componentized physics. Is that synonymous with domain-specific apps, or is this something totally different? No. When I talk about componentized physics, I'm talking about physics at the detailed level within a particular product or product application area. It was done in the context of component as part of a broader system. Understood. Thanks very much. Our next question will come from Blair Abernethy with Rosenblatt. Please go ahead. Thanks very much, and thanks for doing this today. Just Ajei, just wondering if you can give us maybe a little more color around the future use cases. Longer term, as you're looking at really broadening out the use of simulation by what appears to be, I guess, non-engineers, how do you think about that in terms of the products? Is this really, you know, creating more prebuilt solutions around that approach, or are we talking about completely new products? When we talk about future use cases, we're talking about capability where people are using simulation in ways that they've historically not necessarily used simulation. You know, you look at some of the examples that we gave on the video of these future use cases. These are not traditional users sitting at a screen and doing Ansys computations or using Ansys as a tool as they've historically used them. We're talking about a next generation set of opportunities where the insights of simulation are being injected into other workflows, into other capabilities, into other product areas, into decision-making, so that the insights of simulation are then made available not just to engineers who traditionally enjoyed them, but to any potential user who's using these other applications. I'm gonna let both Shane and Walt add a little bit more color to this. Yeah, let me go first. Yeah, Shane, go ahead. Hey. On the product side, as you think about. You asked if there's new product. It's really not new products. It goes to the point of containerizing our existing products and making them more accessible. We're going to make them more accessible on the OnScale platform and a web-based platform. We're gonna do it in such a way that it leverages what we've been doing with the Python ecosystem, with PyMAPDL, with PyAEDT, with PyFluent. Highly successful offerings of more than 1,000 downloads a month that are out there in the market. I think we referenced a couple of those in our video. That's how we should think about the future use cases. We should think about expanding beyond our core user base and leveraging our existing portfolio by effectively making our solver technology more readily available to a broader user base. I think Walt has a good example of that. Yeah. No, no. That's great. Thanks, Shane. Look, let me give you a couple examples. Alcon is a world leader in eye care products, and their engineers, you know, they've been using Ansys simulation for many years to simulate and optimize their surgical machines. By leveraging simulation, they've been able to, you know, innovate, get their products to market at an accelerated pace. This is a traditional use case. When you think about a future use case, you heard in the video from Optimeyes, right? What Optimeyes is doing is they're taking simulation to the clinician to leverage in a custom patient healthcare application. By leveraging an automated simulation workflow, they're actually opening up simulation to a whole new class of users, the clinician. We see similar opportunities across, you know, many different industries, and applications. Great. Thanks very much for the color. Our next question will come from John Walsh with Credit Suisse. Please go ahead. Hi. Good morning, and I'll echo everyone's thank you for the material today. I know it's not easy to put that together. First question was just around, you know, talking about that tuck-in M&A engine. Just curious, you know, if you're seeing more competition in the market for those properties. You know, in the past you've obviously talked about your moat, but there's a lot of folks that claim or talk about simulation that aren't actually doing what you guys are doing. Just curious what you're seeing there in terms of increased appetite for those tuck-in deals. Yeah. Maybe I'll start kind of in terms of what we're seeing, and I'll you know, ask Shane or others to weigh in on anything that I might have missed. Maybe just start by kind of giving a framework for how we think about M&A. M&A, the way that we build our pipeline is not kind of a one and done opportunity set, right? It's not like things come up in the market, and then we just go after it. I mean, that does happen. There's opportunistic things. But we build our pipeline through long-term relationships with a deep set of technical and go-to-market partners, and we have a broad set of partnerships because we're an open platform, you know, across the industry. In many, many cases, these tuck-ins are a result of multiple years of, or multiple months of engagement, with people and finding the right strategic connection between the two companies. You know, while there's market dynamics that change and you know, things come up on the market and maybe there's more or less people kind of looking at those properties that come up opportunistically, you know, the vast majority of what we have in our tuck-in pipeline comes from a longer term relationship that we have, either formally or informally, with those companies. That is really why not only we can continue to do them, but why they're incredibly successful, and we can integrate them so well, and we know that they're going to succeed. As you know, most people with M&A programs have less than a 50% success rate, and that is not the nature of how we execute M&A, and that is not the level of success we have. We are highly successful in our strategy. Maybe you can add some more color to that, Shane. No, I mean, specific to the question on are we seeing a difference in how competitors are approaching tuck-in acquisitions, are we running into them? I would say as being very close to that process over the last, you know, decade plus, I don't see a meaningful change in the people that we see in the market targeting these applications. You get a mix of PE, you get a mix of strategics, you get a mix of people that are close to that particular area. At the end of the day, the reason that these companies elect us when it comes to the process typically is because of our track record, our ability to retain the development, our ability to integrate, and our ability to basically propel their technology into top class status, which is what they want for their team and for their technology on a go-forward basis. Great. Then I thought it was very interesting, the conversation around digital twins. If we look at some of the customer set, you know, they're moving their business models to, you know, air travel, engine, you know, power by the hour, energy, and utilities. I think these are already big customers of simulation, but as they change their business model, what does that mean for Ansys and the relationship you have with those customers as they shift from just kind of new product design R&D to actually changing the way they do their business model? Thank you. That's a really interesting question. The first thing I would note is that when people talk about digital twin, and it's useful to level set, people have different definitions of digital twin. There isn't a standard industry definition of digital twin. You have to be careful as you evaluate the context within which the conversation is taking place. But that being said, when you think about the use of physics-based analysis in broader context, such as the one you described, where business models are changing, what that really does is it deepens the relationship we have with our customers. I mean, consider this, when a customer is thinking about not just building a product, but thinking about a long-term relationship, for example, if you're building a piece of industrial equipment, that industrial equipment could have a 20-year life cycle afterward, and a significant amount of your monetization happens during that 20-year timeframe when you're providing value-added services and capabilities, and so forth to the end customer. In other words, our customer's customer. If we can help our customers better monetize that relationship with their customers, that changes, that further changes and cements our position with our direct customer. That's essentially the conversations that we're having, as our customers recognize the importance of physics-based analysis and physics-based simulation, as they recognize that it's not just about helping them build products in the short term, which it absolutely is, but that the insights of simulation can help them in so many other aspects of the business, like for example, the long-term monetization of their relationship with their own customers. Walt, do you wanna add anything more? Yeah. You know, when we think about digital twins, and we really think about it as a future use case. You know, on the last investor call you heard Ajei talk about WEG. You know, WEG is a global leader in electrical engineering, power, and automation technology, and they've created a digital twin of the motor, right? What they're doing is they're blending their data with physics-based simulation to get an advanced digital twin. By having that, by having hybrid digital twins that combine both physics and data modeling, they're able to do predictive maintenance, performance optimization, and, you know, this helps support their business value in various and a lot of numerous ways. We're excited about the collaboration with WEG and the opportunities that digital twins bring to us, in future case examples. Great. Thanks for taking the question. Our next question will come from Tyler Radke with Citi. Please go ahead. Thank you. Good morning. Nicole, I wanted to ask you about the long-term target. Obviously, you gave a you know, kind of a cumulative free cash flow number and a ACV CAGR. I'm just kinda curious how we should be thinking about the shape of that. Obviously, some of these markets, particularly some of the emerging categories are you know, early in earlier stages. Should we think about the ACV growth kinda accelerating in out years, or is this gonna be kind of a linear you know, steady growth? Just curious how your assumptions are for that linearity of the growth. Thank you. Yeah. Thanks for the question, Tyler. Let me kind of just to clarify what the underlying assumptions are that, from a market standpoint, that are going into our long-term outlook. As we looked at the market opportunity, there really were two components to the market. There's the core simulation market, which is the market we're in, and that has, you know, the traditional use cases, which tend to be single physics in nature, and then what we've referred to as new use cases, which are, you know, these more complex R&D challenges that customers face. These are really about use cases. It's the same products, it's the same business model, the same selling motion, but it's really about how these products get composed into those solutions to solve those problems. That's kind of the nature of the faster-growing portion of that market. Overall, you know, the market growing at that kind of high single digit, low double digit rate is kind of the underlying assumption behind the ACV growth, right? Because we're focused on that core market. We participate in the core simulation market, and it's the growth of that core simulation market, which is the factor and the underlying demand driver that is supporting the 12% ACV constant currency guidance. Now, those future use cases, they're, you know, you saw a glimpse of some of them. We've talked about the potential impact of them. They're certainly, you know, very exciting and things that we are uniquely positioned to make markets on. We have not factored in the adoption or any significant material impact into our growth in the 12% CAGR from those use cases. You know, I hope that kinda helps. If you tie it to overall demand, you know, our long-term guidance or long-term outlook that we provided today is really, you know, based on the foundation that we have been building from the over the trend, the business model, the financial model, the go-to-market model transition, and the expansion of the portfolio over the past five years. That is what is setting us up for the next chapter of growth. You know, the other point I would make in terms of how you're thinking about modeling the timing, you know, we've given 2022 guidance. You can see where the midpoint of where we're landing today to try to get, you know, an overall feel for how to think about the years. Okay. Great. It sounds like pretty steady growth throughout the future. Maybe a quick follow-up for Walt. First, congrats on the promotion. I know you've been at Ansys for a number of years. I'm just curious, you know, what are the biggest areas, you know, you think, you know, the company is kinda under-penetrated in? You know, what are the biggest changes or focus areas for you, where you think you can have the biggest impact? Thank you. Yeah, no, that's great. Let me talk about it. So before running the worldwide sales organization, you know, I was actually managing the Americas. In the Americas, we had been at the forefront of the transition of our go-to-market model. We've been focused on moving to volume, to strategic, to enterprise. You know, we had tremendous success doing that. You know, in the volume space, we've expanded coverage with companies like SimuTech, who you've heard from across all of the Americas. We've added new channel partners like Rand Simulation. You know, in both these instances, they've been successful in growing new and existing small and medium-sized business customers. In the strategic space, we've been able to expand more users, more products, driving more computation. We've drove larger deals by having a more focused approach. In the enterprise segment, you know, we've assigned dedicated sales, technical and executive resources. This has enabled us to continue growing in that space. You know, we've actually already done the heavy investment needed in this go-to-market transition over the last several years. We're just gonna get to keep executing on that in the future. We don't really see any changes coming in the go-to-market model and really no heavy incremental investment needed. Thank you. Our next question will come from Andrew Obin with Bank of America. Please go ahead. Yeah. Hi, guys. Good morning. Good morning. Good morning. Just a question. Both of my questions are about slide seven in your supplemental slide deck. Just the first question, you know, it shows that, you know, you show the TAM for core simulation market, and it sort of shows that the new use cases TAM will keep growing at roughly the same rate as before. Clearly, I think you guys are betting that your own strategy of shifting away from these super simulation users to more sort of design engineers is successful. I appreciate we've just had an analyst day, but if you could just point to one or two key levers why this will accelerate for you, is it a portfolio of the product? Is it the interface? Is it computational power? Is it all of the above? You know, because clearly that has been at the heart of your strategy to, you know, to materially expand your TAM by targeting these designers versus simulation engineers. It does seem we're approaching an inflection point. What has changed, if you could point to one or two things for you? Sure. Thanks for the question, Andrew Obin. First, let me start with a clarification of what on the top bar on page seven, I think you were referring to the lighter-colored section of the growth rate. Is that what you're referring to when you ask your question? Yes. Correct. Yes. Yep. Okay. Let me clarify what those use cases reflect. Certainly design engineer adoption is a component of the overall core simulation market. It is a relatively immaterial and small portion of the total $8 billion. That is not the underlying driver of that kind of growth rate, the kind of mid-teens growth rate on that chart. What is the underlying driver is really these, what we referred to in the prepared video presentation of these new use cases, right? The new use cases are fueled by trends like electrification, 5G, autonomy, internet of things, next generation connectivity, right? I think that for those, you can see through all of the examples that we gave and the things that we've talked about just why that has fueled that. Now, the market research indicates that, you know, over the past five years, you know, when we did this a while ago, we said this was gonna grow faster than the total market. In fact, the market research when we updated it did indicate that it continued to grow at a faster rate. In fact, you know, about 3x faster than the core market over the past couple of years. Certainly customers' R&D budgets, while they're smaller percentages of it, as you can see in the visual of the TAM, customers' R&D projects are more and more shifting to these complex use cases that require more multiphysics and the connectors of those things. The strategy that you heard laid out today really is kind of the next chapter of really enabling that. No, that makes a ton of sense. Really appreciate it. Thanks for the clarification. Just second question. The chart also shows that traditional use cases have grown at 5% CAGR or sort of undergrowing the 7% CAGR for the total TAM. I guess, my understanding is that overall, industrial PLM grows at around the 7%. Is it just data, or does it imply that traditional use cases are undergrowing the total market? Then it also implies that we will accelerate over the next four years. Why would traditional use? A, am I correct, or is it just sort of how you aggregate the data that it has undergrown sort of the total market? Second, why do you think the traditional use case will accelerate from here on? Thank you very much. Yeah, I mean, this is what the research has told us. Let me start with, as we look to the future, and then I can contextualize the past a little bit. As we look to the future, the research suggests that the core simulation market will see tailwinds, which is the 8%-10% growth, right? Really underneath that, what customers were saying is that the digital transformations have accelerated as a result of new ways of working during the pandemic. Now, underneath that, as we just talked about, there's an expectation by these customers that new use cases will continue to grow faster than overall R&D roadmaps. In addition, the research also indicated that broader use of simulation, even for traditional use cases, will accelerate, and that's really driven by the experience over the past few years that you can build better products cheaper and faster through the use of simulation, especially when working remotely. You know, what the research indicated during the pandemic was that people were still focused on the future and the long-term future. By the way, that's what makes what we do so relevant, and only we can do what is required to address those new use cases in the way our customers really need, right? The value proposition that we brought during a time of challenge is, you know, evident in that, right? Those core and the more traditional ones, you know, were more reprioritized in lieu of those future generations, or those future projects. Again, you know, what we're seeing from the research is that customers have realized the value of simulation is not just about those complex things, but they can actually get better time to value and more efficiency and effectiveness by doing it in their core. Let me just jump in here just to sort of summarize some of this. The traditional use cases and the new use cases represent really customers solving problems. The traditional are use cases they've had in the past. The new use cases Nicole talked about things like electrification and so forth. In all cases, they're taking advantage of Ansys, our products, our flagship products to be able to solve those problems. That's where that's what we've been selling into. That's what we will continue to sell into. Some of these future use cases, for example, the optimized example that was given in the video that Walt talked about as well, those represent future opportunities for us. That is not something that we believe to be material to our business over the short term. What's really important for us is the core business. We're excited about our ability and optimistic about our business. Look, we're the market leaders. We're seeing the market growing, but despite that, as you saw in our guidance, our ACV is outstripping the market growth rates. We expect to be in a position to take market share and to continue to grow. We're excited about our business and we think we're very strong for the future going forward. Thank you everyone for joining. That's all the time we have today. I am now gonna turn it over to Ajei, and he's gonna make some closing remarks. So thank you all for joining us today to learn more about the power of Ansys simulation and about our long-term outlook. As you heard today, Ansys is the leader in engineering simulation. Our product suite is the broadest and deepest in the market, and we continue to grow our product leadership every day through organic development and M&A. Our customers value our accuracy, the completeness of our solutions, our innovation, and they know that we are constantly investing in enhancing the portfolio to help them deal with future challenges. Our business model is supported by three distinct growth vectors: more users, more areas of physics, and more computational methods. We believe that will help to drive future growth and to help us achieve our business and financial outlook for 2022 to 2025 and beyond. I would like to conclude by thanking my colleagues and our channel and strategic partners around the world for their commitment to our ongoing success. Thank you again, and I hope you enjoy the rest of the day. Thank you for being a part of the Ansys 2022 investor update. You may now disconnect. Thank you.