Ansoft Corporation Earnings Nearly Double; Revenue Increases 17%

PITTSBURGH—(BUSINESS WIRE)—Aug. 24, 2006— Ansoft Corporation (NASDAQ: ANST) today announced financial results for its first quarter of fiscal 2007 ended July 31, 2006. All references to share and per share information, except shares authorized, included in this press release have been adjusted to reflect the two-for-one stock split effected in the form of a stock dividend that was declared on March 7, 2006, and distributed on May 9, 2006.

Revenue for the first quarter totaled $17.3 million, an increase of 17% compared to $14.8 million reported in the previous fiscal year's first quarter.

On a generally accepted accounting principles (GAAP) basis, net income for the first quarter was $2.3 million, or $0.09 per diluted share, representing a 96% increase when compared to GAAP net income of $1.2 million, or $0.05 per diluted share in the previous fiscal year's first quarter.

GAAP net income for first quarter includes employee stock-based compensation expense of $0.6 million, or $0.02 per diluted share due to the adoption of Statement of Financial Accounting Standards 123(R) (SFAS 123(R)). The previous fiscal year's first quarter net income did not include employee stock-based compensation expense related to SFAS 123(R).

Additionally, GAAP net income for the first quarter includes acquisition related amortization of $0.3 million, or $0.01 per diluted share. This compares to acquisition related amortization of $0.4 million, or $0.01 per diluted share in the previous fiscal year's first quarter.

"We are pleased to report strong revenue and earnings growth for the first quarter," said Nicholas Csendes, Ansoft's President and CEO. "For the next fiscal quarter, we anticipate continued revenue growth of around 10-15%."

Ansoft is a leading developer of high-performance electronic design automation (EDA) software. Engineers use Ansoft software to design state-of-the-art electronic products, such as cellular phones, internet access devices, broadband networking components and systems, integrated circuits (ICs), printed circuit boards (PCBs), automotive electronic systems and power electronics. Ansoft markets its products worldwide through its own direct sales force and has comprehensive customer-support and training offices throughout North America, Asia and Europe.

This press release contains forward-looking statements including those related to revenue and earnings growth for the current fiscal year that are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, management's ability to forecast revenues and control expenses and the amount, timing and structure of software licenses.

For further information regarding risks and uncertainties associated with Ansoft's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Ansoft's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained at Ansoft's website at www.ansoft.com/about/investor/index.cfm.

All information in this release is as of August 24, 2006. Ansoft undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
                          ANSOFT CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                              (unaudited)


                                           Three months ended July 31,
                                               2006          2005
                                           ------------- -------------
Revenue
   License                                       $8,185        $6,820
   Service and other                              9,138         7,970
                                           ------------- -------------
Total revenue                                    17,323        14,790
Costs of revenue
   License                                          120            99
   Service and other                                333           329
                                           ------------- -------------
Total cost of revenue                               453           428
Gross profit                                     16,870        14,362
Operating Expenses
   Sales and marketing                            7,478         7,143
   Research and development                       4,826         4,060
   General and administrative                     1,384         1,383
   Amortization                                     346           369
                                           ------------- -------------
Total operating expenses                         14,034        12,955
                                           ------------- -------------
Income from operations                                            2,836                  1,407
Net  realized  loss  on  sale  of  securities                              -                        (2)
Other  income,  net                                                                      815                      340
                                                                                      -------------  -------------
Income  before  income  taxes                                                3,651                  1,745
Income  tax  expense                                                                1,362                      576
                                                                                      -------------  -------------
Net  income                                                                              $2,289                $1,169
                                                                                      =============  =============
Net  income  per  share
        Basic                                                                                  $0.10                  $0.05
                                                                                      =============  =============
        Diluted                                                                              $0.09                  $0.05
                                                                                      =============  =============
Weighted  average  shares  used  in  calculation
      Basic                                                                                  23,609                23,834
                                                                                      =============  =============
      Diluted                                                                              26,174                25,954
                                                                                      =============  =============


All  share  and  per  share  information  has  been  adjusted  to  reflect  the
two-for-one  stock  split  effected  in  the  form  of  100%  stock  dividend
that  was  declared  on  March  7,  2006,  and  distributed  on  May  9,  2006.


                                                    ANSOFT  CORPORATION
                                            CONSOLIDATED  BALANCE  SHEETS
                              (In  thousands,  except  per  share  amounts)
                                                            (unaudited)


                                                                                                    July  31,      April  30,
                                                                                                        2006              2006
                                                                                                  ----------  ----------

Assets
Current  assets
Cash  and  cash  equivalents                                                    $16,703        $16,456
Accounts  receivable,  net  of  allowance  for
  doubtful  accounts  of  $640  and  $545,  respectively      11,890          20,264
Deferred  income  taxes                                                                    164                164
Prepaid  expenses  and  other  assets                                        2,653            1,938
                                                                                                  ----------  ----------
Total  current  assets                                                                31,410          38,822

Equipment  and  furniture,  net  of  accumulated
  depreciation  of  $6,530  and  $6,249,  respectively          2,532            2,599
Marketable  securities                                                              36,298          33,621
Other  assets                                                                                      140                131
Deferred  income  taxes                                                                6,344            6,226
Goodwill                                                                                          1,239            1,239
Other  intangible  assets,  net                                                  2,096            2,442
                                                                                                  ----------  ----------
Total  assets                                                                              $80,059        $85,080
                                                                                                  ==========  ==========

Liabilities  and  stockholders'  equity
Current  liabilities
Accounts  payable                                                                            $189              $274
Accrued  payroll                                                                            1,176            3,027
Accrued  income  taxes                                                                  1,526                928
Other  accrued  expenses                                                              2,890            3,609
Current  portion  of  deferred  revenue                                  19,204          19,893
                                                                                                  ----------  ----------
Total  current  liabilities                                                      24,985          27,731
Long-term  portion  of  deferred  revenue                                    940            1,088
                                                                                                  ----------  ----------
Total  liabilities                                                                      25,925          28,819

Stockholders'  equity
Preferred  stock,  par  value  $0.01  per  share;  1,000
  shares  authorized,  no  shares  outstanding                                -                    -
Common  stock,  par  value  $0.01  per  share;  50,000
  shares  authorized;  issued  28,672  and  28,576
  shares,  respectively  and  outstanding  23,573  and
  23,764,  respectively                                                                    287                286
Additional  paid-in  capital                                                    77,926          76,795
Treasury  stock,  5,099  and  4,812  shares,
  respectively                                                                            (43,650)      (37,913)
Accumulated  other  comprehensive  loss,  net                      (1,350)        (1,539)
Retained  earnings                                                                      20,921          18,632
                                                                                                  ----------  ----------
Total  stockholders'  equity                                                    54,134          56,261
                                                                                                  ----------  ----------
  Total  liabilities  and  stockholders'  equity                $80,059        $85,080
                                                                                                  ==========  ==========

All  share,  except  shares  authorized,  information  has  been  adjusted  to
reflect  the  two-for-one  stock  split  effected  in  the  form  of  100%  stock
dividend  that  was  declared  on  March  7,  2006,  and  distributed  on  May  9,
2006.
 


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