Ansoft Corporation First Quarter Earnings Increase to $0.11 Per Share on Record Revenues.

PITTSBURGH -- Ansoft Corporation (NASDAQ:ANST) today announced financial results for its first quarter of fiscal 2006 ended July 31, 2005.

Revenue for the first quarter totaled $14.8 million, an increase of 17% compared to $12.7 million reported in the previous fiscal year's first quarter. On a non-GAAP basis, net income for the first quarter was $1.4 million, or $0.11 per diluted share, representing a 392% increase when compared to net income of $0.3 million, or $0.02 per diluted share in the previous fiscal year's first quarter. On a generally accepted accounting principles (GAAP) basis, net income for the first quarter was $1.2 million, or $0.09 per diluted share, compared to GAAP net income of $30,000, or $0.00 per diluted share in the previous fiscal year's first quarter.

"We had an excellent first quarter with strong growth in revenues and earnings," said Nicholas Csendes, Ansoft's President and CEO. "For the balance of the fiscal year, we expect continued revenue growth of around 10-15% with earnings increasing around 25% over the last fiscal year."

Pro forma results represent non-GAAP financial measures and exclude the impact of amortization of intangible assets. A reconciliation of these amounts to the appropriate GAAP amounts, for the three months ended July 31, 2005 and 2004 is included with this press release.

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 size, timing and structure of significant 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 18, 2005. 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,
                                               2005          2004
                                           ------------- -------------
Revenue
  License                                        $6,820        $6,169
  Service and other                               7,970         6,509
                                           ------------- -------------
Total revenue                                    14,790        12,678
Costs of revenue
  License                                            99            97
  Service and other                                 329           304
                                           ------------- -------------
Total cost of revenue                               428           401
                                           ------------- -------------
Gross profit                                     14,362        12,277
Operating Expenses
  Sales and marketing                             7,143         7,497
  Research and development                        4,060         3,978
  General and administrative                      1,383         1,064
  Amortization                                      369           409
                                           ------------- -------------
Total operating expenses                         12,955        12,948
                                           ------------- -------------
Income (loss) from operations                     1,407          (671)
Net realized gain (loss) on sale of
 securities                                          (2)          759
Other income, net                                   340           (48)
                                           ------------- -------------
Income before income taxes                        1,745            40
Income tax expense                                  576            10
                                           ------------- -------------
Net income                                       $1,169           $30
                                           ============= =============

                                           ------------- -------------
  Basic net income per share                      $0.10         $0.00
                                           ============= -------------
  Diluted net income per share                    $0.09         $0.00
                                           ============= =============
Weighted average shares used in
 calculation
  Basic                                          11,917        11,664
                                           ============= -------------
  Diluted                                        12,977        13,314
                                           ============= =============



                          ANSOFT CORPORATION
                      CONSOLIDATED BALANCE SHEETS
                            (In thousands)
                              (unaudited)

                                                 July 31,   April 30,
                                                  2005        2005
                                               ----------- -----------

Assets
Current assets
Cash and cash equivalents                          $8,143     $11,910
Accounts receivable, net                            9,149      17,388
Deferred income taxes                                 229         229
Prepaid expenses and other assets                   1,849       1,148
                                               ----------- -----------
Total current assets                               19,370      30,675

Equipment and furniture, net                        3,030       2,811
Marketable securities                              31,113      28,496
Other assets                                          136         146
Deferred income taxes                               6,177       6,177
Goodwill                                            1,239       1,239
Other intangible assets, net                        3,518       3,877
                                               ----------- -----------
Total assets                                      $64,583     $73,421
                                               =========== ===========

Liabilities and stockholders' equity
Current liabilities
Accounts payable                                   $1,055        $231
Accrued payroll                                       681       2,290
Accrued income taxes                                  747         415
Other accrued expenses                              1,592       2,661
Current portion of deferred revenue                16,066      17,500
                                               ----------- -----------
Total current liabilities                          20,141      23,097
Long-term portion of deferred revenue               1,025       1,039
                                               ----------- -----------
Total liabilities                                  21,166      24,136

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;
 25,000 shares authorized; issued  13,931 and
 13,901 shares, respectively and outstanding
 11,804 and 12,083, respectively                      141         140
Additional paid-in capital                         70,804      70,410
Treasury stock, 2,127 and 1,818 shares,
 respectively                                     (28,873)    (21,762)
Accumulated other comprehensive loss, net            (659)       (338)
Retained earnings                                   2,004         835
                                               ----------- -----------
Total stockholders' equity                         43,417      49,285
                                               ----------- -----------
 Total liabilities and stockholders' equity       $64,583     $73,421
                                               =========== ===========


                          ANSOFT CORPORATION
   RECONCILIATION OF GAAP NET INCOME (LOSS) TO PRO FORMA NET INCOME
               (In thousands, except per share amounts)
                              (unaudited)

Pursuant to the requirement of Regulation G, the Company has
provided a reconciliation of the non-GAAP financial measure to the
most directly comparable GAAP financial measure. These measures differ
from GAAP in that they exclude the amortization of intangible assets.
The Company has provided these measurements in addition to GAAP
financial results because it believes they provide a consistent basis
for comparison between periods that is not influenced by certain
non-cash expenses and therefore are helpful to understanding the
Company's underlying operational results. These same measures are used
by management when evaluating the continuing operating results of the
Company.

                                                 Three months ended
                                                       July 31,
                                               -----------------------
                                                  2005        2004
                                               ----------- -----------

GAAP net income                                    $1,169         $30
                                               ----------- -----------
Amortization of intangibles (1)                       229         254
                                               ----------- -----------
Pro forma net income                               $1,398        $284
                                               =========== ===========
Pro forma net income per diluted common share       $0.11       $0.02
                                               =========== ===========
Weighted average diluted shares used in
 calculation                                       12,977      13,314
                                               =========== ===========

(1) Amortization expense net of a 38% tax rate.