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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended July 31, 2003

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission file number 000-27874

ANSOFT CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 72-1001909
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)

Four Station Square, Suite 200
Pittsburgh, Pennsylvania 15219-1119
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (412) 261-3200


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ x ] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ x ]

The number of shares of the registrant's Common Stock outstanding as of the
close of business on August 28, was 12,360,132.








ANSOFT CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX




Page
----

Part I FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 2003 (unaudited) and April 30, 2003 1
Consolidated Statements of Operations (unaudited) - Three months ended
July 31, 2003 and 2002 2
Consolidated Statements of Cash Flows (unaudited) - Three months ended
July 31, 2003 and 2002 3
Notes to the Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5
Item 3. Quantitative and Qualitative Disclosure about Market Risk 12
Item 4. Controls and Procedures 12


Part II OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K 13

Signatures 13










PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ANSOFT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)




July 31, April 30,
2003 2003
-------- ---------
(unaudited)

Assets
Current assets
Cash and cash equivalents $ 6,166 $ 7,173
Accounts receivable 9,142 13,968
Deferred income taxes 274 310
Prepaid expenses and other assets 1,257 842
-------- --------
Total current assets 16,839 22,293

Equipment and furniture 3,871 3,829
Marketable securities 23,939 21,785
Other assets 425 436
Deferred taxes - non current 5,342 4,909
Goodwill 1,239 1,239
Intangible assets 7,772 8,663
-------- --------
Total assets $ 59,427 $ 63,154
======== ========

Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued expenses $ 1,358 $ 2,449
Deferred revenue 9,643 10,879
-------- --------
Total current liabilities 11,001 13,328
Line of credit 10,000 10,000
-------- --------
Total liabilities 21,001 23,328

Stockholders' equity
Preferred stock -- --
Common stock 123 123
Additional paid-in capital 55,765 55,522
Treasury stock (4,371) (3,954)
Other accumulated comprehensive income (loss) (737) (703)
Accumulated deficit (12,354) (11,162)
-------- --------
Total stockholders' equity 38,426 39,826

Total liabilities and stockholders' equity $ 59,427 $ 63,154
======== ========


See accompanying notes to the consolidated financial statements.


Page 1






ANSOFT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)




Three months ended July 31,
2003 2002
-------- --------

Revenues
License $ 5,341 $ 5,045
Service and other 5,310 4,243
-------- --------
Total revenue 10,651 9,288
Cost of revenue
License 142 225
Service and other 248 222
-------- --------
Total cost of revenue 390 447
-------- --------
Gross profit 10,261 8,841
Costs and expenses
Sales and marketing 6,320 6,230
Research and development 3,823 5,144
General and administrative 1,111 1,032
Amortization 857 856
-------- --------
Total costs and expenses 12,111 13,262
-------- --------
Income (loss) from operations (1,850) (4,421)
Other income, net 261 242
-------- --------
Income (loss) before income taxes (1,589) (4,179)
Income tax benefit 397 836
-------- --------
Net income (loss) $ (1,192) $ (3,343)
======== ========

Basic net income (loss) per share $ (0.10) $ (0.28)
======== ========
Diluted net income (loss) per share $ (0.10) $ (0.28)
======== ========
Weighted average shares used in calculation
Basic 11,672 11,940
======== ========
Diluted 11,672 11,940
======== ========


See accompanying notes to the consolidated financial statements.



Page 2




ANSOFT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)





Three months ended July 31,
2003 2002
------- -------

Cash flows from operating activities
Net loss $(1,192) $(3,343)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation 381 496
Amortization 891 1,009
Deferred taxes (397) (836)
Non cash charge on marketable securities -- 78
Changes in assets and liabilities
Accounts receivable 4,826 3,643
Prepaid expenses and other assets (415) (41)
Other long-term assets and liabilities, net 11 (88)
Accounts payable and accrued expenses (1,091) (1,008)
Deferred revenue (1,236) (189)
------- -------
Net cash provided by (used in) operating activities 1,778 (279)
------- -------
Cash flows from investing activities
Purchases of equipment and furniture (423) (383)
Proceeds from the sale of marketable securities 2,426 --
Purchase of marketable securities (4,609) (273)
------- -------
Net cash used in investing activities (2,606) (656)
------- -------
Cash flows from financing activities
Purchase of treasury stock (417) (335)
Proceeds from the issuance of common stock, net 243 135
------- -------
Net cash used in financing activities (174) (200)
------- -------
Net decrease in cash and cash equivalents (1,002) (1,135)
Effect of exchange rate changes (5) 158
Cash and cash equivalents at beginning of period 7,173 5,269
------- -------
Cash and cash equivalents at end of period $ 6,166 $ 4,292
======= =======
Supplemental disclosures of cash flow information
Cash paid for interest $ 51 $ 78
======= =======
Cash paid for income taxes $ -- $ 821
======= =======


See accompanying notes to the consolidated financial statements.



Page 3



ANSOFT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1) Basis of Presentation

The unaudited consolidated financial statements include the accounts of Ansoft
and its majority owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial position and results of operations have been made.
Operating results for interim periods are not necessarily indicative of results
which may be expected for a full year. The information included in this Form
10-Q should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations and the fiscal year ended April
30, 2003 consolidated financial statements and notes thereto included in
Ansoft's annual report on Form 10-K filed with the Securities and Exchange
Commission.

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and disclosure of contingent assets and liabilities. The
estimates and assumptions used in the accompanying consolidated financial
statements are based on management's evaluation of the relevant facts and
circumstances as of the date of the consolidated financial statements. Actual
results may differ from those estimates.

(2) Comprehensive income (loss)

"Comprehensive income (loss)" includes foreign currency translation gains and
losses and other unrealized gains and losses. A summary of comprehensive income
(loss) follows:




Three Months Ended July 31,
(in thousands, except per share amounts)
2003 2002
---- ----

Net loss $(1,192) $(3,343)
Unrealized gain (loss) on marketable securities (29) (1,355)
Foreign currency translation adjustments (5) 158
------- -------
Comprehensive loss $(1,226) $(4,540)
======= =======


(3) Net income per share

Basic net income per share is calculated using the weighted-average number of
common shares outstanding during the period. Diluted net income per share is
computed using the weighted-average number of common shares and potentially
dilutive common shares outstanding during the period. Potentially dilutive
common shares consist of the incremental common shares issuable upon the
exercise of employee stock options, and are computed using the treasury stock
method. Potentially dilutive common shares are excluded from the calculation if
their effect is antidilutive.

(4) Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with the
Financial Accounting Standards Board's ("FASB") SFAS No. 123 "Accounting for
Stock-Based Compensation." This statement permits a company to choose either a
fair value based method of accounting for its stock-based compensation
arrangements or to comply with the Accounting Principles Board ("APB") Opinion
No. 25 intrinsic value based method, adding pro forma disclosures of net income
and earnings per share computed as if the fair value based method had been
applied in the financial statements. The Company has adopted SFAS No. 123 by
retaining the APB Opinion No. 25 method of accounting for stock-based
compensation with pro forma disclosures of net income and earnings per share.


Page 4






The Company's pro forma information follows:




Three Months Ended July 31,
(in thousands, except per share amounts)
2003 2002
---- ----

Net loss, as reported $(1,192) $(3,343)
Deduct: Total stock-based employee compensation
expense determined under fair value based method, net of tax (800) (696)
------- -------
Pro forma net income (loss) $(1,992) $(4,039)
======= =======
Pro forma net income (loss) per basic and diluted common share $ (0.17) $ (0.34)
======= =======


Because the Company anticipates making additional grants and options vest over
several years, the effects on pro forma disclosures of applying SFAS No. 123 are
not likely to be representative of the effects on pro forma disclosures of
future years.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements that involve
substantial risks and uncertainties. When used in this Form 10-Q, the words
"anticipate," "plan," "believe," "estimate," "expect" and similar expressions as
they relate to Ansoft or its management are intended to identify such
forward-looking statements. Ansoft's actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in this Form 10-Q and in the "Risk Factors"
section included in Ansoft's report on Form 10-K for the fiscal year ended April
30, 2003.

Overview

Ansoft Corporation ("Ansoft" or the "Company") is a developer of electronic
design automation ("EDA") software used in high technology products and
industries. Ansoft's software is used by electrical engineers in the design of
state of the art technology products, such as cellular phones, internet
networking, satellite communications systems, computer chips and circuit boards,
and electronic sensors and motors. Engineers use our software to maximize
product performance, eliminate physical prototypes, and to reduce
time-to-market.


Page 5






Results of Operations

The following table sets forth the percentage of total revenue of each item in
Ansoft's consolidated statements of operations:



Three months ended July 31,
2003 2002
---- ----
(Percentage of Revenue)

Revenue
License 50% 54%
Service and other 50 46
---- ----
Total revenue 100 100
---- ----
Costs of revenue
Cost of license revenue 2 3
Cost of service and other revenue 2 2
---- ----
Gross profit 96 95
---- ----
Operating Expenses
Sales and marketing 59 67
Research and development 36 56
General and administrative 10 11
Amortization 8 9
---- ----
Total operating expenses 113 143
Income (loss) from operations (17) (48)
Other income, net 2 3
---- ----
Income (loss) before income taxes (15) (45)
Income tax expense (benefit) (4) (9)
---- ----
Net income (loss) (11)% (36)%
==== ====


Comparison of the Three Months Ended July 31, 2003 and 2002

Revenue. Total revenue in the three-month period ended July 31, 2003 increased
15% to $10.7 million. License revenue during the three-month period ended July
31, 2003 increased 6% to $5.3 million from $5 million during the comparable
period in the prior fiscal year. The increase is attributable to increased
demand from customers in Asia. Service and other revenue in the three-month
period ended July 31, 2003 increased 25% due to the continued growth of the
installed base of customers under annual maintenance agreements. Ansoft expects
total revenue in fiscal 2004 to increase between 10% and 15% as compared to
fiscal 2003.

International revenue accounted for 62% and 54% of the Company's total product
revenue in the three-month periods ended July 31, 2003 and 2002, respectively.
The Company's future international sales may be subject to additional risks
associated with international operations, including currency exchange
fluctuations, tariff regulations and requirements for export, which licenses may
on occasion be delayed or difficult to obtain.

Cost of revenue. Cost of revenue consists primarily of software materials,
personnel and other expenses related to providing maintenance and post-contract
customer support and amortization of acquired technology. Our cost of license
revenue decreased 13% to $390,000 from $447,000 during the comparable period in
the prior fiscal year. This decrease was due to certain acquired technology
being fully amortized in fiscal 2003. Ansoft expects cost of revenue to
represent 3% of total revenue in fiscal 2004.

Sales and marketing expenses. Sales and marketing expenses consist of salaries,
commissions paid to internal sales and marketing personnel, promotional costs
and related operating expenses. Sales and marketing expenses in the three-month
period ended July 31, 2003 was $6.3 million, comparable to the same period in
the previous fiscal year. Sales and marketing expenses represented 59% and 67%
of total revenue in the three-month periods ended July 31, 2003 and 2002,
respectively. Ansoft expects that sales and marketing expenses will be below
$6.5 million next quarter and increase 5% - 8% for the full fiscal 2004 year, as
compared to fiscal 2003, due to the increase in expected sales.


Page 6







Research and development expenses. Research and development expenses include all
costs associated with the development of new products and enhancements to
existing products. Total research and development expenses for the three-month
period ended July 31, 2003 decreased 26% to $3.8 million, as compared to $5.1
million for the same period in the previous fiscal year. Total research and
development decreased 22% due to the closing of the Altra Broadband Irvine
Technology Center. Total research and development decreased 4% due to general
cost control measures. Research and development expenses represented 36% and 56%
of total revenue in the three-month periods ended July 31, 2003 and 2002,
respectively. Ansoft expects to invest between $15.5 million and $16 million in
research and development expenses for the full 2004 fiscal year.

General and administrative expenses. General and administrative expenses for the
three-month period ended July 31, 2003 was $1.1 million, an 8% increase from
$1.0 million in the same period in the previous fiscal year. The increase is due
to general operation costs related to the increase in sales. General and
administrative expenses represented 10% and 11% of total revenue in the
three-month periods ended July 31, 2003 and 2002, respectively. Ansoft expects
general and administrative expenses for the full 2004 fiscal year to be between
$4.6 million and $4.8 million.

Amortization expense. Amortization expense for the three-month period ended July
31, 2003 was $857,000, comparable to the same period in the previous fiscal
year. Ansoft expects amortization expense for the full 2004 fiscal year to be
$3.1 million.

Other income. Other income for the three-month period ended July 31, 2003 was
$261,000, an increase from the $242,000 reported for the same period in the
previous fiscal year. The increase is due to interest income related to higher
cash and investment balances in the current period.

Income taxes. In the three-month period ended July 31, 2003, the Company
recorded a tax benefit of $397,000. Ansoft expects to be profitable for the full
2004 fiscal year resulting in an expected overall tax expense position for the
full fiscal year.

Liquidity and Capital Resources

As of July 31, 2003, Ansoft had $6.2 million in cash and cash equivalents and
working capital of $5.8 million. Net cash provided by (used in) operating
activities in the three-month periods ended July 31, 2003 and 2002 was $1.8
million and $(279,000), respectively.

Net cash used in investing activities in the three-month periods ended July 31,
2003 and 2002 was $2.6 million and $656,000, respectively. Capital expenditures
were $423,000 and $383,000 in the three-month periods ended July 31, 2003 and
2002, respectively. Net purchases of marketable securities were $2.2 million and
$273,000 in the three-month periods ended July 31, 2003 and 2002, respectively.

Net cash used in financing activities was $174,000 and $200,000 in the
three-month periods ended July 31, 2003 and 2002, respectively. Proceeds from
the issuance of common stock were $243,000 and $135,000 in the three-month
periods ended July 31, 2003 and 2002, respectively. Funds used for the purchase
of treasury stock were $417,000 and $335,000 in the three-month periods ended
July 31, 2003 and 2002, respectively.

Ansoft has available a $20.0 million secured line of credit from a domestic
financial institution at an interest rate equal to LIBOR plus an applicable
margin rate. The line of credit expires on September 30, 2005, and is secured by
the marketable securities held with the institution. As of July 31, 2003, $10
million was the outstanding balance on the line of credit. Ansoft believes that
the available funds will be sufficient to meet its anticipated cash needs for
working capital and capital expenditures for at least the next 12 months.
Thereafter, if cash generated from operations is insufficient to satisfy the
Company's liquidity requirements, Ansoft may seek additional funds through
equity or debt financing. There can be no assurance that additional financing
will be available or that, if available, such financing will be on terms
favorable to Ansoft.


Page 7








A summary of Ansoft's significant contractual obligations and commitments as of
July 31, 2003 is as follows (in thousands):

Debt Operating Leases
---- ----------------
Fiscal 2004 - 941
2005 10,000 1,272
2006 - 1,127
2007 - 624
2008 - 633
2009 - 398

Critical Accounting Policies

Ansoft's critical accounting policies are as follows:

o Revenue Recognition
o Valuation of Accounts Receivable
o Impairment of Long-Lived Assets
o Impairment of Marketable Securities Available for Sale
o Deferred Tax Asset Valuation Allowance

Revenue Recognition

Revenue consists of fees for licenses of software products and service and other
revenue.

License revenue - Ansoft licenses its software on a perpetual basis with no
right to return or exchange the licensed software.

Postcontract customer support ("PCS") is bundled with the perpetual licensing
fee. Revenue related to the three-month PCS is deferred and recognized ratably
over the three-month term. Ansoft's vendor-specific objective evidence of fair
value, or VSOE, for the three-month PCS is based upon the pricing for comparable
transactions when the element is sold separately. Ansoft's VSOE for the
three-month PCS is based upon one fourth of the customer's annual maintenance
contract renewal rates. Three-month PCS services provided are the same as
maintenance.

Service and other revenue - consists primarily of maintenance revenue. Ansoft
offers customers one-year maintenance contracts at 15% of the list price of the
respective software products. Ansoft recognizes all maintenance revenue ratably
over the respective maintenance period. Customers renew maintenance agreements
annually.

Revenue from customer training, support and other services is recognized as the
service is performed.

Valuation of Accounts Receivable

Management reviews accounts receivable to determine which are doubtful of
collection. In making the determination of the appropriate allowance for
doubtful accounts, management considers Ansoft's history of write-offs,
relationships with its customers, and the overall credit worthiness of its
customers.

Impairment of Long-Lived Assets

The Company reviews assets for impairment whenever events or changes in
circumstances indicate that the carrying value of the assets may not be
recoverable. A determination of impairment is made based on estimates of future
cash flows. If such assets are considered to be impaired the amount of the
impairment is based on the excess of the carrying value over the fair value of
the assets.

Page 8






Impairment of Marketable Securities Available for Sale

An impairment charge is recorded if a decline in the market value of any
available for sale security below cost is deemed to be other than temporary. The
impairment is charged to earnings and a new cost basis for the security is
established.

Deferred Tax Asset Valuation Allowance

Deferred tax assets are recognized for deductible temporary differences, net
operating loss carryforwards, and credit carryforwards if it is more likely than
not that the tax benefits will be realized. To the extent a deferred tax asset
cannot be recognized under the preceding criteria, a valuation allowance has
been established.

The judgments used in applying the above policies are based on management's
evaluation of the relevant facts and circumstances as of the date of the
financial statements. Actual results may differ from those estimates. See also
the "Risk Factors" under "Item 1. Business."

Recent Accounting Pronouncements


In January 2003, the Financial Accounting Standards Board, or FASB, issued FASB
Interpretation No. 46, or FIN 46, "Consolidation of Variable Interest Entities -
An Interpretation of ARB No. 51." FIN 46 requires companies to include in their
consolidated financial statements the assets, liabilities and results of
activities of variable interest entities if the company holds a majority of the
variable interests. The consolidation requirements of FIN 46 are effective for
variable interest entities created after January 31, 2003 or for entities in
which an interest is acquired after January 31, 2003. The consolidation
requirements of FIN 46 are effective for periods beginning after June 15, 2003
for all variable interest entities acquired before February 1, 2003. FIN 46 also
requires companies that expect to consolidate a variable interest entity they
acquired before February 1, 2003 to disclose the entity's nature, size,
activities, and the company's maximum exposure to loss in financial statements
issued after January 31, 2003. The adoption of FIN 46 is not expected to have a
material effect on our consolidated financial position, results of operations or
cash flows.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS No. 150
requires companies to classify and measure certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that requires a transfer of assets and that
meets the definition of liabilities in Concepts Statement 6 and other
recognition criteria in SFAS No. 5, "Recognition and Measurement in Financial
Statements of Business Enterprises," be reported as a liability. SFAS No. 150
also requires that certain obligations that could be settled by issuance of an
entity's equity but lack other characteristics of equity be reported as
liabilities even though the obligation does not meet the definition of
liabilities in Concepts Statement No. 6. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective beginning after June 15, 2003. The adoption of SFAS No. 150 is not
expected to have a material effect on our consolidated financial position,
results of operations or cash flows.

Additional Risk Factors that may affect Future Results

Our Future Operating Results Are Uncertain.

Ansoft has incurred net losses in four of the past five fiscal years. There can
be no assurance that Ansoft's revenue and net income will grow or be sustained
in future periods or that Ansoft will be profitable in any future period. Future
operating results will depend on many factors, including the degree and the rate
of growth of the markets in which Ansoft competes and the accompanying demand
for Ansoft's products, the level of product and price competition, the ability
of Ansoft to develop and market new products and to control costs, the ability
of Ansoft to expand its direct sales force and the ability of Ansoft to attract
and retain key personnel.


Page 9





Our Quarterly Operating Results Are Difficult To Predict.

We are unable to accurately forecast our future revenues primarily because of
the emerging nature of the market in which we compete. Our revenues and
operating results generally depend on the size, timing and structure of
significant licenses. These factors have historically been, and are likely to
continue to be, difficult to forecast. In addition, our current and future
expense levels are based largely on our operating plans and estimates of future
revenues and are, to an extent, fixed. We may be unable to adjust spending
sufficiently or quickly enough to compensate for any unexpected revenue
shortfall. Accordingly, any significant shortfall in revenues in relation to our
planned expenditures would seriously harm our business, financial condition and
results of operations. Such shortfalls in our revenue or operating results from
levels expected by public market analysts and investors could seriously harm the
trading price of our common stock. Additionally, we may not learn of such
revenue shortfalls, earnings shortfalls or other failure to meet market
expectations until late in a fiscal quarter, which could result in an even more
immediate and serious harm to the trading price of our common stock. Our
quarterly operating results have varied, and it is anticipated that our
quarterly operating results will vary, substantially from period to period
depending on various factors, many of which are outside our control. Due to the
foregoing factors, we cannot predict with any significant degree of certainty
our quarterly revenue and operating results. Further, we believe that
period-to-period comparisons of our operating results are not necessarily a
meaningful indication of future performance.

Our Stock Price Is Extremely Volatile.

The trading price of our common stock has fluctuated significantly in the past,
and the trading price of our common stock is likely to be highly volatile and
could be subject to wide fluctuations in price in response to such factors as:

- - Actual or anticipated fluctuations in our operating results;

- - Announcements of technological innovations and new products by us or our
competitors;

- - New contractual relationships with strategic partners by us or our
competitors;

- - Proposed acquisitions by us or our competitors; and

- - Financial results that fail to meet public market analyst expectations of
performance.

In addition, the stock market in general, The Nasdaq National Market and the
market for technology companies in particular has experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of such companies. These broad market and industry factors
may seriously harm the market price of our common stock in future periods.

Businesses Or Assets We Acquire May Not Perform As Projected.

We have acquired or merged with a number of technologies, assets and companies
in recent years, including the following: Agilent Technologies, Inc.'s HFSS
product line, SIMEC Corporation, Pacific Numerix Corporation, Compact Software,
Inc., the Electronic Business Unit of MacNeal Schwendler Company and Boulder
Microwave Technologies, and as part of our efforts to increase revenue and
expand our product and services offerings we may acquire additional companies.
In addition to direct costs, acquisitions pose a number of risks, including
potential dilution of earnings per share, delays and other problems of
integrating the acquired products and employees into our business, the failure
to realize expected synergies or cost savings, the failure of acquired products
to achieve projected sales, the drain on management time for acquisition-related
activities, possible adverse effects on customer buying patterns due to
uncertainties resulting from an acquisition, and assumption of unknown
liabilities. The foregoing factors could seriously harm our business, financial
condition and results of operations.

We May Lose Competitive Advantages If Our Proprietary Rights Are Inadequately
Protected.

Ansoft's success depends, in part, upon its proprietary technology. We rely on a
combination of trade secrets, copyrights, trademarks and contractual commitments
to protect our proprietary rights in our software products. We generally enter
into confidentiality or license agreements with our employees, distributors and
customers, and limit access to and distribution of our software, documentation
and other proprietary information. Despite these precautions, a third party may
still copy or otherwise obtain and use our products or technology without
authorization, or develop similar technology independently. In addition,
effective patent, copyright and trade secret protection may be unavailable or
limited in certain foreign countries. It is possible that we may fail to
adequately protect our proprietary rights. This would seriously harm Ansoft's
business, operating results and financial condition.


Page 10






We May Be Unable To Attract And Retain The Key Management And Technical
Personnel That We Need To Succeed.

Ansoft's future operating results depend in large part upon the continued
services of its key technical and management personnel. Ansoft does not have
employment contracts with any executive officer. Ansoft's future success will
also depend in large part on its ability to continue to attract and retain
highly skilled technical, marketing and management personnel. The competition
for such personnel, as well as for qualified EDA engineers, is intense. If
Ansoft is unable to attract, hire and retain qualified personnel in the future,
the development of new products and the management of Ansoft's increasingly
complex business would be impaired. This could seriously harm Ansoft's business,
operating results and financial condition.

We Depend On International Sales for a Significant Percentage Of Our Revenue.

International revenue, principally from Asian customers, accounted for
approximately 56% and 55% of our total revenue in the years ended April 30, 2003
and 2002, respectively. We expect that international license and service revenue
will continue to account for a significant portion of our total revenue for the
foreseeable future. Our international business activities are subject to a
variety of potential risks, including:

- - The impact of recessionary environments in foreign economies;

- - Longer receivables collection periods and greater difficulty in accounts
receivable collection;

- - Difficulties in staffing and managing foreign operations;

- - Political and economic instability;

- - Unexpected changes in regulatory requirements;

- - Reduced protection of intellectual property rights in some countries; and

- - Tariffs and other trade barriers.

Currency exchange fluctuations in countries in which we license our products
could also seriously harm our business, financial condition and results of
operations by resulting in pricing that is not competitive with products priced
in local currencies. Furthermore, we may not be able to continue to generally
price our products and services internationally in U.S. dollars because of
changing sovereign restrictions on importation and exportation of foreign
currencies as well as other practical considerations. In addition, the laws of
certain countries do not protect our products and intellectual property rights
to the same extent, as do the laws of the United States. Moreover, it is
possible that we may fail to sustain or increase revenue derived from
international licensing and service or that the foregoing factors will seriously
harm our future international license and service revenue, and, consequently,
seriously harm our business, financial condition and results of operations.

We Need To Successfully Manage Our Expanding Operations.

Ansoft has experienced rapid growth in recent years which has placed and could
continue to place a significant strain on the its managerial and other
resources. Revenues have grown from $26.3 million in fiscal 1998 to $47.3
million in fiscal year 2003. Ansoft's ability to manage growth effectively will
require it to continue to improve its operational and financial systems, hire
and train new employees and add additional space, both domestically and
internationally. Ansoft may not be successful in addressing such risks, and the
failure to do so would seriously harm Ansoft's business, financial condition and
results of operations.

We Depend On The Growth Of The Communications, Semiconductor And Electronics
Industries.

Ansoft is dependent upon the communications and semiconductor industry and, more
generally, the electronics industry. These industries are characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Segments of these industries
have from time to time experienced significant economic downturns characterized
by decreased product demand, production over-capacity, price erosion, work
slowdowns and layoffs. Any significant downturn could be especially severe on
Ansoft. During such downturns, the number of new integrated circuit design
projects often decreases. Because acquisitions of new licenses from Ansoft are
largely dependent upon the commencement of new design projects, any slowdown in
these industries could seriously harm Ansoft's business, financial condition and
results of operations.


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We Are Controlled By Our Principal Stockholders And Management Which May Limit
Your Ability To Influence Stockholder Matters.

Our executive officers, directors and principal stockholders own approximately
43% of the outstanding shares of Ansoft common stock. As a result, they have the
ability to effectively control us and direct our affairs, including the election
of directors and approval of significant corporate transactions. This
concentration of ownership also may have the effect of delaying, deferring or
preventing a change in control of our company and may make some transactions
more difficult or impossible without the support of these stockholders. The
interests of these stockholders may conflict with those of other stockholders.

Anti-Takeover Provisions in Ansoft's Certificate Of Incorporation, Bylaws, And
Under Delaware Law Could Prevent An Acquisition.

We have adopted a number of provisions that could have anti-takeover effects.
The Board of Directors has the authority to issue up to 1,000,000 shares of
Preferred Stock without any further vote or action by Ansoft's stockholders.
This and other provisions of Ansoft's Certificate of Incorporation, Bylaws and
Delaware Law may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management, including transactions in which the
stockholders of Ansoft might otherwise receive a premium for their shares over
then current market prices.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There have been no material changes in reported market risks faced by the
Company since April 30, 2003.

ITEM 4. CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer, after
participating in the evaluation of the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended) as of a date within 90 days of the
filing of this quarterly report (the "Evaluation Date"), have concluded that, as
of the Evaluation Date, the Company's disclosure controls and procedures were
effective to ensure that information required to be disclosed in reports we file
under the Securities Exchange Action of 1934, as amended, and the rules and
regulations promulgated thereunder is recorded, processed, summarized and
reported in accordance with the rules and forms of the SEC. It should be noted
that the design of the system of controls is based in part upon certain
assumptions about the likelihood of future events. There were no significant
changes in the Company's internal controls, including its internal controls over
financial reporting, or in other factors that could significantly affect the
internal controls subsequent to the Evaluation Date.


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PART II OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

31.1 Certification of the Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, and
Section 302 of the Sarbanes Oxley Act of 2002

31.2 Certification of the Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, and
Section 302 of the Sarbanes Oxley Act of 2002

32.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
to Section 906 Of The Sarbanes-Oxley Act of 2002

32.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
to Section 906 Of The Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K:

On May 28, 2003, Registrant furnished a current report on Form 8-K to provide
under Item 9 and Item 12 the Registrant's press release in connection with its
results of operation and fiscal condition for Registrant's fiscal year ended
April 30, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

Date: September 8, 2003 ANSOFT CORPORATION

By: /s/ Nicholas Csendes
-----------------------------------
Nicholas Csendes
President and Chief Executive Officer

By: /s/ Anthony L. Ryan
-----------------------------------
Anthony L. Ryan
Chief Financial Officer



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