<PAGE>   1



                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-K
ANNUAL REPORT
(Mark one)
[x]   Annual report pursuant to section 13 or 15(d) of the securities
      exchange act of 1934 for the fiscal year ended April 30, 1997 or

[ ]   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 0000849433

                               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 660
     Pittsburgh, Pennsylvania                       15219-1119
     (Address of principal executive offices)       (Zip Code)

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

    Securities registered pursuant to Section 12(b) of the act: None

  Securities registered pursuant to Section 12(g) of the act: Common stock,
par value $.01 per share

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]

As of July 18, 1997, the aggregate market value of voting common stock held by
non-affiliates of the registrant, based upon the last reported sale price for
the registrant's Common Stock on the Nasdaq National Market on such date, as
reported in The Wall Street Journal, was $64,089,282.

The number of shares of the registrant's Common Stock outstanding as of the
close of business on July 18, 1997 was 8,994,987.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the definitive Proxy Statement of Ansoft Corporation (the
"Company") to be furnished in connection with the solicitation of proxies by
the Company's Board of Directors for use at the 1997 Annual Meeting of
Stockholders (the "Proxy Statement") are incorporated by reference into Part
III of this Annual Report on Form 10-K to the extent provided herein. Except as
specifically incorporated by reference herein, the Proxy Statement is not to be
deemed filed as part of this Annual Report on Form 10-K.

<PAGE>   2

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
Item of Form 10-K                                                               Page
-----------------                                                               ----
<S>                                                                              <C>
Part I
     1.    Business                                                               2
     2.    Properties                                                             6
     3.    Legal Proceedings                                                      6
     4.    Submission of Matters to a Vote of Security Holders                    7
     4.(a) Executive Officers of the Registrant                                   7

Part II
     5.    Market for Registrant's Common Stock, Preferred Stock and
           Warrants, and Related Security Holder Matters                          7
     6.    Selected Financial Data                                                8
     7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                              9
     8.    Financial Statements and Supplementary Data                           14
     9.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosures                                  27

Part III
Part III information will appear in Item 4(a) of Part I of Form 10-K and in the
Registrant's Proxy Statement in connection with its Annual Meeting of
Stockholders. Such Proxy Statement will be filed with the Securities and
Exchange Commission and such information is incorporated herein by this
reference as of the date of such filing.

Part IV
     14.   Exhibits, Financial Statement Schedules, and
           Reports on Form 8-K                                                   28
Signatures                                                                       31
</TABLE>


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                                     PART I

ITEM 1. BUSINESS

Ansoft is a leading developer of EDA software. Its products are used by
engineers in the design of high performance electrical devices and systems, such
as cellular phones, satellite communications, computer circuit boards, motors
and ABS braking systems. The Company believes that its proprietary products
enable design engineers to develop smaller systems with higher performance and
greater yields than can be developed with traditional EDA tools, and result in
reduced time-to-market, lower risk of failure and elimination of costly and
time-consuming product redesign. Ansoft markets its products worldwide through
its direct sales force and distributors, and provides comprehensive customer
support and training. Ansoft customers include leading electronics,
telecommunications, and automotive companies including GM, ABB, Motorola,
Raytheon, TRW, Mitsubishi, Texas Instruments, Hitachi, AT&T and Sun
Microsystems.

The Company's products are generally marketed under the Maxwell(R) name. The
Company's electromechanical EM software analyzes the electrical performance of
product designs to increase yields and is applied in the design of sensors,
solenoids, motors and transformers for the automotive and consumer electronics
industries. The Company's signal integrity SI software analyzes the degradation
in signal integrity that results from the higher clock speeds and smaller
physical dimensions of micron and deep-submicron integrated circuits and
computer interconnects for the computer and semiconductor industries. In
addition, the Company's SI software analyzes electromagnetic radiation from
electronic systems, including radio frequency integrated circuits, antenna and
radar systems, and is used in the wireless communications, aerospace and defense
industries.

This Report contains certain "forward-looking statements" within the meaning of 
the Private Securities Litigation Reform Act of 1995. Among other things, they 
regard the Company's future growth plans, the potential impact on the Company's 
earnings as a result of the termination of any of the Company's distribution 
agreements or its agreement with Hewlett-Packard, the Company's ability to 
pursue its product development campaign, and the continued competitiveness of 
the Company's technology in the face of increasing competition. Words or 
phrases denoting the anticipated results of future events--such as 
"anticipate," "believe," "estimate," "expect," "will likely," "are expected 
to," "will continue," "project," and similar expressions that denote 
uncertainty--are intended to identify such forward-looking statements. Actual 
results may differ materially as a result of the risks and uncertainties 
associated with such forward-looking statements.
 
Industry Overview

EDA software automates the previously manual, time-consuming, error-prone design
process, resulting in dramatic increases in productivity and efficiency.
Industry analysts estimate that there are currently over 200,000 installations
of EDA tools. The worldwide EDA market was estimated at $1.9 billion in 1996,
and is forecast to grow to $3.5 billion by 2000.

Ansoft is positioned in the high performance segment of the EDA industry, which
is estimated to grow at twice the overall rate of the industry. The high
performance segment addresses the demands of leading edge design and
manufacturing technology - increased performance, miniaturization, and yield. To
meet these demands, EDA tools increasingly need to solve the fundamental
electromagnetic behavior of high-performance devices and systems. Traditional
EDA tools, which only approximate electromagnetic interaction, fail to offer
solutions with the requisite degree of accuracy. Ansoft products provide
high-performance designers with accurate solutions based on electromagnetic
principles.

Ansoft products may be used as an independent design platform or integrated
within complementary EDA tools. Ansoft participates in industry standardization
efforts and supports a wide range of Unix-based workstations and Intel-based
personal computers running Microsoft Windows 95/Windows NT(R).

Ansoft Strategy

Ansoft's objective is to become a leading, worldwide supplier of EDA software.
Using its proprietary technology as a primary competitive advantage, the Company
pursues its objectives through the following strategies: leveraging its
technology leadership in electromagnetics, capitalizing on growing need for
electromagnetics analysis, integrate its products with multiple EDA design
environments, expanding its broad range of product applications; and focusing on
customer service.


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<PAGE>   4

Acquisitions

In response to evolving market needs, the Company has made, and may continue to
make, acquisitions that add products and technologies and enhance the Company's
ability to offer customers a complete suite of electromagnetics based EDA tools.
The Company completed two acquisitions in fiscal 1997, each of which provided
the Company with products or technology, and expertise that extended the
Company's solution suite. The Company acquired the Electronics Business Unit
(the "EBU") of The MacNeal Schwendler Company for $5.6 million in cash. The EBU
had a long history of success within the electromagnetics market, offering
software tools in both the high and low frequency arenas. The Company acquired
Compact Software Inc. ("Compact"), a developer of a full line of radio frequency
("RF") and microwave circuit design tools for $3.0 million in cash and 1.3
million shares of common stock.

Products

Ansoft solutions are offered in both electromechanical ("EM") and signal
integrity ("SI") products. The Company's EM software products enable designers
of electromechanical components and systems to optimize the electrical
performance of their designs while increasing yields. The Company's SI software
products have two markets: High Speed and High Frequency. The Company's SI (High
Speed) software enables designers to design computer interconnects, IC Packaging
structures and electronic systems by accurately capturing the degradation in
signal quality due to higher clock speeds and smaller physical dimensions. The
Company's SI (High Frequency) software enables designers to design radio
frequency integrated circuits ("RF ICs"), antenna and radar systems and
microwave components by accurately solving the effects of electromagnetic
radiation from electronic systems. Ansoft products are available on Unix
workstations from International Business Machines Corporation, Hewlett-Packard
("HP"), Sun Microsystems, Inc., Silicon Graphics, Inc. and Digital Electronics
Inc. and Intel-based PCs running Microsoft Windows/Windows NT(R).

Ansoft EM Software

Maxwell 2D Field Simulator: This product performs electromagnetic field
simulation at the product design stage from physical design information.
Electromagnetic field simulation provides designers with critical device
parameters such as forces, torques, saturation effects, inductance, capacitance
and power losses. The parametrics capability of this two-dimensional field
simulator allows the user easily to perform "what-if" analysis by automatically
varying physical dimensions, material properties and excitation levels. The U.S.
list price of this product ranges from $2,900 to $13,900.

Maxwell 3D Field Simulator: This product provides similar electromagnetic field
simulation of devices as the Maxwell 2D Field Simulator for devices that require
three-dimensional analysis. The software leads the designer in a top down
fashion from a three-dimensional solid modeler to viewing electromagnetic field
patterns throughout the device. By evaluating field solutions and device
characteristics, the designer is able to determine where material substitutions
and geometry changes can be made to reduce production costs while increasing
device performance. The U.S. list price of this product ranges from $14,900 to
$34,900 (includes Maxwell 2D Field Simulator).

EMSS: This product allows devices designed at the component level in Ansoft
Field Simulators to be simulated on a larger system level by coupling the
electromagnetic behavior of the device with electrical and mechanical drive and
load components, and permits the critical evaluation of both transient and
steady state system level behavior. This integrated solution is used to study
issues such as the effects of non-linear magnetic components on system level
behavior, source and load transients, induced voltages and currents, as well as
position and velocity of moving parts. The U.S. list price of this product
ranges from $19,900 to $24,900.

EMAS: This product is a two- and three-dimensional field simulation tool for
engineers requiring comprehensive analysis capability. EMAS complements EMSS and
the Maxwell field simulators, and bridges the gap between electromagnetic,
structural, and thermal analysis. The coupled electromagnetic-thermal feature
within EMAS allows power loss to be represented as heat generation sources in a
thermal analysis. The U.S. list price of this product ranges from $37,000 to
$65,000.

Ansoft Signal Integrity SI Software (High Speed)

Maxwell Extractor: This product extracts physical interconnects on ICs and
printed circuit boards ("PCBs") and creates device models in HSPICE (Meta
Software), PSpice (MicroSim), or DF/SigNoise (Cadence) formats. The


                                       3
<PAGE>   5
models accurately capture the degradation in signal quality due to higher clock
speeds and smaller physical dimensions. The U.S. list price of this product is
$19,900.

Maxwell Spicelink: This product creates physical models of IC Packaging
structures in industry standard JEDEC format and creates SPICE models for these
devices. The package includes a schematic capture and circuit simulation tool
which allows system designers to study the effect of connectors, cables and
packages on system performance. The U.S. list price of this product is $34,900.

Maxwell Eminence: This product addresses issues of electromagnetic radiation
from electronic systems and provides solutions to both high speed and high
frequency problems. The U.S. list price of this product is $49,900. There are
two key applications for this product:

  - FCC guidelines in the US, European emissions rules and EMC guidelines in
    Japan regulate the level of electromagnetic radiation allowable from
    computers, personal communications systems and other consumer electronic
    products. This product allows system designers to model critical path PCB
    emissions, evaluate component level EMI and study shielding effectiveness,
    thus enabling them to design proactively for EMC compliance (High Speed).

  - Designers of wireless communication systems use this product to design RF
    components and sub-systems and to evaluate the interaction between the
    digital and RF portions of telecommunication systems. Engineers in the
    military/aerospace industry utilize this product for designing antenna and
    radar systems (High Frequency).

ParICs Modeler. This product automatically generates physical designs of IC
Packaging structures in industry standard JEDEC formats. This product is
available stand-alone for IC CAD engineers, or as an option to Extractor or
Spicelink for signal integrity engineers. The U.S. list price for this product
is $4,900.

Ansoft High Frequency Software

Ansoft HFSS (High-frequency Structure Simulator). This product is a finite
element software for microwave and wireless applications. Ansoft HFSS enables
engineers to compute s-parameters and full-wave fields for arbitrary
three-dimensional passive structures. This product was first shipped in fiscal
1990. The Company supplies HP with HFSS, which HP sells worldwide. The HP
Agreement expired in January 1997 and will not be renewed. HP has the
non-exclusive right to sell the HFSS product through January 1998. The U.S. list
price of this product is $41,900.

Maxwell Strata. This product enables the design of highly dense RF ICs,
monolithic microwave integrated circuits ("MMICs") and planar antennas for
customers in the telecommunications and defense electronics market. The U.S.
list prices for this product are $29,900 stand-alone and $19,900 if purchased
with another Ansoft product.

Serenade. This software suite provides integrated design support for microwave,
RF and lightwave applications. The design suite consists of Microwave Harmonica,
Super-Compact, Microwave Success, Super-spice and Microwave Explorer. The design
suite allows the designer to see all three views of the design simultaneously -
schematic, circuit analysis, and layout capability. The Serenade suite
complements Ansoft HFSS and Strata, allowing users to include rigorous analysis
of electromagnetic coupling effects within their circuit analysis. The U.S. list
price of products in this suite range from $2,900 to $35,900.

Sales and Marketing

Ansoft markets its products worldwide through its direct sales force and its
distributors. The Company supports its customers with skilled engineers and
technically proficient sales representatives. The Company hires application
engineers with significant industry experience in order to analyze the needs of
its customers and to gain technical insight into the development of future
products and enhancements to existing products. The Company believes that
customer referrals account for a significant percentage of the Company's new
product sales. The Company generates name recognition and sales through
advertising in trade publications and on the World Wide Web. In addition, the
Company participates in industry trade shows and organizes seminars to promote
and expand the adoption of its products.


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<PAGE>   6

Direct. In North America, the Company maintains direct sales and support
personnel in Pittsburgh, Pennsylvania, Northern and Southern California,
Massachusettes, Florida, Michigan, Texas, and a telemarketing sales group
operating from its Pittsburgh headquarters. In Asia, the Company maintains
direct sales and support offices in Japan, Singapore, and China. In Europe, the
Company maintains sales and support offices in England, Germany, and Italy. As
of April 30, 1997, the Company had a direct sales force of 25 representatives,
supported by 51 employees in application engineering, marketing and sales
administration.

Distributors and HP. In 1989, Ansoft entered into an exclusive distribution
agreement with HP (the "HP Agreement") for worldwide distribution of its HFSS
product. The HP Agreement expired in January 1997, and will not be renewed. HP
has the non-exclusive right to sell the HFSS product through January 1998.
During fiscal 1997, 1996 and 1995, revenue from HP accounted for approximately
12%, 13%, and 18%, respectively, of the Company's total revenue. The Company
expects that HP will account for a decreasing percentage of its total revenues
over the next nine months. The Company directly markets its Ansoft HFSS product,
to target the commercial wireless communications and defense/aerospace  markets
through its worldwide direct sales force and its international distributors.
Management believes that the expiration of the HP agreement will not have a
material adverse effect on the Company's future financial condition or results
of operations.

With respect to international licensing, the Company has entered into a
distribution agreement with Innotech Corporation, which is an exclusive
agreement for sales of its SI software in Japan, and agreements with other
distributors in Europe, Korea, Singapore, China and Taiwan. The Company supports
its distributors and their customers with technical, sales and management
personnel.

Customers

The Company has significant breadth in its installed base with over 500
customers in the wireless communications, semiconductor, automotive, computer,
defense/aerospace and consumer electronics industries. No single customer in the
Company's installed base accounted for more than 10% of total revenue within any
of the past three fiscal years.

Customer Service and Support

Ansoft provides customer support services on both a pre-sale and post-sale
basis. Pre-sale support involves the Company's application engineers working
with the direct sales force to provide on-site support during critical stages of
the user's benchmark, evaluation and implementation processes. Post-sale support
is provided pursuant to renewable annual maintenance contracts. Post-sale
services include on-line and telephone support for design engineers and on-site
and in-house training on all products. Customers with maintenance agreements
receive all product enhancement releases without additional charge. Product
upgrades that add significant new functionality are provided to customers for an
additional fee.

The Company offers a variety of training programs for customers ranging from
introductory level courses to advanced training.

Product Development

The Company continually seeks to design and develop new technologies, products
and interfaces. This effort includes releasing improved versions of its products
on a regular basis and developing new products. The Company assigns an
interdisciplinary  team of personnel from research and development, software
development, documentation, quality assurance, customer support and marketing to
each product development project. Ansoft develops cooperative relationships with
major customers with respect to beta-testing its new products or enhancements
and implementing suggestions for new product features. The Company also
maintains cooperative relationships with the major hardware vendors on which the
Company's products operate. The Company believes that its team approach and
cooperative relationships allow it to design products that respond on a timely
basis to emerging trends in computing, graphics and networking technologies.

During fiscal 1997, 1996 and 1995 research and development expenses were $3.0
million, $1.8 million and $1.5 million, respectively. As of April 30, 1997, the
Company's product development group consisted of 66 employees. The Company
anticipates that it will continue to commit substantial resources to product
development for the foreseeable future.


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Competition

The EDA software industry is highly competitive and is characterized by
continuing advances in products and technologies. In general, competition in the
traditional EDA industry comes from major EDA vendors, some of which have a
longer operating history, significantly greater financial, technical and
marketing resources, greater name recognition and a larger installed customer
base than the Company. These companies also have established relationships with
current and potential customers of the Company. The Company competes directly
with certain major EDA vendors and privately-held companies which provide
products based on electromagnetic principles derived from Maxwell's Equations.
The Company also faces competition from HP, which currently distributes Ansoft's
HFSS product. As the Company expands its product offerings, it will compete
increasingly with these EDA vendors. There can be no assurance that the major
EDA vendors and other EDA companies will not expand and develop new products in
the electromagnetics-based EDA market. The Company also competes, on a limited
basis, with the internal development groups of its existing and potential
customers, many of whom design and develop customized design tools for their
particular needs. If the Company is unable to compete successfully against
current and future competitors, the Company's business, operating results and
financial condition will be materially adversely affected.

Ansoft believes that its current products compete effectively on the basis of
product functionality, solution speed and accuracy, reliability, price, ease of
use and technical support for applications which require accurate modeling of
electromagnetic interaction. However, there is no assurance that the Company
will not face competitive technologies that could hinder its future growth.

Proprietary Rights

The Company is heavily dependent on its proprietary software technology. The
Company relies on a combination of non-competition and confidentiality
agreements with its employees, license agreements, copyrights, trademarks and
trade secret laws to establish and protect proprietary rights to its technology.
The Company does not hold any patents. All Ansoft software is shipped with a
security lock which limits software access to authorized users. In addition, the
Company does not license or release its source code. Effective copyright and
trade secret protection of the Company's proprietary technology may be
unavailable or limited in certain foreign countries.

Compact Software(R), Maxwell(R), Microwave Explorer(R), Microwave Harmonica(R),
ParICs(R), and Serenade(R) are registered trademarks in the United States of
Ansoft Corporation or its subsidiaries.

Employees

As of April 30, 1996, the Company had a total of 154 employees, including 66 in
research and development, 76 in sales, marketing, and customer support services
and 12 in administration. None of the Company's employees is represented by a
collective bargaining agreement, nor has the Company experienced any work
stoppage. The Company considers its relations with its employees to be good.

ITEM 2. PROPERTIES

The Company occupies approximately 18,000 square feet of space at its
headquarters in Pittsburgh, Pennsylvania under a leases expiring in 1998 and
1999. The current annual base rent is approximately $286,000. The Company also
maintains offices in New Jersey, Wisconsin, California, the United Kingdom,
Germany, Italy, Singapore and Japan. The Company's current aggregate annual
rental expenses for these additional facilities is approximately $331,000.
Ansoft believes that its existing facilities are adequate for its current needs
and that suitable additional space will be available when needed.

ITEM 3. LEGAL PROCEEDINGS

The Company is not a party to any litigation and is not aware of any threatened
litigation, unasserted claims or assessments that could have a material adverse
effect on the Company's business, consolidated operating results or financial
condition.


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<PAGE>   8

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning each of the
directors and executive officers Company:

<TABLE>
<CAPTION>
Name                                    Age                  Title
<S>                                     <C>   <C>
Zoltan J. Cendes, Ph.D................   50    Chairman of the Board and Director
Nicholas Csendes......................   52    President and Chief Executive Officer and
                                               Director
Padmanabhan Premkumar.................   34    Vice President-Marketing
Jack Parkes...........................   38    Vice President-Engineering
Tony Ryan.............................   29    Chief Financial Officer
</TABLE>

Dr. Zoltan Cendes is a founder of Ansoft and has served as Chairman of the Board
of Directors of the Company and its chief research scientist, since its
formation in 1984. Since 1982, Dr. Cendes has been a university professor in
electrical and computer engineering at Carnegie Mellon University. Dr. Cendes
has lectured throughout North America, Europe and Asia on the topic of
electromagnetics and finite element analysis and has published over 100
publications on these topics. Dr. Cendes directs the research efforts of Ansoft.

Nicholas Csendes is a founder of Ansoft and has served as President, Chief
Executive Officer and Secretary since 1992 and a director since 1984. Mr.
Csendes was a senior investment officer with Sun Life of Canada for over 15
years. Since 1985, Mr. Csendes has been involved with various public and private
companies including a publicly-held interactive software company, and has been
an officer, director and controlling stockholder of American Banner Resources,
Inc. ("ABR"), a privately-held holding company with various interests in real
estate and public and private securities.

Padmanabhan Premkumar joined Ansoft in 1989. From 1991 to 1994, Mr. Premkumar
was in charge of Ansoft's software development programs as Vice President of
Development. Since 1995, Mr. Premkumar has been Vice President-Marketing,
responsible for product planning, marketing and commercialization of existing
software product enhancements and the commercial development of new products.
Prior to joining Ansoft, Mr. Premkumar was a research associate in the Robotics
Laboratory at the University of Toledo.

Jack Parkes joined Ansoft in 1990. In May 1997, Jack was appointed Vice
President of Engineering. Jack came to Ansoft in 1990 with over 10 years of
experience in electrical engineering. Prior to joining Ansoft, Mr. Parkes was a
senior design and development engineer with Loral Corporation and prior to
joining Loral, with Texas Instruments, Inc.

Tony Ryan joined Ansoft in 1995 as corporate controller. In May 1997, Tony was
appointed chief financial officer. Tony had previously worked with KPMG Peat
Marwick LLP, an international accounting firm, since 1991.

Officers are appointed by the Board of Directors and serve at the discretion of
the Board. Dr. Zoltan J. Cendes and Mr. Nicholas Csendes are brothers. There are
no other family relationships between any of the directors or executive officers
of the Company.

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Common Stock of the Company has been listed on the Nasdaq National Market
under the symbol "ANST" since its initial public offering which was declared
effective on April 3, 1996. Prior to that date, there was no established public
trading market for the Company's Common Stock. The following table sets forth
the range of high and low sale prices of the Common Stock as reported on the
Nasdaq National Market for the fiscal year ended April 30, 1997.


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<PAGE>   9

<TABLE>
<CAPTION>
                                                     High      Low
                                                     ----      ---
   <S>                                              <C>       <C>
   Fiscal 1996:
     Fourth Quarter
       (April 3, 1996 to April 30, 1997)             $9.50    $7.125
   Fiscal 1997:
     First Quarter                                   $8.75     $4.00
     Second Quarter                                  $7.25     $5.00
     Third Quarter                                  $6.875     $4.50
     Fourth Quarter                                 $5.875    $4.625
</TABLE>

The Company has not paid cash dividends on its Common Stock since its inception.
The Company currently intends to retain earnings for development of its business
and, therefore, does not anticipate paying any cash dividends in the foreseeable
future.

The approximate number of shareholders of record at July 18, 1997 was 102, of
which certain of the recordholders were registered clearing agencies holding
common stock on behalf of participants of such clearing agencies.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction
with the Company's Consolidated Financial Statements and the Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere herein. The selected consolidated financial data
are derived from financial statements of the Company which have been audited by
KPMG Peat Marwick LLP, independent certified public accountants.

<TABLE>
<CAPTION>
Year Ended April 30, (In thousands, except per share data)
                                                1997     1996     1995     1994     1993
------------------------------------------------------------------------------------------
<S>                                            <C>       <C>     <C>       <C>       <C>
Consolidated Statement of Operations Data
Revenues:
 License                                       $11,950   $7,995   $5,921   $4,944   $3,350
 Service and other                               2,238      700      233      177      121
------------------------------------------------------------------------------------------
Total revenue                                   14,188    8,695    6,154    5,121    3,471
Costs and expenses:
 Sales and marketing                             7,939    5,007    3,935    2,734    1,699
 Research and development                        2,993    1,766    1,462    1,296    1,450
 General and administrative                      1,647    1,269    1,046    1,137    1,096
 Amortization                                      407       --       --       --       --
 Acquired in process research
   and development                               8,754       --       --       --       --
------------------------------------------------------------------------------------------
Total costs and expenses                        21,740    8,042    6,443    5,167    4,245
------------------------------------------------------------------------------------------
Income (loss) from operations                   (7,552)     653     (289)     (46)    (774)
Interest income (expense)                          682       35      (16)     (94)    (193)
------------------------------------------------------------------------------------------
Income (loss) before income taxes               (6,870)     688     (305)    (140)    (967)
Income tax benefit                                 420      612       --       --       --
------------------------------------------------------------------------------------------
Net income (loss)                              $(6,450)  $1,300   $ (305)  $ (140)  $ (967)
==========================================================================================
Net income (loss) per share                    $ (0.81)  $ 0.19   $(0.06)  $(0.06)  $(0.40)
==========================================================================================
Weighted average shares outstanding              7,955    6,873    5,528    2,394    2,394
==========================================================================================
</TABLE>


                                       8

<PAGE>   10

Year Ended April 30, (In thousands)
<TABLE>
<CAPTION>
                                           1997      1996      1995      1994      1993
-----------------------------------------------------------------------------------------
<S>                                       <C>      <C>        <C>        <C>       <C>
Consolidated Balance Sheet Data
Cash and cash equivalents                 $  312   $10,728    $ 116       $ 43       $ 10
Working capital (deficit)                 (1,936)   12,204      593        259       (748)
Total assets                              21,951    15,391    1,792      1,417        950
Total stockholders' equity (deficit)     $14,917   $14,291   $1,161    $(3,435)   $(3,295)
</TABLE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Overview

Ansoft is a leading developer of EDA software. Its products are used by
engineers in the design of high performance electrical devices and systems, such
as cellular phones, satellite communications, computer circuit boards, motors
and ABS braking systems. The Company was incorporated in 1984 and commenced
commercial shipments of its first software product, focused on the electronic
component industry, in 1987. The Company subsequently offered solutions in both
electromechanical ("EM") and signal integrity ("SI") products. The SI products
are targeted at two markets: High Speed and High Frequency. The importance of
any individual product has diminished as the Company has introduced new
products.

Revenue consists primarily of fees for licenses of the Company's software
products and fees for customer service and support. Revenue from the sale of
software licenses is recognized upon shipment of the products and fulfillment of
acceptance terms, if any. No significant obligations, including the performance
of services essential to the functionality of the software, remain unfulfilled
at the time revenue is recognized on software licenses, and with respect to any
remaining insignificant obligations, either the related revenue is unbundled and
deferred, based on the estimated fair value of related services, or the related
estimated costs are accrued. When the Company receives advance payment for
software products, such payments are recorded as deferred revenue and recognized
as revenue when products are shipped and other obligations, if any, have been
satisfied. Other revenue from customer training, support and other services is
recognized as the service is performed.

In the fourth quarter of fiscal 1997, the Company recorded a net income tax
benefit of $420,000, or $0.05 per share, resulting primarily from the partial
recognition of previously unrecognized deferred tax assets in accordance with
the Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." The Company's net deferred tax
asset of $1,120,000 as of April 30, 1997, consists primarily of net operating
loss carryforwards for federal income tax purposes, which are available to
offset future taxable income, and expire in increments beginning in April 2004,
through April 2012.


                                       9
<PAGE>   11

Results of Operations

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


<TABLE>
<CAPTION>
Year Ended April 30,                                     1997       1996       1995
------------------------------------------------------------------------------------
<S>                                                       <C>        <C>       <C>
Revenues:
 License                                                  84%        92%        96%
 Service and other                                        16          8          4
------------------------------------------------------------------------------------
Total revenue                                            100        100        100
Costs and expenses:
 Sales and marketing                                      56         58         64
 Research and development                                 21         20         24
 General and administrative                               12         15         17
 Amortization                                              3         --         --
 Acquired in process research and development             62         --         --
------------------------------------------------------------------------------------
Total costs and expenses                                 153         93        105
------------------------------------------------------------------------------------
Income (loss) from operations                            (53)         7         (5)
Interest income, net                                       5         --         --
------------------------------------------------------------------------------------
Income (loss) before income taxes                        (48)         7         (5)
Income tax benefit                                         3          8         --
------------------------------------------------------------------------------------
Net income (loss)                                        (45)%       15%        (5)%
====================================================================================
</TABLE>

Year Ended April 30, 1997 compared with Year Ended April 30, 1996

Revenue. The Company's license revenue increased by 49% to $12.0 million for the
year ended April 30, 1997, as compared with $8.0 million in the previous year.
The revenue growth is attributed to the continued growth of the installed base
of customers licensing the Company's existing products and to the expanded suite
of products offered by Ansoft as a result of the acquisition of the EBU. Service
and other revenue increased by 220% to $2.2 million for the year ended April 30,
1997, as compared with $0.7 million in the previous year. The increase in
service and other revenue is attributed to an increase in the number of
purchased annual maintenance agreements, and reflects the continued growth of
the installed base of customers and increased focus on marketing annual
maintenance agreements as well as an increase in revenue recognized under
research and development cost sharing agreements.

International revenue accounted for 41% and 33% of the Company's total revenue
in fiscal 1997 and 1996, respectively. The Company expects that international
revenues will account for an increasing portion of its revenues in the future.

Revenue from the HP agreement accounted for 12% and 13% revenue in fiscal 1997
and 1996, respectively. The HP Agreement expired in January 1997, and will not
be renewed. HP has the non-exclusive right to sell the HFSS product through
January 1998. The Company expects that HP will account for a decreasing
percentage of its total revenues over the next nine months. The Company directly
markets its HFSS product to target the commercial wireless communications and
defense/aerospace markets through its worldwide direct sales force and its
international distributors. Management believes that the expiration of the HP
agreement will not have a material adverse effect on the consolidated financial
condition or results of operations.

Sales and Marketing. Sales and marketing expenses consist of salaries,
commissions paid to internal sales and marketing personnel and international
distributors, promotional costs and related operating expenses. Sales and
marketing expenses increased by 59% to $7.9 million in fiscal 1997, as compared
to $5.0 million in fiscal 1996. The increase is attributed to increased
marketing efforts, including advertising in trade publications and increased
participation in industry trade shows and the increase in salesforce as a result
of the EBU acquisition. Sales and marketing expenses represented 56% and 58%
of total revenue in fiscal 1997 and fiscal 1996, respectively. The Company
expects to increase sales and marketing expenditures both domestically and
internationally as part of its

                                       10

<PAGE>   12
continuing effort to expand its markets, introduce new products, build marketing
staff and programs and expand its international presence.

Research and Development Expenses. Research and development expenses include all
costs associated with the development of new products and enhancements to
existing products. Research and development expenses increased 70% to $3.0
million in fiscal 1997, as compared to $1.8 million in fiscal 1996. The increase
is due to continuing product development and enhancement of existing products in
addition to the increased personnel as a result of the EBU acquisition. Research
and development expenses represented 21% and 20% of total revenue in fiscal 1997
and 1996, respectively. The Company anticipates that it will continue to devote
substantial resources to product research and development.

General and Administrative Expenses. General and administrative expenses
increased 30% to $1.6 million in fiscal 1997, as compared to $1.3 million in
fiscal 1996. The increase is due to additional costs required to support the
expanded operations, including the hiring of additional administrative
personnel, along with other general cost increases. General and administrative
expenses represented 12% and 15% of total revenue in fiscal 1997 and 1996,
respectively. The decrease as a percentage of revenue is due to certain of the
expenses being of a fixed nature which have not increased proportionately with
the increase in revenue. The Company expects general and administrative expenses
to continue to increase but to result in a declining percentage of revenue.

Amortization. Amortization expense in fiscal 1997 of $407,000, or $136,000 per
quarter, was recognized as a result of the amortization of the intangible assets
acquired during fiscal 1997.

Acquired In Process Research and Development Expenses. On July 24, 1996, the
Company acquired MSC's EBU for $5.6 million in cash. On April 9, 1997, the
Company acquired Compact for approximately $10.0 million in cash and stock. The
cost of these acquisitions has been allocated on the basis of the estimated fair
value of the assets acquired and the liabilities assumed. The allocation of the
EBU and Compact acquisitions resulted in charges of $3.1 million and $5.7
million, respectively, for acquired in process research and development based on
the future expected cash flows of certain acquired technology that had not
reached technological feasibility.

Year Ended April 30, 1996 compared with Year Ended April 30, 1995

Revenue. The Company's license revenue increased by 35% to $8.0 million for the
year ended April 30, 1996, as compared with $5.9 million in the previous year.
The increase in revenue is primarily attributable to the increase in the number
of licenses sold. Service and other revenue increased by 200% to $700,000 for
the year ended April 30, 1996, as compared with $233,000 in the previous year.
The increase in service and maintenance revenue was primarily attributable to
purchased annual maintenance agreements and reflects the continued growth of the
installed base of customers and increased focus on marketing annual maintenance
agreements and to a lesser extent, revenue recognized on the research and
development cost sharing agreement.

International revenue accounted for 33% and 31% of the Company's total revenue
in fiscal 1996 and 1995, respectively. Revenue from the HP agreement accounted
for 13% and 18% revenue in fiscal 1996 and 1995, respectively.

Sales and Marketing. Sales and marketing expenses increased by 27% to $5.0
million in fiscal 1996, as compared to $3.9 million in fiscal 1995. Sales and
marketing expenses increased primarily due to the expansion of the Company's
sales and marketing organization and, to a lesser extent, participation in
domestic and international conferences and trade shows. Sales and marketing
expenses represented 58% and 64% of total revenue in fiscal 1996 and fiscal
1995, respectively. The decrease as a percentage of revenue is due to certain of
the expenses being of a fixed nature which have not increased proportionately
with the increase in revenue.

Research and Development Expenses. Research and development expenses increased
21% to $1.8 million in fiscal 1996, as compared to $1.5 million in fiscal 1995.
The increase is due to increased costs associated with continuing product
development and enhancement of existing products. Research and development
expenses represented 20% and 24% of total revenue in fiscal 1996 and 1995,
respectively. The decrease as a percentage of revenue is due to certain of the
expenses being of a fixed nature which have not increased proportionately with
the increase in revenue.

General and Administrative Expenses. General and administrative expenses
increased 21% to $1.3 million in fiscal 1996, as compared to $1.0 million in
fiscal 1995. The increase is due to additional costs required to support the


                                       11

<PAGE>   13
increase in operations, including the hiring of additional administrative
personnel, along with other general cost increases. General and administrative
expenses represented 15% and 17% of total revenue in fiscal 1996 and 1995,
respectively.

Quarterly Results of Operations

The following table presents unaudited quarterly results in dollar amounts for
each quarter of fiscal 1997 and fiscal 1996. The information has been prepared
on a basis consistent with the Company's annual consolidated financial
statements and, in the opinion of management, contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the information for such periods. The Company's quarterly
results have been in the past, and may be in the future, subject to fluctuations
due to increased competition, the timing of new product announcements, changes
in pricing policies by the Company or its competitors, market acceptance of new
and enhanced versions of the Company's products and the size and timing of
significant licenses. The Company believes that results of operations for the
interim periods are not necessarily indicative of the results to be expected for
any future period.

Quarter Ended (In thousands, except per share data)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                          April    Jan.      Oct.     July      April       Jan.       Oct.       July
                                           30,      31,       31,      31,        30,        31,        31,        31,
                                          1997     1997      1996     1996       1996       1996       1995       1995
--------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>        <C>      <C>       <C>        <C>        <C>         <C>       <C>
Statement of Operations Data
Revenues:
 License                                $4,129    $3,010    $2,850    $1,961     $2,359     $2,066     $1,790     $1,780
 Service and other                         832       565       484       357        323        157        131         89
--------------------------------------------------------------------------------------------------------------------------
Total revenue                            4,961     3,575     3,334     2,318      2,682      2,223      1,921      1,869
Costs and expenses:
 Sales and marketing                     2,614     1,977     1,919     1,429      1,582      1,249      1,067      1,110
 Research and development                1,026       720       749       498        508        415        440        403
 General and administrative                555       442       355       294        347        370        289        263
 Amortization                              136       136       136        --         --         --         --         --
Acquired in process research
   and development                       5,700        --        --     3,054         --         --         --         --
--------------------------------------------------------------------------------------------------------------------------
Total costs and expenses                10,031     3,275     3,159     5,275      2,437      2,034      1,796      1,776
--------------------------------------------------------------------------------------------------------------------------
 Income (loss) before taxes             (5,070)      300       175    (2,957)       245        189        125         93
Interest income (expense)                  137       167       158       220         41         (2)        (2)        (2)
--------------------------------------------------------------------------------------------------------------------------
Income (loss) before taxes              (4,933)      467       333    (2,737)       286        187        123         91
Income tax benefit (1)                     420        --        --        --        612         --         --         --
--------------------------------------------------------------------------------------------------------------------------
Net income (loss)                      $(4,513)   $  467     $ 333   $(2,737)     $ 898     $  187     $  123     $   91
==========================================================================================================================
Net income (loss) per share             $(0.54)   $ 0.06     $0.04    $(0.35)     $0.12     $ 0.03     $ 0.02     $ 0.01
==========================================================================================================================
Weighted average shares
 outstanding                             8,308     8,184     8,170     7,907      7,302      6,832      6,861      6,893
==========================================================================================================================
</TABLE>

(1) In the fourth quarter of fiscal 1997 and 1996, the Company recorded a net
    income tax benefit of $420,000 and $612,000, respectively, resulting
    primarily from the partial recognition of previously unrecognized deferred
    tax assets.

Liquidity and Capital Resources

As of April 30, 1997, the Company had $312,000 in cash and cash equivalents. Net
cash provided by operating activities was $403,000 and $716,000 in fiscal 1997
and 1996, respectively. Net cash used in operating activities was $340,000 in
fiscal 1995.

Net cash used in investing activities was $15.1 million in fiscal 1997,
consisting primarily of the net purchase of marketable securities of $5.7
million and the use of $8.6 million in the acquisitions of the EBU and Compact.
Capital expenditures, consisting primarily of purchases of computer equipment,
were $811,000, $400,000 and $277,000 in fiscal 1997, 1996 and 1995,
respectively. The Company expects that purchases of computer equipment will
increase as the Company's employee base grows.


                                       12
<PAGE>   14
Net cash provided by financing activities includes proceeds from the issuance of
Common Stock and stockholders advances totaling $120,000, $11.4 million and
$714,000, in fiscal 1997, 1996 and 1995, respectively. In addition, during
fiscal 1997 the Company borrowed $4.2 million on its line of credit which was
used primarily as part of the cash payment for the acquisitions.

As of April 30, 1997, the Company had a working capital (deficit) of $(1.9)
million. The negative working capital balance resulting from the use of working
capital in connection with the acquisitions of the EBU and Compact during fiscal
1997. The Company also has available an unused portion of a line of credit. The
line of credit is collateralized by the marketable securities of the Company. As
of April 30, 1997, $4.2 million was outstanding under the line of credit with
approximately $417,000 available for borrowing on this line of credit. The
Company believes that the available funds, together with the cash available
under its line of credit and cash flows from operations will be sufficient to
meet its anticipated cash needs for working capital and capital expenditures for
at least the next twelve months. Thereafter, if cash generated from operations
is insufficient to satisfy the Company's liquidity requirements, the Company 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 the Company.

Effects of Inflation

To date, inflation has not had a material impact on the Company's consolidated
financial results.

Recent Accounting Pronouncements:

In February 1997, Statement of Financial Accounting Standards No. 128 "Earnings
Per Share" ("SFAS 128") was issued by the Financial Accounting Standards Board.
SFAS 128 specifies modifications to the calculation of earnings per share from
that currently used by the Company. Under SFAS 128, "basic earnings per share"
will be calculated based upon the weighted average number of common shares
actually outstanding, and "diluted earnings per share" will be calculated based
upon the weighted average number of common shares outstanding and other
potential common shares if they are dilutive. SFAS 128 is effective for the
Company's third quarter of fiscal 1998 and will be adopted at that time. Prior
periods will be restated. Had the Company determined earnings per share in
accordance with SFAS 128, basic earnings (loss) per share for fiscal 1997, 1996
and 1995 would have been $(0.83), $0.21 and $(0.06), respectively, and diluted
earnings (loss) per share would have been $(0.81), $0.19 and $(0.06),
respectively.

On May 1, 1996, the Company adopted the Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"). This
statement permits a company to choose either a new fair value based method of
accounting for its stock-based compensation arrangements or to comply with the
current APB Opinion 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 123
by retaining the APB Opinion 25 method of accounting for stock-based
compensation with annual pro forma disclosures of net income and earnings (loss)
per share.

Statements of Financial Accounting Standards No. 130, "Reporting Comprehensive 
Income", and No. 131, "Disclosures about Segments of an Enterprise and Related 
Information," are effective for the year ended April 30, 1999. The Registrant 
does not believe these statements will have a material impact on its financial 
statements.  


                                       13
<PAGE>   15


                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Ansoft Corporation:

We have audited the accompanying consolidated balance sheets of Ansoft
Corporation and subsidiaries as of April 30, 1997 and 1996, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the three-year period ended April 30, 1997. Our audit also
included the financial statement schedule for the year ended April 30, 1997,
listed at Item 14(a). These consolidated financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ansoft Corporation
and subsidiaries as of April 30, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year period
ended April 30, 1997, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects, the information set forth
therein.




KPMG Peat Marwick LLP

Pittsburgh, Pennsylvania
May 27, 1997



                                       14
<PAGE>   16

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

<TABLE>
<CAPTION>
April 30,                                                   1997            1996
---------------------------------------------------------------------------------
<S>                                                       <C>           <C>
Assets
Current assets:
  Cash and cash equivalents                               $    312      $  10,728
  Accounts receivable, net of allowance for doubtful
   accounts of $125 as of April 30, 1997 and 1996            4,129          1,666
  Marketable securities                                         55            119
  Deferred income taxes                                        320            427
  Prepaid expenses and other assets                            282             91
---------------------------------------------------------------------------------
Total current assets                                         5,098         13,031

Plant and equipment                                          1,995            724
Marketable securities                                        7,095          1,340
Other asset                                                      3             13
Deferred taxes - non current                                   800            273
Intangible assets                                            6,960             10
---------------------------------------------------------------------------------
Total assets                                              $ 21,951       $ 15,391
=================================================================================


Liabilities and Stockholders' Equity
Current liabilities:
  Line of Credit                                          $  4,208       $     --
  Accounts payable                                             149            345
  Accrued expenses                                           1,017            131
  Accrued wages                                                500            209
  Deferred revenue                                           1,160            415
---------------------------------------------------------------------------------
Total current liabilities                                    7,034          1,100

Total liabilities                                            7,034          1,100
---------------------------------------------------------------------------------
Stockholders' equity:
  Preferred stock, par value $.01 per share;
   1,000 shares authorized, no shares
   outstanding                                                  --             --
  Common stock, par value $.01 per share;
   10,000 authorized shares; issued and
   outstanding 8,989 and 7,636
   shares, respectively                                         90             76
  Additional paid-in capital                                24,310         17,204
  Net unrealized loss on
   marketable securities                                       (44)            --
  Accumulated deficit                                       (9,439)        (2,989)
---------------------------------------------------------------------------------
Total stockholders' equity                                  14,917         14,291
---------------------------------------------------------------------------------
Total liabilities and stockholders'
  equity                                                   $21,951        $15,391
=================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       15
<PAGE>   17

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
Fiscal year ended April 30,                          1997       1996       1995
---------------------------------------------------------------------------------
<S>                                               <C>          <C>        <C>
Revenues:
  License                                          $11,950     $7,995      $5,921
  Service and other                                  2,238        700         233
---------------------------------------------------------------------------------
Total revenue                                       14,188      8,695       6,154

Costs and expenses:
  Sales and marketing                                7,939      5,007       3,935
  Research and development                           2,993      1,766       1,462
  General and administrative                         1,647      1,269       1,046
  Amortization                                         407         --          --
  Acquired in process research and development       8,754         --          --
---------------------------------------------------------------------------------
Total costs and expenses                            21,740      8,042       6,443
---------------------------------------------------------------------------------
Income (loss) from
  operations                                        (7,552)       653        (289)
Interest income                                        902         41          --
Interest expense                                      (220)        (6)        (16)
---------------------------------------------------------------------------------
Income (loss) before income
  taxes                                             (6,870)       688        (305)
Income tax benefit                                     420        612          --
---------------------------------------------------------------------------------
Net income (loss)                                  $(6,450)    $1,300      $ (305)
=================================================================================
Net income (loss) per share                        $ (0.81)    $ 0.19      $(0.06)
=================================================================================
Weighted average shares
  outstanding                                        7,955      6,873       5,528
=================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       16
<PAGE>   18

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    (In thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                                Unrealized
                                  Common Stock        Receivable    Additional                    loss on
                                                         From         Paid-in    Accumulated    Marketable
(In thousands)                   Shares    Amount    Stockholders     Capital      Deficit      Securities    Total
----------------------------------------------------------------------------------------------------------------------
<S>                              <C>       <C>          <C>            <C>          <C>          <C>           <C>
Balance, April 30, 1994           1,680    $  17        $  --            532        $(3,984)         --      $(3,435)
Net loss                             --       --           --             33           (305)         --         (272)
Issuance of common stock          4,413       44         (442)         5,266             --          --        4,868
----------------------------------------------------------------------------------------------------------------------

Balance, April 30, 1995           6,093    $  61         (442)       $ 5,831        $(4,289)         --      $ 1,161
Net income                           --       --           --             --          1,300          --        1,300
Issuance of common stock          1,543       15           --         11,373             --          --       11,388
Payments from stockholders           --       --          442             --             --          --          442
----------------------------------------------------------------------------------------------------------------------

Balance, April 30, 1996           7,636    $  76        $  --        $17,204        $(2,989)         --      $14,291
Net loss                             --       --           --             --         (6,450)         --       (6,450)
Issuance of common stock          1,353       14           --          7,106             --          --        7,120
Unrecognized loss on
 marketable securities               --       --           --             --             --         (44)         (44)
----------------------------------------------------------------------------------------------------------------------

Balance, April 30, 1997           8,989    $  90        $  --        $24,310        $(9,439)       $(44)     $14,917
======================================================================================================================
</TABLE>



See accompanying notes to consolidated financial statements.


                                       17
<PAGE>   19

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    (In thousands, except per share amounts)


<TABLE>
<CAPTION>
Fiscal year ended April 30,                              1997         1996          1995
------------------------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>
Cash flows from operating activities:
Net income (loss)                                     $ (6,450)      $ 1,300        $(304)
Adjustments to reconcile net income (loss) to
 net cash provided by (used in) operating activities:
   Depreciation                                            299           197          145
   Amortization                                            429            24           24
   Acquired in process research and development          8,754            --           --
   Non-cash compensation                                    --            --           32
   Deferred taxes                                         (420)         (700)          --
Changes in assets and liabilities:
   Accounts receivable                                  (1,971)         (566)        (194)
   Prepaid expenses and other assets                      (191)          (83)          --
   Other long-term assets                                   10            --           --
   Accounts payable                                       (196)          130          (65)
   Accrued wages and expenses                              (13)          148          (23)
   Deferred revenue                                        152           266           45
------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities        403           716         (340)
------------------------------------------------------------------------------------------
Cash flows from investing activities:
   Purchases of plant and equipment                       (811)         (400)        (277)
   Investment in acquired businesses                    (8,600)           --           --
   Sale of marketable securities                         5,878            --           --
   Purchases of marketable securities                  (11,614)       (1,459)          --
------------------------------------------------------------------------------------------
Net cash used in investing activities                  (15,147)       (1,859)        (277)
------------------------------------------------------------------------------------------
Cash flows from financing activities:
   Proceeds from line of credit, net                     4,208            --           --
   Repayment of borrowings                                  --           (75)         (24)
   Proceeds from the issuance of common
    stock, net                                             120        11,388           14
   Proceeds from related party
    stockholders, net                                       --           442          700
------------------------------------------------------------------------------------------
Net cash provided by financing activities                4,328        11,755          690
------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents   (10,416)       10,612           73
Cash and cash equivalents at beginning of period        10,728           116           43
------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period            $    312       $10,728        $ 116
==========================================================================================

Supplemental disclosures of cash flow
 information:
 Cash paid for interest                               $    221       $     6        $  15
 Cash paid for income taxes                           $     13       $    72        $   2
</TABLE>


See accompanying notes to consolidated financial statements.



                                       18
<PAGE>   20

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In thousands, except per share amounts)


1. Nature of Business and Summary of Significant Accounting Policies

Nature of Business
Ansoft is a leading developer of electronic design automation ("EDA") software.
Its products are used by engineers in the design of high performance electrical
devices and systems, such as cellular phones, satellite communications, computer
circuit boards, motors and ABS braking systems.

Principles of Consolidation and Basis of Presentation 
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries, from the date of inception or acquisition. On July
24, 1996, the Company acquired The MacNeal Schwendler Corporation's Electronics
Business Unit ("EBU") for $5,600 in cash. On April 9, 1997, the Company acquired
Compact Software, Inc., ("Compact") for approximately $3,000 in cash and 1,273
share of common stock. The costs of the acquisitions have been allocated on the
basis of the estimated fair value of the assets acquired and the liabilities
assumed. The acquisitions have been accounted for as a purchase, and the
financial results of the EBU and Compact have been included in the accompanying
consolidated financial statements since the date of their respective
acquisitions.

Use of Estimates
The preparation of the 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 financial statements 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.

Cash Equivalents
Cash equivalents include only highly liquid debt instruments purchased with
original maturity dates of three months or less.

Marketable Securities
In fiscal 1995, the Company adopted Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115"). Marketable Securities portfolio consists of corporate bonds and
government agency issues and are classified as of April 30, 1997 and 1996, as
available for sale. In accordance with SFAS 115, marketable securities available
for sale are recorded at fair market value and any unrecorded gains or losses
are recorded as part of stockholders' equity. Costs of investments sold are
determined on the basis of specific identification.

Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation for financial reporting purposes is computed using
the straight-line method based upon the estimated useful lives of the assets
which range from three to seven years. Assets acquired under capital leases and
leasehold improvements are amortized over their useful life or the lease term,
as appropriate.

Revenue Recognition
The Company recognizes revenue in accordance with the provisions of American
Institute of Certified Public Accountants Statement of Position No. 91-1,
Software Revenue Recognition.

Revenue consists primarily of fees for licenses of the Company's software
products and fees for customer service and support. Revenue from the sale of
software licenses is recognized upon shipment of the products and fulfillment of
acceptance terms, if any. No significant obligations, including the performance
of services essential to the functionality of the software, remain unfulfilled
at the time revenue is recognized on software licenses, and with respect to any
remaining insignificant obligations, either the related revenue is unbundled and
deferred, based on the estimated fair value of related services, or the related
estimated costs are accrued. When the Company receives advance payment for
software products, such payments are recorded as deferred revenue and recognized
as revenue

                                       19

<PAGE>   21
when products are shipped and other obligations, if any, have been satisfied.
Other revenue from customer training, support and other services is recognized
as the service is performed.

The Company uses distributors for certain of its international sales. Revenue
generated through distributors is generally recorded at the gross sales price
paid by the customer. Commissions withheld by distributors are recorded as sales
and marketing expense. License revenue also includes royalties earned on sales
of certain products under terms of an agreement with Hewlett-Packard Corporation
(see also note 9). Related royalty revenue is recognized upon shipment of
product as reported to the Company by Hewlett-Packard. All obligations of the
Company are satisfied upon shipment of product by Hewlett-Packard.

Software Development Costs
Under Statement of Financial Accounting Standards (SFAS) No. 86, software
development costs are capitalized beginning when a product's technological
feasibility has been established and ending when a product is available for
general release to customers. Technological feasibility is deemed to have been
established upon completion of a detail program design or, in its absence,
completion of a working model. Generally, the establishment of technological
feasibility of the Company's products and general release have coincided. As a
result, the Company has not capitalized any software development costs because
any costs meeting the requirements of SFAS No. 86 have not been significant.

Income Taxes
Income taxes are provided for under the provisions of SFAS No. 109, "Accounting
for Income Taxes," for all periods presented. Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized.

Net Income (Loss) Per Share
Net income (loss) per share is computed using the weighted average number of
common and common equivalent shares outstanding during the period. Common
equivalent shares are not included in the per share calculations where their
inclusion would be antidilutive, except that in accordance with certain SEC
Staff Accounting Bulletins, common and common equivalent shares issued during
the 12 months preceding the initial filing of the Registration Statement for the
Company's initial public offering have been included in the calculation using
the treasury stock method as if they were outstanding for all periods presented.


In February 1997, Statement of Financial Accounting Standards No. 128 "Earnings
Per Share" ("SFAS 128") was issued by the Financial Accounting Standards Board.
SFAS 128 specifies modifications to the calculation of earnings per share from
that currently used by the Company. Under SFAS 128, "basic earnings (loss) per
share" will be calculated based upon the weighted average number of common
shares actually outstanding, and "diluted earnings per share" will be calculated
based upon the weighted average number of common shares outstanding and other
potential common shares if they are dilutive. FAS 128 is effective for the
Company's third quarter of fiscal 1998 and will be adopted at that time. Prior
periods will be restated. Had the Company determined earnings per share in
accordance with FAS 128, basic earnings (loss) per share for fiscal 1997, 1996
and 1995 would have been $(0.83), $0.21 and $(0.06), respectively, and diluted
earnings (loss) per share would have been $(0.81), $0.19 and $(0.06),
respectively.

Stock Based Compensation
On May 1, 1996, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards (SFAS) No. 123 "Accounting for
Stock-Based Compensation." This statement permits a company to choose either a
new fair value based method of accounting for its stock-based compensation
arrangements or to comply with the current APB Opinion 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 25
method of accounting for stock-based compensation with annual pro forma
disclosures of net income and earnings per share.


                                       20

<PAGE>   22
Reclassifications
Certain reclassifications have been made in the accompanying consolidated
financial statements for 1996 and 1995 to conform with the 1997 presentation.

2. Acquisitions and Related Intangible Assets

On July 24, 1996, the Company acquired the EBU for $5,600 in cash. The
acquisition has been accounted for as a purchase, and the financial results of
the EBU have been included in the accompanying consolidated financial statements
since the date of the acquisition. The cost of the acquisition has been
allocated on the basis of the estimated fair value of the assets acquired and
the liabilities assumed. The allocation of the acquisition costs resulted in an
acquired in process research and development charge of $3,054 based on the
future expected cash flows of certain acquired technology that had not reached
technological feasibility. The intangible assets of $2,227 (net of amortization
of $267) and $420 (net of amortization of $140) as of April 30, 1997, consist of
the customer list and established work force, respectively. They are being
amortized on a straight line basis over a seven and three year life,
respectively, commencing in August 1996.

   The allocation of fair values are presented below:

<TABLE>
     <S>                                            <C>
     Plant and equipment                            $  215
     Other assets                                       11
     Accrued liabilities                              (491)
     Deferred revenue                                 (243)
     In process research and development             3,054
     Intangible assets                               3,054
----------------------------------------------------------
     Total purchase price                           $5,600
==========================================================
</TABLE>

On April 9, 1997, the Company acquired Compact for approximately $3,000 in cash
and 1,273 shares of common stock. The cost of the acquisition has been allocated
on the basis of the estimated fair value of the assets acquired and the
liabilities assumed. The acquisitions has been accounted for as a purchase, and
the financial results of Compact have been included in the accompanying
consolidated financial statements since the date of the acquisition. The
allocation of the acquisition costs resulted in an acquired in process research
and development charge of $5,700, based on the future expected cash flows of
certain acquired technology that had not reached technological feasibility. The
intangible assets of $3,813 and $500 as of April 30, 1997, consist of the
customer list and established work force, respectively. They are being amortized
on a straight line basis over a seven and three year life, respectively,
commencing in May 1997.

   The allocation of fair values are presented below:

<TABLE>
     <S>                                          <C>
     Accounts receivable                           $   492
     Plant and equipment                               544
     Accrued liabilities                              (568)
     Accrued wages                                    (131)
     Deferred revenue                                 (350)
     In process research and development             5,700
     Intangible assets                               4,313
----------------------------------------------------------
     Total purchase price                          $10,000
==========================================================
</TABLE>

The following unaudited pro forma summary presents information as if the
acquisitions of the EBU and Compact occurred at the beginning of the periods
presented. The EBU has no separate legal status as it was an integral part of
MSC's overall operations. As a result, separate financial statements have not
been maintained for the EBU. Historically, MSC did not allocate general and
administrative costs to the EBU, so any such allocation at this time would be
arbitrary. The pro forma information is provided for information purposes only.
It is based on historical information and does not necessarily reflect the
actual results that would have occurred, nor is it necessarily indicative of
future results of operations of the combined enterprise.


                                       21


<PAGE>   23
<TABLE>
<CAPTION>
Year ending April 30,                 1997           1996
-----------------------------------------------------------
   <S>                             <C>               <C>
   Revenue                          $ 21,020       $ 17,633
   Net income (loss)                $ (6,298)      $    841
   Net income (loss) per share      $  (0.69)      $   0.10
</TABLE>

3. Plant and Equipment

Plant and equipment consist of the following:

<TABLE>
<CAPTION>
April 30,                             1997           1996
-----------------------------------------------------------
<S>                                 <C>          <C>
Computers and equipment              $ 2,856        $ 1,404
Furniture and fixtures                   298            262
Leasehold improvements                    84              2
-----------------------------------------------------------
                                       3,238          1,668
Less allowances for depreciation
 and amortization                      1,243            944
-----------------------------------------------------------
                                     $ 1,995         $  724
===========================================================
</TABLE>

4. Marketable Securities

Marketable securities, classified as available for sale, are summarized as
follows:

<TABLE>
<CAPTION>
                            Amortized    Unrealized     Market
                               cost      gain (loss)    value
---------------------------------------------------------------
<S>                           <C>         <C>          <C>
April 30, 1997
Marketable Securities        $ 7,194       $   (44)    $ 7,150

April 30, 1996
Marketable Securities        $ 1,459       $     --    $ 1,459
</TABLE>

The carrying values of debt securities as of April 30, 1997, by contractual
maturity is shown below:

<TABLE>
   <S>                           <C>
   Due in one year or less        $     55
   Due in one to five years          2,429
   Due in five to ten years          4,666
------------------------------------------
                                  $  7,150
==========================================
</TABLE>

Gross realized and unrealized gains (losses) on sales of securities in fiscal
1997 and 1996 were immaterial.

5. Borrowings

The Company has available a secured line of credit from a domestic financial
institution at an interest rate varying from a minimum of 2% below the Broker's
Call Rate to a maximum equaling the Broker's Call Rate. The line of credit is
secured by the marketable securities held with the institution. As of April 30,
1997, the outstanding balance was $ 4,208 and the interest rate charged was
6.5%. The availability of the unused line of credit, approximately $417 as of
April 30, 1997, is subject to certain borrowing base requirements.

6. Leases

The Company leases its corporate headquarters in Pittsburgh, Pennsylvania, and
other facilities under operating lease agreements which expire over the next six
years. Rental expense incurred by the Company under operating lease agreements
totaled $548, $187 and $154 for the years ended April 30, 1997, 1996 and 1995,
respectively. The future minimum lease payments for such operating leases as of
April 30, 1997, are:


                                       22

<PAGE>   24
<TABLE>
<CAPTION>
Year ending April 30,
-------------------------
   <S>            <C>
   1998           $   617
   1999               529
   2000               380
   2001               349
   2002               312
   Thereafter         330
-------------------------
                  $ 2,517
=========================
</TABLE>

7. Stockholders' Equity and Advances

In May and December 1994, the Company issued 1,398 shares and 400 shares,
respectively, to a corporation whose sole stockholders had been directors and
executive officers of the Company since the formation of the Company, for
settlement of prior advances totaling $2,072. In May 1994, the Company issued
615 shares to three directors and executive officers of the Company at that time
for settlement of prior advances totaling $670. In September 1994, the Company
issued 1,332 shares to nine persons (including three directors and executive
officers of the Company at that time) for settlement of prior advances totaling
$1,413. In December 1994, the Company issued 400 shares to two of the directors
and executive officers of the Company at that time for settlement of advances in
fiscal 1995 totaling $500. The exchange rates for such advances were fixed at
the time of the initial advances, at the estimated fair market value of the
Common Stock on the date of such advance. Interest expense in 1994 includes
interest on stockholder advances totaling $67.

In April 1996, the Company closed its initial public offering of 1,500 shares of
common stock at $8.50 per share. The net proceeds of the offering were
approximately $11,400, after deducting applicable costs and expenses.

8. Common Stock Options

The Company's 1988 Stock Option Plan (1988 Plan) authorizes the issuance of 850
shares of common stock for the grant of incentive or nonstatutory stock options
to employees and directors. Under the terms of the 1988 Plan, options to
purchase Common Stock are granted at no less than the stock's estimated fair
market value at the date of the grant and may be exercised during specified
future periods as determined by the Board of Directors. The 1988 Plan provides
that the options shall expire no more than ten years after the date of the
grant.

In March 1995, the Board of Directors approved a 1995 Stock Option Plan (1995
Plan) that authorized the issuance of up to 350 shares of Common Stock for the
grant of incentive or nonstatutory stock options to employees and directors. In
January 1996, the Board of Directors approved an additional 300 shares of common
stock for grant. Under the terms of the 1995 Plan, options to purchase Common
Stock are granted at no less than the stock's estimated fair market value at the
date of the grant and may be exercised during specified future periods as
determined by the Board of Directors. The 1995 Plan provides that the options
shall expire no more than ten years after the date of the grant. Under the 1995
Plan, the Board approved the granting of incentive stock options to employees
who elected to exercise up to 50% of their currently outstanding incentive stock
options under the 1988 Plan. Employees were also offered the ability to finance
the stock purchased from the exercise of their 1988 Plan options through the
origination of two-year, 8% loans from American Banner Resources, Inc., a
company wholly owned by two directors of the Company. In connection with this
transaction, the Company recorded a charge to fiscal 1995 operations of $33
representing compensation equal to the 10% per share premium on the 1988 options
which were exercised pursuant to the 1995 Plan. Shares under outstanding options
under the 1988 Plan and the 1995 Plan are as follows:

Shares under Outstanding Options

<TABLE>
<CAPTION>
                                     Shares             Price
----------------------------------------------------------------
   <S>                                <C>           <C>
   Outstanding, April 30, 1994         788           $0.32-$1.75
     Granted                           341           $1.75-$2.00
     Exercised                        (218)          $0.32-$1.75
     Canceled                         (149)             $1.75
----------------------------------------------------------------
   Outstanding, April 30, 1995         762           $0.32-$2.00
     Granted                           174           $1.75-$2.00
     Exercised                         (43)          $0.32-$1.75
     Canceled                          (58)             $1.75
----------------------------------------------------------------
   Outstanding, April 30, 1996         835           $1.00-$2.00
     Granted                           270           $5.00-$6.50
     Exercised                         (80)          $1.14-$2.00
     Canceled                          (33)          $2.00-$5.38
----------------------------------------------------------------
   Outstanding, April 30, 1997         992           $1.00-$6.50
================================================================
</TABLE>

                                       23
<PAGE>   25
Options to purchase 628 shares of Common Stock were exercisable as of April 30,
1997 and options to purchase 222 shares of Common Stock were available for
future grant as of April 30, 1997.

In addition to the options described above, the Chairman of the Board of
Directors received an option to purchase 200 shares of Common Stock at an
exercise price of $5.00 per share in April 1995. At that time, such exercise
price was considered to be above the estimated fair market value. As of April
30, 1997, all such options were still outstanding and unexercised. The options
expire ten years after the date of the grant.

As permitted under Statement of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock-Based Compensation," the Company has elected to
follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees" ("APB 25"), and related Interpretations, in accounting for
stock-based awards to employees. Under APB 25, because the exercise price of the
Company's employee stock options generally equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized in
the Company's consolidated financial statements for all periods presented other
than the $33 discussed above.

Pro forma information regarding net income and earnings (loss) per share is
required by SFAS 123. This information is required to be determined as if the
Company had accounted for its employee stock options granted subsequent
to April 30, 1995 under the fair value method prescribed by SFAS 123. The fair
value of options granted in fiscal years 1997 and 1996 reported below has been
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted average assumptions:

<TABLE>
<CAPTION>
Year ended April 30,             1997       1996
------------------------------------------------
<S>                               <C>      <C>
Risk-free rate (%)               6.00       6.00
Volatility (%)                  55.92        n/a
Expected Life (in years)         10.0       10.0
Dividend Yield (%)               0.00       0.00
</TABLE>

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility. Because
the Company's options have characteristics significantly different from those of
traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in the opinion of management, the
existing models do not necessarily provide a reliable single measure of the fair
value of its options. However, based solely on this analysis, the weighted
average estimated fair value of employee stock options granted through April 30,
1997 and 1996 was $3.94 and $1.06 per share, respectively.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows:

<TABLE>
<CAPTION>
Year ended April 30,                           1997        1996
-----------------------------------------------------------------
<S>                                          <C>          <C>
Pro forma net income (loss)                   $(6,711)     $1,060
Pro forma net income (loss) per common share   $(0.84)      $0.15
</TABLE>

     Because the Company anticipates making additional grants and options vest
over several years, the effects on pro forma disclosures of applying SFAS 123
are not likely to be representative of the effects on pro forma disclosures of
future years. SFAS 123 is applicable only to options granted subsequent to April
30, 1995.

The following table summarizes information about stock options outstanding as of
April 30, 1997.


                                       24
<PAGE>   26

<TABLE>
<CAPTION>
Options Outstanding                                      Options Exercisable
                             Weighted-
                Number        Average      Weighted-    Number       Weighted-
 Range Of    Outstanding     Remaining      Average    Exercisable    Average
 Exercise     at April 30,  Contractual    Exercise    at April 30,   Exercise
  Prices         1997          Life          Price         1996        Price
--------------------------------------------------------------------------------
<S>              <C>         <C>            <C>            <C>         <C>
$1.00 - $2.00     563         6.40           $1.75          471         $1.70
   $3.50          135         8.48           $3.50          135         $3.50
$5.00 - $5.75     434         8.88           $5.13          102         $5.76
   $6.50           60         9.00           $6.50           12         $6.50
</TABLE>

9. Export Sales, Major Customers and Credit Risk

Export sales, principally to Asia, accounted for 41%, 33% and 31% of total
revenues in 1997, 1996 and 1995, respectively. Included in export sales to Asia
were sales to Japan, which accounted for approximately 13% of total revenue in
fiscal 1997 and 1996, and 14% of total revenue in fiscal 1995. No other foreign
country accounted for more than 10% of total revenue during these periods.

Revenue from one distributor accounted for approximately $684 of total revenue
in fiscal 1995.

In 1989, the Company entered into an exclusive distribution agreement with
Hewlett-Packard (the "HP agreement") for worldwide distribution of its HFSS
product. Revenue from the HP agreement accounted for 12%, 13%, and 18% of
revenue in fiscal 1997, 1996 and 1995, respectively. The HP Agreement expired in
January 1997, and will not be renewed. HP has the non-exclusive right to sell
the HFSS product through January 1998. The Company expects that HP will account
for a decreasing percentage of its total revenues over the next nine months. The
Company directly markets its HFSS product, to target the commercial wireless
communications and defense/aerospace markets, through its worldwide direct sales
force and its international distributors. Management believes that the
expiration of the HP agreement will not have a material adverse effect on the
consolidated financial condition or results of operations.

The Company markets its software products to customers throughout the world
directly and through distributors and generally does not require collateral.
However, letters of credit are obtained from certain international customers
prior to shipment. The Company performs ongoing credit evaluations of its
customers and maintains an allowance for potential credit losses. The Company
believes that it has adequately provided for credit losses.

10. Income Tax

The provisions for income taxes consisted of the following:

<TABLE>
<CAPTION>
----------------------------------------------------------------
April 30,                          1997       1996       1995
----------------------------------------------------------------
<S>                               <C>         <C>        <C>
Current:
Federal                           $ -          $ 14      $ -
Foreign                             -            72        -
State                               -             2        -
----------------------------------------------------------------
      Total                         -            88        -

Deferred:
   Federal                         (316)       (638)       -
   State                           (104)       ( 62)       -
----------------------------------------------------------------
      Total                        (420)       (700)       -

----------------------------------------------------------------

Total benefit for income taxes    $(420)      $(612)       -
================================================================
</TABLE>


                                       25

<PAGE>   27
The Company's actual income tax expense (benefit) differs from the expected
income tax benefit computed by applying the statutory federal income before
income taxes as a result of the following:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
April 30,                                              1997       1996       1995
---------------------------------------------------------------------------------------
<S>                                                 <C>           <C>         <C>
Income tax expense (benefit) at statutory rate       $(2,335)      $ 234       $(104)
State income tax, net of federal offset                ( 419)         41        ( 18)
Expiration of state net operating losses                  61          91          -
Change in valuation allowance                          2,258        (992)        114
Other, net                                                15          14           8
---------------------------------------------------------------------------------------

Actual income tax benefit                              $(420)      $(612)      $  -
=======================================================================================
</TABLE>


The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below:


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
April 30,                                              1997       1996
---------------------------------------------------------------------------------------
<S>                                                   <C>         <C>
Deferred tax assets:
   Net operating loss carryforward                    $3,885      $1,245
   Allowance for doubtful accounts                        75          51
   Alternative minimum tax credit carryforward             6          14
   Foreign Tax Credit carryforward                         -          72
   Intangible Assets                                     141           -

---------------------------------------------------------------------------------------

Total gross deferred tax assets                        4,107       1,382
Less valuation allowance                               2,857         599

---------------------------------------------------------------------------------------

Net deferred tax assets                                1,250         783

=======================================================================================

Deferred tax liabilities:
   Property, plant and equipment                        (130)        (83)

---------------------------------------------------------------------------------------

Total gross deferred tax liability                      (130)        (83)

---------------------------------------------------------------------------------------

Net deferred taxes                                    $1,120        $700

=======================================================================================
</TABLE>


The Company has established a valuation allowance against its net deferred tax
assets due to the uncertainty surrounding the realization of such assets
pursuant to SFAS No. 109. The increase in the valuation allowance during the
year ended April 30, 1997 was due in part to the successful completion of the
Company's acquisitions of the EBU and Compact, which resulted in acquired in
process research and development charge of $8,754 creating additional federal
tax net operating losses. A valuation allowance has been established on a
portion of these net operating losses because management has determined that it
is more likely than not that a portion of the net operating losses will not be
realized due to a lack of sufficient taxable income. The ultimate realization of
the remaining deferred tax assets is dependent upon the generation of future
taxable income beyond that which is deemed more likely than not at this time.
Management evaluates on a quarterly basis the recoverability of the deferred tax


                                       26

<PAGE>   28

assets and the level of the valuation allowance. Due to the uncertainty of the
future financial results of the company, a valuation allowance is maintained for
the remaining deferred tax assets. The valuation allowance will be reduced at
such time as it is determined that it is more likely than not that the remaining
deferred tax assets are realizable or increased if estimates of future taxable
income during the carry forward period are reduced.

As of April 30, 1997, the Company had net operation loss carryforwards for
federal income tax purposes of $9,984 which are available to offset future
federal taxable income, if any, and expire in increments of between $112 and
$884, beginning April 30, 2004 through April 30, 2010, and $6,652 in April 30,
2012.

11. Related Party Transactions

Certain of the Company's principal stockholders are also members of the Board of
Directors and executive management.

In 1992, the Company entered into an agreement with a distributor under which
distribution rights in Japan were granted for certain Company products. In
addition, the distributor purchased 120 shares of the Company's Common Stock at
a price of $2.50 per share. Sales through the distributor were approximately
$684 in 1995. These transactions were on terms no less favorable to the Company
than could be obtained from unrelated third parties. In fiscal 1995, the Company
terminated the distribution agreement.

12. Employee Benefit Plan

The Company has a 401(k) savings and retirement plan which covers its full-time
employees who have attained the age of 21 and have completed six months of
service. Eligible employees make voluntary contributions to the plan up to 15%
of their annual compensation. The Company is not required to contribute, nor has
it contributed, to the 401(k) Plan.

13. Commitments and Contingencies

The Company is not a party to any litigation and is not aware of any threatened
litigation, unasserted claims or assessments that could have a material adverse
effect on the Company's business, consolidated operating results or consolidated
financial condition.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

None.


                                       27
<PAGE>   29


Item 14. Exhibits, financial statement schedules and reports on form 8-k.

(a) documents filed as part of this report:

1. Financial statements. The following consolidated financial statements of the
company are filed as part of this annual report on form 10-k.

<TABLE>
<CAPTION>
                                                                                  Page
<S>                                                                                <C>
Report of KPMG Peat Marwick LLP                                                     14

Balance Sheet as of April 30, 1997 and 1996                                         15

Statement of Operations for the years ended April 30, 1997, 1996 and 1995           16

Statement of Stockholders' Equity (Deficit) for the years ended April 30, 1997,
 1996 and 1995                                                                      17

Statement of Cash Flows for the years ended April 30, 1997, 1996 and 1995           18

Notes to Financial Statements                                                       19

Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts and Reserves                        29
</TABLE>

Financial statement schedules not listed above have been omitted because they
are inapplicable, are not required under applicable provisions of Regulation
S-X, or the information that would otherwise be included in such schedules is
contained in the registrant's financial statements or accompanying notes.

2. Exhibits. The Exhibits listed below are filed or incorporated by reference
as part of this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
Exhibit No.    Description
<S>           <C>
3.1            Articles of Incorporation of the Company (incorporated by reference from Registration Statement
               No. 333-1398).

3.2            Bylaws of the Company Company (incorporated by reference from Registration Statement No.
               333-1398).

*10.1          1988 Stock Option Plan Company (incorporated by reference from Registration Statement No.
               333-1398).

*10.2          1995 Stock Option Plan Company (incorporated by reference from Registration Statement No.
               333-1398).

*10.3          Zoltan Cendes Stock Option Plan, dated April 30, 1995 (incorporated by reference from
               Registration Statement No. 333-1398).

10.4           Office Lease Agreement between Commerce Court Associates and the Company dated June 7, 1989
               (incorporated by reference from Registration Statement No. 333-1398).

10.5           Amendment No. 1 to Office Lease Agreement between Commerce Court Associates and the Company
               dated March 17, 1994 Company (incorporated by reference from Registration Statement No.
               333-1398).

10.10          Asset Purchase Agreement by and between Ansoft Corporation and The MacNeal-Schwendler Corporation 
               for the Purchase of the Assets of its Electronic Business Unit dated July 24, 1996 (incorporated 
               herein by reference from the Company's quarterly report on Form 10-Q for the period ended 
               July 31, 1997)

10.11          Stock Purchase Agreement between Ansoft Corporation and Dr. Ulrich L. Rohde and Dr. Meta Rohde 
               dated April 9, 1997 (incorporated herein by reference from the Company's current report on Form 
               8-K filed April 22, 1997)          


</TABLE>

                                       28
<PAGE>   30

<TABLE>
<S>            <C>
10.6           Software Distribution Agreement, by and between the Company and Hewlett-Packard Company, dated
               January 1, 1994 Company (incorporated by reference from Registration Statement No. 333-1398).

10.7           First Amendment to Software Distribution Agreement, by and between the Company and
               Hewlett-Packard Company, dated May 9, 1995 Company (incorporated by reference from Registration
               Statement No. 333-1398).

10.8           Second Amendment to Software Distribution Agreement, by and between the Company and
               Hewlett-Packard Company, dated September 7, 1995 Company (incorporated by reference from
               Registration Statement No. 333-1398).

10.9           Underwriting Agreement dated April 3, 1996 by and between Registrant and Janney Montgomery
               Scott Inc. and Pennsylvania Merchant Group Ltd.,as representatives for the Underwriters
               identified therein Company (incorporated by reference from Registration Statement No. 333-1398).

11.1           Calculation of Earnings Per Share Company (filed herewith)

21.1           List of Subsidiaries of the Company (filed herewith)

27.1           Financial Data Schedule (filed herewith).
</TABLE>

* Denotes management contracts and compensatory plans and arrangements required
  to be identified by Item 14(a)(3).


(b) REPORTS ON FORM 8-K:

The Company filed the following reports on Form 8-K during the last quarter of
fiscal year 1997:

            Date of Report            Item Reported
            --------------            -------------
            April 9, 1997             Acquisition or Disposition of Assets


(c) The Company hereby files as exhibits to this Form 10-K the exhibits set
forth in Item 14(a)(2) hereof which are not incorporated by reference.

(d) The Company hereby files as financial statement schedules to this Form 10-K
the financial statement schedules set forth in Item 14(a)(2) hereof.


ITEM 14 (A).
                 Schedule II-Valuation and Qualifying Accounts
                                 (In thousands)


<TABLE>
<CAPTION>
                             Balance as of        Additions                  Balance as of
                             the Beginning    Charged to Costs                 the End of
                             of the Period     and Expenses      Deductions    the Period
                             -------------    ----------------   ----------  -------------
<S>                          <C>                 <C>                <C>        <C>
Year ended April 30, 1997
 Allowance for doubtful
   accounts                       125                -               -             125
Year ended April 30, 1996
 Allowance for doubtful
   accounts                        70                55              -             125
Year ended April 30, 1995
 Allowance for doubtful
   accounts                        60                10              -              70
</TABLE>


                                       29
<PAGE>   31

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 July 25, 1997         ANSOFT CORPORATION.
                           By: /s/ NICHOLAS CSENDES
                           -------------------------------------
                           Nicholas Csendes
                           President and Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on July 25, 1997.


Signature                       Title


(1)  Principal Executive, Financial
     Accounting Officers


/s/ NICHOLAS CSENDES,           President, Chief Executive Officer and Director
---------------------------
Nicholas Csendes


/s/ ZOLTAN J. CENDES, PH.D.     Chairman of the Board and Director
---------------------------
Zoltan J. Cendes, Ph.D.


/s/ ANTHONY L. RYAN             Chief Financial Officer
---------------------------
Anthony L. Ryan


/s/ THOMAS A.N. MILLER          Director
---------------------------
Thomas A.N. Miller


/s/ JACOB K. WHITE, PH.D.       Director
---------------------------
Jacob K. White, Ph.D.


/s/ JOHN N. WHELIHAN            Director
---------------------------
John N. Whelihan


/s/ ULRICH L. ROHDE             Director
---------------------------
Ulrich L. Rohde


                                       31