Aspen Technology Announces Financial Results for the Third Quarter of Fiscal 2024
Aspen Technology, Inc. (AspenTech) (NASDAQ:AZPN), a global leader in industrial software, today announced financial results for its third quarter in fiscal 2024, ended March 31, 2024.
Antonio Pietri, President and Chief Executive Officer of AspenTech, commented, "Our third quarter performance and updated outlook for fiscal 2024 reflects the more cautious customer buying behavior we experienced at the start of the new calendar year. While this dynamic is expected to weigh on ACV growth in the near-term, the continued health and expansion of our pipeline gives us confidence in the underlying growth opportunity for AspenTech."
"AspenTech remains well positioned to support customers in their efforts to capitalize on the long-term investment trends of global decarbonization, electrification, and the transition to a new energy system. The opportunity for further collaboration and co-innovation in these areas was on full display last week at our biennial user conference, OPTIMIZE 24. Now, more than ever, our customers are being asked to meet the world's increasing demand for resources in a sustainable manner, and AspenTech is providing the solutions to make this a reality," concluded Pietri.
Third Quarter Fiscal Year 2024 Recent Business Highlights
- Annual contract value1 ("ACV") was $936.1 million at the end of the third quarter of fiscal 2024, increasing 9.5% year over year and 2.4% quarter over quarter.
- Cash flow from operations was $138.1 million for the third quarter of fiscal 2024, compared to $131.0 million in the third quarter of fiscal 2023.
- Free cash flow2 was $137.0 million for the third quarter of fiscal 2024, compared to $129.3 million in the third quarter of fiscal 2023. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.
Summary of Third Quarter Fiscal Year 2024 Financial Results
AspenTech's total revenue was $278.1 million in the third quarter of fiscal 2024 and included the following:
- License and solutions revenue, which represents the portion of a term license agreement allocated to the initial license and Digital Grid Management ("DGM") revenue where software, hardware and professional services are recognized as one performance obligation, was $169.5 million in the third quarter of fiscal 2024, compared to $136.3 million in the third quarter of fiscal 2023.
- Maintenance revenue, which represents the portion of customer agreements related to ongoing support and the right to future product enhancements, was $86.3 million in the third quarter of fiscal 2024, compared to $77.3 million in the third quarter of fiscal 2023.
- Services and other revenue, which represents the portion of customer agreements related to professional services and training services, was $22.4 million in the third quarter of fiscal 2024, compared to $16.3 million in the third quarter of fiscal 2023.
Loss from operations was $19.3 million in the third quarter of fiscal 2024, compared to $78.5 million in the third quarter of fiscal 2023. Non-GAAP income from operations was $116.3 million in the third quarter of fiscal 2024, compared to $66.8 million in the third quarter of fiscal 2023. The year-over-year improvement in loss from operations was mainly due to a higher mix of license and solutions revenue, in addition to one-time expense savings, lower stock-based compensation and a continuing focus on driving efficiencies.
Net income was $1.6 million, or $0.02 per diluted share, in the third quarter of fiscal 2024, compared to net loss of $57.6 million, or $0.89 per diluted share, in the third quarter of fiscal 2023. AspenTech has increased amortization of intangible assets following the close of its transaction with Emerson Electric Co. ("Emerson"). AspenTech expects its amortization of intangible assets to remain at higher levels for the next several years as the related asset balance is amortized over the respective expected useful lives of the intangible assets.
Non-GAAP net income was $108.7 million, or $1.70 per diluted share, in the third quarter of fiscal 2024, compared to $69.1 million, or $1.06 per diluted share, in the third quarter of fiscal 2023. The year-over-year increase in non-GAAP net income was mainly due to revenue growth combined with strong operating leverage.
AspenTech had cash and cash equivalents of $177.6 million as of March 31, 2024, compared to $241.2 million as of June 30, 2023. The decrease in cash and cash equivalents during this period primarily was due to the impact of share repurchase activity under AspenTech's $300.0 million share repurchase authorization (the "share repurchase authorization") during fiscal 2024. Please see below for an update on the share repurchase authorization. Under its revolving credit facility, AspenTech had no borrowings and $197.7 million available as of March 31, 2024.
AspenTech generated $138.1 million in cash flow from operations and $137.0 million in free cash flow2 in the third quarter of fiscal 2024, compared to $131.0 million in cash flow from operations and $129.3 million in free cash flow2 in the third quarter of fiscal 2023.
Recent Developments
Appointment of Chief Financial Officer
AspenTech today announced the appointment of David Baker to the position of Senior Vice President, Chief Financial Officer of the Company, effective June 3, 2024. Mr. Baker previously was employed by Emerson for over 27 years. Mr. Baker brings to the role deep financial acumen, operational expertise, and significant senior financial leadership experience from his prior roles at Emerson, including Vice President, Financial Planning, where he led the financial planning and analysis function for Emerson since March 2023, Vice President and Chief Financial Officer, Automation Solutions, from November 2018 to February 2023, and Vice President and Chief Financial Officer, Measurement and Analytical, from July 2013 to November 2018. Mr. Baker holds an M.B.A. in Operations Management from the University of Minnesota and a B.A. in Accounting from the University of Northern Iowa.
Appointment of Director of the Board
AspenTech's Board of Directors (the "Board") elected David Henshall as a director of the Board, effective April 26, 2024. Mr. Henshall most recently served as Chief Executive Officer at Citrix Systems, Inc., a leading multinational provider of cloud computing and virtualization technology, where he held executive roles for nearly twenty years. An experienced public company board director, Mr. Henshall actively serves as the Chairman of the board of directors of Everbridge, Inc., is a member of the board of directors of HashiCorp, Inc. and Feedzai, Inc, and is a former member of the boards of directors of New Relic, Inc. and LogMeIn, Inc. He holds a M.B.A. from Santa Clara University and a B.A. in Business Administration from the University of Arizona.
Share Repurchase Authorization Update
AspenTech repurchased 288,241 shares for $56.7 million under its $300.0 million share repurchase authorization, announced on August 1, 2023, in the third quarter of fiscal 2024. As of March 31, 2024, a total of 1,243,080 shares had been repurchased under the share repurchase authorization for $243.1 million, with the total remaining value being $56.9 million.
Fiscal Year 2024 Business Outlook
Based on information as of today, May 7, 2024, AspenTech is updating its fiscal 2024 guidance.
- ACV1 growth of at least 9.0% year-over-year
- GAAP operating cash flow of at least $349 million
- Free cash flow2 of at least $340 million
- Total bookings of at least $1.03 billion
- Total revenue of at least $1.10 billion
- GAAP total expense of approximately $1.22 billion
- Non-GAAP total expense of approximately $675 million
- GAAP operating loss at or better than $121 million
- Non-GAAP operating income of at least $425 million
- GAAP net loss at or better than $29 million
- Non-GAAP net income of at least $403 million
- GAAP net loss per share at or better than $0.45
- Non-GAAP net income per share of at least $6.29
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause AspenTech's actual results to differ materially from these forward-looking statements.
Conference Call and Webcast
AspenTech will host a conference call and webcast presentation on Tuesday, May 7, 2024, at 4:30 p.m. ET to discuss its financial results, business outlook, and related corporate and financial matters. A live webcast of the call will be available on AspenTech's Investor Relations website, http://ir.aspentech.com, via its "Webcasts" page. To access the call by phone, please use the following registration link. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast also will be available for a limited time at http://ir.aspentech.com/.
AspenTech has provided an earnings presentation for its third quarter of fiscal 2024. AspenTech asks that shareholders refer to this presentation in conjunction with the conference call, which can be found at ir.aspentech.com.
Footnotes
| 1. | AspenTech defines ACV as the estimate of the annual value of our portfolio of term license and software maintenance and support, or SMS, contracts, the annual value of SMS agreements purchased with perpetual licenses and the annual value of standalone SMS agreements purchased with certain legacy term license agreements, which have become an immaterial part of our business. |
|
| 2. | Free cash flow is a non-GAAP metric that is calculated as net cash provided by operating activities adjusted for the net impact of purchases of property, equipment and leasehold improvements and payments for capitalized computer software development costs. Effective January 1, 2023, AspenTech no longer excludes acquisition and integration planning related payments from its computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation. |
About AspenTech
Aspen Technology, Inc. (NASDAQ:AZPN) is a global software leader helping industries at the forefront of the world's dual challenge meet the increasing demand for resources from a rapidly growing population in a profitable and sustainable manner. AspenTech solutions address complex environments where it is critical to optimize the asset design, operation and maintenance lifecycle. Through our unique combination of deep domain expertise and innovation, customers in asset-intensive industries can run their assets safer, greener, longer and faster to improve their operational excellence. To learn more, visit AspenTech.com.
Forward-Looking Statements
Statements in this press release that are not strictly historical may be "forward-looking" statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties, and AspenTech undertakes no obligation to update any such statements to reflect later developments. These forward-looking statements include, but are not limited to, our guidance for fiscal 2024, our expectations regarding cash collections, closing of customer renewals and completion of our share repurchase authorization. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "strategy," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," "opportunity" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These risks and uncertainties include, without limitation: the failure to realize the anticipated benefits of our transaction with Emerson Electric Co.; risks resulting from our status as a controlled company; the scope, duration and ultimate impacts of the Russia-Ukraine war and the Israeli-Hamas conflict; as well as economic and currency conditions, market demand (including related to adverse changes in the process or other capital-intensive industries such as materially reduced spending budgets due to oil and gas price declines and volatility), pricing, protection of intellectual property, cybersecurity, natural disasters, tariffs, sanctions, competitive and technological factors, and inflation; and others, as set forth in AspenTech's most recent Annual Report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission (the "SEC"). The outlook contained herein represents AspenTech's expectation for its consolidated results, other than as noted herein.
© 2024 Aspen Technology, Inc. AspenTech, aspenONE, asset optimization and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks not owned by AspenTech are property of their respective owners.
Use of Non-GAAP Financial Measures
This press release contains "non-GAAP financial measures" under the rules of the SEC. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.
Management considers both GAAP and non-GAAP financial results in managing AspenTech's business. As the result of adoption of new licensing models, management believes that a number of AspenTech's performance indicators based on GAAP, including revenue, gross profit, operating income and net income, should be viewed in conjunction with certain non-GAAP and other business measures in assessing AspenTech's performance, growth and financial condition. Accordingly, management utilizes a number of non-GAAP and other business metrics, including the non-GAAP metrics set forth in this press release, to track AspenTech's business performance.
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(Dollars and Shares in Thousands, Except per share data) |
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
License and solutions |
$ |
169,467 |
|
|
$ |
136,292 |
|
|
$ |
470,578 |
|
|
$ |
446,360 |
|
Maintenance |
|
86,256 |
|
|
|
77,283 |
|
|
|
256,280 |
|
|
|
234,277 |
|
Services and other |
|
22,383 |
|
|
|
16,303 |
|
|
|
57,719 |
|
|
|
42,898 |
|
Total revenue |
|
278,106 |
|
|
|
229,878 |
|
|
|
784,577 |
|
|
|
723,535 |
|
Cost of revenue: |
|
|
|
|
|
|
|
||||||||
License and solutions |
|
65,550 |
|
|
|
68,980 |
|
|
|
204,453 |
|
|
|
209,326 |
|
Maintenance |
|
8,344 |
|
|
|
9,020 |
|
|
|
29,192 |
|
|
|
27,804 |
|
Services and other |
|
19,048 |
|
|
|
15,799 |
|
|
|
52,290 |
|
|
|
40,897 |
|
Total cost of revenue |
|
92,942 |
|
|
|
93,799 |
|
|
|
285,935 |
|
|
|
278,027 |
|
Gross profit |
|
185,164 |
|
|
|
136,079 |
|
|
|
498,642 |
|
|
|
445,508 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Selling and marketing |
|
121,303 |
|
|
|
120,035 |
|
|
|
365,921 |
|
|
|
356,260 |
|
Research and development |
|
49,334 |
|
|
|
54,046 |
|
|
|
156,155 |
|
|
|
153,741 |
|
General and administrative |
|
33,821 |
|
|
|
40,471 |
|
|
|
105,315 |
|
|
|
124,557 |
|
Total operating expenses |
|
204,458 |
|
|
|
214,552 |
|
|
|
627,391 |
|
|
|
634,558 |
|
Loss from operations |
|
(19,294 |
) |
|
|
(78,473 |
) |
|
|
(128,749 |
) |
|
|
(189,050 |
) |
Other expense, net |
|
(1,988 |
) |
|
|
(13,281 |
) |
|
|
(8,017 |
) |
|
|
(33,270 |
) |
Interest income, net |
|
13,723 |
|
|
|
9,969 |
|
|
|
40,056 |
|
|
|
19,112 |
|
Loss before benefit for income taxes |
|
(7,559 |
) |
|
|
(81,785 |
) |
|
|
(96,710 |
) |
|
|
(203,208 |
) |
Benefit for income taxes |
|
(9,115 |
) |
|
|
(24,150 |
) |
|
|
(42,241 |
) |
|
|
(68,132 |
) |
Net income (loss) |
$ |
1,556 |
|
|
$ |
(57,635 |
) |
|
$ |
(54,469 |
) |
|
$ |
(135,076 |
) |
Net income (loss) per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.02 |
|
|
$ |
(0.89 |
) |
|
$ |
(0.85 |
) |
|
$ |
(2.09 |
) |
Diluted |
$ |
0.02 |
|
|
$ |
(0.89 |
) |
|
$ |
(0.85 |
) |
|
$ |
(2.09 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
63,508 |
|
|
|
64,796 |
|
|
|
63,844 |
|
|
|
64,622 |
|
Diluted |
|
63,802 |
|
|
|
64,796 |
|
|
|
63,844 |
|
|
|
64,622 |
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
|
|
|
||||
|
March 31, 2024 |
|
June 30, 2023 |
||||
|
|
|
|
||||
|
(Dollars in Thousands, Except Share Data) |
||||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
177,592 |
|
|
$ |
241,209 |
|
Accounts receivable, net |
|
140,469 |
|
|
|
122,789 |
|
Current contract assets, net |
|
378,914 |
|
|
|
367,539 |
|
Prepaid expenses and other current assets |
|
28,697 |
|
|
|
27,728 |
|
Receivables from related parties |
|
69,097 |
|
|
|
62,375 |
|
Prepaid income taxes |
|
— |
|
|
|
11,424 |
|
Total current assets |
|
794,769 |
|
|
|
833,064 |
|
Property, equipment and leasehold improvements, net |
|
16,414 |
|
|
|
18,670 |
|
Goodwill |
|
8,329,499 |
|
|
|
8,330,811 |
|
Intangible assets, net |
|
4,306,689 |
|
|
|
4,659,657 |
|
Non-current contract assets, net |
|
528,282 |
|
|
|
536,104 |
|
Contract costs |
|
21,049 |
|
|
|
15,992 |
|
Operating lease right-of-use assets |
|
94,353 |
|
|
|
67,642 |
|
Deferred income tax assets |
|
9,843 |
|
|
|
10,638 |
|
Other non-current assets |
|
8,529 |
|
|
|
13,474 |
|
Total assets |
$ |
14,109,427 |
|
|
$ |
14,486,052 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
9,876 |
|
|
$ |
20,299 |
|
Accrued expenses and other current liabilities |
|
81,842 |
|
|
|
99,526 |
|
Due to related parties |
|
67,954 |
|
|
|
22,019 |
|
Current operating lease liabilities |
|
13,698 |
|
|
|
12,928 |
|
Income taxes payable |
|
33,999 |
|
|
|
46,205 |
|
Current contract liabilities |
|
134,910 |
|
|
|
151,450 |
|
Total current liabilities |
|
342,279 |
|
|
|
352,427 |
|
Non-current contract liabilities |
|
33,042 |
|
|
|
30,103 |
|
Deferred income tax liabilities |
|
822,197 |
|
|
|
957,911 |
|
Non-current operating lease liabilities |
|
81,361 |
|
|
|
55,442 |
|
Other non-current liabilities |
|
19,726 |
|
|
|
19,240 |
|
Stockholders' equity: |
|
|
|
||||
Common stock, $0.0001 par value Authorized—600,000,000 shares Issued— 65,255,754 and 64,952,868 shares Outstanding— 63,418,003 and 64,465,242 shares |
|
7 |
|
|
|
6 |
|
Additional paid-in capital |
|
13,259,100 |
|
|
|
13,194,028 |
|
Accumulated deficit |
|
(95,860 |
) |
|
|
(41,391 |
) |
Accumulated other comprehensive (loss) income |
|
(4,999 |
) |
|
|
2,436 |
|
Treasury stock, at cost — 1,837,751 and 487,626 shares of common stock |
|
(347,426 |
) |
|
|
(84,150 |
) |
Total stockholders' equity |
|
12,810,822 |
|
|
|
13,070,929 |
|
Total liabilities and stockholders' equity |
$ |
14,109,427 |
|
|
$ |
14,486,052 |
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(Dollars in Thousands) |
||||||||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
1,556 |
|
|
$ |
(57,635 |
) |
|
$ |
(54,469 |
) |
|
$ |
(135,076 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
123,408 |
|
|
|
123,165 |
|
|
|
369,794 |
|
|
|
368,266 |
|
Reduction in the carrying amount of right-of-use assets |
|
4,380 |
|
|
|
3,901 |
|
|
|
11,312 |
|
|
|
10,463 |
|
Net foreign currency losses (gains) |
|
2,070 |
|
|
|
(1,033 |
) |
|
|
8,238 |
|
|
|
3,711 |
|
Realized gain on settlement of foreign currency forward contracts |
|
— |
|
|
|
(10,821 |
) |
|
|
— |
|
|
|
(10,821 |
) |
Stock-based compensation |
|
12,907 |
|
|
|
22,843 |
|
|
|
45,817 |
|
|
|
64,020 |
|
Deferred income taxes |
|
(44,260 |
) |
|
|
(49,661 |
) |
|
|
(138,470 |
) |
|
|
(156,046 |
) |
Provision for uncollectible receivables |
|
5,884 |
|
|
|
716 |
|
|
|
9,269 |
|
|
|
3,944 |
|
Other non-cash operating activities |
|
1,435 |
|
|
|
1,698 |
|
|
|
805 |
|
|
|
1,108 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(12,214 |
) |
|
|
22,630 |
|
|
|
(22,923 |
) |
|
|
(11,060 |
) |
Contract assets |
|
55,024 |
|
|
|
67,192 |
|
|
|
(2,902 |
) |
|
|
(10,672 |
) |
Contract costs |
|
(2,145 |
) |
|
|
(1,810 |
) |
|
|
(5,204 |
) |
|
|
(5,357 |
) |
Lease liabilities |
|
(4,173 |
) |
|
|
(3,694 |
) |
|
|
(11,281 |
) |
|
|
(10,303 |
) |
Prepaid expenses, prepaid income taxes, and other assets |
|
162 |
|
|
|
(6,536 |
) |
|
|
(17,444 |
) |
|
|
27,641 |
|
Liability from foreign currency forward contract |
|
— |
|
|
|
25,135 |
|
|
|
— |
|
|
|
40,454 |
|
Accounts payable, accrued expenses, income taxes payable and other liabilities |
|
(3,286 |
) |
|
|
(10,548 |
) |
|
|
5,972 |
|
|
|
(12,038 |
) |
Contract liabilities |
|
(2,605 |
) |
|
|
5,494 |
|
|
|
(13,564 |
) |
|
|
17,416 |
|
Net cash provided by operating activities |
|
138,143 |
|
|
|
131,036 |
|
|
|
184,950 |
|
|
|
185,650 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Purchases of property, equipment and leasehold improvements |
|
(1,142 |
) |
|
|
(1,671 |
) |
|
|
(2,579 |
) |
|
|
(4,515 |
) |
Proceeds from settlement of foreign currency forward contracts |
|
— |
|
|
|
10,821 |
|
|
|
— |
|
|
|
10,821 |
|
Payments for business acquisitions, net of cash acquired |
|
— |
|
|
|
2,449 |
|
|
|
(8,273 |
) |
|
|
(72,498 |
) |
Payments for equity method investments |
|
249 |
|
|
|
(211 |
) |
|
|
(272 |
) |
|
|
(676 |
) |
Payments for capitalized computer software development costs |
|
— |
|
|
|
(18 |
) |
|
|
(131 |
) |
|
|
(347 |
) |
Payments for asset acquisitions |
|
— |
|
|
|
— |
|
|
|
(12,500 |
) |
|
|
— |
|
Purchase of other assets |
|
— |
|
|
|
(1,000 |
) |
|
|
— |
|
|
|
(1,000 |
) |
Net cash (used in) provided by investing activities |
|
(893 |
) |
|
|
10,370 |
|
|
|
(23,755 |
) |
|
|
(68,215 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Issuance of shares of common stock |
|
7,294 |
|
|
|
5,937 |
|
|
|
15,214 |
|
|
|
31,542 |
|
Repurchases of common stock |
|
(56,737 |
) |
|
|
— |
|
|
|
(243,066 |
) |
|
|
— |
|
Payment of tax withholding obligations related to restricted stock |
|
(3,167 |
) |
|
|
(2,708 |
) |
|
|
(17,010 |
) |
|
|
(14,406 |
) |
Deferred business acquisition payments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,363 |
) |
Repayments of amounts borrowed under term loan |
|
— |
|
|
|
(264,000 |
) |
|
|
— |
|
|
|
(276,000 |
) |
Net transfers from (to) Parent Company |
|
(36,197 |
) |
|
|
(35,621 |
) |
|
|
32,558 |
|
|
|
(5,749 |
) |
Payments of debt issuance costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,375 |
) |
Net cash used in financing activities |
|
(88,807 |
) |
|
|
(296,392 |
) |
|
|
(212,304 |
) |
|
|
(268,351 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(1,604 |
) |
|
|
(4,366 |
) |
|
|
(12,508 |
) |
|
|
(12,073 |
) |
Increase (decrease) in cash and cash equivalents |
|
46,839 |
|
|
|
(159,352 |
) |
|
|
(63,617 |
) |
|
|
(162,989 |
) |
Cash and cash equivalents, beginning of period |
|
130,753 |
|
|
|
446,088 |
|
|
|
241,209 |
|
|
|
449,725 |
|
Cash and cash equivalents, end of period |
$ |
177,592 |
|
|
$ |
286,736 |
|
|
$ |
177,592 |
|
|
$ |
286,736 |
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows (Unaudited) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||||||
|
|
|
|
|
|
|
|
|||||||||
|
(Dollars and Shares in Thousands, Except per Share Data) |
|||||||||||||||
Total expenses |
|
|
|
|
|
|
|
|||||||||
GAAP total expenses (a) |
$ |
297,400 |
|
|
$ |
308,351 |
|
|
$ |
913,326 |
|
|
$ |
912,585 |
|
|
Less: |
|
|
|
|
|
|
|
|||||||||
Stock-based compensation (b) |
|
(12,907 |
) |
|
|
(22,843 |
) |
|
|
(45,817 |
) |
|
|
(64,020 |
) |
|
Amortization of intangibles (c) |
|
(121,749 |
) |
|
|
(121,639 |
) |
|
|
(364,901 |
) |
|
|
(363,960 |
) |
|
Acquisition and integration planning related fees |
|
(945 |
) |
|
|
(761 |
) |
|
|
(815 |
) |
|
|
(7,030 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP total expenses |
$ |
161,799 |
|
|
$ |
163,108 |
|
|
$ |
501,793 |
|
|
$ |
477,575 |
|
|
|
|
|
|
|
|
|
|
|||||||||
(Loss) income from operations |
|
|
|
|
|
|
|
|||||||||
GAAP loss from operations |
$ |
(19,294 |
) |
|
$ |
(78,473 |
) |
|
$ |
(128,749 |
) |
|
$ |
(189,050 |
) |
|
Plus: |
|
|
|
|
|
|
|
|||||||||
Stock-based compensation (b) |
|
12,907 |
|
|
|
22,843 |
|
|
|
45,817 |
|
|
|
64,020 |
|
|
Amortization of intangibles (c) |
|
121,749 |
|
|
|
121,639 |
|
|
|
364,901 |
|
|
|
363,960 |
|
|
Acquisition and integration planning related fees |
|
945 |
|
|
|
761 |
|
|
|
815 |
|
|
|
7,030 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP income from operations |
$ |
116,307 |
|
|
$ |
66,770 |
|
|
$ |
282,784 |
|
|
$ |
245,960 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
|
|
|
|
|
|
|
|||||||||
GAAP net income (loss) |
$ |
1,556 |
|
|
$ |
(57,635 |
) |
|
$ |
(54,469 |
) |
|
$ |
(135,076 |
) |
|
Plus: |
|
|
|
|
|
|
|
|||||||||
Stock-based compensation (b) |
|
12,907 |
|
|
|
22,843 |
|
|
|
45,817 |
|
|
|
64,020 |
|
|
Amortization of intangibles (c) |
|
121,749 |
|
|
|
121,639 |
|
|
|
364,901 |
|
|
|
363,960 |
|
|
Acquisition and integration planning related fees |
|
945 |
|
|
|
761 |
|
|
|
815 |
|
|
|
7,030 |
|
|
Unrealized loss on foreign currency forward contract |
|
— |
|
|
|
25,135 |
|
|
|
— |
|
|
|
40,454 |
|
|
Realized gain on foreign currency forward contract |
|
— |
|
|
|
(10,821 |
) |
|
|
— |
|
|
|
(10,821 |
) |
|
Less: |
|
|
|
|
|
|
|
|
||||||||
Income tax effect on Non-GAAP items (d) |
|
(28,422 |
) |
|
|
(32,776 |
) |
|
|
(85,680 |
) |
|
|
(95,666 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net income |
$ |
108,735 |
|
|
$ |
69,146 |
|
|
$ |
271,384 |
|
|
$ |
233,901 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted income (loss) per share |
|
|
|
|
|
|
|
|||||||||
GAAP diluted income (loss) per share |
$ |
0.02 |
|
|
$ |
(0.89 |
) |
|
$ |
(0.85 |
) |
|
$ |
(2.09 |
) |
|
Plus: |
|
|
|
|
|
|
|
|||||||||
Stock-based compensation (b) |
|
0.20 |
|
|
|
0.35 |
|
|
|
0.71 |
|
|
|
0.98 |
|
|
Amortization of intangibles (c) |
|
1.91 |
|
|
|
1.87 |
|
|
|
5.68 |
|
|
|
5.59 |
|
|
Acquisition and integration planning related fees |
|
0.02 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.11 |
|
|
Unrealized loss on foreign currency forward contract |
|
— |
|
|
|
0.39 |
|
|
|
— |
|
|
|
0.62 |
|
|
Realized gain on foreign currency forward contract |
|
— |
|
|
|
(0.17 |
) |
|
|
— |
|
|
|
(0.17 |
) |
|
Impact of diluted shares |
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
Less: |
|
|
|
|
|
|
|
|||||||||
Income tax effect on Non-GAAP items (d) |
|
(0.45 |
) |
|
|
(0.50 |
) |
|
|
(1.33 |
) |
|
|
(1.47 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP diluted income per share |
$ |
1.70 |
|
|
$ |
1.06 |
|
|
$ |
4.23 |
|
|
$ |
3.59 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Shares used in computing Non-GAAP diluted income per share |
|
63,802 |
|
|
|
65,195 |
|
|
|
64,187 |
|
|
|
65,125 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||||||
Free Cash Flow (2) |
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities (GAAP) |
$ |
138,143 |
|
|
$ |
131,036 |
|
|
$ |
184,950 |
|
|
$ |
185,650 |
|
|
Purchases of property, equipment and leasehold improvements |
|
(1,142 |
) |
|
|
(1,671 |
) |
|
|
(2,579 |
) |
|
|
(4,515 |
) |
|
Payments for capitalized computer software development costs |
|
— |
|
|
|
(18 |
) |
|
|
(131 |
) |
|
|
(347 |
) |
|
Free cash flow (2) (non-GAAP) |
$ |
137,001 |
|
|
$ |
129,347 |
|
|
$ |
182,240 |
|
|
$ |
180,788 |
|
|
|
|
|
|
|
|
|
|
|||||||||
(a) GAAP total expenses |
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Total costs of revenue |
$ |
92,942 |
|
|
$ |
93,799 |
|
|
$ |
285,935 |
|
|
$ |
278,027 |
|
|
Total operating expenses |
|
204,458 |
|
|
|
214,552 |
|
|
|
627,391 |
|
|
|
634,558 |
|
|
GAAP total expenses |
$ |
297,400 |
|
|
$ |
308,351 |
|
|
$ |
913,326 |
|
|
$ |
912,585 |
|
|
|
|
|
|
|
|
|
|
|||||||||
(b) Stock-based compensation expense was as follows: |
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Cost of license and solutions |
$ |
522 |
|
|
$ |
832 |
|
|
$ |
1,804 |
|
|
$ |
2,752 |
|
|
Cost of maintenance |
|
667 |
|
|
|
427 |
|
|
|
1,884 |
|
|
|
1,462 |
|
|
Cost of services and other |
|
731 |
|
|
|
599 |
|
|
|
1,589 |
|
|
|
1,457 |
|
|
Selling and marketing |
|
2,463 |
|
|
|
3,695 |
|
|
|
8,112 |
|
|
|
10,886 |
|
|
Research and development |
|
3,343 |
|
|
|
5,972 |
|
|
|
11,615 |
|
|
|
13,831 |
|
|
General and administrative |
|
5,181 |
|
|
|
11,318 |
|
|
|
20,813 |
|
|
|
33,632 |
|
|
Total stock-based compensation |
$ |
12,907 |
|
|
$ |
22,843 |
|
|
$ |
45,817 |
|
|
$ |
64,020 |
|
|
|
|
|
|
|
|
|
|
|||||||||
(c) Amortization of intangible assets was as follows: |
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Cost of license and solutions |
$ |
48,314 |
|
|
$ |
48,035 |
|
|
$ |
144,384 |
|
|
$ |
143,377 |
|
|
Selling and marketing |
|
73,435 |
|
|
|
73,604 |
|
|
|
220,517 |
|
|
|
220,583 |
|
|
Total amortization of intangible assets |
$ |
121,749 |
|
|
$ |
121,639 |
|
|
$ |
364,901 |
|
|
$ |
363,960 |
|
|
|
|
|
|
|
|
|
|
|||||||||
(d) The income tax effect on non-GAAP items for the three months ended March 31, 2024 and 2023, respectively, is calculated utilizing the Company's combined US federal and state statutory tax rate as following: |
||||||||||||||||
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||||||
U.S. Statutory Rate |
|
21.79 |
% |
|
|
21.79 |
% |
|
|
21.79 |
% |
|
|
21.79 |
% |
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES Reconciliation of Forward-Looking Guidance (Unaudited) |
|||||||
|
|
|
|
||||
|
Twelve Months Ended June 30, 2024 (3) |
||||||
|
(Dollars in Thousands, Except Share Data) |
||||||
Guidance - Total expenses |
|
|
|
||||
GAAP expectation - total expenses |
$ |
1,221,000 |
|
|
|
||
Less: |
|
|
|
||||
Stock-based compensation |
|
(58,000 |
) |
|
|
||
Amortization of intangible assets |
|
(487,000 |
) |
|
|
||
Acquisition and integration planning related fees |
|
(1,000 |
) |
|
|
||
|
|
|
|
||||
Non-GAAP expectation - total expenses |
$ |
675,000 |
|
|
|
||
|
|
|
|
||||
Guidance - (Loss) income from operations |
|
|
|
||||
GAAP expectation - loss from operations |
$ |
(121,000 |
) |
|
|
||
Plus: |
|
|
|
||||
Stock-based compensation |
|
58,000 |
|
|
|
||
Amortization of intangible assets |
|
487,000 |
|
|
|
||
Acquisition and integration planning related fees |
|
1,000 |
|
|
|
||
|
|
|
|
||||
Non-GAAP expectation - income from operations |
$ |
425,000 |
|
|
|
||
|
|
|
|
||||
Guidance - Net (loss) income and diluted (loss) income per share |
|
|
|
||||
GAAP expectation - net loss and diluted loss per share |
$ |
(29,000 |
) |
|
$ |
(0.45 |
) |
Plus: |
|
|
|
||||
Stock-based compensation |
|
58,000 |
|
|
|
||
Amortization of intangible assets |
|
487,000 |
|
|
|
||
Acquisition and integration planning related fees |
|
1,000 |
|
|
|
||
Less: |
|
|
|
||||
Income tax effect on Non-GAAP items (4) |
|
(114,000 |
) |
|
|
||
|
|
|
|
||||
Non-GAAP expectation - net income and diluted income per share |
$ |
403,000 |
|
|
$ |
6.29 |
|
|
|
|
|
||||
Shares used in computing guidance for Non-GAAP diluted income per share |
|
64,100 |
|
|
|
||
|
|
|
|
||||
Guidance - Free Cash Flow (2) (5) |
|
|
|
||||
GAAP expectation - net cash provided by operating activities |
$ |
349,250 |
|
|
|
||
Less: |
|
|
|
||||
Purchases of property, equipment and leasehold improvements |
|
(9,000 |
) |
|
|
||
Payments for capitalized computer software development costs |
|
(250 |
) |
|
|
||
|
|
|
|
||||
Free cash flow expectation (non-GAAP) |
$ |
340,000 |
|
|
|
||
___________________
| (3) | Rounded amount used, except per share data. |
|
| (4) | The income tax effect on non-GAAP items for the twelve months ended June 30, 2024 is calculated utilizing the Company's statutory tax rate of 21.79 percent. |
|
| (5) | Free cash flow guidance has been updated to reflect the change in methodology to calculate free cash flow, as described in Footnote 2, and does not represent a change in management's expectations. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507341670/en/