AZPN Aspen Technology Inc New

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/

Media Contact Len Dieterle Aspen Technology +1 781-221-4291 len.dieterle@aspentech.com

Investor Contact Brian Denyeau ICR for Aspen Technology +1 646-277-1251 ir@aspentech.com