Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2019
“AspenTech’s fourth quarter performance was a strong finish to a great year, highlighted by a return to double-digit annual spend growth. Our results reflect positive contributions across all areas of the business, including meaningful improvement in Engineering, continued strength in MSC and substantial growth from APM,” said
Pietri continued, “We enter fiscal year 2020 performing at a high level and are benefitting from a positive demand environment driven by a secular technology investment cycle in the process and other capital intensive industries. We believe AspenTech is well positioned to benefit from this trend and intend to make investments in the business this year to ensure we maximize this opportunity. We are confident this will generate additional value for our customers and shareholders over time.”
Fourth Quarter and Fiscal Year 2019 Recent Business Highlights
- Annual spend, which the company defines as the annualized value of all term license and maintenance contracts at the end of the quarter, was approximately
$541 million at the end of the fourth quarter of fiscal 2019, which increased 10.6% compared to the fourth quarter of fiscal 2018 and 2.8% sequentially. - GAAP operating margin was 56.8% compared to 50.2% in the fourth quarter of fiscal 2018. Non-GAAP operating margin was 61.3% compared to 54.1% in the fourth quarter of fiscal 2018.
- AspenTech repurchased approximately 648,000 shares of its common stock for
$75 million in the fourth quarter of fiscal 2019. - AspenTech repurchased approximately 3.1 million shares of its common stock for
$300 million in fiscal year 2019.
Summary of Fourth Quarter Fiscal Year 2019 Financial Results
AspenTech’s total revenue of
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was
$148.5 million in the fourth quarter of fiscal 2019, compared to$111.6 million in the fourth quarter of fiscal 2018. - Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was
$39.5 million in the fourth quarter of fiscal 2019, compared to$39.2 million in the fourth quarter of fiscal 2018. - Services and other revenue was
$7.8 million in the fourth quarter of fiscal 2019, compared to$8.3 million in the fourth quarter of fiscal 2018.
For the quarter ended
Net income was
Non-GAAP income from operations was
AspenTech had cash and cash equivalents of
During the fourth quarter, the company generated
Summary of Fiscal Year 2019 Financial Results
AspenTech’s total revenue of
- License revenue was
$404.1 million , an increase from$326.5 million for fiscal year 2018. - Maintenance revenue was
$165.4 million , an increase from$161.1 million for fiscal year 2018. - Services and other revenue was
$28.8 million , compared to$31.2 million for fiscal year 2018.
For the fiscal year ended
Net income was
Non-GAAP income from operations was
For the fiscal year ended
Note regarding Balance Sheet and Cash flow: AspenTech is in the process of completing its final documentation under FASB Topic 606 (Revenue from Contracts with Customers) in connection with its Annual Report on Form 10-K, which it expects to file on time later this month. Selected balance sheet and statement of cash flow information is provided in the tables below.
Business Outlook
Based on information as of today,
- Annual spend growth of 10-12% year-over-year
- Free cash flow of
$250 to $260 million - Total bookings of
$600 to $650 million - Total Revenue of
$575 to $615 million - GAAP operating income of
$206 to $241 million - Non-GAAP operating income of
$272 to $307 million - GAAP net income per share of
$2.70 to $3.11 - Non-GAAP net income per share of
$3.44 to $3.85
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 our actual results to differ materially from these forward-looking statements.
AspenTech has not reconciled its expectations as to non-GAAP operating income and non-GAAP net income per share to their most directly comparable GAAP measure because certain items are out of AspenTech’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating income and non-GAAP net income per share is not available without unreasonable effort.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under the rules of the
Management considers both GAAP and non-GAAP financial results in managing Aspen Technology’s business. As the result of adoption of new licensing models, management believes that a number of Aspen Technology’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 Aspen Technology’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 Aspen Technology’s business performance. None of these non-GAAP metrics should be considered as an alternative to any measure of financial performance calculated in accordance with GAAP.
Conference Call and Webcast
About
Forward-Looking Statements
The third paragraph of this press release as well as the Business Outlook section contain forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may vary significantly from Aspen Technology’s (AspenTech) expectations based on a number of risks and uncertainties, including, without limitation: AspenTech’s failure to increase usage and product adoption of aspenONE offerings or grow the aspenONE APM business, and failure to continue to provide innovative, market-leading solutions; the demand for, or usage of, aspenONE software declines for any reason, including declines due to adverse changes in the process or other capital-intensive industries; unfavorable economic and market conditions or a lessening demand in the market for asset process optimization software; risks of foreign operations or transacting business with customers outside
© 2019
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES |
||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (Dollars in Thousands, Except per Share Data) | ||||||||||||
| Three Months Ended June 30, |
Twelve Months Ended June 30, |
|||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|||||
|
As Adjusted |
As Adjusted |
|||||||||||
| Revenue: | ||||||||||||
| License |
$ 148,506 |
|
$ 111,611 |
|
$ 404,122 |
|
$ 326,549 |
|
||||
| Maintenance |
39,481 |
|
39,175 |
|
165,436 |
|
161,065 |
|
||||
| Services and other |
7,782 |
|
8,298 |
|
28,787 |
|
31,245 |
|
||||
| Total revenue |
195,769 |
|
159,084 |
|
598,345 |
|
518,859 |
|
||||
| Cost of revenue: | ||||||||||||
| License |
1,918 |
|
1,493 |
|
7,060 |
|
5,236 |
|
||||
| Maintenance |
4,967 |
|
4,347 |
|
19,208 |
|
17,408 |
|
||||
| Services and other |
8,605 |
|
7,207 |
|
31,548 |
|
28,000 |
|
||||
| Total cost of revenue |
15,490 |
|
13,047 |
|
57,816 |
|
50,644 |
|
||||
| Gross profit |
180,279 |
|
146,037 |
|
540,529 |
|
468,215 |
|
||||
| Operating expenses: | ||||||||||||
| Selling and marketing |
30,842 |
|
27,047 |
|
111,374 |
|
99,737 |
|
||||
| Research and development |
21,229 |
|
21,213 |
|
83,122 |
|
82,076 |
|
||||
| General and administrative |
16,985 |
|
17,993 |
|
63,231 |
|
67,181 |
|
||||
| Total operating expenses |
69,056 |
|
66,253 |
|
257,727 |
|
248,994 |
|
||||
| Income from operations |
111,223 |
|
79,784 |
|
282,802 |
|
219,221 |
|
||||
| Interest income |
7,068 |
|
6,105 |
|
28,457 |
|
24,954 |
|
||||
| Interest (expense) |
(2,405 |
) |
(1,739 |
) |
(8,733 |
) |
(5,691 |
) |
||||
| Other income (expense), net |
1,149 |
|
120 |
|
664 |
|
(838 |
) |
||||
| Income before income taxes |
117,035 |
|
84,270 |
|
303,190 |
|
237,646 |
|
||||
| Provision for (benefit from) income taxes |
13,170 |
|
7,624 |
|
40,456 |
|
(56,057 |
) |
||||
| Net income |
$ 103,865 |
|
$ 76,646 |
|
$ 262,734 |
|
$ 293,703 |
|
||||
| Net income per common share: | ||||||||||||
| Basic |
$ 1.51 |
|
$ 1.07 |
|
$ 3.76 |
|
$ 4.07 |
|
||||
| Diluted |
$ 1.49 |
|
$ 1.06 |
|
$ 3.71 |
|
$ 4.03 |
|
||||
| Weighted average shares outstanding: | ||||||||||||
| Basic |
68,839 |
|
71,349 |
|
69,925 |
|
72,140 |
|
||||
| Diluted |
69,638 |
|
72,315 |
|
70,787 |
|
72,956 |
|
||||
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | ||||||
| SELECTED CONSOLIDATED BALANCE SHEETS | ||||||
| (Dollars in Thousands) | ||||||
| June 30, | ||||||
|
|
2019 |
|
2018 |
|||
| Cash and cash equivalents |
$ |
71,926 |
$ |
96,165 |
||
| Borrowings under credit agreement |
|
220,000 |
|
170,000 |
||
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows | |||||||||||||||||
| (Dollars in Thousands, Except per Share Data) | |||||||||||||||||
| Three Months Ended June 30, |
Twelve Months Ended June 30, |
||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||
| As Adjusted | As Adjusted | ||||||||||||||||
| Total expenses | |||||||||||||||||
| GAAP total expenses (a) |
$ |
84,546 |
|
$ |
79,300 |
|
$ |
315,543 |
|
$ |
299,638 |
|
|||||
| Less: | |||||||||||||||||
| Stock-based compensation (b) |
|
(6,119 |
) |
|
(5,466 |
) |
|
(27,573 |
) |
|
(22,688 |
) |
|||||
| Amortization of intangibles |
|
(1,153 |
) |
|
(653 |
) |
|
(4,533 |
) |
|
(2,231 |
) |
|||||
| Litigation judgment | — |
|
(141 |
) |
— |
|
(1,689 |
) |
|||||||||
| Acquisition related fees |
|
(1,430 |
) |
|
(15 |
) |
|
(1,438 |
) |
|
(721 |
) |
|||||
| Non-GAAP total expenses |
$ |
75,844 |
|
$ |
73,025 |
|
$ |
281,999 |
|
$ |
272,309 |
|
|||||
| Income from operations | |||||||||||||||||
| GAAP income from operations |
$ |
111,223 |
|
$ |
79,784 |
|
$ |
282,802 |
|
$ |
219,221 |
|
|||||
| Plus: | |||||||||||||||||
| Stock-based compensation (b) |
|
6,119 |
|
|
5,466 |
|
|
27,573 |
|
|
22,688 |
|
|||||
| Amortization of intangibles |
|
1,153 |
|
|
653 |
|
|
4,533 |
|
|
2,231 |
|
|||||
| Litigation judgment | — |
|
141 |
|
— |
|
1,689 |
|
|||||||||
| Acquisition related fees |
|
1,430 |
|
|
15 |
|
|
1,438 |
|
|
721 |
|
|||||
| Non-GAAP income from operations |
$ |
119,925 |
|
$ |
86,059 |
|
$ |
316,346 |
|
$ |
246,550 |
|
|||||
| Net income | |||||||||||||||||
| GAAP net income |
$ |
103,865 |
|
$ |
76,646 |
|
$ |
262,734 |
|
$ |
293,703 |
|
|||||
| Plus: | |||||||||||||||||
| Stock-based compensation (b) |
|
6,119 |
|
|
5,466 |
|
|
27,573 |
|
|
22,688 |
|
|||||
| Amortization of intangibles |
|
1,153 |
|
|
653 |
|
|
4,533 |
|
|
2,231 |
|
|||||
| Litigation judgment | — |
|
141 |
|
— |
|
1,689 |
|
|||||||||
| Acquisition related fees |
|
1,430 |
|
|
15 |
|
|
1,438 |
|
|
721 |
|
|||||
| Less: | |||||||||||||||||
| Income tax effect on Non-GAAP items (c) |
|
(1,827 |
) |
|
(1,763 |
) |
|
(7,044 |
) |
|
(7,679 |
) |
|||||
| Non-GAAP net income |
$ |
110,740 |
|
$ |
81,158 |
|
$ |
289,234 |
|
$ |
313,353 |
|
|||||
| Diluted income per share | |||||||||||||||||
| GAAP diluted income per share |
$ |
1.49 |
|
$ |
1.06 |
|
$ |
3.71 |
|
$ |
4.03 |
|
|||||
| Plus: | |||||||||||||||||
| Stock-based compensation (b) |
|
0.09 |
|
|
0.07 |
|
|
0.40 |
|
|
0.32 |
|
|||||
| Amortization of intangibles |
|
0.02 |
|
|
0.01 |
|
|
0.06 |
|
|
0.03 |
|
|||||
| Litigation judgment | — |
|
0.00 |
|
— |
|
0.02 |
|
|||||||||
| Acquisition related fees |
|
0.02 |
|
|
0.00 |
|
|
0.02 |
|
|
0.01 |
|
|||||
| Less: | |||||||||||||||||
| Income tax effect on Non-GAAP items (c) |
|
(0.03 |
) |
|
(0.02 |
) |
|
(0.10 |
) |
|
(0.11 |
) |
|||||
| Non-GAAP diluted income per share |
$ |
1.59 |
|
$ |
1.12 |
|
$ |
4.09 |
|
$ |
4.30 |
|
|||||
| Shares used in computing Non-GAAP diluted income per share |
|
69,638 |
|
|
72,315 |
|
|
70,787 |
|
|
72,956 |
|
|||||
| Three Months Ended June 30, |
Twelve Months Ended June 30, |
||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||
| Free Cash Flow | |||||||||||||||||
| GAAP cash flow from operating activities |
$ |
85,177 |
|
$ |
79,107 |
|
$ |
238,313 |
|
$ |
206,936 |
|
|||||
| Purchase of property, equipment and leasehold improvements |
|
(230 |
) |
|
(114 |
) |
|
(436 |
) |
|
(331 |
) |
|||||
| Capitalized computer software development costs |
|
(37 |
) |
|
(30 |
) |
|
(1,131 |
) |
|
(329 |
) |
|||||
| Non-capitalized acquired technology (d) | — | — | — |
|
75 |
|
|||||||||||
| Acquisition related fee payments | — |
|
280 |
|
|
27 |
|
|
1,148 |
|
|||||||
| Litigation related payments | — |
|
260 |
|
— |
|
4,546 |
|
|||||||||
| Free Cash Flow |
$ |
84,910 |
|
$ |
79,503 |
|
$ |
236,773 |
|
$ |
212,045 |
|
|||||
| (a) GAAP total expenses | |||||||||||||||||
| Three Months Ended June 30, |
Twelve Months Ended June 30, |
||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||
| As Adjusted | As Adjusted | ||||||||||||||||
| Total costs of revenue |
$ |
15,490 |
|
$ |
13,047 |
|
$ |
57,816 |
|
$ |
50,644 |
|
|||||
| Total operating expenses |
|
69,056 |
|
|
66,253 |
|
|
257,727 |
|
|
248,994 |
|
|||||
| GAAP total expenses |
$ |
84,546 |
|
$ |
79,300 |
|
$ |
315,543 |
|
$ |
299,638 |
|
|||||
| (b) Stock-based compensation expense was as follows: | |||||||||||||||||
| Three Months Ended June 30, |
Twelve Months Ended June 30, |
||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||
| As Adjusted | As Adjusted | ||||||||||||||||
| Cost of maintenance |
$ |
366 |
|
$ |
111 |
|
$ |
1,282 |
|
$ |
559 |
|
|||||
| Cost of services and other |
|
382 |
|
|
249 |
|
|
1,420 |
|
|
920 |
|
|||||
| Selling and marketing |
|
1,162 |
|
|
992 |
|
|
4,849 |
|
|
3,862 |
|
|||||
| Research and development |
|
1,472 |
|
|
1,938 |
|
|
6,923 |
|
|
7,617 |
|
|||||
| General and administrative |
|
2,737 |
|
|
2,176 |
|
|
13,099 |
|
|
9,730 |
|
|||||
| Total stock-based compensation |
$ |
6,119 |
|
$ |
5,466 |
|
$ |
27,573 |
|
$ |
22,688 |
|
|||||
| (c) The income tax effect on non-GAAP items for the three and twelve months ended June 30, 2019 is calculated utilizing the Company's statutory tax rate of 21 percent. The income tax effect on non-GAAP items for the three and twelve months ended June 30, 2018 is calculated utilizing the Company's estimated federal and state tax rate. | |||||||||||||||||
| (d) In the twelve months ended June 30, 2018, the Company has excluded $0.1 million of final payments related to non-capitalized acquired technology from prior fiscal periods from free cash flow to be consistent with the treatment of other transactions where the acquired assets were capitalized. | |||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190807005833/en/
Source:
Media Contact
David Grip
AspenTech
+1 781-221-5273
david.grip@aspentech.com
Investor Contact
Brian Denyeau
ICR
+1 646-277-1251
brian.denyeau@icrinc.com