Aspen Technology Announces Financial Results for the First Quarter of Fiscal 2025
Pietri continued, “At our recent investor day, we laid out a compelling strategy that underscored how we believe
First Quarter Fiscal Year 2025 and Recent Business Highlights
-
Annual contract value1 (“ACV”) was
$941.4 million for the first quarter of fiscal 2025, increasing 9.4% year over year and 0.9% quarter over quarter. -
Cash flow used in operations was
$4.4 million for the first quarter of fiscal 2025. Free cash flow was negative$6.4 million for the first quarter of fiscal 2025. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release. -
AspenTech announced today in a separate press release that it has entered into a definitive agreement to acquireOpen Grid Systems Limited (“Open Grid Systems”), a global provider of network model management technology and a pioneer in developing model-driven applications supporting open access to data through industry standards. This acquisition will further enhance AspenTech’s Digital Grid Management (“DGM”) suite to support utilities in effectively managing grid complexity while also ensuring resiliency.
First Quarter Fiscal Year 2025 Financial Results Summary
AspenTech’s total revenue was
Loss from operations was
Cash flow used in operations was
Recent Developments
Open Grid Systems Acquisition
Fiscal 2025 Share Repurchase Authorization Update
Investor Day
Fiscal Year 2025 Business Outlook
Based on information as of today,
- ACV1 growth of ~9.0% year-over-year
-
GAAP operating cash flow of
~$357 million -
Free cash flow of
~$340 million -
Total bookings2 of
~$1.17 billion -
Total revenue of
~$1.19 billion -
GAAP total expense of
~$1.21 billion -
Non-GAAP total expense of
~$675 million -
GAAP operating loss of
~$24 million -
Non-GAAP operating income of
~$514 million -
GAAP net income of
~$52 million -
Non-GAAP net income of
~$478 million -
GAAP net income per share of
~$0.82 -
Non-GAAP net income per share of
~$7.52
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
Footnotes
-
ACV is the estimate of the annual value of the Company’s 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 the Company's business. All ACV numbers presented in this press release exclude ACV associated with the Company’s
Russia business for all periods presented. - Bookings is the total value of customer term license and perpetual license SMS contracts signed and delivered in the current period, less the value of such contracts signed in the current period where the initial licenses and SMS agreements are not yet deemed delivered, plus the term license contracts and perpetual license SMS contracts signed in a previous period for which the initial licenses are deemed delivered in the current period.
About
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
© 2024
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 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.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
|
(Dollars and Shares in Thousands, Except per Share Data) |
||||||
|
Revenue: |
|
|
|
||||
|
License and solutions |
$ |
101,659 |
|
|
$ |
148,648 |
|
|
Maintenance |
|
90,686 |
|
|
|
84,968 |
|
|
Services and other |
|
23,532 |
|
|
|
15,692 |
|
|
Total revenue |
|
215,877 |
|
|
|
249,308 |
|
|
Cost of revenue: |
|
|
|
||||
|
License and solutions |
|
63,654 |
|
|
|
71,578 |
|
|
Maintenance |
|
10,688 |
|
|
|
10,200 |
|
|
Services and other |
|
21,105 |
|
|
|
16,282 |
|
|
Total cost of revenue |
|
95,447 |
|
|
|
98,060 |
|
|
Gross profit |
|
120,430 |
|
|
|
151,248 |
|
|
Operating expenses: |
|
|
|
||||
|
Selling and marketing |
|
125,661 |
|
|
|
122,378 |
|
|
Research and development |
|
50,000 |
|
|
|
53,676 |
|
|
General and administrative |
|
33,008 |
|
|
|
35,405 |
|
|
Restructuring costs |
|
7,726 |
|
|
|
— |
|
|
Total operating expenses |
|
216,395 |
|
|
|
211,459 |
|
|
Loss from operations |
|
(95,965 |
) |
|
|
(60,211 |
) |
|
Other income (expense), net |
|
2,041 |
|
|
|
(5,830 |
) |
|
Interest income, net |
|
17,176 |
|
|
|
14,049 |
|
|
Loss before benefit for income taxes |
|
(76,748 |
) |
|
|
(51,992 |
) |
|
Benefit for income taxes |
|
(16,284 |
) |
|
|
(17,467 |
) |
|
Net loss |
$ |
(60,464 |
) |
|
$ |
(34,525 |
) |
|
Net loss per common share: |
|
|
|
||||
|
Basic |
$ |
(0.96 |
) |
|
$ |
(0.54 |
) |
|
Diluted |
$ |
(0.96 |
) |
|
$ |
(0.54 |
) |
|
Weighted average shares outstanding: |
|
|
|
||||
|
Basic |
|
63,244 |
|
|
|
64,319 |
|
|
Diluted |
|
63,244 |
|
|
|
64,319 |
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
(Dollars in Thousands, Except Share Data) |
||||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
221,093 |
|
|
$ |
236,970 |
|
|
Accounts receivable, net |
|
102,867 |
|
|
|
115,533 |
|
|
Current contract assets, net |
|
426,387 |
|
|
|
409,177 |
|
|
Prepaid expenses and other current assets |
|
33,670 |
|
|
|
27,441 |
|
|
Receivables from related parties |
|
45,300 |
|
|
|
78,483 |
|
|
Prepaid income taxes |
|
2,909 |
|
|
|
8,462 |
|
|
Total current assets |
|
832,226 |
|
|
|
876,066 |
|
|
Property, equipment and leasehold improvements, net |
|
18,093 |
|
|
|
17,389 |
|
|
|
|
8,330,124 |
|
|
|
8,328,201 |
|
|
Intangible assets, net |
|
4,063,852 |
|
|
|
4,184,750 |
|
|
Non-current contract assets, net |
|
518,562 |
|
|
|
515,106 |
|
|
Contract costs |
|
26,265 |
|
|
|
24,903 |
|
|
Operating lease right-of-use assets |
|
95,001 |
|
|
|
96,034 |
|
|
Deferred income tax assets |
|
7,627 |
|
|
|
6,989 |
|
|
Other non-current assets |
|
25,189 |
|
|
|
22,269 |
|
|
Total assets |
$ |
13,916,939 |
|
|
$ |
14,071,707 |
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
12,050 |
|
|
$ |
8,099 |
|
|
Accrued expenses and other current liabilities |
|
78,926 |
|
|
|
100,167 |
|
|
Due to related parties |
|
24,979 |
|
|
|
47,449 |
|
|
Current operating lease liabilities |
|
12,172 |
|
|
|
13,125 |
|
|
Income taxes payable |
|
21,656 |
|
|
|
44,249 |
|
|
Current contract liabilities |
|
117,768 |
|
|
|
124,312 |
|
|
Total current liabilities |
|
267,551 |
|
|
|
337,401 |
|
|
Non-current contract liabilities |
|
33,569 |
|
|
|
27,512 |
|
|
Deferred income tax liabilities |
|
758,389 |
|
|
|
790,687 |
|
|
Non-current operating lease liabilities |
|
85,676 |
|
|
|
84,875 |
|
|
Other non-current liabilities |
|
18,795 |
|
|
|
18,377 |
|
|
Stockholders’ equity: |
|
|
|
||||
|
Common stock, Authorized—600,000,000 shares Issued— 65,453,489 and 65,367,159 shares Outstanding— 63,245,006 and 63,251,495 shares |
|
7 |
|
|
|
7 |
|
|
Additional paid-in capital |
|
13,293,704 |
|
|
|
13,277,851 |
|
|
Accumulated deficit |
|
(111,626 |
) |
|
|
(51,162 |
) |
|
Accumulated other comprehensive loss |
|
(2,059 |
) |
|
|
(7,261 |
) |
|
|
|
(427,067 |
) |
|
|
(406,580 |
) |
|
Total stockholders’ equity |
|
12,752,959 |
|
|
|
12,812,855 |
|
|
Total liabilities and stockholders’ equity |
$ |
13,916,939 |
|
|
$ |
14,071,707 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
|
(Dollars in Thousands) |
||||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net loss |
$ |
(60,464 |
) |
|
$ |
(34,525 |
) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
122,856 |
|
|
|
123,219 |
|
|
Reduction in the carrying amount of right-of-use assets |
|
3,961 |
|
|
|
3,562 |
|
|
Net foreign currency (gains) losses |
|
(2,120 |
) |
|
|
5,894 |
|
|
Stock-based compensation |
|
14,814 |
|
|
|
16,699 |
|
|
Deferred income taxes |
|
(32,448 |
) |
|
|
(51,080 |
) |
|
Provision for uncollectible receivables |
|
491 |
|
|
|
1,788 |
|
|
Other non-cash operating activities |
|
(258 |
) |
|
|
19 |
|
|
Changes in assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
12,887 |
|
|
|
29,417 |
|
|
Contract assets |
|
(18,851 |
) |
|
|
(24,062 |
) |
|
Contract costs |
|
1,285 |
|
|
|
(1,163 |
) |
|
Lease liabilities |
|
(3,041 |
) |
|
|
(3,770 |
) |
|
Prepaid expenses, prepaid income taxes, and other assets |
|
(5,956 |
) |
|
|
(22,487 |
) |
|
Accounts payable, accrued expenses, income taxes payable and other liabilities |
|
(37,052 |
) |
|
|
10,200 |
|
|
Contract liabilities |
|
(501 |
) |
|
|
(36,730 |
) |
|
Net cash (used in) provided by operating activities |
|
(4,397 |
) |
|
|
16,981 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property, equipment and leasehold improvements |
|
(2,022 |
) |
|
|
(937 |
) |
|
Payments for business acquisitions, net of cash acquired |
|
— |
|
|
|
(8,273 |
) |
|
Payments for equity method investments |
|
(30 |
) |
|
|
(98 |
) |
|
Payments for asset acquisitions |
|
— |
|
|
|
(12,500 |
) |
|
Net cash used in investing activities |
|
(2,052 |
) |
|
|
(21,808 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Issuance of shares of common stock, net of taxes |
|
6,262 |
|
|
|
3,285 |
|
|
Repurchases of common stock |
|
(20,487 |
) |
|
|
(114,224 |
) |
|
Payment of tax withholding obligations related to restricted stock |
|
(4,635 |
) |
|
|
(1,938 |
) |
|
Net transfers from Parent Company |
|
8,836 |
|
|
|
3,890 |
|
|
Payments of debt issuance costs |
|
(107 |
) |
|
|
— |
|
|
Net cash used in financing activities |
|
(10,131 |
) |
|
|
(108,987 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
3,264 |
|
|
|
(6,855 |
) |
|
Decrease in cash, cash equivalents and restricted cash |
|
(13,316 |
) |
|
|
(120,669 |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
248,468 |
|
|
|
241,209 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
235,152 |
|
|
$ |
120,540 |
|
|
|
|
|
|
||||
|
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
221,093 |
|
|
$ |
120,540 |
|
|
Restricted cash in other non-current assets |
|
14,059 |
|
|
|
— |
|
|
Total cash, cash equivalents and restricted cash |
$ |
235,152 |
|
|
$ |
120,540 |
|
|
Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows (Unaudited) |
|||||||
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
|
(Dollars and Shares in Thousands, Except per Share Data) |
||||||
|
Total expenses |
|
|
|
||||
|
GAAP total expenses (a) |
$ |
311,842 |
|
|
$ |
309,519 |
|
|
Less: |
|
|
|
||||
|
Stock-based compensation (b) |
|
(14,814 |
) |
|
|
(16,699 |
) |
|
Amortization of intangibles (c) |
|
(121,589 |
) |
|
|
(121,587 |
) |
|
Acquisition and integration planning related fees |
|
(405 |
) |
|
|
255 |
|
|
Restructuring costs3 |
|
(7,726 |
) |
|
|
— |
|
|
|
|
|
|
||||
|
Non-GAAP total expenses |
$ |
167,308 |
|
|
$ |
171,488 |
|
|
|
|
|
|
||||
|
(Loss) income from operations |
|
|
|
||||
|
GAAP loss from operations |
$ |
(95,965 |
) |
|
$ |
(60,211 |
) |
|
Plus: |
|
|
|
||||
|
Stock-based compensation (b) |
|
14,814 |
|
|
|
16,699 |
|
|
Amortization of intangibles (c) |
|
121,589 |
|
|
|
121,587 |
|
|
Acquisition and integration planning related fees |
|
405 |
|
|
|
(255 |
) |
|
Restructuring costs3 |
|
7,726 |
|
|
|
— |
|
|
|
|
|
|
||||
|
Non-GAAP income from operations |
$ |
48,569 |
|
|
$ |
77,820 |
|
|
|
|
|
|
||||
|
Net (loss) income |
|
|
|
||||
|
GAAP net loss |
$ |
(60,464 |
) |
|
$ |
(34,525 |
) |
|
Plus: |
|
|
|
||||
|
Stock-based compensation (b) |
|
14,814 |
|
|
|
16,699 |
|
|
Amortization of intangibles (c) |
|
121,589 |
|
|
|
121,587 |
|
|
Acquisition and integration planning related fees |
|
405 |
|
|
|
(255 |
) |
|
Restructuring costs3 |
|
7,726 |
|
|
|
— |
|
|
Less: |
|
|
|
||||
|
Income tax effect on Non-GAAP items (d) |
|
(30,203 |
) |
|
|
(28,621 |
) |
|
|
|
|
|
||||
|
Non-GAAP net income |
$ |
53,867 |
|
|
$ |
74,885 |
|
|
|
|
|
|
||||
|
Diluted (loss) income per share |
|
|
|
||||
|
GAAP diluted loss per share |
$ |
(0.96 |
) |
|
$ |
(0.54 |
) |
|
Plus: |
|
|
|
||||
|
Stock-based compensation (b) |
|
0.23 |
|
|
|
0.26 |
|
|
Amortization of intangibles (c) |
|
1.91 |
|
|
|
1.88 |
|
|
Acquisition and integration planning related fees |
|
0.01 |
|
|
|
— |
|
|
Restructuring costs3 |
|
0.12 |
|
|
|
— |
|
|
Impact of diluted shares |
|
0.01 |
|
|
|
— |
|
|
Less: |
|
|
|
||||
|
Income tax effect on Non-GAAP items (d) |
|
(0.47 |
) |
|
|
(0.44 |
) |
|
|
|
|
|
||||
|
Non-GAAP diluted income per share |
$ |
0.85 |
|
|
$ |
1.16 |
|
|
|
|
|
|
||||
|
Shares used in computing Non-GAAP diluted (loss) income per share |
|
63,547 |
|
|
|
64,658 |
|
|
(3) |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
|
(Dollars in Thousands) |
||||||
|
Free Cash Flow |
|
|
|
||||
|
Net cash (used in) provided by operating activities (GAAP) |
$ |
(4,397 |
) |
|
$ |
16,981 |
|
|
Purchases of property, equipment and leasehold improvements |
|
(2,022 |
) |
|
|
(937 |
) |
|
Free cash flow (non-GAAP) |
$ |
(6,419 |
) |
|
$ |
16,044 |
|
|
|
|
|
|
||||
|
(a) GAAP total expenses |
|
|
|
||||
|
Total costs of revenue |
$ |
95,447 |
|
|
$ |
98,060 |
|
|
Total operating expenses |
|
216,395 |
|
|
|
211,459 |
|
|
GAAP total expenses |
$ |
311,842 |
|
|
$ |
309,519 |
|
|
|
|
|
|
||||
|
(b) Stock-based compensation expense was as follows: |
|
|
|
||||
|
Cost of license and solutions |
$ |
551 |
|
|
$ |
680 |
|
|
Cost of maintenance |
|
887 |
|
|
|
488 |
|
|
Cost of services and other |
|
1,045 |
|
|
|
498 |
|
|
Selling and marketing |
|
2,930 |
|
|
|
2,942 |
|
|
Research and development |
|
3,000 |
|
|
|
4,553 |
|
|
General and administrative |
|
6,401 |
|
|
|
7,538 |
|
|
Total stock-based compensation |
$ |
14,814 |
|
|
$ |
16,699 |
|
|
|
|
|
|
||||
|
(c) Amortization of intangible assets was as follows: |
|
|
|
||||
|
Cost of license and solutions |
$ |
48,202 |
|
|
$ |
48,035 |
|
|
Selling and marketing |
|
73,387 |
|
|
|
73,552 |
|
|
Total amortization of intangible assets |
$ |
121,589 |
|
|
$ |
121,587 |
|
|
|
|
|
|
||||
|
(d) The income tax effect on non-GAAP items for the three months ended |
|||||||
|
|
|
21.79 |
% |
|
|
21.79 |
% |
|
Reconciliation of Forward-Looking Guidance (Unaudited) |
||||||
|
|
|
|
|
|||
|
|
Twelve Months Ended |
|||||
|
|
(Dollars in Thousands, Except Share Data) |
|||||
|
Guidance - Total expenses |
|
|
|
|||
|
GAAP expectation - total expenses |
$ |
1,213,000 |
|
|
|
|
|
Less: |
|
|
|
|||
|
Stock-based compensation |
|
(56,000 |
) |
|
|
|
|
Amortization of intangibles |
|
(474,000 |
) |
|
|
|
|
Restructuring costs3 |
|
(8,000 |
) |
|
|
|
|
|
|
|
|
|||
|
Non-GAAP expectation - total expenses |
$ |
675,000 |
|
|
|
|
|
|
|
|
|
|||
|
Guidance - (Loss) income from operations |
|
|
|
|||
|
GAAP expectation - loss from operations |
$ |
(24,000 |
) |
|
|
|
|
Plus: |
|
|
|
|||
|
Stock-based compensation |
|
56,000 |
|
|
|
|
|
Amortization of intangibles |
|
474,000 |
|
|
|
|
|
Restructuring costs3 |
|
8,000 |
|
|
|
|
|
|
|
|
|
|||
|
Non-GAAP expectation - income from operations |
$ |
514,000 |
|
|
|
|
|
|
|
|
|
|||
|
Guidance - Net income and diluted income per share |
|
|
|
|||
|
GAAP expectation - net income and diluted income per share |
$ |
52,000 |
|
|
$ |
0.82 |
|
Plus: |
|
|
|
|||
|
Stock-based compensation |
|
56,000 |
|
|
|
|
|
Amortization of intangibles |
|
474,000 |
|
|
|
|
|
Restructuring costs3 |
|
8,000 |
|
|
|
|
|
Less: |
|
|
|
|||
|
Income tax effect on Non-GAAP items (5) |
|
(112,000 |
) |
|
|
|
|
|
|
|
|
|||
|
Non-GAAP expectation - net income and diluted income per share |
$ |
478,000 |
|
|
$ |
7.52 |
|
|
|
|
|
|||
|
Shares used in computing guidance for Non-GAAP diluted income per share |
|
63,600 |
|
|
|
|
|
|
|
|
|
|||
|
Guidance - Free Cash Flow |
|
|
|
|||
|
GAAP expectation - net cash provided by operating activities |
$ |
357,000 |
|
|
|
|
|
Less: |
|
|
|
|||
|
Purchases of property, equipment and leasehold improvements |
|
(17,000 |
) |
|
|
|
|
|
|
|
|
|||
|
Free cash flow expectation (non-GAAP) |
$ |
340,000 |
|
|
|
|
|
|
|
|
||||
|
(4) Rounded amount used, except per share data. |
|
|
|
|||
|
(5) The income tax effect on non-GAAP items for the twelve months ended |
||||||
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