Aspen Technology Announces Financial Results for the First Quarter of Fiscal 2020
“AspenTech got off to a good start in the first quarter of fiscal 2020, and we remain positive about the outlook for the full year. We believe that the broad-based strength in our business, driven by the increasing focus on digitalization and continuous improvement in operational excellence, positions us well to deliver another year of solid growth and free cash flow generation,” said
Pietri continued, “The recent introduction of Aspen Enterprise Insights, which incorporates visualization and workflow management capabilities from our Sabisu acquisition, is an exciting opportunity for collaborative and data-driven applications. In addition, we continue to receive a positive reaction from customers to our strategy and plan for leveraging artificial intelligence, cloud and IoT technologies to drive significantly higher levels of operational excellence across assets, providing substantial incremental value for customers.”
First Quarter Fiscal 2020 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
$548 million at the end of the first quarter of fiscal 2020, which increased 10.0% compared to the first quarter of fiscal 2019 and 1.3% sequentially. - GAAP operating margin was 35.3% compared to 32.4% in the first quarter of fiscal 2019. Non-GAAP operating margin was 43.2% compared to 41.1% in the first quarter of fiscal 2019.
- AspenTech repurchased approximately 382,000 shares of its common stock for
$50 million in the first quarter of fiscal 2020.
Summary of First Quarter Fiscal Year 2020 Financial Results
AspenTech’s total revenue of
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was
$81.2 million in the first quarter of fiscal 2020, compared to$63.8 million in the first quarter of fiscal 2019. - Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was
$43.6 million in the first quarter of fiscal 2020, compared to$43.0 million in the first quarter of fiscal 2019. - Services and other revenue was
$9.3 million in the first quarter of fiscal 2020, compared to$7.4 million in the first quarter of fiscal 2019.
For the quarter ended
Net income was
Non-GAAP income from operations was
AspenTech had cash and cash equivalents of
During the first quarter, the company generated
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 total expenses of
$369 to $374 million - Non-GAAP total expenses of
$303 to $308 million - GAAP operating income of
$206 to $241 million - Non-GAAP operating income of
$272 to $307 million - GAAP net income per share of
$2.72 to $3.14 - Non-GAAP net income per share of
$3.47 to $3.89
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 second and third paragraphs 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
Source:
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES |
|||||||
|
|
Three Months Ended |
||||||
|
|
2019 |
|
2018 |
||||
|
|
(Dollars in Thousands, Except per Share Data) |
||||||
|
Revenue: |
|
|
|
||||
|
License |
$ |
81,171 |
|
|
$ |
63,755 |
|
|
Maintenance |
43,574 |
|
|
43,039 |
|
||
|
Services and other |
9,346 |
|
|
7,375 |
|
||
|
Total revenue |
134,091 |
|
|
114,169 |
|
||
|
Cost of revenue: |
|
|
|
||||
|
License |
1,660 |
|
|
1,665 |
|
||
|
Maintenance |
4,977 |
|
|
3,993 |
|
||
|
Services and other |
8,581 |
|
|
7,569 |
|
||
|
Total cost of revenue |
15,218 |
|
|
13,227 |
|
||
|
Gross profit |
118,873 |
|
|
100,942 |
|
||
|
Operating expenses: |
|
|
|
||||
|
Selling and marketing |
29,192 |
|
|
26,812 |
|
||
|
Research and development |
22,493 |
|
|
21,056 |
|
||
|
General and administrative |
19,884 |
|
|
16,084 |
|
||
|
Total operating expenses |
71,569 |
|
|
63,952 |
|
||
|
Income from operations |
47,304 |
|
|
36,990 |
|
||
|
Interest income |
7,976 |
|
|
7,069 |
|
||
|
Interest (expense) |
(3,000 |
) |
|
(1,814 |
) |
||
|
Other income, net |
1,132 |
|
|
128 |
|
||
|
Income before income taxes |
53,412 |
|
|
42,373 |
|
||
|
Provision for income taxes |
7,128 |
|
|
4,307 |
|
||
|
Net income |
$ |
46,284 |
|
|
$ |
38,066 |
|
|
Net income per common share: |
|
|
|
||||
|
Basic |
$ |
0.68 |
|
|
$ |
0.54 |
|
|
Diluted |
$ |
0.67 |
|
|
$ |
0.53 |
|
|
Weighted average shares outstanding: |
|
|
|
||||
|
Basic |
68,441 |
|
|
70,988 |
|
||
|
Diluted |
69,317 |
|
|
72,015 |
|
||
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES |
|||||||
|
|
September 30, |
|
June 30, |
||||
|
|
(Dollars in Thousands, Except Share Data) |
||||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
57,943 |
|
|
$ |
71,926 |
|
|
Accounts receivable, net |
48,991 |
|
|
47,784 |
|
||
|
Current contract assets |
286,644 |
|
|
294,193 |
|
||
|
Prepaid expenses and other current assets |
12,603 |
|
|
12,628 |
|
||
|
Prepaid income taxes |
1,269 |
|
|
2,509 |
|
||
|
Total current assets |
407,450 |
|
|
429,040 |
|
||
|
Property, equipment and leasehold improvements, net |
7,259 |
|
|
7,234 |
|
||
|
Computer software development costs, net |
1,205 |
|
|
1,306 |
|
||
|
Goodwill |
126,937 |
|
|
78,383 |
|
||
|
Intangible assets, net |
60,955 |
|
|
33,607 |
|
||
|
Non-current contract assets |
358,704 |
|
|
325,510 |
|
||
|
Contract costs |
25,327 |
|
|
24,982 |
|
||
|
Operating lease right-of-use assets |
29,842 |
|
|
— |
|
||
|
Deferred tax assets |
1,781 |
|
|
1,669 |
|
||
|
Other non-current assets |
2,197 |
|
|
1,334 |
|
||
|
Total assets |
$ |
1,021,657 |
|
|
$ |
903,065 |
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
10,641 |
|
|
$ |
5,891 |
|
|
Accrued expenses and other current liabilities |
41,176 |
|
|
54,594 |
|
||
|
Current operating lease liabilities |
6,462 |
|
|
— |
|
||
|
Income taxes payable |
13,348 |
|
|
14,952 |
|
||
|
Borrowings under credit agreement |
320,000 |
|
|
220,000 |
|
||
|
Current deferred revenue |
25,699 |
|
|
25,318 |
|
||
|
Total current liabilities |
417,326 |
|
|
320,755 |
|
||
|
Non-current deferred revenue |
17,349 |
|
|
19,573 |
|
||
|
Deferred income taxes |
160,230 |
|
|
159,071 |
|
||
|
Non-current operating lease liabilities |
28,765 |
|
|
— |
|
||
|
Other non-current liabilities |
4,704 |
|
|
10,381 |
|
||
|
Commitments and contingencies (Note 17) |
|
|
|
||||
|
Series D redeemable convertible preferred stock, $0.10 par value— |
— |
|
|
— |
|
||
|
Stockholders’ equity: |
|
|
|
||||
|
Common stock, $0.10 par value— Authorized—210,000,000 shares |
10,372 |
|
|
10,365 |
|
||
|
Additional paid-in capital |
745,908 |
|
|
739,099 |
|
||
|
Retained earnings |
1,306,268 |
|
|
1,259,984 |
|
||
|
Accumulated other comprehensive (loss) income |
(2,766 |
) |
|
336 |
|
||
|
Treasury stock, at cost—35,400,005 shares of common stock at September 30, 2019 and 35,017,726 shares at June 30, 2019 |
(1,666,499 |
) |
|
(1,616,499 |
) |
||
|
Total stockholders’ equity |
393,283 |
|
|
393,285 |
|
||
|
Total liabilities and stockholders’ equity |
$ |
1,021,657 |
|
|
$ |
903,065 |
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES |
|||||||
|
|
Three Months Ended |
||||||
|
|
2019 |
|
2018 |
||||
|
|
(Dollars in Thousands) |
||||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
46,284 |
|
|
$ |
38,066 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
2,036 |
|
|
2,000 |
|
||
|
Right-of-use asset amortization |
1,887 |
|
|
— |
|
||
|
Net foreign currency losses (gains) |
721 |
|
|
(200 |
) |
||
|
Stock-based compensation |
9,275 |
|
|
8,865 |
|
||
|
Deferred income taxes |
(182 |
) |
|
(44,670 |
) |
||
|
Provision for bad debts |
982 |
|
|
34 |
|
||
|
Other non-cash operating activities |
107 |
|
|
107 |
|
||
|
Changes in assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
(1,945 |
) |
|
(12,394 |
) |
||
|
Contract assets |
(25,440 |
) |
|
(30,914 |
) |
||
|
Contract costs |
(345 |
) |
|
(796 |
) |
||
|
Lease liabilities |
(1,932 |
) |
|
— |
|
||
|
Prepaid expenses, prepaid income taxes, and other assets |
(2,092 |
) |
|
(855 |
) |
||
|
Accounts payable, accrued expenses, income taxes payable and other liabilities |
(12,741 |
) |
|
34,924 |
|
||
|
Deferred revenue |
(1,355 |
) |
|
11,403 |
|
||
|
Net cash provided by operating activities |
15,260 |
|
|
5,570 |
|
||
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property, equipment and leasehold improvements |
(600 |
) |
|
(96 |
) |
||
|
Payments for business acquisitions, net of cash acquired |
(74,219 |
) |
|
— |
|
||
|
Payments for capitalized computer software costs |
(9 |
) |
|
(90 |
) |
||
|
Net cash used in investing activities |
(74,828 |
) |
|
(186 |
) |
||
|
Cash flows from financing activities: |
|
|
|
||||
|
Exercises of stock options |
1,018 |
|
|
4,054 |
|
||
|
Repurchases of common stock |
(50,848 |
) |
|
(49,977 |
) |
||
|
Payments of tax withholding obligations related to restricted stock |
(3,166 |
) |
|
(3,179 |
) |
||
|
Proceeds from credit agreement |
100,000 |
|
|
— |
|
||
|
Net cash provided by (used in) financing activities |
47,004 |
|
|
(49,102 |
) |
||
|
Effect of exchange rate changes on cash and cash equivalents |
(729 |
) |
|
(399 |
) |
||
|
Decrease in cash, cash equivalents, and restricted cash |
(13,293 |
) |
|
(44,117 |
) |
||
|
Cash and cash equivalents, beginning of period |
71,926 |
|
|
96,165 |
|
||
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
58,633 |
|
|
$ |
52,048 |
|
|
Supplemental disclosure of cash flow information: |
|
|
|
||||
|
Income taxes paid, net |
$ |
10,284 |
|
|
$ |
2,755 |
|
|
Interest paid |
2,801 |
|
|
1,538 |
|
||
|
Supplemental disclosure of non-cash activities: |
|
|
|
||||
|
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses |
$ |
160 |
|
|
$ |
(11 |
) |
|
Change in repurchases of common stock included in accounts payable and accrued expenses |
(848 |
) |
|
23 |
|
||
|
Lease liabilities arising from obtaining right-of-use assets |
3,272 |
|
|
— |
|
||
|
|
|
|
|
||||
|
|
September 30, |
|
June 30, |
||||
|
Reconciliation to amounts within the unaudited consolidated balance sheets: |
(Dollars in Thousands) |
||||||
|
Cash and cash equivalents |
$ |
57,943 |
|
|
$ |
71,926 |
|
|
Restricted cash included in other non-current assets |
690 |
|
|
— |
|
||
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
58,633 |
|
|
$ |
71,926 |
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
2019 |
|
2018 |
||||
|
Total expenses |
|
|
|
|
||||
|
GAAP total expenses (a) |
|
$ |
86,787 |
|
|
$ |
77,179 |
|
|
Less: |
|
|
|
|
||||
|
Stock-based compensation (b) |
|
(9,275 |
) |
|
(8,865 |
) |
||
|
Amortization of intangibles |
|
(1,195 |
) |
|
(1,067 |
) |
||
|
Acquisition related fees |
|
(118 |
) |
|
7 |
|
||
|
|
|
|
|
|
||||
|
Non-GAAP total expenses |
|
$ |
76,199 |
|
|
$ |
67,254 |
|
|
|
|
|
|
|
||||
|
Income from operations |
|
|
|
|
||||
|
GAAP income from operations |
|
$ |
47,304 |
|
|
$ |
36,990 |
|
|
Plus: |
|
|
|
|
||||
|
Stock-based compensation (b) |
|
9,275 |
|
|
8,865 |
|
||
|
Amortization of intangibles |
|
1,195 |
|
|
1,067 |
|
||
|
Acquisition related fees |
|
118 |
|
|
(7 |
) |
||
|
|
|
|
|
|
||||
|
Non-GAAP income from operations |
|
$ |
57,892 |
|
|
$ |
46,915 |
|
|
|
|
|
|
|
||||
|
Net income |
|
|
|
|
||||
|
GAAP net income |
|
$ |
46,284 |
|
|
$ |
38,066 |
|
|
Plus: |
|
|
|
|
||||
|
Stock-based compensation (b) |
|
9,275 |
|
|
8,865 |
|
||
|
Amortization of intangibles |
|
1,195 |
|
|
1,067 |
|
||
|
Acquisition related fees |
|
118 |
|
|
(7 |
) |
||
|
Less: |
|
|
|
|
||||
|
Income tax effect on Non-GAAP items (c) |
|
(2,223 |
) |
|
(2,084 |
) |
||
|
|
|
|
|
|
||||
|
Non-GAAP net income |
|
$ |
54,649 |
|
|
$ |
45,907 |
|
|
|
|
|
|
|
||||
|
Diluted income per share |
|
|
|
|
||||
|
GAAP diluted income per share |
|
$ |
0.67 |
|
|
$ |
0.53 |
|
|
Plus: |
|
|
|
|
||||
|
Stock-based compensation (b) |
|
0.13 |
|
|
0.13 |
|
||
|
Amortization of intangibles |
|
0.02 |
|
|
0.01 |
|
||
|
Acquisition related fees |
|
— |
|
|
— |
|
||
|
Less: |
|
|
|
|
||||
|
Income tax effect on Non-GAAP items (c) |
|
(0.03 |
) |
|
(0.03 |
) |
||
|
|
|
|
|
|
||||
|
Non-GAAP diluted income per share |
|
$ |
0.79 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
||||
|
Shares used in computing Non-GAAP diluted income per share |
|
69,317 |
|
|
72,015 |
|
||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
|
|
2019 |
|
2018 |
||||
|
Free Cash Flow |
|
|
|
|
||||
|
GAAP cash flow from operating activities |
|
$ |
15,260 |
|
|
$ |
5,570 |
|
|
Purchase of property, equipment and leasehold improvements |
|
(600 |
) |
|
(96 |
) |
||
|
Capitalized computer software development costs |
|
(9 |
) |
|
(90 |
) |
||
|
Acquisition related (receipts) payments, net |
|
(353 |
) |
|
12 |
|
||
|
Free Cash Flow |
|
$ |
14,298 |
|
|
$ |
5,396 |
|
|
|
|
|
|
|
||||
|
(a) GAAP total expenses |
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
|
|
2019 |
|
2018 |
||||
|
Total costs of revenue |
|
$ |
15,218 |
|
|
$ |
13,227 |
|
|
Total operating expenses |
|
71,569 |
|
|
63,952 |
|
||
|
GAAP total expenses |
|
$ |
86,787 |
|
|
$ |
77,179 |
|
|
|
|
|
|
|
||||
|
(b) Stock-based compensation expense was as follows: |
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
|
|
2019 |
|
2018 |
||||
|
Cost of maintenance |
|
$ |
398 |
|
|
$ |
146 |
|
|
Cost of services and other |
|
543 |
|
|
319 |
|
||
|
Selling and marketing |
|
1,547 |
|
|
1,331 |
|
||
|
Research and development |
|
2,102 |
|
|
2,295 |
|
||
|
General and administrative |
|
4,685 |
|
|
4,774 |
|
||
|
Total stock-based compensation |
|
$ |
9,275 |
|
|
$ |
8,865 |
|
|
|
|
|
|
|
||||
| (c) The income tax effect on non-GAAP items for the three months ended September 30, 2019 and 2018 is calculated utilizing the Company's statutory tax rate of 21 percent. | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20191030006028/en/
Source:
Media Contact
Lucy Millington
AspenTech
+1 781-221-6419
lucy.millington@aspentech.com
Investor Contact
Brian Denyeau
ICR
+1 646-277-1251
brian.denyeau@icrinc.com