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Aspen Technology Announces Financial Results for the Second Quarter Fiscal Year 2010

Company Approved to Relist on NASDAQ Stock Market
BURLINGTON, Mass., Feb 09, 2010 (BUSINESS WIRE) -- Aspen Technology, Inc. (NASDAQ: AZPN, as of February 10, 2010) a leading provider of software and services to the process industries, today announced its financial results for its second quarter of fiscal 2010, ended December 31, 2009.

Mark Fusco, Chief Executive Officer of AspenTech, said, "We are pleased with the company's performance in the second quarter, as solid transaction flow drove product-related bookings of approximately $95 million. Within product related bookings, the license portion was consistent with the year ago period. Early customer response to our new aspenONE licensing model has been very favorable, which is driving both renewal activity and expanded usage with customers across each of our target markets. As we look to the second half of our fiscal year, customer interest levels remain high and we are encouraged by the positive impact of our new aspenONE licensing model on both our competitive position and long-term market opportunity."

Fusco added, "After bringing our financial statements current with the filing of our first quarter results and subsequently filing our second quarter results in a timely manner, we have been approved to relist the company's common stock on the NASDAQ stock market effective tomorrow morning under the ticker 'AZPN'. We are excited to complete this process so that investors can focus exclusively on AspenTech's business performance, strong competitive position and market opportunity."

AspenTech's total revenue of $42.7 million decreased from $82.6 million in the second quarter of the prior year, due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model.


  • Subscription revenue includes all revenue associated with the company's new aspenONE licensing model. Subscription revenue was approximately $1.2 million in the second quarter of fiscal 2010. No subscription revenue was recorded in the year ago period as the company's new aspenONE licensing model was launched during the first quarter of fiscal 2010. Subscription revenue is recognized over the course of the multi-year agreement, and recognition begins when the first payment is due, which is typically 30 days after the contract is signed.
  • Software revenue includes all non-subscription-based license revenue, including term-based contracts for point products as well as perpetual licenses. Software revenue was $9.0 million in the second quarter of fiscal 2010, compared to $47.3 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is recognized over the contract term, generally as payments become due. In prior fiscal year periods, the company predominantly recognized term license revenue on an up-front basis, and what was previously categorized as license revenue typically equaled license bookings. However, in the second quarter of fiscal year 2009, license revenue was approximately $17 million lower than license bookings as a result of certain license bookings not meeting the criteria for up-front revenue recognition.
  • Services & other revenue, which includes professional services, maintenance and other revenue, was $32.5 million in the second quarter of fiscal 2010, a decrease compared to $35.4 million in the year ago period. The year-over-year decline was primarily a result of the more challenging economic environment compared to the year ago period. Services and other revenue was up sequentially compared to $28.7 million in the first quarter of fiscal 2010.


For the quarter ended December 31, 2009, AspenTech reported a loss from operations of $29.3 million due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model. For the quarter ended December 31, 2008, the company reported income from operations of $18.8 million. Net loss was $30.7 million in the second quarter of fiscal 2010, leading to net loss per basic and diluted share of $0.34 compared to net income per diluted share of $0.25 in the same period last year.

AspenTech had a cash balance of $109.4 million at December 31, 2009, compared to $109.0 million at the end of the first quarter of fiscal 2010. The company did not sell any installments receivable to raise cash during the second quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $96.5 million at the end of the quarter, down $12.3 million compared to $108.8 million at the end of the first quarter of fiscal 2010.

Other Second Quarter Business Metrics


  • The company closed 18 product-related bookings of over $1 million during the second quarter, and 57 product related bookings between $250,000 and $1 million.
  • Average deal size for product-related bookings over $100,000 was $778,000 in the second quarter.


Conference Call and Webcast

AspenTech will host a conference call and webcast today, February 9, at 5:00 p.m. (Eastern Time), to discuss the company's financial results for the first quarter of fiscal 2010. The live dial-in number is (877) 245-0126, conference ID code 53424224. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech's website,, and clicking on the "webcast" link. A replay of the call will be archived on AspenTech's website and will also be available via telephone at (800) 642-1687 or (706) 645-9291, conference ID code 53424224 through February 16, 2010.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing - for energy, chemicals, pharmaceuticals, engineering and construction, and other industries that manufacture and produce products from a chemical process. With integrated aspenONE solutions, process manufacturers can implement best practices for optimizing their engineering, manufacturing and supply chain operations. As a result, AspenTech customers are better able to increase capacity, improve margins, reduce costs and become more energy efficient. To see how the world's leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit

© 2010 Aspen Technology, Inc., AspenTech, aspenONE and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

Forward-Looking Statements

The second paragraph of this press release may contain forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the anticipated benefits of AspenTech's new subscription-based licensing model. Actual results may vary significantly from AspenTech's expectations based on a number of risks and uncertainties, including, without limitation: customers' failure to adopt the new AspenONE licensing model at the rate expected by AspenTech or at all; AspenTech's failure to realize the anticipated financial and operational benefits of the new AspenONE licensing model; unforeseen difficulties or uncertainties in the application of accounting standards; weaknesses in our internal controls, including our controls over the recognition of license revenue; and other risk factors described from time to time in AspenTech's periodic reports filed with the Securities and Exchange Commission.

AspenTech cannot guarantee any future results, levels of activity, performance, or achievements. AspenTech expressly disclaims any current intention to update forward-looking statements after the date of this press release.

(in thousands, except per share data)
      Three Months Ended   Six Months Ended
      December 31,   December 31,
      2009   2008   2009   2008
Subscription     $ 1,214     $ -     $ 1,239     $ -  
Software       8,976       47,272       20,058       96,909  
Total subscription and software       10,190       47,272       21,297       96,909  
Services and other       32,496       35,355       61,185       72,124  
Total revenue       42,686       82,627       82,482       169,033  
Cost of revenue:                  
Subscription and software       1,677       2,877       3,450       5,524  
Services and other       14,792       15,287       30,488       31,806  
Total cost of revenue       16,469       18,164       33,938       37,330  
Gross profit       26,217       64,463       48,544       131,703  
Operating costs:                  
Selling and marketing       23,757       19,988       44,309       42,113  
Research and development       12,515       10,514       23,409       23,166  
General and administrative       19,226       14,276       34,640       28,391  
Restructuring charges       32       231       303       265  
Loss (gain) on sales and disposals of assets       2       (1 )     2       3  
Impairment of goodwill and intangible assets       -       623       -       623  
Total operating costs       55,532       45,631       102,663       94,561  
(Loss) income from operations       (29,315 )     18,832       (54,119 )     37,142  
Interest income       5,083       5,955       10,532       11,870  
Interest expense       (2,480 )     (2,743 )     (4,891 )     (5,597 )
Other income (expense), net       (222 )     2,920       2,047       (661 )
(Loss) income before provision for income taxes       (26,934 )     24,964       (46,431 )     42,754  
Provision for income taxes       (3,723 )     (2,003 )     (5,288 )     (8,140 )
Net (loss) income     $ (30,657 )   $ 22,961     $ (51,719 )   $ 34,614  
(Loss) earnings per common share:                  
Basic     $ (0.34 )   $ 0.26     $ (0.57 )   $ 0.38  
Diluted     $ (0.34 )   $ 0.25     $ (0.57 )   $ 0.37  
Weighted average shares outstanding:                  
Basic       91,002       90,043       90,538       90,031  
Diluted       91,002       92,030       90,538       93,055  
(in thousands)
      December 31,   June 30,
      2009   2009
Current assets:          
Cash and cash equivalents     $ 109,437     $ 122,213  
Accounts receivable, net of allowance for doubtful accounts of $3,840 and $5,809       35,507       49,882  
Current portion of installments receivable, net of allowance for doubtful accounts of $990 and $1,015       52,405       64,531  
Current portion of collateralized receivables, net of unamortized discount       30,874       38,695  
Unbilled services       1,859       298  
Prepaid expenses and other current assets       6,075       9,413  
Prepaid income taxes       13,593       13,159  
Deferred tax assets       3,839       3,795  
Total current assets       253,589       301,986  
Non-current installments receivable, net of allowance for doubtful accounts of $1,682 and $1,663       104,144       113,390  
Non-current collateralized receivables, net of unamortized discount       49,607       57,671  
Property, equipment and leasehold improvements, net of accumulated depreciation of $28,703 and $27,438       9,154       9,604  
Computer software development costs       2,560       3,918  
Goodwill       17,672       16,686  
Non-current deferred tax assets       10,737       10,788  
Other non-current assets       1,854       1,933  
Total assets     $ 449,317     $ 515,976  
Current liabilities:          
Current portion of secured borrowing     $ 33,166     $ 83,885  
Accounts payable       6,972       5,135  
Accrued expenses       39,819       47,882  
Income taxes payable       3,387       1,888  
Deferred revenue       57,592       62,801  
Current deferred tax liability       2,496       2,481  
Total current liabilities       143,432       204,072  
Long-term secured borrowing       63,347       28,211  
Deferred revenue       15,401       16,070  
Non-current deferred tax liability       2,362       2,354  
Other non-current liabilities       33,065       35,859  
Commitments and contingencies          
Stockholders' equity:          
Series D redeemable convertible preferred stock, $0.10 par value--          
Authorized-- 3,636 shares as of December 31, 2009 and June 30, 2009          
Issued and outstanding-- none as of December 31, 2009 and June 30, 2009       -       -  
Common stock, $0.10 par value-- Authorized--210,000,000 shares          
Issued-- 91,741,941 shares as of December 31, 2009 and 90,326,513

shares at June 30, 2009

Outstanding-- 91,508,477 shares at December 31, 2009 and 90,093,049 shares at June 30, 2009       9,174       9,033  
Additional paid-in capital       509,880       497,478  
Accumulated deficit       (335,312 )     (283,593 )
Accumulated other comprehensive income       8,481       7,005  
Treasury stock, at cost--233,464 shares of common stock as of December 31,

2009 and June 30, 2009

      (513 )     (513 )
Total stockholders' equity       191,710       229,410  
      $ 449,317     $ 515,976  

SOURCE: Aspen Technology, Inc.

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