AZPN
$211.32
Aspen Technology
($.34)
(.16%)
Earnings Details
2nd Quarter December 2022
Wednesday, January 25, 2023 4:05:00 PM
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Summary

Aspen Technology Misses

Aspen Technology (AZPN) reported 2nd Quarter December 2022 earnings of $0.25 per share on revenue of $242.8 million. The consensus earnings estimate was $1.32 per share on revenue of $273.5 million. The Earnings Whisper number was $1.38 per share. Revenue grew 41.7% on a year-over-year basis.

The company said it now expects fiscal 2023 non-GAAP earnings of $6.83 to $7.43 per share and continues to expect revenue of $1.14 billion to $1.20 billion. The company's previous guidance was earnings of $6.76 to $6.91 per share and the current consensus earnings estimate is $6.87 per share on revenue of $1.17 billion for the year ending June 30, 2023.

Aspen Technology Inc together with its subsidiaries is engaged in providing process optimization software solutions designed to manage and optimize plant and process design, operational performance, and supply chain planning.

Results
Reported Earnings
$0.25
Earnings Whisper
$1.38
Consensus Estimate
$1.32
Reported Revenue
$242.8 Mil
Revenue Estimate
$273.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Aspen Technology Announces Financial Results for the Second Quarter of Fiscal 2023

BEDFORD, Mass.--(BUSINESS WIRE)--Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced financial results for its second-quarter fiscal 2023, ended December 31, 2022.

“AspenTech’s second quarter results reflected continued, strong end market demand and the benefit of the addition of the OSI and SSE businesses to heritage AspenTech. We made significant progress on our integration and transformation initiatives and we believe we are well positioned to deliver on our full year operational and financial objectives,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.

“AspenTech is playing an essential role in helping our customers meet the demand for the products that support greater global prosperity while achieving their sustainability goals and ambitions,” Pietri added. “Delivering on both goals is the core of our Dual Challenge mission. Our customers have validated this value proposition and recognize our unique position to help them achieve it. We are confident these imperatives will enable AspenTech to deliver attractive growth and profitability over the long-term.”

Second Quarter and Fiscal Year 2023 Recent Business Highlights

  • Annual contract value, which we define 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, was $833.7 million at the end of the second quarter of fiscal 2023, which increased 8.7% compared to the second quarter of fiscal 2022.
  • Annual spend for heritage AspenTech, which the company defines as the annualized value of all term license and maintenance contracts at the end of the quarter for the businesses other than OSI and SSE, was $697.5 million at the end of the second quarter of fiscal 2023, which increased 9.0% compared to the second quarter of fiscal 2022 and 2.2% sequentially.

Summary of Second Quarter Fiscal Year 2023 Financial Results

As a result of the transaction between AspenTech and Emerson Electric Co.(“Emerson”), EmerSubCX, the subsidiary Emerson created as part of the transaction, became the surviving entity when the transaction closed on May 16th, 2022. The comparable periods shown in the financial statements below for fiscal year 2022 reflect only the historical results of the OSI and SSE businesses that were contributed to new AspenTech.

AspenTech’s total revenue of $242.8 million included:

  • License and solutions revenue, which represents the portion of a term license agreement allocated to the initial license and OSI revenue recognized on a percentage of completion basis, was $149.8 million in the second quarter of fiscal 2023, compared to $48.5 million in the second quarter of fiscal 2022.
  • Maintenance revenue, which represents the portion of customer agreements related to ongoing support and the right to future product enhancements, was $78.6 million in the second quarter of fiscal 2023, compared to $26.3 million in the second quarter of fiscal 2022.
  • Services and other revenue was $14.4 million in the second quarter of fiscal 2023, compared to $7.0 million in the second quarter of fiscal 2022.

For the quarter ended December 31, 2022, AspenTech reported loss from operations of $59.4 million, compared to loss from operations of $254,000 in the second quarter of fiscal 2022.

Net loss was $66.2 million for the quarter ended December 31, 2022, leading to net loss per share of $1.02 compared to net loss per share of $0.02 in the same period last fiscal year.

Non-GAAP income from operations was $86.6 million for the second quarter of fiscal 2023. Non-GAAP net income was $22.8 million, or $0.35 per share, for the second quarter of fiscal 2023. These non-GAAP results add back the impact of stock-based compensation expense, amortization of intangibles, fees related to acquisitions and integration planning and unrealized gain on derivatives associated with acquisitions. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.

AspenTech had cash and cash equivalents of $446.1 million and total borrowings of $264.0 million at December 31, 2022. During the quarter the company entered into a Credit Agreement with Emerson for an aggregate loan commitment of $630 million. The proceeds from borrowings under the Agreement will principally be used to fund the pending acquisition of Micromine.

During the second quarter, AspenTech generated $49.5 million in cash flow from operations and generated $53.1 million in free cash flow. Free cash flow is calculated as net cash provided by operating activities adjusted for the net impact of: purchases of property, equipment and leasehold improvements; payments for capitalized computer software development costs; and other nonrecurring items, such as payments related to acquisitions and integration planning.

Business Outlook

Based on information as of today, January 25, 2023, AspenTech is issuing the following guidance for fiscal year 2023. Please note this guidance does not include any contribution from the pending acquisition of Micromine, which is expected to close as soon as the remaining regulatory approval is obtained.

  • Annual Contract Value (“ACV”) growth of 10.5-13.5% year-over-year. The company defines ACV as the estimate of the annual value of our portfolio of term license and software maintenance and support (SMS) agreements
  • Free cash flow of $347 to $362 million
  • Total bookings of $1.07 to $1.17 billion
  • Total revenue of $1.14 to $1.20 billion
  • GAAP total expense of $1.207 to $1.217 billion
  • Non-GAAP total expense of $637 to $647 million
  • GAAP operating loss of $67 million to $15 million
  • Non-GAAP operating income of $503 to $555 million
  • GAAP net loss of $7.5 million to net income of $32.5 million
  • Non-GAAP net income of $451 to $491 million
  • GAAP net loss per share of $0.11 to income per share of $0.49
  • Non-GAAP net income per share of $6.83 to $7.43

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.

Use of Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. 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. 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

AspenTech will host a conference call and webcast presentation on January 25, 2023 at 4:30 p.m. (Eastern Time) to discuss the company's financial results, business outlook, and related corporate and financial matters. A live webcast of the call will be available on the Investor Relations section of AspenTech’s website, http://ir.aspentech.com/, and clicking on the “webcast” link. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. 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 will also be available for a limited time at http://ir.aspentech.com/.

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 capital-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

This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the statements contained in the Business Outlook section as well as those related to our ability to deliver on our financial objectives. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. We can give no assurance that such plans, estimates or expectations will be achieved and therefore, actual results may differ materially from any plans, estimates or expectations in such forward-looking statements.

Actual results may vary significantly from AspenTech’s expectations based on a number of risks and uncertainties, including, without limitation: delays or reductions in demand for AspenTech solutions due to the COVID-19 pandemic; AspenTech’s failure to increase usage and product adoption of aspenONE or other offerings or grow the aspenONE APM, OSI and SSE businesses, and failure to continue to provide innovative, market-leading solutions; declines in the demand for, or usage of, aspenONE software for any reason, including declines due to adverse changes in the process or other capital-intensive industries and materially reduced industry spending budgets due to the drop in demand for oil due to the COVID-19 pandemic; the consummation and the anticipated benefits of the acquisition of Micromine; unfavorable economic and market conditions or a lessening demand in the market for asset process optimization software, including materially reduced industry spending budgets due to the significant drop in oil prices arising from drop in demand due to the COVID-19 pandemic; risks of foreign operations or transacting business with customers outside the United States; risks of competition; risks that acquisitions could be difficult to consummate and integrate into our operations, which could disrupt our business, dilute stockholder value or impair our financial results; and other risk factors described from time to time in AspenTech’s periodic reports filed with the Securities and Exchange Commission.

Furthermore, there are additional factors relating to the transaction with Emerson that could cause actual results to differ materially from AspenTech’s plans, estimates or expectations regarding the transaction include, among others: (1) unexpected costs, charges or expenses resulting from the transaction; (2) failure to realize the anticipated benefits of the transaction, including as a result of delay in integrating the industrial software business of Emerson with AspenTech’s business; (3) the ability of AspenTech to implement its business strategy; (4) difficulties and delays in achieving revenue and cost synergies; (5) inability to retain and hire key personnel; (6) potential litigation in connection with the transaction or other settlements or investigations that may result in significant costs of defense, indemnification and liability; (7) AspenTech’s ability to recover successfully from a disaster or other business continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the COVID-19 pandemic; and (8) other risk factors as detailed from time to time in AspenTech’s reports filed with the SEC, including AspenTech’s annual reports on Form 10-K, periodic quarterly reports on Form 10-Q, and current reports on Form 8-K.

While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

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

© 2023 Aspen Technology, Inc. AspenTech, aspenONE, asset optimization and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

(Unaudited in Thousands, Except per Share Data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Six Months Ended

December 31,

 

 

2022

 

2021

 

2022

 

2021

Revenue:
License and solutions

$

149,843

 

$

48,491

 

$

310,068

 

$

92,706

 

Maintenance

 

78,628

 

 

26,272

 

 

156,994

 

 

50,807

 

Services and other

 

14,367

 

 

7,012

 

 

26,595

 

 

15,277

 

Total revenue

 

242,838

 

 

81,775

 

 

493,657

 

 

158,790

 

Cost of revenue:
License and solutions

 

70,833

 

 

33,221

 

 

140,346

 

 

67,609

 

Maintenance

 

9,567

 

 

4,074

 

 

18,784

 

 

8,308

 

Services and other

 

12,698

 

 

4,282

 

 

25,098

 

 

9,180

 

Total cost of revenue

 

93,098

 

 

41,577

 

 

184,228

 

 

85,097

 

Gross profit

 

149,740

 

 

40,198

 

 

309,429

 

 

73,693

 

Operating expenses:
Selling and marketing

 

117,951

 

 

17,995

 

 

236,225

 

 

42,995

 

Research and development

 

49,954

 

 

15,383

 

 

99,695

 

 

30,938

 

General and administrative

 

41,230

 

 

7,036

 

 

84,086

 

 

13,653

 

Restructuring costs

 

 

 

38

 

 

 

 

245

 

Total operating expenses

 

209,135

 

 

40,452

 

 

420,006

 

 

87,831

 

(Loss) from operations

 

(59,395

)

 

(254

)

 

(110,577

)

 

(14,138

)

Other income (expense), net

 

38,643

 

 

(1,419

)

 

(19,989

)

 

(2,778

)

Interest income (expense), net

 

4,120

 

 

(20

)

 

9,143

 

 

(292

)

(Loss) before provision for income taxes

 

(16,632

)

 

(1,693

)

 

(121,423

)

 

(17,208

)

Provision (benefit) for income taxes

 

49,565

 

 

(933

)

 

(43,982

)

 

(5,246

)

Net (loss)

$

(66,197

)

$

(760

)

$

(77,441

)

$

(11,962

)

Net (loss) per common share:
Basic

$

(1.02

)

$

(0.02

)

$

(1.20

)

$

(0.33

)

Diluted

$

(1.02

)

$

(0.02

)

$

(1.20

)

$

(0.33

)

Weighted average shares outstanding:
Basic

 

64,621

 

 

36,308

 

 

64,538

 

 

36,308

 

Diluted

 

64,621

 

 

36,308

 

 

64,538

 

 

36,308

 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED BALANCE SHEETS

(Unaudited in Thousands, Except Share and Per Share Data)

 

 

 

 

 

 

 

December 31,

2022

 

June 30,

2022

ASSETS
Current assets:
Cash and cash equivalents

$

446,088

 

$

449,725

 

Accounts receivable, net

 

140,746

 

 

111,027

 

Current contract assets, net

 

419,714

 

 

428,833

 

Prepaid expenses and other current assets

 

23,750

 

 

23,461

 

Receivables from related parties

 

15,099

 

 

16,941

 

Prepaid income taxes

 

 

 

17,503

 

Total current assets

 

1,045,397

 

 

1,047,490

 

Property, equipment and leasehold improvements, net

 

17,138

 

 

17,148

 

Goodwill

 

8,328,846

 

 

8,266,809

 

Intangible assets, net

 

4,902,442

 

 

5,112,781

 

Non-current contract assets, net

 

515,820

 

 

428,232

 

Contract costs

 

9,042

 

 

5,473

 

Operating lease right-of-use assets

 

71,426

 

 

78,286

 

Deferred tax assets

 

2,328

 

 

4,937

 

Other non-current assets

 

8,214

 

 

8,766

 

Total assets

$

14,900,653

 

$

14,969,922

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable

$

12,975

 

$

21,416

 

Accrued expenses and other current liabilities

 

95,407

 

 

90,123

 

Liability from foreign currency forward contract

 

15,319

 

 

 

Due to related parties

 

32,284

 

 

4,111

 

Current operating lease liabilities

 

12,627

 

 

7,191

 

Income taxes payable

 

25,704

 

 

6,768

 

Current borrowings

 

264,000

 

 

28,000

 

Current contract liabilities

 

146,887

 

 

143,327

 

Total current liabilities

 

605,203

 

 

300,936

 

Non-current contract liabilities

 

29,707

 

 

21,081

 

Deferred income tax liabilities

 

1,040,094

 

 

1,145,408

 

Non-current operating lease liabilities

 

60,005

 

 

71,933

 

Non-current borrowings, net

 

 

 

245,647

 

Other non-current liabilities

 

18,579

 

 

15,560

 

Stockholders’ equity:

Common stock, $0.0001 par value
Authorized—600,000,000 shares
Issued— 64,767,755 shares at December 31, 2022 and 64,425,378 shares at June 30, 2022
Outstanding— 64,767,755 shares at December 31, 2022 and 64,425,378 shares at June 30, 2022

6

6

Additional paid-in capital

 

13,164,874

 

 

13,107,570

 

Retained earnings

 

(11,072

)

 

66,369

 

Accumulated other comprehensive (loss)

 

(6,743

)

 

(4,588

)

Total stockholders’ equity

 

13,147,065

 

 

13,169,357

 

Total liabilities and stockholders’ equity

$

14,900,653

 

$

14,969,922

 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Six Months Ended

December 31,

 

 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:
Net (loss)

$

(66,197

)

$

(760

)

$

(77,441

)

$

(11,962

)

Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization

 

122,556

 

 

23,664

 

 

245,102

 

 

54,084

 

Reduction in the carrying amount of right-of-use assets

 

3,271

 

 

1,355

 

 

6,562

 

 

3,067

 

Net foreign currency (gain) losses

 

(3,588

)

 

1,475

 

 

4,744

 

 

3,013

 

Stock-based compensation

 

23,441

 

 

458

 

 

41,177

 

 

826

 

Deferred income taxes

 

(35,946

)

 

(2,355

)

 

(106,384

)

 

(8,047

)

Provision for uncollectible receivables

 

(381

)

 

(16

)

 

3,228

 

 

43

 

Other non-cash operating activities

 

(3,820

)

 

23

 

 

(593

)

 

84

 

Changes in assets and liabilities:
Accounts receivable

 

(41,700

)

 

(31,371

)

 

(33,691

)

 

(47,061

)

Contract assets

 

(9,507

)

 

(8,258

)

 

(77,864

)

 

(13,034

)

Contract costs

 

(96

)

 

 

 

(3,547

)

 

 

Lease liabilities

 

(4,949

)

 

(1,390

)

 

(6,609

)

 

(1,811

)

Prepaid expenses, prepaid income taxes, and other assets

 

81,184

 

 

(2,978

)

 

34,177

 

 

(1,167

)

Liability from foreign currency forward contract

 

(34,940

)

 

 

 

15,319

 

 

 

Accounts payable, accrued expenses, income taxes payable and other liabilities

 

11,983

 

 

(10,571

)

 

(1,490

)

 

(12,805

)

Contract liabilities

 

8,223

 

 

15,926

 

 

11,922

 

 

10,786

 

Net cash provided by (used in) operating activities

 

49,534

 

 

(14,798

)

 

54,612

 

 

(23,984

)

Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements

 

(1,523

)

 

(786

)

 

(2,844

)

 

(3,393

)

Payments for business acquisitions, net of cash acquired

 

 

 

 

 

(74,947

)

 

(1,065

)

Payments for equity method investments

 

(465

)

 

 

 

(465

)

 

 

Payments for capitalized computer software development costs

 

(230

)

 

 

 

(329

)

 

 

Purchases of other assets

 

 

 

(2

)

 

 

 

(287

)

Net cash used in investing activities

 

(2,218

)

 

(788

)

 

(78,585

)

 

(4,745

)

Cash flows from financing activities:
Issuance of shares of common stock

 

17,135

 

 

 

 

25,605

 

 

 

Payment of tax withholding obligations related to restricted stock

 

(8,276

)

 

 

 

(11,698

)

 

 

Deferred business acquisition payments

 

 

 

 

 

(1,363

)

 

 

Repayments of amounts borrowed under term loan

 

(6,000

)

 

 

 

(12,000

)

 

 

Net transfers from Parent Company

 

17,426

 

 

17,660

 

 

29,872

 

 

32,855

 

Payments of debt issuance costs

 

 

 

 

 

(2,375

)

 

 

Net cash provided by financing activities

 

20,285

 

 

17,660

 

 

28,041

 

 

32,855

 

Effect of exchange rate changes on cash and cash equivalents

 

(3,970

)

 

(136

)

 

(7,705

)

 

(134

)

Increase (decrease) in cash and cash equivalents

 

63,631

 

 

1,938

 

 

(3,637

)

 

3,992

 

Cash and cash equivalents, beginning of period

 

382,457

 

 

25,713

 

 

449,725

 

 

23,659

 

Cash and cash equivalents, end of period

$

446,088

 

$

27,651

 

$

446,088

 

$

27,651

 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows

(Unaudited in Thousands, Except per Share Data)

 

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

Total expenses
GAAP total expenses (a)

$

302,233

 

$

82,029

 

$

604,234

 

$

172,928

 

Less:
Stock-based compensation (b)

 

(23,441

)

 

(458

)

 

(41,177

)

 

(826

)

Amortization of intangibles (c)

 

(121,161

)

 

(22,176

)

 

(242,321

)

 

(50,985

)

Acquisition and integration planning related fees

 

(1,411

)

 

 

 

(6,269

)

 

(54

)

 
Non-GAAP total expenses

$

156,220

 

$

59,395

 

$

314,467

 

$

121,063

 

 
Income from operations
GAAP (loss) from operations

$

(59,395

)

$

(254

)

$

(110,577

)

$

(14,138

)

Plus:
Stock-based compensation (b)

 

23,441

 

 

458

 

 

41,177

 

 

826

 

Amortization of intangibles (c)

 

121,161

 

 

22,176

 

 

242,321

 

 

50,985

 

Acquisition and integration planning related fees

 

1,411

 

 

 

 

6,269

 

 

54

 

 
Non-GAAP income from operations

$

86,618

 

$

22,380

 

$

179,190

 

$

37,727

 

 
Net income
GAAP net (loss)

$

(66,197

)

$

(760

)

$

(77,441

)

$

(11,962

)

Plus:
Stock-based compensation (b)

 

23,441

 

 

458

 

 

41,177

 

 

826

 

Amortization of intangibles (c)

 

121,161

 

 

22,176

 

 

242,321

 

 

50,985

 

Acquisition and integration planning related fees

 

1,411

 

 

 

 

6,269

 

 

54

 

Unrealized (gain) loss on foreign currency forward contract

 

(34,940

)

 

 

 

15,319

 

 

 

Less:
Income tax effect on Non-GAAP items (d)

 

(22,075

)

 

(5,145

)

 

(62,591

)

 

(12,033

)

 
Non-GAAP net income

$

22,801

 

$

16,729

 

$

165,054

 

$

27,870

 

 
Diluted loss per share
GAAP diluted (loss) per share

$

(1.02

)

$

(0.02

)

$

(1.20

)

$

(0.33

)

Plus:
Stock-based compensation (b)

 

0.36

 

 

0.01

 

 

0.64

 

$

0.02

 

Amortization of intangibles (c)

 

1.87

 

 

0.61

 

 

3.75

 

$

1.41

 

Acquisition and integration planning related fees

 

0.02

 

 

 

 

0.10

 

$

 

Unrealized loss on foreign currency forward contract

 

(0.54

)

 

 

 

0.24

 

$

 

Less:
Income tax effect on Non-GAAP items (d)

 

(0.34

)

 

(0.14

)

 

(0.97

)

$

(0.33

)

 
Non-GAAP diluted income per share

$

0.35

 

$

0.46

 

$

2.56

 

$

0.77

 

 
Shares used in computing Non-GAAP diluted income per share

 

64,621

 

 

36,308

 

 

64,538

 

 

36,308

 

 
 

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

Free Cash Flow
Net cash provided by operating activities (GAAP)

$

49,534

 

$

(14,798

)

$

54,612

 

$

(23,984

)

Purchases of property, equipment and leasehold improvements

 

(1,523

)

 

(786

)

 

(2,844

)

 

(3,393

)

Payments for capitalized computer software development costs

 

(230

)

 

 

 

(329

)

 

 

Acquisition and integration planning related payments

 

5,321

 

 

 

 

12,380

 

 

54

 

Free cash flow (non-GAAP)

$

53,102

 

$

(15,584

)

$

63,819

 

$

(27,323

)

 
(a) GAAP total expenses

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

Total costs of revenue

$

93,098

 

$

41,577

 

$

184,228

 

$

85,097

 

Total operating expenses

 

209,135

 

 

40,452

 

 

420,006

 

 

87,831

 

GAAP total expenses

$

302,233

 

$

82,029

 

$

604,234

 

$

172,928

 

 
(b) Stock-based compensation expense was as follows:

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

Cost of license and solutions

$

1,200

 

$

 

$

1,919

 

$

 

Cost of maintenance

 

474

 

 

 

 

1,035

 

 

 

Cost of services and other

 

428

 

 

 

 

858

 

 

 

Selling and marketing

 

3,826

 

 

 

 

7,191

 

 

 

Research and development

 

4,240

 

 

 

 

7,858

 

 

 

General and administrative

 

13,273

 

 

458

 

 

22,316

 

 

826

 

Total stock-based compensation

$

23,441

 

$

458

 

$

41,177

 

$

826

 

 
(c) Amortization of intangible assets was as follows:

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

Cost of license and solutions

$

47,671

 

$

13,193

 

$

95,342

 

$

26,385

 

Selling and marketing

 

73,490

 

 

8,983

 

 

146,979

 

 

24,600

 

Total amortization of intangible assets

$

121,161

 

$

22,176

 

$

242,321

 

$

50,985

 

 
 
 
(d) The income tax effect on non-GAAP items for the three and six months ended December 31, 2022 and 2021, respectively, is calculated utilizing the Company's combined US federal and state statutory tax rate as following:

Three Months Ended

December 31,

 

Six Months Ended

December 31,

2022

 

2021

 

2022

 

2021

U.S. statutory rate

 

21.79

%

 

22.73

%

 

21.79

%

 

23.20

%

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of Forward-Looking Guidance Range

(Unaudited in Thousands, Except per Share Data)

 

Twelve Months Ended June 30, 2023 (a)

Range

Low

 

High

Guidance - Total expenses
GAAP expectation - total expenses

$

1,207,000

 

$

1,217,000

 

Less:
Stock-based compensation

 

(77,000

)

 

(77,000

)

Amortization of intangible assets

 

(486,500

)

 

(486,500

)

Acquisition and integration planning related fees

 

(6,500

)

 

(6,500

)

 
Non-GAAP expectation - total expenses

$

637,000

 

$

647,000

 

 
Guidance - Income from operations
GAAP expectation - (loss) from operations

$

(67,000

)

$

(15,000

)

Plus:
Stock-based compensation

 

77,000

 

 

77,000

 

Amortization of intangible assets

 

486,500

 

 

486,500

 

Acquisition and integration planning related fees

 

6,500

 

 

6,500

 

 
Non-GAAP expectation - income from operations

$

503,000

 

$

555,000

 

 
Guidance - Net income and diluted income per share
GAAP expectation - net (loss) and diluted (loss) per share

$

(7,500

)

$

(0.11

)

$

32,500

 

$

0.49

Plus:
Stock-based compensation

 

77,000

 

 

77,000

 

Amortization of intangible assets

 

486,500

 

 

486,500

 

Acquisition and integration planning related fees

 

6,500

 

 

6,500

 

Unrealized loss on foreign currency forward contract

 

15,500

 

 

15,500

 

Less:
Income tax effect on Non-GAAP items (b)

 

(127,500

)

 

(127,500

)

 
Non-GAAP expectation - net income and diluted income per share

$

450,500

 

$

6.83

 

$

490,500

 

$

7.43

 
Shares used in computing guidance for Non-GAAP diluted income per share

 

66,000

 

 

66,000

 

 
Guidance - Free Cash Flow
GAAP expectation - Net cash provided by operating activities

$

351,000

 

$

366,000

 

Less:
Purchases of property, equipment and leasehold improvements

 

(1,000

)

 

(1,000

)

Payments for capitalized computer software development costs

 

(9,500

)

 

(9,500

)

Plus:
Acquisition and integration planning related fees

 

6,500

 

 

6,500

 

 
Free cash flow expectation (non-GAAP)

$

347,000

 

$

362,000

 

 
(a) Rounded amount used, except per share data.
(b) The income tax effect on non-GAAP items for the twelve months ended June 30, 2023 is calculated utilizing the Company's statutory tax rate of 21.79 percent.

 

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
brian.denyeau@icrinc.com

Source: Aspen Technology, Inc.