Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization
software company, today announced financial results for its fourth
quarter and fiscal year ended June 30, 2017.
“AspenTech reported fourth quarter and fiscal year 2017
financial results that exceeded expectations and were highlighted
by a positive performance across all geographies and product
suites,” said Antonio Pietri, President and Chief Executive Officer
of AspenTech. “During the fourth quarter we made significant
strides in bringing continued innovation to market. We successfully
launched aspenONE v10, which will deliver increased value to our
customers through enhanced functionality and capabilities. In
addition, we saw positive momentum with our APM suite as we closed
several transactions and continued to generate strong customer
interest.”
Pietri added, “We believe AspenTech enters fiscal year 2018 with
a strong and expanded product portfolio and a substantial growth
opportunity, which positions us to execute successfully against our
strategic objectives and continue to deliver significant long-term
value to our shareholders.”
Fourth Quarter and Fiscal Year 2017 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 $460 million at the end of
fiscal 2017, an increase of 1.8% from March 31, 2017 and 4.1% from
the end of fiscal 2016.
- GAAP operating margin was 39.6% in the
fourth quarter of fiscal 2017, compared to 43.1% in the fourth
quarter of fiscal 2016. Non-GAAP operating margin was 46.1% in the
fourth quarter of fiscal 2017, compared to 46.1% in the fourth
quarter of fiscal 2016.
- GAAP operating margin was 43.9% for
fiscal year 2017, compared to 44.8% for fiscal year 2016. Non-GAAP
operating margin was 48.8% for fiscal year 2017, compared to 49.3%
for fiscal year 2016.
- AspenTech repurchased approximately 1.3
million shares of our common stock for $75.0 million in the fourth
quarter of fiscal 2017.
- AspenTech repurchased approximately 7.3
million shares of common stock for $375.0 million in fiscal year
2017.
Summary of Fourth Quarter Fiscal Year 2017 Financial
Results
AspenTech’s total revenue of $123.7 million increased 8.8% from
$113.7 million in the fourth quarter of the prior fiscal year.
- Subscription and software
revenue was $115.4 million in the fourth quarter of fiscal
2017, an increase from $106.7 million in the fourth quarter of
fiscal 2016.
- Services and other revenue was
$8.2 million in the fourth quarter of fiscal 2017, an increase from
$7.0 million in the fourth quarter of fiscal 2016.
For the quarter ended June 30, 2017, AspenTech reported income
from operations of $48.9 million, compared to income from
operations of $49.0 million for the quarter ended June 30,
2016.
Net income was $54.4 million for the quarter ended June 30,
2017, leading to net income per share of $0.73, compared to net
income per share of $0.41 in the same period last fiscal year.
Non-GAAP income from operations, which adds back stock-based
compensation expense, amortization of intangibles associated with
acquisitions, acquisition-related costs and non-capitalized
acquired technology, was $57.0 million for the fourth quarter of
fiscal 2017, compared to non-GAAP income from operations of $52.4
million in the same period last fiscal year. Non-GAAP net income
was $59.1 million, or $0.79 per share, for the fourth quarter of
fiscal 2017, compared to non-GAAP net income of $35.5 million, or
$0.44 per share, in the same period last fiscal year.
During the quarter ended June 30, 2017, the company realized a
$19 million tax benefit primarily resulting from the release of
contingent tax reserves. The tax benefit resulted in a $0.26 per
share benefit for both GAAP and non-GAAP net income per share in
the quarter ended June 30, 2017.
AspenTech had cash and marketable securities of $102.0 million
at June 30, 2017, compared to $101.7 million at the end of the
prior quarter.
During the fourth quarter, the company generated $73.3 million
in cash flow from operations and $76.8 million in free cash
flow.
Summary of Fiscal Year 2017 Financial Results
AspenTech’s total revenue of $482.9 million increased 2.2% from
$472.3 million for fiscal year 2016.
- Subscription and software
revenue was $453.5 million, an increase from $440.4 million for
fiscal year 2016.
- Services and other revenue was
$29.4 million, compared to $31.9 million for fiscal year 2016.
For the fiscal year ended June 30, 2017, AspenTech reported
income from operations of $212.0 million, an improvement from
income from operations of $211.4 million for fiscal year 2016.
Net income was $162.2 million for the fiscal year ended June 30,
2017, leading to net income per share of $2.11, compared to net
income per share of $1.68 for fiscal year 2016.
Non-GAAP income from operations was $235.8 million for fiscal
year 2017, an improvement compared to non-GAAP income from
operations of $232.7 million for fiscal year 2016. Non-GAAP net
income was $177.4 million, or $2.30 per share, for fiscal year
2017, an improvement compared to non-GAAP net income of $155.8
million, or $1.87 per share, for fiscal year 2016.
For the fiscal year ended June 30, 2017, the company generated
$182.4 million in cash flow from operations and $187.2 million in
free cash flow.
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 today, August
10, 2017, at 4:30 p.m. (Eastern Time), to discuss the company's
financial results for the fourth quarter and fiscal year 2017 as
well as the company’s business outlook.
The live dial-in number is (866) 604-6127 or (443) 961-0460,
conference ID code 60952917. Interested parties may also listen to
a live webcast of the call by logging on to the Investor Relations
section of AspenTech’s website,
http://www.aspentech.com/corporate/investor.cfm, 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
(855) 859-2056 or (404) 537-3406, conference ID code 60952917,
through September 10, 2017.
About AspenTech
AspenTech is a leading software supplier for optimizing asset
performance. Our products thrive in complex, industrial
environments where it is critical to optimize the asset design,
operation and maintenance lifecycle. AspenTech uniquely combines
decades of process modeling expertise with big data
machine-learning. Our purpose-built software platform automates
knowledge work and builds sustainable competitive advantage by
delivering high returns over the entire asset lifecycle. As a
result, companies in capital-intensive industries can maximize
uptime and push the limits of performance, running their assets
faster, safer, longer and greener. Visit AspenTech.com to find
out more.
Forward-Looking Statements
The second and third paragraphs of this press release 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 AspenTech’s 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
capital-intensive process industries; unfavorable economic and
market conditions or a lessening demand in the market for asset
process optimization software; 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 obligation to update
forward-looking statements after the date of this press
release.
© 2017 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen
leaf logo, Aspen Basic Engineering, Aspen Fidelis Reliability,
Aspen Mtell, Aspen Unified PIMS and OPTIMIZE are trademarks of
Aspen Technology, Inc. All rights reserved. All other trademarks
are property of their respective owners.
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited in thousands, except per share data)
Three Months EndedJune
30,
Twelve Months EndedJune 30, 2017
2016 2017 2016 Revenue:
Subscription and software $ 115,435 $ 106,701 $ 453,512 $ 440,408
Services and other 8,247 6,979 29,430 31,936
Total revenue 123,682 113,680 482,942
472,344
Cost of revenue: Subscription and software
5,285 4,901 21,051 20,376 Services and other 6,829 6,830
26,415 28,235 Total cost of revenue 12,114
11,731 47,466 48,611 Gross profit
111,568 101,949 435,476 423,733
Operating expenses: Selling and marketing 26,510 24,832
92,633 91,536 Research and development 21,953 16,754 79,530 67,152
General and administrative 14,157 11,391 51,297
53,664 Total operating expenses 62,620 52,977
223,460 212,352 Income from operations 48,948
48,972 212,016 211,381 Interest income 143 198 808 441 Interest
(expense) (1,066 ) (868 ) (3,787 ) (1,212 ) Other income (expense),
net 21 1,976 1,309 29 Income before
provision for income taxes 48,047 50,278 210,346 210,639 Provision
for income taxes (6,305 ) 16,952 48,150 70,688
Net income $ 54,352 $ 33,326 $ 162,196 $
139,951
Net income per common share: Basic $ 0.73 $
0.41 $ 2.12 $ 1.69 Diluted $ 0.73 $ 0.41 $ 2.11 $ 1.68
Weighted
average shares outstanding: Basic 74,294 81,282 76,491 82,892
Diluted 74,830 81,599 76,978 83,309
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited in
thousands, except share data)
June 30, 2017
June 30, 2016 ASSETS Current assets: Cash and
cash equivalents $ 101,954 $ 318,336 Short-term marketable
securities — 3,006 Accounts receivable, net 27,670 20,476 Prepaid
expenses and other current assets 12,061 13,948 Prepaid income
taxes 4,501 5,557 Total current assets 146,186
361,323 Property, equipment and leasehold improvements, net 13,400
15,825 Computer software development costs, net 667 720 Goodwill
51,248 23,438 Intangible assets, net 20,789 5,000 Non-current
deferred tax assets 14,352 12,236 Other non-current assets 1,300
1,196 Total assets $ 247,942 $ 419,738
LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities:
Accounts payable $ 5,467 $ 3,559 Accrued expenses and other current
liabilities 48,149 36,105 Income taxes payable 1,603 439 Borrowings
under credit agreement 140,000 140,000 Current deferred revenue
272,024 252,520 Total current liabilities 467,243
432,623 Non-current deferred revenue 28,335 29,558 Other
non-current liabilities 13,148 32,591 Commitments and contingencies
(Note 16) Series D redeemable convertible preferred stock, $0.10
par value—Authorized—3,636 shares as of June 30, 2017 and
2016Issued and outstanding—none as of June 30, 2017 and 2016 — —
Stockholders' deficit: Common stock, $0.10 par
value—Authorized—210,000,000 sharesIssued—102,567,129 shares at
June 30, 2017 and 102,031,960 shares at June 30,
2016Outstanding—73,421,153 shares at June 30, 2017 and 80,177,950
shares at June 30, 2016 10,257 10,203 Additional paid-in capital
687,479 659,287 Retained earnings (deficit) 156,520 (5,676 )
Accumulated other comprehensive income 1,459 2,651 Treasury stock,
at cost—29,145,976 shares of common stock at June 30, 2017 and
21,854,010 shares at June 30, 2016 (1,116,499 ) (741,499 ) Total
stockholders' deficit (260,784 ) (75,034 ) Total liabilities and
stockholders' deficit $ 247,942 $ 419,738
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited in thousands)
Three Months EndedJune
30,
Twelve Months EndedJune 30, 2017
2016 2017 2016 Operating
activities: Net income $
54,352
$ 33,326 $ 162,196 $ 139,951 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 1,412 1,542 6,405 6,061 Net foreign currency losses
(gains) 984 (5,087 ) (1,036 ) (3,666 ) Stock-based compensation
expense 4,493 3,414 18,800 15,727 Deferred income taxes (5,455 )
1,804 (4,286 ) 2,499 Provision for (recovery from) bad debts (26 )
86 199 260 Tax benefits from stock-based compensation 3,621 330
5,965 2,208 Excess tax benefits from stock-based compensation
(3,621 ) (330 ) (5,965 ) (2,208 ) Other non-cash operating
activities 172 64 602 321
Changes in assets and liabilities,
excluding initial effects of acquisitions: Accounts receivable
7,464 869 (7,480 ) 9,382 Prepaid expenses, prepaid income taxes,
and other assets (6,069 ) (9,552 ) (2,421 ) (6,106 ) Accounts
payable, accrued expenses, income taxes payable and other
liabilities
(16,018
) 1,094
(9,070
) (4,489 ) Deferred revenue 32,039 17,289 18,477
(6,196 ) Net cash provided by operating activities
73,348
44,849
182,386
153,744
Investing activities: Purchases of
marketable securities — — (683,748 ) — Maturities of marketable
securities 17,130 6,008 686,346 58,973 Purchase of property,
equipment and leasehold improvements (569 ) (953 ) (2,720 ) (3,483
) Acquisition related deposits — 255,067 — — Payments for business
acquisitions, net of cash acquired — (8,000 ) (36,171 ) (8,000 )
Payments for capitalized computer software costs (279 ) (269 ) (405
) (269 ) Net cash provided by (used in) investing activities 16,282
251,853 (36,698 ) 47,221
Financing
activities: Exercise of stock options 1,381 1,062 9,273 3,924
Repurchases of common stock
(75,849
) (75,476 )
(371,491
) (178,604 ) Payment of tax withholding obligations related to
restricted stock (1,418 ) (1,076 ) (5,764 ) (4,480 ) Excess tax
benefits from stock-based compensation 3,621 330 5,965 2,208
Proceeds from credit agreement — — — 140,000 Payments of credit
agreement issuance costs — (120 ) — (1,707 ) Net cash
used in financing activities
(72,265
) (75,280 )
(362,017
) (38,659 ) Effect of exchange rate changes on cash and cash
equivalents 37 4 (53 ) (219 ) Increase (decrease) in
cash and cash equivalents 17,402 221,426 (216,382 ) 162,087 Cash
and cash equivalents, beginning of year 84,552 96,910
318,336 156,249
Cash and cash equivalents, end of
year $ 101,954 $ 318,336 $ 101,954 $
318,336 Supplemental disclosure of cash flow
information: Income tax paid, net $ 23,794 $ 17,416 $ 65,536 $
69,028 Interest paid 945 619 3,444 963
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of
Operations and Cash Flows(Unaudited in thousands, except per
share data)
Three Months EndedJune
30, Twelve Months EndedJune 30, 2017
2016 2017 2016
Total
expenses
GAAP total expenses (a) $ 74,734 $ 64,708 $ 270,926 $ 260,963 Less:
Stock-based compensation (b) (4,493 ) (3,414 ) (18,800 ) (15,727 )
Non-capitalized acquired technology (e) (1,900 ) — (2,250 ) (250 )
Amortization of intangibles (434 ) — (950 ) (147 ) Acquisition
related fees (1,261 ) — (1,754 ) (5,213 )
Non-GAAP total expenses $ 66,646
$ 61,294 $ 247,172
$ 239,626
Income from
operations
GAAP income from operations $ 48,948 $ 48,972 $ 212,016 $ 211,381
Plus: Stock-based compensation (b) 4,493 3,414 18,800 15,727
Non-capitalized acquired technology (e) 1,900 — 2,250 250
Amortization of intangibles 434 — 950 147 Acquisition related fees
1,261 — 1,754 5,213
Non-GAAP income
from operations $ 57,036 $
52,386 $ 235,770 $
232,718
Net
income
GAAP net income $ 54,352 $ 33,326 $ 162,196 $ 139,951 Plus:
Stock-based compensation (b) 4,493 3,414 18,800 15,727
Non-capitalized acquired technology (e) 1,900 — 2,250 250
Amortization of intangibles 434 — 950 147 Acquisition related fees
1,261 — 1,754 8,649 Less: Income tax effect on Non-GAAP items (c)
(3,303 ) (1,229 ) (8,551 ) (8,918 )
Non-GAAP net income $ 59,137 $
35,511 $ 177,399 $
155,806
Diluted income
per share
GAAP diluted income per share $ 0.73 $ 0.41 $ 2.11 $ 1.68 Plus:
Stock-based compensation (b) 0.05 0.05 0.24 0.19 Non-capitalized
acquired technology (e) 0.03 — 0.03 0.01 Amortization of
intangibles 0.01 — 0.01 — Acquisition related fees 0.01 — 0.02 0.10
Less: Income tax effect on Non-GAAP items (c) (0.04 ) (0.02 ) (0.11
) (0.11 )
Non-GAAP diluted income per
share $ 0.79 $ 0.44
$ 2.30 $ 1.87
Shares used in computing Non-GAAP diluted income per share 74,830
81,599 76,978 83,309
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of
Operations and Cash Flows(Unaudited in thousands, except per
share data)
Three Months EndedJune 30, Twelve Months
EndedJune 30, 2017 2016 2017
2016
Free Cash
Flow
GAAP cash flow from operating activities $
73,348
$ 44,849 $
182,386
$ 153,744 Purchase of property, equipment and leasehold
improvements (569 ) (953 ) (2,720 ) (3,483 ) Capitalized computer
software development costs (279 ) (269 ) (405 ) (269 )
Non-capitalized acquired technology (e) 1,400 — 2,246 1,250 Excess
tax benefits from stock-based compensation (d) 3,621 330 5,965
2,208 Acquisition related fee payments — 2,581 448 8,649 Litigation
related (receipts) payments (721 ) 960
(721 ) 3,040 Free Cash
Flow $
76,800
$ 47,498 $
187,199
$ 165,139 (a) GAAP total
expenses
Three Months EndedJune 30, Twelve Months
EndedJune 30, 2017 2016 2017
2016 Total costs of revenue $ 12,114 $ 11,731 $ 47,466 $
48,611 Total operating expenses 62,620 52,977 223,460
212,352 GAAP total expenses $ 74,734 $ 64,708
$ 270,926 $ 260,963 (b) Stock-based
compensation expense was as follows:
Three Months
EndedJune 30, Twelve Months EndedJune 30,
2017 2016 2017 2016 Cost of services
and other $ 371 $ 341 $ 1,477 $ 1,390 Selling and marketing 715 804
3,652 4,351 Research and development 1,629 880 5,806 3,423 General
and administrative 1,778 1,389 7,865 6,563
Total stock-based compensation $ 4,493 $ 3,414
$ 18,800 $ 15,727
(c) The income tax effect on non-GAAP items for the three and
twelve months ended June 30, 2017 and 2016 is calculated utilizing
the Company's estimated federal and state tax rate.
(d) Excess tax benefits are related to stock-based compensation
tax deductions in excess of book compensation expense and reduce
our income taxes payable. We have included the impact of excess tax
benefits in free cash flow to be consistent with the treatment of
other tax activity.
(e) In the twelve months ended June 30, 2017 and March 31, 2016,
we acquired technology that did not meet the accounting
requirements for capitalization and therefore the cost of the
acquired technology was expensed as research and development. We
have excluded the expense of the acquired technology from non-GAAP
operating income to be consistent with transactions where the
acquired assets were capitalized. In the twelve months ended June
30, 2017 and 2016, we have excluded payments of $2.3 million and
$1.3 million, respectively, for the non-capitalized acquired
technology (including $0.5 million and $1 million, respectively 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: http://www.businesswire.com/news/home/20170810006071/en/
Media ContactAspenTechDavid Grip, +1
781-221-5273david.grip@aspentech.comorInvestor
ContactICRBrian Denyeau, +1
646-277-1251brian.denyeau@icrinc.com
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