Aspen Technology, Inc. (NASDAQ: AZPN), a global leader in asset
optimization software, today announced financial results for its
third quarter of fiscal year 2021 ended March 31, 2021.
“AspenTech’s third quarter performance was highlighted by strong
free cash flow generation and demand activity in each of our core
end-markets that was at or above pre-pandemic levels,” said Antonio
Pietri, President and Chief Executive Officer of Aspen Technology.
“At the same time, the continued uncertainty in the global macro
environment due to COVID, coupled with the significant and costly
disruptions in the energy and chemicals markets related to the
winter storm in the US during the quarter, made it more challenging
to close transactions than we expected.”
Pietri continued, “Our high levels of engagement with customers
regarding AspenTech’s critical role in their long-term
digitalization and sustainability initiatives give us confidence
that we will drive faster growth as market conditions
normalize.”
Third Quarter Fiscal Year 2021 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 $609.9 million at the end of the third quarter of
fiscal 2021, which increased 6.0% compared to the third quarter of
fiscal 2020 and 1.0% sequentially.
Summary of Third Quarter Fiscal Year 2021 Financial
Results
AspenTech’s total revenue of $162.7 million included:
- License revenue, which represents the portion of a term
license agreement allocated to the initial license, was $110.1
million in the third quarter of fiscal 2021, compared to $78.2
million in the third quarter of fiscal 2020.
- Maintenance revenue, which represents the portion of the
term license agreement related to on-going support and the right to
future product enhancements, was $45.9 million in the third quarter
of fiscal 2021, compared to $44.2 million in the third quarter of
fiscal 2020.
- Services and other revenue was $6.7 million in the third
quarter of fiscal 2021, compared to $8.2 million in the third
quarter of fiscal 2020.
For the quarter ended March 31, 2021, AspenTech reported income
from operations of $68.9 million, compared to income from
operations of $44.7 million for the quarter ended March 31,
2020.
Net income was $62.5 million for the quarter ended March 31,
2021, leading to net income per share of $0.91, compared to net
income per share of $0.61 in the same period last fiscal year.
Non-GAAP income from operations, was $80.9 million for the third
quarter of fiscal 2021, compared to non-GAAP income from operations
of $53.9 million in the same period last fiscal year. Non-GAAP net
income was $72.0 million, or $1.05 per share, for the third quarter
of fiscal 2021, compared to non-GAAP net income of $49.1 million,
or $0.72 per share, in the same period last fiscal year. These
non-GAAP results add back the impact of stock-based compensation
expense, amortization of intangibles and acquisition-related fees.
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 $317.1 million and
total borrowings, net of debt issuance costs, of $297.0 million at
March 31, 2021.
During the third quarter, the company generated $98.7 million in
cash flow from operations and $100.0 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 acquisition-related payments.
Business Outlook
Based on information as of today, April 28, 2021, Aspen
Technology is issuing the following guidance for fiscal year
2021:
- Annual spend growth of 4-5.5% year-over-year
- Free cash flow of $265 to $275 million
- Total bookings of $771 to $809 million
- Total revenue of $705 to $729 million
- GAAP total expense of $355 to $360 million
- Non-GAAP total expense of $310 to $315 million
- GAAP operating income of $350 to $369 million
- Non-GAAP operating income of $395 to $415 million
- GAAP net income of $306 to $321 million
- Non-GAAP net income of $341 to $357 million
- GAAP net income per share of $4.46 to $4.70
- Non-GAAP net income per share of $4.98 to $5.22
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
forward-looking non-GAAP total expense, non-GAAP operating income,
non-GAAP net 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 total expense,
non-GAAP operating income, non-GAAP net 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 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 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
Aspen Technology will host a conference call and webcast today,
April 28, 2021, at 4:30 p.m. (Eastern Time), to discuss the
company's financial results for the second-quarter of fiscal year
2021 as well as the company’s business outlook. The live dial-in
number is (866) 471-3828 or (678) 509-7573, conference ID code
6459234. Interested parties may also listen to a live webcast of
the call by logging on to the Investor Relations section of Aspen
Technology’s website,
http://ir.aspentech.com/events-and-presentations, and clicking on
the “webcast” link. A replay of the call will be archived on Aspen
Technology’s website and will also be available via telephone at
(855) 859-2056 or (404) 537-3406, conference ID code 6459234,
through May 5, 2021.
About Aspen Technology
Aspen Technology (AspenTech) is a global leader in asset
optimization software. Its solutions address complex, industrial
environments where it is critical to optimize the asset design,
operation and maintenance lifecycle. AspenTech uniquely combines
decades of process modelling expertise with artificial
intelligence. Its 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
safer, greener, longer and faster. Visit AspenTech.com to find out
more.
Forward-Looking Statements
The third paragraph 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 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 offerings or grow the aspenONE APM business,
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 due to the
drop in demand for oil due to the COVID-19 pandemic, compounded by
the excess supply arising from producers’ failure to agree on
production cuts; unfavorable economic and market conditions or a
lessening demand in the market for asset process optimization
software, including due to the significant drop in oil prices
arising from drop in demand due to the COVID-19 pandemic and
producers’ failure to agree on production cuts; risks of foreign
operations or transacting business with customers outside the
United States; risks of competition 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.
© 2021 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 STATEMENTS OF
OPERATIONS
(Unaudited in Thousands, Except
per Share Data)
Three Months Ended March
31,
Nine Months Ended March
31,
2021
2020
2021
2020
(Dollars in Thousands, Except
per Share Data)
Revenue:
License
$
110,104
$
78,156
$
352,133
$
238,311
Maintenance
45,885
44,199
139,561
132,418
Services and other
6,737
8,233
19,721
26,048
Total revenue
162,726
130,588
511,415
396,777
Cost of revenue:
License
2,485
1,881
6,859
5,550
Maintenance
5,174
4,778
14,066
14,339
Services and other
8,396
9,046
24,911
26,560
Total cost of revenue
16,055
15,705
45,836
46,449
Gross profit
146,671
114,883
465,579
350,328
Operating expenses:
Selling and marketing
30,345
28,354
82,092
86,046
Research and development
25,874
23,576
70,576
68,694
General and administrative
21,553
18,219
60,389
54,525
Total operating expenses
77,772
70,149
213,057
209,265
Income from operations
68,899
44,734
252,522
141,063
Interest income
8,410
8,173
26,383
24,577
Interest (expense)
(1,495)
(3,207)
(5,639)
(9,368)
Other (expense), net
(5)
(352)
(1,807)
(217)
Income before income taxes
75,809
49,348
271,459
156,055
Provision for income taxes
13,314
7,522
47,101
20,914
Net income
$
62,495
$
41,826
$
224,358
$
135,141
Net income per common share:
Basic
$
0.92
$
0.62
$
3.31
$
1.98
Diluted
$
0.91
$
0.61
$
3.28
$
1.96
Weighted average shares
outstanding:
Basic
67,920
67,806
67,809
68,122
Diluted
68,608
68,482
68,439
68,906
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Unaudited in Thousands, Except
Share and Per Share Data)
March 31, 2021
June 30, 2020
(Dollars in Thousands, Except
Share Data)
ASSETS
Current assets:
Cash and cash equivalents
$
317,099
$
287,796
Accounts receivable, net
49,034
56,301
Current contract assets, net
298,835
291,497
Prepaid expenses and other current
assets
9,762
10,884
Prepaid income taxes
12,008
3,962
Total current assets
686,738
650,440
Property, equipment and leasehold
improvements, net
5,506
5,963
Computer software development costs,
net
1,255
928
Goodwill
158,182
137,055
Intangible assets, net
45,996
42,851
Non-current contract assets, net
409,010
318,976
Contract costs
28,419
28,614
Operating lease right-of-use assets
31,589
34,905
Deferred tax assets
2,924
1,735
Other non-current assets
3,042
1,839
Total assets
$
1,372,661
$
1,223,306
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
3,563
$
3,988
Accrued expenses and other current
liabilities
43,063
43,556
Current operating lease liabilities
7,214
6,824
Income taxes payable
76
1,799
Current borrowings
18,000
135,163
Current deferred revenue
54,730
43,168
Total current liabilities
126,646
234,498
Non-current deferred revenue
11,535
13,913
Deferred tax liabilities
188,896
179,978
Non-current operating lease
liabilities
28,894
33,088
Non-current borrowings, net
278,960
292,369
Other non-current liabilities
4,842
3,107
Commitments and contingencies (Note
17)
Series D redeemable convertible preferred
stock, $0.10 par value—
Authorized— 367,000 shares as of March 31,
2021 and June 30, 2020
Issued and outstanding— none as of March
31, 2021 and June 30, 2020
—
—
Stockholders’ equity:
Common stock, $0.10 par value—
Authorized—210,000,000 shares
Issued— 104,283,957 shares at March 31,
2021 and 103,988,707 shares at June 30, 2020
Outstanding— 68,013,942 shares at March
31, 2021 and 67,718,692 shares at June 30, 2020
10,429
10,399
Additional paid-in capital
799,743
769,411
Retained earnings
1,682,688
1,458,330
Accumulated other comprehensive income
(loss)
6,527
(5,288)
Treasury stock, at cost—36,270,015 shares
of common stock at March 31, 2021 and 36,270,015 shares at June 30,
2020
(1,766,499)
(1,766,499)
Total stockholders’ equity
732,888
466,353
Total liabilities and stockholders’
equity
$
1,372,661
$
1,223,306
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited in Thousands)
Three Months Ended March
31,
Nine Months Ended March
31,
2021
2020
2021
2020
(Dollars in Thousands)
Cash flows from operating
activities:
Net income
$
62,495
$
41,826
$
224,358
$
135,141
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,688
2,549
7,545
7,028
Reduction in the carrying amount of
right-of-use assets
2,258
3,267
7,037
6,518
Net foreign currency losses (gains)
(27)
345
2,027
183
Stock-based compensation
9,225
7,299
24,589
24,133
Deferred income taxes
6,817
(116)
7,029
(1,516)
Provision for bad debts
2,064
2,127
6,800
3,391
Other non-cash operating activities
311
208
718
423
Changes in assets and
liabilities:
Accounts receivable
(4,257)
(11,889)
4,115
(16,428)
Contract assets, net
19,835
32,216
(103,538)
2,329
Contract costs
(123)
(692)
198
(1,522)
Lease liabilities
(2,298)
(3,444)
(7,533)
(6,840)
Prepaid expenses, prepaid income taxes,
and other assets
(7,001)
(433)
(6,959)
(2,201)
Accounts payable, accrued expenses, income
taxes payable and other liabilities
216
2,353
(6,847)
(20,752)
Deferred revenue
6,456
5,765
13,410
13,701
Net cash provided by operating
activities
98,659
81,381
172,949
143,588
Cash flows from investing
activities:
Purchases of property, equipment and
leasehold improvements
(211)
(143)
(733)
(1,111)
Payments for business acquisitions, net of
cash acquired
(329)
(241)
(16,272)
(74,460)
Payments for equity method investments
(760)
(319)
(926)
(319)
Payments for capitalized computer software
development costs
—
(71)
(895)
(141)
Net cash used in investing activities
(1,300)
(774)
(18,826)
(76,031)
Cash flows from financing
activities:
Issuance of shares of common stock
9,394
2,650
12,508
5,364
Repurchases of common stock
—
(49,757)
—
(150,621)
Payments of tax withholding obligations
related to restricted stock
(2,612)
(2,395)
(6,719)
(8,246)
Deferred business acquisition payments
—
(4,600)
—
(4,600)
Proceeds from revolving credit facility,
net of repayments
—
90,000
(119,182)
219,163
Repayments of amounts borrowed under term
loan
(4,000)
(4,000)
(12,000)
(4,000)
Payments of debt issuance costs
—
(79)
—
(3,533)
Net cash provided by (used in) financing
activities
2,782
31,819
(125,393)
53,527
Effect of exchange rate changes on cash
and cash equivalents
(531)
(740)
573
(838)
Increase in cash and cash equivalents
99,610
111,686
29,303
120,246
Cash and cash equivalents, beginning of
period
217,489
80,486
287,796
71,926
Cash and cash equivalents, end of
period
$
317,099
$
192,172
$
317,099
$
192,172
Supplemental disclosure of cash flow
information:
Income taxes paid, net
$
18,681
$
6,611
$
49,349
$
26,359
Interest paid
1,455
3,054
5,672
8,246
Supplemental disclosure of non-cash
activities:
Change in purchases of property, equipment
and leasehold improvements included in accounts payable and accrued
expenses
$
20
$
7
$
77
$
(89)
Change in repurchases of common stock
included in accounts payable and accrued expenses
—
243
—
(621)
Lease liabilities arising from obtaining
right-of-use assets
197
6,802
1,488
11,626
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 March
31,
Nine Months Ended March
31,
2021
2020
2021
2020
Total
expenses
GAAP total expenses (a)
$
93,827
$
85,854
$
258,893
$
255,714
Less:
Stock-based compensation (b)
(9,225)
(7,299)
(24,589)
(24,133)
Amortization of intangibles
(2,047)
(1,864)
(5,657)
(4,741)
Acquisition related fees
(749)
—
(3,133)
(78)
Non-GAAP total expenses
$
81,806
$
76,691
$
225,514
$
226,762
Income from
operations
GAAP income from operations
$
68,899
$
44,734
$
252,522
$
141,063
Plus:
Stock-based compensation (b)
9,225
7,299
24,589
24,133
Amortization of intangibles
2,047
1,864
5,657
4,741
Acquisition related fees
749
—
3,133
78
Non-GAAP income from operations
$
80,920
$
53,897
$
285,901
$
170,015
Net
income
GAAP net income
$
62,495
$
41,826
$
224,358
$
135,141
Plus:
Stock-based compensation (b)
9,225
7,299
24,589
24,133
Amortization of intangibles
2,047
1,864
5,657
4,741
Acquisition related fees
749
—
3,133
78
Less:
Income tax effect on Non-GAAP items
(c)
(2,524)
(1,924)
(7,010)
(6,080)
Non-GAAP net income
$
71,992
$
49,065
$
250,727
$
158,013
Diluted income
per share
GAAP diluted income per share
$
0.91
$
0.61
$
3.28
$
1.96
Plus:
Stock-based compensation (b)
0.14
0.11
0.35
0.35
Amortization of intangibles
0.03
0.03
0.08
0.07
Acquisition related fees
0.01
—
0.05
—
Less:
Income tax effect on Non-GAAP items
(c)
(0.04)
(0.03)
(0.10)
(0.09)
Non-GAAP diluted income per share
$
1.05
$
0.72
$
3.66
$
2.29
Shares used in computing Non-GAAP diluted
income per share
68,608
68,482
68,439
68,906
Three Months Ended March
31,
Nine Months Ended March
31,
2021
2020
2021
2020
Free Cash
Flow
Net cash provided by operating activities
(GAAP)
$
98,659
$
81,381
$
172,949
$
143,588
Purchases of property, equipment and
leasehold improvements
(211)
(143)
(733)
(1,111)
Payments for capitalized computer software
development costs
—
(71)
(895)
(141)
Acquisition related payments
1,526
—
2,433
1,264
Free cash flow (non-GAAP)
$
99,974
$
81,167
$
173,754
$
143,600
(a) GAAP total expenses
Three Months Ended
March 31,
Nine Months Ended
March 31,
2021
2020
2021
2020
Total costs of revenue
$
16,055
$
15,705
$
45,836
$
46,449
Total operating expenses
77,772
70,149
213,057
209,265
GAAP total expenses
$
93,827
$
85,854
$
258,893
$
255,714
(b) Stock-based compensation expense was
as follows:
Three Months Ended March
31,
Nine Months Ended March
31,
2021
2020
2021
2020
Cost of maintenance
$
234
$
343
$
688
$
1,104
Cost of services and other
412
450
1,198
1,477
Selling and marketing
1,869
1,472
4,655
4,228
Research and development
2,273
2,082
6,515
6,193
General and administrative
4,437
2,952
11,533
11,131
Total stock-based compensation
$
9,225
$
7,299
$
24,589
$
24,133
(c) The income tax effect on non-GAAP items for the three and nine
months ended March 31, 2021 and 2020, respectively, is calculated
utilizing the Company's statutory tax rate of 21 percent.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210428006081/en/
Media Contact Lucy Millington Aspen Technology +1
781-221-6419 lucy.millington@aspentech.com
Investor Contact Brian Denyeau ICR for Aspen Technology
+1 646-277-1251 brian.denyeau@icrinc.com
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