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

Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced financial results for its third quarter of fiscal 2023, ended March 31, 2023.

“AspenTech’s third quarter performance was highlighted by a return to double-digit ACV growth, driven by ongoing strength in several of our key markets. We believe this performance, in the midst of an uncertain economic environment, is an important indication of the strategic importance of AspenTech’s solutions to our customers,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.

“We have made significant progress on our integration and transformation initiatives that have combined OSI, SSE and heritage AspenTech together to create a much larger, diversified and faster growing industrial software leader,” Pietri added. “We believe AspenTech is well-positioned to generate attractive, long-term growth and profitability given the positive demand trends in our end-markets as customers increase their technology investments to meet their sustainability and operational excellence objectives.”

Third 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 $854.6 million at the end of the third quarter of fiscal 2023, which increased 11.2% compared to the third 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 $712.0 million at the end of the third quarter of fiscal 2023, which increased 8.6% compared to the third quarter of fiscal 2022 and 2.1% sequentially.

Summary of Third 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 16, 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 $229.9 million included:

  • License and solutions revenue, which represents the portion of a term license agreement allocated to the initial license and OSI revenue where software and professional services are recognized as one performance obligation, was $136.3 million in the third quarter of fiscal 2023, compared to $50.8 million in the third 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 $77.3 million in the third quarter of fiscal 2023, compared to $27.3 million in the third quarter of fiscal 2022.
  • Services and other revenue was $16.3 million in the third quarter of fiscal 2023, compared to $6.5 million in the third quarter of fiscal 2022.

For the quarter ended March 31, 2023, AspenTech reported loss from operations of $78.5 million, compared to loss from operations of $2.7 million in the third quarter of fiscal 2022.

Net loss was $57.6 million for the quarter ended March 31, 2023, leading to net loss per share of $0.89, compared to net loss per share of $0.09 in the same period of last fiscal year.

Non-GAAP income from operations was $66.8 million for the third quarter of fiscal 2023. Non-GAAP net income was $69.1 million, or $1.06 per share, for the third 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 loss less realized 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 $286.7 million and no borrowings as of March 31, 2023.

During the third quarter, AspenTech generated $131.0 million in cash flow from operations and $129.3 million in free cash flow. Free cash flow1 is calculated as net cash provided by operating activities adjusted for the net impact of: purchases of property, equipment and leasehold improvements and payments for capitalized computer software development costs.

Business Outlook

Based on information as of today, April 26, 2023, AspenTech is issuing the following guidance for fiscal year 2023. Please note this guidance does not include any contribution from the acquisition of Micromine, which is pending final regulatory approval.

  • Annual Contract Value (“ACV”) growth of 11.0-12.0% year-over-year.
  • GAAP operating cash flow of at least $324 million
  • Free cash flow1 of at least $315 million
  • Total bookings of $1.03 to $1.06 billion
  • Total revenue of $1.04 to $1.06 billion
  • GAAP total expense of $1,219 to $1,224 million
  • Non-GAAP total expense of $642 to $647 million
  • GAAP operating loss of $179 to $164 million
  • Non-GAAP operating income of $398 to $413 million
  • GAAP net loss of $110 to $97 million
  • Non-GAAP net income of $372 to $385 million
  • GAAP net loss per share of $1.68 to $1.48
  • Non-GAAP net income per share of $5.63 to $5.83

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.

1. Effective January 1, 2023, we no longer exclude acquisition and integration planning related payments from our computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation methodology.

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 (the "SEC"). 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 April 26, 2023, at 4:30 p.m. ET to discuss its financial results, business outlook, and related corporate and financial matters. A live webcast of the call will be available on AspenTech's Investor Relations website, http://ir.aspentech.com/, via its "Webcasts" page. To access the call by phone, please go to the following 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

Statements in this press release that are not strictly historical may be “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties, and AspenTech undertakes no obligation to update any such statements to reflect later developments. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “strategy,”  “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “opportunity” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These risks and uncertainties include, without limitation: the failure to realize the anticipated benefits of our transaction with Emerson Electric Co.; risks resulting from our status as a controlled company; AspenTech’s ability to successfully complete on the terms and conditions contemplated, and the financial impact of, the proposed Micromine transaction; the scope, duration and ultimate impacts of the COVID-19 pandemic and the Russia-Ukraine conflict; as well as economic and currency conditions, market demand, including related to the pandemic and adverse changes in the process or other capital-intensive industries such as materially reduced spending budgets due to oil and gas price declines and volatility, pricing, protection of intellectual property, cybersecurity, natural disasters, tariffs, sanctions, competitive and technological factors, inflation; and others, as set forth in AspenTech’s most recent Annual Report on Form 10-KT and subsequent reports filed with the Securities and Exchange Commission. The outlook contained herein represents AspenTech’s expectation for its consolidated results, other than as noted herein.

© 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

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

License and solutions

$

136,292

 

 

$

50,838

 

 

$

446,360

 

 

$

143,544

 

Maintenance

 

77,283

 

 

 

27,313

 

 

 

234,277

 

 

 

78,120

 

Services and other

 

16,303

 

 

 

6,450

 

 

 

42,898

 

 

 

21,727

 

Total revenue

 

229,878

 

 

 

84,601

 

 

 

723,535

 

 

 

243,391

 

Cost of revenue:

 

 

 

 

 

 

 

License and solutions

 

68,980

 

 

 

35,546

 

 

 

209,326

 

 

 

103,155

 

Maintenance

 

9,020

 

 

 

4,296

 

 

 

27,804

 

 

 

12,604

 

Services and other

 

15,799

 

 

 

3,959

 

 

 

40,897

 

 

 

13,139

 

Total cost of revenue

 

93,799

 

 

 

43,801

 

 

 

278,027

 

 

 

128,898

 

Gross profit

 

136,079

 

 

 

40,800

 

 

 

445,508

 

 

 

114,493

 

Operating expenses:

 

 

 

 

 

 

 

Selling and marketing

 

120,035

 

 

 

18,899

 

 

 

356,260

 

 

 

61,894

 

Research and development

 

54,046

 

 

 

15,462

 

 

 

153,741

 

 

 

46,400

 

General and administrative

 

40,471

 

 

 

9,139

 

 

 

124,557

 

 

 

22,792

 

Restructuring costs

 

 

 

 

43

 

 

 

 

 

 

288

 

Total operating expenses

 

214,552

 

 

 

43,543

 

 

 

634,558

 

 

 

131,374

 

(Loss) from operations

 

(78,473

)

 

 

(2,743

)

 

 

(189,050

)

 

 

(16,881

)

Other (expense), net

 

(13,281

)

 

 

(2,685

)

 

 

(33,270

)

 

 

(5,463

)

Interest income (expense), net

 

9,969

 

 

 

(28

)

 

 

19,112

 

 

 

(320

)

(Loss) before provision for income taxes

 

(81,785

)

 

 

(5,456

)

 

 

(203,208

)

 

 

(22,664

)

(Benefit) for income taxes

 

(24,150

)

 

 

(2,176

)

 

 

(68,132

)

 

 

(7,422

)

Net (loss)

$

(57,635

)

 

$

(3,280

)

 

$

(135,076

)

 

$

(15,242

)

Net (loss) per common share:

 

 

 

 

 

 

 

Basic

$

(0.89

)

 

$

(0.09

)

 

$

(2.09

)

 

$

(0.42

)

Diluted

$

(0.89

)

 

$

(0.09

)

 

$

(2.09

)

 

$

(0.42

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

64,796

 

 

 

36,308

 

 

 

64,622

 

 

 

36,308

 

Diluted

 

64,796

 

 

 

36,308

 

 

 

64,622

 

 

 

36,308

 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED BALANCE SHEETS

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

 

 

 

 

 

March 31,

2023

 

June 30,

2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

286,736

 

 

$

449,725

 

Accounts receivable, net

 

115,362

 

 

 

111,027

 

Current contract assets, net

 

399,388

 

 

 

428,833

 

Prepaid expenses and other current assets

 

22,951

 

 

 

23,461

 

Receivables from related parties

 

43,998

 

 

 

16,941

 

Prepaid income taxes

 

7,603

 

 

 

17,503

 

Total current assets

 

876,038

 

 

 

1,047,490

 

Property, equipment and leasehold improvements, net

 

18,332

 

 

 

17,148

 

Goodwill

 

8,328,210

 

 

 

8,266,809

 

Intangible assets, net

 

4,780,644

 

 

 

5,112,781

 

Non-current contract assets, net

 

471,397

 

 

 

428,232

 

Contract costs

 

11,174

 

 

 

5,473

 

Operating lease right-of-use assets

 

69,173

 

 

 

78,286

 

Deferred tax assets

 

2,388

 

 

 

4,937

 

Other non-current assets

 

9,553

 

 

 

8,766

 

Total assets

$

14,566,909

 

 

$

14,969,922

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

11,531

 

 

$

21,416

 

Accrued expenses and other current liabilities

 

95,319

 

 

 

90,123

 

Liability from foreign currency forward contract

 

40,454

 

 

 

 

Due to related parties

 

16,103

 

 

 

4,111

 

Current operating lease liabilities

 

12,683

 

 

 

7,191

 

Income taxes payable

 

24,729

 

 

 

6,768

 

Current borrowings

 

 

 

 

28,000

 

Current contract liabilities

 

154,313

 

 

 

143,327

 

Total current liabilities

 

355,132

 

 

 

300,936

 

Non-current contract liabilities

 

27,654

 

 

 

21,081

 

Deferred income tax liabilities

 

990,461

 

 

 

1,145,408

 

Non-current operating lease liabilities

 

57,706

 

 

 

71,933

 

Non-current borrowings, net

 

 

 

 

245,647

 

Other non-current liabilities

 

16,877

 

 

 

15,560

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value

Authorized—600,000,000 shares

Issued— 64,858,598 shares at March 31, 2023 and 64,425,378 shares at June 30, 2022

Outstanding— 64,858,598 shares at March 31, 2023 and 64,425,378 shares at June 30, 2022

 

6

 

 

 

6

 

Additional paid-in capital

 

13,188,678

 

 

 

13,107,570

 

Retained (deficit) earnings

 

(68,707

)

 

 

66,369

 

Accumulated other comprehensive (loss)

 

(898

)

 

 

(4,588

)

Total stockholders’ equity

 

13,119,079

 

 

 

13,169,357

 

Total liabilities and stockholders’ equity

$

14,566,909

 

 

$

14,969,922

 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

Net (loss)

$

(57,635

)

 

$

(3,280

)

 

$

(135,076

)

 

$

(15,242

)

Adjustments to reconcile net (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

123,165

 

 

 

23,251

 

 

 

368,266

 

 

 

77,335

 

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

 

3,901

 

 

 

1,173

 

 

 

10,463

 

 

 

4,240

 

Net foreign currency (gain) losses

 

(1,033

)

 

 

2,752

 

 

 

3,711

 

 

 

5,765

 

Realized gain on settlement of foreign currency forward contracts

 

(10,821

)

 

 

 

 

 

(10,821

)

 

 

 

Stock-based compensation

 

22,843

 

 

 

519

 

 

 

64,020

 

 

 

1,345

 

Deferred income taxes

 

(49,661

)

 

 

(3,801

)

 

 

(156,046

)

 

 

(11,848

)

Provision for uncollectible receivables

 

716

 

 

 

810

 

 

 

3,944

 

 

 

852

 

Other non-cash operating activities

 

1,698

 

 

 

83

 

 

 

1,108

 

 

 

167

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

22,630

 

 

 

29,423

 

 

 

(11,060

)

 

 

(17,637

)

Contract assets

 

67,192

 

 

 

(1,735

)

 

 

(10,672

)

 

 

(14,769

)

Contract costs

 

(1,810

)

 

 

 

 

 

(5,357

)

 

 

 

Lease liabilities

 

(3,694

)

 

 

(1,335

)

 

 

(10,303

)

 

 

(3,146

)

Prepaid expenses, prepaid income taxes, and other assets

 

(6,536

)

 

 

505

 

 

 

27,641

 

 

 

(662

)

Liability from foreign currency forward contract

 

25,135

 

 

 

 

 

 

40,454

 

 

 

 

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

 

(10,548

)

 

 

5,177

 

 

 

(12,038

)

 

 

(7,628

)

Contract liabilities

 

5,494

 

 

 

(9,437

)

 

 

17,416

 

 

 

1,349

 

Net cash provided by operating activities

 

131,036

 

 

 

44,105

 

 

 

185,650

 

 

 

20,121

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, equipment and leasehold improvements

 

(1,671

)

 

 

(442

)

 

 

(4,515

)

 

 

(3,831

)

Proceeds from settlement of foreign currency forward contracts

 

10,821

 

 

 

 

 

 

10,821

 

 

 

 

Payments for business acquisitions, net of cash acquired

 

2,449

 

 

 

 

 

 

(72,498

)

 

 

(1,065

)

Payments for equity method investments

 

(211

)

 

 

 

 

 

(676

)

 

 

 

Payments for capitalized computer software development costs

 

(18

)

 

 

 

 

 

(347

)

 

 

 

Purchases of other assets

 

(1,000

)

 

 

4

 

 

 

(1,000

)

 

 

(287

)

Net cash provided by (used in) investing activities

 

10,370

 

 

 

(438

)

 

 

(68,215

)

 

 

(5,183

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Issuance of shares of common stock

 

5,937

 

 

 

 

 

 

31,542

 

 

 

 

Payment of tax withholding obligations related to restricted stock

 

(2,708

)

 

 

 

 

 

(14,406

)

 

 

 

Deferred business acquisition payments

 

 

 

 

 

 

 

(1,363

)

 

 

 

Repayments of amounts borrowed under term loan

 

(264,000

)

 

 

 

 

 

(276,000

)

 

 

 

Net transfers to Parent Company

 

(35,621

)

 

 

(50,104

)

 

 

(5,749

)

 

 

(17,249

)

Payments of debt issuance costs

 

 

 

 

 

 

 

(2,375

)

 

 

 

Net cash (used in) financing activities

 

(296,392

)

 

 

(50,104

)

 

 

(268,351

)

 

 

(17,249

)

Effect of exchange rate changes on cash and cash equivalents

 

(4,366

)

 

 

(852

)

 

 

(12,073

)

 

 

(986

)

(Decrease) in cash and cash equivalents

 

(159,352

)

 

 

(7,289

)

 

 

(162,989

)

 

 

(3,297

)

Cash and cash equivalents, beginning of period

 

446,088

 

 

 

27,651

 

 

 

449,725

 

 

 

23,659

 

Cash and cash equivalents, end of period

$

286,736

 

 

$

20,362

 

 

$

286,736

 

 

$

20,362

 

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,

 

 

2023

 

2022

 

2023

 

2022

Total expenses

 

 

 

 

 

 

 

 

GAAP total expenses (a)

 

$

308,351

 

 

$

87,344

 

 

$

912,585

 

 

$

260,272

 

Less:

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

 

(22,843

)

 

 

(519

)

 

 

(64,020

)

 

 

(1,345

)

Amortization of intangibles (c)

 

 

(121,639

)

 

 

(22,397

)

 

 

(363,960

)

 

 

(73,382

)

Acquisition and integration planning related fees

 

 

(761

)

 

 

 

 

 

(7,030

)

 

 

(54

)

 

 

 

 

 

 

 

 

 

Non-GAAP total expenses

 

$

163,108

 

 

$

64,428

 

 

$

477,575

 

 

$

185,491

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

 

 

 

GAAP (loss) from operations

 

$

(78,473

)

 

$

(2,743

)

 

$

(189,050

)

 

$

(16,881

)

Plus:

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

 

22,843

 

 

 

519

 

 

 

64,020

 

 

 

1,345

 

Amortization of intangibles (c)

 

 

121,639

 

 

 

22,397

 

 

 

363,960

 

 

 

73,382

 

Acquisition and integration planning related fees

 

 

761

 

 

 

 

 

 

7,030

 

 

 

54

 

 

 

 

 

 

 

 

 

 

Non-GAAP income from operations

 

$

66,770

 

 

$

20,173

 

 

$

245,960

 

 

$

57,900

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

GAAP net (loss)

 

$

(57,635

)

 

$

(3,280

)

 

$

(135,076

)

 

$

(15,242

)

Plus (less):

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

 

22,843

 

 

 

519

 

 

 

64,020

 

 

 

1,345

 

Amortization of intangibles (c)

 

 

121,639

 

 

 

22,397

 

 

 

363,960

 

 

 

73,382

 

Acquisition and integration planning related fees

 

 

761

 

 

 

 

 

 

7,030

 

 

 

54

 

Unrealized loss on foreign currency forward contract

 

 

25,135

 

 

 

 

 

 

40,454

 

 

 

 

Realized gain on foreign currency forward contract

 

 

(10,821

)

 

 

 

 

 

(10,821

)

 

 

 

Less:

 

 

 

 

 

 

 

 

Income tax effect on Non-GAAP items (d)

 

 

(32,776

)

 

 

(5,209

)

 

 

(95,666

)

 

 

(17,252

)

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

69,146

 

 

$

14,427

 

 

$

233,901

 

 

$

42,287

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

 

 

 

 

 

 

 

GAAP diluted (loss) per share

 

$

(0.89

)

 

$

(0.09

)

 

$

(2.09

)

 

$

(0.42

)

Plus (less):

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

 

0.35

 

 

 

0.01

 

 

 

0.98

 

 

 

0.04

 

Amortization of intangibles (c)

 

 

1.87

 

 

 

0.62

 

 

 

5.59

 

 

 

2.02

 

Acquisition and integration planning related fees

 

 

0.01

 

 

 

 

 

 

0.11

 

 

 

 

Unrealized loss on foreign currency forward contract

 

 

0.39

 

 

 

 

 

 

0.62

 

 

 

 

Realized gain on foreign currency forward contract

 

 

(0.17

)

 

 

 

 

 

(0.17

)

 

 

 

Impact of diluted shares

 

 

 

 

 

 

 

 

0.02

 

 

 

 

Less:

 

 

 

 

 

 

 

 

Income tax effect on Non-GAAP items (d)

 

 

(0.50

)

 

 

(0.14

)

 

 

(1.47

)

 

 

(0.48

)

 

 

 

 

 

 

 

 

 

Non-GAAP diluted income per share

 

$

1.06

 

 

$

0.40

 

 

$

3.59

 

 

$

1.16

 

 

 

 

 

 

 

 

 

 

Shares used in computing Non-GAAP diluted income per share

 

 

65,195

 

 

 

36,308

 

 

 

65,125

 

 

 

36,308

 

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

Free Cash Flow (1)

 

 

 

 

 

 

 

 

Net cash provided by operating activities (GAAP)

 

$

131,036

 

 

$

44,105

 

 

$

185,650

 

 

$

20,121

 

Purchases of property, equipment and leasehold improvements

 

 

(1,671

)

 

 

(442

)

 

 

(4,515

)

 

 

(3,831

)

Payments for capitalized computer software development costs

 

 

(18

)

 

 

 

 

 

(347

)

 

 

 

Free cash flow (non-GAAP)

 

$

129,347

 

 

$

43,663

 

 

$

180,788

 

 

$

16,290

 

(1) Effective January 1, 2023, we no longer exclude acquisition and integration planning related payments from our computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation methodology.

(a) GAAP total expenses

 

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

Total costs of revenue

 

$

93,799

 

 

$

43,801

 

 

$

278,027

 

 

$

128,898

 

Total operating expenses

 

 

214,552

 

 

 

43,543

 

 

 

634,558

 

 

 

131,374

 

GAAP total expenses

 

$

308,351

 

 

$

87,344

 

 

$

912,585

 

 

$

260,272

 

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

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

Cost of license and solutions

 

$

832

 

 

$

 

 

$

2,752

 

 

$

 

Cost of maintenance

 

 

427

 

 

 

 

 

 

1,462

 

 

 

 

Cost of services and other

 

 

599

 

 

 

 

 

 

1,457

 

 

 

 

Selling and marketing

 

 

3,695

 

 

 

 

 

 

10,886

 

 

 

 

Research and development

 

 

5,972

 

 

 

 

 

 

13,831

 

 

 

 

General and administrative

 

 

11,318

 

 

 

519

 

 

 

33,632

 

 

 

1,345

 

Total stock-based compensation

 

$

22,843

 

 

$

519

 

 

$

64,020

 

 

$

1,345

 

(c) Amortization of intangible assets was as follows:

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

 

2023

 

2022

 

2023

 

2022

Cost of license and solutions

 

$

48,035

 

 

$

13,192

 

 

$

143,377

 

 

$

39,577

 

Selling and marketing

 

 

73,604

 

 

 

9,205

 

 

 

220,583

 

 

 

33,805

 

Total amortization of intangible assets

 

$

121,639

 

 

$

22,397

 

 

$

363,960

 

 

$

73,382

 

(d) The income tax effect on non-GAAP items for the three and nine months ended March 31, 2023 and 2022, respectively, is calculated utilizing the Company's combined US federal and state statutory tax rate as following:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

 

2023

 

2022

 

2023

 

2022

U.S. Statutory Rate

21.79

%

 

22.73

%

 

21.79

%

 

23.07

%

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

 

$

1,219,000

 

 

 

$

1,224,000

 

 

Less:

 

 

 

 

 

 

Stock-based compensation

 

 

(84,000

)

 

 

 

(84,000

)

 

Amortization of intangible assets

 

 

(486,000

)

 

 

 

(486,000

)

 

Acquisition and integration planning related fees

 

 

(7,000

)

 

 

 

(7,000

)

 

 

 

 

 

 

 

 

Non-GAAP expectation - total expenses

 

$

642,000

 

 

 

$

647,000

 

 

 

 

 

 

 

 

 

Guidance - Income from operations

 

 

 

 

 

 

GAAP expectation - (loss) from operations

 

$

(179,000

)

 

 

$

(164,000

)

 

Plus:

 

 

 

 

 

 

Stock-based compensation

 

 

84,000

 

 

 

 

84,000

 

 

Amortization of intangible assets

 

 

486,000

 

 

 

 

486,000

 

 

Acquisition and integration planning related fees

 

 

7,000

 

 

 

 

7,000

 

 

 

 

 

 

 

 

 

Non-GAAP expectation - income from operations

 

$

398,000

 

 

 

$

413,000

 

 

 

 

 

 

 

 

 

Guidance - Net income and diluted income per share

 

 

 

 

 

 

GAAP expectation - net (loss) and diluted (loss) per share

 

$

(110,000

)

$

(1.68

)

 

$

(97,000

)

$

(1.48

)

Plus (less):

 

 

 

 

 

 

Stock-based compensation

 

 

84,000

 

 

 

 

84,000

 

 

Amortization of intangible assets

 

 

486,000

 

 

 

 

486,000

 

 

Acquisition and integration planning related fees

 

 

7,000

 

 

 

 

7,000

 

 

Unrealized loss on foreign currency forward contract

 

 

40,500

 

 

 

 

40,500

 

 

Realized gain on foreign currency forward contract

 

 

(10,800

)

 

 

 

(10,800

)

 

Less:

 

 

 

 

 

 

Income tax effect on Non-GAAP items (b)

 

 

(125,000

)

 

 

 

(125,000

)

 

 

 

 

 

 

 

 

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

 

$

371,700

 

$

5.63

 

 

$

384,700

 

$

5.83

 

 

 

 

 

 

 

 

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

 

 

66,000

 

 

 

 

66,000

 

 

 

 

 

 

 

 

 

Guidance - Free Cash Flow (1)

 

 

 

 

 

 

GAAP expectation - Net cash provided by operating activities

 

$

323,500

 

 

 

 

 

Less:

 

 

 

 

 

 

Purchases of property, equipment and leasehold improvements

 

 

(8,000

)

 

 

 

 

Payments for capitalized computer software development costs

 

 

(500

)

 

 

 

 

 

 

 

 

 

 

 

Free cash flow expectation (non-GAAP)

 

$

315,000

 

 

 

 

 

 

 

 

 

 

 

 

(1) Free cash flow guidance has been updated to reflect a change in methodology to calculate free cash flow. The change in free cash flow calculation methodology does not represent a change in management's expectations. Effective January 1, 2023, we no longer exclude acquisition and integration planning related payments from our computation of free cash flow. We have updated our guidance computation for free cash flow to reflect that such payments are no longer excluded from free cash flow.

(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.

 

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