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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Aspen Technology Inc New | NASDAQ:AZPN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
3.14 | 1.52% | 209.08 | 205.00 | 248.39 | 211.38 | 203.9601 | 206.33 | 317,275 | 01:00:00 |
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
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:
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.
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230426005675/en/
Media Len Dieterle Aspen Technology +1 781-221-4291 len.dieterle@aspentech.com
Investors Brian Denyeau ICR for Aspen Technology +1 646-277-1251 brian.denyeau@icrinc.com
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