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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 205.94 | 197.00 | 327.44 | 0 | 09:05:00 |
Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced financial results for its fourth quarter and fiscal year 2023, ended June 30, 2023.
“The fourth quarter was a strong finish to an important year and showed benefits from our transformation efforts and learnings in fiscal 2023. We delivered a full year of double-digit ACV growth, ending above the midpoint of our guidance range. Demand in most of our end markets and geographies was strong in the quarter and throughout the year. This performance, during an unpredictable macro environment, validates the mission criticality of AspenTech solutions to our customers’ operations and strategic priorities,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.
Fiscal Year 2023 Recent Business Highlights
Summary of Fourth Quarter and Fiscal Year 2023 Financial Results4, 5
AspenTech’s total revenue was $320.6 million for the fourth quarter of fiscal 2023 and included the following:
Income from operations was $6.0 million in the fourth quarter of fiscal 2023, compared to income from operations of $39.2 million in the fourth quarter of fiscal 2022.
Net income was $27.3 million or $0.42 per diluted share in the fourth quarter of fiscal 2023, compared to net income of $57.2 million, or $1.13 per diluted share, in the fourth quarter of fiscal 2022. The Company has elevated amortization of intangible assets following the close of the transaction with Emerson. As a result, the Company expects its amortization of intangible assets to remain elevated for the next several years as the related asset balance is amortized over time.
Non-GAAP income from operations was $148.9 million in the fourth quarter of fiscal 2023. Non-GAAP net income was $138.2 million, or $2.13 per share, for the fourth 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 realized and unrealized gains and losses in connection with derivatives on foreign currency forward contracts. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.
As of June 30, 2023, AspenTech had cash and cash equivalents of $241.2 million, no borrowings, and $193.1 million available on its revolving credit facility.
During the fourth quarter, AspenTech generated $113.6 million in cash flow from operations and $111.5 million in free cash flow3. 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 and payments for capitalized computer software development costs. Free cash flow was below our guidance for fiscal 2023 due to lower-than-expected cash collections. AspenTech has already received a significant portion of these payments in July 2023.
Recent Developments
Micromine Transaction Update
AspenTech, in collaboration with Potentia, Micromine’s majority owner, has terminated its share sale agreement to acquire Micromine. AspenTech and Potentia were waiting to secure a final Russian regulatory approval as a condition to closing the transaction. As this process continued, the timing and requirements necessary to get this approval became increasingly unclear. This lack of clarity on the potential for, and timing of, a successful review led AspenTech and Potentia to this mutual course of action. AspenTech will not be paying any termination fee as part of this arrangement.
Share Repurchase Programs Update
AspenTech announced today that its Board of Directors has approved a new share repurchase authorization, through which the Company may repurchase up to $300 million of its outstanding shares of common stock in fiscal 2024. This authorization is in addition to the Company’s $100 million accelerated share repurchase program announced on May 5, 2023. The Company expects to complete the accelerated share repurchase program in its first quarter of fiscal 2024. Upon its completion, the Company will begin executing the $300 million share repurchase authorization.
Fiscal Year 2024 Business Outlook
Based on information as of today, August 1, 2023, AspenTech is issuing the following guidance for fiscal 2024.
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.
Conference Call and Webcast
AspenTech will host a conference call and webcast presentation on Tuesday, August 1, 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 use the following registration link. 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 also will be available for a limited time at http://ir.aspentech.com/.
Expanded Earnings Presentation
AspenTech has provided an expanded earnings presentation for its fourth quarter and fiscal 2023. The Company asks that shareholders refer to this presentation in conjunction with today’s conference call, which can be found at ir.aspentech.com.
Footnotes
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. These forward-looking statements include, but are not limited to, our guidance for fiscal 2024, our expectations regarding cash collections and completion of our accelerated share repurchase program. 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; 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, and 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.
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.
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS(Unaudited in Thousands, Except per Share Data) Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,
2023
2022
2023
2022
Revenue: License and solutions
$
222,825
$
179,260
$
669,185
$
278,589
Maintenance
82,634
50,201
316,911
103,786
Services and other
15,184
9,459
58,082
22,921
Total revenue
320,643
238,920
1,044,178
405,296
Cost of revenue: License and solutions
70,238
56,491
279,564
125,258
Maintenance
8,846
6,660
36,650
15,030
Services and other
16,478
7,867
57,375
16,108
Total cost of revenue
95,562
71,018
373,589
156,396
Gross profit
225,081
167,902
670,589
248,900
Operating expenses: Selling and marketing
126,396
71,569
482,656
108,463
Research and development
55,606
33,440
209,347
64,285
General and administrative
37,094
23,703
161,651
39,878
Restructuring costs
—
36
—
117
Total operating expenses
219,096
128,748
853,654
212,743
Income (loss) from operations
5,985
39,154
(183,065
)
36,157
Other income (expense), net
3,850
4,414
(29,418
)
310
Interest income, net
12,807
3,542
31,917
3,494
Income (loss) before provision for income taxes
22,642
47,110
(180,566
)
39,961
(Benefit) for income taxes
(4,674
)
(10,076
)
(72,806
)
(13,185
)
Net income (loss)$
27,316
$
57,186
$
(107,760
)
$
53,146
Net income (loss) per common share: Basic
$
0.42
$
1.14
$
(1.67
)
$
1.30
Diluted
$
0.42
$
1.13
$
(1.67
)
$
1.30
Weighted average shares outstanding: Basic
64,614
50,179
64,621
40,931
Diluted
64,943
50,406
64,621
41,008
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED BALANCE SHEETS(Unaudited in Thousands, Except Share and Per Share Data) June 30,
2023
2022
ASSETS Current assets: Cash and cash equivalents
$
241,209
$
449,725
Accounts receivable, net
122,789
111,027
Current contract assets, net
367,539
428,833
Prepaid expenses and other current assets
27,728
23,461
Receivables from related parties
62,375
16,941
Prepaid income taxes
11,424
17,503
Total current assets
833,064
1,047,490
Property, equipment and leasehold improvements, net
18,670
17,148
Goodwill
8,330,811
8,266,809
Intangible assets, net
4,659,657
5,112,781
Non-current contract assets, net
536,104
428,232
Contract costs
15,992
5,473
Operating lease right-of-use assets
67,642
78,286
Deferred tax assets
10,638
4,937
Other non-current assets
13,474
8,766
Total assets
$
14,486,052
$
14,969,922
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable
$
20,299
$
21,416
Accrued expenses and other current liabilities
99,526
90,123
Due to related parties
22,019
4,111
Current operating lease liabilities
12,928
7,191
Income taxes payable
46,205
6,768
Current borrowings
—
28,000
Current contract liabilities
151,450
143,327
Total current liabilities
352,427
300,936
Non-current contract liabilities
30,103
21,081
Deferred income tax liabilities
957,911
1,145,408
Non-current operating lease liabilities
55,442
71,933
Non-current borrowings, net
—
245,647
Other non-current liabilities
19,240
15,560
Stockholders’ equity: Common stock, 0.0001 par value—Authorized—600,000,000 sharesIssued— 64,952,868 shares at June 30, 2023 and 64,425,378 shares at June 30, 2022Outstanding— 64,465,242 shares at June 30, 2023 and 64,425,378 shares at June 30, 2022
6
6
Additional paid-in capital
13,194,028
13,107,570
(Accumulated deficit) retained earnings
(41,391
)
66,369
Accumulated other comprehensive income (loss)
2,436
(4,588
)
Treasury stock, at cost- 487,626 shares of common stock at June 30, 2023 and none at June 30, 2022
(84,150
)
—
Total stockholders’ equity
13,070,929
13,169,357
Total liabilities and stockholders’ equity
$
14,486,052
$
14,969,922
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS(Unaudited in Thousands) Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,
2023
2022
2023
2022
Cash flows from operating activities: Net income (loss)
$
27,316
$
57,186
$
(107,760
)
$
53,146
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization
123,153
73,015
491,419
119,930
Reduction in the carrying amount of right-of-use assets
3,406
3,387
13,869
5,915
Net foreign currency losses (gains)
368
(4,533
)
4,079
(306
)
Net realized loss on settlement of foreign currency forward contracts
36,997
—
26,176
—
Stock-based compensation
20,830
14,786
84,850
15,763
Deferred income taxes
(36,880
)
(72,865
)
(192,926
)
(79,021
)
Provision for uncollectible receivables
3,883
(54
)
7,827
794
Other non-cash operating activities
(1,336
)
123
(228
)
228
Changes in assets and liabilities: Accounts receivable
(14,478
)
13,206
(25,538
)
11,204
Contract assets
(10,986
)
(68,129
)
(21,658
)
(78,122
)
Contract costs
(4,808
)
(4,992
)
(10,165
)
(4,992
)
Lease liabilities
(3,352
)
(2,833
)
(13,655
)
(5,558
)
Prepaid expenses, prepaid income taxes, and other assets
(20,016
)
(6,303
)
7,625
(8,776
)
Liability from foreign currency forward contract
(40,454
)
—
—
—
Accounts payable, accrued expenses, income taxes payable and other liabilities
30,353
(18,280
)
18,315
(23,674
)
Contract liabilities
(437
)
15,942
16,979
22,431
Net cash provided by (used in) operating activities
113,559
(344
)
299,209
28,962
Cash flows from investing activities: Purchase of property, equipment and leasehold improvements
(2,062
)
(982
)
(6,577
)
(2,263
)
Proceeds from sale of property and equipment
—
36
—
91
Net payments for settlement of foreign currency forward contracts
(36,997
)
—
(26,176
)
—
Payments for business acquisitions, net of cash acquired
—
(5,571,931
)
(72,498
)
(5,571,931
)
Payments for equity method investments
(24
)
(24
)
(700
)
(24
)
Payments for capitalized computer software development costs
(19
)
(508
)
(366
)
(508
)
Purchase of other assets
—
(553
)
(1,000
)
(553
)
Net cash (used in) investing activities
(39,102
)
(5,573,962
)
(107,317
)
(5,575,188
)
Cash flows from financing activities: Issuance of shares of common stock
5,194
5,701
36,736
5,702
Repurchases of common stock
(100,000
)
—
(100,000
)
—
Payment of tax withholding obligations related to restricted stock
(6,430
)
(1,676
)
(20,836
)
(1,676
)
Deferred business acquisition payments
—
(1,200
)
(1,363
)
(1,200
)
Repayments of amounts borrowed under term loan
—
(6,000
)
(276,000
)
(6,000
)
Net transfers (to) from Parent Company
(14,184
)
6,004,439
(19,933
)
5,971,995
Payments of debt issuance costs
—
—
(2,375
)
—
Net cash (used in) provided by financing activities
(115,420
)
6,001,264
(383,771
)
5,968,821
Effect of exchange rate changes on cash and cash equivalents
(4,564
)
2,405
(16,637
)
1,417
(Decrease) increase in cash and cash equivalents
(45,527
)
429,363
(208,516
)
424,012
Cash and cash equivalents, beginning of period
286,736
20,362
449,725
25,713
Cash and cash equivalents, end of period
$
241,209
$
449,725
$
241,209
$
449,725
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, Year EndedJune 30, Nine MonthsEnded June 30,
2023
2022
2023
2022
Total expenses GAAP total expenses (a)
$
314,658
$
199,766
$
1,227,243
$
369,139
Less: Stock-based compensation (b)
(20,830
)
(14,786
)
(84,850
)
(15,763
)
Amortization of intangibles (c)
(121,526
)
(71,342
)
(485,486
)
(116,743
)
Acquisition and integration planning related fees
(526
)
(3,749
)
(7,556
)
(3,749
)
Non-GAAP total expenses$
171,776
$
109,889
$
649,351
$
232,884
Income from operations GAAP income (loss) from operations
$
5,985
$
39,154
$
(183,065
)
$
36,157
Plus: Stock-based compensation (b)
20,830
14,786
84,850
15,763
Amortization of intangibles (c)
121,526
71,342
485,486
116,743
Acquisition and integration planning related fees
526
3,749
7,556
3,749
Non-GAAP income from operations
$
148,867
$
129,031
$
394,827
$
172,412
Net income GAAP net income (loss)
$
27,316
$
57,186
$
(107,760
)
$
53,146
Plus (less): Stock-based compensation (b)
20,830
14,786
84,850
15,763
Amortization of intangibles (c)
121,526
71,342
485,486
116,743
Acquisition and integration planning related fees
526
3,749
7,556
3,749
Unrealized (gain) on foreign currency forward contract
(40,454
)
—
—
—
Realized loss on foreign currency forward contract
36,997
—
26,176
—
Less: Income tax effect on Non-GAAP items (d)
(28,565
)
(18,295
)
(124,231
)
(28,316
)
Non-GAAP net income$
138,176
$
128,768
$
372,077
$
161,085
Diluted income per share GAAP diluted income (loss) per share
$
0.42
$
1.13
$
(1.67
)
$
1.30
Plus (less): Stock-based compensation (b)
0.32
0.29
1.30
0.38
Amortization of intangibles (c)
1.87
1.42
7.46
2.85
Acquisition and integration planning related fees
0.01
0.07
0.12
0.09
Unrealized (gain) on foreign currency forward contract
(0.62
)
—
—
—
Realized loss on foreign currency forward contract
0.57
—
0.40
—
Impact of diluted shares
—
—
0.02
—
Less: Income tax effect on Non-GAAP items (d)
(0.44
)
(0.36
)
(1.91
)
(0.69
)
Non-GAAP diluted income per share$
2.13
$
2.55
$
5.72
$
3.93
Shares used in computing Non-GAAP diluted income per share
64,943
50,406
65,094
41,008
Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,
2023
2022
2023
2022
Free Cash Flow (6) Net cash provided by (used in) operating activities (GAAP)
$
113,559
$
(344
)
$
299,209
$
28,962
Purchases of property, equipment and leasehold improvements
(2,062
)
(982
)
(6,577
)
(2,263
)
Payments for capitalized computer software development costs
(19
)
(508
)
(366
)
(508
)
Free cash flow (non-GAAP)$
111,478
$
(1,834
)
$
292,266
$
26,191
(6) 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 EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,
2023
2022
2023
2022
Total costs of revenue$
95,562
$
71,018
$
373,589
$
156,396
Total operating expenses
219,096
128,748
853,654
212,743
GAAP total expenses$
314,658
$
199,766
$
1,227,243
$
369,139
(b) Stock-based compensation expense was as follows: Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,2023
2022
2023
2022
Cost of license and solutions$
813
$
1,351
$
3,565
$
1,351
Cost of maintenance
431
344
1,893
344
Cost of services and other
538
282
1,995
282
Selling and marketing
5,316
2,850
16,202
2,850
Research and development
7,959
3,507
21,790
3,507
General and administrative
5,773
6,452
39,405
7,429
Total stock-based compensation$
20,830
$
14,786
$
84,850
$
15,763
(c) Amortization of intangible assets was as follows:(7) Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,2023
2022
2023
2022
Cost of license and solutions$
48,035
$
30,068
$
191,412
$
56,453
Selling and marketing
73,491
41,274
294,074
60,290
Total amortization of intangible assets$
121,526
$
71,342
$
485,486
$
116,743
(7) Amortization of intangible assets for the three and nine months ended June 30, 2022 has been updated to reflect the amounts as presented in our Form 10-KT for our fiscal 2022. (d) The income tax effect on non-GAAP items is calculated utilizing the Company's combined US federal and state statutory tax rate as follows:(8) Three Months EndedJune 30, Year EndedJune 30, Nine MonthsEnded June 30,2023
2022
2023
2022
U.S. statutory rate21.79 %
21.79 %
21.79 %
21.79 %
(8) The income tax effect on non-GAAP items for the three and nine months ended June 30, 2022 has been updated to conform to the current methodology of calculating the income tax effect on non-GAAP items. ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESReconciliation of Forward-Looking Guidance(Unaudited in Thousands, Except per Share Data) Twelve Months Ended June 30, 2024 (9) Guidance - Total expenses GAAP expectation - total expenses$
1,220,000
Less: Stock-based compensation
(59,000
)
Amortization of intangibles
(486,000
)
Non-GAAP expectation - total expenses$
675,000
Guidance - Income from operations GAAP expectation - (loss) from operations
$
(100,000
)
Plus: Stock-based compensation
59,000
Amortization of intangibles
486,000
Non-GAAP expectation - income from operations
$
445,000
Guidance - Net income and diluted income per share GAAP expectation - net (loss) and diluted (loss) per share
$
(7,000
)
$
(0.11
)
Plus (less): Stock-based compensation
59,000
Amortization of intangibles
486,000
Less: Income tax effect on Non-GAAP items (10)
(114,000
)
Non-GAAP expectation - net income and diluted income per share$
424,000
$
6.51
Shares used in computing guidance for Non-GAAP diluted income per share
65,100
Guidance - Free Cash Flow (11) GAAP expectation - Net cash provided by operating activities
$
378,000
Less: Purchases of property, equipment and leasehold improvements
(17,500
)
Payments for capitalized computer software development costs
(500
)
Free cash flow expectation (non-GAAP)$
360,000
(9) Rounded amounts used, except per share data. (10) The income tax effect on non-GAAP items for the twelve months ended June 30, 2024 is calculated utilizing the Company’s statutory tax rate of 21.79 percent. (11) Free cash flow guidance has been updated to reflect a change in methodology to calculate free cash flow and 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801756683/en/
Media Contact Len Dieterle Aspen Technology +1 781-221-4291 len.dieterle@aspentech.com
Investor Contact Brian Denyeau ICR for Aspen Technology +1 646-277-1251 brian.denyeau@icrinc.com
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