BEDFORD, Mass.--(BUSINESS WIRE)-- Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization software company, today announced financial results for its fourth quarter of fiscal year 2020 ended June 30, 2020.
“AspenTech delivered solid fourth quarter results that exceeded expectations in the midst of unprecedented economic conditions,” said Antonio Pietri, President and Chief Executive Officer of Aspen Technology. “Customers in our core markets continued to make significant investments in AspenTech products despite the challenges facing their own businesses. Companies in the process and other capital intensive industries increasingly recognize that investing in digitalization initiatives is essential to long-term financial and operational success and we believe we are well-positioned to benefit from this trend.”
Pietri continued, “We are furthering our commitment to our customers through today’s announcement of the new AIoT Hub and our investment in the next generation of hybrid modeling software capabilities, planned for release in the coming months. We intend to introduce contextual artificial intelligence into our core products to enable better informed and more accurate decisions to improve the operating performance of assets. We are confident that these innovations will further extend the value AspenTech delivers for its customers.”
Fourth Quarter and Fiscal Year 2020 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 approximately $593 million at the end of the fourth quarter of fiscal 2020, which increased 9.6% compared to the fourth quarter of fiscal 2019 and 3.1% sequentially.
- AspenTech repurchased approximately 1.3 million shares of its common stock for $150 million in fiscal year 2020.
Summary of Fourth Quarter Fiscal Year 2020 Financial Results
AspenTech’s total revenue of $199.3 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $147.2 million in the fourth quarter of fiscal 2020, compared to $148.5 million in the fourth quarter of fiscal 2019.
- Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was $45.7 million in the fourth quarter of fiscal 2020, compared to $39.5 million in the fourth quarter of fiscal 2019.
- Services and other revenue was $6.4 million in the fourth quarter of fiscal 2020, compared to $7.8 million in the fourth quarter of fiscal 2019.
For the quarter ended June 30, 2020, AspenTech reported income from operations of $113.7 million, compared to income from operations of $111.2 million for the quarter ended June 30, 2019.
Net income was $97.6 million for the quarter ended June 30, 2020, leading to net income per share of $1.43, compared to net income per share of $1.49 in the same period last fiscal year.
Non-GAAP income from operations, was $122.9 million for the fourth quarter of fiscal 2020, compared to non-GAAP income from operations of $119.9 million in the same period last fiscal year. Non-GAAP net income was $104.9 million, or $1.54 per share, for the fourth quarter of fiscal 2020, compared to non-GAAP net income of $110.7 million, or $1.59 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 $287.8 million and total borrowings, net of debt issuance costs, of $427.5 million at June 30, 2020.
During the fourth quarter, the company generated $99.7 million in cash flow from operations and $99.5 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.
Summary of Fiscal Year 2020 Financial Results
AspenTech’s total revenue of $590.2 million decreased 1.0% from $598.3 million for fiscal year 2019.
- License revenue, was $377.2 million, a decrease from $404.1 million for fiscal year 2019.
- Maintenance revenue, was $179.8 million, an increase from $165.4 million for fiscal year 2019.
- Services and other revenue was $33.2 million, an increase from $28.8 million for fiscal year 2019.
For the fiscal year ended June 30, 2020, AspenTech reported income from operations of $248.8 million, compared to income from operations of $282.8 million for fiscal year 2019.
Net income was $225.7 million for the fiscal year ended June 30, 2020, leading to net income per share of $3.28, compared to net income per share of $3.71 for fiscal year 2019.
Non-GAAP income from operations was $287.0 million for fiscal year 2020, compared to non-GAAP income from operations of $316.3 million for fiscal year 2019. Non-GAAP net income was $255.9 million, or $3.72 per share, for fiscal year 2020, compared to non-GAAP net income of $289.2 million, or $4.09 per share, for fiscal year 2019.
For the fiscal year ended June 30, 2020, the company generated $243.3 million in cash flow from operations and $243.1 million in free cash flow.
Based on information as of today, August 12, 2020, Aspen Technology is issuing the following guidance for fiscal year 2021:
- Annual spend growth of 6-9% year-over-year
- Free cash flow of $260 to $270 million
- Total bookings of $770 to $850 million
- Total revenue of $704 to $754 million
- GAAP total expense of $372 to $377 million
- Non-GAAP total expense of $330 to $335 million
- GAAP operating income of $332 to $377 million
- Non-GAAP operating income of $374 to $420 million
- GAAP net income of $290 to $327 million
- Non-GAAP net income of $324 to $360 million
- GAAP net income per share of $4.29 to $4.83
- Non-GAAP net income per share of $4.78 to $5.32
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 non-GAAP operating 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 expenses, non-GAAP operating 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, August 12, 2020, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2020 as well as the company’s business outlook. The live dial-in number is (866) 471-3828 or (678) 509-7573, conference ID code 8084773. 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 8084773, through August 19, 2020.
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 modeling 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.
The second and third paragraphs 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; the demand for, or usage of, aspenONE software declines 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.
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