Bedford, Mass. - August 8, 2018 - Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization software company, today announced financial results for its fourth quarter and fiscal year ended June 30, 2018.
“AspenTech ended fiscal 2018 with a solid performance across all areas of the business. Our results reflect encouraging signs of improvement among Engineering & Construction customers, as well as continued strength from our owner-operator customers,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.
Pietri continued, “We are also seeing growing momentum for our APM business, which signed a number of exciting transactions in the quarter. We are pleased with the significant progress made with APM in its first year in the market and believe we are well positioned to generate meaningful growth from this market opportunity in fiscal 2019 and beyond.”
Fourth Quarter and Fiscal Year 2018 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 $489 million at the end of the fourth quarter of fiscal 2018, which increased 6.4% compared to the fourth quarter of fiscal 2017 and 1.9% sequentially.
- GAAP operating margin was 40.3%, compared to 39.6% in the fourth quarter of fiscal 2017.Non-GAAP operating margin was 45.2%, compared to 46.1% in the fourth quarter of fiscal 2017.
- AspenTech repurchased approximately 550,000 shares of its common stock for $50.0 million in the fourth quarter of fiscal 2018.
- AspenTech repurchased approximately 2.8 million shares of its common stock for $200 million in fiscal year 2018.
Summary of Fourth Quarter Fiscal Year 2018 Financial Results
AspenTech’s total revenue of $126.0 million included:
- Subscription and software revenue was $119.5 million in the fourth quarter of fiscal 2018, an increase from $115.4 million in the fourth quarter of fiscal 2017.
- Services and other revenue was $6.5 million in the fourth quarter of fiscal 2018, compared to $8.2 million in the fourth quarter of fiscal 2017.
For the quarter ended June 30, 2018, AspenTech reported income from operations of $50.7 million, compared to income from operations of $48.9 million for the quarter ended June 30, 2017.
Net income was $38.0 million for the quarter ended June 30, 2018, leading to net income per share of $0.53, compared to net income per share of $0.73 in the same period last fiscal year.
Non-GAAP income from operations, which adds back the impact of stock-based compensation expense, amortization of intangibles associated with acquisitions and acquisition related fees, was $57.0 million for the fourth quarter of fiscal 2018, compared to non-GAAP income from operations of $57.0 million in the same period last fiscal year. Non-GAAP net income was $42.5 million, or $0.59 per share, for the fourth quarter of fiscal 2018, compared to non-GAAP net income of $59.1 million, or $0.79 per share, in the same period last fiscal year. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.
AspenTech had cash and marketable securities of $96.2 million and borrowings of $170.0 million at June 30, 2018.
During the fourth quarter, the company generated $79.1 million in cash flow from operations and $79.5 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; capitalized computer software development costs; non-capitalized acquired technology, excess tax benefits from stock-based compensation, and other nonrecurring items, such as acquisition or litigation related payments.
Summary of Fiscal Year 2018 Financial Results
AspenTech’s total revenue of $499.5 million increased 3.4% from $482.9 million for fiscal year 2017.
- Subscription and software revenue was $471.0 million, an increase from $453.5 million for fiscal year 2017.
- Services and other revenue was $28.5 million, compared to $29.4 million for fiscal year 2017.
For the fiscal year ended June 30, 2018, AspenTech reported income from operations of $209.6 million, compared to income from operations of $212.0 million for fiscal year 2017.
Net income was $148.7 million for the fiscal year ended June 30, 2018, leading to net income per share of $2.04, compared to net income per share of $2.11 for fiscal year 2017.
Non-GAAP income from operations was $237.0 million for fiscal year 2018, an improvement compared to non-GAAP income from operations of $235.8 million for fiscal year 2017. Non-GAAP net income was $168.3 million, or $2.31 per share, for fiscal year 2018, compared to non-GAAP net income of $177.4 million, or $2.30 per share, for fiscal year 2017.
For the fiscal year ended June 30, 2018, the company generated $206.9 million in cash flow from operations and $212 million in free cash flow.
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 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 today, August 8, 2018, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2018 as well as the company’s business outlook.
To listen to the earnings call, participants need to utilize the live dial-in number (833) 713-6081 or (702) 374-0603, conference ID code 1967135. The supplemental webcast presentation about ASC Topic 606 will occur at the end of management’s prepared remarks and prior to the live Q&A session. To view the webcast, interested parties will need to log on to the Investor Relations section of AspenTech’s website, http://ir.aspentech.com/, and click on the “Webcast” link. After the webcast presentation, participants should return to the live dial-in number for the Q&A session. A replay of the call and webcast presentation will be archived on AspenTech’s website and will also be available via telephone at (855) 859-2056 or (404) 537-3406, conference ID code 1967135, through September 23, 2018.
AspenTech is a leading software supplier for optimizing asset performance. Our products thrive in 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 big data machine-learning. Our 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 faster, safer, longer and greener. Visit AspenTech.com to find out more.
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