Media Contact | Investor Contact | |||||||
Len Dieterle | Brian Denyeau | |||||||
Aspen Technology | ICR for Aspen Technology | |||||||
+1 781-221-4291 | +1 646-277-1251 | |||||||
len.dieterle@aspentech.com | brian.denyeau@icrinc.com |
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Unaudited in Thousands, Except per Share Data) | |||||||||||||||||||||||
Three Months Ended June 30, | Year Ended June 30, | Nine Months Ended 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 SUBSIDIARIES CONSOLIDATED 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 shares Issued— 64,952,868 shares at June 30, 2023 and 64,425,378 shares at June 30, 2022 Outstanding— 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 SUBSIDIARIES CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Unaudited in Thousands) | |||||||||||||||||||||||
Three Months Ended June 30, | Year Ended June 30, | Nine Months Ended 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 SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows (Unaudited in Thousands, Except per Share Data) | ||||||||||||||||||||||||||
Three Months Ended June 30, | Year Ended June 30, | Nine Months Ended 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 Ended June 30, | Year Ended June 30, | Nine Months Ended 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 Ended June 30, | Year Ended June 30, | Nine Months Ended 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 Ended June 30, | Year Ended June 30, | Nine Months Ended 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 Ended June 30, | Year Ended June 30, | Nine Months Ended 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 Ended June 30, | Year Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
U.S. statutory rate | 21.79 | % | 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 SUBSIDIARIES Reconciliation 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. |