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 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. |