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Aspen Technology Announces Financial Results for the Second Quarter of Fiscal 2022

Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in asset optimization software, today announced financial results for its second-quarter of fiscal year 2022, ended December 31, 2021.

“AspenTech delivered strong second quarter results that reflected continued improvement in both customer demand and business conditions in many of our key end markets, which supports our increased outlook for annual spend growth for fiscal 2022. We are confident that the strategic imperative for our customers to operate assets more efficiently and sustainably will drive increased spend that will generate double-digit growth for AspenTech over time.”

Pietri continued, “We are on track to close the proposed transaction with Emerson in our fourth fiscal quarter. We remain excited by the opportunities for the new AspenTech to enable customers to improve the safety, sustainability, reliability and efficiency of their assets. The combination of talented individuals and leading software products and solutions in the OSI and Geological Simulation Software businesses will strengthen AspenTech and collectively enhance our unique ability to improve the profitability and sustainability of our customers. We are also confident this transaction will generate attractive financial performance and significant value for our shareholders over the long-term.”

Second Quarter and Fiscal Year 2022 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 $640 million at the end of the second quarter of fiscal 2022, which increased 6.0% compared to the second quarter of fiscal 2021 and 1.7% sequentially.
  • AspenTech repurchased approximately 439,000 shares of its common stock for $65 million in the second quarter of fiscal 2022.

Summary of Second Quarter Fiscal Year 2022 Financial Results

AspenTech’s total revenue of $171.4 million included:

  • License revenue, which represents the portion of a term license agreement allocated to the initial license, was $116.1 million in the second quarter of fiscal 2022, compared to $180.2 million in the second quarter of fiscal 2021.
  • Maintenance revenue, which represents the portion of the term license agreement related to ongoing support and the right to future product enhancements, was $48.4 million in the second quarter of fiscal 2022, compared to $46.8 million in the second quarter of fiscal 2021.
  • Services and other revenue was $6.9 million in the second quarter of fiscal 2022, compared to $6.7 million in the second quarter of fiscal 2021.

For the quarter ended December 31, 2021, AspenTech reported income from operations of $68.5 million, compared to income from operations of $149.5 million in the second quarter of fiscal 2021.

Net income was $61.9 million for the quarter ended December 31, 2021, leading to net income per share of $0.92, compared to net income per share of $1.89 in the same period last fiscal year.

Non-GAAP income from operations was $92.2 million for the second quarter of fiscal 2022, compared to non-GAAP income from operations of $162.2 million in the same period last fiscal year. Non-GAAP net income was $80.6 million, or $1.20 per share, for the second quarter of fiscal 2022, compared to non-GAAP net income of $139.3 million, or $2.04 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 and integration planning 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 $211.4 million and total borrowings, net of debt issuance costs, of $285.2 million at December 31, 2021.

During the second quarter, the company generated $41.3 million in cash flow from operations and $51.9 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 and integration planning related payments.

Business Outlook

Based on information as of today, January 26, 2022, AspenTech is issuing the following guidance for fiscal year 2022:

  • Annual spend growth of 7-8% year-over-year
  • Free cash flow of $280 to $290 million
  • Total bookings of $814 to $840 million
  • Total revenue of $737 to $754 million
  • GAAP total expense of $413 to $418 million
  • Non-GAAP total expense of $340 to $345 million
  • GAAP operating income of $324 to $336 million
  • Non-GAAP operating income of $397 to $409 million
  • GAAP net income of $295 to $306 million
  • Non-GAAP net income of $353 to $364 million
  • GAAP net income per share of $4.37 to $4.53
  • Non-GAAP net income per share of $5.23 to $5.39

The above guidance does not give effect to the proposed transaction with Emerson, which, if completed, is expected to close during fiscal 2022. 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.

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, January 26, 2022, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the second-quarter fiscal year 2022 as well as the company’s business outlook. The live dial-in number is (866) 471-3828 or (678) 509-7573, conference ID code 9639977. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech’s website, http://ir.aspentech.com/events-and-presentations, and clicking on the “webcast” link. A replay of the call 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 9639977, through February 2, 2022.

About AspenTech

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 modelling 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.

© 2022 Aspen Technology, Inc. AspenTech and the Aspen leaf logo are trademarks of Aspen Technology, Inc.

Forward-Looking Statements

The second and third paragraph 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, including statements regarding the pending transaction with Emerson. The forward-looking statements regarding the pending transaction with Emerson include: the expected timing and structure of the transaction; the ability of the parties to complete the transaction considering the various closing conditions; the expected benefits of the transaction, such as improved synergies, growth potential, business plans, expanded portfolio, financial performance and strength; the position of the new AspenTech following completion of the transaction; and any assumptions underlying any of the foregoing. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. We can give no assurance that such plans, estimates or expectations will be achieved and therefore, actual results may differ materially from any plans, estimates or expectations in such forward-looking statements.

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; declines in the demand for, or usage of, aspenONE software for any reason, including declines due to adverse changes in the process or other capital-intensive industries and materially reduced industry spending budgets due to the drop in demand for oil due to the COVID-19 pandemic; unfavorable economic and market conditions or a lessening demand in the market for asset process optimization software, including materially reduced industry spending budgets due to the significant drop in oil prices arising from drop in demand due to the COVID-19 pandemic; 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.

Important factors that could cause actual results relating to the pending transaction with Emerson to differ materially from AspenTech’s plans, estimates or expectations regarding the transaction include, among others: (1) that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by AspenTech’s stockholders may not be obtained; (2) the risk that the transaction may not be completed in the time frame expected by AspenTech or Emerson, or at all; (3) unexpected costs, charges or expenses resulting from the transaction; (4) uncertainty of the expected financial performance of the new AspenTech (“New AspenTech”) following completion of the transaction; (5) failure to realize the anticipated benefits of the transaction, including as a result of delay in completing the transaction or integrating the industrial software business of Emerson with AspenTech’s business; (6) the ability of New AspenTech to implement its business strategy; (7) difficulties and delays in achieving revenue and cost synergies of New AspenTech; (8) inability to retain and hire key personnel; (9) the occurrence of any event that could give rise to termination of the transaction; (10) potential litigation in connection with the transaction or other settlements or investigations that may affect the timing or occurrence of the transaction or result in significant costs of defense, indemnification and liability; (11) AspenTech’s ability and the ability of Emerson and New AspenTech to successfully recover from a disaster or other business continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the COVID-19 pandemic; (12) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (13) the risk that disruptions from the transaction will harm Emerson’s and AspenTech’s business, including current plans and operations; (14) certain restrictions during the pendency of the transaction that may impact Emerson’s or AspenTech’s ability to pursue certain business opportunities or strategic transactions; (15) AspenTech’s, Emerson’s and new AspenTech’s ability to meet expectations regarding the accounting and tax treatments of the transaction; and (16) other risk factors as detailed from time to time in Emerson’s and AspenTech’s reports filed with the SEC, including Emerson’s and AspenTech’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other documents filed with the SEC.

While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

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.

© 2022 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.

Source: Aspen Technology, Inc.

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited in Thousands, Except per Share Data)
 
Three Months Ended

December 31,
Six Months Ended

December 31,

 

2021

2020

2021

2020

Revenue:
License

$

116,111

 

$

180,170

 

$

197,215

 

$

242,029

 

Maintenance

 

48,385

 

 

46,818

 

 

96,598

 

 

93,676

 

Services and other

 

6,860

 

 

6,730

 

 

13,563

 

 

12,984

 

Total revenue

 

171,356

 

 

233,718

 

 

307,376

 

 

348,689

 

Cost of revenue:
License

 

2,340

 

 

2,238

 

 

4,802

 

 

4,374

 

Maintenance

 

4,352

 

 

4,128

 

 

8,914

 

 

8,892

 

Services and other

 

8,204

 

 

7,949

 

 

16,063

 

 

16,515

 

Total cost of revenue

 

14,896

 

 

14,315

 

 

29,779

 

 

29,781

 

Gross profit

 

156,460

 

 

219,403

 

 

277,597

 

 

318,908

 

Operating expenses:
Selling and marketing

 

30,630

 

 

26,575

 

 

60,111

 

 

51,747

 

Research and development

 

25,414

 

 

22,172

 

 

52,271

 

 

44,702

 

General and administrative

 

31,927

 

 

21,203

 

 

56,848

 

 

38,836

 

Total operating expenses

 

87,971

 

 

69,950

 

 

169,230

 

 

135,285

 

Income from operations

 

68,489

 

 

149,453

 

 

108,367

 

 

183,623

 

Interest income

 

8,695

 

 

9,304

 

 

17,359

 

 

17,973

 

Interest (expense)

 

(1,518

)

 

(2,049

)

 

(3,054

)

 

(4,144

)

Other (expense), net

 

(1,757

)

 

(333

)

 

(2,629

)

 

(1,802

)

Income before income taxes

 

73,909

 

 

156,375

 

 

120,043

 

 

195,650

 

Provision for income taxes

 

12,045

 

 

27,223

 

 

18,780

 

 

33,787

 

Net income

$

61,864

 

$

129,152

 

$

101,263

 

$

161,863

 

Net income per common share:
Basic

$

0.93

 

$

1.91

 

$

1.51

 

$

2.39

 

Diluted

$

0.92

 

$

1.89

 

$

1.50

 

$

2.37

 

Weighted average shares outstanding:
Basic

 

66,775

 

 

67,780

 

 

66,888

 

 

67,754

 

Diluted

 

67,249

 

 

68,400

 

 

67,337

 

 

68,360

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited in Thousands, Except Share and Per Share Data)
 
December 31,

2021
June 30,

2021
ASSETS
Current assets:
Cash and cash equivalents

$

211,399

 

$

379,853

 

Accounts receivable, net

 

35,696

 

 

52,502

 

Current contract assets, net

 

324,710

 

 

308,607

 

Prepaid expenses and other current assets

 

13,401

 

 

12,716

 

Prepaid income taxes

 

2,696

 

 

14,639

 

Total current assets

 

587,902

 

 

768,317

 

Property, equipment and leasehold improvements, net

 

4,741

 

 

5,610

 

Computer software development costs, net

 

1,202

 

 

1,461

 

Goodwill

 

156,626

 

 

159,852

 

Intangible assets, net

 

39,602

 

 

44,327

 

Non-current contract assets, net

 

448,331

 

 

407,180

 

Contract costs

 

29,679

 

 

29,056

 

Operating lease right-of-use assets

 

29,984

 

 

32,539

 

Deferred tax assets

 

2,145

 

 

2,121

 

Other non-current assets

 

3,718

 

 

3,537

 

Total assets

$

1,303,930

 

$

1,454,000

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable

$

4,666

 

$

4,367

 

Accrued expenses and other current liabilities

 

44,637

 

 

50,575

 

Current operating lease liabilities

 

7,511

 

 

6,751

 

Income taxes payable

 

42,457

 

 

3,444

 

Current borrowings

 

24,000

 

 

20,000

 

Current deferred revenue

 

49,464

 

 

56,393

 

Total current liabilities

 

172,735

 

 

141,530

 

Non-current deferred revenue

 

9,478

 

 

11,732

 

Deferred income tax liabilities

 

139,914

 

 

193,360

 

Non-current operating lease liabilities

 

26,481

 

 

29,699

 

Non-current borrowings, net

 

261,177

 

 

273,162

 

Other non-current liabilities

 

2,341

 

 

3,760

 

Commitments and contingencies
Series D redeemable convertible preferred stock, $0.10 par value—

Authorized— 3,636 shares as of December 31, 2021 and June 30, 2021

Issued and outstanding— none as of December 31, 2021 and June 30, 2021

 

-

 

 

-

 

Stockholders’ equity:
Common stock, $0.10 par value— Authorized—210,000,000 shares

Issued— 104,793,030 shares at December 31, 2021 and 104,543,414 shares at June 30, 2021

Outstanding— 66,656,349 shares at December 31, 2021 and 67,912,160 shares at June 30, 2021

 

10,480

 

 

10,455

 

Additional paid-in capital

 

828,780

 

 

819,642

 

Retained earnings

 

1,879,396

 

 

1,778,133

 

Accumulated other comprehensive income

 

4,336

 

 

9,026

 

Treasury stock, at cost—38,136,681 shares of common stock at December 31, 2021 and 36,631,254 shares at June 30, 2021

 

(2,031,188

)

 

(1,816,499

)

Total stockholders’ equity

 

691,804

 

 

800,757

 

Total liabilities and stockholders’ equity

$

1,303,930

 

$

1,454,000

 

 
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)
 
Three Months Ended

December 31,
Six Months Ended

December 31,

2021

2020

2021

2020

Cash flows from operating activities:
Net income

$ 61,864

$ 129,152

$ 101,263

$ 161,863

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

2,688

2,523

5,471

4,857

Reduction in the carrying amount of right-of-use assets

2,643

2,414

5,109

4,779

Net foreign currency losses

1,556

591

2,307

2,054

Stock-based compensation

7,866

9,096

17,956

15,364

Deferred income taxes

(87)

171

(53,439)

212

Provision for receivables

395

1,616

1,477

4,736

Other non-cash operating activities

441

205

772

407

Changes in assets and liabilities:
Accounts receivable

3,121

6,129

15,311

8,372

Contract assets, net

(29,504)

(116,007)

(59,058)

(123,373)

Contract costs

(367)

37

(623)

321

Lease liabilities

(2,597)

(2,572)

(5,158)

(5,235)

Prepaid expenses, prepaid income taxes, and other assets

2,625

1,942

12,415

42

Accounts payable, accrued expenses, income taxes payable and other liabilities

(5,119)

(1,558)

39,267

(7,063)

Deferred revenue

(4,268)

4,100

(9,126)

6,954

Net cash provided by operating activities

41,257

37,839

73,944

74,290

Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements

(406)

(345)

(659)

(522)

Payments for business acquisitions, net of cash acquired

-

(15,943)

-

(15,943)

Payments for equity method investments

(234)

168

(584)

(166)

Payments for capitalized computer software development costs

(152)

(89)

(330)

(895)

Net cash used in investing activities

(792)

(16,209)

(1,573)

(17,526)

Cash flows from financing activities:
Issuance of shares of common stock

12,916

2,846

14,307

3,114

Repurchases of common stock

(79,690)

-

(234,043)

-

Payments of tax withholding obligations related to restricted stock

(4,243)

(2,279)

(10,296)

(4,107)

Deferred business acquisition payments

(1,210)

-

(1,220)

-

Repayments of amounts borrowed

(4,000)

(123,182)

(8,000)

(127,182)

Payments of debt issuance costs

(402)

-

(402)

-

Net cash used in financing activities

(76,629)

(122,615)

(239,654)

(128,175)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(613)

876

(1,171)

1,104

(Decrease) in cash, cash equivalents, and restricted cash

(36,777)

(100,109)

(168,454)

(70,307)

Cash and cash equivalents, beginning of period

248,176

317,598

379,853

287,796

Cash, cash equivalents, and restricted cash, end of period

$ 211,399

$ 217,489

$ 211,399

$ 217,489

Supplemental disclosure of cash flow information:
Income taxes paid, net

$ 18,428

$ 27,965

$ 21,246

$ 30,668

Interest paid

1,305

2,096

2,638

4,217

Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses

$ 11

$ (224)

$ (107)

$ 57

Change in repurchases of common stock included in accounts payable and accrued expenses

-

-

(4,353)

-

Lease liabilities arising from obtaining right-of-use assets

169

1,068

1,632

1,291

 
Six Months Ended

December 31,

2021

2020

Reconciliation to amounts within the unaudited consolidated balance sheets: (Dollars in Thousands)
Cash and cash equivalents

$ 211,399

$ 217,487

Restricted cash included in other non-current assets

-

2

Cash, cash equivalents, and restricted cash, end of period

$ 211,399

$ 217,489

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

December 31,
Six Months Ended

December 31,

2021

2020

2021

2020

Total expenses
GAAP total expenses (a)

$

102,867

 

$

84,265

 

$

199,009

 

$

165,066

 

Less:
Stock-based compensation (b)

 

(7,866

)

 

(9,096

)

 

(17,956

)

 

(15,364

)

Amortization of intangibles

 

(2,033

)

 

(1,865

)

 

(4,077

)

 

(3,610

)

Acquisition and integration planning related fees

 

(13,787

)

 

(1,821

)

 

(17,143

)

 

(2,384

)

 
Non-GAAP total expenses

$

79,181

 

$

71,483

 

$

159,833

 

$

143,708

 

 
Income from operations
GAAP income from operations

$

68,489

 

$

149,453

 

$

108,367

 

$

183,623

 

Plus:
Stock-based compensation (b)

 

7,866

 

 

9,096

 

 

17,956

 

 

15,364

 

Amortization of intangibles

 

2,033

 

 

1,865

 

 

4,077

 

 

3,610

 

Acquisition and integration planning related fees

 

13,787

 

 

1,821

 

 

17,143

 

 

2,384

 

 
Non-GAAP income from operations

$

92,175

 

$

162,235

 

$

147,543

 

$

204,981

 

 
Net income
GAAP net income

$

61,864

 

$

129,152

 

$

101,263

 

$

161,863

 

Plus:
Stock-based compensation (b)

 

7,866

 

 

9,096

 

 

17,956

 

 

15,364

 

Amortization of intangibles

 

2,033

 

 

1,865

 

 

4,077

 

 

3,610

 

Acquisition and integration planning related fees

 

13,787

 

 

1,821

 

 

17,143

 

 

2,384

 

Less:
Income tax effect on Non-GAAP items (c)

 

(4,974

)

 

(2,684

)

 

(8,227

)

 

(4,485

)

 
Non-GAAP net income

$

80,576

 

$

139,250

 

$

132,212

 

$

178,736

 

 
Diluted income per share
GAAP diluted income per share

$

0.92

 

$

1.89

 

$

1.50

 

$

2.37

 

Plus:
Stock-based compensation (b)

 

0.12

 

 

0.13

 

 

0.27

 

 

0.23

 

Amortization of intangibles

 

0.03

 

 

0.03

 

 

0.06

 

 

0.05

 

Acquisition and integration planning related fees

 

0.21

 

 

0.03

 

 

0.25

 

 

0.03

 

Less:
Income tax effect on Non-GAAP items (c)

 

(0.08

)

 

(0.04

)

 

(0.12

)

 

(0.07

)

 
Non-GAAP diluted income per share

$

1.20

 

$

2.04

 

$

1.96

 

$

2.61

 

 
Shares used in computing Non-GAAP diluted income per share

 

67,249

 

 

68,400

 

 

67,337

 

 

68,360

 

 
 
Three Months Ended

December 31,
Six Months Ended

December 31,

2021

2020

2021

2020

Free Cash Flow
Net cash provided by operating activities (GAAP)

$

41,257

 

$

37,839

 

$

73,944

 

$

74,290

 

Purchases of property, equipment and leasehold improvements

 

(406

)

 

(345

)

 

(659

)

 

(522

)

Payments for capitalized computer software development costs

 

(152

)

 

(89

)

 

(330

)

 

(895

)

Acquisition and integration planning related payments

 

11,223

 

 

616

 

 

12,000

 

 

907

 

Free cash flow (non-GAAP)

$

51,922

 

$

38,021

 

$

84,955

 

$

73,780

 

 
(a) GAAP total expenses
Three Months Ended

December 31,
Six Months Ended

December 31,

2021

2020

2021

2020

Total costs of revenue

$

14,896

 

$

14,315

 

$

29,779

 

$

29,781

 

Total operating expenses

 

87,971

 

 

69,950

 

 

169,230

 

 

135,285

 

GAAP total expenses

$

102,867

 

$

84,265

 

$

199,009

 

$

165,066

 

 
(b) Stock-based compensation expense was as follows:
Three Months Ended

December 31,
Six Months Ended

December 31,

2021

2020

2021

2020

Cost of maintenance

$

149

 

$

122

 

$

354

 

$

438

 

Cost of services and other

 

226

 

 

351

 

 

506

 

 

801

 

Selling and marketing

 

1,774

 

 

1,612

 

 

3,637

 

 

2,856

 

Research and development

 

1,734

 

 

2,449

 

 

3,732

 

 

4,171

 

General and administrative

 

3,983

 

 

4,562

 

 

9,727

 

 

7,098

 

Total stock-based compensation

$

7,866

 

$

9,096

 

$

17,956

 

$

15,364

 

 
(c) The income tax effect on non-GAAP items for the three and six-months ended December 31, 2021 and 2020, respectively, is calculated utilizing the Company’s statutory tax rate of 21 percent.
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of Forward-Looking Guidance Range

(Unaudited in Thousands, Except per Share Data)
 
Twelve Months Ended June 30, 2022 (a)
Range
Low High
Guidance - Total expenses
GAAP - total expenses

$

413,000

 

$

418,000

 

Less:
Stock-based compensation

 

(33,000

)

 

(33,000

)

Amortization of intangibles

 

(8,000

)

 

(8,000

)

Acquisition and integration planning related fees

 

(32,000

)

 

(32,000

)

 
Non-GAAP - total expenses

$

340,000

 

$

345,000

 

 
Guidance - Income from operations
GAAP - income from operations

$

324,000

 

$

336,000

 

Plus:
Stock-based compensation

 

33,000

 

 

33,000

 

Amortization of intangibles

 

8,000

 

 

8,000

 

Acquisition and integration planning related fees

 

32,000

 

 

32,000

 

 
Non-GAAP - income from operations

 

397,000

 

 

409,000

 

 
Guidance - Net income and diluted income per share
GAAP - net income and diluted income per share

$

295,000

 

$

4.37

$

306,000

 

$

4.53

Plus:
Stock-based compensation

 

33,000

 

 

33,000

 

Amortization of intangibles

 

8,000

 

 

8,000

 

Acquisition and integration planning related fees

 

32,000

 

 

32,000

 

Less:
Income tax effect on Non-GAAP items (b)

 

(15,000

)

 

(15,000

)

 
Non-GAAP - net income and diluted income per share

$

353,000

 

$

5.23

$

364,000

 

$

5.39

 
Shares used in computing guidance for Non-GAAP diluted income per share

 

67,500

 

 

67,500

 

 
Guidance - Free Cash Flow
GAAP - Net cash provided by operating activities

$

251,200

 

$

261,200

 

Less:
Purchases of property, equipment and leasehold improvements

(3,000

)

(3,000

)

Payments for capitalized computer software development costs

(200

)

(200

)

Plus:
Acquisition and integration planning related payments

 

32,000

 

 

32,000

 

 
Free cash flow expectation (non-GAAP)

$

280,000

 

$

290,000

 

 
(a) Rounded amount used, except per share data.
(b) The income tax effect on non-GAAP items for the twelve months ended June 30, 2022 is calculated utilizing the Company’s statutory tax rate of 21 percent.

 

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