Aspen Technology, Inc. (“AspenTech” or the “Company”) (NASDAQ:
AZPN), a global leader in industrial software, today announced
financial results for its first quarter in fiscal 2025, ended
September 30, 2024.
Antonio Pietri, President and Chief Executive Officer of
AspenTech, commented, “AspenTech continues to perform well amid
ongoing macro uncertainty, delivering solid results to start fiscal
2025. We continue to see strong customer demand for our products
and solutions to support their operational excellence and
sustainability initiatives. The resilience of our ACV growth is a
great indication of the mission-criticality of AspenTech’s
technology to our customers.”
Pietri continued, “At our recent investor day, we laid out a
compelling strategy that underscored how we believe AspenTech is
poised to benefit from global investments in decarbonization,
electrification, and the transition to a new energy system. Looking
ahead, we are confident in our ability to deliver consistent
high-single to double-digit ACV growth while meaningfully expanding
our ACV margin to our Target Operating Model of 45-47% in the
coming years. Today’s announcement of our anticipated acquisition
of Open Grid Systems is in support of the strategy outlined and
expands our suite of products and solutions for the utilities
industry.”
First Quarter Fiscal Year 2025 and Recent Business
Highlights
- Annual contract value1 (“ACV”) was $941.4 million for the first
quarter of fiscal 2025, increasing 9.4% year over year and 0.9%
quarter over quarter.
- Cash flow used in operations was $4.4 million for the first
quarter of fiscal 2025. Free cash flow was negative $6.4 million
for the first quarter of fiscal 2025. A reconciliation of GAAP to
non-GAAP results is presented in the financial tables included in
this press release.
- AspenTech announced today in a separate press release that it
has entered into a definitive agreement to acquire Open Grid
Systems Limited (“Open Grid Systems”), a global provider of network
model management technology and a pioneer in developing
model-driven applications supporting open access to data through
industry standards. This acquisition will further enhance
AspenTech’s Digital Grid Management (“DGM”) suite to support
utilities in effectively managing grid complexity while also
ensuring resiliency.
First Quarter Fiscal Year 2025 Financial Results
Summary
AspenTech’s total revenue was $215.9 million in the first
quarter of fiscal 2025, compared to $249.3 million in the first
quarter of fiscal 2024. Total revenue in the period included
license and solutions revenue of $101.7 million, compared to $148.6
million in the first quarter of fiscal 2024, maintenance revenue of
$90.7 million, compared to $85.0 million in the first quarter of
fiscal 2024, and services and other revenue of $23.5 million,
compared to $15.7 million in the first quarter of fiscal 2024.
Bookings2 was $151.4 million in the first quarter of fiscal 2025,
compared to $211.8 million in the first quarter of fiscal 2024. The
year-over-year differences related to bookings and total revenue
were in line with the Company’s expectations and driven by the
timing of contract renewals and a higher concentration of attrition
in the first quarter of fiscal 2025 relative to the full fiscal
year.
Loss from operations was $96.0 million in the first quarter of
fiscal 2025, compared to a loss of $60.2 million in the first
quarter of fiscal 2024. Non-GAAP income from operations was $48.6
million in the first quarter of fiscal 2025, compared to $77.8
million in the first quarter of fiscal 2024. Net loss was $60.5
million, or $0.96 per diluted share, in the first quarter of fiscal
2025, compared to $34.5 million, or $0.54 per diluted share, in the
first quarter of fiscal 2024. Non-GAAP net income was $53.9
million, or $0.85 per diluted share, in the first quarter of fiscal
2025, compared to $74.9 million, or $1.16 per diluted share, in the
first quarter of fiscal 2024.
AspenTech had cash and cash equivalents of $221.1 million as of
September 30, 2024, compared to $237.0 million as of June 30, 2024.
The decrease in cash and cash equivalents during this period was
primarily due to the impact of share repurchase activity under the
Company’s fiscal 2025 share repurchase authorization (the “Fiscal
2025 Share Repurchase Authorization”). Under its revolving credit
facility, AspenTech had no borrowings and $194.5 million available
as of September 30, 2024.
Cash flow used in operations was $4.4 million and free cash flow
was negative $6.4 million in the first quarter of fiscal 2025,
compared to cash flow from operations of $17.0 million and free
cash flow of $16.0 million in the first quarter of fiscal 2024. The
year-over-year differences in operating cash flow and free cash
flow were due to one-time charges related to the Company’s
workforce reduction and Russia exit as well as the timing of
collections in the first quarter of fiscal 2025.
Recent Developments
Open Grid Systems Acquisition
AspenTech today announced in a separate press release that it
has entered into a definitive agreement to acquire Open Grid
Systems. With this acquisition, AspenTech’s DGM suite will offer
utilities a comprehensive, fully integrated network model
management solution to address the acceleration of new grid assets,
such as renewable generation, with increased flexibility to manage
and scale network model data both inside and outside the control
room. Open Grid Systems has a long history of participation in
International Electrotechnical Commission (“IEC”) standards groups
and collaborating with experts around the world to develop and
promote the adoption of standards throughout the electrical
industry. The transaction is subject to receipt of customary
regulatory approvals and is expected to close during the second
quarter of fiscal 2025.
Fiscal 2025 Share Repurchase Authorization Update
AspenTech repurchased 92,819 shares for approximately $20.5
million under the Company’s Fiscal 2025 Share Repurchase
Authorization during the first quarter of fiscal 2025. The total
value remaining under this authorization was approximately $79.5
million as of September 30, 2024.
Investor Day
AspenTech held its 2024 Investor Day on September 17, 2024. As
part of the event, the Company provided a multi-year financial
outlook and value creation framework to drive ACV1 growth, expand
margins, and execute disciplined capital allocation. A replay of
the event webcast and presentation materials are available for a
limited time on the Webcasts and Events section of AspenTech’s IR
website at
https://ir.aspentech.com/events-presentations/webcasts-and-events.
Fiscal Year 2025 Business Outlook
Based on information as of today, November 4, 2024, AspenTech is
reaffirming its fiscal 2025 guidance. Please note that the
Company’s fiscal 2025 ACV1 growth guidance is based on an ACV1
balance of $932.9 million as of June 30, 2024.
- ACV1 growth of ~9.0% year-over-year
- GAAP operating cash flow of ~$357 million
- Free cash flow of ~$340 million
- Total bookings2 of ~$1.17 billion
- Total revenue of ~$1.19 billion
- GAAP total expense of ~$1.21 billion
- Non-GAAP total expense of ~$675 million
- GAAP operating loss of ~$24 million
- Non-GAAP operating income of ~$514 million
- GAAP net income of ~$52 million
- Non-GAAP net income of ~$478 million
- GAAP net income per share of ~$0.82
- Non-GAAP net income per share of ~$7.52
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.
Conference Call and Webcast
AspenTech will host a conference call and webcast presentation
on Monday, November 4, 2024, at 4:30 p.m. ET to discuss its
financial results, business outlook, and related corporate and
financial matters. A live webcast of the call will be available on
AspenTech’s Investor Relations website, http://ir.aspentech.com,
via its “Webcasts” page. To access the call by phone, please use
the registration link. To avoid delays, we encourage participants
to dial into the conference call fifteen minutes ahead of the
scheduled start time. A replay of the webcast also will be
available for a limited time at http://ir.aspentech.com/.
AspenTech has provided an earnings presentation for its first
quarter of fiscal 2025. AspenTech asks that shareholders refer to
this presentation in conjunction with the conference call, which
can be found at ir.aspentech.com.
Footnotes
- ACV is the estimate of the annual value of the Company’s
portfolio of term license and software maintenance and support, or
SMS, contracts, the annual value of SMS agreements purchased with
perpetual licenses and the annual value of standalone SMS
agreements purchased with certain legacy term license agreements,
which have become an immaterial part of the Company's business. All
ACV numbers presented in this press release exclude ACV associated
with the Company’s Russia business for all periods presented.
- Bookings is the total value of customer term license and
perpetual license SMS contracts signed and delivered in the current
period, less the value of such contracts signed in the current
period where the initial licenses and SMS agreements are not yet
deemed delivered, plus the term license contracts and perpetual
license SMS contracts signed in a previous period for which the
initial licenses are deemed delivered in the current period.
About AspenTech
Aspen Technology, Inc. (NASDAQ: AZPN) is a global software
leader helping industries at the forefront of the world’s dual
challenge meet the increasing demand for resources from a rapidly
growing population in a profitable and sustainable manner.
AspenTech solutions address complex environments where it is
critical to optimize the asset design, operation and maintenance
lifecycle. Through our unique combination of deep domain expertise
and innovation, customers in asset-intensive industries can run
their assets safer, greener, longer and faster to improve their
operational excellence. To learn more, visit AspenTech.com.
Forward-Looking Statements
Statements in this press release that are not strictly
historical may be “forward-looking” statements for purposes of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, which involve risks and uncertainties, and AspenTech
undertakes no obligation to update any such statements to reflect
later developments. These forward-looking statements include, but
are not limited to, AspenTech’s guidance for fiscal 2025, the
completion of the Fiscal 2025 Share Repurchase Authorization and
the completion and timing of the announced acquisition. In some
cases, you can identify forward-looking statements by the following
words: “may,” “will,” “could,” “would,” “should,” “expect,”
“intend,” “plan,” “target,” “strategy,” “anticipate,” “believe,”
“estimate,” “predict,” “project,” “potential,” “continue,”
“ongoing,” “opportunity” or the negative of these terms or other
comparable terminology, although not all forward-looking statements
contain these words. These risks and uncertainties include, without
limitation: the failure to realize the anticipated benefits of the
transaction with Emerson; risks resulting from the Company’s status
as a controlled company; risks resulting from the suspension of
commercial activities in Russia and the scope, duration and
ultimate impacts of the conflict in the Middle East; as well as
economic and currency conditions, market demand (including adverse
changes in the process or other capital-intensive industries, such
as materially reduced spending budgets due to oil and gas price
declines and volatility), pricing, protection of intellectual
property, cybersecurity, natural disasters, tariffs, sanctions,
competitive and technological factors, and inflation; and others,
as set forth in AspenTech’s most recent Annual Report on Form 10-K
and subsequent reports filed with the U.S. Securities and Exchange
Commission (the “SEC”). The outlook contained herein represents
AspenTech’s expectation for its consolidated results, other than as
noted herein.
© 2024 Aspen Technology, Inc. AspenTech, aspenONE, asset
optimization and the Aspen leaf logo are trademarks of Aspen
Technology, Inc. All rights reserved. All other trademarks not
owned by AspenTech are property of their respective owners.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under
the rules of the SEC. 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.
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September
30,
2024
2023
(Dollars and Shares in
Thousands, Except per Share Data)
Revenue:
License and solutions
$
101,659
$
148,648
Maintenance
90,686
84,968
Services and other
23,532
15,692
Total revenue
215,877
249,308
Cost of revenue:
License and solutions
63,654
71,578
Maintenance
10,688
10,200
Services and other
21,105
16,282
Total cost of revenue
95,447
98,060
Gross profit
120,430
151,248
Operating expenses:
Selling and marketing
125,661
122,378
Research and development
50,000
53,676
General and administrative
33,008
35,405
Restructuring costs
7,726
—
Total operating expenses
216,395
211,459
Loss from operations
(95,965
)
(60,211
)
Other income (expense), net
2,041
(5,830
)
Interest income, net
17,176
14,049
Loss before benefit for income taxes
(76,748
)
(51,992
)
Benefit for income taxes
(16,284
)
(17,467
)
Net loss
$
(60,464
)
$
(34,525
)
Net loss per common share:
Basic
$
(0.96
)
$
(0.54
)
Diluted
$
(0.96
)
$
(0.54
)
Weighted average shares
outstanding:
Basic
63,244
64,319
Diluted
63,244
64,319
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
September 30, 2024
June 30, 2024
(Dollars in Thousands, Except
Share Data)
ASSETS
Current assets:
Cash and cash equivalents
$
221,093
$
236,970
Accounts receivable, net
102,867
115,533
Current contract assets, net
426,387
409,177
Prepaid expenses and other current
assets
33,670
27,441
Receivables from related parties
45,300
78,483
Prepaid income taxes
2,909
8,462
Total current assets
832,226
876,066
Property, equipment and leasehold
improvements, net
18,093
17,389
Goodwill
8,330,124
8,328,201
Intangible assets, net
4,063,852
4,184,750
Non-current contract assets, net
518,562
515,106
Contract costs
26,265
24,903
Operating lease right-of-use assets
95,001
96,034
Deferred income tax assets
7,627
6,989
Other non-current assets
25,189
22,269
Total assets
$
13,916,939
$
14,071,707
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
12,050
$
8,099
Accrued expenses and other current
liabilities
78,926
100,167
Due to related parties
24,979
47,449
Current operating lease liabilities
12,172
13,125
Income taxes payable
21,656
44,249
Current contract liabilities
117,768
124,312
Total current liabilities
267,551
337,401
Non-current contract liabilities
33,569
27,512
Deferred income tax liabilities
758,389
790,687
Non-current operating lease
liabilities
85,676
84,875
Other non-current liabilities
18,795
18,377
Stockholders’ equity:
Common stock, $0.0001 par value
Authorized—600,000,000 shares
Issued— 65,453,489 and 65,367,159
shares
Outstanding— 63,245,006 and 63,251,495
shares
7
7
Additional paid-in capital
13,293,704
13,277,851
Accumulated deficit
(111,626
)
(51,162
)
Accumulated other comprehensive loss
(2,059
)
(7,261
)
Treasury stock, at cost — 2,208,483 and
2,115,664 shares of common stock
(427,067
)
(406,580
)
Total stockholders’ equity
12,752,959
12,812,855
Total liabilities and stockholders’
equity
$
13,916,939
$
14,071,707
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended September
30,
2024
2023
(Dollars in Thousands)
Cash flows from operating
activities:
Net loss
$
(60,464
)
$
(34,525
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
122,856
123,219
Reduction in the carrying amount of
right-of-use assets
3,961
3,562
Net foreign currency (gains) losses
(2,120
)
5,894
Stock-based compensation
14,814
16,699
Deferred income taxes
(32,448
)
(51,080
)
Provision for uncollectible
receivables
491
1,788
Other non-cash operating activities
(258
)
19
Changes in assets and
liabilities:
Accounts receivable
12,887
29,417
Contract assets
(18,851
)
(24,062
)
Contract costs
1,285
(1,163
)
Lease liabilities
(3,041
)
(3,770
)
Prepaid expenses, prepaid income taxes,
and other assets
(5,956
)
(22,487
)
Accounts payable, accrued expenses, income
taxes payable and other liabilities
(37,052
)
10,200
Contract liabilities
(501
)
(36,730
)
Net cash (used in) provided by operating
activities
(4,397
)
16,981
Cash flows from investing
activities:
Purchases of property, equipment and
leasehold improvements
(2,022
)
(937
)
Payments for business acquisitions, net of
cash acquired
—
(8,273
)
Payments for equity method investments
(30
)
(98
)
Payments for asset acquisitions
—
(12,500
)
Net cash used in investing activities
(2,052
)
(21,808
)
Cash flows from financing
activities:
Issuance of shares of common stock, net of
taxes
6,262
3,285
Repurchases of common stock
(20,487
)
(114,224
)
Payment of tax withholding obligations
related to restricted stock
(4,635
)
(1,938
)
Net transfers from Parent Company
8,836
3,890
Payments of debt issuance costs
(107
)
—
Net cash used in financing activities
(10,131
)
(108,987
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
3,264
(6,855
)
Decrease in cash, cash equivalents and
restricted cash
(13,316
)
(120,669
)
Cash, cash equivalents and restricted
cash, beginning of period
248,468
241,209
Cash, cash equivalents and restricted
cash, end of period
$
235,152
$
120,540
Reconciliation of cash, cash equivalents
and restricted cash:
Cash and cash equivalents
$
221,093
$
120,540
Restricted cash in other non-current
assets
14,059
—
Total cash, cash equivalents and
restricted cash
$
235,152
$
120,540
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
Reconciliation of GAAP to
Non-GAAP Results of Operations and Cash Flows
(Unaudited)
Three Months Ended September
30,
2024
2023
(Dollars and Shares in
Thousands, Except per Share Data)
Total
expenses
GAAP total expenses (a)
$
311,842
$
309,519
Less:
Stock-based compensation (b)
(14,814
)
(16,699
)
Amortization of intangibles (c)
(121,589
)
(121,587
)
Acquisition and integration planning
related fees
(405
)
255
Restructuring costs3
(7,726
)
—
Non-GAAP total expenses
$
167,308
$
171,488
(Loss) income
from operations
GAAP loss from operations
$
(95,965
)
$
(60,211
)
Plus:
Stock-based compensation (b)
14,814
16,699
Amortization of intangibles (c)
121,589
121,587
Acquisition and integration planning
related fees
405
(255
)
Restructuring costs3
7,726
—
Non-GAAP income from operations
$
48,569
$
77,820
Net (loss)
income
GAAP net loss
$
(60,464
)
$
(34,525
)
Plus:
Stock-based compensation (b)
14,814
16,699
Amortization of intangibles (c)
121,589
121,587
Acquisition and integration planning
related fees
405
(255
)
Restructuring costs3
7,726
—
Less:
Income tax effect on Non-GAAP items
(d)
(30,203
)
(28,621
)
Non-GAAP net income
$
53,867
$
74,885
Diluted (loss)
income per share
GAAP diluted loss per share
$
(0.96
)
$
(0.54
)
Plus:
Stock-based compensation (b)
0.23
0.26
Amortization of intangibles (c)
1.91
1.88
Acquisition and integration planning
related fees
0.01
—
Restructuring costs3
0.12
—
Impact of diluted shares
0.01
—
Less:
Income tax effect on Non-GAAP items
(d)
(0.47
)
(0.44
)
Non-GAAP diluted income per share
$
0.85
$
1.16
Shares used in computing Non-GAAP diluted
(loss) income per share
63,547
64,658
(3) AspenTech incurred restructuring costs
as a result of its workforce reduction and Russian business exit
both announced in August 2024.
Three Months Ended September
30,
2024
2023
(Dollars in Thousands)
Free Cash
Flow
Net cash (used in) provided by operating
activities (GAAP)
$
(4,397
)
$
16,981
Purchases of property, equipment and
leasehold improvements
(2,022
)
(937
)
Free cash flow (non-GAAP)
$
(6,419
)
$
16,044
(a) GAAP total expenses
Total costs of revenue
$
95,447
$
98,060
Total operating expenses
216,395
211,459
GAAP total expenses
$
311,842
$
309,519
(b) Stock-based compensation expense was
as follows:
Cost of license and solutions
$
551
$
680
Cost of maintenance
887
488
Cost of services and other
1,045
498
Selling and marketing
2,930
2,942
Research and development
3,000
4,553
General and administrative
6,401
7,538
Total stock-based compensation
$
14,814
$
16,699
(c) Amortization of intangible assets was
as follows:
Cost of license and solutions
$
48,202
$
48,035
Selling and marketing
73,387
73,552
Total amortization of intangible
assets
$
121,589
$
121,587
(d) The income tax effect on non-GAAP
items for the three months ended March 31, 2024 and 2023,
respectively, is calculated utilizing the Company’s combined US
federal and state statutory tax rate as following:
U.S. Statutory Rate
21.79
%
21.79
%
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIES
Reconciliation of
Forward-Looking Guidance
(Unaudited)
Twelve Months Ended June 30,
2025 (4)
(Dollars in Thousands, Except
Share Data)
Guidance - Total expenses
GAAP expectation - total expenses
$
1,213,000
Less:
Stock-based compensation
(56,000
)
Amortization of intangibles
(474,000
)
Restructuring costs3
(8,000
)
Non-GAAP expectation - total expenses
$
675,000
Guidance - (Loss) income from
operations
GAAP expectation - loss from
operations
$
(24,000
)
Plus:
Stock-based compensation
56,000
Amortization of intangibles
474,000
Restructuring costs3
8,000
Non-GAAP expectation - income from
operations
$
514,000
Guidance - Net income and diluted
income per share
GAAP expectation - net income and diluted
income per share
$
52,000
$
0.82
Plus:
Stock-based compensation
56,000
Amortization of intangibles
474,000
Restructuring costs3
8,000
Less:
Income tax effect on Non-GAAP items
(5)
(112,000
)
Non-GAAP expectation - net income and
diluted income per share
$
478,000
$
7.52
Shares used in computing guidance for
Non-GAAP diluted income per share
63,600
Guidance - Free Cash Flow
GAAP expectation - net cash provided by
operating activities
$
357,000
Less:
Purchases of property, equipment and
leasehold improvements
(17,000
)
Free cash flow expectation (non-GAAP)
$
340,000
(4) Rounded amount used, except per share
data.
(5) The income tax effect on non-GAAP
items for the twelve months ended June 30, 2025 is calculated
utilizing the Company’s statutory tax rate of 21.79 percent.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104222426/en/
Media Contact Len Dieterle Aspen Technology +1
781-221-4291 len.dieterle@aspentech.com
Investor Contact William Dyke Aspen Technology +1
781-221-5571 ir@aspentech.com
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