Aspen Technology, Inc. announced financial results for its fourth quarter and fiscal year ended June 30, 2019.
“AspenTech’s fourth quarter performance was a strong finish to a great year, highlighted by a return to double-digit annual spend growth. Our results reflect positive contributions across all areas of the business, including meaningful improvement in Engineering, continued strength in MSC and substantial growth from APM,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.
Pietri continued, “We enter fiscal year 2020 performing at a high level and are benefitting from a positive demand environment driven by a secular technology investment cycle in the process and other capital intensive industries. We believe AspenTech is well positioned to benefit from this trend and intend to make investments in the business this year to ensure we maximize this opportunity. We are confident this will generate additional value for our customers and shareholders over time.”
Fourth Quarter and Fiscal Year 2019 Recent Business Highlights
- Annual spend, which the company defines as the annualized value of all term license and maintenance contracts at the end of the quarter, was approximately $541 million at the end of the fourth quarter of fiscal 2019, which increased 10.6% compared to the fourth quarter of fiscal 2018 and 2.8% sequentially.
- GAAP operating margin was 56.8% compared to 50.2% in the fourth quarter of fiscal 2018. Non-GAAP operating margin was 61.3% compared to 54.1% in the fourth quarter of fiscal 2018.
- AspenTech repurchased approximately 648,000 shares of its common stock for $75 million in the fourth quarter of fiscal 2019.
- AspenTech repurchased approximately 3.1 million shares of its common stock for $300 million in fiscal year 2019.
Summary of Fourth Quarter Fiscal Year 2019 Financial Results
- AspenTech’s total revenue of $195.8 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $148.5 million in the fourth quarter of fiscal 2019, compared to $111.6 million in the fourth quarter of fiscal 2018.
- Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was $39.5 million in the fourth quarter of fiscal 2019, compared to $39.2 million in the fourth quarter of fiscal 2018.
- Services and other revenue was $7.8 million in the fourth quarter of fiscal 2019, compared to $8.3 million in the fourth quarter of fiscal 2018.
For the quarter ended June 30, 2019, AspenTech reported income from operations of $111.2 million, compared to income from operations of $79.8 million for the quarter ended June 30, 2018.
Net income was $103.9 million for the quarter ended June 30, 2019, leading to net income per share of $1.49, compared to net income per share of $1.06 in the same period last fiscal year.
Non-GAAP income from operations was $119.9 million for the fourth quarter of fiscal 2019, compared to non-GAAP income from operations of $86.1 million in the same period last fiscal year. Non-GAAP net income was $110.7 million, or $1.59 per share, for the fourth quarter of fiscal 2019, compared to non-GAAP net income of $81.2 million, or $1.12 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 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 $71.9 million and borrowings of $220 million at June 30, 2019.
During the fourth quarter, the company generated $85.2 million in cash flow from operations and $84.9 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; capitalized computer software development costs, and other nonrecurring items, such as acquisition related payments.
Summary of Fiscal Year 2019 Financial Results
AspenTech’s total revenue of $598.3 million increased 15% from $518.9 million for fiscal year 2018.
- License revenue was $404.1 million, an increase from $326.5 million for fiscal year 2018.
- Maintenance revenue was $165.4 million, an increase from $161.1 million for fiscal year 2018.
- Services and other revenue was $28.8 million, compared to $31.2 million for fiscal year 2018.
For the fiscal year ended June 30, 2019, AspenTech reported income from operations of $282.8 million, compared to income from operations of $219.2 million for fiscal year 2018.
Net income was $262.7 million for the fiscal year ended June 30, 2019, leading to net income per share of $3.71, compared to net income per share of $4.03 for fiscal year 2018. Net income in the year ago period benefited from one-time, non-cash items related to the implementation of Topic 606 and the implementation of the Tax Cuts and Jobs Act of 2017.
Non-GAAP income from operations was $316.3 million for fiscal year 2019, an improvement compared to non-GAAP income from operations of $246.6 million for fiscal year 2018. Non-GAAP net income was $289.2 million, or $4.09 per share, for fiscal year 2019, compared to non-GAAP net income of $313.4 million, or $4.30 per share, for fiscal year 2018.
For the fiscal year ended June 30, 2019, the company generated $238.3 million in cash flow from operations and $236.8 million in free cash flow.
