Aspen Technology, Inc. announced financial results for its fourth quarter of fiscal year 2020 ended June 30, 2020.
“AspenTech delivered solid fourth quarter results that exceeded expectations in the midst of unprecedented economic conditions,” said Antonio Pietri, President and Chief Executive Officer of Aspen Technology. “Customers in our core markets continued to make significant investments in AspenTech products despite the challenges facing their own businesses. Companies in the process and other capital intensive industries increasingly recognize that investing in digitalization initiatives is essential to long-term financial and operational success and we believe we are well-positioned to benefit from this trend.”
Pietri continued, “We are furthering our commitment to our customers through today’s announcement of the new AIoT Hub and our investment in the next generation of hybrid modeling software capabilities, planned for release in the coming months. We intend to introduce contextual artificial intelligence into our core products to enable better informed and more accurate decisions to improve the operating performance of assets. We are confident that these innovations will further extend the value AspenTech delivers for its customers.”
Fourth Quarter and Fiscal Year 2020 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 $593 million at the end of the fourth quarter of fiscal 2020, which increased 9.6% compared to the fourth quarter of fiscal 2019 and 3.1% sequentially.
AspenTech repurchased approximately 1.3 million shares of its common stock for $150 million in fiscal year 2020.
Summary of Fourth Quarter Fiscal Year 2020 Financial Results
AspenTech’s total revenue of $199.3 million included:
License revenue, which represents the portion of a term license agreement allocated to the initial license, was $147.2 million in the fourth quarter of fiscal 2020, compared to $148.5 million in the fourth quarter of fiscal 2019.
Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was $45.7 million in the fourth quarter of fiscal 2020, compared to $39.5 million in the fourth quarter of fiscal 2019.
Services and other revenue was $6.4 million in the fourth quarter of fiscal 2020, compared to $7.8 million in the fourth quarter of fiscal 2019.
For the quarter ended June 30, 2020, AspenTech reported income from operations of $113.7 million, compared to income from operations of $111.2 million for the quarter ended June 30, 2019.
Net income was $97.6 million for the quarter ended June 30, 2020, leading to net income per share of $1.43, compared to net income per share of $1.49 in the same period last fiscal year.
Non-GAAP income from operations, was $122.9 million for the fourth quarter of fiscal 2020, compared to non-GAAP income from operations of $119.9 million in the same period last fiscal year. Non-GAAP net income was $104.9 million, or $1.54 per share, for the fourth quarter of fiscal 2020, compared to non-GAAP net income of $110.7 million, or $1.59 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 $287.8 million and total borrowings, net of debt issuance costs, of $427.5 million at June 30, 2020.
During the fourth quarter, the company generated $99.7 million in cash flow from operations and $99.5 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-related payments.
Summary of Fiscal Year 2020 Financial Results
AspenTech’s total revenue of $590.2 million decreased 1.0% from $598.3 million for fiscal year 2019.
License revenue, was $377.2 million, a decrease from $404.1 million for fiscal year 2019.
Maintenance revenue, was $179.8 million, an increase from $165.4 million for fiscal year 2019.
Services and other revenue was $33.2 million, an increase from $28.8 million for fiscal year 2019.
For the fiscal year ended June 30, 2020, AspenTech reported income from operations of $248.8 million, compared to income from operations of $282.8 million for fiscal year 2019.
Net income was $225.7 million for the fiscal year ended June 30, 2020, leading to net income per share of $3.28, compared to net income per share of $3.71 for fiscal year 2019.
Non-GAAP income from operations was $287.0 million for fiscal year 2020, compared to non-GAAP income from operations of $316.3 million for fiscal year 2019. Non-GAAP net income was $255.9 million, or $3.72 per share, for fiscal year 2020, compared to non-GAAP net income of $289.2 million, or $4.09 per share, for fiscal year 2019.
For the fiscal year ended June 30, 2020, the company generated $243.3 million in cash flow from operations and $243.1 million in free cash flow.
Business Outlook
Based on information as of today, August 12, 2020, Aspen Technology is issuing the following guidance for fiscal year 2021:
Annual spend growth of 6-9% year-over-year
Free cash flow of $260 to $270 million
Total bookings of $770 to $850 million
Total revenue of $704 to $754 million
GAAP total expense of $372 to $377 million
Non-GAAP total expense of $330 to $335 million
GAAP operating income of $332 to $377 million
Non-GAAP operating income of $374 to $420 million
GAAP net income of $290 to $327 million
Non-GAAP net income of $324 to $360 million
GAAP net income per share of $4.29 to $4.83
Non-GAAP net income per share of $4.78 to $5.32
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