Aspen Technology, Inc., a global leader in asset optimization software, announced financial results for its second quarter of fiscal year 2021 ended December 31, 2020.
“AspenTech’s second quarter results were solid in the context of the current economic environment and support our outlook for a strong performance in the fiscal year. The quarter results were also highlighted by strong free cash flow generation,” said Antonio Pietri, President and Chief Executive Officer of Aspen Technology. “Customers continued to make substantial long-term commitments with AspenTech, including a renewal in excess of $75 million with one of the largest global oil companies making it one of the biggest transactions in our history.”
Pietri continued, “Demand activity remains strong across our product portfolio and we believe we are on track to have a good second half of the fiscal year. The increasing importance of digitalization and sustainability in the process and other capital intensive industries, as well as customer feedback on recent product announcements like the Aspen AIoT Hub and aspenONE v12, give us confidence in our ability to return to double-digit annual spend growth once the economy normalizes.”
Second Quarter Fiscal Year 2021 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 $604 million at the end of the second quarter of fiscal 2021, which increased 7.0% compared to the second quarter of fiscal 2020 and 1.3% sequentially.
Summary of Second Quarter Fiscal Year 2021 Financial Results
AspenTech’s total revenue of $233.7 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $180.2 million in the second quarter of fiscal 2021, compared to $72.4 million in the second quarter of fiscal 2020.
- Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was $46.8 million in the second quarter of fiscal 2021, compared to $44.5 million in the second quarter of fiscal 2020.
- Services and other revenue was $6.7 million in the second quarter of fiscal 2021, compared to $9.0 million in the second quarter of fiscal 2020.
For the quarter ended December 31, 2020, AspenTech reported income from operations of $149.5 million, compared to income from operations of $42.9 million for the quarter ended December 31, 2019.
Net income was $129.2 million for the quarter ended December 31, 2020, leading to net income per share of $1.89, compared to net income per share of $0.58 in the same period last fiscal year.
Non-GAAP income from operations was $162.2 million for the second quarter of fiscal 2021, compared to non-GAAP income from operations of $52.1 million in the same period last fiscal year. Non-GAAP net income was $139.3 million, or $2.04 per share, for the second quarter of fiscal 2021, compared to non-GAAP net income of $47.1 million, or $0.68 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 $217.5 million and total borrowings, net of debt issuance costs, of $300.8 million at December 31, 2020. During the second quarter the company paid down approximately $119.2 million on the outstanding balance on its revolving credit facility.
During the second quarter, the company generated $37.8 million in cash flow from operations and $38.0 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.
Business Outlook
Based on information as of today, January 27, 2021, Aspen Technology is issuing the following guidance for fiscal year 2021:
- Annual spend growth of 6-8% year-over-year
- Free cash flow of $265 to $275 million
- Total bookings of $805 to $850 million
- Total revenue of $731 to $760 million
- GAAP total expense of $356 to $361 million
- Non-GAAP total expense of $313 to $318 million
- GAAP operating income of $375 to $399 million
- Non-GAAP operating income of $418 to $442 million
- GAAP net income of $328 to $347 million
- Non-GAAP net income of $362 million to $381 million
- GAAP net income per share of $4.80 to $5.08
- Non-GAAP net income per share of $5.29 to $5.58
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 our actual results to differ materially from these forward-looking statements.
AspenTech has not reconciled its expectations as to forward-looking non-GAAP total expense, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share to their most directly comparable GAAP measure because certain items are out of AspenTech’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP total expense, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share is not available without unreasonable effort.
