Aspen Technology, Inc. (AspenTech), a global leader in asset optimization software, announced financial results for its first-quarter of fiscal year 2022 ended September 30, 2021.
“AspenTech’s first quarter results reflected a notable improvement in customer demand, particularly among refining customers. While the macro environment remains fluid, we continue to see positive interest from our customers, who recognize the critical value AspenTech’s solutions can provide in supporting their strategic sustainability and efficiency investments,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.
Pietri continued, “The recent announcement of our definitive agreement with Emerson Electric is a transformational moment for us. After the Emerson transaction, AspenTech will be an industrial software leader with an expanded product portfolio and broader market reach that will extend our ability to help customers improve safety, sustainability, reliability, and efficiency. We believe this transaction will position AspenTech to deliver significant growth and high levels of profitability while generating near- and long-term value for our shareholders.”
First 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 $630 million at the end of the first quarter of fiscal 2022, which increased 5.6% compared to the first quarter of fiscal 2021 and 1.4% sequentially.
- AspenTech repurchased approximately 1.1 million shares of its common stock for $150 million in the first quarter of fiscal 2022.
- Emerson Electric and AspenTech entered into a definitive agreement to contribute Emerson’s industrial software businesses – OSI Inc. and the Geological Simulation Software business – to AspenTech (“New AspenTech”).
Summary of First Quarter Fiscal Year 2022 Financial Results
AspenTech’s total revenue of $136.0 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $81.1 million in the first quarter of fiscal 2022, compared to $61.9 million in the first 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 $48.2 million in the first quarter of fiscal 2022, compared to $46.9 million in the first quarter of fiscal 2021.
- Services and other revenuewas $6.7 million in the first quarter of fiscal 2022, compared to $6.3 million in the first quarter of fiscal 2021.
For the quarter ended September 30, 2021, AspenTech reported income from operations of $39.9 million, compared to income from operations of $34.2 million in the first quarter of fiscal 2021.
Net income was $39.4 million for the quarter ended September 30, 2021, leading to net income per share of $0.58, compared to net income per share of $0.48 in the same period last fiscal year.
Non-GAAP income from operations was $55.4 million for the first quarter of fiscal 2022, compared to non-GAAP income from operations of $42.7 million in the same period last fiscal year. Non-GAAP net income was $51.6 million, or $0.77 per share, for the first quarter of fiscal 2022, compared to non-GAAP net income of $39.5 million, or $0.58 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 $248.0 million and total borrowings, net of debt issuance costs, of $289.4 million at September 30, 2021.
During the first quarter, the company generated $32.7 million in cash flow from operations and $33.0 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, October 27, 2021, AspenTech is issuing the following guidance for fiscal year 2022:
- Annual spend growth of 5-7% year-over-year
- Free cash flow of $275 to $285 million
- Total bookings of $766 to $819 million
- Total revenue of $702 to $737 million
- GAAP total expense of $389 to $394 million
- Non-GAAP total expense of $341 to $346 million
- GAAP operating income of $313 to $343 million
- Non-GAAP operating income of $361 to $391 million
- GAAP net income of $285 to $311 million
- Non-GAAP net income of $323 to $349 million
- GAAP net income per share of $4.19 to $4.57
- Non-GAAP net income per share of $4.75 to $5.13
The above guidance does not give effect to the proposed transaction with Emerson Electric, 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.
Conference Call and Webcast
AspenTech will host a conference call and webcast October 27, 2021, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the first-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 6994407. 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 6994407, through November 3, 2021.
