Aspen Technology, Inc. (AspenTech), a global leader in asset optimization software, announced financial results for its second-quarter of fiscal year 2022, ended December 31, 2021.
“AspenTech delivered strong second quarter results that reflected continued improvement in both customer demand and business conditions in many of our key end markets, which supports our increased outlook for annual spend growth for fiscal 2022. We are confident that the strategic imperative for our customers to operate assets more efficiently and sustainably will drive increased spend that will generate double-digit growth for AspenTech over time.”
Pietri continued, “We are on track to close the proposed transaction with Emerson in our fourth fiscal quarter. We remain excited by the opportunities for the new AspenTech to enable customers to improve the safety, sustainability, reliability and efficiency of their assets. The combination of talented individuals and leading software products and solutions in the OSI and Geological Simulation Software businesses will strengthen AspenTech and collectively enhance our unique ability to improve the profitability and sustainability of our customers. We are also confident this transaction will generate attractive financial performance and significant value for our shareholders over the long-term.”
Second 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 $640 million at the end of the second quarter of fiscal 2022, which increased 6.0% compared to the second quarter of fiscal 2021 and 1.7% sequentially.
- AspenTech repurchased approximately 439,000 shares of its common stock for $65 million in the second quarter of fiscal 2022.
Summary of Second Quarter Fiscal Year 2022 Financial Results
AspenTech’s total revenue of $171.4 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $116.1 million in the second quarter of fiscal 2022, compared to $180.2 million in the second 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 $48.4 million in the second quarter of fiscal 2022, compared to $46.8 million in the second quarter of fiscal 2021.
- Services and other revenuewas $6.9 million in the second quarter of fiscal 2022, compared to $6.7 million in the second quarter of fiscal 2021.
For the quarter ended December 31, 2021, AspenTech reported income from operations of $68.5 million, compared to income from operations of $149.5 million in the second quarter of fiscal 2021.
Net income was $61.9 million for the quarter ended December 31, 2021, leading to net income per share of $0.92, compared to net income per share of $1.89 in the same period last fiscal year.
Non-GAAP income from operations was $92.2 million for the second quarter of fiscal 2022, compared to non-GAAP income from operations of $162.2 million in the same period last fiscal year. Non-GAAP net income was $80.6 million, or $1.20 per share, for the second quarter of fiscal 2022, compared to non-GAAP net income of $139.3 million, or $2.04 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 and integration planning 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 $211.4 million and total borrowings, net of debt issuance costs, of $285.2 million at December 31, 2021.
During the second quarter, the company generated $41.3 million in cash flow from operations and $51.9 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; payments for capitalized computer software development costs, and other nonrecurring items, such as acquisition and integration planning related payments.
Business Outlook
Based on information as of today, January 26, 2022, AspenTech is issuing the following guidance for fiscal year 2022:
- Annual spend growth of 7-8% year-over-year
- Free cash flow of $280 to $290 million
- Total bookings of $814 to $840 million
- Total revenue of $737 to $754 million
- GAAP total expense of $413 to $418 million
- Non-GAAP total expense of $340 to $345 million
- GAAP operating income of $324 to $336 million
- Non-GAAP operating income of $397 to $409 million
- GAAP net income of $295 to $306 million
- Non-GAAP net income of $353 to $364 million
- GAAP net income per share of $4.37 to $4.53
- Non-GAAP net income per share of $5.23 to $5.39
The above guidance does not give effect to the proposed transaction with Emerson, 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 today, January 26, 2022, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the second-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 9639977. 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 9639977, through February 2, 2022.
