Aspen Technology, Inc. (AspenTech), a global leader in asset optimization software, announced financial results for its third-quarter of fiscal year 2022, ended March 31, 2022.
“AspenTech delivered strong third quarter results driven by a notable improvement in customer spending and continued execution by our team. We believe the growing importance of operational efficiency and sustainability across capital intensive industries will support our ability to return to consistent double-digit growth over time,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.
Pietri continued, “We are also excited to be approaching the completion of our proposed transaction with Emerson with the shareholder meeting set for May 16th. We believe the innovation and expertise of OSI and Geological Simulation Software will enable the new AspenTech to deliver even greater transformative value to customers in a broader set of industries.”
Third 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 $655 million at the end of the third quarter of fiscal 2022, which increased 7.4% compared to the third quarter of fiscal 2021 and 2.4% sequentially.
Summary of Third Quarter Fiscal Year 2022 Financial Results
AspenTech’s total revenue of $187.8 million included:
- License revenue, which represents the portion of a term license agreement allocated to the initial license, was $130.0 million in the third quarter of fiscal 2022, compared to $110.1 million in the third 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 $50.0 million in the third quarter of fiscal 2022, compared to $45.9 million in the third quarter of fiscal 2021.
- Services and other revenuewas $7.7 million in the third quarter of fiscal 2022, compared to $6.7 million in the third quarter of fiscal 2021.
For the quarter ended March 31, 2022, AspenTech reported income from operations of $80.8 million, compared to income from operations of $68.9 million in the third quarter of fiscal 2021.
Net income was $75.1 million for the quarter ended March 31, 2022, leading to net income per share of $1.12, compared to net income per share of $0.91 in the same period last fiscal year.
Non-GAAP income from operations was $102.5 million for the third quarter of fiscal 2022, compared to non-GAAP income from operations of $80.9 million in the same period last fiscal year. Non-GAAP net income was $92.3 million, or $1.38 per share, for the third quarter of fiscal 2022, compared to non-GAAP net income of $72.0 million, or $1.05 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 $285.2 million and total borrowings, net of debt issuance costs, of $279.4 million at March 31, 2022.
During the third quarter, the company generated $81.1 million in cash flow from operations and $89.2 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, April 27, 2022, AspenTech is issuing the following guidance for fiscal year 2022:
- Annual spend growth of 7-8% year-over-year
- Free cash flow of at least $285 million
- Total bookings of $814 to $840 million
- Total revenue of $737 to $754 million
- GAAP total expense of $410 to $415 million
- Non-GAAP total expense of $333 to $338 million
- GAAP operating income of $327 to $339 million
- Non-GAAP operating income of $404 to $416 million
- GAAP net income of $299 to $310 million
- Non-GAAP net income of $360 to $371 million
- GAAP net income per share of $4.43 to $4.59
- Non-GAAP net income per share of $5.33 to $5.50
The above guidance does not give effect to the proposed transaction with Emerson, which, if completed, is expected to close during the fourth quarter of fiscal 2022, ending June 30, 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.
