Press Release

Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2016

August 11, 2016

Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2016
Bedford, MA -

Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries,today announced financial results for its fourth quarter and fiscal year ended June 30, 2016.

“AspenTech reported a solid fourth quarter and fiscal year 2016,” said Antonio Pietri, President and Chief Executive Officer of AspenTech. “We saw strong demand among our owner-operator customers during the quarter, including a significant upsell and a large renewal with two of the top oil and chemicals companies in the world. These transactions show the value we deliver for customers and our ability to generate growth in a challenging economic environment.”

Pietri added, “Our scalable business model and disciplined approach to investing for growth while prudently managing expenses delivered another year of solid profitability and free cash flow. Our balance sheet and cash flow are strategic assets that we are leveraging to invest in areas that drive growth in the business and to fund our share repurchase program to deliver significant value to our shareholders.”

Fourth Quarter and Fiscal Year 2016 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 $441 million at the end of fiscal 2016, an increase of 2.5% from March 31, 2016 and 5.3% from the end of fiscal 2015.

GAAP operating margin was 43.1% in the fourth quarter of fiscal 2016, compared to 41.1% in the fourth quarter of fiscal 2015.  Non-GAAP operating margin was 46.1% in the fourth quarter of fiscal 2016, compared to 44.2% in the fourth quarter of fiscal 2015.

GAAP operating margin was 44.8% for fiscal year 2016, compared to 40.8% for fiscal year 2015.  Non-GAAP operating margin was 49.3% for fiscal year 2016, compared to 45.1% for fiscal year 2015.

AspenTech repurchased nearly 2.0 million shares of our common stock for $75.0 million in the fourth quarter of fiscal 2016.

AspenTech repurchased nearly 4.8 million shares of common stock for $180.0 million in fiscal year 2016.

Summary of Fourth Quarter Fiscal Year 2016 Financial Results

AspenTech’s total revenue of $113.7 million decreased 0.4% from $114.2 million in the fourth quarter of the prior fiscal year. 

  • Subscription and software revenue was $106.7 million in the fourth quarter of fiscal 2016, an increase from $105.6 million in the fourth quarter of fiscal 2015. 
  • Services and other revenue was $7.0 million in the fourth quarter of fiscal 2016, a decrease from $8.5 million in the fourth quarter of fiscal 2015. 

For the quarter ended June 30, 2016, AspenTech reported income from operations of $49.0 million, compared to income from operations of $46.9 million for the quarter ended June 30, 2015. 

Net income was $33.3 million for the quarter ended June 30, 2016, leading to net income per share of $0.41, compared to net income per share of $0.36 in the same period last fiscal year. 

Non-GAAP income from operations, which adds back stock-based compensation expense, amortization of intangibles associated with acquisitions, acquisition-related costs and non-capitalized acquired technology, was $52.4 million for the fourth quarter of fiscal 2016, compared to non-GAAP income from operations of $50.5 million in the same period last fiscal year.  Non-GAAP net income was $35.5 million, or $0.44 per share, for the fourth quarter of fiscal 2016, compared to non-GAAP net income of $33.1 million, or $0.39 per share, in the same period last fiscal year. 

AspenTech had cash and marketable securities of $321.3 million at June 30, 2016, compared to $105.9 million at the end of the prior quarter.  

During the fourth quarter, the company generated $44.8 million in cash flow from operations and $47.5 million in free cash flow.

Summary of Fiscal Year 2016 Financial Results

AspenTech’s total revenue of $472.3 million increased 7.3% from $440.4 million for fiscal year 2015. 

  • Subscription and software revenue was $440.4 million, an increase from $405.6 million for fiscal year 2015.
  • Services and other revenue was $31.9 million, compared to $34.8 million for fiscal year 2015. 

For the fiscal year ended June 30, 2016, AspenTech reported income from operations of $211.4 million, an improvement from income from operations of $179.8 million for fiscal year 2015.   

Net income was $140.0 million for the fiscal year ended June 30, 2016, leading to net income per share of $1.68, compared to net income per share of $1.33 for fiscal year 2015. 

Non-GAAP income from operations was $232.7 million for fiscal year 2016, an improvement compared to non-GAAP income from operations of $198.4 million for fiscal year 2015.  Non-GAAP net income was $155.8 million, or $1.87 per share, for fiscal year 2016, an improvement compared to non-GAAP net income of $130.3 million, or $1.46 per share, for fiscal year 2015.

For the fiscal year ended June 30, 2016, the company generated $153.7 million in cash flow from operations and $165.1 million in free cash flow. 

Use of Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.  A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.

Management considers both GAAP and non-GAAP financial results in managing AspenTech’s business.  As the result of adoption of new licensing models, management believes that a number of AspenTech’s performance indicators based on GAAP, including revenue, gross profit, operating income and net income, should be viewed in conjunction with certain non-GAAP and other business measures in assessing AspenTech’s performance, growth and financial condition. Accordingly, management utilizes a number of non-GAAP and other business metrics, including the non-GAAP metrics set forth in this press release, to track AspenTech’s business performance. None of these non-GAAP metrics should be considered as an alternative to any measure of financial performance calculated in accordance with GAAP.

Conference Call and Webcast

AspenTech will host a conference call and webcast today, August 11, 2016, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2016 as well as the company’s business outlook. 

The live dial-in number is (866) 604-6127 or (443) 961-0460, conference ID code 56375102. 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://www.aspentech.com/corporate/investor.cfm, 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 56375102, through September 11, 2016.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing – for energy, chemicals, engineering and construction, and other industries that manufacture and produce products from a chemical process. With integrated aspenONE solutions, process manufacturers can implement best practices for optimizing their engineering, manufacturing and supply chain operations. As a result, AspenTech customers are better able to increase capacity, improve margins, reduce costs and become more energy efficient. To see how the world’s leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit www.aspentech.com.

Forward-Looking Statements

The third paragraph of this press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Actual results may vary significantly from AspenTech’s expectations based on a number of risks and uncertainties, including, without limitation:  AspenTech’s failure to increase usage and product adoption of aspenONE offerings, and failure to continue to provide innovative, market-leading solutions; demand for, or usage of, aspenONE software declines for any reason, including declines due to adverse changes in the process industries; unfavorable economic and market conditions or a lessening demand in the market for process optimization software; and other risk factors described from time to time in AspenTech’s periodic reports filed with the Securities and Exchange Commission.  AspenTech cannot guarantee any future results, levels of activity, performance, or achievements.  AspenTech expressly disclaims any obligation to update forward-looking statements after the date of this press release.

© 2016 Aspen Technology, Inc.  AspenTech, aspenONE and the Aspen leaf logo are registered trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

 

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