Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2010
September 2, 2010
Mark Fusco, Chief Executive Officer of AspenTech, said, "The fourth quarter was a strong finish to our fiscal year. The combination of customers moving to our new aspenONE licensing model and new and expanded usage drove record quarterly and annual product related bookings that were well above our expectations. Most important, strong growth in our customer relationships during the fourth quarter contributed to double digit full year growth in the license portion of our total contract value during fiscal 2010. This reflects the underlying growth of our business, and we are optimistic that AspenTech is well positioned to continue growing its over a billion dollar total contract value in fiscal 2011 and beyond."
Fusco added, "In addition to validating market acceptance of our new aspenONE licensing model during fiscal 2010, we also made significant progress putting in place the foundation to grow the company's subscription cash flow model. We have not sold receivables to raise cash in nearly three years and we have steadily increased the portion of our business where customers have elected annual payment terms over the course of our multi-year contracts. We believe continued execution of this strategy will lead to strong growth in our free cash flow beginning in fiscal 2011."
Fourth Quarter Business Highlights
- Total contract value at the end of fiscal 2010 was approximately
$1.2 billion, an increase of approximately 17% compared to the end
of fiscal 2009. Approximately 10 percentage points of the growth in
total contract value during fiscal 2010 was driven by increased
license fees, with approximately 7 percentage points of the
year-over-year growth related to including maintenance with the
company’s new aspenONE licensing model, which was launched at
the beginning of fiscal 2010.
- Record product related bookings were approximately $138 million
for the fourth quarter, leading to record full year product related
bookings of approximately $366 million.
- Billings backlog was $389 million at the end of the fourth
quarter, an increase from $270 million at the end of last quarter
and $101 million at the end of fiscal 2009.
- The value of contractually committed, future cash collections
associated with the company’s subscription and multi-year
term contracts was $625 million at the end of the fourth quarter,
an increase from $537 million at the end of last quarter and $466
million at the end of fiscal 2009.
- The company closed 20 product related bookings of over $1 million
during the fourth quarter, and 50 product related bookings between
$250,000 and $1 million.
- Average deal size for product related bookings over $100,000 was
$1.1 million in the fourth quarter.
Summary of Fourth Quarter Financial Results
AspenTech's total revenue of $38.2 million decreased from $71.3 million in the fourth quarter of the prior year, due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model.
- Subscription revenue includes all revenue associated with the company's new aspenONE licensing model. Subscription revenue was approximately $5.9 million in the fourth quarter of fiscal 2010, an increase from $4.0 million last quarter. No subscription revenue was recorded in the year ago period as the company's new aspenONE licensing model was launched during the first quarter of fiscal 2010. Subscription revenue is recognized over the course of the multi-year agreement, and recognition begins when the first payment is due, which is typically 30 days after the contract is signed.
- Software revenue includes all non-subscription-based license revenue, including term-based contracts for point products as well as perpetual licenses. Software revenue was $8.1 million in the fourth quarter of fiscal 2010, compared to $41.6 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is generally recognized over the contract term as payments become due. In prior fiscal year periods, the company recognized term license revenue predominantly on an up-front basis, and the majority of license bookings were recognized as license revenue in the same period.
- Services & other revenue, which includes professional services, maintenance and other revenue, was $24.2 million in the fourth quarter of fiscal 2010, a decrease compared to $29.6 million in the year ago period.
For the quarter ended June 30, 2010, AspenTech reported a loss from operations of $35.6 million due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model. For the quarter ended June 30, 2009, the company reported income from operations of $2.3 million. Net loss was $34.0 million for the fourth quarter of fiscal 2010, leading to net loss per basic and diluted share of $0.37, compared to net income per diluted share of $0.11 in the same period last year.
AspenTech had a cash balance of $124.9 million at June 30, 2010, an increase of $5.9 million from the end of the prior quarter. The company did not sell any installments receivable to raise cash during the fourth quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $76.1 million at the end of the quarter, down $11.3 million compared to $87.4 million at the end of the third quarter of fiscal 2010.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, September
2, at 8:00 a.m. (Eastern Time), to discuss the company's financial
results for the fourth quarter and fiscal year 2010 as well as the
company’s business outlook. The live dial-in number is (877)
245-0126, conference ID code 97523083. 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 (800) 642-1687 or (706) 645-9291, conference ID code
97523083 through September 9, 2010.
About AspenTech
AspenTech is a leading supplier of software that optimizes process
manufacturing – for energy, chemicals, pharmaceuticals,
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.
© 2010 Aspen Technology, Inc. AspenTech, aspenONE and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.
Forward-Looking Statements
This press release may contain forward-looking statements for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements relating to the
anticipated benefits of AspenTech's new subscription-based
licensing model. Actual results may vary significantly from
AspenTech's expectations based on a number of risks and
uncertainties, including, without limitation: customers' failure to
adopt the new aspenONE licensing model at the rate expected by
AspenTech; AspenTech's failure to realize the anticipated financial
and operational benefits of the new aspenONE licensing model;
unforeseen difficulties or uncertainties in the application of
accounting standards; weaknesses in our internal controls; 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
current intention to update forward-looking statements after the
date of this press release.
Source: Aspen Technology, Inc.
Full financial tables are available in the printer friendly PDF link at the top of this page.