Aspen Technology Announces Financial Results for the Third Quarter Fiscal Year 2010
May 6, 2010
Mark Fusco, Chief Executive Officer of AspenTech, said, "The positive momentum of AspenTech's business continued during the third quarter. Product related bookings of approximately $94 million were consistent with the level of our seasonally stronger second quarter due primarily to customer interest in moving to our new aspenONE licensing model, in addition to expanded usage across our customer base. On a fiscal year-to-date basis, the company's license bookings are up approximately 10% compared to the comparable period in fiscal 2009, which we believe is a strong performance considering fiscal 2010 is the first year of our new aspenONE licensing model."
Fusco added, "We are pleased with the company's cash flow in the third quarter. We generated $19.4 million in cash flows from operations, which enabled the company to grow its cash balance by nearly $10 million at the same time secured borrowings were reduced by $9.1 million. We are at the early stages of ramping the company's subscription cash flow model and we are encouraged by our progress and long-term outlook."
AspenTech's total revenue of $45.6 million decreased from $71.3 million in the third 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 $4.0 million in the third quarter of fiscal 2010, an increase from $1.2 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 $14.7 million in the third quarter of fiscal 2010, compared to $41.1 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is recognized over the contract term, generally 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 $26.9 million in the third quarter of fiscal 2010, a decrease compared to $30.2 million in the year ago period.
For the quarter ended March 31, 2010, AspenTech reported a loss from operations of $19.6 million due primarily to the ratable revenue recognition associated with the company’s new aspenONE licensing model. For the quarter ended March 31, 2009, the company reported income from operations of $4.5 million. Net loss was $21.8 million for the third quarter of fiscal 2010, leading to net loss per basic and diluted share of $0.24 compared to net income per diluted share of $0.09 in the same period last year.
AspenTech had a cash balance of $119.1 million at March 31, 2010, an increase of $9.6 million from the end of the prior quarter. The company did not sell any installments receivable to raise cash during the third quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $87.4 million at the end of the quarter, down $9.1 million compared to $96.5 million at the end of the second quarter of fiscal 2010.
Other Third Quarter Business Metrics
- The company closed 21 product related bookings of over $1 million during the third quarter, and 39 product related bookings between $250,000 and $1 million.
- Average deal size for product related bookings over $100,000 was $807,000 in the third quarter.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, May 6, at 5:00 p.m. (Eastern Time), to discuss the company's financial results for the third quarter of fiscal 2010 as well as the company's business outlook. The live dial-in number is (877) 245-0126, conference ID code 70000573. 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 70000573 through May 13, 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
The second and third paragraphs of 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 or at all; 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, including our controls over the recognition of license revenue; 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.
Full financial tables available via the PDF link at the top of this page