Business Wire | Jan 27, 2021 04:05PM EST

Aspen Technology Announces Financial Results for the Second Quarter of Fiscal 2021

Jan. 27, 2021

BEDFORD, Mass.--(BUSINESS WIRE)--Jan. 27, 2021--Aspen Technology, Inc. (NASDAQ: AZPN), a global leader in asset optimization software, today announced financial results for its second quarter of fiscal year 2021 ended December 31, 2020.

"AspenTech's second quarter results were solid in the context of the current economic environment and support our outlook for a strong performance in the fiscal year. The quarter results were also highlighted by strong free cash flow generation," said Antonio Pietri, President and Chief Executive Officer of Aspen Technology. "Customers continued to make substantial long-term commitments with AspenTech, including a renewal in excess of $75 million with one of the largest global oil companies making it one of the biggest transactions in our history."

Pietri continued, "Demand activity remains strong across our product portfolio and we believe we are on track to have a good second half of the fiscal year. The increasing importance of digitalization and sustainability in the process and other capital intensive industries, as well as customer feedback on recent product announcements like the Aspen AIoT Hub and aspenONE v12, give us confidence in our ability to return to double-digit annual spend growth once the economy normalizes."

Second Quarter Fiscal Year 2021 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 approximately $604 million at the end of the second quarter of fiscal 2021, which increased 7.0% compared to the second quarter of fiscal 2020 and 1.3% sequentially.

Summary of Second Quarter Fiscal Year 2021 Financial Results

AspenTech's total revenue of $233.7 million included:

* License revenue, which represents the portion of a term license agreement allocated to the initial license, was $180.2 million in the second quarter of fiscal 2021, compared to $72.4 million in the second quarter of fiscal 2020. * Maintenance revenue, which represents the portion of the term license agreement related to on-going support and the right to future product enhancements, was $46.8 million in the second quarter of fiscal 2021, compared to $44.5 million in the second quarter of fiscal 2020. * Services and other revenue was $6.7 million in the second quarter of fiscal 2021, compared to $9.0 million in the second quarter of fiscal 2020.

For the quarter ended December 31, 2020, AspenTech reported income from operations of $149.5 million, compared to income from operations of $42.9 million for the quarter ended December 31, 2019.

Net income was $129.2 million for the quarter ended December 31, 2020, leading to net income per share of $1.89, compared to net income per share of $0.58 in the same period last fiscal year.

Non-GAAP income from operations was $162.2 million for the second quarter of fiscal 2021, compared to non-GAAP income from operations of $52.1 million in the same period last fiscal year. Non-GAAP net income was $139.3 million, or $2.04 per share, for the second quarter of fiscal 2021, compared to non-GAAP net income of $47.1 million, or $0.68 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-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 $217.5 million and total borrowings, net of debt issuance costs, of $300.8 million at December 31, 2020. During the second quarter the company paid down approximately $119.2 million on the outstanding balance on its revolving credit facility.

During the second quarter, the company generated $37.8 million in cash flow from operations and $38.0 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-related payments.

Business Outlook

Based on information as of today, January 27, 2021, Aspen Technology is issuing the following guidance for fiscal year 2021:

* Annual spend growth of 6-8% year-over-year * Free cash flow of $265 to $275 million * Total bookings of $805 to $850 million * Total revenue of $731 to $760 million * GAAP total expense of $356 to $361 million * Non-GAAP total expense of $313 to $318 million * GAAP operating income of $375 to $399 million * Non-GAAP operating income of $418 to $442 million * GAAP net income of $328 to $347 million * Non-GAAP net income of $362 million to $381 million * GAAP net income per share of $4.80 to $5.08 * Non-GAAP net income per share of $5.29 to $5.58

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 our actual results to differ materially from these forward-looking statements.

AspenTech has not reconciled its expectations as to forward-looking non-GAAP total expense, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share to their most directly comparable GAAP measure because certain items are out of AspenTech's control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP total expense, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share is not available without unreasonable effort.

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 Aspen Technology's business. As the result of adoption of new licensing models, management believes that a number of Aspen Technology'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 Aspen Technology'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 Aspen Technology'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

Aspen Technology will host a conference call and webcast today, January 27, 2021, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the second-quarter of fiscal year 2021 as well as the company's business outlook. The live dial-in number is (866) 471-3828 or (678) 509-7573, conference ID code 8443369. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of Aspen Technology's website, http://ir.aspentech.com/events-and-presentations, and clicking on the "webcast" link. A replay of the call will be archived on Aspen Technology's website and will also be available via telephone at (855) 859-2056 or (404) 537-3406, conference ID code 8443369, through February 3, 2021.

About Aspen Technology

Aspen Technology (AspenTech) is a global leader in asset optimization software. Its solutions address complex, industrial environments where it is critical to optimize the asset design, operation and maintenance lifecycle. AspenTech uniquely combines decades of process modelling expertise with artificial intelligence. Its purpose-built software platform automates knowledge work and builds sustainable competitive advantage by delivering high returns over the entire asset lifecycle. As a result, companies in capital-intensive industries can maximize uptime and push the limits of performance, running their assets safer, greener, longer and faster. Visit AspenTech.com to find out more.

Forward-Looking Statements

The third paragraph of this press release as well as the Business Outlook section contain 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: delays or reductions in demand for AspenTech solutions due to the COVID-19 pandemic; AspenTech's failure to increase usage and product adoption of aspenONE offerings or grow the aspenONE APM business, and failure to continue to provide innovative, market-leading solutions; declines in the demand for, or usage of, aspenONE software for any reason, including declines due to adverse changes in the process or other capital-intensive industries and due to the drop in demand for oil due to the COVID-19 pandemic, compounded by the excess supply arising from producers' failure to agree on production cuts; unfavorable economic and market conditions or a lessening demand in the market for asset process optimization software, including due to the significant drop in oil prices arising from drop in demand due to the COVID-19 pandemic and producers' failure to agree on production cuts; risks of foreign operations or transacting business with customers outside the United States; risks of competition 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.

(c) 2021 Aspen Technology, Inc. AspenTech, aspenONE, asset optimization and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited in Thousands, Except per Share Data)



Three Months Ended Six Months Ended December 31, December 31,

2020 2019 2020 2019

(Dollars in Thousands, Except per Share Data)

Revenue:

License $ 180,170 $ 72,436 $ 242,029 $ 160,155

Maintenance 46,818 44,547 93,676 88,219

Services and other 6,730 9,029 12,984 17,815

Total revenue 233,718 126,012 348,689 266,189

Cost of revenue:

License 2,238 2,009 4,374 3,669

Maintenance 4,128 4,584 8,892 9,561

Services and other 7,949 8,933 16,515 17,514

Total cost of revenue 14,315 15,526 29,781 30,744

Gross profit 219,403 110,486 318,908 235,445

Operating expenses:

Selling and marketing 26,575 28,500 51,747 57,692

Research and development 22,172 22,625 44,702 45,118

General and administrative 21,203 16,422 38,836 36,306

Total operating expenses 69,950 67,547 135,285 139,116

Income from operations 149,453 42,939 183,623 96,329

Interest income 9,304 8,428 17,973 16,404

Interest (expense) (2,049 ) (3,161 ) (4,144 ) (6,161 )

Other (expense) income, net (333 ) (997 ) (1,802 ) 135

Income before income taxes 156,375 47,209 195,650 106,707

Provision for income taxes 27,223 7,408 33,787 13,392

Net income $ 129,152 $ 39,801 $ 161,863 $ 93,315

Net income per common share:

Basic $ 1.91 $ 0.58 $ 2.39 $ 1.37

Diluted $ 1.89 $ 0.58 $ 2.37 $ 1.35

Weighted average shares outstanding:

Basic 67,780 68,114 67,754 68,277

Diluted 68,400 68,844 68,360 69,090

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited in Thousands, Except Share and Per Share Data)

December 31,2020

June 30,2020

(Dollars in Thousands, Except Share Data)

ASSETS

Current assets:

Cash and cash equivalents

$

217,487

$

287,796

Accounts receivable, net

46,348

56,301

Current contract assets, net

309,964

291,497

Prepaid expenses and other current assets

10,922

10,884

Prepaid income taxes

4,003

3,962

Total current assets

588,724

650,440

Property, equipment and leasehold improvements, net

5,748

5,963

Computer software development costs, net

1,438

928

Goodwill

157,797

137,055

Intangible assets, net

48,223

42,851

Non-current contract assets, net

419,258

318,976

Contract costs

28,295

28,614

Operating lease right-of-use assets

33,431

34,905

Deferred tax assets

2,863

1,735

Other non-current assets

2,112

1,839

Total assets

$

1,287,889

$

1,223,306

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

2,876

$

3,988

Accrued expenses and other current liabilities

40,230

43,556

Current operating lease liabilities

7,094

6,824

Income taxes payable

4,359

1,799

Current borrowings

16,000

135,163

Current deferred revenue

48,582

43,168

Total current liabilities

119,141

234,498

Non-current deferred revenue

12,524

13,913

Deferred tax liabilities

181,734

179,978

Non-current operating lease liabilities

30,890

33,088

Non-current borrowings, net

284,757

292,369

Other non-current liabilities

4,711

3,107

Commitments and contingencies (Note 17)

Series D redeemable convertible preferred stock, $0.10 par value- Authorized- 367,000 shares as of December 31, 2020 and June 30, 2020 Issued and outstanding- none as of December 31, 2020 and June 30, 2020

-

-

Stockholders' equity:

Common stock, $0.10 par value- Authorized-210,000,000 shares Issued- 104,099,832 shares at December 31, 2020 and 103,988,707 shares at June 30, 2020 Outstanding- 67,829,817 shares at December 31, 2020 and 67,718,692 shares at June 30, 2020

10,410

10,399

Additional paid-in capital

783,897

769,411

Retained earnings

1,620,193

1,458,330

Accumulated other comprehensive income (loss)

6,131

(5,288

)

Treasury stock, at cost-36,270,015 shares of common stock at December 31, 2020 and 36,270,015 shares at June 30, 2020

(1,766,499

)

(1,766,499

)

Total stockholders' equity

654,132

466,353

Total liabilities and stockholders' equity

$

1,287,889

$

1,223,306

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited in Thousands, Except Share and Per Share Data)



December 31, June 30, 2020 2020

(Dollars in Thousands, Except Share Data)

ASSETS

Current assets:

Cash and cash equivalents $ 217,487 $ 287,796

Accounts receivable, net 46,348 56,301

Current contract assets, net 309,964 291,497

Prepaid expenses and other current assets 10,922 10,884

Prepaid income taxes 4,003 3,962

Total current assets 588,724 650,440

Property, equipment and leasehold improvements, 5,748 5,963 net

Computer software development costs, net 1,438 928

Goodwill 157,797 137,055

Intangible assets, net 48,223 42,851

Non-current contract assets, net 419,258 318,976

Contract costs 28,295 28,614

Operating lease right-of-use assets 33,431 34,905

Deferred tax assets 2,863 1,735

Other non-current assets 2,112 1,839

Total assets $ 1,287,889 $ 1,223,306



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 2,876 $ 3,988

Accrued expenses and other current liabilities 40,230 43,556

Current operating lease liabilities 7,094 6,824

Income taxes payable 4,359 1,799

Current borrowings 16,000 135,163

Current deferred revenue 48,582 43,168

Total current liabilities 119,141 234,498

Non-current deferred revenue 12,524 13,913

Deferred tax liabilities 181,734 179,978

Non-current operating lease liabilities 30,890 33,088

Non-current borrowings, net 284,757 292,369

Other non-current liabilities 4,711 3,107

Commitments and contingencies (Note 17)

Series D redeemable convertible preferred stock,$0.10 par value-Authorized- 367,000 shares as of December 31, - - 2020 and June 30, 2020Issued and outstanding- none as of December 31,2020 and June 30, 2020

Stockholders' equity:

Common stock, $0.10 par value-Authorized-210,000,000 sharesIssued- 104,099,832 shares at December 31, 2020 10,410 10,399 and 103,988,707 shares at June 30, 2020Outstanding- 67,829,817 shares at December 31,2020 and 67,718,692 shares at June 30, 2020

Additional paid-in capital 783,897 769,411

Retained earnings 1,620,193 1,458,330

Accumulated other comprehensive income (loss) 6,131 (5,288 )

Treasury stock, at cost-36,270,015 shares ofcommon stock at December 31, 2020 and 36,270,015 (1,766,499 ) (1,766,499 )shares at June 30, 2020

Total stockholders' equity 654,132 466,353

Total liabilities and stockholders' equity $ 1,287,889 $ 1,223,306

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)

Three Months EndedDecember 31,

Six Months EndedDecember 31,

2020

2019

2020

2019

(Dollars in Thousands)

Cash flows from operating activities:

Net income

$

129,152

$

39,801

$

161,863

$

93,315

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2,523

2,443

4,857

4,479

Reduction in the carrying amount of right-of-use assets

2,414

1,364

4,779

3,251

Net foreign currency losses (gains)

591

(883

)

2,054

(162

)

Stock-based compensation

9,096

7,559

15,364

16,834

Deferred income taxes

171

(74

)

212

(1,400

)

Provision for bad debts

1,616

282

4,736

1,264

Other non-cash operating activities

205

108

407

215

Changes in assets and liabilities:

Accounts receivable

6,129

(2,594

)

8,372

(4,539

)

Contract assets, net

(116,007

)

1,639

(123,373

)

(29,887

)

Contract costs

37

(485

)

321

(830

)

Lease liabilities

(2,572

)

(1,464

)

(5,235

)

(3,396

)

Prepaid expenses, prepaid income taxes, and other assets

1,942

324

42

(1,768

)

Accounts payable, accrued expenses, income taxes payable and other liabilities

(1,558

)

(10,364

)

(7,063

)

(23,105

)

Deferred revenue

4,100

9,291

6,954

7,936

Net cash provided by operating activities

37,839

46,947

74,290

62,207

Cash flows from investing activities:

Purchases of property, equipment and leasehold improvements

(345

)

(368

)

(522

)

(968

)

Payments for business acquisitions, net of cash acquired

(15,943

)

-

(15,943

)

(74,219

)

Payments for equity method investments

168

-

(166

)

-

Payments for capitalized computer software development costs

(89

)

(61

)

(895

)

(70

)

Net cash used in investing activities

(16,209

)

(429

)

(17,526

)

(75,257

)

Cash flows from financing activities:

Issuance of shares of common stock

2,846

1,696

3,114

2,714

Repurchases of common stock

-

(50,016

)

-

(100,864

)

Payments of tax withholding obligations related to restricted stock

(2,279

)

(2,685

)

(4,107

)

(5,851

)

Proceeds from revolving credit facility, net of repayments

(119,182

)

29,163

(119,182

)

129,163

Repayments of amounts borrowed under term loan

(4,000

)

-

(8,000

)

-

Payments of debt issuance costs

-

(3,454

)

-

(3,454

)

Net cash provided by (used in) financing activities

(122,615

)

(25,296

)

(128,175

)

21,708

Effect of exchange rate changes on cash and cash equivalents

876

631

1,104

(98

)

Increase (decrease) in cash, cash equivalents, and restricted cash

(100,109

)

21,853

(70,307

)

8,560

Cash, cash equivalents, and restricted cash, beginning of period

317,598

58,633

287,796

71,926

Cash, cash equivalents, and restricted cash, end of period

$

217,489

$

80,486

$

217,489

$

80,486

Supplemental disclosure of cash flow information:

Income taxes paid, net

$

27,965

$

9,464

$

30,668

$

19,748

Interest paid

2,096

2,391

4,217

5,192

Supplemental disclosure of non-cash activities:

Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses

$

(224

)

$

(256

)

$

57

$

(96

)

Change in repurchases of common stock included in accounts payable and accrued expenses

-

(16

)

-

(864

)

Lease liabilities arising from obtaining right-of-use assets

1,068

1,552

1,291

4,824

December 31,2020

December 31,2019

Reconciliation to amounts within the unaudited consolidated balance sheets:

(Dollars in Thousands)

Cash and cash equivalents

$

217,487

$

80,486

Restricted cash included in other non-current assets

2

-

Cash, cash equivalents, and restricted cash, end of period

$

217,489

$

80,486

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)



Three Months Ended Six Months Ended December 31, December 31,

2020 2019 2020 2019

(Dollars in Thousands)

Cash flows from operating activities:

Net income $ 129,152 $ 39,801 $ 161,863 $ 93,315

Adjustments to reconcilenet income to net cash provided by operatingactivities:

Depreciation and 2,523 2,443 4,857 4,479 amortization

Reduction in the carryingamount of right-of-use 2,414 1,364 4,779 3,251 assets

Net foreign currency losses 591 (883 ) 2,054 (162 )(gains)

Stock-based compensation 9,096 7,559 15,364 16,834

Deferred income taxes 171 (74 ) 212 (1,400 )

Provision for bad debts 1,616 282 4,736 1,264

Other non-cash operating 205 108 407 215 activities

Changes in assets and liabilities:

Accounts receivable 6,129 (2,594 ) 8,372 (4,539 )

Contract assets, net (116,007 ) 1,639 (123,373 ) (29,887 )

Contract costs 37 (485 ) 321 (830 )

Lease liabilities (2,572 ) (1,464 ) (5,235 ) (3,396 )

Prepaid expenses, prepaidincome taxes, and other 1,942 324 42 (1,768 )assets

Accounts payable, accruedexpenses, income taxes (1,558 ) (10,364 ) (7,063 ) (23,105 )payable and otherliabilities

Deferred revenue 4,100 9,291 6,954 7,936

Net cash provided by 37,839 46,947 74,290 62,207 operating activities

Cash flows from investing activities:

Purchases of property,equipment and leasehold (345 ) (368 ) (522 ) (968 )improvements

Payments for businessacquisitions, net of cash (15,943 ) - (15,943 ) (74,219 )acquired

Payments for equity method 168 - (166 ) - investments

Payments for capitalizedcomputer software (89 ) (61 ) (895 ) (70 )development costs

Net cash used in investing (16,209 ) (429 ) (17,526 ) (75,257 )activities

Cash flows from financing activities:

Issuance of shares of 2,846 1,696 3,114 2,714 common stock

Repurchases of common stock - (50,016 ) - (100,864 )

Payments of tax withholdingobligations related to (2,279 ) (2,685 ) (4,107 ) (5,851 )restricted stock

Proceeds from revolvingcredit facility, net of (119,182 ) 29,163 (119,182 ) 129,163 repayments

Repayments of amounts (4,000 ) - (8,000 ) - borrowed under term loan

Payments of debt issuance - (3,454 ) - (3,454 )costs

Net cash provided by (used (122,615 ) (25,296 ) (128,175 ) 21,708 in) financing activities

Effect of exchange ratechanges on cash and cash 876 631 1,104 (98 )equivalents

Increase (decrease) incash, cash equivalents, and (100,109 ) 21,853 (70,307 ) 8,560 restricted cash

Cash, cash equivalents, andrestricted cash, beginning 317,598 58,633 287,796 71,926 of period

Cash, cash equivalents, andrestricted cash, end of $ 217,489 $ 80,486 $ 217,489 $ 80,486 period

Supplemental disclosure of cash flow information:

Income taxes paid, net $ 27,965 $ 9,464 $ 30,668 $ 19,748

Interest paid 2,096 2,391 4,217 5,192

Supplemental disclosure of non-cash activities:

Change in purchases ofproperty, equipment andleasehold improvements $ (224 ) $ (256 ) $ 57 $ (96 )included in accountspayable and accruedexpenses

Change in repurchases ofcommon stock included in - (16 ) - (864 )accounts payable andaccrued expenses

Lease liabilities arisingfrom obtaining right-of-use 1,068 1,552 1,291 4,824 assets



December December 31, 31, 2020 2019

Reconciliation to amountswithin the unaudited (Dollars in Thousands) consolidated balancesheets:

Cash and cash equivalents $ 217,487 $ 80,486

Restricted cash included in 2 - other non-current assets

Cash, cash equivalents, andrestricted cash, end of $ 217,489 $ 80,486 period



ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows

(Unaudited in Thousands, Except per Share Data)

Three Months EndedDecember 31,

Six Months EndedDecember 31,

2020

2019

2020

2019

Total expenses

GAAP total expenses (a)

$

84,265

$

83,073

$

165,066

$

169,860

Less:

Stock-based compensation (b)

(9,096

)

(7,559

)

(15,364

)

(16,834

)

Amortization of intangibles

(1,865

)

(1,682

)

(3,610

)

(2,877

)

Acquisition related fees

(1,821

)

40

(2,384

)

(78

)

Non-GAAP total expenses

$

71,483

$

73,872

$

143,708

$

150,071

Income from operations

GAAP income from operations

$

149,453

$

42,939

$

183,623

$

96,329

Plus:

Stock-based compensation (b)

9,096

7,559

15,364

16,834

Amortization of intangibles

1,865

1,682

3,610

2,877

Acquisition related fees

1,821

(40

)

2,384

78

Non-GAAP income from operations

$

162,235

$

52,140

$

204,981

$

116,118

Net income

GAAP net income

$

129,152

$

39,801

$

161,863

$

93,315

Plus:

Stock-based compensation (b)

9,096

7,559

15,364

16,834

Amortization of intangibles

1,865

1,682

3,610

2,877

Acquisition related fees

1,821

(40

)

2,384

78

Less:

Income tax effect on Non-GAAP items (c)

(2,684

)

(1,932

)

(4,485

)

(4,156

)

Non-GAAP net income

$

139,250

$

47,070

$

178,736

$

108,948

Diluted income per share

GAAP diluted income per share

$

1.89

$

0.58

$

2.37

$

1.35

Plus:

Stock-based compensation (b)

0.13

0.11

0.23

0.25

Amortization of intangibles

0.03

0.02

0.05

0.04

Acquisition related fees

0.03

-

0.03

-

Less:

Income tax effect on Non-GAAP items (c)

(0.04

)

(0.03

)

(0.07

)

(0.06

)

Non-GAAP diluted income per share

$

2.04

$

0.68

$

2.61

$

1.58

Shares used in computing Non-GAAP diluted income per share

68,400

68,844

68,360

69,090

Three Months EndedDecember 31,

Six Months EndedDecember 31,

2020

2019

2020

2019

Free Cash Flow

Net cash provided by operating activities (GAAP)

$

37,839

$

46,947

$

74,290

$

62,207

Purchases of property, equipment and leasehold improvements

(345

)

(368

)

(522

)

(968

)

Payments for capitalized computer software development costs

(89

)

(61

)

(895

)

(70

)

Acquisition related payments

616

1,617

907

1,264

Free cash flow (non-GAAP)

$

38,021

$

48,135

$

73,780

$

62,433

(a) GAAP total expenses

Three Months EndedDecember 31,

Six Months EndedDecember 31,

2020

2019

2020

2019

Total costs of revenue

$

14,315

$

15,526

$

29,781

$

30,744

Total operating expenses

69,950

67,547

135,285

139,116

GAAP total expenses

$

84,265

$

83,073

$

165,066

$

169,860

(b) Stock-based compensation expense was as follows:

Three Months EndedDecember 31,

Six Months EndedDecember 31,

2020

2019

2020

2019

Cost of maintenance

$

122

$

362

$

438

$

761

Cost of services and other

351

484

801

1,027

Selling and marketing

1,612

1,209

2,856

2,756

Research and development

2,449

2,009

4,171

4,111

General and administrative

4,562

3,495

7,098

8,179

Total stock-based compensation

$

9,096

$

7,559

$

15,364

$

16,834

(c) The income tax effect on non-GAAP items for the three and six months ended December 31, 2020 and 2019, respectively, is calculated utilizing the Company's statutory tax rate of 21 percent.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005916/en/

CONTACT: Media Contact Lucy Millington Aspen Technology +1 781-221-6419 lucy.millington@aspentech.com

CONTACT: Investor Contact Brian Denyeau ICR for Aspen Technology +1 646-277-1251 brian.denyeau@icrinc.com