Business Wire | Aug 11, 2021 04:06PM EDT

Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal 2021

Aug. 11, 2021

BEDFORD, Mass.--(BUSINESS WIRE)--Aug. 11, 2021--Aspen Technology, Inc. (NASDAQ: AZPN), a global leader in asset optimization software, today announced financial results for its fourth-quarter and fiscal year 2021 ended June 30, 2021.

"AspenTech finished fiscal 2021 having generated record profitability and free cash flow, with 4.8% annual spend growth in the midst of unprecedented challenges for many of our customers. Our ability to achieve these results reflects the mission-critical role our solutions play in supporting the sustainability and efficiency requirements of our customers across the process and other capital-intensive industries," said Antonio Pietri, President and Chief Executive Officer of Aspen Technology.

Pietri continued, "As we enter fiscal 2022, we are optimistic about the long-term opportunity for AspenTech. The need for our customers to operate their assets safely, sustainably, reliably and profitably has never been greater. Our continued focus on innovation, including the recently released aspenONE v12.1 that embeds AI capabilities across our solutions, enables even more value creation by customers. We are confident in our ability to return to double-digit annual spend growth over time as economic conditions and industry budgets normalize."

Fourth Quarter and 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 $621 million at the end of the fourth quarter of fiscal 2021, which increased 4.8% compared to the fourth quarter of fiscal 2020 and 1.9% sequentially. * AspenTech repurchased approximately 361,000 shares of its common stock for $50 million in fiscal year 2021.

Summary of Fourth Quarter Fiscal Year 2021 Financial Results

AspenTech's total revenue of $198.0 million included:

* License revenue, which represents the portion of a term license agreement allocated to the initial license, was $145.3 million in the fourth quarter of fiscal 2021, compared to $149.9 million in the fourth quarter of fiscal 2020. * Maintenance revenue, which represents the portion of the term license agreement related to ongoing support and the right to future product enhancements, was $45.6 million in the fourth quarter of fiscal 2021, compared to $45.7 million in the fourth quarter of fiscal 2020. * Services and other revenue was $7.0 million in the fourth quarter of fiscal 2021, compared to $6.4 million in the fourth quarter of fiscal 2020.

For the quarter ended June 30, 2021, AspenTech reported income from operations of $105.9 million, compared to income from operations of $116.3 million in the fourth quarter of fiscal 2020.

Net income was $95.4 million for the quarter ended June 30, 2021, leading to net income per share of $1.39, compared to net income per share of $1.39 in the same period last fiscal year.

Non-GAAP income from operations was $118.4 million for the fourth quarter of fiscal 2021, compared to non-GAAP income from operations of $125.5 million in the same period last fiscal year. Non-GAAP net income was $105.3 million, or $1.53 per share, for the fourth quarter of fiscal 2021, compared to non-GAAP net income of $101.8 million, or $1.49 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 $379.9 million and total borrowings, net of debt issuance costs, of $293.2 million at June 30, 2021.

During the fourth quarter, the company generated $103.2 million in cash flow from operations and $103.7 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.

Summary of Fiscal Year 2021 Financial Results

AspenTech's total revenue of $709.4 million increased 18.5% from $598.7 million for fiscal year 2020.

* License revenue was $497.5 million, an increase from $388.2 million for fiscal year 2020. * Maintenance revenue was $185.2 million, an increase from $178.1 million for fiscal year 2020. * Services and other revenue was $26.7 million, a decrease from $32.4 million for fiscal year 2020.

For the fiscal year ended June 30, 2021, AspenTech reported income from operations of $358.4 million, compared to income from operations of $257.4 million for fiscal year 2020.

Net income was $319.8 million for the fiscal year ended June 30, 2021, leading to net income per share of $4.67, compared to net income per share of $3.34 for fiscal year 2020.

Non-GAAP income from operations was $404.3 million for fiscal year 2021, compared to non-GAAP income from operations of $295.6 million for fiscal year 2020. Non-GAAP net income was $356.0 million, or $5.20 per share, for fiscal year 2021, compared to non-GAAP net income of $259.8 million, or $3.78 per share, for fiscal year 2020.

For the fiscal year ended June 30, 2021, the company generated $276.1 million in cash flow from operations and $277.5 million in free cash flow.

Business Outlook

Based on information as of today, August 11, 2021, Aspen Technology is issuing the following guidance for fiscal year 2022:

* Annual spend growth of 5-7% year-over-year * Free cash flow of $275 to $285 million * Total bookings of $766 to $819 million * Total revenue of $702 to $737 million * GAAP total expense of $386 to $391 million * Non-GAAP total expense of $341 to $346 million * GAAP operating income of $316 to $346 million * Non-GAAP operating income of $361 to $391 million * GAAP net income of $288 to $314 million * Non-GAAP net income of $323 to $349 million * GAAP net income per share of $4.27 to $4.65 * Non-GAAP net income per share of $4.79 to $5.17

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.

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, August 11, 2021, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth-quarter and 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 7282409. 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 7282409, through August 18, 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 materially reduced industry spending budgets due to the drop in demand for oil due to the COVID-19 pandemic; unfavorable economic and market conditions or a lessening demand in the market for asset process optimization software, including materially reduced industry spending budgets due to the significant drop in oil prices arising from drop in demand due to the COVID-19 pandemic; 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited in Thousands, Except per Share Data) Three Months Ended June Twelve Months Ended 30, June 30,

2021 2020 2021 2020

Revenue:License $ 145,346 $ 149,869 $ 497,479 $ 388,180

Maintenance 45,603 45,721 185,164 178,139

Services and other 7,012 6,350 26,733 32,398

Total revenue 197,961 201,940 709,376 598,717

Cost of revenue:License 2,417 1,691 9,276 7,241

Maintenance 4,221 4,909 18,287 19,248

Services and other 7,677 8,558 32,588 35,118

Total cost of revenue 14,315 15,158 60,151 61,607

Gross profit 183,646 186,782 649,225 537,110

Operating expenses:Selling and marketing 32,867 28,440 114,959 114,486

Research and development 23,653 23,536 94,229 92,230

General and administrative 21,247 18,510 81,636 73,035

Total operating expenses 77,767 70,486 290,824 279,751

Income from operations 105,879 116,296 358,401 257,359

Interest income 10,408 8,081 36,791 32,658

Interest (expense) (1,606) (2,494) (7,245) (11,862)

Other (expense), net (1,393) 1,419 (3,200) 1,202

Income before income taxes 113,288 123,302 384,747 279,357

Provision for income taxes 17,843 28,772 64,944 49,686

Net income $ 95,445 $ 94,530 $ 319,803 $ 229,671

Net income per common share:Basic $ 1.40 $ 1.40 $ 4.71 $ 3.38

Diluted $ 1.39 $ 1.39 $ 4.67 $ 3.34

Weighted average sharesoutstanding:Basic 68,028 67,634 67,863 68,000

Diluted 68,612 68,176 68,492 68,727

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited in Thousands, Except Share and Per Share Data)June 30,2021June 30,2020ASSETSCurrent assets:Cash and cash equivalents$ 379,853

$ 287,796

Accounts receivable, net52,502

56,301

Current contract assets308,607

291,497

Prepaid expenses and other current assets12,716

10,884

Prepaid income taxes14,639

3,962

Total current assets768,317

650,440

Property, equipment and leasehold improvements, net5,610

5,963

Computer software development costs, net1,461

928

Goodwill159,852

137,055

Intangible assets, net44,327

42,851

Non-current contract assets407,180

318,976

Contract costs29,056

28,614

Operating lease right-of-use assets32,539

34,905

Deferred tax assets2,121

1,735

Other non-current assets3,537

1,839

Total assets$ 1,454,000

$ 1,223,306

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$ 4,367

$ 3,988

Accrued expenses and other current liabilities50,575

43,556

Current operating lease liabilities6,751

6,824

Income taxes payable3,444

1,799

Current borrowings20,000

135,163

Current deferred revenue56,393

43,168

Total current liabilities141,530

234,498

Non-current deferred revenue11,732

13,913

Deferred income taxes193,360

179,978

Non-current operating lease liabilities29,699

33,088

Non-current borrowings, net273,162

292,369

Other non-current liabilities3,760

3,107

Commitments and contingencies (Note 17)Series D redeemable convertible preferred stock, $0.10 par value-Authorized- 367,000 shares as of June 30, 2021 and June 30, 2020Issued and outstanding- none as of June 30, 2021 and June 30, 2020-

-

Stockholders' equity:Common stock, $0.10 par value- Authorized-210,000,000 sharesIssued- 104,543,414 shares at June 30, 2021 and 103,988,707 shares at June 30, 2020Outstanding- 67,912,160 shares at June 30, 2021 and 67,718,692 shares at June 30, 202010,455

10,399

Additional paid-in capital819,642

769,411

Retained earnings1,778,133

1,458,330

Accumulated other comprehensive income (loss)9,026

(5,288)

Treasury stock, at cost-36,631,254 shares of common stock at June 30, 2021 and 36,270,015 shares at June 30, 2020(1,816,499)

(1,766,499)

Total stockholders' equity800,757

466,353

Total liabilities and stockholders' equity$ 1,454,000

$ 1,223,306

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited in Thousands, Except Share and Per Share Data) June 30, June 30, 2021 2020ASSETSCurrent assets:Cash and cash equivalents $ 379,853 $ 287,796

Accounts receivable, net 52,502 56,301

Current contract assets 308,607 291,497

Prepaid expenses and other current assets 12,716 10,884

Prepaid income taxes 14,639 3,962

Total current assets 768,317 650,440

Property, equipment and leasehold improvements, net 5,610 5,963

Computer software development costs, net 1,461 928

Goodwill 159,852 137,055

Intangible assets, net 44,327 42,851

Non-current contract assets 407,180 318,976

Contract costs 29,056 28,614

Operating lease right-of-use assets 32,539 34,905

Deferred tax assets 2,121 1,735

Other non-current assets 3,537 1,839

Total assets $ 1,454,000 $ 1,223,306

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 4,367 $ 3,988

Accrued expenses and other current liabilities 50,575 43,556

Current operating lease liabilities 6,751 6,824

Income taxes payable 3,444 1,799

Current borrowings 20,000 135,163

Current deferred revenue 56,393 43,168

Total current liabilities 141,530 234,498

Non-current deferred revenue 11,732 13,913

Deferred income taxes 193,360 179,978

Non-current operating lease liabilities 29,699 33,088

Non-current borrowings, net 273,162 292,369

Other non-current liabilities 3,760 3,107

Commitments and contingencies (Note 17)Series D redeemable convertible preferred stock, $0.10par value-Authorized- 367,000 shares as of June 30, 2021 and June - -30, 2020Issued and outstanding- none as of June 30, 2021 andJune 30, 2020Stockholders' equity:Common stock, $0.10 par value- Authorized-210,000,000sharesIssued- 104,543,414 shares at June 30, 2021 and 10,455 10,399103,988,707 shares at June 30, 2020Outstanding- 67,912,160 shares at June 30, 2021 and67,718,692 shares at June 30, 2020Additional paid-in capital 819,642 769,411

Retained earnings 1,778,133 1,458,330

Accumulated other comprehensive income (loss) 9,026 (5,288)

Treasury stock, at cost-36,631,254 shares of common (1,816,499) (1,766,499)stock at June 30, 2021 and 36,270,015 shares at June30, 2020Total stockholders' equity 800,757 466,353

Total liabilities and stockholders' equity $ 1,454,000 $ 1,223,306

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited in Thousands)Three Months Ended June 30,

Twelve Months Ended June 30,

2021

2020

2021

2020

Cash flows from operating activities:Net income$ 95,445

$ 94,530

$ 319,803

$ 229,671

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization2,712

2,522

10,257

9,550

Reduction in the carrying amount of right-of-use assets1,890

2,576

8,927

9,094

Net foreign currency losses (gains)1,383

(1,128)

3,410

(945)

Stock-based compensation9,055

7,415

33,644

31,548

Deferred income taxes5,226

29,617

12,255

28,101

Provision for bad debts2,916

1,864

9,716

5,255

Other non-cash operating activities203

202

921

625

Changes in assets and liabilities:Accounts receivable(6,247)

3,553

(2,132)

(12,875)

Contract assets, net(10,199)

(30,413)

(113,737)

(28,084)

Contract costs(636)

(2,048)

(438)

(3,570)

Lease liabilities(2,649)

(2,668)

(10,182)

(9,508)

Prepaid expenses, prepaid income taxes, and other assets(5,883)

(3,087)

(12,842)

(5,288)

Accounts payable, accrued expenses, income taxes payable and other liabilities6,788

(2,608)

(59)

(23,360)

Deferred revenue3,181

(657)

16,591

13,044

Net cash provided by operating activities103,185

99,670

276,134

243,258

Cash flows from investing activities:Purchases of property, equipment and leasehold improvements(504)

(167)

(1,237)

(1,278)

Payments for business acquisitions, net of cash acquired-

-

(16,272)

(74,460)

Payments for equity method investments(217)

(5)

(1,143)

(324)

Payments for capitalized computer software development costs(234)

-

(1,129)

(141)

Net cash used in investing activities(955)

(172)

(19,781)

(76,203)

Cash flows from financing activities:Issuance of shares of common stock13,588

3,640

26,096

9,004

Repurchases of common stock(45,647)

(1,811)

(45,647)

(152,432)

Payments of tax withholding obligations related to restricted stock(2,453)

(1,921)

(9,172)

(10,167)

Deferred business acquisition payments(1,229)

-

(1,229)

(4,600)

Proceeds from borrowings-

-

-

574,163

Repayments of amounts borrowed(4,000)

(4,000)

(135,182)

(363,000)

Payments of debt issuance costs-

-

-

(3,533)

Net cash provided by (used in) financing activities(39,741)

(4,092)

(165,134)

49,435

Effect of exchange rate changes on cash and cash equivalents265

218

838

(620)

Increase in cash and cash equivalents62,754

95,624

92,057

215,870

Cash and cash equivalents, beginning of period317,099

192,172

287,796

71,926

Cash and cash equivalents, end of period$ 379,853

$ 287,796

$ 379,853

$ 287,796

Supplemental disclosure of cash flow information:Income taxes paid, net$ 12,061

$ 13,174

$ 61,410

$ 39,533

Interest paid731

4,198

6,403

12,444

Supplemental disclosure of non-cash activities:Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses$ 35

$ (10)

$ 112

$ (99)

Change in repurchases of common stock included in accounts payable and accrued expenses4,353

(1,811)

4,353

(2,432)

Lease liabilities arising from obtaining right-of-use assets2,012

2,387

3,500

14,013

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited in Thousands) Three Months Twelve Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Cash flows from operating activities:Net income $ 95,445 $ 94,530 $ 319,803 $ 229,671

Adjustments to reconcile net income tonet cash provided by operatingactivities:Depreciation and amortization 2,712 2,522 10,257 9,550

Reduction in the carrying amount of 1,890 2,576 8,927 9,094right-of-use assetsNet foreign currency losses (gains) 1,383 (1,128) 3,410 (945)

Stock-based compensation 9,055 7,415 33,644 31,548

Deferred income taxes 5,226 29,617 12,255 28,101

Provision for bad debts 2,916 1,864 9,716 5,255

Other non-cash operating activities 203 202 921 625

Changes in assets and liabilities:Accounts receivable (6,247) 3,553 (2,132) (12,875)

Contract assets, net (10,199) (30,413) (113,737) (28,084)

Contract costs (636) (2,048) (438) (3,570)

Lease liabilities (2,649) (2,668) (10,182) (9,508)

Prepaid expenses, prepaid income taxes, (5,883) (3,087) (12,842) (5,288)and other assetsAccounts payable, accrued expenses, 6,788 (2,608) (59) (23,360)income taxes payable and otherliabilitiesDeferred revenue 3,181 (657) 16,591 13,044

Net cash provided by operating activities 103,185 99,670 276,134 243,258

Cash flows from investing activities:Purchases of property, equipment and (504) (167) (1,237) (1,278)leasehold improvementsPayments for business acquisitions, net - - (16,272) (74,460)of cash acquiredPayments for equity method investments (217) (5) (1,143) (324)

Payments for capitalized computer (234) - (1,129) (141)software development costsNet cash used in investing activities (955) (172) (19,781) (76,203)

Cash flows from financing activities:Issuance of shares of common stock 13,588 3,640 26,096 9,004

Repurchases of common stock (45,647) (1,811) (45,647) (152,432)

Payments of tax withholding obligations (2,453) (1,921) (9,172) (10,167)related to restricted stockDeferred business acquisition payments (1,229) - (1,229) (4,600)

Proceeds from borrowings - - - 574,163

Repayments of amounts borrowed (4,000) (4,000) (135,182) (363,000)

Payments of debt issuance costs - - - (3,533)

Net cash provided by (used in) financing (39,741) (4,092) (165,134) 49,435activitiesEffect of exchange rate changes on cash 265 218 838 (620)and cash equivalentsIncrease in cash and cash equivalents 62,754 95,624 92,057 215,870

Cash and cash equivalents, beginning of 317,099 192,172 287,796 71,926period $ $ $ 379,853 $ 287,796Cash and cash equivalents, end of period 379,853 287,796

Supplemental disclosure of cash flowinformation:Income taxes paid, net $ 12,061 $ 13,174 $ 61,410 $ 39,533

Interest paid 731 4,198 6,403 12,444

Supplemental disclosure of non-cashactivities:Change in purchases of property,equipment and leasehold improvements $ 35 $ (10) $ 112 $ (99)included in accounts payable and accruedexpensesChange in repurchases of common stock 4,353 (1,811) 4,353 (2,432)included in accounts payable and accruedexpensesLease liabilities arising from obtaining 2,012 2,387 3,500 14,013right-of-use assetsASPEN TECHNOLOGY, INC. AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows(Unaudited in Thousands, Except per Share Data)Three Months Ended June 30,

Twelve Months Ended June 30,

2021

2020

2021

2020

Total expensesGAAP total expenses (a)$ 92,082

$ 85,644

$ 350,975

$ 341,358

Less:Stock-based compensation (b)(9,055)

(7,415)

(33,644)

(31,548)

Amortization of intangibles(2,040)

(1,831)

(7,697)

(6,572)

Acquisition related fees(1,385)

-

(4,518)

(78)

Non-GAAP total expenses$ 79,602

$ 76,398

$ 305,116

$ 303,160

Income from operationsGAAP income from operations$ 105,879

$ 116,296

$ 358,401

$ 257,359

Plus:Stock-based compensation (b)9,055

7,415

33,644

31,548

Amortization of intangibles2,040

1,831

7,697

6,572

Acquisition related fees1,385

-

4,518

78

Non-GAAP income from operations$ 118,359

$ 125,542

$ 404,260

$ 295,557

Net incomeGAAP net income$ 95,445

$ 94,530

$ 319,803

$ 229,671

Plus:Stock-based compensation (b)9,055

7,415

33,644

31,548

Amortization of intangibles2,040

1,831

7,697

6,572

Acquisition related fees1,385

-

4,518

78

Less:Income tax effect on Non-GAAP items (c)(2,621)

(1,942)

(9,630)

(8,022)

Non-GAAP net income$ 105,304

$ 101,834

$ 356,032

$ 259,847

Diluted income per shareGAAP diluted income per share$ 1.39

$ 1.39

$ 4.67

$ 3.34

Plus:Stock-based compensation (b)0.13

0.11

0.49

0.46

Amortization of intangibles0.03

0.03

0.11

0.10

Acquisition related fees0.02

-

0.07

-

Less:Income tax effect on Non-GAAP items (c)(0.04)

(0.03)

(0.14)

(0.12)

Non-GAAP diluted income per share$ 1.53

$ 1.49

$ 5.20

$ 3.78

Shares used in computing Non-GAAP diluted income per share68,612

68,176

68,492

68,727

Three Months Ended June 30,

Twelve Months Ended June 30,

2021

2020

2021

2020

Free Cash FlowNet cash provided by operating activities (GAAP)$ 103,185

$ 99,670

$ 276,134

$ 243,258

Purchases of property, equipment and leasehold improvements(504)

(167)

(1,237)

(1,278)

Payments for capitalized computer software development costs(234)

-

(1,129)

(141)

Acquisition related payments1,300

-

3,733

1,264

Free cash flow (non-GAAP)$ 103,747

$ 99,503

$ 277,501

$ 243,103

(a) GAAP total expensesThree Months Ended June 30,

Twelve Months Ended June 30,

2021

2020

2021

2020

Total costs of revenue$ 14,315

$ 15,158

$ 60,151

$ 61,607

Total operating expenses77,767

70,486

290,824

279,751

GAAP total expenses$ 92,082

$ 85,644

$ 350,975

$ 341,358

(b) Stock-based compensation expense was as follows:Three Months Ended June 30,

Twelve Months Ended June 30,

2021

2020

2021

2020

Cost of maintenance$ 208

$ 337

$ 896

$ 1,441

Cost of services and other415

484

1,613

1,961

Selling and marketing1,912

1,428

6,567

5,656

Research and development2,472

2,113

8,987

8,306

General and administrative4,048

3,053

15,581

14,184

Total stock-based compensation$ 9,055

$ 7,415

$ 33,644

$ 31,548

(c) The income tax effect on non-GAAP items for the three and twelve months ended June 30, 2021 and 2020, respectively, is calculated utilizing the Company's statutory tax rate of 21 percent.ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows(Unaudited in Thousands, Except per Share Data) Three Months Twelve Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Total expenses $ $ $ $GAAP total expenses (a) 92,082 85,644 350,975 341,358

Less:Stock-based compensation (b) (9,055) (7,415) (33,644) (31,548)

Amortization of intangibles (2,040) (1,831) (7,697) (6,572)

Acquisition related fees (1,385) - (4,518) (78)

$ $ $ $Non-GAAP total expenses 79,602 76,398 305,116 303,160

Income from operations $ $ $ $GAAP income from operations 105,879 116,296 358,401 257,359

Plus:Stock-based compensation (b) 9,055 7,415 33,644 31,548

Amortization of intangibles 2,040 1,831 7,697 6,572

Acquisition related fees 1,385 - 4,518 78

$ $ $ $Non-GAAP income from operations 118,359 125,542 404,260 295,557

Net income $ $ $ $GAAP net income 95,445 94,530 319,803 229,671

Plus:Stock-based compensation (b) 9,055 7,415 33,644 31,548

Amortization of intangibles 2,040 1,831 7,697 6,572

Acquisition related fees 1,385 - 4,518 78

Less:Income tax effect on Non-GAAP items (c) (2,621) (1,942) (9,630) (8,022)

$ $ $ $Non-GAAP net income 105,304 101,834 356,032 259,847

Diluted income per shareGAAP diluted income per share $ 1.39 $ 1.39 $ 4.67 $ 3.34

Plus:Stock-based compensation (b) 0.13 0.11 0.49 0.46

Amortization of intangibles 0.03 0.03 0.11 0.10

Acquisition related fees 0.02 - 0.07 -

Less:Income tax effect on Non-GAAP items (c) (0.04) (0.03) (0.14) (0.12)

Non-GAAP diluted income per share $ 1.53 $ 1.49 $ 5.20 $ 3.78

Shares used in computing Non-GAAP diluted 68,612 68,176 68,492 68,727income per share Three Months Twelve Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Free Cash FlowNet cash provided by operating activities $ $ $ $(GAAP) 103,185 99,670 276,134 243,258

Purchases of property, equipment and (504) (167) (1,237) (1,278)leasehold improvementsPayments for capitalized computer software (234) - (1,129) (141)development costsAcquisition related payments 1,300 - 3,733 1,264

$ $ $ $Free cash flow (non-GAAP) 103,747 99,503 277,501 243,103

(a) GAAP total expenses Three Months Twelve Months Ended Ended June 30, June 30,

2021 2020 2021 2020

$ $ $ 60,151 $ 61,607Total costs of revenue 14,315 15,158

Total operating expenses 77,767 70,486 290,824 279,751

$ $ $ $GAAP total expenses 92,082 85,644 350,975 341,358

(b) Stock-based compensation expense was asfollows: Three Months Twelve Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Cost of maintenance $ 208 $ 337 $ 896 $ 1,441

Cost of services and other 415 484 1,613 1,961

Selling and marketing 1,912 1,428 6,567 5,656

Research and development 2,472 2,113 8,987 8,306

General and administrative 4,048 3,053 15,581 14,184

Total stock-based compensation $ 9,055 $ 7,415 $ 33,644 $ 31,548

(c) The income tax effect on non-GAAP items for the three and twelve monthsended June 30, 2021 and 2020, respectively, is calculated utilizing theCompany's statutory tax rate of 21 percent.ASPEN TECHNOLOGY, INC. AND SUBSIDIARIESReconciliation of Forward-Looking Guidance Range(Unaudited in Thousands, Except per Share Data)Twelve Months Ended June 30, 2022 (a)RangeLowHighGuidance - Total expensesGAAP - total expenses$ 386,000

$ 391,000

Less:Stock-based compensation(36,000)

(36,000)

Amortization of intangibles(9,000)

(9,000)

Non-GAAP - total expenses$ 341,000

$ 346,000

Guidance - Income from operationsGAAP - income from operations$ 316,000

$ 346,000

Plus:Stock-based compensation36,000

36,000

Amortization of intangibles9,000

9,000

Non-GAAP - income from operations361,000

391,000

Guidance - Net income and diluted income per shareGAAP - net income and diluted income per share$ 288,000

$ 4.27

$ 314,000

$ 4.65

Plus:Stock-based compensation36,000

36,000

Amortization of intangibles9,000

9,000

Less:Income tax effect on Non-GAAP items (b)(10,000)

(10,000)

Non-GAAP - net income and diluted income per share$ 323,000

$ 4.79

$ 349,000

$ 5.17

Shares used in computing guidance for Non-GAAP diluted income per share67,500

67,500

Guidance - Free Cash FlowGAAP - Net cash provided by operating activities$ 278,800

$ 288,800

Less:Purchases of property, equipment and leasehold improvements(3,000)

(3,000)

Payments for capitalized computer software development costs(800)

(800)

Free cash flow (non-GAAP)$ 275,000

$ 285,000

(a) Rounded amounts used, except per share data.(b) The income tax effect on non-GAAP items for the twelve months ended June 30, 2022 is calculated utilizing the Company's statutory tax rate of 21 percent. View source version on businesswire.com: https://www.businesswire.com/news/home/20210811005834/en/

CONTACT: Media Contact Len Dieterle Aspen Technology +1 781-221-4291 len.dieterle@aspentech.com

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