Aspentech Corp 10-Q Quarterly Report October 2018

- Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization software company, today announced financial results for its first quarter of fiscal year 2019 ended September 30, 2018.

“We are pleased with our first quarter performance, which was highlighted by 8% year-over-year annual spend growth driven by solid performance across the company in each major geography and product suite. We are benefiting from broadening signs of demand among Engineering & Construction customers, in addition to continued positive trends among owner-operator customers,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.

Pietri continued, “We are also pleased with the progress in our APM business. We are seeing growing market recognition of the technical superiority of our product offering, which is helping drive customer wins in our core verticals and the Global Economy Industries. APM represents an exciting, and sizable, growth opportunity in the early days of a market where we believe we are well positioned to win.”

Pietri concluded, “We continue to execute on our strategic priorities while also delivering high levels of profitability and free cash flow on an annual basis. As a reminder, now that we have adopted Topic 606, we will experience significant variability on our income statement, due to the timing of renewals and the fact that a significant amount of license revenue is now recognized up front instead of ratably. However, the fundamental business drivers and the value we provide customers have not changed under Topic 606.”

First Quarter Fiscal 2019 and Recent Business Highlights

All results for the first fiscal quarter of 2019 and the comparable periods are presented under ASC Topic 606, which the company adopted on July 1^st, 2018. As a reminder, AspenTech’s income statement results are impacted by the adoption of Topic 606, which impacts both the timing and method of revenue recognition for term license contracts.

•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 $498 million at the end of the first quarter of fiscal 2019, which increased 8.1% compared to the first quarter of fiscal 2018 and 1.9% sequentially.

•AspenTech repurchased approximately 473,000 shares of its common stock for $50.0 million in the first quarter of fiscal 2019.

The following information was filed by Aspentech Corp on Wednesday, October 24, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Aspentech Corp's 10-Q Quarterly Report:

Financial - Earnings Highlight
Gross profit margin on services and other revenue of 2.6% for the three months ended September 30, 2018 decreased from 5.2% for the corresponding period of the prior fiscal year.

Financial - Expense Highlight
The period-over-period increase of $0.6 million in interest expense during the three months ended September 30, 2018 was primarily attributable to interest expenses related to higher interest rates under our Credit Agreement.
Financial - Expense Highlight
The period-over-period increase of $1.6 million in research and development expense during the three months ended September 30, 2018 was primarily attributable to higher compensation costs of $0.7 million related to an increase in headcount, and higher stock-based compensation of $0.4 million.
Financial - Income Highlight
The effective tax rate for the periods presented is primarily the result of income earned in the U.S. taxed at U.S. federal and state statutory income tax rates, income earned in foreign tax jurisdictions taxed at the applicable rates, as well as the impact of permanent differences between book and tax income.
Revenue - Product Highlight
We expect maintenance revenue to increase as a result of: i having a larger base of arrangements recognized on a ratable basis ii increased customer usage of our software iii adding new customers and iv escalating annual payments.
Revenue - Product
As our typical contract term...Read more
Other - Other
We believe that cash inflows...Read more
Financial - Cash Flow
We believe this measure is...Read more
Revenue - Product
The period-over-period increase of $2.8...Read more
Other - Other
Risk Factors of Part II...Read more
Other - Other
We have established sustainable competitive...Read more
Financial - Income
Our effective income tax rate...Read more
Financial - Cash Flow
Free cash flow is calculated...Read more
Other - Other
Note 2, Significant Accounting Policies,...Read more
Financial - Expense
The period-over-period increase of $1.0...Read more
Revenue - Product
The period-over-period decrease of $15.1...Read more
Other - Other
We had $170.0 million in...Read more
Revenue - Product
Comparing annual spend for different...Read more
Other - Other
Our primary source of cash...Read more
Other - Other
We utilize certain key non-GAAP...Read more
Financial - Income
The Tax Act also included...Read more
Other - Other
Our effective tax rate decreased...Read more
Other - Other
We have refined the set...Read more
Financial - Expense
Cash provided by working capital...Read more
Other - Other
Purchases of property, equipment, and...Read more
Other - Other
Our professional services are focused...Read more
Revenue - Product
See Note 2, Significant Accounting...Read more
Financial - Expense
During the three months ended...Read more
Other - Other
We have developed our applications...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Aspentech Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

CIK: 929940
Form Type: 10-Q Quarterly Report
Accession Number: 0000929940-18-000032
Submitted to the SEC: Wed Oct 24 2018 4:04:37 PM EST
Accepted by the SEC: Wed Oct 24 2018
Period: Sunday, September 30, 2018
Industry: Computer Programming Services