Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries, today announced financial results for its second quarter of fiscal year 2014, ended December 31, 2013.

"AspenTech continued to perform at a high level in the second quarter, with financial results that exceeded our guidance on all key metrics. Customer demand and usage patterns continue to be solid and helped drive year-over-year growth of over 13% in total license contract value," said Antonio Pietri, President and Chief Executive Officer of AspenTech.  "At the same time we remain disciplined from an operational perspective, as evidenced by the $70 million of free cash flow generated on a year-to-date basis.  We are focused on building on our strong first half results and are optimistic about the company's outlook for the remainder of the fiscal year."

Second Quarter Fiscal 2014 and Recent Business Highlights

Summary of Second Quarter Fiscal Year 2014 Financial Results

AspenTech's total revenue of $98.8 million increased 27.8% from $77.3 million in the second quarter of the prior fiscal year. 

• Subscription and software revenue was $88.9 million in the second quarter of fiscal 2014, an increase from $69.0 million in the second quarter of fiscal 2013. 
• Services & other revenue was $9.8 million in the second quarter of fiscal 2014, compared to $8.3 million in the second quarter of fiscal 2013. 

For the quarter ended December 31, 2013, AspenTech reported income from operations of $36.1 million, compared to income from operations of $14.9 million for the quarter ended December 31, 2012. 

Net income was $23.3 million for the quarter ended December 31, 2013, leading to net income per share of $0.25, compared to net income per share of $0.10 in the same period last fiscal year. 

Non-GAAP income from operations, which adds back stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $39.5 million for the second quarter of fiscal 2014, compared to non-GAAP income from operations of $18.6 million in the same period last fiscal year.  Non-GAAP net income was $25.4 million, or $0.27 per share, for the second quarter of fiscal 2014, compared to non-GAAP net income of $12.3 million, or $0.13 per share, in the same period last fiscal year.  A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.

AspenTech had cash and marketable securities of $235.7 million at December 31, 2013, an increase of $14.2 million from the end of the prior quarter after using $30.0 million in cash to repurchase shares of common stock. During the second quarter, the company generated $46.3 million in cash flow from operations and $45.2 million in free cash flow after taking into consideration $1.1 million in capital expenditures and capitalized software.

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

AspenTech will host a conference call and webcast today, January 30, 2014, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the second quarter fiscal year 2014 as well as the company's business outlook. 

The live dial-in number is (877) 245-0126 or (706) 634-5625, conference ID code 35794133. 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 (855) 859-2056 or (404) 537-3406, conference ID code 35794133, through March 2, 2014.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing - for energy, chemicals, 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

Forward-Looking Statements

The second paragraph of this press release contains 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: AspenTech's failure to develop new software products, enhance existing products and services, or penetrate new vertical markets; demand for, or usage of, aspenONE software declines for any reason; unfavorable economic and market conditions or a lessening demand in the market for process optimization software; 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.

© 2014 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen leaf logo, Aspen Plus and Aspen HYSYS are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

Source: Aspen Technology, Inc.