Aspen Technology(US:AZPN)2023-11-05 16:00Financial Performance - As of September 30, 2023, the Annual Contract Value (ACV) grew approximately 10.9% from $809.6 million to $897.6 million compared to the previous year[106]. - Total Contract Value (TCV) increased from $3.3 billion to $3.7 billion year-over-year as of September 30, 2023[107]. - Bookings for the three months ended September 30, 2023, were $211.8 million, a decrease from $224.0 million in the same period of 2022[107]. - Total revenue decreased by $1.5 million, or 0.6%, to $249.3 million for the three months ended September 30, 2023, compared to $250.8 million in the same period last year[119]. - License and solutions revenue fell by $11.6 million, or 7.2%, primarily due to the timing of contract renewals[120]. - Maintenance revenue increased by $6.6 million, or 8.4%, driven by growth in the base of arrangements[121]. - Services and other revenue rose by $3.5 million, or 28.3%, due to the timing and volume of professional services engagements[122]. - Gross profit decreased by $8.4 million, or 5.3%, with a gross profit margin of 60.7%, down from 63.7% in the prior year[127]. - Non-GAAP income from operations for the three months ended September 30, 2023, was $77.8 million, compared to $92.6 million in the same period of 2022[112]. Cash Flow and Investments - Free cash flow (non-GAAP) for the three months ended September 30, 2023, was $16.0 million, up from $3.7 million in the same period of 2022[109]. - Net cash provided by operating activities increased by $11.9 million, driven by favorable changes in working capital[135]. - Total free cash flow increased by $12.4 million, primarily due to cash flows from operating activities and a decrease in capital expenditures[137]. - Net cash provided by operating activities for the three months ended September 30, 2023, was $16,981 thousand, with free cash flow reported at $16,044 thousand[142]. - The company no longer excludes acquisition and integration planning related payments from free cash flow calculations starting January 1, 2023[142]. - The company has a total commitment of $5.0 million CAD (approximately $3.7 million USD) in a limited partnership investment fund, with a fair value of $3.6 million CAD (approximately $2.7 million USD) as of September 30, 2023[145]. Shareholder Actions - The company repurchased 579,798 shares for $114.2 million under the Share Repurchase Authorization, with a remaining value of $185.8 million as of September 30, 2023[100]. Operational Focus - The company’s operational focus includes optimizing asset lifecycle management to enhance efficiency and sustainability in asset-intensive industries[96]. Currency and Interest Rate Impact - Approximately 85% of the company's ACV is denominated in U.S. dollars, providing stability against currency fluctuations[105]. - For the three months ended September 30, 2023, 7.1% of total revenue was denominated in foreign currencies, down from 11.7% in the same period of 2022[140]. - Net foreign currency exchange losses for the three months ended September 30, 2023, were $5.9 million, compared to $8.3 million in 2022[141]. - A hypothetical 10% change in foreign currency exchange rates could have impacted results by approximately $4.7 million in 2023 and $2.4 million in 2022[141]. - A hypothetical 100 basis point change in interest rates would not materially impact the fair value of the investment portfolio as of September 30, 2023[144]. - Interest income increased by $9.0 million, or 179.7%, primarily from higher interest earned on cash and cash equivalents[130]. Agreements and Terminations - The company entered into a $12.5 million agreement with Emerson for the purchase of Plantweb Optics Analytics software[98]. - The agreement to purchase Micromine was terminated due to unclear regulatory approval timelines[98]. Cost and Expense Management - Total cost of revenue increased by $6.9 million, or 7.6%, primarily due to increased compensation costs and headcount[124]. - Selling and marketing expenses rose by $4.1 million, or 3.5%, mainly due to higher compensation costs[128].