Aspen (AZPN) Q2 Earnings Miss Estimates, Revenues Rise Y/Y

Core View - Aspen Technology (AZPN) reported second-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $1.37, missing the Zacks Consensus Estimate of $1.49, compared to non-GAAP EPS of 35 cents in the same quarter last year [1] - Revenues of $257.2 million increased by 5.9% year over year but fell short of the Zacks Consensus Estimate by 1% [1] Revenue Breakdown - License and solutions' revenues, accounting for 59.3% of total revenues, rose by 1.7% year over year to $152.5 million [2] - Maintenance revenues, making up 33.1% of total revenues, increased by 8.2% year over year to $85.1 million [2] - Revenues from Services and other, which represent 7.6% of total revenues, surged by 36.7% year over year to $19.6 million [2] - The Zacks Consensus Estimate for fiscal second-quarter revenues for the License, Maintenance, and Services segments were $158 million, $86 million, and $15.3 million, respectively [2] Margins and Expenses - Gross profit increased to $162.2 million from $149.7 million in the prior year, with gross margin improving to 63.1% from 61.7% [3] - Total operating expenses rose to $211.4 million from $209.1 million year over year, driven by higher selling, marketing, and research and development costs [3] - Non-GAAP operating income was $88.7 million, up from $86.6 million in the year-ago quarter [3] Balance Sheet & Cash Flow - As of December 31, 2023, cash and cash equivalents were $130.7 million, an increase from $120.5 million as of September 30, 2023 [4] - The company generated $29.8 million in cash from operations, down from $49.5 million in the previous quarter, with non-GAAP free cash flow at $29.2 million compared to $47.8 million in the prior-year quarter [4] - Aspen repurchased 375,041 shares for $72.1 million in the fiscal second quarter, totaling 954,839 shares worth $186.3 million repurchased under a $300 million buyback authorization [4] Fiscal 2024 Outlook - For fiscal 2024, Aspen expects revenues to be at least $1.12 billion, aligning with the Zacks Consensus Estimate [5] - Non-GAAP net income is anticipated to be at least $6.59 per share, slightly up from earlier guidance of $6.57 per share, with the consensus estimate at $6.63 per share [5] - Management projects Annual Contract Value growth of at least 11.5% year over year and total bookings to reach at least $1.04 billion [6] - Non-GAAP operating income is estimated to be at least $445 million, with total expenses expected to be nearly $675 million [6] - Free cash flow is projected to be at least $360 million [6]