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Aspen Technology Announces Financial Results for the Third Quarter of Fiscal 2022

Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in asset optimization software, today announced financial results for its third-quarter of fiscal year 2022, ended March 31, 2022.

“AspenTech delivered strong third quarter results driven by a notable improvement in customer spending and continued execution by our team. We believe the growing importance of operational efficiency and sustainability across capital intensive industries will support our ability to return to consistent double-digit growth over time,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.

Pietri continued, “We are also excited to be approaching the completion of our proposed transaction with Emerson with the shareholder meeting set for May 16th. We believe the innovation and expertise of OSI and Geological Simulation Software will enable the new AspenTech to deliver even greater transformative value to customers in a broader set of industries.”

Third Quarter and Fiscal Year 2022 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 $655 million at the end of the third quarter of fiscal 2022, which increased 7.4% compared to the third quarter of fiscal 2021 and 2.4% sequentially.

Summary of Third Quarter Fiscal Year 2022 Financial Results

AspenTech’s total revenue of $187.8 million included:

  • License revenue, which represents the portion of a term license agreement allocated to the initial license, was $130.0 million in the third quarter of fiscal 2022, compared to $110.1 million in the third quarter of fiscal 2021.
  • Maintenance revenue, which represents the portion of the term license agreement related to ongoing support and the right to future product enhancements, was $50.0 million in the third quarter of fiscal 2022, compared to $45.9 million in the third quarter of fiscal 2021.
  • Services and other revenue was $7.7 million in the third quarter of fiscal 2022, compared to $6.7 million in the third quarter of fiscal 2021.

For the quarter ended March 31, 2022, AspenTech reported income from operations of $80.8 million, compared to income from operations of $68.9 million in the third quarter of fiscal 2021.

Net income was $75.1 million for the quarter ended March 31, 2022, leading to net income per share of $1.12, compared to net income per share of $0.91 in the same period last fiscal year.

Non-GAAP income from operations was $102.5 million for the third quarter of fiscal 2022, compared to non-GAAP income from operations of $80.9 million in the same period last fiscal year. Non-GAAP net income was $92.3 million, or $1.38 per share, for the third quarter of fiscal 2022, compared to non-GAAP net income of $72.0 million, or $1.05 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 and integration planning 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 $285.2 million and total borrowings, net of debt issuance costs, of $279.4 million at March 31, 2022.

During the third quarter, the company generated $81.1 million in cash flow from operations and $89.2 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 and integration planning related payments.

Business Outlook

Based on information as of today, April 27, 2022, AspenTech is issuing the following guidance for fiscal year 2022:

  • Annual spend growth of 7-8% year-over-year
  • Free cash flow of at least $285 million
  • Total bookings of $814 to $840 million
  • Total revenue of $737 to $754 million
  • GAAP total expense of $410 to $415 million
  • Non-GAAP total expense of $333 to $338 million
  • GAAP operating income of $327 to $339 million
  • Non-GAAP operating income of $404 to $416 million
  • GAAP net income of $299 to $310 million
  • Non-GAAP net income of $360 to $371 million
  • GAAP net income per share of $4.43 to $4.59
  • Non-GAAP net income per share of $5.33 to $5.50

The above guidance does not give effect to the proposed transaction with Emerson, which, if completed, is expected to close during the fourth quarter of fiscal 2022, ending June 30, 2022. 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 AspenTech’s 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 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, April 27, 2022, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the third-quarter fiscal year 2022 as well as the company’s business outlook. The live dial-in number is (866) 471-3828 or (678) 509-7573, conference ID code 6745137. 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://ir.aspentech.com/events-and-presentations, 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 6745137, through May 4, 2022.

About AspenTech

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 second and 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, including statements regarding the pending transaction with Emerson. The forward-looking statements regarding the pending transaction with Emerson include: the expected timing of the transaction; the ability of the parties to complete the transaction considering the various closing conditions; the expected benefits of the transaction, such as improved synergies, growth potential, business plans, expanded portfolio, financial performance and strength; the position of the new AspenTech following completion of the transaction; and any assumptions underlying any of the foregoing. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. We can give no assurance that such plans, estimates or expectations will be achieved and therefore, actual results may differ materially from any plans, estimates or expectations in such forward-looking statements.

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.

Important factors that could cause actual results relating to the pending transaction with Emerson to differ materially from AspenTech’s plans, estimates or expectations regarding the transaction include, among others: (1) that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by AspenTech’s stockholders may not be obtained; (2) the risk that the transaction may not be completed in the time frame expected by AspenTech or Emerson, or at all; (3) unexpected costs, charges or expenses resulting from the transaction; (4) uncertainty of the expected financial performance of the new AspenTech (“New AspenTech”) following completion of the transaction; (5) failure to realize the anticipated benefits of the transaction, including as a result of delay in completing the transaction or integrating the industrial software business of Emerson with AspenTech’s business; (6) the ability of New AspenTech to implement its business strategy; (7) difficulties and delays in achieving revenue and cost synergies of New AspenTech; (8) inability to retain and hire key personnel; (9) the occurrence of any event that could give rise to termination of the transaction; (10) potential litigation in connection with the transaction or other settlements or investigations that may affect the timing or occurrence of the transaction or result in significant costs of defense, indemnification and liability; (11) AspenTech’s ability and the ability of Emerson and New AspenTech to successfully recover from a disaster or other business continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the COVID-19 pandemic; (12) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (13) the risk that disruptions from the transaction will harm Emerson’s and AspenTech’s business, including current plans and operations; (14) certain restrictions during the pendency of the transaction that may impact Emerson’s or AspenTech’s ability to pursue certain business opportunities or strategic transactions; (15) AspenTech’s, Emerson’s and new AspenTech’s ability to meet expectations regarding the accounting and tax treatments of the transaction; and (16) other risk factors as detailed from time to time in Emerson’s and AspenTech’s reports filed with the SEC, including Emerson’s and AspenTech’s annual reports on Form 10-K, periodic quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC.

While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

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.

© 2022 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 SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited in Thousands, Except Per Share Data)
 
Three Months Ended

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Revenue:
License

$

130,032

$

110,104

$

327,247

$

352,133

Maintenance

 

50,017

 

45,885

 

146,615

 

139,561

Services and other

 

7,704

 

6,737

 

21,267

 

19,721

Total revenue

 

187,753

 

162,726

 

495,129

 

511,415

Cost of revenue:
License

 

489

 

2,485

 

5,291

 

6,859

Maintenance

 

4,760

 

5,174

 

13,674

 

14,066

Services and other

 

8,373

 

8,396

 

24,436

 

24,911

Total cost of revenue

 

13,622

 

16,055

 

43,401

 

45,836

Gross profit

 

174,131

 

146,671

 

451,728

 

465,579

Operating expenses:
Selling and marketing

 

33,977

 

30,345

 

94,088

 

82,092

Research and development

 

28,704

 

25,874

 

80,975

 

70,576

General and administrative

 

30,694

 

21,553

 

87,542

 

60,389

Total operating expenses

 

93,375

 

77,772

 

262,605

 

213,057

Income from operations

 

80,756

 

68,899

 

189,123

 

252,522

Interest income

 

8,287

 

8,410

 

25,646

 

26,383

Interest (expense)

 

(1,572)

 

(1,495)

 

(4,626)

 

(5,639)

Other income (expense), net

 

522

 

(5)

 

(2,107)

 

(1,807)

Income before income taxes

 

87,993

 

75,809

 

208,036

 

271,459

Provision for income taxes

 

12,870

 

13,314

 

31,650

 

47,101

Net income

$

75,123

$

62,495

$

176,386

$

224,358

Net income per common share:
Basic

$

1.13

$

0.92

$

2.64

$

3.31

Diluted

$

1.12

$

0.91

$

2.62

$

3.28

Weighted average shares outstanding:
Basic

 

66,594

 

67,920

 

66,791

 

67,809

Diluted

 

67,014

 

68,608

 

67,241

 

68,439

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited in Thousands, Except Share and Per Share Data)
 
March 31,

2022
June 30,

2021
ASSETS
Current assets:
Cash and cash equivalents

$

285,217

$

379,853

Accounts receivable, net

 

49,182

 

52,502

Current contract assets, net

 

345,633

 

308,607

Prepaid expenses and other current assets

 

11,848

 

12,716

Prepaid income taxes

 

3,154

 

14,639

Total current assets

 

695,034

 

768,317

Property, equipment and leasehold improvements, net

 

4,650

 

5,610

Computer software development costs, net

 

1,003

 

1,461

Goodwill

 

157,855

 

159,852

Intangible assets, net

 

37,737

 

44,327

Non-current contract assets, net

 

416,604

 

407,180

Contract costs

 

30,274

 

29,056

Operating lease right-of-use assets

 

31,609

 

32,539

Deferred tax assets

 

2,157

 

2,121

Other non-current assets

 

4,094

 

3,537

Total assets

$

1,381,017

$

1,454,000

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable

$

7,176

$

4,367

Accrued expenses and other current liabilities

 

46,161

 

50,575

Current operating lease liabilities

 

7,119

 

6,751

Income taxes payable

 

33,649

 

3,444

Current borrowings

 

26,000

 

20,000

Current deferred revenue

 

50,569

 

56,393

Total current liabilities

 

170,674

 

141,530

Non-current deferred revenue

 

12,114

 

11,732

Deferred income tax liabilities

 

139,921

 

193,360

Non-current operating lease liabilities

 

27,761

 

29,699

Non-current borrowings, net

 

253,412

 

273,162

Other non-current liabilities

 

2,280

 

3,760

Commitments and contingencies
Series D redeemable convertible preferred stock, $0.10 par value—

Authorized— 3,636 shares as of March 31, 2022 and June 30, 2021

Issued and outstanding— none as of March 31, 2022 and June 30, 2021

 

-

 

-

Stockholders’ equity:
Common stock, $0.10 par value— Authorized—210,000,000 shares

Issued— 104,845,904 shares at March 31, 2022 and 104,543,414 shares at June 30, 2021

Outstanding— 66,607,779 shares at March 31, 2022 and 67,912,160 shares at June 30, 2021

 

10,485

 

10,455

Additional paid-in capital

 

850,948

 

819,642

Retained earnings

 

1,954,519

 

1,778,133

Accumulated other comprehensive income

 

5,091

 

9,026

Treasury stock, at cost—38,238,125 shares of common stock at March 31, 2022 and 36,631,254 shares at June 30, 2021

 

(2,046,188)

 

(1,816,499)

Total stockholders’ equity

 

774,855

 

800,757

Total liabilities and stockholders’ equity

$

1,381,017

$

1,454,000

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited in Thousands)
 
Three Months Ended

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Cash flows from operating activities:

 

Net income

$

75,123

$

62,495

$

176,386

$

224,358

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

 

2,680

 

2,688

 

8,151

 

7,545

Reduction in the carrying amount of right-of-use assets

 

2,457

 

2,258

 

7,566

 

7,037

Net foreign currency (gain) losses

 

(69)

 

(27)

 

2,238

 

2,027

Stock-based compensation

 

7,757

 

9,225

 

25,713

 

24,589

Deferred income taxes

 

(33)

 

6,817

 

(53,472)

 

7,029

Provision for receivables

 

799

 

2,064

 

2,276

 

6,800

Other non-cash operating activities

 

735

 

311

 

1,507

 

718

Changes in assets and liabilities:
Accounts receivable

 

(14,506)

 

(4,257)

 

805

 

4,115

Contract assets, net

 

9,319

 

19,835

 

(49,739)

 

(103,538)

Contract costs

 

(595)

 

(123)

 

(1,218)

 

198

Lease liabilities

 

(2,750)

 

(2,298)

 

(7,908)

 

(7,533)

Prepaid expenses, prepaid income taxes, and other assets

 

(304)

 

(7,001)

 

12,111

 

(6,959)

Accounts payable, accrued expenses, income taxes payable and other liabilities

 

(3,231)

 

216

 

36,036

 

(6,847)

Deferred revenue

 

3,760

 

6,456

 

(5,366)

 

13,410

Net cash provided by operating activities

 

81,142

 

98,659

 

155,086

 

172,949

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

 

(479)

 

(211)

 

(1,138)

 

(733)

Payments for business acquisitions, net of cash acquired

 

-

 

(329)

 

-

 

(16,272)

Payments for equity method investments

 

(33)

 

(760)

 

(617)

 

(926)

Payments for capitalized computer software development costs

 

(31)

 

-

 

(361)

 

(895)

Net cash used in investing activities

 

(543)

 

(1,300)

 

(2,116)

 

(18,826)

Cash flows from financing activities:
Issuance of shares of common stock

 

1,616

 

9,394

 

15,923

 

12,508

Repurchases of common stock

 

-

 

-

 

(234,043)

 

-

Payments of tax withholding obligations related to restricted stock

 

(2,360)

 

(2,612)

 

(12,656)

 

(6,719)

Deferred business acquisition payments

 

-

 

-

 

(1,220)

 

-

Repayments of amounts borrowed

 

(6,000)

 

(4,000)

 

(14,000)

 

(131,182)

Payments of debt issuance costs

 

-

 

-

 

(402)

 

-

Net cash used in financing activities

 

(6,744)

 

2,782

 

(246,398)

 

(125,393)

Effect of exchange rate changes on cash and cash equivalents

 

(37)

 

(531)

 

(1,208)

 

573

Increase (Decrease) in cash and cash equivalents

 

73,818

 

99,610

 

(94,636)

 

29,303

Cash and cash equivalents, beginning of period

 

211,399

 

217,489

 

379,853

 

287,796

Cash and cash equivalents, end of period

$

285,217

$

317,099

$

285,217

$

317,099

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

$

21,451

$

18,681

$

42,697

$

49,349

Interest paid

 

1,337

 

1,455

 

3,975

 

5,672

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

$

8

$

20

$

(99)

$

77

Change in repurchases of common stock included in accounts payable and accrued expenses

 

-

 

-

 

(4,353)

 

-

Lease liabilities arising from obtaining right-of-use assets

 

3,228

 

197

 

4,860

 

1,488

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows


(Unaudited in Thousands, Except Per Share Data)
 
Three Months Ended

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Total expenses
GAAP total expenses (a)

$

106,997

$

93,827

$

306,006

$

258,893

Less:
Stock-based compensation (b)

 

(7,757)

 

(9,225)

 

(25,713)

 

(24,589)

Amortization of intangibles

 

(2,025)

 

(2,047)

 

(6,102)

 

(5,657)

Acquisition and integration planning related fees

 

(11,923)

 

(749)

 

(29,066)

 

(3,133)

 
Non-GAAP total expenses

$

85,292

$

81,806

$

245,125

$

225,514

 
Income from operations
GAAP income from operations

$

80,756

$

68,899

$

189,123

$

252,522

Plus:
Stock-based compensation (b)

 

7,757

 

9,225

 

25,713

 

24,589

Amortization of intangibles

 

2,025

 

2,047

 

6,102

 

5,657

Acquisition and integration planning related fees

 

11,923

 

749

 

29,066

 

3,133

 
Non-GAAP income from operations

$

102,461

$

80,920

$

250,004

$

285,901

 
Net income
GAAP net income

$

75,123

$

62,495

$

176,386

$

224,358

Plus:
Stock-based compensation (b)

 

7,757

 

9,225

 

25,713

 

24,589

Amortization of intangibles

 

2,025

 

2,047

 

6,102

 

5,657

Acquisition and integration planning related fees

 

11,923

 

749

 

29,066

 

3,133

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

 

(4,558)

 

(2,524)

 

(12,785)

 

(7,010)

 
Non-GAAP net income

$

92,270

$

71,992

$

224,482

$

250,727

 
Diluted income per share
GAAP diluted income per share

$

1.12

$

0.91

$

2.62

$

3.28

Plus:
Stock-based compensation (b)

 

0.12

 

0.14

 

0.39

 

0.35

Amortization of intangibles

 

0.03

 

0.03

 

0.09

 

0.08

Acquisition and integration planning related fees

 

0.18

 

0.01

 

0.43

 

0.05

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

 

(0.07)

 

(0.04)

 

(0.19)

 

(0.10)

 
Non-GAAP diluted income per share

$

1.38

$

1.05

$

3.34

$

3.66

 
Shares used in computing Non-GAAP diluted income per share

 

67,014

 

68,608

 

67,241

 

68,439

 
 
Three Months Ended

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Free Cash Flow
Net cash provided by operating activities (GAAP)

$

81,142

$

98,659

$

155,086

$

172,949

Purchases of property, equipment and leasehold improvements

 

(479)

 

(211)

 

(1,138)

 

(733)

Payments for capitalized computer software development costs

 

(31)

 

-

 

(361)

 

(895)

Acquisition and integration planning related payments

 

8,592

 

1,526

 

20,592

 

2,433

Free cash flow (non-GAAP)

$

89,224

$

99,974

$

174,179

$

173,754

 
(a) GAAP total expenses
Three Months Ended

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Total costs of revenue

$

13,622

$

16,055

$

43,401

$

45,836

Total operating expenses

 

93,375

 

77,772

 

262,605

 

213,057

GAAP total expenses

$

106,997

$

93,827

$

306,006

$

258,893

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

March 31,
Nine Months Ended

March 31,

2022

2021

2022

2021

Cost of maintenance

$

150

$

234

$

505

$

688

Cost of services and other

 

225

 

412

 

731

 

1,198

Selling and marketing

 

1,687

 

1,869

 

5,324

 

4,655

Research and development

 

1,702

 

2,273

 

5,434

 

6,515

General and administrative

 

3,993

 

4,437

 

13,719

 

11,533

Total stock-based compensation

$

7,757

$

9,225

$

25,713

$

24,589

(c) The income tax effect on non-GAAP items for the three and nine-months ended March 31, 2022 and 2021, respectively, is calculated utilizing the company’s statutory tax rate of 21 percent.
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of Forward-Looking Guidance Range

(Unaudited in Thousands, Except Per Share Data)
 
Twelve Months Ended June 30, 2022 (a)
Range
Low High
Guidance - Total expenses
GAAP - total expenses

$

410,000

$

415,000

Less:
Stock-based compensation

 

(33,000)

 

(33,000)

Amortization of intangibles

 

(8,000)

 

(8,000)

Acquisition and integration planning related fees

 

(36,000)

 

(36,000)

 
Non-GAAP - total expenses

$

333,000

$

338,000

 
Guidance - Income from operations
GAAP - income from operations

$

327,000

$

339,000

Plus:
Stock-based compensation

 

33,000

 

33,000

Amortization of intangibles

 

8,000

 

8,000

Acquisition and integration planning related fees

 

36,000

 

36,000

 
Non-GAAP - income from operations

$

404,000

$

416,000

 
Guidance - Net income and diluted income per share
GAAP - net income and diluted income per share

$

299,000

$

4.43

$

310,000

$

4.59

Plus:
Stock-based compensation

 

33,000

 

33,000

Amortization of intangibles

 

8,000

 

8,000

Acquisition and integration planning related fees

 

36,000

 

36,000

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

 

(16,000)

 

(16,000)

 
Non-GAAP - net income and diluted income per share

$

360,000

$

5.33

$

371,000

$

5.50

 
Shares used in computing guidance for Non-GAAP diluted income per share

 

67,500

 

67,500

 
 
Guidance - Free Cash Flow (c)
GAAP - Net cash provided by operating activities

$

251,500

Less:
Purchases of property, equipment and leasehold improvements

 

(2,000)

Payments for capitalized computer software development costs

 

(500)

Plus:
Acquisition and integration planning related payments

 

36,000

 
Free cash flow expectation (non-GAAP)

$

285,000

(a) Rounded amount 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.
(c) The company is estimating free cash flow of at least $285 million.

 

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