Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 02, 2024

ASPEN TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-41400

87-3100817

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

20 Crosby Drive,

Bedford,

01730

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (781) 221-6400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common stock, $0.0001 par value per share

AZPN

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.			Results of Operations and Financial Condition.

On May 7, 2024, Aspen Technology, Inc. (the "Company") issued a press release announcing financial results for the third quarter of fiscal year 2024, ended March 31, 2024. The full text of the press release issued in connection with this announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 (the "1933 Act") or the Exchange Act except as expressly set forth by specific reference in such a filing.


Item 5.02			Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On May 7, 2024, the Company announced the appointment of David Baker to the position of Senior Vice President, Chief Financial Officer of the Company, effective June 3, 2024. Mr. Baker will serve at an annual base salary of $425,000, and will be a participant under the Aspen Technology, Inc. Executive Retention Plan (the “Plan”) described below. He will receive a new hire equity award of restricted stock units with a grant date value of $437,500 that will vest in equal quarterly installments over a three-year period. Mr. Baker also will be eligible to participate in the Company’s Executive Bonus Plan for its fiscal year ending June 30, 2025 (“Fiscal 2025) with an annual bonus target of $325,000, and will have an initial annual equity grant target of up to $1,750,000 beginning in Fiscal 2025. Mr. Baker is not a party to any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K and there is no arrangement or understanding between Mr. Baker and any other person pursuant to which he was selected as an officer of the Company.

Mr. Baker previously was employed by Emerson Electric Co. (“Emerson”) for over 27 years. Emerson owned approximately 56% of the Company’s outstanding common stock as of March 31, 2024. As permitted under Emerson’s 2015 Incentive Shares Plan (the “Emerson Plan”), Mr. Baker will remain eligible to receive a payout of any earned equity awards under the Emerson Plan, subject to the terms and conditions of such awards and the Emerson Plan. Previously at Emerson, Mr. Baker held a range of leadership positions within Emerson’s finance organization, including, most recently, Vice President, Financial Planning, since March 2023, where he led the financial planning and analysis function for Emerson, Vice President and Chief Financial Officer, Automation Solutions, from November 2018 to February 2023, and Vice President and Chief Financial Officer, Measurement and Analytical, from July 2013 to November 2018. Earlier in his career, Mr. Baker worked at Graco Inc. as a Factory Controller and Senior Internal Auditor after serving as an auditor at KPMG. Mr. Baker holds an M.B.A. in Operations Management from the University of Minnesota and a B.A. in Accounting from the University of Northern Iowa. He is 58 years old.

On May 7, 2024, the Company issued a press release announcing Mr. Baker’s appointment. The full text of the press release is furnished as Exhibit 99.2 to this report. The information in Exhibit 99.2 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of Section 11 or 12(a)(2) of the Securities Act of 1933, nor shall it be deemed incorporated by reference in any filing made by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in any such filing.

On May 2, 2024, the Human Capital Committee of the Board of Directors (the “Board”) of the Company approved the Plan. In addition to Mr. Baker, the Plan will cover other employees selected to participate by the Board; the other initial participants are Christopher Stagno, Senior Vice President, Chief Accounting Officer, and Mark Mouritsen, Senior Vice President, Chief Legal Officer.

The Plan provides for severance payments and benefits to participants upon a termination of employment with the Company either by the Company without “Cause” or a resignation by the participant for “Good Reason” (as such terms are defined in the Plan). In the event of such a qualifying termination which occurs outside the context of a “Change in Control” or “Control Event” (which are described below), participants are entitled to previously accrued compensation and benefits and the following severance payments and benefits:

•Payment of cash severance over the 12-month period following the participant’s termination date equal to the sum of (a) 12 months of the participant’s base salary and (b) the Participant’s target annual cash bonus, pro-rated for the portion of the fiscal year which has elapsed as of the date of the termination (less any previously paid bonus amounts);

•An additional cash payment, payable in a lump sum in an amount equal to 12 times the monthly employer portion of the premium for the same level of coverage, including dependents, provided to the participant under the Company’s group health benefit plans immediately before the termination date; and

•If and to the extent determined to be appropriate by the Board, Company-paid outplacement services.

If the qualifying termination occurs during the 12 month period immediately following a Change in Control (as defined in the Plan, generally as acquisition of control of the Company by an unaffiliated third party), the cash severance and the payment in respect of benefit premiums described in the first and second bullets above will be paid in a lump sum and the participant will also be entitled to full vesting of each then-unvested equity or equity-based award held by the participant, with any awards that are subject to the attainment of performance criteria vesting at the target level of performance (or, if determinable and greater, the actual level of performance).

If the qualifying termination occurs during the 12 month period following a Control Event (as defined in the Plan, generally as the acquisition by EMR Worldwide, Inc. and its affiliates of 90% or more of either (x) the then-outstanding shares of common stock of the Company or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors), then the cash severance and the payment in respect of benefit premiums described in the first and second bullets above will also be paid in a lump sum and the participant will be entitled to the following treatment of unvested equity or equity based awards (unless an award is both granted following the adoption of the Plan and is specifically excepted pursuant to its terms from the following equity treatment):

•Equity awards which are subject to only time-based vesting conditions will vest with respect to the portion of the award which would have become vested in the one-year period immediately following the termination had the participant remained employed; and

•Equity awards which are subject to performance-based vesting conditions will (a) be converted into a time vesting award, vesting in equal annual tranches at the target level of performance and (b) be vested as to the portion of the award which would have vested on the time vesting schedule described in clause (a), commencing on the date of grant and ending on the one-year anniversary of the qualifying termination.

The Plan will be administered by the Board. All payments and other benefits under the Plan are subject to applicable withholding obligations and the participant’s release of claims against the Company and its affiliates.

The foregoing description of the Plan is qualified in its entirety by reference to the complete text of the Plan, a copy of which will be filed with the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.


Item 9.01			Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.						Description

99.1						Press release issued by Aspen Technology, Inc. on May 7 , 2024
99.2						Aspen Technology Appoints David Baker as SVP, Chief Financial Officer

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ASPEN TECHNOLOGY, INC.


Date: May 7, 2024	By:	/s/ Christopher Stagno
		Christopher Stagno
		Senior Vice President, Interim Chief Financial Officer
		(Principal Financial Officer)

Exhibit 99.1

Contacts:


Media Contact						Investor Contact
Len Dieterle						Brian Denyeau
Aspen Technology						ICR for Aspen Technology
+1 781-221-4291						+1 646-277-1251
len.dieterle@aspentech.com						ir@aspentech.com

Aspen Technology Announces Financial Results for the

Third Quarter of Fiscal 2024

Bedford, Mass. – May 7, 2024 - Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced financial results for its third quarter in fiscal 2024, ended March 31, 2024.

Antonio Pietri, President and Chief Executive Officer of AspenTech, commented, “Our third quarter performance and updated outlook for fiscal 2024 reflects the more cautious customer buying behavior we experienced at the start of the new calendar year. While this dynamic is expected to weigh on ACV growth in the near-term, the continued health and expansion of our pipeline gives us confidence in the underlying growth opportunity for AspenTech.”

“AspenTech remains well positioned to support customers in their efforts to capitalize on the long-term investment trends of global decarbonization, electrification, and the transition to a new energy system. The opportunity for further collaboration and co-innovation in these areas was on full display last week at our biennial user conference, OPTIMIZE 24. Now, more than ever, our customers are being asked to meet the world’s increasing demand for resources in a sustainable manner, and AspenTech is providing the solutions to make this a reality,” concluded Pietri.

Third Quarter Fiscal Year 2024 Recent Business Highlights

•Annual contract value1 (“ACV”) was $936.1 million at the end of the third quarter of fiscal 2024, increasing 9.5% year over year and 2.4% quarter over quarter.

•Cash flow from operations was $138.1 million for the third quarter of fiscal 2024, compared to $131.0 million in the third quarter of fiscal 2023.

•Free cash flow2 was $137.0 million for the third quarter of fiscal 2024, compared to $129.3 million in the third quarter of fiscal 2023. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.

Summary of Third Quarter Fiscal Year 2024 Financial Results

AspenTech’s total revenue was $278.1 million in the third quarter of fiscal 2024 and included the following:

•License and solutions revenue, which represents the portion of a term license agreement allocated to the initial license and Digital Grid Management (“DGM”) revenue where software, hardware and professional services are recognized as one performance obligation, was $169.5 million in the third quarter of fiscal 2024, compared to $136.3 million in the third quarter of fiscal 2023.

•Maintenance revenue, which represents the portion of customer agreements related to ongoing support and the right to future product enhancements, was $86.3 million in the third quarter of fiscal 2024, compared to $77.3 million in the third quarter of fiscal 2023.

•Services and other revenue, which represents the portion of customer agreements related to professional services and training services, was $22.4 million in the third quarter of fiscal 2024, compared to $16.3 million in the third quarter of fiscal 2023.

Loss from operations was $19.3 million in the third quarter of fiscal 2024, compared to $78.5 million in the third quarter of fiscal 2023. Non-GAAP income from operations was $116.3 million in the third quarter of fiscal 2024, compared to $66.8 million in the third quarter of fiscal 2023. The year-over-year improvement in loss from operations was mainly due to a higher mix of license and solutions revenue, in addition to one-time expense savings, lower stock-based compensation and a continuing focus on driving efficiencies.

Net income was $1.6 million, or $0.02 per diluted share, in the third quarter of fiscal 2024, compared to net loss of $57.6 million, or $0.89 per diluted share, in the third quarter of fiscal 2023. AspenTech has increased amortization of intangible assets following the close of its transaction with Emerson Electric Co. (”Emerson”). AspenTech expects its amortization of intangible assets to remain at higher levels for the next several years as the related asset balance is amortized over the respective expected useful lives of the intangible assets.

Non-GAAP net income was $108.7 million, or $1.70 per diluted share, in the third quarter of fiscal 2024, compared to $69.1 million, or $1.06 per diluted share, in the third quarter of fiscal 2023. The year-over-year increase in non-GAAP net income was mainly due to revenue growth combined with strong operating leverage.

AspenTech had cash and cash equivalents of $177.6 million as of March 31, 2024, compared to $241.2 million as of June 30, 2023. The decrease in cash and cash equivalents during this period primarily was due to the impact of share repurchase activity under AspenTech’s $300.0 million share repurchase authorization (the “share repurchase authorization”) during fiscal 2024. Please see below for an update on the share repurchase authorization. Under its revolving credit facility, AspenTech had no borrowings and $197.7 million available as of March 31, 2024.

AspenTech generated $138.1 million in cash flow from operations and $137.0 million in free cash flow2 in the third quarter of fiscal 2024, compared to $131.0 million in cash flow from operations and $129.3 million in free cash flow2 in the third quarter of fiscal 2023.

Recent Developments

Appointment of Chief Financial Officer

AspenTech today announced the appointment of David Baker to the position of Senior Vice President, Chief Financial Officer of the Company, effective June 3, 2024. Mr. Baker previously was employed by Emerson for over 27 years. Mr. Baker brings to the role deep financial acumen, operational expertise, and significant senior financial leadership experience from his prior roles at Emerson, including Vice President, Financial Planning, where he led the financial planning and analysis function for Emerson since March 2023, Vice President and Chief Financial Officer, Automation Solutions, from November 2018 to February 2023, and Vice President and Chief Financial Officer, Measurement and Analytical, from July 2013 to November 2018. Mr. Baker holds an M.B.A. in Operations Management from the University of Minnesota and a B.A. in Accounting from the University of Northern Iowa.

Appointment of Director of the Board

AspenTech’s Board of Directors (the “Board”) elected David Henshall as a director of the Board, effective April 26, 2024. Mr. Henshall most recently served as Chief Executive Officer at Citrix Systems, Inc., a leading multinational provider of cloud computing and virtualization technology, where he held executive roles for nearly twenty years. An experienced public company board director, Mr. Henshall actively serves as the Chairman of the board of directors of Everbridge, Inc., is a member of the board of directors HashiCorp, Inc. and Feedzai, Inc, and is a former member of the boards of directors of New Relic, Inc. and LogMeIn, Inc. He holds a M.B.A. from Santa Clara University and a B.A. in Business Administration from the University of Arizona.

Share Repurchase Authorization Update

AspenTech repurchased 288,241 shares for $56.7 million under its $300.0 million share repurchase authorization, announced on August 1, 2023, in the third quarter of fiscal 2024. As of March 31, 2024, a total of 1,243,080 shares had been repurchased under the share repurchase authorization for $243.1 million, with the total remaining value being $56.9 million.

Fiscal Year 2024 Business Outlook

Based on information as of today, May 7, 2024, AspenTech is updating its fiscal 2024 guidance.

•ACV1 growth of at least 9.0% year-over-year

•GAAP operating cash flow of at least $349 million

•Free cash flow2 of at least $340 million

•Total bookings of at least $1.03 billion

•Total revenue of at least $1.10 billion

•GAAP total expense of approximately $1.22 billion

•Non-GAAP total expense of approximately $675 million

•GAAP operating loss at or better than $121 million

•Non-GAAP operating income of at least $425 million

•GAAP net loss at or better than $29 million

•Non-GAAP net income of at least $403 million

•GAAP net loss per share at or better than $0.45

•Non-GAAP net income per share of at least $6.29

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.

Conference Call and Webcast

AspenTech will host a conference call and webcast presentation on Tuesday, May 7, 2024, at 4:30 p.m. ET to discuss its financial results, business outlook, and related corporate and financial matters. A live webcast of the call will be available on AspenTech’s Investor Relations website, http://ir.aspentech.com, via its “Webcasts” page. To access the call by phone, please use the registration link. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast also will be available for a limited time at http://ir.aspentech.com/.

AspenTech has provided an earnings presentation for its third quarter of fiscal 2024. AspenTech asks that shareholders refer to this presentation in conjunction with the conference call, which can be found at ir.aspentech.com.

Footnotes

1.AspenTech defines ACV as the estimate of the annual value of our portfolio of term license and software maintenance and support, or SMS, contracts, the annual value of SMS agreements purchased with perpetual licenses and the annual value of standalone SMS agreements purchased with certain legacy term license agreements, which have become an immaterial part of our business.

2.Free cash flow is a non-GAAP metric that is calculated as net cash provided by operating activities adjusted for the net impact of purchases of property, equipment and leasehold improvements and payments for capitalized computer software development costs. Effective January 1, 2023, AspenTech no longer excludes acquisition and integration planning related payments from its computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation.

About AspenTech

Aspen Technology, Inc. (NASDAQ: AZPN) is a global software leader helping industries at the forefront of the world’s dual challenge meet the increasing demand for resources from a rapidly growing population in a profitable and sustainable manner. AspenTech solutions address complex environments where it is critical to optimize the asset design, operation and maintenance lifecycle. Through our unique combination of deep domain expertise and innovation, customers in asset-intensive industries can run their assets safer, greener, longer and faster to improve their operational excellence. To learn more, visit AspenTech.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical may be “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties, and AspenTech undertakes no obligation to update any such statements to reflect later developments. These forward-looking statements include, but are not limited to, our guidance for fiscal 2024, our expectations regarding cash collections, closing of customer renewals and completion of our share repurchase authorization. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “strategy,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “opportunity” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These risks and uncertainties include, without limitation: the failure to realize the anticipated benefits of our transaction with Emerson Electric Co.; risks resulting from our status as a controlled company; the scope, duration and ultimate impacts of the Russia-Ukraine war and the Israeli-Hamas conflict; as well as economic and currency conditions, market demand (including related to adverse changes in the process or other capital-intensive industries such as materially reduced spending budgets due to oil and gas price declines and volatility), pricing, protection of intellectual property, cybersecurity, natural disasters, tariffs, sanctions, competitive and technological factors, and inflation; and others, as set forth in AspenTech’s most recent Annual Report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission (the “SEC”). The outlook contained herein represents AspenTech’s expectation for its consolidated results, other than as noted herein.

© 2024 Aspen Technology, Inc. AspenTech, aspenONE, asset optimization and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks not owned by AspenTech are property of their respective owners.

Use of Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” under the rules of the SEC. 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.


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023

	(Dollars and Shares in Thousands, Except per share data)
Revenue:
License and solutions	$	169,467	$	136,292	$	470,578	$	446,360
Maintenance	86,256		77,283		256,280		234,277
Services and other	22,383		16,303		57,719		42,898
Total revenue	278,106		229,878		784,577		723,535
Cost of revenue:
License and solutions	65,550		68,980		204,453		209,326
Maintenance	8,344		9,020		29,192		27,804
Services and other	19,048		15,799		52,290		40,897
Total cost of revenue	92,942		93,799		285,935		278,027
Gross profit	185,164		136,079		498,642		445,508
Operating expenses:
Selling and marketing	121,303		120,035		365,921		356,260
Research and development	49,334		54,046		156,155		153,741
General and administrative	33,821		40,471		105,315		124,557
Total operating expenses	204,458		214,552		627,391		634,558
Loss from operations	(19,294)		(78,473)		(128,749)		(189,050)
Other expense, net	(1,988)		(13,281)		(8,017)		(33,270)
Interest income, net	13,723		9,969		40,056		19,112
Loss before benefit for income taxes	(7,559)		(81,785)		(96,710)		(203,208)
Benefit for income taxes	(9,115)		(24,150)		(42,241)		(68,132)
Net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Net income (loss) per common share:
Basic	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Diluted	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Weighted average shares outstanding:
Basic	63,508		64,796		63,844		64,622
Diluted	63,802		64,796		63,844		64,622


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	March 31, 2024		June 30, 2023

	(Dollars in Thousands, Except Share Data)
ASSETS
Current assets:
Cash and cash equivalents	$	177,592	$	241,209
Accounts receivable, net	140,469		122,789
Current contract assets, net	378,914		367,539
Prepaid expenses and other current assets	28,697		27,728
Receivables from related parties	69,097		62,375
Prepaid income taxes	—		11,424
Total current assets	794,769		833,064
Property, equipment and leasehold improvements, net	16,414		18,670
Goodwill	8,329,499		8,330,811
Intangible assets, net	4,306,689		4,659,657
Non-current contract assets, net	528,282		536,104
Contract costs	21,049		15,992
Operating lease right-of-use assets	94,353		67,642
Deferred income tax assets	9,843		10,638
Other non-current assets	8,529		13,474
Total assets	$	14,109,427	$	14,486,052

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,876	$	20,299
Accrued expenses and other current liabilities	81,842		99,526
Due to related parties	67,954		22,019
Current operating lease liabilities	13,698		12,928
Income taxes payable	33,999		46,205
Current contract liabilities	134,910		151,450
Total current liabilities	342,279		352,427
Non-current contract liabilities	33,042		30,103
Deferred income tax liabilities	822,197		957,911
Non-current operating lease liabilities	81,361		55,442
Other non-current liabilities	19,726		19,240
Stockholders’ equity:
Common stock, $0.0001 par value Authorized—600,000,000 shares Issued— 65,255,754 and 64,952,868 shares Outstanding— 63,418,003 and 64,465,242 shares	7		6
Additional paid-in capital	13,259,100		13,194,028
Accumulated deficit	(95,860)		(41,391)
Accumulated other comprehensive (loss) income	(4,999)		2,436
Treasury stock, at cost — 1,837,751 and 487,626 shares of common stock	(347,426)		(84,150)
Total stockholders’ equity	12,810,822		13,070,929
Total liabilities and stockholders’ equity	$	14,109,427	$	14,486,052


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023

	(Dollars in Thousands)
Cash flows from operating activities:
Net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	123,408		123,165		369,794		368,266
Reduction in the carrying amount of right-of-use assets	4,380		3,901		11,312		10,463
Net foreign currency losses (gains)	2,070		(1,033)		8,238		3,711
Realized gain on settlement of foreign currency forward contracts	—		(10,821)		—		(10,821)
Stock-based compensation	12,907		22,843		45,817		64,020
Deferred income taxes	(44,260)		(49,661)		(138,470)		(156,046)
Provision for uncollectible receivables	5,884		716		9,269		3,944
Other non-cash operating activities	1,435		1,698		805		1,108
Changes in assets and liabilities:
Accounts receivable	(12,214)		22,630		(22,923)		(11,060)
Contract assets	55,024		67,192		(2,902)		(10,672)
Contract costs	(2,145)		(1,810)		(5,204)		(5,357)
Lease liabilities	(4,173)		(3,694)		(11,281)		(10,303)
Prepaid expenses, prepaid income taxes, and other assets	162		(6,536)		(17,444)		27,641
Liability from foreign currency forward contract	—		25,135		—		40,454
Accounts payable, accrued expenses, income taxes payable and other liabilities	(3,286)		(10,548)		5,972		(12,038)
Contract liabilities	(2,605)		5,494		(13,564)		17,416
Net cash provided by operating activities	138,143		131,036		184,950		185,650
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements	(1,142)		(1,671)		(2,579)		(4,515)
Proceeds from settlement of foreign currency forward contracts	—		10,821		—		10,821
Payments for business acquisitions, net of cash acquired	—		2,449		(8,273)		(72,498)
Payments for equity method investments	249		(211)		(272)		(676)
Payments for capitalized computer software development costs	—		(18)		(131)		(347)
Payments for asset acquisitions	—		—		(12,500)		—
Purchase of other assets	—		(1,000)		—		(1,000)
Net cash (used in) provided by investing activities	(893)		10,370		(23,755)		(68,215)
Cash flows from financing activities:
Issuance of shares of common stock	7,294		5,937		15,214		31,542
Repurchases of common stock	(56,737)		—		(243,066)		—
Payment of tax withholding obligations related to restricted stock	(3,167)		(2,708)		(17,010)		(14,406)
Deferred business acquisition payments	—		—		—		(1,363)
Repayments of amounts borrowed under term loan	—		(264,000)		—		(276,000)
Net transfers (to) from Parent Company	(36,197)		(35,621)		32,558		(5,749)
Payments of debt issuance costs	—		—		—		(2,375)
Net cash used in financing activities	(88,807)		(296,392)		(212,304)		(268,351)
Effect of exchange rate changes on cash and cash equivalents	(1,604)		(4,366)		(12,508)		(12,073)
Increase (decrease) in cash and cash equivalents	46,839		(159,352)		(63,617)		(162,989)
Cash and cash equivalents, beginning of period	130,753		446,088		241,209		449,725
Cash and cash equivalents, end of period	$	177,592	$	286,736	$	177,592	$	286,736


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows (Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023

	(Dollars and Shares in Thousands, Except per Share Data)
Total expenses
GAAP total expenses (a)	$	297,400	$	308,351	$	913,326	$	912,585
Less:
Stock-based compensation (b)	(12,907)		(22,843)		(45,817)		(64,020)
Amortization of intangibles (c)	(121,749)		(121,639)		(364,901)		(363,960)
Acquisition and integration planning related fees	(945)		(761)		(815)		(7,030)

Non-GAAP total expenses	$	161,799	$	163,108	$	501,793	$	477,575

(Loss) income from operations
GAAP loss from operations	$	(19,294)	$	(78,473)	$	(128,749)	$	(189,050)
Plus:
Stock-based compensation (b)	12,907		22,843		45,817		64,020
Amortization of intangibles (c)	121,749		121,639		364,901		363,960
Acquisition and integration planning related fees	945		761		815		7,030

Non-GAAP income from operations	$	116,307	$	66,770	$	282,784	$	245,960

Net income (loss)
GAAP net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Plus:
Stock-based compensation (b)	12,907		22,843		45,817		64,020
Amortization of intangibles (c)	121,749		121,639		364,901		363,960
Acquisition and integration planning related fees	945		761		815		7,030
Unrealized loss on foreign currency forward contract	—		25,135		—		40,454
Realized gain on foreign currency forward contract	—		(10,821)		—		(10,821)
Less:
Income tax effect on Non-GAAP items (d)	(28,422)		(32,776)		(85,680)		(95,666)

Non-GAAP net income	$	108,735	$	69,146	$	271,384	$	233,901

Diluted income (loss) per share
GAAP diluted income (loss) per share	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Plus:
Stock-based compensation (b)	0.20		0.35		0.71		0.98
Amortization of intangibles (c)	1.91		1.87		5.68		5.59
Acquisition and integration planning related fees	0.02		0.01		0.01		0.11
Unrealized loss on foreign currency forward contract	—		0.39		—		0.62
Realized gain on foreign currency forward contract	—		(0.17)		—		(0.17)
Impact of diluted shares	—		—		0.01		0.02
Less:
Income tax effect on Non-GAAP items (d)	(0.45)		(0.50)		(1.33)		(1.47)

Non-GAAP diluted income per share	$	1.70	$	1.06	$	4.23	$	3.59

Shares used in computing Non-GAAP diluted income per share	63,802		65,195		64,187		65,125


	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
Free Cash Flow (2)
Net cash provided by operating activities (GAAP)	$	138,143		$	131,036		$	184,950		$	185,650
Purchases of property, equipment and leasehold improvements	(1,142)			(1,671)			(2,579)			(4,515)
Payments for capitalized computer software development costs	—			(18)			(131)			(347)
Free cash flow (2) (non-GAAP)	$	137,001		$	129,347		$	182,240		$	180,788

(a) GAAP total expenses
	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
Total costs of revenue	$	92,942		$	93,799		$	285,935		$	278,027
Total operating expenses	204,458			214,552			627,391			634,558
GAAP total expenses	$	297,400		$	308,351		$	913,326		$	912,585

(b) Stock-based compensation expense was as follows:
	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
Cost of license and solutions	$	522		$	832		$	1,804		$	2,752
Cost of maintenance	667			427			1,884			1,462
Cost of services and other	731			599			1,589			1,457
Selling and marketing	2,463			3,695			8,112			10,886
Research and development	3,343			5,972			11,615			13,831
General and administrative	5,181			11,318			20,813			33,632
Total stock-based compensation	$	12,907		$	22,843		$	45,817		$	64,020

(c) Amortization of intangible assets was as follows:
	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
Cost of license and solutions	$	48,314		$	48,035		$	144,384		$	143,377
Selling and marketing	73,435			73,604			220,517			220,583
Total amortization of intangible assets	$	121,749		$	121,639		$	364,901		$	363,960

(d) The income tax effect on non-GAAP items for the three months ended March 31, 2024 and 2023, respectively, is calculated utilizing the Company’s combined US federal and state statutory tax rate as following:

	Three Months Ended March 31,						Nine Months Ended March 31,
	2024			2023			2024			2023
U.S. Statutory Rate	21.79		%	21.79		%	21.79		%	21.79		%


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES Reconciliation of Forward-Looking Guidance (Unaudited)

	Twelve Months Ended June 30, 2024 (3)
	(Dollars in Thousands, Except Share Data)
Guidance - Total expenses
GAAP expectation - total expenses	$	1,221,000
Less:
Stock-based compensation	(58,000)
Amortization of intangible assets	(487,000)
Acquisition and integration planning related fees	(1,000)

Non-GAAP expectation - total expenses	$	675,000

Guidance - (Loss) income from operations
GAAP expectation - loss from operations	$	(121,000)
Plus:
Stock-based compensation	58,000
Amortization of intangible assets	487,000
Acquisition and integration planning related fees	1,000

Non-GAAP expectation - income from operations	$	425,000

Guidance - Net (loss) income and diluted (loss) income per share
GAAP expectation - net loss and diluted loss per share	$	(29,000)	$	(0.45)
Plus:
Stock-based compensation	58,000
Amortization of intangible assets	487,000
Acquisition and integration planning related fees	1,000
Less:
Income tax effect on Non-GAAP items (4)	(114,000)

Non-GAAP expectation - net income and diluted income per share	$	403,000	$	6.29

Shares used in computing guidance for Non-GAAP diluted income per share	64,100

Guidance - Free Cash Flow (2) (5)
GAAP expectation - net cash provided by operating activities	$	349,250
Less:
Purchases of property, equipment and leasehold improvements	(9,000)
Payments for capitalized computer software development costs	(250)

Free cash flow expectation (non-GAAP)	$	340,000
__________
(3) Rounded amount used, except per share data.
(4) The income tax effect on non-GAAP items for the twelve months ended June 30, 2024 is calculated utilizing the Company’s statutory tax rate of 21.79 percent.
(5) Free cash flow guidance has been updated to reflect the change in methodology to calculate free cash flow, as described in Footnote 2, and does not represent a change in management’s expectations.

Exhibit 99.2

Aspen Technology Appoints David Baker as SVP, Chief Financial Officer

BEDFORD, Mass. - May 7, 2024 - Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced that David Baker has been appointed as Senior Vice President, Chief Financial Officer at AspenTech, effective June 3, 2024.

Mr. Baker joins AspenTech from Emerson Electric Co. (Emerson), where he spent over 27 years in various financial leadership roles, most recently serving as Vice President, Financial Planning, where he led financial planning and analysis for the entire $17 billion Emerson corporation. In this position, Mr. Baker was crucial in leading Emerson’s finance transformation to meet the needs of a newly focused global automation leader. Prior to this role, Mr. Baker served as Vice President and Chief Financial Officer, Automation Solutions at Emerson, where he spearheaded a multi-year cost reset plan that impacted organizational structure and plant footprint, among other areas. As a result of this work, Emerson’s $11.8 billion Automation Solutions business reported record orders, sales and EBITA in 2022.

“I am very pleased to welcome Dave to the AspenTech team. He brings extensive experience in executing growth initiatives and driving financial outcomes at Emerson,” said Antonio Pietri, President and CEO of AspenTech. “His deep financial and business experience, strategic acumen and proven leadership will be critical in helping to drive our corporate strategy and leading our talented finance organization to deliver long-term value to shareholders.”

“AspenTech is an exceptional company with unparalleled leadership in industrial software and it is an honor to be joining this world-class team,” said Mr. Baker. “Asset-intensive companies are looking for strategic partners as they navigate the energy transition and l look forward to leading AspenTech’s finance organization at this pivotal time. AspenTech is well-positioned to capitalize on this tremendous opportunity as digital solutions and innovation remain fundamental drivers of our customers’ growth.”

On June 3rd, current interim Chief Financial Officer, Christopher Stagno will resume his role within AspenTech as Senior Vice President and Chief Accounting Officer. “I want to thank Chris for stepping in to serve as interim CFO during our search process. I look forward to working with Dave and Chris going forward to continue executing on our strategy and delivering long-term success for the company,” Pietri concluded.

About AspenTech

Media Contact

Len Dieterle

AspenTech

+1 781-221-4291

len.dieterle@aspentech.com

Investor Contact

Brian Denyeau

ICR

+1 646-277-1251

ir@aspentech.com

Cover Page	May 02, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	May 02, 2024
Entity Registrant Name	ASPEN TECHNOLOGY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-41400
Entity Tax Identification Number	87-3100817
Entity Address, Address Line One	20 Crosby Drive,
Entity Address, City or Town	Bedford,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01730
City Area Code	781
Local Phone Number	221-6400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.0001 par value per share
Trading Symbol	AZPN
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001897982
Amendment Flag	false