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Aspen (AZPN) Q3 Earnings & Revenues Surpass Estimates, Up Y/Y
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Aspen Technology (AZPN - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of $1.70 per share, beating the Zacks Consensus Estimate of $1.32. AZPN reported non-GAAP earnings of $1.06 per share in the year-ago quarter.
The company reported revenues of $278.1 million, surpassing the Zacks Consensus Estimate by 10.5%. The company had reported revenues of $230 million in the year-ago quarter.
Following the announcement, shares of the company were down 1.4% in pre-market trading on May 8. In the past year, shares of the company have gained 10% compared with the sub-industry’s growth of 50.6%.
Aspen Technology, Inc. Price, Consensus and EPS Surprise
License’s revenues (61% of revenues) were up 24.3% year over year to $169.5 million.
Maintenance’s revenues (31% of revenues) rose 11.6% year over year to $86.3 million.
Revenues from Services and other (8% of revenues) rose 37.3% from the year-ago quarter’s figure to $22.4 million.
As of Mar 31, 2024, Annual contract value or "ACV" ( which Aspen Technology defines 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 its business) amounted to $936.1 million, up 9.5% year over year and 2.4% quarter over quarter.
Margins
Gross profit increased to $185.2 million from the year-ago quarter’s figure of $136.1 million. As a percentage of total revenues, the figure reached 66.6% from 59.2% reported in the prior-year quarter.
Total operating expenses amounted to $204.5 million compared with the year-ago quarter’s figure of $214.6 million due to a reduction in research and development costs and general and administrative expenses.
Non-GAAP operating income totaled $116.3 million compared with $66.8 million reported in the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and cash equivalents were $177.6 million compared with $241.2 million as of Jun 30, 2023. The downtick was caused due to the impact of share repurchase activity under AZPN’s $300 million share buyback authorization in the course of fiscal 2024.
The company generated $138.1 million in cash from operations compared with $131 million reported in the previous quarter. Non-GAAP free cash flow was $137 million in the fiscal third quarter compared with $129.3 million in the prior-year quarter.
Aspen repurchased 288,241 shares for $56.7 million in the fiscal third quarter. As of Mar 31, 2024, a total of 1,243,080 shares worth $243.1 million had been repurchased under the share buyback authorization of $300 million announced in August 2023. The company has shares worth $56.9 million left under its buyback authorization.
Fiscal 2024 Guidance
The updated guidance for fiscal 2024 highlights the impact of cautious customer spending behavior. However, the company expects its global business pipeline to cushion the overall performance in 2024.
For fiscal 2024, Aspen expects revenues to be at least $1.10 billion, slightly down from the previous guidance of $1.12 billion.
Non-GAAP net income is now anticipated to be at least $6.29 per share compared with earlier guidance of $6.59 per share.
Management projects ACV growth to be at least 9% from a year ago and total bookings to be at least $1.03 billion. Earlier, it predicted ACV growth to be at least 11.5% from a year ago and total bookings to be at least $1.04 billion.
Non-GAAP operating income is now estimated to be at least $425 million, down from the earlier outlook of $445 million. Non-GAAP total expenses are expected to be nearly $675 million, unchanged from the prior outlook.
Free cash flow is projected to be at least $340 million, down from prior guidance of $360 million.
Pinterest (PINS - Free Report) , carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 38.78%. In the first quarter, it delivered an earnings surprise of 42.86%. Revenues for the quarter were $740 million, with non-GAAP net earnings of 20 cents per share.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, benefited from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters. Revenues for the first quarter were $1.57 billion, with non-GAAP net earnings of $1.99 per share.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
NVIDIA Corporation (NVDA - Free Report) , currently sporting a Zacks Rank #1, delivered a trailing four-quarter average earnings surprise of 20.18%. In the first quarter, it delivered an earnings surprise of 13.41%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
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Aspen (AZPN) Q3 Earnings & Revenues Surpass Estimates, Up Y/Y
Aspen Technology (AZPN - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings of $1.70 per share, beating the Zacks Consensus Estimate of $1.32. AZPN reported non-GAAP earnings of $1.06 per share in the year-ago quarter.
The company reported revenues of $278.1 million, surpassing the Zacks Consensus Estimate by 10.5%. The company had reported revenues of $230 million in the year-ago quarter.
Following the announcement, shares of the company were down 1.4% in pre-market trading on May 8. In the past year, shares of the company have gained 10% compared with the sub-industry’s growth of 50.6%.
Aspen Technology, Inc. Price, Consensus and EPS Surprise
Aspen Technology, Inc. price-consensus-eps-surprise-chart | Aspen Technology, Inc. Quote
Quarter in Detail
License’s revenues (61% of revenues) were up 24.3% year over year to $169.5 million.
Maintenance’s revenues (31% of revenues) rose 11.6% year over year to $86.3 million.
Revenues from Services and other (8% of revenues) rose 37.3% from the year-ago quarter’s figure to $22.4 million.
As of Mar 31, 2024, Annual contract value or "ACV" ( which Aspen Technology defines 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 its business) amounted to $936.1 million, up 9.5% year over year and 2.4% quarter over quarter.
Margins
Gross profit increased to $185.2 million from the year-ago quarter’s figure of $136.1 million. As a percentage of total revenues, the figure reached 66.6% from 59.2% reported in the prior-year quarter.
Total operating expenses amounted to $204.5 million compared with the year-ago quarter’s figure of $214.6 million due to a reduction in research and development costs and general and administrative expenses.
Non-GAAP operating income totaled $116.3 million compared with $66.8 million reported in the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and cash equivalents were $177.6 million compared with $241.2 million as of Jun 30, 2023. The downtick was caused due to the impact of share repurchase activity under AZPN’s $300 million share buyback authorization in the course of fiscal 2024.
The company generated $138.1 million in cash from operations compared with $131 million reported in the previous quarter. Non-GAAP free cash flow was $137 million in the fiscal third quarter compared with $129.3 million in the prior-year quarter.
Aspen repurchased 288,241 shares for $56.7 million in the fiscal third quarter. As of Mar 31, 2024, a total of 1,243,080 shares worth $243.1 million had been repurchased under the share buyback authorization of $300 million announced in August 2023. The company has shares worth $56.9 million left under its buyback authorization.
Fiscal 2024 Guidance
The updated guidance for fiscal 2024 highlights the impact of cautious customer spending behavior. However, the company expects its global business pipeline to cushion the overall performance in 2024.
For fiscal 2024, Aspen expects revenues to be at least $1.10 billion, slightly down from the previous guidance of $1.12 billion.
Non-GAAP net income is now anticipated to be at least $6.29 per share compared with earlier guidance of $6.59 per share.
Management projects ACV growth to be at least 9% from a year ago and total bookings to be at least $1.03 billion. Earlier, it predicted ACV growth to be at least 11.5% from a year ago and total bookings to be at least $1.04 billion.
Non-GAAP operating income is now estimated to be at least $425 million, down from the earlier outlook of $445 million. Non-GAAP total expenses are expected to be nearly $675 million, unchanged from the prior outlook.
Free cash flow is projected to be at least $340 million, down from prior guidance of $360 million.
Zacks Rank
Aspen currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Pinterest (PINS - Free Report) , carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 38.78%. In the first quarter, it delivered an earnings surprise of 42.86%. Revenues for the quarter were $740 million, with non-GAAP net earnings of 20 cents per share.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, benefited from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters. Revenues for the first quarter were $1.57 billion, with non-GAAP net earnings of $1.99 per share.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
NVIDIA Corporation (NVDA - Free Report) , currently sporting a Zacks Rank #1, delivered a trailing four-quarter average earnings surprise of 20.18%. In the first quarter, it delivered an earnings surprise of 13.41%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.