[April 25, 2018] |
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Aspen Technology Announces Financial Results for the Third Quarter of Fiscal 2018
Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization software
company, today announced financial results for its third quarter of
fiscal year 2018, ended March 31, 2018.
"AspenTech's third quarter reflected good execution across the company
and a solid demand environment, resulting in strong financial results.
The quarter was highlighted by strong performance among our
owner-operator customers and continued momentum of our APM suite. We are
also pleased with growing customer interest in our APM products across a
number of geographies and industries," said Antonio Pietri, President
and Chief Executive Officer of AspenTech.
Third Quarter Fiscal 2018 and 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
approximately $480 million at the end of the third quarter of fiscal
2018, which increased 6.3% compared to the third quarter of fiscal
2017 and 2.3% sequentially.
-
GAAP operating margin was 40.6%, compared to 43.8% in the third
quarter of fiscal 2017. Non-GAAP operating margin was 45.6%, compared
to 48.1% in the third quarter of fiscal 2017.
-
AspenTech repurchased approximately 650,000 shares of its common stock
for $50.0 million in the third quarter of fiscal 2018.
Summary of Third Quarter Fiscal Year 2018 Financial Results
AspenTech's total revenue of $125.9 million included:
-
Subscription and software revenue was $118.1 million in the
third quarter of fiscal 2018, an increase from $111.7 million in the
third quarter of fiscal 2017.
-
Services and other revenue was $7.7 million in the third
quarter of fiscal 2018, compared to $7.6 million in the third quarter
of fiscal 2017.
For the quarter ended March 31, 2018, AspenTech reported income from
operations of $51.2 million, compared to income from operations of $52.3
million for the quarter ended March 31, 2017.
Net income was $37.8 million for the quarter ended March 31, 2018,
leading to net income per share of $0.52, compared to net income per
share of $0.47 in the same period last fiscal year.
Non-GAAP income from operations, which adds back the impact of
stock-based compensation expense, amortization of intangibles associated
with acquisitions and acquisition related fees, was $57.4 million for
the third quarter of fiscal 2018, compared to non-GAAP income from
operations of $57.4 million in the same period last fiscal year.
Non-GAAP net income was $42.3 million, or $0.58 per share, for the third
quarter of fiscal 2018, compared to non-GAAP net income of $39.4
million, or $0.52 per share, in the same period last fiscal year. A
reconciliation of GAAP to non-GAAP results is presented in the financial
tables included in this press release.
AspenTech had cash and marketable securities of $71.1 million and
borrowings of $170.0 million at March 31, 2018.
During the third quarter, the company generated $73.1 million in cash
flow from operations and $78.1 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; capitalized computer software development costs;
non-capitalized acquired technology, excess tax benefits from
stock-based compensation, and other nonrecurring items, such as
acquisition or litigation related payments.
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 25, 2018,
at 4:30 p.m. (Eastern Time), to discuss the company's financial results
for the third quarter fiscal year 2018 as well as the company's business
outlook.
The live dial-in number is (866) 604-6127 or (443) 961-0460, conference
ID code 2986139. 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/,
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 2986139, through
May 25, 2018.
About AspenTech
AspenTech is a leading software supplier for optimizing asset
performance. Our products thrive in complex, industrial environments
where it is critical to optimize the asset design, operation and
maintenance lifecycle. AspenTech uniquely combines decades of process
modeling expertise with big data machine-learning. Our 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
faster, safer, longer and greener. Visit AspenTech.com
to find out more.
Forward-Looking Statements
The second paragraph of this press release contains forward-looking
statements for purposes of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Actual results may vary
significantly from AspenTech's expectations based on a number of risks
and uncertainties, including, without limitation: 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; the demand for, or usage of, aspenONE software
declines for any reason, including declines due to adverse changes in
the capital-intensive process industries; unfavorable economic and
market conditions or a lessening demand in the market for asset process
optimization software; and other risk factors described from time to
time in AspenTech's periodic reports filed with the Securities and
Exchange Commission. 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.
© 2018 Aspen Technology, Inc. AspenTech, aspenONE and the Aspen leaf
logo are registered trademarks of Aspen Technology, Inc. All rights
reserved. All other trademarks are property of their respective owners.
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ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited in thousands, except per share data)
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Three Months Ended March 31,
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Nine Months Ended March 31,
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2018
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2017
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2018
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2017
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Revenue:
|
|
|
|
|
|
|
|
|
|
|
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Subscription and software
|
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$
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118,126
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|
|
$
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111,717
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|
|
$
|
351,540
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|
|
$
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338,077
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Services and other
|
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7,745
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|
|
7,560
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|
|
|
22,014
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|
21,184
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Total revenue
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125,871
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|
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119,277
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373,554
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359,261
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Cost of revenue:
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|
|
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|
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Subscription and software
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5,817
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|
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5,521
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17,086
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|
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15,766
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Services and other
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6,959
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6,746
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20,511
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19,586
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Total cost of revenue
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12,776
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12,267
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|
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37,597
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|
|
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35,352
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Gross profit
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113,095
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107,010
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335,957
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323,909
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Operating expenses:
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Selling and marketing
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25,924
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22,269
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73,875
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66,123
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Research and development
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21,584
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20,348
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60,863
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57,577
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General and administrative
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14,430
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12,120
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42,284
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|
|
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37,140
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Total operating expenses
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61,938
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54,737
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177,022
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160,840
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Income from operations
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51,157
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52,273
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158,935
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163,069
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Interest income
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23
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|
|
|
176
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|
|
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204
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|
|
|
665
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Interest (expense)
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(1,485
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)
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(959
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)
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(3,952
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)
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(2,721
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)
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Other (expense) income, net
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(104
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)
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(56
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)
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(958
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)
|
|
|
1,287
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Income before provision for income taxes
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49,591
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|
|
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51,434
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154,229
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|
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162,300
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Provision for income taxes
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|
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11,756
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|
|
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15,600
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|
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43,561
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|
|
|
54,455
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Net income
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$
|
37,835
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|
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$
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35,834
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$
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110,668
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$
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107,845
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Net income per common share:
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Basic
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$
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0.53
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$
|
0.47
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$
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1.53
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$
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1.40
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Diluted
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$
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0.52
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$
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0.47
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$
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1.51
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$
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1.39
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Weighted average shares outstanding:
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Basic
|
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71,828
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75,676
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|
|
72,402
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|
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77,221
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Diluted
|
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72,663
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|
|
76,182
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|
|
|
73,136
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|
|
|
77,652
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ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited in thousands, except share data)
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March 31, 2018
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June 30, 2017
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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71,075
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$
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101,954
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Accounts receivable, net
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27,755
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|
|
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27,670
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Prepaid expenses and other current assets
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|
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9,827
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|
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12,061
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Prepaid income taxes
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2,506
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4,501
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Total current assets
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111,163
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146,186
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Property, equipment and leasehold improvements, net
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10,703
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13,400
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Computer software development costs, net
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664
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667
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Goodwill
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76,016
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51,248
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Intangible assets, net
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36,045
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20,789
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Non-current deferred tax assets
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9,900
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14,352
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Other non-current assets
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1,516
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1,300
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Total assets
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$
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246,007
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$
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247,942
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable
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$
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5,823
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|
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$
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5,467
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Accrued expenses and other current liabilities
|
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40,319
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|
|
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48,149
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Income taxes payable
|
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|
413
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|
|
|
1,603
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Borrowings under credit agreement
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170,000
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|
140,000
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Current deferred revenue
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261,222
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|
|
|
272,024
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Total current liabilities
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|
477,777
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|
467,243
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Non-current deferred revenue
|
|
|
27,312
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|
|
|
28,335
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Other non-current liabilities
|
|
|
19,524
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|
|
|
13,148
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Commitments and contingencies (Note 15)
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Series D redeemable convertible preferred stock, $0.10 par value- Authorized-
3,636 shares as of March 31, 2018 and June 30, 2017 Issued and
outstanding- none as of March 31, 2018 and June 30, 2017
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-
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-
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Stockholders' deficit:
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Common stock, $0.10 par value- Authorized-210,000,000 shares Issued-
102,936,605 shares at March 31, 2018 and 102,567,129 shares at June
30, 2017 Outstanding- 71,545,642 shares at March 31, 2018 and
73,421,153 shares at June 30, 2017
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10,294
|
|
|
|
10,257
|
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Additional paid-in capital
|
|
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706,554
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687,479
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Retained earnings
|
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267,188
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156,520
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Accumulated other comprehensive income
|
|
|
3,857
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|
|
|
1,459
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Treasury stock, at cost-31,390,963 shares of common stock at March
31, 2018 and 29,145,976 shares at June 30, 2017
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(1,266,499
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)
|
|
|
(1,116,499
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)
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Total stockholders' deficit
|
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|
(278,606
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)
|
|
|
(260,784
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)
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Total liabilities and stockholders' deficit
|
|
|
$
|
246,007
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|
|
|
$
|
247,942
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|
|
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ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited in thousands)
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|
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Three Months Ended March 31,
|
|
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Nine Months Ended March 31,
|
|
|
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2018
|
|
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2017
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
37,835
|
|
|
|
$
|
35,834
|
|
|
|
$
|
110,668
|
|
|
|
$
|
107,845
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
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Depreciation and amortization
|
|
|
1,544
|
|
|
|
1,693
|
|
|
|
4,902
|
|
|
|
4,993
|
|
Net foreign currency (gains) losses
|
|
|
96
|
|
|
|
281
|
|
|
|
1,086
|
|
|
|
(2,020
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)
|
Stock-based compensation
|
|
|
5,353
|
|
|
|
4,677
|
|
|
|
17,222
|
|
|
|
14,307
|
|
Deferred income taxes
|
|
|
171
|
|
|
|
987
|
|
|
|
4,467
|
|
|
|
1,169
|
|
Provision for bad debts
|
|
|
1,401
|
|
|
|
169
|
|
|
|
1,373
|
|
|
|
225
|
|
Tax benefits from stock-based compensation
|
|
|
-
|
|
|
|
1,312
|
|
|
|
-
|
|
|
|
2,344
|
|
Excess tax benefits from stock-based compensation
|
|
|
-
|
|
|
|
(1,312
|
)
|
|
|
-
|
|
|
|
(2,344
|
)
|
Other non-cash operating activities
|
|
|
107
|
|
|
|
390
|
|
|
|
314
|
|
|
|
430
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(4,620
|
)
|
|
|
(17,438
|
)
|
|
|
(964
|
)
|
|
|
(14,944
|
)
|
Prepaid expenses, prepaid income taxes, and other assets
|
|
|
3,949
|
|
|
|
(13
|
)
|
|
|
4,908
|
|
|
|
3,648
|
|
Accounts payable, accrued expenses, income taxes payable and other
liabilities
|
|
|
(2,656
|
)
|
|
|
1,863
|
|
|
|
(4,448
|
)
|
|
|
6,947
|
|
Deferred revenue
|
|
|
29,887
|
|
|
|
27,178
|
|
|
|
(11,699
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)
|
|
|
(13,562
|
)
|
Net cash provided by operating activities
|
|
|
73,067
|
|
|
|
55,621
|
|
|
|
127,829
|
|
|
|
109,038
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of marketable securities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(683,748
|
)
|
Maturities of marketable securities
|
|
|
-
|
|
|
|
55,837
|
|
|
|
-
|
|
|
|
669,216
|
|
Purchases of property, equipment and leasehold improvements
|
|
|
(61
|
)
|
|
|
(777
|
)
|
|
|
(217
|
)
|
|
|
(2,151
|
)
|
Payments for business acquisitions, net of cash acquired
|
|
|
(22,900
|
)
|
|
|
-
|
|
|
|
(33,700
|
)
|
|
|
(36,171
|
)
|
Payments for capitalized computer software costs
|
|
|
57
|
|
|
|
(26
|
)
|
|
|
(299
|
)
|
|
|
(126
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(22,904
|
)
|
|
|
55,034
|
|
|
|
(34,216
|
)
|
|
|
(52,980
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercises of stock options
|
|
|
3,854
|
|
|
|
3,049
|
|
|
|
7,402
|
|
|
|
7,892
|
|
Repurchases of common stock
|
|
|
(49,328
|
)
|
|
|
(96,058
|
)
|
|
|
(154,365
|
)
|
|
|
(295,642
|
)
|
Payments of tax withholding obligations related to restricted stock
|
|
|
(1,945
|
)
|
|
|
(1,560
|
)
|
|
|
(5,412
|
)
|
|
|
(4,346
|
)
|
Deferred business acquisition payments
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,600
|
)
|
|
|
-
|
|
Excess tax benefits from stock-based compensation
|
|
|
-
|
|
|
|
1,312
|
|
|
|
-
|
|
|
|
2,344
|
|
Proceeds from credit agreement
|
|
|
19,000
|
|
|
|
-
|
|
|
|
30,000
|
|
|
|
-
|
|
Payments of credit agreement issuance costs
|
|
|
-
|
|
|
|
-
|
|
|
|
(351
|
)
|
|
|
-
|
|
Net cash used in financing activities
|
|
|
(28,419
|
)
|
|
|
(93,257
|
)
|
|
|
(125,326
|
)
|
|
|
(289,752
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
628
|
|
|
|
128
|
|
|
|
834
|
|
|
|
(90
|
)
|
Increase (decrease) in cash and cash equivalents
|
|
|
22,372
|
|
|
|
17,526
|
|
|
|
(30,879
|
)
|
|
|
(233,784
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
48,703
|
|
|
|
67,026
|
|
|
|
101,954
|
|
|
|
318,336
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
71,075
|
|
|
|
$
|
84,552
|
|
|
|
$
|
71,075
|
|
|
|
$
|
84,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid, net
|
|
|
$
|
8,920
|
|
|
|
$
|
16,742
|
|
|
|
$
|
38,662
|
|
|
|
$
|
41,742
|
|
Interest paid
|
|
|
1,417
|
|
|
|
920
|
|
|
|
3,456
|
|
|
|
2,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total expenses (a)
|
|
|
$
|
74,714
|
|
|
|
$
|
67,004
|
|
|
|
$
|
214,619
|
|
|
|
$
|
196,192
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
|
(5,353
|
)
|
|
|
(4,677
|
)
|
|
|
(17,222
|
)
|
|
|
(14,307
|
)
|
Non-capitalized acquired technology (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(350
|
)
|
Amortization of intangibles
|
|
|
(526
|
)
|
|
|
(405
|
)
|
|
|
(1,578
|
)
|
|
|
(516
|
)
|
Litigation judgment
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,548
|
)
|
|
|
-
|
|
Acquisition related fees
|
|
|
(378
|
)
|
|
|
(31
|
)
|
|
|
(706
|
)
|
|
|
(493
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total expenses
|
|
|
$
|
68,457
|
|
|
|
$
|
61,891
|
|
|
|
$
|
193,565
|
|
|
|
$
|
180,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income from operations
|
|
|
$
|
51,157
|
|
|
|
$
|
52,273
|
|
|
|
$
|
158,935
|
|
|
|
$
|
163,069
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
|
5,353
|
|
|
|
4,677
|
|
|
|
17,222
|
|
|
|
14,307
|
|
Non-capitalized acquired technology (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
350
|
|
Amortization of intangibles
|
|
|
526
|
|
|
|
405
|
|
|
|
1,578
|
|
|
|
516
|
|
Litigation judgment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,548
|
|
|
|
-
|
|
Acquisition related fees
|
|
|
378
|
|
|
|
31
|
|
|
|
706
|
|
|
|
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
|
$
|
57,414
|
|
|
|
$
|
57,386
|
|
|
|
$
|
179,989
|
|
|
|
$
|
178,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
$
|
37,835
|
|
|
|
$
|
35,834
|
|
|
|
$
|
110,668
|
|
|
|
$
|
107,845
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
|
5,353
|
|
|
|
4,677
|
|
|
|
17,222
|
|
|
|
14,307
|
|
Non-capitalized acquired technology (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
350
|
|
Amortization of intangibles
|
|
|
526
|
|
|
|
405
|
|
|
|
1,578
|
|
|
|
516
|
|
Litigation judgment
|
|
|
-
|
|
|
|
-
|
|
|
|
1,548
|
|
|
|
-
|
|
Acquisition related fees
|
|
|
378
|
|
|
|
31
|
|
|
|
706
|
|
|
|
493
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect on Non-GAAP items (c)
|
|
|
(1,758
|
)
|
|
|
(1,554
|
)
|
|
|
(5,916
|
)
|
|
|
(5,248
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
|
$
|
42,334
|
|
|
|
$
|
39,393
|
|
|
|
$
|
125,806
|
|
|
|
$
|
118,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income per share
|
|
|
$
|
0.52
|
|
|
|
$
|
0.47
|
|
|
|
$
|
1.51
|
|
|
|
$
|
1.39
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
|
0.06
|
|
|
|
0.06
|
|
|
|
0.24
|
|
|
|
0.18
|
|
Non-capitalized acquired technology (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Amortization of intangibles
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.01
|
|
Litigation judgment
|
|
|
-
|
|
|
|
-
|
|
|
|
0.02
|
|
|
|
-
|
|
Acquisition related fees
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
0.01
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect on Non-GAAP items (c)
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
|
|
(0.08
|
)
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted income per share
|
|
|
$
|
0.58
|
|
|
|
$
|
0.52
|
|
|
|
$
|
1.72
|
|
|
|
$
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing Non-GAAP diluted income per share
|
|
|
72,663
|
|
|
|
76,182
|
|
|
|
73,136
|
|
|
|
77,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
Nine Months Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cash flow from operating activities
|
|
|
$
|
73,067
|
|
|
|
$
|
55,621
|
|
|
|
$
|
127,829
|
|
|
|
$
|
109,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and leasehold improvements
|
|
|
(61
|
)
|
|
|
(777
|
)
|
|
|
(217
|
)
|
|
|
(2,151
|
)
|
Capitalized computer software development costs
|
|
|
57
|
|
|
|
(26
|
)
|
|
|
(299
|
)
|
|
|
(126
|
)
|
Non-capitalized acquired technology (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
75
|
|
|
|
846
|
|
Excess tax benefits from stock-based compensation (d)
|
|
|
-
|
|
|
|
1,312
|
|
|
|
-
|
|
|
|
2,344
|
|
Acquisition related fee payments
|
|
|
780
|
|
|
|
35
|
|
|
|
868
|
|
|
|
448
|
|
Litigation related payments
|
|
|
4,286
|
|
|
|
-
|
|
|
|
4,286
|
|
|
|
-
|
|
Free Cash Flow
|
|
|
$
|
78,129
|
|
|
|
$
|
56,165
|
|
|
|
$
|
132,542
|
|
|
|
$
|
110,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) GAAP total expenses
|
|
|
|
Three Months Ended March 31,
|
|
|
Nine Months Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Total costs of revenue
|
|
|
$
|
12,776
|
|
|
|
$
|
12,267
|
|
|
|
$
|
37,597
|
|
|
|
$
|
35,352
|
|
Total operating expenses
|
|
|
61,938
|
|
|
|
54,737
|
|
|
|
177,022
|
|
|
|
160,840
|
|
GAAP total expenses
|
|
|
$
|
74,714
|
|
|
|
$
|
67,004
|
|
|
|
$
|
214,619
|
|
|
|
$
|
196,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Stock-based compensation expense was as follows:
|
|
|
|
Three Months Ended March 31,
|
|
|
Nine Months Ended March 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Cost of services and other
|
|
|
$
|
345
|
|
|
|
$
|
363
|
|
|
|
$
|
1,119
|
|
|
|
$
|
1,106
|
|
Selling and marketing
|
|
|
979
|
|
|
|
972
|
|
|
|
2,870
|
|
|
|
2,937
|
|
Research and development
|
|
|
1,892
|
|
|
|
1,618
|
|
|
|
5,679
|
|
|
|
4,177
|
|
General and administrative
|
|
|
2,137
|
|
|
|
1,724
|
|
|
|
7,554
|
|
|
|
6,087
|
|
Total stock-based compensation
|
|
|
$
|
5,353
|
|
|
|
$
|
4,677
|
|
|
|
$
|
17,222
|
|
|
|
$
|
14,307
|
|
(c) The income tax effect on non-GAAP items for the three and nine
months ended March 31, 2018 is calculated utilizing the Company's
blended statutory tax rate, of 28 percent. The income tax rate used for
the three and nine months ended March 31, 2018 reflects the impact of
the Tax Cuts and Jobs Act signed into law on December 22, 2017, with an
effective date of January 1, 2018. The income tax effect on non-GAAP
items for the three and nine months ended March 31, 2017 is calculated
utilizing the Company's estimated federal and state tax rate.
(d) Excess tax benefits are related to stock-based compensation tax
deductions in excess of book compensation expense and reduce the
Company's income taxes payable. The Company adopted ASU No. 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee
Share-Based Payment Accounting ("ASU No. 2016-09") effective July 1,
2017. The Company adopted the cash flow presentation prospectively, and
accordingly, excess tax benefits from stock-based compensation of $1.2
million and $2.1 million is presented as an operating activity as a
component of net income for the three and nine months ended March 31,
2018, respectively, while $1.3 million and $2.3 million of excess tax
benefits from stock-based compensation is presented as a financing
activity for the three and nine months ended March 31, 2017,
respectively.
(e) In the nine months ended March 31, 2017, the Company acquired
technology that did not meet the accounting requirements for
capitalization and therefore the cost of the acquired technology was
expensed as research and development. The Company has excluded the
expense of the acquired technology from non-GAAP operating income to be
consistent with transactions where the acquired assets were capitalized.
In the nine months ended March 31, 2018 and 2017, the Company has
excluded payments of $0.1 million and $0.8 million, respectively, for
non-capitalized acquired technology (including $0.1 million and $0.5
million, respectively, of final payments related to non-capitalized
acquired technology from prior fiscal periods) from free cash flow to be
consistent with the treatment of other transactions where the acquired
assets were capitalized.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180425006648/en/
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