| [August 08, 2018] |
 |
Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2018
Aspen Technology, Inc. (NASDAQ: AZPN), the asset optimization software
company, today announced financial results for its fourth quarter and
fiscal year ended June 30, 2018.
"AspenTech ended fiscal 2018 with a solid performance across all areas
of the business. Our results reflect encouraging signs of improvement
among Engineering & Construction customers, as well as continued
strength from our owner-operator customers," said Antonio Pietri,
President and Chief Executive Officer of AspenTech.
Pietri continued, "We are also seeing growing momentum for our APM
business, which signed a number of exciting transactions in the quarter.
We are pleased with the significant progress made with APM in its first
year in the market and believe we are well positioned to generate
meaningful growth from this market opportunity in fiscal 2019 and
beyond."
Fourth Quarter and Fiscal Year 2018 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 $489 million at the end of the fourth quarter of fiscal
2018, which increased 6.4% compared to the fourth quarter of fiscal
2017 and 1.9% sequentially.
-
GAAP operating margin was 40.3%, compared to 39.6% in the fourth
quarter of fiscal 2017. Non-GAAP operating margin was 45.2%, compared
to 46.1% in the fourth quarter of fiscal 2017.
-
AspenTech repurchased approximately 550,000 shares of its common stock
for $50.0 million in the fourth quarter of fiscal 2018.
-
AspenTech repurchased approximately 2.8 million shares of its common
stock for $200 million in fiscal year 2018.
Summary of Fourth Quarter Fiscal Year 2018 Financial Results
AspenTech's total revenue of $126.0 million included:
-
Subscription and software revenue was $119.5 million in the
fourth quarter of fiscal 2018, an increase from $115.4 million in the
fourth quarter of fiscal 2017.
-
Services and other revenue was $6.5 million in the fourth
quarter of fiscal 2018, compared to $8.2 million in the fourth quarter
of fiscal 2017.
For the quarter ended June 30, 2018, AspenTech reported income from
operations of $50.7 million, compared to income from operations of $48.9
million for the quarter ended June 30, 2017.
Net income was $38.0 million for the quarter ended June 30, 2018,
leading to net income per share of $0.53, compared to net income per
share of $0.73 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 $57.0 million for
the fourth quarter of fiscal 2018, compared to non-GAAP income from
operations of $57.0 million in the same period last fiscal year.
Non-GAAP net income was $42.5 million, or $0.59 per share, for the
fourth quarter of fiscal 2018, compared to non-GAAP net income of $59.1
million, or $0.79 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 $96.2 million and
borrowings of $170.0 million at June 30, 2018.
During the fourth quarter, the company generated $79.1 million in cash
flow from operations and $79.5 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.
Summary of Fiscal Year 2018 Financial Results
AspenTech's total revenue of $499.5 million increased 3.4% from $482.9
million for fiscal year 2017.
-
Subscription and software revenue was $471.0 million, an
increase from $453.5 million for fiscal year 2017.
-
Services and other revenue was $28.5 million, compared to $29.4
million for fiscal year 2017.
For the fiscal year ended June 30, 2018, AspenTech reported income from
operations of $209.6 million, compared to income from operations of
$212.0 million for fiscal year 2017.
Net income was $148.7 million for the fiscal year ended June 30, 2018,
leading to net income per share of $2.04, compared to net income per
share of $2.11 for fiscal year 2017.
Non-GAAP income from operations was $237.0 million for fiscal year 2018,
an improvement compared to non-GAAP income from operations of $235.8
million for fiscal year 2017. Non-GAAP net income was $168.3 million, or
$2.31 per share, for fiscal year 2018, compared to non-GAAP net income
of $177.4 million, or $2.30 per share, for fiscal year 2017.
For the fiscal year ended June 30, 2018, the company generated $206.9
million in cash flow from operations and $212 million in free cash flow.
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, August 8, 2018,
at 4:30 p.m. (Eastern Time), to discuss the company's financial results
for the fourth quarter and fiscal year 2018 as well as the company's
business outlook.
To listen to the earnings call, participants need to utilize the live
dial-in number (833) 713-6081 or (702) 374-0603, conference ID code
1967135. The supplemental webcast presentation about ASC Topic 606 will
occur at the end of management's prepared remarks and prior to the live
Q&A session. To view the webcast, interested parties will need to log on
to the Investor Relations section of AspenTech's website, http://ir.aspentech.com/,
and click on the "Webcast" link. After the webcast presentation,
participants should return to the live dial-in number for the Q&A
session. A replay of the call and webcast presentation 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 1967135, through
September 23, 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.
© 2018 Aspen Technology, Inc. AspenTech, aspenONE and the Aspen leaf
logo are trademarks of Aspen Technology, Inc. All rights reserved.
Source: Aspen Technology, Inc.
|
|
|
|
|
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except per Share Data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Subscription and software
|
|
$
|
119,501
|
|
|
$
|
115,435
|
|
|
$
|
471,041
|
|
|
$
|
453,512
|
|
|
Services and other
|
|
6,459
|
|
|
8,247
|
|
|
28,473
|
|
|
29,430
|
|
|
Total revenue
|
|
125,960
|
|
|
123,682
|
|
|
499,514
|
|
|
482,942
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
Subscription and software
|
|
6,142
|
|
|
5,285
|
|
|
23,228
|
|
|
21,051
|
|
|
Services and other
|
|
6,905
|
|
|
6,829
|
|
|
27,416
|
|
|
26,415
|
|
|
Total cost of revenue
|
|
13,047
|
|
|
12,114
|
|
|
50,644
|
|
|
47,466
|
|
|
Gross profit
|
|
112,913
|
|
|
111,568
|
|
|
448,870
|
|
|
435,476
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
27,202
|
|
|
26,510
|
|
|
101,077
|
|
|
92,633
|
|
|
Research and development
|
|
21,213
|
|
|
21,953
|
|
|
82,076
|
|
|
79,530
|
|
|
General and administrative
|
|
13,792
|
|
|
14,157
|
|
|
56,076
|
|
|
51,297
|
|
|
Total operating expenses
|
|
62,207
|
|
|
62,620
|
|
|
239,229
|
|
|
223,460
|
|
|
Income from operations
|
|
50,706
|
|
|
48,948
|
|
|
209,641
|
|
|
212,016
|
|
|
Interest income
|
|
27
|
|
|
143
|
|
|
231
|
|
|
808
|
|
|
Interest (expense)
|
|
(1,739
|
)
|
|
(1,066
|
)
|
|
(5,691
|
)
|
|
(3,787
|
)
|
|
Other income (expense), net
|
|
120
|
|
|
21
|
|
|
(838
|
)
|
|
1,309
|
|
|
Income before provision for income taxes
|
|
49,114
|
|
|
48,047
|
|
|
203,343
|
|
|
210,346
|
|
|
Provision for income taxes
|
|
11,094
|
|
|
(6,305
|
)
|
|
54,655
|
|
|
48,150
|
|
|
Net income
|
|
$
|
38,020
|
|
|
$
|
54,352
|
|
|
$
|
148,688
|
|
|
$
|
162,196
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.53
|
|
|
$
|
0.73
|
|
|
$
|
2.06
|
|
|
$
|
2.12
|
|
|
Diluted
|
|
$
|
0.53
|
|
|
$
|
0.73
|
|
|
$
|
2.04
|
|
|
$
|
2.11
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
71,349
|
|
|
74,294
|
|
|
72,140
|
|
|
76,491
|
|
|
Diluted
|
|
72,315
|
|
|
74,830
|
|
|
72,956
|
|
|
76,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share and Per Share Data)
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
June 30,
2017
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
96,165
|
|
|
$
|
101,954
|
|
|
Accounts receivable, net
|
|
21,910
|
|
|
27,670
|
|
|
Prepaid expenses and other current assets
|
|
10,509
|
|
|
12,061
|
|
|
Prepaid income taxes
|
|
2,601
|
|
|
4,501
|
|
|
Total current assets
|
|
131,185
|
|
|
146,186
|
|
|
Property, equipment and leasehold improvements, net
|
|
9,806
|
|
|
13,400
|
|
|
Computer software development costs, net
|
|
646
|
|
|
667
|
|
|
Goodwill
|
|
75,590
|
|
|
51,248
|
|
|
Intangible assets, net
|
|
35,310
|
|
|
20,789
|
|
|
Non-current deferred tax assets
|
|
11,090
|
|
|
14,352
|
|
|
Other non-current assets
|
|
1,297
|
|
|
1,300
|
|
|
Total assets
|
|
$
|
264,924
|
|
|
$
|
247,942
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,230
|
|
|
$
|
5,467
|
|
|
Accrued expenses and other current liabilities
|
|
39,515
|
|
|
48,149
|
|
|
Income taxes payable
|
|
1,698
|
|
|
1,603
|
|
|
Borrowings under credit agreement
|
|
170,000
|
|
|
140,000
|
|
|
Current deferred revenue
|
|
286,845
|
|
|
272,024
|
|
|
Total current liabilities
|
|
502,288
|
|
|
467,243
|
|
|
Non-current deferred revenue
|
|
28,259
|
|
|
28,335
|
|
|
Other non-current liabilities
|
|
18,492
|
|
|
13,148
|
|
|
Commitments and contingencies (Note 15)
|
|
|
|
|
Series D redeemable convertible preferred stock, $0.10 par
value-Authorized-3,636 shares as of June 30, 2018 and 2017
Issued
and outstanding-none as of June 30, 2018 and 2017
|
|
-
|
|
|
-
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
Common stock, $0.10 par value-Authorized-210,000,000 shares
Issued-103,130,300
shares at June 30, 2018 and 102,567,129 shares at June 30, 2017
Outstanding-71,186,701
shares at June 30, 2018 and 73,421,153 shares at June 30, 2017
|
|
10,313
|
|
|
10,257
|
|
|
Additional paid-in capital
|
|
715,475
|
|
|
687,479
|
|
|
Retained earnings
|
|
305,208
|
|
|
156,520
|
|
|
Accumulated other comprehensive income
|
|
1,388
|
|
|
1,459
|
|
|
Treasury stock, at cost- 31,943,599 shares of common stock at June
30, 2018 and 29,145,976 shares at June 30, 2017
|
|
(1,316,499
|
)
|
|
(1,116,499
|
)
|
|
Total stockholders' deficit
|
|
(284,115
|
)
|
|
(260,784
|
)
|
|
Total liabilities and stockholders' deficit
|
|
$
|
264,924
|
|
|
$
|
247,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
38,020
|
|
|
$
|
54,352
|
|
|
$
|
148,688
|
|
|
$
|
162,196
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
1,642
|
|
|
1,412
|
|
|
6,544
|
|
|
6,405
|
|
|
Net foreign currency (gains) losses
|
|
(106
|
)
|
|
984
|
|
|
980
|
|
|
(1,036
|
)
|
|
Stock-based compensation expense
|
|
5,466
|
|
|
4,493
|
|
|
22,688
|
|
|
18,800
|
|
|
Deferred income taxes
|
|
(1,274
|
)
|
|
(5,455
|
)
|
|
3,193
|
|
|
(4,286
|
)
|
|
Provision for (recovery from) bad debts
|
|
45
|
|
|
(26
|
)
|
|
1,418
|
|
|
199
|
|
|
Tax benefits from stock-based compensation
|
|
-
|
|
|
3,621
|
|
|
-
|
|
|
5,965
|
|
|
Excess tax benefits from stock-based compensation
|
|
-
|
|
|
(3,621
|
)
|
|
-
|
|
|
(5,965
|
)
|
|
Other non-cash operating activities
|
|
107
|
|
|
172
|
|
|
421
|
|
|
602
|
|
|
Changes in assets and liabilities, excluding initial effects of
acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
5,291
|
|
|
7,464
|
|
|
4,327
|
|
|
(7,480
|
)
|
|
Prepaid expenses, prepaid income taxes, and other assets
|
|
(1,087
|
)
|
|
(6,069
|
)
|
|
3,821
|
|
|
(2,421
|
)
|
|
Accounts payable, accrued expenses, income taxes payable and other
liabilities
|
|
5,604
|
|
|
(16,018
|
)
|
|
1,156
|
|
|
(9,070
|
)
|
|
Deferred revenue
|
|
25,399
|
|
|
32,039
|
|
|
13,700
|
|
|
18,477
|
|
|
Net cash provided by operating activities
|
|
79,107
|
|
|
73,348
|
|
|
206,936
|
|
|
182,386
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of marketable securities
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(683,748
|
)
|
|
Maturities of marketable securities
|
|
-
|
|
|
17,130
|
|
|
-
|
|
|
686,346
|
|
|
Purchase of property, equipment and leasehold improvements
|
|
(114
|
)
|
|
(569
|
)
|
|
(331
|
)
|
|
(2,720
|
)
|
|
Payments for business acquisitions, net of cash acquired
|
|
-
|
|
|
-
|
|
|
(33,700
|
)
|
|
(36,171
|
)
|
|
Payments for capitalized computer software costs
|
|
(30
|
)
|
|
(279
|
)
|
|
(329
|
)
|
|
(405
|
)
|
|
Net cash (used in) provided by investing activities
|
|
(144
|
)
|
|
16,282
|
|
|
(34,360
|
)
|
|
(36,698
|
)
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
6,064
|
|
|
1,381
|
|
|
13,466
|
|
|
9,273
|
|
|
Repurchases of common stock
|
|
(50,684
|
)
|
|
(75,849
|
)
|
|
(205,049
|
)
|
|
(371,491
|
)
|
|
Payment of tax withholding obligations related to restricted stock
|
|
(2,484
|
)
|
|
(1,418
|
)
|
|
(7,896
|
)
|
|
(5,764
|
)
|
|
Deferred business acquisition payments
|
|
(6,049
|
)
|
|
-
|
|
|
(8,649
|
)
|
|
-
|
|
|
Excess tax benefits from stock-based compensation
|
|
-
|
|
|
3,621
|
|
|
-
|
|
|
5,965
|
|
|
Proceeds from credit agreement
|
|
-
|
|
|
-
|
|
|
30,000
|
|
|
-
|
|
|
Payments of credit agreement issuance costs
|
|
-
|
|
|
-
|
|
|
(351
|
)
|
|
-
|
|
|
Net cash used in financing activities
|
|
(53,153
|
)
|
|
(72,265
|
)
|
|
(178,479
|
)
|
|
(362,017
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(720
|
)
|
|
37
|
|
|
114
|
|
|
(53
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
|
25,090
|
|
|
17,402
|
|
|
(5,789
|
)
|
|
(216,382
|
)
|
|
Cash and cash equivalents, beginning of year
|
|
71,075
|
|
|
84,552
|
|
|
101,954
|
|
|
318,336
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
96,165
|
|
|
$
|
101,954
|
|
|
$
|
96,165
|
|
|
$
|
101,954
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Income tax paid, net
|
|
$
|
11,895
|
|
|
$
|
23,794
|
|
|
$
|
50,557
|
|
|
$
|
65,536
|
|
|
Interest paid
|
|
1,582
|
|
|
945
|
|
|
5,038
|
|
|
3,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Results of Operations and
Cash Flows
(Dollars in Thousands, Except per Share Data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Total expenses
|
|
|
|
|
|
|
|
|
|
GAAP total expenses (a)
|
|
$
|
75,254
|
|
|
$
|
74,734
|
|
|
$
|
289,873
|
|
|
$
|
270,926
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
(5,466
|
)
|
|
(4,493
|
)
|
|
(22,688
|
)
|
|
(18,800
|
)
|
|
Non-capitalized acquired technology (e)
|
|
-
|
|
|
(1,900
|
)
|
|
-
|
|
|
(2,250
|
)
|
|
Amortization of intangibles
|
|
(653
|
)
|
|
(434
|
)
|
|
(2,231
|
)
|
|
(950
|
)
|
|
Litigation judgment
|
|
(141
|
)
|
|
-
|
|
|
(1,689
|
)
|
|
-
|
|
|
Acquisition related fees
|
|
(15
|
)
|
|
(1,261
|
)
|
|
(721
|
)
|
|
(1,754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total expenses
|
|
$
|
68,979
|
|
|
$
|
66,646
|
|
|
$
|
262,544
|
|
|
$
|
247,172
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
GAAP income from operations
|
|
$
|
50,706
|
|
|
$
|
48,948
|
|
|
$
|
209,641
|
|
|
$
|
212,016
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
5,466
|
|
|
4,493
|
|
|
22,688
|
|
|
18,800
|
|
|
Non-capitalized acquired technology (e)
|
|
-
|
|
|
1,900
|
|
|
-
|
|
|
2,250
|
|
|
Amortization of intangibles
|
|
653
|
|
|
434
|
|
|
2,231
|
|
|
950
|
|
|
Litigation judgment
|
|
141
|
|
|
-
|
|
|
1,689
|
|
|
-
|
|
|
Acquisition related fees
|
|
15
|
|
|
1,261
|
|
|
721
|
|
|
1,754
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
56,981
|
|
|
$
|
57,036
|
|
|
$
|
236,970
|
|
|
$
|
235,770
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
38,020
|
|
|
$
|
54,352
|
|
|
$
|
148,688
|
|
|
$
|
162,196
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
5,466
|
|
|
4,493
|
|
|
22,688
|
|
|
18,800
|
|
|
Non-capitalized acquired technology (e)
|
|
-
|
|
|
1,900
|
|
|
-
|
|
|
2,250
|
|
|
Amortization of intangibles
|
|
653
|
|
|
434
|
|
|
2,231
|
|
|
950
|
|
|
Litigation judgment
|
|
141
|
|
|
-
|
|
|
1,689
|
|
|
-
|
|
|
Acquisition related fees
|
|
15
|
|
|
1,261
|
|
|
721
|
|
|
1,754
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Income tax effect on Non-GAAP items (c)
|
|
(1,763
|
)
|
|
(3,303
|
)
|
|
(7,679
|
)
|
|
(8,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
42,532
|
|
|
$
|
59,137
|
|
|
$
|
168,338
|
|
|
$
|
177,399
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share
|
|
|
|
|
|
|
|
|
|
GAAP diluted income per share
|
|
$
|
0.53
|
|
|
$
|
0.73
|
|
|
$
|
2.04
|
|
|
$
|
2.11
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (b)
|
|
0.07
|
|
|
0.05
|
|
|
0.32
|
|
|
0.24
|
|
|
Non-capitalized acquired technology (e)
|
|
-
|
|
|
0.03
|
|
|
-
|
|
|
0.03
|
|
|
Amortization of intangibles
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.01
|
|
|
Litigation judgment
|
|
-
|
|
|
-
|
|
|
0.02
|
|
|
-
|
|
|
Acquisition related fees
|
|
-
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Income tax effect on Non-GAAP items (c)
|
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.11
|
)
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted income per share
|
|
$
|
0.59
|
|
|
$
|
0.79
|
|
|
$
|
2.31
|
|
|
$
|
2.30
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing Non-GAAP diluted income per share
|
|
72,315
|
|
|
74,830
|
|
|
72,956
|
|
|
76,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Free Cash Flow
|
|
|
|
|
|
|
|
|
|
GAAP cash flow from operating activities
|
|
$
|
79,107
|
|
|
$
|
73,348
|
|
|
$
|
206,936
|
|
|
$
|
182,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, equipment and leasehold improvements
|
|
(114
|
)
|
|
(569
|
)
|
|
(331
|
)
|
|
(2,720
|
)
|
|
Capitalized computer software development costs
|
|
(30
|
)
|
|
(279
|
)
|
|
(329
|
)
|
|
(405
|
)
|
|
Non-capitalized acquired technology (e)
|
|
-
|
|
|
1,400
|
|
|
75
|
|
|
2,246
|
|
|
Excess tax benefits from stock-based compensation (d)
|
|
-
|
|
|
3,621
|
|
|
-
|
|
|
5,965
|
|
|
Acquisition related fee payments
|
|
280
|
|
|
-
|
|
|
1,148
|
|
|
448
|
|
|
Litigation related payments
|
|
260
|
|
|
(721
|
)
|
|
4,546
|
|
|
(721
|
)
|
|
Free Cash Flow
|
|
$
|
79,503
|
|
|
$
|
76,800
|
|
|
$
|
212,045
|
|
|
$
|
187,199
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) GAAP total expenses
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Total costs of revenue
|
|
$
|
13,047
|
|
|
$
|
12,114
|
|
|
$
|
50,644
|
|
|
$
|
47,466
|
|
|
Total operating expenses
|
|
62,207
|
|
|
62,620
|
|
|
239,229
|
|
|
223,460
|
|
|
GAAP total expenses
|
|
$
|
75,254
|
|
|
$
|
74,734
|
|
|
$
|
289,873
|
|
|
$
|
270,926
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Stock-based compensation expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Cost of services and other
|
|
$
|
360
|
|
|
$
|
371
|
|
|
$
|
1,479
|
|
|
$
|
1,477
|
|
|
Selling and marketing
|
|
992
|
|
|
715
|
|
|
3,862
|
|
|
3,652
|
|
|
Research and development
|
|
1,938
|
|
|
1,629
|
|
|
7,617
|
|
|
5,806
|
|
|
General and administrative
|
|
2,176
|
|
|
1,778
|
|
|
9,730
|
|
|
7,865
|
|
|
Total stock-based compensation
|
|
$
|
5,466
|
|
|
$
|
4,493
|
|
|
$
|
22,688
|
|
|
$
|
18,800
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) The income tax effect on non-GAAP items for the three and twelve
months ended June 30, 2018 is calculated utilizing the Company's
blended statutory tax rate, of 28 percent. The income tax rate used
for the three and twelve months ended June 30, 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 twelve months ended June
30, 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 $0.9 million and $3.0 million is
presented as an operating activity as a component of net income for
the three and twelve months ended June 30, 2018, respectively, while
$3.6 million and $6.0 million of excess tax benefits from
stock-based compensation is presented as a financing activity for
the three and twelve months ended June 30, 2017, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
(e) In the twelve months ended June 30, 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 twelve months ended June 30, 2018 and 2017, the
Company has excluded payments of $0.1 million and $2.2 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.
|
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