A month has gone by since the last earnings report for Aspen Technology (AZPN - Free Report) . Shares have added about 3.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aspen Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Aspen Q4 Earnings Beat Estimates, Revenues Up Y/Y
Aspen Technology reported fourth-quarter fiscal 2022 non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate by 13%. The company reported non-GAAP earnings of 38 cents per share in the year-ago quarter.
Revenues of $238.9 million missed the Zacks Consensus Estimate by 19.7%. The company reported revenues of $77.4 million in the year-ago quarter.
Quarter in Detail
License revenues (74.2% of revenues) were up 288% year over year to $177.3 million.
Maintenance revenues (21%) rose 110% year over year to $50.2 million.
Services and other revenues (4.8%) rose 49% from the year-ago quarter’s figure to $11.5 million.
As of Jun 30, 2022, the annual spend (which Aspen Technology defines as the annualized value of all term license and maintenance contracts at the end of the quarter) amounted to $674 million, up 8.5% year over year and 2.8% quarter over quarter.
Margins
Gross profit increased to $167.9 million from the year-ago quarter’s figure of $35.4 million. As a percentage of total revenues, the figure increased 24.5% on a year-over-year basis to 70.3%.
Total operating expenses increased to $128.8 million from the year-ago quarter’s figure of $44.2 million due to higher selling and marketing, and research and development costs.
Non-GAAP operating income totaled $128.9 million compared with $20.5 million reported in the prior-year quarter. Non-GAAP operating margin was 54% compared with the 10.4% operating margin reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and cash equivalents were $449.7 million compared with $285.2 million as of Mar 31, 2022. The company’s total borrowings and net of debt issuance costs stood at $273.6 million as of Jun 30, 2022.
The company used $0.3 million in cash from operations compared with $81.1 million in the previous quarter. Non-GAAP free cash flow was $4.9 million in the fiscal fourth quarter.
Fiscal 2023 View
For fiscal 2023, Aspen expects revenues in the range of $1.14-$1.20 billion. The Zacks Consensus Estimate for revenues is pegged at $1.04 billion.
Management project Annual Contract Value (ACV) growth of 10.5%-13.5% year over year.
Total bookings are projected in the range of $1.07-$1.17 billion.
Non-GAAP net income is anticipated to be $6.40-$6.89 per share. The consensus mark for earnings is pegged at $6.25.
Management projects non-GAAP operating income in the range of $503-$555 million. Non-GAAP total expenses are projected to be between $637 million and $647 million.
Free cash flow is projected in the range of $347-$362 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 34.16% due to these changes.
VGM Scores
Currently, Aspen Technology has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Aspen Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
A month has gone by since the last earnings report for Aspen Technology (AZPN - Free Report) . Shares have added about 3.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aspen Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Aspen Q4 Earnings Beat Estimates, Revenues Up Y/Y
Aspen Technology reported fourth-quarter fiscal 2022 non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate by 13%. The company reported non-GAAP earnings of 38 cents per share in the year-ago quarter.
Revenues of $238.9 million missed the Zacks Consensus Estimate by 19.7%. The company reported revenues of $77.4 million in the year-ago quarter.
Quarter in Detail
License revenues (74.2% of revenues) were up 288% year over year to $177.3 million.
Maintenance revenues (21%) rose 110% year over year to $50.2 million.
Services and other revenues (4.8%) rose 49% from the year-ago quarter’s figure to $11.5 million.
As of Jun 30, 2022, the annual spend (which Aspen Technology defines as the annualized value of all term license and maintenance contracts at the end of the quarter) amounted to $674 million, up 8.5% year over year and 2.8% quarter over quarter.
Margins
Gross profit increased to $167.9 million from the year-ago quarter’s figure of $35.4 million. As a percentage of total revenues, the figure increased 24.5% on a year-over-year basis to 70.3%.
Total operating expenses increased to $128.8 million from the year-ago quarter’s figure of $44.2 million due to higher selling and marketing, and research and development costs.
Non-GAAP operating income totaled $128.9 million compared with $20.5 million reported in the prior-year quarter. Non-GAAP operating margin was 54% compared with the 10.4% operating margin reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and cash equivalents were $449.7 million compared with $285.2 million as of Mar 31, 2022. The company’s total borrowings and net of debt issuance costs stood at $273.6 million as of Jun 30, 2022.
The company used $0.3 million in cash from operations compared with $81.1 million in the previous quarter. Non-GAAP free cash flow was $4.9 million in the fiscal fourth quarter.
Fiscal 2023 View
For fiscal 2023, Aspen expects revenues in the range of $1.14-$1.20 billion. The Zacks Consensus Estimate for revenues is pegged at $1.04 billion.
Management project Annual Contract Value (ACV) growth of 10.5%-13.5% year over year.
Total bookings are projected in the range of $1.07-$1.17 billion.
Non-GAAP net income is anticipated to be $6.40-$6.89 per share. The consensus mark for earnings is pegged at $6.25.
Management projects non-GAAP operating income in the range of $503-$555 million. Non-GAAP total expenses are projected to be between $637 million and $647 million.
Free cash flow is projected in the range of $347-$362 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 34.16% due to these changes.
VGM Scores
Currently, Aspen Technology has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Aspen Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on AZPN - FREE