Aspen Technology(AZPN) - 2023 Q3 - Quarterly Report

Financial Performance - The pro forma Annual Contract Value (ACV) grew approximately 11.2% from $768.6 million as of March 31, 2022, to$854.6 million as of March 31, 2023[114]. - Total Contract Value (TCV) increased to $3.5 billion as of March 31, 2023, compared to$3.2 billion as of March 31, 2022[115]. - Bookings for the three months ended March 31, 2023, were $231.3 million, down from$273.4 million for the same period in 2022; however, bookings for the nine months ended March 31, 2023, rose to $698.1 million from$638.4 million in the prior year[116]. - Free cash flow for the nine months ended March 31, 2023, was $180.8 million, significantly up from$16.3 million in the same period of 2022[119]. - Total revenue increased by $145.3 million to$229.9 million for the three months ended March 31, 2023, compared to the same period in the prior fiscal year, primarily driven by $157.8 million from Heritage AspenTech[128]. - Total revenue for the nine months ended March 31, 2023, increased by$480.1 million to $723.5 million, primarily due to$501.7 million from Heritage AspenTech[137]. - License and solutions revenue increased by $302.8 million for the nine months ended March 31, 2023, primarily driven by$313.7 million from Heritage AspenTech due to the Transaction[138]. - Maintenance revenue rose by $156.2 million during the same period, mainly due to$163.7 million from Heritage AspenTech[138]. - Overall gross profit increased by $331.0 million, with a gross profit margin rising to 59.2$78.5 million for the three months ended March 31, 2023, compared to a loss of $2.7 million for the same period in 2022[120]. - Net loss for the three months ended March 31, 2023, was$57.6 million, compared to a net loss of $3.3 million in the same period last year[137]. - Selling and marketing expenses surged by$101.1 million to $120.0 million, primarily due to$100.8 million from Heritage AspenTech[132]. - Research and development expenses rose by $38.6 million to$54.0 million, mainly due to $35.7 million from Heritage AspenTech[132]. - General and administrative expenses increased by$31.3 million to $40.5 million, primarily due to$33.6 million from Heritage AspenTech[133]. - Selling and marketing expenses increased by $294.4 million, primarily due to$301.0 million from Heritage AspenTech[143]. - Research and development expenses rose by $107.3 million, mainly attributed to$99.3 million from Heritage AspenTech[143]. Acquisition and Investments - The company entered into a definitive agreement to acquire Micromine for AU $900 million (approximately$623 million USD), with the transaction primarily financed through debt[108]. - The acquisition of Micromine is subject to regulatory approval, and the company has implemented foreign currency forward contracts to mitigate exchange rate risks associated with the purchase[108]. - The company entered into a $630.0 million Emerson Credit Agreement to finance acquisitions, replacing a previous$475.0 million Bridge Facility[152]. - As of March 31, 2023, the company's total commitment under a limited partnership investment fund is $5.0 million CAD ($4.0 million USD), with an investment value of $3.3 million CAD ($2.5 million USD) recorded in non-current assets[166]. Cash Flow and Financial Position - Operating cash flows for the nine months ended March 31, 2023, were $185.7 million, compared to$20.1 million for the same period in 2022[154]. - Free cash flow increased by $164.5 million during the nine-month period, primarily due to contributions from Heritage AspenTech[155]. - As of March 31, 2023, cash and cash equivalents were$286.7 million, down from $449.7 million as of June 30, 2022[150]. - The company recorded an income tax benefit of$68.1 million for the nine months ended March 31, 2023, compared to $7.4 million for the same period in 2022[149]. Currency and Market Risks - As of March 31, 2023, approximately 84$1.0 million and a loss of $2.8 million for the three months ended March 31, 2023 and 2022, respectively[162]. - A hypothetical 10$10.1 million for the three months ended March 31, 2023[162]. - The company has not entered into foreign currency forward contracts during the three months ended March 31, 2023, to mitigate foreign exchange risk[161]. - The company may enter into derivative financial instruments to manage exposure to market risks, including foreign currency exchange rates[159]. - The company recognizes that unfavorable future changes in market conditions could lead to a potential loss up to the full value of its $5.0 million CAD ($4.0 million USD) commitment in the partnership[166]. Internal Controls and Compliance - There was no change in internal control over financial reporting that materially affected the company during the nine months ended March 31, 2023[169]. - The company's disclosure controls and procedures were evaluated as effective as of March 31, 2023[168]. - A hypothetical 100 basis point increase or decrease in interest rates would not have a material impact on the fair value of the company's investment portfolio[164].