EX-99.1 2 q3fy2024earningsreleasexex.htm EX-99.1 Document

Exhibit 99.1
aspentechnologylogoa61.jpg

Contacts:     
Media Contact Investor Contact
Len Dieterle Brian Denyeau
Aspen Technology ICR for Aspen Technology
+1 781-221-4291 +1 646-277-1251
len.dieterle@aspentech.com ir@aspentech.com

Aspen Technology Announces Financial Results for the
Third Quarter of Fiscal 2024

Bedford, Mass. – May 7, 2024 - Aspen Technology, Inc. (AspenTech) (NASDAQ: AZPN), a global leader in industrial software, today announced financial results for its third quarter in fiscal 2024, ended March 31, 2024.
Antonio Pietri, President and Chief Executive Officer of AspenTech, commented, “Our third quarter performance and updated outlook for fiscal 2024 reflects the more cautious customer buying behavior we experienced at the start of the new calendar year. While this dynamic is expected to weigh on ACV growth in the near-term, the continued health and expansion of our pipeline gives us confidence in the underlying growth opportunity for AspenTech.”

“AspenTech remains well positioned to support customers in their efforts to capitalize on the long-term investment trends of global decarbonization, electrification, and the transition to a new energy system. The opportunity for further collaboration and co-innovation in these areas was on full display last week at our biennial user conference, OPTIMIZE 24. Now, more than ever, our customers are being asked to meet the world’s increasing demand for resources in a sustainable manner, and AspenTech is providing the solutions to make this a reality,” concluded Pietri.

Third Quarter Fiscal Year 2024 Recent Business Highlights    
•Annual contract value1 (“ACV”) was $936.1 million at the end of the third quarter of fiscal 2024, increasing 9.5% year over year and 2.4% quarter over quarter.
•Cash flow from operations was $138.1 million for the third quarter of fiscal 2024, compared to $131.0 million in the third quarter of fiscal 2023.
•Free cash flow2 was $137.0 million for the third quarter of fiscal 2024, compared to $129.3 million in the third quarter of fiscal 2023. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.
Summary of Third Quarter Fiscal Year 2024 Financial Results
AspenTech’s total revenue was $278.1 million in the third quarter of fiscal 2024 and included the following:
•License and solutions revenue, which represents the portion of a term license agreement allocated to the initial license and Digital Grid Management (“DGM”) revenue where software, hardware and professional services are recognized as one performance obligation, was $169.5 million in the third quarter of fiscal 2024, compared to $136.3 million in the third quarter of fiscal 2023.
•Maintenance revenue, which represents the portion of customer agreements related to ongoing support and the right to future product enhancements, was $86.3 million in the third quarter of fiscal 2024, compared to $77.3 million in the third quarter of fiscal 2023.


•Services and other revenue, which represents the portion of customer agreements related to professional services and training services, was $22.4 million in the third quarter of fiscal 2024, compared to $16.3 million in the third quarter of fiscal 2023.
Loss from operations was $19.3 million in the third quarter of fiscal 2024, compared to $78.5 million in the third quarter of fiscal 2023. Non-GAAP income from operations was $116.3 million in the third quarter of fiscal 2024, compared to $66.8 million in the third quarter of fiscal 2023. The year-over-year improvement in loss from operations was mainly due to a higher mix of license and solutions revenue, in addition to one-time expense savings, lower stock-based compensation and a continuing focus on driving efficiencies.
Net income was $1.6 million, or $0.02 per diluted share, in the third quarter of fiscal 2024, compared to net loss of $57.6 million, or $0.89 per diluted share, in the third quarter of fiscal 2023. AspenTech has increased amortization of intangible assets following the close of its transaction with Emerson Electric Co. (”Emerson”). AspenTech expects its amortization of intangible assets to remain at higher levels for the next several years as the related asset balance is amortized over the respective expected useful lives of the intangible assets.
Non-GAAP net income was $108.7 million, or $1.70 per diluted share, in the third quarter of fiscal 2024, compared to $69.1 million, or $1.06 per diluted share, in the third quarter of fiscal 2023. The year-over-year increase in non-GAAP net income was mainly due to revenue growth combined with strong operating leverage.
AspenTech had cash and cash equivalents of $177.6 million as of March 31, 2024, compared to $241.2 million as of June 30, 2023. The decrease in cash and cash equivalents during this period primarily was due to the impact of share repurchase activity under AspenTech’s $300.0 million share repurchase authorization (the “share repurchase authorization”) during fiscal 2024. Please see below for an update on the share repurchase authorization. Under its revolving credit facility, AspenTech had no borrowings and $197.7 million available as of March 31, 2024.
AspenTech generated $138.1 million in cash flow from operations and $137.0 million in free cash flow2 in the third quarter of fiscal 2024, compared to $131.0 million in cash flow from operations and $129.3 million in free cash flow2 in the third quarter of fiscal 2023.
Recent Developments
Appointment of Chief Financial Officer
AspenTech today announced the appointment of David Baker to the position of Senior Vice President, Chief Financial Officer of the Company, effective June 3, 2024. Mr. Baker previously was employed by Emerson for over 27 years. Mr. Baker brings to the role deep financial acumen, operational expertise, and significant senior financial leadership experience from his prior roles at Emerson, including Vice President, Financial Planning, where he led the financial planning and analysis function for Emerson since March 2023, Vice President and Chief Financial Officer, Automation Solutions, from November 2018 to February 2023, and Vice President and Chief Financial Officer, Measurement and Analytical, from July 2013 to November 2018. Mr. Baker holds an M.B.A. in Operations Management from the University of Minnesota and a B.A. in Accounting from the University of Northern Iowa.
Appointment of Director of the Board
AspenTech’s Board of Directors (the “Board”) elected David Henshall as a director of the Board, effective April 26, 2024. Mr. Henshall most recently served as Chief Executive Officer at Citrix Systems, Inc., a leading multinational provider of cloud computing and virtualization technology, where he held executive roles for nearly twenty years. An experienced public company board director, Mr. Henshall actively serves as the Chairman of the board of directors of Everbridge, Inc., is a member of the board of directors HashiCorp, Inc. and Feedzai, Inc, and is a former member of the boards of directors of New Relic, Inc. and LogMeIn, Inc. He holds a M.B.A. from Santa Clara University and a B.A. in Business Administration from the University of Arizona.
Share Repurchase Authorization Update
AspenTech repurchased 288,241 shares for $56.7 million under its $300.0 million share repurchase authorization, announced on August 1, 2023, in the third quarter of fiscal 2024. As of March 31, 2024, a total of 1,243,080 shares had been repurchased under the share repurchase authorization for $243.1 million, with the total remaining value being $56.9 million.
Fiscal Year 2024 Business Outlook
Based on information as of today, May 7, 2024, AspenTech is updating its fiscal 2024 guidance.


•ACV1 growth of at least 9.0% year-over-year
•GAAP operating cash flow of at least $349 million
•Free cash flow2 of at least $340 million
•Total bookings of at least $1.03 billion
•Total revenue of at least $1.10 billion
•GAAP total expense of approximately $1.22 billion
•Non-GAAP total expense of approximately $675 million
•GAAP operating loss at or better than $121 million
•Non-GAAP operating income of at least $425 million
•GAAP net loss at or better than $29 million
•Non-GAAP net income of at least $403 million
•GAAP net loss per share at or better than $0.45
•Non-GAAP net income per share of at least $6.29
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause AspenTech’s actual results to differ materially from these forward-looking statements.
Conference Call and Webcast
AspenTech will host a conference call and webcast presentation on Tuesday, May 7, 2024, at 4:30 p.m. ET to discuss its financial results, business outlook, and related corporate and financial matters. A live webcast of the call will be available on AspenTech’s Investor Relations website, http://ir.aspentech.com, via its “Webcasts” page. To access the call by phone, please use the registration link. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast also will be available for a limited time at http://ir.aspentech.com/.
AspenTech has provided an earnings presentation for its third quarter of fiscal 2024. AspenTech asks that shareholders refer to this presentation in conjunction with the conference call, which can be found at ir.aspentech.com.
Footnotes
1.AspenTech defines ACV 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 our business.
2.Free cash flow is a non-GAAP metric that is calculated as net cash provided by operating activities adjusted for the net impact of purchases of property, equipment and leasehold improvements and payments for capitalized computer software development costs. Effective January 1, 2023, AspenTech no longer excludes acquisition and integration planning related payments from its computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation.
About AspenTech
Aspen Technology, Inc. (NASDAQ: AZPN) is a global software leader helping industries at the forefront of the world’s dual challenge meet the increasing demand for resources from a rapidly growing population in a profitable and sustainable manner. AspenTech solutions address complex environments where it is critical to optimize the asset design, operation and maintenance lifecycle. Through our unique combination of deep domain expertise and innovation, customers in asset-intensive industries can run their assets safer, greener, longer and faster to improve their operational excellence. To learn more, visit AspenTech.com.


Forward-Looking Statements
Statements in this press release that are not strictly historical may be “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties, and AspenTech undertakes no obligation to update any such statements to reflect later developments. These forward-looking statements include, but are not limited to, our guidance for fiscal 2024, our expectations regarding cash collections, closing of customer renewals and completion of our share repurchase authorization. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “strategy,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “opportunity” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These risks and uncertainties include, without limitation: the failure to realize the anticipated benefits of our transaction with Emerson Electric Co.; risks resulting from our status as a controlled company; the scope, duration and ultimate impacts of the Russia-Ukraine war and the Israeli-Hamas conflict; as well as economic and currency conditions, market demand (including related to adverse changes in the process or other capital-intensive industries such as materially reduced spending budgets due to oil and gas price declines and volatility), pricing, protection of intellectual property, cybersecurity, natural disasters, tariffs, sanctions, competitive and technological factors, and inflation; and others, as set forth in AspenTech’s most recent Annual Report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission (the “SEC”). The outlook contained herein represents AspenTech’s expectation for its consolidated results, other than as noted herein.
© 2024 Aspen Technology, Inc. AspenTech, aspenONE, asset optimization and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks not owned by AspenTech are property of their respective owners.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under the rules of the SEC. 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.


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
(Dollars and Shares in Thousands, Except per share data)
Revenue:
License and solutions$169,467 $136,292 $470,578 $446,360 
Maintenance86,256 77,283 256,280 234,277 
Services and other22,383 16,303 57,719 42,898 
Total revenue278,106 229,878 784,577 723,535 
Cost of revenue:
License and solutions65,550 68,980 204,453 209,326 
Maintenance8,344 9,020 29,192 27,804 
Services and other19,048 15,799 52,290 40,897 
Total cost of revenue92,942 93,799 285,935 278,027 
Gross profit185,164 136,079 498,642 445,508 
Operating expenses:
Selling and marketing121,303 120,035 365,921 356,260 
Research and development49,334 54,046 156,155 153,741 
General and administrative33,821 40,471 105,315 124,557 
Total operating expenses204,458 214,552 627,391 634,558 
Loss from operations(19,294)(78,473)(128,749)(189,050)
Other expense, net(1,988)(13,281)(8,017)(33,270)
Interest income, net13,723 9,969 40,056 19,112 
Loss before benefit for income taxes(7,559)(81,785)(96,710)(203,208)
Benefit for income taxes(9,115)(24,150)(42,241)(68,132)
Net income (loss)$1,556 $(57,635)$(54,469)$(135,076)
Net income (loss) per common share:
Basic$0.02 $(0.89)$(0.85)$(2.09)
Diluted$0.02 $(0.89)$(0.85)$(2.09)
Weighted average shares outstanding:
Basic63,508 64,796 63,844 64,622 
Diluted63,802 64,796 63,844 64,622 


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, 2024June 30, 2023
(Dollars in Thousands, Except Share Data)
ASSETS
Current assets:
Cash and cash equivalents$177,592 $241,209 
Accounts receivable, net140,469 122,789 
Current contract assets, net378,914 367,539 
Prepaid expenses and other current assets28,697 27,728 
Receivables from related parties69,097 62,375 
Prepaid income taxes— 11,424 
Total current assets794,769 833,064 
Property, equipment and leasehold improvements, net16,414 18,670 
Goodwill8,329,499 8,330,811 
Intangible assets, net4,306,689 4,659,657 
Non-current contract assets, net528,282 536,104 
Contract costs21,049 15,992 
Operating lease right-of-use assets94,353 67,642 
Deferred income tax assets9,843 10,638 
Other non-current assets8,529 13,474 
Total assets$14,109,427 $14,486,052 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$9,876 $20,299 
Accrued expenses and other current liabilities81,842 99,526 
Due to related parties67,954 22,019 
Current operating lease liabilities13,698 12,928 
Income taxes payable33,999 46,205 
Current contract liabilities134,910 151,450 
Total current liabilities342,279 352,427 
Non-current contract liabilities33,042 30,103 
Deferred income tax liabilities822,197 957,911 
Non-current operating lease liabilities81,361 55,442 
Other non-current liabilities19,726 19,240 
Stockholders’ equity:
Common stock, $0.0001 par value
Authorized—600,000,000 shares
Issued— 65,255,754 and 64,952,868 shares
Outstanding— 63,418,003 and 64,465,242 shares		7 6 
Additional paid-in capital13,259,100 13,194,028 
Accumulated deficit(95,860)(41,391)
Accumulated other comprehensive (loss) income(4,999)2,436 
Treasury stock, at cost — 1,837,751 and 487,626 shares of common stock(347,426)(84,150)
Total stockholders’ equity12,810,822 13,070,929 
Total liabilities and stockholders’ equity$14,109,427 $14,486,052 


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
(Dollars in Thousands)
Cash flows from operating activities:
Net income (loss)$1,556 $(57,635)$(54,469)$(135,076)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization123,408 123,165 369,794 368,266 
Reduction in the carrying amount of right-of-use assets4,380 3,901 11,312 10,463 
Net foreign currency losses (gains)2,070 (1,033)8,238 3,711 
Realized gain on settlement of foreign currency forward contracts— (10,821)— (10,821)
Stock-based compensation12,907 22,843 45,817 64,020 
Deferred income taxes(44,260)(49,661)(138,470)(156,046)
Provision for uncollectible receivables5,884 716 9,269 3,944 
Other non-cash operating activities1,435 1,698 805 1,108 
Changes in assets and liabilities:
Accounts receivable(12,214)22,630 (22,923)(11,060)
Contract assets55,024 67,192 (2,902)(10,672)
Contract costs(2,145)(1,810)(5,204)(5,357)
Lease liabilities(4,173)(3,694)(11,281)(10,303)
Prepaid expenses, prepaid income taxes, and other assets162 (6,536)(17,444)27,641 
Liability from foreign currency forward contract— 25,135 — 40,454 
Accounts payable, accrued expenses, income taxes payable and other liabilities(3,286)(10,548)5,972 (12,038)
Contract liabilities(2,605)5,494 (13,564)17,416 
Net cash provided by operating activities138,143 131,036 184,950 185,650 
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements(1,142)(1,671)(2,579)(4,515)
Proceeds from settlement of foreign currency forward contracts— 10,821 — 10,821 
Payments for business acquisitions, net of cash acquired— 2,449 (8,273)(72,498)
Payments for equity method investments249 (211)(272)(676)
Payments for capitalized computer software development costs— (18)(131)(347)
Payments for asset acquisitions— — (12,500)— 
Purchase of other assets— (1,000)— (1,000)
Net cash (used in) provided by investing activities(893)10,370 (23,755)(68,215)
Cash flows from financing activities:
Issuance of shares of common stock7,294 5,937 15,214 31,542 
Repurchases of common stock(56,737)— (243,066)— 
Payment of tax withholding obligations related to restricted stock(3,167)(2,708)(17,010)(14,406)
Deferred business acquisition payments— — — (1,363)
Repayments of amounts borrowed under term loan— (264,000)— (276,000)
Net transfers (to) from Parent Company(36,197)(35,621)32,558 (5,749)
Payments of debt issuance costs— — — (2,375)
Net cash used in financing activities(88,807)(296,392)(212,304)(268,351)
Effect of exchange rate changes on cash and cash equivalents(1,604)(4,366)(12,508)(12,073)
Increase (decrease) in cash and cash equivalents46,839 (159,352)(63,617)(162,989)
Cash and cash equivalents, beginning of period130,753 446,088 241,209 449,725 
Cash and cash equivalents, end of period$177,592 $286,736 $177,592 $286,736 


ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows
(Unaudited)
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
(Dollars and Shares in Thousands, Except per Share Data)
Total expenses
GAAP total expenses (a)$297,400 $308,351 $913,326 $912,585 
Less:
Stock-based compensation (b)(12,907)(22,843)(45,817)(64,020)
Amortization of intangibles (c)(121,749)(121,639)(364,901)(363,960)
Acquisition and integration planning related fees(945)(761)(815)(7,030)
Non-GAAP total expenses$161,799 $163,108 $501,793 $477,575 
(Loss) income from operations
GAAP loss from operations$(19,294)$(78,473)$(128,749)$(189,050)
Plus:
Stock-based compensation (b)12,907 22,843 45,817 64,020 
Amortization of intangibles (c)121,749 121,639 364,901 363,960 
Acquisition and integration planning related fees945 761 815 7,030 
Non-GAAP income from operations$116,307 $66,770 $282,784 $245,960 
Net income (loss)
GAAP net income (loss)$1,556 $(57,635)$(54,469)$(135,076)
Plus:
Stock-based compensation (b)12,907 22,843 45,817 64,020 
Amortization of intangibles (c)121,749 121,639 364,901 363,960 
Acquisition and integration planning related fees945 761 815 7,030 
Unrealized loss on foreign currency forward contract— 25,135 — 40,454 
Realized gain on foreign currency forward contract— (10,821)— (10,821)
Less:
Income tax effect on Non-GAAP items (d)(28,422)(32,776)(85,680)(95,666)
Non-GAAP net income$108,735 $69,146 $271,384 $233,901 
Diluted income (loss) per share
GAAP diluted income (loss) per share$0.02 $(0.89)$(0.85)$(2.09)
Plus:
Stock-based compensation (b)0.20 0.35 0.71 0.98 
Amortization of intangibles (c)1.91 1.87 5.68 5.59 
Acquisition and integration planning related fees0.02 0.01 0.01 0.11 
Unrealized loss on foreign currency forward contract— 0.39 — 0.62 
Realized gain on foreign currency forward contract— (0.17)— (0.17)
Impact of diluted shares— — 0.01 0.02 
Less:
Income tax effect on Non-GAAP items (d)(0.45)(0.50)(1.33)(1.47)
Non-GAAP diluted income per share$1.70 $1.06 $4.23 $3.59 
Shares used in computing Non-GAAP diluted income per share63,802 65,195 64,187 65,125 


Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Free Cash Flow (2)
Net cash provided by operating activities (GAAP)$138,143 $131,036 $184,950 $185,650 
Purchases of property, equipment and leasehold improvements(1,142)(1,671)(2,579)(4,515)
Payments for capitalized computer software development costs— (18)(131)(347)
Free cash flow (2) (non-GAAP)
$137,001 $129,347 $182,240 $180,788 
(a) GAAP total expenses
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Total costs of revenue$92,942 $93,799 $285,935 $278,027 
Total operating expenses204,458 214,552 627,391 634,558 
GAAP total expenses$297,400 $308,351 $913,326 $912,585 
(b) Stock-based compensation expense was as follows:
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Cost of license and solutions$522 $832 $1,804 $2,752 
Cost of maintenance667 427 1,884 1,462 
Cost of services and other731 599 1,589 1,457 
Selling and marketing2,463 3,695 8,112 10,886 
Research and development3,343 5,972 11,615 13,831 
General and administrative5,181 11,318 20,813 33,632 
Total stock-based compensation$12,907 $22,843 $45,817 $64,020 
(c) Amortization of intangible assets was as follows:
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
Cost of license and solutions$48,314 $48,035 $144,384 $143,377 
Selling and marketing73,435 73,604 220,517 220,583 
Total amortization of intangible assets$121,749 $121,639 $364,901 $363,960 
(d) The income tax effect on non-GAAP items for the three months ended March 31, 2024 and 2023, respectively, is calculated utilizing the Company’s combined US federal and state statutory tax rate as following:
Three Months Ended March 31,Nine Months Ended March 31,
2024202320242023
U.S. Statutory Rate 21.79 %21.79 %21.79 %21.79 %




ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
(Unaudited)
Twelve Months Ended June 30, 2024 (3)
(Dollars in Thousands, Except Share Data)
Guidance - Total expenses
GAAP expectation - total expenses$1,221,000 
Less:
Stock-based compensation(58,000)
Amortization of intangible assets(487,000)
Acquisition and integration planning related fees(1,000)
Non-GAAP expectation - total expenses$675,000 
Guidance - (Loss) income from operations
GAAP expectation - loss from operations$(121,000)
Plus:
Stock-based compensation58,000 
Amortization of intangible assets487,000 
Acquisition and integration planning related fees1,000 
Non-GAAP expectation - income from operations$425,000 
Guidance - Net (loss) income and diluted (loss) income per share
GAAP expectation - net loss and diluted loss per share$(29,000)$(0.45)
Plus:
Stock-based compensation58,000 
Amortization of intangible assets487,000 
Acquisition and integration planning related fees1,000 
Less:
Income tax effect on Non-GAAP items (4)
(114,000)
Non-GAAP expectation - net income and diluted income per share$403,000 $6.29 
Shares used in computing guidance for Non-GAAP diluted income per share64,100
Guidance - Free Cash Flow (2) (5)
GAAP expectation - net cash provided by operating activities$349,250 
Less:
Purchases of property, equipment and leasehold improvements(9,000)
Payments for capitalized computer software development costs(250)
Free cash flow expectation (non-GAAP)$340,000 
__________
(3) Rounded amount used, except per share data.
(4) The income tax effect on non-GAAP items for the twelve months ended June 30, 2024 is calculated utilizing the Company’s statutory tax rate of 21.79 percent.
(5) Free cash flow guidance has been updated to reflect the change in methodology to calculate free cash flow, as described in Footnote 2, and does not represent a change in management’s expectations.