Delaware | 04-2739697 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
20 Crosby Drive | ||
Bedford, Massachusetts | 01730 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer o | ||
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | |||
Emerging growth company o |
Page | ||
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands, Except per Share Data) | |||||||
Revenue: | |||||||
Subscription and software | $ | 115,756 | $ | 113,444 | |||
Services and other | 7,025 | 6,606 | |||||
Total revenue | 122,781 | 120,050 | |||||
Cost of revenue: | |||||||
Subscription and software | 5,783 | 5,069 | |||||
Services and other | 6,949 | 6,437 | |||||
Total cost of revenue | 12,732 | 11,506 | |||||
Gross profit | 110,049 | 108,544 | |||||
Operating expenses: | |||||||
Selling and marketing | 23,571 | 22,025 | |||||
Research and development | 19,489 | 18,632 | |||||
General and administrative | 13,676 | 13,157 | |||||
Total operating expenses | 56,736 | 53,814 | |||||
Income from operations | 53,313 | 54,730 | |||||
Interest income | 141 | 272 | |||||
Interest (expense) | (1,206 | ) | (869 | ) | |||
Other (expense) income, net | (616 | ) | 646 | ||||
Income before provision for income taxes | 51,632 | 54,779 | |||||
Provision for income taxes | 16,877 | 19,779 | |||||
Net income | $ | 34,755 | $ | 35,000 | |||
Net income per common share: | |||||||
Basic | $ | 0.48 | $ | 0.44 | |||
Diluted | $ | 0.47 | $ | 0.44 | |||
Weighted average shares outstanding: | |||||||
Basic | 73,024 | 79,048 | |||||
Diluted | 73,609 | 79,385 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands) | |||||||
Net income | $ | 34,755 | $ | 35,000 | |||
Other comprehensive income (loss): | |||||||
Net unrealized losses on available for sale securities, net of tax effects of $15 for the three months ended September 30, 2016 | — | (26 | ) | ||||
Foreign currency translation adjustments | 1,401 | (904 | ) | ||||
Total other comprehensive income (loss) | 1,401 | (930 | ) | ||||
Comprehensive income | $ | 36,156 | $ | 34,070 |
September 30, 2017 | June 30, 2017 | ||||||
(Dollars in Thousands, Except Share Data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 58,983 | $ | 101,954 | |||
Accounts receivable, net | 28,284 | 27,670 | |||||
Prepaid expenses and other current assets | 11,336 | 12,061 | |||||
Prepaid income taxes | 3,334 | 4,501 | |||||
Total current assets | 101,937 | 146,186 | |||||
Property, equipment and leasehold improvements, net | 12,360 | 13,400 | |||||
Computer software development costs, net | 706 | 667 | |||||
Goodwill | 51,738 | 51,248 | |||||
Intangible assets, net | 20,263 | 20,789 | |||||
Non-current deferred tax assets | 14,404 | 14,352 | |||||
Other non-current assets | 1,315 | 1,300 | |||||
Total assets | $ | 202,723 | $ | 247,942 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,522 | $ | 5,467 | |||
Accrued expenses and other current liabilities | 36,761 | 48,149 | |||||
Income taxes payable | 15,913 | 1,603 | |||||
Borrowings under credit agreement | 140,000 | 140,000 | |||||
Current deferred revenue | 233,476 | 272,024 | |||||
Total current liabilities | 429,672 | 467,243 | |||||
Non-current deferred revenue | 26,754 | 28,335 | |||||
Other non-current liabilities | 13,754 | 13,148 | |||||
Commitments and contingencies (Note 15) | |||||||
Series D redeemable convertible preferred stock, $0.10 par value— Authorized— 3,636 shares as of September 30, 2017 and June 30, 2017 Issued and outstanding— none as of September 30, 2017 and June 30, 2017 | — | — | |||||
Stockholders’ deficit: | |||||||
Common stock, $0.10 par value— Authorized—210,000,000 shares Issued— 102,692,094 shares at September 30, 2017 and 102,567,129 shares at June 30, 2017 Outstanding— 72,706,959 shares at September 30, 2017 and 73,421,153 shares at June 30, 2017 | 10,269 | 10,257 | |||||
Additional paid-in capital | 694,638 | 687,479 | |||||
Retained earnings | 191,275 | 156,520 | |||||
Accumulated other comprehensive income | 2,860 | 1,459 | |||||
Treasury stock, at cost—29,985,135 shares of common stock at September 30, 2017 and 29,145,976 shares at June 30, 2017 | (1,166,499 | ) | (1,116,499 | ) | |||
Total stockholders’ deficit | (267,457 | ) | (260,784 | ) | |||
Total liabilities and stockholders’ deficit | $ | 202,723 | $ | 247,942 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 34,755 | $ | 35,000 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,753 | 1,791 | |||||
Net foreign currency (gains) losses | 936 | (745 | ) | ||||
Stock-based compensation | 6,414 | 4,958 | |||||
Deferred income taxes | (33 | ) | (46 | ) | |||
Provision for (recovery from) bad debts | 20 | (7 | ) | ||||
Tax benefits from stock-based compensation | — | 584 | |||||
Excess tax benefits from stock-based compensation | — | (584 | ) | ||||
Other non-cash operating activities | — | 90 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (504 | ) | (1,355 | ) | |||
Prepaid expenses, prepaid income taxes, and other assets | 2,292 | 1,885 | |||||
Accounts payable, accrued expenses, income taxes payable and other liabilities | 6,764 | 12,520 | |||||
Deferred revenue | (40,037 | ) | (27,841 | ) | |||
Net cash provided by operating activities | 12,360 | 26,250 | |||||
Cash flows from investing activities: | |||||||
Purchases of marketable securities | — | (193,748 | ) | ||||
Maturities of marketable securities | — | 53,184 | |||||
Purchases of property, equipment and leasehold improvements | (123 | ) | (898 | ) | |||
Payments for business acquisitions | — | (5,400 | ) | ||||
Payments for capitalized computer software costs | (65 | ) | (51 | ) | |||
Net cash used in investing activities | (188 | ) | (146,913 | ) | |||
Cash flows from financing activities: | |||||||
Exercises of stock options | 2,411 | 3,089 | |||||
Repurchases of common stock | (55,109 | ) | (151,621 | ) | |||
Payments of tax withholding obligations related to restricted stock | (1,650 | ) | (1,297 | ) | |||
Deferred business acquisition payment | (600 | ) | — | ||||
Excess tax benefits from stock-based compensation | — | 584 | |||||
Payments of credit agreement issuance costs | (351 | ) | — | ||||
Net cash used in financing activities | (55,299 | ) | (149,245 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 156 | (51 | ) | ||||
Decrease in cash and cash equivalents | (42,971 | ) | (269,959 | ) | |||
Cash and cash equivalents, beginning of period | 101,954 | 318,336 | |||||
Cash and cash equivalents, end of period | $ | 58,983 | $ | 48,377 | |||
Supplemental disclosure of cash flow information: | |||||||
Income taxes paid, net | $ | 1,243 | $ | 1,239 | |||
Interest paid | 968 | 850 | |||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses | $ | (70 | ) | $ | 506 | ||
Change in common stock repurchases included in accrued expenses | (5,109 | ) | (1,621 | ) |
Gross | Allowance | Net | |||||||||
(Dollars in Thousands) | |||||||||||
September 30, 2017: | |||||||||||
Accounts receivable | $ | 29,479 | $ | 1,195 | $ | 28,284 | |||||
June 30, 2017: | |||||||||||
Accounts receivable | $ | 28,955 | $ | 1,285 | $ | 27,670 |
September 30, 2017 | June 30, 2017 | ||||||
(Dollars in Thousands) | |||||||
Property, equipment and leasehold improvements, at cost: | |||||||
Computer equipment | $ | 8,313 | $ | 8,262 | |||
Purchased software | 24,135 | 24,091 | |||||
Furniture & fixtures | 6,825 | 6,805 | |||||
Leasehold improvements | 12,059 | 12,025 | |||||
Property, equipment and leasehold improvements, at cost | 51,332 | 51,183 | |||||
Accumulated depreciation | (38,972 | ) | (37,783 | ) | |||
Property, equipment and leasehold improvements, net | $ | 12,360 | $ | 13,400 |
Amount | |||
(Dollars in Thousands) | |||
Tangible assets acquired, net | $ | 779 | |
Identifiable intangible assets: | |||
Developed technology | 11,385 | ||
Customer relationships | 679 | ||
Non-compete agreements | 553 | ||
Goodwill | 25,888 | ||
Deferred tax liabilities, net | (2,099 | ) | |
Total assets acquired | $ | 37,185 |
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
(Dollars in Thousands) | |||||||||||
September 30, 2017: | |||||||||||
Technology and patents | $ | 22,443 | $ | (3,775 | ) | $ | 18,668 | ||||
Customer relationships | 1,432 | (221 | ) | 1,211 | |||||||
Non-compete agreements | 553 | (169 | ) | 384 | |||||||
Total | $ | 24,428 | $ | (4,165 | ) | $ | 20,263 | ||||
June 30, 2017: | |||||||||||
Technology and patents | $ | 22,350 | $ | (3,254 | ) | $ | 19,096 | ||||
Customer relationships | 1,432 | (169 | ) | 1,263 | |||||||
Non-compete agreements | 553 | (123 | ) | 430 | |||||||
Total | $ | 24,335 | $ | (3,546 | ) | $ | 20,789 |
Year Ended June 30, | Amortization Expense | ||
(Dollars in Thousands) | |||
2018 | $ | 1,578 | |
2019 | 2,063 | ||
2020 | 2,134 | ||
2021 | 2,206 | ||
2022 | 2,451 | ||
Thereafter | 9,831 | ||
Total | $ | 20,263 |
Gross Carrying Amount | Accumulated Impairment Losses | Effect of Currency Translation | Net Carrying Amount | ||||||||||||
(Dollars in Thousands) | |||||||||||||||
June 30, 2017: | $ | 116,817 | $ | (65,569 | ) | $ | — | $ | 51,248 | ||||||
Foreign currency translation | — | — | 490 | 490 | |||||||||||
September 30, 2017: | $ | 116,817 | $ | (65,569 | ) | $ | 490 | $ | 51,738 |
September 30, 2017 | June 30, 2017 | ||||||
(Dollars in Thousands) | |||||||
Payroll and payroll-related | $ | 12,896 | $ | 20,864 | |||
Royalties and outside commissions | 2,706 | 2,733 | |||||
Professional fees | 2,382 | 2,216 | |||||
Deferred acquisition payments | 7,932 | 8,548 | |||||
Other | 10,845 | 13,788 | |||||
Total accrued expenses and other current liabilities | $ | 36,761 | $ | 48,149 |
September 30, 2017 | June 30, 2017 | ||||||
(Dollars in Thousands) | |||||||
Deferred rent | $ | 7,045 | $ | 6,916 | |||
Uncertain tax positions | 4,307 | 3,921 | |||||
Other | 2,402 | 2,311 | |||||
Total other non-current liabilities | $ | 13,754 | $ | 13,148 |
Three Months Ended September 30, | |||||
2017 | 2016 | ||||
Risk-free interest rate | 1.7 | % | 1.1 | % | |
Expected dividend yield | 0.0 | % | 0.0 | % | |
Expected life (in years) | 4.6 | 4.6 | |||
Expected volatility factor | 28.1 | % | 31.5 | % |
Three Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
(Dollars in Thousands) | ||||||||
Recorded as expenses: | ||||||||
Cost of services and other | $ | 450 | $ | 369 | ||||
Selling and marketing | 885 | 955 | ||||||
Research and development | 1,896 | 1,062 | ||||||
General and administrative | 3,183 | 2,572 | ||||||
Total stock-based compensation | $ | 6,414 | $ | 4,958 |
Stock Options | Restricted Stock Units | ||||||||||||||||||
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in 000’s) | Shares | Weighted Average Grant Date Fair Value | ||||||||||||||
Outstanding at June 30, 2017 | 1,353,558 | $ | 37.98 | 7.30 | $ | 23,535 | 615,998 | $ | 45.62 | ||||||||||
Granted | 375,330 | 63.14 | 310,303 | 63.14 | |||||||||||||||
Settled (RSUs) | — | (84,927 | ) | 50.43 | |||||||||||||||
Exercised | (66,567 | ) | 36.21 | — | |||||||||||||||
Cancelled / Forfeited | (26,747 | ) | 50.72 | (21,478 | ) | 56.10 | |||||||||||||
Outstanding at September 30, 2017 | 1,635,574 | $ | 43.62 | 7.73 | $ | 31,553 | 819,896 | $ | 51.48 | ||||||||||
Vested and exercisable at September 30, 2017 | 836,448 | $ | 35.08 | 6.45 | $ | 23,214 | — | ||||||||||||
Vested and expected to vest as of September 30, 2017 | 1,556,485 | $ | 43.16 | 7.66 | $ | 30,741 | 736,841 | $ | 51.50 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars and Shares in Thousands, Except per Share Data) | |||||||
Net income | $ | 34,755 | $ | 35,000 | |||
Weighted average shares outstanding | 73,024 | 79,048 | |||||
Dilutive impact from: | |||||||
Share-based payment awards | 585 | 337 | |||||
Dilutive weighted average shares outstanding | 73,609 | 79,385 | |||||
Income per share | |||||||
Basic | $ | 0.48 | $ | 0.44 | |||
Dilutive | $ | 0.47 | $ | 0.44 |
Three Months Ended September 30, | |||||
2017 | 2016 | ||||
(Shares in Thousands) | |||||
Employee equity awards | 674 | 1,535 |
Subscription and Software | Services | Total | |||||||||
(Dollars in Thousands) | |||||||||||
Three Months Ended September 30, 2017 | |||||||||||
Segment revenue | $ | 115,756 | $ | 7,025 | $ | 122,781 | |||||
Segment expenses (1) | (48,843 | ) | (6,949 | ) | (55,792 | ) | |||||
Segment profit | $ | 66,913 | $ | 76 | $ | 66,989 | |||||
Three Months Ended September 30, 2016 | |||||||||||
Segment revenue | $ | 113,444 | $ | 6,606 | $ | 120,050 | |||||
Segment expenses (1) | (45,726 | ) | (6,437 | ) | (52,163 | ) | |||||
Segment profit | $ | 67,718 | $ | 169 | $ | 67,887 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands) | |||||||
Total segment profit for reportable segments | $ | 66,989 | $ | 67,887 | |||
General and administrative | (13,676 | ) | (13,157 | ) | |||
Other (expense) income, net | (616 | ) | 646 | ||||
Interest (expense) income, net | (1,065 | ) | (597 | ) | |||
Income before income taxes | $ | 51,632 | $ | 54,779 |
• | whether the professional services arrangement was sold as a single arrangement with, or in contemplation of, a new aspenONE licensing arrangement; |
• | the number, value and rate per hour of service transactions booked during the current and preceding periods; |
• | the number and availability of service resources actively engaged on billable projects; |
• | the timing of milestone acceptance for engagements contractually requiring customer sign-off; |
• | the timing of collection of cash payments when collectability is uncertain; and |
• | the size of the installed base of license contracts. |
• | Annual spend; |
• | Free cash flow; and |
• | Non-GAAP operating income. |
• | New term license agreements with new or existing customers; |
• | Renewals or modifications of existing term license agreements that result in higher license fees due to price escalation or an increase in the number of tokens (units of software usage) or products licensed; and |
• | Escalation of annual payments in our active term license contracts. |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands) | |||||||
Net cash provided by operating activities | $ | 12,360 | $ | 26,250 | |||
Purchases of property, equipment, and leasehold improvements | (123 | ) | (898 | ) | |||
Capitalized computer software development costs | (65 | ) | (51 | ) | |||
Non-capitalized acquired technology | 75 | 846 | |||||
Excess tax benefits from stock-based compensation | — | 584 | |||||
Free cash flows (non-GAAP) | $ | 12,247 | $ | 26,731 |
Three Months Ended September 30, | 2017 Compared to 2016 | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
GAAP income from operations | $ | 53,313 | $ | 54,730 | $ | (1,417 | ) | (2.6 | )% | |||||
Plus: | ||||||||||||||
Stock-based compensation | 6,414 | 4,958 | 1,456 | 29.4 | % | |||||||||
Non-capitalized acquired technology | — | 350 | (350 | ) | (100.0 | )% | ||||||||
Amortization of intangibles | 526 | 55 | 471 | 856.4 | % | |||||||||
Acquisition related fees | 130 | 362 | (232 | ) | (64.1 | )% | ||||||||
Non-GAAP income from operations | $ | 60,383 | $ | 60,455 | $ | (72 | ) | (0.1 | )% |
• | revenue recognition; |
• | accounting for income taxes; and |
• | loss contingencies. |
Three Months Ended September 30, | Increase / (Decrease) Change | |||||||||
2017 | 2016 | % | ||||||||
(Dollars in Thousands) | ||||||||||
Revenue: | ||||||||||
Subscription and software | $ | 115,756 | $ | 113,444 | 2.0 | % | ||||
Services and other | 7,025 | 6,606 | 6.3 | % | ||||||
Total revenue | 122,781 | 120,050 | 2.3 | % | ||||||
Cost of revenue: | ||||||||||
Subscription and software | 5,783 | 5,069 | 14.1 | % | ||||||
Services and other | 6,949 | 6,437 | 8.0 | % | ||||||
Total cost of revenue | 12,732 | 11,506 | 10.7 | % | ||||||
Gross profit | 110,049 | 108,544 | 1.4 | % | ||||||
Operating expenses: | ||||||||||
Selling and marketing | 23,571 | 22,025 | 7.0 | % | ||||||
Research and development | 19,489 | 18,632 | 4.6 | % | ||||||
General and administrative | 13,676 | 13,157 | 3.9 | % | ||||||
Total operating expenses, net | 56,736 | 53,814 | 5.4 | % | ||||||
Income from operations | 53,313 | 54,730 | (2.6 | )% | ||||||
Interest income | 141 | 272 | (48.2 | )% | ||||||
Interest (expense) | (1,206 | ) | (869 | ) | 38.8 | % | ||||
Other (expense) income, net | (616 | ) | 646 | (195.4 | )% | |||||
Income before provision for income taxes | 51,632 | 54,779 | (5.7 | )% | ||||||
Provision for income taxes | 16,877 | 19,779 | (14.7 | )% | ||||||
Net income | $ | 34,755 | $ | 35,000 | (0.7 | )% |
Three Months Ended September 30, | |||||
2017 | 2016 | ||||
(% of Revenue) | |||||
Revenue: | |||||
Subscription and software | 94.3 | % | 94.5 | % | |
Services and other | 5.7 | 5.5 | |||
Total revenue | 100.0 | 100.0 | |||
Cost of revenue: | |||||
Subscription and software | 4.7 | 4.2 | |||
Services and other | 5.7 | 5.4 | |||
Total cost of revenue | 10.4 | 9.6 | |||
Gross profit | 89.6 | 90.4 | |||
Operating expenses: | |||||
Selling and marketing | 19.2 | 18.3 | |||
Research and development | 15.9 | 15.5 | |||
General and administrative | 11.1 | 11.0 | |||
Total operating expenses, net | 46.2 | 44.8 | |||
Income from operations | 43.4 | 45.6 | |||
Interest income | 0.1 | 0.2 | |||
Interest (expense) | (1.0 | ) | (0.7 | ) | |
Other (expense) income, net | (0.5 | ) | 0.5 | ||
Income before provision for income taxes | 42.1 | 45.6 | |||
Provision for income taxes | 13.7 | 16.5 | |||
Net income | 28.3 | % | 29.2 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Subscription and software revenue | $ | 115,756 | $ | 113,444 | $ | 2,312 | 2.0 | % | ||||||
As a percent of total revenue | 94.3 | % | 94.5 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Services and other revenue | $ | 7,025 | $ | 6,606 | $ | 419 | 6.3 | % | ||||||
As a percent of total revenue | 5.7 | % | 5.5 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Cost of subscription and software revenue | $ | 5,783 | $ | 5,069 | $ | 714 | 14.1 | % | ||||||
As a percent of subscription and software revenue | 5.0 | % | 4.5 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Cost of services and other revenue | $ | 6,949 | $ | 6,437 | $ | 512 | 8.0 | % | ||||||
As a percent of services and other revenue | 98.9 | % | 97.4 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Selling and marketing expense | $ | 23,571 | $ | 22,025 | $ | 1,546 | 7.0 | % | ||||||
As a percent of total revenue | 19.2 | % | 18.3 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Research and development expense | $ | 19,489 | $ | 18,632 | $ | 857 | 4.6 | % | ||||||
As a percent of total revenue | 15.9 | % | 15.5 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
General and administrative expense | $ | 13,676 | $ | 13,157 | $ | 519 | 3.9 | % | ||||||
As a percent of total revenue | 11.1 | % | 11.0 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Interest income | $ | 141 | $ | 272 | $ | (131 | ) | (48.2 | )% | |||||
As a percent of total revenue | 0.1 | % | 0.2 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Interest expense | $ | (1,206 | ) | $ | (869 | ) | $ | (337 | ) | 38.8 | % | |||
As a percent of total revenue | (1.0 | )% | (0.7 | )% |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Other (expense) income, net | $ | (616 | ) | $ | 646 | $ | (1,262 | ) | (195.4 | )% | ||||
As a percent of total revenue | (0.5 | )% | 0.5 | % |
Three Months Ended September 30, | Period-to-Period Change | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Provision for income taxes | $ | 16,877 | $ | 19,779 | $ | (2,902 | ) | (14.7 | )% | |||||
Effective tax rate | 32.6 | % | 36.1 | % |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Dollars in Thousands) | |||||||
Cash flow provided by (used in): | |||||||
Operating activities | $ | 12,360 | $ | 26,250 | |||
Investing activities | (188 | ) | (146,913 | ) | |||
Financing activities | (55,299 | ) | (149,245 | ) | |||
Effect of exchange rates on cash balances | 156 | (51 | ) | ||||
Decrease in cash and cash equivalents | $ | (42,971 | ) | $ | (269,959 | ) |
Period | Total Number of Shares Purchased (2) | Average Price Paid per Share (3) | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (4) | ||||||||||
July 1 to 31, 2017 | 280,929 | $ | 56.49 | 280,929 | ||||||||||
August 1 to 31, 2017 | 308,775 | $ | 59.14 | 308,775 | ||||||||||
September 1 to 30, 2017 | 249,455 | $ | 63.62 | 249,455 | ||||||||||
Total | 839,159 | $ | 59.58 | 839,159 | $ | 296,292,703 |
Incorporated by Reference | ||||||||||
Exhibit Number | Description | Filed with this Form 10-Q | Form | Filing Date with SEC | Exhibit Number | |||||
10.7 | X | |||||||||
31.1 | X | |||||||||
31.2 | X | |||||||||
32.1 | X | |||||||||
101.INS | Instance Document | X | ||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X |
Aspen Technology, Inc. | ||
Date: October 26, 2017 | By: | /s/ ANTONIO J. PIETRI |
Antonio J. Pietri | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
Date: October 26, 2017 | By: | /s/ KARL E. JOHNSEN |
Karl E. Johnsen | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
Incorporated by Reference | ||||||||||
Exhibit Number | Description | Filed with this Form 10-Q | Form | Filing Date with SEC | Exhibit Number | |||||
10.7 | X | |||||||||
31.1 | X | |||||||||
31.2 | X | |||||||||
32.1 | X | |||||||||
101.INS | Instance Document | X | ||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X |
ASPEN TECHNOLOGY, INC. | |
By: | /s/ KARL E. JOHNSEN |
Name: | Karl E. Johnsen |
Title: | Chief Financial Officer |
ASPENTECH CANADA HOLDINGS, LLC | |
By: | /s/ FREDERIC G. HAMMOND |
Name: | Frederic G. Hammond |
Title: | Sole Manager and Secretary |
JPMORGAN CHASE BANK, N.A., as Administrative Agent and an Incremental Facility Lender | |
By: | /s/ DAGLAS PANCHAL |
Name: | Daglas Panchal |
Title: | Executive Director |
SILICON VALLEY BANK, as an Incremental Facility Lender | |
By: | /s/ FRANK GROCCIA |
Name: | Frank Groccia |
Title: | Vice President |
CITIBANK, N.A., as an Incremental Facility Lender | |
By: | /s/ RONALD HOMA |
Name: | Ronald Homa |
Title: | Senior Vice President, as authorized |
Wells Fargo Bank, National Association, as an Incremental Facility Lender | |
By: | /s/ TIFFANY ORMON |
Name: | Tiffany Ormon |
Title: | Director |
Wells Fargo Bank, N.A., London Branch, as an Incremental Facility Lender | |
By: | /s/ K.J. MCKNIGHT |
Name: | K.J. McKnight |
Title: | Director, Credit Risk |
By: | /s/ GINA FLYNN |
Name: | Gina Flynn |
Title: | Authorized Signatory |
Citizens Bank, N.A., as an Incremental Facility Lender | |
By: | /s/ CHRISTOPHER J. DELAURO |
Name: | Christopher J. DeLauro |
Title: | Vice President |
TD Bank, N.A., as an Incremental Facility Lender | |
By: | /s/ CRAIG WELCH |
Name: | Craig Welch |
Title: | Senior Vice President |
Lender | Incremental Commitment |
JPMORGAN CHASE BANK, N.A. | $20,000,000 |
SILICON VALLEY BANK | $20,000,000 |
CITIBANK, N.A. | $16,000,000 |
WELLS FARGO BANK, N.A. WELLS FARGO BANK, N.A. LONDON BRANCH | $16,000,000 |
CITIZENS BANK, N.A. | $14,000,000 |
TD BANK, N.A. | $14,000,000 |
Total | $100,0000,000 |
Lender | Revolving Credit Commitment | Percentage |
JPMorgan Chase Bank, N.A. | $70,000,000.00 | 20.00% |
Silicon Valley Bank | $70,000,000.00 | 20.00% |
Citibank, N.A. | $56,000,000.00 | 16.00% |
Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. London Branch | $56,000,000.00 | 16.00% |
Citizens Bank, N.A. | $49,000,000.00 | 14.00% |
TD Bank, N.A. | $49,000,000.00 | 14.00% |
Total | $350,000,000 | 100.00% |
Name of Subsidiary | Jurisdiction of Organization | Ownership of Equity Interests |
AspenTech Argentina S.r.l. | Argentina | 95% of the Equity Interests are owned by the Borrower and the remaining 5% are owned by Aspen Technology International, Inc. |
Aspen Technology Australia Pty. Ltd. | Australia | 100% of the Equity Interests are owned by the Borrower. |
Aspen Technology WLL | Bahrain | 99% of the Equity Interests are owned by AspenTech Europe BV and the remaining 1% are owned by AspenTech Europe SA/NV. |
AspenTech Europe S.A./N.V. | Belgium | 95.84% of the Equity Interests are owned by the Borrower and the remaining 4.16% are owned by AspenTech Europe BV. |
AspenTech Software Brazil Ltda. | Brazil | 99% of the Equity Interests are owned by the Borrower and the remaining 1% are owned by Aspen Technology International, Inc. |
AspenTech Canada Corporation | Canada | 100% of the Equity Interests are owned by the AspenTech Canada Holdings, LLC. |
Aspen Technology S.A.S. | Colombia | 100% of the Equity Interests are owned by the Borrower. |
Aspen Tech India Pte. Ltd. | India | 15.75% of the Equity Interests are owned by the Borrower and the remaining 84.25% are owned by Aspen Technology (Asia), Inc. |
Aspen Technology S.r.l. | Italy | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Japan Co. Ltd. | Japan | 100% of the Equity Interests are owned by Aspen Technology (Asia), Inc. |
AspenTech Solutions Sdn. Bhd. | Malaysia | 100% of the Equity Interests are owned by AspenTech Canada Corporation. |
Aspen Tech de Mexico, S. de R.L. de C.V. | Mexico | 99% of the Equity Interests are owned by the Borrower and the remaining 1% are owned by Aspen Technology International, Inc. |
AspenTech Europe B.V. | Netherlands | 100% of the Equity Interests are owned by the Borrower. |
AspenTech (Beijing) Co., Ltd. | PRC | 100% of the Equity Interests are owned by Aspen Technology (Asia), Inc. |
AspenTech (Shanghai) Co., Ltd. | PRC | 100% of the Equity Interests are owned by Aspen Technology (Asia), Inc. |
Aspen Technology LLC | Russia | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Pte. Ltd. | Singapore | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Africa (Pty.) Ltd. | South Africa | 100% of the Equity Interests are owned by the Borrower. |
Aspen Technology S.L. | Spain | 100% of the Equity Interests are owned by AspenTech Canada Corporation. |
AspenTech (Thailand) Ltd. | Thailand | 100% of the Equity Interests are owned by Aspen Technology (Asia), Inc. |
AspenTech Ltd. | UK | 100% of the Equity Interests are owned by the Borrower. |
ATI Global Optimisation Ltd. | UK | 100% of the Equity Interests are owned by the Borrower. |
Hyprotech UK Ltd. | UK | 100% of the Equity Interests are owned by AspenTech Ltd. |
AspenTech Canada Holdings, LLC | Delaware | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Holding Corporation | Delaware | 100% of the Equity Interests are owned by the Borrower. |
Aspen Technology (Asia) Inc. | Delaware | 100% of the Equity Interests are owned by the Borrower. |
Aspen Technology International, Inc. | Delaware | 100% of the Equity Interests are owned by the Borrower. |
Aspen Technology Services Corporation | Delaware | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Software Corporation | Delaware | 100% of the Equity Interests are owned by the Borrower. |
AspenTech Venezuela, C.A. | Venezuela | 100% of the Equity Interests are owned by the Borrower. |
SolidSim Engineering GmbH | Germany | 100% of the Equity Interests are owned by the AspenTech Holding Corporation. |
The Fidelis Group, LLC | Texas | 100% of the Equity Interests are owned by the Borrower. |
Mtelligence Corporation | Delaware | 100% of the Equity Interests are owned by the AspenTech Holding Corporation. |
Date: October 26, 2017 | /s/ ANTONIO. J. PIETRI |
Antonio J. Pietri | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
Date: October 26, 2017 | /s/ KARL E. JOHNSEN |
Karl E. Johnsen | |
Senior Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
Date: October 26, 2017 | /s/ ANTONIO J. PIETRI |
Antonio J. Pietri | |
President and Chief Executive Officer |
Date: October 26, 2017 | /s/ KARL E. JOHNSEN |
Karl E. Johnsen | |
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 19, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | ASPEN TECHNOLOGY INC /DE/ | |
Entity Central Index Key | 0000929940 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 72,535,428 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 34,755 | $ 35,000 |
Other comprehensive income (loss): | ||
Net unrealized losses on available for sale securities, net of tax effects of $15 for the three months ended September 30, 2016 | 0 | (26) |
Foreign currency translation adjustments | 1,401 | (904) |
Total other comprehensive income (loss) | 1,401 | (930) |
Comprehensive income | $ 36,156 | $ 34,070 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net unrealized losses on available for sale securities, net of tax effects | $ 0 | $ 15 |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Series D redeemable convertible preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Series D redeemable convertible preferred stock, authorized | 3,636 | 3,636 |
Series D redeemable convertible preferred stock, issued | 0 | 0 |
Series D redeemable convertible preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized | 210,000,000 | 210,000,000 |
Common stock, issued | 102,692,094 | 102,567,129 |
Common stock, outstanding | 72,706,959 | 73,421,153 |
Treasury stock, shares | 29,985,135 | 29,145,976 |
Interim Unaudited Consolidated Financial Statements |
3 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Unaudited Consolidated Financial Statements | Interim Unaudited Consolidated Financial Statements The accompanying interim unaudited consolidated financial statements of Aspen Technology, Inc. and its subsidiaries have been prepared on the same basis as our annual consolidated financial statements. We have omitted certain information and footnote disclosures normally included in our annual consolidated financial statements. Such interim unaudited consolidated financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (GAAP), as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 270, Interim Reporting, for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements for the year ended June 30, 2017, which are contained in our Annual Report on Form 10-K, as previously filed with the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations, and cash flows at the dates and for the periods presented have been included and all intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three months ended September 30, 2017 are not necessarily indicative of the results to be expected for the subsequent quarter or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Unless the context requires otherwise, references to we, our and us refer to Aspen Technology, Inc. and its subsidiaries. |
Significant Accounting Policies |
3 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies (a) Principles of Consolidation The accompanying consolidated financial statements include the accounts of Aspen Technology, Inc. and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. (b) Significant Accounting Policies Our significant accounting policies are described in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017. We adopted Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU No. 2016-09”) effective July 1, 2017. Refer to Note 2 (g), “Recently Issued Accounting Pronouncements,” for further information regarding the adoption of ASU No. 2016-09. There were no other significant changes to our significant accounting policies during the three months ended September 30, 2017. (c) Revenue Recognition We generate revenue from the following sources: (1) Subscription and software revenue; and (2) Services and other revenue. We sell our software products to end users primarily under fixed-term licenses. We license our software products primarily through a subscription offering which we refer to as our aspenONE licensing model, which includes software maintenance and support, known as our Premier Plus SMS offering, for the entire term. Our aspenONE products are organized into three suites: 1) engineering; 2) manufacturing and supply chain; and 3) asset performance management. The aspenONE licensing model provides customers with access to all of the products within the aspenONE suite(s) they license. We refer to these arrangements as token arrangements. Tokens are fixed units of measure. The amount of software usage is limited by the number of tokens purchased by the customer. We also license our software through point product term arrangements, which include our Premier Plus SMS offering for the entire term, as well as perpetual license arrangements. Four basic criteria must be satisfied before software license revenue can be recognized: persuasive evidence of an arrangement between us and an end user; delivery of our product has occurred; the fee for the product is fixed or determinable; and collection of the fee is probable. Persuasive evidence of an arrangement—We use a signed contract as evidence of an arrangement for software licenses and SMS. For professional services we use a signed contract and a work proposal to evidence an arrangement. In cases where both a signed contract and a purchase order are required by the customer, we consider both taken together as evidence of the arrangement. Delivery of our product—Software and the corresponding access keys are generally delivered to customers via electronic delivery or via physical medium with standard shipping terms of Free Carrier, our warehouse (i.e., FCA, AspenTech). Our software license agreements do not contain conditions for acceptance. Fee is fixed or determinable—We assess whether a fee is fixed or determinable at the outset of the arrangement. Significant judgment is involved in making this assessment. As a standard business practice, we offer fixed-term license arrangements, which are generally payable on an annual basis. We cannot assert that the fees under our aspenONE licensing model and point product arrangements with Premier Plus SMS are fixed or determinable because of the rights provided to customers, economics of the arrangements, and because we do not have an established history of our arrangements going to term end date without providing concessions to customers. As a result, the amount of revenue recognized for these arrangements is limited by the amount of customer payments that become due. Collection of fee is probable—We assess the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer's payment history, its current creditworthiness, economic conditions in the customer's industry and geographic location, and general economic conditions. If in our judgment collection of a fee is not probable, revenue is recognized as cash is collected, provided all other conditions for revenue recognition have been met. Vendor-Specific Objective Evidence of Fair Value (VSOE) We have established VSOE for professional services and certain training offerings, but not for our software products or our SMS offerings. We assess VSOE for SMS, professional services, and training, based on an analysis of standalone sales of the offerings using the bell-shaped curve approach. We do not have a history of selling our Premier Plus SMS offering to customers on a standalone basis, and as a result are unable to establish VSOE for this deliverable. Subscription and Software Revenue Subscription and software revenue consists primarily of product and related revenue from our (i) aspenONE licensing model; (ii) point product arrangements with our Premier Plus SMS offering included for the contract term; and (iii) perpetual arrangements. When a customer elects to license our products under our aspenONE licensing model, our Premier Plus SMS offering is included for the entire term of the arrangement and the customer receives, for the term of the arrangement, the right to any new unspecified future software products and updates that may be introduced into the licensed aspenONE software suite. Due to our obligation to provide unspecified future software products and updates and because we do not have VSOE for our Premier Plus SMS offering, we are required to recognize revenue ratably over the term of the arrangement, once the other revenue recognition criteria noted above have been met. Our point product arrangements with Premier Plus SMS include SMS for the term of the arrangement. Since we do not have VSOE for our Premier Plus SMS offering, the SMS element of our point product arrangements is not separable. As a result, revenue associated with point product arrangements with Premier Plus SMS included for the contract term is recognized ratably over the term of the arrangement, once the other revenue recognition criteria have been met. Services and Other Revenue Professional Services Revenue Professional services are provided to customers on a time-and-materials (T&M) or fixed-price basis. We recognize professional services fees for our T&M contracts based upon hours worked and contractually agreed-upon hourly rates. Revenue from fixed-price engagements is recognized using the proportional performance method based on the ratio of costs incurred to the total estimated project costs. Project costs are typically expensed as incurred. The use of the proportional performance method is dependent upon our ability to reliably estimate the costs to complete a project. We use historical experience as a basis for future estimates to complete current projects. Additionally, we believe that costs are the best available measure of performance. Out-of-pocket expenses which are reimbursed by customers are recorded as revenue. In certain circumstances, professional services revenue may be recognized over a longer time period than the period over which the services are performed. If the costs to complete a project are not estimable or the completion is uncertain, the revenue and related costs are recognized upon completion of the services. In circumstances in which professional services are sold as a single arrangement with, or in contemplation of, a new aspenONE license or point product arrangement with Premier Plus SMS, revenue is deferred and recognized on a ratable basis over the longer of (i) the period the services are performed, or (ii) the license term. When we provide professional services considered essential to the functionality of the software, we recognize the combined revenue from the sale of the software and related services using the completed contract or percentage-of-completion method. We have occasionally been required to commit unanticipated additional resources to complete projects, which resulted in losses on those contracts. Provisions for estimated losses on contracts are made during the period in which such losses become probable and can be reasonably estimated. Training Revenue We provide training services to our customers, including on-site, Internet-based, public and customized training. Revenue is recognized in the period in which the services are performed. In circumstances in which training services are sold as a single arrangement with, or in contemplation of, a new aspenONE license or point product arrangement with Premier Plus SMS, revenue is deferred and recognized on a ratable basis over the longer of (i) the period the services are performed or (ii) the license term. Deferred Revenue Deferred revenue includes amounts billed or collected in advance of revenue recognition, including arrangements under the aspenONE licensing model, point product arrangements with Premier Plus SMS, professional services, and training. Deferred revenue is recorded as each invoice becomes due. Other Licensing Matters Our standard licensing agreements include a product warranty provision. We have not experienced significant claims related to software warranties beyond the scope of SMS support, which we are already obligated to provide, and consequently, we have not established reserves for warranty obligations. Our agreements with our customers generally require us to indemnify the customer against claims that our software infringes third-party patent, copyright, trademark or other proprietary rights. Such indemnification obligations are generally limited in a variety of industry-standard respects, including our right to replace an infringing product. As of September 30, 2017 and June 30, 2017, we had not experienced any material losses related to these indemnification obligations and no claims with respect thereto were outstanding. We do not expect significant claims related to these indemnification obligations, and consequently, have not established any related reserves. (d) Loss Contingencies We accrue estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim, assessment or damages can be reasonably estimated. We believe that we have sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Please refer to Note 15 for discussion of these matters and related liability accruals. (e) Foreign Currency Transactions Foreign currency exchange gains and losses generated from the settlement and remeasurement of transactions denominated in currencies other than the functional currency of our subsidiaries are recognized in our results of operations as incurred as a component of other income (expense), net. Net foreign currency (losses) gains were $(0.6) million and $0.6 million during the three months ended September 30, 2017 and 2016, respectively. (f) Research and Development Expense We charge research and development expenditures to expense as the costs are incurred. Research and development expenses consist primarily of personnel expenses related to the creation of new products, enhancements and engineering changes to existing products and costs of acquired technology prior to establishing technological feasibility. We acquired no technology during the three months ended September 30, 2017 and $0.4 million during the three months ended September 30, 2016. At the time we acquired the technology, the projects to develop commercially available products did not meet the accounting definition of having reached technological feasibility and therefore the cost of the acquired technology was expensed as a research and development expense. (g) Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. We will adopt ASU No. 2014-09 during the first quarter of fiscal 2019. Based on our preliminary assessment, the adoption of ASU No. 2014-09 will impact the timing of a portion of the revenue recognized from our term contracts. We are continuing to evaluate the impact of ASU No. 2014-09 on our consolidated financial statements and implementing accounting system changes related to the adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the amendment, lessees will be required to recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and lease liability. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendment identifies several areas for simplification applicable to entities that issue share-based payment awards to their employees, including income tax consequences, the option to recognize gross stock compensation expense with actual forfeitures recognized when they occur, and certain classifications on the statements of cash flows. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. We adopted ASU No. 2016-09 effective July 1, 2017. As a result of adopting the new standard, excess tax benefits from stock-based compensation are now reflected in the consolidated statements of operations as a component of the provision for income taxes, whereas they were previously a component of stockholders’ deficit. The adoption of ASU No. 2016-09 resulted in a decrease in our provision for income taxes of $0.5 million for the three months ended September 30, 2017. This represents a decrease in our effective tax rate of approximately 1.0 percentage point for the three months ended September 30, 2017, due to the recognition of excess tax benefits for options exercised and the vesting of equity awards. There was no change as a result of how we account for forfeitures for financial statement reporting purposes. We adopted the cash flow presentation prospectively, and accordingly, excess tax benefits from stock-based compensation of $0.5 million is presented as a cash inflow from operating activity included within the change in income tax payable for the three months ended September 30, 2017, while $0.6 million of excess tax benefits from equity-based compensation is presented as a financing activity for the three months ended September 30, 2016. We prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have a material impact on our diluted earnings per share for the three months ended September 30, 2017. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). The amendment changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-13 on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The amendment updates the guidance as to how certain cash receipts and cash payments should be presented and classified, and is intended to reduce the existing diversity in practice. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-15 on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business. The amendment changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We do not anticipate the adoption of ASU No. 2017-01 will have a material effect on the consolidated financial statements or related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350) - Simplifying the Test for Goodwill Impairment. The amendment eliminates Step 2 of the goodwill impairment test and requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We do not anticipate the adoption of ASU No. 2017-04 will have a material effect on the consolidated financial statements or related disclosures. |
Fair Value |
3 Months Ended |
---|---|
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value We determine fair value by utilizing a fair value hierarchy that ranks the quality and reliability of the information used in its determination. Fair values determined using “Level 1 inputs” utilize unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Fair values determined using “Level 2 inputs” utilize data points that are observable, such as quoted prices, interest rates and yield curves for similar assets and liabilities. Cash equivalents of $43.9 million and $79.7 million as of September 30, 2017 and June 30, 2017, respectively, were reported at fair value utilizing quoted market prices in identical markets, or “Level 1 inputs.” Our cash equivalents consist of short-term, highly liquid investments with remaining maturities of three months or less when purchased. Financial instruments not measured or recorded at fair value in the accompanying unaudited consolidated financial statements consist of accounts receivable, accounts payable and accrued liabilities. The estimated fair value of these financial instruments approximates their carrying value. The estimated fair value of the borrowings under the Credit Agreement (described below in Note 10, Credit Agreement) approximates its carrying value due to the floating interest rate. |
Accounts Receivable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Our accounts receivable, net of the related allowance for doubtful accounts, were as follows as of September 30, 2017 and June 30, 2017:
As of September 30, 2017, we had one customer receivable balance that individually represented approximately 18% of our total receivables. |
Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property, equipment and leasehold improvements in the accompanying unaudited consolidated balance sheets consisted of the following:
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Mtelligence Corporation On October 26, 2016, we completed the acquisition of all the outstanding shares of Mtelligence Corporation (“Mtell”), a provider of predictive and prescriptive maintenance software and related services used to optimize asset performance, for total cash consideration of $37.4 million. The purchase price consisted of $31.9 million of cash paid at closing and an additional $5.5 million to be held back until April 2018 as security for certain representations, warranties, and obligations of the sellers. The holdback was recorded at its fair value as of the acquisition date of $5.3 million, and is recorded in other non-current liabilities in our consolidated balance sheet. An allocation of the purchase price is as follows:
We used the income approach to determine the values of the identifiable intangible assets. The weighted-average discount rate (or rate of return) used to determine the value of the Mtell intangible assets was 19% and the effective tax rate used was 34%. The values of the developed technology, customer relationships and non-compete agreements are being amortized on a straight-line basis, except technology, which is being amortized on a proportional use basis, over their estimated useful lives of 12 years, 6 years and 3 years, respectively. The goodwill, which is not deductible for tax purposes, reflects the value of the assembled workforce and the company-specific synergies we expect to realize by selling Mtell products and services to our existing customers. The results of operations of Mtell have been included prospectively in our results of operations since the date of acquisition. |
Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets We include in our amortizable intangible assets those intangible assets acquired in our business and asset acquisitions. We amortize acquired intangible assets with finite lives over their estimated economic lives, generally using the straight-line method. Each period, we evaluate the estimated remaining useful lives of acquired intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. Acquired intangibles are removed from the accounts when fully amortized and no longer in use. Intangible assets consisted of the following as of September 30, 2017 and June 30, 2017:
Total amortization expense related to intangible assets is included in operating expenses and amounted to approximately $0.5 million and less than $0.1 million for the three months ended September 30, 2017 and 2016, respectively. Future amortization expense as of September 30, 2017 is expected to be as follows:
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill The changes in the carrying amount of goodwill for our subscription and software reporting unit during the three months ended September 30, 2017 was as follows:
No triggering events indicating goodwill impairment occurred during the three months ended September 30, 2017. |
Accrued Expenses and Other Liabilities |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other current liabilities in the accompanying unaudited consolidated balance sheets consisted of the following:
Other non-current liabilities in the accompanying unaudited consolidated balance sheets consisted of the following:
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Credit Agreement |
3 Months Ended |
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Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement On February 26, 2016, we entered into a $250.0 million Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, Silicon Valley Bank, as syndication agent, and the lenders and other parties named therein (the “Lenders”). On August 9, 2017, we entered into an Amendment to increase the Credit Agreement to $350.0 million. The indebtedness evidenced by the Credit Agreement matures on February 26, 2021. Prior to the maturity of the Credit Agreement, any amounts borrowed may be repaid and, subject to the terms and conditions of the Credit Agreement, borrowed again in whole or in part without penalty. As of September 30, 2017 and June 30, 2017, we had $140.0 million in outstanding borrowings under the Credit Agreement. Borrowings under the Credit Agreement bear interest at a rate equal to either, at our option, the sum of (a) the highest of (1) the rate of interest publicly announced by JPMorgan Chase Bank, N.A. as its prime rate in effect, (2) the Federal Funds Effective Rate plus 0.5%, and (3) the one-month Adjusted LIBO Rate plus 1.0%, plus (b) a margin initially of 0.5% for the first full fiscal quarter ending after the date of the Credit Agreement and thereafter based on our Leverage Ratio; or the Adjusted LIBO Rate plus a margin initially of 1.5% for the first full fiscal quarter ending after the date of the Credit Agreement and thereafter based on our Leverage Ratio. We must also pay, on a quarterly basis, an unused commitment fee at a rate of between 0.2% and 0.3% per annum, based on our Leverage Ratio. The interest rate as of September 30, 2017 was 2.74%. All borrowings under the Credit Agreement are secured by liens on substantially all of our assets. The Credit Agreement contains affirmative and negative covenants customary for facilities of this type, including restrictions on: incurrence of additional debt; liens; fundamental changes; asset sales; restricted payments; and transactions with affiliates. The Credit Agreement contains financial covenants regarding maintenance as of the end of each fiscal quarter, commencing with the quarter ending June 30, 2016, of a maximum Leverage Ratio of 3.0 to 1.0 and a minimum Interest Coverage Ratio of 3.0 to 1.0. As of September 30, 2017 we were in compliance with these covenants. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The weighted average estimated fair value of option awards granted was $16.91 and $12.96 during the three months ended September 30, 2017 and 2016, respectively. We utilized the Black-Scholes option valuation model with the following weighted average assumptions:
The stock-based compensation expense under all equity plans and its classification in the unaudited consolidated statements of operations for the three months ended September 30, 2017 and 2016 are as follows:
A summary of stock option and RSU activity under all equity plans for the three months ended September 30, 2017 is as follows:
The weighted average grant-date fair value of RSUs granted was $63.14 and $45.44 during the three months ended September 30, 2017 and 2016, respectively. The total fair value of shares vested from RSU grants was $5.3 million and $4.0 million during the three months ended September 30, 2017 and 2016, respectively. At September 30, 2017, the total future unrecognized compensation cost related to stock options was $10.6 million and is expected to be recorded over a weighted average period of 3.0 years. At September 30, 2017, the total future unrecognized compensation cost related to RSUs was $36.7 million and is expected to be recorded over a weighted average period of 3.0 years. The total intrinsic value of options exercised was $1.7 million and $2.7 million during the three months ended September 30, 2017 and 2016, respectively. We received cash proceeds from option exercises of $2.4 million and $3.1 million during the three months ended September 30, 2017 and 2016, respectively. We withheld withholding taxes on vested RSUs of $1.7 million and $1.3 million during the three months ended September 30, 2017 and 2016, respectively. At September 30, 2017, common stock reserved for future issuance or settlement under equity compensation plans was 10.6 million shares. |
Stockholders' Deficit |
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Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Stock Repurchases On January 22, 2015, our Board of Directors approved a share repurchase program (the "Share Repurchase Program") for up to $450.0 million worth of our common stock. On April 26, 2016 and June 8, 2017, the Board of Directors approved a $400.0 million and $200.0 million increase to the Share Repurchase Program, respectively. The timing and amount of any shares repurchased are based on market conditions and other factors. All shares of our common stock repurchased have been recorded as treasury stock under the cost method. During the three months ended September 30, 2017, we repurchased 839,159 shares of our common stock in the open market for $50.0 million. As of September 30, 2017, the total remaining value under the Share Repurchase Program was approximately $296.3 million. Accumulated Other Comprehensive Income As of September 30, 2017, accumulated other comprehensive income was comprised of foreign currency translation adjustments of $2.9 million. As of June 30, 2017, accumulated other comprehensive income was comprised of foreign currency translation adjustments of $1.5 million and net unrealized gains on available for sale securities of less than $0.1 million. |
Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share Basic income per share is determined by dividing net income by the weighted average common shares outstanding during the period. Diluted income per share is determined by dividing net income by diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares. To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted net income per share based on the treasury stock method. The calculations of basic and diluted net income per share and basic and dilutive weighted average shares outstanding for the three months ended September 30, 2017 and 2016 are as follows:
For the three months ended September 30, 2017 and 2016, certain employee equity awards were anti-dilutive based on the treasury stock method. Additionally, during the three months ended September 30, 2017, options to purchase 372,305 shares and of our common stock were not included in the computation of dilutive weighted average shares outstanding, because their exercise prices ranged from $60.05 per share to $63.77 per share and were greater than the average market price of our common stock during the period then ended. These options were outstanding as of September 30, 2017 and expire at various dates through August 31, 2027. The following employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive as of September 30, 2017 and 2016:
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Income Taxes |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the periods presented was primarily the result of income earned in the U.S., taxed at U.S. federal and state statutory income tax rates, income earned in foreign tax jurisdictions taxed at the applicable rates, as well as the impact of permanent differences between book and tax income. Our effective tax rate was 32.6% and 36.1% for the three months ended September 30, 2017 and 2016, respectively. Our effective tax rate decreased for the three months ended September 30, 2017 compared to the same period in 2016 due to discrete items, primarily related to lower interest expense on uncertain tax positions. During the three months ended September 30, 2017 and 2016, our income tax expense was driven primarily by pre-tax profitability in our domestic and foreign operations and the impact of permanent items. The permanent items are predominantly a U.S. domestic production activity deduction and tax credits for research expenditures, slightly offset by non-deductible stock-based compensation expense. During the three months ended September 30, 2017, we adopted ASU No. 2016-09. As a result of adopting the new standard, excess tax benefits from stock-based compensation are now reflected in the consolidated statements of operations as a component of the provision for income taxes, whereas they were previously a component of stockholders’ deficit. The adoption of ASU 2016-09 resulted in a decrease in our provision for income taxes of $0.5 million for the three months ended September 30, 2017. This represents a decrease in our effective tax rate of approximately 1.0 percentage point for the three months ended September 30, 2017, due to the recognition of excess tax benefits for options exercised and the vesting of equity awards. Deferred income taxes are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment. We do not provide deferred taxes on unremitted earnings of foreign subsidiaries since we intend to indefinitely reinvest those earnings either currently or sometime in the foreseeable future. Unrecognized provisions for taxes on undistributed earnings of foreign subsidiaries, which are considered indefinitely reinvested, are not material to our consolidated financial position or results of operations. |
Commitments and Contingencies |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We lease certain facilities under non-cancellable operating leases with terms in excess of one year. Rental expense on leased facilities under operating leases was approximately $2.0 million and $2.2 million during the three months ended September 30, 2017 and September 30, 2016, respectively. Standby letters of credit for $3.0 million and $2.9 million secure our performance on professional services contracts, certain facility leases and potential liabilities as of September 30, 2017 and June 30, 2017, respectively. The letters of credit expire at various dates through fiscal 2025. Legal Matters In the ordinary course of business, we are, from time to time, involved in lawsuits, claims, investigations, proceedings and threats of litigation. These matters include an April 2004 claim by a customer that certain of our software products and implementation services failed to meet the customer's expectations. In March 2014, a judgment was issued by the trial court against us in the amount of approximately 1.9 million Euro (“€”) plus interest and a portion of legal fees. We subsequently filed an appeal of that judgment. In March 2016, the appellate court determined that we are liable for damages in the amount of approximately €1.7 million plus interest, with the possibility of additional damages to be determined in further proceedings by the appellate court. As of September 30, 2017, there has been no change to the appellate court’s determination. While the outcome of the proceedings and claims referenced above cannot be predicted with certainty, there were no such matters, as of September 30, 2017 that, in the opinion of management, are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Liabilities, if applicable, related to the aforementioned matters discussed in this Note have been included in our accrued liabilities at September 30, 2017, and are not material to our financial position for the period then ended. As of September 30, 2017, we do not believe that there is a reasonable possibility of a material loss exceeding the amounts already accrued for the proceedings or matters discussed above. However, the results of litigation (including the above-referenced appeal) and claims cannot be predicted with certainty; unfavorable resolutions are possible and could materially affect our results of operations, cash flows or financial position. In addition, regardless of the outcome, litigation could have an adverse impact on us because of attorneys' fees and costs, diversion of management resources and other factors. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and to assess performance. Our chief operating decision maker is our President and Chief Executive Officer. The subscription and software segment is engaged in the licensing of process optimization and asset performance management software solutions and associated support services. The services segment includes professional services and training. We do not track assets or capital expenditures by operating segments. Consequently, it is not practical to present assets, capital expenditures, depreciation or amortization by operating segments. The following table presents a summary of our reportable segments’ profits:
(1) Our reportable segments’ operating expenses include expenses directly attributable to the segments. Segment expenses include selling and marketing, research and development, stock-based compensation and certain corporate expenses incurred in support of the segments. Segment expenses do not include allocations of general and administrative; interest income, net; and other income, net. Reconciliation to Income before Income Taxes The following table presents a reconciliation of total segment profit to income before income taxes for the three months ended September 30, 2017 and 2016:
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Significant Accounting Policies (Policies) |
3 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Aspen Technology, Inc. and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition We generate revenue from the following sources: (1) Subscription and software revenue; and (2) Services and other revenue. We sell our software products to end users primarily under fixed-term licenses. We license our software products primarily through a subscription offering which we refer to as our aspenONE licensing model, which includes software maintenance and support, known as our Premier Plus SMS offering, for the entire term. Our aspenONE products are organized into three suites: 1) engineering; 2) manufacturing and supply chain; and 3) asset performance management. The aspenONE licensing model provides customers with access to all of the products within the aspenONE suite(s) they license. We refer to these arrangements as token arrangements. Tokens are fixed units of measure. The amount of software usage is limited by the number of tokens purchased by the customer. We also license our software through point product term arrangements, which include our Premier Plus SMS offering for the entire term, as well as perpetual license arrangements. Four basic criteria must be satisfied before software license revenue can be recognized: persuasive evidence of an arrangement between us and an end user; delivery of our product has occurred; the fee for the product is fixed or determinable; and collection of the fee is probable. Persuasive evidence of an arrangement—We use a signed contract as evidence of an arrangement for software licenses and SMS. For professional services we use a signed contract and a work proposal to evidence an arrangement. In cases where both a signed contract and a purchase order are required by the customer, we consider both taken together as evidence of the arrangement. Delivery of our product—Software and the corresponding access keys are generally delivered to customers via electronic delivery or via physical medium with standard shipping terms of Free Carrier, our warehouse (i.e., FCA, AspenTech). Our software license agreements do not contain conditions for acceptance. Fee is fixed or determinable—We assess whether a fee is fixed or determinable at the outset of the arrangement. Significant judgment is involved in making this assessment. As a standard business practice, we offer fixed-term license arrangements, which are generally payable on an annual basis. We cannot assert that the fees under our aspenONE licensing model and point product arrangements with Premier Plus SMS are fixed or determinable because of the rights provided to customers, economics of the arrangements, and because we do not have an established history of our arrangements going to term end date without providing concessions to customers. As a result, the amount of revenue recognized for these arrangements is limited by the amount of customer payments that become due. Collection of fee is probable—We assess the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer's payment history, its current creditworthiness, economic conditions in the customer's industry and geographic location, and general economic conditions. If in our judgment collection of a fee is not probable, revenue is recognized as cash is collected, provided all other conditions for revenue recognition have been met. Vendor-Specific Objective Evidence of Fair Value (VSOE) We have established VSOE for professional services and certain training offerings, but not for our software products or our SMS offerings. We assess VSOE for SMS, professional services, and training, based on an analysis of standalone sales of the offerings using the bell-shaped curve approach. We do not have a history of selling our Premier Plus SMS offering to customers on a standalone basis, and as a result are unable to establish VSOE for this deliverable. Subscription and Software Revenue Subscription and software revenue consists primarily of product and related revenue from our (i) aspenONE licensing model; (ii) point product arrangements with our Premier Plus SMS offering included for the contract term; and (iii) perpetual arrangements. When a customer elects to license our products under our aspenONE licensing model, our Premier Plus SMS offering is included for the entire term of the arrangement and the customer receives, for the term of the arrangement, the right to any new unspecified future software products and updates that may be introduced into the licensed aspenONE software suite. Due to our obligation to provide unspecified future software products and updates and because we do not have VSOE for our Premier Plus SMS offering, we are required to recognize revenue ratably over the term of the arrangement, once the other revenue recognition criteria noted above have been met. Our point product arrangements with Premier Plus SMS include SMS for the term of the arrangement. Since we do not have VSOE for our Premier Plus SMS offering, the SMS element of our point product arrangements is not separable. As a result, revenue associated with point product arrangements with Premier Plus SMS included for the contract term is recognized ratably over the term of the arrangement, once the other revenue recognition criteria have been met. Services and Other Revenue Professional Services Revenue Professional services are provided to customers on a time-and-materials (T&M) or fixed-price basis. We recognize professional services fees for our T&M contracts based upon hours worked and contractually agreed-upon hourly rates. Revenue from fixed-price engagements is recognized using the proportional performance method based on the ratio of costs incurred to the total estimated project costs. Project costs are typically expensed as incurred. The use of the proportional performance method is dependent upon our ability to reliably estimate the costs to complete a project. We use historical experience as a basis for future estimates to complete current projects. Additionally, we believe that costs are the best available measure of performance. Out-of-pocket expenses which are reimbursed by customers are recorded as revenue. In certain circumstances, professional services revenue may be recognized over a longer time period than the period over which the services are performed. If the costs to complete a project are not estimable or the completion is uncertain, the revenue and related costs are recognized upon completion of the services. In circumstances in which professional services are sold as a single arrangement with, or in contemplation of, a new aspenONE license or point product arrangement with Premier Plus SMS, revenue is deferred and recognized on a ratable basis over the longer of (i) the period the services are performed, or (ii) the license term. When we provide professional services considered essential to the functionality of the software, we recognize the combined revenue from the sale of the software and related services using the completed contract or percentage-of-completion method. We have occasionally been required to commit unanticipated additional resources to complete projects, which resulted in losses on those contracts. Provisions for estimated losses on contracts are made during the period in which such losses become probable and can be reasonably estimated. Training Revenue We provide training services to our customers, including on-site, Internet-based, public and customized training. Revenue is recognized in the period in which the services are performed. In circumstances in which training services are sold as a single arrangement with, or in contemplation of, a new aspenONE license or point product arrangement with Premier Plus SMS, revenue is deferred and recognized on a ratable basis over the longer of (i) the period the services are performed or (ii) the license term. Deferred Revenue Deferred revenue includes amounts billed or collected in advance of revenue recognition, including arrangements under the aspenONE licensing model, point product arrangements with Premier Plus SMS, professional services, and training. Deferred revenue is recorded as each invoice becomes due. Other Licensing Matters Our standard licensing agreements include a product warranty provision. We have not experienced significant claims related to software warranties beyond the scope of SMS support, which we are already obligated to provide, and consequently, we have not established reserves for warranty obligations. Our agreements with our customers generally require us to indemnify the customer against claims that our software infringes third-party patent, copyright, trademark or other proprietary rights. Such indemnification obligations are generally limited in a variety of industry-standard respects, including our right to replace an infringing product. As of September 30, 2017 and June 30, 2017, we had not experienced any material losses related to these indemnification obligations and no claims with respect thereto were outstanding. We do not expect significant claims related to these indemnification obligations, and consequently, have not established any related reserves. |
Loss Contingencies | Loss Contingencies We accrue estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim, assessment or damages can be reasonably estimated. We believe that we have sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Please refer to Note 15 for discussion of these matters and related liability accruals. |
Foreign Currency Transactions | Foreign Currency Transactions Foreign currency exchange gains and losses generated from the settlement and remeasurement of transactions denominated in currencies other than the functional currency of our subsidiaries are recognized in our results of operations as incurred as a component of other income (expense), net. Net foreign currency (losses) gains were $(0.6) million and $0.6 million during the three months ended September 30, 2017 and 2016, respectively. |
Research and Development Expense | Research and Development Expense We charge research and development expenditures to expense as the costs are incurred. Research and development expenses consist primarily of personnel expenses related to the creation of new products, enhancements and engineering changes to existing products and costs of acquired technology prior to establishing technological feasibility. We acquired no technology during the three months ended September 30, 2017 and $0.4 million during the three months ended September 30, 2016. At the time we acquired the technology, the projects to develop commercially available products did not meet the accounting definition of having reached technological feasibility and therefore the cost of the acquired technology was expensed as a research and development expense. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. We will adopt ASU No. 2014-09 during the first quarter of fiscal 2019. Based on our preliminary assessment, the adoption of ASU No. 2014-09 will impact the timing of a portion of the revenue recognized from our term contracts. We are continuing to evaluate the impact of ASU No. 2014-09 on our consolidated financial statements and implementing accounting system changes related to the adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the amendment, lessees will be required to recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and lease liability. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendment identifies several areas for simplification applicable to entities that issue share-based payment awards to their employees, including income tax consequences, the option to recognize gross stock compensation expense with actual forfeitures recognized when they occur, and certain classifications on the statements of cash flows. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. We adopted ASU No. 2016-09 effective July 1, 2017. As a result of adopting the new standard, excess tax benefits from stock-based compensation are now reflected in the consolidated statements of operations as a component of the provision for income taxes, whereas they were previously a component of stockholders’ deficit. The adoption of ASU No. 2016-09 resulted in a decrease in our provision for income taxes of $0.5 million for the three months ended September 30, 2017. This represents a decrease in our effective tax rate of approximately 1.0 percentage point for the three months ended September 30, 2017, due to the recognition of excess tax benefits for options exercised and the vesting of equity awards. There was no change as a result of how we account for forfeitures for financial statement reporting purposes. We adopted the cash flow presentation prospectively, and accordingly, excess tax benefits from stock-based compensation of $0.5 million is presented as a cash inflow from operating activity included within the change in income tax payable for the three months ended September 30, 2017, while $0.6 million of excess tax benefits from equity-based compensation is presented as a financing activity for the three months ended September 30, 2016. We prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have a material impact on our diluted earnings per share for the three months ended September 30, 2017. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). The amendment changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-13 on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The amendment updates the guidance as to how certain cash receipts and cash payments should be presented and classified, and is intended to reduce the existing diversity in practice. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact of ASU No. 2016-15 on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business. The amendment changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We do not anticipate the adoption of ASU No. 2017-01 will have a material effect on the consolidated financial statements or related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350) - Simplifying the Test for Goodwill Impairment. The amendment eliminates Step 2 of the goodwill impairment test and requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. We do not anticipate the adoption of ASU No. 2017-04 will have a material effect on the consolidated financial statements or related disclosures. |
Intangible Assets (Policies) |
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Intangible Assets | Intangible Assets We include in our amortizable intangible assets those intangible assets acquired in our business and asset acquisitions. We amortize acquired intangible assets with finite lives over their estimated economic lives, generally using the straight-line method. Each period, we evaluate the estimated remaining useful lives of acquired intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. Acquired intangibles are removed from the accounts when fully amortized and no longer in use. Intangible assets consisted of the following as of September 30, 2017 and June 30, 2017:
Total amortization expense related to intangible assets is included in operating expenses and amounted to approximately $0.5 million and less than $0.1 million for the three months ended September 30, 2017 and 2016, respectively. Future amortization expense as of September 30, 2017 is expected to be as follows:
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Goodwill (Policies) |
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Goodwill | Goodwill The changes in the carrying amount of goodwill for our subscription and software reporting unit during the three months ended September 30, 2017 was as follows:
No triggering events indicating goodwill impairment occurred during the three months ended September 30, 2017. |
Accounts Receivable (Tables) |
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Schedule of accounts receivable, net allowance for doubtful accounts | Our accounts receivable, net of the related allowance for doubtful accounts, were as follows as of September 30, 2017 and June 30, 2017:
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Property and Equipment (Tables) |
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Schedule of property, equipment and leasehold improvements | Property, equipment and leasehold improvements in the accompanying unaudited consolidated balance sheets consisted of the following:
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed |
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Intangible Assets (Tables) |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization expense as of September 30, 2017 is expected to be as follows:
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Intangible assets | Intangible assets consisted of the following as of September 30, 2017 and June 30, 2017:
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Goodwill (Tables) |
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Changes in carrying amount of goodwill by reporting unit | The changes in the carrying amount of goodwill for our subscription and software reporting unit during the three months ended September 30, 2017 was as follows:
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Accrued Expenses and Other Liabilities (Tables) |
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Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities in the accompanying unaudited consolidated balance sheets consisted of the following:
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Schedule of other non-current liabilities | Other non-current liabilities in the accompanying unaudited consolidated balance sheets consisted of the following:
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Stock-Based Compensation (Tables) |
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Schedule of weighted average assumptions | We utilized the Black-Scholes option valuation model with the following weighted average assumptions:
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Schedule of stock-based compensation expense | The stock-based compensation expense under all equity plans and its classification in the unaudited consolidated statements of operations for the three months ended September 30, 2017 and 2016 are as follows:
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Schedule of stock option and RSU activity | A summary of stock option and RSU activity under all equity plans for the three months ended September 30, 2017 is as follows:
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Net Income Per Share (Tables) |
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Schedule of calculations of basic and diluted net income per share and basic and dilutive weighted average shares outstanding | The calculations of basic and diluted net income per share and basic and dilutive weighted average shares outstanding for the three months ended September 30, 2017 and 2016 are as follows:
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Schedule of employee equity awards excluded from the calculation of dilutive weighted average shares outstanding | The following employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive as of September 30, 2017 and 2016:
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of reportable segments' profits | The following table presents a summary of our reportable segments’ profits:
(1) Our reportable segments’ operating expenses include expenses directly attributable to the segments. Segment expenses include selling and marketing, research and development, stock-based compensation and certain corporate expenses incurred in support of the segments. Segment expenses do not include allocations of general and administrative; interest income, net; and other income, net. |
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Schedule of reconciliation of total segment operating profit to income before income taxes | The following table presents a reconciliation of total segment profit to income before income taxes for the three months ended September 30, 2017 and 2016:
|
Significant Accounting Policies - Revenue Recognition and Other Licensing Matters (Details) - claims |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Other Licensing Matters | ||
Number of claims outstanding | 0 | 0 |
Significant Accounting Policies - Foreign Currency Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other income (expense), net | ||
Foreign Currency Transactions | ||
Foreign currency transaction and remeasurement gains (losses) | $ (0.6) | $ 0.6 |
Significant Accounting Policies - Research and Development Expense (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Accounting Policies [Abstract] | ||
Research and development expense | $ 0 | $ 400,000 |
Significant Accounting Policies Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 0 | $ 584 |
Excess Tax Benefit from Share-based Compensation, Financing Activities | 0 | $ 584 |
Accounting Standards Update 2016-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increase (Decrease) in Income Taxes | $ (500) | |
Change in Effective Income Tax Rate Due to Excess Tax Benefits Recognized from Share-Based Compensation | (1.00%) | |
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 500 |
Fair Value (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Level 1 Inputs | ||
Fair Value | ||
Cash equivalents | $ 43.9 | $ 79.7 |
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Accounts Receivable | ||
Account receivable, Gross | $ 29,479 | $ 28,955 |
Account receivable, Allowance | 1,195 | 1,285 |
Account receivable, Net | $ 28,284 | $ 27,670 |
Accounts Receivable (Details) |
3 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounts Receivable | Customer One | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Percentage of total accounts receivables | 18.00% |
Property and Equipment - Property, Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements-at cost | $ 51,332 | $ 51,183 |
Accumulated depreciation | (38,972) | (37,783) |
Property, equipment and leasehold improvements, net | 12,360 | 13,400 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements-at cost | 8,313 | 8,262 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements-at cost | 24,135 | 24,091 |
Furniture & fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements-at cost | 6,825 | 6,805 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements-at cost | $ 12,059 | $ 12,025 |
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Business Acquisition [Line Items] | ||
Goodwill | $ 51,738 | $ 51,248 |
Mtelligence Corporation | ||
Business Acquisition [Line Items] | ||
Tangible assets acquired, net | 779 | |
Goodwill | 25,888 | |
Deferred tax liabilities, net | (2,099) | |
Total assets acquired | 37,185 | |
Developed Technology Rights | Mtelligence Corporation | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 11,385 | |
Customer Relationship | Mtelligence Corporation | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | 679 | |
Non-compete Agreements | Mtelligence Corporation | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 553 |
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 24,428 | $ 24,335 |
Accumulated Amortization | (4,165) | (3,546) |
Net Carrying Amount | 20,263 | 20,789 |
Technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 22,443 | 22,350 |
Accumulated Amortization | (3,775) | (3,254) |
Net Carrying Amount | 18,668 | 19,096 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,432 | 1,432 |
Accumulated Amortization | (221) | (169) |
Net Carrying Amount | 1,211 | 1,263 |
Non-compete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 553 | 553 |
Accumulated Amortization | (169) | (123) |
Net Carrying Amount | $ 384 | $ 430 |
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset amortization expense | $ 500 | $ 100 |
Amortization expense - 2018 | 1,578 | |
Amortization expense - 2019 | 2,063 | |
Amortization expense - 2020 | 2,134 | |
Amortization expense - 2021 | 2,206 | |
Amortization expense - 2022 | 2,451 | |
Amortization expense - Thereafter | 9,831 | |
Finite Lived Intangible Assets Future Amortization Expense | $ 20,263 |
Goodwill - Goodwill, Net (Details) $ in Thousands |
3 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Goodwill: | |
Goodwill, net, beginning balance | $ 51,248 |
Goodwill, net, ending balance | 51,738 |
Subscription and software | |
Goodwill: | |
Goodwill, gross, beginning balance | 116,817 |
Accumulated impairment losses, beginning balance | (65,569) |
Goodwill, net, beginning balance | 51,248 |
Effect of currency translation | 490 |
Goodwill, gross, ending balance | 116,817 |
Accumulated impairment losses, ending balance | (65,569) |
Goodwill, net, ending balance | 51,738 |
Mtelligence Corporation | |
Goodwill: | |
Goodwill, net, ending balance | $ 25,888 |
Goodwill - Narrative (Details) |
3 Months Ended |
---|---|
Sep. 30, 2017
triggering_event
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of triggering events | 0 |
Accrued Expenses and Other Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Accrued expenses and other current liabilities | ||
Payroll and payroll-related | $ 12,896 | $ 20,864 |
Royalties and outside commissions | 2,706 | 2,733 |
Professional fees | 2,382 | 2,216 |
Deferred acquisition payments | 7,932 | 8,548 |
Other | 10,845 | 13,788 |
Total accrued expenses and other current liabilities | $ 36,761 | $ 48,149 |
Accrued Expenses and Other Liabilities - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Other non-current liabilities | ||
Deferred rent | $ 7,045 | $ 6,916 |
Uncertain tax positions | 4,307 | 3,921 |
Other | 2,402 | 2,311 |
Total other non-current liabilities | $ 13,754 | $ 13,148 |
Credit Agreement (Details) |
Feb. 26, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Aug. 09, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
---|---|---|---|---|
Credit Agreement | ||||
Amount outstanding | $ 140,000,000 | $ 140,000,000 | ||
Line of Credit | Credit Agreement | ||||
Credit Agreement | ||||
Principal amount | $ 250,000,000.0 | $ 350,000,000.0 | ||
Amount outstanding | $ 140,000,000 | $ 140,000,000 | ||
Margin rate (as a percent) | 0.50% | |||
Effective interest rate (as a percent) | 2.74% | |||
Maximum leverage ratio | 3.0 | |||
Minimum interest coverage ratio | 3.0 | |||
Line of Credit | Credit Agreement | Minimum | ||||
Credit Agreement | ||||
Commitment fee percentage (as a percent) | 0.20% | |||
Line of Credit | Credit Agreement | Maximum | ||||
Credit Agreement | ||||
Commitment fee percentage (as a percent) | 0.30% | |||
Line of Credit | Credit Agreement | Federal Funds Effective Rate | ||||
Credit Agreement | ||||
Variable rate spread (as a percent) | 0.50% | |||
Line of Credit | Credit Agreement | Adjusted LIBOR | ||||
Credit Agreement | ||||
Variable rate spread (as a percent) | 1.00% | |||
Margin rate (as a percent) | 1.50% |
Stock-Based Compensation - Stock-Based Compensation Accounting (Details) - Stock Options - $ / shares |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Stock-Based Compensation Accounting | ||
Weighted average fair value (in dollars per share) | $ 16.91 | $ 12.96 |
Risk-free interest rate (as a percent) | 1.70% | 1.10% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Expected life (in years) | 4 years 7 months 10 days | 4 years 7 months 10 days |
Expected volatility factor (as a percent) | 28.10% | 31.50% |
Stock-Based Compensation - Stock-Based Compensation Expense and its Classification in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Recorded as expenses: | ||
Total stock-based compensation | $ 6,414 | $ 4,958 |
Cost of services and other | ||
Recorded as expenses: | ||
Total stock-based compensation | 450 | 369 |
Selling and marketing | ||
Recorded as expenses: | ||
Total stock-based compensation | 885 | 955 |
Research and development | ||
Recorded as expenses: | ||
Total stock-based compensation | 1,896 | 1,062 |
General and administrative | ||
Recorded as expenses: | ||
Total stock-based compensation | $ 3,183 | $ 2,572 |
Stock-Based Compensation - RSU Activity (Details) - Restricted Stock Units |
3 Months Ended | |
---|---|---|
Sep. 30, 2017
$ / shares
shares
|
Sep. 30, 2016
$ / shares
|
|
Restricted stock units activity | ||
Outstanding, beginning of period (in shares) | shares | 615,998 | |
Granted (in shares) | shares | 310,303 | |
Settled (in shares) | shares | (84,927) | |
Cancelled / Forfeited (in shares) | shares | (21,478) | |
Outstanding, end of period (in shares) | shares | 819,896 | |
Vested and expected to vest (in shares) | shares | 736,841 | |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 45.62 | |
Granted (in dollars per share) | $ / shares | 63.14 | $ 45.44 |
Settled (RSUs) (in dollars per share) | $ / shares | 50.43 | |
Cancelled / Forfeited (in dollars per share) | $ / shares | 56.10 | |
Outstanding, end of period (in dollars per share) | $ / shares | $ 51.48 | |
Vested and expected to vest, end of period (in dollars per share) | $ / shares | 51.50 |
Stockholders' Deficit - Stock Repurchase Program (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2017 |
Jun. 08, 2017 |
Apr. 26, 2016 |
Jan. 22, 2015 |
|
Class of Stock [Line Items] | ||||
Approved stock repurchase program, authorized amount (up to) | $ 200,000,000 | $ 400,000,000.0 | $ 450,000,000.0 | |
Remaining capacity under the stock repurchase program | $ 296,300,000 | |||
Open Market Transaction | ||||
Class of Stock [Line Items] | ||||
Repurchase of common stock (in shares) | 839,159 | |||
Repurchase of common stock, amount | $ 50,000,000 |
Stockholders' Deficit - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Accumulated Other Comprehensive Income | ||
Foreign translation adjustments | $ 2.9 | $ 1.5 |
Maximum | ||
Accumulated Other Comprehensive Income | ||
Net unrealized gains (losses) on available for sale securities | $ 0.1 |
Net Income Per Share - Calculations of Basic and Diluted Net Income per Share and Basic and Dilutive Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||
Net income | $ 34,755 | $ 35,000 |
Weighted average shares outstanding (in shares) | 73,024 | 79,048 |
Dilutive impact from: | ||
Share-based payment awards (in shares) | 585 | 337 |
Dilutive weighted average shares outstanding (in shares) | 73,609 | 79,385 |
Income per share | ||
Basic (in dollars per share) | $ 0.48 | $ 0.44 |
Dilutive (in dollars per share) | $ 0.47 | $ 0.44 |
Net Income Per Share - Stock Options Excluded from the Computation of Dilutive Weighted Average Shares Outstanding (Details) |
3 Months Ended |
---|---|
Sep. 30, 2017
$ / shares
shares
| |
Stock Options | |
Employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive | |
Options to purchase shares of common stock (in shares) | shares | 372,305 |
Stock Options | |
Employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive | |
Exercise price range, low end of range (in dollars per share) | $ 60.05 |
Exercise price range, high end of range (in dollars per share) | $ 63.77 |
Net Income Per Share - Employee Equity Awards Excluded from the Calculation of Dilutive Weighted Average Shares Outstanding (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Employee Equity Awards | ||
Employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive | ||
Employee equity awards (in shares) | 674 | 1,535 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Excess tax benefits from stock-based compensation | $ 0 | $ 584 |
Effective income tax rate (as a percent) | 32.60% | 36.10% |
Accounting Standards Update 2016-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
EffectiveIncomeTaxRateReconciliationChangeInTaxRateDueToExcessTaxBenefitsRecognizedFromShareBasedCompensation | (1.00%) | |
Increase (Decrease) in Income Taxes | $ (500) |
Commitments and Contingencies - Rental Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Operating Leases | ||
Rent expense | $ 2.0 | $ 2.2 |
Minimum | ||
Operating Leases | ||
Operating lease terms | 1 year |
Commitments and Contingencies - Standby Letters of Credit (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|
Standby Letter of Credit | ||
Operating Leases | ||
Standby letters of credit | $ 3.0 | $ 2.9 |
Commitments and Contingencies - Legal Matters (Details) € in Millions |
1 Months Ended | ||
---|---|---|---|
Mar. 31, 2014
EUR (€)
|
Sep. 30, 2017
claims
|
Mar. 31, 2016
EUR (€)
|
|
Legal Matters | |||
Matters that might have a material adverse effect on financial position, results of operations or cash flows | claims | 0 | ||
Customer claim | |||
Legal Matters | |||
Judgment issued | € 1.9 | ||
Damages, plus interest, with the possibility of additional damages to be determined | € 1.7 |
Segment Information - Summary of Reportable Segments' Profits (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Summary of reportable segments' profits | ||
Segment revenue | $ 122,781 | $ 120,050 |
Income from operations | 53,313 | 54,730 |
Operating segments | ||
Summary of reportable segments' profits | ||
Segment revenue | 122,781 | 120,050 |
Segment expenses | (55,792) | (52,163) |
Income from operations | 66,989 | 67,887 |
Subscription and software | Operating segments | ||
Summary of reportable segments' profits | ||
Segment revenue | 115,756 | 113,444 |
Segment expenses | (48,843) | (45,726) |
Income from operations | 66,913 | 67,718 |
Services | Operating segments | ||
Summary of reportable segments' profits | ||
Segment revenue | 7,025 | 6,606 |
Segment expenses | (6,949) | (6,437) |
Income from operations | $ 76 | $ 169 |
Segment Information - Reconciliation of Total Segment Profit to Income before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Reconciliation to Income before Income Taxes | ||
Total segment profit for reportable segments | $ 53,313 | $ 54,730 |
General and administrative | (13,676) | (13,157) |
Other (expense) income, net | (616) | 646 |
Income before provision for income taxes | 51,632 | 54,779 |
Operating segments | ||
Reconciliation to Income before Income Taxes | ||
Total segment profit for reportable segments | 66,989 | 67,887 |
Segment Reconciling Items | ||
Reconciliation to Income before Income Taxes | ||
General and administrative | (13,676) | (13,157) |
Other (expense) income, net | (616) | 646 |
Interest (expense) income, net | $ (1,065) | $ (597) |
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