Aspen Technology, Inc. (AZPN), a software provider to process industries, on Tuesday reported a turnaround to profit in the third quarter on strong revenue growth. Both revenue and adjusted earnings per share beat analysts' estimates.
In addition, AspenTech's board of directors approved a share repurchase program for up to $150 million, replacing the existing share repurchase program that had about $65 million remaining as of March 31.
AspenTech named Antonio Pietri as its president and chief executive officer, effective October 1. Pietri replaces Mark Fusco who has decided to retire from the company. Fusco, who has spent eight years at the company's helm, will continue to serve as the company's president and CEO during the transition period, after which time he will be retiring to spend more time with his family.
Commenting on the results, Mark Fusco, Chief Executive Officer of AspenTech, said, "AspenTech delivered strong fiscal third quarter results that exceeded our guidance on all key metrics, including approximately 13% year-over-year growth in total license contract value. Customer demand remains solid across our key vertical markets and geographies, and we are increasingly seeing customers use a broader cross-section of our product suite."
The license portion of total contract value in the quarter grew 13 percent from last year to $1.58 billion. Total contract value, including the value of bundled maintenance, increased 15 percent from the year-ago period to $1.83 billion.
AspenTech's net income for the third quarter was $10.51 million or $0.11 per share, compared to loss of $520 thousand or $0.01 per share in the year-ago period.
Adjusted net income for the quarter was $12.87 million or $0.14 per share, compared to adjusted net income of $1.43 million or $0.01 per share in the same period last year. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.05 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenue for the quarter increased 29 percent to $79.36 million from $61.34 million in the year-ago period. Analysts had a consensus revenue estimate of $73.10 million.
Subscription and software revenue surged 44 percent from the previous-year quarter to $60.90 million, while services & other revenue edged down slightly to $18.46 million.
AspenTech's incoming CEO Pietri has been with the company for the past 17 years. He is currently serving as the company's executive vice president of worldwide field operations since 2007. He joined the company through its acquisition of Setpoint, where he served as a sales manager for the South American region. Prior to joining Setpoint, Pietri worked at ABB Simcon.
In addition, Pietri will join AspenTech's board of directors, effective July 1, 2013. Fusco has notified the company that he will resign from AspenTech's board, effective as of the close of business on September 30, 2013, at the end of the executive transition.
AZPN closed Tuesday's regular trading at $30.48, up $0.23 or 0.76 percent on a volume of 432,608 shares. In after-hours, the stock further gained $1.62 or 5.31 percent to $32.10.
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