The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Aspen Technology crushed expectations on revenues and NA on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly, and GAAP earnings per share improved. The profit was a surprise, as analysts had predicted a loss.
Margins expanded across the board.
Aspen Technology reported revenue of $66.6 million. The nine analysts polled by S&P Capital IQ predicted a top line of $52.9 million. Sales were 34% higher than the prior-year quarter's $49.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.06. The eight earnings estimates compiled by S&P Capital IQ predicted -$0.05 per share on the same basis. GAAP EPS were $0.04 for Q2 compared to -$0.11 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 80.6%, 780 basis points better than the prior-year quarter. Operating margin was 10.6%, 2,910 basis points better than the prior-year quarter. Net margin was 5.8%, 2,640 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $61.5 million. On the bottom line, the average EPS estimate is -$0.01.
Next year's average estimate for revenue is $232.7 million. The average EPS estimate is -$0.17.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 54 members out of 80 rating the stock outperform, and 26 members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Aspen Technology a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Aspen Technology is buy, with an average price target of $20.75.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.