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8-K - 8-K - ASPEN TECHNOLOGY INC /DE/a15-17567_18k.htm

Exhibit 99.1

 

 

Contacts:

 

Media Contact

 

Investor Contact

David Grip

 

Brian Denyeau

AspenTech

 

ICR

+1 781-221-5273

 

+1 646-277-1251

david.grip@aspentech.com

 

brian.denyeau@icrinc.com

 

Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2015

 

Bedford, Mass. — August 13, 2015 — Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries, today announced financial results for its fourth quarter and fiscal year ended June 30, 2015.

 

“AspenTech reported solid fourth quarter results that exceeded our expectations from both a revenue and profitability perspective,” said Antonio Pietri, President and Chief Executive Officer of AspenTech.  “Our ability to deliver double-digit annual spend growth against the backdrop of an increasingly challenging macro environment reflects the strength of AspenTech’s model and the mission critical nature of our solutions.”

 

Pietri added, “Our strong balance sheet and significant free cash flow, driven in part by our expense discipline, enabled us to repurchase approximately 7.7 million shares of common stock during fiscal 2015. As we enter fiscal 2016, we will continue to focus on driving increased usage across the aspenONE suite in order to deliver continued top and bottom line growth and shareholder value.”

 

Fourth Quarter and Fiscal Year 2015 Business Highlights

 

·                 The license portion of total contract value was $2.07 billion at the end of fiscal 2015, which increased 2.2% from March 31, 2015 and 11.8% compared to the end of fiscal 2014.

 

·                 Total contract value, including the value of bundled maintenance, was $2.46 billion at the end of fiscal 2015, which increased 2.2% from March 31, 2015 and 12.3% compared to the end of fiscal 2014.

 

·                 Annual spend, which the company defines as the annualized value of all term license and term maintenance contracts at the end of the quarter, was $419 million at the end of fiscal 2015, an increase of 1.9% from March 31, 2015 and 10.5% from the end of fiscal 2014.

 

·                 GAAP operating margin was 41.1%, compared to 36.8% in the fourth quarter of fiscal 2014.  Non-GAAP operating margin was 44.2%, compared to 39.9% in the fourth quarter of fiscal 2014.

 



 

·                 We repurchased nearly 1.8 million shares of our common stock for $73.6 million in the fourth quarter of fiscal 2015.

 

Summary of Fourth Quarter Fiscal Year 2015 Financial Results

 

AspenTech’s total revenue of $114.2 million increased 12.5% from $101.5 million in the fourth quarter of the prior year.

 

·                  Subscription and software revenue was $105.6 million in the fourth quarter of fiscal 2015, an increase from $91.6 million in the fourth quarter of fiscal 2014.

 

·                  Services and other revenue was $8.5 million in the fourth quarter of fiscal 2015, a decrease from $10.0 million in the fourth quarter of fiscal 2014.

 

For the quarter ended June 30, 2015, AspenTech reported income from operations of $46.9 million, compared to income from operations of $37.4 million for the quarter ended June 30, 2014.

 

Net income was $30.8 million for the quarter ended June 30, 2015, leading to net income per share of $0.36, compared to net income per share of $0.29 in the same period last fiscal year.

 

Non-GAAP income from operations, which adds back stock-based compensation expense, restructuring charges, amortization of intangibles associated with acquisitions and non-capitalized acquired technology, was $50.5 million for the fourth quarter of fiscal 2015, compared to a non-GAAP income from operations of $40.5 million in the same period last fiscal year.  Non-GAAP net income was $33.1 million, or $0.39 per share, for the fourth quarter of fiscal 2015, compared to non-GAAP net income of $28.7 million, or $0.31 per share, in the same period last fiscal year.

 

AspenTech had cash and marketable securities of $218.5 million at June 30, 2015, compared to $225.0 million at the end of the prior quarter after using $74.4 million in cash to repurchase shares of common stock.  During the fourth quarter, the company generated $53.6 million in cash flow from operations.  On a non-GAAP basis, cash flow from operations was $68.7 million and free cash flow was $67.0 million after taking into consideration $1.8 million in capital expenditures and capitalized software.  Both non-GAAP figures include $15.2 million of excess tax benefits from stock-based compensation.

 

Summary of Fiscal Year 2015 Financial Results

 

AspenTech’s total revenue of $440.4 million increased 12.5% from $391.5 million for fiscal year 2014.

 

·                  Subscription and software revenue was $405.6 million, an increase from $350.5 million for fiscal year 2014.

 

·                  Services and other revenue was $34.8 million, compared to $41.0 million for fiscal year 2014.

 

For the fiscal year ended June 30, 2015, AspenTech reported income from operations of $179.8 million, an improvement from income from operations of $129.7 million for fiscal year 2014.

 



 

Net income was $118.4 million for the fiscal year ended June 30, 2015, leading to net income per share of $1.33, compared to net income per share of $0.92 for fiscal year 2014.

 

Non-GAAP income from operations was $198.4 million for fiscal year 2015, an improvement compared to non-GAAP income from operations of $149.5 million for fiscal year 2014.  Non-GAAP net income was $130.3 million, or $1.46 per share, for fiscal year 2015, an improvement compared to non-GAAP net income of $98.5 million, or $1.05 per share, for fiscal year 2014.

 

For the fiscal year ended June 30, 2015, the company generated $192.0 million in cash flow from operations, $231.6 million in non-GAAP cash flow from operations and $223.6 million in free cash flow.  Both non-GAAP figures include the $2.6 million cash payment associated with the purchase of non-capitalized acquired technology and include $37.0 million of excess tax benefits from stock-based compensation.

 

Use of Non-GAAP Financial Measures

 

This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP.  Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.  A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.

 

Management considers both GAAP and non-GAAP financial results in managing AspenTech’s business.  As the result of adoption of new licensing models, management believes that a number of AspenTech’s performance indicators based on GAAP, including revenue, gross profit, operating income and net income, should be viewed in conjunction with certain non-GAAP and other business measures in assessing AspenTech’s performance, growth and financial condition. Accordingly, management utilizes a number of non-GAAP and other business metrics, including the non-GAAP metrics set forth in this press release, to track AspenTech’s business performance. None of these non-GAAP metrics should be considered as an alternative to any measure of financial performance calculated in accordance with GAAP.

 

Conference Call and Webcast

 

AspenTech will host a conference call and webcast today, August 13, 2015, at 4:30 p.m. (Eastern Time), to discuss the company’s financial results for the fourth quarter and fiscal year 2015 as well as the company’s business outlook.

 

The live dial-in number is (877) 245-0126 or (706) 634-5625, conference ID code 90931889. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech’s website, http://www.aspentech.com/corporate/investor.cfm, and clicking on the “webcast” link.  A replay of the call will be archived on AspenTech’s website and will also be available via telephone at (855) 859-2056 or (404) 537-3406, conference ID code 90931889, through September 13, 2015.

 



 

About AspenTech

 

AspenTech is a leading supplier of software that optimizes process manufacturing - for energy, chemicals, engineering and construction, and other industries that manufacture and produce products from a chemical process. With integrated aspenONE solutions, process manufacturers can implement best practices for optimizing their engineering, manufacturing and supply chain operations. As a result, AspenTech customers are better able to increase capacity, improve margins, reduce costs and become more energy efficient. To see how the world’s leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit www.aspentech.com.

 

Forward-Looking Statements

 

The third paragraph of this press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Actual results may vary significantly from AspenTech’s expectations based on a number of risks and uncertainties, including, without limitation:  AspenTech’s failure to increase usage and product adoption of aspenONE offerings, and failure to continue to provide innovative, market-leading solutions; demand for, or usage of, aspenONE software declines for any reason; unfavorable economic and market conditions or a lessening demand in the market for process optimization software; and other risk factors described from time to time in AspenTech’s periodic reports filed with the Securities and Exchange Commission.  AspenTech cannot guarantee any future results, levels of activity, performance, or achievements.  AspenTech expressly disclaims any obligation to update forward-looking statements after the date of this press release.

 

© 2015 Aspen Technology, Inc.  AspenTech, aspenONE and the Aspen leaf logo are registered trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

 

Source: Aspen Technology, Inc.

 



 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS*

(In thousands, except per share data)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

(Unaudited)

 

(Audited)

 

 

 

2015

 

2014

 

2015

 

2014

 

Revenue:

 

 

 

 

 

 

 

 

 

Subscription and software

 

$

105,638

 

$

91,570

 

$

405,640

 

$

350,486

 

Services and other

 

8,548

 

9,962

 

34,761

 

40,967

 

Total revenue

 

114,186

 

101,532

 

440,401

 

391,453

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Subscription and software

 

5,352

 

5,167

 

21,165

 

20,141

 

Services and other

 

7,269

 

7,712

 

28,411

 

32,547

 

Total cost of revenue

 

12,621

 

12,879

 

49,576

 

52,688

 

Gross profit

 

101,565

 

88,653

 

390,825

 

338,765

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling and marketing

 

25,137

 

23,451

 

92,736

 

94,827

 

Research and development

 

17,036

 

15,769

 

69,584

 

68,410

 

General and administrative

 

12,486

 

12,072

 

48,713

 

45,804

 

Total operating expenses

 

54,659

 

51,292

 

211,033

 

209,041

 

Income from operations

 

46,906

 

37,361

 

179,792

 

129,724

 

Interest income

 

98

 

155

 

487

 

1,124

 

Interest expense

 

(22

)

(5

)

(30

)

(37

)

Other income (expense), net

 

(1,132

)

(471

)

(778

)

(2,278

)

Income before provision for income taxes

 

45,850

 

37,040

 

179,471

 

128,533

 

Provision for income taxes

 

15,044

 

10,362

 

61,064

 

42,750

 

Net income

 

$

30,806

 

$

26,678

 

$

118,407

 

$

85,783

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.36

 

$

0.29

 

$

1.34

 

$

0.93

 

Diluted

 

$

0.36

 

$

0.29

 

$

1.33

 

$

0.92

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

85,056

 

91,916

 

88,398

 

92,648

 

Diluted

 

85,585

 

92,710

 

89,016

 

93,665

 

 


(*)- Certain items in prior period Consolidated Statements of Operations have been reclassified to conform to the current period presentation.

 



 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Audited in thousands, except share data)

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

156,249

 

$

199,526

 

Short-term marketable securities

 

59,197

 

67,619

 

Accounts receivable, net

 

30,721

 

38,532

 

Current portion of installments receivable, net

 

1,589

 

640

 

Unbilled services

 

1,108

 

1,656

 

Prepaid expenses and other current assets

 

8,055

 

10,567

 

Prepaid income taxes

 

542

 

605

 

Current deferred tax assets

 

6,169

 

10,537

 

Total current assets

 

263,630

 

329,682

 

Long-term marketable securities

 

3,047

 

31,270

 

Non-current installments receivable, net

 

253

 

811

 

Property, equipment and leasehold improvements, net

 

18,039

 

7,588

 

Computer software development costs, net

 

1,026

 

1,390

 

Goodwill

 

17,360

 

19,276

 

Non-current deferred tax assets

 

10,444

 

12,765

 

Other non-current assets

 

1,562

 

5,190

 

Total assets

 

$

315,361

 

$

407,972

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

5,240

 

$

412

 

Accrued expenses and other current liabilities

 

38,483

 

34,984

 

Income taxes payable

 

1,775

 

2,168

 

Current deferred revenue

 

250,968

 

228,940

 

Total current liabilities

 

296,466

 

266,504

 

Non-current deferred revenue

 

37,919

 

45,942

 

Other non-current liabilities

 

29,522

 

11,850

 

Commitments and contingencies

 

 

 

 

 

Series D redeemable convertible preferred stock, $0.10 par value—

 

 

 

 

 

Authorized— 3,636 shares as of June 30, 2015 and 2014

 

 

 

 

 

Issued and outstanding— none as of June 30, 2015 and 2014

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

Common stock, $0.10 par value— Authorized—210,000,000 shares

 

 

 

 

 

Issued— 101,607,520 shares at June 30, 2015 and 101,033,740 shares at June 30, 2014

 

 

 

 

 

Outstanding— 84,504,202 shares at June 30, 2015 and 91,661,850 shares at June 30, 2014

 

10,161

 

10,103

 

Additional paid-in capital

 

641,883

 

591,324

 

Accumulated deficit

 

(145,627

)

(264,034

)

Accumulated other comprehensive income

 

6,470

 

9,372

 

Treasury stock, at cost—17,103,318 shares of common stock at June 30, 2015 and 9,371,890 shares at June 30, 2014

 

(561,433

)

(263,089

)

Total stockholders’ equity (deficit)

 

(48,546

)

83,676

 

Total liabilities and stockholders’ equity (deficit)

 

$

315,361

 

$

407,972

 

 



 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS*

(In thousands)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

(Unaudited)

 

(Audited)

 

 

 

2015

 

2014

 

2015

 

2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

30,806

 

$

26,678

 

$

118,407

 

$

85,783

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,600

 

1,360

 

6,216

 

5,215

 

Net foreign currency (gains) losses

 

1,163

 

490

 

(1,552

)

1,934

 

Stock-based compensation

 

3,462

 

2,954

 

14,584

 

14,056

 

Deferred income taxes

 

(1,205

)

8,769

 

20,112

 

34,596

 

Provision for bad debts

 

(42

)

649

 

(513

)

1,793

 

Tax benefits from stock-based compensation

 

15,181

 

590

 

37,024

 

727

 

Excess tax benefits from stock-based compensation

 

(15,181

)

(590

)

(37,024

)

(727

)

Other non-cash operating activities

 

218

 

489

 

1,619

 

1,847

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(2,493

)

(8,245

)

8,028

 

(3,179

)

Unbilled services

 

41

 

(366

)

526

 

301

 

Prepaid expenses, prepaid income taxes, and other assets

 

(692

)

(3,380

)

4,070

 

947

 

Installments receivable

 

(1,186

)

1,674

 

(364

)

13,607

 

Accounts payable, accrued expenses, and other liabilities

 

7,131

 

2,154

 

5,933

 

906

 

Deferred revenue

 

14,765

 

25,016

 

14,919

 

42,325

 

Net cash provided by operating activities

 

53,568

 

58,242

 

191,985

 

200,131

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(32,814

)

(50,065

)

(68,356

)

Maturities of marketable securities

 

18,612

 

26,903

 

85,535

 

60,265

 

Purchases of property, equipment and leasehold improvements

 

(1,731

)

(1,381

)

(7,645

)

(4,011

)

Purchases of technology intangibles

 

 

 

 

(400

)

Capitalized computer software development costs

 

(44

)

(84

)

(359

)

(685

)

Net cash provided by (used in) investing activities

 

16,837

 

(7,376

)

27,466

 

(13,187

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Exercises of stock options

 

2,616

 

1,235

 

4,662

 

8,710

 

Repurchases of common stock

 

(74,368

)

(32,857

)

(297,246

)

(121,776

)

Payments of tax withholding obligations related to restricted stock

 

(1,825

)

(1,896

)

(5,699

)

(7,831

)

Excess tax benefits from stock-based compensation

 

15,181

 

590

 

37,024

 

727

 

Net cash used in financing activities

 

(58,396

)

(32,928

)

(261,259

)

(120,170

)

Effect of exchange rate changes on cash and cash equivalents

 

278

 

105

 

(1,469

)

320

 

Increase (decrease) in cash and cash equivalents

 

12,287

 

18,043

 

(43,277

)

67,094

 

Cash and cash equivalents, beginning of period

 

143,962

 

181,483

 

199,526

 

132,432

 

Cash and cash equivalents, end of period

 

$

156,249

 

$

199,526

 

$

156,249

 

$

199,526

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net

 

$

779

 

$

1,440

 

$

3,712

 

$

7,157

 

Interest paid

 

30

 

5

 

30

 

37

 

 


(*)- Certain items for the three and twelve months ended June 30, 2014 presented in the Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

 



 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows

 

The following tables reflect a reconciliation of selected Aspen Technology GAAP to Non-GAAP results of operations and cash flows.
(unaudited in thousands, except per share data)

 

 

 

Three Months Ended
June 30,

 

Twelve Months Ended
June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Total expenses

 

 

 

 

 

 

 

 

 

GAAP total expenses (a)

 

$

67,280

 

$

64,171

 

$

260,609

 

$

261,729

 

Less:

 

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

(3,462

)

(2,954

)

(14,584

)

(14,056

)

Non-capitalized acquired technology (e)

 

 

 

(3,277

)

(4,856

)

Restructuring charges

 

 

 

 

 

15

 

Amortization of purchased technology intangibles

 

(113

)

(224

)

(748

)

(922

)

Non-GAAP total expenses

 

$

63,705

 

$

60,993

 

$

242,000

 

$

241,910

 

 

         

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

 

 

 

 

GAAP income from operations

 

$

46,906

 

$

37,361

 

$

179,792

 

$

129,724

 

Plus:

 

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

3,462

 

2,954

 

14,584

 

14,056

 

Non-capitalized acquired technology (e)

 

 

 

3,277

 

4,856

 

Restructuring charges

 

 

 

 

(15

)

Amortization of purchased technology intangibles

 

113

 

224

 

748

 

922

 

Non-GAAP income from operations

 

$

50,481

 

$

40,539

 

$

198,401

 

$

149,543

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

30,806

 

$

26,678

 

$

118,407

 

$

85,783

 

Plus:

 

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

3,462

 

2,954

 

14,584

 

14,056

 

Non-capitalized acquired technology (e)

 

 

 

 

3,277

 

4,856

 

Restructuring charges

 

 

 

 

(15

)

Amortization of purchased technology intangibles

 

113

 

224

 

748

 

922

 

Less:

 

 

 

 

 

 

 

 

 

Income tax effect on Non-GAAP items (c)

 

(1,287

)

(1,144

)

(6,699

)

(7,135

)

Non-GAAP net income

 

$

33,094

 

$

28,712

 

$

130,317

 

$

98,467

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share

 

 

 

 

 

 

 

 

 

GAAP diluted income per share

 

$

0.36

 

$

0.29

 

$

1.33

 

$

0.92

 

Plus:

 

 

 

 

 

 

 

 

 

Stock-based compensation (b)

 

0.04

 

0.03

 

0.16

 

0.15

 

Non-capitalized acquired technology (e)

 

 

 

0.04

 

0.05

 

Restructuring charges

 

 

 

 

 

Amortization of purchased technology intangibles

 

 

 

0.01

 

0.01

 

Less:

 

 

 

 

 

 

 

 

 

Income tax effect on Non-GAAP items (c)

 

(0.02

)

(0.01

)

(0.08

)

(0.08

)

Non-GAAP diluted income per share

 

$

0.39

 

$

0.31

 

$

1.46

 

$

1.05

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing Non-GAAP diluted income per share

 

85,585

 

92,710

 

89,016

 

93,665

 

 



 

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Results of Operations and Cash Flows

 

The following tables reflect a reconciliation of selected Aspen Technology GAAP to Non-GAAP results of operations and cash flows.
(unaudited in thousands, except per share data)

 

 

 

Three Months Ended
June 30,

 

Twelve Months Ended
June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Non-GAAP Cash Flows from Operating Activities and Free Cash Flow

 

 

 

 

 

 

 

 

 

GAAP cash flows from operating activities

 

$

53,568

 

$

58,242

 

$

191,985

 

$

200,131

 

Plus:

 

 

 

 

 

 

 

 

 

Non-capitalized acquired technology (e)

 

 

 

2,621

 

3,856

 

Excess tax benefits from stock-based compensation (d)

 

15,181

 

590

 

37,024

 

727

 

Non-GAAP Cash Flows from Operating Activities

 

$

68,749

 

$

58,832

 

$

231,630

 

$

204,714

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

Purchases of property, equipment and leasehold improvements

 

(1,731

)

(1,381

)

(7,645

)

(4,011

)

Capitalized computer software development costs

 

(44

)

(84

)

(359

)

(685

)

Free Cash Flow

 

$

66,974

 

$

57,367

 

$

223,626

 

$

200,018

 

 


(a) GAAP total expenses

 

 

 

Three Months Ended
June 30,

 

Twelve Months Ended
June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Total costs of revenue

 

$

12,621

 

$

12,879

 

$

49,576

 

$

52,688

 

Total operating expenses

 

54,659

 

51,292

 

211,033

 

209,041

 

GAAP total expenses

 

$

67,280

 

$

64,171

 

$

260,609

 

$

261,729

 

 

(b) Stock-based compensation expense was as follows:

 

 

 

Three Months Ended
June 30,

 

Twelve Months Ended
June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Cost of services and other

 

$

337

 

$

329

 

$

1,351

 

$

1,239

 

Selling and marketing

 

774

 

627

 

3,056

 

3,280

 

Research and development

 

958

 

862

 

3,881

 

4,129

 

General and administrative

 

1,393

 

1,136

 

6,296

 

5,408

 

Total stock-based compensation

 

$

3,462

 

$

2,954

 

$

14,584

 

$

14,056

 

 

(c) The income tax effect on non-GAAP items for the three and twelve months ended June 30, 2015 and 2014 is calculated utilizing the Company’s estimated federal and state tax rate of 36%.

 

(d) Excess tax benefits from stock-based compensation are included in non-GAAP cash flows from operating activities and free cash flow to be consistent with the treatment of other tax benefits. Refer to the Company’s Form 10-K for the period ended June 30, 2015 for additional details.

 

(e) During the three months ended March 31, 2015 and 2014, we acquired certain technology for $3.3 million and $4.9 million, respectively, as a part of projects initiated during these periods to develop commercially available products. At the time of these purchases, the projects did not meet the accounting definition of having reached technological feasibility, and, as such, the costs of the acquired technology were expensed during the three and nine months ended March 31, 2015 and 2014.  During the three and nine months ended March 31, 2015 and 2014, we excluded the payments of $2.6 million and $3.9 million for the acquired technology from non-GAAP cash flows from operating activities and free cash flow to be consistent with the treatment of other transactions where acquired assets are capitalized.