What Triggered the rally: Aspen Technology, Inc. (NASDAQ: AZPN) stock rose over 13% on January 24th, 2019 (Source: Google finance) after the company posted better than expected results for the second quarter of FY 19. For the quarter ended December 31, 2018, AspenTech reported income from operations of $63.8 million, compared to income from operations of $30.1 million for the quarter ended December 31, 2017. The company has delivered the net income of $59.2 million for the quarter ended December 31, 2018. AZPN has cash and marketable securities of $54.4 million and borrowings of $220.0 million at December 31, 2018.
Stock Buyback, another major booster: For the second quarter 2019, annual spend was $513 million, up 9.4% year-over-year. Free cash flow was $57.3 million, and the company returned $100 million to shareholders by repurchasing approximately 1.2 million shares. During the quarter, the company accelerated the share repurchase program. The company has recently approved an expansion of the share repurchase authorization from $200 million to up to $300 million for fiscal 2019. The company intend to repurchase $75 million of stock in both the third and fourth fiscal quarters, subject to business and market conditions.
Positive Milestones: Moreover, during the second quarter 2019, the company has closed APM transactions in eight different countries in the refining, chemicals, pharmaceuticals, mining, engineering and construction, and air separation industries. APM is a global business with 53 customers in 19 countries across a variety of industries. Six of the APM transactions closed in the second quarter were in the six figure range, three of which were in the mid six figure range.
AZPN in the second quarter of FY 19 has reported the adjusted earnings per share of 92 cents, beating the analysts’ estimates for the adjusted earnings per share of 66 cents. The company had reported the adjusted revenue of $140.4 million in the second quarter of FY 19, beating the analysts’ estimates for revenue of $120.4 million. License revenue was $93.4 million in the second quarter of fiscal 2019, compared to $57.0 million in the second quarter of fiscal 2018. Services and other revenue was $6.0 million in the second quarter of fiscal 2019, compared to $7.8 million in the second quarter of fiscal 2018.
In the second quarter, the engineering business built on the progress the company made in the first quarter and is tracking ahead of the expectations so far in fiscal 2019. The growth generated in the first half of fiscal year 2019 already exceeds the growth achieved in fiscal year 2018 for that business