Fiscal 2010 continues to be not such a good time to compare year-over-year results, due to the company’s change in accounting methods. Sequentially, the company shows improvement in their third quarter.

Aspen Technology, Inc. (NASDAQ: AZPN) reported its financial results for the third quarter of its fiscal year 2010 this week. In a break from our usual  financial coverage, we are playing down year-over-year results. As explained in our article for AspenTech’s second quarter (“New License Plan
Forces AspenTech Second Quarter Loss”), the leading vendor of software for managing processing manufacturing has changed its accounting methods on how it records subscription and license income.

Total revenue for the quarter (ending March 31, 2010) was $45.6 million. Of that, subscription revenue (including all revenue associated with the company’s new aspenONE licensing model) was $4.0 million, up from $1.2 million last quarter. No subscription revenue was recorded in the year ago period as the company’s new aspenONE licensing model was launched during the first quarter of fiscal 2010.

Under the new accounting methods, subscription revenue is recognized over the course of a multi-year agreement, and recognition begins when the first payment is due, which is typically 30 days after the contract is signed.

Software revenue (all non-subscription-based license revenue, including term-based contracts for point products as well as perpetual licenses) was $14.7 million in the third quarter of fiscal 2010, compared to $41.1 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is
recognized over the contract term, generally as payments become due. In prior fiscal year periods, the company recognized term license revenue predominantly on an up-front basis, and the majority of license bookings were recognized as license revenue in the same period.

Services and other revenue, (including professional services, maintenance and other revenue) was $26.9 million in the third quarter of fiscal 2010, a  decrease compared to $30.2 million in the year ago period.

Because of the shift in revenue recognition, AspenTech reported a loss from operations of $19.6 million in the quarter.

AspenTech had a cash balance of $119.1 million at March 31, 2010, an increase of $9.6 million from the end of the prior quarter. Cash per share on March 31, 2010 was $1.30, up from $1.19 at the end of 2009. The company did not sell any installments receivable to raise cash during the third quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $87.4 million at the end of the quarter, down $9.1 million compared to $96.5 million at the end of the second quarter of fiscal 2010. §