Aspen Technology (AZPN) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 delivered resilient ACV growth of 9.4% year-over-year to $941.4M, despite macro uncertainty and lower total revenue and bookings due to contract timing and attrition.

• Announced acquisition of Open Grid Systems Limited for $45M to enhance digital grid management, expected to close in Q2 FY2025.

• Net loss widened to $60.5M from $34.5M prior year, reflecting lower revenue and higher restructuring costs.

• Free cash flow was negative $6.4M, below expectations due to timing of collections, workforce reduction, and Russia exit.

• FY2025 guidance reaffirmed: ~9% ACV growth, ~$340M free cash flow, and strong pipeline in sustainability and AI.

Financial highlights

• Q1 revenue was $215.9M, down from $249.3M year-over-year; bookings were $151.4M, down from $211.8M.

• Non-GAAP operating income was $48.6M (22.5% margin), down from $77.8M; non-GAAP net income was $53.9M ($0.85/share), down from $74.9M ($1.16/share).

• GAAP net loss was $60.5M; GAAP loss from operations was $96.0M.

• Cash and equivalents at quarter-end were $221.1M, with $194.5M available under the revolving credit facility.

• Free cash flow was negative $6.4M, compared to positive $16.0M prior year.

Outlook and guidance

• FY2025 guidance: ~9% ACV growth, ~$340M free cash flow, total revenue ~$1.19B, bookings ~$1.17B.

• GAAP net income expected at ~$52M ($0.82/share); non-GAAP net income at ~$478M ($7.52/share).

• Most free cash flow expected in the second half of FY2025 due to timing of collections and one-time payments.

• Q2 revenue expected between $290M-$300M; Q4 anticipated as the highest revenue quarter.

• Attrition for FY2025 projected at ~4.5%, with higher attrition in Q1 and Q4 due to renewal timing.