Aspen Technology (AZPN) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and FY24 results, driven by innovation, integration of acquired businesses, and efficiency initiatives, with notable execution in DGM and utilities markets.

• Integration of Heritage AspenTech, DGM, and SSE businesses largely completed, positioning for continued ACV growth and profitability.

• Exited Russian market due to expanded sanctions, resulting in a $35.5M ACV write-off, $5.5M revenue reversal, and workforce reduction.

• Industrial AI and microgrid solutions highlighted as key innovation drivers for future growth.

Financial highlights

• Q4 FY24 revenue was $343M, up from $320.6M in Q4 FY23; full-year revenue $1.13B.

• ACV reached $968.4M in Q4 FY24, up 9.4% year-over-year; adjusted to $933M after Russia exit, representing 10% growth ex-Russia.

• Free cash flow was $335M for FY24 and $153M in Q4; cash and cash equivalents at year-end were $237M.

• Non-GAAP operating income was $173M in Q4 (50.6% margin) and $456M for the year (40.5% margin); Q4 non-GAAP net income was $150.7M ($2.37/share).

• Completed $300M share repurchase in FY24; new $100M authorization for FY25.

Outlook and guidance

• FY25 ACV growth targeted at ~9% from $932.9M base; total bookings expected at ~$1.17B, revenue ~$1.19B.

• FY25 non-GAAP operating income projected at ~$514M; free cash flow guidance ~$340M.

• GAAP net income guidance ~$52M; non-GAAP net income ~$478M.

• Workforce reduction of ~5% planned in Q1 FY25, with $7M–$9M restructuring charges and $25M annualized cost savings.

• Expenses planned to remain flat year-over-year; attrition expected to improve to ~4.5% in FY25.