Aspen Technology (AZPN) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and fiscal 2024 results, driven by innovation, integration, and efficiency, with notable growth in DGM and utilities markets despite a dynamic macro environment and cautious customer spending.

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

• Exited Russian market due to expanded U.S. sanctions, resulting in a $35.5 million ACV write-off, $5.5 million Q4 revenue reversal, and workforce reduction.

• Announced a 5% workforce reduction in Q1 fiscal 2025 to streamline operations and align resources.

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

Financial highlights

• Q4 2024 revenue was $343 million, up from $320.6 million in Q4 2023; full-year revenue was $1.13 billion.

• Q4 ACV was $968.4 million, up 9.4% year-over-year and 3.5% sequentially; adjusted to $933 million after Russia exit, representing 10% year-over-year growth ex-Russia.

• Free cash flow for fiscal 2024 was $335 million, with $153 million in Q4.

• Q4 non-GAAP operating income was $173 million (50.6% margin); full-year non-GAAP operating income was $456 million (40.5% margin).

• Q4 GAAP net income was $44.7 million ($0.70/diluted share); Q4 non-GAAP net income was $150.7 million ($2.37/diluted share); full-year non-GAAP net income was $422 million ($6.59/diluted share).

• Ended fiscal 2024 with $237 million in cash and no debt.

Outlook and guidance

• Fiscal 2025 ACV growth targeted at approximately 9% from a $932.9 million base.

• Fiscal 2025 revenue guidance is $1.19 billion; total bookings ~$1.17 billion; GAAP net income $52 million; non-GAAP net income $478 million.

• Free cash flow guidance for fiscal 2025 is $340 million, with underlying growth of 15% after adjusting for one-time items.

• Expenses planned to remain flat year-over-year.

• Non-GAAP net income per share expected at ~$7.47; GAAP net income per share at -$0.81.