AspenTech Delivers Strong Q4 Results Despite Suspending Operations In Russia: Details

Aspen Technology, Inc. AZPN shares are trading higher after the company reported better-than-expected Q4 FY24 financial results on Tuesday.

Revenue stood at $342.9 million, beating the consensus of $319.16 million.

At the end of fiscal 2024, Annual Contract Value (ACV) reached $968.4 million, marking a 9.4% increase Y/Y and rose 3.5% Q/Q, in the quarter.

AspenTech has suspended all commercial activities in Russia due to expanded sanctions and has written off approximately $35.5 million in Annual Contract Value (ACV) as of the end of fiscal 2024.

As a result, ACV stood at $932.9 million as of June 30, 2024. Excluding Russia-based ACV for both fiscal 2023 and 2024, ACV increased by 10.0% Y/Y in fiscal 2024.

Adjusted income from operations in Q4 stood at $173.4 million, up from $148.9 million in the prior year quarter, due to lower operating expenses and reduced stock-based compensation.

Adjusted EPS of $2.37 surpassed the street view of $2.08.

In fiscal 2024, cash flow from operations was $339.9 million (+13.6% Y/Y) and free cash flow was $335.3 million, reflecting a 14.7% increase Y/Y.

Buyback: AspenTech’s Board of Directors has approved a $100 million share repurchase authorization for fiscal 2025.

The company completed its $300 million share repurchase authorization in the fourth quarter.

As of June 30, 2024, AspenTech had cash and cash equivalents of $237 million and had no borrowings under its revolving credit facility and $195.1 million available.

Outlook: For FY25, Aspen Technology sees adjusted EPS of ~$7.47 vs. an estimate of $6.90 and revenue of ~$1.19 billion vs. $1.11 billion estimate.

Also, the company projects ACV growth of ~9.0% Y/Y and bookings of ~$1.17 billion.

Antonio Pietri, president and chief executive officer, said, “The strong performance of our DGM suite in the full year was a great demonstration of the significant growth opportunities in the utilities market and the benefit of our diversified end-market exposure.”

“In fiscal 2025, we are targeting another year of solid ACV growth, even as we manage through a dynamic macro environment. At the same time, we are focused on driving toward best-in-class profitability and plan to continue enhancing our productivity and efficiency.”

Investors can gain exposure to the stock via ProShares S&P Kensho Smart Factories ETF MAKX and FM Focus Equity ETF FMCX.

Price Action: AZPN shares are up 17.3% at $208.70 at the last check Wednesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image created using artificial intelligence via Midjourney.