Aspen Technology Reports 18% Revenue Growth and Net Income Turnaround for December Quarter

Aspen Technology, Inc. reported a total revenue of $303.6 million for the three months ended December 31, 2024, marking an 18% increase from $257.2 million in the same period last year. The company's net income for the quarter was $20.3 million, a significant turnaround from a net loss of $21.5 million in the prior year. For the six months ending December 31, 2024, total revenue reached $519.4 million, a slight increase of 2.6% compared to $506.5 million in the previous year, while the net loss narrowed to $40.1 million from $56.0 million.

The financial performance was bolstered by a 23.5% increase in license and solutions revenue, which rose to $188.2 million, and a 25.9% increase in services and other revenue, which reached $24.7 million. Maintenance revenue also saw a 6.5% increase to $90.6 million. The overall gross profit margin improved to 68.9% for the quarter, up from 63.1% a year earlier, primarily due to higher revenue and lower costs associated with license and solutions.

In terms of strategic developments, AspenTech completed the acquisition of Open Grid Systems, Ltd. on November 15, 2024, for a total cash consideration of $48.9 million. This acquisition is expected to enhance AspenTech's capabilities in network model management technology. Additionally, the company announced a merger agreement with Emerson Electric Co. on January 26, 2025, under which Emerson will acquire all outstanding shares of AspenTech at a price of $265 per share. The merger is anticipated to close in the first half of 2025, subject to various conditions.

Operationally, AspenTech reported a customer base that spans 113 countries, with a notable increase in annual contract value (ACV) to $964.9 million as of December 31, 2024, reflecting a 9.2% growth year-over-year. The company also reported a total contract value (TCV) of $4.1 billion, up from $3.7 billion a year earlier. The employee headcount remained stable, with 63.3 million shares of common stock outstanding as of January 31, 2025.

Looking ahead, AspenTech's management expressed optimism regarding the company's growth trajectory, driven by the successful integration of recent acquisitions and the anticipated benefits from the merger with Emerson. However, they acknowledged potential risks associated with the completion of the merger and ongoing geopolitical tensions that could impact operations, particularly in the Middle East. The company remains focused on leveraging its software solutions to address the evolving needs of asset-intensive industries while navigating these challenges.