The following is a summary of the Aspen Technology, Inc. (AZPN) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Aspen Technology reported a Q1 annual contract value (ACV) of $941 million, up 9.4% year-over-year, in line with expectations.

• Total bookings and revenue for Q1 were $151 million and $216 million, respectively, demonstrating growth from the previous year.

• Non-GAAP operating income stood at $49 million, indicating a non-GAAP operating margin of 22.5%.

• Free cash flow was reported as negative $6 million, slightly below expectations due to timing of collections.

Business Progress:

• Announced the anticipated acquisition of Open Grid Systems to enhance Digital Grid Management (DGM) suite capabilities.

• Launched new microgrid solution expanding its portfolio into industrial AI and sustainability.

• Achieved key customer wins including utility and oil companies, showcasing strong demand across asset life-cycle management solutions.

Opportunities:

• Expansion into European markets is being aggressively pursued, especially with regulatory requirements driving the need for Open Grid Systems' technology.

• The energy and utilities sectors are showing strong demand signals, particularly in North America and Europe, indicating further growth opportunities.

Risks:

• Notable increase in grid complexity and rapid changes demanding higher flexibility and faster adaptation in offerings.

• Attributed higher attrition rate in Q1 to the timing of renewals, presenting a risk of fluctuating performance metrics across quarters.

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