AZPN - Earnings call transcript Q1 2025

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Operator

Good day, and thank you for standing by. Welcome to the Q1 2025 Aspen Technology Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Brian Denyeau from ICR.

Brian Denyeau

Josh. you, Thank and our everyone, fiscal for us joining ending Good results thank for discuss financial XX, of the to September afternoon, XXXX. you first XXXX quarter

the AspenTech's CFO. bookings impact explanation note, AspenTech's on With on this contract and Antonio earnings financial results. It posted includes regarding value Topic other or of Please annual We today This our call. and to Baker, CEO; the ACV, conjunction IR we Pietri, cash website. XXX that me our on today's Dave metrics. free President definitions also among call an presentation and presentation have flow, ASC investors are of with an ask includes refer in to

our take our results by you differ to Starting XX-K press statements no of the on set events. cause on and this information as undertake this subsequent those materially today, Factors Slide are opportunity and could that forth remarks in update statements. results Actual will these X, that statements include may forward-looking differ to forward-looking based other statements. Form contemplated result make call from to we to remind of and report Any forward-looking with on SEC. we made as assumptions future filings these a I release obligation are these today like materially in annual today's would new on or

are today's certain press available both which Relations and measures present we non-GAAP measures. presentation, in this During to will Investor investor our both release of earnings GAAP non-GAAP website. A financial presentation, is on included and of reconciliation GAAP

Antonio? the call that, With me over to turn Antonio. let

Antonio Pietri

discuss us quarter our anticipated everyone. and joining for our utility XXXX. for to operations increasing for the acquisition on start of you, evening, The of announced fiscal addressing good of the today electric Hello, Thank by to like globally. the grid, I'd Thank first out you results Brian. Open driving push renewable generation market assets after are complexity electrification acceleration Systems and today. more to

will single truth or accurate and Systems complete management, able centralized to model Grid network offer the incorporating our utilities management fully DGM we to Around digital source a to customers into Open acquisition as network commitment models comprehensive The our a challenges. Suite, power technology assets. grid for need stock-in of of dedication critical AspenTech's to addressing By be and demonstrates real-time integrated to as utilities. grid solution visibility our well industry world, utility provide

them continuing years, look with Having to worked to welcome we the AspenTech growth capture this Systems opportunity excited important over industry. see closely to forward and in the team we're Open to Grid our partnership the

to expect we before Finally, closing close conditions XXXX, approvals. of comer acquisition the end to this subject and

value, we quarterly contract the QX. or in would about amount achieved with execution and our for outlook annual in to was like remainder we X.X% renewals for Overall, a QX, timing the of growth Slide expected and million X.X% quarter to feel year. our X turn I good as our our in what annual the attrition and in of well our Now ACV, due communicated of as the disproportionate the occurring last This increasing line was we quarter expectations and $XXX quarter-over-quarter to year-over-year.

cash address remarks. cash around the timing Free flow $X collections. free due our of was drivers modestly flow to the negative specific his expectations in in will QX, million below They

the X quarter. the key are Following takeaways first for

customers' focus achieved these collaboration operational First, enhancing a and our execution, on we strong excellence. through results continued

our we year years. past transformation built X and from the have our standpoint, historically the is for through QX integration the by excited lightest a in we're the pipeline While growth opportunities efforts see foundation and quarter we over this

ongoing macro strength asset of life most Second, testament the products we considering in the across is strength to solutions the cycle. continued demand our criticality our markets, the uncertainty. and mission we're across of This see by particularly encouraged a end

customers Third, portfolio and In capabilities we new more tap across our continue we opportunities help and end possible industrial by bundlers new QX, our introducing sustainability further push the to integrated launched into solution we the are of AI is our into our microgrid innovative to offerings. what seeing markets.

ACV we approximately of flow approximately million. year generation This in of cash Fourth our final, guidance. and confident and growth free remain XXXX X% includes $XXX annual

the robust of or our demand, Now Suite quarter. Slide Grid for to ongoing X our and benefit we customer relationships mission-critical turning to from innovation. strong in with grid our Starting first suites discussion Management a performances DGM, Digital continue

our recently the in rising for intelligence levels high also the market expect in our in international use in expansion. rapid of the pipeline tailwinds and sources investment combined We with foreseeable renewable growth internationally, future. to and These from continued by are this complexity centers with increase the the accelerated demand an artificial of sales most data for support latter grid by uptake America driving driven energy electricity, of North

our their capabilities operational our to partnership example, possibility remain or their resource for the to QX, advanced newest and marked U.S. our the system further evaluates forward. the we with momentum our management In management support management other excited we agenda. their to zero as This deal of capabilities communities about this energy utilities clean relationship or customer net as going energy implement as of distributed DERMS leading with well further grid ambitious goals continued utility the functionality among enhance ADMS distribution areas, a expansion and customer into

be company's to in excess to North better manage of a source SCADA storage hydrogen once into the and demand increases. electricity and back complexity leading and intermittent hydrogen utilizing operate network EMS our including the and By a of our will this electricity Sea. We large-scale mechanism energy of the the energy or utility also system a version management able this electricity into renewable as product, transmission customer reconversion Europe expanded the business wind in new offshore support with

remain grid the European and we the expansion we're about in region grow, experiencing the of well growing and complexity to the there opportunity. excited positioned traction continues the As

remains or Engineering where suite, solid. to upstream demand Subsurface Side SSE, and Turning the

We are seeing and their their of their available spend increasing reassessing token capabilities in on tools their digital performance ROI are model. this with of evaluating new subsurface our our to SSE digital optimize customers capabilities interest growing that business. options and improve and number the of and the their investment An increase in can part technologies flexibility

to In has national business. their other already QX, offerings deal tech competitor win a parts with here company deployed of American large displaced in that we oil adjustment for a South example, a successfully

our in driving drilling, better areas. support producers, them this outcomes value geology ability to analysis and As one across of the region's other key energy customer

Now and to turn AspenTech energy Suites. to with from Hearing, demand owner projects Slide operators we X sustainability-related and continue supporting strong traditional growth. both both EPCs our for our Heritage see

well high-velocity We logos accounts on sales which team, or with start-ups. are seeing and new our enterprise larger HBS is this as as level momentum with focused

Our of cases HBS new across sustainability a and logos. solid use wins range team, in particular, QX had different a with

Importantly, our projects online, come will we multiple as across these have expansion other suites. opportunities

Investor at focused as recent We we driving outlined our on also through solution growth Day. sales, remain

logistics most value an world's of benefits them based cycle and industry's leading only competitive the life in partnership, In existing After a one the adopt single their agreement energy, has concurrent groups of product business on carbon one on been previously to solution storage CCUS focused industrial our QX, evaluation and comprehensive to had areas, excited now capture of forward. to decision this and with this our engineering our point utilized partnering in the who in customer and going close support infrastructure, with the engineering of expanded among and offerings we're our other customer suite. we This or growing continue solution utilization made business. CCUS

downstream ways through a what and efficiency of industry Overall The deployments manufacturing second driving seen recent the have imbalances markets their focus in supply also chain value continued variety a and well meet economic MSC a expand and to perform sustainability demand with continue MSC to in operations. following has conditions generate we remain across and the consistent with customers in numerous to Our to improving XXXX. suite we half objectives their quarters, due fiscal or strong supply on work of conditions. help the margin chemicals continues to

refining lower their and under to pressure continue come these we of increase Additionally, to has see while late, margins as digitalization emissions. profitability customers oil invest in

would I I points as a couple note of in traveled from salient like I that to customer attended quarter. the meetings

First, optimization remain customers financial on performance. our and focused

million we identified multiunit have X an $XX from than savings $XX GDOT more of example, our the As million and product. deployment dynamic of customer optimization, recent implementations, in

existing a United our ability GDOT operations, regions. which large-scale of largest of a The first petrochemical facilities the a our States. to in further demonstrate optimize the help the engagements assets was their us Both to of significant of one value example range the the leading smaller for contracted across scope the drive second and for the of refiner deployment were and for strong customers in was with while Middle East, collaboration example outcomes

to our whom how period, turnaround our of partnership customer clear After and operating us our of realize a to for integrate months, of leveraged financial is their petrochemical last MSC that announced worked their of this technology strategies outline carbonization processes Over one this quick outcomes. and to of production with refining contribute sustainable through to technology in the Second, with operations exceeded customer owner-operator aviation we a expectations. we and fuels. XX example optimization the clear in a is these This the plant this the customers some experiencing in innovation. enhancements, impressive now results has products enhancements

drive of our COX The the offering Third, months. digitalization and suite. from in owner traditional the been declaration we're grown with reduce interest zero increasing the emissions downstream products sector, of capabilities in X operational efficiencies, a increase and carbon noticeable into by capabilities X upstream in over the to has X leveraging this to migration last operators MSC steadily net decarbonize with interest last years to objective experiencing

with the business. or by combination the strength and the Emerson's for won Performance strong of upstream in existing with Emerson. our our were APM, performed customers Asset points. of and sector AspenTech expanding We as strategy benefiting of in partnership pain focused the our in supported their well relationships Management noteworthy well the wins as Aspen our the equipment in Heritage APM maintenance X go-to-market asset our understanding predictive quarter, business reliability Finally, deals These with suite, on from product customers QX,

X sustainability. which In several released software Slide XX.X our in initiatives. includes to our update, R&D version industrial turning AI and product important our Now portfolio aspenONE and for QX, across enhancements we

automated has decision-making workflows. while planning and and accelerate asset optimize product to enable now For placement the This generative example, between and our design more additional supports understand equipment a trade-offs customers customers their capabilities process different that helping design Optiplan placement efficient also AI in options.

buy in announced We also with the suite, DGM the acquisition This capabilities a decision make deployed generate Open strengthen continue innovation. to where Systems. have of the we we accelerate cash is time versus positively Grid our to this

and grid a through truth grid of and model planning anticipated with The us network data navigation of Grid This for a utility ultimately, includes integration management visualization well of applications. provide offering data acquisition as management and overall a managing will complex improve source single and performance real-time model grid renewables increasingly approach model, reliability an Systems high-performance better analysis. network as grid Our better and solution data. to will improved Open architecture model for supporting unified integration

The governance addition data North stability coming energy support is Europe the and as ensuring of focused of will for technology increasing increasing the as grid well new given renewable utility and complexity this customers, the sources online. to and allow to requirements on from this regulatory American which grid in proper management our offerings interest modeling, us of

of excited been Finally, the meant recent in or of renewable expanded. our to customers' reaction that to solution microgrid management energy highlight October. adoption the years, positive sources asset-related has has complexity rapid In launch of the I'm network micro electrical

moment needs. for management proof of our load Day to resulting problem by cross-sell concert seeing innovation strong September. to the and X, enabling asset key point some manage Our investors energy in we're this opportunities. On I we their between would of launch storage to microgrid microgrids communicated a is This Slide with to at their our the helps like convergence in take a owners Investor and industries reiterate messages solve the active industrial solution to

to ongoing their of to billion industrial support software First, within of AspenTech parts the will addressable goals. sustainability, is that This these all tailwinds all total our software focused $XX demand the drivers or of electrification coming from benefit a market category. drivers on TAM digitalization, that excellence operational demand $XX believe remain asset-intensive with an represents innovation powerful a global energy important will some business We billion the industries transition and and strong the for years. cross-section long-term in

in maintain market. utilities chemicals the we market markets the strong a leading with Second, global energy, share and in momentum EPC

have focus time-tested by customers We on with in pathway a and grow this and token efficiencies leveraging of to proven model the site success. licensing our customer market

this expansion to organic disciplined deliver and ACV investment high in growth to we focus well margin double-digit position a single-digit margin to we execution dynamics us believe years. XX%. our multiyear expansion period, prudent Third, and of ACV the our healthy support can to believe coming XX% growth and on target Over

our years X strong meet QX of our In year. going start portfolio, forward. foundation a more have in a operating expanded than the to conclusion, solid was objectives place we to With

confident includes free approximately expectations Looking ACV of guidance ahead, and XXXX cash of we year growth which fiscal X% flow $XXX remain generation million. in for approximately our

With call over to of turn now the I you. over discussion that, to will for Dave, the Dave financials. a

David Baker

of and year were year. compared ] and the quarter X.X% in year-over-year timing due $XXX on XXXX and fiscal to respectively, QX QX Thank a of concentration ago. In [ fiscal the our we million, X.X% in and quarter-over-quarter. our revenue renewals was $XXX a you, fiscal to in to million ACV attrition review results. Total million hello, our million expectations of and and everyone. Slide XXXX, $XXX $XXX This higher grew to Antonio, X QX outcome line with relative Starting bookings

that and As our line are in consistent the QX and revenue results Topic XXX ASC a outcome. revenue is expectations quarter, were impacted by reminder, ACV QX revenue the Bookings in factors our our with under with renewal recognized bookings and same heavily timing. contract drove for

$XX in reported quarter income difference $XX primarily share per profitability the per revenue income we share For Non-GAAP $X.XX or lower $XX of quarter. profitability, basis, on ago. million representing in year margin. a the million net operating $X.XX in year-over-year XX.X% by was a operating driven non-GAAP a million QX, The non-GAAP to were compared in or

the cash with approximately our and The million to balance quarter sheet. no Turning and ended $XXX equivalents in debt. cash

also We $XXX credit ] our facility. had available million revolving under [

$XX negative year $XX to flow million, were On free respectively, negative Cash cash QX million flows. flow $X a and ago. million and in from operations cash compared $X million and

administrative modestly below our As primarily more timing expectations, tend Antonio from was to to companies mentioned, cumbersome. the this collections due result of processes in regions be where

monitoring Russia to in flows broadly, our by team increased related rigor relative workforce collections in companies sales year cash have and collections more for We prior difference timing to forward. deliver with driven the predictable coordination between reduction payments our geographies and More going our was these QX operating in to working are exit.

quarter. QX On for our shares authorization allocation. in last XX,XXX repurchase announced approximately purchased $XX share million $XXX under capital We million

Systems, recent Grid our over our Day line as will important material AspenTech It have priorities with grid Investor capabilities XXXX, laid it DGM to fiscal our capital allocation impact to will tuck-in out Open digitalization acquisition purchase of we accretive in add the at be suite. this a and to our expect time. to in and financials Regarding is not

with I to Turning close X. to would Slide guidance. like

metrics. outlook For we reiterating the full are all fiscal XXXX, our across of year

approximately first expect the XXXX, free estimate quarter to XX% EPS $XXX have cash shares in non-GAAP Relative with on we and ACV EPS appendix. X% detailed our reflect repurchase to generation and $X.XX free of to our our activity continue million We impact of flow presentation prior by in cash estimate underlying growth fiscal earnings the share outstanding. by growth approximately our flow of as guide, increased of $X.XX GAAP our in

For presentation XXXX a our please and IR complete guidance, to year overview refer of our on website. the release fiscal available press

On some investors the they Slide for included remainder for we year. commentary linearity XX, of the have about as think

the to quarter to cadence deal continue the we have variability some is we note ACV, pipeline. be current ACV for large also to a due several historically. that I growth would in in our seen potential expect opportunities First, for to what of similar there

to Second, free our now XXXX. flow, half expect for of second fiscal all in cash nearly the generate free we flow of cash

As the cash reminder, our our a typically of half substantial majority fiscal in a of generate we second year.

out year this to expectations pushed to collections the that Russia of fiscal as for this in the We which activities, to year. of execute our the as have restructuring QX the remainder larger well due expect payments onetime our for come exit the in over majority and of occurred QX,

revenue. the Third,

revenue million, revenue QX, to million highest quarter. QX expect be in between $XXX $XXX and our We

up We QX. with million $XXX also up fiscal for $XXX million have XXXX for in bookings renewal renewal in of

to conclusion, our objectives Demand remains and strong, delivered disciplined through we to strength In profitability well fiscal our meet execution exposure year are the growth year a and full on end solid with growth. we to track markets and are innovation, XXXX our objectives. start positioned of attractive on to and deliver

and closing back to you Antonio for Thank remarks.

Antonio Pietri

nature in solid a underscores drive our Thanks, helping macro role execution We trusted our operational excellence Dave. the results further delivered solutions and environment and uncertain on partner. through as growth of well ACV into focus as our our essential a as a of products the customers The QX strong strength

further Josh? of open this also Open excited Looking growth . With ahead, markets. opportunities new enhance AspenTech to grid technology. our critical through we're energized to end the to Systems questions. team by to we'll across the we it up welcome our Grid innovation range wide see We're and that,

Operator

[Operator from next Becker Blair. Instructions] Dylan question with comes Our

Dylan Becker

continue to budgetary we've of expectations about But between trend like fiscal I kind of past off, calendar and alignment lumpy It kind of years. cycles relative accounting talked very kind is in starting know expectations. the the to the sounds here. Maybe obviously of

if So can on given out? their of those sense I customers into kind about the give and are macro continue how maybe is sentiment to software how general play some of us wonder see you trending, thinking budget of of a kind factors, year-end we evolution

Antonio Pietri

here, I about my future calendar CEOs about like that the corner. budgets, based look will the Dylan, decrease think probably so get how observations thinking to end I come rates I is commentary interest in especially environment do uncertainty looks creates certainly a around favorable will uncertainty customers. always a down that that be Certainly, the hopefully uncertainty that have that will includes from and will outcome year place plays put in be think investors. iron we mean, our for soon and think a continue economic the in I -- that and as more and And role that 'XX, will calendar election we a But on to for big think plans context, we another they big in will investments. year did will than this to our disappear. But 'XX. fiscal June, that -- and better conditions at looking and in last we sense rain then know August announced tomorrow standpoint, the of

strong from -- conditions overall that demand the a calendar that through that's is refining of good that we've we're why guidance. downturn, given the reiterating in first utilities. the year, and that second assumed similar in a have the Chemicals 'XX, you, seen from we've And We conditions business our will half. half to continued first guidance half what of still this support fiscal demand remain sector

Dylan Becker

cetera, the the sense, kind microgrid generally touching given Maybe receptivity on not Okay. you the chemicals, DGM how the markets that's that growing if But threat the about the end a et innovation of into kind That's opportunity. get now around kind core for like across suite, of the that also interested only available within offering, kind really but you environment. to of proliferation obviously, will. Be refining, DGM what of think opportunity, unlocks helpful. newer

Antonio Pietri

the that, is mostly in But solution for nonutility Yes. able talking and formal electrifying chemicals I fact subways a where we airports mining the And but and and of transportation with will launch go then see assets opportunities refining, take already to big that customers. customers solution, are In that used the meet It's our heartly in around a into the these into they microgrid matter whole will about way, that using certain own offering, as well. microgrid it sales be the that purpose. of DGM -- renewable as is sector. energy -- with organization we as customers, DGM

microgrid this solution value. So play create lot a where is a and a can then of role

of So many our we're excited into about other DGM industries. this because it expands use suite the

Operator

question comes Jason with Our KeyBanc Markets. next Capital Celino from

Jason Celino

the infrastructure pull that understand Maybe of as theme. versus push think first need is we sticking Like where grid DGM and to the one, kind of to enormous. you're upgrade about manage expanding

these moving? and that Open about thinks think like and coming see we Grid,acquisition. power you of the they want the companies like when the expansion suggestions to then Does where versus this much puck microgrid where So make expand utility is How Aspen is from from sense?

Antonio Pietri

around we're ideas. Yes. on Also its No, totally. in another in an in that DGM increasing deck where innovation. this for Europe. a for all of outage now an subcontractors -- Innovation moment lot there's of requirement great us network with Customers around Medina, believe in we Grid absolute develop the you located, it X application the DERMS That this that our introduced lot projecting. the also to made But Medina, a or I -- very And And Minnesota. a accelerated sense this need that acquire. And game. good grid, from management. the newly and resource have us time. source been that by management, to at in started We're of in our relationship developed in has by for for the where it's made management electrical is one Systems. They therefore, to authorities of team in America need this was therefore, are new is scenario and projects is an we it's is business interest hands energy capabilities Europe ahead model our get Open look, are application, a regulations expand deploying which Europe, applications, European everywhere. X distributor North case, ideas it would especially the sense at a team new

So were area. out to formalize especially we that and really and case, us of relationship having a in think certainly this Europe, in us I customers pushing -- driving

Jason Celino

Okay. one Perfect. I pipeline. nicely. then Was second large The it's maybe for ACV? accelerating looks second in several mean Dave. what opportunities revenue quarter? for And implied guidance comment you the quarter for might know mentioned deal this Directionally, like XQ that a specific

David Baker

The to indication ACV, have revenue an our we more expect And it the to what trends renewals. timing been. really, just is the historical be similar really of of

As Topic XXX you lumpy. becomes very ASC know, because of

little And guidance a so bit to of give trying that a quarterly accounting. revenue basis we're due further to on just

Operator

Our from Markets. Schappel with Mark Loop question [Operator Capital comes next Instructions]

Mark Schappel

a the it little under Antonio, detail. deals meaningful wondering could review more in quarter, if just wins those APM hear was to strategy. you in of I nice especially the the new was

Antonio Pietri

leads a -- they with these cycle our are very to quick parties, mean, management the us bring are table. to big because capabilities of introduce capabilities familiarity that customers X points. and lot MSC between They the all therefore, customer. for the are AspenTech Emerson, a of customers' engineering. understand that see Emerson own deals. They and is solutions need it pain AspenTech's Yes. and in sales and there's And brings Mtell asset introduce there look, in us and users good I the also and customers, predictive performance both a solutions Aspen their very they Emerson HAT

about AspenTech. in transaction So places or between a I customer that these be this. with that very happy can But repeated is happened one X And refining many type an believe and of Emerson certainly customer. this

Mark Schappel

Open was bringing just through I new Great. if company did already run the the you wondering to have? And then just going Grid, that you could not back that capabilities is

Antonio Pietri

had did more we some Open more System way, much in product by customers. with acceptability and in in and a the but that a greater area, capabilities deployments have market Grid Well,

are about order customers new It especially to to line very we in a change for distribution sense a case. network management for would us the transmission take consumers, of time buy degree network a be this it But new accelerate in lot used to market made source much. you develop. didn't their for a is the that So repeating Look, and to residential on data a houses These itself those hundreds, lot not operators their the the of of challenge a are and putting is into do is up and in a having happening relationship solar flow the as that panels grid solar models, maintaining panels thousands model a electricity or times and have grid. if become long -- consumers would day. grid, of a complexity

to eventually this operate allows their address up. to it important and grid if does, they is allows fashion what issues as So were models models, keep technology a automated they in to maintain look them up more a which changes to customers grid with the very come to their grid

this organization. to really our accelerating excited own So this technology we're very about the sales market and forward with to looking

Operator

comes question next from Baird. Our Rob Oliver with

Robert Oliver

And sales first speaking, months, I think, out other correctly. focus called remember one Day reminding the guess, guys and on previously, at a I if are things, XX generally long I of the Analyst business, management cycles think is to said is the just questions. one of us you both Europe. have I know in business the couple couple a grid that is I you So on this XX

would it's how when look it's I playing your at Europe you kick whether from pipeline, as deal know expectations? Antonio, in. out -- update wanted I on just is to get So that to you, just more relative an fiscal 'XX

expect And a those And are I at progress how follow-up all? is in Europe within Europe more the happening? I it's how is the had help a deals evolving know will So in which tuck-in tech Dave. And open Europe given should an grid, for pipe? domiciled then we then of

Antonio Pietri

customer North to in and base, technology Look, see especially the cycle rapidly We'll X that what then years. also we're therefore, our because East. continue DGM, we American it go see to is Europe will spend branding our next Europe, and this the Pacific which sell fiscal large. an happy next about integrating where regulatory we're getting it that only deals of sales is XX pipeline. the a the sales new building in the the significant profile see But over and over the months, for it it's and up your ready therefore, is -- technology of also requirement the Grid Look, 'XX. for team And building customers and competitive presented expect which because, suite. tokens customers existing Europe. as business pipeline Middle about in we technology well. 'XX And to technology, opportunities of in expect the we in time to well takes is us but normally now we the in couple to Asia Systems to our uptick do huge and on Europe, there's signing requiring developing it but already we'll again, point pipeline globally in But as 'XX, North in Europe, this number are a in in And customers. fiscal Yes. working of will and meantime, out those enhance European be very America loan look, and are We that in demand thing course, now can great Europe. our is about Open The so

Robert Oliver

Dave, then got And asked, apologize I that. -- think off this appreciate knocked it I I but was I briefly. helpful. was if don't That's

been out a to flow something, also these assume what think company, I to all proper second or free put could a the or some have half-loaded guys alleviate -- cash geos? so there. but processes to what this collections I were. called place from finer geos on if maybe is guys some risk? you in And mean, for timing wanted get challenges just know sense those that wanted of I you I -- I called And ask of you does check what that half. And mitigate always And out in point of out, about called collection going these on put just have a to the the you've be you collections you technology

David Baker

Yes. Sure, Rob.

onetime that administrative procedures are of first timing So the of coming those the that a the earlier we've not the the just big impacted the It's which more the through instituted timing. collections QX. what comparables pretty with to some the I've geos are is as really necessarily due they in confident out about, And and are booking out identifying coming were new of that's the talked really slower that as deals by But we related sales team. -- fully of more collections well both with collections payments half team, are the really the to team. partnering

the can plan. kind hang free is million flow do confident And $XXX of and in of So little we've we're sales a bit that the earlier the with maturing longer we together the identify approximately down collection, partner teams we're ideal and learning, drive we going of to Rob. cash $XXX -- on and to are the million length time that and -- year,

Operator

with [Operator Instructions] Piper comes Our Clarke next Jeffries question Sandler. from

Clarke Jeffries

of of landed that talked follow-up, through think a as to full that larger, Just It have the on another platform? of this sit be second, like overlap be as in then the any is opportunity X.X% but has is about can year. customer given Is there on much something will you the it sort ask, balance way I And going versus the Monarch Open the regulatory Grid. on different top in index that platform you especially small, for can the then that is to year? all the tailwinds. attrition future the we X% applicable wanted utilities how QX sounds had follow of modules to to today,

Antonio Pietri

Yes.

the -- the the of So that is part Monarch your question, first of some fact ADMS and and is integrating applications, top on. yes. DERMS The certainly, first answer to your technology to Grid the on other will look, Open of sit so to the solution and System

attrition. With a said attrition question Look, in dumbbell a call shape. fiscal -- yes. So in our sort of respect we the timing respect was attrition part in bit little to QX. guided we and to attrition and a the then the and of With be because QX, for you guided We of X.X% QX of just was less in we of QX to August had High that the to second then in year. renewals attrition to QX of attrition. that the

a we make that. -- can say and you attrition but this look, So it's well, around to assumptions But came about how QX. some weird overall little feel good in, in

we will SSE, will and I be QX, line be slipped renewal how there to about growth. very But way that with work new at a feel now QX available for takes. managing were we came deals attrition. overall, this some puts moment. attrition, in SMS be in think -- into done define -- and Unfortunately, what good And is rigorous about be the very we we're that a couple a good did But the in there definition. very we had can attrition of the expected,

Operator

Wolfe Our next Arsenije comes with Research. from question Matovic

Arsenije Matovic

kind ask in historical Should commentary understand see understand Sorry renewal in Arsenije down more last XQ? kind growth has this year renewal Just QX Matovic to renewal especially How think Understanding the XQ? Tilton. cadence, than now about much of that parse and to year the that? cadence be last Josh I of XQ. versus bookings bookings had about It's for to versus higher we to the the for historical be ACV on should given about how lower should and are of XH on it just growth last that. the kind wanted thinking last bookings ACV. the we QX of QX

David Baker

well potential Again, attrition out be tricky the renewal attrition. The renewals as as are can I very in to to historical. result opportunities all we sight would not little expect there, a attrition have what good and timing the going bit to similar to because ACV be our

is high, attrition of because just high So as well. doesn't renewals our mean are

be confident to in growth would do that? what ACV had Antonio, past. similar in a we expecting similar we're I you I are we pattern. think -- So the we very to the in that expect very And add our have to want to

Antonio Pietri

Yes.

fact Let on the that we some that an agreement duration the their about there's is matter an and renewal growth. to escalation to me most and growth the comment. don't the attrition because a Dave's we factor add of that's renew We color see through later just the or driver with that of have of when little only it of times, when time just as only need opportunity at on sometimes customers is customers happens careful think how growth the agreement maybe growth to and we renewals but The it. comes to fact or renew growth, AspenTech when Attrition them, it's have an expired happens because not agreement. renewal spend reduce for very agreement be

a is ACV the part to is are related, most Growth Attrition for absolutely not. and not related So event. the growth necessarily X attrition. renewal

So let's . that I just provide want to insight. clarify or that

Arsenije Matovic

Really helpful. it. Got

that in Now Or on I the tech I to And there just you? was a guess, is was your split ahead there heritage segment, line? everything businesses, in just anything significantly had DGM was follow-up. brief -- expectations? of guess, out I all QX high-level as was an the anything really that

Antonio Pietri

have and that's performance guided longer, for faster, the limited, had more linear need really these what No. We're the of both and I'm number. make in had, and CapEx Look, to that investors demand excited where attrition is that we assets more operate reliable about sure what is customers frankly, sort these environment customers environment. digitalization, sustainability seeing greener had to can that an do. we we But we mean, that they I yes,

So energy digitalization, the electrification again, electrification combination -- and of, global transition, sustainability. think I

All perfect environment of a company. the this really for is

Operator

call I any would Antonio for closing to now back remarks. to over the like turn Pietri

Antonio Pietri

going Wells investor everyone, Summit first of and NASDAQ right. the TMT and We're the you, second and London conferences Josh, weeks All call the the to Thank Fargo today. thank in you, December. joining for be attending

please for many out events. those more So our touching with forward on We to Investor soon. to look you information team reach Relations of

thank joining, you, you Thanks. we for everyone, So the on road. see and will

Operator

for conference. you. This your you the Thank concludes Thank participation.

disconnect. You may now

Aspen Technology (AZPN) 4 Nov 242025 Q1 Earnings call transcript