Aspen's Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y

Zacks

Aspen Technology, Inc. AZPN reported second-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $2.06, which surpassed the Zacks Consensus Estimate of $1.85 by 11.4%. The figure jumped 50.4% from the year-ago non-GAAP earnings of $1.37.

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The company reported revenues of $303.6 million, which beat the Zacks Consensus Estimate of $294.5 by 3.1% and jumped 18% from $257.2 million in the year-ago quarter.

Aspen Technology, Inc. Price, Consensus and EPS Surprise

Aspen Technology, Inc. price-consensus-eps-surprise-chart | Aspen Technology, Inc. Quote

AZPN’s Quarter in Detail

License’s revenues (62% of revenues) were up 23.5% year over year to $188.2 million. Maintenance’s revenues (29.8% of revenues) rose 6.5% to $90.6 million. Revenues from Services and other (8.2% of revenues) surged 25.9% to $24.7 million.

As of Dec. 31, 2024, annual contract value or ACV ( which Aspen Technology defines as the estimate of the annual value of our portfolio of term license and software maintenance and support, or SMS, contracts, the annual value of SMS agreements purchased with perpetual licenses and the annual value of standalone SMS agreements purchased with certain legacy term license agreements, which have become an immaterial part of its business) amounted to $964.9 million, up 9.2% year over year and 2.5% quarter over quarter.

Margins

Gross profit increased 29% to $209.3 million from the year-ago quarter figure of $162.2 million. As a percentage of total revenues, the figure reached 68.9% from 63.1% reported in the prior-year quarter.

Total operating expenses amounted to $200.3 million compared with the year-ago quarter figure of $211.5 million.

Non-GAAP operating income totaled $149 million compared with $88.7 million reported in the prior-year quarter.

Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash and cash equivalents were $181.8 million compared with $237 million as of June 30, 2024. The decrease was due to the effects of share repurchases under the company’s fiscal 2025 buyback program in the first quarter of fiscal 2025, along with a net cash outflow of $36.5 million in the second quarter for acquiring Open Grid Systems Limited.

In October 2024, Aspen announced its agreement to acquire Open Grid Systems, which will enhance its DGM suite with advanced network model management and data infrastructure. As of Dec. 31, 2024, AZPN had no outstanding borrowings under its revolving credit facility, with $194.5 million available.

The company generated $38.1 million in cash from operations compared with $29.8 million reported in the year-ago quarter. Non-GAAP free cash flow was $36.4 million in the fiscal second quarter compared with free cash flow of $29.2 million in the prior-year quarter.

In the second quarter of fiscal 2025, Aspen repurchased $2.2 million worth of shares.

Fiscal 2025 Outlook

AZPN will not hold an earnings conference call for its second-quarter fiscal 2025 results or provide guidance due to its agreement and plan of merger with Emerson Electric Co. EMR and Emersub CXV, Inc., which was signed on Jan. 26, 2025.

Per the deal, EMR will acquire all remaining outstanding shares of Aspen’s common stock that it does not already own. The agreement, structured as an all-cash tender offer, values the minority stake at $7.2 billion, with a per-share price of $265.00.

This transaction places Aspen’s total market capitalization at $17 billion on a fully diluted basis, with an enterprise value of $16.8 billion. As previously stated, the tender offer requires a non-waivable condition that a majority of AZPN's common stock held by minority shareholders must be tendered and remain unwithdrawn. The transaction is anticipated to close in the first half of 2025, subject to customary closing conditions.

AZPN’s Zacks Rank

Aspen currently has a Zacks Rank #3 (Hold). In the past year, shares have gained 36.5% compared with the Zacks industry’s growth of 33.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in Broader Tech Space

Plexus Corp PLXS reported first-quarter fiscal 2025 adjusted EPS of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.

In the past year, shares of PLXS have gained 50.1%.

Seagate Technology Holdings plc STX reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.

In the past year, STX shares have gained 9.7%.

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Emerson Electric (EMR) Q1 Earnings Surpass Estimates

Zacks

Emerson Electric (EMR) came out with quarterly earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.28 per share. This compares to earnings of $1.22 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 7.81%. A quarter ago, it was expected that this maker of process controls systems, valves and analytical instruments would post earnings of $1.47 per share when it actually produced earnings of $1.48, delivering a surprise of 0.68%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Emerson Electric, which belongs to the Zacks Manufacturing - Electronics industry, posted revenues of $4.18 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.91%. This compares to year-ago revenues of $4.12 billion. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Emerson Electric shares have added about 3% since the beginning of the year versus the S&P 500's gain of 2.7%.

What's Next for Emerson Electric?

While Emerson Electric has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Emerson Electric: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.43 on $4.45 billion in revenues for the coming quarter and $5.91 on $18.06 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - Electronics is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Plug Power (PLUG), is yet to report results for the quarter ended December 2024.

This alternative energy company is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of +78.5%. The consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level.

Plug Power's revenues are expected to be $260.18 million, up 17.1% from the year-ago quarter.

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Alphabet, Apple, Chipotle and Uber fall premarket; Snap rises

Investing.com

Investing.com -- US stock futures slipped lower Wednesday, as investors focused on a slew of earnings and trade tensions between the US and China.

Here are some of the biggest premarket US stock movers today:

Alphabet (NASDAQ:GOOGL) stock fell 6.9% after the Google parent said it plans to spend $75 billion on building out its artificial intelligence capabilities this year, well above the $58 billion in capital expenditures pencilled in by analysts.
Apple (NASDAQ:AAPL) stock fell 2% after Bloomberg reported that Chinese regulators are considering whether to open a formal probe into the iPhone giant’s App Store fees and policies.
Snap (NYSE:SNAP) stock rose 2.3% after the Snapchat-owner posted better-than-expected quarterly earnings and issued upbeat guidance on the back of stabilizing digital ad spending.
Chipotle (NYSE:CMG) stock fell 4.6% after the burrito chain reported fourth-quarter same-store sales that rose less than expected.
AMD (NASDAQ:AMD) stock fell 9.8% after the computer hardware manufacturer's fourth-quarter data center revenue came in at $3.9 billion, below consensus expectations of $4.15 billion.
Walt Disney (NYSE:DIS) stock rose 1.6% after the media giant posted better-than-anticipated first-quarter earnings, bolstered in large part by returns during the holiday period from its animated film "Moana 2".
Uber (NYSE:UBER) stock fell 5.3% after the ride-hailing and food delivery giant forecast current-quarter bookings below estimates, joining a slew of US companies in warning that a strong dollar could hurt the first three months of 2025.
New York Times (NYSE:NYT) stock rose 0.2% after the newspaper forecast first-quarter subscription revenue growth below estimates, signaling growing competition for attracting new subscribers.
Emerson Electric (NYSE:EMR) stock fell 1.5% after the engineering company issued weaker-than-expected guidance for the second quarter.
Capri (NYSE:CPRI) stock fell 3.3% after the fashion holding company forecast annual revenue below estimates, as the Michael Kors owner grappled with slowing demand for luxury goods and persistent declines in the Americas and Asia.
Harley-Davidson (NYSE:HOG) stock fell 3.1% after the motorcycle manufacturer said it expects 2025 motorcycle revenue to be flat to down 5%, as consumers pulled back from big-ticket purchases.

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Loop Capital Downgrades Aspen Technology to Hold From Buy, Adjusts Price Target to $265 From $260

MT Newswires

Aspen Technology

+0.48%

Aspen Technology has an average rating of Hold and mean price target of $261, according to analysts polled by FactSet.

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Stock Futures Fall Amid Alphabet, AMD Declines; Asia, Europe Churn

MT Newswires

Advanced Micro Devices

-6.27%

Chipotle Mexican Grill

-2.56%

The main US stock measures were trending downwards in Wednesday's premarket activity as traders digest the latest quarterly results of Alphabet and Advanced Micro Devices .

Standard & Poor's 500 declined 0.5%, the Dow Jones Industrial Average edged down 0.1% and the Nasdaq fell 0.9% before the opening bell. Asian exchanges and European bourses were mixed to lower.

Alphabet's shares dropped 6.6% pre-bell as the Google parent company's fourth-quarter revenue fell short of market estimates. AMD fell 8.9% as the chipmaker forecast a sequential decline in first-quarter revenue. Chipotle Mexican Grill slid 5.9% as the burrito chain reported its fourth-quarter results.

Novo Nordisk's US-listed stock increased 3.8% before the opening bell as the Danish pharmaceutical company reported its latest quarterly results. Apple was down 2.7% following media reports that the technology giant may face an antitrust probe by China's State Administration for Market Regulation over its app store fees and practices.

Walt Disney , Boston Scientific , Uber Technologies , Fiserv , Emerson Electric , Johnson Controls International , Performance Food Group , New York Times , Harley-Davidson and Capri report their latest financial results early Wednesday, among others.

Qualcomm , Arm , McKesson (MCK), O'Reilly Automotive and MicroStrategy are scheduled to post earnings after the markets close.

On the economic calendar, the weekly mortgage applications bulletin is out at 7 am ET, followed by the ADP Employment report for January at 8:15 am. The international trade in goods and services report for December posts at 8:30 am.

The January purchasing managers' index composite final report from S&P Global (SPGI) is due at 9:45 am, while the Institute for Supply Management's services index for the same month follows at 10 am. The weekly EIA domestic petroleum inventories report posts at 10:30 am.

Federal Reserve Bank of Richmond President Thomas Barkin is scheduled to speak at 9 am, while Chicago Fed President Austan Goolsbee speaks at 2:30 pm. Federal Reserve Governor Michelle Bowman is slated to speak at 3 pm, while Fed Vice Chair Philip Jefferson speaks at 7:30 pm.

In premarket action, bitcoin moved down 0.5% to $98,227, West Texas Intermediate crude oil decreased 1.2% to $71.82 a barrel, yields on 10-year Treasuries retreated 3.3 basis points to 4.48% and gold rose 0.7% to $2,895 an ounce.

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