Continuing to struggle with its long-term switchover to a subscription-based licensing model, process manufacturing software and services provider Aspen Technology Inc. yesterday reported a $15.5 million loss for its fiscal first quarter, which ended Sept. 30.
The company, which does most of its business with the construction, pharmaceutics, chemical, and other process industries, reported an uptick of 8% in total revenue for the first quarter of 2011 to $43.1 million compared to $39.8 million a year ago. However, the company also reported a net loss of $15.5 million in the quarter, compared to the $21.1 million net loss it suffered in the same quarter in 2010.
The company attributed much of the net loss to its aspenONE subscription program, under which customers pay for software and services over several years rather than through typical up-front term licenses. AspenTech is now in its second year of a transition to subscription licensing. “It will still take four to five years for our P&L to normalize,” said AspenTech CFO Mark Sullivan on the company’s earnings call.
But AspenTech CEO Mark Fusco painted a brighter picture for future quarters. “While the first quarter is typically a seasonally weaker quarter, new and expanded adoption of our aspenONE product suites drove an approximate 1.5% sequential increase in the license portion of our total contract value,” Fusco said. “We believe the company is on track toward achieving its full year objective of upper-single-digit to double-digit growth in this metric, building on our three-year CAGR of double-digit growth."