Aspen Technology (NASDAQ:AZPN) navigates debt wisely for future growth.

1 min read


Key Points:

  • Aspen Technology (NASDAQ:AZPN) has debt on its balance sheet, but also has cash to offset it.
  • The company has been growing its revenue and generating positive free cash flow, indicating it may not be too risky.

According to the article published by Simply Wall St on February 22, 2024, Aspen Technology, Inc. (NASDAQ:AZPN) has a net debt of US$34.9m, with US$130.8m in cash to offset its total debt of US$95.9m. The company also has liabilities of US$1.01b due beyond 12 months, but with a market capitalization of US$11.1b, these liabilities may not pose a significant threat. Aspen Technology has also managed to grow its revenue by 29%, reaching US$1.1b, although it was not profitable at an EBIT level in the last year.

The article mentions that while debt can be risky for a company, Aspen Technology’s positive free cash flow and ability to grow revenue suggest that it may not be too risky in the near term. The company’s strong balance sheet, with more cash than debt, also provides a level of safety. However, it is still important to monitor the company’s future earnings and balance sheet strength.

Overall, Aspen Technology’s use of debt seems to be sensible, given its ability to offset debt with cash and its positive free cash flow generation. Despite some liabilities, the company’s growth prospects and balance sheet strength may help mitigate the risks associated with debt.

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