Great. I think we'll go ahead and get started. My name is Jason Celino, and I am the Vertical Software Analyst here at KeyBanc. With me today is Chantelle Breithaupt with AspenTech. She is the CFO. Wave at the camera for the webcast if you want. Maybe my first question for you, Chantelle, is, you know, AspenTech is transforming, right? The company has a goal to become an industrial software powerhouse and a pure play in the space. With Emerson last year, and Inmation, and Micromine, you know, there's a lot of new faces. Can you give us an update on how it feels to be leading, you know, this transformation and any lessons you've learned so far? Yeah, sure. Thank you, Jason. Thank you for having us. Good morning to those in the room. I think that there are a few things that I would say are exciting and provide lots of optimism for us at AspenTech, given this new kind of structure that we're in post the Emerson transaction and the acquisition of Inmation and the to-be-closed Micromine acquisition. I think there are a few things. The first thing is in the sense of having a rinse-repeat model that works. You know, the more that we're working through the integration, I'm confident, the company's confident, that the transformation that AspenTech originally went through back about 10 years ago in the sense of becoming a pure play software innovator for the oil and gas and chemical markets, we can take that playbook and repeat it for what we're entering into in the sense of SSE, subsurface engineering, and for OSI, which is the Digital Grid Management portfolio. Very excited to take what we've done in the past and apply it to new industries and get the same kind of outcome and performance for that. The other thing, too, which is great for the transformation that I'm pleased to share, is that all of the great work that we did together with Emerson through the diligence and the closing and the setting of the transaction agreement, et cetera, having those rules of engagement set well up front and learning from the industry, has really taken out a lot of friction that could have been there and allowed us to go faster than actually we even hoped. That's great. The third thing I would like to kind of enunciate for the transaction and the transformation is that we're pleased in the sense of some of the cross-portfolio things that we're seeing. One thing I would encourage you to take a look at, there was a press release this morning. We released what we're calling an Emissions Management solution. The thing that we're thrilled about that is it's taking both historic heritage AspenTech greatness in our software, but it's actually mostly the OSI portfolio that's donated the software from their Operational Insights to this Emissions Management solution. Really seeing strength, innovation, a few months after the transaction's closing with new innovation to the market. Okay. Excellent. Yeah, I definitely wanna hit on some of these sustainability drivers. Mm-hmm. you know, maybe before we get there, if we kinda close out the Emerson topic, you know, it's opened up a lot of doors. maybe can you speak to, you know, how that integration is progressing and what should we be focused on going forward? Yeah, sure. I think that we have four synergies that we're tracking. The four synergies are, we call growth synergy, which is the cross-portfolio work. Where can we sell Digital Grid Management into chemical companies, and where can we sell some of heritage AspenTech into Digital Grid Management? That's growth. The second one is the transformation, and that's what we announced in our Q2 earnings in the sense of having OSI, the DGM portfolio, go from project solution milestone led to being outsourced to services with a services partner ecosystem. That's the second synergy. The third one's cost, and the fourth one's the commercial agreement, and that's where we have the Emerson team, sales team, industrial software sales, selling the AspenTech portfolio into the industries where they play prime, where they have primary relationships, such as pulp and paper, wastewater management, pharmaceuticals. What you can look for going forward, I would say really keep your eye on synergy two, which is the transformation, where we're basically unlocking the potential and power of the OSI software DGM into the T&D market and into the energy market and into the chemicals market and into the mining market. The commercial agreement with Emerson p hase II of the commercial agreement, besides the sellers there selling our softwares, the OEM potential, where the AspenTech software is put onto the Emerson equipment and sold that way. Interesting. It seems like there's a lot of cross-sell potential with this master license agreement. How will investors track it? Is it gonna show up with accelerated growth? Is it gonna be some other metric we could track? How should we think about it? Yeah. I think that the way at least now and the way that we report, you'll see it in the sense of the suites. You'll see either the growth, the accelerated growth in the engineering MSC or the DGM or SSC suites. We have suites that can track that performance. I think, too, we're also considering other metrics, you know, that perhaps we can provide on a, on a frequency-to-determine basis in the sense of certain synergies are going. There'll be different ways to track it. All of it is assumed in the suite's growth over the five-year timeframe. Okay. You know, I do apologize. I was going through the proxy statements, and it looks like there's some sort of ACV metric that I think the management team is being measured on. Like, what is this Emerson ACV? Emerson ACV? Yeah. AspenTech uses ACV, which is annual contract value, which captures the recurring piece of our business 'cause we wanna emphasize the recurring growth and not, you know, for the perpetual growth per se. The Emerson ACV, AspenTech has its own ACV guidance, and that's what's in the five-year model. Emerson has its own software business. Okay ...so maybe that's what you're referring to. Perfect. Yeah. Kinda getting to the meat of it here, you know, the sustainability related measures, drivers that is. When we think about dual challenge, I guess what does this address and mean for AspenTech? Yeah. We're very excited. I'm personally very excited with the dual challenge and for those who are not familiar with it, in a nutshell, it's basically how does AspenTech help its customers work through the two vectors of a growing population that wants to hit middle class in the sense of their living style and the sustainability goals of every company, human, whatever they are for the individual and the company on the planet. How do we help our customers achieve both operational efficiency in their goals and their sustainability goals? What are we excited about? You know, I can give you some things we're tracking in the sense the CapEx that we feel shows and bolsters our enthusiasm for this kind of dual vector strategy. If you look at, I'll just take a couple of the markets. If you take the energy, oil and gas, the CapEx there is projected to be in 2023, $485 billion, which is 12% up versus last year. There's growth in CapEx for efficiencies. The transmission and distribution industry has two great CapEx vectors behind it. The first one is in the U.S., the administration has a $13 billion act from 2022, which is called GRIP, which is Grid Resilience and Innovation Partnerships. That $13 billion is focused on transmission and distribution. There's $2 billion in the Inflation Reduction Act. We have two acts behind us just in the U.S., and there are similar CapEx things around the world. That also helps us with the dual challenge in the sense of our goals. I think the third thing from a metals and mining, just to touch on that a little bit. Metals and mining is going through its own digitalization and sustainability, I guess, revamp or goals. There, there's about an addition of $130 billion per year projected for the next five to seven years to support sustainable mining for the ores needed for batteries, et cetera. We're just excited by the diversity- Mm-hmm. Of the CapEx. We're excited by the goals. They align with the dual challenge aspects of efficiency and sustainability. Okay. Interesting. Obviously the CapEx drivers, you know, benefit Heritage, AspenTech, DGM, SCM. That's right. How do we think about some of these other initiatives where companies are actively trying to reduce their emissions? Is there a way for AspenTech? Well, I guess you had the press release this morning. This fits exactly in. Yeah. The press release today, we've heard from our customers. We have an executive customer advisory board, and as we sat with them last year coming into our fiscal year, they were very vocal in the sense of we need help from someone like AspenTech, who gets both the industry, our data and sustainability through emissions. We've worked since that feedback to innovate what's been announced today with the Emissions Management solution, which brings together, like I mentioned, pieces of the portfolio of all the industries that we have. Interesting. Mm-hmm. Yeah, definitely worth something looking into. Mm-hmm. Maybe has Aspen seen any, I guess, dollars or benefit from any of these CapEx bills so far, or is it still to come? Definitely still to come. We're definitely encouraged. I think this is a three to five year journey. I was just actually listening to similar companies on Squawk Box this morning talk about everyone kind of sees this three to five year CapEx roll. Let's talk about what we've seen to date so far. I think where we're seeing it, because we don't necessarily hear from our customers, this is a state sustainability software purchase. How we do see it, for example, is the E&Cs. The E&Cs had a bit of a downturn during COVID, obviously, because of the, you know, lack of builds, et cetera, and the traditional oil and gas. That's actually been a positive growth factor faster than we expected so far this year, because now the E&Cs are starting to see final investment decisions on a lot of things to do with hydrogen, LNG. I think the CapEx is starting to come through that E&C build. Where we see it there first is our engineering software. Our engineering software is in the design, and that's actually where Emerson is a very big help as a partner because Emerson has a seat at the table. A lot of the designs for LNG sites, they win, I think 50% or more of those wins on average. We see it through engineering, through the E&Cs is where we're seeing it first. They'll come back and hopefully come back through MSC when they start to operate the facility. Interesting. Mm-hmm. Yeah, definitely interesting. Yeah. Maybe I should have led it off with this, but if we think about the DGM business. Mm-hmm. I think there's still a lot of confusion with investors, like what exactly it does. Sure. We think about like the global electrification moves. I guess, what does DGM do, and then how does it help with this global electrification effort? Yeah, great. DGM is a pure play software. Its competitors are mostly industrial led, just to give kind of the comparison of the competitive landscape. DGM is software, innovative software that basically, once the power is generated, it moves it from generation to transmission and distribution. The four things that are important in that market here and now are grid expansion. We don't have enough capacity, and I'm speaking mostly to North America, but you can extrapolate this globally. Grid expansion, which is capacity, is very important because there are more people and more things demanding it. Grid complexity, which is the renewables, the batteries from your car to your home, your home to your battery storage, it's down to microgrid. Complexity. There's outage management. You know, there's been a 170% increase in climate related outages for electricity in the last, I think it's five to seven years. How do we have predictable, reliable electricity, excuse me? The fourth one's cybersecurity. In all of those places, OSI/DGM help the grids with those four vectors after power is generated on a global basis once we do the expansion. Those are the four things that we work on. Interesting. They're called Outage Management System, Advanced Distribution Management System. There are acronyms for it, but that's basically what they're doing. Okay. Perfect and hence the CapEx drivers. That's right. Yeah. That's right. Then if we think about the SSE business, we hear these words like carbon capture and sequestration and, you know, maybe I personally don't know what these are. Mm. How does SSE help with that? Yeah. SSE has a tremendous team of, you know, geologists, geophysicists, et cetera, and what they do with their software innovation is right now if you look at just the upstream market, which is part of that $485 billion up 12% last year, that's the running the SSE part for upstream. Where it flips to on the sustainability agenda is that whole reservoir modeling of where to find the things to take out of the ground can use that same software in the sense of carbon capture sequestration, where can you put things back into the ground? Oh, interesting. SSE kinda has this full loop or bigger loop, we call it, from out of the ground to the gas station, and then you can complete it in the sense of the emissions going back through the emissions reporting, how do you put it back through SSE software into carbon capture and sequestration. Hmm. You can show that you can see the full portfolio benefit there of the whole cycle. Okay. Yeah. Interesting. Mm-hmm. I've a lot of questions left, but I do wanna keep this interactive if there's any questions from the audience. Perfect. Obviously we've got the sustainability drivers, you know, investors like optionality. Mm-hmm. Right? With the two acquisitions, you're trying to tokenize them, like you mentioned earlier. What has been the impact of the DGM separability that you saw in the second quarter? Yeah, sure. Just to remind those who are listening, there are several factors in the sense of the transformation of the software journey. Just quickly, SSE came in as a highly term business, mostly term software, and we've worked to tokenize that software. Tokenization is what Heritage AspenTech did for the oil and gas and chemicals industry to basically allow a full portfolio suite of product for them to use with a tokenized system. The customers see great value because they can use various elements of the software at different times, similar to an enterprise license in some format, to give an analogy. SSE is going from term to tokenization. We've announced we've achieved tokenization software, so we're starting to work with that with our customers, and it's working through the pipeline. Those customers, especially in oil and gas, chemical industry, know that model from Heritage AspenTech, so it's an easier selling motion. That's SSE, and we're very excited about it. Now DGM. DGM, the OSI software, was coming in as milestone solution completion. Perpetual software, hardware, services, we'll give you a timeframe, we'll hit milestones, takes many years. It was that sort of business coming in and very successful for a long time with that. What our goal is, and what we've done is we've, through Q2, we've demonstrated we're going to separate out software from services delivery, no longer be in the hardware business over time, and allow the services to be done by a partner ecosystem. We just focus on the software. That's the rinse repeat of AspenTech about 10 years ago, where we achieved that kind of, you know, value back to the customer. This is what we're doing. Eventually, that will also be tokenized, but just getting it to term right now is a big step and a very needed step. Our customers are super excited. The feedback, just even personally, that I've gotten being at a couple events, they're excited we're going to this services partner ecosystem because now we can run parallel versus a sequential kind of offering. If that makes sense for those who are listening. We're very excited by how that accelerates the growth. Okay. Yeah. Interesting. Mm-hmm. With this, I don't wanna call it model transition, but tokenization opportunity. Mm-hmm. How should investors think about growth contribution timeframe? I think that, if we look at our guide this year, you know, we've four points of our guide, the midpoint being 12 points of growth, is coming from SSE and DGM. DGM's just starting to contribute in the second half because it's just achieved the status where it can participate, where it starts to count. That's this year. Going into future years, you know, we see the DGM suite being a high double-digit grower, SSE getting to high single digits, maybe bumping up against low double digits, and Heritage AspenTech being that low double-digit range that we've set out as our initial CAGR. Those are the kind of ratios we're seeing, especially given the end market. Okay. Yeah. Interesting. Sure. Mm. Hi. Hi. Is there a way to kinda think about? It seems like the market is really coming your way in terms of these new opportunities. Mm. Whether it's related to sustainable or new type of energy generation. It also seems like you guys are doing a lot internally to both expand the funnel and improve visibility moving to tokenization from perpetual. Mm. Mm-hmm. Can you just kind of give us a framework for how to think about how big that funnel is and how your visibility has improved? We are still working through. I'll take the visibility in the sense of the TAM. We know the CapEx, what we're studying right now, if that's your question, is the TAM. We're still working through the TAM for our next kind of investor day conversation. What I would say is the sense of visibility. We have visibility both in the sense of the end markets on their own and gaining visibility of the cross-market portfolio opportunities. I think that's where we're learning to have more visibility. How far can we take the portfolio in each of the end markets, if this is what your question's referring to. I think there we need to think through if there's other ways we'll measure that because perhaps the way we're measuring today is not gonna capture all those succinctly. We're still working through how do we, how do we capture that. The one thing that's difficult is we don't really have a sustainability tag because it's the same software that they use for operational efficiency that's usually used for sustainability, so we're working through that. There's more to come, I think right now we know the CapEx is there, and we see the customers asking, and we see the pipeline growing, but we need to understand the TAM part and work through that. If I could just follow on. Yeah. Prior to Emerson. Mm-hmm. Prior to this kinda new age of Aspen. Mm-hmm. If you were to say, you know, you could see business out 6-18 months. Mm-hmm. Whatever that was prior. Now what is that? Can you get visibility starting at 18 months and then to third year? Am I just kind of asking more than you're willing to guide to? Well, I think the thing I would refer back to is before the Emerson transaction, AspenTech had laid out a five-year journey in the sense of a low to mid double-digit CAGR. That was the journey before Emerson. We see that supported at least now 'cause we take every year, every calendar fiscal year on its own merit, given some of the cyclicality. Right now, given what we've seen, that's still supported to have that CAGR growth. We haven't lost our accountability what we said for heritage AspenTech. Then I've quoted in the sense of the kind of growth expected from DGM and SSE. The DGM, we see that. We can see the pipeline for D-DGM headed that direction because right now, the growth in DGM's just from North America. We have global expansion plans and have had very active customer conversations in the sense of our software being what they're looking for. We're buoyed by the customer conversations pipeline and the market for DGM. Yeah, you're welcome. Perfect. I think we have a couple of minutes left, but it's kind of a good segue to my last topic on just, kind of, the guidance framework. Yeah. You've laid out. Mm-hmm. I think a lot of investors, while we still have it, are focusing on, you know, the annual spend. Mm-hmm. Kind of the implied ACV for the heritage business. Six months left. Yep, six months left. On that measure. We're gonna look at these data points. Yeah, I know. There's an implied acceleration. Yeah. In the second half of the year. Mm-hmm. I think second quarter you did, like, 9% or something. Mm-hmm. End of the year, it's implied that accelerates to double digits. Mm-hmm. With all the things in the macro, I guess, what is built into that acceleration? Yeah. How to think about it. Yeah, no, it's a great question. As we had, just to go back to the Q2 kind of prepared remarks to remind the audience, we see a healthy end market, OpEx and CapEx from the oil and gas markets, absolutely, in the sense of you've seen the same customers results in the sense of how they've reported. In the second half, naturally, Jason, is a stronger half because the fourth quarter is always usually the strongest quarter for AspenTech. We have that acceleration. It's the customer end markets, CapEx and OpEx. The place where we did note that we're just watching a little bit is Chemicals Europe because of the energy transition and some of the feedstock and some of the price movements there. Generally, the acceleration comes from the pipeline growth, takes six to nine months, so it's usually the second half. You're seeing innovations such as the Emissions Management solution, so you're starting to see some sustainability become accretive. In the sense of we've been working that pipeline to get to that growth we originally demonstrated. There's a few things there that I would say make us at least confident that, you know, we're gonna get there. Okay. Yeah. Perfect. With that, we're about out of time. Maybe last question. Favorite place to eat in the Bay Area? Oh. That's a great question. Oh my goodness. I just love actually the local poke bowl shops. Okay. Good answer. You can't get better poke anywhere. Perfect. At the conference. Thank you.