Good day, and thank you for standing by. Welcome to the Q2 2023 Aspen Technology Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, to Brian Denyeau, ICR. Please go ahead. Thank you. Good afternoon, everyone, and thank you for joining us to discuss our financial results for the 2nd quarter of fiscal 2023, ending December 31, 2022. With me on the call today are Antonio Pietri, AspenTech's President and CEO, Chantelle Breithaupt, AspenTech's CFO. Before we begin, I want to make the safe harbor statement that during the course of this call, we may make projections or other forward-looking statements about the financial performance of the company that involve risks and uncertainties. The company's actual results may differ materially from such projections or statements. Factors that might cause such differences include, but are not limited to, those discussed in today's call, as well as those contained in our Form 10-Q, most recently filed with the SEC. Please note that the following information relates to our current business conditions and our outlook as of today, January 25th, 2023. Consistent with our prior practice, we expressly disclaim any obligation to update this information. Please note that we have posted a financial update presentation on the investor relations portion of our website. The structure of today's call will be as follows: Antonio will discuss business highlights from the second quarter, then Chantelle will review our financial results and discuss our guidance for fiscal year 2023. With that, let me turn the call over to Antonio. Antonio? Thanks, Brian, and thanks to all of you for joining us today. AspenTech delivers solid second quarter result as we continue to benefit from a positive demand environment in many of our core end markets. We're also seeing clear benefits from the combination of Heritage AspenTech with the OSI and SSE businesses that were part of the Emerson transaction in go-to-market activities, innovation, and customer access. As I mentioned last quarter, our primary focus in the first half of the year was executing on the integration, transformation, and change management plans to create unified, consistent operating principles and a single business model across the entire organization. We have made substantial progress and believe our initial integration plans are largely complete, and the transformation phase of the OSI and SSE businesses is well underway. Our primary focuses in the second quarter was instituting and standardizing on best practices across our go-to-market organization, including transaction terms and conditions and the change management required to support these best practices. While we have already onboarded the OSI and SSE sales teams in the first quarter and implemented a standardized sales methodology, we're now focused on driving the execution required to deliver high quality and long-term duration license agreements that support the financial predictability that investors are accustomed to from Heritage AspenTech. This was a key area of reinforcement at our recent company-wide sales meeting in Boston, from which I came away very pleased with the progress we have made towards establishing a common set of transaction best practices across all businesses and the enthusiasm and buy-in demonstrated by the OSI and SSE sales teams. There's still more work to do in this area, but I'm encouraged by the progress to date. In terms of synergies, we're confident on our ability to meet or exceed the synergies expected in fiscal year 2023 based on the increase in pipeline across the different growth synergy categories. The actual cost synergies achieved today, the alignment and execution between the Emerson and AspenTech teams, and the completion of the key transformation requirements that capture growth in ACV in the OSI business. Overall, I'm pleased with our performance in the first half of the year and confident in our ability to execute to achieve our full-year financial targets. The success we expect this year in integrating and transforming the business sets up the new AspenTech well to deliver significant top and bottom-line growth in the coming years. I'm highly optimistic about the opportunity ahead for AspenTech and our ability to generate significant value for our shareholders. Looking at our financial results for the second quarter, annual contract value for ACV was $833.7 million, up 8.7% year-over-year. Revenue was $242.8 million. GAAP loss per share was $1.02, and non-GAAP EPS was $0.35, and free cash flow was $53.1 million. I wish to provide further commentary on the quarter performance from OSI and SSE. The OSI business closed significant transactions in the quarter in line with our expectations, but because of the bundled nature of the commercial arrangements in the quarter, they did not contribute to ACV growth. In our last earnings call, we talked about the importance of achieving separability for the OSI services business as a key transformation milestone so that new agreements signed are able to be included in our ACV metric. We're excited to announce that, as expected, we recently achieved this key milestone, which will allow us to begin including from OSI agreements, the DGM product term license component, and the SMS component of perpetual license agreements in our ACV metric beginning this quarter. This aligns OSI with how ACV is calculated for Heritage AspenTech. Chantelle will go into more detail in her prepared remarks. We also continue to be very encouraged by the prospects of the SSE business and its contribution to ACV growth, as demonstrated through its contribution of the two largest ACV growth transactions in the quarter. We equally expect that as our execution in the OSI and SSE sales organizations evolves to be in line with Heritage AspenTech, we will experience greater and more predictable ACV growth. Looking at the quarter in more detail, the demand environment remained positive and was similar to trends we have seen in recent quarters. We signed notable contracts in each of our key verticals and global markets. Pipeline development continues to be robust. Our continuous strong performance in the midst of uncertain and changing economic conditions is a testament to the relevance and resiliency of our customers' businesses and the mission criticality of new AspenTech solutions. AspenTech has an essential role to play in helping our customers meet the demand for the products that support greater global prosperity while achieving their sustainability goals and ambitions. Historically, these two areas have been viewed as being in tension with one another, and delivering on both goals is the core of our Dual Challenge mission. Our customers have validated this value proposition and recognized our unique position to help them meet the Dual Challenge. Refiners and chemical producers will need to meet the increasing demand for their products and significantly reduce their environmental impact, while utilities will need to transform how electricity is generated and distributed to meet an unprecedented increase in demand. These are complicated challenges that will require elevated levels of investment for decades to come, and AspenTech is in a great position to benefit from these trends. I would now like to spend a moment providing details on what we're seeing in the market and our performance by vertical. Refining continues to perform well around the world. Refining margins are expected to remain solid through 2023, albeit down from historical highs. Overall, end market demand for refined products will continue to grow, especially for diesel and middle distillate products. The ongoing return of air travel, the upcoming import ban of refined products from Russia by the European Union, and the increasing demand from the recent reopening in China are all expected to be ongoing catalysts for this market. We feel very good about the opportunity for AspenTech to drive consistently strong growth with refining customers. We had a very strong quarter and have great momentum in the power transmission and distribution or T&D market with the DGM solutions from our OSI business. We're very pleased with the sales performance of DGM in the first half of the year. The secular trends in this market are incredibly favorable given the expected vast increase in electricity demand and the increasing number of energy sources that will power the grid in the future. The greater complexity from renewable power sources like wind and solar is creating more complex transmission and distribution networks, including commercial and industrial microgrids, which will require a wholesale rethinking of how to manage them. We expect this industry to have favorable investment trends for many years to come, considering the investment that will be required to transform the grid. CapEx spend in 2023 for power generation, transmission, and distribution is expected to be about $1.2 trillion. One of our key growth synergy opportunities with DGM is to leverage AspenTech's global footprint starting in Europe. We have already had some exciting early wins with DGM in that market and continue to actively build out our sales capacity in that region. In December, we held the OSI User Forum in Las Vegas. The event was highly successful, with 500 customer attendees representing more than 150 utility companies from around the world. This was the first time since the pandemic started that OSI's customers gather in person. We felt great enthusiasm from customers about the future plans for the OSI business under AspenTech, especially on the establishment of an ecosystem of third-party implementers for the DGM solutions. The oil and gas industry, upstream and midstream, had a banner year in 2022, supported by high oil prices and strong execution discipline. Forecasts indicate oil prices will remain elevated through 2023 at an average of $80-$90 per barrel for Brent crude for the year, based on various current projections. The industry CapEx is expected to increase by 12% to $485 billion in calendar 2023 according to Energy Intelligence projections, with a significant portion of that increase coming from national oil companies. In our business, we had another strong quarter as the combination of Heritage AspenTech solutions and SSE's products has created an unmatched technology portfolio that can deliver far greater value for customers. We signed a number of quality wins with the upstream customers in the quarter, including a significant contract with one of the largest oil producers in South America. We're also engaged with customers on the use of SSE capabilities for carbon capture and sequestration in various locations around the world. The E&C vertical did well in the second quarter and has been an important source of strength in the first half of the year. Customers in this market are benefiting from two important trends. First, in their traditional business, investment in upstream oil and gas projects has increased notably in recent quarters. The combination of strong oil prices and tight supply after several years of below-average CapEx investment in the oil and gas market is supportive of E&C's backlog and headcount growth, which is positive for AspenTech. Second, E&Cs are aggressively investing in establishing engineering capabilities for sustainability investments that represent a new growth opportunity that is likely to be less cyclical than their traditional business. The CapEx investment required to meet sustainability targets in our core owner-operator markets will be substantial and will present E&Cs with sizable growth opportunities that haven't been present for several years. We're very optimistic on the outlook in this market in fiscal year 2023 and beyond. Finally, the chemicals industry had a good quarter, but does face some challenges globally and regionally in Europe. The ongoing situation in Europe and its impact on local energy supplies and consumer demand continue to weigh on chemical customers in the region. Globally, chemical customers are also experiencing a slowing demand and margin pressure as the global economy has slowed its growth. In conversations through the last quarter, many of our customers have told us they believe the current situation will recover in the second half of the calendar 2023 as economic activity picks up. We remain optimistic on the opportunity in the chemicals market, would flag it as one of the area of our business that we are cautious on in the near term. I would now like to share some customer wins from the quarter that demonstrate our success. First, an existing SSE and Heritage AspenTech customer and one of the largest oil producers in South America is looking to shorten by 65% the time it takes to get a new oil field discovery to production. As part of this initiative, the customer evaluated multiple vendors on their knowledge automation and AI capabilities and elected to increase the spend of SSE products due to the combination of capabilities in the SSE suite. SSE has been and remains the largest incumbent in the exploration and production portfolio of software capabilities used by the customer. An international utility company headquartered in the U.K. owns and maintains the high-voltage electricity transmission network in England and Wales. This customer is investing heavily in its network of thousands of kilometers of overhead lines and underground cables and more than 300 substations to connect more and more low-carbon electricity sources since that is a crucial factor to meeting net zero carbon ambitions in the region. After a careful study to upgrade transmission management system and an extensive evaluation of multiple competitors, the customer selected the OSI solution because of its more mature, modern architecture and out-of-the-box capabilities. This win opens up the opportunity to expand the use of OSI products into other operating areas and across other companies in the customer's group. Third and final, Emerson and AspenTech are having success in the market. Emerson recently announced its selection as the main automation contractor for the Ras Laffan Petrochemical Complex or RLP, a joint venture between QatarEnergy and Chevron Phillips Chemical. RLP will be the largest ethylene plant in the region and one of the largest in the world. The scope of work covers automation, software, and analytics capabilities, including various products from AspenTech's engineering and MSC suites. Emerson's seat at the table in the very early phases of the competitive process for this major construction project accelerated AspenTech's visibility into this opportunity. While AspenTech's products and solutions contributed to Emerson's overall bid quality to the customer. We expect this win will open many more opportunities for both companies in the future. This win is also a good demonstration that the commercial relationship between Emerson and AspenTech is already benefiting both companies, and the alignment between both commercial organizations will undoubtedly continue to grow the pipeline of business. We expect the focus on targeted growth initiatives will result in increased long-term growth and profitability for both companies through a strengthened go-to-market presence and offering. Now, turning to our innovation investments. In November, we launched our new software release, aspenONE version 14, which provides augmented intelligence guiding users to improve decision-making abilities and increased operational excellence. Introducing over 100 sustainability models, this release will help customers accelerate progress in the areas of emissions management, hydrogen economy, carbon capture, material circularity, bio-based feedstocks, and renewable energy. V14 is a great example of how AspenTech will leverage our historical strength in modeling and simulation with new technologies like artificial intelligence to deliver greater value to customers through better profitability and improved sustainability. A great example of collaborative innovation in product development is our recently announced strategic partnership and licensing agreement with Saudi Aramco. As part of this agreement, we partner with Aramco to provide to the market a unique integrated modeling and optimization solution for the sourcing and utilization of CO₂. Through this solution, we expect to provide customers the ability to rapidly evaluate sources of CO₂ generation and potential opportunities for use or sequestration of the CO₂, hence design new innovative solutions that can reduce their carbon footprint while ensuring profitability. M&A is another important part of our innovative strategy. We continue to maintain a positive posture in this area. We got off to a strong start with Inmation, which has received fantastic early feedback from customers. It greatly accelerates our AIoT industrial data and connectivity product roadmap and will enable greater visibility and understanding of an asset's operating environment. We're also proceeding on our integration planning with Micromine as we work towards the completion of the transaction. We expect this acquisition to close as soon as we obtain the last remaining regulatory approval, which we are actively working to secure. We have become even more impressed with the Micromine team and products as we have gotten to know them better as this process has played out, and look forward to welcoming them to AspenTech. Let me finish by providing our latest thoughts on fiscal year 2023 guidance and the second half of fiscal 2023. We remain confident in our ability to deliver on the full year ACV growth target and are maintaining the guidance range of 10.5%-13.5%, while also maintaining our free cash flow guidance of $347 million-$362 million. Our confidence is based on our pipeline of business, the momentum building from the integration and transformation activities undertaken, the 2023 CapEx spend projections and economic outlook in our core industries. Our success in achieving these outcomes will still depend in part on continuing to successfully execute on our integration and transformation initiatives across the company. As a reminder, we have always expected the second half of the year to be a stronger contributor to growth and free cash flow, given the historical buying patterns of Heritage AspenTech customers and the expected timing of DGM and SSE contributions, including for the anticipated synergies. We're pleased with the performance of DGM and SSE so far, and believe the operational progress we have made in the first half of the year and our growing sales pipeline puts us on track to deliver four points of ACV growth from those businesses. We also continue to be mindful of the macroeconomic environment, COVID developments in China, and the challenges facing the chemicals market, which we have flagged as the key variables in how we perform within our ACV growth range for the year. Before I turn it over to Chantelle, I want to reiterate how much progress we have made in the first half of the year in bringing Heritage AspenTech, OSI, and SSE together as one company. We have created a world-class industrial software company that is poised to accelerate growth and generate significant profitability as we execute on our long-term strategy. The new AspenTech team has done an amazing job getting us to this point, and I want to recognize their effort and commitment to our success. With that, let me turn the call over to Chantelle. Chantelle? Thank you, Antonio. I will now review our financials for the second quarter fiscal 2023. As a reminder, these results are being reported under Topic 606, which has a material impact on both the timing and method of our revenue recognition for our term license contracts. Our license revenue is heavily impacted by the timing of bookings and more specifically, renewal bookings. A decrease or increase in bookings between fiscal periods resulting from a change in the amount of term license contracts up for renewal is not an indicator of the health or growth of our business. The timing of renewals is not linear between quarters or fiscal years. This non-linearity will have a significant impact on the timing of our revenue. As a reminder, we have transitioned from Annual spend ACV, Annual Contract Value, as our primary growth metric. We define ACV as an estimate of the annual value of our portfolio of term license and term and perpetual Software Maintenance and Support or SMS agreements. ACV provides insight into the annual growth and retention of our recurring revenue base, which is the majority of our overall revenue as well as recurring cash flow. Annual Contract Value was $833.7 million in the second quarter of fiscal 2023, up 8.7% year-over-year. As Antonio mentioned, we are pleased to have recently achieved separability for DGM software, which will allow us to prospectively recognize the growth of DGM term license and SMS businesses into our ACV metric on a standalone basis. The main contributors to this go-to-market change are the enablement of implementation service partners to operate autonomously and directly with our DGM customers, the change to OSI commercial contracts whereby the customers will be contracting for software licenses and professional services separately, and the streamlining of tools and processes for implementation services to significantly reduce complexity and interdependency with our software. We will begin to see the impact of this change at DGM beginning in the third quarter, which will have a meaningful benefit to ACV in the second half of this fiscal year. It's important to note that achieving separability has multiple business benefits as well, including the general acceleration of revenue and free cash flow generation. Annual spend for Heritage AspenTech, which the company defines as the annualized value of all term license and maintenance contracts at the end of the quarter for the businesses other than OSI and SSE, was approximately $697.5 million at the end of the second quarter of fiscal 2023, which increased 9% compared to the second quarter of fiscal year 2022, and 2.2% sequentially. As a reminder, we intend to provide this annual spend disclosure for Heritage AspenTech only for fiscal 2023 to provide investors comparability with our historical disclosures. Total bookings, which we define as the total value of customer term license and perpetual SMS contracts signed in the current period, plus the value of term license and perpetual SMS contracts signed in the current period but where the initial licenses have not yet been delivered under Topic 606, plus term license and perpetual SMS contracts signed in a previous period for which the initial licenses are deemed delivered in the current period was $242.8 million, a 16.3% increase year-over-year. Total revenue was $242.8 million for the second quarter. As a reminder, as a result of the Emerson transaction, the subsidiary that included OSI and SSE businesses became the surviving entity. As a result, the year-ago comparisons you see in our financial statements include OSI and SSE in the second quarter of fiscal 2022, year-over-year comparisons are not meaningful. Now turning to profitability beginning on a GAAP basis. Operating expenses for the quarter were $209.1 million. Total expenses, including cost of revenue, were $302.2 million. Operating loss was $59.4 million, and net loss for the quarter was $66.2 million, or $0.012 per share. Please note that the net loss in the quarter reflected approximately AUD 344.8 million of a non-cash gain related to the mark-to-market adjustment for the Australian dollar foreign currency derivative related to the pending Micromine acquisition. Since the inception of this foreign currency derivative, the total net unrealized loss we have incurred has been approximately $15.3 million. There will continue to be fluctuations until the closing of the Micromine transaction. Turning to non-GAAP results, excluding the impact of stock-based compensation expense, the amortization of intangibles associated with acquisitions, and acquisition and integration planning related fees, and excluding the impact of the unrealized gain on the foreign currency derivative, we reported non-GAAP operating income for the second quarter of $86.6 million, representing a 35.7% non-GAAP operating margin. As a reminder, margins will fluctuate period to period due to the timing of customer renewals and therefore license revenue recognized during the quarter. Non-GAAP net income was $22.8 million or $0.35 per share based on 64.6 million shares outstanding. Turning to the balance sheet and cash flow, we ended the quarter with approximately $446.1 million of cash and cash equivalents, and $264 million outstanding under our term loan agreement. On December 23, 2022, we entered into a credit agreement with Emerson for an aggregate term loan commitment of $630 million. We intend to use the proceeds from borrowings under the agreement to pay in part the cash consideration for funding the pending Micromine acquisition. Also, in January, we fully paid off our existing term loan balance. In the second quarter, we generated $49.5 million of cash from operations and $53.1 million of free cash flow after taking into consideration the net impact of capital expenditures, capitalized software, and excluding acquisition and integration planning related payments. We had a solid cash generation quarter that was in line with our expectations. Our free cash flow cadence will be more back-end loaded than prior years, due in part to business mix, upfront integration expenses, and the timing of the expected impact of our synergy initiatives. In terms of synergies, we've made additional progress in each of our four synergy buckets: growth, business transformation, cost, and the commercial agreement with Emerson. The most notable milestone was the DGM separability that we discussed earlier. We believe we are well positioned for the long term from both a growth and profitability perspective, and on our ability to realize the $110 million of adjusted EBITDA synergies by 2026. I would now like to close with guidance. We have performed well in the first half of fiscal 2023 and have delivered on the business integration and transformation initiatives needed to position the business for faster ACV growth in the second half of the year. We are encouraged by the overall demand trends across the business, while also being mindful of an uncertain economic outlook. To account for this uncertainty, we continue to believe maintaining a wider guidance range is prudent. With respect to ACV, we are maintaining our target of 10.5%-13.5% growth for the year, including 4 points of growth contribution from the DGM and SSE product portfolios. We are encouraged by the transformation and integration outcomes with DGM and SSE and the trends in Heritage AspenTech. We are maintaining our book and bookings guidance in the range of $1.07 billion-$1.17 billion, which includes $547 million of contracts that are up for renewal in fiscal 2023. This includes approximately $133 million of contracts up for renewal in the third quarter. We continue to expect revenue in the range of $1.14 billion-$1.2 billion. We expect license and solutions revenue in the range of $765 million-$826 million. Maintenance revenue and service and other revenue of approximately $312 million and $64 million respectively. From an expense perspective, we expect total GAAP expenses of $1.207 billion-$1.217 billion. Taken together, we expect GAAP operating income in a range of loss of $67 million to a loss of $15 million for fiscal 2023, with GAAP net income in the range of -$7.5 million to +$32.5 million. We expect GAAP net loss per share to be in the range of a loss of $0.11 to positive $0.49. A non-GAAP perspective, we expect operating income of $503 million-$555 million, and non-GAAP income per share in the range of $6.83-$7.00. From a free cash flow perspective, we continue to expect free cash flow of $347 million-$362 million. Our fiscal 2023 free cash flow guidance assumes cash tax payments in the range of $94 million-$104 million, which is unchanged. We would expect the third quarter to be the largest free cash flow quarter of the year, due in part to the timing and cash collections for SSE's renewal portfolio. To wrap up, AspenTech is performing at a high level. We generated solid growth and profitability in the first half of the year, and we believe we are well-positioned to deliver on our full-year financial targets. We are targeting a large and expanding market opportunity that we believe can support significant levels of growth and profitability over time. With that, operator, we would now like to begin the Q&A. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. I show our first question comes from the line of Rob Oliver from Baird. Please go ahead. Great. Hi, Rob. Hey, good afternoon. Hi, Antonio. Can you guys hear me okay? Yeah. Yeah. Okay, great. Hi, Chantelle. Just a couple questions from me. Just first, Antonio, you talked about the phases, or maybe Chantelle, this was you. You talked about the phases of the integration of OSI and SSE and how you've gotten through the first phase. Can you remind us of what the milestones are and what needs to be done, as we enter phase two? Well, look, Rob Oliver, in a way, a lot of the key transformation milestones have been achieved. Certainly separability was a key one for the OSI business because now it allows us to account for the growth in ACV from these transactions that we signed with customers. The release of the SSE suite and tokens for Microsoft was also a key milestone that we achieved in the Q1 quarter. We are about to release the version for Linux, and then later in the year, in the fiscal year, we will be releasing the suite of tokens for the OSI Digital Grid Management suite. There are many other smaller milestones, if you will, that are accomplished almost on a weekly basis. Fundamentally is also about the transformation of the commercial agreements between customers and the new AspenTech. For SSE, it's a significant set of steps to transform those agreements into what looks like a Heritage AspenTech commercial terms and conditions. For OSI, for the majority of it is now introducing term licensing to these customers. We did a little bit of that in Q2. There will be a lot of that done in Q3 and Q4 and going forward. Look at some of the things that we talked about, new self methodology, standardizing on best practices, a lot of change management going on. I would say that the major milestones that we had hoped to achieve are in place now, and that's what we have talked about Q3 and Q4 being the quarter where we expect the results from all this work we've done in the first six months of the year to show up. I don't know if I've missed anything, Chantelle? Yep. That's very helpful. Thanks, Antonio. I had one follow-up for you just around the ACV guide for the full year, acknowledging that now, you know, having now reached severability, you guys are gonna be able to start to book some of the new Emerson properties into ACV, which is exciting. You know, I think under Heritage AspenTech, you had traditionally given a fairly tight range, and then you kinda broadened that out a little bit prior to the Emerson transaction to kind of a 3-point range. You're at the 3-point range right now, I know earlier you had been talking about being comfortable with the high end of that range. I didn't hear you say that on this call, so. At the same time, I heard you say you're real comfortable with the back half of the year. Just wanted to get a sense for, you know, as you look at the end markets that you gave a lot of detail about, you know, how you feel about where we are within that range? Thank you. Yeah, no, Rob, I appreciate the question. Look, the fact is that we're very comfortable with where we are at this point in the year on our growth in ACV trajectory. We felt that it was prudent and cautious to maintain our guidance, but I also feel a lot of confidence on the outlook for the year. Based on what I've seen so far and what we have accomplished and the outlook for our industries and customers, I feel comfortable thinking that we could come in the mid to upper part of our range. The bottom part of our range is just a conservative, cautious stance. Great. Very helpful. Thank you guys very much. Appreciate it. Thank you. I show our next question comes from the line of Andrew Obin from Bank of America. Please go ahead. Hi. Yes, Andrew. Hey, how are you? Can you hear me? Yeah. Yeah. Looking at Heritage AspenTech annual spend showing nice acceleration, is this more on the engineering side or manufacturing and supply chain? Look, certainly the first half of the year has been a good year for engineering. We've seen an acceleration and we're performing ahead of our plan in engineering. With MSC, I would say we're tracking, MSC deals tend to have a longer sales cycle, 9-12 months, and really historically is in the Q3, Q4 when we see a big wave of MSC deals. Overall, performing according to expectations. Gotcha. Just a follow-up question. I think it's more of a big picture question. You know, right now is sort of December, January, and when we're getting like really good view at the budgets of your customers for capital planning for 2023. Now that you guys sort of have access to Emerson, and their channels, et cetera, et cetera, how has visibility for Aspen changed through the relationship you have with Emerson? You know what I'm referring to. Like, do you guys get better visibility with the relationship now versus before? Thank you. Well, look, certainly as the two companies are engaging in the market, we're getting increased visibility. I do think it behooves us as separate entities to develop our own point of view. We, you know, we do share what we hear in the market. Our point of view on the macro outlook and budgets is developed internally, is developed through multiple conversations and customers over a period of time. That's what you have in our guidance. Thanks so much. I would say- Yeah. Sorry. Go ahead. Yeah. I think the only thing I would add, Andrew, if I can take that bigger picture down to more granular, so not macro, but I think where we do have more near-term visibility is probably more at an account segment level working with Emerson. We have probably more granular visibility into the customer accounts, but at the macro level as Antonio articulated. Got you. No, this is very useful. Thank you. Thank you. I show our next question comes from the line of Matthew Faul from William Blair. Please go ahead. Hi, Matt. If you have your phone on mute, please unmute your line. Yeah. Hey. Hey, Antonio and Chantelle. Thanks for taking my questions. Wanted to first follow up on your chemicals commentary. This is an area that I believe last quarter you sort of also called out that performance was good, but you were maybe cautious on it and keeping a close eye. This quarter you had somewhat similar commentary. Just wondering, you know, if anything's changed versus last quarter, either in terms of pipeline or ability to close deals in the chemicals vertical. No. Perhaps what I would say is with some customers in chemicals, we did see a little bit of longer conversations on deals. You know, there was perhaps 1 or 2 deals that moved from Q2 into Q3 that we're now working to close. In general, it's just a lot of conversations, a lot of meetings with chemical customers. I spent a lot of time meeting customers in the Q2 quarter, and they just express, you know, the reality of what they're facing, which is a slowing demand and more pressure in margins. I think we all see that in the announcements that they're making with their results and guidance, forward-looking guidance they're giving. Look, at the same time, as we've said, when the economic environment becomes more difficult for these customers, they also look for ways to drive efficiencies in their businesses, and they've turned to AspenTech historically for that as well. You know, just being cautious about it, I think especially, you know, this quarter as new budgets have to be executed. We continue good engagement. We have good visibility into a pipeline of business in the quarter and into Q4, and we're, you know, just being cautious about it. Okay, great. On the revenue in the quarter, it was down sequentially from first quarter, we don't have a lot of history of the combined business, but in Heritage AspenTech, you typically would see a sequential increase from first Q to second Q. Is that related to SSE and OSI? Is this sort of some sort of seasonality that we should think about modeling going forward? Thanks. Yeah, I would definitely take into account, Matthew, the portfolio business mix coming in, and happy to follow up with you on that. It's definitely a seasonality based on the portfolio mix. You take the business models coming of SSE historically having one-year terms and their calendar year, and then you have the OSI milestone completion. You're gonna see a different mix, definitely. It depends on the renewal cycle as well. There are quite a few dynamics. I think, Matt, and just to emphasize the point that one of the points that Chantelle made, remember the OSI revenue today is a% of completion on projects and it's driven by dynamics around projects. It has nothing to do with software sales. Okay. Understood. Very helpful. Thank you. Appreciate it. Thank you. Thank you. I show our next question comes from the line of Jason Celino from KeyBanc Capital Markets. Please go ahead. Jason. Great. Hey, Antonio. Hey, Chantelle. You know, one question on the unbundling or the separability for OSI. You know, the price that customers pay, is there any difference between, you know, when it gets separated or is it net equal from the total perspective? Yeah. Well, I think probably more to come in the sense of what's possible. I would say just the, you know, apples to apples answer, Jason, it's the separation of the pieces. You know, once it goes to third-party services, that'll be their conversation to have. I would expect a apples to apples to be fairly similar, with opportunities there as we work through to demonstrate our value to see where we can take that to. Okay. Excellent. Then maybe just building off of or following up with Rob's guidance question, can you just remind, you know, everyone what type of, you know, macro or business conditions were you kind of baking into the bookends of the range? I think at the high end in a way is what we talked about, the good budget, solid budgets into 2023, macroeconomic conditions that support the industries that we're in. Certainly the continued investment in expansion and upgrade of the grid into utilities and more CapEx spend in upstream and midstream. That upper end also supports, you know, solid chemicals spending. The low end, think about it, you know, the opposite on the macro environment and budget, but also throw in COVID, throw in regional conflict in Europe. Those are the bookends for those two. You know, we see China reopening from COVID and while the conflict in Europe is created certainly difficult dynamics for chemical customers, we've continued to see good business from customers in Europe in refining and EPCs. The EPC industry in general around the world is, it's on the up and up because it's a global business. So while they might be headquartered in Europe, they are doing global projects. So but those are the factors. You know, and 10.5% is worst case scenario, 13.5% is a great outcome. Okay. Great. No, super helpful. Thank you. Thank you. I show our next question comes from the line of Mark Schappel from Loop Capital. Please go ahead. Mark. Hi, Antonio. Hi, Chantelle. Antonio, starting with you. In your prepared remarks, you mentioned some of the Emerson Aspen integration sales efforts and milestones. I was wondering if you could speak to any early efforts with Emerson to sell your products into other markets that Aspen historically hasn't played in, such as pulp and paper and wastewater. Well, I mean, look, those efforts are ongoing. Of course, you know, both Emerson and AspenTech have great familiarity with our core markets and there's big capital projects happening in oil and gas chemicals, even in refining in the Middle East and Asia. So it's natural that some of the first wins you would see are in those core industries. At the same time, as you said, Emerson has the presence in other industries. They, we're enabling the sales people and teams in those industries. We're also working to determine the value proposition for some of these industries and some of the applications. I would argue that's a longer term tail to business generation. Nonetheless, it's an ongoing effort, and it's part of our targeted initiatives, especially with pharma. While AspenTech has been in pharma, Emerson has a first or second largest market share in that area. We see great opportunities for both companies with Emerson's leadership in that space. Okay, great. Thank you. That's all for me. Thank you. I show our next question comes from the line of Arseniy Ponomarev from Wolfe Research. Please go ahead. Arseniy. Hi, this is Arseniy on for Gal. Thanks for taking the question. With aspenONE SSE Suite for Linux still in development, I was wondering whether when that comes. You know, when it becomes complete, whether there will be any incremental benefit from this because Linux operating systems generally tend to be used with larger corporations, because of better safety and greater security parameters, relative to Windows, which you guys released in fiscal Q1. Whether that could continue to drive large deals in SSE and correspondingly strong contribution to ACV growth in the year? Thank you. I just one follow-up after that. Yeah, no, it's no doubt. What we've learned is that the Linux version of the operating or operating system is more common with higher work, higher workload applications, more sophisticated applications in the SSE suite. Perhaps applications that consume a lot more tokens as well. That suite will be released soon. We do expect to sort of capture that incremental use. The bulk of the SSE suite usage is with the Microsoft operating system. I do wanna emphasize that. Got it. Then just to follow up on the guidance question, what has to happen, I guess, to improve relative to today to get towards that top-end range of guidance? Is there any call-outs in particular sectors that you would need to see perform better than what you currently see in the first half of fiscal 23? Thank you. Well, I mean, look, the reason we maintain 13.5% as the high end of our guidance is because we have a visibility. We have a path into to that number. With that, the pipeline of business supported by synergies then benefits from the transformation of OSI and SSE. What needs to happen, look, it's execution, you know, and not being impacted by some of the things that I've mentioned, the COVID, conflict in Europe, you know, surprises around transformation. The transformation of a business is not linear per se. There's always surprises, and you can always be tripped in your execution. You know, we've found some things in the last 6 months that were not in our assumptions. We've been able to overcome them. We don't know of anything that could trip us in the 2nd half of the year. We also wanna be cautious because there's a lot of we're lifting a lot of rocks and assuming that we're gonna find what we think we're gonna find, and in some cases we may not. We're just being cautious about that. If we continue to execute on the transformation the way we did in the 1st half, then that path to 13.5 is there. Great. Thank you very much. Mm-hmm. Thank you. I show our last question comes from the line of Clarke Jeffries from Piper Sandler. Please go ahead. Hi, Clarke. Perfect. Thank you for taking the question. Hello. Antonio, you know, Emerson held its Analyst Day in November and quoted two metrics that stood out to me on the Aspen business, one being 1,000-plus salespeople actively selling AspenTech, and the second being 70% of Emerson control systems do not have AspenTech software. The question is, you know, how do you expect those metrics to change in the coming calendar year? Which metric would you expect us to see the most progress in soon? Which is the most meaningful near term to AspenTech? Well, I mean, look, I think it's a combination. The Emerson installed base is addressed by those thousands of sales people. Now they have to be trained, enabled, educated, and so on. So the goal here is not to try to boil the ocean in one year, because when you try to do that, you dilute yourself and you end up not being successful. I think we wanna be very focused on the initiatives that we wanna pursue to deliver the synergies that we've outlined for ourselves every year going forward. That eventually will turn into many more salespeople selling an AspenTech into a much greater installed base. That installed base is a huge opportunity for Aspen. You know, there are places where Emerson has tremendous market position, pharmaceuticals, China, oil and gas, midstream, LNG, and some of these core industries where they're in. We'll start, you know, focusing and working with them on each of these areas. You know, the fruit of our labor will show up over time. You know, those thousands of salespeople or the installed base that you refer to, think of that as the total addressable market, and we'll start eating into that TAM as time passes. Perfect. Thank you very much. Just to follow up, Chantelle, maybe I missed it, but, you know, could you clarify what the raise is to the high end of net income? Is that primarily the fluctuation of the currency derivative, or could you clarify what the change is there to the full year guidance on the EPS? Yeah. I think it would be the items that come in on the sense that there's some stock-based compensation in there. There's the derivative. I think those are the two moving pieces that you would see in that, in that change, the two main drivers. All right. Perfect. Thank you very much. Thank you. Thank you. That concludes our Q&A session for today. At this time, I'd like to turn the conference back over to Antonio Pietri, CEO, for closing remarks. Well, thank you everyone. I know it's it's already, is it January 25th? Hey, Happy New Year to everyone. Look forward to meeting in person, some of you as we engage in conferences and other activities. Thank you, and have a good evening. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.