Okay, great. I think we can go ahead and get started. My name is Jason Celino, and I'm one of the vertical software analysts here at KeyBanc. With me today, I have the great pleasure of introducing AspenTech CEO, Antonio Pietri. Thank you. Welcome. Thank you. Maybe just to start, for those on the webcast and in the audience who may not be familiar with AspenTech's story, you know, what do you do? Well, look, AspenTech is the global leader in asset optimization solutions for asset-intensive industries, and that runs the gamut from oil and gas, chemicals, and now utilities into the EPC companies that build these assets and also into mining as well. Our technologies help optimize the design of these assets, help optimize the operation of these assets, and also then their reliability. And historically, our solutions have been really adopted because of efficiencies and value creation, but more recently, over the last 2, 3 years, the value justification is also including sustainability and reduction in CO₂ emissions. Okay, perfect. I do want to touch on sustainability, but maybe just recapping the quarter a little bit. So you just reported second quarter. Maybe can you just remind us what you did in ACV and, and kind of some of the other financials? Yeah, in the quarter, we reported 1.8% growth in ACV. A little soft from the standpoint that there was a large renewal that accounted for 0.6 points of ACV that didn't get renewed on time. This is due to really administrative reasons, that renewal, we're working on it here in the Q3 quarter. In addition, we had a strong quarter on the Engineering suite, a strong quarter also with our DGM suite and our SSE suites. The MSC suite, our Manufacturing and Supply Chain suite, had a little bit of a soft spot, mainly due one, this one deal that didn't renew, is all MSC software, but also, we introduced in the quarter a new platform for our planning solution for refining that, in a way, delayed some transactions that we now expect to be closing in the Q3, Q4 quarters. Okay. So I think with the guidance for the year, it kind of assumes ACV of, like, 11.5%. Mm-hmm. Year-over-year growth. You know, you're not the only company in software to kind of suggest this second-half ramp, this second-half hockey stick. It seems to be a theme this quarter, but maybe kind of talk about your confidence or the drivers that give us, you know, visibility into that buildup? Yeah. Yeah. So, so year to date, we're at 3.3% growth. So first and foremost, the confidence comes from the pipeline that we have now in the Q3, Q4 quarters. It's not only the volume of the pipeline, but also the size of some of the deals that we're looking to close. And that pipeline is really informed by the work that's happened over the last 12 months in the company as we've ramped up our go-to-market activities in, with DGM for term licensing, as we're seeing a stronger tailwind for our Engineering suite. Also, like I just said, our MSC suite and some of the deals that are now in the Q3, Q4 quarter, and the Subsurface Science and Engineering suite also having a stronger quarter. So overall, if you look at the comps, and this is how I like to break it down, 3.3% year to date, 0.6 points that moved into out of Q2 into Q3, and we'll account for that. That's 3.9. If you look at the comps in Q3, Q4 last year, 2.5% in Q3, 3.8% in Q4, that's 6.3 and 3.9, that's 10.2. 11.5 is another, getting to 11.5 is another $11 million-$12 million of GACV, which we believe is all in our pipeline in the Q3, Q4 quarters. Okay. So, maybe if we kind of dig in a little bit on the MSC side, I think that's kind of where your, mostly where your chemicals customers are. Mm-hmm. Right? So outside of those deals that are now in the second half, you know, are there, can you talk about the, maybe the headwinds that you've seen in that business over the last year, and then what your kind of assumptions are for recovery in the second half and/or, or going forward? Yeah, look, our chemical customers certainly are the second largest adopters of our manufacturing supply chain solutions. That industry—it's been a very strong industry for us over the last 10 years, and really eventually, the normal cyclicality of that industry had to show up, and that is lower demand due to economic reasons, but also buildup of capacity. So it's typical of this industry that when times are good, and demand is strong, companies decide to build more capacity. So over the last 2 years, there's been a significant amount of new capacity that's come on stream in the chemical sector, especially in ethylene and polymers. So what you now have is a, is a Slowdown in demand due to economic reasons, overcapacity as a result of that additional capacity, which is now creating a downturn for that industry. The expectation was that it was gonna be resolved by this time, but now chemical producers are thinking that it's really gonna recover in calendar 2025. Which really then says that we should expect a depressed demand environment from chemical producers the rest of this fiscal year and into next fiscal year, and hopefully a recovery into calendar 2025. Okay. Are there any KPIs that you look at to kind of measure that progress or that state of the Well, I mean, look, you have to look at their earnings results, demand, revenue growth or contraction, and the margins on the, on what they're selling. And it's consistent that these companies have been reporting declining revenues and contracting margins as a result of a lack of demand or overcapacity. Okay, perfect. No, interesting. I have a colleague that covers chemicals. He's my, he's my genie. Maybe switching gears to engineering. You know, we've covered AspenTech a long time. If we kind of go back, you know, post-2015, that engineering segment has been, you know, challenged Mm. slow to recovery. Yep. Over the last year, it's actually started to inflect and accelerate. Can you talk about, you know, what is driving that, and do you think those tailwinds are sustainable? Yeah. Yeah, so you know, the Engineering suite was a double-digit grower suite for AspenTech between 2010, 2014, 2015, 2015. On the back of the oil and gas CapEx super cycle that really ended in 2014, we still benefited from some of that in 2015. After 2015, with a crash in oil prices in 2016, that suite and really the upstream sector and which is what the EPCs were relying on for a lot of their work went into a massive restructuring, as we all know, as a result of prices in oil and gas, demand, and so on. So since 2016, that suite has been sort of a low single digit, mid-single digit growing grower. But now in the last 18 months, we've seen an acceleration in the growth of that suite as a result of better CapEx spend in oil and gas, and also sustainability CapEx. The EPC industry spent the better part of 8 years restructuring itself, refocusing their investments in, and business into, sustainability, hydrogen, CCS, biofuels, and some of these areas, but also really running much leaner businesses. So what we're now seeing in our Engineering suite is an acceleration from mid-single digit to high single digit. I actually believe that we'll be able to hit double-digit growth for that suite again in 2025, 2026, and it's on the back of 2 tailwinds. One, oil and gas CapEx, but more importantly, the sustainability CapEx that is flowing through now our business, which is sustainable and really gives us a lot of hope for that suite going forward. Yeah, interesting. So on the sustainability CapEx, you mentioned a couple different examples like hydrogen, but can you elaborate? Because, you know, when we hear sustainability CapEx, that can mean a lot of things. Mm. So, what does that typically look like? Well, I mean, look, sustainability CapEx manifests itself in all sorts of manners. There's CCS facilities that are gonna be built, and there's hydrogen facilities. Just hand me my phone, Will. And there's too many numbers that because I wanted to make sure that I had the data, and sometimes it's best not to try to throw data from memory. But so CCS CapEx, 339 projects announced globally, $168 billion in CapEx. LNG facilities, 415 global projects, $208 billion in CapEx. Hydrogen and ammonia, 634 projects, $771 billion in CapEx. Biofeedstocks, 157 projects, $81 billion in CapEx. Geothermal energy, 603 projects, $61 billion in CapEx. So this is CapEx that 3 or 4 years ago wasn't around, and it is a result of Net Zero carbon ambitions. A combination of countries announcing their Net Zero carbon emissions, but also companies and their objective to decarbonize their operations. So that's new CapEx. Now, most of that, most of those projects haven't gone to final investment decisions. They've been announced. Probably only about 5% of all of that has been approved to be built, but the expectation is that between now and 2030, what we're gonna have to scale is these new technologies that will allow us to decarbonize the environment, and it's LNG, it's hydrogen, it's CCS, it's biofuels. AspenTech is uniquely positioned in that, our technologies historically have modeled molecules for hydrocarbons. Now, those same technologies can be used to model molecules for sustainable fuels, hydrogen, biofuels, CCS, LNG, but also now with the DGM business, we can also then model the electrons for global electrification. So what you now have is AspenTech uniquely positioned across the entire energy spectrum for the energy transition. And this is what we believe will power AspenTech over the next 10, 15, 20 years, in that we were true believers that the sustainability CapEx will be there regardless of political parties in any government. And there will eventually be a transition, yes, from hydrocarbons to sustainable fuels, but that will take longer to happen. Okay. So I do want to talk about DGM, because you're quite excited about that segment. But I know—I'm not trying to quiz you, but so the CapEx figures you gave. So let's say five years ago, if that was zero, like, as a percentage of total CapEx or CapEx backlogs, what do you think it represents today? Well, look, just to, one example, the, the IRA, here in the U.S., in that whatever it was, $760 billion, there, $265 billion-$295 billion are allocated to expansion of, of the grid and, and modernization of the grid here in the, in the U.S. That's a huge amount of CapEx that wasn't there two years ago. Europe has Fit for 55, India has their own, initiative, and almost every government is putting one in place. That's new CapEx that we believe will be there. You know, in totality, it's expected that, it will take $3 trillion-$5 trillion per year between now and 2050 to achieve net zero carbon emissions. Even if that number doesn't happen, it'll be a smaller number, but it's still a huge amount of CapEx that is new, that will drive a lot of new projects and investment in technology, which is what we do. Okay. So now to DGM, you know, the exciting part. So, I should have said electrifying. But maybe talk about what that business does specifically, and then how that's tied to, you know, the CapEx projects you. Yeah. The DGM suite, it is a suite. The base technology is a SCADA system called Monarch. That basically is the heart of operations of transmission and distribution. And it is about operating and maintaining the grid imbalance. Electricity is a system that has to maintain imbalance. Whatever you're producing has to be consumed and always in balance. And that's an important concept, because part of what we're dealing with is not so much the expansion of the grid, because that's been happening, you know, since the invention of electricity, but it is the introduction of renewables. The introduction of wind and solar power that is intermittent in a way, when there's wind, you produce wind power, but all of a sudden, the wind stops blowing and you don't have that source of electricity. And similarly, a homeowner puts solar panels on his or her roof of the house, and that's a new source of electricity into the grid, but then there's clouds or a storm, and you don't produce electricity. Now, maintaining the grid imbalance is a much more difficult challenge for these utilities, so they need more sophisticated technology. So while you have the base system, which is the core operating technology for the grid, then you have applications that sit on top of this base system to be able to manage the complexity introduced by renewables, advanced distribution management systems, distributed energy resource management systems, which is all about dealing with this complexity. And it's not only that, it's also battery storage. It could be gas power plants. As these sources of electricity come on and off, you have then to kick off new sources of electricity generation. And then you have more storms that are disrupting the grid, and then you have now capabilities such as outage management, which is the acceleration to identify where the failure happened, communication with customers, communication with crews to be able to go and quickly get to that failure point. And then as the grid expands and new sources of electricity are being added every day to it, these users, these utilities are having to upgrade their models daily now and much more frequently. So there's now new capabilities around network model management, for example, that have to be developed and introduced. When we talk to utility operators, one, they love the DGM suite, but equally important, their concern is the ability of companies like AspenTech to keep up with the technology requirements for them to be able to operate and maintain the grid and it's stable. So, what did they use before? Were they using Well, I mean, look, the grid was a very stable animal before, in that, the sources of electricity were gas power plants or coal power plants, and you could turn them on and leave them on, and then turn them off when the demand was subsiding at night, in the middle of the night. And it was a much more predictable situation. The issue is now, and therefore, the technology was all there, the legacy systems. The problem is that with the introduction of renewables, these legacy systems can no longer cope. And the opportunity for DGM and AspenTech is that every time one of these utilities decides to upgrade to new technology, it's a displacement opportunity, and this is what OSI and now AspenTech is doing, we're displacing the competition. So it's a big opportunity. It's not only that there's an upgrade cycle on technology, but then also new applications. The other aspect is cybersecurity. The grid is critical infrastructure and cyber securing the grid is priority number one. So OSI, now AspenTech, has some of the very strong capabilities in the DGM suite that were recognized for us well. Okay. So, you know, very good secular drivers. What we haven't touched on is, you know, the licensing change. Mm-hmm. Can you talk about the opportunity there, maybe what's left to do, and how to think about the uplift? Yeah. Yeah, so DGM and OSI used to go to market with a perpetual licensing model, which worked well for them. But if you want to have a sustainable software business, you have to be in the recurring licensing model. So we've introduced term licensing for that suite 18 months ago, and we're now starting to see the fruits of that effort. Our Q2 quarter was a very strong quarter on term licensing for the DGM suite. I would argue that we're almost done with our rollout. Certainly, this isn't my first rodeo. I was the head of operations when we transformed AspenTech from perpetual licenses to term. And eventually, there's a tail of customers that resist converting, especially in some countries around the world. So there will be work to do there, but in North America, it's now mostly a term licensing business. We're taking that into Europe. And what it will create is a much more stable, recurring revenue model for AspenTech, and a model that will eventually then also allows us to introduce the Token suite for DGM, which will then expose these customers to all the products in the suite that they can take advantage of because now they have access to all of them, and all they need to be purchasing is tokens from AspenTech. Okay. I have one more question on this topic, but did want to ask if there were any questions from the audience. So with DGM, you talked about expanding into Europe. Is that, you know, can you talk about that focus this year and kind of the capacity you're adding? Yeah. Yeah, no, so, so a great job expanding this year into Europe with DGM. We have some anchor customers in some of the countries there now. With this new headcount, we'll certainly be more present in many more countries in Europe with the suite. It certainly is the home country of some of the competitors, Siemens, Schneider, they're both based there in Europe. So we're looking forward to that competition. But now, that was part of the expansion in sales that we did in this fiscal year. Next fiscal year, we'll expand into Asia and the Middle East. We have great anchor customers in Asia. Like I said, our technology is responsible for maintaining the entire grid of India in operation. So that's a great reference for us in Asia, but also the entire country of Vietnam, the same thing. Bangkok, the city of Bangkok, is run on AspenTech technology. So we'll expand into Asia, we'll expand into the Middle East, we'll increase our count in Europe and in North America as well, and especially in the aftermarket team, which is a team that once we get in with a core system is a team that then is adding applications to on top of that system. So we're very excited about DGM. The growth in DGM, one, it's organic. It's probably an industry that is growing software adoption by 25%, but also with expansion, what we'll be doing is generating incremental sales, just because we're present in more regions of the world as well. Okay. For the last couple minutes, I did want to touch on SSE a little bit. Mm-hmm. So can you talk about that business, the drivers, and maybe where we are in the transformation journey? Yeah, look, SSE is a business that, when we took it on, had been restructured by, by Emerson. And really, it was a business, a great technology, very clean because it had just been restructured and, b ut our job has been to inject momentum into that business, through some investments, but also, introducing the Token suite, for that, that, that, that business that now, is exposing more products to customers. There's certainly the, the AspenTech brand that gives it, greater recognition, but also the synergies with our Engineering suite. So overall, we're very happy with the acceleration in growth that we've seen. It's growing 10%-15% per year now. But also then is the opportunity and the benefit that it has from oil and gas CapEx, but the opportunity to take it into carbon capture and sequestration, into geothermal energy. One of the geothermal companies in the U.S., Fervo Energy, which is focusing on geothermal energy, is a customer of AspenTech. But also we have now some of the international oil companies that are setting up CCS businesses are standardizing on the SSE suite for those capabilities. So, look, we're very hopeful about the suite. I think customers also wanted to, were looking for options to the elephant in the space, and now they are seeing AspenTech as a potential option to that competitor. And, you know, we're very optimistic about it going forward. Okay, perfect. I do like to try to end it with a fun question. Okay. So, I'm not trying to put you on the spot, but, you know, I only know Antonio as CEO of AspenTech, and I know you like steak, but I don't know what other hobbies you like to do? No, look, actually, my hobby is being the CEO of AspenTech. I love what I do. I'm into my eleventh year as CEO. I'm actually very energized by the new AspenTech. I think, we've been able to create a runway of another 15-20 years for this company. I wanna make sure that, you know, I see the fruits of that as well, and eventually, someone else will have to take this over. But, I'm pretty committed to what we're doing here, for now. I like running, I like doing other stuff, but, I love doing this job. Okay, well, unfortunately, you're not the only CEO who's given me that similar answer. So maybe it's a characteristic. Look, maybe it's the times we're in. Sure. Well, thanks, Antonio. Thanks, everybody. Thank you, Jason.