Great. Well, good afternoon, everybody. Thank you for joining us. I know we're getting close to competing with cocktails here, but we're gonna make it well worth it because this is AspenTech, after all. I'm Rob Oliver, I follow Software at Baird, and it's a pleasure to have Antonio Pietri with me, who's the CEO of Aspen. Antonio, always good to see you, and thank you so much for coming to the conference. No, glad to be here. There's a lot to talk about. We'll try to keep this as interactive as possible. If you have a question, please don't hesitate to look at the email address in front of you and send me an email, and I will endeavor to get as many questions in as we can. Let's just start with kind of the big picture, obvious things, which is that there are a lot of exciting things happening for your business. You guys are in new markets, you've got secular growth drivers, you've got a new CFO, you've got, you know, you've got an Emerson partnership, which is, you know, maturing in terms of you know, you guys are getting to know each other better. So now, a little over two years after the Emerson transaction, maybe give us a sort of state of the union as to where we are with Aspen. In general? In general. Yeah. I'll get specific after. Okay. Great. Well, look, great to be here. So two years on, since the Emerson transaction, of course, it was transformative for Aspen Technology. Emerson became the majority shareholder. The company is still, of course, publicly traded on Nasdaq. Emerson contributed two software businesses, a company called Open Systems International, which we renamed the products with Digital Grid Management, and a business they called Geological Simulation Sciences, which we've now renamed Subsurface Science and Engineering, and really technologies for oil and gas exploration and production, but these are the same technologies that will be used for carbon capture and sequestration, geothermal energy. A very interesting use case around naturally occurring hydrogen and helium in the subsurface, and these technologies also serve that purpose. But look, two years on, the work around integration and transformation, mostly done. When it comes to transformation, we've put in place all the processes, the talent, and the systems that are required to now execute on driving term software into the market for DGM and SSE. The Token suites are now in the market for both product suites. We're building the ecosystem of services implementers for DGM. So all that is in place. We've expanded our own sales organization to now sort of support a bigger company. That was a lot of the work that happened in fiscal 2024. And in general, the exciting part that we have about Aspen, that I see and we see about Aspen Technology, is how well-positioned now we are around the energy transition, and that, you know, technologies that were developed to model molecules for hydrocarbons, to design, refineries and chemical plants, are now- can now be used also to model molecules for sustainable fuels: hydrogen, biofuels, carbon capture and sequestration, and so on. And then the extension into the electron, our ability to model the entire grid transmission and distribution of electricity. So if you think of the use case where you take wind energy, you produce an electron with wind energy, you use that electron to split hydrogen from water in an electrolyzer, which is a chemical process, and then turn that hydrogen into ammonia for storage, and then turn it back into electricity when the demand for electricity comes back, that entire process can be modeled with Aspen Technology. We have the technologies that support this. So we're very excited about how well aligned we are around the energy transition going forward, and the opportunity that it creates for the company. You just had your OPTIMIZE user conference. I say annual, well, COVID got in the way. It had been since 2019. It struck me, I saw you right before your presentation, and I said, "This is the same room we were in in 2019. Uh. “But there must have been a few fake walls in there, because clearly there were way more people.” I think I saw 1,300 customers, 50 countries, and 20 industries, which strikes me as meaningfully different from the Aspen before. What were some of the main takeaways for you, Antonio, from this in-person OPTIMIZE? Well, I mean, look, we knew it, but certainly the support of a much broader customer base, and even I reacted to the 20 industries, because certainly we're core to six industries: oil and gas, chemicals, engineering, construction, utilities, mining, and pharmaceuticals. But with the Emerson partnership, Emerson sales channels into so many of their industries makes that 20 industries, so much bigger scale. Look, my main takeaway from that conference was the validation from customers that attended the conference. It was the first time they were seeing the value proposition for the new AspenTech, about their conviction that we are the company that is uniquely positioned to help them in their energy transition and execute on their strategy. So very excited about it. Great feedback and results from the conference, and we hope to turn that into more growth in the future. Were there any of the two businesses that came to you guys via the Emerson transaction, one strikes me as a relatively natural fit for your business, and that would be the subsurface engineering business, and the other, DGM, perhaps an entirely newer market for you guys selling to utilities. So maybe talk about the receptivity among the heritage AspenTech customers to the SSE solution as you saw coming out of Optimize. Yeah. Yeah, I mean, the one sort of caveat that I would make about your statement, Rob, is in a way, the utilities business is an OT technology business, and this is what AspenTech does. AspenTech is an OT company. We're a vertical software company in the OT space, and that's what we do. So, that business feels very natural to us, but to your point, it is a completely different industry. The SSE business, which is really targeted at the upstream oil and gas industry, is a business unit of integrated oil companies that we never really visited, because we were downstream, in downstream refining. Now, what some of these companies were actually pulling us into upstream because there's a lot of facilities in upstream for separation of gas from oil, separation from liquids from oil that are designed using our technology, but it was really sort of a far afield from what we do. What customers are now realizing is that with the combined, the new AspenTech, they can model the subsurface, do the exploration, the production engineering, and then optimize this with the surface facilities using our engineering software. That is, and that is a very unique value proposition. As a matter of fact, I've been in a couple of meetings the last three weeks, one in the Middle East, where the customer just volunteered: "You guys are the only ones that can do this." So this differentiates us from the competitors in the market. And then last week in Europe with one of the customers there, where they recognize that these capabilities that we now have are very interesting to them, all coming from the same supplier of technology. So this has changed how companies are thinking about the SSE suite, which was a standalone offering inside Emerson, and now with AspenTech, our brand and our positioning in downstream is giving greater credence to that suite overall. And then the sort of commercial aspect of it with the token suite, which completely changes the licensing model, which I believe some of our competitors in that space will not be able to match. Great, thanks. Got a couple, and I'll get to them, but please keep the questions coming. What's the right way for Aspen investors to think about the cooperation between Aspen and Emerson on the go-to-market with your products? I know, there have been some wins that have been cited recently, I think, with the Hyper-V solution, but help us understand the right way to think about that Yeah. Well, I mean, look, certainly, an important opportunity. So in addition to the transaction and the 55% ownership that Emerson took of AspenTech, Emerson and AspenTech signed a commercial agreement. That commercial agreement opened up all the products and solutions from AspenTech to Emerson for a reselling, for a resale opportunity. Of course, we've had to support Emerson in enabling them, training them on the sale of AspenTech. But equally, we've recognized that Emerson has a strength in their markets. We have our own strengths as well in our products and some of our markets, and therefore, even though Emerson has the ability to resell, our products, what are the best routes to market for each company, where we leverage our strengths? So that's, that's sort of, one component of the commercial relationship. The second component is the OEM relationship, where Emerson is gonna be embedding some of our products into their industrial automation systems, to make them native to their system. And that, started 12 months ago. There's already a couple of products that are embedded and in the market, and we'll start to see results of that probably over the next 6-12 months. And then the third component of that relationship is a co-innovation or development of joint solutions, where you will start to see the power of combining Emerson's solutions with AspenTech's to create native solutions from the combined, offering, that are very unique in their scope and capabilities. Now, AspenTech will continue to pursue opportunities where there might be a Honeywell system installed and all that, because that's part of our total addressable market. But these solutions that we will develop together will. There will be advantages to them. So look, two years on, a lot of learnings the first year, those learnings were applied in at the beginning of this fiscal year into compensation systems, into alignment, go-to-market. We narrowed our focus, in that we are leveraging where Emerson has strengths, and Emerson is leveraging where we have strengths. And my expectation is that volume from the synergies of the relationship will continue to grow the pipeline and eventually become certainly a meaningful contributor to our growth strategy going forward. Got it. I think in the video statement, Lal called it Boundless Automation. Yeah, Boundless Automation is their, their vision. Ours is a self-optimizing plant, but in a way, self-optimizing plant or asset, a self-optimizing asset, you could think of it as a subset of that Boundless Automation vision that Emerson has defined. Got it. So I asked about SSE. I wanna ask about the grid management software. Obviously, a lot of interest in the grid right now, given we're coming into storm season, heat waves, and grids go down, but also more of a secular driver, generative AI, which is, at least at this point, looks to put a strain on some power sources. And, you know, more than a few questions about Aspen and Aspen stock related to grid and grid management. So, you know, that business last quarter was solid, and in fact, we'll talk about the quarter, and it was interesting that the issues in the quarter actually were heritage Aspen, not those new businesses. But, you know, what's the right way for us to think about the grid management, you know, progression of growth for you guys? Well, I mean, look, so there's about 168 countries that have defined initiatives or investments around electrification and sustainability. Here in the United States, we have the IRA, and I think there's about $300 billion to upgrade the grid in the United States. All that is money that is flowing to support the upgrade, expansion of the grid, upgrade of the technology in the grid, and that's what's flowing into investments. So from our standpoint, you know, that investment is producing about a 20% growth in CapEx for these industries over the foreseeable future. And we think about the Digital Grid Management suite growing in that 25%-35% range. Now, that's a new suite to AspenTech. Used to be a perpetual licensing suite. We've converted it into terms, so we're starting from a very slow number, but a small number. But at the same time, we do believe that this suite has a capability to grow at a very accelerated clip for the next few years. And depends on how long we're talking about, but eventually, could certainly become the greatest growth contributor to AspenTech on any given year, but at some point, maybe become even the biggest suite. You know, the Digital Grid Management suite is recognized for how contemporaneous it is, the technology, the fact that it's a suite that was developed organically, not through acquisitions, so it fits together very well. As customers developed or identified the need for new capabilities, they developed them. So when you talk about the summer heat, the storms, those are outages, so the ability to recover from outages has become very important for utility companies, and the capabilities to deploy assets to repair the damage that is caused by storms is very important. So we have those capabilities as well. So overall, look, I think DGM in that context is very exciting, but also DGM has microgrid management capabilities that will benefit our customers in refining, in chemicals, in mining, and in other industries. If you've ever been through the Kuala Lumpur International Airport, the microgrid, the electrical grid that supports that airport is managed by AspenTech technology. If you're from Boston, the MBTA runs on AspenTech technology now. It's a microgrid, and there are many other microgrids and mines. Fortescue in Australia, which is a forward-looking mining company, wants to go fully green in their energy they consume to produce the material that they mine, is using our microgrid capabilities to manage their electrical grid. We believe these are capabilities that we can also bring into oil and gas and chemicals, and we already have opportunities that we're pursuing with some of the IOCs, integrated oil companies, to deploy it in their upstream facilities. Got it. There's a bunch of questions on the grid. I'm picking one. What part of the electrification value chain is DGM best suited for: generation, transmission, distribution, storage? And what other main friction points are pushed back? Yeah, yeah. Transmission and distribution, we're not into generation. Emerson is into generation, and those are synergies that exist, but really, transmission and distribution. Storage of electricity, then you move into AspenTech capabilities because the conversion of electricity into hydrogen via electrolyzers is a capability that AspenTech has in our heritage, AspenTech solutions, in our engineering suite and our SSE suite. So this is now a capability that starts to leverage the capabilities of the broader AspenTech, but the sweet spot of the DGM suite is transmission and distribution. Got it. The OSI businesses, and I learned you guys had a breakout session for us at OPTIMIZE, which was super helpful, and the OSI business is. It's been around a while and is number one in North America, right? Yeah. So, felt like coming out of that, a lot of the growth is gonna come potentially, not only from cross-sell to current customers in North America, but internationally, if that's right. Yeah. Yeah, so OSI was founded in 1992, so it's almost a 30-year-old business. They were mostly a North American-based business. 85% of their revenues were in North America. So over the last two years, we've expanded them into Europe, and this year we're expanding into Asia and the Middle East. Now, having said that, we have customers all over the world. India has the largest synchronous transmission grid and is operated by Aspen Technology. In Latin America, the largest transmission company of electricity, ISA, is using our technology. For example, in the Middle East, we have a few customers, as I said, in Asia, North America, Europe, as well. So the business is going global, but we're accelerating the penetration into Europe and Asia. Got it. I wanna pivot 'cause we only have about 10 minutes left, and there's a bunch I'd like to get to, and keep the questions coming. To the Q3 report, you guys are a June fiscal Q4, and I have not yet made my appeal to your incoming CFO to change the fiscal year to match the calendar year. But when I meet him, I will. So which would align with the budgets of your customers. Nevertheless, the Q3 report was weaker, and you guys took down the full year guide. Mm. What was interesting to me, having followed you guys for a long, long time, is that, you know, historically, when you get into these periods where oil prices are higher, you see this kinda higher CapEx and kind of flow through to you guys. And it sounded like you were expecting that too, but then there was a disconnect, right? Yeah. Where things paused or slowed. Yeah. So just wanted to touch on that, kinda what it was, what you saw to take down that ACV for the full year. Yeah. And look, maybe it's not a wise thing to say by a CEO, but I think we were surprised about the dynamics of the March quarter. We went into the fiscal year, but really into the second half of our fiscal year, thinking that we were gonna have equally strong demand. If you look at all the sort of the macro indicators that we follow, oil price is very high, CapEx spend high, refining margins high, utilities CapEx high. And as all that was positive, and we thought we were gonna have the demand for our products. We get into the quarter, and really, the last month of the quarter, and in the last two weeks, and we started to see a lot of customers pull back. Eventually, there was a broad-based pullback in spending across all regions except one, Latin America, and across the heritage AspenTech suites, engineering, manufacturing, supply chain, and asset performance management. Now, having done the analysis and the sort of retrospective on it, clearly, if you look at the results that were announced by refining companies, the Marathons, the Valeros, P 66, but also international oil companies, they were looking at their lower revenues, lower profitability as a result of certainly lower oil prices, but reduced demand. What we surmise is that at that point, CFOs, CEOs decided to start pulling back on OpEx spend, which is what the spend that comes to us from our refining customers, especially. Now, another dimension that I think has become clear as well, that it's probably impacted the quarter, the return on investment from sustainability projects is lower than that from oil and gas CapEx, and as a result, is more sensitive to interest rates. We believe that the interest rates staying where they are have slowed down the investment around sustainability, which was driving a lot of our engineering growth, the acceleration of our engineering business growth, and we saw a slowdown as well in that area. I think it's probably those two factors that caught us by surprise, and on that basis, we had to reassess the fiscal year, and we took our guidance down. Got it. And there were some... And I don't think it was the primary driver, but there also were some sales, modest sales execution issues. Yeah, that's right. I mean, we've been in an expansion mode in our sales organization, but also integration of the different sales organizations that we inherited from SSC and DGM. And I think the combination of expansion, new salespeople, new leaders, sales leaders taking on new positions and, and all that, I think, created some blind spots and misalignment and execution issues in our sales organization. We don't think that's the main reason for what happened, but nonetheless, it didn't, it didn't help that we were in that sort of execution phase. Now, this quarter, we've certainly learned that, and a lesson, and, and so we're putting a lot more focus on partnering our more senior sales leaders and salespeople to mentor and coach our new teams. So that's to accelerate their learning, but also make sure that we're not, we don't have the same blind spots that we had in the March quarter. Got it. And then on APM, you know, you guys own some great technology. It sounds as if you're gonna focus those efforts a little bit, as opposed to being broader with your offering, so perhaps you can touch on that change. You know, they say that the harder thing about a strategy is deciding what you're not gonna do. So one of the things that certainly we've learned about APM is that it is a great technology. Everyone loves the technology. It's one of the most awarded technologies that AspenTech has. But there are certain use cases where customers that are running their facilities at very high throughput, they do a good job of maintenance of those facilities. Therefore, when you put a technology that is there to monitor failure, it captures very little failures because they are not happening. Therefore, the value creation from the technology doesn't materialize, and eventually, I think these customers, in the context of cutting back on spending or not having the resources to sustain the use of the technology, decide to not renew their agreement. So we've had these customer segments where they buy technology, but a year or two later, we experience attrition because they don't renew their agreements. At the same time, we have other use cases where there's less maintenance of that equipment, but if that equipment fails, it creates huge losses, and these customers love the technology, and they expand the use of the technology. We have customers that are now deploying the technology across 25 sites globally, and they year to year continue to increase. So what we decided is we're gonna focus on high-quality growth, meaning that growth that is not gonna then result in attrition down the road, and we're gonna narrow our focus on our go-to-market for APM into a couple, 2, 3 customer segments where we believe the growth will be high quality with little attrition in the future. I think that will reaccelerate the growth of APM and make it a more successful business for us. Got it. Great. We're running out of time. I haven't even gotten to financials other than touching on the Q3, but let's talk about M&A. You know, when the transaction originally happened with Emerson, you guys felt like you had a mandate to go out there and, and make acquisitions as part of that, and you tried, certainly with one that seems like would've been a great fit, but it didn't work out. Now, after the kind of the ACV reset, like, how should investors think about the appetite for M&A? Is it the same as it was before, or is it more, "Let's get things straightened out here before we start to get aggressive in M&A"? How should we think about the strategy? Well, I mean, look, I think in a way, we've had a year to complete the transformation of these businesses and expand our sales organization and get ready for more M&A. I think we're ready. You know, we're still interested in Micromine, and I'll tell that to the market. Whenever Micromine comes back and available, we'll participate in that process, as well. But look, ultimately, you do the M&A that's available unless you wanna overpay for something, and we're not in that category. I think Emerson is a very supportive partner in leveraging AspenTech for M&A, but it has to be the right assets, and if they're available, we'll take a look at them. If not, we'll be patient and continue to execute on our business, so. Got it. Great. I'll squeeze in one more in the minute that we have remaining. You have a new CFO, David Baker. He's a 27-year veteran of Emerson, although he doesn't look old enough to be a... 27-year veteran of anywhere. What does that mean for you guys? Is it closer cooperation? It would seem that this could help to ease some of the challenges around integration or help facilitate more readily go to market, just knowing people better and processes better. What's the right way for investors to think about that, other than the fact that, "Hey, you know, we've hired a strong CFO?" I mean, look, Dave, because of his history in Emerson, he was a CFO for the automation business, same customers, same industries, similar technologies. So, I now have a CFO that understands our industries, understands what we do, OT technologies. I think that's a big win for Aspen Technology. I have a CFO that comes with experience of the Emerson system, operating system and what's required to execute with excellence. I think that will be an enhancement to AspenTech. But also, Dave comes with the understanding of the Emerson organization and the relationships that will help in that collaboration that has to happen every day with Emerson, especially between finance organizations, because Emerson ultimately rolls up our results into theirs. If there's one function in AspenTech that's had an administrative burden as a result of the Emerson transaction, it's our finance organization, and I think Dave will help facilitate that and accelerate that. Great. Please join me in thanking Antonio Pietri from AspenTech for joining us today. Thank you. you. Thank you. Antonio, always a pleasure. Thank you, Rob. Appreciate it. Thanks very much, and thanks for joining us for day one of the conference. We appreciate it.