Aspen Technology (AZPN) Baird 2024 Global Consumer, Technology, & Services Conference summary

Integration and transformation progress

• Integration of Emerson's contributed software businesses is largely complete, with new processes, talent, and systems in place to drive Digital Grid Management (DGM) and Subsurface Science and Engineering (SSE) suites to market.

• Expanded sales organization to support a larger company, with significant work done in fiscal 2024.

• Emerson partnership has broadened industry reach, now serving 20 industries, up from a core of six.

• Customers validated the new value proposition at the recent OPTIMIZE user conference, reinforcing AspenTech's positioning in the energy transition.

• SSE and DGM suites now offer unique value by enabling modeling from subsurface exploration to surface facility optimization.

Strategic positioning and growth drivers

• Technologies originally developed for hydrocarbons are now applied to sustainable fuels, carbon capture, and grid management.

• DGM suite is expected to grow 25%-35% annually, benefiting from global electrification and grid modernization investments.

• DGM's microgrid management capabilities are being deployed in airports, transit systems, and mining, with expansion into oil, gas, and chemicals underway.

• OSI business, now part of AspenTech, is expanding globally from its North American base, with new penetration in Europe, Asia, and the Middle East.

• DGM suite's sweet spot is transmission and distribution, with storage capabilities leveraging broader AspenTech solutions.

Commercial relationship with Emerson

• Emerson holds a 55% stake and has a commercial agreement to resell AspenTech products, with both companies leveraging their respective market strengths.

• Emerson is embedding AspenTech products into its automation systems, with results expected in the next 6-12 months.

• Joint co-innovation is underway to create unique, native solutions combining both companies' technologies.

• Synergies from the partnership are expected to meaningfully contribute to growth strategy.

• New CFO from Emerson is expected to enhance collaboration and streamline financial integration.