Karl Eric Johnsen - Aspen Technology, Inc. Antonio Jose Pietri - Aspen Technology, Inc.

Matthew Pfau - William Blair & Co. LLC Jackson E. Ader - JPMorgan Rob Oliver - Robert W. Baird & Co., Inc. Jason Celino - KeyBanc Capital Markets, Inc. Andrew DeGasperi - Berenberg Capital Markets LLC Mark W. Schappel - The Benchmark Co. LLC

Ladies and gentlemen, thank you for standing by. And welcome to the Aspen Technology's Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Karl Johnsen, Chief Financial Officer. Please go ahead, sir. Karl Eric Johnsen - Aspen Technology, Inc.: Thank you. Good afternoon, everyone, and thank you for joining us to review our fourth quarter fiscal 2020 results for the period ending June 30, 2020. I'm Karl Johnsen, CFO of AspenTech, and with me on the call is Antonio Pietri, President and CEO. Before we begin, I will 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 and contained in our most recently filed Form 10-Q. Also, please note that the following information relates to our current business conditions and our outlook as of today, August 12, 2020. Consistent with our prior practice, we expressly disclaim any obligation to update this information. The structure of today's call will be as follows: Antonio will discuss business highlights from the fourth quarter; and then I will review our financial results and discuss our guidance for fiscal year 2021. With that, let me turn the call over to Antonio. Antonio? Antonio Jose Pietri - Aspen Technology, Inc.: Thank you, Karl, and thank you all for joining us today. We hope all of you and your families are staying safe and healthy. Today, we're also celebrating AspenTech's 39th anniversary of its founding. AspenTech delivered solid fourth quarter results against one of the most uncertain economic environments we have experienced in our 39-year history. By utilizing AspenTech solutions, our customers were able to adapt quickly to unexpected and challenging circumstances, while continuing to operate their assets safely and efficiently. Our customers faced an unprecedented demand disruption in our fiscal fourth quarter, and we thank them for their continued trust in the AspenTech team and our products and solutions. We believe this illustrates the mission-critical nature of AspenTech as well as the resiliency of our operating and financial model. Our performance was made possible by the hard work and dedication of everybody on the AspenTech team who remain focused on our customer success from the very beginning of the pandemic amidst challenging circumstances. Looking quickly at our financial results for the fourth quarter, revenue was $199.3 million, GAAP EPS was $1.43 and non-GAAP EPS was $1.54. Annual spend was $593 million, up 3.1% in the quarter and 9.6% year-over-year, and free cash flow was $99.5 million. For the full year, total revenue was $590.2 million, GAAP EPS was $3.28 and non-GAAP EPS was $3.72. Free cash flow was $243.1 million, and we returned $150 million to shareholders by repurchasing approximately 1.3 million shares. While we were pleased with our performance in the quarter, our results reflect the impact of the economic downturn related to the COVID-19 pandemic. We have seen conditions in our end markets, showed some improvements in the late March-April timeframe, but our customers continue to operate in uncertain and challenging market conditions. In the energy sector, we had a good quarter with some notable wins amongst refining customers. Oil prices have stabilized by the end of the quarter from their trough in early May and are recently trading around the $40 per barrel level as supply cuts took effect and demand showed signs of improvement. Increased economic activity and automobile use in the May trough has resulted in improved fuel demand, creating a more stable operating environment in refining, driven by an increase in utilization rate, albeit still well below pre-COVID levels. Reduced air and ground travel levels are likely to persist at least in the near term, which could limit further improvements in end market demand. We also had a solid quarter with chemicals customers. This is a sector where some companies benefit and others are impacted from the significant changes in product demand patterns. Sometimes even in business units within the same company. The customer has been adversely impacted, are adjusting their operations and operating expenses to reflect current and near-term demand levels. We're anticipating a slower than expected recovery in economic activity in the second half of this calendar year, which will prolong the recovery for the chemicals industry. Despite the tough operating conditions for our owner-operator customers in the refining and chemicals markets, in each case, we continue to see solid adoption of our products and solutions, as well as growth in our pipeline of business. Customers in these markets recognize that digitalization and automation are areas in which they most continue to invest. We have heard this repeatedly in the last five months during customer meetings and from the membership of our Executive Advisory Board. These customers will require technology that allows them to run their plants more efficiently with more agility and in a more sustainable and safer fashion. We strongly believe that the macro disruption created by the pandemic further underscores this trend and the opportunity for expanded usage of our product suites. The engineering and construction market experienced further backlog declines as its customers reduced global CapEx budgets and delayed final investment decisions or slowed down projects, although the resumption of construction activity in many jurisdictions in the last two, three months, has been a positive development. We generated modest growth from this vertical in the quarter, driven by a combination of transactions in North America and Europe and a strong contribution from Russia. We believe there are growth opportunities from these customers as they continue to look for productivity improvements in their engineering teams and their design activities and shift their focus to operations and maintenance activities in brownfield operations. Overall, we are pleased with the solid performance of both the engineering and MSC suites in the quarter. The MSC suite delivered, especially strong performance and the engineering suite generated good growth despite the challenges faced in the engineering and construction industry. The APM suite delivered a record quarter, the largest quarter in its history. We signed some exciting transactions in the quarter that highlight the opportunity for APM to drive new value creation opportunities for customers across all industries. Key transactions were signed with customers in mining, engineering and construction, pulp and paper, refining, chemicals, pharmaceuticals, and specialty chemicals. At the same time, we had a number of APM transactions that were delayed as customers adjusted their operations to current conditions. APM is an emerging set of technologies, which makes it easier for some prospective customers to delay purchasing decisions as part of their near-term cost-saving initiatives. We remain very encouraged by the breadth of APM pipeline activity and are confident we will see improved performance as the economy normalizes. Today, the APM suite is being used by 103 customers in 33 different countries and we have the largest pipeline of business in the young history of this suite. Following are highlights of some of the transactions signed in the quarter. First, a European oil and gas company that also produces low-carbon energy and is a long-time customer of AspenTech's MSC suite, signed a global enterprise agreement for AspenTech's multivariable control technology, DMC3. This customer is committed to a net zero greenhouse emissions target by 2050, as part of the Paris Climate Change Agreement, and identified multivariable process control as one of the key enabling technologies that will contribute to meet its objective. Aspen DMC3 was selected to be standardized across all refining operations over competing offerings due to our clear market leadership in process control. Second, a Europe-based global E&C company, focused on the asset life cycle of its end-user customers across many industries, once again, renewed its agreement with AspenTech and increased spend by licensing our APM suite. This customer conducted an evaluation of multiple software technology suppliers and selected AspenTech for its broad-ranging vision and leading market position. This company expects to become a digitalization partner to our joint customers, and plans to promote and implement our APM suite as part of expanding relationships in the operations and maintenance space. Third and final, a leading global chemical company in Japan and long-term customer of AspenTech, selected Aspen Mtell to improve maintenance operations as part of its corporate digitalization transformation initiative. The customer evaluated technology from seven local and foreign companies and selected our product after the result of a proof-of-concept pilot. The initial deployment will be at one site in Japan with the expectation of an enterprise rollout in the future. We also had a solid quarter of profitability and free cash flow. We believe the strength of our balance sheet and financial model, together with our operating discipline is a significant competitive advantage during difficult market cycles. We have the resources and flexibility to continue investing in our core growth initiatives, which further extends our product market leadership. I would now like to provide you with some additional details about our performance for the full year 2020. From a product perspective, the engineering business grew annual spend 5.4% for the year; generating 33.4% of our overall annual spend growth. Our manufacturing and supply chain or MSC business continued to perform at a high level, delivering annual spend growth of 12.7%, representing 49.5% of our total annual spend growth. The combined engineering and MSC businesses came in the middle of the range of the original guidance given for the fiscal year of 7 to 9 points of growth contribution from those two suites. The Asset Performance Management or APM business, generated total annual spend growth of over 64% or 17.1% of our total annual spend growth for annual spend growth for the year, contributing 1.7 points of annual spend growth. We think the positive contribution and strong gross growth of our three suites speaks to the multiple growth levers in our business. At the end of the year, our installed base of business was split 58% engineering and 38% MSC, with APM at 4% on an annual spend basis. Our three core verticals of energy, chemicals and engineering and construction contributed 37.7%, 34.3% and 18% of our growth in annual spend during the year, respectively. One of the trends we're also pleased with is our performance in the global economy industries or GEIs, which contributed 10% of our annual spend growth for the year with the pharmaceuticals industry included in this segment and growing 19.7% in the year. The success of the GEIs is a positive indicator of the opportunity with the APM suite and the potential for further end-market diversification. At the end of fiscal year 2020, the energy vertical represented 41% of our business; chemicals 28%; E&Cs 25%; and GEIs, including pharma, 6%. An important trend to note is that over the last six years, more of our business has shifted away from the E&C industry, now representing 25% of our annual spend from 31% at the end of fiscal year 2014, while we have continued to grow and create significant value for our shareholders. For the full year, our attrition rate was 4.2%. We were pleased with the trends in attrition in both the fourth quarter and for the full year. It is important to recognize that we generated 13.8% gross growth for the year. This is growth prior to attrition. Turning to our outlook for fiscal year 2021. We entered the year still facing uncertainty in our core end-markets. Positively, we continue to have a strong pipeline across all three of our product suites and significant customer interest in newer solutions like APM, GDOT and Aspen Enterprise Insights. This encouraging demand trends reflect in part the strategic importance of digitalization investments in the process and other capital-intensive industries. Based on our fourth quarter results, which we felt could be a good barometer for the rest of the calendar year and current visibility into the business, our expectations of how the macro environment will impact our business in fiscal year 2021 have shifted since early May. We are now projecting gross growth to be double-digit again. Our expectation for attrition is marginally higher than our original expectation in the range of 5% to 6%, though, as I noted, we remain confident it will not reach the peak from the previous cycle. The year-over-year increase in attrition reflects a worsened economic environment, particularly for E&C customers and recognizes that we have a larger than usual amount of business up for renewal this fiscal year. As we discussed at length on our last earnings call, while we expect attrition to increase from fiscal year 2020 levels, there are several factors that gives us confidence that attrition will not reach the highs that we experienced during the last cycle. Please note that we expect attrition to be somewhat evenly distributed across all four quarters of the year and anticipate growth will follow our historical seasonality, with the majority of the sequential growth in our business occurring in the second half of the fiscal year. Taking all this into account, we are targeting annual spend growth of 6% to 9% in fiscal year 2021, underlying this guidance, it's an expectation that our core engineering and MSC suites will grow in the 4% to 7% range, and APM will contribute approximately 2 points of growth. The resiliency demonstrated by our business in fiscal year 2020 gives us confidence to continue investing in our key strategic priorities in fiscal year 2021. We announced one of our top investment priorities today with the introduction of our new AIoT Hub that is a result of the integration of recent investments in Industry 4.0 digital capabilities, including the acquisitions of RtTech, Sabisu and Mnubo. It will also include our process industries leading data historian InfoPlus.21 and related capabilities. This new AIoT Hub will focus on data, connectivity, edge and cloud capabilities, visualization and insights and provide a cloud-ready environment for our next-generation hybrid AI products and solutions. The Hub enables, seamless and flexible data mobility and integration across the enterprise from sensors to the edge and cloud, and accelerate the delivery of business insights for the capital-intensive industries. A key focus for the AIoT solutions organization will be to grow the installed base of our IP.21 historian by expanding access to data at the enterprise level, as our customers increase their use of data to deploy our high-value applications and those of third parties using the Hub cloud-ready capabilities. We are very excited about the opportunity for the AIoT Hub, and believe it will further reposition and strengthen AspenTech in the rapidly-expanding segment of Industry 4.0 digital capabilities. We will also be releasing later this year the newest version of the aspenONE suite, which kicks off the introduction of a new generation of software products with hybrid modeling capabilities that will leverage the AIoT Hub for their delivery. Hybrid modeling will combine AI algorithms and capabilities directly with first principle's domain knowledge and expertise in our current software products to significantly advance accuracy and responsiveness without the need for customers to invest in expensive armies of data scientists. We will also expand our investments in APM to increase market coverage and best position this suite to benefit from the improvement in the macro environment over time. In addition, we will materially increase investments in sales capacity for the GEI markets to capitalize on the opportunity we see in those verticals. We look forward to discussing all these and more during our Annual Investor Day, which will be held in November. As Karl will detail later, we are forecasting another strong year of profitability and free cash flow generation in fiscal year 2021, which is supported by our operating discipline and growth outlook. In addition, we will be resuming our stock repurchase program. Our board of directors recently authorized the repurchase of up to $200 million of stock this fiscal year. We believe our ability to consistently return capital to shareholders throughout the business cycle is evidence of the strength and stability of our business. To conclude, I'm as excited as I've ever been about the outlook for AspenTech. While the current macroeconomic environment is challenging, there are many factors that support long-term growth for the business. The introduction of the AIoT Hub and the innovations that will be delivered in our new software release will further reinforce the value our mission-critical solutions have generated for customers for nearly 40 years and uniquely position AspenTech to again lead the next transformation of the process industries. We believe the recovery from the current economic macro conditions will create the right environment for the company to get back to sustainable double-digit growth in the future. I'm confident in our ability to execute in these challenging times and to generate value for our shareholders over the years to come. Now, let me turn the call over to Karl. Karl? Karl Eric Johnsen - Aspen Technology, Inc.: Thanks, Antonio. I will now review our financial results for the fourth quarter fiscal 2020. 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 and this non-linearity will have a significant impact on the timing of our revenue. As a result, we believe our income statement will provide an inconsistent view into our financial performance, especially when comparing between fiscal periods. In our view, annual spend will continue to be the most important metric in assessing the growth of our business, and annual free cash flow, the most important metric for assessing the overall value our business generates. Annual spend, which represents the accumulated value of all our current invoices for our term license agreements at the end of each period was approximately $593 million at the end of the fourth quarter. This represented an increase of approximately 9.6% on a year-over-year basis and 3.1%, sequentially. Total Contract Value, or TCV, which we define as the aggregate value of all payments received or to be received under all active term license agreements, including maintenance and escalation. We believe the TCV metric gives insight into the scale of our overall business. As of June 30, 2020, the total contract value was $2.76 billion. This compares to $2.57 billion at June 30, 2019. Total bookings, which we define as the total value of customer term license contracts signed in the current period less the value of term license contracts signed in the current period but where the initial licenses are not yet deemed delivered under Topic 606 plus term license contracts signed in a previous period for which the initial licenses are deemed delivered in the current period was $236.2 million, a 2% decrease year-over-year. Total bookings in fiscal year 2020 were $610.1 million, a 6% decrease year-over-year. This decrease in the quarter and for the year was the result of a lower amount of renewal bookings for each period, versus the comparable year-ago period. As a reminder, the timing of renewal bookings is not an indicator of our growth or health of our company. Overall, we were pleased with our bookings' performance in the quarter, which reflected solid demand across all three product suites and attrition that was in line with our expectations. Total revenue was $199.3 million for the fourth quarter, a 1.8% increase from the prior-year period. Turning to profitability, beginning on a GAAP basis. Operating expenses for the quarter were $70.5 million compared to $69.1 million in the year-ago period. Total expenses, including cost of revenue were $85.6 million, which was up from $84.5 million in the year-ago period, and down from $85.9 million last quarter. Operating income was $113.7 million, and net income for the quarter was $97.6 million, or $1.43 per share. Turning to non-GAAP results. Excluding the impact of stock-based compensation expense, amortization of intangibles associated with acquisitions and acquisition-related fees, we reported non-GAAP operating income for the fourth quarter of $122.9 million, representing a 61.7% non-GAAP operating margin, compared to non-GAAP operating income and margin of $119.9 million and 61.3%, respectively in the year-ago period. As a reminder, operating margin is heavily impacted by the timing of bookings and recognition of license revenue which is typically highest in the fourth quarter. We believe focusing on annual free cash flow as a percentage of annual spend is the most appropriate way to assess the efficiency of our performance in a period. Non-GAAP net income was $104.9 million, or $1.54 per share based on 68.2 million shares outstanding. Turning to the balance sheet and cash flow. We ended the quarter with $287.8 million of cash and cash equivalents, and $431.2 million outstanding under our term loan and revolving credit facility. We did not repurchase any stock in the fourth quarter and completed $150 million of stock buybacks during the fiscal year. In the fourth quarter, we generated $99.7 million of cash from operations and $99.5 million of free cash flow after taking into consideration the net impact of capital expenditures, capitalized software, and acquisition-related payments. Our cash flow performance was generally in line with our expectations, but did reflect lower-than-usual cash collection, as some customers were more cautious in managing their cash flow given the current macro environment. We had approximately $18 million of receivables due June 30 that were not collected until the first few weeks of July. Overall, we have not seen any material changes in contract or billing terms, or the collectability of our receivables since the pandemic began. For the full year 2020, we generated $243.3 million of cash from operations and $243.1 million of free cash flow. A reconciliation of GAAP to non-GAAP results is provided in the tables within our press release, which is available on our website. I would now like to close with guidance. Consistent with fiscal years 2020 and 2019, we will be providing guidance on an annual basis. This year, we will also be providing renewal bookings on a quarterly basis to provide better insight into the quarterly cadence of our revenue. We expect bookings in the range of $770 million to $850 million, which includes $519 million of contracts that are up for renewal in fiscal year 2021. This includes $81 million of contracts up for renewal in the first quarter. From a linearity perspective, we currently anticipate 40% to 45% of fiscal year 2021 bookings coming in the first-half of the year with the remainder in the second-half. With respect to annual spend growth, as Antonio mentioned, we are now forecasting 6% to 9% annual spend growth. In terms of timing, we would expect the linearity of sequential growth to be similar to recent years. This means the majority of our annual spend growth will occur in the second-half of the fiscal year. We expect revenue in the range of $704 million to $754 million. We expect license revenue in the range of $485 million to $534 million, and maintenance revenue and service and other revenue of approximately $192 million and $28 million, respectively. From an expense perspective, we expect total GAAP expenses of $372 million to $377 million. Taken together, we expect GAAP operating income in the range of $332 million to $377 million for fiscal 2021, with GAAP net income of approximately $290 million to $327 million. We expect GAAP net income per share to be in the range of $4.29 to $4.83. From a non-GAAP perspective, we now expect non-GAAP operating income of $374 million to $420 million and non-GAAP income per share in the range of $4.78 and $5.32. From a free cash flow perspective, we now expect $260 million to $270 million. Our fiscal 2021 free cash flow guidance assumes cash tax payments in the range of $60 million to $70 million. To wrap up, our performance in the fourth quarter and our outlook for fiscal 2021 demonstrates AspenTech's ability to generate solid growth and profitability in trying circumstances. We are focused on continuing to deliver significant value to our customers and investing in the next-generation of products that will provide additional ways to improve the performance of their assets. With that, we would now like to begin the Q&A. Operator?

Certainly. Our first question comes from the line of Matt Pfau from William Blair. Your question please. Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Matt. Matthew Pfau - William Blair & Co. LLC: Hey, guys. Thanks for taking my questions. First, wanted to start off with, when I look at the 2021 guidance and, specifically, around annual spend, maybe you can just help us understand what sort of macro impacts are factored into that, and just sort of a recovery then in the back half of your fiscal year factored in and necessary to come within that guidance range? Antonio Jose Pietri - Aspen Technology, Inc.: Well, I mean, look, again, and this is a little bit back to what we saw in Q4, and that we continue to have good conversations with customers. But at the same time, we recognize the environment that these customers are operating in. The uncertainty around how economic growth is going to develop over the next two, three quarters based on the resolution or not of the pandemic. But what you see in our guidance is, again, a solid performance from our MSC suite. Certainly, an engineering business that will reflect increased attrition. But as you saw, we're guiding that to 5% to 6% from 4.2%, and an APM business that should perform in line or better than it did in fiscal year 2020, from a standpoint of point of growth contribution. The range is just a reflection of, I think, that uncertainty that we see, but also the positive conversations that we're seeing at the high-end of the attrition is associated with the low-end of our growth guidance and vice versa, and perhaps a little bit less gross growth from the engineering business that what we saw in fiscal year 2020. And while we hope the MSC business will perform at the same level, we also would expect perhaps a little bit of a slowdown in gross growth in that business. But overall, 6% to 9% is a range that we're very comfortable with for the fiscal year. Matthew Pfau - William Blair & Co. LLC: Got it. And one more for me. Just maybe you can give us a little bit more detail on how you're investing in sales capacity in the GEI industries. Are these resources dedicated to specific industries within GEI? And then your current GEI business, what's the split between direct or partner stores? Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. So yes, we do have, and we've talked about different industries in the past on GEIs. We've sort of pivoted away from a couple of them, power and water, I think water – forget the name exactly of it. But certainly, mining is core to our activities there. You can expect us to do more in pharmaceuticals. We believe there's also an opportunity in food and beverage. And there's one or two others that we're looking at. We'll give you much more clarity, uncertainty on exactly the industries that we're now going to be focusing on come the November Investor Day. But just know that we believe there's an opportunity there. We see it. And we're going to put more sales resources into these industries going forward. Matthew Pfau - William Blair & Co. LLC: Great. Thanks, guys. Appreciate it. Antonio Jose Pietri - Aspen Technology, Inc.: And Matt, the other part of your question direct versus indirect. Certainly, we're seeing good traction from indirect but based on what we're seeing, we also feel that we need to step in with our own direct sales organization into some of these industries, and that's where our investment will go into. Matthew Pfau - William Blair & Co. LLC: Thanks, Antonio. Appreciate it. Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. No problem, Matt. Thank you.

Thank you. Our next question comes from the line of Jackson Ader from JPMorgan. Your question please. Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Jack. Jackson E. Ader - JPMorgan: Thanks. Hey, guys. Thanks for taking my question. So the MSC suite, really strong growth this year, and it sounds like another outlook for 2021 is calling for more growth. I think that's just surprising on the upside, given the pressure that we're seeing from refiners and chemicals customers. So what's kind of – what's driving this growth? Antonio Jose Pietri - Aspen Technology, Inc.: Look, just – and we've always said that in a way, as economic – the macro environment margins get tightened and demand suffers for these customers, they focus more and more on efficiencies, on flexibility, on agility and that's what our products do. I told this story to investors during the sort of the call back that we had with you, all of you in May and June, one of the largest global chemical companies been using our multivariable control technology to drive more throughput through their units, their ethylene crackers and their propylene plants prior to COVID. Of course, with the demand destruction, the objective was no longer increased throughput through those plants. They shifted the objective function for our controllers to drive-in a stability in the plants, operational stability to drive-in better quality in their products. And this Executive Vice President was so excited because they could do this and sort of drive that sort of flexibility, have that sort of flexibility in our technology. So this is what we do. Look, our technology is not only to be used during a steady state and growth environment. As you can adjust the economic function of our products and to whatever objectives you're trying to accomplish. Supply chains get disrupted. Our supply chain solutions can be used to re-plan refineries, to optimize distribution logistics across multiple plants for demand and supply. So, this is what we do. And in a way, the conversations we've had since this all happened are much more real, and we expect they will continue to be. For a couple of years, we've said that digitalization is becoming front-and-center for this industry that we're in the early stages of technology adoption and automation. And we believe those trends will only accelerate going forward. Jackson E. Ader - JPMorgan: Okay. That makes sense. A follow-up question, Karl for you on cash flow. If we normalize, maybe for that $18 million of cash that ended up being collected in July versus June kind of looks like flattish free cash flow between what you're expecting in 2021 versus 2020. With everything else looking, like it's going to grow. What's the main driver of that kind of flat normalized cash flow growth? Karl Eric Johnsen - Aspen Technology, Inc.: Yes. So there's probably two pieces to it. One is, that $18 million, that's probably about a 3, 4 day increase in our DSO and we're carrying that forward. Just assuming that, that dynamic will hold for the year. So it's a little bit of that playing into it. But then also, you've got cash taxes are up considerably next year. Part of that is there's a little bit of – about $7.5 million of that is for catch up for Topic 605 adoption that we've been paying, you're allowed to pay over 3 years. So a little bit of that too. So I think if you look at those two pieces, that gives you your answer. And I think the collections are right in line with what we'd expect with that slight bump in the DSO and then the cash taxes. Jackson E. Ader - JPMorgan: Got you. All right, makes sense, thank you. Karl Eric Johnsen - Aspen Technology, Inc.: Yeah. Antonio Jose Pietri - Aspen Technology, Inc.: Thank you.

Thank you. Our next question comes from the line of Rob Oliver from Baird. Your question please. Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Rob. Rob Oliver - Robert W. Baird & Co., Inc.: Hi, great, thanks. Hi, Antonio. Hi, Karl. Thanks for taking my question. A couple. Just to start, I wanted to ask about the APM business, solid guidance and strong year-over-year growth. Could you maybe talk a little bit, Antonio, about how that selling environment may have evolved throughout the back half of the year for you guys? I know going back to January; there were some deals that were delayed even prior to China and COVID and you were pretty confident those deals were going to close. It sounds like there's still some deals that are being held up or maybe just for longer sales cycles. So can you maybe just talk a little bit about that environment and how that may have changed throughout the quarter or what you're seeing right now? And then I have one follow-up. Antonio Jose Pietri - Aspen Technology, Inc.: Okay. Well, I mean, Rob, I think throughout last year, and especially the first half of the year, we maintained that really most of our growth was going to come in in Q3, Q4. We were prepared to deliver in my opinion a fantastic Q3 quarter until basically March 8 hit. And we did what we did in Q3. Our performance in Q4 on APM is just a reflection of what we felt was going to be the second half of fiscal 2020, which were going to prove the breakout capacity of our APM business. It was a record quarter for APM in Q4. The fact is that, it could have been even better, but certainly some customers that were looking at the technology to sign up for it for the first time hesitated. We had some good medium-large deals where customers at the very end decided to delay their decision. So we've explained that in the prepared remarks, it's an emerging set of technologies. And in a way, it's an easy decision to delay investment in something like that. But we're also very confident about the suite and the technologies in the suite is being validated by customers. We did some sizable deals in the quarter. And look, while it's hard to be patient. As the economic environment recovers, we'll see APM come back and give us opportunity to provide its breakout capacity. At the same time, like you said, fiscal year 2020, we're guiding for what I believe and we believe is solid guidance, solid growth in the context of the uncertainty and macro that we're seeing, and we'll go from there. Rob Oliver - Robert W. Baird & Co., Inc.: Great. That's helpful. And then just one very quick follow-up on that 2021 attrition guide. Is that going to be more skewed towards any one particular vertical as you guys look at the renewal profile of the large renewals that you guys have this year? Thanks very much. Appreciate it, guys. Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. No. I mean, look, of course, a lot of it will come out of the engineering suite, the E&C vertical. We'll probably see some attrition as well in the energy vertical. But I think it will follow the historical pattern associated with the downturn that we saw in 2015 and 2016, not to the same level that it did back then, but certainly same pattern, same profile. That's what we expect.

Thank you. Our next question comes from the line of Jason Celino from KeyBanc. Your question please? Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Jason. Jason Celino - KeyBanc Capital Markets, Inc.: Antonio, Karl, thanks for taking the question. Good to get all the color. As you talked about your APM pipeline, I think you mentioned it was the biggest pipe that you've seen so far. How much of this confidence is maybe due to enterprise deals? Or is it just the number of opportunities? Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. I mean, Jason, that's a good point. I mean, when we started talking about the APM pipeline three years ago, it was all sort of first-time deals in the pipeline. Now the pipeline also has much larger deals, enterprise-type deals based on the fact that we now have some customers that have been using the technology for one or two years, and we've been expanding into more sites, and we're having conversations with some of these customers about doing an enterprise transaction. So we did that with one of our customers in Q4 in one of the GEI industries. And our expectation is that we're going to have an opportunity to do more of those in the future. Jason Celino - KeyBanc Capital Markets, Inc.: Okay. And then one more APM question, if I can. So this is maybe the first downturn relative to when this new technology was developed. But relative to your competitors, have you noticed any change in competition? Are they doing maybe as well as you're doing, and that's reflective of more the market? Or any other commentary you can provide? Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. I mean, look, we only worry about the competition when we're competing against them head-to-head. Otherwise, they have to worry about their own business. What we see when in head-to-head competition is that we continue to hold our own. One of the vignettes talked about this Japanese customer evaluating seven technology providers and selecting AspenTech. By the way, we also have some of the global consulting and global implementation companies now. Not only partnering with AspenTech, but actually making APM and the Mtell product exclusive in their go-to-market activities with their own customers through the conviction that they are seeing in the market about the product. So the business continues to build, including the ecosystem around the APM suite and the Mtell product. So, this is all part of the success that I believe we continue to have with APM. Jason Celino - KeyBanc Capital Markets, Inc.: Great. Thank you. Appreciate it. I'll get back in queue. Antonio Jose Pietri - Aspen Technology, Inc.: Thank you, Jason.

Thank you. Our next question comes from the line of Andrew DeGasperi from Berenberg. Your question, please. Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Andrew. Andrew DeGasperi - Berenberg Capital Markets LLC: Hi. Thanks for taking my question. I just had one on the deals that you said last quarter that were being delayed. Just wondering how many of those did they close in Q4, given the strong quarter? Or were some potentially delayed beyond this quarter into next year? Antonio Jose Pietri - Aspen Technology, Inc.: Yes. No. I mean, look, some of the deals from Q3 closed in Q4. Some of them, sort of, crossed all of Q4, and they're now in Q1. There were some deals in Q4 that closed in Q4 and some deals in Q4 that moved out of Q4. In a way, what the last three weeks of March did was push the pipeline into the future. But the opportunities haven't disappeared. It's just that they all got pushed into the future. And we closed some of that in Q4, and now it's in fiscal year 2021. But, look, it's – like, we said in the prepared remarks, it's an emerging technology, there has to be a strong conviction by customers to spend the money. We're asking them to spend in the middle of this uncertainty. And some customers are pulling the trigger and others are deciding to sort of delay. But overall, we are happy. Look, it's a suite; it's a product that grew year-on-year, 64%. Yes, it didn't grow what we had hoped it would grow, but 64%, I still think is pretty decent in the context of everything that was going on in the last four months of our fiscal year. Andrew DeGasperi - Berenberg Capital Markets LLC: That's helpful. And then, if I may, on the guidance for next fiscal year. I was wondering how conservative it would be, given the current economic environment. I mean, I think in the past, you mentioned that oil generally being below $50 per barrel for a sustainable amount of time was a negative, but it doesn't seem to be the case with this annual spend guidance. And I'm wondering are you baking in some significant improvement in execution versus the Q4 quarter? Antonio Jose Pietri - Aspen Technology, Inc.: Well, let me look at – we gave a range of 6% to 9%. And again, we're not oblivious to the challenges in the market. But at the same time, Q4, if you look at the earnings result from our customers after – in the last few weeks, you could see how it was one of the most challenging quarters they've ever faced financially, and they still – we still saw the commitment to continue to drive efficiencies in their business. So while we are cognizant of the macro environment that reigns in out there, we also saw good traction with our customers and the implementation of our products. So that's why you have the range that you have. It's a wider range than we've ever given. But we've done a lot of analysis around our business, and well, we gave you the range that we gave you because we believe in it. Andrew DeGasperi - Berenberg Capital Markets LLC: Great. Thanks, Antonio. Antonio Jose Pietri - Aspen Technology, Inc.: Yeah.

Thank you. Our next question comes from the line of Mark Schappel from Benchmark. Your question please. Antonio Jose Pietri - Aspen Technology, Inc.: Hi, Mark. Mark W. Schappel - The Benchmark Co. LLC: Hi. How are you doing? Thank you for taking my question. Just one, Antonio, with respect to APM, in the past, you've talked about incumbency being important to winning new deals or winning new business. I was wondering if you had any meaningful deal wins in the quarter where you weren't the incumbent? Antonio Jose Pietri - Aspen Technology, Inc.: Well, no, look, actually, quite a bit. And when you talk about the GEI industries, that's the case, when you talk about mining, when you talk about pulp and paper, even specialty chemicals and other places. Now when we talk about energy and chemicals, incumbency from a standpoint that it's a customer of AspenTech, not incumbency in that, there's already some APM product in there. But certainly, the fact that we have a long time existing relationships gives us a leg up against the competition, but we're proven that we can go into other industries and equally show success with the APM suite. So, this is why we're stepping up our investment in our sales organization for the GEIs, and more to come on that when we do our Investor Day in November. Mark W. Schappel - The Benchmark Co. LLC: Great. Thank you. Antonio Jose Pietri - Aspen Technology, Inc.: Yeah.

Thank you. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Antonio Pietri for any further remarks. Antonio Jose Pietri - Aspen Technology, Inc.: Yeah. Thank you. Look, I want to thank everyone for joining us today. I just want to take a minute to also thank the AspenTech team. Again, I believe they did a tremendous job pivoting in early April to apply the learnings that we gain from the 2015, 2016 downturn and the leadership they demonstrated. I think our Q4 results should be further proof of the financial model and operating resiliency of this business. I know there were a lot of questions from investors during the call backs in May and June about the resiliency of our business in the face of everything that was going on. I hope we've proven that our business has a resiliency to it that is real. And furthermore, that behind the scenes, over the last four, five years, we've worked to transform our organization, the execution, how we lead, and I believe what we achieved in Q4 and fiscal year 2020 is a reflection of that. And well, fiscal year 2021 is ahead of us. So, thank you, everyone.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.