10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

or

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission file number: 001-41400

ASPEN TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	87-3100817
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

20 Crosby Drive
Bedford
Massachusetts	01730
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code): (781) 221-6400

____________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, $0.0001 par value per share	AZPN	Nasdaq Global Select Market

____________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ý

There were 63,548,821 shares of common stock outstanding as of January 31, 2024.

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited).	4
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2023 and 2022	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended December 31, 2023 and 2022	5
	Condensed Consolidated Balance Sheets as of December 31, 2023 and June 30, 2023	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended December 31, 2023 and 2022	7
	Condensed Consolidated Statements of Cash Flow for the Six Months Ended December 31, 2023 and 2022	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	32
Item 4.	Controls and Procedures.	32
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	34
Item 1A.	Risk Factors.	34
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.	35
Item 3.	Defaults upon Senior Securities.	35
Item 4.	Mine Safety Disclosures.	35
Item 5.	Other Information.	36
Item 6.	Exhibits.	37
	SIGNATURES

Aspen Technology, Inc. (“AspenTech”) has many registered trademarks including aspenONE and Aspen Plus. All other trade names, trademarks and service marks appearing in this Form 10-Q not owned by AspenTech are the property of their respective owners.

Our fiscal year ends on June 30th, and references to a specific fiscal year are to the twelve months ended June 30th of such year (for example, “fiscal 2024” refers to the year ending June 30, 2024).

3

PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements.

 Condensed Consolidated Financial Statements (unaudited)

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars and Shares in Thousands, Except per Share Data)
Revenue:
License and solutions	$	152,463	$	149,843	$	301,111	$	310,068
Maintenance	85,056		78,628		170,024		156,994
Services and other	19,644		14,367		35,336		26,595
Total revenue	257,163		242,838		506,471		493,657
Cost of revenue:
License and solutions	67,326		70,833		138,903		140,346
Maintenance	10,647		9,567		20,848		18,784
Services and other	16,960		12,698		33,242		25,098
Total cost of revenue	94,933		93,098		192,993		184,228
Gross profit	162,230		149,740		313,478		309,429
Operating expenses:
Selling and marketing	122,240		117,951		244,618		236,225
Research and development	53,145		49,954		106,821		99,695
General and administrative	36,088		41,230		71,494		84,086
Total operating expenses	211,473		209,135		422,933		420,006
Loss from operations	(49,243)		(59,395)		(109,455)		(110,577)
Other (expense) income, net	(199)		38,643		(6,029)		(19,989)
Interest income, net	12,283		4,120		26,333		9,143
Loss before benefit for income taxes	(37,159)		(16,632)		(89,151)		(121,423)
(Benefit) provision for income taxes	(15,659)		49,565		(33,126)		(43,982)
Net loss	$	(21,500)	$	(66,197)	$	(56,025)	$	(77,441)
Net loss per common share:
Basic	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)
Diluted	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)
Weighted average shares outstanding:
Basic	63,699		64,621		64,009		64,538
Diluted	63,699		64,621		64,009		64,538

See accompanying notes to these unaudited condensed consolidated financial statements.

4

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Net loss	$	(21,500)	$	(66,197)	$	(56,025)	$	(77,441)
Other comprehensive income (loss):
Foreign currency translation adjustments	4,870		6,710		(6,331)		(2,155)
Total other comprehensive income (loss)	4,870		6,710		(6,331)		(2,155)
Comprehensive loss	$	(16,630)	$	(59,487)	$	(62,356)	$	(79,596)

See accompanying notes to these unaudited condensed consolidated financial statements.

5

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2023		June 30, 2023
	(Dollars in Thousands, Except Share Data)
ASSETS
Current assets:
Cash and cash equivalents	$	130,753	$	241,209
Accounts receivable, net	129,837		122,789
Current contract assets, net	357,847		367,539
Prepaid expenses and other current assets	26,314		27,728
Receivables from related parties	61,479		62,375
Prepaid income taxes	3,021		11,424
Total current assets	709,251		833,064
Property, equipment and leasehold improvements, net	16,756		18,670
Goodwill	8,329,997		8,330,811
Intangible assets, net	4,428,636		4,659,657
Non-current contract assets, net	606,318		536,104
Contract costs	18,971		15,992
Operating lease right-of-use assets	97,035		67,642
Deferred income tax assets	11,392		10,638
Other non-current assets	9,488		13,474
Total assets	$	14,227,844	$	14,486,052
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,517	$	20,299
Accrued expenses and other current liabilities	81,059		99,526
Due to related parties	96,087		22,019
Current operating lease liabilities	13,810		12,928
Income taxes payable	28,988		46,205
Current contract liabilities	135,522		151,450
Total current liabilities	371,983		352,427
Non-current contract liabilities	35,036		30,103
Deferred income tax liabilities	867,927		957,911
Non-current operating lease liabilities	83,812		55,442
Other non-current liabilities	20,013		19,240
Stockholders’ equity:
Common stock, $0.0001 par value Authorized—600,000,000 shares Issued— 65,170,178 and 64,952,868 shares Outstanding— 63,620,668 and 64,465,242 shares	6		6
Additional paid-in capital	13,241,067		13,194,028
Accumulated deficit	(97,416)		(41,391)
Accumulated other comprehensive (loss) income	(3,895)		2,436
Treasury stock, at cost — 1,549,510 and 487,626 shares of common stock	(290,689)		(84,150)
Total stockholders’ equity	12,849,073		13,070,929
Total liabilities and stockholders’ equity	$	14,227,844	$	14,486,052

 See accompanying notes to these unaudited condensed consolidated financial statements.

6

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Accumulated Other Comprehensive Income (Loss)		Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
			Number of Shares	Par Value						Number of Shares	Cost
	(Dollars in Thousands, Except Share Data)
Balance June 30, 2023	$	2,436	64,952,868	$	6	$	13,194,028	$	(41,391)	487,626	$	(84,150)	$	13,070,929
Net loss	—		—	—		—		(34,525)		—	—		(34,525)
Other comprehensive loss	(11,201)		—	—		—		—		—	—		(11,201)
Issuance of shares of common stock	—		29,644	—		3,826		—		—	—		3,826
Issuance of restricted stock units and net share settlement related to withholding taxes	—		47,896	—		(4,585)		—		—	—		(4,585)
Repurchase of common stock	—		—	—		20,210		—		686,843	(134,434)		(114,224)
Stock-based compensation	—		—	—		16,699		—		—	—		16,699
Balance September 30, 2023	$	(8,765)	65,030,408	$	6	$	13,230,178	$	(75,916)	1,174,469	$	(218,584)	$	12,926,919
Net loss	—		—	—		—		(21,500)		—	—		(21,500)
Other comprehensive income	4,870		—	—		—		—		—	—		4,870
Issuance of shares of common stock	—		32,212	—		4,268		—		—	—		4,268
Issuance of restricted stock units and net share settlement related to withholding taxes	—		107,558	—		(9,590)		—		—	—		(9,590)
Repurchase of common stock	—		—	—		—		—		375,041	(72,105)		(72,105)
Stock-based compensation	—		—	—		16,211		—		—	—		16,211
Balance December 31, 2023	$	(3,895)	65,170,178	$	6	$	13,241,067	$	(97,416)	1,549,510	$	(290,689)	$	12,849,073

	Accumulated Other Comprehensive Loss		Common Stock			Additional Paid-in Capital		Retained Earnings		Total Equity/Stockholders’ Equity
			Number of Shares	Par Value
	(Dollars in Thousands, Except Share Data)
Balance June 30, 2022	$	(4,588)	64,425,378	$	6	$	13,107,570	$	66,369	$	13,169,357
Net loss	—		—	—		—		(11,244)		(11,244)
Other comprehensive loss	(8,865)		—	—		—		—		(8,865)
Issuance of shares of common stock	—		71,547	—		8,489		—		8,489
Issuance of restricted stock units and net share settlement related to withholding taxes	—		34,375	—		(4,683)		—		(4,683)
Stock-based compensation	—		—	—		17,736		—		17,736
Balance September 30, 2022	$	(13,453)	64,531,300	$	6	$	13,129,112	$	55,125	$	13,170,790
Net loss	—		—	—		—		(66,197)		(66,197)
Other comprehensive income	6,710		—	—		—		—		6,710
Issuance of shares of common stock	—		202,506	—		16,977		—		16,977
Issuance of restricted stock units and net share settlement related to withholding taxes	—		33,949	—		(4,656)		—		(4,656)
Stock-based compensation	—		—	—		23,441		—		23,441
Balance December 31, 2022	$	(6,743)	64,767,755	$	6	$	13,164,874	$	(11,072)	$	13,147,065

See accompanying notes to these unaudited condensed consolidated financial statements.

7

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended December 31,
	2023		2022
	(Dollars in Thousands)
Cash flows from operating activities:
Net loss	$	(56,025)	$	(77,441)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	246,386		245,102
Reduction in the carrying amount of right-of-use assets	6,932		6,562
Net foreign currency losses	6,168		4,744
Stock-based compensation	32,910		41,177
Deferred income taxes	(94,210)		(106,384)
Provision for uncollectible receivables	3,385		3,228
Other non-cash operating activities	(629)		(593)
Changes in assets and liabilities:
Accounts receivable	(10,709)		(33,691)
Contract assets	(57,926)		(77,864)
Contract costs	(3,059)		(3,547)
Lease liabilities	(7,108)		(6,609)
Prepaid expenses, prepaid income taxes, and other assets	(17,606)		34,177
Liability from foreign currency forward contract	—		15,319
Accounts payable, accrued expenses, income taxes payable and other liabilities	9,258		(1,490)
Contract liabilities	(10,959)		11,922
Net cash provided by operating activities	46,808		54,612
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements	(1,437)		(2,844)
Payments for business acquisitions, net of cash acquired	(8,273)		(74,947)
Payments for equity method investments	(521)		(465)
Payments for capitalized computer software development costs	(131)		(329)
Payments for asset acquisitions	(12,500)		—
Net cash used in investing activities	(22,862)		(78,585)
Cash flows from financing activities:
Issuance of shares of common stock	7,920		25,605
Repurchases of common stock	(186,329)		—
Payment of tax withholding obligations related to restricted stock	(13,843)		(11,698)
Deferred business acquisition payments	—		(1,363)
Repayments of amounts borrowed under term loan	—		(12,000)
Net transfers from Parent Company	68,755		29,872
Payments of debt issuance costs	—		(2,375)
Net cash (used in) provided by financing activities	(123,497)		28,041
Effect of exchange rate changes on cash and cash equivalents	(10,905)		(7,705)
Decrease in cash and cash equivalents	(110,456)		(3,637)
Cash and cash equivalents, beginning of period	241,209		449,725
Cash and cash equivalents, end of period	$	130,753	$	446,088
Supplemental disclosure of cash flow information:
Income taxes paid, net	$	66,290	$	29,388
Interest paid	$	2,433	$	9,819
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses	$	92	$	(735)
Lease liabilities arising from obtaining right-of-use assets	$	36,144	$	68

See accompanying notes to these unaudited condensed consolidated financial statements.

8

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    Organization and Basis of Presentation

AspenTech, together with its subsidiaries (the “Company”), is a leading industrial software company that develops solutions to address complex industrial environments where it is critical to optimize the asset design, operations and maintenance lifecycle. The Company’s unique combination of product capabilities, deep domain expertise and award-winning innovation helps customers across diverse end markets in capital-intensive industries improve their operational excellence while achieving sustainability goals.

The Company has revenue from customers in 117 countries as of December 31, 2023.

Basis of Presentation

The Company has prepared the accompanying unaudited condensed consolidated financial statements as of December 31, 2023, and for the second quarter of fiscal 2024 and 2023 pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and in accordance with generally accepted accounting principles in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The actual results that the Company experiences may differ materially from these estimates.

Russia and Ukraine

The Company maintains limited operations in Russia and licenses software and provides related services to customers in Russia and areas of Ukraine that are not under sanction. The Company had revenue of approximately $5.8 million and $16.8 million for the three months ended December 31, 2023 and 2022, respectively, and $13.0 million and $26.8 million for the six months ended December 31, 2023 and 2022, respectively. The Company had total assets of approximately $35.2 million and $39.7 million as of December 31, 2023 and June 30, 2023, respectively, related to operations in Russia.

The Company may be required to cease or suspend operations in Russia or, should the conflict or the effects of sanctions, export control measures and business restrictions worsen, the Company may voluntarily elect to do so. The Company has terminated all engineering services in Russia and the Company has limited its operations to contract renewals with existing customers. While the Company continues to evaluate the impact of the various sanctions and restrictions imposed by the United States and other governments on the Company’s ability to conduct business in Russia, there is no assurance that the Company will be able to do so in the future. Any disruption to, or suspension of, the Company’s business and operations in Russia would result in the loss of revenue and assets from the business in Russia and would negatively impact growth. The Company may also suffer reputational harm as a result of continued operations in Russia, which may adversely impact sales and other businesses in other countries.

2.    Significant Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. There were no material changes to our significant accounting policies during the six months ended December 31, 2023.

(a)     Revenue Recognition

Prior to the third quarter of fiscal 2023, Open Systems International, Inc. (“OSI Inc.”) software licenses were primarily sold with professional services and hardware to form an integrated solution for the customer. The professional services and hardware sold with the license significantly customized the underlying functionality and usability of the software. As such, none of the software license, hardware or professional services were considered distinct within the context of the contract and were therefore considered a single performance obligation. Because the integrated solution had no alternative use to the Company and the Company held an enforceable right to payment, revenue was recognized over time (typically one to two years) using an input measure of progress based on the ratio of actual costs incurred to date to the total estimated cost to

9

complete. For integrated solution contracts executed prior to the third quarter of fiscal 2023, revenue continues to be recognized over time until the implementation is complete.

At the start of the third quarter of fiscal 2023, the Company completed a series of business transformation activities relating to OSI Inc. products and services in conjunction with its ongoing integration activities. As part of a change in the related go-to-market strategy, the Company has invested in tools and processes to simplify and streamline the implementation services to significantly reduce the complexity and interdependency associated with its software. In addition, the Company has identified and trained several third-party implementation service partners to operate autonomously and directly with OSI Inc. customers to implement its products.

Accordingly, effective January 1, 2023, following the completion of these business transformation activities, for all prospective OSI Inc. contracts entered into after January 1, 2023, the Company accounts for the OSI Inc. software license, hardware, maintenance, and professional services as separate and distinct performance obligations. Software license revenue is recognized at a point in time when control transfers to the customer, which generally aligns with the first day of the contractual term. Hardware revenue is recognized at the point in time when control transfers to the customer, which generally occurs upon delivery. The recognition of maintenance revenue at OSI Inc. is unchanged and continues to be recognized ratably over the maintenance term. Professional services revenue is recognized over time (typically one to two years) using the proportional performance method by comparing the costs incurred to the total estimated project costs.

(b)     Recently Issued Accounting Standards Not Yet Adopted

In October 2023, the FASB issued Accounting Standards Updated (“ASU”) 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 was issued to modify the disclosure or presentation requirements of a variety of topics in the codification. The effective date for each amendment will be the date on which the SEC removal of the related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company does not expect the adoption of ASU 2023-06 to have a material impact on its financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The disclosures required under ASU 2023-07 are also required for public entities with a single reportable segment. The ASU is effective for the Company’s first fiscal year beginning after December 15, 2023 and for interim periods within the Company’s first fiscal year beginning after December 15, 2024, with early adoption permitted. The Company does not expect the adoption of ASU 2023-07 to have a material impact on its financial position or results of operations.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The ASU is effective for the Company’s first fiscal year beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its financial position or results of operations.

3.    Revenue from Contracts with Customers

Contract Assets and Contract Liabilities

Contract assets are subject to credit risk and reviewed in accordance with Accounting Standards Codification (“ASC”) 326, Financial Instruments Credit Losses. The Company monitors the credit quality of customer contract asset balances on an individual basis, at each reporting date, through credit characteristics, geographic location, and the industry in which they operate. The Company recognizes an impairment on contract assets if, subsequent to contract inception, it becomes probable payment is not collectible. An allowance for expected credit loss reflects losses expected over the remaining term of the contract asset and is determined based upon historical losses, customer-specific factors, and current economic conditions. The potential impact of credit losses on contract assets was immaterial as of December 31, 2023.

10

The Company’s contract assets and contract liabilities were as follows as of December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Contract assets	$	964,165	$	903,643
Contract liabilities	(170,558)		(181,553)
Net contract assets	$	793,607	$	722,090

The majority of the Company’s contract balances are related to arrangements where revenue is recognized at a point in time and payments are made according to a contractual billing schedule. The change in the net contract asset balance during the six months ended December 31, 2023 was primarily due to greater revenue recognition as compared to billings. Revenue recognized from the contract liability balance as of June 30, 2023, was $47.4 million and $88.4 million for the three and six months ended December 31, 2023, respectively.

Transaction Price Allocated to Remaining Performance Obligations

The following table includes the aggregate amount of the transaction price allocated as of December 31, 2023 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Year Ending June 30,
	2024		2025		2026		2027		2028		Thereafter		Total
	(Dollars in Thousands)
License and solutions	$	104,615	$	98,569	$	45,664	$	20,742	$	6,911	$	2,243	$	278,744
Maintenance	165,061		257,890		192,502		134,883		85,101		44,596		880,033
Services and other	32,075		40,838		5,903		1,326		721		426		81,289
Total	$	301,751	$	397,297	$	244,069	$	156,951	$	92,733	$	47,265	$	1,240,066

Disaggregated Revenue Information

The table below reflects disaggregated revenues by business for the three months and six months ended December 31, 2023 and 2022:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Heritage AspenTech	$	167,437	$	167,442	$	343,180	$	343,848
Subsurface Science & Engineering	28,574		29,726		52,655		62,714
OSI, Inc.	61,152		45,670		110,636		87,095
Total	$	257,163	$	242,838	$	506,471	$	493,657

The Company did not have any customers that accounted for 10 percent or more of the Company’s revenues for the three and six months ended December 31, 2023 and 2022, respectively.

4.    Acquisitions 

Inmation Software GmbH

On August 29, 2022, the Company completed the acquisition of inmation Software GmbH (“Inmation”) for total cash consideration of $87.2 million. The purchase price consisted of $78.9 million of cash paid at closing and an additional $8.3 million in indemnification holdbacks, which was paid on August 18, 2023. The total cash acquired from Inmation was approximately $6.4 million resulting in a net cash payment of $72.5 million during the three months ended September 30, 2022. The Company recognized goodwill of $63.0 million (none of which is expected to be tax deductible) and identifiable intangible assets of $31.5 million, primarily consisting of developed technology and customer relationships, with a useful life of approximately five years for developed technology and seven years for customer relationships.

Inmation’s revenue included in the Company’s condensed consolidated statements of operations was $0.8 million and $0.9 million for the three months ended December 31, 2023 and 2022, respectively, and $1.3 million and $1.2 million for the six months ended December 31, 2023 and 2022, respectively. Inmation’s net loss included in the Company’s condensed consolidated statements of operations was $2.2 million and $0.9 million for the three months ended December 31, 2023 and

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2022, respectively, and $2.3 million and $1.1 million for the six months ended December 31, 2023 and 2022, respectively. Results included amortization of developed technology and customer relationships of $1.5 million and $1.4 million for the three months ended December 31, 2023 and 2022 respectively, and $2.9 million and $1.9 million for the six months ended December 31, 2023 and 2022, respectively.

Prior to the closing date, Inmation was considered a related party to AspenTech as Emerson Electric Co. (“Emerson” or “Parent Company”), through one of its subsidiaries, held an equity-method investment in Inmation. At the time of close, $17.6 million was paid to Emerson in exchange for all its shares in Inmation, with another $1.9 million paid for an indemnification holdback 12 months after the close on August 18, 2023.

5.    Intangible Assets 

Intangible assets consist of the following as of December 31, 2023 and June 30, 2023:

	December 31, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(438,942)		(19,536)		(578,144)		(9,308)		(1,045,930)
Net carrying amount	$	1,464,657	$	444,864	$	2,504,397	$	14,718	$	4,428,636
	June 30, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	11,526	$	5,462,066
Less: Accumulated amortization	(341,964)		(13,821)		(437,673)		(8,951)		(802,409)
Net carrying amount	$	1,561,635	$	450,579	$	2,644,868	$	2,575	$	4,659,657

Of the total intangible assets net carrying amount of $4.4 billion as of December 31, 2023, $430.0 million relates to the registered trademarks associated with the Transaction (as defined in Note 15, “Related-Party Transactions”) that are not subject to amortization. Total intangible asset amortization expense was $121.7 million and $121.2 million during the three months ended December 31, 2023 and 2022, respectively, and $243.4 million and $242.3 million during the six months ended December 31, 2023 and 2022, respectively.

6.    Goodwill

The changes in the carrying amount of goodwill during the six months ended December 31, 2023 were as follows:

	Carrying Value
	(Dollars in Thousands)
Balance as of June 30, 2023	$	8,330,811
Foreign currency translation	(814)
Balance as of December 31, 2023	$	8,329,997

7.    Leases

On December 26, 2023, the Company entered into an amendment to its existing lease agreement at its principal executive offices located in Bedford, Massachusetts (the “Lease Amendment”). Under the Lease Amendment, the Company: (i) extended the term of the existing lease for approximately 132,000 rentable square feet from March 2025 to March 2038, and (ii) obtained an additional approximate 23,000 rentable square feet of office space, also through March 2038.

The Company accounted for the Lease Amendment as a lease modification. Accordingly, the right-of-use assets and lease liabilities were remeasured using an incremental borrowing rate at the date of modification. This lease modification resulted in the recording of an additional right-of-use asset and lease liability of $32.9 million recognized on the condensed consolidated balance sheet, which is reflected net of a $25.4 million leasehold improvement incentive to be paid directly to external vendors by the landlord under the Lease Amendment. As invoices are paid by the landlord during construction of the

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improvements, the Company will increase the balances of the lease liability and construction-in-process assets, which is included within property, equipment and leasehold improvements, net in the condensed consolidated balance sheets. When placed into service, the construction-in-process assets will be reclassified to leasehold improvements and depreciated over the shorter of the remaining term of the lease or the life of the underlying asset.

Operating lease costs are recognized on a straight-line basis over the term of the lease. The components of total lease expense for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Operating lease expense	$	5,023	$	4,352	$	9,489	$	8,387
Variable lease expense	193		216		416		425
Short term lease expense	147		199		304		(96)
Total lease expense	$	5,363	$	4,767	$	10,209	$	8,716

The following table summarizes the balances of the Company’s operating lease right-of-use assets and operating lease liabilities as of December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Operating lease right-of-use assets	$	97,035	$	67,642
Current operating lease liabilities	$	13,810	$	12,928
Non-current operating lease liabilities	$	83,812	$	55,442

The weighted-average remaining lease term for operating leases was approximately 12 years and 9 years, and the weighted-average discount rate was approximately 4.0% and 3.0% as of December 31, 2023 and June 30, 2023, respectively.

The following table represents the future maturities of the Company’s operating lease liabilities as of December 31, 2023:

Fiscal Year Ending June 30,	(Dollars in Thousands)
2024	$	2,345
2025	9,018
2026	9,422
2027	13,104
2028	12,510
Thereafter	103,490
Total lease payments	149,889
Less: imputed interest	(26,882)
Less: leasehold improvement incentives to be utilized	(25,385)
Total lease maturities	$	97,622

8.    Fair Value

The Company determines fair value by utilizing a fair value hierarchy that ranks the quality and reliability of the information used in its determination. Fair values determined using “Level 1 inputs” utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined using “Level 2 inputs” utilize data points that are observable, such as quoted prices, interest rates and yield curves for similar assets and liabilities. 

Cash equivalents are reported at fair value utilizing quoted market prices in identical markets, or “Level 1 Inputs.” The Company’s cash equivalents consist of short-term money market instruments.

Equity method investments are reported at fair value calculated in accordance with the market approach, utilizing market consensus pricing models with quoted prices that are directly or indirectly observable, or “Level 2 Inputs.”

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The following table summarizes financial assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	December 31, 2023
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	7,715	$	—
Equity method investments	$	—	$	2,398

	June 30, 2023
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	132,918	$	—
Equity method investments	$	—	$	2,673

Financial instruments not measured or recorded at fair value in the accompanying condensed consolidated financial statements consist of accounts receivable, accounts payable and accrued liabilities. The estimated fair value of these financial instruments approximates their carrying value. The estimated fair value of the borrowings under the Amended and Restated Credit Agreement (described below in Note 10, “Debt”) approximates its carrying value due to the floating interest rate.

9.     Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets consist of the following:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Compensation-related	$	54,729	$	62,162
Professional fees	4,042		6,265
Accrued taxes	2,941		3,065
Royalties and outside commissions	422		654
Acquisition-related	5		8,984
Other	18,920		18,396
Total accrued expenses and other current liabilities	$	81,059	$	99,526

10.    Debt

Credit Agreement with Related Party

On December 23, 2022, the Company entered into a credit agreement with Emerson (the “Emerson Credit Agreement”), which provided for an aggregate term loan commitment of $630.0 million. Under the terms of the Emerson Credit Agreement, the Company would have used the proceeds from borrowings under the Emerson Credit Agreement to pay, in part, the cash consideration for funding the acquisition of Mining Software Holdings Pty Ltd (“Micromine”) and to pay the fees and expenses incurred in connection with the Emerson Credit Agreement.

On August 18, 2023, the Emerson Credit Agreement was terminated in connection with the termination of the agreement to purchase Micromine. There was no amount outstanding under the Emerson Credit Agreement at the time it was terminated.

Amended and Restated Credit Agreement

The Company has an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”) that provides for a $200.0 million secured revolving credit facility.

As of December 31, 2023, after taking into account eligible outstanding letters of credit allowable per the Amended and Restated Credit Agreement in the aggregate amount of $2.6 million, the Company had $197.4 million available for borrowing under the Amended and Restated Credit Agreement. Any outstanding balances of the indebtedness under the revolving credit facility will mature on December 23, 2024.

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The Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including restrictions on incurring additional debt, liens, fundamental changes, asset sales, restricted payments (including dividends) and transactions with affiliates. There are also financial covenants measured at the end of each fiscal quarter including a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 2.50 to 1.00. As of December 31, 2023, the Company was in compliance with these covenants.

11.    Stock-Based Compensation 

The stock-based compensation expense under all equity plans and its classification in the condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Cost of license and solutions	$	602	$	1,200	$	1,282	$	1,919
Cost of maintenance	729		474		1,217		1,035
Cost of services and other	360		428		858		858
Selling and marketing	2,707		3,826		5,649		7,191
Research and development	3,719		4,240		8,272		7,858
General and administrative	8,094		13,273		15,632		22,316
Total stock-based compensation	$	16,211	$	23,441	$	32,910	$	41,177

Stock Options

The table below summarizes activities related to stock options for the six months ended December 31, 2023:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
				(in years)	(in thousands)
Outstanding as of June 30, 2023	1,005,826	$	144.17	6.44	$	32,935
Granted	1,471	$	171.56
Exercised	(49,671)	$	134.25
Cancelled / Forfeited	(7,958)	$	184.16
Outstanding as of December 31, 2023	949,668	$	161.10	5.63	$	72,007
Exercisable as of December 31, 2023	683,313	$	130.41	4.88	$	61,341
Vested and expected to vest as of December 31, 2023	933,517	$	143.75	5.58	$	71,386

__________

(1)     The aggregate intrinsic value in this table represents any excess of the closing market price of the Company’s common stock as of December 31, 2023 ($220.15) over the exercise price of the underlying options.

Restricted Stock Units and Performance Stock Units

Restricted stock units and performance stock units are not included in issued and outstanding common stock until the units are vested and the underlying shares are settled. The table below summarizes activities related to restricted stock units and performance stock units for the six months ended December 31, 2023:

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	Number of Shares Underlying Restricted Units — Performance-Based Awards		Number of Shares Underlying Restricted Units — Time-Based Awards
	(Dollars in Thousands)
Outstanding as of June 30, 2023	—		456,368
Granted	94,174		186,938
Settled	—		(229,807)
Cancelled / Forfeited	(716)		(12,792)
Outstanding as of December 31, 2023	93,458		400,707
Weighted average remaining recognition period of outstanding restricted units (in years)	2.50		3.03
Unrecognized stock-based compensation expense of outstanding restricted units	$	8,824	$	43,170
Aggregate intrinsic value of outstanding restricted units	$	14,418	$	86,235

The weighted average grant date fair value per restricted stock unit was $192.21 and $246.15 during the three months ended December 31, 2023 and 2022, respectively, and $193.74 and $209.79 during the six months ended December 31, 2023 and 2022, respectively. The weighted average grant date fair value per performance stock unit was $199.06 and $194.03 during the three and six months ended December 31, 2023, respectively, and there were no granted or outstanding performance stock units during the three and six months ended December 31, 2022.

Beginning in fiscal 2024, the Company granted performance stock units with a performance condition and service condition. These performance stock units vest on a cliff basis in three years based upon the achievement of predefined performance goals, with the ability for 25% of granted awards to vest on an accelerated basis in each of the first two years. The performance goal relates to the sum of (i) annual contract value growth and (ii) free cash flow margin over the performance period. Up to 175% of the performance stock units could vest upon achievement of the performance goals. Conversely, if a minimum performance goal is not met, none of the performance stock units will vest. On a quarterly basis, management evaluates the probability that the threshold performance goals will be achieved, if at all, and the anticipated level of attainment to determine the amount of compensation expense to record in the condensed consolidated financial statements.

12.    Net Loss Per Share

Basic (loss) income per share is determined by dividing net (loss) income by the weighted average common shares outstanding during the period. Diluted (loss) income per share is determined by dividing net (loss) income by diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares. To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted net (loss) income per share based on the treasury stock method.

The calculations of basic and diluted net loss per share and basic and dilutive weighted average shares outstanding for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars and Shares in Thousands, Except per Share Data)
Net loss	$	(21,500)	$	(66,197)	$	(56,025)	$	(77,441)
Basic weighted average shares outstanding	63,699		64,621		64,009		64,538
Dilutive weighted average shares outstanding	63,699		64,621		64,009		64,538
Net loss per share
Basic	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)
Dilutive	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)

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For the three and six months ended December 31, 2023, and 2022 certain employee equity awards were anti-dilutive based on the treasury stock method. The following employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive as of December 31, 2023 and 2022:

	Three Months Ended December 31,		Six Months Ended December 31,
	2023	2022	2023	2022
	(Shares in Thousands)
Employee equity awards	1,433	1,574	1,352	1,479

13.    Stock Repurchases

On May 5, 2023, the Company entered into an accelerated share repurchase program (“ASR Program”) with JPMorgan to repurchase an aggregate of $100.0 million of the Company’s common stock. Pursuant to the terms of the ASR Program, the Company made an initial payment to JPMorgan and received an initial delivery of 487,626 shares of the Company’s common stock, which represented approximately 80% of the total number of shares of the Company’s common stock expected to be purchased under the ASR Program.

The ASR Program was settled on August 7, 2023, resulting in an additional delivery of 107,045 shares of the Company’s common stock. The Company repurchased in total 594,671 shares of common stock for $100.0 million as part of the ASR Program. The $100.0 million payment made to JPMorgan was recognized as a reduction to stockholders’ equity, consisting of an increase in treasury stock representing the value of the 594,671 shares received upon settlement, offset by an increase to additional-paid-in-capital for the value of the shares repurchased in excess of the $100.0 million payment.

On August 1, 2023, the Company announced that its Board of Directors approved a share repurchase program (the “Share Repurchase Authorization”) pursuant to which an aggregate $300.0 million of its common stock may be repurchased, by means of open market transactions, block transactions, privately negotiated purchase transactions or any other purchase techniques, including 10b5-1 trading plans. The timing and amount of any shares repurchased under the Share Repurchase Authorization are based on market conditions and other factors. All shares of the Company’s common stock repurchased have been recorded as treasury stock under the cost method. The Company reflects share repurchases in its condensed consolidated financial statements once the transaction is settled.

During the second quarter of fiscal 2024, the Company repurchased 375,041 shares for $72.1 million under the Share Repurchase Authorization. As of December 31, 2023, a total of 954,839 shares have been repurchased under the Share Repurchase Authorization for $186.3 million, with the total remaining value being $113.7 million.

14.    (Benefit) Provision for Income Taxes

The Company computes its tax provision (benefit) for interim periods by applying the estimated annual effective tax rate (“AETR”) to year-to-date income from operations and adjusting for discrete items arising in that quarter. However, if the Company is unable to make a reliable estimate of its AETR, then the actual effective tax rate for the year-to-date period may be the best estimate. For the three months ended September 30, 2022, the Company computed its tax provision (benefit) using the AETR approach. However, starting with the six months ended December 31, 2022, the Company recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate to be applied to the year-to-date pretax (loss) income given small changes in the forecast of pre-tax (loss) income would result in significant changes in the AETR. For the three and six months ended December 31, 2023, the Company again recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate.

Benefit for income taxes was $15.7 million for the three months ended December 31, 2023 and income tax expense was $49.6 million for the three months ended December 31, 2022, resulting in effective tax rates of 42.1% and (298.0)%, respectively. Income tax benefit primarily increased due to the prior year’s change in the Company’s approach to computing its tax provision (benefit) for interim periods to an actual effective tax rate method.

Benefit for income taxes was $33.1 million and $44.0 million for the six months ended December 31, 2023 and 2022, respectively, resulting in effective tax rates of 37.2% and 36.2%, respectively. Income tax benefit decreased primarily due to an increase in year-to-date earnings and a reduced Foreign-Derived Intangible Income (“FDII”) deduction recorded in the current period.

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15.    Related-Party Transactions

On October 10, 2021, Emerson entered into a definitive agreement (the “Transaction Agreement”) with AspenTech Corporation (f/k/a Aspen Technology, Inc.) (“Heritage AspenTech”) to contribute the Emerson industrial software business (the “Industrial Software Business”), along with $6.014 billion in cash, to create AspenTech (the “Transaction”). The Industrial Software Business included OSI Inc. and the Geological Simulation Software business (“GSS”), which the Company has renamed as Subsurface Science & Engineering (“SSE”). The Transaction closed on May 16, 2022 (“Closing Date”). Emerson owned approximately 56% of AspenTech on a fully diluted basis as of December 31, 2023.

The Company utilizes some aspects of Emerson’s centralized treasury function to manage the working capital and financing needs of its business operations. This function oversees a cash pooling arrangement which sweeps certain Company cash accounts into pooled Emerson cash accounts on a daily basis and are reflected as receivables from related parties in the condensed consolidated balance sheet. Conversely, any cash funded to the Company from these pooled Emerson cash accounts are reflected as due to related parties in the condensed consolidated balance sheet. The aggregate net activity between the Company and Emerson associated with the cash pooling arrangement is reflected within cash flows from financing activities as net transfers from parent within the condensed consolidated statements of cash flows.

Before the closing of the Transaction, the Industrial Software Business was charged for costs directly attributable to the SSE business and OSI Inc. and was allocated a portion of Emerson’s costs, including general corporate costs, information technology costs, insurance and other benefit costs, and shared service and other costs. All of these costs are reflected in the Company’s condensed consolidated financial statements. Management believes the methodologies and assumptions used to allocate these costs are reasonable.

At the closing of the Transaction, Emerson and the Company entered into a transition service agreement (the “Transition Service Agreement”) for the provision of certain transitionary services from Emerson to the Company. Pursuant to the Transition Service Agreement, Emerson provides the Company with certain services, including information technology, human resources and other specified services, as well as access to certain of Emerson’s existing facilities. Transition Service Agreement related activities have been recorded as cost of goods sold or operating expenses from related parties and resulting balances have been presented as receivable from or due to related parties in the condensed consolidated financial statements presented.

In connection with the closing of the Transaction, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) and a tax matters agreement (the “Tax Matters Agreement”) with Emerson. The Registration Rights Agreement grants Emerson certain market registration rights, including demand registration rights and piggyback registration rights, with respect to its registrable securities. The Company has agreed to pay out-of-pocket fees and expenses in connection with such registration, subject to certain exceptions. The Tax Matters Agreement governs the rights and obligations that the Company and Emerson have with respect to taxes of the Company and certain Emerson subsidiaries. In addition, under the terms of the Tax Matters Agreement, the Company agreed to indemnify Emerson and its affiliates against any and all tax-related liabilities incurred by them relating to the Transaction and certain related business reorganizations to the extent such tax-related liabilities are caused by any action taken by the Company.

Receivables from related parties and due to related parties reported in the condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023 include the following:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Interest bearing receivables from related parties	$	60,870	$	61,948
Trade receivables from related parties	609		427
Receivables from related parties	$	61,479	$	62,375
Interest bearing payables to related parties	$	95,860	$	21,866
Trade payables to related parties	227		153
Due to related parties	$	96,087	$	22,019

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Allocations and charges from Emerson are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Information technology	$	370	$	763	$	1,346	$	1,574
Shared services and other	$	266	$	1,157	$	640	$	3,895

Corporate costs, human resources, and insurance and other benefits are recorded in general and administrative expenses and information technology, facility charges, and shared services and other are allocated to cost of goods sold and operating expenses based on systemic methods.

Before the closing of the Transaction, OSI Inc. and the SSE business engaged in various transactions to sell software and purchase goods in the ordinary course of business with affiliates of Emerson. At the closing, the Company and Emerson entered into a commercial agreement to allow Emerson to distribute software and services from the Company (the “Commercial Agreement”). Pursuant to the Commercial Agreement as amended from time to time in accordance with the Stockholders Agreement (as defined below), AspenTech grants Emerson the right to distribute, on a non-exclusive basis, certain (i) existing Heritage AspenTech products, (ii) existing Emerson products transferred to AspenTech pursuant to the Transaction Agreement and (iii) future AspenTech products as mutually agreed upon, in each case, to end-users through Emerson acting as an agent, reseller or original equipment manufacturer. Commercial Agreement-related activities have been recorded as revenues and expenses from related parties and resulting trade balances have been presented as trade receivables from related parties in the condensed consolidated financial statements presented. Revenue and purchases from Emerson affiliates for the three months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Revenue from Emerson affiliates	$	43	$	4	$	310	$	567
Purchases from Emerson affiliates	$	118	$	85	$	189	$	1,786

Emerson Share Maintenance Rights

Immediately following the closing of the Transaction, Emerson beneficially owned 55% of the fully diluted shares of AspenTech common stock. At the Closing Date, the Company and Emerson entered into a stockholders agreement (the “Stockholders Agreement”), which sets forth, among other matters, the right of Emerson to nominate directors to the Company’s board of directors, the right of Emerson to nominate the chair of the Company’s board of directors, the composition of the committees of the Company’s board of directors, certain consent rights of Emerson to certain material actions taken by the Company and consent rights with respect to modifications or changes to the Company’s business strategy. Under the Stockholders Agreement, Emerson also has the right to acquire additional equity securities of AspenTech pursuant to pre-agreed procedures and rights in order to maintain its 55% ownership interest. No additional shares of common stock, or any other equity securities of AspenTech, were issued by the Company to Emerson subsequent to the closing of the Transaction through December 31, 2023.

Business Combination with Related Party

The Inmation acquisition completed on August 29, 2022 was considered a related party transaction. Refer to Note 4, “Acquisitions”, to our condensed consolidated financial statements for further discussion.

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Credit Agreement with Related Party

On December 23, 2022, the Company entered into the Emerson Credit Agreement with Emerson, which provided for an aggregate term loan commitment of $630.0 million, and on August 18, 2023, the Emerson Credit Agreement was terminated in connection with the termination of the agreement to purchase Micromine. There was no amount outstanding under the Emerson Credit Agreement at the time it was terminated. Refer to Note 10, “Debt”, to our condensed consolidated financial statements for further discussion.

Plantweb Optics Analytics

On July 28, 2023, the Company entered into the Plantweb Optics Analytics Assignment and License Agreement with Emerson for the purchase of Emerson’s Plantweb Optics Analytics software and the perpetual and royalty-free licensing of other Emerson intellectual property for $12.5 million in the aggregate.

The Company is currently integrating the purchased software and licensed intellectual property with its existing asset performance management product suite and accordingly has capitalized the full purchase price in accordance with ASC 985-20, “Costs of Software to be Sold, Leased, or Marketed.”

16.    Segment and Geographic Information

The Company operates in one operating and reportable segment. The Company’s chief operating decision maker is its President and Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis.

Geographic Information

Summarized below is information about the Company’s geographic operations:

	Revenue by Destination
	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Americas	$	148,358	$	114,463	$	281,374	$	245,321
Asia, Middle East and Africa	57,030		62,043		114,715		115,714
Europe	51,775		66,332		110,382		132,622
Total	$	257,163	$	242,838	$	506,471	$	493,657

Americas included revenue in the United States of $132.7 million and $88.1 million for the three months ended December 31, 2023 and 2022, respectively, and $228.7 million and $200.4 million for the six months ended December 31, 2023 and 2022, respectively.

	Property, Equipment, and
	Leasehold Improvements, Net
	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Americas	$	13,788	$	15,793
Asia, Middle East and Africa	1,875		1,923
Europe	1,093		954
Total	$	16,756	$	18,670

Property, equipment, and leasehold improvements, net located in the United States were $11.8 million and $13.4 million as of December 31, 2023 and June 30, 2023, respectively.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Caution Concerning Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q that are not strictly historical may be “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties, and AspenTech undertakes no obligation to update any such statements to reflect later developments. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “strategy,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “opportunity” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These risks and uncertainties include, without limitation: the failure to realize the anticipated benefits of our transaction with Emerson; risks resulting from our status as a controlled company; the scope, duration and ultimate impacts of the Russia-Ukraine war and the Israeli-Hamas conflict; as well as economic and currency conditions, market demand (including related to the pandemic and adverse changes in the process or other capital-intensive industries such as materially reduced spending budgets due to oil and gas price declines and volatility), pricing, protection of intellectual property, cybersecurity, natural disasters, tariffs, sanctions, competitive and technological factors, inflation; and others, including those described in “Item 1A. Risk Factors” of Part II in this Quarterly Report on Form 10-Q and those described in our most recent Annual Report on Form 10-K and subsequent reports filed with the SEC. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Any forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. You should read the following discussion in conjunction with our condensed consolidated financial statements and related notes thereto contained in this report. You should also read “Item 1A. Risk Factors” of Part II in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from our expectations.

Our fiscal year ends on June 30, and references in this Quarterly Report on Form 10-Q to a specific fiscal year are to the twelve months ended June 30 of such year (for example, “fiscal 2024” refers to the year ending June 30, 2024).

Business Overview 

We are a global leader in industrial software focused on helping customers in asset-intensive industries address the world’s dual challenge of meeting the increasing demand for resources from a rapidly growing population with the expectation of a higher living standard in a profitable and sustainable manner. Our solutions address complex environments where it is critical to optimize across the full asset lifecycle-asset design, operation, and maintenance - enabling customers to run their assets safer, greener, longer and faster. Thousands of companies, ranging from multi-national corporations to start-ups, rely on our software to help them run their assets more profitably, resiliently, and sustainably to meet their operational excellence and sustainability goals.

We help customers solve some of their most critical challenges via our purpose-built software that combines engineering first principles, deep industry domain knowledge, and advanced technologies. We drive significant value creation through our decades of experience in modeling, simulation, and optimization technologies. The operational challenges we help our customers solve include, among others, how to maintain maximum efficiency in process operations, manage electrical grids amid the growth in renewable energy sources, ensure supply chain resiliency, and reduce carbon emissions.

Our software also seeks to help companies develop new processes that can be scaled to support energy transition and a net zero future, such as green hydrogen, biofuels, carbon capture, utilization and storage and circularity of plastics.

Recent Events

On August 1, 2023, the Company announced that its Board of Directors approved the Share Repurchase Authorization pursuant to which an aggregate $300.0 million of its common stock may be repurchased. During the second quarter of fiscal 2024, the Company repurchased 375,041 shares for $72.1 million under the Share Repurchase Authorization. As of December 31, 2024, a total of 954,839 shares have been repurchased under the Share Repurchase Authorization for $186.3 million, with the total remaining value being $113.7 million.

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Key Business Metrics

Background

We utilize key business metrics to track and assess the performance of our business. We have identified the following set of appropriate business metrics in the context of our evolving business:

•Annual contract value (“ACV”)

•Total contract value (“TCV”)

•Bookings

We also use the following non-GAAP business metrics in addition to GAAP measures to track our business performance:

•Free cash flow

•Non-GAAP income from operations

We make these measures available to investors and none of these metrics should be considered as an alternative to any measure of financial performance calculated in accordance with GAAP.

Annual Contract Value

ACV is an estimate of the annual value of our portfolio of term license and software maintenance and support (“SMS”) contracts, the annual value of SMS agreements purchased with perpetual licenses, and the annual value of standalone SMS agreements purchased with certain legacy term license agreements, which have become an immaterial part of our business.

Comparing ACV for different dates can provide insight into the growth and retention rates of our recurring software business because ACV represents the estimated annual billings associated with our recurring license and maintenance agreements at any point in time. Management uses the ACV business metric to evaluate the growth and performance of our business as well as for planning and forecasting purposes. We believe that ACV is a useful business metric to investors as it provides insight into the growth component of our software business.

ACV generally increases as a result of new term license and SMS agreements with new or existing customers, renewals or modifications of existing term license agreements that result in higher license fees due to contractually-agreed price escalation or an increase in the number of tokens (units of software usage) or products licensed, or an increase in the value of licenses delivered.

ACV is adversely affected by term license and SMS agreements that are renewed at a lower entitlement level or not renewed, a decrease in the value of licenses delivered, and, to a lesser extent, by customer agreements that become inactive during the agreement’s term because, in our determination, amounts due (or which will become due) under the agreement are not collectible. As ACV is an estimate of annual billings, it will generally not include contracts with a term of less than one year. Because ACV represents all other active term software and SMS agreements, it may include amounts under agreements with customers that are delinquent in paying invoices, that are in bankruptcy proceedings, and agreements that are subject to termination by the customer or where payment is otherwise in doubt.

As of December 31, 2023, customer agreements representing approximately 85% of our ACV (by value) were denominated in U.S. dollars. For agreements denominated in other currencies, we use a fixed historical exchange rate to calculate ACV in U.S. dollars rather than using current exchange rates, so that our calculation of growth in ACV is not affected by fluctuations in foreign currencies.

For term license agreements that contain professional services or other products and services, we have included the portion of those agreements that are reflective of the relative fair value of the term license, rather than the portion of the actual invoice attributed to the term license, as outlined in the agreement within ACV. We believe that this methodology more accurately allocates any discounts or premiums to the different elements of the agreement.

We estimate that ACV grew by approximately 9.6%, from $833.7 million as of December 31, 2022 to $914.1 million as of December 31, 2023.

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Total Contract Value

TCV is the aggregate value of all payments received or to be received under all active term license and perpetual SMS agreements, including maintenance and escalation. TCV was $3.8 billion and $3.4 billion as of December 31, 2023 and 2022, respectively.

Bookings

Bookings is the total value of customer term license and perpetual license SMS contracts signed and delivered in the current period, less the value of such contracts signed in the current period where the initial licenses and SMS agreements are not yet deemed delivered, plus the value of term license contracts and perpetual license SMS contracts signed in a previous period for which the initial licenses are deemed delivered in the current period.

Bookings were $233.4 million during the three months ended December 31, 2023, compared to $242.8 million during the three months ended December 31, 2022. Bookings were $445.2 million during the six months ended December 31, 2023, compared to $466.9 million during the six months ended December 31, 2022. The change in bookings is related to the timing of renewals.

Non-GAAP Business Metrics

Free cash flow (non-GAAP) excludes certain non-cash and non-recurring expenses, and is used as a supplement to net cash provided by operating activities presented on a GAAP basis. We believe that free cash flow (non-GAAP) is a useful financial measure because it permits investors to view our performance using tools that our management uses to gauge progress in achieving goals and as an indication of cash flow that may be available to fund future investments and other capital uses, such as to repay borrowings under our credit facilities or to fund acquisitions or share repurchase programs.

The following table provides a reconciliation of net cash provided by operating activities (GAAP) to free cash flow (non-GAAP) for the indicated periods:

	Six Months Ended December 31,
	2023		2022
	(Dollars in Thousands)
Net cash provided by operating activities (GAAP)	$	46,808	$	54,612
Purchase of property, equipment, and leasehold improvements	(1,437)		(2,844)
Payments for capitalized computer software development costs	(131)		(329)
Free cash flow (non-GAAP) (1)	$	45,240	$	51,439

__________

(1)     For the interim period beginning January 1, 2023, we no longer exclude acquisition and integration planning related payments from our computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation methodology.

Non-GAAP income from operations excludes certain non-cash and non-recurring expenses, and is used as a supplement to income from operations presented on a GAAP basis. We believe that non-GAAP income from operations is a useful financial measure because removing certain non-cash and other items provides additional insight into recurring profitability and cash flow from operations.

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The following table provides a reconciliation of GAAP loss from operations to non-GAAP income from operations for the indicated periods:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
GAAP loss from operations	$	(49,243)	$	(59,395)	$	(109,455)	$	(110,577)
Plus:
Stock-based compensation	16,211		23,441		32,910		41,177
Amortization of intangibles (1)	121,565		121,161		243,152		242,321
Acquisition and integration planning related fees	125		1,411		(130)		6,269
Non-GAAP income from operations	$	88,658	$	86,618	$	166,477	$	179,190

__________

(1)     The Company has increased amortization of intangible assets following the close of the Transaction with Emerson. As a result, the Company expects its amortization of intangibles assets to remain at higher levels for the next several years as the related asset balance is amortized over the respective expected useful lives of the intangible assets.

Critical Accounting Estimates and Judgments

Note 2, “Significant Accounting Policies,” to the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 describes the significant accounting policies and methods used in the preparation of the condensed consolidated financial statements appearing in this report. The accounting policies that reflect our critical estimates, judgments and assumptions in the preparation of our condensed consolidated financial statements are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

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Results of Operations

Comparison of the Three Months Ended December 31, 2023 and 2022

The following table sets forth the results of operations, the period-over-period percentage change, and the results of operations as a percentage of total revenue in certain financial data for the three months ended December 31, 2023 and 2022:

	Three Months Ended December 31,				Increase / (Decrease) Change				(% of Revenue)
	2023		2022		$		%		2023		2022
	(Dollars in Thousands)
Revenue:
License and solutions	$	152,463	$	149,843	$	2,620	1.7	%	59.3	%	61.7	%
Maintenance	85,056		78,628		6,428		8.2		33.1		32.4
Services and other	19,644		14,367		5,277		36.7		7.6		5.9
Total revenue	257,163		242,838		14,325		5.9		100.0		100.0
Cost of revenue:
License and solutions	67,326		70,833		(3,507)		(5.0)		26.2		29.2
Maintenance	10,647		9,567		1,080		11.3		4.1		3.9
Services and other	16,960		12,698		4,262		33.6		6.6		5.2
Total cost of revenue	94,933		93,098		1,835		2.0		36.9		38.3
Gross profit	162,230		149,740		12,490		8.3		63.1		61.7
Operating expenses:
Selling and marketing	122,240		117,951		4,289		3.6		47.5		48.6
Research and development	53,145		49,954		3,191		6.4		20.7		20.6
General and administrative	36,088		41,230		(5,142)		(12.5)		14.0		17.0
Total operating expenses	211,473		209,135		2,338		1.1		82.2		86.1
Loss from operations	(49,243)		(59,395)		10,152		(17.1)		(19.1)		(24.5)
Other (expense) income, net	(199)		38,643		(38,842)		(100.5)		(0.1)		15.9
Interest income, net	12,283		4,120		8,163		198.1		4.8		1.7
Loss before benefit for income taxes	(37,159)		(16,632)		(20,527)		123.4		(14.4)		(6.8)
(Benefit) provision for income taxes	(15,659)		49,565		(65,224)		(131.6)		(6.1)		20.4
Net loss	$	(21,500)	$	(66,197)	$	44,697	(67.5)	%	(8.4)	%	(27.3)	%

Revenue

Total revenue increased by $14.3 million, or 5.9%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, due to an increase of $6.4 million in maintenance revenue, an increase of $5.3 million in services and other revenue and an increase of $2.6 million in license and solutions revenue.

License and Solutions Revenue

License and solutions revenue increased by $2.6 million, or 1.7%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily attributable to new term license orders in the second quarter of fiscal 2024.

Maintenance Revenue

Maintenance revenue increased by $6.4 million, or 8.2%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to growth of our base of arrangements.

Services and Other Revenue

Services and other revenue increased by $5.3 million, or 36.7%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to the timing and volume of professional services engagements, and increased activities from certain customer contracts where the related professional services revenue is recognized as a distinct performance obligation effective beginning in the third quarter of fiscal 2023.

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Cost of Revenue

Total cost of revenue increased by $1.8 million, or 2.0%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to increased compensation costs and headcount.

Cost of License and Solutions Revenue

Cost of license and solutions revenue decreased $3.5 million, or 5.0%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to the business transformation activities in which we began recognizing distinct performance obligations for certain customer contracts effective beginning in the third quarter of fiscal 2023. Gross profit margin on license and solutions revenue increased to 55.8% from 52.7% for the three months ended December 31, 2023 2022, respectively, due to higher license and solutions revenue.

Cost of Maintenance Revenue

Cost of maintenance revenue increased by $1.1 million, or 11.3%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs related to salaries, benefits, and stock-based compensation. Gross profit margin on maintenance revenue remained consistent at 87.5% for the three months ended December 31, 2023 as compared to 87.8% for the same period in the prior fiscal year.

Cost of Services and Other Revenue

Cost of services and other revenue increased by $4.3 million, or 33.6%, for the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs related to salaries, benefits, and bonuses and the increased activities from customer contracts where the related professional services revenue is recognized as a distinct performance obligation. Gross margin on services and other revenue increased to 13.7% from 11.6% for the three months ended December 31, 2023 and 2022, respectively, due to an increase in services and other revenue.

Gross Profit

Overall gross profit increased by $12.5 million, or 8.3%, for the three months ended December 31, 2023, as compared to the same period in the prior fiscal year. Gross profit margin increased to 63.1% for the three months ended December 31, 2023, from 61.7% for the same period in the prior fiscal year. The increase was mainly driven by an increase in licensing and services and other revenue compared to the same period in the prior fiscal year.

Operating Expenses

Selling and Marketing Expense

Selling and marketing expense increased by $4.3 million, or 3.6%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs of $4.4 million related to salaries and benefits as we continue to expand our sales capacity in new and existing markets, partially offset by a decrease in stock-based compensation.

Research and Development Expense

Research and development expense increased by $3.2 million, or 6.4%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs of $4.2 million, related to salaries and benefits, partially offset by a decrease in stock-based compensation.

 General and Administrative Expense

General and administrative expense decreased by $5.1 million, or 12.5%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to lower compensation costs of $5.2 million related to lower stock-based compensation in the current period, partially offset by an increase in salaries and benefits.

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Non-Operating (Expense) Income

Other (Expense) Income, Net

Other (expense) income, net decreased by $38.8 million, or 100.5%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to a $34.9 million unrealized gain on foreign currency forward contracts in the prior year that were terminated in June 2023, as well as decreases in unrealized and realized foreign currency exchange gains.

Interest Income, Net

Interest income, net increased by $8.2 million, or 198.1%, during the three months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to an increase in interest income earned on cash and cash equivalent balances of $2.4 million, an increase in interest income earned on long-term revenue contracts of $2.1 million, and a decrease in interest expense of $4.6 million due to the repayment of our term loan facility under the Amended and Restated Credit Agreement in the third quarter of fiscal 2023.

Benefit (Provision) for Income Taxes

The Company computes its tax provision (benefit) for interim periods by applying the estimated AETR to year-to-date income from operations and adjusting for discrete items arising in that quarter. However, if the Company is unable to make a reliable estimate of its AETR, then the actual effective tax rate for the year-to-date period may be the best estimate. For the three months ended December 31, 2022, the Company recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate to be applied to the year to date pretax (loss) income given small changes in the forecast of pre-tax (loss) income would result in significant changes in the AETR. For the three months ended December 31, 2023, the Company again recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate.

Benefit for income taxes was $15.7 million for the three months ended December 31, 2023 and income tax expense was $49.6 million for the three months ended December 31, 2022, resulting in effective tax rates of 42.1% and (298.0)%, respectively. Income tax benefit primarily increased due to the prior year’s change in the Company’s approach to computing its tax provision (benefit) for interim periods to an actual effective tax rate method.

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Comparison of the Six Months Ended December 31, 2023 and 2022

The following table sets forth the results of operations, the period-over-period percentage change, and the results of operations as a percentage of total revenue in certain financial data for the six months ended December 31, 2023 and 2022:

	Six Months Ended December 31,				Increase / (Decrease) Change				(% of Revenue)
	2023		2022		$		%		2023		2022
	(Dollars in Thousands)
Revenue:
License and solutions	$	301,111	$	310,068	$	(8,957)	(2.9)	%	59.5	%	62.8	%
Maintenance	170,024		156,994		13,030		8.3		33.6		31.8
Services and other	35,336		26,595		8,741		32.9		7.0		5.4
Total revenue	506,471		493,657		12,814		2.6		100.0		100.0
Cost of revenue:
License and solutions	138,903		140,346		(1,443)		(1.0)		27.4		28.4
Maintenance	20,848		18,784		2,064		11.0		4.1		3.8
Services and other	33,242		25,098		8,144		32.4		6.6		5.1
Total cost of revenue	192,993		184,228		8,765		4.8		38.1		37.3
Gross profit	313,478		309,429		4,049		1.3		61.9		62.7
Operating expenses:
Selling and marketing	244,618		236,225		8,393		3.6		48.3		47.9
Research and development	106,821		99,695		7,126		7.1		21.1		20.2
General and administrative	71,494		84,086		(12,592)		(15.0)		14.1		17.0
Total operating expenses	422,933		420,006		2,927		0.7		83.5		85.1
Loss from operations	(109,455)		(110,577)		1,122		(1.0)		(21.6)		(22.4)
Other expense, net	(6,029)		(19,989)		13,960		(69.8)		(1.2)		(4.0)
Interest income, net	26,333		9,143		17,190		188.0		5.2		1.9
Loss before benefit for income taxes	(89,151)		(121,423)		32,272		(26.6)		(17.6)		(24.6)
Benefit for income taxes	(33,126)		(43,982)		10,856		(24.7)		(6.5)		(8.9)
Net loss	$	(56,025)	$	(77,441)	$	21,416	(27.7)	%	(11.1)	%	(15.7)	%

Revenue

Total revenue increased by $12.8 million, or 2.6%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to an increase of $13.0 million in maintenance revenue and an increase of $8.7 million in services and other revenue, resulting from an increase in bookings related to the timing of contract renewals. This increase was partially offset by a decrease in license and solutions revenue of $9.0 million.

License and Solutions Revenue

License and solutions revenue decreased by $9.0 million, or 2.9%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily attributable to the timing of renewals and new contracts signed in the same period in the prior fiscal year.

Maintenance Revenue

Maintenance revenue increased by $13.0 million, or 8.3%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to growth of our base of arrangements.

Services and Other Revenue

Services and other revenue increased by $8.7 million, or 32.9%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to the timing and volume of professional services engagements and increased activities from certain customer contracts where the related professional services revenue is recognized as a distinct performance obligation effective beginning in the third quarter of fiscal 2023.

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Cost of Revenue

Total cost of revenue increased by $8.8 million, or 4.8%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to increased compensation costs and headcount, as well as timing of software implementation projects.

Cost of License and Solutions Revenue

Cost of license and solutions revenue decreased by $1.4 million, or 1.0%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to the business transformation activities in which we began recognizing distinct performance obligations for certain customer contracts effective beginning in the third quarter of fiscal 2023. Gross profit margin on license and solutions revenue decreased to 53.9% from 54.7% for the six months ended December 31, 2023 and 2022, respectively, primarily due to lower license and solutions revenue.

Cost of Maintenance Revenue

Cost of maintenance revenue increased by $2.1 million, or 11.0%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs related to salaries, benefits, and stock-based compensation. Gross profit margin on maintenance revenue decreased to 87.7% from 88.0% for the six months ended December 31, 2023 and 2022, respectively.

Cost of Services and Other Revenue

Cost of services and other revenue increased by $8.1 million, or 32.4%, for the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs related to salaries and benefits and the increased activities from customer contracts where the related professional services revenue is recognized as a distinct performance obligation. Gross margin on services and other revenue increased to 5.9% from 5.6% for the six months ended December 31, 2023 and 2022, respectively, due to an increase in services and other revenue.

Gross Profit

Overall gross profit increased by $4.0 million, or 1.3%, for the six months ended December 31, 2023, as compared to the same period in the prior fiscal year. Gross profit margin decreased to 61.9% from 62.7% for the six months ended December 31, 2023 and 2022, respectively. The decrease in gross profit margin was mainly driven by a decrease in license revenue compared to the same period in the prior fiscal year, due to a decrease in bookings driven by the timing of renewals, while compensation costs increased primarily due to headcount.

Operating Expenses

Selling and Marketing Expense

Selling and marketing expense increased by $8.4 million, or 3.6%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs of $8.9 million related to salaries and benefits as we continue to expand our sales capacity in new and existing markets, partially offset by a decrease in stock-based compensation.

Research and Development Expense

Research and development expense increased by $7.1 million, or 7.1%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs of $7.1 million related to salaries and benefits.

 General and Administrative Expense

General and administrative expense decreased by $12.6 million, or 15.0%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to lower compensation costs of $6.7 million related to stock-based compensation, and a decrease in acquisition and integration expenses of $6.0 million related to the Transaction with Emerson.

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Non-Operating (Expense) Income

Other Expense, Net

Other expense, net decreased by $14.0 million, or 69.8%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to $15.3 million of unrealized loss on foreign currency forward contracts in the prior year that were terminated in June 2023, as well as increases in unrealized and realized foreign currency exchange losses.

Interest Income, Net

Interest income, net increased by $17.2 million, or 188.0%, during the six months ended December 31, 2023, as compared to the same period in the prior fiscal year, primarily due to an increase in interest income earned on cash and cash equivalent balances of $4.7 million, an increase in interest income earned on long-term revenue contracts of $4.6 million, and a decrease in interest expense of $8.7 million due to the repayment of our term loan facility under the Amended and Restated Credit Agreement in the third quarter of fiscal 2023.

Benefit for Income Taxes

The Company computes its tax provision (benefit) for interim periods by applying the estimated AETR to year-to-date income from operations and adjusting for discrete items arising in that quarter. However, if the Company is unable to make a reliable estimate of its AETR, then the actual effective tax rate for the year-to-date period may be the best estimate. For the three months ended September 30, 2022, the Company computed its tax provision (benefit) using the AETR approach. However, starting with the six months ended December 31, 2022, the Company recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate to be applied to the year to date pretax (loss) income given small changes in the forecast of pre-tax (loss) income would result in significant changes in the AETR. For the six months ended December 31, 2023, the Company again recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate.

Benefit for income taxes was $33.1 million and $44.0 million for the six months ended December 31, 2023 and 2022, respectively, resulting in effective tax rates of 37.2% and 36.2%, respectively. Income tax benefit decreased primarily due to an increase in year-to-date earnings and a reduced Foreign-Derived Intangible Income (“FDII”) deduction recorded in the current period.

Liquidity and Capital Resources

Resources

As of December 31, 2023 and June 30, 2023, our principal sources of liquidity consisted of $130.8 million and $241.2 million, in cash and cash equivalents, respectively.

We believe our existing cash on hand and cash flows generated by operations are sufficient for at least the next 12 months to meet our operating requirements, including those related to salaries and wages, working capital, capital expenditures, and other liquidity requirements associated with operations. We may need to raise additional funds if we decide to make one or more acquisitions of businesses, technologies or products. If additional funding for such purposes is required beyond existing resources and our Amended and Restated Credit Agreement described below, we may not be able to affect a receivable, equity or debt financing on terms acceptable to us or at all.

Amended and Restated Credit Agreement

The Amended and Restated Credit Agreement provides for a $200.0 million secured revolving credit facility, of which the Company had $197.4 million available for borrowing as of December 31, 2023. For a more detailed description of the Amended and Restated Credit Agreement, see Note 10, “Debt” to our condensed consolidated financial statements.

Cash Flows

Operating Cash Flows

Net cash provided by operating activities decreased by $7.8 million during the six month period ended December 31, 2023, as compared to the same period in prior fiscal year, primarily driven by a decrease of $36.3 million in cash due to unfavorable changes in working capital, primarily due to the timing of contract cycle renewals and billings, partially offset by an increase of $28.5 million in cash provided due to higher income before non-cash charges.

30

Investing Cash Flows

Net cash used in investing activities decreased by $55.7 million during the six month period ended December 31, 2023, as compared to the same period in prior fiscal year, primarily driven by a decrease of $66.7 million in cash used for business acquisitions and $1.4 million in cash used for capital expenditures, partially offset by an increase of $12.5 million in cash used for the asset acquisition of Plantweb Optics Analytics software.

Financing Cash Flows

Net cash used in financing activities increased by $151.5 million during the six month period ended December 31, 2023, as compared to the same period in prior fiscal year, primarily driven by an increase of $186.3 million in cash used for common stock repurchases, partially offset by an increase of $38.9 million in cash provided from our cash pooling arrangements with related parties.

Free Cash Flows

Free cash flow (non-GAAP) decreased $6.2 million during the six month period ended December 31, 2023, as compared to the same period in prior fiscal year, primarily driven by the decrease in net cash provided by operating activities (GAAP), partially offset by a decrease in capital expenditures.

The following table provides a reconciliation of net cash provided by operating activities (GAAP) to free cash flow (non-GAAP) for the indicated periods:

	Six Months Ended December 31,
	2023		2022
	(Dollars in Thousands)
Net cash provided by operating activities (GAAP)	$	46,808	$	54,612
Purchase of property, equipment, and leasehold improvements	(1,437)		(2,844)
Payments for capitalized computer software development costs	(131)		(329)
Free cash flow (non-GAAP) (1)	$	45,240	$	51,439

__________

(1)     For the interim period beginning January 1, 2023, we no longer exclude acquisition and integration planning related payments from our computation of free cash flow. Free cash flow for all prior periods presented has been revised to the current period computation methodology.

Contractual Obligations

Letters of Credit

Standby letters of credit in the aggregate amounts of $31.5 million and $39.0 million secured our performance on professional services contracts, certain facility leases and potential liabilities as of December 31, 2023 and June 30, 2023, respectively. The letters of credit expire at various dates through fiscal 2031.

Effects of Inflation

We do not believe that inflation has had a material impact on our business or operating results during the periods presented. However, inflation may in the future have an impact on our ability to execute on our acquisition strategy. Inflationary costs could adversely affect our business, financial condition and results of operations. In addition, increased inflation has had, and may continue to have, an effect on interest rates. Increased interest rates may adversely affect our borrowing rate and our ability to obtain, or the terms under which we can obtain, any potential additional funding.

31

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

During the three months ended December 31, 2023 and 2022, 12.1% and 8.3% of our total revenue was denominated in a currency other than the U.S. dollar, respectively. During the six months ended December 31, 2023 and 2022, 9.9% and 10.0% of our total revenue was denominated in a currency other than the U.S. dollar, respectively. In addition, certain of our operating costs incurred outside the United States are denominated in currencies other than the U.S. dollar. We conduct business on a worldwide basis and as a result, a portion of our revenue, earnings, net assets, and net investments in foreign affiliates is exposed to changes in foreign currency exchange rates. We measure our net exposure for cash balance positions and for cash inflows and outflows in order to evaluate the need to mitigate our foreign exchange risk. We may enter into foreign currency forward contracts to minimize the impact related to unfavorable exchange rate movements related to our cash positions and cash flows, although we have not done so during the three months ended December 31, 2023 and 2022. Currently, our largest exposures to foreign exchange rates exist primarily with the Euro, Pound Sterling, Japanese Yen, Canadian Dollar, Indonesian Rupiah, and Norwegian Krone.

We recorded net foreign currency exchange losses of $0.3 million and $3.6 million, respectively, during the three months ended December 31, 2023 and 2022, and $6.2 million and $4.7 million, respectively, during the six months ended December 31, 2023 and 2022, related to the settlement and remeasurement of transactions denominated in currencies other than the functional currency of our operating units. Our analysis of operating results transacted in various foreign currencies indicated that a hypothetical 10% change in the foreign currency exchange rates could have increased or decreased our results of operations by approximately $3.0 million and $3.1 million for the three months ended December 31, 2023 and 2022, respectively, and by approximately $4.8 million and $5.6 million for the six months ended December 31, 2023 and 2022, respectively.

Interest Rate Risk

We place our investments in money market instruments. Our analysis of our investment portfolio and interest rates as of December 31, 2023 indicated that a hypothetical 100 basis point increase or decrease in interest rates would not have a material impact on the fair value of our investment portfolio determined in accordance with an income-based approach utilizing portfolio future cash flows discounted at the appropriate rates.

Investment Risk

We own an interest in a limited partnership investment fund. The primary objective of this partnership is investing in equity and equity-related securities (including convertible debt) of venture growth-stage businesses. We account for the investment in accordance with Topic 323, Investments - Equity Method and Joint Ventures. Our total commitment under this partnership is $5.0 million CAD, or $3.7 million USD. Under the conditions of the equity method investment, unfavorable future changes in market conditions could lead to a potential loss up to the full value of our $5.0 million CAD, or $3.7 million USD commitment. As of December 31, 2023, the fair value of this investment was $3.2 million CAD, or $2.4 million USD, representing our payment towards the total commitment, and is recorded in non-current assets in our condensed consolidated balance sheets.

Item 4.    Controls and Procedures.

a)    Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and interim chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our chief executive officer and interim chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

32

b)    Changes in Internal Controls Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the three months ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We will continue to review and document our disclosure controls and procedures, including our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

33

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

The risks described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, could materially and adversely affect our business, financial condition and results of operations. These risk factors do not identify all risks that we face—our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. The Risk Factors section of our 2023 Annual Report on Form 10-K remains current in all material respects, with the exception of the risk factors described below.

In addition, the ongoing conflict in Ukraine could adversely impact our business, financial position, cash flows and results of operations in Russia and Ukraine which may in turn spread and impact our overall business, financial position, cash flows and results of operations.

We maintain limited operations in Russia and license software and provide related services to customers in Russia and areas of Ukraine that are not under sanction. We had revenue of approximately $44.6 million and $9.9 million for fiscal 2023 and 2022, respectively, and $5.8 million and $16.8 million for the three months ended December 31, 2023 and 2022, respectively, and $13.0 million and $26.8 million for the six months ended December 31, 2023 and 2022, respectively. We also had total assets of approximately $35.2 million and $39.7 million as of December 31, 2023 and June 30, 2023, respectively, related to operations in Russia.

As a result of the conflict between Russia and Ukraine, the United States, the European Union, the United Kingdom and other governments, among others, have developed coordinated sanctions and export-control measure packages. These packages include, comprehensive financial sanctions against major Russian banks (including SWIFT cut off); designations of individuals and entities involved in Russian military activities; additional designations of Russian individuals including but not limited to those with significant business interests and government connections; and enhanced export controls and trade sanctions targeting Russia’s imports of a wide range of goods as a whole, including tighter controls on exports and reexports of items previously subject to only a low level of control, stricter licensing policy with respect to issuing export licenses, and/or increased use of “end-use” controls to block or impose licensing requirements on exports.

We may be required to cease or suspend operations in Russia or, should the conflict or the effects of sanctions, export control measures and business restrictions worsen, we may voluntarily elect to do so. We no longer provide engineering services to customers in Russia, which may impact our ability to renew existing contracts and provide support to those customers. In addition, we have limited our operations in Russia to contract renewals only with existing customers. While we continue to evaluate the impact of the various sanctions and restrictions imposed by the United States, other governments, and financial institutions on our ability to do business in Russia and areas of Ukraine that are not under sanction, maintain contracts with vendors and pay employees in Russia, and receive payment from customers in Russia and areas of Ukraine that are not under sanction, there is no assurance that we will be able to do so in the future. Any disruption to, or suspension of, our business and operations in Russia would result in the loss of revenue from the business in Russia and would negatively impact our growth. We also may suffer reputational harm as a result of our continued operations in Russia, which may adversely impact our sales and other businesses in other countries.

We assess our operations for potential asset impairment in accordance with our accounting practices, and are periodically evaluating the impact of the various sanctions and restrictions imposed by the United States and other governments on our ability to conduct business in Russia. The outcome of these assessments, which may include a write-off of our remaining assets that are related to the operations in Russia, and their potential impact on our ability to continue to conduct business to the same extent as currently conducted will depend on how the conflict evolves and on further actions that may be taken by the United States, Russia, other governments, and others.

Furthermore, the ongoing military conflict and sanctions on Russia have resulted in adverse macroeconomic effects which have in the past and may in the future have an adverse effect on our business. For example, the war between Russia and Ukraine has already resulted in significant volatility in financial markets and depreciation of the Russian ruble and the Ukrainian hryvnia against the U.S. dollar, as well as an increase in energy and commodity prices globally and restrictions on our ability to withdraw and move funds from Russian bank accounts. The conflict may also result in additional consequences including, but not limited to, supply shortages, further increases in prices of commodities, reduced consumer purchasing power, significant disruptions in logistics infrastructure, telecommunications services and risks relating to the availability of

34

information technology systems and infrastructure. Other potential consequences include, but are not limited to, growth in the number of popular uprisings in the region, increased political discontent, especially in the regions most affected by the conflict or economic sanctions, increase in cyberterrorism activities and attacks, displacement of persons to regions close to the areas of conflict and an increase in the number of refugees fleeing across Europe, among other unforeseen social and humanitarian effects.

Continued conflict between Russia and Ukraine and any escalation of that conflict, could have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our securities to decline.

An escalation of the Israeli-Hamas conflict may have a material adverse impact on the Company’s business and operations in the region.

We have operations and customers in the Middle East. A further escalation of the current Israeli-Hamas conflict could result in additional armed conflict, terrorist activities, and political or macroeconomic instability in the Middle East region. This, in turn, could cause our customers in the region to reduce their capital expenditures, resulting in a reduction of our sales to such customers. A decline in our sales to our customers in the affected region and any further impact of such conflict or instability on our operations could have a material adverse impact on our business and operations in the region, results of operations or financial condition.

 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

Purchases of Equity Securities by the Issuer

On May 5, 2023, we entered into the ASR Program with JPMorgan to repurchase an aggregate of $100.0 million of our common stock. For more details on the ASR Program, refer to Note 13, “Stock Repurchases” to our condensed consolidated financial statements. During fiscal 2023, we repurchased 487,626 shares of our common stock for $100.0 million pursuant to the ASR Program, and on August 7, 2023 the ASR Program settled, resulting in an additional delivery of 107,045 shares of our common stock to us.

On August 1, 2023, we announced that our board of directors approved the Share Repurchase Authorization, pursuant to which an aggregate $300.0 million of our common stock may be repurchased. During the second quarter of fiscal 2024, the Company repurchased 375,041 shares for $72.1 million under the Share Repurchase Authorization. As of December 31, 2024, a total of 954,839 shares have been repurchased under the Share Repurchase Authorization for $186.3 million, with the total remaining value being $113.7 million. For more details on the Share Repurchase Authorization, refer to Note 13, “Stock Repurchases” to our condensed consolidated financial statements.

The following is a summary of stock repurchases for each month during the second quarter of fiscal 2024:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs (1)
	(Dollars in Thousands, Except Shares and per Share Data)
October 1, 2023 to October 31, 2023	158,479	$	197.67	158,479	$	154,449
November 1, 2023 to November 30, 2023	122,110	177.63		122,110	$	132,759
December 1, 2023 to December 31, 2023	94,452	202.10		94,452	$	113,671
Total	375,041	$	192.26	375,041

__________

(1)     On August 1, 2023, the Company announced that its Board of Directors approved the Share Repurchase Authorization, pursuant to which an aggregate $300.0 million of its common stock may be repurchased.

Item 3.     Defaults upon Senior Securities.

None.

Item 4.     Mine Safety Disclosures.

None.

35

Item 5.     Other Information.

During the three months ended December 31, 2023, none of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

36

Item 6.     Exhibits.

Exhibit Number	Description
31.1	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of President and Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
^	Management contract or compensatory plan or arrangement

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Aspen Technology, Inc.
Date: February 6, 2024	By:	/s/ ANTONIO J. PIETRI
		Antonio J. Pietri
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: February 6, 2024	By:	/s/ CHRISTOPHER STAGNO
		Christopher Stagno
		Senior Vice President, Interim Chief Financial Officer
		(Principal Financial Officer)

38

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Antonio J. Pietri, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Aspen Technology, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2024	/s/ ANTONIO. J. PIETRI
	Antonio J. Pietri
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher Stagno, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Aspen Technology, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2024	/s/ CHRISTOPHER STAGNO
	Christopher Stagno
	Senior Vice President, Interim Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Aspen Technology, Inc. (the “Company”) for the quarter ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies in his capacity as an officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 6, 2024	/s/ ANTONIO J. PIETRI
	Antonio J. Pietri
	President and Chief Executive Officer
	(Principal Executive Officer)

Date: February 6, 2024	/s/ CHRISTOPHER STAGNO
	Christopher Stagno
	Senior Vice President, Interim Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Aspen Technology, Inc. and will be retained by Aspen Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	6 Months Ended
	Dec. 31, 2023	Jan. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-41400
Entity Registrant Name	ASPEN TECHNOLOGY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-3100817
Entity Address, Address Line One	20 Crosby Drive
Entity Address, City or Town	Bedford
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01730
City Area Code	781
Local Phone Number	221-6400
Title of 12(b) Security	Common stock, $0.0001 par value per share
Trading Symbol	AZPN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001897982
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Document Period End Date	Dec. 31, 2023
Entity Common Stock, Shares Outstanding		63,548,821

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenue:
Total revenue	$ 257,163	$ 242,838	$ 506,471	$ 493,657
Cost of revenue:
Total cost of revenue	94,933	93,098	192,993	184,228
Gross profit	162,230	149,740	313,478	309,429
Operating expenses:
Selling and marketing	122,240	117,951	244,618	236,225
Research and development	53,145	49,954	106,821	99,695
General and administrative	36,088	41,230	71,494	84,086
Total operating expenses	211,473	209,135	422,933	420,006
Loss from operations	(49,243)	(59,395)	(109,455)	(110,577)
Other (expense) income, net	199	38,643	6,029	19,989
Interest income, net	12,283	4,120	26,333	9,143
Loss before benefit for income taxes	(37,159)	(16,632)	(89,151)	(121,423)
(Benefit) provision for income taxes	(15,659)	49,565	(33,126)	(43,982)
Net loss	$ (21,500)	$ (66,197)	$ (56,025)	$ (77,441)
Earnings Per Share [Abstract]
Basic	$ (0.34)	$ (1.02)	$ (0.88)	$ (1.20)
Diluted	$ (0.34)	$ (1.02)	$ (0.88)	$ (1.20)
Weighted average shares outstanding:
Basic	63,699	64,621	64,009	64,538
Diluted	63,699	64,621	64,009	64,538
License and solutions
Revenue:
Total revenue	$ 152,463	$ 149,843	$ 301,111	$ 310,068
Cost of revenue:
Total cost of revenue	67,326	70,833	138,903	140,346
Maintenance
Revenue:
Total revenue	85,056	78,628	170,024	156,994
Cost of revenue:
Total cost of revenue	10,647	9,567	20,848	18,784
Services and other
Revenue:
Total revenue	19,644	14,367	35,336	26,595
Cost of revenue:
Total cost of revenue	$ 16,960	$ 12,698	$ 33,242	$ 25,098

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Net loss	$ (21,500)	$ (66,197)	$ (56,025)	$ (77,441)
Other comprehensive income (loss):
Foreign currency translation adjustments	4,870	6,710	(6,331)	(2,155)
Total other comprehensive income (loss)	4,870	6,710	(6,331)	(2,155)
Comprehensive loss	$ (16,630)	$ (59,487)	$ (62,356)	$ (79,596)

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 130,753	$ 241,209
Accounts receivable, net	129,837	122,789
Current contract assets, net	357,847	367,539
Prepaid expenses and other current assets	26,314	27,728
Prepaid income taxes	3,021	11,424
Total current assets	709,251	833,064
Property, equipment and leasehold improvements, net	16,756	18,670
Goodwill	8,329,997	8,330,811
Finite-Lived Intangible Assets, Net	4,428,636	4,659,657
Non-current contract assets, net	606,318	536,104
Contract costs	18,971	15,992
Operating lease right-of-use assets	97,035	67,642
Deferred income tax assets	11,392	10,638
Other non-current assets	9,488	13,474
Total assets	14,227,844	14,486,052
Current liabilities:
Accounts payable	16,517	20,299
Accrued expenses and other current liabilities	81,059	99,526
Current operating lease liabilities	13,810	12,928
Income taxes payable	28,988	46,205
Current contract liabilities	135,522	151,450
Total current liabilities	371,983	352,427
Non-current contract liabilities	35,036	30,103
Deferred income tax liabilities	867,927	957,911
Non-current operating lease liabilities	83,812	55,442
Other non-current liabilities	20,013	19,240
Stockholders' equity:
Common Stock, Value, Issued	6	6
Additional paid-in capital	13,241,067	13,194,028
Accumulated deficit	(97,416)	(41,391)
Accumulated other comprehensive (loss) income	$ (3,895)	$ 2,436
Treasury Stock, Common, Shares	1,549,510	487,626
Treasury Stock, Value	$ (290,689)	$ (84,150)
Total stockholders’ equity	12,849,073	13,070,929
Total liabilities and stockholders’ equity	$ 14,227,844	$ 14,486,052
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	600,000,000	600,000,000
Common stock, issued	65,170,178	64,952,868
Common stock, outstanding	63,620,668	64,465,242
Related Party
Current assets:
Receivables from related parties	$ 61,479	$ 62,375
Current liabilities:
Due to related parties	$ 96,087	$ 22,019

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock, Common
Common stock, issued		64,425,378
Additional paid-in capital			$ 13,107,570
Accumulated deficit				$ 66,369
Accumulated other comprehensive (loss) income					$ (4,588)
Total stockholders’ equity	$ 13,169,357	$ 6
Net loss	(11,244)			(11,244)
Total other comprehensive income (loss)	(8,865)				(8,865)
Issuance of shares of common stock (in shares)		71,547
Issuance of shares of common stock, amount	8,489		8,489
Issuance of restricted stock units and net share settlement related to withholding taxes (in shares)		34,375
Issuance of restricted stock units and net share settlement related to withholding taxes, amount	(4,683)		(4,683)
Stock-based compensation	17,736		17,736
Net loss	(77,441)
Total other comprehensive income (loss)	(2,155)
Common stock, issued		64,531,300
Additional paid-in capital			13,129,112
Accumulated deficit				55,125
Accumulated other comprehensive (loss) income					(13,453)
Total stockholders’ equity	13,170,790	$ 6
Net loss	(66,197)			(66,197)
Total other comprehensive income (loss)	6,710				6,710
Issuance of shares of common stock (in shares)		202,506
Issuance of shares of common stock, amount	16,977		16,977
Issuance of restricted stock units and net share settlement related to withholding taxes (in shares)		33,949
Issuance of restricted stock units and net share settlement related to withholding taxes, amount	(4,656)		(4,656)
Stock-based compensation	23,441		23,441
Common stock, issued		64,767,755
Additional paid-in capital			13,164,874
Accumulated deficit				(11,072)
Accumulated other comprehensive (loss) income					(6,743)
Total stockholders’ equity	$ 13,147,065	$ 6
Common stock, issued	64,952,868	64,952,868				487,626
Additional paid-in capital	$ 13,194,028		13,194,028
Accumulated deficit	(41,391)			(41,391)
Accumulated other comprehensive (loss) income	2,436				2,436
Total stockholders’ equity	13,070,929	$ 6				$ (84,150)
Net loss	(34,525)			(34,525)
Total other comprehensive income (loss)	(11,201)				(11,201)
Issuance of shares of common stock (in shares)		29,644
Issuance of shares of common stock, amount	3,826		3,826
Issuance of restricted stock units and net share settlement related to withholding taxes (in shares)		47,896
Issuance of restricted stock units and net share settlement related to withholding taxes, amount	(4,585)		(4,585)
Repurchase of common stock, amount	(114,224)		(20,210)			$ 134,434
Stock-based compensation	16,699		16,699
Treasury Stock, Shares, Acquired						686,843
Net loss	(56,025)
Total other comprehensive income (loss)	(6,331)
Common stock, issued		65,030,408				1,174,469
Additional paid-in capital			13,230,178
Accumulated deficit				(75,916)
Accumulated other comprehensive (loss) income					(8,765)
Total stockholders’ equity	12,926,919	$ 6				$ (218,584)
Net loss	(21,500)			(21,500)
Total other comprehensive income (loss)	4,870				4,870
Issuance of shares of common stock (in shares)		32,212
Issuance of shares of common stock, amount	4,268		4,268
Issuance of restricted stock units and net share settlement related to withholding taxes (in shares)		107,558
Issuance of restricted stock units and net share settlement related to withholding taxes, amount	(9,590)		(9,590)
Repurchase of common stock, amount	(72,105)					$ 72,105
Stock-based compensation	$ 16,211		16,211
Treasury Stock, Shares, Acquired						375,041
Common stock, issued	65,170,178	65,170,178				1,549,510
Additional paid-in capital	$ 13,241,067		$ 13,241,067
Accumulated deficit	(97,416)			$ (97,416)
Accumulated other comprehensive (loss) income	(3,895)				$ (3,895)
Total stockholders’ equity	$ 12,849,073	$ 6				$ (290,689)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net loss	$ (56,025)	$ (77,441)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	246,386	245,102
Reduction in the carrying amount of right-of-use assets	6,932	6,562
Net foreign currency losses	6,168	4,744
Stock-based compensation	32,910	41,177
Deferred income taxes	(94,210)	(106,384)
Provision for uncollectible receivables	3,385	3,228
Other non-cash operating activities	(629)	(593)
Changes in assets and liabilities:
Accounts receivable	(10,709)	(33,691)
Contract assets	(57,926)	(77,864)
Contract costs	(3,059)	(3,547)
Lease liabilities	(7,108)	(6,609)
Prepaid expenses, prepaid income taxes, and other assets	(17,606)	34,177
Liability from foreign currency forward contract	0	15,319
Accounts payable, accrued expenses, income taxes payable and other liabilities	9,258	(1,490)
Contract liabilities	(10,959)	11,922
Net cash provided by operating activities		54,612
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements	(1,437)	(2,844)
Payments for business acquisitions, net of cash acquired	(8,273)	(74,947)
Payments to Acquire Equity Method Investments	521	465
Payments for capitalized computer software development costs	(131)	(329)
Payments for Software	(12,500)	0
Net cash used in investing activities	(22,862)	(78,585)
Cash flows from financing activities:
Issuance of shares of common stock	7,920	25,605
Payments for Repurchase of Common Stock	(186,329)	0
Payment of tax withholding obligations related to restricted stock	(13,843)	(11,698)
Deferred business acquisition payments	0	(1,363)
Repayments of amounts borrowed under term loan	0	(12,000)
Net transfers from Parent Company	68,755	29,872
Payments of debt issuance costs	0	(2,375)
Net cash (used in) provided by financing activities	(123,497)	28,041
Effect of exchange rate changes on cash and cash equivalents	(10,905)	(7,705)
Decrease in cash and cash equivalents	(110,456)	(3,637)
Cash and cash equivalents, beginning of period	241,209	449,725
Cash and cash equivalents, end of period	130,753
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses	92	(735)
Lease liabilities arising from obtaining right-of-use assets	36,144	68
Supplemental disclosure of cash flow information:
Income taxes paid, net	66,290	29,388
Interest paid	2,433	9,819
Reconciliation to amounts within the unaudited consolidated balance sheets: [Abstract]
Cash, cash equivalents, and restricted cash, end of period	$ 130,753	$ 446,088

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Interim Unaudited Consolidated Financial Statements - USD ($)
$ in Millions

3 Months Ended

6 Months Ended

Aug. 29, 2022

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2023

Dec. 31, 2022

Jun. 30, 2023

Contractors [Abstract]

Revenue from Contract with Customer, Including Assessed Tax Russia

$ 5.8

$ 16.8

$ 13.0

$ 26.8

Assets Russia

$ 35.2

$ 35.2

$ 39.7

Consideration transferred

$ 87.2

Nature of Operations

Organization and Basis of Presentation

AspenTech, together with its subsidiaries (the “Company”), is a leading industrial software company that develops solutions to address complex industrial environments where it is critical to optimize the asset design, operations and maintenance lifecycle. The Company’s unique combination of product capabilities, deep domain expertise and award-winning innovation helps customers across diverse end markets in capital-intensive industries improve their operational excellence while achieving sustainability goals.

The Company has revenue from customers in 117 countries as of December 31, 2023.

Basis of Presentation

The Company has prepared the accompanying unaudited condensed consolidated financial statements as of December 31, 2023, and for the second quarter of fiscal 2024 and 2023 pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and in accordance with generally accepted accounting principles in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The actual results that the Company experiences may differ materially from these estimates.

Russia and Ukraine

The Company maintains limited operations in Russia and licenses software and provides related services to customers in Russia and areas of Ukraine that are not under sanction. The Company had revenue of approximately $5.8 million and $16.8 million for the three months ended December 31, 2023 and 2022, respectively, and $13.0 million and $26.8 million for the six months ended December 31, 2023 and 2022, respectively. The Company had total assets of approximately $35.2 million and $39.7 million as of December 31, 2023 and June 30, 2023, respectively, related to operations in Russia.

The Company may be required to cease or suspend operations in Russia or, should the conflict or the effects of sanctions, export control measures and business restrictions worsen, the Company may voluntarily elect to do so. The Company has terminated all engineering services in Russia and the Company has limited its operations to contract renewals with existing customers. While the Company continues to evaluate the impact of the various sanctions and restrictions imposed by the United States and other governments on the Company’s ability to conduct business in Russia, there is no assurance that the Company will be able to do so in the future. Any disruption to, or suspension of, the Company’s business and operations in Russia would result in the loss of revenue and assets from the business in Russia and would negatively impact growth. The Company may also suffer reputational harm as a result of continued operations in Russia, which may adversely impact sales and other businesses in other countries.

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Significant Accounting Policies

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. There were no material changes to our significant accounting policies during the six months ended December 31, 2023.

(a)     Revenue Recognition

Prior to the third quarter of fiscal 2023, Open Systems International, Inc. (“OSI Inc.”) software licenses were primarily sold with professional services and hardware to form an integrated solution for the customer. The professional services and hardware sold with the license significantly customized the underlying functionality and usability of the software. As such, none of the software license, hardware or professional services were considered distinct within the context of the contract and were therefore considered a single performance obligation. Because the integrated solution had no alternative use to the Company and the Company held an enforceable right to payment, revenue was recognized over time (typically one to two years) using an input measure of progress based on the ratio of actual costs incurred to date to the total estimated cost to

complete. For integrated solution contracts executed prior to the third quarter of fiscal 2023, revenue continues to be recognized over time until the implementation is complete.

At the start of the third quarter of fiscal 2023, the Company completed a series of business transformation activities relating to OSI Inc. products and services in conjunction with its ongoing integration activities. As part of a change in the related go-to-market strategy, the Company has invested in tools and processes to simplify and streamline the implementation services to significantly reduce the complexity and interdependency associated with its software. In addition, the Company has identified and trained several third-party implementation service partners to operate autonomously and directly with OSI Inc. customers to implement its products.

Accordingly, effective January 1, 2023, following the completion of these business transformation activities, for all prospective OSI Inc. contracts entered into after January 1, 2023, the Company accounts for the OSI Inc. software license, hardware, maintenance, and professional services as separate and distinct performance obligations. Software license revenue is recognized at a point in time when control transfers to the customer, which generally aligns with the first day of the contractual term. Hardware revenue is recognized at the point in time when control transfers to the customer, which generally occurs upon delivery. The recognition of maintenance revenue at OSI Inc. is unchanged and continues to be recognized ratably over the maintenance term. Professional services revenue is recognized over time (typically one to two years) using the proportional performance method by comparing the costs incurred to the total estimated project costs.

(b)     Recently Issued Accounting Standards Not Yet Adopted

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Revenue from Contracts with Customers (Notes)

6 Months Ended

Dec. 31, 2023

Revenue from Contracts with Customers [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue from Contracts with Customers

Contract Assets and Contract Liabilities

Contract assets are subject to credit risk and reviewed in accordance with Accounting Standards Codification (“ASC”) 326, Financial Instruments Credit Losses. The Company monitors the credit quality of customer contract asset balances on an individual basis, at each reporting date, through credit characteristics, geographic location, and the industry in which they operate. The Company recognizes an impairment on contract assets if, subsequent to contract inception, it becomes probable payment is not collectible. An allowance for expected credit loss reflects losses expected over the remaining term of the contract asset and is determined based upon historical losses, customer-specific factors, and current economic conditions. The potential impact of credit losses on contract assets was immaterial as of December 31, 2023.

The Company’s contract assets and contract liabilities were as follows as of December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Contract assets	$	964,165	$	903,643
Contract liabilities	(170,558)		(181,553)
Net contract assets	$	793,607	$	722,090

The majority of the Company’s contract balances are related to arrangements where revenue is recognized at a point in time and payments are made according to a contractual billing schedule. The change in the net contract asset balance during the six months ended December 31, 2023 was primarily due to greater revenue recognition as compared to billings. Revenue recognized from the contract liability balance as of June 30, 2023, was $47.4 million and $88.4 million for the three and six months ended December 31, 2023, respectively.

Transaction Price Allocated to Remaining Performance Obligations

The following table includes the aggregate amount of the transaction price allocated as of December 31, 2023 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Year Ending June 30,
	2024		2025		2026		2027		2028		Thereafter		Total
	(Dollars in Thousands)
License and solutions	$	104,615	$	98,569	$	45,664	$	20,742	$	6,911	$	2,243	$	278,744
Maintenance	165,061		257,890		192,502		134,883		85,101		44,596		880,033
Services and other	32,075		40,838		5,903		1,326		721		426		81,289
Total	$	301,751	$	397,297	$	244,069	$	156,951	$	92,733	$	47,265	$	1,240,066

Disaggregated Revenue Information

The table below reflects disaggregated revenues by business for the three months and six months ended December 31, 2023 and 2022:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Heritage AspenTech	$	167,437	$	167,442	$	343,180	$	343,848
Subsurface Science & Engineering	28,574		29,726		52,655		62,714
OSI, Inc.	61,152		45,670		110,636		87,095
Total	$	257,163	$	242,838	$	506,471	$	493,657

The Company did not have any customers that accounted for 10 percent or more of the Company’s revenues for the three and six months ended December 31, 2023 and 2022, respectively.

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Acquisitions - USD ($) $ in Thousands	Aug. 29, 2022	Oct. 10, 2021	Dec. 31, 2023	Jun. 30, 2023
Text Block [Abstract]
Consideration transferred	$ 87,200
Identifiable intangible assets	31,500
Goodwill	$ 63,000		$ 8,329,997	$ 8,330,811
Heritage AspenTech
Text Block [Abstract]
Consideration transferred		$ 6,014,000

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Intangible Assets

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets 

Intangible assets consist of the following as of December 31, 2023 and June 30, 2023:

	December 31, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(438,942)		(19,536)		(578,144)		(9,308)		(1,045,930)
Net carrying amount	$	1,464,657	$	444,864	$	2,504,397	$	14,718	$	4,428,636
	June 30, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	11,526	$	5,462,066
Less: Accumulated amortization	(341,964)		(13,821)		(437,673)		(8,951)		(802,409)
Net carrying amount	$	1,561,635	$	450,579	$	2,644,868	$	2,575	$	4,659,657

Of the total intangible assets net carrying amount of $4.4 billion as of December 31, 2023, $430.0 million relates to the registered trademarks associated with the Transaction (as defined in Note 15, “Related-Party Transactions”) that are not subject to amortization. Total intangible asset amortization expense was $121.7 million and $121.2 million during the three months ended December 31, 2023 and 2022, respectively

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Goodwill

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The changes in the carrying amount of goodwill during the six months ended December 31, 2023 were as follows:

	Carrying Value
	(Dollars in Thousands)
Balance as of June 30, 2023	$	8,330,811
Foreign currency translation	(814)
Balance as of December 31, 2023	$	8,329,997

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Fair Value

6 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The Company determines fair value by utilizing a fair value hierarchy that ranks the quality and reliability of the information used in its determination. Fair values determined using “Level 1 inputs” utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined using “Level 2 inputs” utilize data points that are observable, such as quoted prices, interest rates and yield curves for similar assets and liabilities. 

Cash equivalents are reported at fair value utilizing quoted market prices in identical markets, or “Level 1 Inputs.” The Company’s cash equivalents consist of short-term money market instruments.

Equity method investments are reported at fair value calculated in accordance with the market approach, utilizing market consensus pricing models with quoted prices that are directly or indirectly observable, or “Level 2 Inputs.”

The following table summarizes financial assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	December 31, 2023
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	7,715	$	—
Equity method investments	$	—	$	2,398

	June 30, 2023
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	132,918	$	—
Equity method investments	$	—	$	2,673

Financial instruments not measured or recorded at fair value in the accompanying condensed consolidated financial statements consist of accounts receivable, accounts payable and accrued liabilities. The estimated fair value of these financial instruments approximates their carrying value. The estimated fair value of the borrowings under the Amended and Restated Credit Agreement (described below in Note 10, “Debt”) approximates its carrying value due to the floating interest rate.

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Credit Agreement

6 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Credit Agreement

Debt

Credit Agreement with Related Party

On December 23, 2022, the Company entered into a credit agreement with Emerson (the “Emerson Credit Agreement”), which provided for an aggregate term loan commitment of $630.0 million. Under the terms of the Emerson Credit Agreement, the Company would have used the proceeds from borrowings under the Emerson Credit Agreement to pay, in part, the cash consideration for funding the acquisition of Mining Software Holdings Pty Ltd (“Micromine”) and to pay the fees and expenses incurred in connection with the Emerson Credit Agreement.

On August 18, 2023, the Emerson Credit Agreement was terminated in connection with the termination of the agreement to purchase Micromine. There was no amount outstanding under the Emerson Credit Agreement at the time it was terminated.

Amended and Restated Credit Agreement

The Company has an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”) that provides for a $200.0 million secured revolving credit facility.

As of December 31, 2023, after taking into account eligible outstanding letters of credit allowable per the Amended and Restated Credit Agreement in the aggregate amount of $2.6 million, the Company had $197.4 million available for borrowing under the Amended and Restated Credit Agreement. Any outstanding balances of the indebtedness under the revolving credit facility will mature on December 23, 2024.

The Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including restrictions on incurring additional debt, liens, fundamental changes, asset sales, restricted payments (including dividends) and transactions with affiliates. There are also financial covenants measured at the end of each fiscal quarter including a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 2.50 to 1.00. As of December 31, 2023, the Company was in compliance with these covenants.

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Stock-Based Compensation

6 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation 

The stock-based compensation expense under all equity plans and its classification in the condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Cost of license and solutions	$	602	$	1,200	$	1,282	$	1,919
Cost of maintenance	729		474		1,217		1,035
Cost of services and other	360		428		858		858
Selling and marketing	2,707		3,826		5,649		7,191
Research and development	3,719		4,240		8,272		7,858
General and administrative	8,094		13,273		15,632		22,316
Total stock-based compensation	$	16,211	$	23,441	$	32,910	$	41,177

Stock Options

The table below summarizes activities related to stock options for the six months ended December 31, 2023:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
				(in years)	(in thousands)
Outstanding as of June 30, 2023	1,005,826	$	144.17	6.44	$	32,935
Granted	1,471	$	171.56
Exercised	(49,671)	$	134.25
Cancelled / Forfeited	(7,958)	$	184.16
Outstanding as of December 31, 2023	949,668	$	161.10	5.63	$	72,007
Exercisable as of December 31, 2023	683,313	$	130.41	4.88	$	61,341
Vested and expected to vest as of December 31, 2023	933,517	$	143.75	5.58	$	71,386

__________

(1)     The aggregate intrinsic value in this table represents any excess of the closing market price of the Company’s common stock as of December 31, 2023 ($220.15) over the exercise price of the underlying options.

Restricted Stock Units and Performance Stock Units

Restricted stock units and performance stock units are not included in issued and outstanding common stock until the units are vested and the underlying shares are settled. The table below summarizes activities related to restricted stock units and performance stock units for the six months ended December 31, 2023:

	Number of Shares Underlying Restricted Units — Performance-Based Awards		Number of Shares Underlying Restricted Units — Time-Based Awards
	(Dollars in Thousands)
Outstanding as of June 30, 2023	—		456,368
Granted	94,174		186,938
Settled	—		(229,807)
Cancelled / Forfeited	(716)		(12,792)
Outstanding as of December 31, 2023	93,458		400,707
Weighted average remaining recognition period of outstanding restricted units (in years)	2.50		3.03
Unrecognized stock-based compensation expense of outstanding restricted units	$	8,824	$	43,170
Aggregate intrinsic value of outstanding restricted units	$	14,418	$	86,235

The weighted average grant date fair value per restricted stock unit was $192.21 and $246.15 during the three months ended December 31, 2023 and 2022, respectively, and $193.74 and $209.79 during the six months ended December 31, 2023 and 2022, respectively. The weighted average grant date fair value per performance stock unit was $199.06 and $194.03 during the three and six months ended December 31, 2023, respectively, and there were no granted or outstanding performance stock units during the three and six months ended December 31, 2022.

Beginning in fiscal 2024, the Company granted performance stock units with a performance condition and service condition. These performance stock units vest on a cliff basis in three years based upon the achievement of predefined performance goals, with the ability for 25% of granted awards to vest on an accelerated basis in each of the first two years. The performance goal relates to the sum of (i) annual contract value growth and (ii) free cash flow margin over the performance period. Up to 175% of the performance stock units could vest upon achievement of the performance goals. Conversely, if a minimum performance goal is not met, none of the performance stock units will vest. On a quarterly basis, management evaluates the probability that the threshold performance goals will be achieved, if at all, and the anticipated level of attainment to determine the amount of compensation expense to record in the condensed consolidated financial statements.

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Net Income Per Share

6 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net Income Per Share

Net Loss Per Share

Basic (loss) income per share is determined by dividing net (loss) income by the weighted average common shares outstanding during the period. Diluted (loss) income per share is determined by dividing net (loss) income by diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares. To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted net (loss) income per share based on the treasury stock method.

The calculations of basic and diluted net loss per share and basic and dilutive weighted average shares outstanding for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars and Shares in Thousands, Except per Share Data)
Net loss	$	(21,500)	$	(66,197)	$	(56,025)	$	(77,441)
Basic weighted average shares outstanding	63,699		64,621		64,009		64,538
Dilutive weighted average shares outstanding	63,699		64,621		64,009		64,538
Net loss per share
Basic	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)
Dilutive	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)

For the three and six months ended December 31, 2023, and 2022 certain employee equity awards were anti-dilutive based on the treasury stock method. The following employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive as of December 31, 2023 and 2022:

	Three Months Ended December 31,		Six Months Ended December 31,
	2023	2022	2023	2022
	(Shares in Thousands)
Employee equity awards	1,433	1,574	1,352	1,479

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Stock Repurchases

6 Months Ended

Dec. 31, 2023

Equity [Abstract]

Treasury Stock

Stock Repurchases

On May 5, 2023, the Company entered into an accelerated share repurchase program (“ASR Program”) with JPMorgan to repurchase an aggregate of $100.0 million of the Company’s common stock. Pursuant to the terms of the ASR Program, the Company made an initial payment to JPMorgan and received an initial delivery of 487,626 shares of the Company’s common stock, which represented approximately 80% of the total number of shares of the Company’s common stock expected to be purchased under the ASR Program.

The ASR Program was settled on August 7, 2023, resulting in an additional delivery of 107,045 shares of the Company’s common stock. The Company repurchased in total 594,671 shares of common stock for $100.0 million as part of the ASR Program. The $100.0 million payment made to JPMorgan was recognized as a reduction to stockholders’ equity, consisting of an increase in treasury stock representing the value of the 594,671 shares received upon settlement, offset by an increase to additional-paid-in-capital for the value of the shares repurchased in excess of the $100.0 million payment.

On August 1, 2023, the Company announced that its Board of Directors approved a share repurchase program (the “Share Repurchase Authorization”) pursuant to which an aggregate $300.0 million of its common stock may be repurchased, by means of open market transactions, block transactions, privately negotiated purchase transactions or any other purchase techniques, including 10b5-1 trading plans. The timing and amount of any shares repurchased under the Share Repurchase Authorization are based on market conditions and other factors. All shares of the Company’s common stock repurchased have been recorded as treasury stock under the cost method. The Company reflects share repurchases in its condensed consolidated financial statements once the transaction is settled.

During the second quarter of fiscal 2024, the Company repurchased 375,041 shares for $72.1 million under the Share Repurchase Authorization. As of December 31, 2023, a total of 954,839 shares have been repurchased under the Share Repurchase Authorization for $186.3 million, with the total remaining value being $113.7 million.

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Income Taxes

3 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Benefit) Provision for Income Taxes

The Company computes its tax provision (benefit) for interim periods by applying the estimated annual effective tax rate (“AETR”) to year-to-date income from operations and adjusting for discrete items arising in that quarter. However, if the Company is unable to make a reliable estimate of its AETR, then the actual effective tax rate for the year-to-date period may be the best estimate. For the three months ended September 30, 2022, the Company computed its tax provision (benefit) using the AETR approach. However, starting with the six months ended December 31, 2022, the Company recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate to be applied to the year-to-date pretax (loss) income given small changes in the forecast of pre-tax (loss) income would result in significant changes in the AETR. For the three and six months ended December 31, 2023, the Company again recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate.

Benefit for income taxes was $15.7 million for the three months ended December 31, 2023 and income tax expense was $49.6 million for the three months ended December 31, 2022, resulting in effective tax rates of 42.1% and (298.0)%, respectively. Income tax benefit primarily increased due to the prior year’s change in the Company’s approach to computing its tax provision (benefit) for interim periods to an actual effective tax rate method.

Benefit for income taxes was $33.1 million and $44.0 million for the six months ended December 31, 2023 and 2022, respectively, resulting in effective tax rates of 37.2% and 36.2%, respectively. Income tax benefit decreased primarily due to an increase in year-to-date earnings and a reduced Foreign-Derived Intangible Income (“FDII”) deduction recorded in the current period.

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Comprehensive Text Block List

6 Months Ended

Dec. 31, 2023

Text Block [Abstract]

Related Party Transactions Disclosure

Related-Party Transactions

On October 10, 2021, Emerson entered into a definitive agreement (the “Transaction Agreement”) with AspenTech Corporation (f/k/a Aspen Technology, Inc.) (“Heritage AspenTech”) to contribute the Emerson industrial software business (the “Industrial Software Business”), along with $6.014 billion in cash, to create AspenTech (the “Transaction”). The Industrial Software Business included OSI Inc. and the Geological Simulation Software business (“GSS”), which the Company has renamed as Subsurface Science & Engineering (“SSE”). The Transaction closed on May 16, 2022 (“Closing Date”). Emerson owned approximately 56% of AspenTech on a fully diluted basis as of December 31, 2023.

The Company utilizes some aspects of Emerson’s centralized treasury function to manage the working capital and financing needs of its business operations. This function oversees a cash pooling arrangement which sweeps certain Company cash accounts into pooled Emerson cash accounts on a daily basis and are reflected as receivables from related parties in the condensed consolidated balance sheet. Conversely, any cash funded to the Company from these pooled Emerson cash accounts are reflected as due to related parties in the condensed consolidated balance sheet. The aggregate net activity between the Company and Emerson associated with the cash pooling arrangement is reflected within cash flows from financing activities as net transfers from parent within the condensed consolidated statements of cash flows.

Before the closing of the Transaction, the Industrial Software Business was charged for costs directly attributable to the SSE business and OSI Inc. and was allocated a portion of Emerson’s costs, including general corporate costs, information technology costs, insurance and other benefit costs, and shared service and other costs. All of these costs are reflected in the Company’s condensed consolidated financial statements. Management believes the methodologies and assumptions used to allocate these costs are reasonable.

At the closing of the Transaction, Emerson and the Company entered into a transition service agreement (the “Transition Service Agreement”) for the provision of certain transitionary services from Emerson to the Company. Pursuant to the Transition Service Agreement, Emerson provides the Company with certain services, including information technology, human resources and other specified services, as well as access to certain of Emerson’s existing facilities. Transition Service Agreement related activities have been recorded as cost of goods sold or operating expenses from related parties and resulting balances have been presented as receivable from or due to related parties in the condensed consolidated financial statements presented.

In connection with the closing of the Transaction, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) and a tax matters agreement (the “Tax Matters Agreement”) with Emerson. The Registration Rights Agreement grants Emerson certain market registration rights, including demand registration rights and piggyback registration rights, with respect to its registrable securities. The Company has agreed to pay out-of-pocket fees and expenses in connection with such registration, subject to certain exceptions. The Tax Matters Agreement governs the rights and obligations that the Company and Emerson have with respect to taxes of the Company and certain Emerson subsidiaries. In addition, under the terms of the Tax Matters Agreement, the Company agreed to indemnify Emerson and its affiliates against any and all tax-related liabilities incurred by them relating to the Transaction and certain related business reorganizations to the extent such tax-related liabilities are caused by any action taken by the Company.

Receivables from related parties and due to related parties reported in the condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023 include the following:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Interest bearing receivables from related parties	$	60,870	$	61,948
Trade receivables from related parties	609		427
Receivables from related parties	$	61,479	$	62,375
Interest bearing payables to related parties	$	95,860	$	21,866
Trade payables to related parties	227		153
Due to related parties	$	96,087	$	22,019

Allocations and charges from Emerson are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Information technology	$	370	$	763	$	1,346	$	1,574
Shared services and other	$	266	$	1,157	$	640	$	3,895

Corporate costs, human resources, and insurance and other benefits are recorded in general and administrative expenses and information technology, facility charges, and shared services and other are allocated to cost of goods sold and operating expenses based on systemic methods.

Before the closing of the Transaction, OSI Inc. and the SSE business engaged in various transactions to sell software and purchase goods in the ordinary course of business with affiliates of Emerson. At the closing, the Company and Emerson entered into a commercial agreement to allow Emerson to distribute software and services from the Company (the “Commercial Agreement”). Pursuant to the Commercial Agreement as amended from time to time in accordance with the Stockholders Agreement (as defined below), AspenTech grants Emerson the right to distribute, on a non-exclusive basis, certain (i) existing Heritage AspenTech products, (ii) existing Emerson products transferred to AspenTech pursuant to the Transaction Agreement and (iii) future AspenTech products as mutually agreed upon, in each case, to end-users through Emerson acting as an agent, reseller or original equipment manufacturer. Commercial Agreement-related activities have been recorded as revenues and expenses from related parties and resulting trade balances have been presented as trade receivables from related parties in the condensed consolidated financial statements presented. Revenue and purchases from Emerson affiliates for the three months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Revenue from Emerson affiliates	$	43	$	4	$	310	$	567
Purchases from Emerson affiliates	$	118	$	85	$	189	$	1,786

Emerson Share Maintenance Rights

Immediately following the closing of the Transaction, Emerson beneficially owned 55% of the fully diluted shares of AspenTech common stock. At the Closing Date, the Company and Emerson entered into a stockholders agreement (the “Stockholders Agreement”), which sets forth, among other matters, the right of Emerson to nominate directors to the Company’s board of directors, the right of Emerson to nominate the chair of the Company’s board of directors, the composition of the committees of the Company’s board of directors, certain consent rights of Emerson to certain material actions taken by the Company and consent rights with respect to modifications or changes to the Company’s business strategy. Under the Stockholders Agreement, Emerson also has the right to acquire additional equity securities of AspenTech pursuant to pre-agreed procedures and rights in order to maintain its 55% ownership interest. No additional shares of common stock, or any other equity securities of AspenTech, were issued by the Company to Emerson subsequent to the closing of the Transaction through December 31, 2023.

Business Combination with Related Party

The Inmation acquisition completed on August 29, 2022 was considered a related party transaction. Refer to Note 4, “Acquisitions”, to our condensed consolidated financial statements for further discussion.

Credit Agreement with Related Party

On December 23, 2022, the Company entered into the Emerson Credit Agreement with Emerson, which provided for an aggregate term loan commitment of $630.0 million, and on August 18, 2023, the Emerson Credit Agreement was terminated in connection with the termination of the agreement to purchase Micromine. There was no amount outstanding under the Emerson Credit Agreement at the time it was terminated. Refer to Note 10, “Debt”, to our condensed consolidated financial statements for further discussion.

Plantweb Optics Analytics

On July 28, 2023, the Company entered into the Plantweb Optics Analytics Assignment and License Agreement with Emerson for the purchase of Emerson’s Plantweb Optics Analytics software and the perpetual and royalty-free licensing of other Emerson intellectual property for $12.5 million in the aggregate.

The Company is currently integrating the purchased software and licensed intellectual property with its existing asset performance management product suite and accordingly has capitalized the full purchase price in accordance with ASC 985-20, “Costs of Software to be Sold, Leased, or Marketed.”

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Segment Information

6 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment and Geographic Information

The Company operates in one operating and reportable segment. The Company’s chief operating decision maker is its President and Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis.

Geographic Information

Summarized below is information about the Company’s geographic operations:

	Revenue by Destination
	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Americas	$	148,358	$	114,463	$	281,374	$	245,321
Asia, Middle East and Africa	57,030		62,043		114,715		115,714
Europe	51,775		66,332		110,382		132,622
Total	$	257,163	$	242,838	$	506,471	$	493,657

Americas included revenue in the United States of $132.7 million and $88.1 million for the three months ended December 31, 2023 and 2022, respectively, and $228.7 million and $200.4 million for the six months ended December 31, 2023 and 2022, respectively.

	Property, Equipment, and
	Leasehold Improvements, Net
	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Americas	$	13,788	$	15,793
Asia, Middle East and Africa	1,875		1,923
Europe	1,093		954
Total	$	16,756	$	18,670

Property, equipment, and leasehold improvements, net located in the United States were $11.8 million and $13.4 million as of December 31, 2023 and June 30, 2023, respectively.

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Regulated Operations

6 Months Ended

Dec. 31, 2023

Regulated Operations [Abstract]

Supplemental Balance Sheet Disclosures [Text Block]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets consist of the following:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Compensation-related	$	54,729	$	62,162
Professional fees	4,042		6,265
Accrued taxes	2,941		3,065
Royalties and outside commissions	422		654
Acquisition-related	5		8,984
Other	18,920		18,396
Total accrued expenses and other current liabilities	$	81,059	$	99,526

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Intangible Assets (Policies)

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets 

Intangible assets consist of the following as of December 31, 2023 and June 30, 2023:

	December 31, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(438,942)		(19,536)		(578,144)		(9,308)		(1,045,930)
Net carrying amount	$	1,464,657	$	444,864	$	2,504,397	$	14,718	$	4,428,636
	June 30, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	11,526	$	5,462,066
Less: Accumulated amortization	(341,964)		(13,821)		(437,673)		(8,951)		(802,409)
Net carrying amount	$	1,561,635	$	450,579	$	2,644,868	$	2,575	$	4,659,657

Of the total intangible assets net carrying amount of $4.4 billion as of December 31, 2023, $430.0 million relates to the registered trademarks associated with the Transaction (as defined in Note 15, “Related-Party Transactions”) that are not subject to amortization. Total intangible asset amortization expense was $121.7 million and $121.2 million during the three months ended December 31, 2023 and 2022, respectively

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Goodwill (Policies)

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The changes in the carrying amount of goodwill during the six months ended December 31, 2023 were as follows:

	Carrying Value
	(Dollars in Thousands)
Balance as of June 30, 2023	$	8,330,811
Foreign currency translation	(814)
Balance as of December 31, 2023	$	8,329,997

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Leases, Codification Topic 842 (Policies)

6 Months Ended

Dec. 31, 2023

Leases [Abstract]

Lessee, Leases [Policy Text Block]

Leases

On December 26, 2023, the Company entered into an amendment to its existing lease agreement at its principal executive offices located in Bedford, Massachusetts (the “Lease Amendment”). Under the Lease Amendment, the Company: (i) extended the term of the existing lease for approximately 132,000 rentable square feet from March 2025 to March 2038, and (ii) obtained an additional approximate 23,000 rentable square feet of office space, also through March 2038.

The Company accounted for the Lease Amendment as a lease modification. Accordingly, the right-of-use assets and lease liabilities were remeasured using an incremental borrowing rate at the date of modification. This lease modification resulted in the recording of an additional right-of-use asset and lease liability of $32.9 million recognized on the condensed consolidated balance sheet, which is reflected net of a $25.4 million leasehold improvement incentive to be paid directly to external vendors by the landlord under the Lease Amendment. As invoices are paid by the landlord during construction of the

improvements, the Company will increase the balances of the lease liability and construction-in-process assets, which is included within property, equipment and leasehold improvements, net in the condensed consolidated balance sheets. When placed into service, the construction-in-process assets will be reclassified to leasehold improvements and depreciated over the shorter of the remaining term of the lease or the life of the underlying asset.

Operating lease costs are recognized on a straight-line basis over the term of the lease. The components of total lease expense for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Operating lease expense	$	5,023	$	4,352	$	9,489	$	8,387
Variable lease expense	193		216		416		425
Short term lease expense	147		199		304		(96)
Total lease expense	$	5,363	$	4,767	$	10,209	$	8,716

The following table summarizes the balances of the Company’s operating lease right-of-use assets and operating lease liabilities as of December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Operating lease right-of-use assets	$	97,035	$	67,642
Current operating lease liabilities	$	13,810	$	12,928
Non-current operating lease liabilities	$	83,812	$	55,442

The weighted-average remaining lease term for operating leases was approximately 12 years and 9 years, and the weighted-average discount rate was approximately 4.0% and 3.0% as of December 31, 2023 and June 30, 2023, respectively.

The following table represents the future maturities of the Company’s operating lease liabilities as of December 31, 2023:

Fiscal Year Ending June 30,	(Dollars in Thousands)
2024	$	2,345
2025	9,018
2026	9,422
2027	13,104
2028	12,510
Thereafter	103,490
Total lease payments	149,889
Less: imputed interest	(26,882)
Less: leasehold improvement incentives to be utilized	(25,385)
Total lease maturities	$	97,622

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Revenue from Contracts with Customers (Tables)

6 Months Ended

Dec. 31, 2023

Revenue from Contracts with Customers [Abstract]

Disaggregation of Revenue [Table Text Block]

The table below reflects disaggregated revenues by business for the three months and six months ended December 31, 2023 and 2022:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Heritage AspenTech	$	167,437	$	167,442	$	343,180	$	343,848
Subsurface Science & Engineering	28,574		29,726		52,655		62,714
OSI, Inc.	61,152		45,670		110,636		87,095
Total	$	257,163	$	242,838	$	506,471	$	493,657

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

The Company’s contract assets and contract liabilities were as follows as of December 31, 2023 and June 30, 2023:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Contract assets	$	964,165	$	903,643
Contract liabilities	(170,558)		(181,553)
Net contract assets	$	793,607	$	722,090

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block]

The following table includes the aggregate amount of the transaction price allocated as of December 31, 2023 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Year Ending June 30,
	2024		2025		2026		2027		2028		Thereafter		Total
	(Dollars in Thousands)
License and solutions	$	104,615	$	98,569	$	45,664	$	20,742	$	6,911	$	2,243	$	278,744
Maintenance	165,061		257,890		192,502		134,883		85,101		44,596		880,033
Services and other	32,075		40,838		5,903		1,326		721		426		81,289
Total	$	301,751	$	397,297	$	244,069	$	156,951	$	92,733	$	47,265	$	1,240,066

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Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

Intangible assets consist of the following as of December 31, 2023 and June 30, 2023:

	December 31, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(438,942)		(19,536)		(578,144)		(9,308)		(1,045,930)
Net carrying amount	$	1,464,657	$	444,864	$	2,504,397	$	14,718	$	4,428,636
	June 30, 2023
	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total
	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	11,526	$	5,462,066
Less: Accumulated amortization	(341,964)		(13,821)		(437,673)		(8,951)		(802,409)
Net carrying amount	$	1,561,635	$	450,579	$	2,644,868	$	2,575	$	4,659,657

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Goodwill (Tables)

6 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in carrying amount of goodwill by reporting unit

The changes in the carrying amount of goodwill during the six months ended December 31, 2023 were as follows:

	Carrying Value
	(Dollars in Thousands)
Balance as of June 30, 2023	$	8,330,811
Foreign currency translation	(814)
Balance as of December 31, 2023	$	8,329,997

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Fair Value Fair Value (Tables)

6 Months Ended

Dec. 31, 2023

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Option, Disclosures [Table Text Block]

The following table summarizes financial assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	December 31, 2023
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	7,715	$	—
Equity method investments	$	—	$	2,398

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Stock-Based Compensation (Tables)

6 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of stock-based compensation expense

The stock-based compensation expense under all equity plans and its classification in the condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Cost of license and solutions	$	602	$	1,200	$	1,282	$	1,919
Cost of maintenance	729		474		1,217		1,035
Cost of services and other	360		428		858		858
Selling and marketing	2,707		3,826		5,649		7,191
Research and development	3,719		4,240		8,272		7,858
General and administrative	8,094		13,273		15,632		22,316
Total stock-based compensation	$	16,211	$	23,441	$	32,910	$	41,177

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Net Income Per Share (Tables)

6 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of calculations of basic and diluted net income per share and basic and dilutive weighted average shares outstanding

The calculations of basic and diluted net loss per share and basic and dilutive weighted average shares outstanding for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars and Shares in Thousands, Except per Share Data)
Net loss	$	(21,500)	$	(66,197)	$	(56,025)	$	(77,441)
Basic weighted average shares outstanding	63,699		64,621		64,009		64,538
Dilutive weighted average shares outstanding	63,699		64,621		64,009		64,538
Net loss per share
Basic	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)
Dilutive	$	(0.34)	$	(1.02)	$	(0.88)	$	(1.20)

Schedule of employee equity awards excluded from the calculation of dilutive weighted average shares outstanding

The following employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive as of December 31, 2023 and 2022:

	Three Months Ended December 31,		Six Months Ended December 31,
	2023	2022	2023	2022
	(Shares in Thousands)
Employee equity awards	1,433	1,574	1,352	1,479

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Comprehensive Text Block List (Tables)

6 Months Ended

Dec. 31, 2023

Text Block [Abstract]

Restructuring and Related Costs

Allocations and charges from Emerson are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Information technology	$	370	$	763	$	1,346	$	1,574
Shared services and other	$	266	$	1,157	$	640	$	3,895

Investments in and Advances to Affiliates

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Revenue from Emerson affiliates	$	43	$	4	$	310	$	567
Purchases from Emerson affiliates	$	118	$	85	$	189	$	1,786

Schedule of Accounts Payable and Accrued Liabilities

Receivables from related parties and due to related parties reported in the condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023 include the following:

	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Interest bearing receivables from related parties	$	60,870	$	61,948
Trade receivables from related parties	609		427
Receivables from related parties	$	61,479	$	62,375
Interest bearing payables to related parties	$	95,860	$	21,866
Trade payables to related parties	227		153
Due to related parties	$	96,087	$	22,019

XML

Segment Information (Tables)

6 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Revenue from External Customers by Geographic Areas

Summarized below is information about the Company’s geographic operations:

	Revenue by Destination
	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Americas	$	148,358	$	114,463	$	281,374	$	245,321
Asia, Middle East and Africa	57,030		62,043		114,715		115,714
Europe	51,775		66,332		110,382		132,622
Total	$	257,163	$	242,838	$	506,471	$	493,657

Property, Plant and Equipment [Table Text Block]

	Property, Equipment, and
	Leasehold Improvements, Net
	December 31, 2023		June 30, 2023
	(Dollars in Thousands)
Americas	$	13,788	$	15,793
Asia, Middle East and Africa	1,875		1,923
Europe	1,093		954
Total	$	16,756	$	18,670

XML

Organization and Basis of Presentation (Details) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2023 USD ($) countries	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($) countries	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)
Contractors [Abstract]
Number of Countries in which Entity Operates | countries	117		117
Revenue from Contract with Customer, Including Assessed Tax Russia	$ 5.8	$ 16.8	$ 13.0	$ 26.8
Assets Russia	$ 35.2		$ 35.2		$ 39.7

XML

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Revenue recognized that was previously deferred	$ 47,400		$ 88,400
Revenue from Contract with Customer, Excluding Assessed Tax	257,163	$ 242,838	$ 506,471	$ 493,657
Segment Reporting, Disclosure of Major Customers			not	not
Revenue recognized that was previously deferred	47,400		$ 88,400
OSI Inc.
Revenue from Contract with Customer, Excluding Assessed Tax	61,152	45,670	110,636	$ 87,095
SSE
Revenue from Contract with Customer, Excluding Assessed Tax	28,574	29,726	52,655	62,714
Heritage AspenTech
Revenue from Contract with Customer, Excluding Assessed Tax	$ 167,437	$ 167,442	$ 343,180	$ 343,848

XML

Revenue from Contracts with Customers Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Total revenue	$ 257,163	$ 242,838	$ 506,471	$ 493,657
License and solutions
Total revenue	152,463	149,843	301,111	310,068
Maintenance
Total revenue	85,056	78,628	170,024	156,994
Services and other
Total revenue	$ 19,644	$ 14,367	$ 35,336	$ 26,595

XML

Revenue from Contracts with Customers Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2023	Dec. 31, 2023	Jun. 30, 2023
Revenue recognized that was previously deferred	$ 47,400	$ 88,400
Deferred revenue	(170,558)	(170,558)	$ (181,553)
Contract assets	964,165	964,165	903,643
Net Contract Assets (Liabilities)	$ 793,607	$ 793,607	$ 722,090

XML

Revenue from Contracts with Customers Transaction Price Allocated to Remaining Performance Obligations (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Transaction Price Allocated to Remaining Performance Obligations, Amount	$ 1,240,066
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	301,751
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	397,297
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	244,069
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	156,951
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	92,733
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	47,265
License and solutions
Transaction Price Allocated to Remaining Performance Obligations, Amount	278,744
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	104,615
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	98,569
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	45,664
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	20,742
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	6,911
License and solutions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	2,243
Maintenance
Transaction Price Allocated to Remaining Performance Obligations, Amount	880,033
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	165,061
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	257,890
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	192,502
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	134,883
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	85,101
Maintenance | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	44,596
Services and other
Transaction Price Allocated to Remaining Performance Obligations, Amount	81,289
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	32,075
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	40,838
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	5,903
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	1,326
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	721
Services and other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-07-01
Transaction Price Allocated to Remaining Performance Obligations, Amount	$ 426

XML

Acquisitions - Narrative (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Aug. 18, 2023

Aug. 29, 2022

Oct. 10, 2021

Dec. 31, 2023

Sep. 30, 2023

Dec. 31, 2022

Sep. 30, 2022

Dec. 31, 2023

Dec. 31, 2022

Jun. 30, 2023

Business Acquisition [Line Items]

Consideration transferred

$ 87,200

Identifiable intangible assets

31,500

Goodwill

63,000

$ 8,329,997

$ 8,329,997

$ 8,330,811

Effective income tax rate (as a percent)

42.10%

(298.00%)

37.20%

36.20%

Trademarks

$ 1,045,930

$ 1,045,930

802,409

Total revenue

257,163

$ 242,838

506,471

$ 493,657

Net loss

(21,500)

$ (34,525)

(66,197)

$ (11,244)

(56,025)

(77,441)

Payments to Acquire Businesses, Net of Cash Acquired

8,273

74,947

Intangible asset amortization expense

121,700

121,200

243,400

242,300

Business Combination, Consideration Transferred, Net Cash Paid

$ 72,500

Other Payments to Acquire Businesses

0

1,363

Intangible assets, net

4,428,636

$ 4,428,636

4,659,657

Acquisitions

Acquisitions 

Inmation Software GmbH

On August 29, 2022, the Company completed the acquisition of inmation Software GmbH (“Inmation”) for total cash consideration of $87.2 million. The purchase price consisted of $78.9 million of cash paid at closing and an additional $8.3 million in indemnification holdbacks, which was paid on August 18, 2023. The total cash acquired from Inmation was approximately $6.4 million resulting in a net cash payment of $72.5 million during the three months ended September 30, 2022. The Company recognized goodwill of $63.0 million (none of which is expected to be tax deductible) and identifiable intangible assets of $31.5 million, primarily consisting of developed technology and customer relationships, with a useful life of approximately five years for developed technology and seven years for customer relationships.

Inmation’s revenue included in the Company’s condensed consolidated statements of operations was $0.8 million and $0.9 million for the three months ended December 31, 2023 and 2022, respectively, and $1.3 million and $1.2 million for the six months ended December 31, 2023 and 2022, respectively. Inmation’s net loss included in the Company’s condensed consolidated statements of operations was $2.2 million and $0.9 million for the three months ended December 31, 2023 and

2022, respectively, and $2.3 million and $1.1 million for the six months ended December 31, 2023 and 2022, respectively. Results included amortization of developed technology and customer relationships of $1.5 million and $1.4 million for the three months ended December 31, 2023 and 2022 respectively, and $2.9 million and $1.9 million for the six months ended December 31, 2023 and 2022, respectively.

Prior to the closing date, Inmation was considered a related party to AspenTech as Emerson Electric Co. (“Emerson” or “Parent Company”), through one of its subsidiaries, held an equity-method investment in Inmation. At the time of close, $17.6 million was paid to Emerson in exchange for all its shares in Inmation, with another $1.9 million paid for an indemnification holdback 12 months after the close on August 18, 2023.

Minimum

Business Acquisition [Line Items]

Finite-lived intangible asset, useful life

5 years

Maximum

Business Acquisition [Line Items]

Finite-lived intangible asset, useful life

7 years

Inmation Software GmbH

Business Acquisition [Line Items]

Total revenue

800

900

$ 1,300

1,200

Net loss

2,200

(900)

2,300

(1,100)

Business Combination, Consideration Transferred, Cash Paid

$ 78,900

Business Combination, Consideration Transferred, Hold Back

8,300

Business Combination, Consideration Transferred, Exchange of Shares

17,600

Business Combination, Consideration Transferred, Exchange of Shares, After

$ 1,900

Business Combination, Consideration Transferred, Cash Acquired

$ 6,400

Heritage AspenTech

Business Acquisition [Line Items]

Consideration transferred

$ 6,014,000

Intangible asset amortization expense

430,000

Customer relationships

Business Acquisition [Line Items]

Trademarks

578,144

578,144

437,673

Intangible assets, net

2,504,397

2,504,397

2,644,868

Gross carrying amount

Business Acquisition [Line Items]

Trademarks

438,942

438,942

341,964

Intangible assets, net

1,464,657

1,464,657

1,561,635

Gross carrying amount | Inmation Software GmbH

Business Acquisition [Line Items]

Intangible asset amortization expense

1,500

$ 1,400

2,900

$ 1,900

Trademarks

Business Acquisition [Line Items]

Trademarks

19,536

19,536

13,821

Intangible assets, net

$ 444,864

$ 444,864

$ 450,579

XML

Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023	Aug. 29, 2022
Business Acquisition [Line Items]
Identifiable intangible assets			$ 31,500
Goodwill	$ 8,329,997	$ 8,330,811	$ 63,000

XML

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Developed Technology	$ 5,474,566		$ 5,474,566		$ 5,462,066
Trademarks	(1,045,930)		(1,045,930)		(802,409)
Intangible assets, net	4,428,636		4,428,636		4,659,657
Intangible asset amortization expense	121,700	$ 121,200	243,400	$ 242,300
Gross carrying amount
Finite-Lived Intangible Assets [Line Items]
Developed Technology	1,903,599		1,903,599		1,903,599
Trademarks	(438,942)		(438,942)		(341,964)
Intangible assets, net	1,464,657		1,464,657		1,561,635
Less: Accumulated amortization
Finite-Lived Intangible Assets [Line Items]
Developed Technology	3,082,541		3,082,541		3,082,541
Trademarks	(578,144)		(578,144)		(437,673)
Intangible assets, net	2,504,397		2,504,397		2,644,868
Trademarks
Finite-Lived Intangible Assets [Line Items]
Developed Technology	464,400		464,400		464,400
Trademarks	(19,536)		(19,536)		(13,821)
Intangible assets, net	444,864		444,864		450,579
Purchased software
Finite-Lived Intangible Assets [Line Items]
Developed Technology	24,026		24,026		11,526
Trademarks	(9,308)		(9,308)		(8,951)
Intangible assets, net	$ 14,718		$ 14,718		$ 2,575

XML

Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization expense	$ 121,700	$ 121,200	$ 243,400	$ 242,300
Intangible assets, net	$ 4,428,636		$ 4,428,636		$ 4,659,657

XML

Goodwill - Goodwill, Net (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill:
Balance as of June 30, 2023	$ 8,330,811
Foreign currency translation	(814)
Balance as of December 31, 2023	$ 8,329,997

XML

Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023
Level 1 Inputs
Fair Value
Cash equivalents	$ 7,715	$ 132,918
Level 2 Inputs
Fair Value
Equity method investments	$ 2,398	$ 2,673

XML

Credit Agreement (Details) $ in Millions	Dec. 31, 2023 USD ($)	Dec. 23, 2022 USD ($)	Dec. 23, 2019 USD ($)
Credit Agreement
Maximum leverage ratio	3.50
Minimum interest coverage ratio	2.50
Emerson Electric Co.
Credit Agreement
Principal amount		$ 630.0
Revolving Credit Facility [Member]
Credit Agreement
Principal amount	$ 197.4		$ 200.0

XML

Credit Agreement Schedule of Long-Term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 23, 2019
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	$ 2.6
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 197.4	$ 200.0

XML

Stock-Based Compensation - Additional Disclosures (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Stock-based compensation, additional disclosures
Issuance of shares of common stock			$ 7,920	$ 25,605
Employee stock purchase plan, stock-based compensation	$ 16,211	$ 23,441	$ 32,910	$ 41,177
Restricted Stock Units
Stock-based compensation, additional disclosures
Weighted average grant-date fair value of RSUs granted	$ 192.21	$ 246.15	$ 193.74	$ 209.79
Performance awards, shares granted			186,938

XML

Stock-Based Compensation - Stock-Based Compensation Expense and its Classification in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Recorded as expenses:
Total stock-based compensation	$ 16,211	$ 23,441	$ 32,910	$ 41,177
License and solutions
Recorded as expenses:
Total stock-based compensation	602	1,200	1,282	1,919
Cost of maintenance
Recorded as expenses:
Total stock-based compensation	729	474	1,217	1,035
Cost of services and other
Recorded as expenses:
Total stock-based compensation	360	428	858	858
Selling and marketing
Recorded as expenses:
Total stock-based compensation	2,707	3,826	5,649	7,191
Research and development
Recorded as expenses:
Total stock-based compensation	3,719	4,240	8,272	7,858
General and administrative
Recorded as expenses:
Total stock-based compensation	$ 8,094	$ 13,273	$ 15,632	$ 22,316

XML

Stock-Based Compensation - Stock Option Activity (Details) - USD ($)

6 Months Ended

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Jun. 30, 2023

Aggregate Intrinsic Value

Issuance of shares of common stock

$ 7,920,000

$ 25,605,000

Share Price

$ 220.15

Stock-Based Compensation

Stock-Based Compensation 

The stock-based compensation expense under all equity plans and its classification in the condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 are as follows:

	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
	(Dollars in Thousands)
Cost of license and solutions	$	602	$	1,200	$	1,282	$	1,919
Cost of maintenance	729		474		1,217		1,035
Cost of services and other	360		428		858		858
Selling and marketing	2,707		3,826		5,649		7,191
Research and development	3,719		4,240		8,272		7,858
General and administrative	8,094		13,273		15,632		22,316
Total stock-based compensation	$	16,211	$	23,441	$	32,910	$	41,177

Stock Options

The table below summarizes activities related to stock options for the six months ended December 31, 2023:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
				(in years)	(in thousands)
Outstanding as of June 30, 2023	1,005,826	$	144.17	6.44	$	32,935
Granted	1,471	$	171.56
Exercised	(49,671)	$	134.25
Cancelled / Forfeited	(7,958)	$	184.16
Outstanding as of December 31, 2023	949,668	$	161.10	5.63	$	72,007
Exercisable as of December 31, 2023	683,313	$	130.41	4.88	$	61,341
Vested and expected to vest as of December 31, 2023	933,517	$	143.75	5.58	$	71,386

__________

(1)     The aggregate intrinsic value in this table represents any excess of the closing market price of the Company’s common stock as of December 31, 2023 ($220.15) over the exercise price of the underlying options.

Restricted Stock Units and Performance Stock Units

Restricted stock units and performance stock units are not included in issued and outstanding common stock until the units are vested and the underlying shares are settled. The table below summarizes activities related to restricted stock units and performance stock units for the six months ended December 31, 2023:

	Number of Shares Underlying Restricted Units — Performance-Based Awards		Number of Shares Underlying Restricted Units — Time-Based Awards
	(Dollars in Thousands)
Outstanding as of June 30, 2023	—		456,368
Granted	94,174		186,938
Settled	—		(229,807)
Cancelled / Forfeited	(716)		(12,792)
Outstanding as of December 31, 2023	93,458		400,707
Weighted average remaining recognition period of outstanding restricted units (in years)	2.50		3.03
Unrecognized stock-based compensation expense of outstanding restricted units	$	8,824	$	43,170
Aggregate intrinsic value of outstanding restricted units	$	14,418	$	86,235

The weighted average grant date fair value per restricted stock unit was $192.21 and $246.15 during the three months ended December 31, 2023 and 2022, respectively, and $193.74 and $209.79 during the six months ended December 31, 2023 and 2022, respectively. The weighted average grant date fair value per performance stock unit was $199.06 and $194.03 during the three and six months ended December 31, 2023, respectively, and there were no granted or outstanding performance stock units during the three and six months ended December 31, 2022.

Beginning in fiscal 2024, the Company granted performance stock units with a performance condition and service condition. These performance stock units vest on a cliff basis in three years based upon the achievement of predefined performance goals, with the ability for 25% of granted awards to vest on an accelerated basis in each of the first two years. The performance goal relates to the sum of (i) annual contract value growth and (ii) free cash flow margin over the performance period. Up to 175% of the performance stock units could vest upon achievement of the performance goals. Conversely, if a minimum performance goal is not met, none of the performance stock units will vest. On a quarterly basis, management evaluates the probability that the threshold performance goals will be achieved, if at all, and the anticipated level of attainment to determine the amount of compensation expense to record in the condensed consolidated financial statements.

Stock Options

Stock options activity

Outstanding, beginning of period (in shares)

1,005,826

Granted (in shares)

1,471

Exercised (in shares)

(49,671)

Outstanding, end of period (in shares)

949,668

1,005,826

Weighted Average Exercise Price

Outstanding, beginning of period (in dollars per share)

$ 144.17

Granted (in dollars per share)

171.56

Exercised (in dollars per share)

134.25

Outstanding, end of period (in dollars per share)

$ 161.10

$ 144.17

Weighted Average Remaining Contractual Term

Outstanding, end of period

5 years 7 months 17 days

6 years 5 months 8 days

Aggregate Intrinsic Value

Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period

(7,958)

Cancelled / Forfeited (in dollars per share)

$ 184.16

Outstanding, end of period

$ 72,007

$ 32,935

Vested and exercisable, end of period (in shares)

683,313

Vested and exercisable, end of period (in dollars per share)

$ 130.41

Vested and exercisable, end of period

4 years 10 months 17 days

Vested and exercisable, end of period

$ 61,341

Vested and expected to vest, end of period (in shares)

933,517

Vested and expected to vest, end of period (in dollars per share)

$ 143.75

Vested and expected to vest, end of period

5 years 6 months 29 days

Vested and expected to vest, end of period

$ 71,386

XML

Stock-Based Compensation - RSU Activity (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Restricted Stock Units
Restricted stock units activity
Granted (in shares)			186,938
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 192.21	$ 246.15	$ 193.74	$ 209.79
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	400,707		400,707		456,368
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms			3 years 10 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period			(229,807)
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(12,792)
Total unrecognized compensation cost	$ 43,170		$ 43,170
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 86,235		$ 86,235
Performance Shares [Member]
Restricted stock units activity
Granted (in shares)			94,174
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 199.06		$ 194.03
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	93,458		93,458		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms			2 years 6 months
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period			0
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period			(716)
Total unrecognized compensation cost	$ 8,824		$ 8,824
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 14,418		$ 14,418

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Net Income Per Share - Calculations of Basic and Diluted Net Income per Share and Basic and Dilutive Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
Net loss	$ (21,500)	$ (34,525)	$ (66,197)	$ (11,244)	$ (56,025)	$ (77,441)
Weighted Average Number of Shares Outstanding, Basic	63,699		64,621		64,009	64,538
Basic	$ (0.34)		$ (1.02)		$ (0.88)	$ (1.20)
Earnings Per Share, Diluted	$ (0.34)		$ (1.02)		$ (0.88)	$ (1.20)
Dilutive impact from:
Dilutive weighted average shares outstanding (in shares)	63,699		64,621		64,009	64,538

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Net Income Per Share - Stock Options Excluded from the Computation of Dilutive Weighted Average Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive
Employee equity awards (in shares)	1,433,000	1,574,000	1,352,000	1,479,000

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Net Income Per Share - Employee Equity Awards Excluded from the Calculation of Dilutive Weighted Average Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Employee equity awards were excluded from the calculation of dilutive weighted average shares outstanding because their effect would be anti-dilutive
Employee equity awards (in shares)	1,433,000	1,574,000	1,352,000	1,479,000

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Stock Repurchases - Narrative (Details) - USD ($)			3 Months Ended		6 Months Ended
	Aug. 07, 2023	May 05, 2023	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2023	Aug. 01, 2023
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Value, Acquired, Cost Method			$ 72,105,000	$ 114,224,000
Treasury Stock, Common
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Shares, Acquired			375,041	686,843
Treasury Stock, Value, Acquired, Cost Method			$ (72,105,000)	$ (134,434,000)
Additional Paid-in Capital [Member]
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Value, Acquired, Cost Method				$ 20,210,000
ASR Program
Stock Transactions, Parenthetical Disclosure [Abstract]
Accelerated Share Repurchases, Settlement (Payment) or Receipt		$ 100,000,000
Treasury Stock, Shares, Acquired	594,671
Treasury Stock, Value, Acquired, Cost Method	$ 100,000,000
ASR Program | Initial Share Repurchase
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Shares, Acquired		487,626
ASR Program | Final Share Repurchase
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Shares, Acquired	107,045
Aug 1 Share Repurchase Authorization Program
Stock Transactions, Parenthetical Disclosure [Abstract]
Treasury Stock, Shares, Acquired			375,041		954,839
Treasury Stock, Value, Acquired, Cost Method			$ 72,100,000		$ 186,300,000
Approved stock repurchase program, authorized amount (up to)						$ 300,000,000
Remaining capacity under the stock repurchase program			$ 113,700,000		$ 113,700,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
(Benefit) provision for income taxes	$ (15,659)	$ 49,565	$ (33,126)	$ (43,982)
Effective income tax rate (as a percent)	42.10%	(298.00%)	37.20%	36.20%

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Comprehensive Text Block List (Details) $ in Thousands			3 Months Ended		6 Months Ended
	Aug. 29, 2022 USD ($)	Oct. 10, 2021 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jul. 28, 2023 USD ($)	Dec. 23, 2022 USD ($)	May 16, 2022
Payment for Plantweb Optics Analytics							$ 12,500
Maximum leverage ratio			3.50		3.50
Minimum interest coverage ratio			2.50		2.50
Consideration transferred	$ 87,200
Heritage AspenTech
Consideration transferred		$ 6,014,000
Emerson Electric Co.
Text Block [Abstract]
Purchases from Emerson affiliates			$ 118	$ 85	$ 189	$ 1,786
Revenue from Emerson affiliates			43	4	310	567
Principal amount								$ 630,000
Purchases from Emerson affiliates			118	85	189	1,786
Revenue from Emerson affiliates			$ 43	4	$ 310	567
Emerson Electric Co. | Heritage AspenTech
Text Block [Abstract]
Business Acquisition, Percentage of Voting Interests Acquired			56.00%		56.00%				55.00%
Business Acquisition, Percentage of Voting Interests Acquired			56.00%		56.00%				55.00%
Information technology
Payments of Distributions to Affiliates			$ 370	763	$ 1,346	1,574
Shared services and other
Payments of Distributions to Affiliates			$ 266	$ 1,157	$ 640	$ 3,895

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Segment Information - Summary of Reportable Segments' Profits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Summary of reportable segments' profits
Loss from operations	$ (49,243)	$ (59,395)	$ (109,455)	$ (110,577)
Property, equipment and leasehold improvements, net	16,756		16,756		$ 18,670
Revenue from Contract with Customer, Excluding Assessed Tax	257,163	242,838	506,471	493,657
Americas
Summary of reportable segments' profits
Property, equipment and leasehold improvements, net	13,788		13,788		15,793
Revenue from Contract with Customer, Excluding Assessed Tax	148,358	114,463	281,374	245,321
Asia, Middle East and Africa
Summary of reportable segments' profits
Property, equipment and leasehold improvements, net	1,875		1,875		1,923
Revenue from Contract with Customer, Excluding Assessed Tax	57,030	62,043	114,715	115,714
Europe
Summary of reportable segments' profits
Property, equipment and leasehold improvements, net	1,093		1,093		954
Revenue from Contract with Customer, Excluding Assessed Tax	51,775	66,332	110,382	132,622
North America
Summary of reportable segments' profits
Property, equipment and leasehold improvements, net	11,800		11,800		$ 13,400
Revenue from Contract with Customer, Excluding Assessed Tax	$ 132,700	$ 88,100	$ 228,700	$ 200,400

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Leases, Codification Topic 842 (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2024	Jun. 30, 2023
Lessee, Lease, Description [Line Items]
Operating Lease, Expense	$ 5,023	$ 4,352	$ 9,489	$ 8,387
Variable lease costs	193	216	416	425
Short-Term Lease, Cost	(147)	(199)	(304)	(96)
Total lease costs	5,363	$ 4,767	10,209	$ 8,716
Operating lease right-of-use assets	97,035		97,035		$ 97,035	$ 67,642
Current operating lease liabilities	13,810		13,810		13,810	12,928
Non-current operating lease liabilities	$ 83,812		$ 83,812		$ 83,812	$ 55,442
Weighted average discount rate	4.00%		4.00%			3.00%
Weighted average remaining lease term	12 years		12 years			9 years
2021	$ 2,345		$ 2,345
2022	9,018		9,018
2023	9,422		9,422
2024	13,104		13,104
2025	12,510		12,510
Thereafter	103,490		103,490
Total lease payments	149,889		149,889
Less: imputed interest	(26,882)		(26,882)
Leasehold Improvements, Gross	(25,385)		(25,385)
Operating lease liabilities	97,622		97,622
Additional ROU Asset and Lease Liability	32,900		32,900
Additional ROU Asset and Lease Liability net of Leasehold Improvement Inventives	$ 25,400		$ 25,400

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Regulated Operations (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Regulated Operations [Abstract]
Compensation-related	$ 54,729		$ 62,162
Deferred acquisition payments	5		8,984
Accrued Professional Fees, Current	4,042		6,265
Accrued Income Taxes	2,941		3,065
Accrued Royalties, Current	422		654
Other Accrued Liabilities, Current	18,920		18,396
Accrued expenses and other current liabilities	$ 81,059	$ 81,059	$ 99,526

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Label

Element

Value

Net Cash Provided by (Used in) Operating Activities

us-gaap_NetCashProvidedByUsedInOperatingActivities

$ 46,808,000

Related Party [Member]

Notes Payable

us-gaap_NotesPayable

95,860,000

Notes Payable

us-gaap_NotesPayable

21,866,000

Financing Receivable, after Allowance for Credit Loss

us-gaap_NotesReceivableNet

60,870,000

Financing Receivable, after Allowance for Credit Loss

us-gaap_NotesReceivableNet

61,948,000

Accounts Payable

us-gaap_AccountsPayableCurrentAndNoncurrent

227,000

Accounts Payable

us-gaap_AccountsPayableCurrentAndNoncurrent

153,000

Accounts Receivable, after Allowance for Credit Loss

us-gaap_AccountsReceivableNet

609,000

Accounts Receivable, after Allowance for Credit Loss

us-gaap_AccountsReceivableNet

$ 427,000

Employee Stock Option [Member]

Share-Based Payment Arrangement, Activity [Table Text Block]

us-gaap_ScheduleOfShareBasedCompensationActivityTableTextBlock

The table below summarizes activities related to stock options for the six months ended December 31, 2023:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
				(in years)	(in thousands)
Outstanding as of June 30, 2023	1,005,826	$	144.17	6.44	$	32,935
Granted	1,471	$	171.56
Exercised	(49,671)	$	134.25
Cancelled / Forfeited	(7,958)	$	184.16
Outstanding as of December 31, 2023	949,668	$	161.10	5.63	$	72,007
Exercisable as of December 31, 2023	683,313	$	130.41	4.88	$	61,341
Vested and expected to vest as of December 31, 2023	933,517	$	143.75	5.58	$	71,386

__________

(1)     The aggregate intrinsic value in this table represents any excess of the closing market price of the Company’s common stock as of December 31, 2023 ($220.15) over the exercise price of the underlying options.

Restricted Stock Units (RSUs) [Member]

Share-Based Payment Arrangement, Activity [Table Text Block]

us-gaap_ScheduleOfShareBasedCompensationActivityTableTextBlock

The table below summarizes activities related to restricted stock units and performance stock units for the six months ended December 31, 2023:

	Number of Shares Underlying Restricted Units — Performance-Based Awards		Number of Shares Underlying Restricted Units — Time-Based Awards
	(Dollars in Thousands)
Outstanding as of June 30, 2023	—		456,368
Granted	94,174		186,938
Settled	—		(229,807)
Cancelled / Forfeited	(716)		(12,792)
Outstanding as of December 31, 2023	93,458		400,707
Weighted average remaining recognition period of outstanding restricted units (in years)	2.50		3.03
Unrecognized stock-based compensation expense of outstanding restricted units	$	8,824	$	43,170
Aggregate intrinsic value of outstanding restricted units	$	14,418	$	86,235