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 ~~March~~September 3130, 2024

☐ 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

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,~~327~~249,~~853~~719 shares of common stock outstanding as of ~~April~~October 30, 2024.

Table of Contents

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited).	4
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2024 and 2023.	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended September 30, 2024 and 2023.	5
	Condensed Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023	6
	Condensed Consolidated Balance Sheets as of September 30, 2024 and June 30, 2024.	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 31, 2024 and 2023	7
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2024 and 2023.	7
	Condensed Consolidated Statements of Cash Flow for the Nine Months Ended March 31, 2024 and 2023	9
	Condensed Consolidated Statements of Cash Flow for the Three Months Ended September 30, 2024 and 2023.	8
	Notes to Condensed Consolidated Financial Statements	10
	Notes to Condensed Consolidated Financial Statements.	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2219
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	3326
Item 4.	Controls and Procedures.	3327
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	3528
Item 1A.	Risk Factors.	3528
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	3628
Item 3.	Defaults upon Senior Securities.	3629
Item 4.	Mine Safety Disclosures.	3629
Item 5.	Other Information.	3629
Item 6.	Exhibits.	3730
	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~~2025” refers to the year ending June 30, ~~2024~~2025).

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Condensed Consolidated Financial Statements (~~unaudited~~Unaudited)

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,				Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023		~~2024~~		~~2023~~
	(Dollars and Shares in Thousands, Except per Share Data)
	(Dollars and Shares in Thousands, Except per Share Data; Unaudited)
Revenue:
License and solutions	$	~~169~~101,~~467~~659	$	~~136~~148,~~292~~648	$	~~470,578~~	$	~~446,360~~
Maintenance	8690,~~256~~686		7784,~~283~~968		~~256,280~~		~~234,277~~
Services and other	2223,~~383~~532		1615,~~303~~692		~~57,719~~		~~42,898~~
Total revenue	~~278~~215,~~106~~877		~~229~~249,~~878~~308		~~784,577~~		~~723,535~~
Cost of revenue:
License and solutions	6563,~~550~~654		6871,~~980~~578		~~204,453~~		~~209,326~~
Maintenance	810,~~344~~688		910,~~020~~200		~~29,192~~		~~27,804~~
Services and other	1921,~~048~~105		1516,~~799~~282		~~52,290~~		~~40,897~~
Total cost of revenue	9295,~~942~~447		9398,~~799~~060		~~285,935~~		~~278,027~~
Gross profit	~~185~~120,~~164~~430		~~136~~151,~~079~~248		~~498,642~~		~~445,508~~
Operating expenses:
Selling and marketing	~~121~~125,~~303~~661		~~120~~122,~~035~~378		~~365,921~~		~~356,260~~
Research and development	4950,~~334~~000		5453,~~046~~676		~~156,155~~		~~153,741~~
General and administrative	33,~~821~~008		4035,~~471~~405		~~105,315~~		~~124,557~~
Total operating expenses	204,458		214,552		627,391		634,558
Restructuring costs	7,726		—
Loss from operations	(19,294)		(78,473)		(128,749)		(189,050)
Total operating expenses	216,395		211,459
Other expense, net	(1,988)		(13,281)		(8,017)		(33,270)
Loss from operations	(95,965)		(60,211)
Interest income, net	13,723		9,969		40,056		19,112
Other income (expense), net	2,041		(5,830)
Loss before benefit for income taxes	(7,559)		(81,785)		(96,710)		(203,208)
Interest income, net	17,176		14,049
Benefit for income taxes	(9,115)		(24,150)		(42,241)		(68,132)
Loss before benefit for income taxes	(76,748)		(51,992)
Net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Benefit for income taxes	(16,284)		(17,467)
Net income (loss) per common share:
Net loss	$	(60,464)	$	(34,525)
Basic	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Net loss per common share:
Diluted	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Basic	$	(0.96)	$	(0.54)
Diluted	$	(0.96)	$	(0.54)
Weighted average shares outstanding:
Basic	63,~~508~~244		64,~~796~~319		~~63,844~~		~~64,622~~
Diluted	63,~~802~~244		64,~~796~~319		~~63,844~~		~~64,622~~

See accompanying notes to these unaudited condensed consolidated financial statements.

Table of Contents

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (~~LOSS)

	Three Months Ended March 31,				Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023		~~2024~~		~~2023~~
	(Dollars in Thousands)
	(Dollars in Thousands; Unaudited)
Net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Net loss	$	(60,464)	$	(34,525)
Other comprehensive (loss) income:
Other comprehensive income (loss):
Foreign currency translation adjustments	(15,~~104)~~202		5(11,~~845~~201)		~~(7,435)~~		~~3,690~~
Total other comprehensive (loss) income	(1,104)		5,845		(7,435)		3,690
Total other comprehensive income (loss)	5,202		(11,201)
Comprehensive income (loss)	$	452	$	(51,790)	$	(61,904)	$	(131,386)
Comprehensive loss	$	(55,262)	$	(45,726)

See accompanying notes to these unaudited condensed consolidated financial statements.

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ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2024

June 30, 2023

September 30, 2024

June 30, 2024

(Dollars in Thousands, Except Share Data)

(Dollars in Thousands, Except Share Data; Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

~~177~~221,~~592~~093

~~241~~236,~~209~~970

Accounts receivable, net

~~140~~102,~~469~~867

~~122~~115,~~789~~533

Current contract assets, net

~~378~~426,~~914~~387

~~367~~409,~~539~~177

Prepaid expenses and other current assets

2833,~~697~~670

27,~~728~~441

Receivables from related parties

6945,~~097~~300

6278,~~375~~483

Prepaid income taxes

—2,909

118,~~424~~462

Total current assets

~~794~~832,~~769~~226

~~833~~876,~~064~~066

Property, equipment and leasehold improvements, net

1618,~~414~~093

1817,~~670~~389

Goodwill

8,~~329~~330,~~499~~124

8,~~330~~328,~~811~~201

Intangible assets, net

4,~~306~~063,~~689~~852

4,~~659~~184,~~657~~750

Non-current contract assets, net

~~528~~518,~~282~~562

~~536~~515,~~104~~106

Contract costs

2126,~~049~~265

1524,~~992~~903

Operating lease right-of-use assets

9495,~~353~~001

6796,~~642~~034

Deferred income tax assets

97,~~843~~627

106,~~638~~989

Other non-current assets

825,~~529~~189

1322,~~474~~269

Total assets

1413,~~109~~916,~~427~~939

14,~~486~~071,~~052~~707

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

912,~~876~~050

208,~~299~~099

Accrued expenses and other current liabilities

8178,~~842~~926

99100,~~526~~167

Due to related parties

6724,~~954~~979

2247,~~019~~449

Current operating lease liabilities

1312,~~698~~172

1213,~~928~~125

Income taxes payable

3321,~~999~~656

4644,~~205~~249

Current contract liabilities

~~134~~117,~~910~~768

~~151~~124,~~450~~312

Total current liabilities

~~342~~267,~~279~~551

~~352~~337,~~427~~401

Non-current contract liabilities

33,~~042~~569

3027,~~103~~512

Deferred income tax liabilities

~~822~~758,~~197~~389

~~957~~790,~~911~~687

Non-current operating lease liabilities

8185,~~361~~676

5584,~~442~~875

Other non-current liabilities

1918,~~726~~795

1918,~~240~~377

Stockholders’ equity:

Common stock, $0.0001 par value Authorized—600,000,000 sharesIssued— 65,255,754 and 64,952,868 sharesOutstanding— 63,418,003 and 64,465,242 shares

Common stock, $0.0001 par value Authorized—600,000,000 sharesIssued— 65,453,489 and 65,367,159 sharesOutstanding— 63,245,006 and 63,251,495 shares

Additional paid-in capital

13,~~259~~293,~~100~~704

13,~~194~~277,~~028~~851

Accumulated deficit

(95111,~~860~~626)

(4151,~~391~~162)

Accumulated other comprehensive (loss) income

(4,999)

2,436

Accumulated other comprehensive loss

(2,059)

(7,261)

Treasury stock, at cost — 1,837,751 and 487,626 shares of common stock

(347,426)

(84,150)

Treasury stock, at cost — 2,208,483 and 2,115,664 shares of common stock

(427,067)

(406,580)

Total stockholders’ equity

12,~~810~~752,~~822~~959

1312,~~070~~812,~~929~~855

Total liabilities and stockholders’ equity

1413,~~109~~916,~~427~~939

14,~~486~~071,~~052~~707

See accompanying notes to these unaudited condensed consolidated financial statements.

Table of Contents

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
	Accumulated Other Comprehensive 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)
	(Dollars in Thousands, Except Share Data; Unaudited)
Balance June 30, 2023	$	2,436	64,952,868	$	6	$	13,194,028	$	(41,391)	487,626	$	(84,150)	$	13,070,929
Balance June 30, 2024	$	(7,261)	65,367,159	$	7	$	13,277,851	$	(51,162)	2,115,664	$	(406,580)	$	12,812,855
Net loss	—		—	—		—		(3460,~~525~~464)		—	—		(3460,~~525~~464)
Other comprehensive loss	(11,201)		—	—		—		—		—	—		(11,201)
Other comprehensive income	5,202		—	—		—		—		—	—		5,202
Issuance of shares of common stock	—		2948,~~644~~326	—		36,~~826~~662		—		—	—		36,~~826~~662
Issuance of restricted stock units and net share settlement related to withholding taxes	—		4738,~~896~~004	—		(45,~~585~~623)		—		—	—		(45,~~585~~623)
Repurchase of common stock	—		—	—		~~20,210~~		—		~~686~~92,~~843~~819	(~~134~~20,~~434~~487)		(~~114~~20,~~224~~487)
Stock-based compensation	—		—	—		1614,~~699~~814		—		—	—		1614,~~699~~814
Balance September 30, 2023	$	(8,765)	65,030,408	$	6	$	13,230,178	$	(75,916)	1,174,469	$	(218,584)	$	12,926,919
Balance September 30, 2024	$	(2,059)	65,453,489	$	7	$	13,293,704	$	(111,626)	2,208,483	$	(427,067)	$	12,752,959
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
Net income	—		—	—		—		1,556		—	—		1,556
Other comprehensive loss	(1,104)		—	—		—		—		—	—		(1,104)
Issuance of shares of common stock	—		60,278	1		7,947		—		—	—		7,948
Issuance of restricted stock units and net share settlement related to withholding taxes	—		25,298	—		(2,821)		—		—	—		(2,821)
Repurchase of common stock	—		—	—		—		—		288,241	(56,737)		(56,737)
Stock-based compensation	—		—	—		12,907		—		—	—		12,907
Balance March 31, 2024	$	(4,999)	65,255,754	$	7	$	13,259,100	$	(95,860)	1,837,751	$	(347,426)	$	12,810,822


	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; Unaudited)

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

See accompanying notes to these unaudited condensed consolidated financial statements.

Table of Contents

	Accumulated Other Comprehensive Loss		Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		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
Net loss	—		—	—		—		(57,635)		(57,635)
Other comprehensive income	5,845		—	—		—		—		5,845
Issuance of shares of common stock	—		50,579	—		6,031		—		6,031
Issuance of restricted stock units and net share settlement related to withholding taxes	—		40,264	—		(5,070)		—		(5,070)
Stock-based compensation	—		—	—		22,843		—		22,843
Balance March 31, 2023	$	(898)	64,858,598	$	6	$	13,188,678	$	(68,707)	$	13,119,079

ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended September 30,
		2024		2023

		(Dollars in Thousands; Unaudited)
Cash flows from operating activities:
Net loss		$	(60,464)	$	(34,525)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		122,856		123,219
Reduction in the carrying amount of right-of-use assets		3,961		3,562
Net foreign currency (gains) losses		(2,120)		5,894
Stock-based compensation		14,814		16,699
Deferred income taxes		(32,448)		(51,080)
Provision for uncollectible receivables		491		1,788
Other non-cash operating activities		(258)		19
Changes in assets and liabilities:
Accounts receivable		12,887		29,417
Contract assets		(18,851)		(24,062)
Contract costs		1,285		(1,163)
Lease liabilities		(3,041)		(3,770)
Prepaid expenses, prepaid income taxes, and other assets		(5,956)		(22,487)
Accounts payable, accrued expenses, income taxes payable and other liabilities		(37,052)		10,200
Contract liabilities		(501)		(36,730)
Net cash (used in) provided by operating activities		(4,397)		16,981
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements		(2,022)		(937)
Payments for business acquisitions, net of cash acquired		—		(8,273)
Payments for equity method investments		(30)		(98)
Payments for asset acquisitions		—		(12,500)
Net cash used in investing activities		(2,052)		(21,808)
Cash flows from financing activities:
Issuance of shares of common stock, net of taxes		6,262		3,285
Repurchases of common stock		(20,487)		(114,224)
Payment of tax withholding obligations related to restricted stock		(4,635)		(1,938)
Net transfers from Parent Company		8,836		3,890
Payments of debt issuance costs		(107)		—
Net cash used in financing activities		(10,131)		(108,987)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		3,264		(6,855)
Decrease in cash, cash equivalents and restricted cash		(13,316)		(120,669)
Cash, cash equivalents and restricted cash, beginning of period		248,468		241,209
Cash, cash equivalents and restricted cash, end of period		$	235,152	$	120,540

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		$	221,093	$	120,540
Restricted cash in other non-current assets		14,059		—
Total cash, cash equivalents and restricted cash		$	235,152	$	120,540

Supplemental disclosure of cash flow information:
Income taxes paid, net		$	32,945	$	31,842
Interest paid		$	702	$	663
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses		$	150	$	249
Lease liabilities arising from obtaining right-of-use assets		$	2,098	$	397

See accompanying notes to these unaudited condensed consolidated financial statements.

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ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended March 31,
		2024		2023
		(Dollars in Thousands)
Cash flows from operating activities:
Net loss		$	(54,469)	$	(135,076)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		369,794		368,266
Reduction in the carrying amount of right-of-use assets		11,312		10,463
Net foreign currency losses		8,238		3,711
Realized gain on settlement of foreign currency forward contracts		—		(10,821)
Stock-based compensation		45,817		64,020
Deferred income taxes		(138,470)		(156,046)
Provision for uncollectible receivables		9,269		3,944
Other non-cash operating activities		805		1,108
Changes in assets and liabilities:
Accounts receivable		(22,923)		(11,060)
Contract assets		(2,902)		(10,672)
Contract costs		(5,204)		(5,357)
Lease liabilities		(11,281)		(10,303)
Prepaid expenses, prepaid income taxes, and other assets		(17,444)		27,641
Liability from foreign currency forward contract		—		40,454
Accounts payable, accrued expenses, income taxes payable and other liabilities		5,972		(12,038)
Contract liabilities		(13,564)		17,416
Net cash provided by operating activities		184,950		185,650
Cash flows from investing activities:
Purchases of property, equipment and leasehold improvements		(2,579)		(4,515)
Proceeds from settlement of foreign currency forward contracts		—		10,821
Payments for business acquisitions, net of cash acquired		(8,273)		(72,498)
Payments for equity method investments		(272)		(676)
Payments for capitalized computer software development costs		(131)		(347)
Payments for asset acquisitions		(12,500)		—
Purchase of other assets		—		(1,000)
Net cash used in investing activities		(23,755)		(68,215)
Cash flows from financing activities:
Issuance of shares of common stock		15,214		31,542
Repurchases of common stock		(243,066)		—
Payment of tax withholding obligations related to restricted stock		(17,010)		(14,406)
Deferred business acquisition payments		—		(1,363)
Repayments of amounts borrowed under term loan		—		(276,000)
Net transfers from (to) Parent Company		32,558		(5,749)
Payments of debt issuance costs		—		(2,375)
Net cash used in financing activities		(212,304)		(268,351)
Effect of exchange rate changes on cash and cash equivalents		(12,508)		(12,073)
Decrease in cash and cash equivalents		(63,617)		(162,989)
Cash and cash equivalents, beginning of period		241,209		449,725
Cash and cash equivalents, end of period		$	177,592	$	286,736
Supplemental disclosure of cash flow information:
Income taxes paid, net		$	95,900	$	64,840
Interest paid		$	4,701	$	14,345
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses		$	45	$	(1,307)
Lease liabilities arising from obtaining right-of-use assets		$	61,657	$	784

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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~~Through the Company’s unique combination of product capabilities, deep domain expertise and award-winning innovation, ~~helps~~ customers across diverse end markets in ~~capital~~asset-intensive industries can improve their operational excellence while achieving sustainability goals.

The Company had revenue from customers in ~~116~~113 countries during the first quarter of fiscal ~~2024~~2025.

Basis of Presentation

The Company has prepared the accompanying unaudited condensed consolidated financial statements as of ~~March~~September 3130, 2024, and for the ~~third~~first quarter of fiscal ~~2024~~2025 and ~~2023~~2024 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~~2024.

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

~~The~~In ~~Company~~June ~~maintains~~2024, ~~operations~~the inUnited ~~Russia~~States government announced new expanded restrictions that prohibit the sale, service, maintenance, and ~~licenses~~support ~~software~~(such as bug fixes and ~~provides~~updates) ~~related~~of ~~services~~enterprise tomanagement ~~customers~~software and design and manufacturing software in ~~Russia~~the Russian market. ~~The~~As a result, the Company announced that it had ~~revenue~~suspended all commercial activities in Russia in the fourth quarter of ~~approximately~~fiscal ~~$13~~2024.~~7 million~~ ~~and~~This ~~$7.3 million~~includes ~~for~~the discontinuation of the ~~three~~following ~~months~~activities: ~~ended~~all ~~March 31,~~commercial ~~2024~~discussions ~~and~~with ~~2023~~customers, ~~respectively,~~initiating ~~and~~or ~~$27.7 million~~processing ~~and~~renewals, ~~$34.0 million~~providing ~~for~~proposals ~~the~~to ~~nine~~customers ~~months~~or ~~ended~~selling ~~March~~products ~~31,~~or ~~2024~~services. ~~and~~In ~~2023~~addition, ~~respectively.~~the ~~The~~ Company ~~had~~has ~~total~~written-off certain assets inthat ~~Russia~~are ofrelated ~~approximately~~to ~~$45.8 million~~its operations in Russia, and ~~$39.7 million~~will asbe ofclosing ~~March 31~~certain facilities, ~~2024~~ and ~~June 30,~~terminating ~~2023,~~or ~~respectively,~~relocating ~~related~~substantially toall ~~operations~~employees based in Russia. during fiscal 2025.

~~The~~Beginning ~~Company~~with ~~may~~the beconsolidated ~~required~~balance tosheet ~~cease or suspend operations in Russia or we may voluntarily elect to do so, whether~~ as ~~a result~~ of ~~new~~June ~~sanctions~~30, ~~and~~2024, ~~export-control measure packages or otherwise. There is also a risk that~~ the Company ~~may~~classifies ~~not~~cash bebalances ~~able~~that toare ~~continue~~both ~~its~~held ~~business~~ in Russia ~~because~~and itin isexcess ~~unable~~of towhat ~~conduct~~it ~~banking~~estimates ~~activities~~will inbe ~~Russia.~~required ~~The~~to ~~Company~~wind nodown ~~longer~~its ~~provides~~operations ~~engineering services~~ in Russia, ~~and~~as ~~has~~restricted ~~limited~~cash ~~its~~due ~~operations~~ to ~~contract~~current ~~renewals~~restrictions ~~only~~impacting ~~with existing customers. While~~ the Company’s ~~continues to evaluate the impact of the various sanctions and restrictions on its~~ ability to ~~conduct~~transfer ~~business~~funds infrom ~~Russia,~~bank ~~access~~accounts ~~cash~~located ~~held~~ in Russia, ~~maintain~~to ~~contracts~~other ~~with~~countries. ~~and~~As ~~pay~~of ~~vendors in Russia~~September 30, ~~pay~~2024 ~~employees in Russia,~~ and ~~receive payment from customers in Russia~~June 30, ~~there is no assurance that the Company will be able to do so in the future. Any disruption to~~2024, ~~or suspension of,~~ the ~~Company’s~~restricted ~~business and operations in Russia would result in the loss of revenue or access to~~ cash ~~balances~~held ~~from business~~ in Russia ~~and~~was ~~would~~$14.0 million ~~negatively impact our growth~~ and ~~profitability~~$11.5 million, ~~The Company may also suffer reputational harm as a result of continued operations in Russia~~respectively, which ~~may~~is ~~adversely~~included ~~impact~~within ~~sales~~other ~~and~~non-current ~~other~~assets ~~businesses~~on inthe ~~other~~condensed ~~countries~~consolidated balance sheets.

2. Significant Accounting Policies

Our significant accounting policies are described in Note 2, “Significant Accounting Policies,” to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2023~~2024. There were no material changes to our significant accounting policies during the ~~nine~~three months ended ~~March 31~~September 30, 2024.

(a) ~~Revenue~~ Recently ~~Recognition~~Issued Accounting Standards Not Yet Adopted

Prior to the third quarter of fiscal 2023, Digital Grid Management (“DGM”) 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

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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 DGM 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 DGM customers to implement its products.

Accordingly, effective January 1, 2023, following the completion of these business transformation activities, for all prospective DGM contracts entered into after January 1, 2023, the Company accounts for the DGM 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 DGM 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.

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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 2023-09 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’s ~~monitors the credit quality of customer~~ contract ~~asset~~assets ~~balances on an individual basis, at each reporting date, through credit characteristics, geographic location,~~ and ~~the industry in which the customers operate. The Company recognizes an impairment on~~ contract ~~assets~~liabilities ~~if,~~were ~~subsequent~~as tofollows ~~contract~~as ~~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~~September 30, ~~customer-specific~~2024 ~~factors,~~ and ~~current economic conditions. The potential impact of credit losses on contract assets was immaterial as of March~~June 3130, 2024. :


	September 30, 2024		June 30, 2024

	(Dollars in Thousands)
Contract assets	$	944,949	$	924,283
Contract liabilities	(151,337)		(151,824)
Net contract assets	$	793,612	$	772,459

~~Table~~The majority of ~~Contents~~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 three months ended September 30, 2024 was primarily due to greater revenue recognition as compared to billings. Revenue recognized during the first quarter of fiscal 2024 included $38.0 million that was included in the beginning contract liability balance.

The Company’s contract assets and contract liabilities were as follows as of March 31, 2024 and June 30, 2023:

	March 31, 2024		June 30, 2023
	(Dollars in Thousands)
Contract assets	$	907,196	$	903,643
Contract liabilities	(167,952)		(181,553)
Net contract assets	$	739,244	$	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 nine months ended March 31, 2024 was primarily due to greater revenue recognition as compared to billings. Revenue recognized from the contract liability balance as of June 30, 2023, was $23.8 million and $112.1 million for the three and nine months ended March 31, 2024, respectively.

Transaction Price Allocated to Remaining Performance Obligations

The following table includes the aggregate amount of the transaction price allocated as of ~~March~~September 3130, 2024 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

Year Ending June 30,

Year Ended June 30,

2024

2025

2026

2027

2028

Thereafter

Total

2025

2026

2027

2028

2029

Thereafter

Total

(Dollars in Thousands)

License and solutions

75158,~~529~~801

~~116~~57,~~533~~595

5019,~~467~~618

2010,~~546~~301

75,~~495~~063

~~2,724~~182

~~273~~251,~~294~~560

Maintenance

84246,~~621~~297

~~275~~234,~~169~~058

~~200~~172,~~500~~742

~~141~~114,~~483~~627

9467,~~010~~181

6534,~~330~~640

~~861~~869,~~113~~545

Services and other

2384,~~216~~300

6952,~~346~~695

3318,~~389~~142

157,~~099~~809

~~7,129~~571

~~290~~77

~~148~~163,~~469~~594

Total

~~183~~489,~~366~~398

~~461~~344,~~048~~348

~~284~~210,~~356~~502

~~177~~132,~~128~~737

~~108~~72,~~634~~815

6834,~~344~~899

1,~~282~~284,~~876~~699

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Disaggregated Revenue Information

The table below reflects disaggregated revenues by business for the three months ~~and nine months~~ ended ~~March~~September 3130, 2024 and 2023:

	Three Months Ended March 31,				Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023		~~2024~~		~~2023~~
	(Dollars in Thousands)
Heritage AspenTech	$	~~178~~150,~~621~~043	$	~~155~~175,~~481~~743	$	~~521,801~~	$	~~499,328~~
Subsurface Science & Engineering	43,665		36,854		96,320		99,569
Subsurface Science & Engineering (“SSE”)	20,310		24,081
DGM	55,820		37,543		166,456		124,638
Digital Grid Management (“DGM”)	45,524		49,484
Total	$	~~278~~215,~~106~~877	$	~~229~~249,~~878~~308	$	~~784,577~~	$	~~723,535~~

The Company did not have any customers that accounted for 10 percent or more of the Company’s revenues for the three ~~and nine~~ months ended ~~March~~September 3130, 2024 and 2023, respectively.

4. ~~Acquisitions~~Intangible Assets

~~Inmation~~Intangible ~~Software~~assets ~~GmbH~~consist of the following as of September 30, 2024 and June 30, 2024:

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.


	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total

September 30, 2024	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(585,236)		(18,900)		(796,521)		(10,057)		(1,410,714)
Net carrying amount	$	1,318,363	$	445,500	$	2,286,020	$	13,969	$	4,063,852

	Developed Technology		Trademarks		Customer Relationships and Backlog		Capitalized Software and Other		Total

June 30, 2024	(Dollars in Thousands)
Gross carrying amount	$	1,903,599	$	464,400	$	3,082,541	$	24,026	$	5,474,566
Less: Accumulated amortization	(537,492)		(17,931)		(724,270)		(10,123)		(1,289,816)
Net carrying amount	$	1,366,107	$	446,469	$	2,358,271	$	13,903	$	4,184,750

~~Prior~~Of to the ~~closing~~total ~~date,~~intangible ~~Inmation~~assets ~~was~~net ~~considered~~carrying aamount ~~related~~of ~~party~~$4.1 tobillion ~~AspenTech~~ as ~~Emerson~~of ~~Electric~~September 30, Co2024, $430.0 million ~~(“Emerson”~~relates orto ~~“Parent~~the ~~Company”),~~registered ~~through~~trademarks ~~one~~associated ofwith ~~its~~the ~~subsidiaries,~~Transaction ~~held~~(as andefined ~~equity-method investment~~ in ~~Inmation.~~Note At15, ~~the~~“Related-Party ~~time~~Transactions”) ofthat ~~close,~~are ~~$17.6 million~~not ~~was~~subject ~~paid~~ to ~~Emerson~~amortization. inTotal ~~exchange~~intangible ~~for~~asset ~~all~~amortization ~~its~~expense ~~shares~~was in$121.8 million ~~Inmation,~~and ~~with another~~ $1121.97 million ~~paid~~during ~~for~~the anthree ~~indemnification holdback 12~~ months ~~after~~ended ~~the~~September 30, ~~close~~2024 onand ~~August 18~~2023, ~~2023~~respectively.

125. Goodwill

The changes in the carrying amount of goodwill during the three months ended September 30, 2024 were as follows:


	Carrying Value
	(Dollars in Thousands)
Balance, June 30, 2024	$	8,328,201
Foreign currency translation	1,923
Balance, September 30, 2024	$	8,330,124

6. Restructuring Costs

The Company records liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. Employee severance costs are accrued when the restructuring actions have been determined and communicated to the employee. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period.

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5In August 2024, the Company announced a reorganization of its corporate structure, resulting in the elimination of certain roles as it continues to seek additional opportunities to streamline expenses and increase efficiencies. ~~Intangible~~ ~~Assets~~ Additionally, due to the expansion of sanctions by the United States government on commercial activity in Russia, the Company will be closing certain facilities, and terminating or relocating substantially all employees based in Russia during fiscal 2025. As a result of these actions, the Company has incurred and will continue to incur restructuring costs during fiscal 2025 consisting primarily of severance expenditures, one-time benefits and other contract termination costs.

~~Intangible~~Restructuring ~~assets~~costs ~~consist~~were of$7.7 million for the ~~following~~three asmonths ofended ~~March~~September 3130, 2024, and ~~June~~ there were no restructuring costs for the three months ended September 30, 2023:. As of September 30, 2024, the liability associated with unpaid restructuring costs was $1.1 million, which is included within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

	March 31, 2024
	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	(484,828)		(24,047)		(649,197)		(9,805)		(1,167,877)
Net carrying amount	$	1,418,771	$	440,353	$	2,433,344	$	14,221	$	4,306,689
	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 $4.3 billion as of March 31, 2024, $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 $122.0 million and $121.7 million during the three months ended March 31, 2024 and 2023, respectively, and $365.4 million and $364.2 million during the nine months ended March 31, 2024 and 2023, respectively.

6. Goodwill

The changes in the carrying amount of goodwill during the nine months ended March 31, 2024 were as follows:

	Carrying Value
	(Dollars in Thousands)
Balance as of June 30, 2023	$	8,330,811
Foreign currency translation	(1,312)
Balance as of March 31, 2024	$	8,329,499

7. Leases

OnOperating ~~December 26, 2023, the Company entered into an amendment to its existing~~ lease ~~agreement~~costs atare ~~its~~recognized ~~principal~~on ~~executive~~a ~~offices~~straight-line ~~located~~basis inover ~~Bedford, Massachusetts (~~the ~~“Lease Amendment”). Under the Lease Amendment, the Company: (i) extended the~~ term of the ~~existing~~ lease. The ~~for~~components ~~approximately~~of ~~132,000~~total ~~rentable~~lease ~~square~~expense ~~feet~~for ~~from~~the ~~March~~three ~~2025~~months toended ~~March 2038~~September 30, 2024 and ~~(ii)~~2023 ~~obtained~~were anas ~~additional approximate 23,000 rentable square feet of office space, also through March 2038.~~follows:

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 sheets as of the commencement date, which is reflected net of a $25.4 million leasehold improvement incentive to be reimbursed to the Company by the landlord under the Lease Amendment. As invoices are paid by the Company 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 Amendment or the life of the underlying asset.


	Three Months Ended September 30,
	2024		2023

	(Dollars in Thousands)
Operating lease expense	$	4,977	$	4,466
Variable lease expense	$	404	$	223
Short term lease expense	$	136	$	157

~~Operating~~The ~~lease~~following ~~costs~~table ~~are~~summarizes ~~recognized on a straight-line basis over~~ the ~~term~~balances of the ~~lease. The~~Company’s ~~components~~operating ~~of total~~ lease ~~expense~~right-of-use ~~for~~assets ~~the~~and ~~three~~operating ~~and~~lease ~~nine~~liabilities ~~months~~as ~~ended~~of ~~March~~September 3130, 2024 and ~~2023~~June 30, ~~are as follows~~2024:


	September 30, 2024		June 30, 2024

	(Dollars in Thousands)
Operating lease right-of-use assets	$	95,001	$	96,034
Current operating lease liabilities	$	12,172	$	13,125
Non-current operating lease liabilities	$	85,676	$	84,875

~~Table~~The weighted-average remaining lease term for operating leases was eleven years and eleven years, and the weighted-average discount rate was 4.2% and 4.0% as of ~~Contents~~September 30, 2024 and June 30, 2024, respectively.

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
	(Dollars in Thousands)
Operating lease expense	$	5,199	$	4,495	$	14,688	$	12,882
Variable lease expense	281		245		697		670
Short term lease expense	142		167		447		71
Total lease expense	$	5,622	$	4,907	$	15,832	$	13,623

The following table represents the future maturities of the Company’s operating lease liabilities as of September 30, 2024:

The following table summarizes the balances of the Company’s operating lease right-of-use assets and operating lease liabilities as of March 31, 2024 and June 30, 2023:


Year Ending June 30,	(Dollars in Thousands)
2025	$	10,219
2026	11,019
2027	14,416
2028	14,015
2029	13,125
Thereafter	91,950
Total lease payments	154,744
Less: imputed interest	(32,073)
Less: leasehold improvement incentives to be utilized	(24,823)
Total lease maturities	$	97,848

	March 31, 2024		June 30, 2023
	(Dollars in Thousands)
Operating lease right-of-use assets	$	94,353	$	67,642
Current operating lease liabilities	$	13,698	$	12,928
Non-current operating lease liabilities	$	81,361	$	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 March 31, 2024 and June 30, 2023, respectively.

The following table represents the future maturities of the Company’s operating lease liabilities as of March 31, 2024:

Fiscal Year Ending June 30,	(Dollars in Thousands)
2024	$	3,811
2025	11,977
2026	8,895
2027	13,015
2028	12,818
Thereafter	103,186
Total lease payments	153,702
Less: imputed interest	(33,258)
Less: leasehold improvement incentives to be utilized	(25,385)
Total lease maturities	$	95,059

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.

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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 ~~March~~September 3130, 2024 and June 30, ~~2023~~2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	Fair Value Measurements at Reporting Date Using,
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)

	(Dollars in Thousands)
September 30, 2024
Money market funds (cash equivalents)	$	106,187	$	—
Equity method investments	$	—	$	2,467

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June 30, 2024
Money market funds (cash equivalents)	$	129,710	$	—
Equity method investments	$	—	$	2,437

	March 31, 2024
	Level 1 Inputs		Level 2 Inputs
	(Dollars in Thousands)
Cash equivalents	$	68,868	$	—
Equity method investments	$	—	$	2,424

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 its carrying value. The estimated fair value of the borrowings under the Second Amended and Restated Credit Agreement (described below in Note 10, “Debt”) approximates its carrying value due to the floating interest rate.

	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:

	March 31, 2024		June 30, 2023
	September 30, 2024		June 30, 2024
	(Dollars in Thousands)
Compensation-related	$	5450,~~044~~610	$	6261,~~162~~976
Accrued taxes	7,229		7,921
Professional fees	5,661		4,987
Professional fees	4,144		6,265
Accrued taxes	5,146		10,991
Acquisition related	1,~~019~~475		81,~~984~~804
Royalties and outside commissions	504		654
Restructuring	1,078		—
Other	14,~~902~~956		1320,~~540~~409
Total accrued expenses and other current liabilities	$	8178,~~842~~926	$	99100,~~526~~167

10. Debt

~~Credit~~Second ~~Agreement~~Amended ~~with~~and ~~Related~~Restated ~~Party~~Credit Agreement

On ~~December~~June 2327, ~~2022~~2024, the Company entered into a ~~credit~~new ~~agreement~~Second ~~with~~Amended ~~Emerson~~and ~~(the~~Restated ~~“Emerson~~ Credit Agreement~~”),~~ ~~which provided for an aggregate term loan commitment of $630.0 million. Under~~ (the ~~terms~~“Second ofAmended ~~the~~and ~~Emerson~~Restated Credit Agreement,”) ~~the~~with ~~Company~~JPMorgan ~~would~~Chase ~~have~~Bank, ~~used~~National ~~the~~Association ~~proceeds~~with ~~from~~an ~~borrowings~~expiration ~~under~~date ~~the~~of ~~Emerson~~June ~~Credit Agreement to pay~~27, in2029 ~~part,~~that ~~the~~provides ~~cash consideration~~ for ~~funding~~aggregate ~~the~~borrowing ~~acquisition~~commitments of ~~Mining Software Holdings Pty Ltd (“Micromine”) and to pay the fees and expenses incurred in connection with the Emerson Credit Agreement~~$200.0 million.

OnAs ~~August~~of 18September 30, ~~2023~~2024, the ~~Emerson~~Company ~~Credit Agreement~~ was ~~terminated~~ in ~~connection~~compliance with the ~~termination~~covenants ofassociated with the ~~agreement~~Second toAmended ~~purchase~~and ~~Micromine.~~Restated ~~There~~Credit ~~was~~Agreement, noand, ~~amount~~after considering eligible outstanding ~~under~~letters of credit allowable in the ~~Emerson~~aggregate ~~Credit~~amount ~~Agreement~~of at$5.5 million, the ~~time~~Company ithad ~~was~~$194.5 million ~~terminated~~available for borrowing.

~~Amended and Restated Credit Agreement~~13

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 March 31, 2024, after considering eligible outstanding letters of credit allowable per the Amended and Restated Credit Agreement in the aggregate amount of $2.3 million, the Company had $197.7 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~~For ~~Amended~~a ~~and~~more ~~Restated~~detailed ~~Credit~~description ~~Agreement~~of ~~contains~~the ~~customary~~Second ~~affirmative~~Amended and ~~negative~~Restated ~~covenants,~~Credit ~~including restrictions on incurring additional debt~~Agreement, ~~liens,~~see ~~fundamental~~Note ~~changes~~12, ~~asset~~“Debt” ~~sales,~~to ~~restricted~~the ~~payments~~consolidated ~~(including~~and ~~dividends)~~combined ~~and~~financial ~~transactions~~statements ~~with~~included ~~affiliates.~~in ~~There~~our ~~are~~Annual ~~also~~Report ~~financial~~on ~~covenants~~Form ~~measured~~10-K atfor the ~~end of each~~ fiscal ~~quarter~~year ~~including~~ended aJune ~~maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 2.50 to 1.00. As of March 31~~30, 2024~~, 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 nine~~ months ended ~~March~~September 3130, 2024 and 2023 are as follows:

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

2024

2023

~~2024~~

~~2023~~

(Dollars in Thousands)

Cost of license and solutions

~~522~~551

~~832~~680

~~1,804~~

~~2,752~~

Cost of maintenance

~~667~~887

~~427~~488

~~1,884~~

~~1,462~~

Cost of services and other

~~731~~1,045

~~599~~498

~~1,589~~

~~1,457~~

Selling and marketing

2,~~463~~930

32,~~695~~942

~~8,112~~

~~10,886~~

Research and development

3,~~343~~000

54,~~972~~553

~~11,615~~

~~13,831~~

General and administrative

56,~~181~~401

117,~~318~~538

~~20,813~~

~~33,632~~

Total stock-based compensation

1214,~~907~~814

2216,~~843~~699

~~45,817~~

~~64,020~~

Stock Options

The table below summarizes activities related to stock options for the ~~nine~~three months ended ~~March~~September 3130, 2024:

	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
Outstanding as of June 30, 2024	760,088	$	160.82	5.61	$	43,132
Granted	1,471	$	171.56
Exercised	(50,006)	$	140.67
Exercised	(132,771)	$	140.42
Cancelled / Forfeited	(28,323)	$	175.33
Cancelled / Forfeited	(41,635)	$	184.13
Outstanding as of September 30, 2024	681,759	$	159.47	5.62	$	65,611
Outstanding as of March 31, 2024	832,891	$	160.81	5.93	$	58,787
Exercisable as of September 30, 2024	562,878	$	133.36	5.18	$	59,369
Exercisable as of March 31, 2024	627,849	$	130.04	5.23	$	52,292
Vested and expected to vest as of September 30, 2024	675,824	$	142.10	5.61	$	65,386
Vested and expected to vest as of March 31, 2024	815,941	$	141.91	5.89	$	58,329

__________

(1) The aggregate intrinsic value in this table represents any excess of the closing market price of the Company’s common stock as of ~~March~~September 3130, 2024 ($~~213~~238.2882) 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 ~~nine~~three months ended ~~March~~September 3130, 2024:


	Number of Shares Underlying Performance Stock Units		Weighted Average Grant-Date Fair Value PSUs		Number of Shares Underlying Restricted Stock Units		Weighted Average Grant-Date Fair Value RSUs

	(Dollars in Thousands, except per share data)
Outstanding as of June 30, 2024	82,656		$	194.03	288,887		$	193.98
Granted	87,945		$	234.14	159,878		$	231.06
Settled	—		—		(62,272)		$	196.29
Forfeited	(13,289)		$	194.10	(28,652)		$	198.05
Outstanding as of September 30, 2024	157,312		$	216.45	357,841		$	210.23
Weighted average remaining recognition period of outstanding units (in years)	2.58				2.16
Unrecognized stock-based compensation expense of outstanding units	$	22,753			$	62,714
Aggregate intrinsic value of outstanding units	$	29,282			$	83,133

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	Number of Shares Underlying Performance Stock Units		Number of Shares Underlying Restricted Stock Units
	(Dollars in Thousands)
Outstanding as of June 30, 2023	—		456,368
Granted	94,174		190,426
Settled	—		(268,705)
Forfeited	(9,446)		(40,789)
Outstanding as of March 31, 2024	84,728		337,300
Weighted average remaining recognition period of outstanding restricted units (in years)	2.25		2.38
Unrecognized stock-based compensation expense of outstanding restricted units	$	8,295	$	50,982
Aggregate intrinsic value of outstanding restricted units	$	12,684	$	69,872

In fiscal 2024 and 2025, the Company granted performance stock units with both a performance and service condition. The performance condition relates to the attainment of predefined goals based on annual contract value and free cash flow. 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.

~~The weighted average grant date fair value per restricted stock unit was $200~~12.73 Net ~~and~~Loss ~~$201.72~~Per during the three months ended March 31, 2024 and 2023, respectively, and $193.86 and $208.79 during the nine months ended March 31, 2024 and 2023, respectively. The weighted average grant date fair value per performance stock unit was $194.03 during the nine months ended March 31, 2024. There were no performance stock units granted during the three months ended March 31, 2024, and there were no performance stock units granted or outstanding during the three and nine months ended March 31, 2023.Share

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~~calculations ~~goal relates to the sum~~ of ~~(i)~~basic ~~annual contract value growth~~ and ~~(ii)~~diluted ~~free~~net ~~cash~~loss ~~flow~~per ~~margin~~share ~~over~~and ~~the~~basic ~~performance~~and ~~period.~~diluted Upweighted toaverage ~~175%~~shares ofoutstanding ~~the~~for ~~performance stock units could vest upon achievement of~~ the three ~~performance~~months ~~goals.~~ended ~~Conversely~~September 30, if2024 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~~2023 ~~anticipated~~are ~~level~~as ~~of attainment to determine the amount of compensation expense to record in the condensed consolidated financial statements.~~follows:

12. Net Income (Loss) Per Share


	Three Months Ended September 30,
	2024		2023

	(Dollars and Shares in Thousands, Except per Share Data)
Net loss	$	(60,464)	$	(34,525)

Basic weighted average shares outstanding	63,244		64,319



Dilutive weighted average shares outstanding	63,244		64,319

Net loss per share
Basic	$	(0.96)	$	(0.54)
Dilutive	$	(0.96)	$	(0.54)

~~Basic~~For ~~income~~the ~~(loss)~~three ~~per~~months ~~share~~ended isSeptember 30, ~~determined~~2024, byand ~~dividing~~2023, ~~net~~certain ~~income~~employee ~~(loss)~~equity byawards ~~the~~were ~~weighted~~anti-dilutive ~~average~~due ~~common~~to ~~shares outstanding during~~ the ~~period.~~Company’s ~~Diluted~~net ~~income (~~loss). ~~per~~The ~~share~~following isemployee ~~determined~~equity byawards ~~dividing~~were ~~net~~excluded ~~income~~from ~~(loss)~~the bycalculation of diluted weighted average shares outstanding ~~during~~because ~~the~~their ~~period.~~effect ~~Diluted~~would ~~weighted~~be ~~average shares reflect the~~ anti-dilutive ~~effect,~~as ~~if any,~~ of ~~potential common shares. To the extent their effect is dilutive~~September 30, ~~employee~~2024 ~~equity awards~~ and ~~other commitments to be settled in common stock are included in the calculation of diluted net income (loss) per share based on the treasury stock method.~~2023:

The calculations of basic and diluted net loss per share and basic and diluted weighted average shares outstanding for the three and nine months ended March 31, 2024 and 2023 are as follows:


	Three Months Ended September 30,
	2024	2023

	(Shares in Thousands)
Employee equity awards	1,032	1,449

	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023
	(Dollars and Shares in Thousands, Except per Share Data)
Net income (loss)	$	1,556	$	(57,635)	$	(54,469)	$	(135,076)
Basic weighted average shares outstanding	63,508		64,796		63,844		64,622
Dilutive impact from:
Employee equity awards	294		—		—		—
Dilutive weighted average shares outstanding	63,802		64,796		63,844		64,622
Net income (loss) per share
Basic	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)
Dilutive	$	0.02	$	(0.89)	$	(0.85)	$	(2.09)

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For the three and nine months ended March 31, 2024, and 2023, certain employee equity awards were anti-dilutive based on the treasury stock method. The following employee equity awards were excluded from the calculation of diluted weighted average shares outstanding because their effect would be anti-dilutive as of March 31, 2024 and 2023:

	Three Months Ended March 31,		Nine Months Ended March 31,
	2024	2023	2024	2023
	(Shares in Thousands)
Employee equity awards	1,242	1,441	1,192	1,367

13. Stock Repurchases

On ~~May~~August 56, ~~2023~~2024, the Company ~~entered~~announced ~~into~~that anits ~~accelerated~~Board of Directors approved a share repurchase ~~program~~authorization (the “~~ASR~~Fiscal ~~Program~~2025 Share Repurchase Authorization”) ~~with~~pursuant ~~JPMorgan~~ to ~~repurchase~~which an aggregate amount of $100.0 million of ~~the~~its ~~Company’s~~ common stock. ~~Pursuant~~may tobe ~~the~~repurchased, ~~terms~~by means of ~~the~~open ~~ASR~~market ~~Program~~transactions, ~~the~~block ~~Company~~transactions, ~~made~~privately annegotiated ~~initial~~purchase ~~payment~~transactions toor ~~JPMorgan~~any ~~and~~other ~~received~~purchase antechniques, ~~initial~~including ~~delivery~~10b5-1 trading plans. The timing and amount of ~~487,626~~any shares ofrepurchased under the ~~Company’s~~Fiscal ~~common~~2025 ~~stock,~~Share ~~which~~Repurchase ~~represented~~Authorization ~~approximately~~are ~~80%~~based ofon ~~the~~market ~~total~~conditions ~~number~~and ofother factors. All shares of the Company’s common stock ~~expected~~repurchased tohave bebeen ~~purchased~~recorded as treasury stock under the ~~ASR~~cost ~~Program~~method. The Company reflects share repurchases in its condensed consolidated financial statements once the transaction is settled.

~~The~~ ~~ASR~~As ~~Program~~of ~~was settled on August 7~~September 30, ~~2023~~2024, ~~resulting~~a intotal ~~an additional delivery~~ of ~~107~~92,~~045~~819 shares ofhave ~~the~~been ~~Company’s common stock. The Company~~ repurchased inunder ~~total~~the ~~594,671~~Fiscal ~~shares~~2025 ofShare ~~common~~Repurchase ~~stock~~Authorization for $~~100~~20.05 million, aswith ~~part of~~ the ~~ASR~~total ~~Program.~~remaining ~~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 ofavailable ~~the 594,671 shares received upon settlement, offset by an increase to additional-paid-in-capital~~ for ~~the~~repurchase ~~value~~being ~~of the shares repurchased in excess of the~~ $~~100~~79.05 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 third quarter of fiscal 2024, the Company repurchased 288,241 shares for $56.7 million under the Share Repurchase Authorization. As of March 31, 2024, a total of 1,243,080 shares have been repurchased under the Share Repurchase Authorization for $243.1 million, with the total remaining value being $56.9 million.

14. Benefit 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 both the three months ended September 30, ~~2022,~~2024 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 pre-tax (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 ~~nine~~September ~~months ended March 31~~30, ~~2024,~~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 $9.1 million and $24.2 million for the three months ended March 31, 2024 and 2023, respectively, resulting in effective tax rates of 120.6% and 29.5%, respectively. Income tax benefit decreased primarily due to an increase in pre-tax profitability in our domestic and foreign operations.15

Benefit for income taxes was $42.2 million and $68.1 million for the nine months ended March 31, 2024 and 2023, respectively, resulting in effective tax rates of 43.7% and 33.5%, respectively. Income tax benefit decreased primarily due to an increase in pre-tax profitability in our domestic and foreign operations.

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Benefit for income taxes was $16.3 million and $17.5 million for the three months ended September 30, 2024 and 2023, respectively, resulting in effective tax rates of 21.2% and 33.6%, respectively. Income tax benefit decreased primarily due to the lower Foreign-Derived Intangible Income (“FDII”) deduction taken this year compared to last year resulting from lower taxable income in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. The first quarter of fiscal 2024 included a significant temporary item that increased taxable income relating to a change in the methodology for recording revenue for tax purposes on multi-year software licenses. There was no such temporary item in the first quarter of fiscal 2025.

15. Related-Party Transactions

On October 10, 2021, Emerson Electric Co. (“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 the DGM business and the ~~Subsurface Science & Engineering (“~~SSE”) business. The Transaction closed on May 16, 2022 (“Closing Date”). Emerson owned approximately 56% of AspenTech on a fully diluted basis as of ~~March~~September 3130, 2024.

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~~which are reflected as receivables from related parties in the condensed consolidated balance sheets. 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 sheets. 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 DGM and SSE businesses 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. The Transition Services Agreement expires on December 31, 2024.

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 March 31, 2024 and June 30, 2023 include the following:~~16

	March 31, 2024		June 30, 2023
	(Dollars in Thousands)
Interest bearing receivables from related parties	$	68,767	$	61,948
Trade receivables from related parties	330		427
Receivables from related parties	$	69,097	$	62,375
Interest bearing payables to related parties	$	67,805	$	21,866
Trade payables to related parties	149		153
Due to related parties	$	67,954	$	22,019

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Receivables from related parties and due to related parties reported in the condensed consolidated balance sheets as of September 30, 2024 and June 30, 2024 include the following:


	September 30, 2024		June 30, 2024

	(Dollars in Thousands)
Interest bearing receivables from related parties	$	45,119	$	78,278
Trade receivables from related parties	181		205
Receivables from related parties	$	45,300	$	78,483

Interest bearing payables to related parties	$	24,661	$	47,315
Trade payables to related parties	318		134
Due to related parties	$	24,979	$	47,449

Allocations and charges from Emerson are as follows:

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

2024

2023

~~2024~~

~~2023~~

(Dollars in Thousands)

Information technology

~~176~~194

~~677~~975

~~1,522~~

~~2,251~~

Shared services and other

~~262~~162

~~850~~374

~~807~~

~~4,745~~

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, the DGM and SSE businesses 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. Revenue and purchases from Emerson affiliates for the three ~~and nine~~ months ended ~~March~~September 3130, 2024 and 2023 are as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023		~~2024~~		~~2023~~
	(Dollars in Thousands)
Revenue from Emerson affiliates	$	~~351~~987	$	4313	$	~~661~~	$	12
Purchases from Emerson affiliates	$	~~124~~75	$	~~116~~68	$	~~313~~	$	~~331~~

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~~AspenTech’s board of directors, the right of Emerson to nominate the chair of ~~the Company~~AspenTech’s board of directors, the composition of the committees of ~~the Company~~AspenTech’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 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 ~~March~~September 3130, 2024.

~~Business Combination with Related Party~~17

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 ~~continuing~~currently tointegrating ~~integrate~~ 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 March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

2024

2023

~~2024~~

~~2023~~

(Dollars in Thousands)

Americas

~~121~~111,~~704~~866

~~115~~133,~~614~~016

~~403,078~~

~~360,935~~

Asia, Middle East and Africa

7852,~~165~~269

5857,~~881~~685

~~192,880~~

~~174,595~~

Europe

7851,~~237~~742

5558,~~383~~607

~~188,619~~

~~188,005~~

Total

~~278~~215,~~106~~877

~~229~~249,~~878~~308

~~784,577~~

~~723,535~~

Americas included revenue in the United States of $~~104~~83.14 million and $8996.40 million for the three months ended ~~March~~September 3130, 2024 and 2023, respectively~~, and $332~~.~~8 million and $289.9 million for the nine months ended March 31, 2024 and 2023, respectively.~~

	Property, Equipment, and
	Leasehold Improvements, Net
	March 31, 2024		June 30, 2023
	September 30, 2024		June 30, 2024
	(Dollars in Thousands)
Americas	$	13,~~438~~906	$	1513,~~793~~643
Asia, Middle East and Africa	12,~~775~~452		12,~~923~~011
Europe	1,~~201~~735		~~954~~1,735
Total	$	1618,~~414~~093	$	1817,~~670~~389

Property, equipment, and leasehold improvements, net located in the United States were $11.35 million and $1311.42 million as of ~~March~~September 3130, 2024 and June 30, ~~2023~~2024, respectively.

2117. Subsequent Events

On October 25, 2024, the Company entered into a definitive agreement to acquire Open Grid Systems Limited (“OGS”). OGS is a global provider of network model management technology and a pioneer in developing model-driven applications supporting open access to data through industry standards. The Company has agreed to pay $45.0 million, plus the value of any cash acquired and any necessary net working capital adjustments. The Company currently intends to finance the transaction through cash on hand. The acquisition is expected to close in the second fiscal quarter of 2025, subject to receipt of regulatory approvals.

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

~~Caution~~Cautionary ~~Concerning~~Note Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) 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~~statements ~~and~~are ~~uncertainties~~only ~~include,~~predictions ~~without~~and ~~limitation:~~are ~~the~~based ~~failure~~on tocurrent ~~realize~~expectations ~~the anticipated benefits~~ of ~~our~~management. ~~transaction~~The ~~with~~outcome ~~Emerson; risks resulting from our status as a controlled company; the scope, duration and ultimate impacts~~ of the ~~Russia-Ukraine~~events ~~war~~described ~~and~~in ~~the~~these ~~Israeli~~forward-~~Hamas~~looking ~~conflict;~~statements asis ~~well~~subject asto ~~economic~~known and ~~currency~~unknown ~~conditions~~risks, ~~market~~uncertainties ~~demand~~and ~~(including~~other ~~related~~factors tothat ~~adverse~~may ~~changes~~cause inour, ~~the~~our ~~process~~customers’ or ~~other~~our ~~capital-intensive~~industry’s ~~industries~~actual ~~such as materially reduced spending budgets due to oil and gas price declines and volatility)~~results, ~~pricing,~~levels ~~protection~~ of ~~intellectual property~~activity, ~~cybersecurity,~~performance ~~natural~~or ~~disasters,~~achievements ~~tariffs,~~expressed ~~sanctions,~~or ~~competitive~~implied ~~and~~by ~~technological~~these ~~factors~~forward-looking statements, ~~inflation;~~to ~~and~~differ ~~others,~~ including those ~~described~~set inforth below under “Item 1A. Risk Factors” of Part II inof 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~~Quarterly Report. You should also read “Item 1A. Risk Factors” of Part II inof 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~~2025” refers to the year ending June 30, ~~2024~~2025).

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~~while ~~the~~also ~~expectation~~operating ~~of a higher living standard~~ in a ~~profitable~~more ~~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, such as Industrial Artificial Intelligence (“Industrial AI”), which is the combination of data insights from artificial intelligence and domain expertise grounded in engineering fundamentals, asset knowledge and industry experience. 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~~maintaining ~~others, how to maintain~~ maximum efficiency in process operations, ~~manage~~managing electrical grids amid the growth in renewable energy sources, helping ensure supply chain resiliency, ~~and~~reducing ~~reduce~~ carbon emissions, and more.

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

By combining the software capabilities, deep domain expertise and leadership of Heritage AspenTech with the DGM and SSE businesses, we expanded our served markets, augmented our expertise and sales channels, and broadened our portfolio to include five product suites: Performance Engineering (“ENG”), Manufacturing and Supply Chain (“MSC”), Asset Performance Management (“APM”), DGM, and SSE. These suites are supported by ~~DataWorks~~inmation ~~Industrial~~Software ~~Data Management ("DataWorks")~~GmbH, our ~~industry-leading~~data platform with advanced capabilities in data contextualization, structuring and cleansing, ~~and~~that enables ~~AspenTech~~our customers to better manage their industrial data at scale.

~~Recent Events~~ 19

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 third quarter of fiscal 2024,

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~~the~~Recent ~~Company~~Events repurchased 288,241 shares for $56.7 million under the Share Repurchase Authorization. As of March 31, 2024, a total of 1,243,080 shares have been repurchased under the Share Repurchase Authorization for $243.1 million, with the total remaining value being $56.9 million.

On August 6, 2024, we announced that our Board of Directors approved the Fiscal 2025 Share Repurchase Authorization, pursuant to which we may repurchase up to an aggregate amount of $100.0 million of our outstanding shares of common stock. During the first quarter of fiscal 2025, we repurchased 92,819 shares for $20.5 million under the Fiscal 2025 Share Repurchase Authorization and the total remaining value under the Fiscal 2025 Share Repurchase Authorization as of September 30, 2024 was $79.5 million.

On October 25, 2024, the Company entered into a definitive agreement to acquire OGS, which is a global provider of network model management technology and a pioneer in developing model-driven applications supporting open access to data through industry standards. The Company has agreed to pay $45 million, plus the value of any cash acquired and any necessary net working capital adjustments. The Company currently intends to finance the transaction through cash on hand. The acquisition is expected to close in the second fiscal quarter of 2025, subject to receipt of regulatory approvals.

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~~operating ~~from operations~~income

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 SMS 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 March 31, 2024, customer agreements representing approximately 84.5% 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.20

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.

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WeAs ~~estimate~~of ~~that~~September 30, ~~ACV~~2024, ~~grew~~customer byagreements representing approximately 985.53%, ~~from~~of ~~$854~~our ACV (by value) were denominated in U.6S. ~~million~~dollars. asFor ofagreements ~~March~~denominated 31in other currencies, ~~2023~~we use a fixed historical exchange rate to ~~$936~~calculate ACV in U.1S. ~~million~~dollars asrather ofthan ~~March~~using 31current exchange rates, ~~2024~~so that our calculation of growth in ACV is not affected by fluctuations in foreign currencies.

Beginning in the fourth quarter of fiscal 2024, we suspended all commercial activities in Russia following the announcement of expanded commercial sanctions in the country. Beginning in the first quarter of fiscal 2025, we no longer include Russia within ACV for all periods presented. ACV grew by approximately 9.4%, from $860.5 million as of September 30, 2023 to $941.4 million as of September 30, 2024, and by approximately 0.9% from $932.9 million as of June 30, 2024 to $941.4 million as of September 30, 2024.

Total Contract Value

TCV is the aggregate value of all payments received or to be received under all active term license and SMS agreements, including maintenance and escalation. Our TCV was $34.90 billion as of September 30, 2024, and $3.57 billion as of ~~March~~September 3130, ~~2024~~2023. ~~and~~Excluding ~~2023~~TCV associated with the Company’s Russia business, ~~respectively~~TCV was $3.6 billion as of September 30, 2023.

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~~customer 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 $~~301~~151.24 million during the three months ended ~~March~~September 3130, 2024, compared to $~~231~~211.38 million during the three months ended ~~March~~September 3130, 2023. ~~Bookings~~The ~~were~~change ~~$746.4 million~~in ~~during~~bookings ~~the~~is ~~nine~~primarily ~~months~~driven ~~ended~~by ~~March 31, 2024, compared to $698.1 million during~~ the ~~nine~~timing ~~months~~of ~~ended~~contract ~~March~~renewals ~~31,~~and ~~2023.~~a ~~The~~higher ~~change~~concentration ~~in bookings is related to the timing~~ of ~~renewals~~attrition.

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 (used in) 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~~authorizations.

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

	Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023
	(Dollars in Thousands)
Net cash provided by operating activities (GAAP)	$	184,950	$	185,650
Net cash (used in) provided by operating activities (GAAP)	$	(4,397)	$	16,981
Purchase of property, equipment, and leasehold improvements	(2,~~579~~022)		(~~4,515~~937)
Payments for capitalized computer software development costs	(131)		(347)
Free cash flow (non-GAAP)	$	(6,419)	$	16,044
Free cash flow (non-GAAP) (1)	$	182,240	$	180,788

~~__________~~Non-GAAP income from operations excludes certain non-cash and non-recurring expenses, and is used as a supplement to loss 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.

(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.21

Non-GAAP income from operations excludes certain non-cash and non-recurring expenses, and is used as a supplement to loss 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 March 31,				Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023		~~2024~~		~~2023~~
	(Dollars in Thousands)
GAAP loss from operations	$	(1995,~~294~~965)	$	(7860,~~473~~211)	$	~~(128,749)~~	$	~~(189,050)~~
Plus:
Stock-based compensation	1214,~~907~~814		2216,~~843~~699		~~45,817~~		~~64,020~~
Amortization of intangibles (1)	121,749		121,639		364,901		363,960
Amortization of intangible assets	121,589		121,587
Acquisition and integration planning related fees	~~945~~405		~~761~~(255)		~~815~~		~~7,030~~
Non-GAAP income from operations	$	116,307	$	66,770	$	282,784	$	245,960
Restructuring costs	7,726		—
Non-GAAP income from operations	$	48,569	$	77,820

__________

(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

As of September 30, 2024, the Company’s critical accounting estimates and judgments had not changed significantly from June 30, 2024. Note 2, “Significant Accounting Policies,” to the ~~audited~~ consolidated and combined financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2023~~2024 describes the significant accounting policies and methods used in the preparation of the condensed consolidated financial statements appearing in this ~~report~~Quarterly Report. The accounting policies that reflect our critical estimates, judgments and assumptions in the preparation of our condensed consolidated financial statements included in this Quarterly Report 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~~2024.

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Results of Operations

Comparison of the Three Months Ended ~~March~~September 3130, 2024 and 2023

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 infor certain financial data for the three months ended ~~March~~September 3130, 2024 and 2023:

	Three Months Ended March 31,				Increase / (Decrease) Change				(% of Revenue)
	Three Months Ended September 30,				Increase / (Decrease) Change				(% of Revenue)
	2024		2023		$		%		2024		2023
	(Dollars in Thousands)
Revenue:
License and solutions	$	~~169~~101,~~467~~659	$	~~136~~148,~~292~~648	$	33(46,~~175~~989)	24(31.36)	%	6047.91	%	59.36	%
Maintenance	8690,~~256~~686		7784,~~283~~968		85,~~973~~718		~~11.~~6.7		3142.0		3334.61
Services and other	2223,~~383~~532		1615,~~303~~692		67,~~080~~840		3750.30		810.09		76.13
Total revenue	~~278~~215,~~106~~877		~~229~~249,~~878~~308		48(33,~~228~~431)		21(13.04)		100.0		100.0
Cost of revenue:
License and solutions	6563,~~550~~654		6871,~~980~~578		(37,~~430~~924)		(511.01)		2329.65		3028.07
Maintenance	810,~~344~~688		910,~~020~~200		~~(676)~~488		(74.5)8		35.0		34.91
Services and other	1921,~~048~~105		1516,~~799~~282		34,~~249~~823		2029.6		69.8		6.95
Total cost of revenue	9295,~~942~~447		9398,~~799~~060		(~~857~~2,613)		(02.97)		3344.42		4039.83
Gross profit	~~185~~120,~~164~~430		~~136~~151,~~079~~248		49(30,~~085~~818)		36(20.14)		6655.68		5960.27
Operating expenses:
Selling and marketing	~~121~~125,~~303~~661		~~120~~122,~~035~~378		13,~~268~~283		12.17		4358.62		5249.21
Research and development	4950,~~334~~000		5453,~~046~~676		(43,~~712~~676)		(86.78)		1723.72		2321.5
General and administrative	33,~~821~~008		4035,~~471~~405		(62,~~650~~397)		(166.48)		1215.23		1714.62
Total operating expenses	204,458		214,552		(10,094)		(4.7)		73.5		93.3
Restructuring costs	7,726		—		7,726		100.0		3.6		—
Loss from operations	(19,294)		(78,473)		59,179		(75.4)		(6.9)		(34.1)
Total operating expenses	216,395		211,459		4,936		2.3		100.2		84.8
Other expense, net	(1,988)		(13,281)		11,293		(85.0)		(0.7)		(5.8)
Loss from operations	(95,965)		(60,211)		(35,754)		59.4		(44.5)		(24.2)
Interest income, net	13,723		9,969		3,754		37.7		4.9		4.3
Other expense, net	2,041		(5,830)		7,871		(135.0)		0.9		(2.3)
Loss before benefit for income taxes	(7,559)		(81,785)		74,226		(90.8)		(2.7)		(35.6)
Interest income, net	17,176		14,049		3,127		22.3		8.0		5.6
Benefit for income taxes	(9,115)		(24,150)		15,035		(62.3)		(3.3)		(10.5)
Loss before benefit for income taxes	(76,748)		(51,992)		(24,756)		47.6		(35.6)		(20.9)
Net income (loss)	$	1,556	$	(57,635)	$	59,191	(102.7)	%	0.6	%	(25.1)	%
Benefit for income taxes	(16,284)		(17,467)		1,183		(6.8)		(7.6)		(7.0)
Net loss	$	(60,464)	$	(34,525)	$	(25,939)	75.1	%	(28.0)	%	(13.8)	%

~~Revenue~~22

Total revenue increased by $48.2 million, or 21.0%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, due to an increase of $33.2 million in license and solutions revenue, an increase of $9.0 million in maintenance revenue, and an increase of $6.1 million in services.

License and Solutions Revenue

License and solutions revenue increased by $33.2 million, or 24.3%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily attributable to new term license orders in the third quarter of fiscal 2024.

Maintenance Revenue

Maintenance revenue increased by $9.0 million, or 11.6%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to growth of our base of customer arrangements.

Services and Other Revenue

Services and other revenue increased by $6.1 million, or 37.3%, during the three months ended March 31, 2024, 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.

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Cost of Revenue

Total cost of revenue decreased by $0.9 million, or 0.9%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year.

Cost of License and Solutions Revenue

Cost of license and solutions revenue decreased by $3.4 million, or 5.0%, during the three months ended March 31, 2024, 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 61.3% from 49.4% for the three months ended March 31, 2024 and 2023, respectively, due to higher license and solutions revenue.

Cost of Maintenance Revenue

Cost of maintenance revenue decreased by $0.7 million, or 7.5%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year. Gross profit margin on maintenance revenue increased to 90.3% from 88.3% for the three months ended March 31, 2024 and 2023, respectively, due to higher maintenance revenue.

Cost of Services and Other Revenue

Cost of services and other revenue increased by $3.2 million, or 20.6%, for the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to the increased activities from customer contracts where the related professional services revenue is recognized as a distinct performance obligation. Gross profit margin on services and other revenue increased to 14.9% from 3.1% for the three months ended March 31, 2024 and 2023, respectively, due to higher services and other revenue.

Gross Profit

Overall gross profit increased by $49.1 million, or 36.1%, for the three months ended March 31, 2024, as compared to the same period in the prior fiscal year. Gross profit margin increased to 66.6% from 59.2% for the three months ended March 31, 2024 and 2023, respectively. The increase was driven by an increase in licensing, maintenance, and services and other revenue compared to the same period in the prior fiscal year, as well as a decrease in licensing and maintenance costs of revenue.

Operating Expenses

Selling and Marketing Expense

Selling and marketing expense increased by $1.3 million, or 1.1%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to higher compensation costs of $3.4 million related to salaries due to the expansion of our sales capacity in new and existing markets, partially offset by a decrease in stock-based compensation, benefits, and bonuses of $2.4 million.

Research and Development Expense

Research and development expense decreased by $4.7 million, or 8.7%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to lower compensation costs of $5.3 million, related to benefits, bonuses, and stock-based compensation.

General and Administrative Expense

General and administrative expense decreased by $6.7 million, or 16.4%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to lower compensation costs of $8.0 million related to lower stock-based compensation, benefits, and bonuses in the current period, offset in part by an increase of $3.6 million in bad debt expenses incurred in the current quarter.

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Non-Operating (Expense) Income

Other Expense, Net

Other expense, net decreased by $11.3 million, or 85.0%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to $14.3 million in net unrealized gains on foreign currency forward contracts in the prior year that were terminated in June 2023, offset in part by $3.1 million in unrealized and realized foreign currency exchange losses.

Interest Income, Net

Interest income, net increased by $3.8 million, or 37.7%, during the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, primarily due to an increase in interest income earned on long-term revenue contracts of $2.5 million.

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 March 31, 2023, 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 pre-tax (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 March 31, 2024, the Company again recorded the actual effective tax rate as it was determined that the AETR approach was not the most appropriate estimate.

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Comparison of the Nine Months Ended March 31, 2024 and 2023

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 nine months ended March 31, 2024 and 2023:

	Nine Months EndedMarch 31,				Increase / (Decrease) Change				(% of Revenue)
	2024		2023		$		%		2024		2023
	(Dollars in Thousands)
Revenue:
License and solutions	$	470,578	$	446,360	$	24,218	5.4	%	60.0	%	61.7	%
Maintenance	256,280		234,277		22,003		9.4		32.7		32.4
Services and other	57,719		42,898		14,821		34.5		7.4		5.9
Total revenue	784,577		723,535		61,042		8.4		100.0		100.0
Cost of revenue:
License and solutions	204,453		209,326		(4,873)		(2.3)		26.1		28.9
Maintenance	29,192		27,804		1,388		5.0		3.7		3.8
Services and other	52,290		40,897		11,393		27.9		6.7		5.7
Total cost of revenue	285,935		278,027		7,908		2.8		36.4		38.4
Gross profit	498,642		445,508		53,134		11.9		63.6		61.6
Operating expenses:
Selling and marketing	365,921		356,260		9,661		2.7		46.6		49.2
Research and development	156,155		153,741		2,414		1.6		19.9		21.2
General and administrative	105,315		124,557		(19,242)		(15.4)		13.4		17.2
Total operating expenses	627,391		634,558		(7,167)		(1.1)		80.0		87.7
Loss from operations	(128,749)		(189,050)		60,301		(31.9)		(16.4)		(26.1)
Other expense, net	(8,017)		(33,270)		25,253		(75.9)		(1.0)		(4.6)
Interest income, net	40,056		19,112		20,944		109.6		5.1		2.6
Loss before benefit for income taxes	(96,710)		(203,208)		106,498		(52.4)		(12.3)		(28.1)
Benefit for income taxes	(42,241)		(68,132)		25,891		(38.0)		(5.4)		(9.4)
Net loss	$	(54,469)	$	(135,076)	$	80,607	(59.7)	%	(6.9)	%	(18.6)	%

Revenue

Total revenue ~~increased~~decreased by $6133.04 million, or 813.4%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, ~~primarily~~ due to ana ~~increase~~decrease of $47.0 million in license and solutions revenue, ofpartially ~~$24.2~~offset ~~million,~~by an increase of $225.07 million in maintenance revenue, and an increase of $147.8 million in services and other revenue.

License and Solutions Revenue

License and solutions revenue ~~increased~~decreased by $2447.20 million, or 531.46%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily ~~attributable~~due to the timing of renewals and new contracts signed in the same period in the prior fiscal year.

Maintenance Revenue

Maintenance revenue increased by $225.07 million, or 96.47%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to growth of our base of customer arrangements through both natural renewals of, and amendments to, existing customer arrangements.

Services and Other Revenue

Services and other revenue increased by $147.8 million, or 3450.50%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, 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~~and ~~beginning in~~ the ~~third~~timing ~~quarter~~and volume of ~~fiscal~~professional ~~2023.~~services engagements

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Cost of Revenue

Total cost of revenue ~~increased~~decreased by $72.96 million, or 2.87%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, 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 $47.9 million, or 211.31%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, 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, whereby costs associated with these customer contracts are recognized in cost of services and other revenue. Gross profit margin on license and solutions revenue ~~increased~~during the three months ended September 30, 2024 decreased to 5637.64%, from 5351.18% for the ~~nine~~three months ended ~~March 31~~September 30, ~~2024 and~~ 2023, ~~respectively,~~ primarily due to ~~higher~~lower license and solutions revenue in the current period.

Cost of Maintenance Revenue

Cost of maintenance revenue increased by $10.45 million, or 54.08%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year,. ~~primarily~~Gross ~~due~~profit tomargin ~~higher~~on ~~compensation~~maintenance ~~costs~~revenue ~~related~~during tothe ~~salaries~~three ~~and~~months ~~benefits.~~ended ~~Gross~~September ~~profit~~30, ~~margin~~2024 ~~on maintenance revenue~~ increased to 88.62%, from 88.10% for the ~~nine~~three months ended ~~March 31~~September 30, ~~2024 and~~ 2023, ~~respectively,~~ primarily due to anhigher ~~increase in~~ maintenance revenue.

Cost of Services and Other Revenue

Cost of services and other revenue increased by $~~11.~~4.8 million, or 2729.96%, for the ~~nine~~three months ended ~~March~~September 3130, 2024, 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 and the corresponding cost is recognized in cost of services and other revenue. Gross profit margin on services and other revenue during the three months ended September 30, 2024 increased to 910.43%, from 4(3.78)% for the ~~nine~~three months ended ~~March 31~~September 30, ~~2024 and~~ 2023, ~~respectively,~~ primarily due to anhigher ~~increase in~~ services and other revenue resulting from better leveraging our costs with increased projects.

Gross Profit

Overall gross profit ~~increased~~decreased by $5330.18 million, or 1120.94%, for the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to lower licensing and solutions revenue. Gross profit margin ~~increased~~during the three months ended September 30, 2024 decreased to 6355.68%, from 6160.67% for the ~~nine~~three months ended ~~March 31,~~September ~~2024 and 2023~~30, ~~respectively~~2023. The ~~increase~~decrease ~~in gross profit margin~~ was ~~mainly~~primarily driven by ~~increases~~a decrease in license, ~~maintenance~~ and ~~services~~solutions ~~and other~~ revenue compared to the same period in the prior fiscal year, ~~due~~which tohas ~~increases~~a inrelatively ~~bookings~~fixed ~~driven~~cost ~~by the timing of renewals~~base.

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Operating Expenses

Selling and Marketing Expense

Selling and marketing expense increased by $93.73 million, or 2.7%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to ~~higher compensation costs of $11.8 million related to salaries and benefits due to~~ the expansion of our sales capacity in new and existing markets ~~and a $2~~.~~5 million increase in commission costs related to the continued transition in commission structure, partially offset by a $2.8 million decrease in stock-based compensation.~~

Research and Development Expense

Research and development expense ~~increased~~decreased by $23.47 million, or 1.6.8%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to ~~higher~~lower compensation costs of $63.45 million, related to ~~salaries,~~a ~~partially~~reduction ~~offset~~of bysalary aand ~~decrease in~~ stock-based compensation ~~and~~expenses ~~bonuses~~resulting from the reorganization of $3our corporate structure that was announced in August 2024.~~3 million~~ See Note 6 “Restructuring Costs” to our condensed consolidated financial statements included in this Quarterly Report for further information.

General and Administrative Expense

General and administrative expense decreased by $~~19.~~2.4 million, or 156.48%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to lower ~~stock-based~~ compensation ~~and benefit~~ costs of $142.45 million ~~and~~related ato ~~decrease~~lower insalary, ~~acquisition~~benefits, bonus, and ~~integration~~stock-based compensation expenses resulting from the reorganization of $5our corporate structure that was announced in August 2024.~~8 million~~ ~~related~~See Note 6 “Restructuring Costs” to ~~the~~our ~~Transaction~~condensed ~~with~~consolidated ~~Emerson~~financial statements included in this Quarterly Report for further information.

30Restructuring Costs

~~Table~~Restructuring costs increased by $7.7 million, or 100.0%, during the three months ended September 30, 2024, as compared to the same period in the prior fiscal year. This is a result of ~~Contents~~the reorganization of our corporate structure that was announced in August 2024, which resulted in the elimination of certain roles and our winding down of operations in Russia.

Non-Operating (Expense) Income

Other Income (Expense), Net

Other income (expense), net ~~decreased~~increased by $257.39 million, or 75135.90%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to $297.63 million in ~~net~~ unrealized ~~losses on foreign currency forward contracts in the prior year that were terminated in June 2023, partially offset by $4.5 million in unrealized~~ and realized foreign currency exchange gains ~~on foreign currency forward contracts~~.

Interest Income, Net

Interest income, net increased by $203.91 million, or ~~109~~22.63%, during the ~~nine~~three months ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily due to ~~a decrease in interest expense of $10.6 million due to the repayment of our term loan facility under the Amended and Restated Credit Agreement in the third quarter of fiscal 2023,~~ an increase in interest income earned on long-term revenue contracts of $72.13 million~~, and an increase in interest income earned on cash and cash equivalent balances of $1~~.~~8 million.~~

Benefit 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 both the three months ended September 30, ~~2022,~~2024 ~~the~~and ~~Company~~September ~~computed its tax provision (benefit) using the AETR approach. However~~30, ~~starting~~2023 ~~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 pre-tax (loss) income given small changes in the forecast of pre-tax (loss) income would result in significant changes in the AETR~~. ~~For the nine months ended March 31, 2024, 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 $4216.2 3 million and $6817.1 5 million for the ~~nine~~three months ended ~~March 31~~September 30, 2024 and 2023, respectively, resulting in effective tax rates of 4321.72% and 33.56%, respectively. Income tax benefit decreased primarily due to anthe ~~increase~~lower Foreign-Derived Intangible Income (“FDII”) deduction taken this year compared to last year resulting from lower taxable income in ~~pre-~~the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. The first quarter of fiscal 2024 included a significant temporary item that increased taxable income relating to a change in the methodology for recording revenue for tax ~~profitability~~purposes on multi-year software licenses. There was no such temporary item in ~~our~~the ~~domestic~~first ~~and~~quarter ~~foreign~~of ~~operations~~fiscal 2025.

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Liquidity and Capital Resources

Resources

As of ~~March~~September 3130, 2024 and June 30, ~~2023~~2024, our principal sources of liquidity consisted of $~~177~~221.61 million and $~~241~~237.20 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 Second 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.

Second Amended and Restated Credit Agreement

~~The~~On ~~Amended~~June 27, ~~and~~2024, ~~Restated~~the ~~Credit~~Company ~~Agreement~~entered ~~provides~~into ~~for~~ a ~~$200.0 million~~Second ~~secured~~Amended ~~revolving~~and ~~credit~~Restated ~~facility,~~Credit ofAgreement ~~which~~ (the ~~Company~~“Second ~~had~~Amended ~~$197.7 million~~and ~~available~~Restated ~~for~~Credit ~~borrowing~~Agreement”) aswith ofJPMorgan ~~March 31~~Chase Bank, ~~2024~~National Association. ~~For~~The aSecond ~~more detailed description of the~~ Amended and Restated Credit Agreement, ~~see~~has ~~Note~~an 10expiration date of June 27, ~~“Debt”~~2029, toand ~~our~~provides ~~condensed~~for ~~consolidated~~aggregate ~~financial~~borrowing ~~statements~~commitments of $200.0 million.

As of September 30, 2024, the Company was in compliance with the covenants associated with the Second Amended and Restated Credit Agreement, and, after considering eligible outstanding letters of credit allowable in the aggregate amount of $5.5 million, the Company had $194.5 million available for borrowing.

For a more detailed description of the Second Amended and Restated Credit Agreement, see Note 12, “Debt” to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Cash Flows

Operating Cash Flows

Net cash provided by operating activities decreased by $021.74 million during the ~~nine~~ three-month period ended ~~March~~September 3130, 2024, as compared to the same period in prior fiscal year, primarily driven by aone-time ~~decrease~~charges ofrelated ~~$103.4 million~~to inthe ~~cash~~Company’s ~~due~~workforce toreduction ~~unfavorable~~and ~~changes~~Russia ~~in working capital~~exit, ~~primarily~~as ~~due~~well toas the timing of ~~contract~~collections ~~cycle renewals, billings and the timing of settlement on the foreign currency forward contract~~ in the ~~prior~~first ~~year,~~quarter ~~partially offset by an increase~~ of ~~$102.7 million~~fiscal ~~in cash provided due to higher income before non-cash charges~~2025.

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Investing Cash Flows

Net cash used in investing activities decreased by $4419.58 million during the ~~nine~~ three-month period ended ~~March~~September 3130, 2024, as compared to the same period in prior fiscal year, primarily driven by a decrease of $6412.25 million in cash used for ~~business~~asset acquisitions, ~~partially~~and ~~offset~~a bydecrease ~~an increase~~ of $128.53 million in cash used for ~~the~~business ~~asset acquisition of Plantweb Optics Analytics software and a decrease in the proceeds from the settlement of foreign currency forward contracts of $10~~acquisitions.~~8 million.~~

Financing Cash Flows

Net cash used in financing activities decreased by $5698.09 million during the ~~nine~~ three-month period ended ~~March~~September 3130, 2024, as compared to the same period in prior fiscal year, primarily driven by a decrease ~~in funds used for the repayment~~ of ~~the term loan of~~ $~~276~~93.07 million ~~and an increase of $38.3 million~~ in cash ~~provided from our cash pooling arrangements with related parties, offset in part by an increase of $243.1 million in cash~~ used for common stock repurchases.

Free Cash Flows

Free cash flow (non-GAAP) ~~increased~~decreased by $122.5 million during the ~~nine~~ three-month period ended ~~March~~September 3130, 2024, as compared to the same period in the prior fiscal year, primarily driven by the decrease in net cash ~~used~~provided ~~for~~by ~~capital~~operating ~~expenditures~~activities.

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

	Nine Months Ended March 31,
	Three Months Ended September 30,
	2024		2023
	(Dollars in Thousands)
Net cash provided by operating activities (GAAP)	$	184,950	$	185,650
Net cash (used in) provided by operating activities (GAAP)	$	(4,397)	$	16,981
Purchase of property, equipment, and leasehold improvements	(2,~~579~~022)		(~~4,515~~937)
Payments for capitalized computer software development costs	(131)		(347)
Free cash flow (non-GAAP)	$	(6,419)	$	16,044
Free cash flow (non-GAAP) (1)	$	182,240	$	180,788

__________

Contractual Obligations

Letters of Credit

Standby letters of credit in the aggregate amounts of $3024.85 million and $3932.09 million secured our performance on professional services contracts, certain facility leases and potential liabilities as of ~~March~~September 3130, 2024 and June 30, ~~2023~~2024, respectively. The letters of credit expire at various dates through fiscal ~~2031~~2029.

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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

During the three months ended ~~March~~September 3130, 2024 and 2023, 149.69% and 8.7~~% of our total revenue was denominated in a currency other than the U~~.~~S. dollar, respectively. During the nine months ended March 31, 2024 and 2023, 11.7~~1% ~~and 9.6%~~ 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 ~~March~~September 3130, 2024 and 2023. Currently, our largest exposures to foreign exchange rates exist primarily with the Euro, Pound Sterling, ~~Norwegian~~Japanese ~~Krone~~Yen, ~~Japanese~~Indonesian ~~Yen~~Rupiah, ~~Russian~~Kuwaiti ~~Ruble~~Dinar, ~~Indonesian~~Brazilian ~~Rupiah~~Reais, Norwegian Krone, Australian Dollar, and ~~Kuwaiti~~Canadian ~~Dinar~~Dollar.

We recorded net foreign currency exchange ~~losses~~gains of $2.1 million and ~~$1.0~~losses ~~million,~~of ~~respectively, during the three months ended March 31, 2024 and 2023, and~~ $85.29 million ~~and $3.7 million~~, respectively, during the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023, 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 $3.2 ~~million and $10~~.19 million ~~for the three months ended March 31, 2024~~ and ~~2023, respectively, and by approximately~~ $84.~~1 million and $15.~~7 million for the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023, respectively.

Interest Rate Risk

We place our investments in money market instruments. Our analysis of our investment portfolio and interest rates as of ~~March~~September 3130, 2024 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.

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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 $511.08 million ~~CAD~~Canadian dollars, or $38.7 million ~~USD~~U.S. dollars. 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 $511.08 million ~~CAD~~Canadian dollars, or $38.7 million ~~USD~~U.S. dollars commitment. As of ~~March~~September 3130, 2024, the fair value of this investment was $3.3 million ~~CAD~~Canadian dollars, or $2.45 million ~~USD~~U.S. dollars, 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 ~~March~~September 3130, 2024. 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 ~~March~~September 3130, 2024, our chief executive officer and ~~interim~~ chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

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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 ~~March~~September 3130, 2024, 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.

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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~~2024, 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 ofin our ~~2023~~ Annual Report on Form 10-K for the fiscal year ended June 30, 2024 remains current in all material respects, with the exception of the risk ~~factors~~factor described below.

InAn ~~addition,~~escalation of the ~~ongoing~~ conflict in ~~Ukraine~~the ~~could~~Middle ~~adversely~~East ~~impact our business, financial position, cash flows and results of operations in Russia and Ukraine which~~ may inhave ~~turn~~a ~~spread~~material ~~and~~adverse impact on our ~~overall~~ business, ~~financial position, cash flows~~ and ~~results~~operations ofin ~~operations.~~the region.

We ~~maintain~~have operations and customers in ~~Russia~~the ~~and~~Middle ~~license~~East. ~~software~~Since the initial commencement of the Israeli-Hamas conflict, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and ~~provide~~on ~~related~~other ~~services~~fronts tofrom ~~customers~~various extremist groups in ~~Russia.~~the Weregion, ~~had~~such ~~revenue~~as the Houthis in ~~Russia~~Yemen ofand ~~approximately~~various ~~$44.6~~rebel ~~million~~militia groups in Syria and $9Iraq.9 ~~million~~Israel ~~for~~has ~~fiscal~~carried ~~2023~~out ~~and~~a ~~2022,~~number ~~respectively~~of targeted strikes on sites belonging to these terror organizations. In October 2024, ~~$13~~Israel began limited ground operations against Hezbollah in Lebanon.~~7 million~~ In addition, Iran recently launched direct attacks on Israel and $7has threatened to continue to attack Israel.~~3 million~~ ~~for~~Iran ~~the~~is ~~three~~also ~~months~~believed ~~ended~~to ~~March 31~~have a strong influence among extremist groups in the region, ~~2024~~such ~~and~~as ~~2023~~Hamas in Gaza, ~~respectively~~Hezbollah in Lebanon, the Houthis in Yemen and ~~$27.7 million~~various rebel militia groups in Syria and ~~$34~~Iraq.~~0 million~~ ~~for~~A further escalation of the ~~nine~~conflict ~~months~~or ~~ended~~an ~~March~~extension ~~31,~~of ~~2024~~the conflict for a longer period of time could result in additional armed conflict in other regions in the Middle East and ~~2023~~elsewhere, ~~respectively~~terrorist activities, and political or macroeconomic instability in the Middle East region. WeThis, ~~also~~in ~~had~~turn, ~~total~~could ~~assets~~cause our customers in ~~Russia~~the region to reduce their capital expenditures, resulting in a reduction of ~~approximately~~our ~~$45~~sales to such customers.~~8 million~~ A decline in our sales to our customers in the affected region and ~~$39.7 million~~any asfurther impact of ~~March 31,~~such ~~2024~~conflict ~~and~~or ~~June 30,~~instability ~~2023,~~on ~~respectively,~~our ~~related~~operations tocould materially adversely affect our business and operations in ~~Russia~~the region, and our financial condition and results of operations generally.

As a result of the conflict between Russia and Ukraine, the United States, the European Union, the United Kingdom and other governments, 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 we may voluntarily elect to do so, whether as a result of new sanctions and export-control measure packages or otherwise. There is also a risk that we may not be able to continue our business in Russia because we are unable to conduct banking activities in Russia. 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 on our ability to conduct business in Russia, access cash held in Russia, maintain contracts with and pay vendors in Russia, pay employees in Russia, and receive payment from customers in Russia, 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 or access to our cash balances from the business in Russia and would negatively impact our growth and profitability. 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.

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.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

On ~~May 5~~August 6, ~~2023~~2024, we ~~entered~~announced ~~into~~that ~~the~~our ~~ASR~~board ~~Program with JPMorgan to repurchase an aggregate~~ of ~~$100.0~~directors ~~million~~approved ~~of our common stock. For more details on~~ the ~~ASR~~Fiscal ~~Program,~~2025 ~~refer~~Share toRepurchase ~~Note 13~~Authorization, ~~“Stock~~pursuant ~~Repurchases”~~ to ~~our~~which ~~condensed~~an ~~consolidated~~aggregate ~~financial~~amount ~~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 tomay usbe repurchased.

OnAs ~~August 1, 2023, we announced that our board~~ of ~~directors approved the Share Repurchase Authorization, pursuant to which an aggregate $300.0~~September ~~million of our common stock may be repurchased. During the third quarter of fiscal 2024~~30, ~~the Company repurchased 288,241 shares for $56.7 million under the Share Repurchase Authorization. As of March 31,~~ 2024, a total of 192,~~243,080~~819 shares have been repurchased under the Fiscal 2025 Share Repurchase Authorization for $~~243~~20.15 million, with the total remaining value being $5679.95 million. For more details on the Fiscal 2025 Share Repurchase Authorization, refer to Note 13, “Stock Repurchases” to our condensed consolidated financial statements included in this Quarterly Report.

The following is a summary of stock repurchases for each month during the ~~third~~first quarter of fiscal ~~2024~~2025:

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)
January 1, 2024 to January 31, 2024	91,090	$	204.80	91,090	$	95,015
July 1, 2024 to July 31, 2024	—	—		—	—
February 1, 2024 to February 29, 2024	101,510	187.17		101,510	$	76,016
August 1, 2024 to August 31, 2024	48,451	$	214.98	48,451	$	89,584
March 1, 2024 to March 31, 2024	95,641	199.52		95,641	$	56,934
September 1, 2024 to September 30, 2024	44,368	$	227.00	44,368	$	79,512
Total	~~288~~92,~~241~~819	$	~~196~~220.8473	~~288~~92,~~241~~819

__________

(1) On August 16, ~~2023~~2024, the Company announced that its Board of Directors approved the Fiscal 2025 Share Repurchase Authorization, pursuant to which an aggregate amount of $~~300~~100.0 million of its common stock may be repurchased.

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Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

During the three months ended ~~March~~September 3130, 2024, none of our directors or officers adopted, made certain modifications to, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement.,” as each term is defined in Item 408(a) of Regulation S-K

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Item 6. Exhibits.

Exhibit Number

Description

10.1^

Aspen Technology, Inc. Executive Retention Plan

10.2^

Aspen Technology, Inc. Board of Directors Compensation Plan

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 ~~Interim~~ 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

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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: May 7, 2024	By:	/s/ ANTONIO J. PIETRI
Date: November 4, 2024	By:	/s/ ANTONIO J. PIETRI
		Antonio J. Pietri
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: May 7, 2024	By:	/s/ CHRISTOPHER STAGNO
Date: November 4, 2024	By:	/s/ DAVID BAKER
		Christopher Stagno
		David Baker
		Senior Vice President, Interim Chief Financial Officer
		Senior Vice President, Chief Financial Officer
		(Principal Financial Officer)

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