Andrew Obin : You guys sort of highlighted geopolitical risk as one of the factors. And I was just wondering what that meant because I think you sort of highlighted, but it’s not clear to me what that refers to.
Antonio Pietri: Yes. As we’ve stated in the past, we continue to operate our business in Russia. We’ve also stated in previous opportunities in investor conferences and meetings that the environment there is getting more difficult for us to transact in because of increasing actions on banks, primarily, which is constraining the availability then to get payments. But also there’s a more specific push by the local government there to start using more local software or local software. So the combination of those factors is creating less is leading to less growth and greater attrition in that business which was reflected as growth in our guidance. So that’s also an impact that we’re seeing in our growth rate.
Andrew Obin : Got it. That makes sense. And just another question. How should we think — and sort of I appreciate what happened this year, and I think you’ve made it very clear what happened. So as we think about the path of ACV acceleration and just thinking beyond this year, you did say that it sounds like the DGM sales cycle will come in line with your expectations, right? Assuming chemical OpEx will get better and probably the comps are going to get easier. But what should we think about ACV growth accelerating over the next 2 years, what does today’s changing outlook means for sort of longer-term outlook for ACV acceleration?
Antonio Pietri: Yes. No. So — and thank you for that question, Andrew. So first of all, look, we still have strong conviction about the thesis for bringing these 3 companies together, Heritage AspenTech, OSI and SSE. Assuming that we have a steady macro environment across of our end markets, what we would expect is for the Heritage AspenTech business to perform the way it has performed historically in a normal environment, which is really double-digit growth. We believe that the OSI business it’s a high-growth business in this environment of the huge investments in in transmission and distribution infrastructure and upgrades of their technology capabilities. And the SSE business, while it surprised us on the upside this year.
We would expect that business to return back to a more normal rate of growth. But nonetheless, support what we believe is a rate of growth that is in the mid-teens area for for years to come. And that’s how we see it. I think this year, we’re dealing with many factors. We see it as a year we’re basically building the foundation to launch an unbelievable business. And I think we’ve made great progress on building that foundation. We’ve uncovered a lot of then that we were not expecting. We’ve tested our assumptions. Some of them have turned out to be correct, others have not. But on the whole, there’s no doubt that we are now — we are now much better informed about all the different levers that we have in these 2 businesses to build and accelerate the growth going forward, supported by what we think is a sustained positive environment for sustained positive environment for chemicals.
What we think in the medium to — short to medium term will be a strong environment for oil and gas and also refining. And then eventually, with the closing of the Macromine acquisition, sustained positive environment in the mining area as well.
Operator: One moment for our next question. And our next question comes from the line of Rob Oliver from R. W. Baird.
Rob Oliver: I apologize in advance, suffering from a little laryngitis here. So hopefully, you can hear me okay. I have 2 questions. Antonio, one for you, and then Chantelle a follow-up for you. Antonio, just it seems like a pretty tight turnaround by FY ’24, you mean Aspen’s fiscal ’24 for the sales cycles to come down on DGM back towards the core assets. So just wanted to just dig in a little bit more on that, what gives you the confidence given it’s — we’re kind of in Q4 right now? And then I just had a quick follow-up for Chantelle.
Antonio Pietri: Okay. And thank you for that opportunity because it gives me for that question because it gives me the opportunity to clarify what maybe I created a confusion that I created. I don’t mean to say that sales cycles are going to come down to 9 to 12 months for OSI in fiscal ’24. They are still going to be 12 to 24 months, but by the time we enter fiscal ’24, it will be 12 months of pipeline building and execution on deals another 12 months in fiscal ’24, puts us in that range of 12 to 24 months. So we’ll start to benefit from the pipeline that we’ve been building in fiscal ’23. I hope –
Q –Rob Oliver: Yes, that’s clear. Okay. No, great. I appreciate the clarification. And then Chantelle, one for you. Just on around the – I know just broad perspective, you and Antonio have talked about wanting the predictability in the Emerson assets that you’ve had in the core Aspen. And I get that, that’s going to be a bit of a question today, given what’s happening with OSI. But my question is for you around the margin side? Because I know one of the things you talked about doing to address the potential issues around staffing and projects is to make sure you’re accelerating hiring its staff. And what is the potential implication for margins or variability? And how can we get comfortable around that variability on the margin side?
Chantelle Breithaupt: Yes. I think, Robert, sorry about your laryngitis. I think there are a few things we’re working on that and we continue to – or just is still clear at what we want to do in that area. So I think the majority of what allows that margin expansion. So if you look at services business now versus Heritage AspenTech gross margin of 90-plus percent. What allows that to say is the evolution of moving to a partner ecosystem where they take on the services installation delivery, we get to be a pure play software and that’s well on track. We have been doing that in parallel. We’re growing on – we’re working with the second tier and first tier partners to scale that and ramp that. So that’s very much part of our adjusted going into next year.
And then the second part will just be we free baselined in the hygiene we’re putting in as part of our prepared remarks on how we operate going forward. So I think those new things were very clear. And that’s our continued path and agenda.
Operator: One moment for our next question. And our next question comes from the line of Clarke Jeffries from Piper Sandler.
