Investor Day 2015 -

Aspen Technology, Inc. Investor Day Antonio Pietri – President and Chief Executive Officer

May 4th, 2015

© 2015 Aspen Technology, Inc. All rights reserved 2

Safe Harbor Statement

These slides may contain forward-looking statements for purposes of the safe harbor

provisions of the Private Securities Litigation Reform Act of 1995. Actual results may vary

significantly from AspenTech’s expectations based on a number of risks and uncertainties,

including, without limitation, the risk factors described in AspenTech’s most recent Annual

Report on Form 10-K and any subsequent quarterly reports on Form 10Q, each as filed with

the U.S. Securities and Exchange Commission. AspenTech cannot guarantee any future

results, levels of activity, performance, or achievements. Further, AspenTech expressly

disclaims any current intention to update any forward-looking statements after the date hereof.


Key Highlights

Multi-Billion Dollar TLCV Opportunity

Market Leadership Position

World-Class Customer Base with Significant Upsell Opportunities

Subscription Model with Long-Term Contracts

Best-in-Class Profitability and

Cash Flow Generation

Focus on Driving Shareholder Value


Global Market

Industry characteristics

• $10 trillion global industries

• Complex manufacturing processes

• High capital costs

• High volume production

• Engineering and technology

Energy Chemicals Engineering & Construction


• Globalization

• Volatility

• Changing demographics

Energy Chemicals Engineering & Construction

• Environmental regulations

• Safety regulations

• Focus on operational excellence

Industry Dynamics


Industry Competitive Dynamics

Energy

• Upstream CAPEX: utilizing capital efficiently

• Refining capacity: supply chain challenges

• North American tight oil production

• Alternative fuels

• Disruptive dynamics: shale gas

• New capacity plans in North America

• Integrated refinery-chemical complexes

• Specialty chemicals

Chemicals

• Refinery and Chemical plant expansion/retooling

• Growth in LNG to support global carbon emission reductions

• Need to manage projects globally

• Productivity drivers

Engineering & Construction


Oil Price Volatility

11.7%

14.5%

13.0% 12.2%

11.3%

12.8% 13.2%

12.7%

11.1% 12.3%

11.2%

12.3% 11.9%

112.48

$97.80 $102.16

$112.36

$94.67

$57.33 $56.21

FY '11 FY '12 FY '13 FY14 Q1 FY15 Q2 FY15 Q3 FY15

GTLCV YoY % AS YoY Growth % Brent Crude Oil $(1)

(1) Not available in FY’11


AspenTech’s Customers – Energy

38% of

AspenTech Business

Ranking from Platt Integrated Oil & Gas

Companies, 2014

Largest petroleum

companies

19/20

Percentages based on FY2014


AspenTech’s Customers – Energy Split


Downstream - 60%

Midstream - 10%

Upstream - 30%


AspenTech’s Customers – E&C

31% of

AspenTech Business

20/20 Largest engineering & construction companies

Rankings ENR International design firms that

serve the process industries, 2014



AspenTech’s Customers – Chemical

26% of

AspenTech Business

Largest chemical

companies

19/20

2014 ICIS Rankings



Pharmaceuticals

AspenTech’s Customers – Other Industries

5% of

AspenTech Business


Power and Utilities

Consumer Packaged Goods

Metals and Mining

Pulp and Paper


Product Suites

ENGINEERING MANUFACTURING SUPPLY CHAIN

Simulation

Economic Evaluation

Physical Properties

Equipment Design

Basic Engineering

Advanced Process Control

Real Time Optimization

Information Management

Petroleum Planning & Scheduling

Chemicals Planning & Scheduling

Supply & Distribution


Why AspenTech?

ENGINEERING

Profit improves $65M/year through efficient plant debottlenecking

Site-wide energy efficiency improves $16M/year

MANUFACTURING

Refinery profitability improves by $30,000/day

Site-wide annual benefit increases $23-55M/year

SUPPLY CHAIN

Total margin increases 4%

Run times for enhanced scenario analysis decrease by 70%


Why is AspenTech Unique?

• #1 global provider of optimization software

solutions for the process industries

– Vertical focus

– Deep domain knowledge and expertise on

hydrocarbon processes

– Large return on investment

– Mission critical solutions

• Solve complex optimization problems

• Breadth of solutions

• Track record of innovation

• Singular focus on software


Strong Financial Position Built on the aspenONE Licensing Model

Subscription Model Since FY2010

Highly Scalable Model Long-Term Contracts

Customers Have Access to All Products

98%+ of Contract Value Converted


Growth Strategy

Usage and Product Adoption


Usage and Product Adoption Strategy

Invest in High Growth Markets

Pursue Acquisitions

Product Innovation

Scale through Digital

Channels

Expand Total Addressable Market

Penetrate Customer

Base


Product Innovation

Access Anywhere/ Anytime

Faster and Easier Implementation

Automation of Knowledge Work

Breakthrough Innovation

Intuitive User Experience


Penetrate Customer Base


• China

• Latin America

• Middle East

• Russia

• Inside Sales (SMB)

– High productivity

– New customers

Invest in High Growth Markets


Webinars

Community

Blog Article Content

Discussion Forum Content

Resource Library Content

• Hundreds of Thousands of Users

– Variety of skills, experience and business needs

• Need to Distribute Education and Support

Content to Key Segments and Users

– Map and deliver targeted messages to each

segment and users

• Digital Channel Solutions are Scalable and

Cost Effective

– Especially among global base of customers

• Technology Trends Require Multi-Channel

Access

– Mobility and Collaboration

Deploying a Comprehensive Digital Strategy

Social Media

Website

© 2015 Aspen Technology, Inc. All rights reserved. 23

market addressable total

Existing Customers

Current TLCV


Acquisitions

• An effective way to drive shareholder

value

– Five small tuck-in acquisitions since

February 2012

• Buy versus make decision

• Growth and profitability a

key consideration

• Continuously evaluating

opportunities


Total Addressable Market


Methodology P

rod

uc

ts

Sites

Focus on top 350 accounts

Calculate whitespace by site and product for each account

Estimate revenue and TLCV potential for each

Total extrapolated to all accounts


• Industry Growth

– 1-3% for Energy and Chemicals

– Up to 5% for Engineering

• Price Increases

– 2% price escalation on average on

term contracts

• Product Innovations

– Example: Adaptive Process Control,

Acid Gas Modeling, Visualization and Analytics,

Weigh and Dispense

• Acquisitions

– Examples: SolidSim, Sulsim, BLOWDOWN

Driving Expansion of Total Addressable Market

Existing Customers

Current TLCV


* Estimated by AspenTech from internal whitespace methodology on existing customer base

Potential Total Addressable Market (TLCV)

2014 2015


Existing Customers

Current TLCV $2B

$97 M $130 M

$6.9B $8.9B

AspenTech Expanding TAM Through Innovation (TLCV)

2014 Estimated TLCV expansion from:

Adaptive Process Control - $300 million

Pressure Relief Valve Sizing and Solids Modeling - $100 million

2015 Estimated TLCV expansion from:

Visualization and Analytics – $475 million

Weigh and Dispense – $130 million

Detailed Cost Estimation – $97 million

$475M


Methodology P

rod

uc

ts

Sites

Focus on top 350 accounts

Calculate whitespace by site and product for each account

Estimate revenue and TLCV potential for each

Total extrapolated to all accounts


Investment Allocation that Supports Growth

• Sales organization

– SMB organization

– Russia

– MENA

– China

• Marketing

– Digital channel

– User segmentation

– Market research

• Research and Development

• Acquisitions


Focus on Execution

Multi-Billion Dollar TLCV Opportunity

Market Leadership Position

World-Class Customer Base with Significant Upsell Opportunities

Subscription Model with Long-Term Contracts

Best-in-Class Profitability and

Cash Flow Generation

Focus on Driving Shareholder Value

Thank you

Aspen Technology, Inc. Investor Day Mark Sullivan – Chief Financial Officer

May 4th, 2015


Financial Highlights

• Multi-year history of delivering solid growth in license subscription contracts

• Substantial market white space opportunity

• Best in class profitability and cash flow profile

• Consistently returning capital to shareholders via share repurchases

• In final year of transition to subscription revenue model

• Strong YTD FY 2015 performance and solid outlook for FY 2015 and FY 2016


Total Term Contract Value (TCV)

$ Billions Represents the estimated renewal

value of all active term license

contracts

Provides financial stability and

predictability

• Typically 5-6 year contracts

• Annual escalation

• High renewal rates


Term License Contract Value (TLCV) Year over Year Growth


Annual Spend (1) Year over Year Growth

(1) Represents the aggregate annualized license and maintenance invoice value for all active term contracts.


Revenue Model Transition aspenONE Licensing Model Introduced at Beginning of FY ’10

(1) Includes professional services, training and other revenue

$ Millions (1)


Revenue Model Transition aspenONE Licensing Model Introduced at Beginning of FY ’10

(1) Includes professional services, training and other revenue

$ Millions (1) 12%

15%


Expense Management GAAP & Non-GAAP Total Costs

$ Millions


Free Cash Flow (1)

Q3 YTD FY’15

$ Millions Includes $8M expense related to new headquarters building

¹ Free cash flow is cash flow from operations less (1) purchases of property, equipment and leasehold improvements and (2) capitalized software development costs, plus non-capitalized acquired technology. FY ’13 also includes insurance proceeds.


Free Cash Flow and Stock Repurchase Plan

$ Millions


$ Millions



Cumulative Amount Purchased: $488M

Cumulative Shares Purchased: 15.4M

Average cost: $31.77/share

Share Repurchase Impact on Outstanding and Diluted Shares


Share Repurchase Impact on Outstanding and Diluted Shares

Millions

Cumulative Amount Purchased: $488M

Cumulative Shares Purchased: 15.4M

Average cost: $31.77/share

(1) Year-to-date weighted average diluted shares outstanding (2) Assumes no further share repurchases beyond Q3 FY’15

(2)

(1)


Free Cash Flow per Share

$ Millions except per share

(1) Assumes no further share repurchases beyond Q3 FY’15

(1)


Free Cash Flow per Share Benefit of Share Repurchases


10%

15%

(1) Assumes no further share repurchases beyond Q3 FY’15

(1)


FY ‘15 YTD Results vs. Prior Year

$ Millions except per shareQ3 YTD

FY '15

Q3 YTD

FY '14

Total Revenue 326.2 289.9

Operating Income 132.9 92.4

Operating Margin 40.7% 31.9%

Net Income per share $0.97 $0.63

Non-GAAP Operating Income 147.9 109.0

Non-GAAP Operating Margin 45.3% 37.6%

Non-GAAP Net Income per share $1.08 $0.74


FY 2016 Guidance


Non-GAAP Metrics We Will Provide in FY ’16

• Annual Spend: growth guidance and quarterly results

• TLCV/TCV on milestone basis or at year-end

• Non-GAAP P&L metrics

• Free Cash Flow guidance


FY ‘16 Revenue and Annual Spend Guidance

$ Millions

10%

9%

FY ‘16

Annual Spend Guidance

11+%


Annual Spend vs. Subscription Revenue

• Annual spend increases due to:

• Booking events that a) add new customers, b) add additional tokens, c) increase prices

• Annual fee escalation in our contracts

• Annual Spend is a proxy for subscription revenue, it will not necessarily equal reported

GAAP revenue

• Invoice timing leads revenue recognition, similar to deferred revenue growth preceding revenue

growth

• GAAP rules impact timing of revenue recognition

• Small, decreasing amount of perpetual SMS included in subscription revenue but not in Annual

Spend

• Over-time, Annual Spend and subscription revenue growth rates will be comparable


Estimated Cash Tax

$68-$72M

FY ‘16 Free Cash Flow(1) Guidance

¹ Free cash flow is cash flow from operations less (1) purchases of property, equipment and leasehold improvements and (2) capitalized software development costs, plus non-capitalized acquired technology. FY ’13 also includes insurance proceeds. 2 Diluted shares outstanding are an estimate for FY’12; FY’15 and FY’16 assume 89.3M and $87.1M average weighted diluted shares outstanding, respectively



FY ‘15 & ‘16 Guidance

(1) Guidance assumes 89.3M & 87.1M weighted average diluted shares outstanding for FY ‘15 and FY ‘16 respectively

$Million except per share

Annual Spend Growth 11+% -

License TCV Growth - Exceed 11%

Free Cash Flow 175 - 180 220

Total Revenue 470 - 478 437 - 439

Total GAAP Expense 275 - 280 261 - 264

Operating Income 192 - 200 175 - 177

Operating Margin 41% - 42% 40%

Net Income 122 - 127 113 - 115

Net Income per share $1.40 - $1.46 $1.27 - $1.29

Non-GAAP Operating Income 207 - 215 193 - 195

Non-GAAP Operating Margin 44% - 45% 44%

Non-GAAP Net Income per share $1.51 - $1.57 $1.41 - $1.43

FY '15 Full Year

Guidance (1)

FY '16 Full Year

Guidance (1)


Target Operating Model

Current Updated

Revenue 100% 100%

Gross Margin 87-90% 87-90%

Sales & Marketing 22-24% 21-23%

Research & Development 14-15% 14-15%

General & Administrative 9-10% 8-9%

GAAP Operating Expenses 47-49% 44-46%

GAAP Operating Margin 40-43% 42-44%

Non-GAAP Operating Margin 42-45% 44-46%

GAAP Non-GAAP


• Multi-Billion Dollar Market Opportunity

• Market Leadership Position

• World-Class Customer Base with Significant Upsell Opportunities

• Subscription Model with Long-Term Contracts

• Shareholder Value Driven Focus

• Best In Class Profitability and Cash Flow Profile

Conclusion and Q&A

Investor Day 2015 -

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