Solid ARR and Cash Flow in Q2 of Fiscal
2024
Updating Fiscal 2024 and Mid-Term
Targets
BOSTON, May 1, 2024
/PRNewswire/ -- PTC (NASDAQ: PTC) today reported
financial results for its second fiscal quarter ended March 31, 2024.
"In our second fiscal quarter, we again delivered solid results.
We have a differentiated strategy that leverages our unique product
portfolio to enable our customers with their digital transformation
journeys. Our consistent ARR and free cash flow growth continues to
highlight the value we are bringing to our customers and the
stability of our business model," said Neil
Barua, CEO, PTC.
"We are updating our mid-term ARR targets to low double-digit
ARR growth, which is consistent with our track record of ARR growth
over the past 5 years. Importantly, we are reiterating our mid-term
cash flow targets as we remain confident in our ability to expand
our operating efficiency while continuing to invest in the business
to deliver increasing value to our customers," concluded Barua.
Second Quarter 2024 Highlights
Key operating and financial highlights are set forth below. The
definitions of our operating and non-GAAP financial measures and
reconciliations of non-GAAP financial measures to comparable GAAP
measures are included below and in the reconciliation tables at the
end of this press release.
$ in
millions
|
Q2'24
|
Q2'23
|
YoY
Change
|
|
Q2'24
Guidance
|
ARR as
reported
|
$2,088
|
$1,882
|
11 %
|
|
|
Constant currency
ARR
|
$2,075
|
$1,850
|
12 %
|
|
$2,050 -
$2,065
|
Operating cash
flow
|
$251
|
$211
|
19 %
|
|
~$245
|
Free cash
flow
|
$247
|
$207
|
19 %
|
|
~$240
|
Revenue1
|
$603
|
$542
|
11%2
|
|
$560 - $590
|
Operating
margin1
|
30 %
|
23%3
|
~720bps
|
|
|
Non-GAAP operating
margin1
|
42 %
|
38 %
|
~390bps
|
|
|
Earnings per
share1
|
$0.95
|
$0.533
|
78 %
|
|
$0.57 -
$0.80
|
Non-GAAP earnings per
share1
|
$1.46
|
$1.16
|
26 %
|
|
$1.10 -
$1.30
|
Total cash and cash
equivalents
|
$249
|
$320
|
(22 %)
|
|
|
Gross
debt4
|
$2,011
|
$2,5455
|
(21 %)
|
|
|
|
|
1
|
Revenue and, as a
result, operating margin, operating profit, and earnings per share
are impacted under ASC 606.
|
2
|
In Q2'24, revenue
growth was 11% year over year on a constant currency
basis.
|
3
|
In Q2'23, operating
margin and EPS included a negative impact due to acquisition and
transaction-related charges for the ServiceMax acquisition of $12
million or $0.10.
|
4
|
Gross debt excludes
unamortized debt issuance costs.
|
5
|
Q2'23 gross debt
included a deferred acquisition payment related to ServiceMax of
$620 million, which was paid in October 2023.
|
Fiscal 2024 and Q3'24 Guidance and Mid-Term Targets
"Our ARR and free cash flow results in Q2'24 were solid in a
challenging selling environment, driven by the resilience of our
subscription business model, consistent execution, operational
discipline, and the actions we have taken over time to align our
investments with market opportunities. We continue to rapidly
de-lever, and our debt to EBITDA ratio was 2.3x at the end of
Q2'24," said Kristian Talvitie,
CFO.
"Reflecting our year-to-date performance and our outlook for the
second half, we are narrowing the range of our FY'24 constant
currency ARR guidance and maintaining our FY'24 free cash flow
guidance. For Q3, the ARR guidance range is 11 to 12 percent
growth, with free cash flow of approximately $220 million. It's worth noting that we are
updating our FY'24 revenue and EPS guidance consistent with our
updated ARR guidance range and also due to the impact of FX. We
believe we have set our Q3'24 and FY'24 guidance appropriately,"
concluded Talvitie.
$ in
millions
|
FY'24 Previous
Guidance
|
FY'24
Guidance
|
FY'24 YoY
Growth
Guidance
|
Q3'24
Guidance
|
|
|
Constant currency
ARR
|
$2,190 -
$2,250
|
$2,200 -
$2,240
|
11% - 13%
|
$2,115 -
$2,130
|
|
Operating cash
flow
|
~$745
|
~$745
|
~22%
|
~$225
|
|
Free cash
flow
|
~$725
|
~$725
|
~23%
|
~$220
|
|
Revenue
|
$2,270 -
$2,360
|
$2,270 -
$2,340
|
8% - 12%
|
$525 - $540
|
|
Earnings per
share
|
$2.42 -
$3.32
|
$2.52 -
$3.22
|
22% - 56%
|
$0.41 -
$0.54
|
|
Non-GAAP earnings per
share
|
$4.50 -
$5.20
|
$4.60 -
$5.10
|
6% - 18%
|
$0.90 -
$1.00
|
|
Reconciliation of Operating Cash Flow Guidance to Free Cash
Flow Guidance
In
millions
|
FY'24
Guidance
|
Q3'24
Guidance
|
|
|
|
Operating Cash
Flow
|
~$745
|
~$225
|
|
|
Capital
expenditures
|
(~$20)
|
(~$5)
|
|
|
Free Cash
Flow
|
~$725
|
~$220
|
|
|
Reconciliation of EPS Guidance to Non-GAAP EPS
Guidance
|
FY'24
Guidance
|
Q3'24
Guidance
|
|
|
Earnings per
share
|
$2.52 -
$3.22
|
$0.41 -
$0.54
|
|
Stock-based
compensation expense
|
$1.91 -
$1.66
|
$0.44 -
$0.40
|
|
Intangible asset
amortization expense
|
~$0.68
|
~$0.17
|
|
Acquisition and
transaction-related expense
|
~$0.01
|
~$0.00
|
|
Income tax adjustments
related to the reconciling items
|
($0.52) –
($0.47)
|
~($0.12)
|
|
Non-GAAP Earnings per
share
|
$4.60 -
$5.10
|
$0.90 -
$1.00
|
|
Mid-Term Targets
|
FY'25 Previous
Target
|
FY'26 Previous
Target
|
Target Growth
Rate
|
Constant currency ARR
growth
|
Mid-teens %
|
Mid-teens %
|
Low double-digit
%
|
$ in
millions
|
FY'25 Previous
Targets
|
FY'26 Previous
Targets
|
FY'25
Targets
|
FY'26
Targets
|
Operating cash
flow
|
$850 - $900
|
~$1,025
|
$850 - $900
|
~$1,025
|
Free cash
flow1
|
$825 - $875
|
~$1,000
|
$825 - $875
|
~$1,000
|
|
1 Assumes
capital expenditures of approximately $25 million.
|
FY'24 financial guidance includes the following
assumptions:
- We provide ARR guidance on a constant currency basis, using our
FY'24 Plan foreign exchange rates (rates as of September 30, 2023) for all periods. Foreign
exchange rate fluctuations during the first half of FY'24 had a
$14 million favorable impact on our
Q2'24 reported ARR, compared to our Q2'24 constant currency ARR.
Using foreign exchange rates as of the end of Q2'24 and assuming
the midpoint of our constant currency guidance ranges:
- Q3'24 reported ARR would be higher by approximately
$14 million, compared to Q3'24
constant currency ARR guidance; and
- FY'24 reported ARR would be higher by approximately
$15 million, compared to FY'24
constant currency ARR guidance.
- We expect churn to remain low.
- For cash flow, due to invoicing and payments seasonality, and
consistent with the past 3 years, we expect the majority of our
collections to occur in the first half of our fiscal year and for
fiscal Q4 to be our lowest cash flow generation quarter.
- Compared to FY'23, at the midpoint of FY'24 ARR guidance, FY'24
GAAP operating expenses are expected to increase approximately 6%,
and FY'24 non-GAAP operating expenses are expected to increase
approximately 8%, primarily due to investments to drive future
growth, the acquisition of ServiceMax, and foreign exchange rate
fluctuations.
- FY'24 GAAP P&L results are expected to include the items
below, totaling approximately $285
million to $315 million, as
well as their related tax effects:
- approximately $200 million to
$230 million of stock-based
compensation expense,
- approximately $81 million of
intangible asset amortization expense,
- approximately $2 million, net,
related to acquisition and transaction-related expense and a
restructuring credit, and
- approximately $2 million of other
non-operating expenses, related to an impairment loss on an
available-for-sale debt security.
- Our FY'24 GAAP and non-GAAP tax rates are expected to be
approximately 20%.
- Cash tax payments are expected to be approximately $80 million in FY'24.
- Capital expenditures are expected to be approximately
$20 million in FY'24.
- Cash interest payments are expected to be approximately
$135 million in FY'24.
- Our long-term goal, assuming our Debt/EBITDA ratio is below 3x,
is to return approximately 50% of our free cash flow to
shareholders via share repurchases, while also taking into
consideration the interest rate environment and strategic
opportunities.
- We expect to prioritize paying down our debt in FY'24.
- We expect gross debt of approximately $1.7 billion at the end of FY'24.
- We expect our fully diluted share count to increase by
approximately 1.5 million in FY'24.
PTC's Fiscal Second Quarter Conference Call
The Company will host a conference call to discuss results at
5:00 pm ET on Wednesday, May 1, 2024.
To participate in the live conference call, dial (888)
330-2508 or (240) 789-2735, provide the passcode 7328695, and press
# or log in to the webcast, available on PTC's Investor Relations
website. A replay will also be available.
Important Information About Our Operating and Non-GAAP
Financial Measures
Non-GAAP Financial Measures
We provide supplemental non-GAAP financial measures to our
financial results. We use these non-GAAP financial measures, and we
believe that they assist our investors, to make period-to-period
comparisons of our operating performance because they provide a
view of our operating results without items that are not, in our
view, indicative of our operating results. These non-GAAP financial
measures should not be construed as an alternative to GAAP results
as the items excluded from the non-GAAP financial measures often
have a material impact on our operating results, certain of those
items are recurring, and others often recur. Management uses, and
investors should consider, our non-GAAP financial measures only in
conjunction with our GAAP results.
Non-GAAP operating expense, non-GAAP operating margin, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP net income and
non-GAAP EPS exclude the effect of the following items: stock-based
compensation; amortization of acquired intangible assets;
acquisition and transaction-related charges included in general and
administrative expenses; restructuring and other charges and
credits, net; non-operating charges and credits shown in the
reconciliation provided; and income tax adjustments. Additional
information about the items we exclude from our non-GAAP financial
measures and the reasons we exclude them can be found in "Non-GAAP
Financial Measures" in our Annual Report on Form 10-K for the
fiscal year ended September 30,
2023.
Free Cash Flow: We provide information on free cash
flow to enable investors to assess our ability to generate cash
without incurring additional external financings and to evaluate
our performance against our announced long-term goals and intent to
return approximately 50% of our free cash flow to shareholders via
stock repurchases. Free cash flow is cash provided by (used in)
operations net of capital expenditures. Free cash flow is not a
measure of cash available for discretionary expenditures.
Constant Currency (CC): We present CC information to
provide a framework for assessing how our underlying business
performed excluding the effects of foreign currency exchange rate
fluctuations. To present CC information, FY'24 and comparative
prior period results for entities reporting in currencies other
than United States dollars are
converted into United States
dollars using the foreign exchange rate as of September 30, 2023, rather than the actual
exchange rates in effect during that period.
Operating Measure
ARR: ARR (Annual Run Rate) represents the annualized
value of our portfolio of active subscription software, cloud,
SaaS, and support contracts as of the end of the reporting period.
We calculate ARR as follows:
- We consider a contract to be active when the product or service
contractual term commences (the "start date") until the right to
use the product or service ends (the "expiration date"). Even if
the contract with the customer is executed before the start date,
the contract will not count toward ARR until the customer right to
receive the benefit of the products or services has commenced.
- For contracts that include annual values that increase over
time as there are additional deliverables in subsequent periods,
which we refer to as ramp contracts, we include in ARR only the
annualized value of components of the contract that are considered
active as of the date of the ARR calculation. We do not include the
future committed increases in the contract value as of the date of
the ARR calculation.
- As ARR includes only contracts that are active at the end of
the reporting period, ARR does not reflect assumptions or estimates
regarding future customer renewals or non-renewals.
- Active contracts are annualized by dividing the total active
contract value by the contract duration in days (expiration date
minus start date), then multiplying that by 365 days (or 366 days
for leap years).
We believe ARR is a valuable operating measure to assess the
health of a subscription business because it is aligned with the
amount that we invoice the customer on an annual basis. We invoice
customers annually for the current year of the contract. A customer
with a one-year contract will typically be invoiced for the total
value of the contract at the beginning of the contractual term,
while a customer with a multi-year contract will be invoiced for
each annual period at the beginning of each year of the
contract.
ARR increases by the annualized value of active contracts that
commence in a reporting period and decreases by the annualized
value of contracts that expire in the reporting period.
As ARR is not annualized recurring revenue, it is not calculated
based on recognized or unearned revenue and is not affected by
variability in the timing of revenue under ASC 606, particularly
for on-premises license subscriptions where a substantial portion
of the total value of the contract is recognized at a point in time
upon the later of when the software is made available, or the
subscription term commences.
ARR should be viewed independently of recognized and unearned
revenue and is not intended to be combined with, or to replace,
either of those items. Investors should consider our ARR operating
measure only in conjunction with our GAAP financial results.
Organic ARR: We provide an organic ARR measure to help
investors understand and assess the performance of our business
without the distorting effects of ARR from acquisitions in the
comparative period. We do not adjust for acquisitions that have an
immaterial impact on our ARR results when providing organic ARR
results.
Organic Constant Currency ARR: We provide an organic
constant currency ARR measure to help investors understand and
assess the performance of our business without the distorting
effects of ARR from acquisitions in the comparative period and
foreign exchange rate fluctuations. We do not adjust for
acquisitions that have an immaterial impact on our ARR results when
providing organic constant currency ARR results.
Deferred ARR: Deferred ARR is ARR attributable to our
portfolio of subscription software, cloud, SaaS and support
contracts that are not active as of the end of the reporting period
but are contractually committed to commence in a future period.
Because ARR is independent of recognized and unearned revenue,
deferred ARR should not be viewed as a measurement of revenue which
will be recognized in future periods.
Forward-Looking Statements
Statements in this document that are not historic facts,
including statements about our future financial and growth
expectations and potential stock repurchases, are forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those projected. These
risks include: the macroeconomic and/or global manufacturing
climates may not improve when or as we expect or may deteriorate
due to, among other factors, high interest rates or increases in
interest rates and inflation, volatile foreign exchange rates and
the relative strength of the U.S. dollar, tightening of credit
standards and availability, the effects of the conflicts between
Russia and Ukraine and in the Middle East, and growing tensions with
China, any of which could cause
customers to delay or reduce purchases of new software, reduce the
number of subscriptions they carry, or delay payments to us, which
would adversely affect ARR and/or our financial results, including
cash flow; our investments in our solutions may not drive expansion
of those solutions and/or generate the ARR and/or cash flow we
expect if customers are slower to adopt those solutions than we
expect or if they adopt competing solutions; other uses of cash or
our credit facility limits could limit or preclude the return of
50% of free cash flow to shareholders via share repurchases; and
foreign exchange rates may differ materially from those we expect.
In addition, our assumptions concerning our future GAAP and
non-GAAP effective income tax rates are based on estimates and
other factors that could change, including changes to tax laws in
the U.S. and other countries and the geographic mix of our revenue,
expenses, and profits. Other risks and uncertainties that could
cause actual results to differ materially from those projected are
detailed from time to time in reports we file with the Securities
and Exchange Commission, including our most recent Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, and other filings with
the U.S. Securities and Exchange Commission.
About PTC (NASDAQ: PTC)
PTC (NASDAQ: PTC) is a global software company that enables
industrial and manufacturing companies to digitally transform how
they engineer, manufacture, and service the physical products that
the world relies on. Headquartered in Boston, Massachusetts, PTC employs over 7,000
people and supports more than 25,000 customers globally. For more
information, please visit www.ptc.com.
PTC.com @PTC Blogs
PTC Investor Relations Contact
Matt Shimao
SVP, Investor Relations
mshimao@ptc.com
investor@ptc.com
PTC
Inc.
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenue
|
$
|
564,014
|
|
|
$
|
492,143
|
|
|
$
|
1,070,041
|
|
|
$
|
909,253
|
|
Perpetual
license
|
|
6,753
|
|
|
|
8,921
|
|
|
|
15,193
|
|
|
|
22,165
|
|
Professional
services
|
|
32,305
|
|
|
|
41,117
|
|
|
|
68,052
|
|
|
|
76,673
|
|
Total
revenue(1)
|
|
603,072
|
|
|
|
542,181
|
|
|
|
1,153,286
|
|
|
|
1,008,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(2)
|
|
110,055
|
|
|
|
113,506
|
|
|
|
220,075
|
|
|
|
209,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
493,017
|
|
|
|
428,675
|
|
|
|
933,211
|
|
|
|
798,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
(2)
|
|
134,521
|
|
|
|
129,207
|
|
|
|
271,445
|
|
|
|
247,590
|
|
Research and
development (2)
|
|
106,998
|
|
|
|
100,349
|
|
|
|
212,781
|
|
|
|
188,526
|
|
General and
administrative (2)
|
|
61,526
|
|
|
|
65,923
|
|
|
|
130,732
|
|
|
|
116,894
|
|
Amortization of
acquired intangible assets
|
|
10,424
|
|
|
|
10,656
|
|
|
|
20,787
|
|
|
|
18,682
|
|
Restructuring and
other charges (credits), net
|
|
(7)
|
|
|
|
1
|
|
|
|
(802)
|
|
|
|
(337)
|
|
Total operating
expenses
|
|
313,462
|
|
|
|
306,136
|
|
|
|
634,943
|
|
|
|
571,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
179,555
|
|
|
|
122,539
|
|
|
|
298,268
|
|
|
|
227,440
|
|
Other expense,
net
|
|
(33,810)
|
|
|
|
(41,470)
|
|
|
|
(66,924)
|
|
|
|
(59,947)
|
|
Income before income
taxes
|
|
145,745
|
|
|
|
81,069
|
|
|
|
231,344
|
|
|
|
167,493
|
|
Provision for income
taxes
|
|
31,300
|
|
|
|
17,565
|
|
|
|
50,512
|
|
|
|
28,954
|
|
Net income
|
$
|
114,445
|
|
|
$
|
63,504
|
|
|
$
|
180,832
|
|
|
$
|
138,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.96
|
|
|
$
|
0.54
|
|
|
$
|
1.52
|
|
|
$
|
1.17
|
|
Weighted average
shares outstanding
|
|
119,587
|
|
|
|
118,260
|
|
|
|
119,354
|
|
|
|
118,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
0.95
|
|
|
$
|
0.53
|
|
|
$
|
1.50
|
|
|
$
|
1.17
|
|
Weighted average
shares outstanding
|
|
120,712
|
|
|
|
119,041
|
|
|
|
120,480
|
|
|
|
118,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See supplemental
financial data for revenue by license, support and cloud
services,
and professional services.
|
|
|
|
|
|
|
|
(2) See supplemental
financial data for additional information about stock-based
compensation.
|
|
|
|
|
|
|
|
PTC
Inc.
|
|
SUPPLEMENTAL
FINANCIAL DATA FOR REVENUE AND STOCK-BASED
COMPENSATION
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by license,
support and services is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
License revenue
(1)
|
$
|
234,321
|
|
|
$
|
196,993
|
|
|
$
|
418,319
|
|
|
$
|
369,691
|
|
Support and cloud
services revenue
|
|
336,446
|
|
|
|
304,071
|
|
|
|
666,915
|
|
|
|
561,727
|
|
Professional services
revenue
|
|
32,305
|
|
|
|
41,117
|
|
|
|
68,052
|
|
|
|
76,673
|
|
Total
revenue
|
$
|
603,072
|
|
|
$
|
542,181
|
|
|
$
|
1,153,286
|
|
|
$
|
1,008,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) License revenue
includes the portion of subscription revenue allocated to
license.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amounts in the
income statement include stock-based compensation as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Cost of
revenue
|
$
|
5,034
|
|
|
$
|
5,746
|
|
|
$
|
10,123
|
|
|
$
|
9,821
|
|
Sales and
marketing
|
|
14,729
|
|
|
|
12,845
|
|
|
|
30,856
|
|
|
|
25,041
|
|
Research and
development
|
|
13,936
|
|
|
|
15,580
|
|
|
|
28,174
|
|
|
|
27,038
|
|
General and
administrative
|
|
20,492
|
|
|
|
18,075
|
|
|
|
44,051
|
|
|
|
31,850
|
|
Total stock-based
compensation
|
$
|
54,191
|
|
|
$
|
52,246
|
|
|
$
|
113,204
|
|
|
$
|
93,750
|
|
PTC
Inc.
|
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS (UNAUDITED)
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
$
|
493,017
|
|
|
$
|
428,675
|
|
|
$
|
933,211
|
|
|
$
|
798,795
|
|
Stock-based
compensation
|
|
5,034
|
|
|
|
5,746
|
|
|
|
10,123
|
|
|
|
9,821
|
|
Amortization of
acquired intangible assets included in cost of
revenue
|
|
9,584
|
|
|
|
9,834
|
|
|
|
19,150
|
|
|
|
15,976
|
|
Non-GAAP gross
margin
|
$
|
507,635
|
|
|
$
|
444,255
|
|
|
$
|
962,484
|
|
|
$
|
824,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
179,555
|
|
|
$
|
122,539
|
|
|
$
|
298,268
|
|
|
$
|
227,440
|
|
Stock-based
compensation
|
|
54,191
|
|
|
|
52,246
|
|
|
|
113,204
|
|
|
|
93,750
|
|
Amortization of
acquired intangible assets
|
|
20,008
|
|
|
|
20,490
|
|
|
|
39,937
|
|
|
|
34,658
|
|
Acquisition and
transaction-related charges
|
|
302
|
|
|
|
11,883
|
|
|
|
2,808
|
|
|
|
17,689
|
|
Restructuring and other
charges (credits), net
|
|
(7)
|
|
|
|
1
|
|
|
|
(802)
|
|
|
|
(337)
|
|
Non-GAAP operating
income (1)
|
$
|
254,049
|
|
|
$
|
207,159
|
|
|
$
|
453,415
|
|
|
$
|
373,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
114,445
|
|
|
$
|
63,504
|
|
|
$
|
180,832
|
|
|
$
|
138,539
|
|
Stock-based
compensation
|
|
54,191
|
|
|
|
52,246
|
|
|
|
113,204
|
|
|
|
93,750
|
|
Amortization of
acquired intangible assets
|
|
20,008
|
|
|
|
20,490
|
|
|
|
39,937
|
|
|
|
34,658
|
|
Acquisition and
transaction-related charges
|
|
302
|
|
|
|
11,883
|
|
|
|
2,808
|
|
|
|
17,689
|
|
Restructuring and other
charges (credits), net
|
|
(7)
|
|
|
|
1
|
|
|
|
(802)
|
|
|
|
(337)
|
|
Non-operating charges,
net (2)
|
|
2,000
|
|
|
|
4,622
|
|
|
|
2,000
|
|
|
|
5,147
|
|
Income tax adjustments
(3)
|
|
(14,586)
|
|
|
|
(14,943)
|
|
|
|
(28,624)
|
|
|
|
(33,676)
|
|
Non-GAAP net
income
|
$
|
176,353
|
|
|
$
|
137,803
|
|
|
$
|
309,355
|
|
|
$
|
255,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
|
0.95
|
|
|
$
|
0.53
|
|
|
$
|
1.50
|
|
|
$
|
1.17
|
|
Stock-based
compensation
|
|
0.45
|
|
|
|
0.44
|
|
|
|
0.94
|
|
|
|
0.79
|
|
Amortization of
acquired intangibles
|
|
0.17
|
|
|
|
0.17
|
|
|
|
0.33
|
|
|
|
0.29
|
|
Acquisition and
transaction-related charges
|
|
0.00
|
|
|
|
0.10
|
|
|
|
0.02
|
|
|
|
0.15
|
|
Restructuring and other
charges (credits), net
|
|
(0.00)
|
|
|
|
0.00
|
|
|
|
(0.01)
|
|
|
|
(0.00)
|
|
Non-operating charges,
net (2)
|
|
0.02
|
|
|
|
0.04
|
|
|
|
0.02
|
|
|
|
0.04
|
|
Income tax adjustments
(3)
|
|
(0.12)
|
|
|
|
(0.13)
|
|
|
|
(0.24)
|
|
|
|
(0.28)
|
|
Non-GAAP diluted
earnings per share
|
$
|
1.46
|
|
|
$
|
1.16
|
|
|
$
|
2.57
|
|
|
$
|
2.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Operating margin
impact of non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
GAAP operating
margin
|
|
29.8
|
%
|
|
|
22.6
|
%
|
|
|
25.9
|
%
|
|
|
22.6
|
%
|
Stock-based
compensation
|
|
9.0
|
%
|
|
|
9.6
|
%
|
|
|
9.8
|
%
|
|
|
9.3
|
%
|
Amortization of
acquired intangibles
|
|
3.3
|
%
|
|
|
3.8
|
%
|
|
|
3.5
|
%
|
|
|
3.4
|
%
|
Acquisition and
transaction-related charges
|
|
0.1
|
%
|
|
|
2.2
|
%
|
|
|
0.2
|
%
|
|
|
1.8
|
%
|
Restructuring and
other charges (credits), net
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
(0.1)
|
%
|
|
|
0.0
|
%
|
Non-GAAP operating
margin
|
|
42.1
|
%
|
|
|
38.2
|
%
|
|
|
39.3
|
%
|
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) In Q2'24, we
recognized an impairment loss of $2.0 million on an
available-for-sale debt security. In Q2'23, we recognized
$3.7 million of financing charges for a debt commitment agreement
associated with our acquisition of ServiceMax.
|
|
(3) Income tax
adjustments reflect the tax effects of non-GAAP adjustments which
are calculated by applying the applicable
tax rate by jurisdiction to the non-GAAP adjustments listed above.
Additionally, in the first six months of FY'24, adjustments
exclude a non-cash tax expense of $3.6 million for a tax reserve
related to prior years in a foreign jurisdiction.
|
|
PTC
Inc.
|
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
September
30,
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
248,971
|
|
|
$
|
288,103
|
|
Accounts receivable,
net
|
|
705,493
|
|
|
|
811,398
|
|
Property and equipment,
net
|
|
81,811
|
|
|
|
88,391
|
|
Goodwill and acquired
intangible assets, net
|
|
4,377,844
|
|
|
|
4,299,760
|
|
Lease assets,
net
|
|
135,262
|
|
|
|
143,028
|
|
Other assets
|
|
655,882
|
|
|
|
658,162
|
|
|
|
|
|
|
|
Total assets
|
$
|
6,205,263
|
|
|
$
|
6,288,842
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
revenue
|
$
|
724,571
|
|
|
$
|
681,550
|
|
Debt, net of deferred
issuance costs
|
|
2,005,741
|
|
|
|
1,695,785
|
|
Deferred acquisition
payments (1)
|
|
-
|
|
|
|
620,040
|
|
Lease
obligations
|
|
183,789
|
|
|
|
193,192
|
|
Other
liabilities
|
|
348,030
|
|
|
|
420,985
|
|
Stockholders'
equity
|
|
2,943,132
|
|
|
|
2,677,290
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
6,205,263
|
|
|
$
|
6,288,842
|
|
|
|
|
|
|
|
(1) FY'23 Deferred
acquisition payments represented the fair value of the $650 million
payment associated with the ServiceMax,
Inc. acquisition, which was paid in Q1'24.
|
|
PTC
Inc.
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
114,445
|
|
|
$
|
63,504
|
|
|
$
|
180,832
|
|
|
$
|
138,539
|
|
Stock-based
compensation
|
|
54,191
|
|
|
|
52,246
|
|
|
|
113,204
|
|
|
|
93,750
|
|
Depreciation and
amortization
|
|
26,922
|
|
|
|
27,709
|
|
|
|
54,144
|
|
|
|
49,037
|
|
Amortization of
right-of-use lease assets
|
|
7,735
|
|
|
|
8,510
|
|
|
|
15,459
|
|
|
|
16,564
|
|
Operating lease
liability
|
|
(5,340)
|
|
|
|
(2,910)
|
|
|
|
(10,293)
|
|
|
|
4,985
|
|
Accounts
receivable
|
|
(46,443)
|
|
|
|
(19,034)
|
|
|
|
107,507
|
|
|
|
86,478
|
|
Accounts payable and
accruals
|
|
(109)
|
|
|
|
2,492
|
|
|
|
(64,796)
|
|
|
|
(7,358)
|
|
Deferred
revenue
|
|
70,065
|
|
|
|
55,727
|
|
|
|
40,971
|
|
|
|
36,092
|
|
Income
taxes
|
|
4,620
|
|
|
|
4,667
|
|
|
|
18,087
|
|
|
|
(12,169)
|
|
Other
|
|
24,644
|
|
|
|
18,037
|
|
|
|
(17,044)
|
|
|
|
(14,049)
|
|
Net cash provided by
operating activities
|
|
250,730
|
|
|
|
210,948
|
|
|
|
438,071
|
|
|
|
391,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(3,639)
|
|
|
|
(3,770)
|
|
|
|
(8,202)
|
|
|
|
(12,950)
|
|
Acquisition of
businesses, net of cash acquired(1)
|
|
-
|
|
|
|
(828,271)
|
|
|
|
(93,457)
|
|
|
|
(828,271)
|
|
Borrowings (payments)
on debt, net(2)
|
|
(254,230)
|
|
|
|
566,000
|
|
|
|
304,174
|
|
|
|
566,000
|
|
Deferred acquisition
payment(3)
|
|
-
|
|
|
|
-
|
|
|
|
(620,040)
|
|
|
|
-
|
|
Net proceeds associated
with issuance of common stock
|
|
12,709
|
|
|
|
10,592
|
|
|
|
12,709
|
|
|
|
10,592
|
|
Payments of withholding
taxes in connection with vesting of stock-based awards
|
|
(20,858)
|
|
|
|
(3,599)
|
|
|
|
(71,184)
|
|
|
|
(56,022)
|
|
Settlement of net
investment hedges
|
|
5,123
|
|
|
|
(1,749)
|
|
|
|
(2,224)
|
|
|
|
(12,544)
|
|
Purchases of
investments
|
|
-
|
|
|
|
(5,823)
|
|
|
|
-
|
|
|
|
(5,823)
|
|
Credit facility
origination costs
|
|
-
|
|
|
|
(12,005)
|
|
|
|
-
|
|
|
|
(13,355)
|
|
Other financing &
investing activities
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(371)
|
|
Foreign exchange impact
on cash
|
|
(5,860)
|
|
|
|
565
|
|
|
|
829
|
|
|
|
9,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash,
cash equivalents, and restricted cash
|
|
(16,025)
|
|
|
|
(67,112)
|
|
|
|
(39,324)
|
|
|
|
48,306
|
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
|
265,499
|
|
|
|
388,306
|
|
|
|
288,798
|
|
|
|
272,888
|
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
|
249,474
|
|
|
$
|
321,194
|
|
|
$
|
249,474
|
|
|
$
|
321,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest(3)
|
$
|
49,263
|
|
|
$
|
24,546
|
|
|
$
|
94,020
|
|
|
$
|
29,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In Q1'24, we
acquired pure-systems for $93 million, net of cash acquired. In
Q2'23, we acquired ServiceMax Inc. for $1,448
million, net of cash acquired. We paid $828 million in Q2'23 and
the remaining $620 million in Q1'24.
|
|
(2) In Q1'24, we
borrowed $740 million to fund the ServiceMax deferred acquisition
payment and the pure-systems acquisition.
We made $181 million in payments on our debt in Q1'24 and $254
million in Q2'24.
|
|
(3) In Q1'24, we made a
payment of $650 million to settle the ServiceMax deferred
acquisition payment liability, of which $620
million is a financing outflow and $30 million is an operating
outflow and included in cash paid for interest.
|
|
PTC
Inc.
|
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS (UNAUDITED)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Cash provided by
operating activities(1)
|
$
|
250,730
|
|
|
$
|
210,948
|
|
|
$
|
438,071
|
|
|
$
|
391,869
|
|
Capital
expenditures
|
|
(3,639)
|
|
|
|
(3,770)
|
|
|
|
(8,202)
|
|
|
|
(12,950)
|
|
Free cash
flow(1)
|
$
|
247,091
|
|
|
$
|
207,178
|
|
|
$
|
429,869
|
|
|
$
|
378,919
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/ptc-announces-second-fiscal-quarter-2024-results-302133593.html
SOURCE PTC Inc.