Solid ARR and Cash Flow

BOSTON, Feb. 5, 2025 /PRNewswire/ -- PTC (NASDAQ: PTC) today reported financial results for its first fiscal quarter ended December 31, 2024.

"In Q1'25, we delivered solid year-over-year constant currency ARR growth of 11% and cash flow growth above 25%, which was in-line with our guidance. Our differentiated strategy leverages our unique portfolio to help product companies accelerate their time to market and manage increasing complexity. It's an exciting time because our products are at the epicenter of driving business transformation at our customers," said Neil Barua, President and CEO, PTC.

"In order to better serve the needs of our customers and strengthen our ability to drive consistent growth, in Q1'25, we began the realignment of our go-to-market organization to align with the vertical industries we serve. We will continue to focus on optimizing how we operate, so we can increase customer value while also enhancing shareholder returns," concluded Barua.

First Fiscal Quarter 2025 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 a selling environment that continued to be challenging, our Q1'25 ARR grew 11% year over year on a constant currency basis. Our Q1'25 cash flow was solid, with operating cash flow growing 27% year over year and free cash flow growing 29% year over year, driven by ARR growth and a disciplined process for incremental investment in our business. Additionally, as we indicated, we resumed share repurchases, buying back $75 million worth of our stock in Q1," said Kristian Talvitie, CFO.

"Given our differentiated product portfolio, the resilience of our subscription business model, the actions we have taken over time to align our investments with market opportunities, and allowing that our go-to-market changes are expected to take time to have their intended effect, we expect Q2'25 constant currency ARR growth of approximately 9.5%. Supported by ARR growth, the predictability of our cash collections, the disciplined budgeting structure we have in place, and being mindful of foreign exchange rate fluctuations, we expect Q2'25 free cash flow of approximately $270 million. We also intend to continue to execute on our share repurchase program, with approximately $75 million of buy backs expected in Q2'25," Talvitie concluded.

Full Fiscal Year 2025 and Second Fiscal Quarter Guidance

$ in millions

Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance

Reconciliation of EPS Guidance to Non-GAAP EPS Guidance

PTC's First Fiscal Quarter Results Conference Call

The Company will host a conference call to discuss results at 5:00 pm ET on Wednesday, February 5, 2025. 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.

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future financial and growth expectations and targets, potential stock repurchases, and the expected effect of our go-to-market realignment, 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 or may deteriorate due to, among other factors, the effects of recently imposed import tariffs and threats of additional import tariffs, volatile foreign exchange rates, high interest rates or increases in interest rates and inflation, tightening of credit standards and availability, geopolitical uncertainty, including the effects of the conflicts between Russia and Ukraine and in the Middle East, and 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 and cash flow; and 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 30,000 customers globally. For more information, please visit www.ptc.com.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME