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Dec 31, 2020
PTC Q1 2021 Earnings Report
PTC reported strong ARR, revenue, and cash flow performance, leading to raised FY'21 guidance.
Key Takeaways
PTC's fiscal first quarter of 2021 saw double-digit top line growth and strong cash flow, driven by high demand for their product portfolio. The acquisition of Arena Solutions complements momentum in CAD and PLM markets. The company is updating its fiscal 2021 financial guidance to reflect the effect of Arena Solutions, the impact of foreign currency, and Q1'21 performance.
ARR was $1.34 billion, a 16% increase, or 12% in constant currency, compared to Q1'20.
Revenue was $429 million, a 20% increase, or 17% in constant currency, compared to $356 million in Q1'20.
Cash flow from operations was $114 million, and free cash flow was $111 million in Q1'21.
Operating margin was 21% in Q1'21, compared to 9% in Q1'20; non-GAAP operating margin was 36%, compared to 26% in Q1'20.
Revenue by Segment
Forward Guidance
PTC updated its fiscal 2021 financial guidance to reflect the effect of Arena Solutions, the impact of foreign currency, and Q1'21 performance.
Positive Outlook
- Macroeconomic conditions related to the COVID-19 crisis remain stable near-term with conditions improving in the second-half of FY’21.
- Organic ARR growth of 10% to 12% on a constant currency basis, an increase of 100 basis points at the low-end of guidance vs. our prior guidance.
- Arena Solutions contributes ~400 basis points of ARR growth.
- Changes in foreign currency since September 30, 2020 contribute ~200 basis points of ARR growth.
- Churn improves ~100 bps YoY.
Challenges Ahead
- ARR growth includes a ~2% headwind from lower backlog for FY’21 exiting FY’20, resulting primarily from COVID-19-related bookings pressure in FY’20.
- GAAP tax rate is expected to be ~50%, including an approximately $35 million tax reserve related to an ongoing tax matter in a non-US jurisdiction. Non-GAAP tax rate is expected to be ~19%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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