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Dec 31, 2024
PTC Q1 2025 Earnings Report
PTC reported solid year-over-year constant currency ARR growth of 11% and cash flow growth above 25% in its first fiscal quarter ended December 31, 2024.
Key Takeaways
PTC delivered solid financial results in Q1'25, with constant currency ARR growth of 11% and cash flow growth exceeding 25%, aligning with guidance. The company's differentiated strategy and go-to-market realignment are key to driving business transformation and enhancing shareholder returns.
Constant currency ARR grew 11% year-over-year, reaching $2,277 million.
Operating cash flow increased by 27% year-over-year to $238 million.
Free cash flow grew 29% year-over-year, totaling $236 million.
The company resumed share repurchases, buying back $75 million worth of stock in Q1.
PTC
PTC
PTC Revenue by Segment
Revenue by Segment
Recurring Revenue
CapyFin.comPerpetual License Revenue
CapyFin.comProfessional Services Revenue
CapyFin.com Forward Guidance
For Q2'25, PTC expects constant currency ARR growth of approximately 9.5% and free cash flow of approximately $270 million. The company plans to continue share repurchases, with approximately $75 million of buybacks expected.
Positive Outlook
- Expected constant currency ARR growth of approximately 9.5% in Q2'25.
- Anticipated free cash flow of approximately $270 million in Q2'25, supported by ARR growth and disciplined budgeting.
- Intention to continue share repurchase program, with approximately $75 million of buybacks expected in Q2'25.
- FY'25 GAAP operating expenses expected to increase approximately 4% and non-GAAP operating expenses approximately 5%, primarily due to investments to drive future growth.
- Long-term goal to return approximately 50% of free cash flow to shareholders via share repurchases, assuming Debt/EBITDA ratio is below 3x.
Challenges Ahead
- Go-to-market changes are expected to take time to have their intended effect.
- FY'25 cash flow guidance includes approximately $20 million of outflows related to go-to-market realignment.
- Expected capital expenditures of approximately $15 million for FY'25.
- Anticipated cash interest payments of approximately $90 million for FY'25.
- Expected cash tax payments of approximately $110 million for FY'25.
Revenue & Expenses
Visualization of income flow from segment revenue to net income