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Sep 30, 2023
PTC Q4 2023 Earnings Report
PTC delivered solid ARR and cash flow results.
Key Takeaways
PTC reported solid ARR and cash flow in the fourth fiscal quarter and full year 2023. ARR grew by 26%, organic ARR growth was 15%, and organic constant currency ARR growth was 13%. Operating cash flow was $50 million in Q4, up 29% year over year, and $611 million in FY’23, up 40%. Free cash flow was $44 million in Q4, up 52% year over year, and $587 million in FY’23, up 41%.
ARR growth of 26% was reported.
Organic ARR growth of 15% was achieved.
Operating cash flow was $50 million, up 29% year over year.
Free cash flow was $44 million, up 52% year over year.
PTC
PTC
PTC Revenue by Segment
Revenue by Segment
Perpetual License Revenue
CapyFin.comProfessional Services Revenue
CapyFin.com Forward Guidance
PTC is raising the low end of its previously communicated ARR growth range and establishing a FY’24 ARR guidance range of 11% to 14%. They continue to expect approximately $725 million of free cash flow in FY’24.
Positive Outlook
- FY’24 ARR guidance range of 11% to 14%.
- Approximately $725 million of free cash flow is expected in FY’24.
- Target mid-teens growth over the medium term.
- Expect non-GAAP operating expense growth at roughly 50% of ARR growth over the medium term.
- Providing free cash flow targets through FY’26 that represent a three-year CAGR of approximately 20%.
Challenges Ahead
- Macroeconomic environment could impact any given period.
- FY’24 GAAP operating expenses are expected to increase approximately 3% to 4%.
- FY’24 non-GAAP operating expenses are expected to increase approximately 6% to 7%, primarily due to investments to drive future growth and the acquisition of ServiceMax.
- Cash taxes are expected to increase approximately $15 million in FY’24, and approximately $60 million in both FY’25 and FY’26.
- Interest payments are expected to be approximately $135 million in FY’24.
Revenue & Expenses
Visualization of income flow from segment revenue to net income