PTC Q4 2023 Earnings Report
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
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