Slide 1: Q3'23 Financial Results
Q3’23 FINANCIAL RESULTS Jim Heppelmann Chief Executive Officer Kristian Talvitie Chief Financial Officer July 26, 2023
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation includes forward looking statements regarding PTC’s future financial performance, strategic outlook and expectations, anticipated future operations, and expected effects of strategic investments and initiatives. Because such statements deal with future ev
Slide 3: Q3'23 Highlights
Q3’23 HIGHLIGHTS JIM HEPPELMANN, CEO
Slide 4: Solid Q3'23 Top Line Results
SOLID Q3’23 TOP LINE RESULTS ARR $ in millions Q3'23 Q3'22 YoY Change Q3'23 Guidance ARR as reported $1,929 $1,544 25% ARR at constant currency $1,868 $1,496 25% $1,845 - $1,855 1 Organic ARR as reported $1,762 $1,544 14% Organic ARR at constant currency1 $1,703 $1,496 14% Broad-based strength acros
Slide 5: Solid Q3'23 Bottom Line Results
SOLID Q3’23 BOTTOM LINE RESULTS CASH FLOW Cash flow growth driven by ARR growth and operating efficiency1 expansion $ in millions Q3'23 Q3'22 YoY Change Q3'23 Guidance Cash from operations $169 $117 45% ~$160 Free cash flow $164 $112 46% ~$155 Operational changes and solid execution continue to gene
Slide 6: Solid Q3'23 ARR Results Across Geographic Regions
SOLID Q3’23 ARR RESULTS ACROSS GEOGRAPHIC REGIONS Q3’23 compared to Q3’22 Europe Americas 27% growth; 17% organic 29% growth; 15% organic Constant currency: APAC Constant currency: 24% growth; 13% organic 10% growth; 4% organic 29% growth; 15% organic Constant currency: 16% growth; 10% organic Inorg
Slide 7: Solid Q3'23 ARR Results Across Product Groups
SOLID Q3’23 ARR RESULTS ACROSS PRODUCT GROUPS1 CAD: Product data authoring PLM: Product data management software and process orchestration software $ in millions $ in millions (constant currency) 11% YoY (constant currency) 36% YoY 11% YoY CC 36% YoY CC $735 $1,133 $665 20% ServiceMax $831 Q3'22 Q3'
Slide 8: Sustainability of PTC's Category-Leading Growth
SUSTAINABILITY OF PTC’S CATEGORY-LEADING GROWTH PTC: Double-Digit ARR1 Growth Every Year Since FY’17 TODAY In Guidance Accretive Growth in SLM with ServiceMax millions 23% - 24% $2,000 16% Accretive Growth in ALM with Codebeamer $1,500 11% 17% Mid 12% On-Premise to SaaS Strategy for Core CAD/PLM $1,
Slide 9: Sustainability of PTC's Margin Expansion
SUSTAINABILITY OF PTC’S MARGIN EXPANSION PTC: 14% Operating Efficiency1 Expansion between FY’16 and FY’22 TODAY Guidance Operational Rebalancing 0.4 >36.5% 32% 28% 29% 0.3 26% Aligning to SaaS Principles and Best Practices 20% 21% 18% 0.2 ~40% Improving Commercial Discipline Specific 0.1 Operating t
Slide 10: PTC Succession Plan
PTC SUCCESSION PLAN Jim will retire as CEO in February 2024 and will be succeeded by Neil Barua Jim Heppelmann Neil Barua Mike DiTullio Kristian Talvitie Janice Chaffin Jim has been Appointed CEO- Mike DiTullio will Kristian Talvitie Janice Chaffin has appointed Elect and continue in his will contin
Slide 11: Neil Barua Introduction
NEIL BARUA INTRODUCTION PTC CEO-Elect and former President of PTC’s Service Lifecycle Management business Proven track record in industrial software Extensive background in technology industry with successful history of growing profitable businesses Former CEO of ServiceMax Former Operating Partner
Slide 12: Financial Review and Guidance
FINANCIAL REVIEW AND GUIDANCE KRISTIAN TALVITIE, CFO
Slide 13: Q3'23 Results vs Prior Year
Q3’23 RESULTS VS PRIOR YEAR $ in millions CONSTANT Constant CURRENCY ARR CASH FLOW 1 REVENUE Currency ARR Revenue 25% 45% 46% 17% $169 $164 $1,868 $542 11% $462 ServiceMax $117 $112 $1,496 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 ARR growth of 25%, as-reported Cash flow performance reflects continued Rev
Slide 14: Balance Sheet and Share Repurchases
BALANCE SHEET AND SHARE REPURCHASES Balance sheet as of June 30, 2023 Cash and cash equivalents of $282 million Paid down $180 million of debt in Q3’23 Gross debt of $2.365 billion with an aggregate interest rate of 5.6% $1.0 billion of senior notes with an aggregate interest rate of 3.8% $500 milli
Slide 15: FX Dynamics: Impact to ARR
FX DYNAMICS: IMPACT TO ARR In millions FY'22 FY'23 ARR by Product Group (Constant Currency) Quarter Ended Quarter Ended 30-Sep Using FX rates as of September 30, 2022 Guidance 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun Midpoint CAD (product data authoring) $ 632 $ 648 $ 665 $ 685 $ 696 $ 714 $
Slide 16: FY'23 and Q4'23 Guidance
FY’23 AND Q4’23 GUIDANCE FY’23 Previous FY’23 FY’23 YoY Growth Q4’23 $ in millions Guidance Guidance Guidance Guidance ARR at Constant Currency1 $1,925 - $1,950 $1,935 - $1,950 23% - 24% $1,935 - $1,950 Cash from Operations2 ~$600 ~$605 ~39% ~$44 Free Cash Flow2 ~$580 ~$585 ~41% ~$42 Revenue $2,080
Slide 17: FY'23 Guidance Progression
FY’23 GUIDANCE PROGRESSION Solid progression in an uncertain macroenvironment Q4'22 Earnings Call Q1'23 Earnings Call Q2'23 Earnings Call Q3'23 Earnings Call $ in millions Guidance Midpoint Guidance Midpoint Guidance Midpoint Guidance Midpoint ARR at Constant Currency1 $1,760 $1,935 $1,938 $1,943 AR
Slide 18: Illustrative Constant Currency ARR Model
ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve the midpoint of constant currency ARR guidance? Using FX rates as of September 30, 2022 What you need to Actual Actual Actual Actual Actual Actual Actual believe $ in millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23
Slide 19: Wrap Up
WRAP UP STRONG PORTFOLIO STRONG MARGIN PEER-LEADING ARR AND STRATEGY EXECUTION EXPANSION AND FCF GROWTH Portfolio of products is FY’23 forecasted to be our Hiring and investing in-line Durable and efficient unique and compelling 7th consecutive year of with macroeconomic growth supported by double-d
Slide 20: Appendix: FY'23 Guidance Assumptions
APPENDIX: FY’23 GUIDANCE ASSUMPTIONS We provide ARR guidance on a constant currency basis, using our FY’23 Plan foreign exchange rates (rates as of September 30, 2022) for all periods. Foreign exchange fluctuations during the first nine months of FY’23 had a favorable impact on our Q3’23 reported AR
Slide 21: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Statements in this press release that are not historic facts, including statements about our future financial and growth expectations, guidance, and targets, and potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cau
Slide 22: Operating Measures
OPERATING MEASURES ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, cloud, SaaS, and support contracts as of the end of the reporting period. We calculate ARR as follows: We consider a contract to be active when the product or service contr
Slide 23: Operating Measures Continued
OPERATING MEASURES CONTINUED ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period. As ARR is not annualized recurring revenue, it is not calculated based on recognized or u
Slide 24: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES PTC provides supplemental non-GAAP financial measures to its 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 op
Slide 25: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ARR In millions FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 ARR (as reported) 807 914 1,010 1,111 1,264 1,468 1,572 ARR (constant currency) 739 832 930 1,043 1,156 1,353 1,572 Earnings per share FY’23 Q4’23 Guidance Guidance Diluted Earnings per share $2.14 - $2.45 $0.47 - $0.
Slide 26: Thank You
THANK YOU pt c. c om