Slide 1: Q1'23 Financial Results
Q1’23 FINANCIAL RESULTS Investor Relations February 1, 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: Q1'23 Highlights
Q1’23 HIGHLIGHTS JIM HEPPELMANN – PRESIDENT & CEO
Slide 4: Strong Q1'23 Financial Results
STRONG Q1’23 FINANCIAL RESULTS Top Line Bottom Line ARR at the end of Q1’23 Cash Flow in Q1’23 $1.66 billion as reported, up 11% YoY; $1.65 billion $181 million cash from operations, up 31% YoY organic (excluding Codebeamer) up 10% YoY $1.60 billion constant currency, up 15% YoY, $172 million free c
Slide 5: Digital Twins Physical: ServiceMax Acquisition
Closed-Loop Product Lifecycle Management DIGITAL PHYSICAL Compelling Acquisition TWINS PRODUCTS Closed on Strategic Fit With January 3, 2023 Revenue and Cost Synergies Expected to be Expected to be Accretive to PTC Accretive to Cash Growth Rate Flow in FY’23 System of record System of record for the
Slide 6: Driving Operating Efficiency
DRIVING OPERATING EFFICIENCY1 Continued disciplined cost management, with non-GAAP operating expenses growing more slowly than top line SaaS realignment late FY’21 drove Resource rebalancing in FY’22 driving operating efficiency in FY’22 operating efficiency in FY’23 and beyond PTC Overall PTC Start
Slide 7: Macro Impact to ARR Results in Q1'23
MACRO IMPACT TO ARR RESULTS IN Q1’23 Top Line ARR Incremental bookings softness, driven by macroeconomic environment as opposed to competitive factors Consistent across geos, segments, and channels Strong renewal results, with churn rate improving YoY in Q1’23 Combined impact to year over year ARR g
Slide 8: Resilience of Our Business
RESILIENCE OF OUR BUSINESS Original Guidance New Guidance Constant Currency Free Cash Constant Currency Free Cash ARR Growth Flow ARR Growth Flow Guidance Range Guidance Guidance Range Guidance 14% ~$560 million 25% ~$575 million1 FY’23 Guidance 12% ~$560 million 23% ~$575 million1 Range 10% ~$560 m
Slide 9: Strong Q1'23 ARR Results Across Geographic Regions
STRONG Q1’23 ARR RESULTS ACROSS GEOGRAPHIC REGIONS Americas Q1’23 compared to Q1’22 Double-digit growth in both CAD and PLM, led by Creo and Windchill Strong % growth in IoT, Arena, Windchill, and Onshape 16% growth 9% growth 16% growth CC 15% growth CC Europe1 2% growth Double-digit growth in PLM l
Slide 10: Strong Q1'23 ARR Results Across Product Groups
STRONG Q1’23 ARR RESULTS ACROSS PRODUCT GROUPS 1 CAD PLM Product data authoring Product data management and process orchestration In millions In millions (constant currency) 5% YoY (constant currency) 16% YoY 10% YoY CC 20% YoY CC 2% Codebeamer $696 $907 $632 $757 Q1'22 Q1'23 Q1'22 Q1'23 Double-digi
Slide 11: Example Customer Solution and Impact
10+ customers in or near production use Dozens of new logo and “lift and shift” opportunities in pipeline Part of bigger “Plus strategy” to be launched at LiveWorx Example Customer Leading European motor sports company with ambitious timeline to prepare for 2026 racing season created need for PLM. E
Slide 12: Enabling Nuclear Fusion Breakthrough
ENABLING NUCLEAR FUSION BREAKTHROUGH Scientists at Lawrence Livermore National Laboratory’s National Ignition Facility (NIF) have made history, producing a nuclear fusion reaction that generated more energy than it consumed PTC has been supporting the NIF engineering team as a collaborative partner
Slide 13: Wrap Up
WRAP UP STRONG POSITIONED TO STRONG MARGIN PORTFOLIO DRIVE STRONG EXECUTION EXPANSION AND STRATEGY GROWTH Portfolio of products is FY’23 forecasted to be Hiring and investing in- Business model, market unique and compelling our 7th consecutive year line with macroeconomic position, and execution of
Slide 14: Financial Review and Guidance
FINANCIAL REVIEW AND GUIDANCE KRISTIAN TALVITIE – EVP & CFO
Slide 15: Q1'23 Results vs Prior Year
Q1’23 RESULTS VS PRIOR YEAR In millions CONSTANT CURRENCY ARR CASH FLOW 1 REVENUE Revenue Constant Currency ARR 31% 15% 28% 2% $1,603 $181 $172 $458 $466 1% Codebeamer $138 $134 $1,389 Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 ARR growth of 11%; organic ARR Cash flow performance reflects continued Revenue
Slide 16: Balance Sheet and Share Repurchases
BALANCE SHEET AND SHARE REPURCHASES Balance sheet as of December 31, 2022 Cash and cash equivalents of $388 million Gross borrowings of $1.359 billion with an aggregate interest rate of 4.3% $1.0 billion of senior notes with an aggregate interest rate of 3.8% $359 million drawn on $1.0 billion revol
Slide 17: 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 31-Mar 30-Sep Using FX rates as of September 30, 2022 Guidance Guidance 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec Midpoint 30-Jun Midpoint CAD (product data authoring) $ 632 $ 648 $ 665 $
Slide 18: FX Dynamics: ARR Sensitivity to EUR/USD and USD/Yen
FX DYNAMICS: ARR SENSITIVITY TO EUR/USD AND USD/YEN In millions End of Q1'23 ARR base $1,603 Estimated impact of $0.10 change in EUR/USD rate $39 Estimated impact of 10 Yen change in USD/JPY rate $9 As of the end of Q1’23 50% of our ARR is transacted in USD 25% of our ARR is transacted in EUR 6% of
Slide 19: FY'23 and Q2'23 Guidance
FY’23 AND Q2’23 GUIDANCE FY’23 Previous FY’23 FY’23 YoY Growth Q2’23 In millions except percentages Guidance1 Guidance Guidance Guidance ARR at Constant Currency 2 $1,905 - $1,965 $1,910 - $1,960 22% - 25% $1,790 - $1,810 Cash from Operations ~$585 ~$595 ~37% ~$205 Free Cash Flow ~$565 ~$575 ~38% ~$
Slide 20: Q2'23 Illustrative Constant Currency ARR Model
Q2’23 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve the midpoint of Q2’23 constant currency ARR guidance? Using FX rates as of September 30, 2022 What you need to Actual Actual Actual Actual Actual Actual Actual Actual Actual believe In millions Q1'21 Q2'21 Q3'21
Slide 21: Weathering a Storm
WEATHERING A STORM PTC has a strong track record of disciplined operational management Our top line is resilient Our cost structure is lean While expecting to due to our subscription due to our FY’22 be relatively resilient, business model and organizational realignment we are already customer stick
Slide 22: 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 Q1’23 had a favorable impact on our Q1’23 reported ARR, compared to our Q1’23
Slide 23: 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 and targets, the expected effect of the ServiceMax acquisition on our business and future results, and potential stock repurchases, are for
Slide 24: Operating Measures
OPERATING MEASURES ARR: We provide an ARR (Annual Run Rate) operating measure to help investors understand and assess the performance of our business as a SaaS and on-premises subscription company. ARR represents the annualized value of our portfolio of active subscription software, cloud, SaaS, and
Slide 25: 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 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION In millions Q1'23 Q1'22 Cash from Operations $180.9 $137.7 Capital expenditures ($9.2) ($3.4) Free Cash Flow $171.7 $134.4 26
Slide 27: Thank You
DIGITAL TRANSFORMS PHYSICAL THANK YOU ptc.com Go900