Slide 1: Q4'24 and FY'24 Financial Results
Q4’24 AND FY’24 FINANCIAL RESULTS Neil Barua CEO Kristian Talvitie CFO November 6, 2024
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, expected effects of strategic investments and initiatives, and share repurchase expectations. Because such
Slide 3: Neil Barua, CEO
NEIL BARUA, CEO
Slide 4: Our unique portfolio helps customers accelerate time to market
OUR UNIQUE PORTFOLIO HELPS CUSTOMERS ACCELERATE TIME TO MARKET AND MANAGE INCREASING COMPLEXITY PLM ALM SLM CAD SaaS Product Lifecycle Application Lifecycle Service Lifecycle Computer Aided Software as a Management Management Management Design Service 4
Slide 5: Scaling our business through consistent execution
SCALING OUR BUSINESS THROUGH CONSISTENT EXECUTION Go-to-market realignment plan includes: Hiring a new Chief Revenue Officer; expected to start in December Realigning existing sales, customer success, and marketing resources with our market opportunities in each major geography Reinvesting in techni
Slide 6: Kristian Talvitie, CFO
KRISTIAN TALVITIE, CFO
Slide 7: Q4'24 and FY'24 ARR and Cash Flow Results
Q4’24 AND FY’24 ARR AND CASH FLOW RESULTS ARR $ in millions Q4'24 Q4'23 YoY Change Q4'24 Guidance ARR as reported $2,255 $1,979 14% 1 Constant currency ARR at FY'24 Plan FX rates $2,207 $1,979 12% $2,200 to $2,220 CASH FLOW: Driven by ARR increase and operating efficiency2 expansion $ in millions Q4
Slide 8: Investing in growth while delivering solid FCF
INVESTING IN GROWTH WHILE DELIVERING SOLID FCF Subscription model enables operating leverage AND significant reinvestment, particularly in R&D Free Cash Flow1 Non-GAAP R&D1 in millions in millions $900 $450 4 Year (FY’21 to FY’25) $800 $400 Compound Annual Growth Rate $700 $350 (CAGR) $600 $300 Cons
Slide 9: ARR by Product Group and Geographic Region
ARR BY PRODUCT GROUP AND GEOGRAPHIC REGION CAD: Product data authoring software PLM: Product data management and process orchestration software $1,387 $1,361 $868 +15% $846 +13% $ in millions +13% +10% $1,209 $1,209 $769 $769 As Constant Reported Currency Q4'23 Q4'24 Q4'23 Q4'24 Americas Europe APAC
Slide 10: Balance Sheet and Share Repurchase Program
BALANCE SHEET AND SHARE REPURCHASE PROGRAM Balance sheet $ in millions Q4'24 Q3'24 QoQ Change Q4'23 YoY Change Cash and cash equivalents $ 266 $ 248 $ 18 $ 288 $ (22) Senior notes with an aggregate interest rate of 3.8% $ 1,000 $ 1,000 $ - $ 1,000 $ - Term loan with a variable interest rate of 6.9%
Slide 11: FY'25 ARR Guidance and Reporting
FY’25 ARR GUIDANCE AND REPORTING For comparative purposes, we provide ARR guidance and report ARR on a constant currency basis To help investors understand and assess our business performance excluding FX volatility, we provide constant currency ARR guidance and report constant currency ARR For FY’2
Slide 12: FY'25 and Q1'25 Guidance
FY’25 AND Q1’25 GUIDANCE FY’24 FY’25 FY’25 YoY Growth Q1’25 $ in millions Actual Results Guidance Guidance Guidance Constant currency ARR at FY'25 Plan FX rates1 $2,255 9% to 10% growth 9% to 10% ~10.5% growth Operating cash flow $750 $850 to $8653 13% to 15% ~$234 3 Free cash flow2 $736 $835 to $85
Slide 13: FY'25 Illustrative Constant Currency ARR Model
FY’25 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve our FY’25 constant currency ARR guidance? Using FX rates as of September 30, 2024 What you need to Actual Actual Actual believe $ in millions FY'22 FY'23 FY'24 FY'25 Beginning ARR $ 1,411 $ 1,641 $ 2,021 $ 2,255
Slide 14: Q1'25 Illustrative Constant Currency ARR Model
Q1’25 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve our Q1’25 constant currency ARR guidance? Using FX rates as of September 30, 2024 What you need to Actual Actual Actual Actual Actual Actual Actual Actual believe $ in millions Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
Slide 15: FY'25 Illustrative Free Cash Flow Model
FY’25 ILLUSTRATIVE FREE CASH FLOW MODEL1 At our ARR guidance, what does PTC need to deliver to achieve the midpoint of FY’25 FCF guidance? $ in millions FY'24 Actual FY'25 Illustrative Comments Annual Run Rate (ARR) $ 2,255 $ 2,255 $ 2,469 $ 2,469 For FY'25: using 9.5% growth, the midpoint of our co
Slide 16: Q&A
Q&A
Slide 17: Thank You
© otc ptc.com iD pinfe THANK YOU
Slide 18: Appendix
APPENDIX
Slide 19: Appendix: FY'25 Guidance Includes the Following Assumptions
APPENDIX: FY’25 GUIDANCE INCLUDES THE FOLLOWING ASSUMPTIONS We provide ARR guidance on a constant currency basis, using our FY’25 Plan foreign exchange rates (rates as of September 30, 2024) for all periods. We expect churn to remain low. For cash flow, due to invoicing seasonality, and consistent w
Slide 20: Expanding the footprint of Windchill and Creo at an aerospace company
APPENDIX: EXPANDING THE FOOTPRINT OF WINDCHILL AND CREO TO INCREASE SPEED AT AN AEROSPACE COMPANY Goal This customer is a global leader in the personal aircraft sector. Demand for their new products is seeing strong growth. However, their reliance on manual processes within engineering and manufactu
Slide 21: Extending the digital thread with ServiceMax at an industrial company
APPENDIX: DRIVING GROWTH BY EXTENDING THE DIGITAL THREAD WITH SERVICEMAX AT AN INDUSTRIAL COMPANY Goal This customer is a global leader in the cranes industry and has been a large PTC customer for many years, using both Creo CAD and Windchill PLM. However, they currently manage their field service b
Slide 22: Accelerating time to market with Model Based Definition
APPENDIX: ACCELERATING TIME TO MARKET WITH MODEL BASED DEFINITION (MBD) AT AN INDUSTRIAL COMPANY Goal This customer is a global leader in power generation solutions and has been a large PTC customer for many years, using both Creo CAD and Windchill PLM. To further accelerate time to market, this cus
Slide 23: Displacing a competitor with Windchill+ SaaS at a medical device company
APPENDIX: DISPLACING A COMPETITOR WITH WINDCHILL+ SaaS AT A MEDICAL DEVICE COMPANY Goal This subsidiary of a global industrial conglomerate is a global leader in optical microscopes. They determined their PLM system was no longer adequate to support their business, due to it being a complex system t
Slide 24: Codebeamer expansion for software defined vehicles
APPENDIX: CODEBEAMER EXPANSION FOR SOFTWARE DEFINED VEHICLES AT LEADING AUTO MANUFACTURERS Significant follow-on expansion deals in Q4’24 at 3 global automobile manufacturers for new, committed software defined vehicle production programs 2 of which are top 10 automobile manufacturers by revenue 24
Slide 25: Appendix: FX Impact on ARR
APPENDIX: FX IMPACT ON ARR $ in millions Using FX rates as of September 30, 2023 (FY'24 Plan FX rates) Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Constant Currency ARR by Product Group CAD (product data authoring) $ 712 $ 730 $ 752 $ 769 $ 785 $ 808 $ 824 $ 846 PLM (product data management and
Slide 26: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Statements in this document that are not historic facts, including statements about our future financial and growth expectations and targets, potential stock repurchases and the expected effect of our go-to-market realignment, are forward-looking statements that involve ri
Slide 27: Operating Measure
OPERATING MEASURE ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, 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 cont
Slide 28: Operating Measure (Continued)
OPERATING MEASURE (CONTINUED) As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the tota
Slide 29: 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 30: Reconciliation of Non-GAAP Financial Measures to GAAP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP Diluted earnings per share: GAAP vs. Non-GAAP FY’24 FY'25 Guidance Q1'25 Guidance Diluted earnings per share $3.12 $3.68 to $4.57 $0.28 to $0.52 Stock-based compensation expense 1.85 1.65 to 1.90 0.40 to 0.46 Intangible asset amortization expense
Slide 31: Reconciliation of Non-GAAP Financial Measures to GAAP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP R&D Expense: GAAP vs. Non-GAAP In millions FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 GAAP research and dev elopment expense $182 $189 $202 $211 $215 $222 $226 $228 $229 Stock-based compensation expense (9) (8) (9) (9) (9) (9) (10) (12
Slide 32: Reconciliation of Non-GAAP Financial Measures to GAAP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP Free Cash Flow In millions FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 Net cash prov ided by (used in) operating activ ities $222 $70 $157 $79 $218 $225 $305 $180 $183 Capital expenditures (25) (30) (27) (28) (31) (29) (25) (31) (26) Fr