Slide 1: Q1 Financial Results
Q1 FINANCIAL RESULTS Investor Relations January 26, 2022
Slide 2: Q1'22 Highlights
Q1’22 HIGHLIGHTS JIM HEPPELMANN – PRESIDENT & CEO
Slide 3: Strong Q1 Financial Results
3 STRONG Q1 FINANCIAL RESULTS Growth in every product line and geography Top Line Bottom Line ARR in Q1 Cash Flow in Q1 $1.51 billion constant currency $138 million operating, $134 million free cash flow 1 16% growthconstant currency 21% operating, 21% free cash flow growth Adjusted free cash flow o
Slide 4: Strong Bookings Performance
4 STRONG BOOKINGS PERFORMANCE Strength in both Digital Thread and Velocity, driven by demand for digital transformation and SaaS Top Line Bookings High teens growth, low double digit organic, versus strong Q1 of fiscal 2021 Strong contribution from Arena, and PLM strength particularly in Europe and
Slide 5: Good ARR Performance Across Geographies
5 GOOD ARR PERFORMANCE ACROSS GEOGRAPHIES Americas ARR growth driven by acquisition of Arena and double-digit growth in Digital Thread - Core products 19% growth 6% growth 19% growth CC 1 13% growth CC 1 Europe constant currency ARR growth driven by mid- 8% growth 30s growth in Digital 14% growt
Slide 6: Digital Thread ARR Performance
6 DIGITAL THREAD ARR PERFORMANCE Core Growth FSG 7% YoY 4% YoY 11% YoY 11% YoY CC1 6% YoY CC1 14% YoY CC1 $182 $189 $1,033 $967 $197 $177 Q1'21 Q1'22 Q1'21 Q1'22 Q1'21 Q1'22 CAD and PLM both grew in the ARR grew 14% across both IoT and AR, in Strong customer demand for double digits, and conti
Slide 7: MAN Energy Solutions
MAN ENERGY SOLUTIONS Challenge MAN ES production facilities manufactures complex parts of all sizes, and nearly every engine they make is manufactured to meet unique customer needs. MAN ES relied on manual, outdated processes that slowed down design and production. Solution MAN ES leveraged Creo to
Slide 8: Schaeffler
Digital Thread SCHAEFFLER Challenge Schaeffler’s increasing complexity requires consistent IT solutions in all development areas for more innovation, agility and efficiency. Engineering departments with disparate tool chains needed better support for end-to-end processes. Solution A long-time Creo c
Slide 9: IMA
Smart Connected Products IMA Challenge IMA wanted to expand their control room offering to help customers improve overall equipment effectiveness (OEE) and reduce downtime. Solution Longtime users of PTC’s Creo and Windchill solutions, ThingWorx was the platform for their initiative and Kepware prov
Slide 10: Vectrona / USAF
VECTRONA/ USAF Challenge The U.S. Air Force had finite training resources and limited capacity to rapidly train and deploy critical personnel and wanted to incorporate augmented reality into their maintenance and munitions training. Solution Using Vuforia with Thingworx, PTC partner Vectrona worked
Slide 11: Velocity ARR Performance
11 VELOCITY ARR PERFORMANCE2 28% YoY 28% YoY CC1 $78 $61 Q1'21 Q1'22 53% Onshape ARR growth Performance driven by expansions, competitive win rates and larger deal sizes. Over 20% Arena ARR growth Strong performance driven by both new logos and upsell/expansions. 1 constant currency 2 Veloci
Slide 12: Beta Technologies
BETA TECHNOLOGIES Challenge Beta’s engineering team relied on strict protocols and workflow restrictions of traditional file-based Product Data Management systems and wanted a cloud-native product development platform where everyone would be working with one single source of truth. Solution Onshape’
Slide 13: Potrero
POTRERO Challenge Potrero needed a scalable QMS to support its growing product development and compliance needs while helping address and pass audits. Solution As a cloud-based system, Arena QMS doesn’t require a substantial IT infrastructure investment or a lengthy implementation. Impact Change ord
Slide 14: SaaS Transition Program
14 SaaS TRANSITION PROGRAM Mission: Accelerate PTC’s SaaS value creation opportunity by driving SaaS- first practices (across people, processes, products, and systems) Multi-Year Program Achievements: Transformation Cross-functional PMO modeled on approach used for PTC’s Program successful Subscript
Slide 15: Wrap Up
15 WRAP UP Strong start to fiscal 2022 – forecasted to be our 5th consecutive year of double-digit ARR growth Portfolio of products is unique, compelling and align well to customer demand We are poised to accelerate growth as the powerful SaaS growth tailwind blows harder in coming quarters an
Slide 16: Q1 Financial Review
Q1 FINANCIAL REVIEW KRISTIAN TALVITIE– EVP & CFO
Slide 17: Q1'22 Results vs Prior Year Update
17 Q1’22 RESULTS VS PRIOR YEAR UPDATE Cash Flow (1) Revenue ARR at constant currency 7% 16% ~21% ~21% ~20% $429 $458 $1,507 $138 $134 $145 $114 $111 $121 $1,302 Q121 Q122 Q121 Q122 Q1'21 Q1'22 Cash from Operations FCF AFCF ARR growth of 12%, 16% CC Strong operating and free cash flow Revenue growth
Slide 18: Balance Sheet and Share Repurchases
18 BALANCE SHEET AND SHARE REPURCHASES Strong balance sheet as of December 31, 2021 Cash and cash equivalents of $296 million Medium-term investments of $87 million, primarily related to our investment in Matterport Gross borrowings of $1.45 billion $1.0 billion of senior notes with an aggregate int
Slide 19: Product Group Results at Constant Currency and As Reported
19 PRODUCT GROUP RESULTS AT CONSTANT CURRENCY AND AS REPORTED FY'21 FY'22 ARR in Constant Currency at FY22 Plan Rate Qtr Ended Qtr Ended 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar (G) 30-Jun 30-Sep (G) (in millions) ARR by Product Group: Digital Thread - Core $ 940 $ 956 $ 976 $ 1,013 $ 1,041 Digital
Slide 20: FY22 Guidance
20 FY22 GUIDANCE (1) On a constant currency basis, using our FY’22 Plan foreign exchange rates for all periods. Based on foreign exchange rate fluctuations as of the end of Q1’22, we currently expect a $13 million headwind, relative to our constant currency ARR guidance for FY’22, and a $12 million
Slide 21: Free Cash Flow Model Comparison
21 FREE CASH FLOW MODEL COMPARISON In millions FY21 FY22 - Investor Day FY22 - Q1 Earnings Commentary** Annual Run Rate (ARR) as reported $ 1,475 $ 1,475 $ 1,635 $ 1,635 $ 1,630 $ 1,630 Midpoint of ARR constant currency guidance less expected FX impact of $13 million Acquisition adjustment* (13) (13
Slide 22: FY22 Guidance Assumptions
22 FY22 GUIDANCE ASSUMPTIONS We provide full year ARR guidance on a constant currency basis, using our FY’22 Plan foreign exchange rates for all periods. Based on foreign exchange rate fluctuations as of the end of Q1’22, we currently expect a $13 million headwind, relative to our constant currenc
Slide 23: Forward-Looking Statements
23 FORWARD-LOOKING STATEMENTS Statements in this press release that are not historic facts, including statements about our future financial and growth expectations and targets, and potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cause actua
Slide 24: Operating Measures
24 OPERATING MEASURES ARR - To help investors understand and assess the performance of our business as a SaaS and on-premise subscription company we provide an ARR (Annual Run Rate) operating measure. ARR represents the annualized value of our portfolio of active subscription software, cloud, SaaS,
Slide 25: Non-GAAP Financial Measures
25 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
Slide 26: Unaudited Consolidated Statements of Income
PTC Inc. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended December 31, December 31, 2021 2020 Revenue: Recurring revenue $ 405,125 $ 384,957 Perpetual license 8,468 8,463 Professional services 44,128 35,630 Total revenue (1) 457,721 429,050 Cost of
Slide 27: Supplemental Financial Data for Revenue and Stock-Based Compensation
PTC Inc. SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION (in thousands) Revenue by license, support and services is as follows: Three Months Ended December 31, December 31, 2021 2020 License revenue (1) $ 169,108 $ 177,175 Support and cloud services revenue 244,485 216,245 Profe
Slide 28: Non-GAAP Financial Measures and Reconciliations
PTC Inc. NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended December 31, December 31, 2021 2020 GAAP gross margin $ 362,603 $ 342,220 Stock-based compensation 5,972 4,434 Amortization of acquired intangible assets included in cost of
Slide 29: Unaudited Condensed Consolidated Balance Sheets
PTC Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, September 30, 2021 2021 ASSETS Cash and cash equivalents $ 296,125 $ 326,532 Accounts receivable, net 478,673 541,072 Property and equipment, net 96,848 100,237 Goodwill and acquired intangible assets, net 2,553,757
Slide 30: Unaudited Condensed Consolidated Statements of Cash Flows
PTC Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended December 31, December 31, 2021 2020 Cash flows from operating activities: Net income $ 46,089 $ 23,515 Stock-based compensation 45,942 46,088 Depreciation and amortization 22,088 18,835 Amortization