Slide 1: Q2'23 Financial Results
Q2’23 FINANCIAL RESULTS Jim Heppelmann Chief Executive Officer Kristian Talvitie Chief Financial Officer April 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: Q2'23 Highlights
Q2’23 HIGHLIGHTS JIM HEPPELMANN, CEO
Slide 4: Solid Q2'23 Top Line Results
SOLID Q2’23 TOP LINE RESULTS ARR 1 Q2'23 $ in millions Q2'23 Q2'22 YoY Change Guidance ARR as reported $1,882 $1,532 23% ARR at constant currency $1,814 $1,440 26% $1,790 - $1,810 Organic ARR as reported $1,696 $1,532 11% Organic ARR at constant currency $1,631 $1,440 13% Broad-based strength across
Slide 5: Solid Q2'23 Bottom Line Results
SOLID Q2’23 BOTTOM LINE RESULTS CASH FLOW Cash flow growth driven by ARR growth and operating efficiency1 expansion Q2'23 $ in millions Q2'23 Q2'22 YoY Change Guidance Cash from operations $211 $142 48% ~$205 Free cash flow $207 $140 48% ~$200 Operational changes and solid execution continue to gene
Slide 6: Strong Balance Of Top And Bottom Line Growth
STRONG BALANCE OF TOP AND BOTTOM LINE GROWTH 1 Peer-leading growth and resiliency supported by subscription business model TOP AND BOTTOM LINE RESULTS RECURRING REVENUE AS A % OF TOTAL REVENUE $ in millions 100% 90% $2,100 $700 $1,800 $600 80% $1,500 $500 $1,200 $400 60% $900 $300 40% $600 $200 $300
Slide 7: Rule Of 40 Peer Comparison
RULE OF 40 PEER COMPARISON (USING REVENUE GROWTH % + FCF MARGIN %) YEAR END CLOSEST TO DEC 31, 2022 ACTUALS 60% 55% ANNUAL REPORTS 50% 42% 41% 37% 37% 35% 40% 28% 30% 20% 10% 10% 0% PTC FY’22 YEAR END CLOSEST TO DEC 31, 2023 CONSENSUS YEAR END CLOSEST TO DEC 31, 2024 CONSENSUS 50% 50% 43% 40% 41% 39
Slide 8: Solid Q2'23 ARR Results Across Geographic Regions
SOLID Q2’23 ARR RESULTS ACROSS GEOGRAPHIC REGIONS Q2’23 compared to Q2’22 Europe Americas 21% growth; 9% organic 29% growth; 15% organic Constant currency: APAC Constant currency: 25% growth; 12% organic 10% growth; 3% organic 29% growth; 15% organic Constant currency: 19% growth; 12% organic Inorga
Slide 9: Solid Q2'23 ARR Results Across Product Groups
SOLID Q2’23 ARR RESULTS ACROSS PRODUCT GROUPS 1 CAD: Product data authoring PLM: Product data management software and process orchestration software $ in millions $ in millions (constant currency) 7% YoY (constant currency) 36% YoY 10% YoY CC 39% YoY CC $714 $1,100 $648 23% ServiceMax and Codebeamer
Slide 10: PLM And CAD In Calendar 2022
PLM AND CAD IN CALENDAR 2022 PLM: Product data management and process orchestration software PLM software revenue market share1 Category leadership in the PLM market $1,152M 20% PTC ARR growth YoY vs 11% Market revenue growth $153M 2% inorganic growth (Codebeamer) Subscription business model Share g
Slide 11: Upcoming Event: LiveWorx 2023
UPCOMING EVENT: LIVEWORX 2023 May 15 – 16, 2023 Tuesday, May 16 Investor Track at LiveWorx 2023 LiveWorx (in-person in Boston) 9:00am – 10:15am Keynote session, featuring Jim Heppelmann, CEO 10:15am – 11:15am Break/Networking 11:15am – 11:45am Spotlight session on ServiceMax with Neil Barua, Focused
Slide 12: Fresenius Medical Care
FRESENIUS MEDICAL CARE Challenge With over 40 manufacturing factories and over 4,000 clinics globally, Fresenius Medical Care decided to take a harmonized and streamlined global approach to managing their product strategy. Coming from a document and paper centric world, Fresenius saw the opportunity
Slide 13: Komatsu
KOMATSU Challenge Komatsu is a titan in the heavy equipment industry. They design, manufacture, and service some of the largest industrial equipment in the world, with decades- long operational use. Because post-sales service is strategic to their financial performance, Komatsu has been investing to
Slide 14: 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 15: Financial Review And Guidance
FINANCIAL REVIEW AND GUIDANCE KRISTIAN TALVITIE, CFO
Slide 16: Q2'23 Results Vs Prior Year
Q2’23 RESULTS VS PRIOR YEAR $ in millions CONSTANT CURRENCY ARR CASH FLOW 1 REVENUE Constant Currency ARR Revenue 26% 48% 48% 7% $1,814 $211 $207 $542 13% $505 ServiceMax and $142 $140 $1,440 Codebeamer Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 ARR growth of 23%; organic ARR Cash flow performance reflects
Slide 17: Balance Sheet And Share Repurchases
BALANCE SHEET AND SHARE REPURCHASES Balance sheet as of March 31, 2023 Cash and cash equivalents of $320 million Gross debt of $2,545 billion with an aggregate interest rate of 5.4% $1.0 billion of senior notes with an aggregate interest rate of 3.8% $500 million term loan with a variable interest r
Slide 18: 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-Jun 30-Sep Using FX rates as of September 30, 2022 Guidance Guidance 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar Midpoint Midpoint CAD (product data authoring) $ 632 $ 648 $ 665 $
Slide 19: FX Dynamics: ARR Sensitivity To EUR/USD And USD/Yen
FX DYNAMICS: ARR SENSITIVITY TO EUR/USD AND USD/YEN In millions End of Q2'23 ARR base $1,814 Estimated impact of $0.10 change in EUR/USD rate $40 Estimated impact of 10 Yen change in USD/JPY rate $9 As of the end of Q2’23 54% of our ARR is transacted in USD 23% of our ARR is transacted in EUR 6% of
Slide 20: FY'23 And Q3'23 Guidance
FY’23 AND Q3’23 GUIDANCE FY’23 Previous FY’23 FY’23 YoY Growth Q3’23 $ in millions Guidance Guidance Guidance Guidance 1 ARR at Constant Currency $1,910 - $1,960 $1,925 - $1,950 22% - 24% $1,845 - $1,855 Cash from Operations ~$595 ~$600 ~38% ~$160 Free Cash Flow ~$575 ~$580 ~39% ~$155 Revenue $2,070
Slide 21: Updated FY'23 ARR And FCF Growth Scenarios
UPDATED FY’23 ARR AND FCF GROWTH SCENARIOS Constant Organic Organic Constant Currency Bookings Churn Free Currency ARR ARR Growth YoY Scenario YoY Scenario Cash Flow1 $1,950 million 24% ARR drivers include: ~$580 million Start of Q3’23 Updated bookings Most $1,938 million 23% ~$580 million Guidance
Slide 22: Expected Financial Impact Of ServiceMax In FY'23
EXPECTED FINANCIAL IMPACT OF SERVICEMAX IN FY’23 ServiceMax within PTC FY'23 Expectation 1 Constant Currency ARR ~$170 million EXPECTED FY’23 REVENUE EXPECTED FY’23 ARR1 ARR Collections mix ~95% U.S. Dollar BY LINE OF BUSINESS BY GEOGRAPHIC REGION Free Cash Flow impact to PTC2 ~$5 million accretive
Slide 23: 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 What you need to need to Actual Actual Actual Actual Actual Actual believe believe $ in millions Q1'22 Q2'22 Q3'22 Q4'22
Slide 24: 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 We are proactively due to our subscription due to our FY’22 adapting to changing business model and organizational realignment macro environments customer stick
Slide 25: 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 half of FY’23 had a favorable impact on our Q2’23 reported ARR, comp
Slide 26: 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 27: 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 28: 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 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: 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 Recurring Revenue $ in millions FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20
Slide 31: Thank You
DIGITAL TRANSFORMS PHYSICAL THANK YOU ptc.com Go900