Slide 1: Q2'22 Financial Results
Q2’22 FINANCIAL RESULTS Investor Relations April 27, 2022
Slide 2: Forward Looking Statements
2 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
Slide 3: Q2'22 Highlights
Q2’22 HIGHLIGHTS JIM HEPPELMANN – PRESIDENT & CEO
Slide 4: Strong Q2'22 Financial Results
4 STRONG Q2’22 FINANCIAL RESULTS Top Line Bottom Line ARR in Q2 Cash Flow in Q2 $1.53 billion, up 11% year over year $142 million cash from operations $1.56 billion constant currency, up $140 million free cash flow 13% year over year, all organic $158 million adjusted free cash flow, Growth in every
Slide 5: Strong Q2'22 Bookings Performance
5 STRONG Q2’22 BOOKINGS PERFORMANCE Strength in both Digital Thread and Velocity, driven by demand for digital transformation and SaaS Top Line Bookings Mid-teens % bookings growth year over year on a constant currency basis Digital Thread strength led by Creo CAD and Windchill PLM, particularly in
Slide 6: Our Business Model: ARR and Bookings Dynamics
6 OUR BUSINESS MODEL: ARR AND BOOKINGS DYNAMICS Q2’22 Constant Currency ARR Growth YoY In millions 13% growth ARR is resilient, since growth is a rolling 4-quarter metric Bookings, which is a leading indicator for ARR, grew mid-teens % YoY in Q2’22 on a constant currency basis
Slide 7: Strong ARR Performance Across Geographies
7 STRONG ARR PERFORMANCE ACROSS GEOGRAPHIES Americas Constant currency ARR growth driven by double-digit growth in Digital Thread – Core and mid- 12% growth 9% growth 20s % growth in Velocity 12% growth CC 1 15% growth CC 1 Europe Inclusive of Russia exit 9% growth Constant currency ARR growth drive
Slide 8: Digital Thread ARR Performance
8 DIGITAL THREAD ARR PERFORMANCE1 In millions (constant currency) Core Growth FSG 10% YoY 13% YoY 6% YoY $1,079 13% YoY CC 15% YoY CC 8% YoY CC $956 $180 $207 $180 $195 Q2'21 Q2'22 Q2'21 Q2'22 Q2'21 Q2'22 CAD and PLM both grew in the Landed 9 Digital Performance Strong customer demand, with double-d
Slide 9: Bosch Group
9 BOSCH GROUP Challenge With 400,000 employees, 75,000 engineers, and a few thousand development teams, there is no single answer to digitalization. As a Tier 1 automotive supplier, Bosch delivers a high volume of complex products. In industrial markets, Bosch typically engineers their products to o
Slide 10: Cummins
10 CUMMINS Challenge Cummins set out to rethink their design process in light of their focus on sustainable products and processes. Cummins targeted the design phase because about 70% of an item’s lifecycle CO2 footprint is set there. Solution Cummins is applying Creo generative design and simulatio
Slide 11: Velocity ARR Performance
11 VELOCITY ARR PERFORMANCE1 In millions (constant currency) 27% YoY 27% YoY CC $83 $65 Q2'21 Q2'22 ▪ Mid-40s % Onshape ARR growth – driven by upsell/expansions, competitive win rates, and new logos ▪ Mid-20s % Arena ARR growth – driven by upsell/expansions and new logos 1 Amounts shown and discusse
Slide 12: Filtronic
12 FILTRONIC Challenge Filtronic needed to drive faster product launches and increase customer satisfaction. Past reliance on siloed product development and manufacturing processes was creating unnecessary product design roadblocks and regulatory compliance delays. Solution Arena’s cloud-based PLM s
Slide 13: Recently Signed Transactions
13 RECENTLY SIGNED TRANSACTIONS Both transactions are expected to close during Q3’22
Slide 14: Wrap Up
14 WRAP UP STRONG GROWTH PROFITABILITY FISCAL 2022 PORTFOLIO ACCELERATION EXPANSION Strong 1H’22 Portfolio of products is Strong bookings and Optimized SaaS unique and compelling, renewals throughout operational model Forecasted to be our 5th and aligns well to 1H’22 consecutive year of customer dem
Slide 15: Q2'22 Financial Review
Q2’22 FINANCIAL REVIEW KRISTIAN TALVITIE– EVP & CFO
Slide 16: Q2'22 Results vs Prior Year
16 Q2’22 RESULTS VS PRIOR YEAR In millions ARR at Constant Currency Cash Flow1 Revenue 9% 13% 22% $505 $1,564 17% 21% $462 $158 $142 $140 $122 $130 $1,380 $116 Q2'21 Q2'22 Q2'21 Q2'22 Q2'21 Q2'22 ARR growth of 11%, 13% constant Strong operating and free cash flow Revenue growth of 9%, 13% constant c
Slide 17: Balance Sheet and Share Repurchases
17 BALANCE SHEET AND SHARE REPURCHASES Strong balance sheet as of March 31, 2022 Cash and cash equivalents of $307 million Gross borrowings of $1.275 billion $1.0 billion of senior notes with an aggregate interest rate of 3.8% $275 million drawn on revolving credit facility with a variable interest
Slide 18: ARR by Product Group: FX Dynamics
18 ARR BY PRODUCT GROUP: FX DYNAMICS FY'21 FY'22 ARR by Product Group (Constant Currency) Qtr Ended Qtr Ended 30-Jun 30-Sep Using FX rates as of September 30, 2021 Guidance Guidance 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar Midpoint Midpoint (in millions) ARR by Product Group: Digital Thread - Core
Slide 19: FY'22 and Q3'22 Guidance
19 FY’22 AND Q3’22 GUIDANCE FY’22 Constant Currency ARR guidance raised, Reconciliation of Cash from Operations to Adjusted Free Cash Flow despite Russia exit FY’22 Previous FY’22 Q3’22 In millions Guidance Guidance Guidance FY’22 Free Cash Flow and Adjusted Free Cash Cash from Operations ~$430 ~$43
Slide 20: Expected Financial Impact of Intland and ITCI
20 EXPECTED FINANCIAL IMPACT OF INTLAND AND ITCI Constant currency ARR: Expect a positive impact of approximately $15 million in FY’22 Free cash flow: Expect the transactions to be immaterial to FY’22 and accretive to FY’23 Our FY’22 guidance does not reflect operating results of the Intland acquisi
Slide 21: FY'22 Illustrative Constant Currency ARR Model
21 FY’22 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve the midpoint of constant currency ARR guidance? Q3’22 and FY’22 Ending ARR modelled at the midpoints of our guidance ranges In 1H’22, we added approximately $25M more ARR than in 1H’21 on an organic basis To h
Slide 22: FY'22 and Q3'22 Guidance Assumptions
22 FY’22 AND Q3’22 GUIDANCE ASSUMPTIONS We provide ARR guidance on a constant currency basis, using our FY’22 Plan foreign exchange rates (rates as of September 30, 2021) for all periods. Based on foreign exchange rate fluctuations as of the end of Q2’22, we currently expect a $34 million headwind (
Slide 23: Forward-Looking Statements
23 FORWARD-LOOKING STATEMENTS Statements in this presentation 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 actual
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: Non-GAAP Reconciliation
26 NON-GAAP RECONCILIATION In millions Q2'22 Q2'21 Cash from Operations $142.3 $121.7 Capex $2.1 $5.4 Free Cash Flow $140.2 $116.3 Restructuring payments $17.8 $4.4 Transaction-related payments $0.4 $8.2 Non-ordinary course tax payments - $1.0 Adjusted Free Cash Flow $158.4 $129.9
Slide 27: Thank You
DIGITAL TRANSFORMS PHYSICAL THANK YOU ptc.com Go900