Slide 1: Q2'24 Financial Results
Q2’24 FINANCIAL RESULTS Neil Barua CEO Kristian Talvitie CFO May 1, 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, and expected effects of strategic investments and initiatives. Because such statements deal with future ev
Slide 3: Neil Barua, CEO
NEIL BARUA, CEO
Slide 4: Disciplined and Consistent Execution Across Our Largest Value Creation Opportunities
DISCIPLINED AND CONSISTENT EXECUTION ACROSS OUR LARGEST VALUE CREATION OPPORTUNITIES PLM ALM SLM CAD SaaS Product Lifecycle Application Lifecycle Service Lifecycle Computer Aided Converting our Management Management Management Design installed base 4
Slide 5: PLM Expansion Across a Medical Equipment Company
PLM EXPANSION ACROSS A MEDICAL EQUIPMENT COMPANY Goal With over 50% of their revenue based on products developed in the last 5 years, this MedTech company is focused on driving faster growth by significantly improving their new product introduction timelines Solution and Impact Expand the use of Win
Slide 6: Cross Selling ServiceMax Into Our Base
CROSS SELLING SERVICEMAX INTO OUR BASE Goal One of the largest elevator companies in the world is focused on growing their services business in terms of both revenue and profit Because this company intends to drive a complete service transformation – from disparate, disconnected systems that have he
Slide 7: Kristian Talvitie, CFO
KRISTIAN TALVITIE, CFO
Slide 8: Solid ARR and Cash Flow Results
SOLID ARR AND CASH FLOW RESULTS ARR: Solid growth across geographic regions and product groups Q2'24 $ in millions Q2'24 Q2'23 YoY Change Guidance ARR as reported $2,088 $1,882 11% Constant currency ARR $2,075 $1,850 12% $2,050 - $2,065 CASH FLOW: Solid growth driven by ARR increase and operating ef
Slide 9: ARR by Product Group and Geographic Region
ARR BY PRODUCT GROUP AND GEOGRAPHIC REGION CAD: Product data authoring software1 PLM: Product data management and process orchestration software2 $1,275 $1,267 $814 $808 +12% +13% +9% +11% $ in millions $748 $1,134 $1,119 $730 As Constant Reported Currency Q2'23 Q2'24 Q2'23 Q2'24 Growth primarily dr
Slide 10: Balance Sheet and Share Repurchase Program
BALANCE SHEET AND SHARE REPURCHASE PROGRAM Balance sheet update $ in millions Q2'24 Q1'24 Change Cash and cash equivalents $ 249 $ 265 $ (16) Senior notes with an aggregate interest rate of 3.8% $ 1,000 $ 1,000 $ - Term loan with a variable interest rate of 6.9% $ 497 $ 500 $ (3) $1,250 revolving cr
Slide 11: FY'24 and Q3'24 Guidance
FY’24 AND Q3’24 GUIDANCE FY’24 YoY FY’24 Previous FY’24 Q3’24 $ in millions Growth Guidance Guidance Guidance Guidance Constant currency ARR (FY'24 Plan FX rates)1 $2,190 - $2,250 $2,200 - $2,240 11% - 13% $2,115 - $2,130 Operating cash flow ~$745 ~$745 ~22% ~$225 Free cash flow2 ~$725 ~$725 ~23% ~$
Slide 12: FY'24 Illustrative Constant Currency ARR Model
FY’24 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve the midpoint of FY’24 constant currency ARR guidance? Using FX rates as of September 30, 2023 What you need to Actual Actual Actual Actual Actual believe $ in millions 1H'22 2H'22 1H23 2H'23 1H24 2H'24 Beginning
Slide 13: Q3'24 Illustrative Constant Currency ARR Model
Q3’24 ILLUSTRATIVE CONSTANT CURRENCY ARR MODEL What does PTC need to deliver to achieve the midpoint of Q3’24 constant currency ARR guidance? Using FX rates as of September 30, 2023 What you need to Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual believe $ in millions Q1'22 Q2'
Slide 14: Q&A
Slide 15: Thank You
© otc ptc.com iD pinfe THANK YOU
Slide 16: Appendix
APPENDIX
Slide 17: FY'24 Guidance Includes the Following Assumptions
FY’24 GUIDANCE INCLUDES THE FOLLOWING ASSUMPTIONS We provide ARR guidance on a constant currency basis, using our FY’24 Plan foreign exchange rates (rates as of September 30, 2023) for all periods. Foreign exchange fluctuations during the first half of FY’24 had a $14 million favorable impact on our
Slide 18: Consistent and Durable Organic ARR Growth
CONSISTENT AND DURABLE ORGANIC ARR GROWTH CONSTANT CURRENCY ORGANIC ARR $ in millions PTC ARR Focus Areas $2,000 13% PLM Expansion 15% $1,500 Codebeamer ALM 12% 10% 12% ServiceMax SLM $1,000 CAD $500 SaaS Foundation: Subscription Model with Low Churn $0 and Commercial Discipline FY'19 FY'20 FY'21 FY
Slide 19: Consistent and Disciplined Operational Execution
CONSISTENT AND DISCIPLINED OPERATIONAL EXECUTION OPERATING EFFICIENCY %1 PTC Operating Efficiency Drivers 40% 38% 32% Subscription Model with Low Churn 30% 28% 29% 26% Operational Agility 20% Commercial Discipline 10% Operational Discipline 0% FY'19 FY'20 FY'21 FY'22 FY'23 40%+ Operating Efficiency
Slide 20: Consistent and Strong Free Cash Flow Generation
CONSISTENT AND STRONG FREE CASH FLOW1 GENERATION DRIVEN BY DURABLE ARR GROWTH AND DISCIPLINED OPERATIONAL EXECUTION 95%+ subscription since FY’20 Targeting FY’24 – FY’26 $ in millions Free Cash Flow CAGR of ~20% ~$1,000 $1,000 FY’21 – FY’23 $825 - $875 $800 Free Cash Flow CAGR ~$725 of 40% $587 $600
Slide 21: FX Impact on ARR
FX IMPACT ON ARR Using FY'24 Plan FX rates as of Sept 30, 2023 FY'23 FY'24 In millions Quarter Ended Quarter Ended 30-Jun 30-Sep Guidance Guidance Constant Currency ARR by Product Group 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar Midpoint Midpoint CAD (product data authoring) $ 712 $ 730 $ 752 $ 769 $
Slide 22: 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 potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ m
Slide 23: Operating Measure
OPERATING MEASURE 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 contra
Slide 24: 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 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: Reconciliation of Non-GAAP Financial Measures to GAAP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP Free Cash Flow In millions FY'19 FY'20 FY'21 FY'22 FY'23 Q2'23 Q2'24 Net cash prov ided by (used in) operating activ ities $285 $234 $369 $435 $611 $211 $251 Capital expenditures (64) (20) (25) (19) (24) (4) (4) Free cash flow $221 $214 $344 $416