Slide 1: Q4'20 Prepared remarks
Q4’20 Prepared remarks Investor Relations October 28, 2020
Slide 2: Forward Looking Statements
This presentation includes supplemental operating and non-GAAP financial measures and targets. Except where otherwise noted, all prior period financial results and future period financial expectations and targets are non-GAAP financial measures. The non-GAAP financial measures are not prepared in ac
Slide 3: Fiscal 2020 highlights
Fiscal 2020 highlights jim Heppelmann – president & ceo
Slide 4: News alert: Extends and Expands Strategic Alliance
news alert… Extends and Expands Strategic Alliance A key technology partner; also now one of PTC’s largest resellers. Customer transactions in 45 countries. Landed >250 new accounts to date, ~70% new to PTC IoT and AR customers across discrete and process manufacturing.
Slide 5: News alert: FY'21 Virtual Investor Day
news alert… Please Join Us… FY’21 Virtual Investor Day December 15, 2020 Strategy and Secular Growth Drivers Broad Solutions Portfolio Go-to-market Strategy Attractive Financial Model
Slide 6: Delivering shareholder value
Bottom Line Top Line delivering shareholder value Market Demand Third consecutive year of double-digit ARR growth Strong bookings(1) in Q4’20 Revamped digital marketing machine backed by strong go-to-market Vibrant partner ecosystem Scaling global distribution with Rockwell Automation and Microsoft
Slide 7: FY'20 financial highlights
FY’20 financial highlights ARR and Revenue dollars and growth rates as reported. Cash from Operations and FCF for FY’20 and FY’19 include restructuring and acquisition-related payments of $52M and $25M, respectively. $1,235 - $1,255 14% 11 - 12% ~$232 ~$210 (18)% (3)% ~(19)% ~(5)% $1,415 - $1,430 16
Slide 8: Product group ARR performance
product group arr performance Core Product Group Growth Product Group Focus Solutions Group 11% CC 10% CC 11% CC 24% CC 28% CC 32% CC Q4’20 bookings growth in the low-teens YoY -exceeding expectations. FY’20 ARR growth driven by solid CAD ARR growth in the high single-digits (CC) with very strong PL
Slide 9: CAD highlights
CAD HIGHLIGHTS ARR growth in the high-single digits (CC) despite macro headwinds. APAC led regional performance as economic activity recovered. Upcoming CREO 7 release includes first Atlas-based offering and mainstream Creo Ansys Simulation. Creo Simulation Live (CSL) gained further market traction.
Slide 10: NVIDIA Modernizing Design Processes
nVIDIA Modernizing Design Processes NVIDIA is the premier designer of graphics processing units for the gaming, professional markets, mobile computing and automotive market. The Challenge In a highly competitive market with frequent product releases, Nvidia faces a common product design challenge –
Slide 11: PLM Highlights
PLM Highlights Strong ARR performance with mid-teens YoY growth – well outpacing the market. Broad-based strength across Geos. Medical Device and A&D market demand remains in high gear. Attractive FY’21 pipeline driven by Digital Transformation, new logos and platform consolidation opportunities.
Slide 12: Baxter International Digital Thread Competitive Displacement
Digital Thread Competitive Displacement BAXTER INTERNATIONAL $10 billion global Life Sciences company delivering products and therapies for hospital, clinic and in-home care. The Challenge Disparate, independent systems and processes for product requirements and lifecycle management, impacting regul
Slide 13: TE Connectivity Enterprise Digital Transformation
TE Connectivity The Challenge 20-year old unsupported, highly customized enterprise technical document delivery system. The Solution ThingWorx Navigate, integrated with Windchill PLM and other enterprise systems, accessed by 20K users across purchasing, supply chain planning, and manufacturing plann
Slide 14: IoT Highlights
iot HIGHLIGHTS FY’20 ARR growth impacted by macro-related bookings pressure in Q2/Q3. Q4 bookings doubled QoQ with improved close rates - signaling early recovery. Strong Americas performance led by major Med Device wins and expansions. Momentum heading into FY’21; new IoT Solutions create another g
Slide 15: Stanley Black & Decker Smart Connected Operations
STANLEY BLACK & DECKER Smart Connected Operations Fortune 500 manufacturer of industrial tools, household hardware and security products. $13 billion in revenue with over 60,000 employees. The Challenge Driving improvements in Overall Equipment Effectiveness (OEE) and creating shop floor visibility
Slide 16: Bridgestone Smart Connected Operations
bridgestone Smart Connected Operations The Challenge In a highly competitive market, Bridgestone was looking for new and innovative solutions to drive operational efficiencies, improve throughput and improve quality – all at scale. The Solution ThingWorx Smart Connected Operations + Thingworx Analyt
Slide 17: AR Highlights
ar HIGHLIGHTS FY’20 ARR exceeded market growth rate. Q4 bookings up ~50% YoY; lands seven-figure deal and largest European deal. 18 six-figure deals doubling previous record. Chalk creating significant upsell opportunity. Expert Capture gaining momentum due to COVID-19 operational challenges.
Slide 18: Jabil Transform Front-Line Worker Training
JABIL Transform Front-Line Worker Training Global product manufacturer serving a broad set of vertical markets with 260,000 employees in 30 countries. The Challenge Transform the pace and effectiveness of front-line production training to improve quality, reduce scrap, and drive workforce efficiency
Slide 19: Nordex Remote Knowledge Transfer
NORDEX Remote Knowledge Transfer One of the world’s largest producers of high-yield, cost efficient wind turbines with operations in more than 25 countries. The Challenge Pandemic-related travel restrictions kept technical experts grounded – stalling the commissioning of new production facilities in
Slide 20: Onshape Highlights
onshape HIGHLIGHTS FY’20 ARR growth of 32% YoY was modestly below plan due to Q2/Q3 macro disruption. Record bookings quarter in Q4’20; >80% YoY. ~70% new-logo bookings growth in Q4; >700 competitive displacements in FY’20. GTM investments paying early dividends in Europe; PTC channel ramping. Pipel
Slide 21: Rapid Onshape educational adoption
Rapid Onshape educational adoption 360% Growth
Slide 22: Regional ARR Performance
regional arr Performance +11% growth +11% growth CC +15% growth +8% growth CC +17% growth +14% growth CC APAC led regional ARR growth reflecting the earlier and broader re-opening of those economies. Americas ARR growth of 11% reflected strong ARR growth in our Growth Products Group, low double-digi
Slide 23: Strategic alliance highlights
Strategic alliance highlights PTC products on Microsoft Azure Strong quarter with >20% QoQ bookings growth. Momentum growing in Europe contributing 32% of Q4’20 bookings. Broad demand across SCP, SCO and AR use cases. Robust pipeline heading into FY’21. Ansys technologies embedded in Creo CSL delive
Slide 24: Summary
Growing market demand from Digital Transformation, PLM, remote asset management and remote front-line worker training, with growing interest in SaaS. Strong execution during pandemic with 14% (11% CC) ARR growth versus pre-COVID guidance of 12-15%. Subscription transition complete with return to rec
Slide 25: Financial review
Financial review kristian Talvitie – EVP and Cfo
Slide 26: FY'20 results vs guidance - Details
FY’20 results vs guidance - Details ARR and Revenue dollars and growth rates as reported. Cash from Operations and FCF for FY’20 and FY’19 include restructuring payments and acquisition-related payments of $52M and $25M, respectively. $1,235 - $1,255 14% 11 - 12% ~$232 ~$210 (18)% (3)% ~(19)% ~(5)%
Slide 27: Strong balance sheet as of September 30, 2020
Strong balance sheet as of September 30, 2020 Cash, cash equivalents, and marketable securities totaled $335 million Gross borrowings totaled $1.02 billion, including $1.0 billion of senior notes and $18 million outstanding under our revolving credit facility. Aggregate interest rate on senior debt
Slide 28: FY'21 guidance assumptions
Macroeconomic conditions related to the COVID-19 crisis remain stable near-term with conditions improving in the second-half of FY’21. Churn improvement of approximately 100 bps at the midpoint of guidance. ARR growth includes a ~2% headwind from lower backlog exiting FY’20 resulting from COVID-19-r
Slide 29: FY'21 guidance
FY’21 guidance ARR and Revenue dollars and growth rates as reported. Cash from Operations and FCF for FY’21 and FY’20 include restructuring and acquisition-related payments of $15M and $52M, respectively. $1,385 - $1,420 9 - 12% ~$365 ~$340 ~55% ~60% $1,550 - $1,600 6 - 10% $1.71 - $1.91 53 - 71% $2
Slide 30: Guidance summary table
Guidance summary table In millions except per share amounts Guidance YoY ARR $1,385 - $1,420 9% - 12% Cash from Operations ~365 ~55% Free cash flow(1) ~$340 ~60% Revenue $1,550 - $1,600 6% - 10% GAAP Operating Margin 13% - 14% ~flat Non-GAAP Operating Margin 28% - 29% ~flat GAAP EPS $1.71 - $1.91 53
Slide 31: Q&A
Q&A
Slide 32: Slide 32
Slide 33: Non-GAAP Financial Measures and Reconciliations
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
Slide 34: Non-GAAP Financial Measures and Reconciliations (con't)
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (con’t)
Slide 35: Non-GAAP supplemental financial information
PTC provides non-GAAP supplemental financial information 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 operational performance because they provide a view of our operating results without
Slide 36: Non-GAAP financial and operating measures
Non-gaap financial and operating measures Free Cash Flow - PTC also provides information on “free cash flow” to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goal of returning a
Slide 37: 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, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those