In This Article:
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ARR Growth: 10% year-over-year, reaching $2.326 billion on a constant currency basis.
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Free Cash Flow Growth: 13% year-over-year, with $279 million generated in Q2.
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Leverage Ratio: Reduced to 1.5 times after paying down $500 million of senior notes.
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Cash and Cash Equivalents: $235 million at the end of Q2.
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Gross Debt: $1.393 billion, with a $155 million reduction in Q2.
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Share Repurchase: $75 million used to repurchase 463,000 shares in Q2 under a $2 billion authorization.
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Guidance for Free Cash Flow: Raised low end to $840 million for fiscal 2025.
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Q3 Free Cash Flow Guidance: $230 million to $235 million.
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ARR Guidance Adjustment: Adjusted to 7%-9% growth due to macroeconomic uncertainties.
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Fully Diluted Share Count: Expected to remain approximately flat in fiscal 2025.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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PTC Inc (NASDAQ:PTC) reported a 10% year-over-year growth in Annual Recurring Revenue (ARR) and a 13% increase in free cash flow.
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The company successfully paid down $500 million of senior notes, reducing its leverage ratio to 1.5 times.
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PTC Inc (NASDAQ:PTC) continued its share buyback program, utilizing $75 million to repurchase 463,000 shares.
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The company made significant customer wins, including expansions in Windchill PLM and new Codebeamer ALM wins with global automotive OEMs.
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PTC Inc (NASDAQ:PTC) advanced its product portfolio and generative AI initiatives, launching new AI features across its key focus areas.
Negative Points
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PTC Inc (NASDAQ:PTC) adjusted its ARR guidance, lowering the high end from 10% to 9% due to macroeconomic uncertainties.
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The company introduced a new low end of 7% for its ARR guidance, reflecting potential delays or downsizing of deals.
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Global trade dynamics and macro pressures are causing uncertainty, potentially affecting customer buying behaviors.
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PTC Inc (NASDAQ:PTC) noted that some customer deals might be smaller or delayed due to ongoing economic conditions.
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The company acknowledged that the macro environment could lead to lengthened sales cycles and downsized deals.
Q & A Highlights
Q: Could you provide more details on how you constructed the downside scenario for the 7% ARR guidance? A: Neil Barua, CEO, explained that the adjustment from 10% to 9% was due to customer conversations indicating potential delays or smaller deal sizes due to macroeconomic conditions. The 7% low-end guidance was constructed using a bottoms-up view of the pipeline and a top-down analysis of past crises, considering potential worsening macro conditions.