Core Insights - PTC Inc. reported third-quarter fiscal 2025 non-GAAP EPS of $1.64, exceeding the Zacks Consensus Estimate by 34.4% and up from 98 cents in the prior-year quarter [1][9] - Revenues reached $644 million, a 24% year-over-year increase, surpassing the consensus estimate by 10.6% [2][9] - The company is focusing on digital product innovation and transitioning to SaaS and subscription models, which is establishing a stable revenue base [2][3] Financial Performance - Recurring revenues were $613.6 million, up 27.4% year over year, while perpetual licenses increased by 10.1% to $7.8 million [6] - License revenues accounted for 39% of total revenues at $251.5 million, a 68.6% increase from the previous year, while support and cloud services revenues rose 8.9% to $370 million [7] - PLM revenues were $404 million, growing 23% year over year, and CAD revenues were $240 million, up 27% [10] Operating Metrics - Total operating expenses were $324 million, compared to $310.9 million in the prior-year quarter, with non-GAAP operating income rising to $285.2 million from $164.4 million [12] - The non-GAAP operating margin increased by 1,260 basis points year over year to 44% [12] Cash Flow and Balance Sheet - As of June 30, 2025, cash and cash equivalents were $199 million, down from $235 million as of March 31, 2025, while total debt decreased to $1.23 billion from $1.54 billion [13] - Cash provided by operating activities was $244 million, up from $214 million in the prior-year quarter, and free cash flow was $242 million compared to $212 million [13] Shareholder Returns - During the fiscal third quarter, PTC repurchased $75 million worth of its stock as part of a $300 million buyback plan for fiscal 2025 [14] Future Guidance - PTC now projects fiscal 2025 revenues in the range of $2,570 to $2,630 million, indicating a 12-14% year-over-year increase, and non-GAAP EPS is estimated to be between $6.63 and $7.03, suggesting a rise of 31-38% [15] - For the fourth quarter of fiscal 2025, revenues are estimated to be between $725 and $785 million, with non-GAAP EPS projected in the range of $2.10 to $2.50 [17]

Core Insights - PTC Inc. reported revenue of $643.94 million for the quarter ended June 2025, marking a year-over-year increase of 24.2% and exceeding the Zacks Consensus Estimate of $582.4 million by 10.57% [1] - The company's EPS for the same period was $1.64, up from $0.98 a year ago, representing an EPS surprise of 34.43% compared to the consensus estimate of $1.22 [1] Financial Performance Metrics - Annual Recurring Revenue (ARR) was reported at $2.42 billion, surpassing the average estimate of $2.36 billion from three analysts [4] - Recurring Revenue reached $613.58 million, exceeding the four-analyst average estimate of $549.76 million, with a year-over-year change of 27.4% [4] - Professional Services Revenue was $22.59 million, below the average estimate of $28.18 million, reflecting a year-over-year decline of 24.8% [4] - Perpetual License Revenue was reported at $7.76 million, exceeding the average estimate of $6.27 million, with a year-over-year increase of 10.1% [4] Stock Performance - PTC Inc. shares have returned +18% over the past month, significantly outperforming the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Group 1 - PTC Inc. reported quarterly earnings of $1.64 per share, exceeding the Zacks Consensus Estimate of $1.22 per share, and showing an increase from $0.98 per share a year ago, resulting in an earnings surprise of +34.43% [1][2] - The company achieved revenues of $643.94 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.57%, compared to $518.64 million in the same quarter last year [2] - PTC Inc. has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2][6] Group 2 - The stock has gained approximately 11.1% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4][7] - The current consensus EPS estimate for the upcoming quarter is $1.96 on revenues of $709.64 million, and for the current fiscal year, it is $6.09 on revenues of $2.49 billion [7] Group 3 - The Computer - Software industry, to which PTC Inc. belongs, is currently ranked in the top 21% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Data and Key Metrics Changes - The company reported a constant currency Annual Recurring Revenue (ARR) of $2,372 million, reflecting a 9.3% year-over-year growth [17] - Free cash flow for Q3 was $242 million, up 14% year-over-year [17] - Total debt at the end of Q3 was $1,236 million, with a leverage ratio of 1.2 times [17] Business Line Data and Key Metrics Changes - ARR growth in the CAD segment was 8%, primarily driven by CREO, while PLM saw a 10% increase, mainly from Windchill, CodeBeamer, and IoT [17] - The Americas experienced an 8% growth in constant currency ARR, Europe and Asia Pacific both saw an 11% increase [17] Market Data and Key Metrics Changes - The company noted that policy and trade uncertainties had led some customers to slow or phase deals, but signs of stabilization were observed by quarter-end [9] - Demand remained resilient across various verticals and geographies, indicating that the company's solutions are considered mission-critical [9] Company Strategy and Development Direction - The company is focused on enhancing its product data foundation strategy, which is central to its vision of AI-driven transformation [12][13] - The relationship with NVIDIA is highlighted as a significant opportunity for innovation and collaboration in AI and product data intelligence [14] - The company aims to maintain a net debt position and return excess cash to shareholders through share repurchases [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position in the market and the ongoing transformation of its go-to-market strategy [6][15] - There is optimism regarding the pipeline for Q4, with several meaningful opportunities identified [15] - Management acknowledged the challenges posed by input costs and tariff discussions but noted that customers are adapting to the environment [9] Other Important Information - The company is actively repurchasing shares under a $2 billion authorization, having repurchased $75 million worth of shares in Q3 [17] - The company expects to buy back approximately $300 million of common stock in fiscal '25, with $75 million expected in Q4 [17] Q&A Session Summary Question: Update on go-to-market initiatives and verticalization - Management noted progress in the go-to-market transformation, with improvements in win rates and rep productivity [29][30] Question: Confidence going into Q4 amid macro outlook - Management highlighted a strong pipeline and increased clarity in customer conversations, contributing to confidence for Q4 [36][38] Question: Changes in customer behavior due to tariff uncertainty - Management observed that while uncertainty has decreased, customers are still facing challenges with higher input costs [48][50] Question: Impact of AI on ARR uplift - Management indicated that AI is becoming a critical part of customer conversations, with positive feedback from early adopters [64][66] Question: Thoughts on M&A speculation - Management refrained from commenting on market speculation but emphasized the company's strategic leadership in its space [60] Question: Progress of ServiceMax business - Management discussed the importance of ServiceMax in cross-selling opportunities and its connection to core products like Windchill [76][82] Question: Improvement in multi-solution sales - Management noted an increase in discussions around multi-product offerings, indicating a positive trend in the pipeline [92][93] Question: Timeline for seeing outcomes from go-to-market transition - Management expects to see more significant outcomes from the go-to-market transition by mid to late next year [100][101] Question: Long-term commercial optimization strategies - Management is rigorously discussing commercial levers and believes there are opportunities for growth through pricing strategies [104][106]

Financial Data and Key Metrics Changes - In Q3, the company reported a constant currency ARR of $2,372,000,000, reflecting a 9.3% year-over-year growth [15] - Free cash flow for Q3 was $242,000,000, up 14% year-over-year [15] - The company ended Q3 with cash and cash equivalents of $199,000,000 and total debt of $1,236,000,000, resulting in a leverage ratio of 1.2 times [17] Business Line Data and Key Metrics Changes - Constant currency ARR growth was 8% in CAD, driven primarily by CREO, and 10% in PLM, driven by Windchill, CodeBeamer, and IoT [16] - The Americas saw an 8% growth in constant currency ARR, while Europe and Asia Pacific both experienced an 11% growth [16] Market Data and Key Metrics Changes - The company noted that policy and trade uncertainty led some customers to slow or phase deals, but signs of stabilization were observed by quarter-end [7] - Demand remained resilient across verticals and geographies, indicating that the company's solutions are considered mission-critical by customers [7] Company Strategy and Development Direction - The company is focused on enhancing its product data foundation strategy, which is central to its vision of AI-driven transformation [11] - The relationship with NVIDIA is highlighted as a significant opportunity for innovation and collaboration in AI and product data intelligence [12] - The company is actively engaged in a go-to-market transformation, aiming to build a more consistent operating rhythm and improve collaboration across sales, marketing, and customer success [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position in the market and the resilience of its solutions amid macroeconomic uncertainties [5] - The company anticipates a strong Q4 pipeline with several meaningful opportunities across verticals and core products [13] - Management noted that while there are still challenges, the digital transformation needs of customers have become more pronounced, positioning the company as a strategic partner [53] Other Important Information - The company is committed to a $2,000,000,000 share repurchase program and has repurchased $75,000,000 worth of shares in Q3 [17] - The company expects to maintain a low cash balance and return excess cash to shareholders through share repurchases [19] Q&A Session Summary Question: Update on go-to-market initiatives and verticalization - Management indicated that progress in go-to-market transformation is building confidence, with improvements in win rates and rep productivity [31][32] Question: Confidence going into Q4 amid macro outlook - Management highlighted a strong pipeline with the highest number of $5,000,000+ deals and improved alignment across functions to maximize pipeline opportunities [39][40] Question: Changes in customer behavior due to tariff uncertainty - Management noted that while uncertainty remains, there is more clarity in customer conversations, and digital transformation is increasingly viewed as mission-critical [50][51] Question: Impact of AI on ARR uplift - Management stated that AI is becoming central to customer conversations, with positive feedback on AI capabilities, but cautioned that it is still early to quantify ARR impact [64][65] Question: Thoughts on M&A speculation - Management refrained from commenting on market speculation but emphasized the company's strategic leadership and focus on execution [59][60] Question: Progress of ServiceMax business - Management acknowledged challenges due to churn but remains optimistic about the strategic importance of ServiceMax in relation to core products [84][86] Question: Improvement in multi-solution sales - Management reported an increase in discussions around multi-product offerings, indicating a positive trend in pipeline development [92][93] Question: Timing for seeing outcomes from go-to-market transition - Management expects to see more significant outcomes from the go-to-market transition by mid to late next year [102]

Financial Performance - ARR as reported increased by 14% year-over-year, reaching $2,416 million in Q3'25 compared to $2,126 million in Q3'24 [14] - On a constant currency basis, ARR grew by 8% to 9%, reaching $2,372 million in Q3'25 compared to $2,170 million in Q3'24 [14] - Operating cash flow increased by 14% year-over-year, reaching $244 million in Q3'25 compared to $214 million in Q3'24 [15] - Free cash flow increased by 14% year-over-year, reaching $242 million in Q3'25 compared to $212 million in Q3'24 [15] Product and Geographic Performance - PLM ARR increased by 14% as reported, reaching $1,481 million in Q3'25 compared to $1,302 million in Q3'24 [21] - CAD ARR increased by 13% as reported, reaching $934 million in Q3'25 compared to $824 million in Q3'24 [18] - Americas ARR increased by 8% as reported, reaching $1,141 million in Q3'25 compared to $1,058 million in Q3'24 [22] - Europe ARR increased by 20% as reported, reaching $921 million in Q3'25 compared to $765 million in Q3'24 [23] - APAC ARR increased by 11% as reported, reaching $354 million in Q3'25 compared to $303 million in Q3'24 [24] Capital Allocation and Guidance - The company intends to repurchase approximately $300 million of its common stock in FY'25, with $225 million already repurchased in the first three quarters [28, 38] - FY'25 free cash flow is guided to be approximately $850 million, representing approximately 16% year-over-year growth [29, 68] - FY'25 revenue is guided to be between $2,570 million and $2,630 million, representing 12% to 14% growth [29]

Financial Performance - Q3'25 reported ARR was $2,416 million, a 14% increase from $2,126 million in Q3'24[3] - Constant currency ARR growth was 9.3%, at the higher end of the guidance range[7] - Revenue for Q3'25 was $644 million, representing a 24% year-over-year increase[3] - Non-GAAP earnings per share rose 68% to $1.64, compared to $0.98 in Q3'24[3] - PTC's total revenue for the three months ended June 30, 2025, was $643.9 million, a 24.1% increase from $518.6 million in the same period of 2024[31] - Recurring revenue reached $613.6 million for the three months ended June 30, 2025, compared to $481.6 million in the prior year, reflecting a growth of 27.4%[31] - The company's net income for the three months ended June 30, 2025, was $141.3 million, up 104.5% from $69.0 million in the same quarter of 2024[31] - Earnings per share (EPS) for the three months ended June 30, 2025, were $1.17, compared to $0.57 for the same period in 2024, representing a 105.3% increase[35] - PTC's gross margin for the three months ended June 30, 2025, was $533.9 million, yielding a gross margin percentage of 82.9%, up from 78.3% in the same quarter of 2024[35] - The company reported a non-GAAP operating income of $285.2 million for the three months ended June 30, 2025, compared to $164.4 million in the same period of 2024, indicating a growth of 73.3%[35] Cash Flow and Guidance - Operating cash flow increased by 14% to $244 million, exceeding guidance of $234 to $239 million[3] - Free cash flow also grew by 14% to $242 million, surpassing the guidance range of $230 to $235 million[3] - The updated guidance for FY'25 includes approximately $850 million in free cash flow, supported by disciplined budgeting and cash collection predictability[9] - The company raised guidance for FY'25, expecting revenue between $2,570 million and $2,630 million, reflecting 12% to 14% year-over-year growth[10] - Free cash flow for the nine months ended June 30, 2025, was $756,204 thousand, compared to $642,029 thousand in 2024, indicating an increase of 17.8%[42] Stock and Equity - The company plans to repurchase approximately $300 million of its common stock in FY'25, with $225 million already repurchased[15] - The company repurchased common stock amounting to $74,987 thousand during the three months ended June 30, 2025[40] - Stockholders' equity increased from $3,214,398 thousand as of September 30, 2024, to $3,512,883 thousand as of June 30, 2025, reflecting a growth of 9.3%[39] Expenses and Liabilities - PTC's total operating expenses for the three months ended June 30, 2025, were $324.1 million, an increase from $310.9 million in the same quarter of 2024[31] - Total liabilities decreased from $3,169,144 thousand as of September 30, 2024, to $2,716,170 thousand as of June 30, 2025, a reduction of approximately 14.3%[39] - Total assets decreased from $6,383,542 thousand as of September 30, 2024, to $6,229,053 thousand as of June 30, 2025, representing a decline of approximately 2.4%[39] Revenue Breakdown - License revenue for the three months ended June 30, 2025, was $251.5 million, a significant increase of 68.5% from $149.1 million in the same period of 2024[33] - Support and cloud services revenue for the three months ended June 30, 2025, was $369.9 million, up from $339.5 million in the same quarter of 2024, reflecting an 8.9% increase[33] Capital Expenditures - Capital expenditures for the three months ended June 30, 2025, were $1,887 thousand, slightly higher than $1,639 thousand in 2024[42] Other Financial Activities - The company made a payment of $650 million to settle the ServiceMax deferred acquisition payment liability in Q1'24, which included $620 million as a financing outflow[41] - Cash provided by operating activities increased to $243,928 thousand for the three months ended June 30, 2025, up from $213,799 thousand in 2024, reflecting a growth of 14.1%[42] - The cash, cash equivalents, and restricted cash at the end of the period on June 30, 2025, was $199,894 thousand, down from $248,322 thousand in 2024[40]

Core Insights - PTC reported strong financial results for Q3 FY2025, with significant growth in revenue and operating metrics, indicating effective execution of its strategic initiatives [1][2]. Financial Performance - Annual Recurring Revenue (ARR) reached $2,416 million, a 14% increase from $2,126 million in Q3 FY2024 [3]. - Revenue for Q3 FY2025 was $644 million, representing a 24% year-over-year growth from $519 million [3]. - Operating cash flow increased by 14% to $244 million, while free cash flow also grew by 14% to $242 million [3][5]. - Earnings per share (EPS) rose by 106% to $1.17, compared to $0.575 in Q3 FY2024 [3]. Guidance and Future Outlook - The company raised its guidance for FY2025, expecting constant currency ARR growth of 8% to 9% and free cash flow of approximately $850 million [6][9]. - Q4 FY2025 revenue guidance is set between $725 million and $785 million, with EPS guidance ranging from $1.57 to $2.03 [9]. Strategic Initiatives - PTC is focusing on five key areas: CAD, PLM, ALM, SLM, and SaaS, with new product offerings and enhancements contributing to customer engagement [2][7]. - The company has initiated a share repurchase program, with $75 million planned for Q4 FY2025, completing a $300 million repurchase authorization for the year [8][21]. Market Environment - Despite a challenging selling environment, PTC's constant currency ARR growth of 9.3% indicates resilience and a positive outlook for customer engagements [5][7].

Core Insights - PTC is expanding its collaboration with NVIDIA to integrate Omniverse technologies into its Creo and Windchill solutions, enhancing design, simulation, and collaboration for complex products [1][4] - The integration aims to improve product development processes by providing real-time, immersive simulation environments, allowing teams to visualize and interact with design data [3][4] - PTC has joined the Alliance for OpenUSD, emphasizing its commitment to open standards and interoperability in 3D data for AI infrastructure [1][7] Company Developments - The integration of NVIDIA Omniverse technologies into PTC's offerings will enable faster and more precise movement from concept to production for designers and manufacturers [5][7] - PTC's collaboration with NVIDIA builds on its history of supporting NVIDIA in delivering advanced hardware for AI, including high-performance PCBs and data center systems [4][5] - The integration is expected to serve as a model for extending capabilities to other AI hardware partners, enhancing joint innovation speed and quality [4][5] Industry Impact - The partnership addresses the increasing complexity of modern products, which require integrated and engineering-intensive design processes [4] - By leveraging real-time simulation and immersive visualization, companies can accelerate development cycles and improve product quality across the entire lifecycle [3][4] - PTC's commitment to OpenUSD and open standards is anticipated to unify the global AI infrastructure industry from design to manufacturing [5][7]

Core Viewpoint - The U.S. FDA has approved PTC Therapeutics' PTCT SEPHIENCE (sepiapterin) for treating phenylketonuria (PKU), a rare genetic disorder, which is expected to significantly impact the company's future revenue and position in the market [1][4][7]. Group 1: Product Approval and Market Potential - The approval includes broad labeling for hyperphenylalaninemia (HPA) in patients aged one month and older with sepiapterin-responsive PKU [2]. - The FDA's decision is based on significant efficacy and safety data from the Phase 3 APHENITY trial and its long-term extension study [4]. - PTC Therapeutics anticipates a potential revenue opportunity exceeding $1 billion for Sephience [6]. Group 2: Commercial Strategy - The initial commercial launch strategy will target 1,200 prescribers across 104 centers, covering over 80% of PKU claims data in the U.S. [4]. - The wholesale acquisition cost (WAC) for Sephience is approximately $40,000 per month or $480,000 per year [5]. - The company will prioritize patients who have not responded well to existing oral therapies, estimated to include 40% of the PKU population [5][6]. Group 3: Analyst Insights and Stock Performance - Analysts view the approval as a significant achievement for PTC, with expectations that Sephience could become the new standard of care for PKU patients [7]. - William Blair projects peak global sales for Sephience to reach $2.2 billion by 2031 and total revenue of $1.71 billion in 2025 [7]. - PTC stock has seen a price increase of 12.44%, reaching $49.86 at the time of publication [9].