BOSTON, Feb. 26, 2026 /PRNewswire/ -- PTC (NASDAQ: PTC) today announced the release of a fully cloud- native Model-Based Definition (MBD) capability, built directly into its Onshape® computer-aided design (CAD) and product data management (PDM) platform. The new capability allows engineering teams to add manufacturing information directly into the 3D model early in the design process, enabling clearer design intent, fewer handoffs, and improved efficiency across design, documentation, manufacturing, and qua ...

Core Viewpoint - PTC presents a compelling investment opportunity despite recent stock price pressures, attributed to a shift in investor focus towards AI-related companies and concerns about AI's impact on industrial software [1][2]. Company Overview - PTC is a leader in product lifecycle management (PLM) and computer-aided design (CAD) software, facilitating the creation of a digital thread for products throughout their lifecycle [4]. - The company's preferred metric, Annual Run Rate (ARR), reflects the annualized value of its active subscription software and contracts, which is crucial for revenue and cash flow [5]. Financial Performance - PTC's ARR growth is forecasted to slow to 7.5% to 9.5% in fiscal 2026, a significant decline from previous mid-teens growth expectations [6]. - The stock has declined by 10% over the past year, which is seen as a reaction to the slowing ARR and AI-related market concerns [2][6]. AI Integration - AI is viewed as a major opportunity for PTC rather than a threat, as the company is embedding AI into its existing systems to enhance value [8][9]. - Customers prefer AI to be integrated into trusted systems rather than as standalone solutions, aligning with PTC's strategic focus [9]. Future Outlook - Management anticipates a significant increase in ARR starting in Q4 of fiscal 2026, driven by large deals not yet reflected in current ARR figures [10]. - PTC's restructured go-to-market strategy aims to secure larger enterprise deals, enhancing its market position [11]. - The company expects to achieve $1 billion in free cash flow by 2026, indicating a favorable valuation with a free-cash-flow multiple of 18.7 based on its current market cap of $18.7 billion [12].

Core Insights - PTC Therapeutics reported strong financial results for the fourth quarter and full year 2025, with product and royalty revenue of $831 million, exceeding guidance [1] - The global launch of Sephience™ has been successful, with significant uptake and revenue generation [1] - The company is approaching cash flow breakeven and has a robust financial position with $1.95 billion in cash as of December 31, 2025 [1] Corporate Highlights - Sephience has a strong start, with plans to expand its global footprint to 20-30 countries by the end of 2026 [1] - The company received 1,134 patient start forms in the US and has 946 patients on commercial therapy worldwide as of December 31, 2025 [1] - The FDA has shown openness to an Accelerated Approval pathway for the votoplam Huntington's disease program, with a global Phase 3 trial planned to initiate in 1H 2026 [1] Financial Highlights - Cash, cash equivalents, and marketable securities increased to $1,945.4 million from $1,139.7 million year-over-year [1] - Net income for full year 2025 was $682.6 million, a significant improvement from a net loss of $363.3 million in 2024 [1] - Total revenues for full year 2025 reached $1,730.7 million, compared to $806.8 million in 2024, driven by collaboration and license revenue of $998.4 million related to the votoplam agreement with Novartis [1][2] Revenue Breakdown - Total net product revenues for Q4 2025 were $184.0 million, compared to $150.1 million in Q4 2024 [2] - Emflaza® net product revenues decreased to $27.1 million in Q4 2025 from $50.5 million in Q4 2024 [1] - Translarna™ net product revenues also declined to $39.0 million in Q4 2025 from $89.1 million in Q4 2024 [1] 2026 Financial Guidance - The company projects non-GAAP R&D and SG&A expenses of $680 to $720 million for 2026, excluding estimated non-cash, stock-based compensation expense of $95 million [1] - Total product revenue is expected to be between $700 to $800 million, representing a 19% to 36% increase from 2025, primarily driven by Sephience [1]

Core Insights - The software sector, valued at $450 billion, is facing potential disruption from AI technologies, as highlighted by Tom Lee from Fundstrat [2] - Despite current pressures, the global business software market is projected to grow significantly, reaching $737.3 billion by 2026 and $1.28 trillion by 2031, with a CAGR of 11.71% from 2026 to 2031 [3][4] Industry Growth Factors - Enterprises are increasingly adopting AI-enabled workflow automation, cloud-native deployment, and data-centric architectures, which are expected to drive growth in the software sector [4] - Additional growth drivers include rising demand for ESG reporting, the establishment of resilient regional supply chains, and the adoption of low-code development platforms [4] Investment Opportunities - A list of the 13 most profitable software stocks has been compiled, focusing on companies with market capitalizations over $2 billion and operating/net profit margins exceeding 20% [7] - The methodology for selecting these stocks included filtering for an upside potential of at least 5% and ranking them by trailing twelve-month net income [7] Company Highlights - F5, Inc. (NASDAQ:FFIV) reported a TTM net income of $705.99 million and has 40 hedge fund holdings. Analysts have raised price targets following a strong quarter, indicating an upside potential of 16.02% [9][10] - PTC Inc. (NASDAQ:PTC) has a TTM net income of $818.28 million and 51 hedge fund holdings. Despite a challenging macroeconomic backdrop, analysts remain optimistic about the company's long-term strategy and growth outlook [12][14]

Market Overview - Indian stocks opened lower but quickly trimmed losses in morning trading, indicating a cautious market mood [1] - The BSE Sensex index rose to 82,802, gaining 175 points or 0.21% at 10 AM [2] - The NSE Nifty50 increased to 25,523, up by 51 points or 0.2% [2] Top Gainers and Losers - Top gainers in the Sensex included Power Grid, HDFC Bank, Sun Pharma, NTPC, Kotak Bank, Bajaj Finserv, HCL Tech, ITC, and Axis Bank [2] - Top losers were Infosys, Adani Ports, Titan, HUL, SBI, Tech Mahindra, Bajaj Finance, and ICICI Bank [2] Sector Performance - The Nifty MidCap and Nifty SmallCap indices were down 0.06% each, indicating a slight decline in broader market segments [3] - The Nifty Pharma index gained 1%, reflecting positive performance in the pharmaceutical sector [3] - The Nifty Auto index added 0.06%, showing modest gains in the automotive sector [3] - The Nifty IT and PSU Bank indices both slipped by 0.4%, indicating challenges in these sectors [3]

Regulatory Update - PTC Therapeutics has withdrawn the New Drug Application (NDA) resubmission for Translarna (ataluren) for treating nonsense mutation Duchenne muscular dystrophy (DMD) due to FDA feedback indicating the data is unlikely to meet the effectiveness threshold for approval [1] - The CEO of PTC Therapeutics expressed disappointment over the inability to achieve FDA approval after over two decades of development efforts for a therapy aimed at boys and young men with nonsense mutation DMD [1] Product Information - Translarna (ataluren) is a protein restoration therapy designed to enable the formation of a functioning protein in patients with genetic disorders caused by a nonsense mutation, which halts essential protein synthesis [1] - Duchenne muscular dystrophy is a rare and fatal genetic disorder primarily affecting males, leading to progressive muscle weakness and premature death due to heart and respiratory failure [1] Company Overview - PTC Therapeutics is a global biopharmaceutical company focused on discovering, developing, and commercializing clinically differentiated medicines for rare disorders [1] - The company aims to provide access to best-in-class treatments for patients with unmet medical needs through a robust and diversified pipeline of transformative medicines [1]

Financial Performance - ARR grew 13% (8% constant currency) to $2.49 billion as of the end of Q1'26 compared to Q1'25[103] - Revenue increased by 21% (19% constant currency) to $686 million in Q1'26, driven by higher license revenue from longer renewal contracts[105] - Operating income rose by 91% to $221.1 million in Q1'26, reflecting improved revenue and operational discipline[105] - Diluted earnings per share grew 104% to $1.39 in Q1'26 compared to Q1'25, driven by revenue growth[105] - Total gross margin increased by 25% to $568.1 million in Q1'26, with a gross margin percentage of 83%[123] - Non-GAAP net income rose to $230.7 million in Q1'26, up from $133.3 million in Q1'25, reflecting a year-over-year increase of 73.1%[164] - GAAP diluted earnings per share improved to $1.39 in Q1'26, compared to $0.68 in Q1'25, marking a significant increase of 104.4%[164] - Non-GAAP diluted earnings per share reached $1.92 in Q1'26, up from $1.10 in Q1'25, indicating a growth of 74.5%[164] - Free cash flow for Q1'26 was $267.4 million, compared to $235.7 million in Q1'25, representing a growth of 13.5%[164] Cash Flow and Operating Activities - Cash provided by operating activities increased by 13% to $270 million in Q1'26[104] - Cash provided by operating activities increased by $31 million to $269.7 million in Q1'26 compared to $238.4 million in Q1'25, driven by higher collections[145] - Cash and cash equivalents increased to $209.7 million as of December 31, 2025, up from $184.4 million[142] - The company expects to use net after-tax proceeds from the Kepware and ThingWorx divestiture to repurchase shares, aligning with its long-term goal of returning excess cash to shareholders[151] Expenses and Margins - Total operating expenses increased by 3% to $346.9 million in Q1'26 from $337.8 million in Q1'25, with significant increases in general and administrative expenses by 39%[127] - Professional services revenue decreased by 27% in Q1'26 as the company shifted to leveraging partners for service delivery[117] - Professional services gross margin decreased in Q1'26 compared to Q1'25, primarily due to a sharper decrease in professional services revenue than in professional services expense[125] - Interest expense decreased by 22% to $17.3 million in Q1'26 from $22.0 million in Q1'25, attributed to lower debt balances[131] - GAAP operating margin improved to 32.2% in Q1'26 from 20.4% in Q1'25, showing a significant enhancement in operational efficiency[166] - Non-GAAP operating margin increased to 45.1% in Q1'26, up from 33.9% in Q1'25, reflecting a strong operational performance[166] Debt and Taxation - Total debt remained stable at $1,200.0 million as of December 31, 2025, with an undrawn credit facility revolver of $1,012.5 million available[148] - The effective income tax rate increased to 18% in Q1'26 from 12% in Q1'25, primarily due to changes in the geographic mix of income before taxes[133] - Income before income taxes increased by 118% to $203.0 million in Q1'26 from $93.2 million in Q1'25, while the provision for income taxes rose by 234% to $36.5 million[133] Business Developments - The company entered into an agreement to sell its Kepware and ThingWorx businesses, potentially receiving up to $600 million upon closing[106] - Total headcount increased by 4% between Q1'25 and Q1'26, indicating growth in operational capacity[127] - There have been no significant changes in market risk exposure as per the latest disclosures[167] ARR Growth - PLM ARR grew 13% (9% constant currency) from Q1'25 to Q1'26, with significant growth in Europe and Asia Pacific[119] - CAD ARR also grew 13% (8% constant currency) from Q1'25 to Q1'26, primarily driven by Creo[120]

Core Insights - PTC Inc reported a significant increase in non-GAAP EPS of $1.92 for Q1 fiscal 2026, representing a 75% year-over-year growth, surpassing both the Zacks Consensus Estimate of $1.59 and management's guidance of $1.26-$1.82 [1][9] Financial Performance - Revenues reached $686 million, up 21% year-over-year, and exceeded the consensus estimate by 7.4% [2][9] - Recurring revenues were $657.3 million, reflecting a 25.4% increase year-over-year [5] - License revenues accounted for 39.4% of total revenues at $269.7 million, up 56% from the previous year [6] - Support and cloud services revenues, making up 57.3% of total revenues, increased by 8.9% year-over-year to $393.3 million [6] - Professional services revenues decreased by 27% year-over-year to $22.9 million [6] Product Group Performance - PLM revenues were $432 million, up 22% year-over-year, while CAD revenues reached $254 million, up 20% year-over-year [7][10] Annualized Recurring Revenue (ARR) - By the end of Q1, constant-currency ARR, excluding Kepware and ThingWorx, was $2.3 billion, a 9% increase year-over-year [8] - Including Kepware and ThingWorx, constant-currency ARR totaled $2.5 billion, up 8.4% from the previous year [8] Operating Metrics - Total operating expenses were $346.9 million, slightly up from $337.8 million in the prior-year quarter [11] - Non-GAAP operating income increased to $309.6 million from $191.3 million year-over-year, with an operating margin of 45%, up 1,130 basis points [11] Cash Flow and Share Repurchase - Cash provided by operating activities was $270 million, compared to $238 million in the prior-year quarter [13] - Free cash flow was $267 million, up from $236 million year-over-year [13] - The company repurchased $200 million of common stock during the quarter and plans to repurchase approximately $250 million in Q2 [14] Future Outlook - For Q2 fiscal 2026, PTC estimates revenues between $710-$770 million and non-GAAP EPS in the range of $1.93-$2.54 [15] - Fiscal 2026 revenue projections are now between $2,675 million and $2,940 million, indicating a year-over-year increase of 2%-7% [16] - Cash from operations is projected at around $1.03 billion, a 19% increase year-over-year, with free cash flow expected to be around $1 billion, suggesting a 17% increase [17]

Financial Data and Key Metrics Changes - TPG reported GAAP net income attributable to TPG Inc. of $77 billion and after-tax distributable earnings of $304 million, or $0.71 per share of Class A common stock [4] - Full-year fee-related revenue reached $2.1 billion, including $628 million for the fourth quarter, which grew 36% year-over-year [31] - After-tax distributable earnings increased 17% year-over-year to $304 million, marking the highest level since becoming a public company [35] - Total AUM increased 23% year-over-year to $303 billion, driven by $51 billion of capital raised and $24 billion of value creation [35] Business Line Data and Key Metrics Changes - Software represents 11% of total AUM, with 18% in private equity and approximately 2% in credit [8] - The credit platform raised a record $21 billion during the year, up 67% from 2024, with a record $9 billion raised in the fourth quarter alone [17] - Private equity fundraising grew over 80% to $28 billion in 2025, while overall industry fundraising for PE declined 11% [20] - The real estate platform appreciated 9% in 2025, with $6 billion of capital deployed [25] Market Data and Key Metrics Changes - The company experienced double-digit value creation across nearly all platforms in 2025, with private equity strategies appreciating 11% over the last twelve months [37] - The credit platform also appreciated 11% over the last twelve months, maintaining strong credit quality with non-accruals just over 1% [38] - The real estate portfolios appreciated more than 9% for the year, driven by robust value creation in data center holdings and other sectors [39] Company Strategy and Development Direction - TPG aims to continue driving outsized growth by scaling existing and newer strategies, deepening integration of capital markets capabilities, and selectively capitalizing on inorganic opportunities [28] - The company is focused on expanding its private wealth strategy and enhancing its insurance solutions business, with a strategic partnership with Jackson Financial expected to close soon [12][42] - TPG plans to begin fundraising for several new funds in 2026, including TPG Real Estate's next fund and various Asia-focused funds [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to sustain growth and deliver differentiated value for stakeholders, citing a strong performance in 2025 as a foundation for future success [47] - The company anticipates another robust year of capital formation in 2026, expecting aggregate capital raising to exceed $50 billion [41] - Management highlighted the importance of maintaining strong relationships with borrowers and sponsors to ensure credit quality and performance [50][54] Other Important Information - TPG's new and emerging strategies attracted over $7 billion of commitments in 2025, indicating effective identification and scaling of high-potential opportunities [16] - The company ended 2025 with $72 billion of dry powder, representing 43% of fee-earning AUM, positioning it well for future investments [35] Q&A Session Summary Question: Concerns about direct lending performance sustainability - Management acknowledged the market's skepticism regarding direct lending performance but emphasized the unique characteristics of their lower middle market focus, which differs from upper middle market dynamics [50][51] Question: Inquiry about transaction fees and revenue outlook - Management noted that transaction fees in Q4 were driven by increased deployment and diversification across various platforms, indicating a long-term growth opportunity in capital markets [65][66] Question: Outlook for net deployment in credit business - Management highlighted the significant growth in the credit business and the expected upward trend in deployment opportunities due to increased capital formation and synergies from the Angelo Gordon acquisition [76][77]

Financial Data and Key Metrics Changes - TPG reported GAAP net income attributable to TPG Inc. of $77 billion and after-tax distributable earnings of $304 million, or $0.71 per share of Class A common stock [4][35] - Full-year fee-related revenue reached $2.1 billion, including $628 million for the fourth quarter, which grew 36% year-over-year [31] - The company finished 2025 with $303 billion of total AUM, up 23% from 2024, driven by $51 billion of capital raised and $24 billion of value creation [35] Business Line Data and Key Metrics Changes - In credit, TPG raised a record $21 billion of credit capital during the year, up 67% from 2024, with a record $9 billion raised in the fourth quarter alone [17] - Private equity fundraising grew over 80% to $28 billion in 2025, while overall industry fundraising for PE declined 11% [20] - The real estate platform appreciated 9% in 2025, with $6 billion of capital deployed [25] Market Data and Key Metrics Changes - Software represents 11% of total AUM, with 18% in private equity and approximately 2% in credit [8] - The company ended 2025 with $72 billion of dry powder, representing 43% of fee-earning AUM [35] Company Strategy and Development Direction - TPG aims to continue driving outsized growth by scaling existing and newer strategies, deepening integration of capital markets capabilities, and selectively capitalizing on inorganic opportunities [28][29] - The company is focused on expanding its private wealth strategy and enhancing its insurance solutions business [12][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain growth and deliver differentiated value for stakeholders, expecting 2026 to be another robust year of capital formation with aggregate capital raising expected to exceed $50 billion [40][41] - The company highlighted the importance of avoiding capital loss and managing exposures in the lending markets, particularly in the lower middle market [56] Other Important Information - TPG announced a long-term strategic partnership with Jackson Financial, which is expected to provide predictable fee revenue and enhance credit capabilities [12] - The company launched several new products in 2025, including Tika, a growth equity strategy, and Advantage Direct Lending, a new core middle market direct lending strategy [15] Q&A Session Questions and Answers Question: Concerns about direct lending performance sustainability - Management emphasized the differences between lower middle market lending and upper middle market lending, highlighting their unique position and rigorous monitoring of borrower performance [50][51][54] Question: Inquiry about transaction fees and revenue outlook - Management noted that transaction fees in Q4 were driven by increased deployment and diversification across various platforms, indicating a long-term growth opportunity in capital markets [66][67] Question: Outlook for net deployment in credit business - Management discussed the significant growth in credit capital and the synergies from the TPG and Angelo Gordon collaboration, which are expected to enhance deployment opportunities [78]