01—Abstract
Summary
Summary of the 10-Q filed February 6, 2025. Cited figures are marked; the original filing is the authoritative source.
PTC Inc. reported first-quarter fiscal 2025 results (three months ended December 31, 2024) in this Form 10-Q.
Total revenue rose to $565.1 milliona from $550.2 million, and net income was $82.2 million, or $0.68 diluted EPS, compared with $66.4 million, or $0.55, a year earlier. Operating income was $115.5 million versus $118.7 million, with management attributing the decline mainly to costs tied to its go-to-market realignment. Interest expense fell to $22.0 million from $35.3 million on lower aggregate debt.
Cash provided by operating activities was $238.4 millionb, up from $187.3 million, and free cash flow was $235.7 million versus $182.8 million. ARR grew 7% (11% in constant currency) to $2.21 billion. Recurring revenue was $524.3 million, and support and cloud services revenue increased to $361.0 million, while license revenue declined to $172.8 million from $184.0 million, reflecting the timing and value of large contract renewals.
The balance sheet shows total debt of $1.55 billionc, down from $1.75 billion at September 30, 2024. The company repurchased 0.4 million shares for $75 million during the quarter, and $524.9 million of debt is classified as current, including $499.9 million of 3.625% senior notes due February 2025, which the company intends to redeem using cash on hand and a revolver draw.
The filing also discloses an Executive Agreement with Robert Dahdah, Executive Vice President and Chief Revenue Officer, that includes change-in-control and termination protections. Non-GAAP operating margin was 33.9%d compared with 36.2% in the prior-year quarter.
02—Key points
Key Highlights
- Total revenue of $565.1 million, up from $550.2 million a year earlier; software revenue of $533.7 million.
- GAAP net income of $82.2 million and diluted EPS of $0.68, versus $66.4 million and $0.55; the EPS increase was driven mainly by lower interest expense and a non-cash tax benefit.
- Operating income declined to $115.5 million from $118.7 million, mainly due to costs related to the go-to-market realignment; non-GAAP operating margin was 33.9% versus 36.2%.
- ARR grew 7% (11% constant currency) to $2.21 billion; PLM ARR grew 8% and CAD ARR grew 5%.
- Operating cash flow rose to $238.4 million and free cash flow to $235.7 million, compared with $187.3 million and $182.8 million.
- Total debt fell to $1.55 billion from $1.75 billion, and the company repurchased $75 million of common stock; $499.9 million of 2025 senior notes are due in February 2025.
- Cash and cash equivalents were $196.3 million at December 31, 2024, down from $265.8 million at September 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, PTC kept $0.15.
- Revenue$565.1M100.0%
- Cost of revenue−$111.8M19.8%
- Gross profit$453.3M80.2%
- Operating costs−$337.8M59.8%
- Operating income$115.5M20.4%
- Interest, other & tax−$33.3M5.9%
- Net income$82.2M14.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed February 6, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $565.13M$550.21M | +2.7% |
| Cost of Revenue | $111.80M$110.02M | +1.6% |
| Gross Profit | $453.33M$440.19M | +3.0% |
| R&D Expenses | $115.52M$105.78M | +9.2% |
| Operating Expenses | $337.81M$321.48M | +5.1% |
| Operating Income | $115.52M$118.71M | −2.7% |
| Interest Expense | $22.05M$35.30M | −37.5% |
| Net Income | $82.23M$66.39M | +23.9% |
| EPS (Basic) | $0.68$0.56 | +21.4% |
| EPS (Diluted) | $0.68$0.55 | +23.6% |
| Shares Outstanding (Basic) | 120.24M119.12M | +0.9% |
| Shares Outstanding (Diluted) | 121.14M120.25M | +0.7% |
05—Questions
Frequently Asked Questions
How did PTC's revenue and profitability change in the first quarter of fiscal 2025?
Total revenue increased to $565.1 million from $550.2 million, and net income increased to $82.2 million from $66.4 million. Operating income declined to $115.5 million from $118.7 million, mainly due to go-to-market realignment costs, while lower interest expense supported the higher net income.
What is driving the shift between license and support and cloud services revenue?
License revenue fell to $172.8 million from $184.0 million due to lower volume and value of large contracts renewing in the quarter. Support and cloud services revenue rose to $361.0 million from $330.5 million, mainly driven by PLM growth in the Americas and Europe.
How is PTC managing its debt maturities?
Total debt was $1.55 billion at December 31, 2024. The company intends to redeem its $500 million 3.625% senior notes due February 2025 using cash on hand and a draw on its revolving credit facility, and states it has sufficient liquidity for at least the next twelve months.
What did the filing disclose about the Chief Revenue Officer's compensation arrangements?
On February 6, 2025, Robert Dahdah, Executive Vice President and Chief Revenue Officer, entered into an Executive Agreement. It provides change-in-control benefits, including accelerated equity vesting and cash payments tied to salary and target bonus, and severance protections upon termination without cause.
06—Continue