01—Abstract
Summary
Summary of the 10-Q filed May 1, 2025. Cited figures are marked; the original filing is the authoritative source.
PTC Inc. reported second-quarter fiscal 2025 results (three months ended March 31, 2025) with total revenue of $636.4 milliona, up from $603.1 million a year earlier, and net income of $162.6 million, or $1.35 per diluted share, compared with $114.4 million, or $0.95 per diluted share, in the prior-year quarter.
Operating income rose to $223.5 millionb from $179.6 million, and operating margin was 35.1% versus 29.8%. ARR grew 10% to $2.29 billion. Cash provided by operating activities for the six months was $519.7 million, compared with $438.1 million a year earlier.
Balance sheet activity was dominated by debt reduction and share repurchases. Total debt fell to $1.39 billionc from $1.75 billion at September 30, 2024, as the company redeemed its $500 million 3.625% senior notes due 2025 using a draw on its revolving credit facility and cash on hand. The company repurchased $150.0 million of common stock in the first six months, and it states that it intends to repurchase approximately $300 million of common stock in fiscal 2025.
Cash and cash equivalents were $235.2 milliond at March 31, 2025. Remaining performance obligations totaled $2.28 billion, of which the company expects to recognize approximately 59% over the next 12 months. The filing also notes a $4.2 million impairment and other charge in the quarter related to the sublease of part of the company's Boston office.
Management attributes the decline in operating expenses in the quarter largely to temporary cost reductions from its go-to-market realignment, and it cites macroeconomic uncertainty related to global trade tensions and tariffs. Management states that it believes existing cash and credit facility availability will be sufficient to meet its requirements for at least the next twelve months.
02—Key points
Key Highlights
- Total revenue of $636.4 million in Q2 FY25, up from $603.1 million; total software revenue was $607.4 million.
- GAAP net income of $162.6 million and diluted EPS of $1.35, versus $114.4 million and $0.95 in Q2 FY24.
- Operating income rose to $223.5 million from $179.6 million, with operating margin of 35.1% compared with 29.8%.
- ARR grew 10% to $2.29 billion as of March 31, 2025; PLM ARR grew 11% and CAD ARR grew 8%.
- Total debt declined to $1.39 billion (net of issuance costs) from $1.75 billion at September 30, 2024, after redeeming the $500 million 2025 senior notes.
- Repurchased $150.0 million of common stock in the first six months of fiscal 2025, with approximately $300 million planned for fiscal 2025.
- Remaining performance obligations totaled $2.28 billion, with approximately 59% expected to be recognized over the next 12 months.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, PTC kept $0.26.
- Revenue$636.4M100.0%
- Cost of revenue−$106.3M16.7%
- Gross profit$530.1M83.3%
- Operating costs−$306.6M48.2%
- Operating income$223.5M35.1%
- Interest, other & tax−$60.8M9.6%
- Net income$162.6M25.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed May 1, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $636.37M$603.07M | +5.5% |
| Cost of Revenue | $106.26M$110.06M | −3.4% |
| Gross Profit | $530.10M$493.02M | +7.5% |
| R&D Expenses | $111.02M$107.00M | +3.8% |
| Operating Expenses | $306.64M$313.46M | −2.2% |
| Operating Income | $223.46M$179.56M | +24.5% |
| Interest Expense | $19.61M$31.60M | −38.0% |
| Net Income | $162.64M$114.44M | +42.1% |
| EPS (Basic) | $1.35$0.96 | +40.6% |
| EPS (Diluted) | $1.35$0.95 | +42.1% |
| Shares Outstanding (Basic) | 120.18M119.59M | +0.5% |
| Shares Outstanding (Diluted) | 120.85M120.71M | +0.1% |
05—Questions
Frequently Asked Questions
How did PTC's revenue and profitability change in the second quarter of fiscal 2025?
Total revenue rose to $636.4 million from $603.1 million, and operating income increased to $223.5 million from $179.6 million. Net income reached $162.6 million, or $1.35 per diluted share, compared with $114.4 million, or $0.95 per diluted share, a year earlier. The filing attributes lower operating expenses in the quarter mainly to temporary cost reductions from the go-to-market realignment.
What happened to PTC's debt during the period?
Total debt, net of issuance costs, decreased to $1.39 billion at March 31, 2025, from $1.75 billion at September 30, 2024. The company redeemed its $500 million 3.625% senior notes due 2025 in the second quarter using a draw on its revolving credit facility and cash on hand. The credit facility term loan and revolver had $481.3 million and $411.3 million outstanding, respectively, at quarter end.
How much is the company returning to shareholders through share repurchases?
PTC repurchased $150.0 million of common stock in the first six months of fiscal 2025, including $75 million in the second quarter. The board has authorized up to $2 billion in repurchases for October 1, 2024 through September 30, 2027, with about $1.85 billion remaining as of March 31, 2025. The company states it intends to repurchase approximately $300 million of common stock in fiscal 2025.
What does the filing say about the company's growth outlook and demand environment?
ARR grew 10% to $2.29 billion, and the company notes that the selling environment has been challenging for a couple of years and has begun to reflect heightened macroeconomic uncertainty related to global trade tensions and tariffs. Software revenue grew 6% in the quarter, driven by subscription growth in both CAD and PLM. Professional services revenue declined 10%, as the company continues to rely more on partners to deliver services.
Are there any unusual charges or risks disclosed in this quarter?
The company recorded a $4.2 million impairment and other charge in the second quarter related to the sublease of a portion of its Boston office. The filing also notes that the effective tax rate for the first six months was 18%, reflecting a $10.4 million benefit from changes in prior-year foreign tax reserves, and that the company requested IRS consent to change an accounting method for certain deductions, which, if not granted, could increase future tax payments.
06—Continue