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PTC 8-K Report, Financial Results (Jan 31, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 31, 2024
Period End
January 31, 2024
Security
PTC
In the record · 2016–202610-K1010-Q338-K130

PTC filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 130 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jan ’19Jan ’19
  2. Leadership change8-K · Jan ’21Jan ’21
  3. Deal closed8-K · Jan ’23Jan ’23
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed January 31, 2024. Cited figures are marked; the original filing is the authoritative source.

PTC Inc. reported results for its fiscal first quarter ended December 31, 2023, with total revenue of $550.2 milliona, up from $465.9 million a year earlier, and GAAP net income of $66.4 million, versus $75.0 million in the prior-year quarter.

Diluted GAAP EPS was $0.55b compared with $0.63, while non-GAAP diluted EPS was $1.11 compared with $0.99. Annual Recurring Revenue (ARR) was $2,057 million, up 24% as reported and 23% on a constant currency basis from $2,016 million; organic ARR grew 13% to $1,883 million. Operating cash flow was $187.3 million and free cash flow was $182.8 million, per the cash flow reconciliation in the filing.

Balance sheet activity was dominated by the ServiceMax acquisition. The company paid $650 millionc to settle the ServiceMax deferred acquisition payment, borrowed $740 million, and acquired pure-systems for $93 million net of cash acquired. Gross debt rose to $2,267 million from $1,359 million a year earlier, and cash and cash equivalents were $265 million.

Management stated it continues to de-lever, with the debt to EBITDA ratio back under 3.0x at the end of Q1, and expects to prioritize debt paydown in FY'24 and to end the year with gross debt of approximately $1.7 billiond. FY'24 guidance for constant currency ARR ($2,190 to $2,250 million) and free cash flow (approximately $725 million) was unchanged, with FY'24 revenue guidance of $2,270 to $2,360 million.

Q2'24 guidance calls for revenue of $560 to $590 million and non-GAAP EPS of $1.10 to $1.30. The filing also notes that Neil Barua is CEO-elect, succeeding James Heppelmann.

02—Key points

Key Highlights

  1. Total revenue of $550.2 million, up from $465.9 million year over year; recurring revenue was $506.0 million.
  2. ARR of $2,057 million, up 24% as reported and 23% in constant currency; organic ARR grew 13% to $1,883 million.
  3. GAAP diluted EPS of $0.55 versus $0.63 a year earlier; non-GAAP diluted EPS of $1.11 versus $0.99.
  4. Operating cash flow of $187.3 million and free cash flow of $182.8 million for the quarter.
  5. Paid $650 million to settle the ServiceMax deferred acquisition payment and acquired pure-systems for $93 million net of cash acquired.
  6. Gross debt increased to $2,267 million from $1,359 million; management targets approximately $1.7 billion gross debt by fiscal year-end 2024 and prioritizes debt paydown.
  7. FY'24 constant currency ARR guidance of $2,190 to $2,250 million and free cash flow guidance of approximately $725 million were unchanged; Q2'24 revenue guidance is $560 to $590 million.

03—Questions

Frequently Asked Questions

  1. How did PTC perform in its fiscal first quarter of 2024?

    Total revenue rose to $550.2 million from $465.9 million, and ARR grew 24% as reported to $2,057 million. GAAP net income was $66.4 million, compared with $75.0 million a year earlier, while non-GAAP diluted EPS rose to $1.11 from $0.99.

  2. Did PTC change its fiscal 2024 guidance?

    No. Management said full-year guidance for ARR and free cash flow remains unchanged, with constant currency ARR of $2,190 to $2,250 million and free cash flow of approximately $725 million. FY'24 revenue guidance is $2,270 to $2,360 million.

  3. How is PTC managing its debt after the ServiceMax acquisition?

    The company paid $650 million to settle the ServiceMax deferred acquisition payment, funded partly by $740 million of borrowings. Management said debt to EBITDA was back under 3.0x at the end of Q1, expects to prioritize debt paydown in FY'24, and anticipates gross debt of approximately $1.7 billion at fiscal year-end.

  4. Who will lead PTC going forward?

    The filing identifies Neil Barua as CEO-elect. James Heppelmann is the current CEO, and Barua is quoted as looking forward to working with the team to continue investing in technologies that meet customers' evolving needs.

  5. What is PTC's long-term capital return goal?

    The company's long-term goal, assuming Debt/EBITDA is below 3x, is to return approximately 50% of free cash flow to shareholders via share repurchases, while considering the interest rate environment and strategic opportunities. The filing notes that debt paydown is the priority in FY'24.

04—Continue

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