PTC Inc PTC reported first-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $1.10, beating the Zacks Consensus Estimate by 20.9%. The company reported non-GAAP EPS of $1.11 in the prior-year quarter. 

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Revenues came in at $565 million, up 3% year over year (up 2% at constant currency or cc). The top line beat the consensus estimate by 2.4%.  Despite a challenging sales environment, the top line came close to the upper limit of PTC’s guidance, backed by strong demand for its product lifecycle management (PLM) and computer-aided design (CAD) solutions.

As part of its broader strategic realignment, PTC has begun restructuring its go-to-market organization during the quarter to align with key vertical industries. This move is expected to drive long-term growth and optimize operations.

Top-Line Details

Recurring revenues of $524.3 million rose 3.6% year over year. 

Perpetual licenses increased 11.4% to $9.4 million.

Revenues by License, Support and Services

License revenues (30.6% of total revenues) were $172.8 million, down 6.1% from the year-ago quarter figure.

Support and cloud services revenues (63.9%) of $361 million increased 9.2% year over year.

Professional services revenues (5.5%) were $31.4 million, down 12.1% year over year.

Revenues by Product Group

PLM and CAD businesses continue to experience solid growth momentum. In the fiscal first quarter, PLM revenues were $353 million, up 1% year over year. CAD revenues were $212 million, up 5% year over year.

ARR Performance

Annualized recurring revenues (ARR) were $2.205 billion, up 7% year over year. At constant currency, ARR was $2.277 billion, up 11% year over year. The uptick was driven by strong performance across all divisions and geographies.

In the fiscal first quarter, PLM and CAD ARR were $1,357 million and $848 million, rising 8% and 5% year over year, respectively.

Operating Details

Non-GAAP gross margin remained flat year over year at 82.7%.

Total operating expenses increased $17 million year over year to $338 million.

Operating income on a non-GAAP basis fell 4% year over year to $191 million.

Operating margin on a non-GAAP basis increased 240 basis points on a year-over-year basis to 34%.

Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash and cash equivalents were $196 million compared with $266 million as of Sept. 30, 2024.

Total debt, net of deferred issuance costs, was $1.544 billion as of Dec. 31, 2024, compared with $1.748 billion as of Sept. 30, 2024.

Cash provided by operating activities was $238 million compared with the prior-year quarter’s figure of $187 million.

The free cash flow was $236 million compared with $183 million reported in the year-ago quarter.

Financial Outlook

For the second quarter fiscal 2025, PTC estimates revenues in the $590-$620 million band. Non-GAAP EPS is projected in the range of $1.30-$1.50. Cash from operations is expected to be $274 million, and free cash flow is forecasted to be $270 million.

Revenues for fiscal 2025 are now projected in the range of $2,430-$2,530 million, indicating a rise of 6-10% year over year. The prior view was $2,505 to $2,605 million. Non-GAAP EPS is now estimated in the $5.30-$6.0 band, suggesting a rise of 4-18%. Earlier, PTC predicted the metric to be $5.60 to $6.30.

For fiscal 2025, cash from operations is projected between $850 million and $865 million, indicating a rise of 13% to 15% on a year-over-year basis, unchanged from the prior guidance. The free cash flow is forecasted in the $835-$850 million band, suggesting a 14% to 16% increase, the same as before.

PTC continues to project 9% to 10% growth in ARR on a constant currency basis for fiscal 2025.

PTC’s Zacks Rank

Currently, PTC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

CDW Corporation CDW reported fourth-quarter 2024 non-GAAP EPS of $2.48, beating the Zacks Consensus Estimate of $2.33. However, the bottom line contracted 3.5% year over year.

In the past year, CDW shares have declined 10.6%.

Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter. 

Shares of WDC have gained 10.8% in the past year.

Plexus Corp PLXS reported first-quarter fiscal 2025 adjusted EPS of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.

In the past year, shares of PLXS have surged 50.9%.

 

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