PTC(PTC) - 2025 Q1 - Quarterly Report

Revenue Growth - ARR grew 7% (11% constant currency) to $2.21 billion as of the end of Q1'25 compared to Q1'24[89] - Revenue increased by 3% (2% constant currency) to$ 565 million in Q1'25 compared to Q1'24, driven by growth in support and cloud services revenue[91] - Total recurring revenue rose by 4% to $524.3 million in Q1'25 compared to Q1'24[94] - PLM ARR grew 8% (11% constant currency) from Q1'24 to Q1'25[106] - CAD ARR increased by 5% (9% constant currency) from Q1'24 to Q1'25[106] Cash Flow and Operating Activities - Cash provided by operating activities grew 27% to$ 238 million in Q1'25 compared to Q1'24[90] - Free cash flow increased by 29% to $236 million in Q1'25 compared to Q1'24[90] - Cash provided by operating activities increased by$ 51.1 million to $238.4 million in Q1'25 compared to$ 187.3 million in Q1'24, driven by higher collections and lower vendor disbursements[132] - Cash provided by operating activities rose to $238.4 million in Q4 2024, compared to$ 187.3 million in Q4 2023, marking an increase of 27.3%[151] - Free cash flow improved to $235.7 million in Q4 2024, up from$ 182.8 million in Q4 2023, representing a growth of 29.0%[151] Earnings and Profitability - Diluted earnings per share rose 23% to $0.68 in Q1'25 compared to$ 0.55 in Q1'24[91] - Income before income taxes increased by 9% to $93.2 million in Q1'25 compared to$ 85.6 million in Q1'24, while the provision for income taxes decreased by 43% to $10.9 million[121] - GAAP diluted earnings per share increased to$ 0.68 in Q4 2024 from $0.55 in Q4 2023, reflecting a growth of 23.6%[151] - Non-GAAP net income for Q4 2024 was$ 133.3 million, slightly up from $133.0 million in Q4 2023, indicating a stable performance[151] Expenses and Margins - Total operating expenses increased by 5% to$ 337.8 million in Q1'25 from $321.5 million in Q1'24, driven by a$ 20 million increase in compensation expenses and a $5 million increase in outside services[113][114] - Total gross margin increased by 3% to$ 453.3 million in Q1'25 compared to Q1'24[109] - Professional services revenue decreased by 12% to $31.4 million in Q1'25 compared to Q1'24[102] - Professional services gross margin decreased in Q1'25 compared to Q1'24, primarily due to higher compensation costs related to severance from go-to-market realignment[111] - Non-GAAP operating margin decreased to 33.9% in Q4 2024 from 36.2% in Q4 2023, showing a decline of 6.3%[152] Debt and Financing - Total debt decreased to$ 1,547.5 million as of December 31, 2024, from $1,752.6 million, with$ 524.9 million classified as current debt[135][136] - Interest expense decreased by 38% to $22.0 million in Q1'25 from$ 35.3 million in Q1'24 due to lower aggregate debt[117] - Cash used in financing activities in Q1'25 included $205.1 million in net payments on the credit facility and$ 75.0 million for common stock repurchases[134] Taxation - The effective income tax rate for Q1'25 was 12%, down from 22% in Q1'24, primarily due to changes in the geographic mix of income[121] Capital Expenditures - Capital expenditures for Q4 2024 were $(2.8) million, a decrease from$ (4.6) million in Q4 2023, indicating improved capital efficiency[151] Market Risk - The company reported no significant changes in market risk exposure as per the 2024 Annual Report[153]