PTC(US:PTC)2025-07-31 20:03Revenue Growth - ARR (Annual Run Rate) increased by 14% to $2.42 billion as of Q3'25 compared to Q3'24, with a 9% growth on a constant currency basis [91]. - Total revenue grew by 24% to $644 million in Q3'25 compared to Q3'24, with a 22% increase on a constant currency basis [93]. - Software revenue increased by 27% to $621.3 million in Q3'25 compared to Q3'24, driven by a 69% growth in license revenue [104]. - Total recurring revenue rose by 27% to $613.6 million in Q3'25 compared to Q3'24 [96]. - Software revenue for Q3'25 reached $621.3 million, a 27% increase from $488.6 million in Q3'24, with a 12% growth for the first nine months of FY'25 [107]. - PLM ARR grew 14% (10% constant currency) from Q3'24 to Q3'25, driven primarily by Windchill and Codebeamer [108]. Profitability - Operating income surged by 119% to $209.8 million in Q3'25 compared to Q3'24, reflecting a significant increase in operating margin by 1410 basis points [93]. - Diluted earnings per share rose by 106% to $1.17 in Q3'25 compared to Q3'24 [93]. - Total gross margin for Q3'25 was $533.9 million, a 31% increase from $406.7 million in Q3'24, with a gross margin percentage of 83% [109]. - Income before income taxes for Q3'25 was $193.7 million, a 187% increase from $67.4 million in Q3'24 [123]. - The effective income tax rate for Q3'25 was 27%, significantly higher than the -2% rate in Q3'24, due to changes in the geographic mix of income [123]. - Non-GAAP net income for the nine months ended June 30, 2025, was $547.5 million, compared to $427.3 million for the same period in FY'24 [153]. - GAAP diluted earnings per share for the nine months ended June 30, 2025, was $3.20, up from $2.07 in the same period of FY'24 [153]. - The company reported a GAAP operating margin of 29.7% for the nine months ended June 30, 2025, compared to 23.6% for the same period in FY'24 [154]. Cash Flow and Debt Management - Cash provided by operating activities grew by 14% to $244 million in Q3'25 compared to Q3'24 [92]. - Free cash flow increased by 14% to $242 million in Q3'25 compared to Q3'24 [92]. - Cash and cash equivalents as of June 30, 2025, were $199.3 million, down from $265.8 million on September 30, 2024 [131]. - Net cash provided by operating activities for the nine months ended June 30, 2025, was $763.7 million, compared to $651.9 million for the same period in FY'24 [131]. - Cash provided by operating activities increased by $111.8 million in the first nine months of FY'25 compared to the same period in FY'24, driven by higher collections and lower interest payments [134]. - Total debt as of June 30, 2025, was $1,236.3 million, down from $1,752.6 million as of September 30, 2024 [137]. - The company repaid $157 million of debt and repurchased $75 million of outstanding shares in Q3'25 [92]. - The company intends to repurchase approximately $300 million of its common stock in FY'25 as part of its long-term goal to return excess cash to shareholders [140]. Operating Expenses - Operating expenses increased by 4% in Q3'25 to $324.1 million compared to $310.9 million in Q3'24, primarily due to a $9 million increase in total compensation expense [115]. - Interest expense decreased by 34% in Q3'25 to $18.4 million from $27.8 million in Q3'24, attributed to lower debt balances and interest rates [117]. Investment Activities - Cash used in investing activities in the first nine months of FY'25 was primarily due to outflows from the settlement of net investment hedges, while FY'24 was driven by the acquisition of pure-systems for $93.5 million [135]. Financing Activities - Cash used in financing activities in the first nine months of FY'25 included net payments of $516.7 million on outstanding debt and the repurchase of $225.0 million of common stock [136]. Market Risk - There have been no significant changes in market risk exposure as described in the 2024 Annual Report on Form 10-K [155].