Why Is PTC Inc. (PTC) Down 6.4% Since Last Earnings Report?

Core Viewpoint - PTC Inc. has reported a mixed performance in its recent earnings, with a notable earnings beat but a decline in share price, raising questions about future performance leading up to the next earnings release [1][2]. Financial Performance - PTC reported Q1 fiscal 2025 non-GAAP EPS of $1.10, exceeding the Zacks Consensus Estimate by 20.9% [2]. - Revenues reached $565 million, reflecting a 3% year-over-year increase, and beating the consensus estimate by 2.4% [3]. - Recurring revenues were $524.3 million, up 3.6% year over year, while perpetual licenses increased by 11.4% to $9.4 million [5]. - License revenues constituted 30.6% of total revenues at $172.8 million, down 6.1% from the previous year, while support and cloud services revenues increased by 9.2% to $361 million [6]. - Professional services revenues decreased by 12.1% year over year to $31.4 million [7]. - PLM revenues were $353 million, up 1% year over year, and CAD revenues were $212 million, up 5% year over year [8]. Annualized Recurring Revenue (ARR) - ARR was reported at $2.205 billion, a 7% increase year over year, with constant currency ARR at $2.277 billion, up 11% year over year [9]. - PLM and CAD ARR were $1,357 million and $848 million, rising 8% and 5% year over year, respectively [9]. Operating Metrics - Non-GAAP gross margin remained stable at 82.7% year over year [10]. - Total operating expenses increased by $17 million year over year to $338 million, while operating income fell by 4% year over year to $191 million [10]. - Operating margin on a non-GAAP basis improved by 240 basis points year over year to 34% [11]. Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $196 million, down from $266 million as of September 30, 2024 [12]. - Total debt decreased to $1.544 billion from $1.748 billion [12]. - Cash provided by operating activities was $238 million, compared to $187 million in the prior year, and free cash flow was $236 million, up from $183 million [12]. Financial Outlook - For Q2 fiscal 2025, PTC estimates revenues between $590 million and $620 million, with non-GAAP EPS projected in the range of $1.30 to $1.50 [13]. - Full-year fiscal 2025 revenue projections are now between $2,430 million and $2,530 million, indicating a 6-10% year-over-year increase [14]. - Non-GAAP EPS for fiscal 2025 is estimated to be between $5.30 and $6.00, suggesting a 4-18% increase [14]. - Cash from operations is projected to be between $850 million and $865 million, indicating a 13% to 15% year-over-year increase [15]. Market Sentiment - Estimates for PTC have trended downward recently, with a consensus estimate shift of -8.27% [16]. - PTC holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [18].