PTC Gearing Up to Report Q2 Earnings: Here's What to Expect

Core Insights - PTC Inc. is set to report its second-quarter fiscal 2025 results on April 30, 2025, with anticipated revenues between $590 million and $620 million and non-GAAP EPS expected in the range of $1.30 to $1.50 [1] - The Zacks Consensus Estimate for revenues is $608.3 million, reflecting a 0.9% increase year-over-year, while the consensus estimate for earnings is $1.38 per share, down 5.5% from the previous year [1] Financial Performance - PTC has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 11.8% [2] - Over the past year, PTC's shares have declined by 14.2%, contrasting with a 1.5% growth in the Zacks Computer – Software industry [2] Business Segments - The core business segments, Product Lifecycle Management (PLM) and Computer-Aided Design (CAD) solutions, are expected to drive revenue growth, supported by the adoption of Windchill software and Creo CAD tools [2] - The application lifecycle management (ALM) solution, Codebeamer, has gained traction due to collaborations with Microsoft and Volkswagen, enhancing its market position [3] Recent Developments - PTC launched Codebeamer 3.0 on March 27, 2025, aimed at improving product development and regulatory compliance [4] - The company has realigned its go-to-market strategy to better engage customers, leading to increased customer wins and subscription growth [5] - PTC's shift to a subscription-based model is expected to enhance cash flow, with anticipated cash from operations and free cash flow of $274 million and $270 million, respectively [6] Growth Projections - PTC expects constant currency Annual Recurring Revenue (ARR) growth of approximately 9.5% for the fiscal second quarter, driven by its strong product portfolio and strategic investments [6] Competitive Landscape - The company faces challenges from a volatile global macro environment, foreign currency fluctuations, and stiff competition in the CAD space, which may impact margins [8] Innovations - Recent innovations include the launch of Onshape AI Advisor and Onshape Government, reinforcing PTC's commitment to enhancing productivity and regulatory compliance [9] - The acquisition of IncQuery Group on April 2, 2025, is expected to bolster PTC's capabilities in ALM, PLM, and systems engineering [10] - Windchill AI, showcased at Hannover Messe 2025, aims to improve product development efficiency through AI-driven insights [11] Earnings Prediction - PTC's earnings model indicates a potential earnings beat, supported by a positive Earnings ESP of +1.71% and a Zacks Rank of 3 [12]