Barua said PTC is in a “turning the corner” phase of a broader transformation, citing what he characterized as momentum across product, go-to-market, and customer engagement. He highlighted five indicators:Management also reiterated that the divestiture of Kepware and ThingWorx is progressing and remains on track to close on or before April 1, with no material changes to figures previously provided.On the company’s fiscal first-quarter earnings call, CEO Neil Barua said PTC grew constant-currency ARR 9% yea ...

Q1'26 FINANCIAL RESULTS Neil Barua CEO Jennifer DiRico CFO February 4, 2026 FORWARD LOOKING STATEMENTS This presentation includes forward looking statements regarding PTC's future financial performance, strategic outlook and expectations, anticipated future operations, expected effects of strategic investments and initiatives, and share repurchase expectations. Because such statements deal with future events, actual results may differ materially from those projected in the forward-looking statements. Inform ...

Strategic focus on Intelligent Product Lifecycle vision Solid execution in Q1'26 Constant currency ARR growth of 8.4%; 9.0% excluding Kepware and ThingWorx Operating and free cash flow growth of 13% Embedding AI across portfolio and building common AI infrastructure to drive customer adoption and value Executing on our $2 billion share repurchase authorization: $200 million of repurchases in Q1'26; expect to use net after-tax proceeds from the Kepware and ThingWorx divestiture for incremental repurchase ...

Core Insights - PTC Inc. has been selected by Reditus Space to provide its cloud-native Onshape CAD and PDM platform for the development of reusable spacecraft and related hardware [1][11] Group 1: Reditus Space and Its Mission - Reditus Space is preparing to launch its first reusable satellite, ENOS Mk1, scheduled for July 2026 aboard a SpaceX Falcon 9 rideshare mission [2] - The ENOS Mk1 mission aims to deploy a reusable spacecraft into low Earth orbit, host commercial payloads, remain in orbit for approximately eight weeks, and return safely to Earth for recovery and reuse [2] Group 2: PTC's Role and Technology - Reditus Space was introduced to PTC through the Onshape Startup Program and utilized the platform to transition from early concepts to flight-ready designs [3] - PTC's cloud-native tools provide a strategic advantage by enabling secure collaboration, rapid iteration, and regulatory compliance within a single platform [4] - As demand for aerospace and defense solutions grows, platforms like Onshape are becoming critical for both emerging space companies and established defense contractors [5] Group 3: PTC's Business Outlook - For fiscal 2026, PTC projects revenues between $2.65 billion and $2.9 billion, reflecting a year-over-year change of -3% to -6% [9] - The company targets 7% to 9% ARR growth for fiscal 2026 and anticipates generating $1 billion in free cash flow, supported by strong deferred ARR and a capital return program to buy back $150 million to $250 million of stock per quarter [9] - PTC's fiscal 2026 outlook indicates ongoing double-digit cash flow growth and solid visibility as multi-year ramp contracts begin [9] Group 4: Competitive Positioning - PTC's solutions enhance operational efficiency, accelerate product and service innovation, and boost workforce productivity across industrial enterprises [8] - The company's major technology platforms, including Creo, Windchill, ThingWorx, and Vuforia Studio, are expected to drive revenue growth [8]

Core Insights - PTC Inc. has launched the Arena PLM and QMS AI Engine, which integrates AI into product lifecycle and quality workflows to enhance efficiency and compliance [1][9] - The AI Engine features AI File Summary and AI File Comparison, which improve communication and reduce manual checks, thereby increasing productivity and compliance [2][9] - PTC's strategy focuses on embedding AI into PLM and QMS processes, enhancing product development ecosystems amid volatile global supply chains [3][4] Product and Technology Developments - The Arena AI Assistant has been expanded to include broader Help coverage and multilingual support, improving onboarding and productivity [4] - Arena Supply Chain Intelligence (SCI) has been upgraded with weekly compliance checks for electronic components, enhancing real-time monitoring and regulatory insights [4] Financial Performance - PTC's fiscal fourth quarter saw PLM revenue increase by 44% to $588 million and CAD revenue grow by 40% to $306 million, driven by strong demand and digitalization [5] - The divestiture of Kepware and ThingWorx is aimed at sharpening focus on core strengths in CAD, PLM, ALM, and SLM, which is expected to enhance product cohesion and innovation [6] Market Challenges - PTC faces challenges from foreign exchange volatility due to a stronger U.S. dollar, which may impact revenue performance [7] - The company has indicated that rising interest rates, shifting tax regulations, and a weakening macro environment could affect free cash flow and overall outlook [7] Stock Performance - PTC currently holds a Zacks Rank 3 (Hold), with shares gaining 2.7% over the past six months, contrasting with a 0.8% decline in the Zacks Computer-Software industry [8]

Core Insights - The company has recently announced divestitures, specifically regarding Kepware and ThingWorx, which have raised questions about the strategic rationale behind these decisions [1] Group 1: Divestitures - The divestitures of Kepware and ThingWorx were influenced by a shift in the direction of these businesses, which has diverged from the company's core focus [1] - There was significant effort invested in these deals in the past, indicating that the decision to divest is strategic rather than impulsive [1]

Core Insights - PTC Inc. has shown strong financial performance with a significant increase in revenue and earnings per share, indicating robust growth potential in the technology sector [3] - Institutional investors have been actively increasing their stakes in PTC, reflecting confidence in the company's future prospects [1][6] Financial Performance - PTC reported earnings per share of $3.47 for the latest quarter, surpassing the consensus estimate of $2.26 by $1.21 [3] - The company's revenue reached $893.80 million, exceeding analyst expectations of $752.05 million, marking a 42.7% increase compared to the same quarter last year [3] - PTC's net margin stands at 20.74% and return on equity at 17.09% [3] Stock Performance - PTC's stock opened at $179.61, with a 1-year low of $133.38 and a high of $219.69 [2] - The company has a market capitalization of $21.52 billion, a P/E ratio of 42.36, and a P/E/G ratio of 1.90 [2] Analyst Ratings and Price Targets - Analysts have varied price targets for PTC, with BMO Capital Markets lowering their target from $231.00 to $219.00, while Robert W. Baird set a target of $255.00 [4] - The average price target for PTC is currently $205.92, with a consensus rating of "Moderate Buy" [4] Institutional Ownership - Hedge funds and institutional investors own 95.14% of PTC's stock, indicating strong institutional support [1] - Notable increases in stakes include Allworth Financial LP, which boosted its holdings by 887.0% in the second quarter [6]

Financial Data and Key Metrics Changes - In Q4, the company achieved 8.5% constant currency ARR growth and 16% free cash flow growth year-over-year [7][24] - The company generated $100 million of free cash flow in Q4, with total free cash flow for Fiscal 2025 reaching $857 million, up 16% [23][24] - The operating efficiency percentage expanded by 310 basis points to 45% in Fiscal 2025 compared to 42% in Fiscal 2024 [24] Business Line Data and Key Metrics Changes - ARR attributable to Kepware and ThingWorx was approximately $160 million, with constant currency ARR growth of -1% [16] - The company closed its largest Codebeamer deal ever and the largest Onshape deal ever, indicating strong performance in the automotive and medtech verticals [8][9] Market Data and Key Metrics Changes - The company ended the year with record-deferred ARR under contract, providing strong visibility into Fiscal 2026 and beyond [9] - The average term length for contracts increased from approximately two years in Q4 of 2024 to approximately three years in Q4 of 2025 [21] Company Strategy and Development Direction - The company has reached a definitive agreement for TPG to acquire its Kepware and ThingWorx businesses, allowing it to focus on CAD, PLM, ALM, and SLM, with an emphasis on SaaS and AI [5][6] - The company is enhancing its offerings in CAD, PLM, ALM, and SLM to facilitate the building of product data foundations and embedding more AI capabilities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Fiscal 2026, guiding for ARR growth of 7%-9% including Kepware and ThingWorx, and 7.5%-9.5% excluding them [11][26] - The company anticipates a strong pipeline and deferred ARR balance, which is heavily skewed to Q4, indicating a positive outlook for net new ARR growth [30] Other Important Information - The company plans to return excess cash to shareholders, expecting to buy back between $150 million and $250 million worth of shares per quarter during Fiscal 2026 [13] - The transaction for Kepware and ThingWorx is expected to close in the first half of calendar 2026, with potential cash consideration of up to $725 million [15] Q&A Session Summary Question: Context behind the decision to divest ThingWorx and Kepware - Management emphasized the focus on core priorities and the intelligent product lifecycle vision, stating that the divestiture allows for greater concentration on strategic areas [33][34] Question: OBBA benefit expected in free cash flow guidance - Management confirmed that the $1 billion free cash flow guidance includes some tailwind from the new Section 174 decision, but also noted the impact of increased CapEx related to transitioning an R&D facility [39][40] Question: Characterization of deal structures this quarter - Management clarified that ramp deals were contracted commitments, indicating strong customer demand and a focus on capturing that demand [43][44] Question: Impact of divestiture on CAM business - Management expressed confidence in the addressable market for the intelligent product lifecycle, stating that the divestiture allows for a stronger focus on existing strategies [49][50] Question: Plans for go-to-market changes in Q1 - Management highlighted the successful vertical alignment and the importance of consistent messaging, with plans to integrate AI into industry-specific communications [58][62] Question: Roadmap execution and RPO comments - Management discussed improvements in product execution and the importance of aligning teams to deliver customer value, with approximately 55% of total RPO expected to be recognized over the next 12 months [66][70] Question: Growth potential and key levers for the business - Management indicated that the foundation for sustainable growth is being established, with a focus on executing the intelligent product lifecycle vision and capturing customer demand [74][75]

Financial Data and Key Metrics Changes - In Q4 of Fiscal 2025, the company achieved 8.5% constant currency ARR growth and 16% free cash flow growth year over year [5][22] - The total constant currency ARR at the end of Q4 was $2.446 billion, reflecting an 8.5% increase year over year [19] - Free cash flow for the full fiscal year was $857 million, up 16% from the previous year [22][23] Business Line Data and Key Metrics Changes - ARR attributable to Kepware and ThingWorx was approximately $160 million, with constant currency ARR growth at negative 1% [16] - The revenue contribution from Kepware and ThingWorx, including perpetual licenses and professional services, was approximately $200 million [16] - The average term length for contracts increased from approximately two years in Q4 of 2024 to approximately three years in Q4 of 2025 [20] Market Data and Key Metrics Changes - The company closed its largest Codebeamer deal in the automotive vertical and a significant Windchill competitive displacement win in the medtech vertical [6] - The company reported a record increase in RPO, which was up more than $550 million both sequentially and year over year [21][68] Company Strategy and Development Direction - The company has reached a definitive agreement for TPG to acquire its Kepware and ThingWorx businesses, allowing it to focus on CAD, PLM, ALM, and SLM, with an emphasis on SaaS and AI [4][5] - The strategic decision to divest from Kepware and ThingWorx aligns with the company's focus on the intelligent product lifecycle vision [32][34] - The company plans to return excess cash to shareholders and expects to buy back between $150 million and $250 million worth of shares per quarter during Fiscal 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $1 billion of free cash flow in Fiscal 2026, with ARR growth guidance of 7-9% including Kepware and ThingWorx [10][25] - The company anticipates that the divestiture will not significantly disrupt operations and expects to maintain momentum in its go-to-market strategy [10][53] - Management highlighted the importance of structured product data foundations and the role of AI in enhancing customer offerings [11][72] Other Important Information - The company appointed John Stevenson as Chief Product Officer to enhance product operating rhythm and improve roadmap execution [9] - The transaction for the divestiture is expected to close in the first half of calendar 2026, with potential cash consideration of up to $725 million [14][15] Q&A Session Summary Question: Context behind the decision to divest from ThingWorx and Kepware - Management emphasized the focus on core priorities and the intelligent product lifecycle vision, stating that the divestiture allows for greater concentration on these areas [32][33] Question: Impact of cash tax implications on free cash flow guidance - Management confirmed that the $1 billion free cash flow guidance includes some tailwind from the new Section 174 decision, but also factors in increased CapEx related to transitioning an R&D facility [38][39] Question: Characterization of deal structures in Q4 - Management clarified that the majority of large transactions were closed, with ramp deals being contracted commitments rather than uncertain spending [42][44] Question: Thoughts on the CAM business post-divestiture - Management expressed confidence in the addressable market for intelligent product lifecycle and the potential for AI to enhance product data foundations [47][49] Question: Guidance for net new ARR growth - Management indicated a disciplined approach to guidance, factoring in strong deferred ARR and the potential impact of the divestiture on future performance [50][53] Question: Future go-to-market changes - Management highlighted the importance of vertical alignment and the integration of AI into messaging to improve traction and win rates [56][60] Question: Improvements in roadmap execution - Management discussed the focus on aligning teams to execute on AI initiatives and the importance of delivering customer value through product enhancements [64][66][68] Question: Growth potential and key levers for the business - Management noted that building momentum and focusing on the intelligent product lifecycle vision are critical for achieving sustainable growth [71][74]

Financial Performance & Guidance - Q4'25 ARR as reported reached $2478 million, a 10% YoY increase[22] - FY'25 Free Cash Flow was $857 million, a 16% YoY increase[23] - FY'26 Free Cash Flow guidance is approximately $1000 million[19,29] - FY'26 constant currency ARR growth guidance, excluding Kepware and ThingWorx, is 75% to 95%[16,29] - Q1'26 Free Cash Flow guidance is $265 million to $270 million[29] Kepware and ThingWorx Divestiture - The divestiture involves Kepware industrial connectivity and ThingWorx IoT businesses[9] - Estimated net transaction proceeds from the divestiture are approximately $365 million[12,14] - Kepware and ThingWorx contribute approximately $160 million of ARR and $200 million of revenue[15] - Kepware and ThingWorx contribute an estimated $70 million of free cash flow[17] Capital Allocation - The company intends to repurchase between $150 million and $250 million of its common stock per quarter in FY'26[40,80]