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 ...

PTC (NasdaqGS:PTC) Q1 2026 Earnings call February 04, 2026 05:00 PM ET Company ParticipantsJennifer DiRico - CFOMatt Shimao - Head of Investor RelationsNeil Barua - CEORobert Dahdah - Chief Revenue OfficerConference Call ParticipantsAdam Borg - AnalystBlair Abernethy - AnalystDaniel Jester - AnalystJason Celino - AnalystJay Vleeschhouwer - AnalystJoe Vruwink - AnalystJoshua Tilton - AnalystKen Wong - AnalystMatt Hedberg - AnalystNay Soe Naing - AnalystSiti Panigrahi - AnalystTyler Radke - AnalystYun Kim - A ...

PTC (NasdaqGS:PTC) Q1 2026 Earnings call February 04, 2026 05:00 PM ET Company ParticipantsJennifer DiRico - CFOMatt Shimao - Head of Investor RelationsNeil Barua - CEORobert Dahdah - Chief Revenue OfficerConference Call ParticipantsAdam Borg - AnalystBlair Abernethy - AnalystDaniel Jester - AnalystJason Celino - AnalystJay Vleeschhouwer - AnalystJoe Vruwink - AnalystJoshua Tilton - AnalystKen Wong - AnalystMatt Hedberg - AnalystNay Soe Naing - AnalystSiti Panigrahi - AnalystTyler Radke - AnalystYun Kim - A ...

Financial Data and Key Metrics Changes - The company reported a constant currency ARR of $2.341 billion, up 9% year-over-year excluding Kepware and ThingWorx, and $2.5 billion, up 8.4% including them [15][4] - Free cash flow grew 13% year-over-year, reaching $267 million, which included $10 million of divestiture costs related to Kepware and ThingWorx [15][4] - The company repurchased $200 million of common stock in Q1 under a $2 billion share repurchase authorization, with plans to repurchase approximately $250 million in Q2 [16][15] Business Line Data and Key Metrics Changes - The company is experiencing strong demand for its Intelligent Product Lifecycle vision, with record deferred ARR under contract and increased seller productivity [10][11] - The divestiture of Kepware and ThingWorx is progressing, with a target close date on or before April 1 [15][4] - The company is embedding AI across its product portfolio, with new functionalities introduced in Codebeamer and Windchill [8][9] Market Data and Key Metrics Changes - The company noted that customers are increasingly seeking AI embedded directly into their trusted systems of record, which is a key differentiator in the market [8][9] - The demand capture has been strong, with a record-setting Q1 for large deal volume and competitive displacements [10][11] Company Strategy and Development Direction - The company is focused on transforming its product lifecycle management through connected systems, enterprise-wide cloud access, and AI integration [6][7] - The strategy emphasizes the importance of leveraging product data to drive better decisions across engineering, manufacturing, and service [6][7] - The company aims to build a more durable, multi-year growth engine through its transformation initiatives [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the transformation and the demand being captured, highlighting the importance of modernizing product development environments [4][12] - The company anticipates a significant increase in deferred ARR starting in Q4 2026, which is expected to positively impact future growth [19][20] - Management acknowledged the challenges of the macroeconomic environment but noted strong demand across various verticals and regions [88][90] Other Important Information - The company raised its fiscal 2026 revenue guidance to a range of $2.675 billion to $2.940 billion and non-GAAP EPS guidance to $6.69 to $9.15 [21][20] - The company expects to return additional capital to shareholders following the divestiture, with net after-tax proceeds expected to be approximately $365 million [16][20] Q&A Session Summary Question: What level of visibility do you have on deferred ARR deals for Q4? - Management indicated that the deferred ARR is triple what was present last Q4, with strong demand capture contributing to this increase [25][62] Question: Are we starting to see more material AI capabilities that could impact demand decisions? - Management confirmed that AI capabilities are being embedded into core products, and while the immediate economic impact is immaterial, it is expected to grow as deployments scale [31][32] Question: Can you parse out the growth mix from expansion versus competitive displacement? - Management noted that the majority of growth is still from expansion, but competitive displacement is also increasing as customers consolidate their systems [39][41] Question: What is the outlook for SaaS demand and customer spending? - Management reported strong momentum for SaaS products, particularly Windchill Plus and Creo Plus, with customers increasingly opting for cloud solutions [50][52] Question: How is the company addressing churn in ServiceMax? - Management acknowledged residual churn but highlighted strong demand capture and cross-sell opportunities as positive indicators for ServiceMax's future [76][78]

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 has announced updates to its application lifecycle management (ALM) portfolio, including Codebeamer® 3.2, Codebeamer AI 1.0, and Pure Variants™ 7.2, aimed at helping organizations manage product complexity and regulatory demands more effectively [1][6] Product Enhancements - Codebeamer 3.2 and Pure Variants 7.2 introduce new features that enhance traceability, change management, and visibility across the product lifecycle, reinforcing PTC's ALM suite as a leading system for software development in regulated industries [1][6] - Codebeamer AI 1.0 introduces two AI assistants: the Requirements Assistant and the Test Case Assistant, which automate the detection of requirement quality issues and the generation of test cases, respectively, thereby improving accuracy and reducing manual effort [4][5] Strategic Vision - PTC's updates align with its vision for the Intelligent Product Lifecycle, which aims to build a robust product data foundation in engineering and extend its value across the enterprise, facilitating AI-driven transformation [5][6] - The integration of digital thread capabilities with PTC's Windchill® PLM solution enhances interoperability and compliance management across software and hardware development, reducing manual work and accelerating delivery [7] User Experience Improvements - New UI upgrades to the Review Hub allow for bulk approvals and clearer notifications, streamlining the review process and reducing errors [7] - Feature-Based Product Line Engineering (PLE) automates the creation of streams and stream baselines, supporting concurrent development and optimizing reuse across product lines [7]

Core Insights - PTC Inc. is collaborating with Automobili Lamborghini to modernize product development through its Intelligent Product Lifecycle solutions, emphasizing digital innovation for future challenges [1][10] Group 1: Collaboration and Tools - Lamborghini is adopting PTC's Windchill PLM and Codebeamer ALM solutions to enhance product data traceability, streamline engineering change management, and improve team collaboration [2] - PTC's Creo CAD software is utilized by Lamborghini for designing complex engines, which helps accelerate development cycles while maintaining high standards of craftsmanship and performance [3] Group 2: AI Integration and Demonstration - PTC plans to showcase its Intelligent Product Lifecycle at CES 2026, featuring AI-enhanced tools like Codebeamer AI, Windchill AI, and ServiceMax AI to demonstrate the full lifecycle of product development [4][10] Group 3: Strategic Focus and Financial Outlook - PTC is divesting Kepware and ThingWorx to concentrate on an AI-driven Intelligent Product Lifecycle, with positive feedback and early operational gains already noted [7] - The company targets 7%-9% ARR growth for fiscal 2026 and aims for $1 billion in free cash flow, supported by strong deferred ARR and a stock buyback program of $150-$250 million per quarter [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]

Company Overview - PTC Inc. is a software company based in Boston, Massachusetts, with a market capitalization of $20.8 billion, providing advanced digital solutions including Creo for 3D CAD design and Windchill for product lifecycle management [1][2] - The company is classified as a large-cap stock, supporting digital transformation across various industries such as automotive, aerospace, electronics, and industrial equipment [2] Financial Performance - PTC reported a 42.7% year-over-year increase in total revenue, reaching $893.8 million, which exceeded consensus estimates by 20.2% [5] - The adjusted EPS for Q4 was $3.47, reflecting a 125.3% increase from the previous year and surpassing analyst expectations by 53.5% [5] Stock Performance - PTC's shares have declined 21.2% from their 52-week high of $219.69, reached on July 31, and have fallen 15.1% over the past three months, underperforming the Nasdaq Composite's 7.8% rise [3][4] - Year-to-date, PTC shares are down 5.8%, compared to the Nasdaq's 22.1% return, and have decreased 13.2% over the past 52 weeks, lagging behind the Nasdaq's 19.5% increase [4] Market Trends - PTC has been trading below its 200-day moving average since early November and below its 50-day moving average since mid-September, indicating a bearish trend [4] - Following the Q4 earnings report, PTC's shares fell 8.4% due to weaker-than-expected guidance for Q1 2026, with projected revenue between $600 million and $660 million [5]

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]