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    PTC Announces Second Fiscal Quarter 2024 Results

    5/1/24 4:01:00 PM ET
    $PTC
    Computer Software: Prepackaged Software
    Technology
    Get the next $PTC alert in real time by email

    Solid ARR and Cash Flow in Q2 of Fiscal 2024

    Updating Fiscal 2024 and Mid-Term Targets

    BOSTON, May 1, 2024 /PRNewswire/ -- PTC (NASDAQ:PTC) today reported financial results for its second fiscal quarter ended March 31, 2024.

    PTC - digital transforms physical. (PRNewsfoto/PTC Inc.)

    "In our second fiscal quarter, we again delivered solid results. We have a differentiated strategy that leverages our unique product portfolio to enable our customers with their digital transformation journeys. Our consistent ARR and free cash flow growth continues to highlight the value we are bringing to our customers and the stability of our business model," said Neil Barua, CEO, PTC.

    "We are updating our mid-term ARR targets to low double-digit ARR growth, which is consistent with our track record of ARR growth over the past 5 years. Importantly, we are reiterating our mid-term cash flow targets as we remain confident in our ability to expand our operating efficiency while continuing to invest in the business to deliver increasing value to our customers," concluded Barua.

    Second Quarter 2024 Highlights

    Key operating and financial highlights are set forth below. The definitions of our operating and non-GAAP financial measures and reconciliations of non-GAAP financial measures to comparable GAAP measures are included below and in the reconciliation tables at the end of this press release.

    $ in millions

    Q2'24

    Q2'23

    YoY Change



    Q2'24

    Guidance

    ARR as reported

    $2,088

    $1,882

    11 %





    Constant currency ARR

    $2,075

    $1,850

    12 %



    $2,050 - $2,065

    Operating cash flow

    $251

    $211

    19 %



    ~$245

    Free cash flow

    $247

    $207

    19 %



    ~$240

    Revenue1

    $603

    $542

    11%2



    $560 - $590

    Operating margin1

    30 %

    23%3

     ~720bps





    Non-GAAP operating margin1

    42 %

    38 %

    ~390bps





    Earnings per share1

    $0.95

    $0.533

    78 %



    $0.57 - $0.80

    Non-GAAP earnings per share1

    $1.46

    $1.16

    26 %



    $1.10 - $1.30

    Total cash and cash equivalents

    $249

    $320

    (22 %)





    Gross debt4

    $2,011

    $2,5455

    (21 %)









    1

    Revenue and, as a result, operating margin, operating profit, and earnings per share are impacted under ASC 606.

    2

    In Q2'24, revenue growth was 11% year over year on a constant currency basis.

    3

    In Q2'23, operating margin and EPS included a negative impact due to acquisition and transaction-related charges for the ServiceMax acquisition of $12 million or $0.10.

    4

    Gross debt excludes unamortized debt issuance costs.

    5

    Q2'23 gross debt included a deferred acquisition payment related to ServiceMax of $620 million, which was paid in October 2023.

    Fiscal 2024 and Q3'24 Guidance and Mid-Term Targets

    "Our ARR and free cash flow results in Q2'24 were solid in a challenging selling environment, driven by the resilience of our subscription business model, consistent execution, operational discipline, and the actions we have taken over time to align our investments with market opportunities. We continue to rapidly de-lever, and our debt to EBITDA ratio was 2.3x at the end of Q2'24," said Kristian Talvitie, CFO.

    "Reflecting our year-to-date performance and our outlook for the second half, we are narrowing the range of our FY'24 constant currency ARR guidance and maintaining our FY'24 free cash flow guidance. For Q3, the ARR guidance range is 11 to 12 percent growth, with free cash flow of approximately $220 million. It's worth noting that we are updating our FY'24 revenue and EPS guidance consistent with our updated ARR guidance range and also due to the impact of FX. We believe we have set our Q3'24 and FY'24 guidance appropriately," concluded Talvitie.

      $ in millions

    FY'24 Previous

    Guidance

    FY'24

    Guidance

    FY'24 YoY

    Growth

    Guidance

    Q3'24

    Guidance





    Constant currency ARR

    $2,190 - $2,250

    $2,200 - $2,240

    11% - 13%

    $2,115 - $2,130



    Operating cash flow

    ~$745

    ~$745

    ~22%

    ~$225



    Free cash flow

    ~$725

    ~$725

    ~23%

    ~$220



    Revenue

    $2,270 - $2,360

    $2,270 - $2,340

    8% - 12%

    $525 - $540



    Earnings per share

    $2.42 - $3.32

    $2.52 - $3.22

    22% - 56%

    $0.41 - $0.54



    Non-GAAP earnings per share

    $4.50 - $5.20

    $4.60 - $5.10

    6% - 18%

    $0.90 - $1.00



    Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance

      In millions

    FY'24

    Guidance

    Q3'24

    Guidance







      Operating Cash Flow

    ~$745

    ~$225





    Capital expenditures

    (~$20)

    (~$5)





      Free Cash Flow

    ~$725

    ~$220





    Reconciliation of EPS Guidance to Non-GAAP EPS Guidance



    FY'24

    Guidance

    Q3'24

    Guidance





    Earnings per share

    $2.52 - $3.22

    $0.41 - $0.54



    Stock-based compensation expense

    $1.91 - $1.66

    $0.44 - $0.40



    Intangible asset amortization expense

    ~$0.68

    ~$0.17



    Acquisition and transaction-related expense

    ~$0.01

    ~$0.00



    Income tax adjustments related to the reconciling items

    ($0.52) – ($0.47)

    ~($0.12)



    Non-GAAP Earnings per share

    $4.60 - $5.10

    $0.90 - $1.00



    Mid-Term Targets



    FY'25 Previous

    Target

    FY'26 Previous

    Target

    Target Growth Rate

    Constant currency ARR growth

    Mid-teens %

    Mid-teens %

    Low double-digit %

      $ in millions

    FY'25 Previous

    Targets

    FY'26 Previous

    Targets

    FY'25

    Targets

    FY'26

    Targets

    Operating cash flow

    $850 - $900

    ~$1,025

    $850 - $900

    ~$1,025

    Free cash flow1

    $825 - $875

    ~$1,000

    $825 - $875

    ~$1,000



    1 Assumes capital expenditures of approximately $25 million.

    FY'24 financial guidance includes the following assumptions:

    • We provide ARR guidance on a constant currency basis, using our FY'24 Plan foreign exchange rates (rates as of September 30, 2023) for all periods. Foreign exchange rate fluctuations during the first half of FY'24 had a $14 million favorable impact on our Q2'24 reported ARR, compared to our Q2'24 constant currency ARR. Using foreign exchange rates as of the end of Q2'24 and assuming the midpoint of our constant currency guidance ranges:
      • Q3'24 reported ARR would be higher by approximately $14 million, compared to Q3'24 constant currency ARR guidance; and
      • FY'24 reported ARR would be higher by approximately $15 million, compared to FY'24 constant currency ARR guidance.
    • We expect churn to remain low.
    • For cash flow, due to invoicing and payments seasonality, and consistent with the past 3 years, we expect the majority of our collections to occur in the first half of our fiscal year and for fiscal Q4 to be our lowest cash flow generation quarter.
    • Compared to FY'23, at the midpoint of FY'24 ARR guidance, FY'24 GAAP operating expenses are expected to increase approximately 6%, and FY'24 non-GAAP operating expenses are expected to increase approximately 8%, primarily due to investments to drive future growth, the acquisition of ServiceMax, and foreign exchange rate fluctuations.
    • FY'24 GAAP P&L results are expected to include the items below, totaling approximately $285 million to $315 million, as well as their related tax effects:
      • approximately $200 million to $230 million of stock-based compensation expense,
      • approximately $81 million of intangible asset amortization expense,
      • approximately $2 million, net, related to acquisition and transaction-related expense and a restructuring credit, and
      • approximately $2 million of other non-operating expenses, related to an impairment loss on an available-for-sale debt security.
    • Our FY'24 GAAP and non-GAAP tax rates are expected to be approximately 20%.
    • Cash tax payments are expected to be approximately $80 million in FY'24.
    • Capital expenditures are expected to be approximately $20 million in FY'24.
    • Cash interest payments are expected to be approximately $135 million in FY'24.
    • Our long-term goal, assuming our Debt/EBITDA ratio is below 3x, is to return approximately 50% of our free cash flow to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic opportunities.
      • We expect to prioritize paying down our debt in FY'24.
      • We expect gross debt of approximately $1.7 billion at the end of FY'24.
      • We expect our fully diluted share count to increase by approximately 1.5 million in FY'24.

    PTC's Fiscal Second Quarter Conference Call

    The Company will host a conference call to discuss results at 5:00 pm ET on Wednesday, May 1, 2024. To participate in the live conference call, dial (888) 330-2508 or (240) 789-2735, provide the passcode 7328695, and press # or log in to the webcast, available on PTC's Investor Relations website. A replay will also be available.

    Important Information About Our Operating and Non-GAAP Financial Measures

    Non-GAAP Financial Measures

    We provide supplemental non-GAAP financial measures to our financial results. We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operating performance because they provide a view of our operating results without items that are not, in our view, indicative of our operating results. These non-GAAP financial measures should not be construed as an alternative to GAAP results as the items excluded from the non-GAAP financial measures often have a material impact on our operating results, certain of those items are recurring, and others often recur. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

    Non-GAAP operating expense, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income and non-GAAP EPS exclude the effect of the following items: stock-based compensation; amortization of acquired intangible assets; acquisition and transaction-related charges included in general and administrative expenses; restructuring and other charges and credits, net; non-operating charges and credits shown in the reconciliation provided; and income tax adjustments. Additional information about the items we exclude from our non-GAAP financial measures and the reasons we exclude them can be found in "Non-GAAP Financial Measures" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

    Free Cash Flow: We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return approximately 50% of our free cash flow to shareholders via stock repurchases. Free cash flow is cash provided by (used in) operations net of capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures.

    Constant Currency (CC): We present CC information to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency exchange rate fluctuations. To present CC information, FY'24 and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the foreign exchange rate as of September 30, 2023, rather than the actual exchange rates in effect during that period.

    Operating Measure

    ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, cloud, SaaS, and support contracts as of the end of the reporting period. We calculate ARR as follows:

    • We consider a contract to be active when the product or service contractual term commences (the "start date") until the right to use the product or service ends (the "expiration date"). Even if the contract with the customer is executed before the start date, the contract will not count toward ARR until the customer right to receive the benefit of the products or services has commenced.
    • For contracts that include annual values that increase over time as there are additional deliverables in subsequent periods, which we refer to as ramp contracts, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation.
    • As ARR includes only contracts that are active at the end of the reporting period, ARR does not reflect assumptions or estimates regarding future customer renewals or non-renewals.
    • Active contracts are annualized by dividing the total active contract value by the contract duration in days (expiration date minus start date), then multiplying that by 365 days (or 366 days for leap years).

    We believe ARR is a valuable operating measure to assess the health of a subscription business because it is aligned with the amount that we invoice the customer on an annual basis. We invoice customers annually for the current year of the contract. A customer with a one-year contract will typically be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year contract will be invoiced for each annual period at the beginning of each year of the contract.

    ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period.

    As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the total value of the contract is recognized at a point in time upon the later of when the software is made available, or the subscription term commences.

    ARR should be viewed independently of recognized and unearned revenue and is not intended to be combined with, or to replace, either of those items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.

    Organic ARR: We provide an organic ARR measure to help investors understand and assess the performance of our business without the distorting effects of ARR from acquisitions in the comparative period. We do not adjust for acquisitions that have an immaterial impact on our ARR results when providing organic ARR results.

    Organic Constant Currency ARR: We provide an organic constant currency ARR measure to help investors understand and assess the performance of our business without the distorting effects of ARR from acquisitions in the comparative period and foreign exchange rate fluctuations. We do not adjust for acquisitions that have an immaterial impact on our ARR results when providing organic constant currency ARR results.

    Deferred ARR: Deferred ARR is ARR attributable to our portfolio of subscription software, cloud, SaaS and support contracts that are not active as of the end of the reporting period but are contractually committed to commence in a future period.

    Because ARR is independent of recognized and unearned revenue, deferred ARR should not be viewed as a measurement of revenue which will be recognized in future periods.

    Forward-Looking Statements

    Statements in this document that are not historic facts, including statements about our future financial and growth expectations and potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include: the macroeconomic and/or global manufacturing climates may not improve when or as we expect or may deteriorate due to, among other factors, high interest rates or increases in interest rates and inflation, volatile foreign exchange rates and the relative strength of the U.S. dollar, tightening of credit standards and availability, the effects of the conflicts between Russia and Ukraine and in the Middle East, and growing tensions with China, any of which could cause customers to delay or reduce purchases of new software, reduce the number of subscriptions they carry, or delay payments to us, which would adversely affect ARR and/or our financial results, including cash flow; our investments in our solutions may not drive expansion of those solutions and/or generate the ARR and/or cash flow we expect if customers are slower to adopt those solutions than we expect or if they adopt competing solutions; other uses of cash or our credit facility limits could limit or preclude the return of 50% of free cash flow to shareholders via share repurchases; and foreign exchange rates may differ materially from those we expect. In addition, our assumptions concerning our future GAAP and non-GAAP effective income tax rates are based on estimates and other factors that could change, including changes to tax laws in the U.S. and other countries and the geographic mix of our revenue, expenses, and profits. Other risks and uncertainties that could cause actual results to differ materially from those projected are detailed from time to time in reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

    About PTC (NASDAQ:PTC)

    PTC (NASDAQ:PTC) is a global software company that enables industrial and manufacturing companies to digitally transform how they engineer, manufacture, and service the physical products that the world relies on. Headquartered in Boston, Massachusetts, PTC employs over 7,000 people and supports more than 25,000 customers globally. For more information, please visit www.ptc.com.

    PTC.com @PTC Blogs

    PTC Investor Relations Contact                         

    Matt Shimao

    SVP, Investor Relations

    [email protected]

    [email protected]

     

    PTC Inc.



    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME



    (in thousands, except per share data)





















































    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



























    Revenue:























    Recurring revenue

    $

    564,014





    $

    492,143





    $

    1,070,041





    $

    909,253



    Perpetual license



    6,753







    8,921







    15,193







    22,165



    Professional services



    32,305







    41,117







    68,052







    76,673



    Total revenue(1)



    603,072







    542,181







    1,153,286







    1,008,091



























    Cost of revenue (2)



    110,055







    113,506







    220,075







    209,296



























    Gross margin



    493,017







    428,675







    933,211







    798,795



























    Operating expenses:























    Sales and marketing (2)



    134,521







    129,207







    271,445







    247,590



    Research and development (2)



    106,998







    100,349







    212,781







    188,526



    General and administrative (2)



    61,526







    65,923







    130,732







    116,894



    Amortization of acquired intangible assets



    10,424







    10,656







    20,787







    18,682



    Restructuring and other charges (credits), net



    (7)







    1







    (802)







    (337)



    Total operating expenses



    313,462







    306,136







    634,943







    571,355



























    Operating income



    179,555







    122,539







    298,268







    227,440



    Other expense, net



    (33,810)







    (41,470)







    (66,924)







    (59,947)



    Income before income taxes



    145,745







    81,069







    231,344







    167,493



    Provision for income taxes



    31,300







    17,565







    50,512







    28,954



    Net income

    $

    114,445





    $

    63,504





    $

    180,832





    $

    138,539



























    Earnings per share:























    Basic

    $

    0.96





    $

    0.54





    $

    1.52





    $

    1.17



    Weighted average shares outstanding



    119,587







    118,260







    119,354







    118,037



























    Diluted

    $

    0.95





    $

    0.53





    $

    1.50





    $

    1.17



    Weighted average shares outstanding



    120,712







    119,041







    120,480







    118,912



























    (1) See supplemental financial data for revenue by license, support and cloud services,

    and professional services.















    (2) See supplemental financial data for additional information about stock-based

    compensation.















     

    PTC Inc.



    SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION



    (in thousands, except per share data)



















































    Revenue by license, support and services is as follows:

























    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



    License revenue (1)

    $

    234,321





    $

    196,993





    $

    418,319





    $

    369,691



    Support and cloud services revenue



    336,446







    304,071







    666,915







    561,727



    Professional services revenue



    32,305







    41,117







    68,052







    76,673



    Total revenue

    $

    603,072





    $

    542,181





    $

    1,153,286





    $

    1,008,091



























    (1) License revenue includes the portion of subscription revenue allocated to license.



























    The amounts in the income statement include stock-based compensation as follows:





























    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



    Cost of revenue

    $

    5,034





    $

    5,746





    $

    10,123





    $

    9,821



    Sales and marketing



    14,729







    12,845







    30,856







    25,041



    Research and development



    13,936







    15,580







    28,174







    27,038



    General and administrative



    20,492







    18,075







    44,051







    31,850



    Total stock-based compensation

    $

    54,191





    $

    52,246





    $

    113,204





    $

    93,750



     

    PTC Inc.



    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)



    (in thousands, except per share data)





























    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



























    GAAP gross margin

    $

    493,017





    $

    428,675





    $

    933,211





    $

    798,795



    Stock-based compensation



    5,034







    5,746







    10,123







    9,821



    Amortization of acquired intangible assets included in cost of

    revenue



    9,584







    9,834







    19,150







    15,976



    Non-GAAP gross margin

    $

    507,635





    $

    444,255





    $

    962,484





    $

    824,592



























    GAAP operating income

    $

    179,555





    $

    122,539





    $

    298,268





    $

    227,440



    Stock-based compensation



    54,191







    52,246







    113,204







    93,750



    Amortization of acquired intangible assets



    20,008







    20,490







    39,937







    34,658



    Acquisition and transaction-related charges



    302







    11,883







    2,808







    17,689



    Restructuring and other charges (credits), net



    (7)







    1







    (802)







    (337)



    Non-GAAP operating income (1)

    $

    254,049





    $

    207,159





    $

    453,415





    $

    373,200



























    GAAP net income

    $

    114,445





    $

    63,504





    $

    180,832





    $

    138,539



    Stock-based compensation



    54,191







    52,246







    113,204







    93,750



    Amortization of acquired intangible assets



    20,008







    20,490







    39,937







    34,658



    Acquisition and transaction-related charges



    302







    11,883







    2,808







    17,689



    Restructuring and other charges (credits), net



    (7)







    1







    (802)







    (337)



    Non-operating charges, net (2)



    2,000







    4,622







    2,000







    5,147



    Income tax adjustments (3)



    (14,586)







    (14,943)







    (28,624)







    (33,676)



    Non-GAAP net income

    $

    176,353





    $

    137,803





    $

    309,355





    $

    255,770



























    GAAP diluted earnings per share

    $

    0.95





    $

    0.53





    $

    1.50





    $

    1.17



    Stock-based compensation



    0.45







    0.44







    0.94







    0.79



    Amortization of acquired intangibles



    0.17







    0.17







    0.33







    0.29



    Acquisition and transaction-related charges



    0.00







    0.10







    0.02







    0.15



    Restructuring and other charges (credits), net



    (0.00)







    0.00







    (0.01)







    (0.00)



    Non-operating charges, net (2)



    0.02







    0.04







    0.02







    0.04



    Income tax adjustments (3)



    (0.12)







    (0.13)







    (0.24)







    (0.28)



    Non-GAAP diluted earnings per share

    $

    1.46





    $

    1.16





    $

    2.57





    $

    2.15



























    (1) Operating margin impact of non-GAAP adjustments:

























    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



    GAAP operating margin



    29.8

    %





    22.6

    %





    25.9

    %





    22.6

    %

    Stock-based compensation



    9.0

    %





    9.6

    %





    9.8

    %





    9.3

    %

    Amortization of acquired intangibles



    3.3

    %





    3.8

    %





    3.5

    %





    3.4

    %

    Acquisition and transaction-related charges



    0.1

    %





    2.2

    %





    0.2

    %





    1.8

    %

    Restructuring and other charges (credits), net



    0.0

    %





    0.0

    %





    (0.1)

    %





    0.0

    %

    Non-GAAP operating margin



    42.1

    %





    38.2

    %





    39.3

    %





    37.0

    %

























    (2) In Q2'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security. In Q2'23, we recognized

    $3.7 million of financing charges for a debt commitment agreement associated with our acquisition of ServiceMax.



    (3) Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable

    tax rate by jurisdiction to the non-GAAP adjustments listed above. Additionally, in the first six months of FY'24, adjustments

    exclude a non-cash tax expense of $3.6 million for a tax reserve related to prior years in a foreign jurisdiction.



     

    PTC Inc.



    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



    (in thousands)





























    March 31,





    September 30,





    2024





    2023















    ASSETS























    Cash and cash equivalents

    $

    248,971





    $

    288,103



    Accounts receivable, net



    705,493







    811,398



    Property and equipment, net



    81,811







    88,391



    Goodwill and acquired intangible assets, net



    4,377,844







    4,299,760



    Lease assets, net



    135,262







    143,028



    Other assets



    655,882







    658,162















    Total assets

    $

    6,205,263





    $

    6,288,842















    LIABILITIES AND STOCKHOLDERS' EQUITY























    Deferred revenue

    $

    724,571





    $

    681,550



    Debt, net of deferred issuance costs



    2,005,741







    1,695,785



    Deferred acquisition payments (1)



    -







    620,040



    Lease obligations



    183,789







    193,192



    Other liabilities



    348,030







    420,985



    Stockholders' equity



    2,943,132







    2,677,290















    Total liabilities and stockholders' equity

    $

    6,205,263





    $

    6,288,842















    (1) FY'23 Deferred acquisition payments represented the fair value of the $650 million payment associated with the ServiceMax,

    Inc. acquisition, which was paid in Q1'24.



     

    PTC Inc.



    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



    (in thousands)













































































    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



























    Cash flows from operating activities:























    Net income

    $

    114,445





    $

    63,504





    $

    180,832





    $

    138,539



    Stock-based compensation



    54,191







    52,246







    113,204







    93,750



    Depreciation and amortization



    26,922







    27,709







    54,144







    49,037



    Amortization of right-of-use lease assets



    7,735







    8,510







    15,459







    16,564



    Operating lease liability



    (5,340)







    (2,910)







    (10,293)







    4,985



    Accounts receivable



    (46,443)







    (19,034)







    107,507







    86,478



    Accounts payable and accruals



    (109)







    2,492







    (64,796)







    (7,358)



    Deferred revenue



    70,065







    55,727







    40,971







    36,092



    Income taxes



    4,620







    4,667







    18,087







    (12,169)



    Other



    24,644







    18,037







    (17,044)







    (14,049)



    Net cash provided by operating activities



    250,730







    210,948







    438,071







    391,869



























    Capital expenditures



    (3,639)







    (3,770)







    (8,202)







    (12,950)



    Acquisition of businesses, net of cash acquired(1)



    -







    (828,271)







    (93,457)







    (828,271)



    Borrowings (payments) on debt, net(2)



    (254,230)







    566,000







    304,174







    566,000



    Deferred acquisition payment(3)



    -







    -







    (620,040)







    -



    Net proceeds associated with issuance of common stock



    12,709







    10,592







    12,709







    10,592



    Payments of withholding taxes in connection with vesting of stock-based awards



    (20,858)







    (3,599)







    (71,184)







    (56,022)



    Settlement of net investment hedges



    5,123







    (1,749)







    (2,224)







    (12,544)



    Purchases of investments



    -







    (5,823)







    -







    (5,823)



    Credit facility origination costs



    -







    (12,005)







    -







    (13,355)



    Other financing & investing activities



    -







    -







    -







    (371)



    Foreign exchange impact on cash



    (5,860)







    565







    829







    9,181



























    Net change in cash, cash equivalents, and restricted cash



    (16,025)







    (67,112)







    (39,324)







    48,306



    Cash, cash equivalents, and restricted cash, beginning of period



    265,499







    388,306







    288,798







    272,888



    Cash, cash equivalents, and restricted cash, end of period

    $

    249,474





    $

    321,194





    $

    249,474





    $

    321,194



























    Supplemental cash flow information:























    Cash paid for interest(3)

    $

    49,263





    $

    24,546





    $

    94,020





    $

    29,370



























    (1) In Q1'24, we acquired pure-systems for $93 million, net of cash acquired. In Q2'23, we acquired ServiceMax Inc. for $1,448

    million, net of cash acquired. We paid $828 million in Q2'23 and the remaining $620 million in Q1'24.



    (2) In Q1'24, we borrowed $740 million to fund the ServiceMax deferred acquisition payment and the pure-systems acquisition.

    We made $181 million in payments on our debt in Q1'24 and $254 million in Q2'24.



    (3) In Q1'24, we made a payment of $650 million to settle the ServiceMax deferred acquisition payment liability, of which $620

    million is a financing outflow and $30 million is an operating outflow and included in cash paid for interest.



     

    PTC Inc.



    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)



    (in thousands)





















































    Three Months Ended





    Six Months Ended





    March 31,





    March 31,





    March 31,





    March 31,





    2024





    2023





    2024





    2023



    Cash provided by operating activities(1)

    $

    250,730





    $

    210,948





    $

    438,071





    $

    391,869



    Capital expenditures



    (3,639)







    (3,770)







    (8,202)







    (12,950)



    Free cash flow(1)

    $

    247,091





    $

    207,178





    $

    429,869





    $

    378,919



     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/ptc-announces-second-fiscal-quarter-2024-results-302133593.html

    SOURCE PTC Inc.

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