NASDAQ$PTC
PTC Inc. · Q2 2023 earnings
Q2 2023 earnings · · Investor relations
Briefing
PTC's Q2 2023 results demonstrated strong ARR and cash flow, exceeding guidance. The company is raising ARR midpoint and cash flow guidance for FY'23.
PTC reported strong ARR growth of 23%, organic ARR growth of 11%, and organic constant currency ARR growth of 13%. Cash from operations was $211 million, up 48% year over year, and free cash flow was $207 million, up 48% year over year.
- Delivered strong ARR and cash flow results, exceeding guidance ranges.
- Reported ARR growth of 23%, organic ARR growth of 11%, and organic constant currency ARR growth of 13%.
- ServiceMax and Codebeamer businesses added 13 points of ARR growth, taking constant currency ARR growth to 26%.
- Cash from operations was $211 million, up 48% year over year, and free cash flow was $207 million, up 48% year over year.
Headline financials
Revenue & EPS history
PTC · Revenue · Quarterly
$542M
Revenue by segment
PTC · $46.4M total across 2 segments · Q4 2023
- Professional services$38.1M+3.3%82.3%
- Perpetual license$8.22M+4.7%17.7%
Forward guidance
PTC narrows guidance range for constant currency ARR and raises full year guidance for cash flow, while increasing investment in long-term growth opportunities.
Tailwinds
- We provide ARR guidance on a constant currency basis, using our FY’23 Plan foreign exchange rates (rates as of September 30, 2022) for all periods.
- Foreign exchange fluctuations during the first half of FY’23 had a favorable impact on our Q2’23 reported ARR, compared to our Q2’23 constant currency ARR.
- We expect FY’23 organic churn to be to be approximately 5.5%, in-line with FY’22.
- 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.
- Given the current interest rate environment, we expect to prioritize paying down our debt in FY’23 and FY’24.
Headwinds
- We provide ARR guidance on a constant currency basis, using our FY’23 Plan foreign exchange rates (rates as of September 30, 2022) for all periods.
- Foreign exchange fluctuations during the first half of FY’23 had a favorable impact on our Q2’23 reported ARR, compared to our Q2’23 constant currency ARR.
- For cash flow, due to invoicing seasonality, and consistent with the past 2 years, we expect the majority of our collections to occur in 1H’23 and for Q4’23 to be our lowest cash flow generation quarter.
- Compared to FY’22, at the midpoint of FY’23 ARR guidance, FY’23 GAAP operating expenses are expected to increase approximately 7% to 8%, and FY’23 non-GAAP operating expenses are expected to increase approximately 10% to 11%, primarily due to the acquisition of ServiceMax, foreign exchange rate fluctuations, and incremental investments in 2H’23
- FY’23 GAAP P&L results are expected to include the items below, totaling $284 million to $299 million, as well as their related tax effects:
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q2 2023
+0.5%
Avg return
Earnings day
+0.4%
Avg return
5 days after
+2.6%
Avg return
30 days after
56%
38 / 68 earnings
Positive
+16.9%
Q2 2022
Best reaction
-19.5%
Q3 2019
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q2 2026 | +0.0% | +5.6% | +0.2% | |
| Q1 2026 | +1.7% | +7.5% | +7.5% | |
| Q4 2025 | -8.4% | -6.3% | -8.7% | |
| Q2 2025 | +0.9% | +2.4% | +8.6% | |
| Q1 2025 | -9.6% | -11.5% | -14.3% | |
| Q4 2024 | +0.0% | +2.2% | +5.8% | |
| Q3 2024 | -0.3% | -4.7% | +1.5% | |
| Q2 2024 | -3.9% | +0.4% | -0.7% | |
| Q1 2024 | -2.5% | -3.7% | +2.0% | |
| Q4 2023 | +4.2% | +5.9% | +13.5% | |
| Q3 2023 | +0.7% | +1.1% | +0.4% | |
| Q2 2023 | -0.7% | +1.1% | +5.5% | |
| Q1 2023 | -1.9% | -2.6% | -7.4% | |
| Q4 2022 | +4.4% | +6.1% | +7.2% | |
| Q3 2022 | +13.1% | +9.8% | +3.0% | |
| Q2 2022 | +16.9% | +17.4% | +21.2% | |
| Q1 2022 | -4.2% | +1.4% | -2.7% | |
| Q4 2021 | -4.3% | +0.0% | -10.7% | |
| Q3 2021 | -7.4% | -8.7% | -8.1% | |
| Q2 2021 | -9.7% | -11.9% | -9.2% | |
| Q1 2021 | +6.8% | +5.8% | +5.7% | |
| Q4 2020 | +1.9% | +3.1% | +28.9% | |
| Q3 2020 | +4.0% | +5.0% | +10.8% | |
| Q2 2020 | +4.3% | +1.2% | +15.1% | |
| Q1 2020 | +7.9% | +6.8% | +12.4% | |
| Q4 2019 | +6.1% | +2.2% | +14.0% | |
| Q3 2019 | -19.5% | -22.2% | -28.1% | |
| Q2 2019 | -9.9% | -9.8% | -15.3% | |
| Q1 2019 | -7.1% | -5.1% | +8.4% | |
| Q4 2018 | -8.5% | -12.9% | -7.5% | |
| Q3 2018 | -1.9% | -1.8% | -6.7% | |
| Q2 2018 | +2.2% | +2.2% | +1.2% | |
| Q1 2018 | +7.1% | +11.6% | +12.2% | |
| Q4 2017 | +5.9% | +8.3% | +7.7% | |
| Q3 2017 | -6.8% | -4.0% | -7.8% | |
| Q2 2017 | -0.5% | +0.2% | +3.3% | |
| Q1 2017 | +6.0% | +6.6% | +14.6% | |
| Q4 2016 | +0.2% | +4.2% | +9.4% | |
| Q3 2016 | +2.9% | +2.7% | +8.3% | |
| Q2 2016 | +11.5% | — | — | |
| Q1 2016 | +3.5% | — | — | |
| Q4 2015 | +0.1% | — | — | |
| Q3 2015 | -6.4% | — | — | |
| Q2 2015 | +4.4% | — | — | |
| Q1 2015 | -0.9% | — | — | |
| Q4 2014 | -3.1% | — | — | |
| Q3 2014 | -1.7% | — | — | |
| Q2 2014 | +0.6% | — | — | |
| Q1 2014 | +0.7% | — | — | |
| Q4 2013 | +9.0% | — | — | |
| Q3 2013 | +0.7% | — | — | |
| Q2 2013 | +1.4% | — | — | |
| Q1 2013 | -1.1% | — | — | |
| Q4 2012 | +5.1% | — | — | |
| Q3 2012 | +13.5% | — | — | |
| Q2 2012 | +15.1% | — | — | |
| Q1 2012 | -0.1% | — | — | |
| Q4 2011 | -4.9% | — | — | |
| Q3 2011 | -0.9% | — | — | |
| Q2 2011 | +0.0% | — | — | |
| Q1 2010 | +1.2% | — | — | |
| Q1 2011 | +2.0% | — | — | |
| Q2 2010 | +0.2% | — | — | |
| Q4 2010 | +0.2% | — | — | |
| Q4 2008 | +0.2% | — | — | |
| Q3 2009 | -1.4% | — | — | |
| Q3 2010 | -1.4% | — | — | |
| Q4 2009 | -1.4% | — | — |
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