0000857005
false
0000857005
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 01, 2024
PTC Inc.
(Exact name of Registrant as Specified in Its Charter)
Massachusetts 0-18059 04-2866152
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
121 Seaport Boulevard
Boston 02210
,
Massachusetts
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(781)
370-5000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Common Stock, $.01 par value per share PTC The Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)/230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)/240.12b-2
of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On May 1, 2024, PTC Inc. announced results for its fiscal second quarter ended
March 31, 2024. A copy of the press release is furnished herewith as Exhibit
99.1.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
.
99.1
PTC Inc. Press Release dated May 1, 2024.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PTC Inc.
Date: 1 May 2024 By: /s/ Kristian Talvitie
Kristian Talvitie
Executive Vice President, Chief Financial Officer
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Ex 99.1
PTC Announces Second fiscal Quarter 2024 Results
Solid ARR and Cash Flow in Q2 of Fiscal 2024
Updating Fiscal 2024 and Mid-Term Targets
BOSTON, MA, May 1, 2024 -
PTC
(NASDAQ: PTC) today reported financial results for its second fiscal quarter
ended March 31, 2024.
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 Q224 Q2'23 YoY Change Q224 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
Revenue $603 $542 11% $560 - $590
1 2
Operating margin 30% 23% ~720bps
1 3
Non-GAAP operating margin 42% 38% ~390bps
1
Earnings per share $0.95 $0.53 78% $0.57 - $0.80
1 3
Non-GAAP earnings per share $1.46 $1.16 26% $1.10 - $1.30
1
Total cash and cash equivalents $249 $320 (22%)
Gross debt $2,011 $2,545 (21%)
4 5
1
Revenue and, as a result, operating margin, operating profit, and earnings per
share are impacted under ASC 606.
2
In Q224, revenue growth was 11% year over year on a constant currency basis.
3
In Q223, 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
Q223 gross debt included a deferred acquisition payment related to ServiceMax
of $620 million, which was paid in October 2023.
1
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Fiscal 2024 and Q324 Guidance and Mid-Term Targets
Our ARR and free cash flow results in Q224 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 Q224,
said Kristian Talvitie, CFO.
Reflecting our year-to-date performance and our outlook for the second half,
we are narrowing the range of our FY24 constant currency ARR guidance and
maintaining our FY24 free cash flow guidance. For Q3, the ARR guidance range
is 11 to 12 percent growth, with free cash flow of approximately $220 million.
Its worth noting that we are updating our FY24 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 Q324 and FY24 guidance appropriately, concluded
Talvitie.
$ in millions FY24 Previous Guidance FY24 Guidance FY24 YoY Growth Guidance Q324 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 FY24 Guidance Q324 Guidance
Operating Cash Flow ~$745 ~$225
Capital expenditures (~$20) (~$5)
Free Cash Flow ~$725 ~$220
Reconciliation of EPS Guidance to Non-GAAP EPS Guidance
FY24 Guidance Q324 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
2
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Mid-Term Targets
FY25 Previous Target FY26 Previous Target Target Growth Rate
Constant currency ARR growth Mid-teens % Mid-teens % Low double-digit %
$ in millions FY25 Previous Targets FY26 Previous Targets FY25 Targets FY26 Targets
Operating cash flow $850 - $900 ~$1,025 $850 - $900 ~$1,025
Free cash flow $825 - $875 ~$1,000 $825 - $875 ~$1,000
1
1
Assumes capital expenditures of approximately $25 million.
3
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FY24 financial guidance includes the following assumptions:
"
We provide ARR guidance on a constant currency basis, using our FY24 Plan
foreign exchange rates (rates as of September 30, 2023) for all periods.
Foreign exchange rate fluctuations during the first half of FY24 had a $14
million favorable impact on our Q224 reported ARR, compared to our Q224
constant currency ARR. Using foreign exchange rates as of the end of Q224 and
assuming the midpoint of our constant currency guidance ranges:
"
Q324 reported ARR would be higher by approximately $14 million, compared to
Q324 constant currency ARR guidance; and
"
FY24 reported ARR would be higher by approximately $15 million, compared to
FY24 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 FY23, at the midpoint of FY24 ARR guidance, FY24 GAAP operating
expenses are expected to increase approximately 6%, and FY24 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.
"
FY24 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 FY24 GAAP and non-GAAP tax rates are expected to be approximately 20%.
"
Cash tax payments are expected to be approximately $80 million in FY24.
"
Capital expenditures are expected to be approximately $20 million in FY24.
"
Cash interest payments are expected to be approximately $135 million in FY24.
"
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 FY24.
"
We expect gross debt of approximately $1.7 billion at the end of FY24.
"
We expect our fully diluted share count to increase by approximately 1.5
million in FY24.
4
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PTCs 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
PTCs 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, FY24 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
5
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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
6
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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
mshimao@ptc.com
investor@ptc.com
7
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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 $ 564,014 $ 492,143 $ 1,070,041 $ 909,253
revenue
Perpetual 6,753 8,921 15,193 22,165
license
Professional 32,305 41,117 68,052 76,673
services
Total 603,072 542,181 1,153,286 1,008,091
revenue
(1)
Cost of 110,055 113,506 220,075 209,296
revenue
(2)
Gross 493,017 428,675 933,211 798,795
margin
Operating
expenses:
Sales and 134,521 129,207 271,445 247,590
marketing
(2)
Research and 106,998 100,349 212,781 188,526
development
(2)
General and 61,526 65,923 130,732 116,894
administrative
(2)
Amortization of acquired 10,424 10,656 20,787 18,682
intangible assets
Restructuring and other (7 ) 1 (802 ) (337 )
charges (credits), net
Total operating 313,462 306,136 634,943 571,355
expenses
Operating 179,555 122,539 298,268 227,440
income
Other (33,810 ) (41,470 ) (66,924 ) (59,947 )
expense, net
Income before 145,745 81,069 231,344 167,493
income taxes
Provision for 31,300 17,565 50,512 28,954
income taxes
Net $ 114,445 $ 63,504 $ 180,832 $ 138,539
income
Earnings
per share:
Basic $ 0.96 $ 0.54 $ 1.52 $ 1.17
Weighted average 119,587 118,260 119,354 118,037
shares outstanding
Diluted $ 0.95 $ 0.53 $ 1.50 $ 1.17
Weighted average 120,712 119,041 120,480 118,912
shares outstanding
(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.
8
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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 $ 234,321 $ 196,993 $ 418,319 $ 369,691
(1)
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
9
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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 $ 493,017 $ 428,675 $ 933,211 $ 798,795
gross
margin
Stock-based 5,034 5,746 10,123 9,821
compensation
Amortization of 9,584 9,834 19,150 15,976
acquired intangible
assets included in
cost of revenue
Non-GAAP $ 507,635 $ 444,255 $ 962,484 $ 824,592
gross
margin
GAAP $ 179,555 $ 122,539 $ 298,268 $ 227,440
operating
income
Stock-based 54,191 52,246 113,204 93,750
compensation
Amortization 20,008 20,490 39,937 34,658
of acquired
intangible
assets
Acquisition 302 11,883 2,808 17,689
and
transaction-related
charges
Restructuring (7 ) 1 (802 ) (337 )
and other
charges
(credits), net
Non-GAAP $ 254,049 $ 207,159 $ 453,415 $ 373,200
operating
income
(1)
GAAP net $ 114,445 $ 63,504 $ 180,832 $ 138,539
income
Stock-based 54,191 52,246 113,204 93,750
compensation
Amortization 20,008 20,490 39,937 34,658
of acquired
intangible
assets
Acquisition 302 11,883 2,808 17,689
and
transaction-related
charges
Restructuring (7 ) 1 (802 ) (337 )
and other
charges
(credits), net
Non-operating 2,000 4,622 2,000 5,147
charges,
net
(2)
Income (14,586 ) (14,943 ) (28,624 ) (33,676 )
tax
adjustments
(3)
Non-GAAP $ 176,353 $ 137,803 $ 309,355 $ 255,770
net
income
GAAP $ 0.95 $ 0.53 $ 1.50 $ 1.17
diluted
earnings
per share
Stock-based 0.45 0.44 0.94 0.79
compensation
Amortization 0.17 0.17 0.33 0.29
of
acquired
intangibles
Acquisition 0.00 0.10 0.02 0.15
and
transaction-related
charges
Restructuring (0.00 ) 0.00 (0.01 ) (0.00 )
and other
charges
(credits), net
Non-operating 0.02 0.04 0.02 0.04
charges,
net
(2)
Income (0.12 ) (0.13 ) (0.24 ) (0.28 )
tax
adjustments
(3)
Non-GAAP $ 1.46 $ 1.16 $ 2.57 $ 2.15
diluted
earnings
per share
(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 29.8 % 22.6 % 25.9 % 22.6 %
operating
margin
Stock-based 9.0 % 9.6 % 9.8 % 9.3 %
compensation
Amortization 3.3 % 3.8 % 3.5 % 3.4 %
of
acquired
intangibles
Acquisition 0.1 % 2.2 % 0.2 % 1.8 %
and
transaction-related
charges
Restructuring 0.0 % 0.0 % (0.1 )% 0.0 %
and other
charges
(credits), net
Non-GAAP 42.1 % 38.2 % 39.3 % 37.0 %
operating
margin
(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.
10
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PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, September 30,
2024 2023
ASSETS
Cash and cash $ 248,971 $ 288,103
equivalents
Accounts 705,493 811,398
receivable, net
Property and 81,811 88,391
equipment, net
Goodwill and acquired 4,377,844 4,299,760
intangible assets, net
Lease 135,262 143,028
assets, net
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 2,005,741 1,695,785
issuance costs
Deferred acquisition - 620,040
payments
(1)
Lease 183,789 193,192
obligations
Other 348,030 420,985
liabilities
Stockholders' 2,943,132 2,677,290
equity
Total liabilities and $ 6,205,263 $ 6,288,842
stockholders' equity
(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.
11
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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 $ 114,445 $ 63,504 $ 180,832 $ 138,539
income
Stock-based 54,191 52,246 113,204 93,750
compensation
Depreciation 26,922 27,709 54,144 49,037
and
amortization
Amortization 7,735 8,510 15,459 16,564
of
right-of-use
lease assets
Operating (5,340 ) (2,910 ) (10,293 ) 4,985
lease
liability
Accounts (46,443 ) (19,034 ) 107,507 86,478
receivable
Accounts (109 ) 2,492 (64,796 ) (7,358 )
payable
and
accruals
Deferred 70,065 55,727 40,971 36,092
revenue
Income 4,620 4,667 18,087 (12,169 )
taxes
Other 24,644 18,037 (17,044 ) (14,049 )
Net cash 250,730 210,948 438,071 391,869
provided by
operating
activities
Capital (3,639 ) (3,770 ) (8,202 ) (12,950 )
expenditures
Acquisition of - (828,271 ) (93,457 ) (828,271 )
businesses,
net of cash
acquired
(1)
Borrowings (254,230 ) 566,000 304,174 566,000
(payments)
on debt,
net
(2)
Deferred - - (620,040 ) -
acquisition
payment
(3)
Net proceeds 12,709 10,592 12,709 10,592
associated with
issuance of
common stock
Payments of withholding (20,858 ) (3,599 ) (71,184 ) (56,022 )
taxes in connection
with vesting of
stock-based awards
Settlement 5,123 (1,749 ) (2,224 ) (12,544 )
of net
investment
hedges
Purchases - (5,823 ) - (5,823 )
of
investments
Credit - (12,005 ) - (13,355 )
facility
origination
costs
Other - - - (371 )
financing &
investing
activities
Foreign (5,860 ) 565 829 9,181
exchange
impact
on cash
Net change in (16,025 ) (67,112 ) (39,324 ) 48,306
cash, cash
equivalents, and
restricted cash
Cash, cash 265,499 388,306 288,798 272,888
equivalents, and
restricted cash,
beginning of period
Cash, cash $ 249,474 $ 321,194 $ 249,474 $ 321,194
equivalents, and
restricted cash,
end of period
Supplemental
cash
flow
information:
Cash $ 49,263 $ 24,546 $ 94,020 $ 29,370
paid for
interest
(3)
(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.
12
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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 $ 250,730 $ 210,948 $ 438,071 $ 391,869
(1)
Capital expenditures (3,639 ) (3,770 ) (8,202 ) (12,950 )
Free cash flow $ 247,091 $ 207,178 $ 429,869 $ 378,919
(1)
13
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