PTC (PTC) investor relations material

Product strategy and innovation

• Focus on intelligent product life cycle, integrating engineering data across manufacturing, service, and supply chain for complex industries like automotive and medical technology.

• Data flows from engineering through manufacturing, ERP, and service systems, enabling rapid response to changes such as supplier shifts.

• Recent product launches include PTC Jetstream for collaborative design and PTC Orbit for managing as-maintained bills of materials, both receiving positive early feedback.

• AI is being infused holistically across the product lifecycle, moving from individual productivity gains to coordinated, end-to-end process improvements.

• AI tools are streamlining roles and processes, especially in code generation, QA, and customer support, with ongoing efforts to institutionalize these gains.

Pricing, packaging, and cloud strategy

• Core products remain seat-based, but AI features are introducing consumption-based pricing, with token models for advanced AI usage.

• Some AI products, like ServiceMax AI, already use a hybrid seat and consumption-based model.

• Cloud migration is not required for AI adoption; hybrid models allow on-premises data to access cloud-based AI, supporting regulated industries.

• Monetization tools are being developed for API connectivity and agent-based workflows.

• New customer price protection (CPP) contracts are replacing previous renewal negotiations, embedding 3%-4% annual price uplifts over three-year terms.

Market dynamics and growth opportunities

• CAD and PLM market share is growing through competitive displacements, especially as companies modernize digital foundations and consolidate systems.

• Codebeamer is expanding in automotive and compliance-critical industries, with strong European presence and cross-sell opportunities in the U.S.

• ServiceMax faced elevated churn but is stabilizing, with growth expected from AI enhancements and cross-selling into the Windchill base.

• Expansion efforts focus on demonstrating value in cost of goods sold and quality, not just engineering productivity.

• Industry partnerships and research are exploring text-to-code-to-CAD as the future for AI-driven design, leveraging existing CAD expertise.