PTC (PTC) 53rd Annual JPMorgan Global Technology, Media and Communications Conference summary

Guidance and market environment

• ARR growth guidance was revised from 10-9% to 9-7% due to customer caution and potential delays or downsizing of initiatives, reflecting global economic uncertainties and recent tariff news.

• Downside scenario planning considered both bottoms-up and top-down approaches, referencing past crises like COVID and the GFC to set a 7% low-end ARR growth.

• Customer caution is more pronounced in specific verticals, such as U.S. automotive, while sectors like federal aerospace and defense show robust demand.

• Underlying demand and pipeline quality remain strong, with no major project cancellations, though final outcomes depend on Q3 and Q4 decisions.

Go-to-market transformation and pipeline

• Sales organization shifted from geographic to vertical focus, targeting industrials, aerospace and defense, automotive, electronics, high-tech, and med tech.

• Transformation incurred a one-time $20 million expense for severance and consulting, with plans to rehire for new roles and capabilities.

• No quantifiable disruption observed from the transformation; pipeline creation increased in Q2 versus Q1 and the prior year.

• New Chief Revenue Officer brought in to drive sales process discipline and pipeline hygiene, with early positive cultural changes.

• Progress will be tracked primarily through incremental net new ARR growth, with potential for additional transparency metrics.

Product and growth strategy

• Software's growing role in hardware creates opportunities, especially for ALM and PLM products; Codebeamer acquisition has driven growth in regulated industries.

• Main growth drivers are upsell and expansion, followed by cross-sell, pricing, and new customer acquisition.

• Competitive landscape is stable with few major share shifts; Onshape SaaS-native CAD platform is seeing interest for competitive displacement.

• SLM often replaces homegrown or absent systems, while PLM and CAD expand within existing customers' divisions or product lines.