PTC (PTC) Q1 2025 earnings summary

Executive summary

• Fiscal Q1 2025 results exceeded guidance with 11% constant currency ARR growth and 29% free cash flow growth, despite a challenging macro environment and ongoing go-to-market changes.

• Strategic focus on five core product areas—PLM, ALM, SLM, CAD, and SaaS—with significant AI-driven advancements and digital transformation initiatives.

• Go-to-market transformation underway, including verticalization and new leadership, aimed at sustaining low double-digit ARR growth and enhancing customer value.

• Expanded customer adoption of Codebeamer ALM and Windchill PLM, displacing competitors and driving cross-sell opportunities, especially in med tech and defense.

• 27 of top 30 public medical device manufacturers use core offerings.

Financial highlights

• Q1'25 constant currency ARR reached $2.277B, up 11% year-over-year; as reported ARR: $2.205B, up 7%.

• Q1'25 revenue: $565M, up 3% year-over-year; recurring revenue comprised 93% of total.

• Free cash flow in Q1'25 was $236M, up 29% year-over-year, absorbing $11M in go-to-market realignment outflows.

• Q1'25 GAAP EPS: $0.68 (up 23% YoY); non-GAAP EPS: $1.10.

• Ended Q1'25 with $196M in cash and $1.548B in gross debt; leverage at 1.7x.

Outlook and guidance

• Fiscal 2025 constant currency ARR growth expected at 9%-10%; Q2 guidance at ~9.5%.

• Fiscal 2025 free cash flow guidance: $835M–$850M, absorbing $20M in realignment costs; about 60% expected in first half.

• Fiscal 2025 revenue guidance: $2,430M–$2,605M; non-GAAP EPS: $5.30–$6.30.

• Share repurchases of ~$300M planned for fiscal 2025, with $75M expected in Q2.

• Plan to retire $500M senior notes in FY'25 using cash and credit facility.