PTC (PTC) Q3 2024 earnings summary

Executive summary

• Q3'24 saw ARR grow 10% year-over-year (12% constant currency) to $2.13B, with free cash flow up 29% to $212M, reflecting strong subscription momentum and operational discipline.

• Revenue declined 4% year-over-year to $519M, mainly due to lower on-premises subscription license revenue and a shift to SaaS contracts.

• Leadership transition underway, eliminating COO and CRO roles to streamline operations and drive effectiveness.

• The company continues to align resources with five focus areas and maintains a differentiated product portfolio, supporting resilience in a challenging selling environment.

• Product and geographic diversification contributed to performance, with notable customer wins in automotive, medical equipment, and power systems sectors.

Financial highlights

• Q3'24 constant currency ARR reached $2.125B–$2.13B, up 12% year-over-year and within guidance.

• Q3'24 free cash flow was $212M, up 29% year-over-year, though slightly below $220M guidance due to timing; full-year target of $725M reaffirmed.

• Q3'24 revenue was $518.6M–$519M, down 4% year-over-year; recurring revenue was $482M, and professional services revenue was $30M.

• Q3'24 CAD ARR grew 8–10%, PLM ARR grew 10–13% year-over-year.

• Consistent ARR growth across Americas (13%), Europe (10%), and APAC (14%) in low to mid double digits.

Outlook and guidance

• FY'24 constant currency ARR guidance narrowed to 11–12% growth ($2.20–$2.22B), lowering the high end by $20M.

• Revenue guidance for FY'24 is $2.27–$2.32B (8–11% growth); free cash flow guidance remains at ~$725M.

• Q4'24 guidance: free cash flow of ~$83M, ARR of $2.2–$2.22B (11–12% growth).

• FY'24 GAAP EPS guidance is $2.78–$3.35; non-GAAP EPS guidance is $4.85–$5.21, up 12–20% year-over-year.

• Early view for FY'25: low double-digit ARR growth and free cash flow guidance of $825–$875M; share repurchases expected to resume around $300M.