PTC Announces Fiscal Second Quarter 2020 Results

Solid Q2’20 ARR, Revenue, Operating Margin and EPS Performance; Revises FY’20 Outlook

BOSTON — (BUSINESS WIRE) — April 29, 2020 — PTC (NASDAQ: PTC) today reported financial results for its fiscal second quarter ended March 28, 2020.

“Our performance in the second quarter was solid, with ARR growing 11% on a constant currency basis despite the increasingly challenging macro environment towards the end of the quarter. Revenue, operating margin and EPS results exceeded our expectations, reflecting the strength of our recurring revenue model. Given the durable nature of our business, we remain committed to delivering solid results for the remainder of FY’20 while navigating the current backdrop of macroeconomic uncertainty,” said James Heppelmann, President and CEO, PTC.

“We continue to work closely with our customers to address the ever-changing demands this crisis is having on their businesses. We are providing white-glove support to our many medical device and health-tech customers to ramp up production of critical medical equipment, and we announced free use of our Vuforia Chalk augmented reality remote support and collaboration technology during the crisis,” continued Heppelmann.

“The disruptive nature of the crisis is reinforcing the mission-critical nature of our broad technology portfolio – from the data access and collaboration capabilities of Windchill PLM, to the remote management enabled by our ThingWorx IoT solutions, to the remote collaboration and training of front-line workers enabled by our Vuforia AR suite, to our pure SaaS Onshape platform that enables engineers to work from anywhere and on any device. We will continue to drive innovation to further enhance our already robust product portfolio and we believe we will emerge even better positioned following this crisis,” concluded Heppelmann.

Second quarter 2020 highlights1

Key operating and financial highlights are set forth below. For additional details, please refer to the prepared remarks and financial data tables that have been posted to the Investor Relations section of our website at investor.ptc.com.

  • ARR was $1.18 billion. Growth of 10%, or 11% in constant currency, compared to Q2’19 reflects solid performance in our Core and Growth businesses, and in our global channel.
  • Revenue was $360 million in Q2’20. Growth of 24% compared to Q2’19 was driven by strength across our Core and Growth businesses.
  • Cash from operations was $88 million in Q2’20, compared to $141 million in Q2’19. Free cash flow was $82 million, compared to $120 million in Q2’19. Cash flow from operations and free cash flow included $18 million in restructuring payments and $2 million of acquisition-related payments.
  • Operating margin was 14% in Q2’20 on a GAAP basis compared to (8)% in Q2’19; non-GAAP operating margin was 29%, compared to 15% in Q2’19.
  • Total cash, cash equivalents, and marketable securities as of the end of Q2’20 was $884 million; total debt, net of deferred issuance costs, was $1.6 billion. We will redeem all $500 million of our 6% Senior Notes due 2024 on May 15, 2020.
_______________

1 We include operating and non-GAAP financial measures in our operational highlights. We revised the definition of ARR on September 5, 2019. The detailed definitions of these items 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.

Fiscal 2020 Outlook

“Our actions over the past few years to migrate the business to a more predictable recurring revenue model has made PTC more resilient than ever. Our revised fiscal 2020 guidance demonstrates our expectation that even in this challenging environment PTC will remain financially healthy and still post solid growth,” said Kristian Talvitie, EVP and CFO, PTC.

Revised Fiscal 2020 Guidance

Our revised fiscal 2020 financial outlook includes the following assumptions:

  • Impact of weakening of macroeconomic conditions related to the COVID-19 crisis.
  • A severe disruption in new bookings growth, down 30% YoY at the midpoint for the second half of the year.
    • The low end of the range assumes ~50% decline in new bookings for Q3’20 and Q4’20.
    • The high end of the range assumes a ~30% decline in new bookings for Q3’20 and a ~20% decline in Q4.
  • Churn deteriorates approximately 100 bps to 8%, rather than a modest improvement over FY’19.
  • Operating expense growth of roughly 2% YoY compared to our previous projection of 9% YoY due primarily to restructuring activity conducted in H1’20 as well as increased cost discipline related to headcount additions, variable compensation expense, travel and marketing expense.
  • GAAP tax rate is expected to be 20%, Non-GAAP tax rate is expected to be 19%.

In millions except per share amounts

Previous

Guidance

Revised

Guidance

YoY

ARR

$1,270 - $1,295

$1,220 - $1,255

9% - 12%

Cash from Operations

$245 - $265

~$222

~(22)%

Free cash flow (1)

$218 - $238

~$200

~(10)%

Revenue

$1,445 - $1,525

$1,400 - $1,430

11% - 14%

GAAP Operating Margin

11% - 15%

13% - 14%

800 - 900 bps

Non-GAAP Operation Margin (2)

26% - 29%

27% - 28%

700 - 800 bps

GAAP EPS

$0.71 - $1.23

$0.70 - $0.84

404% - 465%

Non-GAAP EPS (2)

$2.15 - $2.65

$2.20 - $2.35

34% - 43%

(1)

Cash from operations and free cash flow include ~$65 million of interest payments, ~$45 million of restructuring and ~$10 million of acquisition-related payments; free cash flow includes capital expenditures of ~$22 million.

(2)

The FY’20 non-GAAP guidance excludes the estimated items outlined in the table below, as well as any tax effects and discrete tax items (which are not known nor reflected).

In millions

 

 

FY’20

 

 

 

 

Acquisition-related charges

 

 

$7

Restructuring and other charges

 

 

$32

Intangible asset amortization expense

 

 

$56

Stock-based compensation expense

 

 

$102

Debt early redemption premium

 

 

$15

Total Estimated Pre-Tax GAAP adjustments

 

 

$212


1 | 2 | 3  Next Page »



Review Article Be the first to review this article
SolidCAM - Learn More


Featured Video
Editorial
Jobs
ROV Pilot II for TechnipFMC at Houston,, Texas
Mechanical Designer for TechnipFMC at Houston,, Texas
GIS Analyst #14713 for State of Missouri at Jefferson City,, Missouri
Geographic Information System Analyst II for State of Idaho at Boise, Idaho
Upcoming Events
ASME AM Medical Virtual Summit at NY - May 27, 2020
AM Medical at Minneapolis MN - May 27 - 28, 2020
Sensors Expo & Conference at SAN JOSE CA - Jun 9 - 11, 2020
Realize LIVE 2020 at Mandalay Bay Las Vegas NV - Jun 22 - 25, 2020
Kenesto: 30 day trial
MasterCAM
SolidCAM:



© 2020 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise