PTC Announces Q1 Results and Initiates Q2 Guidance, Maintains FY Targets

Please refer to the standalone Hyundai Motor Company and Kia Motors Corporation press release issued earlier today for more details on this important engagement.

Heppelmann added, “We had 22 large deals (license + services revenue of more than $1 million) in Q1’11, compared to 10 in Q1’10. We believe this is an indicator of the strength of our pipeline for business opportunities with new and existing customers. During the quarter we recognized revenue from leading organizations such as Fresenius Medical, Gemalto, GKN, Lockheed Martin, Northrup Grumman, Raytheon, Schaeffler, System SPA, and Vestas Wind Systems.”

Jeff Glidden, chief financial officer, commented, “From a profitability standpoint, while we outperformed our revenue targets, our non-GAAP EPS result of $0.22 was adversely impacted by approximately $0.03 to $0.04 related to contract accounting treatment of the first phase of our expected multi-year engagement with Hyundai Motor Company and Kia Motors Corporation, for which we did not recognize any revenue during the quarter.”

“We ended the first quarter with $183 million of cash, which was negatively impacted by approximately $48 million related to a previously announced litigation settlement in Japan,” continued Glidden. “Our non-GAAP tax rate was lower than expected during the quarter primarily due to the extension of the R&D tax credit.”

Outlook Commentary

“Based on the market momentum we are seeing, the strength of our pipeline, our sales capacity, many important product initiatives such as the launches of Windchill 10 and Creo, and the significant interest we are seeing in other products such as Arbortext, Relex and InSight, we continue to be excited about our long-term growth opportunity,” said Heppelmann. “We remain confident and committed to achieving our goal of a 20% non-GAAP EPS CAGR through 2014.”

“For Q2 we are providing guidance of $260 to $270 million in revenue with non-GAAP EPS of $0.22 to $0.26,” Glidden added. “From a revenue perspective, we are expecting approximately 20% to 25% year-over-year growth in our license revenue in Q2, with our combined services and maintenance businesses up in the mid-single digit range resulting in high single- to low double-digit year-over-year growth in total revenue.” For Q2 the GAAP EPS target is $0.11 to $0.15.

The Q2 guidance assumes a non-GAAP tax rate of 24%, a GAAP tax rate of 25% and 122 million diluted shares outstanding. The Q2 non-GAAP guidance excludes approximately $10.2 million of stock-based compensation expense, $7.5 million of acquisition-related intangible asset amortization expense and their related income tax effects.

Glidden continued, “Looking to the full year FY’11, we are continuing to target revenue growth of 10% to 12%. We are expecting license revenue growth of approximately 20% to 25%, services revenue growth of approximately 10% and maintenance revenue growth of approximately 5%. We are committed to achieving our non-GAAP EPS target of $1.20 to $1.25, while balancing investments in future growth with our commitment to 20% non-GAAP EPS growth.” For FY’11 the GAAP EPS target is $0.73 to $0.78.

The FY’11 targets assume a non-GAAP tax rate of 24%, a GAAP tax rate of 25% and 122 million diluted shares outstanding. The FY’11 non-GAAP guidance excludes approximately $44.2 million of stock-based compensation expense, $29.1 million of acquisition-related intangible asset amortization, $0.7 million of foreign currency transaction losses, and their related income tax effects.

Q1 Earnings Conference Call and Webcast

Prepared remarks for the conference call have been posted to the investor relations section of our website. The prepared remarks will not be read live; the call will be primarily Q&A.

What:     PTC Fiscal Q1 Conference Call and Webcast
 
When: Thursday, January 27th, 2011 at 8:30 am (ET)
 

Dial-in:

1-800-857-5592 or 1-773-799-3757

Call Leader: James Heppelmann

Passcode: PTC

 
Webcast:

www.ptc.com/for/investors.htm

 
Replay:

The audio replay of this event will be archived for public replay until 4:00 pm (CT) on February 1, 2011 at 1-800-839-1117 or 203-369-3355. To access the replay via webcast, please visit www.ptc.com/for/investors.htm .

 


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