What were the key takeaways from PTC’s earnings call?

What were the key takeaways from PTC's earnings call?

What is the revenue and EPS growth rate for PTC year over year?

What guidance did PTC's management provide for the next earnings period?

Did PTC beat or miss consensus estimates last quarter?

What is the market's earnings forecast for PTC next quarter?

What factors drove the changes in PTC's revenue and profit?

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- **Strategic Divestiture**: Sold Kepware and ThingWorx to TPG for up to $725M, freeing PTC to focus on CAD, PLM, AI, and SaaS.
- **Financial Strength**: Q4 ARR +8.5% YoY, free cash flow +16% YoY to $857M; guiding to $1B+ free cash flow in 2026.
- **AI and Growth**: Integrating AI into core products, with 2026 ARR guidance of 7.5-9.5% (excl. divested businesses).
- **Capital Return**: Planning $150-250M share buybacks/Q, starting with $200M in Q1 2026.
- **Operational Efficiency**: 310bps expansion in operating efficiency ratio to 45%, driven by ARR growth and cost control.

**【Management Remarks】**
- Announced definitive agreement to divest Kepware and ThingWorx businesses to TPG for up to $725 million in total cash consideration, with $565 million upfront payment expected in Q2 2026.
- Transaction aims to enhance operational focus on core CAD, PLM, AI, and SaaS offerings, aligning with Intelligent Product Lifecycle vision.
- Q4 2025 ARR grew 8.5% YoY (constant currency) to $2.446 billion, with free cash flow up 16% YoY to $857 million.
- Fiscal 2026 free cash flow guidance of $1 billion includes Kepware and ThingWorx until transaction close.

**【CEO Summary Section】**
- Fiscal 2025 execution highlights: 8.5% ARR growth, 16% free cash flow growth, and record deferred ARR under contract.
- Key wins: Largest Codebeamer deal in automotive, competitive displacement in med tech, and Onshape SaaS expansion.
- Fiscal 2026 ARR guidance: 7-9% with Kepware/ThingWorx, 7.5-9.5% without; targeting $1 billion+ free cash flow.
- Capital allocation strategy: Share buybacks ($150-250M/Q) and disciplined R&D investment.
- AI integration roadmap: New capabilities in ServiceMax, Onshape, Arena, and upcoming Creo updates.

**【CFO Financial Commentary】**
- Q4 2025 ARR (constant currency): $2.446 billion (+8.5% YoY), with Kepware/ThingWorx contributing $160M ARR (-1% YoY).
- Fiscal 2026 ARR guidance: 7-9% (incl. Kepware/ThingWorx), 7.5-9.5% (excl.).
- Free cash flow impact: $840M in 2026 if transaction closes April 1, 2026, with $160M one-time costs (taxes, fees).
- Fiscal 2026 revenue guidance: +10%+ first half, mid-single digits Q3, down Q4 due to 2025 Q4 overperformance.
- Operating efficiency ratio expanded 310bps to 45% in 2025, driven by ARR growth and cost control.

**【Q&A Key Highlights】**
- **Divestiture Rationale**: TPG's operational expertise better aligns with factory-floor IoT focus, freeing PTC to prioritize product data foundation and AI.
- **Free Cash Flow Tailwinds**: $1B+ guidance includes $174M tax benefit from Section 174, offset by $20M one-time CapEx.
- **Go-to-Market Momentum**: Verticalized sales force execution improving deal velocity, with Q4 deferred ARR skewed to 2026+.
- **AI Strategy**: Embedding generative AI in core products (e.g., ServiceMax, Onshape) to enable contextual data-driven decisions.
- **RPO Visibility**: 55% of total RPO expected to recognize in next 12 months, reflecting strong multiyear contract pipeline.


PTC Inc. (PTC) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PTC

PTC fundamentals

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