"In our first fiscal quarter, we again delivered strong ARR and cash flow results that exceeded our guidance ranges. We reported ARR growth of 11%, organic ARR growth of 10%, and organic constant currency ARR growth of 14%. The Codebeamer™ business, which we acquired in Q3'22, added an additional point of ARR growth, taking constant currency ARR growth to 15%. In Q1, our cash from operations was $181 million, up 31% year over year, and our free cash flow was $172 million, up 28% year over year," said James Heppelmann, President and CEO, PTC.
"Our product portfolio, now increasingly differentiated with the acquisition of ServiceMax, and our industry-leading SaaS capabilities align well to the manufacturing industry's push for digital transformation. Despite uncertain macroeconomic conditions, the resiliency of our business due to our subscription model and our strong market position, coupled with solid execution and prudent financial management, position PTC for continued solid financial performance in fiscal 2023," concluded Heppelmann.
First Quarter 2023 Highlights
Key operating and financial highlights are set forth below. For additional details, please refer to the Q1'23 earnings presentation and financial data tables that have been posted to the Investor Relations section of our website at investor.ptc.com. The definitions of our operating and non-GAAP financial measures 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.
$ In millions | Q1'23 | Q1'22 | YoY Change | Q1'23
|
ARR as reported | $1,663 | $1,496 | 11 % |
|
ARR at constant currency | $1,603 | $1,389 | 15 % | $1,580 - $1,600 |
Organic ARR as reported | $1,645 | $1,496 | 10 % |
|
Organic ARR at constant currency | $1,586 | $1,389 | 14 % |
|
Cash from operations | $181 | $138 | 31 % | ~$170 |
Free cash flow | $172 | $134 | 28 % | ~$165 |
Revenue1 | $466 | $458 | 2 % |
|
| Operating margin 1 | 23 % | 14 % | 900 bps |
|
| Non-GAAP operating margin 1 | 36 % | 35 % | 100 bps |
|
| Earnings per share 1 | $0.63 | $0.39 2 | 63 % |
|
| Non-GAAP earnings per share 1 | $0.99 | $0.95 | 4 % |
|
| Total cash and cash equivalents | $388 | $296 | 31 % |
|
| Gross debt | $1,359 | $1,450 | -6 % |
|
| 1 | In Q1'23, revenue was up 9% year over year, on a constant currency basis. Revenue and, as a result, operating margin, operating profit, and earnings per share are impacted by revenue recognition under ASC 606. |
| 2 | In Q1'22, earnings per share included a $0.29 impact related to restructuring, partially offset by a $0.08 benefit related to a gain on an investment. |
