"In our fourth fiscal quarter, we again delivered solid ARR and cash flow results. We reported ARR growth of 26%, organic ARR growth of 15%, and organic constant currency ARR growth of 13%. Our ServiceMax® business contributed an additional 11 points of ARR growth, taking constant currency ARR growth to 23%. Our operating cash flow was $50 million in Q4, up 29% year over year, and $611 million in FY'23, up 40%. Our free cash flow was $44 million in Q4, up 52% year over year, and $587 million in FY'23, up 41%," said James Heppelmann, CEO, PTC.
"Our differentiated product portfolio and our industry-leading SaaS capabilities align well to the manufacturing industry's push for digital transformation. On a constant currency basis, Creo and Windchill ARR continued to grow at a double-digit pace, growing 10% and 16% respectively; ServiceMax ended fiscal 2023 at the $170 million of ARR we guided to previously; and our Codebeamer ARR has more than doubled since we acquired the business six quarters ago. Our strong market position and solid execution, coupled with our subscription model, position PTC to continue delivering durable and consistent ARR and cash flow growth," concluded Heppelmann.
Fourth Quarter and Full Year 2023 Highlights
Key operating and financial highlights are set forth below. 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 | Q4'23 | Q4'22 | YoY Change |
| Q4'23
|
ARR as reported | $1,979 | $1,572 | 26 % |
|
|
Constant currency ARR (FY'23 Plan FX rates) | $1,941 | $1,572 | 23 % |
| $1,935 - $1,950 |
Organic ARR as reported | $1,807 | $1,572 | 15 % |
|
|
Constant currency organic ARR | $1,770 | $1,572 | 13 % |
|
|
Operating cash flow | $50 | $38 | 29 % |
| ~$44 |
Free cash flow | $44 | $29 | 52 % |
| ~$42 |
| Revenue 1 | $547 | $508 | 8 % |
| $540 - $570 |
| Operating margin 1 | 22 % | 29 % | -660 bps |
|
|
| Non-GAAP operating margin 1 | 37 % | 40 % | -350 bps |
|
|
| Earnings per share 1 | $0.38 2 | $0.90 2 | (58 %) |
| $0.47 - $0.77 |
| Non-GAAP earnings per share 1 | $1.20 2 | $1.27 2 | (5 %) |
| $0.95 - $1.25 |
| Total cash and cash equivalents | $288 | $272 | 6 % |
|
|
| Gross debt | $2,322 3 | $1,359 | 71 % |
|
|
|
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| 1 In Q4'23, revenue growth was 6% year over year on a constant currency basis. Revenue and, as a result, operating margin,
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| 2 In Q4'23, both EPS and non-GAAP EPS were impacted by increased interest expense. Q4'23 EPS included an impact of
| |||||
| 3 Q4'23 gross debt includes a deferred acquisition payment related to ServiceMax of $620 million, which was paid in October
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