"In our second fiscal quarter, we again delivered solid results. We have a differentiated strategy that leverages our unique product portfolio to enable our customers with their digital transformation journeys. Our consistent ARR and free cash flow growth continues to highlight the value we are bringing to our customers and the stability of our business model," said Neil Barua, CEO, PTC.
"We are updating our mid-term ARR targets to low double-digit ARR growth, which is consistent with our track record of ARR growth over the past 5 years. Importantly, we are reiterating our mid-term cash flow targets as we remain confident in our ability to expand our operating efficiency while continuing to invest in the business to deliver increasing value to our customers," concluded Barua.
Second Quarter 2024 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 | Q2'24 | Q2'23 | YoY Change |
| Q2'24
|
ARR as reported | $2,088 | $1,882 | 11 % |
|
|
Constant currency ARR | $2,075 | $1,850 | 12 % |
| $2,050 - $2,065 |
Operating cash flow | $251 | $211 | 19 % |
| ~$245 |
Free cash flow | $247 | $207 | 19 % |
| ~$240 |
Revenue1 | $603 | $542 | 11%2 |
| $560 - $590 |
Operating margin1 | 30 % | 23%3 | ~720bps |
|
|
Non-GAAP operating margin1 | 42 % | 38 % | ~390bps |
|
|
| Earnings per share 1 | $0.95 | $0.53 3 | 78 % |
| $0.57 - $0.80 |
| Non-GAAP earnings per share 1 | $1.46 | $1.16 | 26 % |
| $1.10 - $1.30 |
| Total cash and cash equivalents | $249 | $320 | (22 %) |
|
|
| Gross debt 4 | $2,011 | $2,545 5 | (21 %) |
|
|
|
|
|
| 1 | Revenue and, as a result, operating margin, operating profit, and earnings per share are impacted under ASC 606. |
| 2 | In Q2'24, revenue growth was 11% year over year on a constant currency basis. |
| 3 | In Q2'23, operating margin and EPS included a negative impact due to acquisition and transaction-related charges for the ServiceMax acquisition of $12 million or $0.10. |
| 4 | Gross debt excludes unamortized debt issuance costs. |
| 5 | Q2'23 gross debt included a deferred acquisition payment related to ServiceMax of $620 million, which was paid in October 2023. |
