PTC Inc. announced impressive results for its fourth quarter of fiscal 2024, with non-GAAP earnings per share (EPS) of $1.54, reflecting a 28% increase compared to the same period last year. This figure surpassed the Zacks Consensus Estimate by 7.7%.
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Quarterly revenues reached $627 million, marking a 15% rise year over year, and just above the Zacks Consensus Estimate of $620.5 million. The strong performance was fueled by ongoing demand for PTC’s product lifecycle management (PLM) and computer-aided design (CAD) solutions.
In a move to enhance shareholder value, PTC announced a new $2 billion share repurchase program effective until September 30, 2027. The company plans to buy back approximately $300 million of its stock in fiscal 2025, starting in the fiscal first quarter. Additionally, PTC will retire $500 million in senior notes due in fiscal second quarter 2025.
Following the earnings announcement, PTC shares climbed 4.2% on November 6, closing at $198.04. Over the past year, the stock has increased by 33.7%, outperforming the sub-industry’s 22.1% growth rate.
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Revenue Insights
Recurring revenues amounted to $582.4 million, showing a 16.4% increase year over year. Meanwhile, perpetual licenses saw a substantial rise of 21%, reaching $9.9 million.
PTC Inc. Price, Consensus, and EPS Surprise
PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote
Revenue Breakdown by License, Support, and Services
License revenues, representing 38.2% of total revenues, increased to $239.5 million, a rise of 29.9% from the previous year.
Support and cloud services revenues, which accounted for 56.3%, rose by 8.9% to $352.9 million.
Professional services revenues, making up 5.5%, decreased by 10.4%, totaling $34.2 million.
Performance by Product Group
Both PLM and CAD businesses demonstrated solid growth. In the fourth quarter, PLM revenues hit $408 million, up 14% year over year, while CAD revenues reached $219 million, marking a 16% increase.
Annualized Recurring Revenue (ARR)
Annualized recurring revenues reached $2.255 billion, a 14% rise year over year. When adjusted for constant currency, ARR was $2.207 billion, reflecting a 12% increase. Strong growth was noted across all divisions and geographical regions.
For the fourth quarter, PLM and CAD ARR amounted to $1,387 million and $868 million, respectively, showing year-over-year increases of 15% and 13%.
Operating Metrics
Non-GAAP gross margin improved to 84.4%, up from 81.6% in the same quarter last year. Total operating expenses rose 3.3% year over year to $319.8 million. Non-GAAP operating income experienced a significant increase of 37.8%, reaching $276.6 million, while operating margin rose by 740 basis points to 44.1%.
Financial Health Overview
As of September 30, 2024, cash and cash equivalents stood at $266 million, which is a decrease from $288 million a year earlier. Total debt was $1.748 billion, up from $1.695 billion as of September 30, 2023. Cash from operating activities improved to $98 million, compared to $50 million in the prior year, while free cash flow rose to $94 million from $44 million.
Future Outlook
For the first quarter of fiscal 2025, PTC expects revenues to be between $540 million and $570 million. Non-GAAP EPS is projected between 75 cents and 95 cents, while cash from operations is anticipated to be $234 million, and free cash flow is forecasted to reach $230 million.
For the entirety of fiscal 2025, revenues are expected in the range of $2.505 billion to $2.605 billion, reflecting a 9% to 13% increase year over year. Non-GAAP EPS is anticipated between $5.60 and $6.30, representing a potential rise of 10% to 24%. Cash from operations is projected to be between $850 million and $865 million, with free cash flow expected in the range of $835 million to $850 million, indicating a 14% to 16% increase. PTC also forecasts a growth in ARR between 9% and 10% on a constant currency basis for fiscal 2025.
PTC’s Investment Position
Currently, PTC holds a Zacks Rank of #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Comparative Performance of Other Companies
Itron Inc. (ITRI) reported non-GAAP EPS of $1.84 for the third quarter of 2024, exceeding the Zacks Consensus Estimate by 62.8%. This marks an increase from earnings of 98 cents in the same quarter last year. ITRI shares have appreciated by 77% over the past year.
Watts Water Technologies, Inc. (WTS) delivered a third-quarter 2024 adjusted EPS of $2.03, slightly lower than the $2.04 reported in the prior-year quarter, but exceeded Zacks Consensus by 2%. WTS shares have risen by 5.2% in the past year.
Western Digital Corporation (WDC) recorded first-quarter fiscal 2025 non-GAAP earnings of $1.78 per share, surpassing the Zacks Consensus Estimate by 2.3%, following a loss of $1.76 per share in the prior-year quarter. WDC has seen a remarkable 51.1% increase in its shares over the last year.
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