PTC Inc. PTC reported second-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $1.46, up 26% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate by 18.7%.
Revenues came in at $603 million, up 11% year over year (up 11% at constant currency or cc). The top line beat the Zacks Consensus Estimate by 4.8%.
The year-over-year improvement in the top line was driven by steady demand for its computer-aided design (CAD) and product lifecycle management (PLM).
PTC Inc. Price, Consensus and EPS Surprise
PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote
Top Line in Detail
Recurring revenues of $564 million rose 14.6% year over year. Perpetual licenses decreased 24.3% to $6.7 million.
Revenues by License, Support and Services
License revenues (38.9% of total revenues) were $234.3 million, up 18.9% from the year-ago quarter’s figure.
Support and cloud services revenues (55.8%) of $336.4 million increased 10.6% year over year.
Professional services revenues (5.3%) were $32.3 million, down 21.4% year over year.
Revenues by Product Group
PLM and CAD businesses continue to witness healthy growth. In the fiscal second quarter, PLM revenues were $373 million, rising 8% year over year. CAD revenues were $230 million, up 16% year over year.
ARR Performance
Annualized recurring revenues (ARR) were $2.088 billion, up 11% year over year (up 12% at cc). The uptick was driven by strong performance across all divisions and geographies.
In the fiscal second quarter, PLM and CAD ARR were $1,275 million and $814 million, rising 12% and 9% year over year, respectively.
Operating Details
Non-GAAP gross margin increased 230 basis points (bps) on a year-over-year basis to 84.2%.
Total operating expenses increased $7 million year over year to $313 million.
Operating income on a non-GAAP basis increased 22.7% year over year to $254 million.
Operating margin on a non-GAAP basis increased 390 bps on a year-over-year basis to 42%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash, cash equivalents and marketable securities were $249 million compared with $265 million as of Dec 31, 2023.
Total debt, net of deferred issuance costs, was $2.005 billion as of Mar 31, 2024, compared with $2.260 billion as of Dec 31, 2023.
Cash provided by operating activities was $251 million compared with the prior-year quarter’s figure of $211 million.
The free cash flow was $247 million compared with $207 million reported in the year-ago quarter.
Fiscal 2024 Guidance
For fiscal 2024, ARR is expected to be in the range of $2.200-$2.240 billion, which indicates a rise of 11-13% year over year at cc.
Revenues for fiscal 2024 are projected to be in the range of $2.270-$2.340 billion, indicating a rise of 8-12% year over year.
For fiscal 2024, cash from operations is projected to be $745 million, indicating a rise of 22% on a year-over-year basis. The free cash flow is forecasted to be $725 million, suggesting a 23% increase year over year.
For the fiscal third quarter, PTC expects ARR between $2.115 and $2.130 billion. Cash from operations is projected to be $225 million, and free cash flow is forecasted to be $220 million.
Zacks Rank & Stocks to Consider
Currently, PTC carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Badger Meter BMI, Pinterest PINS and Arista Networks ANET. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2024 EPS has increased 9.9% in the past 60 days to $3.89. BMI’s long-term earnings growth rate is 12.3%.
Badger Meter’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 12.7%. BMI shares have risen 35.8% in the past year.
The Zacks Consensus Estimate for PINS’s 2024 EPS has increased 0.7% in the past 60 days to $1.34. PINS’ long-term earnings growth rate is 20.1%.
Pinterest’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, delivering an average earnings surprise of 37.4%. Shares of PINS have gained 13% in the past year.
The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.4% in the past 60 days to $7.49. ANET’s long-term earnings growth rate is 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.7% in the past year.
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