PTC Q4 Earnings and Revenues Surpass Estimates, Improve Y/Y
Zacks Investment Research | Nov 03, 2021 10:09PM ET
PTC (NASDAQ:PTC) Inc. PTC Inc. Quote
The company also created two new business units namely — Digital Thread and Velocity. Digital Thread includes products like Creo computer-aided design or CAD, Windchill PLM, Thingworx IoT and Vuforia AR. The Velocity unit comprises products like Onshape CAD and Arena PLM.
h3 Top Line in Detail/h3Recurring revenues of $429.4 million increased 22.6% year over year. Perpetual license of $10.4 million increased 19.5% from the year-ago quarter’s figure.
h3 Revenues by License, Support and Services/h3License revenues (41.5% of total revenues) were $199.3 million, up 41.8% from the year-ago quarter’s figure.
Support and cloud services revenues (50%) of $240.4 million increased 10.2% year over year.
Professional services revenues (8.5%) of $40.9 million, up 27.1% year over year.
h3 Revenues by Product Group/h3Revenues from Core Product Group — which includes computer-aided design (CAD) & Product Lifecycle Management (PLM) offerings — came in at $328 million, up 21% year over year (up 19% cc).
Revenues from Growth Product Group (which includes IoT, AR & Onshape) totaled $91 million, up 35% year over year (up 34% at cc).
Revenues from Focused Solutions Group (FSG) amounted to $61 million, up 18% year over year (up 17% at cc).
h3 Revenue by Product Group (New)/h3Revenues from Digital Thread came in at $465 million, up 20% year over year. Revenues in the Velocity segment came in at $16 million, up 586% year over year.
Revenues from Digital Thread - Core came in at $328 million, up 21% from the prior-year quarter’s levels.
Revenues from Digital Thread - Growth came in at $75 million, increasing 16% from the year-ago quarter’s figure.
Revenues from Digital Thread - FSG came in at $61 million, increasing 18% from the prior quarter year.
h3 ARR Performance/h3Annualized recurring revenues (ARR) were $1.475 billion, up 16% year over year (up 16% at cc). The uptick was driven by strong performance of Core and Growth divisions along with contribution from Arena Solutions.
ARR from Core Product Group (CAD & PLM) came in at $1.013 billion, up 11% year over year (up 12% at cc). Growth was driven by strength in PLM and CAD solutions.
ARR from Growth Product Group (IoT, AR & Onshape) came in at $272 million, up 50% year over year (up 50% at cc). The upside can be attributed to strength in Onshape and Arena Solutions as well as IoT offerings.
ARR from FSG came in at $190 million, up 6% year over year (up 6% at cc) driven by systems and software engineering solutions.
h3 Operating Details/h3Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis to 82%.
Get The News You Want
Total operating expenses increased 11% year over year to $265.8 million mainly due to research and development, sales and marketing along with general and administrative costs.
Operating income on a non-GAAP basis increased 42.4% year over year to $176.1 million.
Operating margin on a non-GAAP basis expanded 500 bps on a year-over-year basis to 36.6%.
h3 Balance Sheet & Cash Flow/h3As of Sep 30, 2021, cash, cash equivalents and marketable securities were $327 million compared with $366 million as of Jun 30, 2021.
Total debt, net of deferred issuance costs, was $1.4 billion as of Sep 30, 2021, up from $1.5 billion, as of Jun 30, 2021. The company repaid $40 million under its revolver facility in the quarter under review.
Cash provided by operating activities came in at $45 million compared with the prior-quarter’s figure of $88 million.
Free cash flow was $32 million compared with $85 million reported in the previous quarter.
In the quarter under review, the company repurchased shares worth $30 million.
h3 Guidance/h3PTC continues to expect overall macroeconomic backdrop to be consistent in the first half of 2022 and the same to start moderating in the second half of fiscal 2022.
Fiscal 2022 revenues are now projected between $1.85 billion and $1.975 billion, which indicates a rise of 2-9% year over year.
The Zacks Consensus Estimate for revenues is currently pegged at $1.89 billion, suggesting year-over-year growth of 7.9%.
ARR is now expected to be $1.615-$1.66 billion, which indicates a rise of 10-13% year over year.
Non-GAAP operating expenses are anticipated to increase in the range of 2-3%. The company expects costs to increase owing to hiring and higher investments in SaaS business.
Cash from operations is projected to be $430 million, indicating an increase of 17% on a year-over-year basis. Free cash flow is forecast to be $400 million, which suggests 16% year-over-year growth in fiscal 2022.
h3 Zacks Rank & Stocks to Consider/h3Currently, PTC carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include HP Inc (NYSE:HPQ)
Long-term earnings growth rate of HP Inc, Synaptics and Etsy is pegged at 12.7%, 10% and 19.7%, respectively.
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. To read this article on Zacks.com click here.