Yahoo Finance PTC's Q4 Earnings and Revenues Beat Estimates, Rise Y/Y
PTC Inc PTC reported fourth-quarter fiscal 2022 non-GAAP earnings of $1.27 per share, up 15.5% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate by 11.4%.
Revenues came in at $508 million, up 6% year over year (up 12% at constant currency or cc). The top line beat the Zacks Consensus Estimate by 2%.
The year-over-year improvement in the top line was driven by steady demand for products (digital transformation and SaaS) across all segments. The company is also working toward accelerating the SaaS transition by launching Windchill plus and other SaaS offerings like Creo Plus in fiscal 2023. In the fourth quarter, the company also landed several Windshields deals. Continued momentum in Onshape and Arena will further assist the company in the SaaS transition.
PTC Inc. Price, Consensus and EPS Surprise
PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote
Product Lifecycle Management (PLM) and computer-aided design (CAD) businesses continue to witness healthy growth. In fiscal 2022, PLM and CAD revenues were $1.137 billion and $796 million, respectively.
Synergies from the recent acquisition of Codebeamer were further tailwinds. Unfavorable forex movement and the impact of the Russia-Ukraine war were dampeners.
For fiscal 2022, the company reported non-GAAP earnings of $4.58 per share, up 15.4% on a year-over-year basis. Revenues came in at $1.933 million, up 7% year over year (up 11% at cc)
In the past year, PTC has lost 4.3% compared with the industry’s decline of 36.8%.
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Top Line in Detail
Recurring revenues of $463.1 million rose 7.8% year over year. Perpetual licenses declined 24.3% to $7.9 million.
Revenues by License, Support and Services
License revenues (43.3% of total revenues) were $220 million, up 10.4% from the year-ago quarter’s figure.
Support and cloud services revenues (49.4%) of $251 million increased 4.4% year over year.
Professional services revenues (7.3%) were $37 million, down 9.8% year over year.
Revenues by Product Group
The company has two new business units, Digital Thread and Velocity. Digital Thread includes products like Creo CAD, Windchill PLM, Thingworx IoT and Vuforia AR. The Velocity unit comprises products like Onshape CAD and Arena PLM.
Revenues from Digital Thread came in at $485 million, up 4.3% year over year. Revenues from the Velocity segment totaled $22 million, up 37.5%.
Revenues from Digital Thread - Core came in at $340 million, up 3.7% from the prior-year quarter’s levels.
Revenues from Digital Thread - Growth came in at $71 million, down 5.3% on a year-over-year basis.
Revenues from Digital Thread - FSG (Focused Solutions Group) came in at $75 million, up 23% from the prior-year quarter’s levels.
ARR Performance
Annualized recurring revenues (ARR) were $1.572 billion, up 7% year over year (up 16% at cc). The uptick was driven by strong performance across all divisions and geographies.
ARR from Digital Thread - Core came in at $1.054 billion, up 4% year over year (up 14% at cc). Growth was driven by strength in Creo CAD and Windchill PLM
products.
ARR from Digital Thread - Growth came in at $216 million, up 12% year over year (up 19% at cc). The upside can be attributed to higher Digital Performance Management deals.
ARR from Digital Thread - FSG totaled $209 million, up 10% year over year (up 19% at cc).
Velocity segment ARR came in at $94 million, up 29% (up 29% at cc) year over year, owing to continued momentum in Onshape and Arena.
Operating Details
Non-GAAP gross margin increased 130 bps on a year-over-year basis at 83.3%.
Total operating expenses were unchanged year over year at $266 million.
Operating income on a non-GAAP basis improved 15.9% year over year to $204 million.
Operating margin on a non-GAAP basis expanded 370 bps on a year-over-year basis to 40.3%.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash, cash equivalents and marketable securities were $272 million compared with $322 million as of Jun 30, 2022.
Total debt, net of deferred issuance costs, was $1.35 billion as of Sep 30, 2022, compared with $1.43 billion as of Jun 30, 2022.
Cash provided by operating activities came in at $38 million compared with the prior-quarter figure of $117 million.
The free cash flow was $29 million compared with $112 million reported in the previous quarter.
Fiscal 2023 Guidance
For fiscal 2023, ARR is now expected to be $1.730-$1.790 billion, which indicates a rise of 10-14% year over year at cc.
Revenues for fiscal 2023 are projected in the range of $1.910-$1.990 billion, indicating a decline of 1% to a rise of 3% year over year.
For fiscal 2023, cash from operations is projected to be $580 million, indicating an increase of 33% on a year-over-year basis. The free cash flow is forecasted to be $560 million, suggesting 35% growth.
Adjusted free cash flow is expected to be $562 million, up 20% year over year.
For the fiscal first quarter, PTC expects ARR to be between $1.580 and $1.6 billion. Cash from operations is projected to be $170 million, and free cash flow is forecasted to be $165 million. Adjusted free cash flow is expected to be $166 million.
Zacks Rank & Stocks to Consider
Currently, PTC carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology space are InterDigital IDCC, Pure Storage PSTG and Jabil JBL. InterDigital and Jabil currently sport a Zacks Rank #1 (Strong Buy) whereas Pure Storage currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 81.9%. Shares of IDCC have decreased 34% in the past year.
The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 10.7% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 0.8% in the past year.
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