PTC Inc. (PTC) Bundle
A Brief History of PTC Inc.
PTC Inc., founded in 1985, has evolved significantly over the years, establishing itself as a leader in the software industry, particularly in product lifecycle management (PLM) and computer-aided design (CAD). The company became publicly traded in 1989 on the NASDAQ under the ticker symbol PTC.
Acquisitions and Growth
In recent years, PTC has expanded its portfolio through strategic acquisitions. Notably, the acquisition of ServiceMax in early 2023 for approximately $828.2 million has enhanced PTC's capabilities in field service management, contributing significantly to revenue growth.
Financial Performance in 2024
As of June 30, 2024, PTC reported a total revenue of $1.671 billion for the nine months ended, representing an 8% increase from $1.550 billion in the same period of 2023. The company’s operating income rose to $394.1 million compared to $337.3 million in the previous year, reflecting a 17% increase.
| Financial Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Total Revenue | $518.6 | $542.3 | (4%) |
| Operating Income | $95.8 | $109.9 | (13%) |
| Net Income | $68.978 | $61.398 | 11% |
| Diluted Earnings Per Share | $0.57 | $0.51 | 11% |
Recurring Revenue
Recurring revenue, which comprises on-premises subscriptions, perpetual support, and SaaS offerings, reached $1.552 billion for the nine months ended June 30, 2024, up from $1.408 billion in the previous year, marking a 10% increase.
| Recurring Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| On-Premises Subscription | $7.1 | $8.3 |
| Perpetual Support | $30.0 | $35.7 |
| SaaS | $481.6 | $498.4 |
Cash Flow and Capital Expenditures
For the nine months ended June 30, 2024, PTC reported cash provided by operating activities of $651.9 million, up from $561.1 million in the same period of 2023. Free cash flow also increased to $642.0 million from $543.1 million.
| Cash Flow Metrics | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Cash Provided by Operating Activities | $651.9 | $561.1 |
| Capital Expenditures | ($9.8) | ($18.0) |
| Free Cash Flow | $642.0 | $543.1 |
Debt Management
As of June 30, 2024, PTC's total debt stood at $1.816 billion, with a significant portion attributed to its acquisitions. The company maintained compliance with all financial covenants associated with its debt obligations.
| Debt Metrics | Amount (in millions) |
|---|---|
| 4.000% Senior Notes due 2028 | $500.0 |
| 3.625% Senior Notes due 2025 | $500.0 |
| Credit Facility Revolver Line | $322.0 |
| Credit Facility Term Loan | $493.8 |
A Who Owns PTC Inc. (PTC)
Major Shareholders
As of 2024, PTC Inc. has a diversified ownership structure, with significant stakes held by institutional investors and mutual funds. The largest shareholders include:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 9.8% | 11,770,000 |
| BlackRock, Inc. | 8.5% | 10,200,000 |
| SSgA Funds Management, Inc. | 7.3% | 8,800,000 |
| FMR LLC (Fidelity) | 5.6% | 6,700,000 |
| Invesco Ltd. | 4.2% | 5,000,000 |
Insider Ownership
Insider ownership is also a critical aspect of PTC's ownership structure. As of 2024, key executives and board members hold the following percentages:
| Insider | Position | Ownership Percentage | Number of Shares |
|---|---|---|---|
| James Heppelmann | CEO | 1.5% | 1,800,000 |
| Kristian Talvitie | CFO | 0.7% | 850,000 |
| Other Executives | Various | 2.0% | 2,400,000 |
Institutional Ownership
Institutional ownership represents a substantial portion of PTC's equity, reflecting confidence in the company's future performance:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| Vanguard Total Stock Market Index Fund | 5.5% | 6,600,000 |
| iShares Russell 1000 Growth ETF | 4.1% | 5,000,000 |
| SPDR S&P 500 ETF Trust | 3.8% | 4,600,000 |
Recent Changes in Ownership
Recent trends indicate a slight increase in institutional ownership over the past year, with notable purchases from large investment firms:
- Vanguard Group increased its stake by 1.2%.
- BlackRock acquired an additional 0.8% of shares during the fiscal year.
- Fidelity has been gradually increasing its holdings, reflecting positive sentiment towards PTC's strategic direction.
Market Capitalization
As of mid-2024, PTC Inc. has a market capitalization of approximately $12.0 billion, reflecting its strong position in the software industry.
Conclusion
PTC's ownership landscape is characterized by a mix of institutional and insider ownership, indicative of a well-supported public company. The significant stakes held by major institutional investors highlight confidence in PTC's growth and operational strategy moving forward.
PTC Inc. (PTC) Mission Statement
Overview of PTC's Mission Statement
PTC Inc. is dedicated to providing technology solutions that facilitate digital transformation across various industries. The company aims to empower organizations to innovate faster, improve operational efficiency, and deliver superior customer experiences through its comprehensive suite of software solutions.
Financial Performance Indicators
As of June 30, 2024, PTC reported significant financial metrics indicative of its operational performance:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Annual Run Rate (ARR) | $2.13 billion | $1.93 billion | 10% |
| Total Revenue | $518.6 million | $542.3 million | (4%) |
| Total Recurring Revenue | $481.6 million | $498.4 million | (3%) |
| Operating Income | $95.8 million | $109.9 million | (13%) |
| Net Income | $69.0 million | $61.4 million | 12% |
| Diluted Earnings Per Share | $0.57 | $0.51 | 11% |
| Free Cash Flow | $212.2 million | $164.1 million | 29% |
Strategic Focus Areas
PTC's mission emphasizes several key strategic areas:
- Innovation: PTC focuses on continuous innovation in its product offerings, particularly in areas such as CAD, PLM, and IoT.
- Customer Success: The company prioritizes customer satisfaction and aims to enhance user experience through tailored solutions.
- Digital Transformation: PTC assists organizations in their digital transformation journeys, enabling them to leverage data and technology effectively.
Market Position and Competitive Advantage
PTC positions itself as a leader in the digital transformation landscape, leveraging its strengths in:
- Comprehensive Solutions: A broad portfolio of solutions that cater to various industry needs.
- Robust Partnerships: Collaborations with key technology partners to enhance product capabilities.
- Global Reach: Operations in multiple regions, facilitating a diverse customer base.
Recent Developments
In 2024, PTC has made strategic acquisitions and enhancements to its product suite, particularly with the integration of ServiceMax, which has contributed significantly to its revenue growth.
Financial Outlook
For the remainder of FY 2024, PTC anticipates continued growth driven by the expansion of its SaaS offerings and a focus on enhancing customer engagement.
| Debt Obligations | June 30, 2024 | September 30, 2023 |
|---|---|---|
| 4.000% Senior Notes due 2028 | $500.0 million | $500.0 million |
| 3.625% Senior Notes due 2025 | $500.0 million | $500.0 million |
| Credit Facility Revolver Line | $322.0 million | $202.0 million |
| Credit Facility Term Loan | $493.8 million | $500.0 million |
| Total Debt | $1,815.8 million | $1,702.0 million |
| Total Debt, Net of Issuance Costs | $1,811.2 million | $1,695.8 million |
As of June 30, 2024, PTC's total debt stood at $1.82 billion, reflecting its financial strategy to support growth initiatives through leveraging debt while maintaining compliance with all covenants.
How PTC Inc. (PTC) Works
Business Overview
PTC Inc. specializes in software solutions for product lifecycle management (PLM), computer-aided design (CAD), and the Internet of Things (IoT). As of June 30, 2024, PTC's Annual Run Rate (ARR) reached $2.13 billion, reflecting a 10% increase year-over-year.
Financial Performance
In the third quarter of fiscal year 2024 (Q3 FY24), PTC reported total revenue of $518.6 million, a decrease of 4% compared to Q3 FY23. The decline was influenced by a reduction in on-premises subscription license revenue.
| Financial Metrics | Q3 FY24 | Q3 FY23 | Change (%) |
|---|---|---|---|
| Total Revenue | $518.6 million | $542.3 million | -4% |
| Gross Margin | $406.7 million | $426.5 million | -5% |
| Operating Income | $95.8 million | $109.9 million | -13% |
| Net Income | $68.978 million | $61.398 million | +12.9% |
| Diluted Earnings Per Share | $0.57 | $0.51 | +11% |
Revenue Breakdown
For Q3 FY24, PTC's revenue sources were categorized as follows:
| Revenue Source | Q3 FY24 | Q3 FY23 | Change (%) |
|---|---|---|---|
| Software Revenue | $488.6 million | $506.7 million | -4% |
| Professional Services | $30.0 million | $35.7 million | -16% | Recurring Revenue | $481.6 million | $498.4 million | -3% |
Cost Structure
PTC's total cost of revenue for Q3 FY24 was $111.9 million, with a gross margin of $406.7 million, resulting in a gross margin percentage of 78%.
The operating expenses totaled $310.9 million, which was a 2% decrease from the previous year.
| Operating Expenses | Q3 FY24 | Q3 FY23 | Change (%) |
|---|---|---|---|
| Sales and Marketing | $140.3 million | $145.1 million | -3% |
| Research and Development | $110.3 million | $103.8 million | +6% |
| General and Administrative | $49.7 million | $57.1 million | -13% |
Debt and Cash Flow
As of June 30, 2024, PTC's total debt was $1.81 billion, with a total cash balance of $247.7 million. The cash provided by operating activities for the first nine months of FY24 was $651.9 million, reflecting an increase from $561.1 million in FY23.
| Debt and Cash Flow Metrics | Value |
|---|---|
| Total Debt | $1.81 billion |
| Cash and Cash Equivalents | $247.7 million |
| Cash Provided by Operating Activities | $651.9 million |
Market Position and Strategy
PTC continues to focus on expanding its SaaS offerings and enhancing cloud capabilities. The company's strategy includes leveraging partnerships for service delivery and shifting towards a more subscription-based revenue model, which is expected to stabilize revenue recognition over time.
Geographic Revenue Distribution
PTC's revenue by geographic region for Q3 FY24 was distributed as follows:
| Region | Q3 FY24 Revenue | Q3 FY23 Revenue |
|---|---|---|
| Americas | $253.6 million | $278.3 million |
| Europe | $170.6 million | $173.6 million |
| Asia Pacific | $94.4 million | $90.5 million |
How PTC Inc. (PTC) Makes Money
Revenue Sources
PTC Inc. generates revenue through multiple streams, primarily categorized into software revenue, support and cloud services, and professional services. The following table outlines the revenue contributions for the three months and nine months ended June 30, 2024, compared to the same periods in 2023.
| Revenue Source | Three Months Ended June 30, 2024 (in millions) | Three Months Ended June 30, 2023 (in millions) | Nine Months Ended June 30, 2024 (in millions) | Nine Months Ended June 30, 2023 (in millions) |
|---|---|---|---|---|
| Total Revenue | $518.6 | $542.3 | $1,671.9 | $1,550.4 |
| Software Revenue | $488.6 | $506.7 | $1,573.8 | $1,438.1 |
| Support and Cloud Services | $339.5 | $313.7 | $1,006.4 | $875.4 |
| Professional Services | $30.0 | $35.7 | $98.1 | $112.4 |
Annual Recurring Revenue (ARR)
As of June 30, 2024, PTC reported an Annual Recurring Revenue (ARR) of $2.13 billion, representing a growth of 10% compared to the same period in the previous year. This growth is attributed to the increasing adoption of SaaS contracts and the expansion of their cloud offerings, particularly in Product Lifecycle Management (PLM) and Computer-Aided Design (CAD) segments.
Cost Structure
PTC's total cost of revenue for the three months ended June 30, 2024, was $111.9 million, resulting in a gross margin of $406.7 million, or 78% of total revenue. The breakdown of costs for the same period is shown in the following table:
| Cost Component | Three Months Ended June 30, 2024 (in millions) | Three Months Ended June 30, 2023 (in millions) |
|---|---|---|
| Total Cost of Revenue | $111.9 | $115.9 |
| Gross Margin | $406.7 | $426.5 |
Operating Expenses
Operating expenses for the three months ended June 30, 2024, totaled $310.9 million, reflecting a decrease from $316.6 million in the same period of 2023. The following table summarizes the operating expenses for these periods:
| Expense Category | Three Months Ended June 30, 2024 (in millions) | Three Months Ended June 30, 2023 (in millions) |
|---|---|---|
| Sales and Marketing | $140.3 | $145.1 |
| Research and Development | $110.3 | $103.8 |
| General and Administrative | $49.7 | $57.1 |
| Amortization of Acquired Intangible Assets | $10.7 | $10.7 |
| Total Operating Expenses | $310.9 | $316.6 |
Net Income and Earnings Per Share
For the three months ended June 30, 2024, PTC reported a net income of $69.0 million, which translates to diluted earnings per share of $0.57, up from $0.51 in the same period of 2023. The following table provides the net income and earnings per share for the periods:
| Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 |
|---|---|---|
| Net Income (in millions) | $69.0 | $61.4 |
| Diluted Earnings per Share | $0.57 | $0.51 |
Debt and Cash Flow
As of June 30, 2024, PTC's total outstanding debt was $1.82 billion. Cash provided by operating activities for the nine months ended June 30, 2024, was $651.9 million, compared to $561.1 million in the prior year, demonstrating strong cash flow generation capabilities.
| Debt Component | June 30, 2024 (in millions) | September 30, 2023 (in millions) |
|---|---|---|
| 4.000% Senior Notes due 2028 | $500.0 | $500.0 |
| 3.625% Senior Notes due 2025 | $500.0 | $500.0 |
| Credit Facility Revolver Line | $322.0 | $202.0 |
| Credit Facility Term Loan | $493.8 | $500.0 |
| Total Debt | $1,815.8 | $1,702.0 |
PTC's business model emphasizes a transition towards recurring revenue from software as a service (SaaS) offerings, enhancing long-term financial stability and growth potential. The strategic acquisitions, such as ServiceMax, have also contributed positively to revenue growth and diversification of service offerings.
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