PTC today reported financial results for its fiscal second quarter ended June 30, 2018.
- Third quarter total revenue was $315 million
- Third quarter GAAP net income was $17 million or $0.14 per diluted share; non-GAAP net income was $42 million or $0.36 per diluted share
- Third quarter license and subscription bookings were $113 million and subscription mix was 78%
- Total deferred revenue, billed and unbilled, was $1.21 billion, an increase of 33% from the same period last year
- Third quarter subscription Annualized Recurring Revenue (ARR) was $509 million, an increase of $207 million or 69% from the same period last year
“Our third quarter results continued the solid performance we have been driving across our product portfolio,” said James Heppelmann, President and CEO, PTC. “Despite currency headwinds in the quarter, recurring software revenue grew 15% year over year, reflecting the strength of our subscription model, and new bookings were strong.”
Heppelmann added, “Through the first three quarters of the fiscal year, CAD bookings grew double-digits, far outpacing market growth, PLM bookings grew above-market, ThingWorx continued to gain significant traction across a broad set of vertical markets, and interest in our augmented reality (AR) solutions accelerated.”
Additional third quarter operating and financial highlights are set forth below. Information about our bookings and other reporting measures (as updated) is provided beginning on page four. For additional details, please refer to the prepared remarks and financial data tables that have been posted to the Investor Relations section of our website at investor.ptc.com.
- Q3’18 license and subscription bookings were $113 million, up 26% year over year. On a year-to-date basis, bookings were $316 million, up 15% year over year.
- Q3’18 software revenue was $274 million, an increase of 10% year over year, despite a 1,400 basis point increase in the subscription mix compared to the same period last year.
- Approximately 91% of third quarter software revenue came from recurring revenue streams, up from 87% in the same period last year.
- Annualized Recurring Revenue (ARR) was $994 million, an increase of 15% year over year and the sixth consecutive quarter of double-digit year-over-year growth.
- Total deferred revenue – billed and unbilled - increased $301 million or 33% year-over-year. Billed deferred revenue increased 4% year-over year to $484 million, despite Q3 this year not including July 1st, whereas July 1st fell in Q3 in FY’17. Recurring billings on July 1, 2018 were about $39 million. Billed deferred revenue can fluctuate quarterly based upon the contractual billing dates in our recurring revenue contracts, the timing of our fiscal reporting periods, and Fx rates.
- GAAP operating margin in the third quarter was 7%, compared to 4% in the same period last year; non-GAAP operating margin was 18%, compared to 15% in the same period last year.
- Operating cash flow in the third quarter was $49 million and free cash flow was $42 million. Year-to-date free cash flow was $167 million, up 100% compared to the same period last year. Free cash flow includes cash payments of approximately $1 million for the quarter and $2 million year-to-date related to our past restructuring plans, compared to $6 million in Q3’17 and $35 million for the first three quarters of FY’17.
- Total cash, cash equivalents, and marketable securities as of the end of the third quarter was $321 million and total debt, net of deferred issuance costs, was $693 million. During the quarter, we borrowed $150 million in part to finance the share repurchase described below, $100 million of which was repaid prior to quarter end.
- As part of our previously announced share repurchase program, we completed a $100 million accelerated stock repurchase agreement during the quarter and retired 1.15 million shares in the quarter.
To view the full release, please visit: https://www.ptc.com/en/news/2018/ptc-announces-q3-fy18-results
