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Thursday, October 25, 2018

PTC Announces Fourth Quarter Fiscal Year 2018 Results

 

PTC reported financial results for its fiscal fourth quarter and fiscal year ended September 30, 2018.

·         Fourth quarter GAAP revenue was $313 million; non-GAAP revenue was $322 million

·         FY'18 GAAP revenue was $1,242 million; non-GAAP revenue was $1,252 million

·         Fourth quarter GAAP net income was $13 million or $0.11 per diluted share; non-GAAP net income was $53 million or $0.45 per diluted share

·         FY’18 GAAP net income was $52 million or $0.44 per diluted share; non-GAAP net income was $171 million and $1.45 per diluted share

·         Fourth quarter license and subscription bookings were $149 million and subscription mix was 81%

·         FY’18 license and subscription bookings were $466 million and subscription mix was 76%.

·         Total deferred revenue, billed and unbilled, was $1,410 million, an increase of 29% from the same period last year

·         Fourth quarter subscription Annualized Recurring Revenue (ARR) was $544 million, an increase of $205 million or 61% from the same period last year

“We are very pleased with our fourth quarter results and strong finish to the fiscal year,” said James Heppelmann, President and CEO. “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 continued, “Fiscal 2018 was another year of great progress in our transformation to become a high-growth subscription software company and industrial IoT leader. During the year, we delivered good results in our core CAD and PLM businesses, ThingWorx continued to gain significant traction with both new and expanding customers, and interest in our augmented reality (AR) solutions accelerated. We also made important strides in extending our market reach and further differentiating our technology with new strategic partnerships entered into during the year.”

Additional operating and financial highlights are set forth below. Information about our bookings and other reporting measures (as updated) is provided beginning on page five. 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.

·         Q4’18 license and subscription bookings were $149 million, up 4% year over year. FY’18 license and subscription bookings were $466 million, up 11% year over year.

·         Q4’18 software revenue was $287 million, an increase of 9% year over year, despite a 900 basis point increase in the subscription mix compared to the same period last year. FY’18 software revenue was $1,088 million, an increase of 10% year over year, despite a 800 basis point increase in the subscription mix compared to the same period last year.

·         Approximately 91% of fourth quarter software revenue came from recurring revenue streams, up from 85% in the same period last year.

·         Annualized Recurring Revenue (ARR) was $1,012 million, an increase of 12% year over year and the seventh consecutive quarter of double-digit year-over-year growth.

·         Billed deferred revenue increased 9% year over year to $499 million. Total deferred revenue – billed and unbilled - increased $318 million or 29% year over year. Billed and unbilled 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 fourth quarter was 4%, compared to 6% in the same period last year; non-GAAP operating margin was 21%, compared to 18% in the same period last year. FY’18 GAAP operating margin was 6%, compared to 4% in the same period last year; non-GAAP operating margin was 18%, compared to 16% in the same period last year.

·         Operating cash flow in the fourth quarter was $62 million and free cash flow was $45 million. FY’18 operating cash flow was $248 million and free cash flow was $212 million, up 83% and 93%, respectively, compared to the same periods last year. Free cash flow includes cash payments of approximately $0.3 million for the fourth quarter and $3 million for FY’18 related to our past restructuring plans, compared to $2 million in Q4’17 and $37 million for FY’17.

·         Total cash, cash equivalents, and marketable securities as of the end of the fourth quarter was $316 million and total debt, net of deferred issuance costs, was $643 million. During the fourth quarter, we repaid net $50 million of debt, and for FY’18, we repaid net $70 million of debt.

·         In Q4’18, in connection with our strategic alliance with Rockwell Automation, we sold 10,582,010 shares of the Company’s Common Stock to Rockwell for approximately $1.0 billion. We used the proceeds from the Rockwell equity investment to repurchase shares of our common stock under a $1.0 billion accelerated share repurchase ("ASR") agreement with a major financial institution, of which $800 million worth of shares were delivered to us in Q4’18.

·         With the growth opportunity in front of us in the Industrial Internet of Things and Augmented Reality, other strategic initiatives we’ve undertaken, and our continued commitment to operating margin improvement, we are realigning our workforce in the beginning of FY’19 to shift investment to support these strategic, high growth opportunities. This realignment will result in a restructuring charge of approximately $18 million in FY’19, which consists principally of termination benefits, substantially all of which we expect will be paid in FY’19. As this is a realignment of resources rather than a cost-savings initiative, we don’t expect this realignment will result in significant cost savings, and the effect of the realignment is reflected in our FY’19 guidance.

To view the original press release, please click here.

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