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Why Is PTC Inc. (PTC) Up 2% Since Last Earnings Report?
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It has been about a month since the last earnings report for PTC Inc. (PTC - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PTC Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
PTC's Q1 Earnings Beat Estimates
PTC reported first-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $1.11, up 12.1% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate by 13.3%.
Revenues came in at $550 million, up 18% year over year (up 16% at constant currency or cc). The top line beat the Zacks Consensus Estimate by 2.2%.
The year-over-year improvement in the top line was driven by steady demand for its computer-aided design (CAD) and product lifecycle management (PLM). Synergies from the acquisition of pure-systems are a major tailwind.
Top Line in Detail
Recurring revenues of $506 million rose 21.3% year over year. Perpetual licenses decreased 36.3% to $8.2 million.
Revenues by License, Support and Services
License revenues (33.4% of total revenues) were $183.9 million, up 6.5% from the year-ago quarter’s figure.
Support and cloud services revenues (60.1%) of $330.5 million increased 28.3% year over year.
Professional services revenues (6.5%) were $35.7 million, up 0.5% year over year.
Revenues by Product Group
PLM and CAD businesses continue to witness healthy growth. In the fiscal first quarter, PLM revenues were $349 million, rising 25% year over year. CAD revenues were $202 million, up 8% year over year.
ARR Performance
Annualized recurring revenues (ARR) were $2.057 billion, up 24% year over year (up 23% at cc). The uptick was driven by strong performance across all divisions and geographies.
In the fiscal first quarter, PLM and CAD ARR were $1,252 million and $805 million, rising 34% and 11% year over year, respectively.
Operating Details
Non-GAAP gross margin increased 90 basis points (bps) on a year-over-year basis to 82.7%.
Total operating expenses increased $56.2 million year over year to $321.4 million.
Operating income on a non-GAAP basis increased 19.9% year over year to $199 million.
Operating margin on a non-GAAP basis increased 60 bps on a year-over-year basis to 36.2%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash, cash equivalents and marketable securities were $265 million compared with $288 million as of Sep 30, 2023.
Total debt, net of deferred issuance costs, was $2.260 billion as of Dec 31, 2023, compared with $1.695 billion as of Sep 30, 2023.
Cash provided by operating activities was $187 million compared with the prior-year quarter’s figure of $181 million.
The free cash flow was $183 million compared with $172 million reported in the year-ago quarter.
Fiscal 2024 Guidance
For fiscal 2024, ARR is expected to be in the range of $2.190-$2.250 billion, which indicates a rise of 11-14% year over year at cc.
Revenues for fiscal 2024 are projected to be in the range of $2.270-$2.360 billion, indicating a rise of 8-13% year over year.
For fiscal 2024, cash from operations is projected to be $745 million, indicating a rise of 22% on a year-over-year basis. The free cash flow is forecasted to be $725 million, suggesting a 23% increase year over year.
For the fiscal second quarter, PTC expects ARR between $2.050 and $2.065 billion. Cash from operations is projected to be $245 million, and free cash flow is forecasted to be $240 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, PTC Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, PTC Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
PTC Inc. is part of the Zacks Computer - Software industry. Over the past month, SAP (SAP - Free Report) , a stock from the same industry, has gained 6%. The company reported its results for the quarter ended December 2023 more than a month ago.
SAP reported revenues of $9.12 billion in the last reported quarter, representing a year-over-year change of +5.9%. EPS of $1.52 for the same period compares with $1.02 a year ago.
SAP is expected to post earnings of $1.33 per share for the current quarter, representing a year-over-year change of +14.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
SAP has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is PTC Inc. (PTC) Up 2% Since Last Earnings Report?
It has been about a month since the last earnings report for PTC Inc. (PTC - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PTC Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
PTC's Q1 Earnings Beat Estimates
PTC reported first-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $1.11, up 12.1% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate by 13.3%.
Revenues came in at $550 million, up 18% year over year (up 16% at constant currency or cc). The top line beat the Zacks Consensus Estimate by 2.2%.
The year-over-year improvement in the top line was driven by steady demand for its computer-aided design (CAD) and product lifecycle management (PLM). Synergies from the acquisition of pure-systems are a major tailwind.
Top Line in Detail
Recurring revenues of $506 million rose 21.3% year over year. Perpetual licenses decreased 36.3% to $8.2 million.
Revenues by License, Support and Services
License revenues (33.4% of total revenues) were $183.9 million, up 6.5% from the year-ago quarter’s figure.
Support and cloud services revenues (60.1%) of $330.5 million increased 28.3% year over year.
Professional services revenues (6.5%) were $35.7 million, up 0.5% year over year.
Revenues by Product Group
PLM and CAD businesses continue to witness healthy growth. In the fiscal first quarter, PLM revenues were $349 million, rising 25% year over year. CAD revenues were $202 million, up 8% year over year.
ARR Performance
Annualized recurring revenues (ARR) were $2.057 billion, up 24% year over year (up 23% at cc). The uptick was driven by strong performance across all divisions and geographies.
In the fiscal first quarter, PLM and CAD ARR were $1,252 million and $805 million, rising 34% and 11% year over year, respectively.
Operating Details
Non-GAAP gross margin increased 90 basis points (bps) on a year-over-year basis to 82.7%.
Total operating expenses increased $56.2 million year over year to $321.4 million.
Operating income on a non-GAAP basis increased 19.9% year over year to $199 million.
Operating margin on a non-GAAP basis increased 60 bps on a year-over-year basis to 36.2%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash, cash equivalents and marketable securities were $265 million compared with $288 million as of Sep 30, 2023.
Total debt, net of deferred issuance costs, was $2.260 billion as of Dec 31, 2023, compared with $1.695 billion as of Sep 30, 2023.
Cash provided by operating activities was $187 million compared with the prior-year quarter’s figure of $181 million.
The free cash flow was $183 million compared with $172 million reported in the year-ago quarter.
Fiscal 2024 Guidance
For fiscal 2024, ARR is expected to be in the range of $2.190-$2.250 billion, which indicates a rise of 11-14% year over year at cc.
Revenues for fiscal 2024 are projected to be in the range of $2.270-$2.360 billion, indicating a rise of 8-13% year over year.
For fiscal 2024, cash from operations is projected to be $745 million, indicating a rise of 22% on a year-over-year basis. The free cash flow is forecasted to be $725 million, suggesting a 23% increase year over year.
For the fiscal second quarter, PTC expects ARR between $2.050 and $2.065 billion. Cash from operations is projected to be $245 million, and free cash flow is forecasted to be $240 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, PTC Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, PTC Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
PTC Inc. is part of the Zacks Computer - Software industry. Over the past month, SAP (SAP - Free Report) , a stock from the same industry, has gained 6%. The company reported its results for the quarter ended December 2023 more than a month ago.
SAP reported revenues of $9.12 billion in the last reported quarter, representing a year-over-year change of +5.9%. EPS of $1.52 for the same period compares with $1.02 a year ago.
SAP is expected to post earnings of $1.33 per share for the current quarter, representing a year-over-year change of +14.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
SAP has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.