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PTC delivered Q3 EPS of $1.64 and revenue of $644M, beating estimates and its own guidance range.
PTC's revenue rose 24% Y/Y on SaaS growth, strong CAD and PLM demand and rising recurring revenue streams.
New AI features in Creo 12 and Arena Supply Chain Intelligence enhanced product capabilities this quarter.
PTC Inc. ((PTC - Free Report) ) reported third-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $1.64, beating the Zacks Consensus Estimate by 34.4%. The company reported non-GAAP EPS of 98 cents in the prior-year quarter. Management had estimated non-GAAP EPS in the range of $1.05 to $1.30.
Revenues came in at $644 million, rising 24% year over year (up 22% at constant currency or cc). The top line beat the consensus estimate by 10.6%. Management projected revenues in the $560-$600 million band. The company’s focus on digital product innovation, combined with its shift toward SaaS and subscription-based models, is creating a stable and scalable revenue base.
Even as the broader economic landscape remains uncertain, its go-to-market strategy resonates well across various industries and regions, helping PTC navigate market uncertainties. With a strong subscription model, continued momentum in key product segments — CAD, PLM, ALM, SLM and SaaS — and a solid capital allocation strategy, PTC aims for long-term growth.
In addition, during the quarter, PTC advanced its AI efforts with the launch of Creo 12, the most updated version yet, featuring enhancements like AI-driven generative design. In PLM, it introduced Arena Supply Chain Intelligence to enable AI-based supply chain risk monitoring within the PLM system.
In response to the better-than-anticipated performance, PTC’s shares jumped 7.6% in pre-market trading today. In the past year, shares of PTC have soared 15.2% compared with the Zacks Computer – Software industry’s growth of 25.7%.
Image Source: Zacks Investment Research
Top-Line Details
Recurring revenues of $613.6 million rose 27.4% year over year.
Perpetual licenses increased 10.1% to $7.8 million.
Revenues by License, Support and Services
License revenues (39% of total revenues) were $251.5 million, up 68.6% from the year-ago quarter figure.
Support and cloud services revenues (57.5%) of $370 million increased 8.9% year over year.
Professional services revenues (3.5%) were $22.6 million, down 24.7% year over year.
Revenues by Product Group
Demand for PLM and CAD solutions remains strong and continues to grow steadily.
In the fiscal third quarter, PLM revenues were $404 million, gaining 23% year over year.
CAD revenues were $240 million, up 27%.
ARR Growth Reflects Business Strength
Annualized recurring revenues (ARR) were $2.4 billion, up 14% year over year. At constant currency, ARR was $2.37 billion, up 9.3%. The uptick was driven by strong performance across all divisions and regions.
In the fiscal third quarter, PLM and CAD ARR were $1,481 million and $934 million, rising 14% and 13% year over year, respectively.
Operating Details
Total operating expenses came in at $324 million compared with $310.9 million in the prior-year quarter.
Operating income on a non-GAAP basis was $285.2 million, up from $164.4 million in the prior-year quarter.
Operating margin on a non-GAAP basis increased 1,260 basis points year over year to 44%.
Balance Sheet & Cash Flow
As of June 30, 2025, cash and cash equivalents were $199 million compared with $235 million as of March 31, 2025.
Total debt, net of deferred issuance costs, was $1.23 billion as of June 30, 2025, compared with $1.54 billion as of March 31, 2025.
Cash provided by operating activities was $244 million compared with the prior-year quarter figure of $214 million. The free cash flow was $242 million compared with $212 million reported in the year-ago quarter.
During the fiscal third quarter, PTC repurchased $75 million worth of its stock, in line with its previously announced $300 million buyback plan for fiscal 2025. Another $75 million in repurchases is expected in the fiscal fourth quarter to complete this initiative.
Updated Fiscal 2025 Financial Guidance
Revenues for fiscal 2025 are now projected in the range of $2,570 to $2,630 million, indicating a rise of 12-14% year over year. The prior view was $2,445 to $2,565 million. Non-GAAP EPS is now estimated in the $6.63-$7.03 band, suggesting a rise of 31-38%. Earlier, PTC predicted the metric to be $5.80 to $6.55.
For fiscal 2025, cash from operations is projected to be around $860 million, indicating a rise of about 15% on a year-over-year basis. The free cash flow is forecasted to be roughly $850 million, suggesting about a 16% increase. Previously, PTC viewed operating cash flow and free cash flow in the $855-$865 million and $840-$850 million bands, respectively.
PTC now projects 8% to 9% growth in ARR on a constant currency basis for fiscal 2025, broadened from the earlier view of 7% to 9%.
For the fourth quarter fiscal 2025, PTC estimates revenues in the $725-$785 million band. Non-GAAP EPS is projected in the range of $2.10 to $2.50. Cash from operations is expected to be in the band of $93-$98 million, and free cash flow is forecasted to be between $90 million and $95 million.
Seagate Technology Holdings plc ((STX - Free Report) ) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.59 per share, beating the Zacks Consensus Estimate by 5.3%. The bottom line was in the upper end of STX’s guidance of $2.4 per share (+/- 20 cents), reflecting the outcome of structural improvements and strong cloud-driven demand. The company reported non-GAAP earnings of $1.05 per share in the year-ago quarter.
Non-GAAP revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.6%. Revenues came in above the midpoint of guidance, rising 30% year over year.
Cadence Design Systems ((CDNS - Free Report) ) reported second-quarter 2025 non-GAAP EPS of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guided range of $1.55-$1.61. Revenues of $1.275 billion beat the Zacks Consensus Estimate by 1.3% and increased 20.3% year over year. The figure beat CDNS’ guided range of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE ((SAP - Free Report) ) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63 per share. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.
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PTC's Q3 Earnings & Sales Top, Jump Y/Y, Raised Outlook Boosts Shares
Key Takeaways
PTC Inc. ((PTC - Free Report) ) reported third-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $1.64, beating the Zacks Consensus Estimate by 34.4%. The company reported non-GAAP EPS of 98 cents in the prior-year quarter. Management had estimated non-GAAP EPS in the range of $1.05 to $1.30.
Revenues came in at $644 million, rising 24% year over year (up 22% at constant currency or cc). The top line beat the consensus estimate by 10.6%. Management projected revenues in the $560-$600 million band. The company’s focus on digital product innovation, combined with its shift toward SaaS and subscription-based models, is creating a stable and scalable revenue base.
Even as the broader economic landscape remains uncertain, its go-to-market strategy resonates well across various industries and regions, helping PTC navigate market uncertainties. With a strong subscription model, continued momentum in key product segments — CAD, PLM, ALM, SLM and SaaS — and a solid capital allocation strategy, PTC aims for long-term growth.
PTC Inc. Price, Consensus and EPS Surprise
PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote
In addition, during the quarter, PTC advanced its AI efforts with the launch of Creo 12, the most updated version yet, featuring enhancements like AI-driven generative design. In PLM, it introduced Arena Supply Chain Intelligence to enable AI-based supply chain risk monitoring within the PLM system.
In response to the better-than-anticipated performance, PTC’s shares jumped 7.6% in pre-market trading today. In the past year, shares of PTC have soared 15.2% compared with the Zacks Computer – Software industry’s growth of 25.7%.
Image Source: Zacks Investment Research
Top-Line Details
Recurring revenues of $613.6 million rose 27.4% year over year.
Perpetual licenses increased 10.1% to $7.8 million.
Revenues by License, Support and Services
License revenues (39% of total revenues) were $251.5 million, up 68.6% from the year-ago quarter figure.
Support and cloud services revenues (57.5%) of $370 million increased 8.9% year over year.
Professional services revenues (3.5%) were $22.6 million, down 24.7% year over year.
Revenues by Product Group
Demand for PLM and CAD solutions remains strong and continues to grow steadily.
In the fiscal third quarter, PLM revenues were $404 million, gaining 23% year over year.
CAD revenues were $240 million, up 27%.
ARR Growth Reflects Business Strength
Annualized recurring revenues (ARR) were $2.4 billion, up 14% year over year. At constant currency, ARR was $2.37 billion, up 9.3%. The uptick was driven by strong performance across all divisions and regions.
In the fiscal third quarter, PLM and CAD ARR were $1,481 million and $934 million, rising 14% and 13% year over year, respectively.
Operating Details
Total operating expenses came in at $324 million compared with $310.9 million in the prior-year quarter.
Operating income on a non-GAAP basis was $285.2 million, up from $164.4 million in the prior-year quarter.
Operating margin on a non-GAAP basis increased 1,260 basis points year over year to 44%.
Balance Sheet & Cash Flow
As of June 30, 2025, cash and cash equivalents were $199 million compared with $235 million as of March 31, 2025.
Total debt, net of deferred issuance costs, was $1.23 billion as of June 30, 2025, compared with $1.54 billion as of March 31, 2025.
Cash provided by operating activities was $244 million compared with the prior-year quarter figure of $214 million. The free cash flow was $242 million compared with $212 million reported in the year-ago quarter.
During the fiscal third quarter, PTC repurchased $75 million worth of its stock, in line with its previously announced $300 million buyback plan for fiscal 2025. Another $75 million in repurchases is expected in the fiscal fourth quarter to complete this initiative.
Updated Fiscal 2025 Financial Guidance
Revenues for fiscal 2025 are now projected in the range of $2,570 to $2,630 million, indicating a rise of 12-14% year over year. The prior view was $2,445 to $2,565 million. Non-GAAP EPS is now estimated in the $6.63-$7.03 band, suggesting a rise of 31-38%. Earlier, PTC predicted the metric to be $5.80 to $6.55.
For fiscal 2025, cash from operations is projected to be around $860 million, indicating a rise of about 15% on a year-over-year basis. The free cash flow is forecasted to be roughly $850 million, suggesting about a 16% increase. Previously, PTC viewed operating cash flow and free cash flow in the $855-$865 million and $840-$850 million bands, respectively.
PTC now projects 8% to 9% growth in ARR on a constant currency basis for fiscal 2025, broadened from the earlier view of 7% to 9%.
For the fourth quarter fiscal 2025, PTC estimates revenues in the $725-$785 million band. Non-GAAP EPS is projected in the range of $2.10 to $2.50. Cash from operations is expected to be in the band of $93-$98 million, and free cash flow is forecasted to be between $90 million and $95 million.
PTC’s Zacks Rank
Currently, PTC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Recent Performance of Other Companies
Seagate Technology Holdings plc ((STX - Free Report) ) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.59 per share, beating the Zacks Consensus Estimate by 5.3%. The bottom line was in the upper end of STX’s guidance of $2.4 per share (+/- 20 cents), reflecting the outcome of structural improvements and strong cloud-driven demand. The company reported non-GAAP earnings of $1.05 per share in the year-ago quarter.
Non-GAAP revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.6%. Revenues came in above the midpoint of guidance, rising 30% year over year.
Cadence Design Systems ((CDNS - Free Report) ) reported second-quarter 2025 non-GAAP EPS of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guided range of $1.55-$1.61. Revenues of $1.275 billion beat the Zacks Consensus Estimate by 1.3% and increased 20.3% year over year. The figure beat CDNS’ guided range of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE ((SAP - Free Report) ) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63 per share. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.