PTC Inc 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.

PTC Inc. Price, Consensus and EPS Surprise

PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote

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.