PTC Inc (PTC) Reports 26% ARR Growth in Q4 and 40% Increase in FY'23 Operating Cash Flow
PTC Inc (NASDAQ:PTC) reported a 26% ARR growth in Q4 and a 40% increase in FY'23 operating cash flow.
The company's Q4 operating cash flow was $50 million, up 29% year over year, and $611 million in FY23, up 40%.
PTC Inc (NASDAQ:PTC) reported revenue growth of 8% in Q4 and FY'23.
The company's FY'24 guidance indicates an ARR growth range of 11% to 14%.
On November 1, 2023, PTC Inc (NASDAQ:PTC) announced its financial results for the fourth fiscal quarter and full year ended September 30, 2023. The company reported solid ARR and cash flow results, with a 26% ARR growth in Q4 and a 40% increase in FY'23 operating cash flow. The company's Q4 operating cash flow was $50 million, up 29% year over year, and $611 million in FY23, up 40%. PTC Inc (NASDAQ:PTC) also reported revenue growth of 8% in Q4 and FY'23.
Financial Highlights
In Q4, PTC Inc (NASDAQ:PTC) reported ARR growth of 26%, organic ARR growth of 15%, and organic constant currency ARR growth of 13%. The company's ServiceMax business contributed an additional 11 points of ARR growth, taking constant currency ARR growth to 23%. The operating cash flow was $50 million in Q4, up 29% year over year, and $611 million in FY23, up 40%. The free cash flow was $44 million in Q4, up 52% year over year, and $587 million in FY23, up 41%.
For FY'23, the company reported operating cash flow of $611 million, up 40% year over year, and free cash flow of $587 million, up 41% year over year. The revenue growth was 8% year over year, with total revenue reaching $2,097 million.
Company's Performance Analysis
PTC Inc (NASDAQ:PTC)'s CEO, James Heppelmann, stated that the company's differentiated product portfolio and industry-leading SaaS capabilities align well with the manufacturing industry's push for digital transformation. The company's strong market position and solid execution, coupled with its subscription model, position PTC to continue delivering durable and consistent ARR and cash flow growth.
Despite a challenging backdrop, the company's financial results in FY23 were solid, driven by the resilience of its business model, consistent execution, operational discipline, and the actions taken to align its investments with its growth opportunities.
Fiscal 2024 Guidance and Mid-Term Targets
For FY'24, PTC Inc (NASDAQ:PTC) expects a constant currency ARR growth of 11% to 14%, operating cash flow of approximately $745 million, and free cash flow of approximately $725 million. The company also expects revenue growth of 8% to 13%, with total revenue ranging from $2,270 million to $2,360 million.
In terms of free cash flow, the company is providing targets through FY26 that represent a three-year CAGR of approximately 20%. The company's long-term goal, assuming its Debt/EBITDA ratio is below 3x, is to return approximately 50% of its free cash flow to shareholders via share repurchases.
Explore the complete 8-K earnings release (here) from PTC Inc for further details.
This article first appeared on GuruFocus.
