PTC Inc at Nasdaq Investor Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Hamza Fodderwala - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So you just capped off your fiscal year recently with over $2 billion in ARR, still growing in that low to mid-teens range and really strong free cash flow generation as well. Maybe you can talk just a little bit about at a high-level sort of the various growth drivers at PTC today and just the state of the industry within the technical software domain that you play in.

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Congratulates. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:30AM, PTC.OQ - PTC Inc at Nasdaq Investor Conference

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Yeah. I mean it's -- to your point, it's mission critical software and a lot of the competitors within this domain, you tend to see very high retention rates, high margins as a result of that. And I know recently, you had a pretty big business model transformation over the last few years. Can you go into that a little bit? What's sort of changed and how is that making sort of the business more predictable going forward?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Yeah. And so I wanted to dig a little bit into the -- into various pillars of the business, right? So PLM, there's ALM, there's SLM, which is based on your ServiceMax acquisition for a -- couple of years ago and then there's CAD which we all kind of know as the core of the business. On the PLM side, it does seem like that business has been a lot more durable. It's been expanding within your customer base a lot more. Can you talk a little bit about that both inside as well as outside of some of the core engineering use cases?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Yeah. And then there's the ALM side and the SLM side. Maybe talk a little bit about those two areas.

Question: Hamza Fodderwala - Morgan Stanley - Analyst : And have you guys given disclosure on what percent of your customers are using multiple product categories and conversely, maybe what is the white space if you will, the opportunity within your installed base to sell more product?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : One last question. I'd love to open up for the audience as well. I was really impressed by sort of the efficiency that you run this business at. In the last earnings call, you talked about how you guys have grown ARR durably at mid-teens over the last four years with OpEx that's been growing less than half of that. And then you guided to over $830 million in free cash flow for fiscal '25. I think the mid-term target is $1 billion by fiscal '26. What's sort of driving that efficiency and how much visibility do you have into that mid-term free cash flow outlook?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Any questions from the audience?

Question: Hamza Fodderwala - Morgan Stanley - Analyst : Yeah. This might be a little bit of extrapolation but it does -- so PTC is in the business of selling software to help people make things or help industries make things and what we're seeing in the US, a lot of the West is, there's a focus on onshoring again and there's a lot of fiscal support towards that endeavor. We have the CHIPS Act in the United States and a lot of various initiatives to bring manufacturing back. Does PTC see that as a longer-term opportunity and have there been any tailwinds from that already?