PTC Inc Q1 2025 Earnings Call Summary

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

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Neil, your various comments on new products or product expansions, are quite interesting to me, and one thing I'd like to ask about is your comments about the AI products specifically. Maybe you could talk about how you're organizing and investing in those or is this a segment or products specific development effort? Is there a central AI group that is managing all of these developments So there's some commonality within the company for your AI proliferation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00PM, PTC.OQ - Q1 2025 PTC Inc Earnings Call And then just to finish up on the product side, you alluded to some expansion into manufacturing process. This is something that two of your larger competitors, Dassault and Siemens have clearly been investing in and seeing new business in. Is this an incrementally important use case or application area for you?

Question: Jason Celino - KeyBanc Capital Markets - Analyst : Actually kind of building off of Jay's -- one of Jay's parters. Two of your competitors, your European ones, seem to be really battling it out on the PLM side. Ironically, one seems to be taking share from the other. Where does PTC fall in all this? I mean have you seen any changes to the -- in competitive environment, any changes to your win rates? Are you involved in some of these? Are you happy just be watching on the sidelines?

Question: Ken Wong - Oppenheimer & Co. Inc. - Analyst : Kristian, I just wanted to ask about the trajectory of NRR. When I look at kind of Q2 being a little subseasonal, and then I maybe meld that with Neil's comments that you guys won't hit your go-to-market stride until Q4. Is it fair to assume that we should be looking at kind of slightly subseasonal net new ARR until you hit that fourth quarter?

Question: Siti Panigrahi - Mizuho Securities - Analyst : Neil, on your comments about exiting fiscal '25 with momentum and maybe growing '26, help us understand the progress you have made on the go-to-market alignment side given that Rob joined recently as CRO. And also on the macro side also, we recently saw manufacturing PMI bouncing back above [50] after two years. Wondering what are the metrics that you look at to feel comfortable on the macro side. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00PM, PTC.OQ - Q1 2025 PTC Inc Earnings Call

Question: Siti Panigrahi - Mizuho Securities - Analyst : Well, I appreciate the great color and all the LinkedIn posts. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:00PM, PTC.OQ - Q1 2025 PTC Inc Earnings Call

Question: Peter Griffith - Citi - Analyst : This is Peter on the line for Tyler. In your presentation, there's an example of a med tech Windchill customer expanding their seats from 10% to 15% to over 50%. Just curious how much of the opportunity is there still left like within the existing PLM customer base to see Seat Count expansion like outside of that core engineering team and like dive deeper into other departments whether that's like quality, supply chain and manufacturing.

Question: Stephen Tusa - JPMorgan - Analyst : I wish I got as excited as you guys do about the macro data like Christmas morning with the ISM or the PMI. On the macro front, how are you seeing the focus on AI impact decisions and budgets more specifically than just what normally happens at this time of year on budgets?

Question: Arsenije Matovic - Wolfe Research - Analyst : This is Arsenije on for Josh Tilton. I just had a question really on the net new ARR performance. Look, it was within the range of guidance, but even after adjusting for the timing impact and for net ARR, it looked like it was below year over year irrespective of the environment not really changing, still mixed. I guess what occurred? Is there some underperformance in the channel versus expectations, or is it just kind of exactly within what you were expecting even on the channel front and expected still better visibility with growth recovery in the back half?

Question: Nay Soe Naing - Berenberg - Analyst : I've got two questions if I may. The first one on the go-to-market changes. It sounded like you made quite a lot of good progress in Q1. I just want to get a sense of whether that was ahead of what you scheduled or is it -- everything's pretty much on track? And then a secondary question to that is that Neil, I think if I remember correctly, you said that last quarter that you weren't expecting any major disruptions of sales from these go-to-market changes. Now that it's been a quarter, can we get an update on that one, please?

Question: Nay Soe Naing - Berenberg - Analyst : One quick question if I could squeeze in if that's all right. The AI product launches that are upcoming, all sounds very exciting, but are they going to be limited to just Codebeamer and ServiceMax, or will that be across your entire product portfolio?

Question: Saket Kalia - Barclays Capital - Analyst : Kristian, maybe for you and Neil, please feel free to chime in here, right? So I want to go back to kind of the five pillars that Neil, you talked about in your prepared comments, right? So clearly, there are a few higher growth parts of the business like an ALM or an SLM or a SaaS part of the business just because of their scale, right? I think there are the strong competitive position drives solid growth in PLM and CAD. But it feels like those three segments have the potential to grow faster. Maybe the question is where are those businesses in their evolution in terms of being more additive to growth? And then maybe the other side of that coin, how much of a drag are some of the businesses that maybe aren't those pillars anymore, like an IoT for example? There are a lot of moving parts in that question, but does that make sense?