PTC Inc Q3 2025 Earnings Call Transcript

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

Question: Tyler Radke - Citi Infrastructure Investments LLC - Analyst : Yeah. Thank you for taking my question. I'd be curious just to get an update on the go-to-market initiatives. I know you're heading into year-end planning and thinking about next year. How are you thinking about the evolution of verticalization as well as the product in packaging at this point?

Question: Andrew Obin - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Yes. Good afternoon. Kristian, just a question. You mentioned something that the tariff uncertainty is dissipating. And it's a very interesting dialogue that we have with the CEOs in the industrial space. Are you seeing an actual change in behavior and maybe some budgets being led out as a result of the deals that have been signed. I know it's only been a couple of weeks, but I've been, I guess, pleasantly surprised by your comments, you think it is starting to make a difference. Any color would be greatly appreciated. Thank you so much.

Question: Andrew Obin - Bofa Merrill Lynch Asset Holdings Inc - Analyst : This is great color. Thank you so much.

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : That's fantastic. Neil, I was hoping maybe you could address the elephant in the room. I know it's not typical for you guys to comment on M&A headlines. But obviously, there was something about competitor acquiring you guys above how you guys are thinking about it and how you would suggest investors think about PTC going forward?

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : All right. Fantastic. Thanks a lot and enjoyed the event quite a lot.

Question: Siti Panigrahi - Mizuho Securities USA LLC - Analyst : Great. Thank you Aand congrats on a good quarter. And Neil, it's good to hear some of the positive commentary about AI. Could you walk us through some of the early adopters using, and I know it's pretty early to expect any benefit. But what ARR uplift we should expect as customers start upticking AI.

Question: Siti Panigrahi - Mizuho Securities USA LLC - Analyst : Great. Thanks for the color.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Great. Thanks for taking my questions. Congrats from me on the results. It's really good to see. Kristian, given the success you had in this quarter and the free cash flow commentary and even some of the commentary on taxes and FX movements. I wanted to ask about the prior $1 billion free cash flow target next year. Last quarter, you didn't really want to reiterate that number. But just curious if you have any increased confidence in that with what you've seen this past quarter.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Thanks a lot, guys.

Question: Jay Vleeschhouwer - Griffin Securities Inc - Analyst : Good evening, Neil. In terms of your current pipeline, are you seeing some improvement in the percentage or magnitude of multi-solution -- multi-letter acronym sales, a quarter ago, you suggested there might be some disaggregation of deals here and there in that respect? Are you perhaps seeing some reaggregation in terms of those kinds of multi-brand deals that are fundamental to your closed-loop life cycle management strategy? And sorry about asking the second question, but since you highlighted a corporate relationship with NVIDIA, I'd like to ask you about another one that has a direct revenue impact, namely the OEM relationship you've had with [Ansys]. I assume that survives the Synopsys acquisition. And given that Synopsys is now much more exposed to your world than just do you see perhaps that there might be some further opportunity to expand on what has already been an expanded relationship with Ansys over the last number of years.

Question: Jay Vleeschhouwer - Griffin Securities Inc - Analyst : Thank you, Neil. Thank you, Kristian.

Question: Saket Kalia - Barclays Services Corp - Analyst : Okay. Great. Hey, guys. Thanks for taking my questions here. Hey, Neil, listen, there's been some super helpful commentary on the near-term numbers, even more medium term. I'd love to ask a little bit of a longer-term question maybe for all of you, right, for Neil, Kristian and Rob, I was wondering if you folks can just talk about how you think about commercial optimization. There's a lot of value that you folks provide through your PLM and CAD systems. And historically, I don't think pricing has been as much of a lever of growth in the past. Maybe philosophically speaking, how do you think about that as a lever going forward?

Question: Saket Kalia - Barclays Services Corp - Analyst : Super helpful. Thanks, guys.

Question: Adam Borg - Stifel Nicolaus & Company Inc - Analyst : Awesome. Thanks for filling me in. Maybe for Neil, just going back to the macro for a minute. I'd love maybe to go a step deeper just on the federal aerospace and defense vertical, what you're seeing overall? And maybe just comment on the US public sector as we head into the September quarter. Thanks so much.

Question: Adam Borg - Stifel Nicolaus & Company Inc - Analyst : Sorry about that. Just about the US public sector as you head into the September quarter.

Question: Adam Borg - Stifel Nicolaus & Company Inc - Analyst : Awesome. Thanks so much.

Question: Clarke Jeffries - Piper Sandler - Analyst : Thanks for taking the question. So Neil, what stood out to me were some of your comments around maybe some green shoots around inching up of win rates, not tell a clear signal, but maybe some reprieve in what has been a difficult selling environment. I just wanted to ask, what are your expectations for rep growth now that we're getting to the past the period of maximum disruption looking ahead to the year, not guidance, but philosophically, do you think the wallet share benefits from the verticalization will be more impactful? Or is there an opportunity here to increase the hiring on the rep side? Thank you.

Question: Clarke Jeffries - Piper Sandler - Analyst : Really appreciate the color.