PTC Inc Q4 2024 Earnings Call Transcript

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

Question: Ken Wong - Oppenheimer & Co - Analyst : Fantastic. I wanted to just ask a question in terms of the go-to-market disruption. Neil, you mentioned that Kristian has baked that into the guidance I guess, one, when would you assume that you hit peak disruption. And then I couldn't help but notice that in Q1, you're growing 10.5% at 11% on an adjusted basis. Is that the right way to think about the growth rate, assuming you guys can manage through the disruption with minimal impact?

Question: Ken Wong - Oppenheimer & Co - Analyst : Perfect. Thank you.

Question: Daniel Jester - BMO Capital Markets - Analyst : Great. Thanks for taking my question. Maybe just on the market. I know there's five pillars on the product side of what you're really focused on. Maybe, Neil, we can have an update as to what you expect to see from variation in terms of performance of the business and maybe double-click on ServiceMax and Codebeamer. Thank you.

Question: Daniel Jester - BMO Capital Markets - Analyst : Thank you very much.

Question: Saket Kalia - Barclays - Analyst : Okay, great. Hey, guys. Thanks for taking my question here. Maybe for you. I know you spend a lot of time with customers. And you called out Western Europe in your prepared remarks. So I'd love to just zoom into that geography a little bit. What are you hearing from customers there about willingness to spend right now? And how do you envision 2025 in Europe from just a demand perspective?

Question: Saket Kalia - Barclays - Analyst : Makes sense. Thanks, guys.

Question: Joseph Vruwink - Robert W. Baird & Co - Analyst : Great. Thanks. On the go-to-market change, would you say that initiating the timing now means the structure is mature ahead of needing to be positioned for maybe any benefit from renewed spending that customers might do around macro improvement and I guess I ask because there's the potential always after US election that industrial orders pick up. If you did see an improvement in industrial sentiment vis-a-vis PMI, do you think there's a lag for your business? So you expect your pipelines to replenish maybe later in 2025. And that really simply lines up with when this new structure is going to be mature anyways. And so all of that is ultimately compatible with the changes you're now making?

Question: Joseph Vruwink - Robert W. Baird & Co - Analyst : Thank you.

Question: Adam Borg - Stifel Nicolaus & Co Inc - Analyst : Thanks so much for taking the question. Awesome. Maybe for Neil, you talked a little bit about the go-to-market focus around five key verticals. And I believe to Saket's question talked a little bit about what you're seeing in the automotive. I was hoping you could talk a little bit, is there anything else interesting happening in the other four verticals worth commenting, both positive or negative? And maybe, Kristian, if you could just remind us what the current ARR mix is for each of those top five verticals, that would be really helpful. Thanks so much.

Question: Adam Borg - Stifel Nicolaus & Co Inc - Analyst : Thanks, again. Great.

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Thank you. Good evening. With regard to the digital thread comments, maybe we could tie that into the vertical comments you had this evening. That is which verticals would you say are furthest along in terms of adoption -- adopting three or more solutions or three or more of your various three-letter acronyms as indicative of implementing closed loop life cycle management. And then with regard to auto, when you last reported your segments as a percentage of revenue, which was six years ago, it was mid-teens percent, but your exposure to auto was very different. Back then, it was largely powertrains, some supply chain, never really body -- but would you say now that with the evolution of automotive systems requirements that your whole exposure and delivery of software to automotive is going to be fundamentally different than your more limited exposure in the past.

Question: Jay Vleeschhouwer - Griffin Securities - Analyst : Thank you.

Question: Andrew Obin - BofA Global Research - Analyst : Hi. So we're sitting here right after the election and we ended up going to a bunch of industry shows. And it just seems a lot of uncertainty that we were picking up from election, this multiyear destock really impacting people's budgets that have disrupted operations post the election, do you feel there is more uncertainty than usual about '25 calendar year budgets or because the comps have gotten so much easier, and we are past the election that created this uncertainty that visibility has gotten better? Thank you.

Question: Andrew Obin - BofA Global Research - Analyst : So realignment is a bigger source of uncertainty into '25 versus macro. Is that fair to say?

Question: Andrew Obin - BofA Global Research - Analyst : That's great answer. Thanks so much.