Earnings Review and Free Research Report: PTC’s Subscription ARR Rocketed 131%; Outperformed Revenue and Earnings Expectations

LONDON, UK / ACCESSWIRE / July 25, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on PTC Inc. (NASDAQ: PTC), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PTC, following the Company’s release of its financial results on July 20, 2017, the third quarter fiscal 2017. The product development software maker reported a 1% gain in revenue on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

For the three months ended July 01, 2017, PTC reported total GAAP revenue of $291.29 million compared to revenue of $288.65 million in Q3 FY16. The Company’s revenue numbers topped analysts’ expectations of $290.6 million.

For Q3 FY17, PTC’s GAAP operating expenses were approximately $198 million, compared to $199 million in Q3 FY16. The Company’s non-GAAP operating expenses were approximately $174 million compared to $175 million in the prior year’s same quarter. PTC’s GAAP operating income was $11.26 million for Q3 FY17 compared to $7.60 million for Q3 FY16. The Company’s non-GAAP operating income was $45 million, or 15% of revenue, in the reported quarter.

PTC posted GAAP net loss of $951,000, or $0.01 per diluted share, for Q3 FY17 compared to net income of $3.07 million, or $0.03 per share, for Q3 FY16. The Company’s non-GAAP net income was $33 million, or $0.28 per diluted share, for the reported quarter ahead of Wall Street’s expectations of $0.28 per share

Segment Results

PTC reported subscription revenue growth of 135% and recurring software revenue growth of 11% resulted in total software revenue growth of 4% on y-o-y basis for Q3 FY17, despite a higher mix of subscription bookings than last year. Approximately 87% of software revenue came from recurring revenue streams, up from 81% in Q3 FY16.

During Q3 FY17, PTC’s License and subscription bookings were $90 million, below the Company’s expectations due to sales execution issues in Japan. On a year-to-date basis, bookings were $275 million, an increase of 6% on a y-o-y basis as reported and 7% in constant currency, despite a year-to-date decline in bookings in Japan of $20 million.

For Q3 FY17, PTC’s subscription bookings comprised 64% of total bookings, slightly below the Company’s expectations primarily due to subscription bookings performance and were also attributable to one large IoT deal that closed as a perpetual license. Subscription mix of 64% increased from 58% in the prior year’s comparable quarter.

During Q3 FY17, PTC’s total deferred revenue billed and unbilled, had increased $251 million, or 38%, on a y-o-y basis to $909 million. Billed deferred revenue increased 9% on a y-o-y basis to $465 million, due to the timing of support contract billings during the year.

The Company’s annualized recurring revenue (ARR) was approximately $865 million, reflecting an increase of 11% on a y-o-y basis. PTC’s total deferred revenue billed and unbilled, had increased $251 million to $909 million from Q3 FY16. The Company’s subscription ARR soared 131% to $302 million.

Financial Perspective

For Q3 FY17, PTC’s operating cash flows were $74 million and free cash flow was $69 million, both of which include cash payments for the restructuring of approximately $6 million and legal payments of approximately $2 million. As of July 01, 2017, the Company’s total cash, cash equivalents, and marketable securities were $311 million, and total debt, net of deferred issuance costs, was $712 million.

PTC resumed share buybacks in Q3 FY17 and repurchased $35 million worth of shares in the reported quarter, which represents more than 50% of free cash flow in Q3 FY17.

Outlook

For Q4 FY17, PTC is forecasting revenue in the range of $303 million to $308 million and earnings in the band of $0.33 to $0.38 per share. For FY17, the Company is estimating earnings in the range of negative $0.01 to positive $0.04 per share, with revenue ranging from $1.16 billion to $1.17 billion.

Stock Performance

PTC Inc.’s share price finished yesterday’s trading session at $55.73, marginally advancing 0.92%. A total volume of 1.74 million shares has exchanged hands, which was higher than the 3-month average volume of 1.33 million shares. The Company’s stock price soared 4.46% in the last three months, 10.36% in the past six months, and 37.44% in the previous twelve months. Additionally, the stock rallied 20.45% since the start of the year. The stock currently has a market cap of $6.44 billion.

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