PTC Q3 FY2025 Earnings Beat Expectations, Raises Guidance

by MarketNewsData

PTC delivered a clear outperformance across all major metrics, fueled by strong recurring revenue growth and improved profitability.

📊 Quarterly Results (Three months ended June 30, 2025)

  • Revenue: $643.9 million
    ↳ +24.2% YoY, beating consensus of $582.4M (~10.6% beat)
  • Non-GAAP EPS: $1.64
    ↳ +68% YoY, above $1.21 consensus estimate
  • GAAP EPS: $1.17 vs. $0.57 YoY
  • ARR (Annual Recurring Revenue): $2.416 billion
    ↳ +14% YoY, +9.3% in constant currency, at top end of guide
  • Recurring Revenue: $613.6 million
    ↳ +27.4% YoY, a record
  • Professional Services Revenue: $22.6 million
    ↳ –24.8% YoY, reflecting PTC’s SaaS shift
  • Free Cash Flow: $134 million
    ↳ +14% YoY

🧮 Margins and Operational Leverage

  • GAAP Operating Margin: 33% (vs. 18% YoY)
  • Non-GAAP Operating Margin: 44% (vs. 32% YoY)
  • Continued leverage from growth in recurring revenue and SaaS mix
  • Share repurchase: $75M in Q3, with another $75M planned in Q4
  • Net debt down 32%; leverage ratio on track for ~1x by year-end

🔮 Raised Guidance

FY2025 (Full Year)

  • ARR Growth: 8–9% (constant currency)
  • Revenue: $2.57–$2.63 billion
  • Non-GAAP EPS: $6.63–$7.03 (raised from $5.80–$6.55)
  • Free Cash Flow: ~$850 million (up from ~$730M)

Q4 2025

  • Revenue: $725–785 million
  • EPS: $2.10–$2.50
  • Free Cash Flow: $90–95 million

⚙️ Business Highlights

  • Product momentum in CAD, PLM, SLM, and ALM segments
  • SaaS transition progressing with margin tailwind
  • Partnership with NVIDIA to drive industrial AI initiatives
  • Strong client traction across verticals despite macro caution

📈 Stock Performance

  • Closed July 31 at $214.81, +6.07%, marking a new 52-week high
  • Intraday range: Low of $207.51 to high of $220.00
  • Volume: 2.6 million shares — over 2x the 50-day average
  • Peers Autodesk (ADSK), Synopsys (SNPS), and Cadence (CDNS) declined 1.6–1.8% that same day

❗ Initial after-hours dip (–0.7%) was reversed in full-day session as investors priced in strong fundamentals and guidance upgrades.

🧠 Key Takeaways

  • Recurring revenue strength, margin expansion, and visibility into cash flow are driving investor confidence.
  • PTC is now trading near record highs with a forward P/E above 50× — execution needs to remain flawless to justify valuation.
  • AI partnerships (e.g., NVIDIA) and software-led growth offer long-term differentiation but raise competitive pressure in the PLM/CAD ecosystem.

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