PTC's Q4 Earnings Surpass Estimates, Revenues Rise Y/Y, Shares Jump

PTC Inc PTC reported fourth-quarter fiscal 2024 non-GAAP earnings per share (EPS) of $1.54, up 28% year over year. The figure beat the Zacks Consensus Estimate by 7.7%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly revenues soared 15% year over year to $627 million. The Zacks Consensus Estimate for revenues was pegged at $620.5 million. The top line neared the high end of PTC’s guidance, driven by continued demand for its product lifecycle management (PLM) and computer-aided design (CAD) solutions.As part of its commitment to enhancing shareholder value, PTC announced a new $2 billion share repurchase authorization extending through Sept. 30, 2027. It plans to buy back nearly $300 million of its stock in fiscal 2025, with purchases commencing in the fiscal first quarter. In addition, PTC intends to retire $500 million in senior notes due in the fiscal second quarter of 2025. In response to the results, shares of PTC gained 4.2% in trading on Nov. 6 and closed the session at $198.04. The company's shares have rallied 33.7% in the past year compared with the sub-industry's growth of 22.1%.Image Source: Zacks Investment ResearchTop Line DetailsRecurring revenues of $582.4 million rose 16.4% year over year. Perpetual licenses increased 21% to $9.9 million.PTC Inc. Price, Consensus and EPS Surprise PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. QuoteRevenues by License, Support and ServicesLicense revenues (38.2% of total revenues) were $239.5 million, up 29.9% from the year-ago quarter’s figure.Support and cloud services revenues (56.3%) of $352.9 million increased 8.9%.Professional services revenues (5.5%) were $34.2 million, down 10.4% year over year.Revenues by Product GroupPLM and CAD businesses continue to witness healthy momentum. In the fiscal fourth quarter, PLM revenues were $408 million, rising 14% year over year. CAD revenues were $219 million, up 16% from a year ago.ARR PerformanceAnnualized recurring revenues (ARR) were $2.255 billion, up 14% year over year. At constant currency, ARR was $2.207 billion, up 12% year over year. The uptick was driven by strong performance across all divisions and regions.In the fiscal fourth quarter, PLM and CAD ARR were $1,387 million and $868 million, rising 15% and 13% year over year, respectively.Operating DetailsNon-GAAP gross margin came in at 84.4% compared with 81.6% in the prior-year period.Total operating expenses increased 3.3% year over year to $319.8 million.Operating income on a non-GAAP basis rose 37.8% year over year to $276.6 million.Operating margin on a non-GAAP basis increased 740 basis points on a year-over-year basis to 44.1%.Balance Sheet & Cash FlowAs of Sept. 30, 2024, cash and cash equivalents were $266 million compared with $288 million as of Sept. 30, 2024.Total debt, net of deferred issuance costs, was $1.748 billion as of Sept. 30, 2024, compared with $1.695 billion as of Sept. 30, 2023.Cash provided by operating activities was $98 million compared with the prior-year quarter’s figure of $50 million.The free cash flow was $94 million compared with $44 million in the year-ago quarter.GuidanceFor the first quarter fiscal 2025, PTC estimates revenues in the $540-$570 million band. Non-GAAP EPS is projected in the range of 75 cents to 95 cents. Cash from operations is expected to be $234 million, and free cash flow is forecasted to be $230 million.Revenues for fiscal 2025 are projected in the range of $2,505-$2,605 billion, indicating a rise of 9-13% year over year. Non-GAAP EPS is estimated in the $5.60-$6.30 band, suggesting a rise of 10-24%.For fiscal 2025, cash from operations is projected between $850 million and $865 million, indicating a rise of 13% to 15% on a year-over-year basis. The free cash flow is forecasted in the $835-$850 million band, suggesting a 14% to 16% increase.PTC projects 9% to 10% growth in ARR on a constant currency basis for fiscal 2025.PTC’s Zacks RankCurrently, PTC carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other CompaniesItron Inc ITRI reported non-GAAP EPS of $1.84 for third-quarter 2024, which beat the Zacks Consensus Estimate by 62.8%. The company reported earnings of 98 cents in the prior-year quarter.Shares of ITRI gained 77% in the past year. Watts Water Technologies, Inc. WTS reported third-quarter 2024 adjusted EPS of $2.03 compared with $2.04 in the prior-year quarter. The bottom line topped the Zacks Consensus Estimate by 2%.Shares of WTS have gained 5.2% in the past year. Western Digital Corporation WDC reported first-quarter fiscal 2025 non-GAAP earnings of $1.78 per share, surpassing the Zacks Consensus Estimate by 2.3%. The company incurred a loss of $1.76 per share in the prior-year quarter.Shares of WDC have gained 51.1% in the past year.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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