[April 20, 2016] |
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PTC Announces Second Quarter FY'16 Results
PTC
(Nasdaq: PTC) today reported financial results for the second quarter
ended April 2, 2016.
Q2 Fiscal 2016 Overview Second
quarter FY'16 GAAP revenue was $273 million; non-GAAP revenue was $274
million. GAAP net loss was $5 million or $0.05 per share; non-GAAP net
income was $26 million or $0.23 per share.
As compared to the second quarter of FY'15, currency negatively impacted
revenue by approximately $9 million and negatively impacted non-GAAP EPS
by approximately $0.01 per share.
James Heppelmann, President and CEO said, "We were very pleased with our
execution in Q2. Bookings exceeded the high-end of guidance, adoption of
our subscription licensing model accelerated, support conversions to
subscription accelerated sequentially, and we continued to gain traction
in our IoT business." Heppelmann added, "While a higher subscription mix
negatively impacts near-term reported revenue and earnings, we believe
significant long-term value will be created for our customers and
shareholders by transitioning to a subscription model. Importantly, we
remain committed to our track record of financial discipline, and when
viewed on a mix-adjusted basis, according to our model, both our Q2
revenue and earnings per share would have exceeded the high end of our
guidance range."
Operational Overview For
additional details, please refer to the prepared remarks and financial
data tables that have been posted to the Investor Relations section of
our website at ptc.com. Information about our bookings and other
reporting measures is provided on page 4.
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License and subscription bookings were $86 million; above the high end
of the guidance range of $71 million to $81 million.
-
For the quarter, subscription bookings were approximately 54% of total
bookings, well above our guidance assumption of 26% and up from 14% a
year ago. Based upon our model, this higher than guidance mix of
subscription in the quarter, while expected to be positive long-term,
reduced perpetual license revenue by approximately $24 million and
reduced non-GAAP EPS by approximately $0.16 as compared to our
guidance. As a rule of thumb, our model indicates that, on an annual
basis, every 1% change in subscription mix will impact annual revenue
by $3 million, and annual non-GAAP EPS by $0.02.
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Total subscription annualized contract value (ACV) was $23 million;
above guidance of $10 million.
-
Software revenue, which reflects a higher mix of subscription than
last year, was down approximately $24 million or 9% on a
year-over-year, constant currency basis. Our model indicates that the
higher mix of subscription than last year lowered Q2'16 software
revenue by approximately $30 million.
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Annualized recurring revenue (ARR) was approximately $742 million at
the end of the second quarter of fiscal 2016.
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GAAP operating expenses were approximately $191 million; non-GAAP
operating expenses were approximately $164 million. These results were
at the low end of both the GAAP and non-GAAP guidance ranges.
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Q2'16 GAAP operating margin was 1% and non-GAAP operating margin was
14%. Q2'15 GAAP operating margin was 1% and non-GAAP operating margin
was 23%. Based on our model, the higher mix of subscription in Q2'16
reduced Q2'16 non-GAAP operating margin by approximately 700 basis
points as compared to guidance.
-
For Q2'16, we recorded a GAAP income tax expense of $1.6 million, or
$0.01 per share and a non-GAAP income tax expense of $6.8 million, or
$0.06 per share. The non-GAAP tax rate for the quarter was 21%.
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Cash flow from operations was $49 million. Excluding $28 million paid
in February in connection with the SEC and DOJ FCPA investigation
related to our China business and $25 million paid in connection with
the restructuring announced in October 2015, cash provided by
operations for Q2'16 was $102 million and free cash flow was $97
million. We did not purchase any shares in Q2'16, as our share
repurchases are planned for the second half of FY'16.
-
We ended the quarter with total cash and cash equivalents of $368
million and total debt of $838 million.
Workforce Realignment In
October 2015, reflecting a realignment of resources toward higher growth
opportunities and our commitment to operating margin improvement, we
announced a plan to repurpose or eliminate approximately 8% of worldwide
positions and to consolidate select facilities. This is expected to
result in a restructuring charge of up to $50 million; of which $37
million was recorded in Q1'16 and $5 million was recorded in Q2'16, with
the remainder expected to be recorded in Q3 and Q4 of FY'16.
Substantially all of the charges are attributable to termination
benefits, most of which will be paid in FY'16.
FY'16 Business Outlook For the
quarter ending July 2, 2016 and fiscal year 2016, the company expects:
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($ in millions)
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Q3'16 Low
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Q3'16 High
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FY'16 Low
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FY'16 High
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Subscription ACV(1)
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$
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22
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$
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24
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$
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79
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$
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84
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License and Subscription Bookings(1)
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90
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100
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357
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377
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Subscription % of Bookings(1)
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48
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%
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48
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%
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44
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%
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44
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%
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Subscription Revenue
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$
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32
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$
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32
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$
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115
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$
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116
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Support Revenue
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159
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159
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649
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650
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Perpetual License Revenue
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47
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52
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200
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212
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Total Software Revenue
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238
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243
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964
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978
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Professional Services Revenue
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49
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49
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196
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197
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Total Revenue
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$
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287
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$
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292
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$
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1,160
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$
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1,175
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Operating Expense (GAAP)
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$
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196
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$
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198
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$
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798
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$
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802
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Operating Expense (Non-GAAP)
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167
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169
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656
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660
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Operating Margin (GAAP)
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2
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%
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4
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%
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3
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%
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4
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%
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Operating Margin (Non-GAAP)
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16
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%
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17
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%
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18
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%
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19
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%
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Tax Rate (GAAP)
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10
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%
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8
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%
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10
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%
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0
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%
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Tax Rate (Non-GAAP)
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10
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%
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8
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%
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10
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%
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8
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%
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Shares Outstanding
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116
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116
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116
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116
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EPS (GAAP)
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$
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0.01
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$
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0.06
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$
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0.11
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$
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0.18
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EPS (Non-GAAP)
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$
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0.31
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$
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0.36
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$
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1.52
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$
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1.62
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Free Cash Flow(2)
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$
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215
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$
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225
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(1)Explanation of these metrics is provided below. (2)Free
Cash Flow guidance is net cash provided by (used in) operating
activities less capital expenditures, and excludes previously announced
restructuring payments of approximately $50 million and the $28 million
legal settlement in connection with the SEC and DOJ FCPA investigation
related to our China business.
The Q3'16 and full year FY'16 non-GAAP operating margin and non-GAAP EPS
guidance exclude the estimated items outlined in the table below and
their income tax effects, as well as any discrete tax items (which are
not known or reflected). Additionally, the company is currently
reviewing its financing structure and considering refinancing
opportunities in the credit and debt markets; our guidance excludes the
potential impact of any such potential refinancing.
($ in millions)
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Q3'16
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FY'16
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Effect of acquisition accounting on fair value of acquired
deferred revenue
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$
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1
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$
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3
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Stock-based compensation expense
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14
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66
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Intangible asset amortization expense
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15
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58
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Acquisition-related charges
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0
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2
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Restructuring charges
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8
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50
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Non-operating credit facility refinancing costs
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-
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2
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Total Estimated GAAP adjustments
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$
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38
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$
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182
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Numbers may not sum due to rounding.
PTC's Second Quarter FY'16 Results Conference
Call, Prepared Remarks and Financial Data Tables Prepared
remarks for the conference call and financial data tables have been
posted to the Investor Relations section of our website at ptc.com. The
Company will host a management presentation to discuss results at 5:00
pm ET on Wednesday, April 20, 2016. To access the live webcast, please
visit PTC's Investor Relations website at investor.ptc.com at least 15
minutes before the scheduled start time to download any necessary audio
or plug-in software. To participate in the live conference call, dial
8008575592 or 7737993757 and provide the passcode PTC. The call will
be recorded and a replay will be available for 10 days following the
call by dialing 888-567-0385 and entering the pass code 1321. The
archived webcast will also be available on PTC's
Investor Relations website.
Bookings Metrics We offer both
perpetual and subscription licensing options to our customers, as well
as monthly software rentals for certain products. Given the difference
in revenue recognition between the sale of a perpetual software license
(revenue is recognized at the time of sale) and a subscription (revenue
is deferred and recognized ratably over the subscription term), we use
bookings for internal planning, forecasting and reporting of new license
and cloud services transactions. In order to normalize between perpetual
and subscription licenses, we define subscription bookings as the
subscription annualized contract value (subscription ACV) of new
subscription bookings multiplied by a conversion factor of 2. We arrived
at the conversion factor of 2 by considering a number of variables
including pricing, support, length of term, and renewal rates. We define
subscription ACV as the total value of a new subscription booking
divided by the term of the contract (in days) multiplied by 365. If the
term of the subscription contract is less than a year, the ACV is equal
to the total contract value.
License and subscription bookings equal subscription bookings (as
described above) plus perpetual license bookings plus any monthly
software rental bookings during the period. Total ACV equals
subscription ACV (as described above) plus the annualized value of
incremental monthly software rental bookings during the period.
Because subscription bookings is a metric we use to approximate the
value of subscription sales if sold as perpetual licenses, it does not
represent the actual revenue that will be recognized with respect to
subscription sales or that would be recognized if the sales were
perpetual licenses, nor does the annualized value of monthly software
rental bookings represent the value of any such booking.
License Mix-Adjusted Metrics These
metrics assume that all new software and cloud services bookings since
the start of FY'14 were perpetual license sales that included support in
subsequent periods. The license mix-adjusted amount is calculated by
converting the ACV (as defined above) of a new subscription solutions
booking in the period to an assumed perpetual license equivalent by
multiplying the ACV by a conversion factor of 2 (as defined above), and
adding that amount to the perpetual license revenue amounts recognized
in that period. Support calculated at 20% of the annual value of the
converted amount is added to support revenue in future periods,
beginning the quarter after the converted booking is assumed to be
recognized. The assumed support revenue is spread ratably over a 12
month period and is assumed to renew in subsequent years.
Annualized Recurring Revenue (ARR) We
currently offer our solutions on premise, as a cloud service, and as
SaaS offerings. Our on premise solutions can be licensed either as
perpetual with annual support contracts or through a subscription, which
is a combination of license and support. Beginning in FY'16, we launched
a number of initiatives designed to incentivize more of our customers to
purchase our solutions on a subscription basis. If successful, these
initiatives will cause an increasing percentage of our revenue to come
from subscriptions, which is expected to grow our recurring software
revenue.
To help investors understand and assess the success of this expected
revenue transition, we are providing an Annualized Recurring Revenue
operating measure. Annualized Recurring Revenue (ARR) for a given
quarter is calculated by dividing the non-GAAP subscription and support
software revenue for the quarter by the number of days in the quarter
and multiplying by 365. ARR should be viewed independently of revenue
and deferred revenue as it is an operating measure and is not intended
to be combined with or to replace either of those items. ARR is not a
forecast and does not include revenue reported as perpetual license or
professional services revenue in our consolidated statement of income.
Subscription and support revenue and ARR reported in a quarter can be
impacted by multiple factors, including but not limited to (1) the
timing of the start of a contract or a renewal, including the impact of
on-time renewals, support win-backs, and support conversions, which may
vary by quarter, (2) the ramping of committed monthly payments under a
subscription agreement over time, and (3) multiple other contractual
factors with the customer including other elements sold with the
subscription or support contract, and these elements can result in
variability in reported ARR.
Constant Currency Change Metric Year-over-year
changes in revenue and bookings on a constant currency basis compare
actual reported results excluding the effect of any hedging converted
into U.S. dollars based on the corresponding prior year's foreign
currency exchange rates to reported results for the comparable prior
year period.
Important Information About Non-GAAP References PTC
provides non-GAAP supplemental information to its financial results.
Non-GAAP revenue, non-GAAP operating expenses, non-GAAP operating
margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net
income and non-GAAP EPS exclude the effect of purchase accounting on the
fair value of acquired deferred revenue and costs, stock-based
compensation expense, amortization of acquired intangible assets,
restructuring charges, acquisition-related expenses, costs associated
with terminating a U.S. pension plan, costs associated with our
previously disclosed China investigation, certain identified
non-operating gains and losses, the related tax effects of the preceding
items, credit facility refinancing expenses and certain discrete tax
items. We use these non-GAAP measures, and we believe that they assist
our investors, to make period-to-period comparisons of our operational
performance because they provide a view of our operating results without
items that are not, in our view, indicative of our core operating
results. We believe that these non-GAAP measures help illustrate
underlying trends in our business, and we use the measures to establish
budgets and operational goals, communicated internally and externally,
for managing our business and evaluating our performance. We believe
that providing non-GAAP measures affords investors a view of our
operating results that may be more easily compared to the results of
peer companies. In addition, compensation of our executives is based in
part on the performance of our business based on these non-GAAP
measures. However, non-GAAP information should not be construed as an
alternative to GAAP information as the items excluded from the non-GAAP
measures often have a material impact on PTC's financial results.
Management uses, and investors should consider, non-GAAP measures in
conjunction with our GAAP results.
PTC also provides information on "free cash flow" and "free cash flow
return" to enable investors to assess our ability to generate cash
without incurring additional external financings and to evaluate our
performance against our announced long-term goal of returning
approximately 40% of our free cash flow to shareholders via stock
repurchases. Free-cash flow is net cash provided by (used in) operating
activities less capital expenditures, and free-cash flow return is the
value of shares repurchased divided by free cash flow.
Forward-Looking Statements Statements
in this press release that are not historic facts, including statements
about our third quarter and full fiscal 2016 targets and other future
financial and growth expectations, anticipated tax rates, and potential
refinancing opportunities are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks include: the macroeconomic
and/or global manufacturing climates may not improve or may deteriorate;
customers may not purchase our solutions when or at the rates we expect;
our businesses, including our Internet of Things (IoT) business, may not
expand and/or generate the revenue we expect; foreign currency exchange
rates may vary from our expectations and thereby affect our reported
revenue and expense; the mix of revenue between license & subscription
solutions, support and professional services could be different than we
expect, which could impact our EPS results; our customers may purchase
more of our solutions as subscriptions than we expect, which would
adversely affect near-term revenue, operating margins, and EPS;
customers may not purchase subscriptions at the rate we expect; sales of
our solutions as subscriptions may not have the longer-term effect on
revenue that we expect; our workforce realignment may not achieve the
expense savings we expect and may adversely affect our operations; we
may be unable to generate sufficient operating cash flow to return 40%
of free cash flow to shareholders or that other uses of cash could
preclude share repurchases; the resolution of the Securities and
Exchange Commission and Department of Justice FCPA investigation may
have collateral effects on our business in the United States and
elsewhere; and we may be unable to complete any refinancing
opportunities or that, if we do, expenses associated with our capital
structure may increase.
In addition, our assumptions concerning our future GAAP and non-GAAP
effective income tax rates are based on estimates and other factors that
could change, including the geographic mix of our revenue, expenses and
profits and loans and cash repatriations from foreign subsidiaries.
Other risks and uncertainties that could cause actual results to differ
materially from those projected are detailed from time to time in
reports we file with the Securities and Exchange Commission, including
our most recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q.
PTC and the PTC logo are trademarks or registered trademarks of PTC
Inc. or its subsidiaries in the United States and in other countries.
About PTC PTC
(NASDAQ: PTC) is a global provider of technology platforms and solutions
that transform how companies create, operate, and service the "things"
in the Internet of Things (IoT). The company's next-generation
ThingWorx® technology platform gives developers the tools they need to
capture, analyze, and capitalize on the vast amounts of data being
generated by smart, connected products and systems. The company's
field-proven solutions are deployed in more than 26,000 businesses
worldwide to generate a product or service advantage. PTC's
award-winning CEO, considered an industry thought leader, co-authored
the definitive guides to the impact of the IoT on business in the Harvard
Business Review.
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PTC Inc. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in
thousands, except per share data)
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Three Months Ended
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Six Months Ended
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April 2, 2016
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April 4, 2015
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April 2, 2016
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April 4, 2015
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Revenue:
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Subscription
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$
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23,659
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$
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15,765
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$
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45,835
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$
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29,988
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Support
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160,625
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168,727
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332,381
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350,356
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Total recurring software
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184,284
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184,492
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378,216
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380,344
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Perpetual license
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39,689
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70,187
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87,452
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134,935
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Total software
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223,973
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254,679
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465,668
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515,279
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Professional services
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48,654
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59,440
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97,976
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124,282
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Total revenue
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272,627
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314,119
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563,644
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639,561
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Cost of revenue:
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Cost of software revenue (1)
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38,613
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34,518
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75,427
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69,243
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Cost of professional services revenue(1)
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41,578
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51,536
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84,912
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109,753
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Total cost of revenue
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80,191
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86,054
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160,339
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178,996
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Gross margin
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192,436
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228,065
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403,305
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460,565
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Operating expenses:
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Sales and marketing (1)
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87,177
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83,865
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169,606
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173,349
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Research and development (1)
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56,610
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60,158
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114,279
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121,255
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General and administrative (1)
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33,916
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32,394
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72,483
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67,524
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Amortization of acquired intangible assets
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8,396
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9,173
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|
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16,746
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|
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18,586
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Restructuring charges
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|
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4,579
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|
|
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38,487
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|
|
|
41,726
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|
|
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38,232
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Total operating expenses
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|
|
|
190,678
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|
|
|
224,077
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|
|
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414,840
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|
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418,946
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|
|
|
|
|
|
|
|
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Operating income (loss)
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|
|
|
1,758
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|
|
|
3,988
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|
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(11,535
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)
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|
|
41,619
|
|
Other expense, net
|
|
|
|
(5,327
|
)
|
|
|
(3,601
|
)
|
|
|
(11,580
|
)
|
|
|
(6,825
|
)
|
Income (loss) before income taxes
|
|
|
|
(3,569
|
)
|
|
|
387
|
|
|
|
(23,115
|
)
|
|
|
34,794
|
|
Provision (benefit) for income taxes
|
|
|
|
1,604
|
|
|
|
(5,005
|
)
|
|
|
5,950
|
|
|
|
(882
|
)
|
Net income (loss)
|
|
|
$
|
(5,173
|
)
|
|
$
|
5,392
|
|
|
$
|
(29,065
|
)
|
|
$
|
35,676
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.31
|
|
Weighted average shares outstanding
|
|
|
|
114,563
|
|
|
|
114,944
|
|
|
|
114,354
|
|
|
|
115,147
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.31
|
|
Weighted average shares outstanding
|
|
|
|
114,563
|
|
|
|
115,922
|
|
|
|
114,354
|
|
|
|
116,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The amounts in the tables above include stock-based
compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
April 2, 2016
|
|
April 4, 2015
|
Cost of software revenue
|
|
|
$
|
1,100
|
|
|
$
|
1,107
|
|
|
$
|
3,005
|
|
|
$
|
2,025
|
|
Cost of professional services revenue
|
|
|
|
1,279
|
|
|
|
1,504
|
|
|
|
2,730
|
|
|
|
3,193
|
|
Sales and marketing
|
|
|
|
3,777
|
|
|
|
3,545
|
|
|
|
8,059
|
|
|
|
6,746
|
|
Research and development
|
|
|
|
2,534
|
|
|
|
3,001
|
|
|
|
5,047
|
|
|
|
6,087
|
|
General and administrative
|
|
|
|
6,146
|
|
|
|
3,665
|
|
|
|
19,184
|
|
|
|
6,013
|
|
Total stock-based compensation
|
|
|
$
|
14,836
|
|
|
$
|
12,822
|
|
|
$
|
38,025
|
|
|
$
|
24,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PTC Inc. NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS (UNAUDITED) (in thousands, except per
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
April 2, 2016
|
|
April 4, 2015
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
|
$
|
272,627
|
|
|
$
|
314,119
|
|
|
$
|
563,644
|
|
|
$
|
639,561
|
|
Fair value adjustment of acquired deferred subscription revenue
|
|
|
|
777
|
|
|
|
590
|
|
|
|
965
|
|
|
|
1,272
|
|
Fair value adjustment of acquired deferred support revenue
|
|
|
|
-
|
|
|
|
265
|
|
|
|
-
|
|
|
|
730
|
|
Fair value adjustment of acquired deferred services revenue
|
|
|
|
286
|
|
|
|
278
|
|
|
|
595
|
|
|
|
535
|
|
Non-GAAP revenue
|
|
|
$
|
273,690
|
|
|
$
|
315,252
|
|
|
$
|
565,204
|
|
|
$
|
642,098
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
$
|
192,436
|
|
|
$
|
228,065
|
|
|
$
|
403,305
|
|
|
$
|
460,565
|
|
Fair value adjustment of acquired deferred revenue
|
|
|
|
1,063
|
|
|
|
1,133
|
|
|
|
1,560
|
|
|
|
2,537
|
|
Fair value adjustment to deferred services cost
|
|
|
|
(125
|
)
|
|
|
(151
|
)
|
|
|
(257
|
)
|
|
|
(257
|
)
|
Stock-based compensation
|
|
|
|
2,379
|
|
|
|
2,611
|
|
|
|
5,735
|
|
|
|
5,218
|
|
Amortization of acquired intangible assets included in cost of
software revenue
|
|
|
|
6,725
|
|
|
|
4,714
|
|
|
|
11,852
|
|
|
|
9,481
|
|
Non-GAAP gross margin
|
|
|
$
|
202,478
|
|
|
$
|
236,372
|
|
|
$
|
422,195
|
|
|
$
|
477,544
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
|
$
|
1,758
|
|
|
$
|
3,988
|
|
|
$
|
(11,535
|
)
|
|
$
|
41,619
|
|
Fair value adjustment of acquired deferred revenue
|
|
|
|
1,063
|
|
|
|
1,133
|
|
|
|
1,560
|
|
|
|
2,537
|
|
Fair value adjustment to deferred services cost
|
|
|
|
(125
|
)
|
|
|
(151
|
)
|
|
|
(257
|
)
|
|
|
(257
|
)
|
Stock-based compensation
|
|
|
|
14,836
|
|
|
|
12,822
|
|
|
|
38,025
|
|
|
|
24,064
|
|
Amortization of acquired intangible assets included in cost of
software revenue
|
|
|
|
6,725
|
|
|
|
4,714
|
|
|
|
11,852
|
|
|
|
9,481
|
|
Amortization of acquired intangible assets
|
|
|
|
8,396
|
|
|
|
9,173
|
|
|
|
16,746
|
|
|
|
18,586
|
|
Acquisition-related charges included in general and administrative
costs
|
|
|
|
1,071
|
|
|
|
1,892
|
|
|
|
2,278
|
|
|
|
5,925
|
|
US pension plan termination-related costs
|
|
|
|
-
|
|
|
|
1,713
|
|
|
|
-
|
|
|
|
3,397
|
|
Restructuring charges
|
|
|
|
4,579
|
|
|
|
38,487
|
|
|
|
41,726
|
|
|
|
38,232
|
|
Non-GAAP operating income (2)
|
|
|
$
|
38,303
|
|
|
$
|
73,771
|
|
|
$
|
100,395
|
|
|
$
|
143,584
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
$
|
(5,173
|
)
|
|
$
|
5,392
|
|
|
$
|
(29,065
|
)
|
|
$
|
35,676
|
|
Fair value adjustment of acquired deferred revenue
|
|
|
|
1,063
|
|
|
|
1,133
|
|
|
|
1,560
|
|
|
|
2,537
|
|
Fair value adjustment to deferred services cost
|
|
|
|
(125
|
)
|
|
|
(151
|
)
|
|
|
(257
|
)
|
|
|
(257
|
)
|
Stock-based compensation
|
|
|
|
14,836
|
|
|
|
12,822
|
|
|
|
38,025
|
|
|
|
24,064
|
|
Amortization of acquired intangible assets included in cost of
software revenue
|
|
|
|
6,725
|
|
|
|
4,714
|
|
|
|
11,852
|
|
|
|
9,481
|
|
Amortization of acquired intangible assets
|
|
|
|
8,396
|
|
|
|
9,173
|
|
|
|
16,746
|
|
|
|
18,586
|
|
Acquisition-related charges included in general and administrative
costs
|
|
|
|
1,071
|
|
|
|
1,892
|
|
|
|
2,278
|
|
|
|
5,925
|
|
US pension plan termination-related costs
|
|
|
|
-
|
|
|
|
1,713
|
|
|
|
-
|
|
|
|
3,397
|
|
Restructuring charges
|
|
|
|
4,579
|
|
|
|
38,487
|
|
|
|
41,726
|
|
|
|
38,232
|
|
Non-operating credit facility refinancing costs
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,359
|
|
|
|
-
|
|
Income tax adjustments (3)
|
|
|
|
(5,208
|
)
|
|
|
(13,757
|
)
|
|
|
(279
|
)
|
|
|
(17,243
|
)
|
Non-GAAP net income
|
|
|
$
|
26,164
|
|
|
$
|
61,418
|
|
|
$
|
84,945
|
|
|
$
|
120,398
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings (loss) per share
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.31
|
|
Fair value of acquired deferred revenue
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.02
|
|
Stock-based compensation
|
|
|
|
0.13
|
|
|
|
0.11
|
|
|
|
0.33
|
|
|
|
0.21
|
|
Amortization of acquired intangibles
|
|
|
|
0.13
|
|
|
|
0.12
|
|
|
|
0.25
|
|
|
|
0.24
|
|
Acquisition-related charges
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.05
|
|
US pension plan termination-related costs
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.03
|
|
Restructuring charges
|
|
|
|
0.04
|
|
|
|
0.33
|
|
|
|
0.36
|
|
|
|
0.33
|
|
Non-operating credit facility refinancing costs
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.02
|
|
|
|
-
|
|
Income tax adjustments
|
|
|
|
(0.05
|
)
|
|
|
(0.12
|
)
|
|
|
(0.00
|
)
|
|
|
(0.15
|
)
|
Non-GAAP diluted earnings per share
|
|
|
$
|
0.23
|
|
|
$
|
0.53
|
|
|
$
|
0.74
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted weighted average shares outstanding
|
|
|
|
114,563
|
|
|
|
115,922
|
|
|
|
114,354
|
|
|
|
116,479
|
|
Dilutive effect of stock based compensation plans
|
|
|
|
428
|
|
|
|
-
|
|
|
|
758
|
|
|
|
-
|
|
Non-GAAP diluted weighted average shares outstanding
|
|
|
|
114,991
|
|
|
|
115,922
|
|
|
|
115,112
|
|
|
|
116,479
|
|
|
|
|
|
|
|
|
|
|
|
(2)Operating margin impact of non-GAAP adjustments:
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
April 2, 2016
|
|
April 4, 2015
|
GAAP operating margin
|
|
|
|
0.6
|
%
|
|
|
1.3
|
%
|
|
|
-2.0
|
%
|
|
|
6.5
|
%
|
Fair value of acquired deferred revenue
|
|
|
|
0.4
|
%
|
|
|
0.4
|
%
|
|
|
0.3
|
%
|
|
|
0.4
|
%
|
Fair value adjustment to deferred services cost
|
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
Stock-based compensation
|
|
|
|
5.4
|
%
|
|
|
4.1
|
%
|
|
|
6.7
|
%
|
|
|
3.8
|
%
|
Amortization of acquired intangibles
|
|
|
|
5.5
|
%
|
|
|
4.4
|
%
|
|
|
5.1
|
%
|
|
|
4.4
|
%
|
Acquisition-related charges
|
|
|
|
0.4
|
%
|
|
|
0.6
|
%
|
|
|
0.4
|
%
|
|
|
0.9
|
%
|
US pension plan termination-related costs
|
|
|
|
0.0
|
%
|
|
|
0.5
|
%
|
|
|
0.0
|
%
|
|
|
0.5
|
%
|
Restructuring charges
|
|
|
|
1.7
|
%
|
|
|
12.3
|
%
|
|
|
7.4
|
%
|
|
|
6.0
|
%
|
Non-GAAP operating margin
|
|
|
|
14.0
|
%
|
|
|
23.4
|
%
|
|
|
17.8
|
%
|
|
|
22.4
|
%
|
|
|
|
|
|
|
|
|
|
|
(3) We have recorded a full valuation allowance against our U.S. net
deferred tax assets and a valuation allowance against net deferred tax
assets in certain foreign jurisdictions. As we are profitable on a
non-GAAP basis, the 2016 and 2015 non-GAAP tax provisions are being
calculated assuming there is no valuation allowance. Income tax
adjustments for the three and six months ended April 4, 2015 reflect the
tax effects of non-GAAP adjustments which are calculated by applying the
applicable tax rate by jurisdiction to the non-GAAP adjustments listed
above. However, for the six months ended April 2, 2016, because of low
expected full year GAAP earnings combined with the relatively large
year-to-date GAAP loss, the non-GAAP provision for the second quarter
and first six months of 2016 calculated based on our historical
methodology is not reflective of our full year expected non-GAAP tax
rate. As a result, in the second quarter we changed our methodology for
calculating our non-GAAP tax provision. For the six months ended April
2, 2016, our non-GAAP tax provision is based on our annual expected
non-GAAP tax rate applied to our year-to-date non-GAAP earnings.
|
|
|
|
|
|
PTC Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
September 30, 2015
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
368,456
|
|
$
|
273,417
|
Accounts receivable, net
|
|
|
|
146,669
|
|
|
197,275
|
Property and equipment, net
|
|
|
|
62,867
|
|
|
65,162
|
Goodwill and acquired intangible assets, net
|
|
|
|
1,511,416
|
|
|
1,360,342
|
Other assets
|
|
|
|
322,094
|
|
|
313,717
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
2,411,502
|
|
$
|
2,209,913
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue
|
|
|
$
|
446,608
|
|
$
|
386,850
|
Borrowings under credit facility
|
|
|
|
838,125
|
|
|
668,125
|
Other liabilities
|
|
|
|
272,665
|
|
|
294,767
|
Stockholders' equity
|
|
|
|
854,104
|
|
|
860,171
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
2,411,502
|
|
$
|
2,209,913
|
|
|
|
|
|
|
|
PTC Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
|
April 2, 2016
|
|
April 4, 2015
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(5,173
|
)
|
|
$
|
5,392
|
|
|
$
|
(29,065
|
)
|
|
$
|
35,676
|
|
Stock-based compensation
|
|
|
|
14,836
|
|
|
|
12,822
|
|
|
|
38,025
|
|
|
|
24,064
|
|
Depreciation and amortization
|
|
|
|
22,291
|
|
|
|
20,968
|
|
|
|
42,904
|
|
|
|
42,205
|
|
Accounts receivable
|
|
|
|
28,398
|
|
|
|
(3,089
|
)
|
|
|
63,617
|
|
|
|
22,711
|
|
Accounts payable and accruals
|
|
|
|
(28,067
|
)
|
|
|
33,720
|
|
|
|
(17,692
|
)
|
|
|
(17,198
|
)
|
Deferred revenue
|
|
|
|
22,757
|
|
|
|
40,976
|
|
|
|
24,019
|
|
|
|
32,200
|
|
Income taxes
|
|
|
|
(5,471
|
)
|
|
|
(13,612
|
)
|
|
|
(8,826
|
)
|
|
|
(16,565
|
)
|
Excess tax benefits from stock-based awards
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(56
|
)
|
|
|
(163
|
)
|
Other
|
|
|
|
(686
|
)
|
|
|
(5,185
|
)
|
|
|
(2,787
|
)
|
|
|
(17,306
|
)
|
Net cash provided by operating activities (4)
|
|
|
|
48,885
|
|
|
|
91,992
|
|
|
|
110,139
|
|
|
|
105,624
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(4,681
|
)
|
|
|
(6,160
|
)
|
|
|
(8,866
|
)
|
|
|
(14,107
|
)
|
Acquisitions of businesses, net of cash acquired (5)
|
|
|
|
(99,411
|
)
|
|
|
-
|
|
|
|
(164,191
|
)
|
|
|
180
|
|
Proceeds (payments) on debt, net
|
|
|
|
120,000
|
|
|
|
(75,000
|
)
|
|
|
170,000
|
|
|
|
(81,250
|
)
|
Proceeds from issuance of common stock
|
|
|
|
-
|
|
|
|
3
|
|
|
|
1
|
|
|
|
6
|
|
Payments of withholding taxes in connection with vesting of
stock-based awards
|
|
|
|
(638
|
)
|
|
|
(195
|
)
|
|
|
(15,471
|
)
|
|
|
(21,864
|
)
|
Excess tax benefits from stock-based awards
|
|
|
|
-
|
|
|
|
-
|
|
|
|
56
|
|
|
|
163
|
|
Other financing & investing activities
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,300
|
)
|
|
|
(1,000
|
)
|
Foreign exchange impact on cash
|
|
|
|
7,504
|
|
|
|
(3,877
|
)
|
|
|
5,671
|
|
|
|
(13,591
|
)
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
71,659
|
|
|
|
6,763
|
|
|
|
95,039
|
|
|
|
(25,839
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
|
296,797
|
|
|
|
261,052
|
|
|
|
273,417
|
|
|
|
293,654
|
|
Cash and cash equivalents, end of period
|
|
|
$
|
368,456
|
|
|
$
|
267,815
|
|
|
$
|
368,456
|
|
|
$
|
267,815
|
|
|
|
|
|
|
|
|
|
|
|
(4) The three months ended April 2, 2016 include a $28 million legal
settlement payment. The three and six months ended April 2, 2016 include
$25 million and $42 million in restructuring payments, respectively. The
three and six months ended April 4, 2015 include $5 million and $23
million in restructuring payments, respectively. The three and six
months ended April 4, 2015 included $5 million and $15 million of
voluntary contributions to a non-U.S. pension plan, respectively.
(5) We aquired Kepware, Inc. on January 11, 2016 for $99 million (net of
cash acquired) and Vuforia on November 3, 2015 for $65 million (net of
cash acquired).
View source version on businesswire.com: http://www.businesswire.com/news/home/20160420006406/en/
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