PTC Inc.

PTC produced a mixed set of results for first quarter of fiscal 2023. The company surpassed the revenue expectations of Wall Street but missed out on meeting earnings expectations given that it experienced some level of economic headwinds. The company reached $1.603 billion on the top line metric of ARR, which was above the high end of its target and up more than 15% year-over-year. The 14% organic ARR growth was followed by the additional point of inorganic growth from Codebeamer. The IoT, Arena, Windchill, and Onshape segments in the Americas experienced the fastest ARR percentage gain. Arbortext and Servigistics had significant growth in both APAC and Europe. Moreover, Onshape and augmented reality had significant percentage growth in Europe. The motorsports company implemented Windchill+, which included interaction with their hybrid SaaS ERP system, to achieve a production ramp-up period of several months. They achieved this so rapidly by utilizing Windchill+’s out-of-the-box functionality, which PTC provided to the user as a secure preconfigured service. Using SaaS apps is crucial for this customer since they lack a dedicated IT crew, allowing them to keep their internal efforts concentrated on racing while fostering better teamwork among members locally and globally. We give PTC Inc. a ‘Hold’ rating with a revised target price.