PTC Announces Solid Q3 Results, Increases FY’12 EPS Guidance

Heppelmann added, “We had 34 large deals (recognition of license + services revenue of more than $1 million from a single customer) in Q3’12, compared to 25 in Q2’12. We believe this is an indicator of the strength of our pipeline for business opportunities with new and existing customers. During the quarter we recognized revenue from leading organizations such as FAW Group, Jenoptick, KTM-Sportmotorcycle AG, Levi Strauss, Samsung, Stryker, US Navy and Volvo.”

Heppelmann continued, “We are excited about the market momentum we are seeing and remain committed to driving margin expansion. In spite of weaker macroeconomic conditions and currency headwinds (currency alone could negatively impact FY’13 revenues by approximately $40 million) we are targeting FY’13 non-GAAP EPS of $1.70 to $1.80.” We will provide formal FY’13 guidance in conjunction with our Q4 results in October.

Jeff Glidden, chief financial officer, commented, “From a profitability standpoint, Q3 was another solid quarter with a good mix of revenue, strong services margins, and lower operating expenses as we remained disciplined on hiring and spending. We delivered $0.37 non-GAAP EPS, an increase of 16% from $0.32 non-GAAP EPS in Q3’11. We ended Q3’12 with $238 million of cash up from $224 million at the end of Q2’12, reflecting strong operating cash flow, offset by $20 million used to repay our revolving credit facility and $20 million for stock repurchases.”

Outlook Commentary

Glidden added, “For Q4, we are providing guidance of $320 to $335 million in revenue with $100 to $115 million in license revenue, approximately $70 million in services revenue and $150 million in maintenance revenue. Q4 guidance assumes $1.20 USD / EURO, down from previous assumption of $1.30. We are expecting Q4 non-GAAP EPS of $0.44 to $0.50 and GAAP EPS of $0.33 to $0.39.” The Q4 guidance assumes a non-GAAP tax rate of 25%, a GAAP tax rate of 20% and 121 million diluted shares outstanding. The Q4 non-GAAP EPS guidance excludes $12 million of stock-based compensation expense, $9 million of acquisition-related intangible asset amortization expense, and their related income tax effects.

Glidden continued, “Looking to the full year FY’12, we are now targeting non-GAAP revenue of $1,255 to $1,270 million, representing 10% to 11% year-over-year growth on a constant currency basis. We are now targeting license revenue of approximately $355 million (up 6% year-over-year on a constant currency basis), services revenue of approximately $300 million and non-GAAP maintenance revenue of $610 million. Our commitment to profitability remains squarely on track. We continue to work toward significant improvement in services non-GAAP net margins with a target of at least 12% for the year, and we are targeting approximately 180bps of non-GAAP operating margin improvement during FY’12. Our new FY’12 non-GAAP EPS target is $1.46 to $1.52.” On a reported revenue basis, we are now targeting FY’12 non-GAAP and GAAP revenue growth of 7% to 9% year-over-year, license revenue growth of 4% year-over-year and a GAAP EPS target of $0.73 to $0.80 with a target of approximately $607 million in GAAP maintenance revenue.

The FY’12 targets assume a non-GAAP tax rate of 24.5%, a GAAP tax rate of 23% and 121 million diluted shares outstanding. The FY’12 non-GAAP targets exclude approximately $25 million in restructuring charges, $3 million for the effect of purchase accounting on acquired MKS deferred maintenance revenue, $52 million of stock-based compensation expense, $36 million of acquisition-related intangible asset amortization, $3 million of acquisition-related expenses, $1 million of other expense, their related income tax effects, as well as any one time tax items.

Senior management will host a live webcast and conference call on Thursday, July 26, 2012 at 8:30 am Eastern Time to discuss Q3 results.

Q3 Earnings Conference Call and Webcast

Prepared remarks for the conference call have been posted to the investor relations section of our website. The prepared remarks will not be read live; the call will be primarily Q&A.

What:     PTC Fiscal Q3 Conference Call and Webcast
When: Thursday, July 26th, 2012 at 8:30 am (ET)
Dial-in: 1-800-857-5592 or 1-773-799-3757

Call Leader: James Heppelmann

Passcode: PTC

Webcast:

www.ptc.com/for/investors.htm

Replay:

The audio replay of this event will be archived for public replay until 4:00 pm (CT) on August 6, 2012 at 1-866-393-0874. To access the replay via webcast, please visit www.ptc.com/for/investors.htm .


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