Maintains 35% to 40% License Revenue Growth Target in FY’10 on Strength of Windchill PLM Solution
NEEDHAM, Mass. — (BUSINESS WIRE) — June 7, 2010 — PTC (Nasdaq: PMTC), The Product Development Company®, today updated its revenue guidance for its fiscal Q3 and FY’10 due to the impact of currency fluctuations.
The Q3 guidance assumes a non-GAAP tax rate of 23%, a GAAP tax rate of 15% and 119 million diluted shares outstanding. The Q3 non-GAAP guidance excludes approximately $12 million of stock-based compensation expense, $9 million of acquisition-related intangible asset amortization expense and $6 million of related income tax effects.
The FY’10 targets assume a non-GAAP tax rate of 25%, a GAAP tax rate of 17% and 120 million diluted shares outstanding. The FY’10 non-GAAP targets exclude approximately $49 million of stock-based compensation expense, $34 million of acquisition-related intangible asset amortization and $27 million of related income tax effects.
James Heppelmann, president and chief operating officer commented, “There is a lot of momentum in the PLM market and we believe that PTC is gaining significant market share. As the year has progressed, we’ve seen building strength in our business and on that basis have increased our revenue expectations by more than $50 million and non-GAAP EPS expectations by $0.11 above our initial guidance on a constant currency basis. However, at the same time currency fluctuations have negatively impacted our FY’10 revenue expectations by more than $30 million and FY’10 non-GAAP EPS expectations by $0.07. We are pleased that the incremental revenue has more than offset the negative currency impact, and we remain $20 million in revenue and $0.04 in non-GAAP EPS ahead of our original guidance at this point.”
“We started the year with a 20% license growth target, and subsequently increased that target to 30% after seeing Q1 results and then to 35% to 40% after seeing Q2 results. Given the strength of our pipeline in all regions, we are maintaining our FY’10 license revenue guidance of 35% to 40% growth compared to FY’09, despite the impact of the weakening Euro on our near-term revenue performance,” continued Heppelmann. “We remain very optimistic about the market opportunity for PTC and are committed to achieving our goal of a 20% non-GAAP EPS CAGR over the next 5 years.”
Neil Moses, chief financial officer, commented, “We are reducing our currency assumptions for Q3 and Q4 from the $1.36 USD/EURO used to establish our previous Q3 and FY’10 guidance. We are now using the actual weighted average rate for Q3 of $1.29 USD/EURO and the current rate of $1.20 USD/EURO for Q4. The impact of this change is to reduce our Q3 revenue guidance by $5 million and to reduce our FY’10 revenue guidance by $15 million. We are maintaining our previous EPS targets for Q3 and FY’10.”
“We are also maintaining our non-GAAP operating margin target of 16% for
the year,” continued Moses, “as we intend to moderate the incremental
investments we had planned in our business during H2 to enable us to
still meet our $1.00 non-GAAP EPS guidance for the full year. We believe
this still allows us to make certain strategic investments, notably,
increasing our sales capacity, to continue to position us for a strong
FY’11 and to capitalize on our long-term growth opportunity.” For FY’10
the GAAP operating margin target is 7.5% and the GAAP EPS target is