NEEDHAM, Mass. — (BUSINESS WIRE) — January 28, 2015 — PTC (Nasdaq: PTC) today reported results for its first fiscal quarter ended January 3, 2015.

Highlights

• Q1 Results:

• Non-GAAP revenue of $327 million, up 1% over Q1’14 non-GAAP revenue and up 4% on a constant currency basis; unfavorable currency movements vs. year-ago rates impacted revenue by approximately $12 million.
• Non-GAAP EPS of $0.50, up 1% year over year and up 12% year over year on a constant currency basis; unfavorable currency movements vs. year-ago rates impacted non-GAAP EPS by approximately $0.05.
• Subscription solutions bookings ⁽¹⁾ represented 19% of License & Subscription Solutions (L&SS) bookings ⁽²⁾, above our guidance assumption of 15%. We believe this higher than expected level of subscription solutions, while positive long-term, reduced L&SS revenue by $3 million and non-GAAP EPS by $0.02.
• Non-GAAP operating margin of 21.4%, down 400 basis points year over year and down 270 basis points on a constant currency basis.
• GAAP revenue of $325 million, GAAP operating margin of 11.6% and GAAP EPS of $0.26
• Non-GAAP revenue contribution from acquired businesses Atego (acquired on June 30, 2014), and Axeda (acquired on August 11, 2014) was $14 million.

⁽¹⁾ Subscription solutions bookings are new subscription solutions annualized contract value (ACV) bookings multiplied by a conversion factor of 2. Annualized contract value (ACV) is the total value of a new subscription solutions bookings divided by the term of the contract (in days) multiplied by 365. If the contract term is less than one year, then the ACV is the actual value of the contract.

⁽²⁾ L&SS bookings are new license revenue plus subscription solutions bookings.

• Updated Guidance:

• Please refer to Table 2 for detailed guidance and key assumptions

A reconciliation between the GAAP and non-GAAP results for Q1’15 is contained in the tables attached to this press release.

Results Commentary
James Heppelmann, president and chief executive officer, commented, “We had a solid quarter with 4% L&SS bookings growth, 4% non-GAAP revenue growth, and 12% non-GAAP EPS growth on a constant currency basis. Having established a leadership position in the market for smart, connected products during FY’14, our results in Q1’15 suggest we are seeing good customer traction for our Internet of Things (IoT) solutions, as we added 42 new IoT customer logos in the quarter. We believe growth in IoT, when combined with our strong product offerings in the CAD, PLM, ALM, and SLM markets, positions PTC as the foremost provider of solutions to help customers create, operate and service smart, connected products. In addition, with the Q1’15 rollout of subscription pricing across the vast majority of our products, customers now have greater flexibility in how they engage with PTC. We were encouraged to see solid customer acceptance of this offering, with subscription solutions bookings in the quarter representing 19% of our L&SS bookings, which was higher than our expectation of 15%. Furthermore, approximately 60% of Q1’15 revenue came from recurring revenue streams, up from approximately 53% in the year ago period.”

Heppelmann added, “Looking at Q1’15 results, PTC non-GAAP revenue exceeded the high end of our guidance range, driven by higher than expected support and professional services revenue. Non-GAAP L&SS revenue of $80 million was flat year over year on a constant currency basis (YoY CC) while L&SS bookings increased 4% YoY CC. From a geographic perspective, we saw good L&SS YoY revenue and bookings results in Japan, the Pac Rim, and Europe offset by a difficult compare in the Americas due to strong performance in FY’14.” Please refer to Table 1 for a breakdown of our L&SS performance by solution area and region.