PTC INC. has recently released its 10-K report, revealing a business that operates as a software company across the Americas, Europe, and the Asia Pacific. The company offers a suite of products including Windchill, ThingWorx, ServiceMax, Arena, Codebeamer, Servigistics, FlexPLM, Kepware, Creo, Onshape, Vuforia, Arbortext, PTC Products, and augmented reality products. PTC Inc. was incorporated in 1985 and is headquartered in Boston, Massachusetts.
In the 10-K report, PTC INC. reported that its Annual Run Rate (ARR) grew by 10% (8.5% constant currency) to $2.48 billion as of the end of FY'25 compared to FY’24. Cash provided by operating activities grew by 16% to $868 million in FY'25 compared to FY'24, with free cash flow also growing by 16% to $857 million in FY'25 compared to FY'24. The company attributes its cash flow growth to resilient top-line growth due to its subscription business model and operational discipline. PTC INC. also made net debt repayments of $553 million and repurchased $300 million of its outstanding shares in FY'25. The company ended FY’25 with cash and cash equivalents of $184 million and gross debt of $1.20 billion, carrying an aggregate weighted average interest rate of 4.9%.
Revenue grew by 19% (18% constant currency) in FY'25 compared to FY'24, with operating margin growing by approximately 1030 basis points in FY'25 compared to FY'24. Diluted earnings per share grew by 95% to $6.08 in FY'25 compared to FY'24, driven by revenue growth. PTC INC. also entered into a definitive agreement with an affiliate of TPG, under which it agreed to sell its Kepware and ThingWorx businesses for total consideration of up to $725 million, with the transaction expected to close in the first half of calendar 2026.
The company's total recurring revenue grew by 22% (21% constant currency) in FY'25 compared to FY'24, while its total revenue increased by 19% (18% constant currency) in the same period. The gross margin also grew by 24% in FY'25 compared to FY'24, with the non-GAAP gross margin percentage reaching 86% in FY'25. PTC INC. also reported a 67% increase in operating income and a 46% increase in non-GAAP operating income in FY'25 compared to FY'24.
PTC INC. saw its license gross margin grow at a higher rate than license revenue in FY'25 due mainly to license revenue growth, while its support and cloud services gross margin growth was in line with support and cloud services revenue growth. The company's professional services gross margin decreased in FY’25 compared to FY’24, primarily driven by a sharper decrease in professional services revenue than in professional services expense.
Following these announcements, the company's shares moved 0.99%, and are now trading at a price of $172.12. If you want to know more, read the company's complete 10-K report here.
