PTC Inc. has recently released its 10-K report, providing a comprehensive overview of its financial performance for the fiscal year ending September 30, 2025. The company operates as a software company across the Americas, Europe, and the Asia Pacific, offering a suite of products that manage all aspects of the product development lifecycle, including real-time information sharing, Industrial Internet of Things software, service lifecycle management solutions, SaaS PLM solutions, and augmented reality software.
In the fiscal year 2025, PTC Inc. reported an Annual Run Rate (ARR) growth of 10% (8.5% constant currency) to $2.48 billion compared to the previous fiscal year. The company's cash provided by operating activities grew by 16% to $868 million, while free cash flow also saw a 16% increase to $857 million. PTC Inc. attributed its cash flow growth to resilient top-line growth due to its subscription business model and operational discipline.
Revenue for the fiscal year 2025 grew by 19% (18% constant currency) compared to the previous fiscal year. The operating margin also saw a significant increase of approximately 1030 basis points in fiscal year 2025 compared to the previous year, reflecting higher revenue and continued operating discipline. Diluted earnings per share grew by 95% to $6.08 in fiscal year 2025 compared to the previous year, primarily driven by revenue growth.
PTC Inc. also entered into a definitive agreement with an affiliate of TPG 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 plans to use the net after-tax proceeds to follow its overall capital allocation strategy of returning excess cash to shareholders via share repurchases, while allowing for potential tuck-in acquisitions.
The company's revenue by line of business showed that software revenue grew by 21% in fiscal year 2025, driven by significant growth in license revenue and support and cloud services revenue. Professional services revenue, however, decreased as the company continues to execute its strategy of leveraging partners to deliver services rather than contracting to deliver services itself.
Furthermore, PTC Inc. reported a growth in gross margin, with total gross margin percentage increasing to 84% in fiscal year 2025 from 81% in the previous year. The company's operating expenses increased by 4% in fiscal year 2025 compared to the previous year, primarily due to higher compensation expense, impairment charges, and acquisition-related costs.
As a result of these announcements, the company's shares have moved 0.99% on the market, 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.
