Schnitger Corporation

PTC continues to roll

PTC announced earnings after the market closed on July 22, reporting revenue of $273 million for the fiscal third quarter of 2008, ahead of expectations – and up 21%,over last FQ3 due in no small part to the contribution of CoCreate.

A couple of interesting tidbits from the earnings call: CEO Dick Harrison said that the company’s business in North America was weighted towards Windchill, rather than Pro/E. Understandable since Windchill was first introduced in North America, then rolled out globally, but still surprising given how long Pro/E has been in the marketplace. This likely gives some proof to the conclusion that, at least in PTC’s case, the market for CAD solutions may be saturated in North America.

PTC now has 450 to 455 direct sales reps today and expects to add more during the fourth quarter. Harrison said that PTC sees sales reps becoming effective after a six to nine month “ramp up,” meaning that many of these new reps won’t become productive until the second half of fiscal 2009 (the middle of next calendar year). Since Dassault Systemes is also fiddling with its sales channels, we may be seeing the periodic expansion of the direct channel. Every few years, it becomes more fashionable to sell through a direct channel; then that proves too expensive and a lot of sales reps find themselves job hunting – until the next cycles, when it begins again.

Don’t you just love earnings season?

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