Schnitger Corporation

PTC reports decent FQ2, still tough out there

NewsPTC just reported results for its fiscal second quarter (ended March 31) that show the company performed more or less as it predicted. But the rest of fiscal 2013 (through September) is going to be tough and so PTC moderated its revenue forecast for the next six months. CEO Jim Heppelmann said that the continued slowdown in the manufacturing industry led to decreased license revenue (and large deals weighted towards services) in FQ2, a trend that is likely to continue.

Total GAAP revenue for the second fiscal quarter was $314 million, up 4%, right in the middle of the target it announced at the FQ1 earnings call, though $1 million below analyst consensus so the share price may fall a bit at the open. On the other hand, PTC implemented cost control measures (including a layoff) that led to higher profit in FQ2, and a higher earnings outlook for the rest of the year that should make investors happy. On the other other hand, PTC lowered its revenue forecast for the rest of the year. Oh, who knows what investors will do? The share price will open up, down or the same. (Also, DS will have announced in Europe before the US markets open; if they report a massive March quarter, PTC would suffer in comparison.)

The details:

PTC lowered its outlook for the rest of 2013, with FQ3 GAAP revenue now expected to be between $314 million and $329 million (of which $80 million to $90 million will be from licenses, basically flat with last year). For the year, PTC now sees GAAP revenue of $1,302 million to $1,312 million — which is a pretty significant $40 million lower than forecast at the FQ1 earnings call.

Okay. That’s a heck of a lot of numbers. We’ll get more color commentary in the morning. I hope we find out what worked in Japan that doesn’t seem to be working in other parts of the world; why the CAD channel appears to be struggling; why big deals seem harder to close yet stay the same size (would it be easier to close smaller deals?); what percentage of the base is now on Creo (vs. ProE or Wildfire) and how Windchill Elements, the new “quick install” flavor released earlier this year, is doing.

I’d also be interested in learning what parts of the business are winning competitive engagements — and why. Is it because PTC has such a broad offering now that  entire enterprises are standardizing on PTC for design – manufacturing – service? Or is one part of the portfolio leading today, and there is evaluation/interest in the rest? Or is it point solutions, Creo vs CAD or Windchill vs PLM?

Stay tuned. I’ll post a quick update after the earnings call, if warranted.

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