PTC : Q4 FY’23 Earnings Presentation

Q4'23 AND FY'23

FINANCIAL

RESULTS

Jim Heppelmann

CEO

Neil Barua

CEO-elect

Kristian Talvitie

CFO

November 1, 2023

FORWARD LOOKING STATEMENTS

This presentation includes forward looking statements regarding PTC's future financial performance, strategic outlook and expectations, anticipated future operations, and expected effects of strategic investments and initiatives. Because such statements deal with future events, actual results may differ materially from those projected in the forward- looking statements. Information about factors that could cause actual results to differ materially from those in the forward-looking statements can be found in the appendix to this presentation and in PTC's Annual Report on Form 10-K, Forms 10-Q and other filings with the U.S. Securities and Exchange Commission.

IMPORTANT INFORMATION ABOUT OPERATING AND NON-GAAP FINANCIAL MEASURES

This presentation includes supplemental operating and non-GAAP financial measures, targets and estimates. The non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. The definitions of these items and reconciliations of non-GAAP financial measures to comparable GAAP measures are included in the appendix to this presentation.

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Q4'23 AND FY'23 HIGHLIGHTS

JIM HEPPELMANN, CEO

SOLID TOP-LINE RESULTS

ARR

	$ in millions	Q4'23	Q4'22	YoY Change		Q4'23
		Guidance
	ARR as reported	$1,979	$1,572	26%
	Constant currency ARR	$1,941	$1,572	23%		$1,935 - $1,950
	Organic ARR as reported1	$1,807	$1,572	15%
	Constant currency organic ARR1	$1,770	$1,572	13%

Broad-based strength across product groups and geographic regions, combined with low churn

Q4'23 net new constant currency ARR of $73 million

In-quarter starts were $8 million lower than modeled

Deferred ARR that is contractually committed to start in future periods was $8 million higher than modeled

Solid outlook at the start of FY'24, based on strong pipeline and deferred ARR balance

At the start of FY'24, deferred ARR with contractually committed start dates over the next 12 months was approximately $20M higher than at the start of FY'23

FY'24 constant currency ARR guidance of 11% to 14% growth, up from the 10% to 14% range discussed last quarter

1 Organic results exclude ServiceMax (acquired in Q2'23)

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SOLID BOTTOM-LINE RESULTS
CASH FLOW
Cash flow growth driven by ARR growth and operating efficiency1 expansion
$ in millions	Q4'23	Q4'22	YoY Change	Q4'23
Guidance
Operating cash flow	$50	$38	29%	~$44
Free cash flow	$44	$29	52%	~$42

Operational changes and solid execution continue to generate the positive results we expect

Exceeded our Q4'23 cash flow guidance and extended our track record of disciplined operational management

FY'23 operating cash flow of $611M, up 40% and exceeded guidance of ~$605M

FY'23 free cash flow of $587M, up 41% and exceeded guidance of ~$585M

Expanded operating efficiency1 by 620 bps to 38% in FY'23, helped by resource rebalancing completed in 2H'22 Outperformed initial target of ~450 bps of expansion

Over the mid-term, we expect free cash flow to grow faster than ARR, with non-GAAP operating expenses expected to grow at roughly half the rate of ARR

1 Operating Efficiency % = Cash generation less non-GAAP cost of revenue and non-GAAP operating expenses, divided by cash generation Cash generation = ARR + Perpetual revenue + Professional services revenue

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SOLID ARR RESULTS ACROSS GEOGRAPHIC REGIONS

Q4'23 compared to Q4'22

	Europe
Americas	31% growth; 21% organic
25% growth; 12% organic	Constant currency:	APAC
	16% growth; 10% organic
Constant currency:	24% growth; 13% organic
25% growth; 12% organic		Constant currency:
		18% growth; 12% organic

Inorganic growth due to the acquisition of ServiceMax

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SOLID ARR RESULTS ACROSS PRODUCT GROUPS1

CAD: Product data authoring

software

PLM: Product data management and process orchestration software

$ in millions (constant currency)

$685	$752
Q4'22	Q4'23

12% YoY

10% YoY CC

$ in millions	36% YoY
(constant currency)

$1,188	34% YoY CC
	14% ServiceMax
$887

Q4'22 Q4'23

Double-digit growth in APAC and the Americas; high single-digit growth in Europe

Growth primarily driven by Creo

Strong % growth in Onshape

34% growth; 15% organic growth ex-ServiceMax ServiceMax delivered $170 million of ARR in Q4'23

Double-digit organic growth in Europe, the Americas, and APAC

Organic growth primarily driven by Windchill Strong organic % growth in ALM (Codebeamer)

1 Amounts shown and discussed on this slide are on a constant currency basis; Slide 18 shows constant currency and reported ARR

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DURABLE AND CONSISTENT GROWTH

NEIL BARUA, CEO-ELECT

CEO SUCCESSION GOING WELL

Moved from California to Boston

Started world tour with Jim

Met with customers, partners, employees, and investors

Great company with a strong foundation, and I'm excited about our future

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SUSTAINABILITY OF PTC'S TOP-LINE GROWTH

PTC: Double-Digit ARR1 Growth Every Year Since FY'17

Specific to PTC:

Layers of

Cumulative

Growth Drivers

$ in
millions							23%
$2,000
						16%
$1,500				11%	17%
			12%
		12%
$1,000	13%
$500
$-
FY'16	FY'17	FY'18	FY'19	FY'20	FY'21	FY'22	FY'23

Accretive Growth in SLM with ServiceMax

Accretive Growth in ALM with Codebeamer

On-Premise to SaaS Strategy for Core CAD/PLM

Accretive Growth in Pure-SaaS PLM with Arena

Accretive Growth in Pure-SaaS CAD with Onshape

Improving Commercial Discipline: Churn, Pricing, Discounting

Mid-

Teens %

Mid-Term

ARR

Growth2

Target

Conversion to Subscription Business Model Completed

Accretive Growth in IoT Segment with ThingWorx

Best in Class Core CAD/Creo and PLM/Windchill Products Taking Market Share

FY'12

FY'15

FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 FY'24 . . .

Overall		High-single-digitmarket growth trend driven by global economic growth and digital transformation
Market:		at industrial product companies

1 On a constant currency basis, using our FY'23 Plan foreign exchange rates (rates as of September 30, 2022) for all periods
2 ARR growth on an organic constant currency basis		10