PTC Announces Record Q4 and Full Fiscal 2008 Revenue
28 October 2008 | News | Source: PTC
NEEDHAM, Mass.—October 28, 2008 --PTC (Nasdaq: PMTC - News), The Product Development Company®, today reported results for its fiscal fourth quarter and year ended September 30, 2008.
- Q4 non-GAAP Results: Revenue of $300.2 million and EPS of $0.45
- Q4 GAAP Results: Revenue of $299.5 million and EPS of $0.31
- FY 2008 non-GAAP Results: Revenue of $1,075 million with EPS of $1.36
- FY 2008 GAAP Results: Revenue of $1,070 million with EPS of $0.68
- Q1 non-GAAP Guidance: Revenue of $250 to $260 million with EPS of $0.23 to $0.29
- Q1 GAAP Guidance: Revenue of $250 to $260 million with EPS of $0.11 to $0.17
- FY 2009 non-GAAP Target: Revenue of $1,100 million with EPS of $1.35 to $1.40
- FY 2009 GAAP Target: Revenue of $1,100 million with EPS of $0.85 to $0.90
C. Richard Harrison, president and chief executive officer, commented, “We achieved record revenue in our fourth quarter and full fiscal year. Our non-GAAP year-over-year revenue growth was 13% in the fourth quarter and 14% for the full year, reflecting contribution from the CoCreate Software business acquired on November 30, 2007, favorable currency impact and organic growth. Importantly, we achieved $502 million in non-GAAP maintenance revenue in FY’08, which is largely a recurring revenue stream, and our reseller channel delivered 39% year-over-year growth.” GAAP year-over-year revenue growth was 12% for the fourth fiscal quarter and 14% for the full year. GAAP maintenance revenue was $498 million. Non-GAAP revenue and non-GAAP maintenance revenue exclude the effect of purchase accounting on the acquired deferred maintenance revenue balance of CoCreate of approximately $1 million in the fourth quarter and $5 million for the full year.
Harrison added, “In the fourth quarter, PTC received major orders from leading organizations, including Continental AG, Cisco, China Shipbuilding Group, EADS, Gildemeister, Hager, Kellog Brown and Root, NASA, SMS Demag AG, Redcats, Schaeffler, Toyota, Tyco, US Army, Wuhan Ship Development and Xian Aircraft.”
“There were 25 customers from which we recognized more than $1 million of license and services revenue in Q4. This compares to 13 customers last quarter and 22 in the same period last year. We recognized $61.3 million of license and services revenue from such customers in Q4, compared with $35.6 million last quarter and $58.2 million in Q4 of last year.”
Neil Moses, chief financial officer, commented, “We delivered 24.9% non-GAAP operating margin in the fourth quarter, an 80 basis point improvement from the same period last year. Our FY’08 non-GAAP operating margin of 21.6% is up 460 basis points over fiscal 2007.” GAAP operating margins for Q4 of 2008 and the full fiscal year 2008 were 15.8% and 11.7%, respectively. The Company’s non-GAAP tax rate was 27% in Q4 of 2008 and 31% for the full year. PTC’s GAAP tax rate was 22% in Q4 and 33% for the full year.
Moses continued, “During the quarter, we recorded a $4.7 million restructuring charge related to our ongoing globalization initiative as we continue to transition certain back-office functions to lower cost regions.”
Moses added, “Cash flow from operations was $41 million for the fourth quarter. We generated $222 million of cash flow from operations for the full fiscal year, compared to $127 million in FY’07. We used $11 million in Q4 to repay amounts borrowed under our revolving credit facility to finance the CoCreate acquisition, leaving an outstanding loan balance of $89 million at the end of the fourth quarter. Cash and cash equivalents were $257 million at the end of fiscal 2008.”
For the fiscal year ending September 30, 2009, PTC currently expects revenue to be approximately $1,100 million with non-GAAP earnings per diluted share in the range of $1.35 to $1.40. PTC expects GAAP earnings per diluted share in the range of $0.85 to $0.90 for the 2009 fiscal year. The full fiscal year guidance assumes a non-GAAP and GAAP tax rate of 30%.
The non-GAAP earnings guidance excludes approximately $47 million of stock-based compensation expense, $37 million of acquisition-related intangible asset amortization expense and the related income tax effects.
Harrison said, “Given the potential impact of a slowing economy in 2009 and currency fluctuations, we believe that our outlook and initiatives reflect a warranted balance of caution about next year and optimism about the longer-term health and growth potential of the business. We start the year with an expanded direct sales force resulting from investments made in fiscal 2008, and intend in fiscal 2009 to increase our investment in marketing in support of our reseller channel, in sales to develop a network of enterprise resellers, in services to develop an ecosystem of strategic services partners, and in R&D to further improve the breadth and competitiveness of our product portfolio.”
Moses added, “We remain focused on enhancing our longer-term business model through our on-going efforts to evolve our distribution model, globalize our workforce, and leverage the value of our Services business. Given the current difficult economic outlook, we are expecting FY’09 non-GAAP operating margins to be comparable to FY’08; however, we remain committed to further expanding our operating margins over the longer-term and believe the strategic investments we are making this year position us well for the future. Should our revenue estimates prove conservative for the year, there is opportunity for continued margin expansion in FY’09.”
Q1 FY’09 Outlook
“Looking forward to Q1, we are currently expecting revenue to be between $250 million and $260 million,” said Harrison. “Non-GAAP earnings per diluted share are expected to be between $0.23 and $0.29.” PTC expects GAAP Q1 earnings per diluted share between $0.11 and $0.17. The Q1 guidance assumes a non-GAAP and GAAP tax rate of 30%.
The Q1 non-GAAP earnings guidance excludes approximately $11 million of stock-based compensation expense, $9 million of acquisition-related intangible asset amortization expenses and the related income tax effects.
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