Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you provide more details on how you constructed the downside scenario for the 7% ARR guidance? A: Neil Barua, CEO, explained that the adjustment from 10% to 9% was due to customer conversations indicating potential delays or smaller deal sizes due to macroeconomic conditions. The 7% low-end guidance was constructed using a bottoms-up view of the pipeline and a top-down analysis of past crises, considering potential worsening macro conditions.
Q: Can you elaborate on the steps taken in the go-to-market transformation and the indicators of its success? A: Robert Dahdah, Chief Revenue Officer, highlighted the pivot to a vertical approach in the field organization, which was executed with low churn and retention of top talent. This transformation is expected to lead to more customer conversations and a stronger pipeline, indicating early success.
Q: How should we think about the $1 billion free cash flow target for next year given the current ARR outlook? A: Kristian Talvitie, CFO, mentioned that it's premature to provide specifics as they need to complete the annual planning process and consider factors like interest rates, tax policy, and foreign exchange rates. The company remains confident in its execution and financial discipline.
Q: How are customer discussions regarding AI adoption progressing in the current environment? A: Neil Barua noted strong customer interest in PTC's AI products, such as Windchill AI and ServiceMax AI. While customers are more engaged, significant adoption of generative AI is expected to occur methodically over the next 12 to 24 months.
Q: Are the conversations about potential deal delays or smaller sizes happening across all verticals or specific ones? A: Neil Barua explained that these conversations are idiosyncratic and vary by customer and their level of transformation. While some customers are moving forward with digital transformation, others may delay or reduce project sizes due to macroeconomic uncertainties.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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