PTC Inc delivered a solid QQ2 2025 performance with a durable margin profile and strong cash generation, underpinned by disciplined cost management and a continued transition toward recurring revenue streams. Revenue of $636.366 million rose 5.5% year-over-year and 12.6% quarter-over-quarter, supported by a high gross margin of 83.3% and a robust operating margin of 35.1%. Net income of $162.644 million produced an net margin of 25.6%, while diluted EPS reached $1.346 in the quarter, up meaningfully versus the prior-year period. EBITDA of $258.532 million yielded an EBITDA margin of 40.6%, highlighting the business’s ability to convert revenue into cash flow despite a sizable cost base, including ongoing R&D and GT&A investments to accelerate cloud and SaaS initiatives.
Cash flow metrics reinforce the strength of PTC’s cash generation. Operating cash flow stood at $281.309 million, with capital expenditures of only $2.809 million, resulting in free cash flow of $278.501 million for QQ2 2025. The company ended the period with a net debt position of approximately $1.332 billion on total debt of $1.567 billion, and cash balance of about $235 million, yielding a healthy though leverage-exposed balance sheet given the scale of goodwill and intangibles on the books (goodwill and intangible assets totaling ~$4.3 billion).
Management’s trajectory remains anchored in cloud-native products and platform integration (ThingWorx, Vuforia, Onshape, Arena, Windchill, Creo) to expand the subscription mix, improve gross retention, and drive long-term value creation. While no explicit forward-looking guidance is provided in the QQ2 update, the cadence of quarterly improvements and the strength of FCF support a constructive investment thesis for the near-to-medium term, contingent on continued execution in cloud transition and enterprise software demand.