PTC Inc reported QQ3 2024 revenue of $518.6 million, down 4.4% year-over-year and 14.0% sequentially. The top-line softness contrasted with a robust gross margin of 76.4%, supporting an operating margin of 18.5% and an EBITDA margin of 25.2%. Net income stood at $68.98 million, up 12.4% year-over-year, driven by cost controls and favorable non-operating items, while quarterly earnings experienced a meaningful quarter-over-quarter decline due to revenue mix and higher operating expenses in the period.
The company generated solid cash flow, with operating cash flow of $213.8 million and free cash flow of $212.2 million, leading to cash at period-end of $247.7 million. However, PTC carries a substantial balance sheet burden: total debt of $1.991 billion and net debt of approximately $1.744 billion, contributing to leverage metrics (debt/EBITDA and debt-to-equity) that warrant attention as the company continues its cloud and subscription transition. The balance sheet also features a heavy goodwill and intangible asset footprint ($3.442 billion goodwill; $910.5 million in intangibles; total goodwill and intangibles of about $4.353 billion), raising impairment risk if growth trajectories underperform.
Looking forward, management did not publish explicit quarterly forward guidance in QQ3 2024. The key question for investors centers on the trajectory of cloud/subscription mix, ARR growth, and margin expansion as PTC continues to migrate customers to Onshape, Arena, ThingWorx, and Vuforia platforms. In the near term, PTC remains well positioned to monetize its diversified software portfolio but must navigate revenue volatility and high leverage to sustain value creation.