PTC Parametric Technology Corporation

PTC Inc. (formerly Parametric Technology Corporation) 's strategy in the field Internet of Things is based on its IoT ThingWorx Application Developer Platform. ON It enables rapid development with ready-made models and hybrid application technology (mashups).

PTC also offers the Axeda Machine Cloud, which provides services and software for managing connected devices, and the Coldlight Neuron predictive analytics platform, which allows you to automatically analyze data, identify patterns and send this information to any application.

Performance indicators

2021: Revenue - $1.81 billion, profit - $476.9 million

PTC completed fiscal year 2021 with revenue of $1.81 billion compared to $1.46 billion for the previous year. Software subscriptions that provide recurring revenues account for most of the business of the American company: over the year, their sales increased from $1.28 billion to $1.62 billion.

The implementation of indefinite licenses for software installed on client computers increased from $32.7 million in 2020 to $33 million a year later. About $157.8 million PTC earned on all kinds of professional services, including product support. In 2020, these revenues were measured at $143.8 million.

PTC 2021 Results: Revenue Grows with Cloud Products

The report says that annual revenue from support services and sales of cloud services reached about $911.3 million, which is more than the previous year (about $804.8 million). License sales increased from $509.8 million to $738.1 million.

In North America, PTC revenue in 2021 increased by 19% compared to 2020, which is the highest among the regions. For comparison: in Europe, turnover increased by 12%, in the Asia-Pacific region - by 16%. The results of the company's work in Russia are not given in the report.

PTC's net profit in FY2021 was $476.9 million, significantly increasing from a year ago, which was $130.7 million.

PTC in its report showed the advantages of using cloud solutions over local ones: buying the former costs twice as much as the latter, but local products require additional costs (servers, data warehouses, system administrators, and software integration), as a result of which using SaaS platforms, in terms of total cost of ownership (Customer TCO), costs at least half as much.^[1]

History

2022: PTC Halts Operations in Russia

American developer of industrial solutions PTC announced that it is terminating its operations and sales in Russia. A message about this appeared on March 4 on the English version of ^[2] = pr_urconflict. Also, the company's partners in Russia received written notification.

The company offered Russian consumers augmented reality (AR) systems, industrial Internet of Things (IIoT), computer-aided design (CAD ) systems and PLM systems. In Russia, PTC worked through a single partner, Mont.

PTC's Russian office will be closed soon. In Russia, Belarus and Ukraine, the company will stop all operational activities, while supporting projects in Asian CIS members.

A statement published on the PTC website also says that the company will donate $1 million to help residents of Ukraine.

2020: The company got rid of losses by switching to subscriptions

In fiscal 2020, PTC recorded revenue of $1.46 billion, while a year earlier sales were measured at $1.26 billion. That is, there was a 16 percent increase. Most of the company's revenues - $1.28 billion in 2020 - come regularly from subscription sales.

For the 12-month reporting period, closed at the end of September of the 2020 calendar year, deliveries of indefinite licenses provided the software manufacturer with revenue of $32.7 million, which more than doubles to the figure of a year ago ($70.7 million). All kinds of professional services added about $143.8 million to PTC's annual revenue, compared to $167.5 million in fiscal 2019.

In 2020, PTC managed to avoid losses by switching to subscriptions

The company completed the 2020 reporting year with a net profit of $130.7 million, while a year earlier there were equal to $27.5 million.

Parametric Technology Corporation states that the COVID-19 coronavirus pandemic did not have a significant impact on the company's business, because, according to management, the transition to a subscription-based model of recurring income allows the vendor to cope with major macroeconomic problems.

Although we see some signs of weakness in small areas of our business, especially in aviation and retail, we have not had significant failures amid the current macroeconomic conditions, said PTC CFO Kristian Talvitie.

However, there were no negative consequences of the pandemic. According to PTC's annual statements, revenue in Focus Solutions Group declined by 4%, compared with a 10 percent increase a year earlier. The decline was due to a decrease in demand for the company's products from retailers, airlines and several other customers. In the Core Product Group direction, PTC's revenue rose 11%.^[3]

2019

Revenue - $1.31 billion, profit - $2.98 million

In fiscal 2019 (ended September 30, 2019 calendar year), PTC raised $1.31 billion against $1.24 billion in 2018. Software license sales for the year increased from $529.3 million to $666.8 million. Revenue from sales of support services and cloud services decreased from $559.2 million to $484 million

In the reporting year, PTC continued to move from the traditional sales model software to a subscription distribution scheme, just as it does Adobe. Autodesk This approach to business entails a high focus on future revenue and accelerated new customer engagement, but PTC's performance differs from that shown by competitors.

PTC raised $1.31 billion against $1.24 billion in 2018.

Regular annual revenue (ARR) reached $1.12 billion, which is 12% higher than a year ago. Recurring revenue from PTC software sales in 2019 reached $1.08 billion, which is 10% more than a year earlier. Excluding currency fluctuations, revenues increased by 13%.

The company earned $42.2 million on professional services, which significantly exceeds the result of the 2018 financial year of $25.3 million.

Commenting on the financial results, PTC President and CEO Jim Heppelmann said that thanks to cooperation with Rockwell Automation, the company makes major deals, but they account for less than 10% of the revenue from sales of Internet of Things and augmented reality solutions. At the same time, PTC expects to increase this share to 25%.

In fiscal 2019, PTC's net profit turned out to be $2.98 million, which is several times less than the profit of the previous year (almost $52 million).

On the day the annual statements were published, PTC's stock rose more than 4% in price due to the company's revenue and profit being above market expectations.^[4]

Onshape cloud CAD developer purchase for $470 million

On October 24, 2019, PTC announced the acquisition of Onshape for $470 million. After the close of the transaction, scheduled for November, the company being sold will become a separate division of PTC, whose management will report to CEO Jim Heppelmann. More details here.

Morgan Stanley: PTC will buy in the next 12 months

In early August 2019, Morgan Stanley presented a list of large IT companies, which, according to bank analysts, will be "definitely bought" over the next 12 months. Among them is PTC. More details here.

2018

2018: Revenue - $1.3 billion, profit - $51.99 million

In fiscal year 2018, which ended September 30, 2018, PTC sales amounted to $1.24 billion against $1.2 billion a year earlier.

The company earned $482.03 million on the implementation of subscriptions for the software, and support services brought the vendor $496.83 million. These figures refer to so-called recurring income.

Sales of indefinite licenses are declining, and in 2018 they amounted to $109.63 million. Professional services added about $153.34 million in revenue to PTC's budget.

PTC Financials

PTC's net profit jumped more than eight times - from $6.24 million in fiscal year 2017 to $51.99 million a year later.

According to PTC President and CEO  James Heppelmann,  2018 was another successful year in terms of making the company a fast-growing provider of subscription software and a leader in the industrial IoT market.

Over the year, we have achieved good results in our main business areas: CAD and PLM. Also, ThingWorx continues to gain momentum among new and current customers, and interest in our augmented reality solutions has grown even faster, "said the head of PTC.

Together with the release of the financial report, the company announced a restructuring in which it plans to invest more in IIoT, augmented reality and other technologies, the revenues of which are increasing.

Conversion costs will amount to $18 million. They mainly include the costs of personnel changes and canceled bonuses. However, restructuring will not result in significant cost savings, as it is only a "reallocation of resources," PTC said in a press release.

On the day of the financial year 2018 statements and restructuring announcements, PTC shares fell 5% in price^[5]

Purchase of software developer for generative design Frustum for $70 million

On November 20, 2018, PTC announced the acquisition of generative design software developer Frustum for $70 million. With this deal, the artificial intelligence-based generative design technologies that Frustum is developing will be a transformative addition to PTC Creo's portfolio. More details here.

Purchase of augmented reality technology developer Waypoint Labs

On June 18, 2018, PTC announced the acquisition of Waypoint Labs. This is the third purchase on the augmented reality (AR) market for the manufacturer of product design and lifecycle management software. More details here.

Sale of 8.4% of shares for $1 billion to Rockwell

In June 2018, the manufacturer of industrial automation solutions Rockwell Automation announced the purchase of an 8.4% stake in PTC for $1 billion and thereby became one of the three largest shareholders in the development of computer-aided design (CAD) systems.

Under the terms of the agreement, Rockwell buys 10.6 million new PTC shares at  $94.5  apiece, which is about 8.6% more than the PTC quotation rate by the close of the exchange on the day before the deal was announced. After the announcement, PTC securities rose 10.2% and reached a record $95.88, reports Reuters news agency.

Rockwell Automation Headquarters

 Rockwell Automation Chairman and Chief Executive Officer Blake Moret will join  PTC's board after closing the deal scheduled for the second half of 2018.

It is noted that due to the significant participation in the equity capital of PTC, the manufacturer of equipment and software for production automation expects to bring IoT and augmented reality technologies to its solutions.

We see this agreement as a strategically important positive for PTC, which can help open doors for thousands of companies that traditionally do not use PTC products for their key CAD capabilities, "comments JP Morgan analyst Sterling Auty.

According to PTC CEO Jim Heppelmann, leveraging the company's expertise with PTC technologies will enable customers to make money from a promising industrial Internet of Things.

According to experts, Rockwell and PTC are entering a new strategic partnership, which was prompted by the same vision of smart enterprise software technologies and a focus on industrial customers interested in digitalization.^[6]

2017: Return to profit; revenue - $1.16 billion

In fiscal 2017, PTC's revenue amounted to $1.16 billion, compared to $1.14 billion a year earlier. The company returned to profit, recording it at $6.24 million, while in 2016 there were equal $54.5 million losses, which were then associated with the costs of layoffs.

If in fiscal year 2016, PTC's total expenses were measured at $852 million, then a year later they amounted to $794 million.

Most of PTC's turnover comes from software sales (including support and subscription services), which in fiscal year 2017 turned out to be $987.3 million, an increase of almost 5% compared to the previous year. The rest of the turnover - $176.7 million - fell on various kinds of professional services.

According to PTC President and CEO James Heppelmann, the company is pleased with the annual results. Orders for new software licenses and support services were on record ($419 million, up 4%) and exceeded PTC expectations.

PTC Software Revenue Evolution

Fiscal year 2017 was another year of excellent progress in our transformation into a fast-growing software subscription company and leader of the industrial IoT. Last year, we achieved high results in our key CAD and PLM divisions, increased orders in the IoT business at a pace above the market and emerged from the "subscription feeder," said the head of PTC.

In 2017, orders for the purchase of computer-aided design systems rose by 14%. This growth, measured by a two-digit indicator, was the second in a row. Orders for PLM solutions increased, and the IoT business showed a rise of 29%.

PTC's most profitable market remains North and South America, where the company's annual revenue reached $434 million, which is 5% more than a year earlier. The volume of European business increased by 6%, to $357 million. In the Asia-Pacific region, sales grew by 2% to $197 million.^[7]

2016

Losses due to layoffs

PTC completed fiscal year 2016 with losses due to downsizing costs. This is stated in the report published by the company.

For the 12-month reporting period, which ended on September 30, 2016, PTC sales amounted to $1.1 billion against $1.3 billion a year earlier. The company received a net loss of $54.5 million, while in 2015 there was a net profit of $47.6 million.

PTC Headquarters

The past year has been a turning point for PTC, says PTC President and CEO James Heppelmann. - We have exceeded the strategic objectives of order growth, leadership in the IoT market, improvement of margins and transition to subscription model.

According to the top manager, about 56% of the orders accepted by PTC were for software subscription purchases, which is higher than the company's own expectations. In 2016, orders for the purchase of licenses and subscriptions ON turned out to be $401 million, an increase of 16% year on year.

The average contract value for the sale of subscriptions jumped 281% to $114 million. This growth was largely due to two major transactions in the final quarter of the reporting year.

Most of PTC's revenue is generated by software sales, which in fiscal year 2016 exceeded $943.6 million. The rest of the turnover - $197 million - fell on professional services.

During the reporting year, operating expenses amounted to almost $852 million, slightly decreasing from $878.9 million a year earlier. This included $76.3 million in restructuring costs, which, in particular, involves the dismissal of employees. In October 2015, PTC reported a decline of about 8% in global staffing and consolidation of some business units.

The company completed 2016 with cash and cash equivalents of $328 million, as well as with a total debt of $758 million.^[8]

Fine of $28 million for bribes in state-owned companies in China

In mid-February 2016, it became known that PTC would have to pay more than $28 million for bribes in order to receive contracts. It is reported by the news agency Reuters.

The United States Department of Justice (U.S. Department of Justice) and the Securities and Exchange Commission (SEC) have announced the signing of an agreement with PTC to resolve claims related to the company's violation of the Anti-Corruption Abroad Act (FCPA), which prohibits bribery of foreign government officials.

PTC to pay $28 million bribe of top managers of Chinese state-owned companies

PTC is accused of arranging and paying for several Chinese executives to travel to the United States between 2006 and 2011 with the help of local partners in Shanghai and Hong Kong. On paper, these were trips to conduct training at PTC headquarters in Needham (Massachusetts, USA), and expenses were disguised as travel costs.

Top managers of Chinese state-owned companies really visited the PTC office in Massachusetts, however, as a rule, they were there for no more than a day, after which they went to have fun (they attended excursions, played golf, etc.). The company paid for excursion trips to New York, Los Angeles, Las Vegas and Hawaii, the Americangovernmental the agencies said.

PTC's Chinese divisions spent more than $1 million on such tours, and in return the company received contracts from local state-owned companies in excess of $13 million.

To prevent possible prosecution, PTC agreed to pay $14.5 million to the US Department of Justice. In addition, according to an SEC statement, the company will return $11.9 million in profits resulting from bribery and $1.8 million in interest.

PTC declined to comment on Reuters' request.^[9]

2015: Purchase of Vuforia AR from Qualcomm

On October 15, 2015, PTC announced a final agreement to acquire Vuforia from Qualcomm Connected Experiences, Inc., a $65 million subsidiary of Qualcomm Incorporated.

Vuforia is the advanced and most common augmented reality (AR) technology platform. Its acquisition will expand PTC's portfolio and accelerate the company's strategy to become a leading provider of technologies and solutions that bring the digital world closer to the real world.

Under the terms of the agreement, PTC will acquire Vuforia, including the development ecosystem. PTC intends to continue investing in a platform that supports and extends the Vuforia ecosystem.

Combining the capabilities of Vuforia and PTC platforms allows you to take advantage of two qualitatively new technological trends - [[Internet of Things (IoT)|[[Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|[[Internet of things of Internet of Things (IoT)|IoT (IoT)]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]] and augmented reality (AR)] - to create a new class of products that bring the digital and real worlds closer together. In conjunction with PTC's IoT and analytics platforms, the Vuforia platform offers opportunities to create new ways to develop, monitor, and control products, and train operators and technicians to use and maintain them.

2014

Revenue $1.35 billion

In accordance with generally accepted accounting principles (GAAP), the company's revenue for fiscal year 2014 amounted to $1 billion 357 million against $1 billion 284 million a year earlier, and operating margin - 14.5% against 9.8% in 2013.

Atego takeover

On August 8, 2014, PTC announced the completion of the acquisition of Atego, a developer of model-oriented design systems and software development applications.

The new division will complement PTC's Product Lifecycle Management (PLM) and Application Lifecycle Management (ALM ) portfolio and confirm PTC's commitment to developing its customers' systems design initiatives with powerful modeling tools.

Atego's advanced Model-Oriented System Design (MBSE) solution combines capabilities for requirements engineering, architectural modeling, physical product properties, and system function validation. This ensures efficiency and standardization of the process, allowing geographically dispersed teams to jointly develop digital models of complex systems, easily track changes made to them and use developments in new projects. These capabilities are becoming increasingly important in the world of intelligent, interconnected products, where manufacturers must develop systems that simultaneously include high-tech mechanical, electrical, and software components.

2011

50% increase in turnover in Russia and the CIS

In the global market, the company's revenues grew by more than 15.8%, exceeding $1 billion, the margin was 17.7%. Turnover growth in Russia and the CIS countries exceeded 50% and is noticeably ahead of the corporate one. The turnover of the Russian RTS office increased by 100% compared to the last quarter of fiscal year 2010. Global revenue for this period amounted to $341.3 million, operating margin - 22.7%. The growth of RTS revenues over the past year exceeded the total market growth by almost twice. Most of the revenue in fiscal 2011 (48%), the corporation received from sales of technical support services, 29% brought license sales and 23% - consulting services. It was this part of PTC's business that grew most dynamically: consulting growth exceeded 23%. Most of the RTS turnover (40%) was earned in the European region, where sales grew by 20%, while the turnover in the market of Russia and the CIS countries exceeded these indicators and amounted to about 50%.

According to industrial analysts, Russian discrete production is "sandwiched" between the high quality of Western products and the low prices of Chinese and other Asian manufacturers. The low efficiency of the organization of domestic enterprises leads to low profitability of operations. Russian enterprises face problems such as low productivity, a gap in generations of industrial personnel, and an increase in the complexity of managing numerous suppliers. The global challenges of industry in Russia are the increase in the cost of resources, the increase in consumer demand and tougher competition, the need for castomization of products, etc. According to RTS, PLM systems, in general, and its business platform, in particular, solve many of these problems, and intends to convince the management of Russian industrial enterprises of the need to invest in solutions of this class.

According to the CIMdata analytical agency, the market for management business platforms of the PLM class (software solutions for optimizing all processes from conceptual product design to decommissioning) grew by 9.1%. RTS also estimates the global market for computer-aided design (CAD) and PLM class systems as growing and plans to increase revenue growth by 40% by 2014.

Presentation of new products in Stuttgart

In the third decade of November 2011, PTC held a conference in Stuttgart (Germany), where the main events were the announcements of new products of the company and its acquisition.

PTC announced three innovations in its product portfolio. First of all, the launch of several applications for Creo - the new MCAD platform, which the company announced in October 2010. With Creo, the company combines MCAD (ProEngineer, CoCreate, and Product View) products. At the same time, AnyData Adoption technology allows the integration of heterogeneous CAD products (that is, third-party developers).

Analysts regard the launch of this platform as a good move, since the vendor has the opportunity to integrate many of its modeling tools, which have become part of the product portfolio due to acquisitions made earlier (for example, CoCreate and ProductView). However, from a marketing point of view, PTC will be quite difficult - to replace the brand "ProEngineer," as this product has been appreciated for a fairly long time.

Second, PTC launched Windchill 10.0, the most complex release of its PLM platform, according to a company statement that included not only InSight (product analytics) and Relex (quality management) products, but also recently acquired. The updated product received an optimized user interface to facilitate the use of Windchill by wider groups of users in companies.

Finally, PTC announced two strategic acquisitions. First: the Canadian company MKS Integrity, so far the largest acquisition of PTC is the deal amount of $300 million. Its purchase extends the portfolio of PTC applications with the functionality of integrating embedded software into the product lifecycle management process. Thus, MKS Integrity provides coordination and administration of tools and all activities related to the development of software-oriented products, including testing and technical requirements management.

According to PAC analyst Stefanie Naujoks, this step is important for PTC, since there is an extraordinary increase in the share of embedded software in cars, industrial, electronic or medical equipment, therefore, a product component should be used in product lifecycle management. Competitors of the company are also invested in this direction (for example, Dassault, which bought Geensoft back in 2010). Nevertheless, according to the analyst, the acquisition of MKS is certainly good news, since it expands the RTS portfolio with its key functionality.

The second acquisition is 4CS Solutions, which will expand PTC's Arbortext Service Information Suite and strengthen its business services. Attention to the services of the business of manufacturers is a wise solution, since these services become one of the main areas with an attractive rate of return for manufacturers. In industries with a high amount of equipment in the field, for example, machines, industrial or medical equipment, there is great potential for further improving service efficiency through acceptable software solutions.

These include, for example, convenient 2D/3D illustrations of spare parts or video materials for repair and restoration, which can be used by specialists to obtain information directly from the site. In addition, this is of course more important for the processes of the manufacturer's service - effective management of the service bill-of-material (SBOM) service, or as PTC calls it "presented bill for materials." Both acquisitions show that PTC is investing in its products by addressing issues that look key to manufacturing today: increasing the share of embedded software in finished products and the growing relevance of business services to manufacturing.

2010: Turnover exceeded $1 billion

The company's turnover in 2010 exceeded $1 billion. Large corporations account for about 60% of PTC's turnover, the remaining 40% for small and medium businesses. Compared to 2009, the growth was 8%. PTC plans to grow by 11.5% in 2011. 37% of PTC's turnover in 2010 was in North America, 40% in Europe and 23% in Asia.

Of the European countries, the largest increase in sales of the company was observed in Russia. On the one hand, contracts concluded with shipbuilding companies played a role in this, on the other hand, the development of service services, the development of which was helped by the use of its own application Arbortext, developed for the rapid production of documentation. In Russia, turnover by industry is distributed as follows (2010 data). A large share - 29% is accounted for by industrial enterprises, 22% - the aerospace industry, 16% - electronics. In the near future, PTC plans to develop cooperation with Russian enterprises in the oil and gas industry and nuclear energy.

1985-1998

RTS was founded in 1985 by Samuel Heisberg, a professor at Leningrad University.

In 1988, PTC released the first CAD solution, Pro/ENGINEER, and is the founder of the 3D product development methodology.

Shares of the company have been listed on the stock market since 1989.

In 1998, PTC introduced its PLM solution based on Windchill. The company continues to expand its market presence by offering more and more of its own solutions in the field of product development, acquiring third-party innovations and establishing partnerships with independent developers.

Decisions

PTC has expertise in launching industry products software to create, automate, document, and reuse engineering calculations used in product development.

PTC's customers are the leading manufacturing companies in aerospace and defense, in the automotive and electronic industries, as well as in the industrial and medical equipment.

For quick learning, PTC has created a free library of documents with real computational equations available to users. Today, Mathcad employs more than 1,000,000 professionals worldwide, making it a standard solution for engineering computing in discrete engineering, high-tech products, architecture, civil engineering, and engineering education.

There are many modeling tools that allow you to create digital prototypes of products, but it is PTC Creo CAD that provides a versatile product design and development environment that enables you to take advantage of all the technologies and best practices for direct and parametric modeling. This improves productivity and innovation by better meeting the versatile needs of product development professionals, regardless of discipline, skill, and depth of specialization.

• Product Development System (PDS)

Enterprise Solutions

• Windchill ® is a data and project management solution that enables a company to fully control the product development process and collaborate both internally and externally.
• Windchill ProductPoint is a product development cycle support solution based on Microsoft SharePoint technology.
• ProductView™ - a scalable solution for collaboration with documentation and data visualization, helps companies view and interact with digital data of a product of any format without the need to install appropriate applications.
• Arbortext is a dynamic data publishing system that allows the company to automate the process of collecting and publishing product and service information in various languages ​ ​ and in various formats.

Desktop Solutions

• Pro/ENGINEER Wildfire is a 3D product development solution that helps you digitally create a detailed, accurate, and realistic view of your future product.
• Mathcad - Leading Suite for Engineering Computing and Analysis

Services

• Consulting, implementation and training - PTC offers practices to optimize human resources, business processes and technologies in enterprises. PTC employees and partners provide a range of standardized software installation and configuration solutions, as well as training services for future users.
• RTS has more than 800 partners worldwide, including resellers, system integrators, technology providers, and strategic service partners.

Notes