PTC Inc. Net Income jumped on 576% and Revenue surged on 16.1%
10/28/2020 • About PTC Inc. (
$PTC) • By InTwits
PTC Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 22.4% in FY2020, 11.2% in FY2019, 12.9% in FY2018, 11.0% in FY2017, 4.3% in FY2016
- PTC Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 3.6%. Average EBITDA Margin for the same period was 12.9%
- PTC Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $20m in FY2020, $64m in FY2019, $36m in FY2018, $25m in FY2017, $26m in FY2016
- In the last 5 years the company invested considerably less than D&A: $172m vs. $261m
- The company has business model with average profitability: ROIC is 10.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
PTC Inc.'s Revenue jumped on 16.1%. Revenue growth showed acceleration in FY20Q4 - it increased 16.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 20.0% to 22.3% in FY2020. EBITDA Margin grew at 3.6 pp per annum in the last 5 years.
Gross Margin increased on 3.0 pp from 74.1% to 77.1% in FY2020. Gross Margin stuck to a growing trend at 1.4 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 2.6 pp from 43.4% to 40.8% in FY2020.
Net Income margin jumped on 11.1 pp from -2.2% to 9.0% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.4%. PTC Inc. showed small CAPEX/Revenue decline of 0.80 pp from 2.2% in FY2017 to 1.4% in FY2020. It's average CAPEX/Revenue for the last three years was 3.1%.
Return on investment
The company operates at low ROIC (10.6%) and ROE (9.9%). ROIC increased on 6.5 pp from 4.1% to 10.6% in FY2020. ROE surged on 12.5 pp from -2.6% to 9.9% in FY2020. ROIC stuck to a growing trend at 2.7 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.9x and Debt / EBITDA is 3.7x. Net Debt / EBITDA increased on 0.1x from 2.8x to 2.9x in FY2020. Debt jumped on 82.4% while cash increased on 2.2%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2018 at 2.4x and was growing since that time.
PTC Inc. has no short term refinancing risk: cash is higher than short term debt (795.3%).
Valuation and dividends
The company's trades at EV/EBITDA 35.8x and P/E 82.0x.
Management team
The company's CEO James E Heppelmann "Jim" has spent 10 years with the company. PTC Inc.'s CFO Kristian Talvitie has spent 1 year with the company.
Financial and operational results
FY ended 09/30/2020
PTC Inc. ($PTC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,141 | 1,164 | 1,242 | 1,256 | 1,458 | 16.1% |
| Gross Profit | 815 | 835 | 916 | 930 | 1,124 | 20.8% |
| SG&A | 513 | 518 | 558 | 545 | 595 | 9.2% |
| EBITDA | 50 | 128 | 161 | 141 | 326 | 131.5% |
| EBIT | -37 | 41 | 73 | | | |
| Interest expence | 30 | 42 | 42 | | | |
| Tax | -13 | -8 | -23 | | | |
| Net Income | -54 | 6 | 52 | -27 | 131 | |
| Stock Based Compensation | 66 | 77 | 83 | | | |
Balance Sheet
|
|---|
| Cash | 278 | 280 | 260 | 270 | 275 | 2.2% |
| Accounts Receivable | 161 | 152 | 129 | | | |
| Accounts Payable | 18 | 35 | 53 | | | |
| Short Term Debt | 0 | 0 | 0 | | 35 | |
| Long Term Debt | 752 | 712 | 643 | 669 | 1,186 | 77.2% |
Cash flow
|
|---|
| Capex | 26 | 25 | 36 | 64 | 20 | -68.6% |
| Acquisitions | 166 | 5 | 3 | | | |
Ratios
|
|---|
| Revenue growth | -9.1% | 2.1% | 6.7% | 1.1% | 16.1% | |
| EBITDA growth | -60.7% | 157.7% | 25.9% | -12.3% | 131.5% | |
|
|---|
| Gross Margin | 71.4% | 71.7% | 73.7% | 74.1% | 77.1% | 3.0% |
| EBITDA Margin | 4.3% | 11.0% | 12.9% | 11.2% | 22.4% | 11.1% |
| EBIT Margin | -3.2% | 3.5% | 5.9% | | |
| SG&A, % of revenue | 45.0% | 44.5% | 44.9% | 43.4% | 40.8% | -2.6% |
| SBC, % of revenue | 5.8% | 6.6% | 6.7% | | |
| Net Income Margin | -4.8% | 0.5% | 4.2% | -2.2% | 9.0% | 11.1% |
| CAPEX, % of revenue | 2.3% | 2.2% | 2.9% | 5.1% | 1.4% | -3.7% |
|
|---|
| ROIC | -2.4% | 2.7% | 5.1% | 4.1% | 10.6% | 6.5% |
| ROE | -6.4% | 0.7% | 5.9% | -2.6% | 9.9% | 12.5% |
| Net Debt/EBITDA | 9.6x | 3.4x | 2.4x | 2.8x | 2.9x | 0.1x |
| Interest coverage ratio (ICR) | | 1.0x | 1.8x | | |
| Interest expence / Average debt | 4.0% | 5.8% | 6.1% | | | |
People
|
|---|
| Insider ownership | 0.9% | 0.9% | 0.9% | | | |
| Employees | 5,800 | 5,983 | 6,110 | | | |
| Revenue/Employee, th. $ | 197 | 195 | 203 | | | |
PTC Inc. ($PTC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 356 | 360 | 352 | 391 | | 6.4% | 23.8% | 19.0% | 16.7% |
| EBITDA | 58 | 80 | 93 | 95 | | 15.3% | - | 228.4% | 44.7% |
| Net Income | 35 | 7 | 35 | 53 | | 69.0% | - | - | 443.5% |
Balance Sheet
|
|---|
| Cash | 237 | 827 | 377 | 275 | | -14.4% | 180.9% | 40.9% | 2.2% |
| Short Term Debt | 34 | 536 | 37 | 35 | | - | - | - | - |
| Long Term Debt | 1,316 | 1,319 | 1,304 | 1,186 | | 69.0% | 78.6% | 86.6% | 77.2% |
Ratios
|
|---|
| Gross Margin | 75.5% | 76.9% | 77.5% | 78.4% | | -1.4% | 4.4% | 5.5% | 3.9% |
| EBITDA Margin | 16.2% | 22.2% | 26.5% | 24.3% | | 1.3% | 23.4% | 16.9% | 4.7% |
| Net Income Margin | 10.0% | 2.0% | 9.9% | 13.7% | | 3.7% | 17.0% | 14.9% | 10.7% |
Peers in Application Software
Below you can find PTC Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.5% |
|---|
| PTC Inc. ($PTC) | - | 2.1% | 6.7% | 1.1% | 16.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 69.4% |
|---|
| PTC Inc. ($PTC) | 71.4% | 71.7% | 73.7% | 74.1% | 77.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| PTC Inc. ($PTC) | 4.3% | 11.0% | 12.9% | 11.2% | 22.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 2.9% | 2.6% |
|---|
| PTC Inc. ($PTC) | 2.3% | 2.2% | 2.9% | 5.1% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| PTC Inc. ($PTC) | -2.4% | 2.7% | 5.1% | 4.1% | 10.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.9x | -0.7x | 0.4x | 0.0x |
|---|
| PTC Inc. ($PTC) | 9.6x | 3.4x | 2.4x | 2.8x | 2.9x |
