Company: PTC
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0000950170-25-015530
Chunk: 83

Company: PTC INC.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 1
Chunk 83
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    $
    238.4

    $
    187.3

    Capital expenditures

    (2.8
    )

    (4.6
    )

    Free cash flow
     
    $
    235.7

    $
    182.8

(1)See Non-GAAP Financial Measures below for a reconciliation of our GAAP results to our non-GAAP financial measures and Impact of Foreign Currency Exchange on Results of Operations below for a description of how we calculate our results on a constant currency basis.

(2)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Impact of Foreign Currency Exchange on Results of Operations

Approximately 50% of our revenue and 35% of our expenses are transacted in currencies other than the U.S. Dollar. Because we report our results of operations in U.S. Dollars, currency translation, particularly changes in the Euro, Yen, Shekel, and Rupee relative to the U.S. Dollar, affects our reported results. Our constant currency disclosures are calculated by multiplying the results in local currency for the quarterly periods for FY'25 and FY'24 by the exchange rates in effect on September 30, 2024.

If Q1'25 reported results were converted into U.S. Dollars using the rates in effect as of September 30, 2024, ARR would have been higher by $71 million, revenue would have been higher by $7 million, and expenses would have been higher by $3 million. If Q1'24 reported results were converted into U.S. Dollars using the rates in effect as of September 30, 2024, ARR would have been higher by $2 million, revenue would have been higher by $10 million, and expenses would have been higher by $4 million.

Revenue

Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period can have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period over period. We recognize revenue for the license portion of on-premises subscription contracts up front when we deliver the licenses to the customer, typically on the start date, and we recognize revenue on the support portion of on-premises subscription contracts and stand-alone support contracts ratably over the term. We continue to convert existing support contracts to on-prem