PTC Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to PTC's 2025 fourth quarter conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. I would now like to turn the call over to Matt Schimel, PTC's head of investor relations. Please go ahead.

Good afternoon. Thank you, Operator, and welcome to PTC's fourth quarter and fiscal year 2025 conference call. On the call today are Neil Barua, Chief Executive Officer, Christian Talbatia, Chief Financial Officer, and Robert Dada, Chief Revenue Officer. Today's conference call is being broadcast live through an audio webcast, and the replay of the call will be available later today at www.ptc.com. During this call, PTC will make forward-looking statements, including guidance as to future operating results. Because such statements deal with future events, actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in PTC's annual report on Form 10-K Form 10Q, and other filings with the U.S. Securities and Exchange Commission, as well as in today's press release. The forward-looking statements, including guidance provided during this call, are valid only as of today's date, November 5th, 2025, and PTC assumes no obligation to update these forward-looking statements. During the call, PTC will discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in today's press release made available on our website. With that, I'd like to turn the call over to PPC's Chief Executive Officer, Neil Barua.

Thank you, Matt, and good afternoon, everyone. I'll begin by addressing the press release we issued earlier today regarding the definitive agreement we've reached for TPG to acquire our Kepware and ThingWorx businesses. This is exciting news for us. For our Kepware and ThingWorx customers, this move is designed to enhance the value these products deliver. By partnering with TPG, Kepware and ThingWorx gain additional investment, expertise, and operational focus. all for the businesses to continue growing and delivering more for customers. For PTC, this move increases our focus on the areas central to our intelligent product lifecycle vision, CAD, PLM, ALM, and SLM, and the growing emphasis on SAS and AI. With our resources and investment concentrated in these areas, we will continue helping our customers address some of their most pressing challenges by enabling them to fully leverage the value of their product data and to transform each stage of the lifecycle. When the transaction closes, we will maintain a close relationship with the Kepware and ThingWorx businesses to ensure a smooth transition. Christian will walk you through more of the transaction details in a few minutes. Turning to fiscal 25, Q4 was another quarter of solid execution. we delivered 8.5% constant currency ARR growth and 16% free cash flow growth year over year. Throughout the quarter, we were encouraged to see some of the early benefits of our go-to-market transformation show up operationally. Our execution on large strategic agreements improved through better coordination between our sales, technical, and customer success teams. We said on our Q3 call that we had a robust pipeline of large Q4 deals, and I'm proud to say we closed most of them. The dynamics of these deals are encouraging in the context of our intelligent product lifecycle vision and focus areas. We want our largest CodeBeamer deal ever as a customer in the automotive vertical decides to move off legacy processes and invest in its next-gen product data foundation. A large windshield competitive displacement win in the MedTech vertical was alongside a ServiceMax expansion, reinforcing this customer's commitment to building a product data foundation and extending that data to other parts of the lifecycle. We also won the largest Onshape deal ever. This was a competitive displacement with the customer embracing the workflow and collaboration benefits of a cloud-native SaaS offering. You could read more about our customer wins across verticals in our appendix slides. ARR came in at the middle of our Q4 guidance range, which reflects the variability of the large deal structures we discussed in our Q3 call. Importantly, we ended the year with record deferred ARR under contract, providing strong visibility into fiscal 26 and beyond. While not all of that converts immediately, it gives us confidence in our growth trajectory as these multi-year ramps activate. In addition, our go-to-market teams are operating with great alignment across verticals and geos. We continue to execute on commercial optimization levels, and the overall feedback from the field is very positive. Our marketing messaging, focused on our intelligent product lifecycle vision, is helping customers clearly see how our portfolio enables them to leverage their product data to transform with AI. Finally, we appointed John Stevenson, an industry veteran, as Chief Product Officer. John is establishing a clear product operating rhythm to support our go-to-market motion and tightening product and R&D linkage to increase the pace and predictability of roadmap execution. Overall, Q4 capped off a year of steady, disciplined execution during a volatile market environment. The go-to-market momentum we described last quarter didn't fade. It accelerated. our teams leaned into the transformation and strengthened customer relationships at the executive level, and we saw clear evidence of multi-product adoption across verticals. When we started the go-to-market transformation, we said it would take 18 to 24 months to hit full stride. Less than a year in, the factors we control are clearly moving in the right direction, and we are focused on making them more repeatable and sustainable in fiscal 26. Regarding the outlook for Fiscal 26, for ARR growth, we are guiding to a range of 7% to 9% with Kepware and ThingWorx, and 7.5% to 9.5% without Kepware and ThingWorx. We are also well on track to deliver $1 billion of free cash on Fiscal 26, including Kepware and ThingWorx. Regarding that new ARR, Q1 will be similar to last year, and we expect momentum to build through the year. supported by the shape of our pipeline and deferred ARR. The high end of our annual ARR range accounts for continued improvements in our go-to-market progression. Minimal customer disruption from the TEPWARE and ThingWorx divestiture in a relatively steady macro environment. The low end of our annual ARR range accounts for some worsening in the macro environment and unexpected disruption from the divestiture. Variability in deal structures can also move us higher or lower in the range. Our confidence in fiscal 26 is underpinned by our focus on our intelligent product lifecycle vision. AI is cementing the importance of structured product data foundations, and PPC is uniquely positioned to make these possible. Customers understand that applying AI to siloed or stale data doesn't work. and are turning to PTC's portfolio to build their data foundation. This begins in engineering and extends to other departments and functions across the lifecycle. AI is then applied to this contextual data, and even more substantial transformations become possible for our customers. We're enhancing our CAD, PLM, ALM, and SLM offerings to make it even easier to build a product data foundation, and we're embedding more AI. We've recently released new AI capabilities in ServiceMax, Servagistics, Onshape, and Arena, and we have a strong Creo AI roadmap underway. We are also on track to release new versions of Windchill, Windchill Plus, and CodeBeamer in the weeks ahead. I would like to now turn to our capital allocation strategy. In fiscal 26, with our leverage below one times, we expect to return excess cash to shareholders. We expect to buy back between $150 million and $250 million worth of shares per quarter during fiscal 26, starting with $200 million in Q1. Our capital allocation strategy remains disciplined and flexible, as we will continue to make investments in R&D around our intelligent product lifecycle vision and leave the door open for token acquisitions. In summary, we feel momentum building. We're pleased to share today's news about Capware and ThingWorx, and we're happy they're set up for success with TPG. And for PTC, we move with clarity and a purposeful direction with the entire company focused on delivering our intelligent product lifecycle vision for customers. With that, I'll turn the call over to Christian.