$ in millions | FY'25
| FY'26
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ARR at constant currency | Mid-teens % growth | Mid-teens % growth |
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Operating cash flow | $850 - $900 | ~$1,025 |
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Free cash flow1 | $825 - $875 | ~$1,000 |
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1 Assumes capital expenditures of approximately $25 million.
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Reconciliation of EPS Guidance to Non-GAAP EPS Guidance
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| FY'24
| Q1'24
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Earnings per share | $2.42 - $3.321 | $0.26 - $0.492 |
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Stock-based compensation expense | $1.66 - $1.91 | $0.46 - $0.50 |
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Intangible asset amortization expense | ~$0.68 | ~$0.17 |
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Acquisition and transaction-related expense | ~$0.01 | ~$0.01 |
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Income tax adjustments related to the reconciling items | ($0.52) – ($0.47) | ($0.14) – ($0.13) |
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Non-GAAP Earnings per share | $4.50 - $5.201 | $0.80 - $1.002 |
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1 Our FY'24 EPS and non-GAAP EPS guidance are both inclusive of an expected $121 million in interest expense ($96 million, net
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2 Our Q1'24 EPS and non-GAAP EPS guidance are both inclusive of an expected $36 million in interest expense ($29 million, net
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FY'24 financial guidance and mid-term targets include the following assumptions:
- We provide ARR guidance on a constant currency basis, using our FY'24 Plan foreign exchange rates (rates as of September 30, 2023) for all periods.
- We expect churn to remain low.
- For cash flow, due to invoicing seasonality, and consistent with the past 3 years, we expect the majority of our collections to occur in the first half of our fiscal year and for fiscal Q4 to be our lowest cash flow generation quarter.
- Compared to FY'23, at the midpoint of FY'24 ARR guidance, FY'24 GAAP operating expenses are expected to increase approximately 3% to 4%, and FY'24 non-GAAP operating expenses are expected to increase approximately 6% to 7%, primarily due to investments to drive future growth and the acquisition of ServiceMax.
- FY'24 GAAP P&L results are expected to include the items below, totaling approximately $283 million to $313 million, as well as their related tax effects:
- approximately $200 million to $230 million of stock-based compensation expense,
- approximately $82 million of intangible asset amortization expense, and
- approximately $1 million of acquisition and transaction-related expense.
- Our FY'24 GAAP and non-GAAP tax rates are expected to be approximately 20%.
- Cash taxes are expected to increase approximately $15 million in FY'24, and approximately $60 million in both FY'25 and FY'26.
- Capital expenditures are expected to be approximately $20 million in FY'24, and approximately $25 million in FY'25 and FY'26.
- Interest payments are expected to be approximately $135 million in FY'24.
- Our long-term goal, assuming our Debt/EBITDA ratio is below 3x, is to return approximately 50% of our free cash flow to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic opportunities.
- We expect to prioritize paying down our debt in FY'24.
- We expect gross debt of approximately $1.7 billion at the end of FY'24.
- We expect our fully diluted share count to increase by approximately 1 million in FY'24.
PTC's Fiscal Fourth Quarter and Full Year Results Conference Call
The Company will host a conference call to discuss results at 5:00 pm ET on Wednesday, November 1, 2023. To participate in the live conference call, dial (888) 330-2508 or (240) 789-2735 and provide the passcode 7328695, or log in to the webcast, available on
PTC's Investor Relations website . A replay will also be available.
