PTC Inc. (PTC): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the core engine of this industrial software giant now that they've shed non-core assets, and honestly, the late-2025 picture is one of focused, high-margin execution. After sharpening their focus on the Intelligent Product Lifecycle, the numbers tell a clear story: total revenue reached $2.739 billion in FY2025, driven by a subscription base exceeding $2.3 billion in Annual Recurring Revenue, all while maintaining a fantastic gross profit margin of 83.76%. That focus translated directly to the bottom line, generating a very healthy $857 million in Free Cash Flow last year, so you definitely want to see the full breakdown of how they are structuring their value capture-dive into the Canvas below to see the key activities and customer segments fueling this performance.

PTC Inc. (PTC) - Canvas Business Model: Key Partnerships

You're looking at how PTC Inc. builds value by leaning on others, which is critical when you're driving complex digital transformation for manufacturers. The partnership structure is deep, covering everything from foundational technology to final implementation.

Strategic technology alliances (e.g., NVIDIA Omniverse tie-up)

The relationship with NVIDIA is a prime example of a strategic technology alliance, moving beyond simple integrations. This tie-up was expanded on July 30, 2025, specifically to integrate NVIDIA Omniverse technologies into PTC's Creo computer-aided design (CAD) and Windchill product lifecycle management (PLM) solutions. This lets users access high-fidelity 3D simulations directly within Windchill, using Omniverse OpenUSD and RTX libraries to power an interactive, real-time viewport. This focus on open standards is cemented by PTC joining the Alliance for OpenUSD (AOUSD). To give you a sense of the company's financial footing supporting these moves, PTC's gross profit margin stood at an impressive 81%, and for fiscal year 2025, revenue grew 18% year over year on a constant currency basis.

Global network of authorized resellers and distributors

PTC Inc. relies on a broad ecosystem to get its solutions deployed globally. This network includes various partner types, and the overall structure is designed to accelerate time to value for customers. The global partner ecosystem consists of more than 700+ partners, which includes technology partners, Global System Integrators (GSIs), resellers, and consultants. PTC focuses on developing these partnerships to ensure they have deep industry expertise or a specific regional focus to support use cases effectively.

Here's a quick look at the components of this partner community:

• The Distribution group handles orders for software updates and shipment tracking.
• Resellers provide expertise and support throughout the customer journey.
• Strategic Alliances focus on industry-leading technology innovations.

System integrators and implementation partners for large-scale projects

For the big, complex deployments, system integrators (SIs) are essential for stitching PTC's software into existing enterprise environments. PTC's solutions are key enablers in sectors like construction, where digital twin and lifecycle management capabilities are vital for large-scale infrastructure projects. PTC holds approximately 9.9% share in the AI in Construction Market, indicating significant influence in this implementation space. The global system integrators market itself was valued at just over $30 billion in 2024, showing the scale of the implementation work available. These partners leverage collective expertise to support digital transformation journeys.

Cloud infrastructure providers for SaaS delivery (e.g., Onshape)

The success of cloud-native offerings like Onshape is directly tied to its infrastructure partners. PTC signed a strategic collaboration agreement with Amazon Web Services (AWS) in September 2024 to grow the Onshape solution, focusing on enhancing features and advancing AI efforts. Furthermore, the latest AI advancements for Onshape, such as the Onshape AI Advisor embedded in the CAD environment, are powered by Amazon Bedrock, demonstrating a deep, integrated reliance on AWS services for scaling AI securely. The platform's accessibility is also a key metric here; Onshape continues to see massive adoption in education, bringing in more than 1.5 million new signups per year from students and educators.

Academic and research institutions for talent and innovation pipeline

Securing future talent and driving foundational innovation requires strong ties to academia. PTC Inc. channels this through its philanthropic arm, the PTC Foundation. In fiscal year 2025 (FY25), the Foundation and PTC Inc. contributed more than $737,000 in corporate charitable giving. Of that total, $620,000 was directed to grantmaking, supporting 15 organizations worldwide, with a core pillar being STEM Education. These partnerships support programs that introduce students to engineering and advanced mathematics, building the pipeline for the next generation of users and developers.

Here is a summary of the FY25 philanthropic investment:

Metric	Amount/Count
Total FY25 Corporate Charitable Giving	$737,000
Amount Directed to Grantmaking	$620,000
Organizations Supported via Grants	15
Primary Focus Area	STEM Education

PTC Inc. (PTC) - Canvas Business Model: Key Activities

You're looking at the core engine driving PTC Inc.'s value creation right now, which is all about execution on product innovation and sales structure changes.

Core software Research & Development (R&D) with a target of approximately $400 million in FY2025

PTC Inc.'s investment in R&D is substantial, though the specific R&D-only figure for FY2025 is part of a larger expense guidance. For the full year 2024, GAAP R&D expenses were $534.5 million. For the full fiscal year 2025, PTC anticipates total GAAP R&D and SG&A expenses to be between $805 million and $835 million.

The company is focused on integrating intelligence across its stack. Here are some figures related to the portfolio health:

Metric	Value	Period/Context
PLM Segment YoY Growth	11%	Q1 FY2025 (Constant Currency ARR)
CAD Segment YoY Growth	9%	Q1 FY2025 (Constant Currency ARR)
Constant Currency ARR	$2.277 billion	End of Q1 2025
Constant Currency ARR	$2.42 billion	End of Q2 CY2025

Developing and integrating Industrial AI capabilities (e.g., generative design)

The integration of AI is a primary activity, with specific product enhancements:

• Creo Generative Design, which is AI-powered, is available today.
• Windchill AI, a generative AI-powered PLM assistant, was previewed at Hannover Messe from March 31 - April 4, 2025.
• AI features were introduced in Creo-12, such as generative design capabilities.
• AI agents for ServiceMax for maintenance efficiency were introduced.
• Additional AI features are planned for Codebeamer and other products later in fiscal 2025.

Maintaining and enhancing the core CAD/PLM/ALM/SLM product portfolio

PTC Inc. is actively unifying its core offerings under the Integrated Product Engineering (IPE) strategy, connecting ALM (Codebeamer+), PLM (Windchill, Arena), and CAD (Creo+, Onshape). The company launched a start-up programme offering free access to these solutions, including Creo+® SaaS CAD, Onshape® cloud-native CAD/PDM, Codebeamer+™ ALM, and an Arena® PLM/QMS package.

Executing the go-to-market realignment and sales force training

The realignment of the go-to-market organization to align with vertical industries began in Q1 FY2025. This required cash outlay:

• Total expected outflows for go-to-market realignment in FY2025: approximately $20 million.
• Outflows paid in Q1 FY2025: $11 million.
• Outflows expected in Q2 FY2025: approximately $4 million.
• Outflows paid through Q3 FY2025: $17 million.
• Outflow expected in Q4 FY2025: approximately $1 million.

Management stated in July 2025 that they are structurally stronger following the transformation.

Managing the global subscription and cloud service infrastructure

The subscription business model is central, with management reiterating a full-year fiscal 2025 constant currency ARR growth guidance of 9% to 10%. The company expects approximately 60% of its free cash flow to be generated in the first half of the year. For Q2 FY2025, free cash flow was projected at approximately $270 million.

Finance: draft 13-week cash view by Friday.

PTC Inc. (PTC) - Canvas Business Model: Key Resources

You're looking at the core assets that let PTC Inc. operate and compete in the industrial software space as of late 2025. These aren't just line items; they are the engines driving the business model.

The most tangible resources are definitely the intellectual property (IP) tied to their software suite. This is the moat, so to speak, built up over years of development and acquisition.

• Proprietary software IP includes flagship products like Creo (CAD), Windchill (PLM), Onshape, Arena, and Vuforia (AR).
• The depth of this IP is reflected in the patent portfolio, with 513 Total Documents Applications and Grants and 259 Total Patents Families as of late 2025 [cite: 2 in first search].

Next up is the human capital required to maintain and advance this complex technology stack. You can't run this kind of platform without top-tier talent, especially with the focus on AI integration.

PTC Inc. employs 7,642 people as of 2025 [cite: 2 in first search]. This team includes the highly skilled software engineers and AI/ML specialists necessary to push the Intelligent Product Lifecycle vision forward. Honestly, the sheer scale of the engineering team is a resource in itself.

Financially, the recurring revenue base provides the stability and predictability that analysts, like myself, value highly. This is the lifeblood of a modern SaaS-focused enterprise.

Financial Metric	Latest Reported Value (FY2025)	Context/Growth
Constant Currency ARR Base (Latest Reported)	$2.372 billion (Q3 FY2025)	Confirmed to be over the $2.3 billion threshold [cite: 1 in second search].
FY2025 Constant Currency ARR Growth	8.5%	Reported for the full fiscal year ended September 30, 2025 [cite: 1 in third search].
FY2026 Constant Currency ARR Growth Guidance	7% to 9%	Guidance provided in November 2025 [cite: 1 in third search].

The customer base represents significant market penetration and a massive installed base for future upselling and cross-selling efforts. These are the companies that rely on PTC Inc. for mission-critical product development.

• Global customer base stands at 28,000 customers [cite: 2 in first search].
• The focus is heavily weighted toward industrial and manufacturing companies globally [cite: 3 in first search].

Finally, the deferred revenue balance is a direct indicator of future recognized revenue, giving management strong visibility into the near-term financial runway. The CEO noted 'record deferred ARR' in the outlook for FY2026, suggesting this number is climbing.

As of the end of the second fiscal quarter on March 31, 2025, the balance sheet showed $801.847 million in Deferred revenue [cite: 2 in second search]. If onboarding takes 14+ days, churn risk rises, but strong deferred revenue helps cushion that impact.

PTC Inc. (PTC) - Canvas Business Model: Value Propositions

You're looking at the core promises PTC Inc. (PTC) is making to its customers as of late 2025, which is the heart of their Business Model Canvas. This is what they are selling, and the numbers show they are selling it effectively, especially with the shift to a subscription model.

Enabling the Intelligent Product Lifecycle (IPL) via a unified data foundation

PTC Inc. (PTC) is positioning its software suite to manage the entire product journey, from initial concept through design, manufacturing, service, and eventual retirement. This is centered on creating a single source of truth for product data. The focus on the IPL vision is underscored by the strategic divestiture of non-core assets like Kepware and ThingWorx to sharpen the portfolio around CAD, PLM, ALM, and SLM.

• Product Lifecycle Management (PLM) software revenue grew by 23% in FY2025.
• Computer-Aided Design (CAD) software revenue grew by 19% in FY2025.
• Annual Recurring Revenue (ARR) constant currency growth for FY2025 was 8.5%.

Cloud-native SaaS solutions for design and manufacturing (e.g., Onshape)

The value here is moving away from heavy, installed software to flexible, real-time collaboration in the cloud. Onshape is a prime example of this, offering built-in Product Data Management (PDM) without the usual IT overhead. This cloud-native approach is clearly gaining traction across the market.

Here's a look at the scale of the Onshape offering as of late 2025:

Metric	Value	Date/Period
Verified Companies Using Onshape	464	August 2025
Estimated Onshape Platform Revenue	$160 million	2025
New Student/Educator Signups Per Year	Over 1.5 million	Per Year

The platform eliminates the pain of traditional file locking and server management, so teams can work instantly together.

High-margin gross profit at 83.76% for FY2025

The subscription-heavy model delivers excellent profitability, which is a key indicator of pricing power and the value customers place on the recurring service. While the latest reported quarterly gross margin for the quarter ending September 2025 was 86.92%, the full fiscal year performance reflects sustained high margins.

The stated high-margin figure for the fiscal year is 83.76%, which was noted as the highest in the last 13 years. This high-margin structure supports significant investment back into the product.

AI-driven tools to streamline engineering workflows and product development

PTC Inc. (PTC) is embedding Artificial Intelligence across its suite to automate and speed up design and engineering tasks. This focus on AI is a major driver for new sales, as companies look to integrate these capabilities into their existing product development processes.

The operational leverage from this focus is clear in the bottom-line results:

• Non-GAAP Operating Income surged by 67% in FY2025.
• The company is continuing to build a strong foundation for AI-driven and verticalized growth.

Digital Twin and Augmented Reality (AR) solutions for service and operations

The value proposition extends beyond design into the operational phase, using Digital Twin technology-virtual representations of physical products powered by real-time data-to optimize maintenance and performance. PTC is a key player in this expanding market.

The market context for these solutions is significant:

• The Global Digital Twin Market Size was estimated at $20.41 Billion in 2024.
• The market is projected to grow at a Compound Annual Growth Rate (CAGR) of 27.4% between 2025 and 2035.

These AR and Digital Twin capabilities help customers reduce downtime and improve service delivery, which translates directly to customer gains.

PTC Inc. (PTC) - Canvas Business Model: Customer Relationships

You're looking at how PTC Inc. manages its relationships with its industrial software customers as of late 2025. It's all about locking in long-term value through subscriptions and dedicated support for complex engineering and manufacturing software.

Dedicated direct sales and account management for large enterprise accounts

PTC Inc. has been actively refining its sales approach, completing a significant go-to-market realignment. This effort involved $19 million in restructuring costs, with an objective to shorten average sales cycle time by 20% and increase win rates by 15% by the third quarter of fiscal year 2025. This structure supports deep engagement with major clients, evidenced by the November 2025 announcement of an expansion deal with Garrett Motion, where they adopted multiple PTC SaaS platforms.

• Strengthened relationships with American customers and partners at the January 2025 Global Summit.

Subscription-based model ensuring high customer retention and stickiness

The core of PTC Inc.'s customer relationship strategy is its recurring revenue base, which provides stability. About 95% of fiscal year 2025 revenue was recurring in nature, anchored in their PLM, CAD, and related industrial software offerings. This sticky model drove a constant currency Annual Recurring Revenue (ARR) growth of 8.5% for the full fiscal year 2025. To be fair, Q1 FY2025 saw even stronger growth, with Constant Currency ARR reaching $2.277 billion, an 11% year-over-year increase. The company's full-year guidance for constant currency ARR growth was set between 9% to 10%.

Here's a quick look at the financial scale supporting this relationship structure for the fiscal year ended September 30, 2025:

Metric	Amount (Millions USD)	Context
Total Revenue	2,740.00	FY 2025 Total Revenue
Total Recurring Revenue	2,600.00	FY 2025 Total Recurring Revenue
Professional Services Revenue	107.34	FY 2025 Professional Services Revenue
Q1 FY2025 Constant Currency ARR	2,277.00	Q1 FY2025 ARR in millions

Professional services and technical support for complex deployments

For the complex deployments that PTC Inc.'s core software requires, professional services remain a key touchpoint. For the full fiscal year 2025, Professional Services Revenue totaled $107.34 million. This revenue stream supports customers navigating intricate implementations of their CAD and PLM suites.

Community and ecosystem engagement (e.g., PTC/USER Global Summit)

Engagement is fostered through user events, which serve as critical exchange points. The PTC/USER Global Summit in New Orleans, held from January 27 to 30, 2025, brought together a total of 900 participants. The focus of discussions, including submissions for proposals, specifically highlighted the transition to cloud-based SaaS solutions.

Proactive transition support for customers moving to cloud-native offerings

PTC Inc. is actively supporting the shift to its cloud-native platforms. New customers, such as Nimble in July 2025, adopted platforms like Onshape and Arena. The call for proposals for the January 2025 user summit specifically sought out user stories detailing planning around or being already on cloud-based SaaS solutions, indicating a proactive focus on this transition within the user community.

PTC Inc. (PTC) - Canvas Business Model: Channels

You're looking at how PTC Inc. (PTC) gets its software and services into the hands of customers as of late 2025. The channel strategy is clearly split, leaning heavily on direct engagement for the biggest deals while relying on partners for broader market coverage.

Direct sales force focusing on large, strategic enterprise customers

The core of the revenue engine is the direct sales force, which targets your largest, most strategic enterprise accounts. Honestly, this focus makes sense given the complexity of their industrial software portfolio, like Windchill and Creo. We see the numbers backing this up: about 75% of PTC Inc.'s total revenue was derived from these direct sales to large accounts in fiscal year 2025. This high percentage shows where the company places its primary sales muscle.

Extensive global partner network for SMB market penetration

To cover the rest of the market efficiently, PTC Inc. uses its extensive global partner network. These authorized resellers and strategic system integrators are crucial for cost-effectively reaching the Small and Medium Business (SMB) market. While the exact revenue percentage from partners isn't explicitly stated for 2025, the structure implies they handle the segment not covered by the 75% direct sales figure. The partner network also receives quantitative awards based on performance metrics like growth, new logos, and subscription/customer retention.

Cloud-native platforms (e.g., Onshape) for direct digital distribution

The cloud-native platforms represent a pure digital distribution channel, bypassing traditional sales friction for many users. Onshape, for example, is a direct-to-customer Software-as-a-Service (SaaS) offering. For the fiscal year 2025, Onshape revenue is estimated to hit $160 million, a jump from the estimated $130 million in 2024. This platform is gaining traction, with 464 verified companies using Onshape as of August 17, 2025. PTC Inc. even secured its largest-ever Onshape deal in the fourth quarter of fiscal 2025. Also, the education segment feeds this channel heavily, bringing in over 1.5 million new signups per year from students and educators. That's a massive future pipeline being cultivated digitally.

Here's a quick look at the financial scale of the channels as of the end of fiscal year 2025:

Metric	Value (FY2025)	Context
Total Annual Revenue	$2.74 Billion	Fiscal year ending September 30, 2025.
Direct Sales Revenue Share	Approx. 75%	Focus on large, strategic enterprise customers.
Onshape Estimated Revenue	$160 Million	Estimated revenue for the Atlas (Onshape/Arena) platform in 2025.
GAAP Professional Services Revenue Change	Down 24.7%	Year-over-year change in Q3 FY2025.
Constant Currency ARR Growth Guidance (ex-divestiture)	7.5% to 9.5%	Guidance for fiscal year 2026.

Online marketplaces and application stores for specific tools

While not explicitly detailed with its own revenue line item, the cloud-native strategy inherently utilizes digital distribution points that function like online marketplaces. The open API and public model library within Onshape enable teams to develop and integrate their own AI solutions, which is a form of digital ecosystem distribution. The focus on vertical alignment and product enhancements, like the Arena AI Assistant launch, suggests these digital storefronts are key for feature adoption.

Professional Services organization for implementation and consulting

The Professional Services organization is there to help customers implement and consult on the complex deployments, but this channel seems to be shrinking relative to the subscription growth. In the third fiscal quarter of 2025, GAAP professional services revenue actually fell over 24.7% year-over-year. This decline suggests a deliberate shift where implementation work is either being absorbed by the subscription model, handled by the partner network, or customers are adopting the cloud solutions with less upfront consulting need. The company is spending on go-to-market realignment, with about $17 million paid out in the first three quarters of FY2025 related to this restructuring.

Finance: finalize the Q4 2025 channel revenue attribution model by next Tuesday.

PTC Inc. (PTC) - Canvas Business Model: Customer Segments

PTC Inc. supports over 30,000 customers globally. This customer base spans from the world's largest, most complex organizations to the fast-growing startups redefining industries.

The primary focus is on industrial and manufacturing enterprises requiring digital transformation solutions for designing, manufacturing, and servicing physical products. The company's strategy is built around its five key focus areas: CAD, PLM, ALM, SLM, and SaaS.

The key verticals targeted are served by specific product strengths:

Key Vertical	Associated PTC Focus Area/Product Mention	Customer Activity Example
Aerospace & Defense (FA&D)	Creo for design engineering	Investing in digital transformation.
Automotive	Core industrial software	Resilient demand for design software.
Heavy Equipment	Industrial and manufacturing sectors	Focus area mentioned in executive commentary.
Medical Technology	Codebeamer adoption	Driven by regulatory and safety compliance.

The segment includes customers moving toward cloud-native platforms, such as new customers like Nimble adopting Onshape and Arena in July 2025.

Within these organizations, the primary users are within the Engineering and R&D departments. These teams drive demand for PTC's core offerings, such as Creo for design, and Windchill for Product Lifecycle Management (PLM). For instance, one established customer utilizes Windchill as an enterprise platform for collaboration, focusing on software-defined product growth.

Customers are actively focused on digital transformation and AI adoption, which is a major driver of the business. The company's fiscal year 2025 Annual Recurring Revenue (ARR) growth of 9.3% year-over-year in Q3 was reinforced by customers prioritizing these initiatives. The AI offerings are designed to help customers:

• Interrogate product data intelligently.
• Accelerate engineering workflows.
• Automate specific domain tasks.

The overall scale of the business supporting these segments resulted in an annual revenue of $2.74B for the fiscal year ending September 30, 2025.

PTC Inc. (PTC) - Canvas Business Model: Cost Structure

You're analyzing the cost base for PTC Inc. as they push their industrial software transformation. The structure is heavily weighted toward talent and future product development, which is typical for a high-growth, IP-heavy software firm.

High fixed cost base dominated by R&D and software development salaries

The core of PTC Inc.'s cost structure is its investment in intellectual property, which translates directly into high fixed costs centered on Research & Development (R&D). This spending fuels the development of their core platforms and the AI-driven features you're seeing in the market. For instance, non-GAAP R&D expenses were projected to be around $400 million for fiscal 2025, representing an 11% Compound Annual Growth Rate (CAGR) from fiscal 2021 through 2025. This commitment to innovation is a significant, non-negotiable cost driver.

Sales and Marketing expenses, including commissions for the direct and partner channels

Sales and Marketing (S&M) is the other major operational outlay, supporting the direct sales force and the partner ecosystem that drives subscription revenue. For the nine months ended June 30, 2025, Sales and Marketing expenses totaled $424,319 thousand. This spending supports the go-to-market strategy, including commissions tied to the growing Annual Recurring Revenue (ARR).

Here's a quick look at some key operating expense components based on the latest available figures:

Cost Component	Period/Basis	Amount (USD)
Sales and Marketing Expenses	Nine Months Ended June 30, 2025	$424.3 million
GAAP Stock-Based Compensation Expense (Estimated Full Year)	FY2025 Guidance	$210 million to $220 million
Non-GAAP R&D Expenses (Expected)	FY2025	Approx. $400 million
Go-to-Market Realignment Cash Outflow (Total Expected)	FY2025	Approx. $20 million

Operating expenses increased approximately 3% in FY2025 due to growth investments

Overall spending reflects a balance between maintaining discipline and investing for the future. Compared to Fiscal Year 2024, PTC Inc.'s FY2025 GAAP operating expenses were expected to increase by approximately 3%, driven by those investments aimed at future growth. Still, you see operating efficiency gains, as evidenced by the strong margin expansion reported in earlier quarters.

Costs associated with the go-to-market realignment (approximately $20 million cash outflow in FY2025)

The strategic shift in how PTC Inc. sells its software incurred a specific, one-time cash impact. The full-year FY2025 cash flow guidance absorbed approximately $20 million of outflows directly related to this go-to-market realignment initiative. To be fair, this cost is a necessary friction point for realigning the sales structure toward verticalized solutions.

Cloud hosting and infrastructure costs for SaaS platforms

As PTC Inc. continues its pivot to cloud-native Software-as-a-Service (SaaS) platforms like Onshape and Arena, the associated costs for cloud hosting and infrastructure are an increasingly important part of the Cost of Revenue and operating expenses. While specific dollar amounts for FY2025 cloud infrastructure costs aren't explicitly broken out in the latest guidance summaries, the strategy itself dictates a sustained, variable cost component tied to customer consumption and platform scaling.

You'll want to monitor the relationship between the growth in Recurring Revenue and the associated Cost of Revenue, as that will show how efficiently they are scaling their cloud delivery.

• The company is focused on leveraging partners to deliver services, which helps manage direct professional services costs.
• The shift to SaaS is intended to lower customer costs to implement, upgrade, and administer software over the long term.
• SBC dilution is being offset by significant share repurchase programs.

Finance: draft 13-week cash view by Friday.

PTC Inc. (PTC) - Canvas Business Model: Revenue Streams

You're looking at how PTC Inc. actually brings in the money, which is key for understanding its stability. Honestly, the shift to recurring revenue is the story here, making cash flow much more predictable than the old one-time software sale model.

Subscription and License Revenue forms the core, with total FY2025 revenue hitting $2.739 billion. This is a mature software business now; about 95% of that 2025 revenue was recurring in nature, driven by existing customers expanding their use of PTC's SaaS and on-premise offerings.

The revenue streams break down into a few clear buckets, which you can see laid out here:

Revenue Component	FY2025 Amount (Approximate)
Total Revenue	$2.739 billion
Support and Cloud Services Revenue	$1.47 billion
License Revenue	$1.16 billion
Professional Services Revenue	$107.34 million

The largest component by far is Support and Cloud Services Revenue, which totaled $1.47 billion in FY2025. This stream includes support for perpetual licenses, the support portion of on-premises subscriptions, SaaS, and hosting services. This ratable recognition provides that steady foundation the company likes to talk about.

Next up is License Revenue, which was $1.16 billion for the fiscal year 2025. This figure includes the upfront recognition for the license portion of on-premises subscription contracts, which is a change from the older perpetual license model. It's definitely a smaller piece than the recurring services, but still substantial.

The smallest piece of the revenue pie is Professional Services Revenue, contributing $107.34 million in FY2025. You'll notice this number is relatively small, and management has been actively working to leverage partners for service delivery, which is why this revenue stream saw a decline compared to prior years.

The strength of this recurring model translates directly to the bottom line in terms of cash generation. PTC reported a strong Free Cash Flow generation of $857 million in FY2025. That's a 16.46% year-over-year increase for the annual figure.

Here's a quick look at what drives that cash flow:

• High Recurring Base: About 95% of FY2025 revenue was recurring.
• Predictability: The subscription model offers better business predictability.
• Cash Flow Growth: FY2025 FCF grew 16% year-over-year.
• FY2026 Expectation: Guidance for FY2026 operating cash flow is approximately $1.03 billion.

Finance: draft 13-week cash view by Friday.