PTC’s Q3 ARR Glimmers; Maintain $105 FVE

PTC’s third-quarter results fell short of our top-line expectations while meeting them on the bottom line. As previously noted, due to the impact from ASC 606, top-line growth is not the best metric to evaluate PTC’s business. Instead, annual recurring revenue, or ARR, is the better metric to determine demand which exceeded management’s expectations in the quarter and had guidance raised for the fiscal year. On the other hand, PTC faces foreign exchange headwinds of $81 million and a continued $4 million impact on ARR from exiting Russia.