Total Revenue

+5.5% (from $603.1M to $636.4M)

Total revenue increased by 5.5% driven by growth in core software and subscription segments. This continues the trend from previous periods where acquisitions and organic product expansion contributed to higher revenues, underscoring sustained customer demand. " "

License Revenue

+8.6% (from $234.3M to $254.4M)

License revenue rose by 8.6%, reflecting ongoing organic growth and expanded contract renewals. This builds on prior progress in geographic regions such as Americas and Asia Pacific where increased demand in key products, like Creo and PLM solutions, has consistently boosted license figures. " "

Professional Services Revenue

-10.2% (from $32.3M to $29.0M)

Professional services revenue declined by about 10.2% as the company continues its strategy of leveraging partners instead of providing services internally. This trend has been evident in previous quarters, signaling a shift away from high-cost internal service delivery towards more scalable partner-supported models. " "

PLM Revenue

+7.2% (from $343.6M to $368.4M)

PLM revenue increased by 7.2% driven by strong performance in products like Windchill and Codebeamer. The result builds on the sustained momentum from earlier periods enhanced by both organic growth and earlier acquisition impacts, thereby reinforcing the product’s central role in digital transformation strategies. " "

Recurring Revenue

+6.6% (from $564.0M to $601.5M)

Recurring revenue grew by 6.6%, largely due to heightened support and cloud services performance. Continued low churn and a rising subscription model—trends previously observed—further boosted this segment’s contribution. " "

CAD Revenue

+5.2% (from $227.2M to $239.0M)

CAD revenue increased by 5.2% boosted by sustained growth in Creo, especially in the Americas and Asia Pacific. This is consistent with earlier periods where steady product performance and long-term subscription contracts have driven incremental revenue gains. " "

Americas Revenue

+12.4% (from $260.6M to $292.8M)

Americas revenue jumped by 12.4% due to robust growth in support and cloud services along with higher CAD sales. This improvement builds on previous solid performance in the region driven by larger contract renewals and deeper market penetration. " "

Asia Pacific Revenue

+8.5% (from $85.1M to $92.4M)

Asia Pacific revenue increased by 8.5% reflecting continued demand for PLM and CAD solutions in the region. Prior trends indicated rising product adoption in Asia Pacific, and this growth reinforces the long-term momentum observed in earlier quarters. " "

Operating Income

+24% (from $179.6M to $223.5M)

Operating income surged by 24% due to improved operational efficiency and disciplined expense management despite rising overall costs. This marks a notable improvement compared to the previous quarter’s figures, where increased revenue was partly offset by higher operating expenses, and now enhanced margins reflect better cost control. " "

Net Income

+42% (from $114.4M to $162.6M)

Net income surged by 42% thanks to lower interest expenses, including a one-time effect from prior deferred interest costs, and a beneficial non-cash tax adjustment. These factors, combined with continued top-line growth and improved operational discipline from previous periods, have led to robust profit gains. " "

ARR Growth

FY 2025

9% to 10% "

7% to 9% " " "

lowered

Free Cash Flow

FY 2025

$835 million to $850 million "

$840 million to $850 million " "

raised

Free Cash Flow

Q3 2025

$270 million "

$230 million to $235 million "

lowered

Sequential Net New ARR Growth

Q3 2025

no prior guidance

$30 million to $50 million "

no prior guidance

Consistent ARR Growth

Q1 2025: Reported 11% YoY growth with strong ARR metrics. " " Q4 2024 & Q3 2024: Achieved 12% YoY growth and solid product‐group/geographic performance. " " " "

Q2 2025: Reported 10% YoY growth (lowered high‐end guidance to 9% with a downside scenario at 7%) with detailed geographic breakdown. " " " " "

Consistent but with nuanced adjustments. The growth remains steady, although guidance has been slightly revised reflecting a cautious stance amid macro uncertainties.

Pipeline Resilience

Q1 2025, Q4 2024, Q3 2024: Consistently stressed the robustness of the pipeline with emphasis on deal quality and significant back‐end opportunities. " " " "

Q2 2025: Pipeline described as strong and intact despite macro uncertainties with expected improvements in conversion rates in future quarters. " " "

Steady resilience with signs of incremental quality improvement. The integrated focus on pipeline quality continues to underpin growth efforts.

Conversion Rate Challenges

Q1 2025, Q4 2024, Q3 2024: Acknowledged persistent challenges in close rates and conversion, with historical context and internal restructuring efforts in progress. " " " "

Q2 2025: Highlighted potential for smaller, phased deals and moderated ARR guidance to reflect conversion challenges. " " " "

Persistent challenge with modest progress expectations. The issue remains a key concern with strategies in place to drive future improvement.

Persistent Macro Uncertainty and Economic Headwinds

Q1 2025, Q4 2024, Q3 2024: Repeated discussion of a sluggish selling environment, regional headwinds, and caution affecting customer behavior. " " " " "

Q2 2025: Provided detailed commentary on macro uncertainty, including sector‐specific impacts and required ARR guidance adjustments. " " " "

Consistent concern with more detailed sector analysis. The macro environment remains a headwind, though management adapts its guidance accordingly.

Go-to-Market Transformation and Organizational Restructuring

Q1 2025: Announced leadership changes (e.g., Rob Dahdah as CRO), vertical focus, and restructuring including personnel shifts. " " " " Q4 2024 & Q3 2024: Emphasized vertical realignment, flattening layers, and cultural shifts to drive value. " " " "

Q2 2025: Continued emphasis on executing a vertical approach with clear benefits from the restructured field organization and associated costs accounted for. " " " " "

Steadily evolving with increased execution. The transformation remains a constant strategic focus with progressive alignment and clearer vertical segmentation.

Digital Transformation and Enduring Customer Demand

Q1 2025, Q4 2024, Q3 2024: Repeatedly underscored as critical drivers; customer success stories and digital thread initiatives were central to the narrative. " " " " "

Q2 2025: Reaffirmed as essential, with emphasis on building a product data foundation and leveraging generative AI to drive customer competitiveness. " " "

A cornerstone strategy with enhanced focus. Digital transformation continues as an undiminished growth driver even amid economic headwinds.

Vertical Market Realignment and Cross-Selling Opportunities

Q1 2025: Detailed realignment into key verticals (industrial, FA&D, automotive, med tech, high tech) with cross-selling between products like Windchill and Codebeamer. " " " " Q4 2024 & Q3 2024: Similar emphasis on specialization and unlocking cross-sell potential. " " "

Q2 2025: Reiterated the vertical realignment strategy with even more refined integration and clear cross-selling targets supported by AI integration. " "

Consistent with incremental refinement. The vertical focus remains critical and is increasingly leveraged for cross-selling opportunities as the product portfolio integrates further.

Product Integration Strategies (PLM, CAD, Windchill, Codebeamer)

Q1 2025: Focused on expanding PLM usage, integrating Creo with Windchill, and aligning Codebeamer for seamless product development. " " " " Q4 2024 & Q3 2024: Emphasized creating a digital thread and interconnecting core products for end-to-end value. " " " " "

Q2 2025: Expanded the integration strategy with new product launches (Windchill AI, Codebeamer 3.0, Onshape AI Adviser) and deeper generative AI involvement to enhance interoperability. " " " " " "

Consistently strategic with AI-driven enhancements. While integration has been a steady theme, the current period introduces stronger AI components, likely to have a significant long-term impact.

Emerging AI and Generative AI Initiatives

Q1 2025: Discussed in detail with AI integration across the portfolio, pilot programs in Codebeamer and ServiceMax, and strategic alignment under centralized coordination. " " " Q4 2024 & Q3 2024: Little to no specific discussion on AI initiatives [—].

Q2 2025: Presented robust updates, including public previews (Windchill AI), new AI-driven product SKUs (ServiceMax AI, Onshape AI Adviser), and a strategic acquisition (IncQuery Labs) to accelerate AI innovation. " "

Emerging as a new strategic emphasis. While discussed in Q1, there was a gap in previous Q3/Q4 mentions; Q2 consolidates and escalates AI initiatives for future growth.

Evolving Executive Leadership Dynamics

Q3 2024: Notable leadership transitions (Mike DiTullio’s exit, CEO taking on additional roles) and organizational flattening. " " " " Q1 2025 & Q4 2024: Detailed discussions on leadership appointments and expanded roles (Rob Dahdah, new leadership hires). " " " "

Q2 2025: No specific commentary on evolving leadership dynamics was provided.

Less emphasized in the current period. While it was a major focus earlier as part of transformation efforts, its absence in Q2 may suggest stabilization of the new leadership structure.

Shift in Capital Allocation Focus (Share Repurchase)

Q3 2024: Announced a temporary pause in share repurchases due to debt pay-down from acquisitions; prior Q1 2025 and Q4 2024 discussions detailed robust repurchase plans. " " " " "

Q2 2025: Reaffirms ongoing commitment with active repurchases (463,000 shares for $75M) and planned future buy-backs while maintaining a low cash balance. "

Reaffirmed commitment. After a brief strategic pause in Q3 2024, the focus on share repurchase has resumed steadily, reflecting a stable capital allocation approach.