Good afternoon, ladies and gentlemen. Thank you for standing by, welcome to the PTC 2023 second 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 conference over to Mr. Matt Shimao, PTC's Head of Investor Relations. Please go ahead, sir. Good afternoon. Thank you, Lisa, and welcome to PTC's fiscal 2023 second quarter conference call. On the call today are Jim Heppelmann, Chief Executive Officer, and Kristian Talvitie, Chief Financial Officer. Today's conference call is being broadcast live through an audio webcast, and a 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 10-Q, 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, April 26, 2023, 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 PTC's Chief Executive Officer, Jim Heppelmann. Thanks, Matt Shimao. Good afternoon, everyone, thank you for joining us. I'm pleased to report PTC delivered strong results in our second fiscal quarter of 2023. As you know, we feel that ARR and free cash flow are the best metrics to assess the performance of our business. We exceeded our guidance on both metrics in Q2 and are at the midpoint, raising the full-year guidance for both metrics. A reminder that as usual, I'll focus my discussion on constant currency results when discussing top-line metrics, and Kristian Talvitie will expound on currency effects later in the call. Starting with the top-line metric of ARR on slide four, in Q2, we came in at $1.814 billion, which was above the high end of our guidance range and up 26% year-over-year. Top-line strength was broad-based across all segments and geographies. Bookings were solid in Q2, and our churn results were outstanding. Organic ARR growth was 13%, with ServiceMax and Codebeamer contributing the extra 13 points of inorganic growth to bridge us to that 26% growth rate. Given our strong first half results together with a solid outlook for the second half, we are narrowing our full-year ARR guidance range while slightly raising the midpoint. Kristian will provide guidance details later. Global PMIs continue to hover in the mid- 40s - 50 range, suggesting the business environment remains challenging for industrial companies, but it does not appear to be getting much worse. Despite the sluggish macro, the solid organic bookings result we saw in Q2 was up nicely on a sequential and year-over-year basis, suggesting at this point that the softer booking result in Q1 was probably an anomaly within the normal range of bookings volatility rather than the beginning of a more sinister trend. While we did see continued booking softness in small and medium business and in China, this was offset by notable booking strength in Europe and in the U.S., and in particular with Windchill and Codebeamer, as well as with IoT and AR. Running counter to the SMB trend, Onshape had a record bookings quarter, helped in part by a large household name electronics company making the decision to move away from SOLIDWORKS and standardize instead on Onshape to gain the advantages of SaaS and agile product development. This key win represents a notable milestone for Onshape. In our core business, we saw a higher mix of ramp deals from companies choosing to proceed with large strategic programs, but wanting to ramp their deployments over multiple years. This buying behavior pushes more of the bookings into deferred ARR, which benefits fiscal 2024 and fiscal 2025 ARR growth more than it does fiscal 2023. Deferred ARR is up sharply year-over-year. Naturally, we took the outlook for book-bookings, churn, start dates, and deferred ARR into account when we adjusted our FY 2023 ARR guidance. We landed a large and interesting PLM and ALM order from a European automotive OEM that included extension options for Windchill and Codebeamer that contemplate a relationship spanning 20 years. The fact that an automotive OEM wants to understand commercial terms over the next two decades speaks to how sticky our software is. Clearly, they expect to have it for a while. A final top-line observation is that organic growth arguably has a bit more momentum than the numbers on this slide suggest. That's because following the Codebeamer acquisition, our strategy has been to shift our organic ALM selling effort to the new Codebeamer technology platform. That strategy is working, and Codebeamer is doing exceptionally well. Codebeamer is now the ALM standard at several of the largest European and Asian auto OEMs and at numerous suppliers. The consequence of this shift in sales strategy is that some of the ALM business we would have likely transacted organically is now scored as inorganic Codebeamer instead. We estimate that excluding the impact of this mix shift factor in Q2 would cause this slide to show organic growth at 14% with inorganic growth at 12%. Codebeamer will become organic in Q3 when we pass the acquisition anniversary. Switching to our bottom line, we delivered $207 million of free cash flow in Q2, a record quarterly result that was ahead of our guidance and up 48% year-over-year. Note that in fiscal 2022 we had $41 million of restructuring-related cash outflows for the full year and $18 million in Q2. Excluding the impact of restructuring payments in last year's compare, we still delivered 31% year-over-year free cash flow growth in Q2, driven by a combination of strong ARR growth and higher operating efficiency due to disciplined cost management. We raised our free cash flow guide for the year. Kristian will elaborate on that too. To help you understand what's driving the big year-over-year increase in free cash flow, let me recap the margin expansion program that PTC management's been driving. I'll remind you that operating efficiency is our metric that measures the percentage of our billings that we're able to convert to cash flow each year. Margins have been expanding for many years now, the organizational realignment we did at the end of fiscal 2021, coupled with the resource rebalancing work we did during fiscal 2022, have together created an organizational model for PTC that's efficient and sustainable. We delivered 300 basis points of expansion in fiscal 2022. At the midpoint of our fiscal 2023 ARR guidance range, based on actions that are well behind us now, we expect our operating efficiency to expand by at least another 450 basis points this year. Looking back, while other companies were hiring like crazy, the proactive work we did to optimize our cost structure proved prescient and is generating exactly the results we promised. Given the trends at PTC, we do not anticipate any need for the type of layoffs or restructuring that we've seen in the tech world around us. Indeed, we're still hiring and investing in the business, albeit conservatively, which Kristian will discuss later. Turning to slide six, a large driver of this margin expansion is the natural result of putting the business model transition behind us. Traversing the valley of death in fiscal 2014-2019 caused PTC to defer revenue recognition while retaining the same spending levels, which made our reported margins look much worse than they fundamentally were. The short-term pain we endured during that transition is long gone, and now we're enjoying the fruits of the long-term gain we were aiming for, which is a resilient business that's tracking toward peer-leading performance. That's a good segue to slide seven, where I'd like to share a view of PTC's combined top and bottom line performance in comparison to peers. Starting at the upper left, Autodesk recently showed this FY 2023 Rule of 40 comparison at their Investor Day in March. Note that Autodesk's definition of the Rule of 40 uses free cash flow margin rather than operating margin, which is probably a good way to look at it given ASC 606 accounting noise. I'd prefer to use ARR rather than revenue growth for the same reasons, I realize that makes comparisons of actuals hard to do. For today's purposes, we will embrace Autodesk's definition. That said, this chart showed PTC with an anemic 28% figure for fiscal 2023, which didn't sound right to me given the margin expansion I just described. Moving to the upper right, our team looked up all the actuals to reverse engineer the Autodesk chart, and two things became clear. First, Autodesk has a strange fiscal calendar where 11 of the 12 months of their fiscal 2023 actually happened in calendar 2022. Most of the companies in this analysis, including PTC, would say this is really a 2022 comparison. Second, there are some significant one-time factors involved here too, because PTC's fiscal 2022 cash flow was negatively impacted by the restructuring I mentioned, whereas Autodesk cash flow during this period was helped by their practice of billing multi-year subscriptions up front, which they've since committed to move away from. Putting those points aside, obviously the future matters more than the past. It's interesting to consider the trajectory of companies in this peer group going forward. The two charts on the lower half of the slide have been created using consensus data pulled directly from FactSet. In the current year, based on strong growth and significant free cash flow margin expansion that PTC has been delivering, we're expected to move to the middle of the pack while Autodesk recedes. Next year in 2024, based on continued growth in margin expansion, PTC is expected to lead this peer group in the Rule of 40 as Autodesk defines it. Of course, these are just consensus models and not actuals, but we're comfortable with the expectations shown here for PTC because they align to the midterm guidance ranges we provided at our November Investor Day. We'll plan to revisit this useful chart periodically to track how PTC is doing as compared to peers. Turning to slide eight, let's look at ARR growth by geography. ARR growth in Americas was 29%. In Europe, ARR growth was 25%. In Asia Pacific, ARR growth was 19%. All three regions benefited from the acquisitions of ServiceMax and Codebeamer, albeit to differing degrees. Next, let's look at ARR performance of our product groups on slide nine. In CAD, which is those products that enable authoring of product data, we delivered 10% ARR growth in Q2 in a market that's been growing an estimated 7%. Within these results, the growth was primarily driven by Creo, but supplemented by strong percentage growth in Onshape. Jay Vleeschhouwer recently noted in his research that Creo has been the fastest-growing major CAD system for 12 of the past 16 quarters. Onshape's growing at a considerably faster rate than Creo. PTC is clearly taking shares in different parts of the market with both products. I feel we have a great hand to play in the CAD market. In PLM, which includes those products that enable data and process management, our ARR growth rate in Q1 was 39% or 16% organic, with the inorganic growth coming from both ServiceMax and Codebeamer. Codebeamer having enjoyed a tailwind from the ALM mix shift factor I previously mentioned. In PLM, we continue to significantly outperform the market, which has been growing approximately 8% in core PLM, but more like 11% when you roll in the extended PLM categories of ALM and SLM. ARR growth for PLM in Q2 was primarily driven by Windchill, supplemented by strong percentage growth in Arena, IoT and SLM. PTC has a strong hand to play here too, as clearly we are taking significant market share in the PLM market as well. Turning to slide 10, now that 2022 is behind us, we thought it'd be helpful to publish PTC's calendar year performance for those analysts who wish to make growth and market share comparisons on that basis. As you can see, calendar 2022 was a strong year for PTC, and it was our fifth consecutive year of double-digit ARR growth in both our CAD and PLM segments. In PLM, the addition of ServiceMax into our portfolio brings management of the customer's installed base of products into our product lifecycle management offering, and this significantly expands our category leadership. On a calendar 2022 basis, inclusive of the $153 million ServiceMax contributed on a pro forma basis, PLM revenue was $1.15 billion. ARR growth was strong at 20%, with organic at 18%, which suggests we're widening the leadership gap. In CAD, our results were all organic in calendar 2022, and growth here too remains well ahead of the market. CAD revenue was $788 million in calendar 2022, and the ARR growth rate was 10%. PTC's growth rate in CAD is best in class. While we're not the category leader, given the differential growth rates, we are in the passing lane. Turning to slide 11. In just a few weeks, we're hosting our big LiveWorx event on May 15 and 16 here in Boston. This is our flagship event dedicated to our customer and partner ecosystem, and we're also welcoming investors to join. It's a great way to network and learn firsthand all things PTC. This year we're excited to try a new approach to maximize the investor experience. In addition to having an exclusive investor lunch session on sustainability as well as an executive Q&A session, we have organized an immersive investor track which will enable you to attend our main keynote and our spotlight sessions on ServiceMax, Windchill+, and Creo+ sitting alongside our customers and partners. We will host a special demo tour for investors, and you'll be free to explore and learn more on your own too. There will also be opportunities to network with our executive team, and our board will be present as well. We would love to see you at LiveWorx. If you need registration details, please reach out to our IR team. On slide 12, one of the demos you can check out in the Windchill section will come from Fresenius Medical Care. Fresenius is the world's leading provider of products and services for individuals that need dialysis treatment. Fresenius produces dialysis machines in over 40 manufacturing facilities around the globe and also runs a network of over 4,000 dialysis clinics. There's a lot of inherent complexity in their product lifecycle. Fresenius saw the opportunity to bring down treatment costs and improve their products by building a digital thread workflow across their engineering, manufacturing, and service domains. Windchill was selected as the backbone to bring product data together and enable better collaboration across internal groups and with external partners. Fresenius subsequently standardized on Creo and has since adopted ThingWorx for smart connected products and for smart connected factories. Currently, they're exploring how they might leverage ServiceMax in that digital thread. Fresenius is a great case study that shows the breadth of what PTC technology can enable. For another teaser on slide 13, one of the demos you literally can't miss seeing is the Komatsu wheel loader. It's big and yellow and weighs 30 tons. Using Creo and Windchill, Komatsu engineers and manufactures equipment that customers use for decades in the field. Komatsu's aftermarket service business contributes significantly to their overall financial results, they've been investing in software to make their services business more efficient and productive. Komatsu's been using PTC service lifecycle management software, including Servigistics since 2006 to optimize spare parts inventory and Arbortext since 2015 to streamline the availability of service instructions. Last year, Komatsu expanded their investment in service technology by selecting ServiceMax. Komatsu purchased software independently from PTC and ServiceMax when we were still separate companies. Represents a good example of the type of customer where we think we can be successful cross-selling because they really appreciate that 3D model-based digital thread. Komatsu is also a poster child for my point that for every customer that ServiceMax currently has, PTC has 10 more that look like them. Companies that use Creo and Windchill to produce products that have long service lives. Summarizing then on slide 14, in fiscal 2023, we're continuing to make good progress toward our midterm guidance targets. With solid first half results, we're well positioned to achieve our full year ARR and free cash flow guidance, which ticked upward this quarter. PTC has expanded our clear category leadership role in PLM, which has become a must-have technology backbone for digital transformation at industrial companies. The addition of ServiceMax further extends what was already a unique portfolio of interconnected digital thread capabilities across the full product lifecycle. With organic growth at double-digit levels already, we're in the early days but executing well against a major on-premise to SaaS transformation that should provide a multi-year growth tailwind. You'll learn a lot more about our SaaS strategy at LiveWorx. We have a well-earned reputation for driving margin expansion that goes back more than a decade, and the proactive changes we made are driving high levels of free cash flow growth through the midterm guidance period. With organic ARR in the low teens juxtaposed on PMIs in the upper forties, I trust you would agree we are actively demonstrating that our business model is very resilient. Q2 bookings were solid and churn outstanding. Top line growth and bottom line profitability are approaching peer leadership levels even in this challenging macro environment. Finally, we're led by a team that has deep expertise and a proven ability to drive growth and margin expansion. I want to congratulate Mike DiTullio, who was promoted to President and COO in the quarter. Mike and I have decades of experience working together, and I'm very much enjoying this new division of labor. Congratulations also to Neil Barua, who was previously the CEO of ServiceMax and joined PTC as the President of our SLM business that combines ServiceMax with PTC's broader suite of service-related technologies and use cases. We're pleased to have Neil join the team and love what he brings to the business. With so many positive trends going our way, I continue to believe PTC has a tremendous opportunity to create shareholder value. With that, I'll turn it over to Kristian for his more detailed commentary on financial results and guidance. Thanks, Jim, and good afternoon, everyone. Before I get into it, I'd like to note that the non-GAAP results and guidance and ARR references I'll be discussing will be in both constant currency and as reported. Turning to slide 16. In Q2 of 2023, our constant currency ARR was $1.81 billion, up 26% year-over-year and above the high end of our guidance range. On an organic constant currency basis, excluding ServiceMax and Codebeamer, our ARR was $1.63 billion, up 13% year-over-year. As Jim explained, our solid top line in Q2 was broad-based across all geographies and product groups. Our pipeline development also continued over the past three months in a solid and consistent way, and our outlook was steady all quarter long. In Q2, our organic top line continued to show good resilience. I'm sure many of you have been following the manufacturing PMIs due to the historical correlation with our top line when we operated a perpetual business model. The PMIs have been soft over the past year, particularly in Europe, where factory orders have been down 11 months in a row and where the Eurozone PMI was a little over 47 in March. In contrast to those trends, our top line, including in Europe, has continued to grow. Our subscription business model makes our ARR resilient, and demand for digital transformation continues across our customer base. Q2 was one of our best bookings quarters in Europe ever. On an as reported basis, we delivered 23% ARR growth, 11% organic. In Q2, our as reported ARR was $68 million higher than our constant currency ARR. Remember that for our constant currency reporting, we use rates as of September 30, 2022, for all periods, forwards and backwards. On a year-over-year basis, currency fluctuations were still a meaningful headwind in Q2 and for the entire first half. Moving on to cash flow, our results were strong, with Q2 cash from operations of $211 million and free cash flow of $207 million coming in ahead of our guidance. This performance was driven by continued strong execution based on a foundation of solid collections and cost discipline. When assessing and forecasting our cash flow, it's always good to remember a few things. The majority of our collections occur in the first half of our fiscal year. Q4 is our lowest cash flow generation quarter, and on an annual basis, free cash flow is primarily a function of ARR rather than revenue. Q2 revenue of $542 million increased 7% year-over-year and was up 13% on a constant currency basis. In Q2, recurring revenue grew by approximately $40 million, partially offset by small declines in perpetual license and professional services revenue. The decline in professional services revenue is consistent with our strategy to transition some of our professional services to DxP Services, our partner for Windchill+ lift and shift projects. The decline in perpetual license revenue is consistent with our plan to continue transitioning Kepware to a subscription model over time. Kepware is the primary driver of the small amount of perpetual license revenue we have left. As we've discussed previously, revenue is impacted by ASC 606, so we do not believe that revenue is the best indicator of our underlying business performance, but would rather guide you to ARR as the best metric to understand our top-line performance and cash generation. Moving to slide 17, we ended the second quarter with cash and cash equivalents of $320 million. Our gross debt was $2.545 billion, with an aggregate interest rate of 5.4%. In Q2, in conjunction with the ServiceMax acquisition, we took out a $500 million term loan and increased the size of our revolving credit facility from $1 billion to $1.25 billion. After the new borrowings and $205 million of debt paydown in Q2, we had $1 billion in high-yield notes, a $500 million term loan, and approximately $425 million drawn on our revolver at the end of the quarter. As a reminder, we have a second payment for the ServiceMax transaction due in October of 2023 of $650 million, which consists of $620 million of debt and $30 million of imputed interest. We intend to fund this with cash on hand and our revolving credit facility. This deferred payment is included in debt on our balance sheet and is factored into our debt-to-EBITDA ratio, which was 3.4 x at the end of Q2. We continue to expect to be around three times levered by the end of Q4 and below three times throughout fiscal 2024. Given the interest rate environment, we expect to prioritize paying down our debt in fiscal 2023 and fiscal 2024. We've paused our share repurchase program, and in fiscal 2023, we expect our diluted share count to increase by approximately one million shares. We expect to have substantially reduced our debt by the end of fiscal 2024 and will then revisit the prioritization of debt paydown and share repurchases. Despite this interruption, our long-term goal, assuming our debt-to-EBITDA ratio is below three times, remains to return 50% or so of our free cash flow to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic opportunities. Next, slide 18 shows our ARR by product group. In the constant currency section on the top half of the slide, we use rates as of September 30, 2022 to calculate ARR for all periods. You can see on the slide how FX dynamics have resulted in differences between our constant currency ARR and as-reported ARR over the past six quarters. Based on exchange rates at the end of Q2 2023, as-reported ARR in Q3 2023 would be higher by approximately $70 million compared to the midpoint of our constant currency guidance. Fiscal 2023, as-reported ARR would be higher by approximately $73 million compared to our constant currency guidance midpoint. We report both actual and current constant currency results, FX fluctuations can have a material impact on actuals. Remember, we provide ARR guidance on a constant currency basis. If exchange rates fluctuate significantly, between the end of Q2 2023 and the end of Q3 2023, the impact to our as-reported ARR would also change. We believe, the constant currency is the best way to evaluate the top-line performance of our business because it removes FX fluctuations from the analysis, positive or negative. Given the continued volatility in FX that we've seen over the past few months, I thought it would be useful to update our ARR sensitivity rule of thumb on slide 19. Using FX rates at the end of Q2, the impact of a 10-cent change in the euro-to-USD rate would be about $40 million, positive or negative, and the impact of a 10-yen change in the USD -to-yen rate would be about JPY 9 million, again, positive or negative. In addition to the dollar, we transact in euro, the yen, and more than 10 other additional currencies. Of course, the estimated dollar impact to ARR is dependent on the size of the ARR base. With that, I'll take you through our guidance on slide 20. For all ARR guidance amounts, we're using our constant currency FX rates, which are as of September 30, 2022. For fiscal 2023, we expect constant currency ARR growth of 22%-24%, which corresponds to a fiscal 2023 constant currency ARR guidance range of $1.925 billion-$1.95 billion. We raised the low end by $15 million and lowered the high end of our ARR range by $10 million. The midpoint of our ARR guidance is up a few million dollars. I'm gonna circle back on this on the next slide to provide a little more context. For Q3, we're guiding constant currency ARR to be in the range of $1.845 billion-$1.855 billion. At the midpoint, this equates to 24% constant currency growth. On cash flows, we are again raising our fiscal 2023 cash flow guidance. We're now targeting cash from operations of $600 million and free cash flow of $580 million. I think it's worth pointing out that we're raising our cash flow guidance for the year, while also increasing investments in select growth opportunities for our business in the second half of fiscal 2023. The important point here is the resilience of our business enables us to maintain core long-term investments, even in a turbulent macro environment. In addition to that, as a baseline, we can adjust our shorter-term investments accordingly given our business performance and outlook. The net result is solid and consistent cash flow growth. We maintain consistent billing practices, and we've improved our processes around collections and payments over the past tow to three years. The quarterly seasonality of our free cash flow results has been very consistent over the past two years, and we're on track to deliver similar quarterly linearity in fiscal 2023 as well. As in the past two fiscal years, we ended the halfway point of fiscal 2023, at approximately 65% of our full year cash flow target. For Q3, we're guiding to free cash flow of approximately $155 million. We expect approximately $5 million of CapEx. Therefore our cash from operations guidance is approximately $160 million. Moving to revenue guidance. For fiscal 2023, we expect revenue of $2.08 billion-$2.14 billion, which corresponds to a growth rate of 8%-11%. ASC 606 makes it fairly difficult to predict in the short term for on-premise subscription companies, hence the wide range. More importantly, revenue does not influence ARR or cash generation as we typically bill customers annually upfront regardless of contract term lengths. On slide 21. We've taken you through a lot of details, I think it's important to step back and give you a high-level perspective. We'll use the slide that we showed on our Q4 2022 call as a basis to do this. The initial guidance range and scenarios we provided on our Q4 2022 call is at the bottom half of this slide. We started the year providing a range of ARR outcomes that included organic bookings anywhere from up 5% to down 15% on a year-over-year basis, and churn anywhere from flat to worse by 100 basis points. On the top half of the slide, you can see a summary of the current guidance range. As you can see, we've narrowed the guidance from our initial range of $60 million at the start of the year to our current range of $25 million at the midpoint. In short, since Q4 of fiscal 2022, we've taken the bottom end of the ARR range up by $25 million and taken the top end of the range down by $10 million, along with the adjustment for ServiceMax we made at the time of close. Basically, based on our first half performance and the outlook for the second half, we've taken the initial low-end scenario for ARR off the table, which called for an organic bookings decline of 15% and for churn to increase. Our organic bookings growth was solid in the first half, and we expect flattish organic bookings for the full year. We've also continued our strong organic churn performance, and we've actually seen an improvement of about 50 basis points in the first half. While we continue to guide to flat churn for the year, we think this may be conservative. There are a lot of factors that could impact where we end the year in terms of ARR. Just to be clear on the major factors, they include, first, whether organic bookings are flat or a little better or a little worse than that. Second, how inorganic bookings perform also matters. The scenarios we're showing on the bottom half of the page only contemplated organic bookings. In addition to flattish organic bookings, we expect total bookings growth on a year-over-year basis, supported by bookings from ServiceMax and Codebeamer. Third, whether churn comes in flat or continues on the trend of slight improvement we've seen in the first half. Fourth, we saw in Q2 in particular, increased customer interest in ramp deals. These are multi-year contractual commitments from customers where the ARR increases during the contractual term. In practice, what this means is that the amount of ARR we get in year one is smaller than the exit run rate, which is what creates deferred ARR for us. These are great deals in the sense that they demonstrate significant customer commitments to PTC, with low churn rates we have, these deals bode well for future ARR growth. Lastly, it probably goes without saying that the difference in timing of booking a deal and when the contract term actually begins matters as well. We count the booking when we sign the contract, but ARR and revenue start only when the contract term begins. We have consistently called this out as a factor in ARR, especially in a Q4 when we may sign a contract in Q4, but for a variety of reasons, it doesn't actually start until Q1. This also can create deferred ARR for us, but it's just short-term deferred, and the timing difference is generally measured in days or weeks. A lot of moving parts for sure, but the net result of all of this is that we've raised the midpoint of our ARR guidance by approximately $8 million from when we started the year. On the free cash flow side of the equation at the beginning of the year, we said we thought $560 million was a good target regardless of the ARR outcome as we would moderate or increase spending based on the environment as we saw it. As you know, we were cautious on spending and hiring in the first half, and that has served us well. We're comfortable increasing the target to $580 million for the year, given the results in the first half and the outlook for the back half. While there is a tailwind from FX to be expected for the year, I'll remind you that FX rates in the first half are still below the FX rates for the first half of last year, we've not really seen much of a year-over-year benefit from FX thus far this year. I'll also remind you, we generate about 65% of our free cash flow in the first half. If FX rates hold for the second half, we should see some pickup. This will be offset by higher than anticipated interest rates and the increased investments we're making in select growth opportunities, namely Codebeamer, Windchill+, and Atlas in the back half. This is all factored into our current guidance. Hopefully, this slide helps clarify at a big picture level how we've performed through the first half and our expected range of outcomes for the back half. Summing all this up in the first half of fiscal 2023, we've been demonstrating the resilience of the model and the stickiness of our solutions. Said another way, the value that customers are getting from our solutions in an uncertain macro environment. On the top line, we think the combination of flattish or organic bookings compared to record bookings last year, with additional growth coming from our more recent acquisitions and churn that is flat to improving, is a compelling outcome in a difficult macro. On the bottom line, we're continuing to be judicious with our investments, being mindful of both long-term opportunities and near-term macro uncertainty. Turning to slide 22. Although we're not providing separate guidance on ServiceMax, I thought it would be helpful to summarize the financial disclosures we made on ServiceMax in one place for you. These are the same numbers we provided previously with one exception. Since we focus on software ARR, we updated the geographic region chart to show the expected ARR mix instead of the expected revenue mix. As part of PTC, ServiceMax continues to trend toward the numbers we gave you. Turning to slide 23. Here's an illustrative constant currency ARR model for the back half of the year. You can see our results over the past six quarters, and the two columns on the right illustrate what is needed to get to the midpoint of our constant currency ARR guidance for Q3 and Q4 of fiscal 2023. Because our ARR tends to see some seasonality, the most relevant comparisons are the sequential growth in Q3 and Q4 of fiscal 2022. The illustrative model indicates that to hit the midpoint of our Q3 2023 guidance range of $1.85 billion, we need to add $36 million of organic ARR on a sequential basis. This is $7 million less than the $43 million we added in Q3 of fiscal 2022. In percentage terms, we need 2% organic sequential ARR growth to hit our guidance midpoint for Q3, which is at the lower end of what we've delivered over the past six quarters. Next, to hit the midpoint of our full year guidance range of $1.938 billion, we need to add $88 million of organic ARR on a sequential basis in Q4. While this is $12 million more than we added in Q4 of fiscal 2022, we expect previously deferred ARR and sequential ARR growth from ServiceMax that we didn't have in Q4 of 2022. We expect these two things will more than compensate for the additional $12 million sequential increase when compared to Q4 of 2022. All things considered, we believe we've set our Q3 2023 and full year constant currency ARR guidance ranges prudently. Turning to slide 24, I'll conclude my prepared remarks today by highlighting that we prepared for a storm, and we're demonstrating resilience in the midst of one. The environment will continue to change around us, and we will continue to adapt accordingly. We're still pushing the envelope of what we can do for our customers. From a top-line perspective, we serve industrial product companies, and R&D at those companies tends to be quite resilient. We have a supportive top-line backdrop. We also have a subscription business model, and our products are very sticky with our customers. Given our results in the first half and the pipeline and outlook for the second half, we expect to deliver flattish organic bookings in fiscal 2023 in comparison to record bookings in 2022. We also expect our ARR growth in fiscal 2023 to benefit from incremental ServiceMax and Codebeamer contributions. On the top line, we conservatively expect flattish churn from the already strong level of churn at the end of fiscal 2022. Just as importantly, from a cost and operational perspective, we are lean, having already batten down the hatches a while ago. In addition to the cost optimization work we did last year, we slow-planned hires and backfills in the first half of fiscal 2023. We're well-positioned to deliver on our updated cash flow targets for the year. Now, at a time when many other technology companies are cutting costs, we're capitalizing on the strength of our business model and outlook by increasing investments selectively in long-term growth opportunities. With that, I'll turn the call over to the Operator, and we can begin Q&A. Thank you, sir. To ask a question, please press star one on your telephone keypad. We ask that you please limit yourselves to one question only. If you have additional questions, you may reenter the queue. Once again, that is star one to ask a question. We'll go first to Jason Celino, KeyBanc. Hello, Jason. Great. Hey, thanks, guys. You know, cleaner quarter here. Maybe just my one question. You know, this morning your French competitor talked about a really strong large deal pipeline for the year for them. You know, I'm curious on what you're seeing from a pipeline, large deal pipeline perspective for yourself, and if you are, you know, what types of end markets we're seeing strengthen? Yeah. Hey, Jason, it's Kristian. Yeah, I think we actually are. We would agree that we're also seeing a pretty good pipeline for large deals. I would say that actually is across, you know, our major geos and the major verticals that we serve as well. You know, we've seen good interest in FA&D, for sure, in automotive, industrial, med device, yeah, life sciences or med devices as well. You know, across all those, we continue to see good business momentum and good pipeline generation. Up next, we'll hear from Nay Soe Naing, Berenberg. Hi. Hello. Thank you for taking my questions. Hi. Hello. Congrats on a pretty solid quarter. You mentioned, you know, a few times that you are winning in your core CAD and PLM markets. If you could share, you know, where is it that you're seeing the competitive wins? Is it in the core Creo and Windchill, or is it in your cloud version of the CAD and PLM products? Related to that, now that you now have the plus versions of both Windchill and Creo, how do you expect the competitive landscape to change going forward? Thank you. Yeah. Good question. We believe that we're taking share with both products because both products are growing double digits. I mean, Creo's growing low double digits, Onshape's growing at a multiple of that. You know, I think we're taking share, though, in different parts of the market. You know, Creo is a little bit in the upper half of the market, today Onshape is typically a little bit in the bottom half of the market. They're both, for example, competing against SOLIDWORKS, perhaps at different ends of the SOLIDWORKS base. Creo might be taking customers that have kinda outgrown SOLIDWORKS, Onshape's taking customers that, for example, might feel like SOLIDWORKS is too heavy, too expensive, too complicated, requires a system administrator. You know, they just... T hey really like the idea of the pure web-based technology. Both products are doing very well. In order to sustain that level of performance, you know, keep in mind for Creo, we're talking 22 quarters, 23 quarters now in a row that we've had a double-digit growth rate. One of those numbers right in there. You can't do that unless there's something good happening. I mean, part of it's the business model, we're clear on that, but part of it is. You know, we're winning a lot of new orders as well. What will the advent of, you know, Creo+ do? First of all, it's not yet in the market, but we're launching it at LiveWorx in a couple weeks. That should be helpful. It should be helpful for two reasons. One is it's more compelling. You know, some of the advantages that are present in Onshape will become present in Creo. Some of the same characteristics, you know. It won't be exactly like Onshape because Creo+ is fully compatible with Creo, and, you know, that's a fixed requirement. I think some of the real advantages of always being on the latest version and so forth, will accrue to Creo as well. Second all, we will ultimately lift and shift Creo customers to the cloud, and there'll be an uplift there as well. It's only helpful. It's only helpful. Your next question comes from Steve Tusa, JPMorgan. Hello, Steve. Hey guys, how's it going? Good. Congrats on the execution on the quarter, and looking forward to LiveWorx for sure. Just on this orders commentary, were orders actually down in the first quarter? I think there are still people trying to kind of pencil that out. You mentioned, you know, these ramp orders several times in this presentation, which I'm sure influences the actual number that you're kind of reporting and why it may not line up directly with the change in ARR. I guess as you look out, and you say they're gonna be flat for the year, does that imply they're gonna be down at all at any point in the second half for bookings? You know, Steve, I mean, we had a very good orders quarter. It wouldn't be fair for us to give the details when it's a good, strong quarter when we didn't wanna give them when it was a softer quarter last quarter. I mean. Right I think Kristian took you through the guidance changes. You know, in general, we're tracking well. You know, renewals have been our friend all year, as Kristian said, in the first half, we have a number that doesn't compare too badly to first half last year that was, you know, a record first half. You know, I think it's strong, but it is complicated to understand how much is going into deferred and when does it come back out, and by the way, how much is coming out next quarter and the quarter after that. It just requires a level of disclosure that, you know, seems a little bit inappropriate for an earnings call. That's why we're just trying to back off and give you directional commentary on bookings and churn and much more precise commentary around ARR guidance. We'll go next to Ken Wong, Oppenheimer. Great. Fantastic. I wanted to circle up on the ramp deals. I guess how much of that was customer driven versus maybe you guys are pushing more aggressively with kind of more add-ons, more attach, more cross-selling, or just the sales force is maybe pushing in that particular direction? Any color there would be fantastic. Well, first thing to know, Ken, is there's nothing but goodness in ramp deals. They make it a little bit more difficult for us to predict ARR, though. Because for example, if we were to get a very large order, you know, I suppose we could take a smaller one that started all at once and go get another order later to grow it. Yeah, in that environment, we'd rather take the larger order now with a ramp because it's got the customer locked in. You know, ramps are irrevocable. You know, it's not something. Kristian talked earlier about churn, just to be clear, you can only churn at the end of a ramp, not during one. We like the commitment, and if a customer is willing to make a commitment, we wanna take it. It just makes it a little harder for us to predict. As Kristian said, in Q4, it's really hard because sometimes a ramp in Q2, the first tranche might start in Q3 or Q4. In Q4, if it's a ramp, anything that's not in Q4 is in the next fiscal year. That makes it a little tricky to predict. In general, ramps are great and, you know, we do reward our sales team for getting them, we also have a strange incentive that they get a little bit more credit for dollars that come in in the front part of a ramp than they do for dollars that come in in the back part of a ramp. They still get credit for dollars that, you know, grow as the ramp goes on. You know, we want the bigger deals, the bigger commitments, and of course, we want them to start as soon as possible and grow as soon as possible. That's all a point of negotiation with the customers. Up next, we'll hear from Adam Borg, Stifel. Great, and thanks very much for taking the question. Just for Jim on Codebeamer, it's nice to see the continued traction there. Is this more of an upsell motion, or is this really tip of spear? Maybe just as a quick follow-up on, for Kristian on the incremental investments in the back half of the year, just where are you making them? Is it R&D? Is it sales and marketing? Any color there. Thanks so much. Yeah, Codebeamer is both an upsell and a tip of the spear. Some amount of the Codebeamer success we're cross-selling from Windchill, because Windchill and Codebeamer are, you know, sold together like the previous product Integrity and Windchill frequently were. We're cross-selling from a Windchill position. For example, in some of these automotive accounts, we don't have a Windchill position, and Codebeamer is a very compelling product, and then we'll lead with it. You know, we'll see if we get Codebeamer installed. Can we cross-sell from there? I don't know. You know, we haven't had really enough time with it yet, but certainly we've penetrated some accounts with Codebeamer where we had no significant Windchill position, and that's good news. Then on the, just on the, on the sneaky follow-up question. Investments, yeah. The second question on the investments. What I would say is it's probably again, the primary areas are Codebeamer, Windchill+, and Atlas. In terms of where it is organizationally, it's probably, I don't know, 75%-80% R&D, 20%-25% sales and marketing. We will move on to Jay Vleeschhouwer at Griffin Securities. Mm. Thank you. Good afternoon. Hey Jim. Hey Kristian. Jim, you mentioned the PLM/ALM selection at a European auto. Could you speak more broadly about multi-solution sales, PLM with SLM, for example, as examples of the implementation of closed loop, and you're probably talking about LiveWorx? Yep Maybe speak about what you're seeing already in that regard. Yeah, I mean, I think there's a couple of words that go together here. There's the digital thread idea, which means data created upstream is used multiple times downstream. There's the model-based idea, which says, "Oh, by the way, let's make sure this data is 3D models, not 2D drawings." Model-based digital thread. Closed-l oop means let's make sure that things we find in the manufacturing process, for example, using DPM, get reflected into changes upstream, either in the product itself or in the manufacturing plan. Let's make sure that what we find when the product's out in the field at the customer site, for example, IoT, smart connected products, that is likewise being funneled back in, you know, ultimately upstream, maybe into the product, maybe into the manufacturing process, maybe into the service process. Let's have these feedback loops. I think this concept PTC has of a model-based, closed- loop, digital thread is very powerful and I'd say pretty unique. Yeah, I'll talk a lot about that at LiveWorx in my keynote and, you know, it'll be a kinda theme throughout. It allows us to cross-sell in a lot of directions, you know. We talked about Codebeamer and Windchill. There's gonna be a similar conversation between Windchill and ServiceMax, and between ServiceMax and Servigistics, and ServiceMax and ThingWorx IoT. We like this idea of a lot of products that are very compelling, could be sold standalone as the tip of the spear, but then integrated into this digital thread so that they could, you know, it's kind of better together. Better together, but you don't have to buy it all. You know, if you wanna use ServiceMax with some other PLM system, fine, we know how to make that work. You have to be that way, because it's practical. Customers don't throw out all their technology and switch lock, stock, and barrel. They look at what they have, and they wanna systematically, over time, upgrade it. We get in there, we might win with Windchill, and then we might win with Codebeamer, and then we might introduce ServiceMax, and that's kinda how we've built our whole growth story, you know, over the last decade, is by really perfecting these cross-sell motions. Everyone, at this time, that does conclude our question and answer session. We ask that you please remain on the line for any additional remarks as I hand the conference back to Mr. Jim Heppelmann. Okay. Well, great. Thank you, thank you Lisa. You know, for anybody who has more questions that maybe we didn't have time to get to, please come to LiveWorx. You're gonna get lots and lots and lots of information. You're gonna get a fire hose, I promise. You know, the real day we have set up for investors is May 16th. You're welcome to stay longer if you want, that's where we have this sort of investor track that was on the slide. Otherwise, if you can't come to LiveWorx, there'll be a couple other opportunities to catch us. I know that Kristian Talvitie, myself, and Mike DiTullio are going to the JP Morgan conference in Boston on May 22nd. We're hosting a Bank of America road show here at PTC on June 5th. Kristian and our Chief Product Officer, Kevin Wrenn, are participating in the Stifel Conference in Boston on June 6th. Lots of opportunities to engage us with more questions and get more information across all those different events I spoke of. Thanks for your time today. Really appreciate it. You know, look forward to talking to you during the course of the quarter or in 90 days as the case may be. Thanks a lot. Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today.