All right, Kevin. I guess, I'm just sorry. Good morning still. My name is Andrew Obin. I'm BOA's multi-industrial, industrial software analyst, and we're here with PTC, and we have Kevin Wrenn, company's Chief Product Officer. We also have Matt Shimao here in the audience. Matt, thanks so much for making this happen. Always appreciate this. I think the plan is just to go into the fireside chat, right? Yep. I'll do that. Thanks so much. Thank you for being here. Andrew? Of course. Thanks for having me. Okay. We'll just jump right in. Maybe start with a general update. Can you give an update on what's the most exciting product developments going on? Love to hear about anything new in the market or coming soon. Sure. Just before I go there, maybe just to give everybody a little bit of a primer on PTC, if you don't know us that well. We're in the business of making software to help our customers engineer, manufacture, and service products. The vast majority of our customers look similar, meaning complicated equipment that's really difficult to engineer, hard to figure out how to manufacture, and we say has a long and interesting service life, meaning usually lives in the customer's hands for a decade or more. With that as a background, we categorize our business in two categories. One is CAD. The other is PLM. Our CAD business is about 40% of our Annual Recurring Revenue, and PLM is about 60% of our ARR. In terms of, let's say, recent releases, on the CAD side, we just released Creo 11 at the beginning of May. Creo, by the way, has been growing double digits for about the last 18 quarters in a row, so we've been having a pretty good run there. We've been doing that by focusing on what our customers really care about. Think about things like NBD, NBE for digital thread, generative design, simulation-driven design. We added a new composites module. We continue to enhance manufacturing, both subtractive and additive. Essentially rounding out the suite there that keeps our customers productive and happy. On the PLM side, we have a lot going on, but the two biggest things that are exciting is we made a couple of acquisitions in the last 18 months. One is Codebeamer in the area of ALM or Application Lifecycle Management. The reason that's exciting is that, especially in automotive, there's this concept of software-defined vehicles. Software has become so much more important in automotive. It's actually allowed us to capture some of the logos there as well. We think that that's going to move to other industries as software and electronics become more and more important in big products like I described. On the service side, I said long and interesting service life. We made a large acquisition of ServiceMax. It's asset-centric field service management. Think about the kind of equipment I described with a service life of 10-30 years. Now we have an asset that's, let's say, central to our SLM strategy there. Let's say, round out our SLM suite. When you talk to your customers on the factory floor or in the field, what are their key pain points? What do they need done better or more efficiently? What are their priorities from a software standpoint? They all face the same thing. They're trying to get faster to market so they can have more product iterations. They're trying to lower the cost of goods sold, so actually have less parts but still have the same kind of variety out in the field. We call that diversity- at- scale. What diversity- at- scale is product platforms, etc. Those are the things that they're trying to get done. The other thing is they're trying to create differentiated products. All of those things wrap up as they're all going through the same thing of digital transformation. They're trying to digitally transform their product itself. They're trying to digitally transform engineering, manufacturing, and service. For companies like I described, a lot of that data gets created in engineering. That's what's happening is they're starting to try to leverage the data they create in engineering to transform what's happening in manufacturing and in service. Excellent. Thank you. Maybe just differentiation. How much of your business is entirely new customers versus taking share from a competing supplier versus renewals? From a product standpoint, how does PTC differentiate itself from its competition? What are the niches that you play better in? First, I mean, the industry that we're in largely is you can pick between 25 and 35 years old. The offerings are quite sticky. Displacing the competition is actually a small amount of what we do. Most of our growth comes from expansion and renewals. We do get some new clients. Codebeamer is a really good example of us winning some new automotive clients. There are always skirmishes at the border and M&A and things like that. We get in competitive displacement situations, but it's not the main part of our business. The main part of our business is either expanding the number of seats at our customers or, let's say, the size of seats that they have at their customers. That's, let's say, the dynamics of competition. The second thing is what makes us different. What makes us different is, as I said, we're in CAD and PLM, and we're in sub-markets there. We invest to be at the top of the market. If you look at us in any of the subcategories, we're always top right across the portfolio. The second piece is we're open, meaning that we make our software work together, so it's more like a digital transformation suite. We're also willing to integrate with competitive technologies and other, let's say, important systems in our customer's landscape. Think like ERP and MES systems, which we don't own. Some of our competition don't behave that way from an open perspective. We feel like those are the three things for us. One is win in our categories, make sure our stuff works together, and make sure our stuff works with third-party stuff. Excellent. Maybe I just talk about ARR by industry. Which end markets do you have the largest presence in terms of ARR? What are specific verticals that are of greater focus, area of expertise for PTC? Do certain products do better in certain end markets? For example, Codebeamer core market is autos, but also medical electronics. Do other products have similar core markets? So first, I mean, our biggest market is industrials. The next one would be A&D. To round out, we have a presence in electronics and high-tech. We actually have a very, very good presence in medical device. In fact, we're the system of choice, I think, in 28 of the 30 top medical device manufacturers globally. Those are our top five. I think that makes up about 80% of our ARR. Where is our special sauce? You mentioned Codebeamer. We're actually having a little bit of a run with Codebeamer right now. A little bit? It's actually maybe a little bit of inside baseball. We had a competing product there. It was MKS that we purchased in 2011. And what was good about MKS or Integrity was that it had really good traceability. So in automotive, in med device, in any safety or compliance-critical environment, you have to be able to trace from a requirement all the way to verification and validation. And you have to prove that. And it's important for quality reasons, but it's also important for compliance reasons. The problem with doing that, let's say, in automotive is you have to follow a waterfall kind of development process if you're actually going to make that work with Integrity or actually most other ALM systems. The magic of Codebeamer is that you can have that kind of traceability, and you can use agile software development methodologies so you kind of get the best of both worlds. This ability to rapidly innovate software while maintaining this traceability so that you can comply with the requirements that you have, but most importantly, be safe. That is why it's viral, almost viral in automotive because of the software-defined vehicle and all of the requirements they have to meet and also catching up with their competition. We will see it show up in med dev here next and likely start to see it show up in other industries like A&D here shortly. That is Codebeamer's, let's say, special sauce. If you look at the rest, CAD, PLM, and SLM, those are just growing. Gotcha. Maybe just tell us a little bit about the sales process. When you go and do the sale, who are the influencers in decision-making? When you go to market, are the conversations held with IT software engineers in the sales process? Was the C-suite a combination of both? If we're selling into a department, let's pick engineering. We're selling into the engineering department. There's always going to be the technical buyers. You got to satisfy the folks that are going to use the software or be responsible for extracting the benefits of the software. Of course, there's going to be the commercial buyer. Usually at that point, the product engineering manufacturing service, those companies will usually have a Chief Digital Officer. That's when it gets into the C-suite. That's when we're having, let's say, multidimensional deals. Much, much bigger economic value is required to get those deals done. Usually, they take a bit longer. Departmentally, we still need to win over the technical people and the folks. Just directionally, how much of your ARR coming from customers that just buy one product? How much from the customers that buy two and more? If you choose to use a whole suite of, what sort of functionality improvement do you get? First of all, I mean, a big strategy at our company for decades has been cross-sell. We cross-sold Windchill into the Creo base, and now everything else is getting cross-sold into Windchill, more or less. In terms of customers that own just one of our products, I would say it's probably maybe just a little bit south or a little bit north of 10%, somewhere around there. It's not much. Our whole goal is to land and expand and then cross-sell. If you think about the acquisition of ServiceMax, ServiceMax, we're selling it into the Windchill base because there's good synergy. At the beginning of this fiscal year, we reorganized the sales team a little bit so the ServiceMax specialists could help the, we call them full product line reps, in the PTC base, sell ServiceMax. Now, my job then is to integrate them so that there's a compelling technical and value reason for someone to own ServiceMax if they own Windchill. If you think about what those integrations look like, the first one that we did is from ServiceMax, you can submit a complaint report basically back to the engineers to say, "Hey, there's a quality problem going on with this product." We get feedback from the field. If you think about the data that could come out of Windchill, for example, we create service work instructions, let's say, with Arbortext and other technology that we have that gets managed in Windchill, and then that can get essentially published into ServiceMax. That's the, let's say, some of the technical integrations that we work on to make sure that there's, let's say, technical and business value for the cross-sell rather than just selling out a relationship. Interesting. We are going to cover some of the questions I was going to ask. Neil's number one focus area, PLM expansion. Maybe let's go to Windchill, good old Windchill. S ure. Which seems to be Neil's number one focus area. Windchill has been a key driver of outgrowth for several years now. It has been a very pleasant surprise, frankly. What is working well here? What is driving the incremental adoption of Windchill within engineering and outside of engineering? Because if you told us three, four years ago how strong and how long it would go for, I do not think a lot of people would see that coming. I started this job as Chief Product Officer in 2020. Prior to that, I was the GM of PLM. My colleague, Brian Thompson, was the GM of CAD. We started to see it in the late teens, which is we get engaged with customers. We would show them what customers would realize, that all of that data that we showed them in that demonstration came from CAD models, and it had to be managed in PLM. All of a sudden, they started to take it more seriously. That said, "Okay, we need to, and we need to actually take our PLM system much more seriously." That is when we started to see PLM expansion. All of a sudden, they know, "Okay, we can't just do CAD data management anymore. We need to manage engineering bill of materials more seriously. We need to transform those into manufacturing bills of materials and into service bills of materials so that, for example, we can send a manufacturing bill of materials to ERP, and it'll be the material master, and supply chain people can start work. We can send service instructions to an MES system in the shop floor, and the shop floor can work. You can make dynamic changes in PLM," and all of a sudden, you can update ERP and update the shop floor simultaneously." As people started to see this idea of when they're customers that I described, that all of this data that they create can then do train service, that's when they started to take it more seriously. That's when we started to see PLM expand beyond CAD users. If you think about it, if you have a CAD data management customer, it's one seat of PLM for every seat of CAD they have. As soon as they start managing an engineering bill of materials, you probably have four or five seats of PLM for every seat of CAD. If you get manufacturing engineering involved, then you start to move to more six or seven people are involved. When you start to have all that interesting information in PLM, there are other people that want to look at it. We have these lightweight solutions called Navigate that they want to look at. That's what we've seen happening with the expansion of PLM. Do these people, is the same type of license, same type of seats? Because we've also, I think, one of the events where the manufacturing floor now touch it. Can you just expand a little bit on that? First of all, what happened, it's both the weight of seats near the core, let's say. The CAD engineers will now have a more sophisticated seat so they can deal with the bill of materials. Once you do that, lighter weight seats for people who are involved in the changing configuration process, but again, more seats. Even outside of that, more lightweight seats for people who want to look at up-to-date information, o f course, publishing data to the shop floor or to ERP is a different kind of a license. There's lots more opportunity there, actually. We don't do enough in, let's say, supply chain collaboration, for example. We think that there's lots of opportunity around sustainability where people want to look at sustainability in PLM. In the core, it's heavier seats, and then it's consumer seats for all of these other, let's say, folks who aren't quite as close to engineering. It's been a great story. Maybe we can talk about another great story. Codebeamer, Intel acquisition has clearly been a home run. You double sales in 2023. Seems like there's a lot of momentum in the pipeline. Can you describe what customers like so much about Codebeamer and what has made it such a great success? I think on our math, initial expectations are more for 20-30% CAGR. It certainly has been outperforming. What is so good about Codebeamer? I've been at PTC for 30 years, or 31 years, actually. I haven't seen adoption of a technology like this since Pro/ENGINEER, mid-1990s Pro/ENGINEER kind of thing in terms of draw. I think other than the things I talked about before, meaning combining traceability with agile development, the engineers like the user experience. They like it a lot. And just to give you a little bit of background, why we bought it was, as you know, as the Chief Product Officer, you, of course, get to set strategy, but you also get involved in the worst customer situations. We had implementations of RV&S at a bunch of our customers, lots of automotive customers. I'm not exaggerating when I say I was in three escalations over a period of two weeks when Jim Heppelmann was still the CEO of the company. A couple of them got as bad that he was getting involved. What they were saying to us was, "Hey, you need to help us here because there's this Codebeamer stuff coming in the side door. People are buying it in departments." After three conversations with three big automotive customers of ours, Jim said, "Walk down this hall and talk to Jonathan Kateman and see if you can buy it." We bought it. The reason we bought it is because it's a tiny little company. The likes of VW and ZF and BMW don't trust their software to a tiny little company unless there's something special there. There was. It's this combination of usability, supporting modern software development practices, and the ability to manage traceability. The users like it. The customers like the value. The deployments go viral. It is really interesting. We're investing there because, frankly, we did buy it from a really small company. It was family-owned who built some really good features, but sometimes not quite as scalable that you need as a company like, pick VW. And so we're working on that at the moment. Maybe we can go to ServiceMax, which is the third key focus area. It seems ServiceMax cross-sell is going well. I think you alluded to that. Is it more that PTC core businesses are getting existing ServiceMax customers or that PTC core customers are now buying ServiceMax? It's much more sell ServiceMax into the PTC install case. And it's the Windchill install base. I think I might have mentioned that before. No, that was going to be my next question, but I think we covered that quite a bit. Maybe we can talk about sort of R&D priorities and portfolio integration. What are the key priorities for reinvesting into the business, specifically R&D? I think PTC talked about prioritizing R&D budgets with regards to ThingWorx, for example. Where is the company spending the most money? What are the areas that are most key to the business? As you evaluate various products, how do you decide what the key new projects are? How does the company determine internal spending priorities? It's a lot. The focus areas are PLM and ALM, SLM, especially ServiceMax and CAD, and then SaaS is maybe the. Those are the priorities, and that's how we're investing. The other thing that I talk about is IoT and AR. We thought that IoT and AR were separate markets. We thought they were going to evolve and grow as separate markets. I think a lot of people thought that, including the likes of McKinsey and all of the industry analysts. Now we think that those are actually features of something else. We recently did a reorganization where we're organized now, where IoT and AR are much more, let's say, technology segments than business segments. The idea here is, let's say, on the engineering side, we have an offering called Navigate that's built on ThingWorx to expand our Navigate portfolio. On the ServiceMax side, if you think about remote service, which is a big part of our IoT business, remote service should be run out of the middle of ServiceMax. Remote service will start to become more of a feature of ServiceMax and differentiate ServiceMax. We think the same thing for AR. AR is not standalone applications. It should show up as a feature of PLM or a feature of CAD or a feature of ServiceMax. If you think about work instructions in the field, they should automatically be able to be created to do augmented service instructions, augmented reality service instructions that we see in ServiceMax. That is how we see it. How do we determine where we are going next? Because we compete in individual markets, each of the teams collect information from customer advisory boards. They collect it from our user groups. Of course, every segment has its own strategy. At my level, we're trying to figure out cross-segment strategies. Think about doing sustainability. If you want to make a difference in sustainability, you need coordinated projects across ALM, CAD, PLM, ServiceMax so that you can have a suite of products that can work together, can help our customers reduce their carbon footprint. Likewise, for AI, we can do individual AI projects, but it's much more interesting to do them, let's say, across and coordinated across the segments. Interesting. Maybe we can talk about acquisition integration. From your seat as the Chief Product Officer, what happens when PTC makes an acquisition? What are the initial steps, and how do you think about the process of integration? The first step is a boring one, which is we say, "Do no harm." When we bring them in, we want to make sure they feel comfortable in the company and a bunch of IP does not walk out the door. The next thing is to try to figure out how we can put together some integrations that will technically justify a cross-sell. Because as I mentioned before, whenever we acquire something, we are acquiring it so we can cross-sell it into the base. A good example is Codebeamer. When we bought Codebeamer, even during the do -no- harm phase, we built an integration with Windchill based on a standard called OSLC, which enabled us to do it much more quickly than we would have had we not already been OSLC compliant on the Windchill side. The idea is, of course, in the field, it's figure out exactly how to cross-sell, what sellers will have it in their bag, what's the value propositions, etc. From a technical perspective, it's always my job is to figure out a technical integration strategy that's going to drive a compelling reason for the customer to own it versus owning a competing product in the same market. Maybe we can just sort of talk about SLM portfolio integration in more detail. The ServiceMax acquisition has done very well. From our understanding, the goal was to integrate ServiceMax with Servigistics, and you brought SLM portfolio in FY 2024. How is this trending, and what's the initial feedback from customers? What can ServiceMax do that other competitive offerings are not able to? Let me start at the end. ServiceMax is the number one field service management solution for asset-intensive equipment. That is on its own. That is before we got it. The integrations that we are doing, so if Servigistics, let me just give a 30-second primer on Servigistics. Servigistics is a purpose-built analytics engine to optimize spare parts stocking locations so that you can have spare parts in places so that you can meet SLAs to your customers. It combines that with actually having the minimum amount of spare parts inventory that you have globally. The idea is reposition spare parts dynamically daily so that you can meet your commitments to customers while owning absolute minimum amount of spare parts inventory. You can imagine with ServiceMax, an interesting integration is as they go replace something on a field service call, that that information goes directly into the planning system. That is the first, let's say, integration that we built with ServiceMax. That is, let's say, service integration for service, and it does not matter if you own anything else from PTC other than ServiceMax and Servigistics. A cross-sell opportunity there, although the Servigistics base is much, much smaller than the Windchill base. The bigger one is how do we integrate Windchill with ServiceMax? The first one was really just to signal to our customers that we are serious about it, to be able to issue a problem report from ServiceMax to Windchill so that we can have a better together story. We can talk about more of our plans in the future to have, let's say, a two-way flow of information. Think about engineering information, making it into ServiceMax to help service technicians have the right part at the right time, have the right instructions at the right time, improve their first-time fix rate because they're working with accurate and up-to-date repair information and configuration-specific. That's, let's say, forward flow of information from Windchill. Problem reports are one thing, but the other thing we're thinking about is, if you look at repair history of certain kinds of products across the entire ServiceMax base, you can start to bring that information back into engineering so customers can make better next-generation products so that they can understand the failure modes, what's going on with products in the field through service records. Interesting. Thank you. I guess maybe perhaps I should have brought it up earlier, but GenAI, are you planning to integrate GenAI capabilities into PLM and SLM? First, what we're after is trying to solve the problems that our customers have and have always had with AI. We're not looking to actually get some kind of phony halo that we have ChatGPT for something useless. When you think about it, if you think about engineering, in engineering, we're trying to figure out how they can get products to market faster, how they can do it with less engineering hours, how they can do it with less parts, and how they can have less quality problems. That's what we're focused on in engineering. Frankly, the first stop there is parts rationalization. If you think about parts rationalization, it's two levers there. One is it lowers the cost of goods sold for the customer and improves their return on assets because they're using the same parts. Second thing it does is it lowers cost of poor quality because they have less chance of low quality because they're managing less parts. That's the value of it. The way we're using it for AI, let's think about PLM for a minute. We actually use AI that we already have from Vuforia because we can train that. We can also look at CAD models and identify like- CAD models so that customers can figure out in their PLM database how many duplicate parts do they have that they're managing. We give them tools to rationalize that. If you move to ALM and you think someone's writing requirements, first of all, we can do ChatGPT for that. If someone's writing requirements, we can predict the next requirement that they're going to write. We can also look in their requirements database to see if they have duplicate requirements so they're not re-specifying new requirements that they already have, which also helps with parts rationalization. We're also using it as a quality assurance mechanism for requirements. In CAD, it's the same thing as PLM. We can watch you building a model and look at your PLM database and say, "Hey, you shouldn't build this model because you already have one." On the other side, we can also, let's say, suggest the next feature for them to add or even automatically add it. Those are the things that we're working on in the engineering realm right now. Some of those are researched. Some of those are on their way to be productized. If you look at service, actually, the ServiceMax folks are a little bit more ahead in terms of using GenAI to predict the kind of service that something would need. They're also looking at analyzing massive amounts of repair records to try to figure out quality issues, etc. Again, we're trying to figure out how to use GenAI and all kinds of AI, but just to solve the kinds of problems that we see in engineering. I talked about it a lot. In service, it has to do with first-time fix rate and reduction of spare parts inventory and, frankly, improving spare parts sales and contract performance. Maybe in the remaining couple of minutes, just a couple of highlights. Maybe start with CAD, specifically Creo Plus. You announced cloud-based CAD offering almost a year ago. What have you learned from this process, and what has the feedback from customers been like? I think the biggest lesson that we learned, both with Creo Plus and Windchill Plus, is actually sell what the customer's buying. I think at first, we were kind of trying to push the SaaS narrative a little bit. We think our industry is going to go there. We think there's signs that it's going to go there. A lot of our customers are getting ready to go there. Essentially, like I said, we're selling what they're buying. Right now, Creo Plus, it's got differentiated features, which is interesting on top of, let's say, a lot of the administration starts to come to PTC. On Windchill Plus, we're starting to see differentiated features on Windchill Plus. We think the demand for that will start to increase over these next coming years. For both of them, we see it's a decade-long journey. Like I said, we're selling what they're buying. I think we're out of time. You've been very generous with your time. Thanks so much. Thank you. Thank you.