All right. Making our way through the home stretch here on day one. Thanks, everybody, again, as always. With us right now, Kristian Talvitie, CFO of PTC, and Matt Shimao, IR, in the front row. Thanks, Matt, Kristian, for coming, as always. Thanks for having us. Yeah, your support has been unwavering through the years, so I do appreciate the attendance. As has yours. Let's, you know, generally, we start with kind of an overview of sort of what you guys just reported a couple of weeks ago. You know, top of mind that I just keep getting asked is some bit of divestitures that you just announced. We'll get into some of the overall underlying performance of the business. Maybe just starting with Kepware and ThingWorx, you know, could you talk about sort of the rationale? You know, strategically, there was a lot of effort, as you know, put into those deals back in the day. You know, I think the direction of those businesses has gone a little different than the core. Talk about some of the rationale behind these, and then we'll talk about some of the financial impacts. Yeah, sure. Happy to do so. Before we get started, my general counsel would be very upset with me if I did not remind everybody about our safe harbor language. Please. Forward-looking statement, cautionary language, that's all documented in a very detailed fashion in our press releases. Go to the website. Files on file within Forms 8K and 10K on file with the SEC. Please, please do take a look at those. On to your question, the strategic rationale. You know, I think Neil has, you know, been in the CEO seat now for coming up on two years here soon. You know, I think he's been pretty unwavering from the beginning on what, you know, in his view, the core priorities of the business are and the strategy of the company is, which really revolves around, you know, CAD, PLM, ALM, and SLM with a, you know, underpinning or foundation of SaaS as a delivery model, as well as AI, you know, embedded in the products. You'll notice what I didn't really talk about there was IoT. Yep. IoT was. And so, you know, we have been refocusing on the core and on the core priorities and think that it actually just made strategic sense to find a home for those businesses because they are good businesses, probably just better served for our customers in the hands of somebody who is focused on that part of the market. That is what we intended to do, which also provides strategic focus and clarity for, you know, the folks at PTC with everybody focusing on, you know, the kind of the core strategy, which is good for our customers and, again, good for the, you know, IoT business as well with that kind of focus coming from the right owner. We undertook a process. It was a full, you know, full process, narrowed it down to a handful of participants, and ultimately determined that, you know, TPG was the right owner for this business. That's great. Yeah. I guess, you know, think you just gave fiscal 2026 guidance both with and without. When we think, you know, even longer term, you know, when we think about sort of how specifically on, I guess, both ARR and cash flow, what are sort of the longer term implications of this? Do you think, I mean, as ultimately, like slightly higher growth, you know, better profitability longer term? Like what's sort of the longer term ramifications of this? Yeah. I think that there's, you know, I think it's clear even from our, you know, earnings materials that, you know, in recent years, relative to the rest of the core, you know, portfolio, this business has been a drag, if you will, on growth. I think that that is helpful, you know, over the longer term in terms of the profitability of the business. You know, I think that, you know, by now at this time, with the sale of the business, the profitability of that business is largely in line with a broader company. You know, I think we tried to outline that as best we could. Again, in the earnings materials, I think in fiscal 2025, we estimate that it contributed approximately $70 million of free cash flow. I think the way to think about that for 2026, you know, 2027, you know, and beyond is in fiscal 2026, again, depending a little bit on the timing of the close, but we had an assumption around, you know, April 1st that it would actually be, you know, free cash flow neutral in 2026 because A, timing of collections, and B, as part of the transaction, we expect there will also be a period where there's kind of transaction transition services attendant that transaction as the business migrates. I think for the, you know, the balance of 2026, that will largely offset the cash flow differential in 2026. You know, I think in 2027, we also said, you know, probably less than a $50 million impact to cash flows in 2027. Okay. Building that bridge, and you did a good job in the deck, but just to reiterate, you know, you're talking about sort of including those businesses is still a $1 billion dollars-ish of free cash flow. In 2026, obviously, that steps down a little bit. How should we think about sort of like getting back to those levels, you know, as we sort of like anniversary this and move forward? Yeah. I think that, like, I mean, this would be my mental model. You know, this year, I think we'll do about $1 billion of free cash flow less, somewhere in the ballpark of about $160 million, which is made up of, you know, taxes on the proceeds as well as divestiture-related fees. As we start thinking about 2027, you know, in my mental model, I would actually start building off of the $1 billion. We then have the offset of, you know, kind of less than $50 million, which is, you know, left over from the transaction or the businesses, excuse me. I would probably add back still the $20 million of kind of CapEx, incremental CapEx that we have this year in fiscal 2026 as we move one of our, or actually our largest R&D center from one office into a new office. Like that, that I do not expect to occur next year. I would kind of be building off of that. You know, I guess the rough math is a, you know, 970 level. Yeah. Okay. Helpful. Now, you know, on the ARR side, you've always given a lot of thought to how you think about guidance, sort of the high end, low end of the range. And it feels like that low end is completely de-risked. I guess, you know, taking the glass half full side of it, what gets you to the higher end of that range? You know, macro is obviously a bit of a wild card, but what are the things that you look for? You're like, well, this could actually, you know, let's think positivity here. Matt and I were just talking about the volatility of this market. But like what gets you to that higher end of the range in 2026? Yeah. I mean, I think just bracketing the guidance range in general, right? I think we, you know, Neil tried to do a pretty articulate job on the call of saying, you know, the low end actually accounts for some deterioration in macro. You know, also tries to take into account potential disruption from the divestiture. You know, the higher end of the range, I think contemplates some continued positive momentum from some of the go-to-market evolution that we started embarking on last year. Then embedded within that range as well is the kind of deal structure volatility that we can see from quarter -to -quarter, which is just part of. Yeah. Part of the business that we operate. Yeah. What if, so the go-to-market changes, it strikes us that, you know, that verticalization approach should start paying dividends. And maybe you're already seeing it manifest itself. How should we think about the benefit of that as we sort of anniversary these changes and start to think about, you know, how that sales force can be better aligned to target the opportunity? Yeah, I think that's right. I think that it isn't just the sales force being aligned, and we always talk about it as go-to-market because it isn't just the salespeople, but it's sales and marketing and customer success, right? Technical resources all aligned around verticals and all focused on those customers in those verticals. You know, I think I agree that that is the right direction for us to be moving in. I think we've seen good progress. I think we saw, you know, it's difficult for me to point to any disruption that we saw last year while implementing these changes. You know, now it's a matter of really starting to see some of the benefits of executing on those changes. I would say, you know, just remind you that a lot of the sales cycles for PLM, ALM, right? Larger enterprise deals, those sales cycles can run 9- 18 months, you know, sometimes even longer. It is going to take a little bit of time for that momentum to, you know, to catch up and build there. That is, you know, where we left room, where we left room for improved velocity in the high end of the range. We talked about this when you reported, but are there the significant changes really were made last year? As As you're sitting in this Q1, there's always tweaks as a sales force is wanting to do. Is there anything that you'd highlight that you sort of like we should be aware of in terms of anything incremental that could cause either, you know, some potential volatility or even opportunity? No. I mean, apart from normal, you know, normal tweaks, tweaking compensation plans, tweaking territories, et c. I mean, of course, the disruption, potential disruption from the divestiture, I covered that. Yeah. Yeah. Okay. You know, I want to drill in on a couple of the businesses, but AI has obviously been a huge focus for the industry and for PTC for quite some time. I mean, you guys, like most organizations, have been talking about AI before it was really, you know, given a name by the market. How are you helping customers think through leveraging this technology across the various businesses? And how do you think, you know, from the CFO seat, you know, what does that mean from a monetization standpoint? Do you see there's an incremental opportunity with value that, you know, you were able to think about monetization differently or charge more or seeing higher commits? You know, how do we think about AI layering into the model? Yeah. It's a really interesting question and interesting time. It is. Times that we live in. You know, I think our view is that, you know, AI can definitely help our customers with, you know, with their product development, you know, processes, you know, overall. We talk about it as the, you know, intelligent product lifecycle. There are a few different components to it. One, which we think is somewhat foundational, is making sure that they actually have their, you know, data house in order, as we like to say. A lot of that revolves around making sure that their, you know, data's in a PLM system and is clean and readily usable, if you will, by AI. That is one whole part of the digital transformation that a lot of companies are going through anyways. You want to start thinking about, well, what is the AI functionality that we can bring to bear for our customers? You know, I think the way that we like to talk about that is, you know, advise, assist, and eventually automate. If you think about, you know, those three words and how that works in a product development workflow and, you know, broadly across an enterprise, you know, how does advise, you know, assist and ultimately automate work, which is making sure that engineers are able to find the right parts in a speedy fashion and the right parts or share information across department lines or, you know, other silos into regulatory or into quality departments. How can we help companies, again, find the right information, provide context around that information that's useful to them? I think, you know, that's one way to do it with the advise and the assist and then ultimately automate will also come across disciplines, if you will. If you think about AI and Windchill, there's, you know, that's just within the Windchill application and AI and ServiceMax and AI and whatever, Codebeamer, but none of those systems really operate as silos and they actually all interact with other systems. In some cases, it's ERP systems or MES systems and so on. You know, can we bring to bear technology that is going to help that data sharing across those platform silos and even outside of, you know, kind of PTC's technology stack and into, you know, into other technology stacks that are vital to the whole product lifecycle? From a monetization standpoint, how do you, because that's sort of the question, is like, you know, it's great that we're providing AI features, but like is it table stakes? Is it incremental to the growth opportunity? You know, how do you kind of think about, you know, that element? Yeah. On monetization, you know, in general, I mean, just a general observation, I would think, as you know, we went from perpetual to subscription, subscription, you know, now to SaaS and ultimately AI. Going from perpetual to subscription allows you certain options with pricing, like you think about token models and so on and so forth, just even if it's on-prem subscription. Going to SaaS opens that aperture up even further and you can start thinking about consumption, you know, consumption type models. Again, with meter spinning and with AI, you know, it obviously brings similar opportunities. That said, for right now, and it's still very early days for PTC, but right now we've actually still gone with a kind of seat-based pricing, even for the AI parts that we have out in the market. You know, again, it's so early that I think we're actually kind of just trying to figure out what is the way that customers actually want to consume. Right now we're trying to make sure we have the right value prop and a reasonable price point. We will continue to fine-tune, you know, based on customer requirements, the best way to, yeah, the best way to price it. I mean, does that imply as you learn and as you continue to develop, there could be more of a consumption element to some of these? We'll look at it for sure. Yeah. Yeah. Is there much of a network effect? You know, I think a lot of times there's a real concern about customer data and privacy and training models on customers' data. Is there a broader network effect where the sum of the parts of the platform provides an overall higher borrow functionality for every customer? Or is it still very siloed in how you think about leveraging data? Yeah, I would, our customers tend to be very protective of their product IP. Yeah. Yeah. In terms of, you know, SaaS, we, you know, we've been talking about that for a while and you guys have made quite a bit of advancements, not only just in, you know, in Onshape and things like that, but also the core Windchill+ and Creo +. Talk about, you know, just, and you know, I think, you know, with AI, SaaS gets sort of like left behind in a lot of the conversations. Talk about sort of how, where we are in that progression. You guys have never talked about like a forced transition and you're very sort of open to customers how they want to consume the product. You know, do you feel like you still have that lead from a SaaS perspective? Because it really felt like you guys were far in front of most of your primary competitors from a SaaS perspective. Where are we in that sort of arms race from a SaaS perspective? Yeah. You know, I think SaaS is still, you know, an underpinning of the intelligent product lifecycle as we talk about it and see it on our slides. In that sense, it's very much still part of the strategy. I think that you're right. I don't think we're going to go to a, you know, a forced model and force a customer to consume the software in one way or another. We are seeing, you know, consistent momentum with customers who do want to migrate and we want to make sure that we have best-in-class offerings for them to migrate to. Okay. Okay. Ultimately what I want to, where I want to go is sort of how to think about a layer cake approach with, you know, your various businesses. ServiceMax, you know, I think, you know, Matt, we've had a number of conversations on this too. It just, it feels like such a, like, like if you're not using your guys' ServiceMax or SLM, I don't know what they're, I don't know what your customers are doing. Maybe that's the question. I mean, it feels like the cross -sell opportunity is so ripe and there. Obviously you guys have a lot of initiatives across the entire business, but what's the unlock for ServiceMax? Yeah. You know, I think that is, I think that's right. I think we're still very much behind the, you know, strategy as initially laid out as part of the intelligent product lifecycle and, you know, thinking about, you know, design through to service and the synergies that you get by sharing information, you know, back and forth, you know, or up and down that, up and down that stack or the synergies that a customer would get by doing that. You know, I think that last year ServiceMax had a couple of headwinds. There were some leadership changes, particularly on the go-to-market side that happened. Subsequently, we've also had some idiosyncratic churn events really on the ServiceMax side. From a customer perspective? Yeah. There were just some unique, no identifiable trend, unique kind of one-time events. Somebody acquired somebody and they had a different strategy. You know, there you have it. Yeah. Yeah. Yeah. Yeah. That's what we mean by idiosyncratic. It had a difficult year. I think that, you know, we'll continue to see some of that headwind into the first half of this fiscal year. On the flip side, the momentum of kind of pipeline build and new business being booked, you know, that we're starting to see, we're starting to see that turn the corner. That's great. That is good. You guys have so many businesses. We don't have time to go through all of them, but you've always been such great at these like mental models of thinking about, okay, here's how I think about cash flow build. And you've been very, very accurate in some of those builds over the years. Do you, when you think about like that ARR build, is there a mental model that you, you know, you're like, well, I think about a couple, you know, three points from PLM, a couple points from CAD? Like, is there some way that we should think about like a build or a layer cake to kind of get to call it high single-digit ARR growth? Yeah, that's a great question. You know, I think that we should probably take that and try to articulate that more clearly, you know, at like an Investor Day. I think that would be ideal. Maybe said differently than what if you were to say, you know, when we think about the growth element of the business, what are some of the, what are you most, and obviously you come with a conservative lens as you know, but what are some of these big blocks that can move that can start to, you know, drive? Again, it kind of gets back to that question about like the higher end of the growth algorithm this year. Yeah. I mean, again, I think a lot of it, you know, I mean, here, I would say that the vast majority of things that we're doing is to actually try and drive growth in our net new ARR, right? I would bucket it into maybe three broad categories. One is on the product side. We, you know, we've been investing pretty heavily in R&D over the past few years. We've almost doubled our annual R&D spend over the last five years or so. That is really all in support of, you know, our customers and trying to bring to market, you know, capabilities that are going to drive growth. That includes things like investing in the SaaS transition, like investing in, you know, tighter integration between ALM and PLM, because we're hearing that from a lot of customers that that would be super valuable to them. Like investing in AI that we kind of just talked about. There is a whole set of kind of product initiatives underway. There is a go-to-market evolution that we've been talking about, which is really all about us being better equipped to serve our customers, how we're going to market, how we're helping them. That actually spans both across, you know, PTC's direct sales force, as well as, you know, our channel partners, which are a broad extension of, you know, our sellers, right? They represent about a quarter of our, quarter of our ARR. It is an important route to market for us. Again, trying to work across those vectors to make sure we've got the right kind of account coverage, the right kind of, you know, messaging that's going to resonate with customers so that we can help them. In the last piece, the last bucket, I would put it into, you know, commercial optimization. You know, that's been an ongoing process for a number of years at PTC. You know, I think if you went back and looked at our churn in 2019, I think it was around 9%, a little over 9%. You know, that has now come down. It's, you know, pretty well below 5% for the last couple of years. Expect it to be this year as well. I think there's just incremental opportunity for us to continue to improve on that part of the execution as well. You know, I mean, there's kind of three buckets there. That's great. The other thing that, you know, capital allocation is always a subject near and dear to your heart in terms of thinking about deploying this cash. And you've made a pretty significant change in how you think about maintaining cash balances. I forget when that was actually put in place, but it felt like you've certainly amped up the commitment to buyback. How do you think about, you know, with these cash flow levels, that balance between buyback, M&A, investing back in the business? How should we think about that? I guess specifically on the buyback element, it feels like with some of the proceeds here, you know, there's going to be some significant activity on that front. Yeah. You know, I think maybe the way I would try to articulate our philosophy, if we start with a couple of basic tenets. One, you know, we believe that PTC should operate in a net debt position. That is where we are now. We've done a, I think we've done a very good job at, you know, bringing the debt levels that we've had down. You know, I think we're pretty good on that front. As you said, kind of the cash balance, just because of the subscription nature of the business and the predictability of the cash inflows and cash outflows, we definitely want to try to maintain as low a cash balance as we can. I think that's been helpful over the past few years. You know, we've brought that down from, I don't know, call it $350 million on average to, you know, I think we ended last quarter at about $185 million round numbers in terms of a cash balance. We'll try to maintain a low cash balance. With those two caveats in place, then the free cash flow that we generate, you know, I think either that would go towards any kind of M&A that we might want to do, which tends to be more focused now on kind of smaller technology tuck-ins that support the core. To the extent that we don't use any of it for that, you know, I would expect that we turn, we would turn the rest to shareholders via share repurchases. Does it, with the divestitures, also sort of imply that there's no big gaps that you're looking for right now? It feels more that you're sort of signaling more of these strategic tuck-ins as opposed to another ServiceMax or something of that nature. Yeah. I'll say it this way. That may be a little above my pay grade, but as best as I understand it, yes. When we, as we close here, I mean, it feels like ultimately the algorithm is, the top line growth is, you know, it's a fairly tight range depending on the economic circumstances. The margin expansion is there. The buybacks are there. It feels like cash flow, cash flow growth per share should continue to outpace sort of the ARR growth element. Is that sort of the right way to think about how you are kind of calibrating the business, is kind of like thinking about free cash flow per share growth? I think that's right, yes. Yeah. Ultimately, I think that's, I mean, we've covered PTC for a long, long time and we've always felt that there's a bit of a valuation gap with some of your peers. It feels like as you continue to grow that cash flow per share at an accelerator rate, it feels like the market should reward that. It feels like that's the kind of the balance of growth and profitability that we should think about. Yes. Excellent. We are out of time. I was hoping to get a question in from the audience, but we did not even talk about a handful of items. Thanks again, Kristian. Thanks, Matt, for being here as always. Best of luck. Thank you.