Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to PTC's 2025 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 call over to Matt Shimao, PTC's Head of Investor Relations. Please go ahead. Good afternoon. Thank you, Kate, and welcome to PTC's 2025 second quarter conference call. On the call today are Neil Barua, Chief Executive Officer; Kristian Talvitie, Chief Financial Officer; and Robert Dahdah, Chief Revenue 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 30th, 2025, 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, Neil Barua. Thank you, Matt, and good afternoon, everyone. Q2 was a solid quarter of execution for PTC. We delivered 10% ARR growth and 13% free cash flow growth year over year. We also made progress delevering our capital structure as we said we would. In February, we paid down $500 million of senior notes that were due. With our leverage ratio now at 1.5 x and continued visibility to solid cash generation, we continued share buybacks in Q2 and expect to remain active under our $2 billion share repurchase authorization. Our Q2 results reflected solid execution across our five focus areas: PLM, ALM, SLM, CAD, and SaaS. Across our geographic regions and verticals, our customers reinforced the importance of PTC software to accelerate time to market, produce higher quality products, and manage complexity across their businesses. Q2 customer wins included significant Windchill PLM expansions at a medtech company and also at the aerospace division of a large European industrial conglomerate. A new Codeb eamer ALM, multiple wins with global automotive OEMs in Japan, India, and Europe. A ServiceMax SLM cross-sell win at a global industrial company. Lastly, a game-changing Creo CAD and Windchill PLM expansion with a well-known aerospace and defense company. You could read more about these wins in our appendix slides. Our Q2 execution gives us confidence in the progress of our go-to-market transformation. We said on our last earnings call that the foundation was laid in Q1, and Q2 was the start of the team finding its new rhythm. This is playing out as expected, as we're seeing higher quality pipeline velocity, solid hiring and enablement of quota-bearing reps, and more consistent execution. I credit our go-to-market leadership team for their relentless focus in driving this transformation. I am more confident today than I was at the beginning of the year, given our progress. Be assured, we are continuing to press harder. We also advanced our product portfolio and generative AI initiatives across all five focus areas, including in PLM, we publicly previewed Windchill AI at the Hannover Messe trade show in Germany. In ALM, Codeb eamer 3.0 is now GA. In SLM, we introduced ServiceMax AI, and in CAD, we launched Onshape AI Advisor and Onshape Government. In April, we bought a great company called IncQuery Labs that brings development and deep technical talent to accelerate our product roadmap in ALM, PLM, and critical integrations between the two. Overall, Q2 was a solid quarter of supporting our customers, making progress on initiatives like our go-to-market transformation and advancing our market-leading product portfolio and generative AI strategy. We're still in the early phases of digital transformation across our customer base, and there's no question about the critical role PTC will play in these transformations over the medium and long term. Now, turning to the near term, as we discussed last quarter, we entered the second half with a strong pipeline. That pipeline remains intact, and we have not yet seen material changes in customer behavior. However, we recognize growing uncertainty related to global trade dynamics and macro pressures, which affect our customers. While no broad trends have emerged yet since the beginning of April, customer conversations as a result of these dynamics are progressing in a way that suggests our prior high end of 10% is now a stretch. These conversations indicate an increasing potential for deals in our second half to be smaller, done in phases, or potentially delayed. Accordingly, we have moderated the high end of our ARR guidance to 9% growth. Also, to allow for the potential that macro conditions significantly worsen and its impact to customer buying behaviors, we are introducing a new low end of 7% to our guidance range. To be clear, this adjustment is about the potential timing and sizing of projects, not about fundamental demand. The long-term need for digital transformation remains extremely important to our customers. Despite this ARR guidance adjustment, our financial discipline allows us to raise the low end of our free cash flow guidance for 2025, a reflection of strong execution and profitability focus. Kristian will take you through our Q2 and updated guidance in more detail, but I'd like to make a few final points that I feel are important. This near-term uncertainty poses questions and makes things difficult to predict, but it ultimately reinforces the need for digital transformation and could serve as a tailwind over the medium term. The need to build a product data foundation, apply generative AI to that foundation, and transform only gets heightened because of this uncertainty. Customers, for their survival, need to develop products faster, build a more resilient supply chain, and optimize aftermarket service revenue streams. That is why PTC is exceptionally well-positioned to be the leader in bringing these critical needs into reality. We will navigate this near-term uncertainty and stay focused on the right things, helping our customers transform, progressing our go-to-market transformation, and delivering enhanced products and generative AI capabilities across our five key focus areas. With that, I'll turn things over to Kristian. Thanks, Neil, and hello, everyone. Starting off with slide six. As you know, we believe ARR and free cash flow are the most important metrics to assess the performance of our business. To help investors understand our business performance, excluding the impact of FX volatility, we provide ARR guidance and disclose our ARR results on a constant currency basis. At the end of Q2, our constant currency ARR using our fiscal 2025 plan FX rates was $2.326 billion, up 10% year over year. In Q2, our free cash flow was up 13% year over year as we continued to invest in our key focus areas. Note that the $279 million of free cash flow we generated also absorbed $3 million of outflows related to our go-to-market realignment. Turning to slide seven, let's look at our constant currency ARR growth in more detail. Looking at our product groups, our ARR growth was 8% in CAD, driven primarily by Creo, and 11% in PLM, driven by Windchill, Codeb eamer, and IoT. On a year-over-year basis, constant currency ARR grew by 9% in the Americas, 11% in Europe, and 10% in Asia-Pacific. Moving to slide eight, we ended Q2 with cash and cash equivalents of $235 million. At the end of Q2, gross debt was $1.393 billion, and we were 1.5x levered. We continued to diligently pay down our debt in Q2, with our gross debt balance decreasing by $155 million. As expected, we retired $500 million of senior notes that were due in February with a draw on our revolver and cash on hand. In addition, we continued the disciplined and consistent execution of our $2 billion share repurchase program, and in Q2, we used $75 million of cash to repurchase 463,000 shares of our common stock. Given the consistency and predictability of our free cash flow generation, we aim to maintain a low cash balance. As such, assuming we have excess cash, we expect to return it to shareholders. The share repurchase authorization we now have in place gives us a lot of flexibility in how we do that. In line with what we said previously, we currently intend to buy back approximately $300 million of our common stock in fiscal 2025, with another approximately $75 million of repurchases expected in Q3. Finally, our fully diluted share count in fiscal 2024 was 121 million, and we currently expect fully diluted shares to be approximately flat in fiscal 2025. With that, I'll take you through our guidance on slide nine. All of the ARR amounts on this slide are based on our fiscal 2025 plan FX rates as of September 30, 2024. We've updated our guidance ranges for ARR, free cash flow, revenue, and EPS to reflect our first half results and the potential for elevated macro uncertainty in the second half of our fiscal year. As Neil said, uncertainty in the macro environment could result in lengthened sales cycles and downsized deals. We've decided to take a more conservative stance on how ARR may evolve in the second half of fiscal 2025. I'll get into more detail on our constant currency ARR guide on the next two slides. On free cash flow, we've raised the low end of our guidance for the year by $5 million to $840 million. As a reminder, our fiscal 2025 free cash flow guidance of $840 million-$850 million absorbs approximately $19 million of cash outflows for severance and consulting fees related to our go-to-market realignment. For Q3, we're guiding for free cash flow of $230 million-$235 million, which absorbs approximately $4 million of cash outflows related to our go-to-market realignment. At this point, we have good visibility to the potential range of free cash flow for fiscal 2025 for a few reasons. First and foremost, we've already generated approximately 60% of our full-year free cash flow in the first half. Also, remember that Q4 is seasonally our lowest cash generation quarter. In fiscal 2025, we expect largely similar invoicing seasonality compared to previous years, and by the end of Q3, we'll have already billed most of what we expect to collect for the remainder of this year. If we see a significant impact to customer demand later this year, you can expect us to respond with disciplined cost controls. In addition, costs associated with customer demand, for example, commissions and royalties, would naturally come in lower, thereby mitigating the impact to our fiscal 2025 free cash flow. It's worth pointing out that our free cash flow guidance is not on a constant currency basis, so it's important to be mindful of FX volatility. Approximately 45% of our ARR is transacted in foreign currencies, and approximately 35% of our non-GAAP cost of revenue and operating expenses are transacted in foreign currencies, so we have somewhat of a natural hedge. That said, significant FX moves can still have an impact. We'll see how FX rates move as we progress through the year, but at this point, we're comfortable with our free cash flow guidance for Q3 and fiscal 2025 because of the levers that we have that continue to be fully within our control. Importantly, we've maintained consistent billing practices over time. We primarily bill our customers annually upfront, one year at a time, regardless of contract term lengths. Over the medium term, we expect our free cash flow to grow faster than our ARR, with our non-GAAP operating expenses expected to grow at roughly half the rate of ARR. A basic tenet of our subscription business model and budgeting process is that there is natural operating leverage that we benefit from as our ARR grows. To help you with your models, we're providing revenue and EPS guidance. However, I'd like to reiterate my favorite reminder. ASC 606 makes revenue and EPS difficult to predict for PTC since we primarily sell on-premise subscriptions, and the way revenue is recognized from these contracts can vary significantly based on variables that aren't necessarily relevant to the performance of the business. I did a teach-in on this subject on our Q4 of fiscal 2022 earnings call that you may want to refer to if you're new to PTC. You can find that presentation on the investor section of our website. The summary is we believe ARR and free cash flow, rather than revenue and operating income, to be the best metrics to assess the performance of our business. Turning to slide 10, here's an illustrative constant currency ARR model that shows our guidance for Q3 and Q4 in context. You can see our sequential net new ARR over the past 10 quarters. The two columns on the right illustrate that our guidance range for Q3 is for $30 million-$50 million of sequential net ARR growth, and our guidance range for Q4 is for $55 million-$85 million of sequential net ARR growth. The year remains back-end loaded, which is supported by the size and shape of our pipeline, which is also influenced by the shape of the expiring base. In contrast to prior years, our expiring base was essentially flat in the first half of the year and is up almost 20% in the second half of the year. Even the second half is skewed more heavily to Q4. Again, the shape of the pipeline is not determined by the expiring base, but it is influenced by it. As Neil said, we've not seen a significant change in customer demand. However, we are seeing a few early signs of customer caution given the macro uncertainty that our customers have experienced in recent weeks. With just two quarters remaining in our fiscal year, we've decided to take a more conservative stance on our full-year guidance. I'll point out that for Q3 and Q4, the high ends of our sequential net new ARR guidance ranges are around or below the sequential net new ARR growth we've delivered in prior years. The low end of our guidance ranges allow for the potential that the macro conditions worsen significantly. Moving to slide 11, here's a similar illustrative model for fiscal 2025. You can see our results over the past three years, and the column on the right illustrates that we need $157 million-$207 million of net ARR growth this year to hit our fiscal 2025 constant currency ARR guidance range. Note that fiscal 2024 benefited by approximately $10 million due to deferred ARR. We expect churn to remain low in fiscal 2025. Since transitioning to a subscription business model, our business has proved to be resilient because our customers need to maintain the software in order to continue designing and producing their products. While we sell to engineering, manufacturing, and services departments, most of our business is focused on engineering, where spending by our customers tends to be more protected. With that, I'd like to turn the call back over to Neil. Thanks, Kristian. Before we move into Q&A, let me step back for a moment to frame where we are. Our strategy remains absolutely consistent since I started. Deepen customer value through PLM, ALM, SLM, CAD, and SaaS. Verticalize our go-to-market execution and lead innovation through applied generative AI and making our products work well together. We executed solidly in Q2, strengthening our pipeline, advancing our go-to-market transformation, and enhancing our product portfolio. At the same time, we're being clear-eyed about the external environment. Global trade and macro volatility have intensified recently, and while customer urgency for digital transformation remains strong, decision-making can become more cautious during these periods. That is why we proactively adjusted our ARR range to account for potential timing shifts in deal closure and sizing. Fundamental structural customer demand for our products remains strong. Our free cash flow strength, margin discipline, and financial resilience remain firmly intact. We feel great about our long-term opportunity and confident in the near-term discipline we're applying. With that, let's take your questions. At this time, I would like to remind everyone, in order to ask a question, please press star and then the number one on your telephone keypad. Please limit yourself to one question only. If you have additional questions, please return to the queue. We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Daniel Jester with BMO Capital Markets. Please go ahead. Good afternoon, everyone. Thank you for taking my question. I guess this is for Kristian. Maybe could you dive in a little bit deeper about how you constructed the downside scenario for the 7% ARR? Any additional color about what that assumes from a macro perspective or deal size, delay, etc., would be very helpful. Thank you. Yeah, thanks for the question. This is Neil. Let me start, and then Kristian can add on how we did this. As we saw, let me start with the framework of the 10 to 9. Again, to reiterate, we feel and see a strong pipeline as we've been entering into the second half. We continue to see that. As of the early April timeframe, when we all got hit with a lot of news and impact that's really centered around our customer base, around trade policy and macro conditions, we've been in conversations with customers that are indicating things like, I was on with the exec team of a large medical device company that says, "We're moving down the path with all of you on the PLM expansion that we need to do, but when we get to sign the contract in Q4, we might, if this continued environment persists, need to make it a smaller chunk first and do a bigger chunk later when there's more clarity." We are in these conversations. Again, it's not broad-based, but it's enough for us to say, "We look at the pipeline. We've assessed the end markets, the geographies, and said, 'You know what? The 10% is a stretch.' Let's bring that top end down to 9% based on what we're seeing.' Now, on the low-end side, we took it to 7%. We did two things with the assessment of the 7% in our understanding of how to portray that to all of you. Number one is we did a bottoms-up view. You'll hear, hopefully, from Rob in Q&A as well, where the pipeline quality and the velocity of it is incrementally getting better. We've been doing that for multiple years, but this quarter, we really went into, "What does that pipeline look like? When will the conversions actually hit net new ARR in Q3, Q4? What are the end markets? What's related to a renewal? What's not? When we did that assessment and looked at, in particular, the industrial manufacturing segment in the United States as one example, or the automotive or auto parts segments, and we thought through a really worsening condition of macro where nothing gets resolved. There's no trade deals that get announced in the next 30-60 days. Other factors increase greater uncertainty. We factored that into thinking, "What could be a downside case if people moved out projects or made projects even smaller than what is our current understanding of the environment?" We did a bottoms-up. We did a top-down view of, "What was the worst environment and what happened at PTC when other crises came about in 2009 during the pandemic?" We looked at that. We said, "You know what? If all those things hit in the same similar manner, that 7% is an extremely good floor for what we see currently to put as the low end. To be crystal clear to answer your question, when we think about the 7%, it would need to have significant deterioration of things that we are seeing to actually be put into practice from our customer perspective on how they buy from us. We are not seeing it, but we want to proactively tell you things that we are working on and make it visible on the things that we cannot control, i.e., the macro conditions that might get worse or better, quite frankly, over the next five months as we close out the year. Our next question comes from the line of Adam Borg with Stifel. Please go ahead. Awesome. Thanks so much for taking the question. I appreciate it. Maybe for Rob on the go-to-market, I'd love to talk a little bit more about just some of the steps that have been taken, the confidence that you have, the internal indicators you're looking at to see that the go-to-market changes are indeed working. Of course, Neil chime in as well. Thanks so much. Yeah, thanks for the question. Top line is I'm really pleased with all the work that's been done and that we put into play here just over the last 90 days, for sure. When you think about what we started, we pivoted the full-standing field organization to a vertical approach. That required a lot of movement. I'm proud to say the team really came through well. We did it with low churn, customer churn. We retained all of our top talent and a highly tenured sales organization. Very low drama. We delivered on the quarter. I think overall, we feel really good about the foundation that was planned for, frankly, and then delivered and executed on in the last quarter. It really sets us up well for a future growth trajectory that allows for just more intimate conversations with our customers, more outcomes-focused discussions, and hopefully a greater trajectory, which we're seeing a little bit here early on the pipe. Overall, very pleased. Our next question comes from the line of Saket Kalia with Barclays Capital. Please go ahead. Okay, great. Hey, guys. Thanks for taking my question here. Kristian, maybe for you, first off, good to see this year's free cash flow midpoint go up. Maybe as we think about the billion in free cash flow next year, just appreciating that it's a very different macro, what are some of the puts and takes that you want us to think about with that target as we just think about kind of the more prudent ARR outlook for this year? Does that make sense? Yeah, I think it's a fair question. I think it's definitely premature to really be answering it. We need to, first of all, finish out this year and see where we actually end up. We need to get through the annual planning process as well, which has not happened yet. We need to look at some other factors like what's going to happen with interest rates, what's going to happen with tax policy, what's going to happen with foreign exchange rates. I think those are some of the variables that we're looking at and contemplating. Yeah, Saket, thanks for the question too. I'd like to add the go-to-market transformation. Again, one quarter in, as you heard Rob, he's feeling the momentum. That needs to continue as we build and see that actually relate to how the pipeline is and the conversion rates. As we build that up organically here at the business, we also have to take a look at what happens in this macro environment, right, and changes that are happening relatively rapidly, some good, maybe some bad. We are putting that all into the mixer and making sure as we come out, the framework, I think, still holds that we've been talking about. All those details need to be squared away to make sure we put our best foot forward as we talk to you guys about next year. I will say from a confidence perspective, hopefully you've seen it, Saket, that delivering this type of free cash flow in an environment where our current guidance range is now 7%-9% is a really strong indication of the strong execution culture we've built in this company. Our next question comes from the line of Siti Panigrahi with Mizuho. Please go ahead. Thank you. Neil, thanks for that clear explanation about what you're seeing with customer. I wanted to ask you, in this kind of environment, how is your discussion going on with your customer in terms of AI adoption? You guys introduced some of those AI products both in Windchill and even ServiceMax and other areas as well. How are they, how is the discussion going in terms of them adopting AI in this kind of environment? Yeah, it's a great question. If you were watching us in Hannover Messe when we announced Windchill AI, showed the world Codeb eamer AI, and obviously, as we talked about ServiceMax AI alongside the Onshape AI Advisor, we've got a full stable of launches and proof points that we're putting out into the marketplace. A lot of great innovation that the team's doing, a lot of great customer reception. It was standing room only in terms of the things that our customers were seeing, prospects were seeing around our AI capabilities. I think the major thing that we're learning through this process is that, as we mentioned a few quarters ago, this product data foundation that our core systems allow our customers to achieve with PLM, CAD, ALM, SLM, having that is absolutely critical for getting the best use of generative AI. Those two factors, a great generative AI product innovation that we're now showing to our customers, getting feedback from our customers, relating back to how do you really supercharge that while put together a great PLM system across your enterprise or ALM system across your enterprise, the two is the differentiator for PTC. It is highly valuable, and we believe it's going to be an ultimate growth driver that results in ARR growth over the midterm and long term. I think in the near term, to summarize, customers are still interested. They're far more engaged this quarter than they were last quarter given our launches. Our view is it will take some time for the biggest bite sizes of generative AI to take hold. It will happen, but it will happen more methodically over the course of the next 12 to 24 months. Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead. Great. Thanks for taking my question. This one's for you, Kristian. Somewhat building on Dan's question earlier, as you think about that 7% range and that requiring significant erosion in macro, any way to frame some of the moving pieces financially in terms of churn? And I think in the past, during COVID, you guys had talked about net new ARR down a certain amount. How should we think about what are some of the components that would go into getting to that 7%? Yeah, thanks. It's a good question. I would say that, first of all, the churn has been low now for a couple of years. We expect it to continue to remain low. Even in some of the prior macro situations that the company's been in, we haven't actually seen significant increases in the churn rates. It really is more down to new business and how that is coming in. Again, is it smaller bite size chunks, etc., etc. Yeah, just to add to this, we chose to give this guidance range different than some others out there that are still looking at the environment. We want to be proactive about it. The way you look at it, if you think about the Q4 number to your question, the low end is $55 million in net new ARR. The high end's $85 million, right, at 9%. Last Q4, we did $84 million. In 2023, we did $76 million. When we look at that $20 million or so downside protection, we did that bottoms-up view. We know every customer and made assessments around what could push, what could get smaller bite size. To your question around other crises, we looked at what happened in those other really dramatic crises, which, quite frankly, I don't believe personally that that will happen in this go-around. If it does, what we saw was a 20-30% reduction in conversion rates when things really fell apart in the industry. Top down, bottoms up, we came to that $20 million risk as a good risk profile if things get materially worse in Q3, Q4. Yeah, and you'd see it more broadly across the business and throughout the channel and elsewhere in the direct space. It's not just the biggest deals in that case. Your next question comes from the line of Jason Celino with KeyBank Capital Markets. Please go ahead. Perfect. Thank you for taking my questions. Or just one question that is, one of your competitors talked about seeing some pauses in deal activity at the end of March, but then things kind of normalized in April. This does not sound like a dynamic that you are kind of talking about today. Is this something that you saw? Just curious on how some of that demand activity might have changed. Neil, I know you talked about some of the convos you have been in, but curious on this specifically. Thank you. Yeah, I couldn't make sense of what our competitors said on that front. In terms of our business, most importantly, we had a solid quarter in Q2. Look at the customer appendix slides. Some, by the way, disruptive moves that we did, competitive displacements that were made with real sizable accounts, right? Strong demand environment. I want to reiterate, we've entered Q3. We continue to see an extremely strong, a good, strong, high-quality pipeline that we're continuing to build upon with Rob's hard work here. We feel like the demand environment is solid. What we're portraying in this new guidance range is making sure these initial conversations of uncertainty in end markets that are most impacted by the trade policy, we're just being prudent and making sure we're ahead of it as they actually formulate themselves. If they do, this is the range that we see. Your next question comes from the line of Jay Vleeschhouwer with Griffin Securities. Please go ahead. Thank you. Good evening. Neil, Christian, Rob, perhaps almost irrespective of the tariffs morass, maybe we can talk about the underlying growth dynamics of the business organically. For instance, when we think about your two largest pillars, CAD and PLM, it would seem that the active base growth there for each is in the mid-single digits, and that seems likely to continue if churn remains low. Over and above that mid-single digit for your two largest businesses, how are you thinking about perhaps pricing or pricing power? Dassault is going to be raising prices 2-5% in July. Does that give you some cover for pricing and for yourselves? How are you thinking about ongoing cross-sell opportunities with ALM, SLM, and so forth? Or on the other hand, does the new environment mean that customers will begin to disaggregate the deals and do maybe one three-letter acronym at a time? Thank you. Yeah, let me start with the demand and call it the seat size side of the equation. Then Kristian and or Rob can talk about the commercial optimization piece. The vertical approach that we undertook at the beginning of the year, the go-to-market transformation, is all intended to ensure we're capturing more wallet share in the verticals that we're strong in and have a concise, determined effort led by Rob to make sure that we execute better across that demand opportunity that is getting better on a monthly basis because digital transformation is getting more urgent. That is the premise of the work that we're putting, hard work that we're putting in that's going to take a few quarters to really see the fruits of that labor, but is to expand the utilization of Windchill, to expand the utilization of Creo, to cross-sell ALM, to think about SLM being integrated in a vertical approach, by the way, supplemented by a solid generative AI technology layer that really leverages all that great system work that we've got. That is still in the work and in the futures. That being said, in Q2, you saw again examples of, I think if you looked at the bullets, CAD consolidation, right? In many of these cases, we're going into a vertical approach and saying, "Can you consolidate your CAD estate?" We saw that happen in Q2. The methodical way that Rob, CK are making sure that this happens is the biggest impetus of why we did this go-to-market transformation. That is our North Star. Commercial optimization, do you guys want to, Rob, you want to start? Yeah, I mean, where we can come in behind that and just extra structures to make sure that the comp plans are aligned to support those moves. We have the folks bought in at the field level. It is doing the right thing by the customer, and the company rewards them as well. That is a very important part of it. We have alignment there. We will continue to work to make sure that that is set up well, especially as we develop really strong outcomes-oriented talk tracks that we can engage with our customers on. Historically, at a horizontal level, some of the positioning was really from our perspective out to the customer. When you start talking in the vertical format, you start talking back from the customer's problem that you are trying to solve to the way we can help them solve it. That really adds extra credibility to the discussion. It elevates the conversation. I think we're in a good position there as well. Your next question comes from the line of Nay Soe Naing with Berenberg. Please go ahead. Hi, thank you for taking my questions. If I could start with some of the conversation, customer conversation that you mentioned that suggests that you might have some of the deals postponed or the deal sizes come in as smaller than what you've expected. You call out an example in the med tech end market. I was wondering, are these conversations happening across the board or are the conversations happening more so in some of the verticals than others? If you could also comment from the geo perspective between CAD and PLM, that would be super helpful. My second part of the question is, the top end of the guide now, 9%, can I ask what is assumed in that, please? Is it that the current macro uncertainty continues for H2, or what would happen if we have meaningful global trade agreements in this quarter and next quarter, please? Yeah, great question. Really glad you asked it. I'd start with the first part of your question around the conversation we're having. They are idiosyncratic based on where the customer is and the level of the transformation and the competitive positioning that they're under, right? As an example, I can't make a broad brush statement that says, "We're having conversations with automotive OEMs that are all pulling guidance, and they are all now telling us they're going to stop buying from any of the software vendors because they're in paralysis mode." In some cases, we actually announced something this morning. Schaeffler, one of the largest industrial parts manufacturers that actually is very centered around the automotive market, just did a massive strategic partnership deal, multi-year deal. It's going to transform them to our SaaS framework. You might question, "Well, why would they sign something like that in this type of environment?" because they have now understood that they've got to be even more nimble in this environment. They have moved forward with that. In other cases, there could be automotive OEMs or parts manufacturers, which again, this is the pipeline work we've done, where they're earlier on in their diligence of how much they want to transform. They're doing a lot of work about why Windchill could help them. They're coming to us and saying, "This sounds great. We're down the path of selecting someone. It's going to take another four weeks to select it. At the end of the four weeks, if this tariff issue does not get resolved or is still unclear the way it currently is to them, we might have to pull back. This might push into Q1 of next year, or I might take a smaller chunk. There is no broad brush of within Japan or EMEA or North America. There are patterns across everyone that I could standardize on. We are staying very close to them on a pipeline opportunity perspective by pipeline opportunity. That is number one. On your second part of how we got from 10 to 9, and if things get better, could they get better than 9? Our view is we have already lost 30 days. Since April 3rd or April 4th, the current conversations and when I was on with the exec team of a large food processing equipment manufacturer, one of the largest ones in the world out of Europe this morning, they are clearly going to move forward with digital transformation, but they're right now trying to figure out where to send excess supply to before the reciprocal tariffs might get taken off the table. They are like, "Over the next six weeks, we just can't do anything other than figure out how we move supply around the world. We'll come back to digital transformation after, hopefully, the trade policies get squared away." Assume they all get squared away. We still believe at this current time, we've lost some time in the five months left we have in the quarter. Again, very different than other companies that have 12/31. We only have five months left, hence the range of 7%-9%. Your next question comes from the line of Joshua Tilton with Wolfe Research. Please go ahead. Hey, guys. Can you hear me? Hey, Josh? Hey. Hey, We can hear you. Also two parts. Sorry to keep pounding on the guidance. I guess hypothetically, if you guys have 10 customers and three customers you're having these conversations with where it suggests things can get right-sized or delayed, does the midpoint of that 7-9 range, does that assume that just those three customers push out? Or is there cushion within the midpoint of the guidance for those conversations that you're having today to kind of be more broader-based? The second part of my question is, I go back to kind of a follow-up to the last one. These conversations that you're having with customers, are they really so scary that what was previously the low end of the guidance last quarter has now become the high end of the guidance? Let me start with the last question first. The situation that has started for all of us, particularly most importantly, the end markets that PTC serves has been dramatic since April 4th. You guys are watching it. Guidance is being pulled from a lot of our end market customers. That means they do not know what they are going to do or what they see in even the subsequent quarter. That then relates to conversation that says, "What are the things we absolutely need to do, and what are the things that are nice to do?" In some cases, working with PTC, signing on the dotted line to expand their technology with PTC is a must-have to be competitive even in this tough environment, hence where we sit in our 7%-9% range. In other scenarios, it really could mean a delay or extending out the time period they decide or making a smaller decision. I wouldn't say they're scary. We've been in other crises. I've done this multiple times, and this team is experienced enough to do it as well. This has been very impactful to our end market customers from their ability to decide clearly how to think about their business and where to invest for the future. Hopefully, that gets taken care of and there's more certainty as the weeks progress and trade deals are announced and people know how to navigate with discipline around the guide rails that they run their business. On how you should think about it, look, we want to be really transparent with all of you. It's a 7%-9% range. I think we did a lot of justice, hopefully, on this call around the ways in which 7% on the lowest end could look like, the ways we're looking at that. We also mentioned that 9% coming into this quarter, we had pipeline that felt really strong on our original guide. We also have mentioned this go-to-market transformation is starting to hit stride. It's going to take multiple quarters to show it, but that's on track. We also said the strategic priorities of the company have been working well. You saw that in Q2 in terms of how customers are buying. We are working really hard to make sure we capture as much demand as possible off of that pipeline, hence our range and how we see it. Your next question comes from the line of Tyler Radke with Citi. Please go ahead. Hey, this is Pierre on the line for Tyler Radke. Just a quick one from me. On the macro uncertainty, I was just wondering if you're seeing a risk uncertainty for a specific product or if it's in a specific vertical. Yeah, if there's any more color you have to provide on that at all. Thanks. Yeah, this is not product-related. We have all of our products, fortunately, are mission-critical products that the world uses, and we all rely upon these companies to produce things out there. Our products are the underpinning of the great products that are out there in the world. It is not a product-specific issue. This is just how do customers think about investment decisions in light of uncertainty around the guardrails that they need to understand to run their businesses, right? What the supply chain looks like, what their input costs look like, etc., etc., where manufacturing resides, which is all things that they are now needing to contemplate in light of what happened at the beginning of April. That is from that standpoint. I think that covers probably both questions there. I will turn the call back over to Neil Barua for closing remarks. Please stay on the line. Sure. Thank you, everyone, for joining us and for your questions today. We will be on the road in the weeks ahead participating in investor conferences. In May, Kristian will attend the J.P. Morgan Conference in Boston, and Matt will attend the Bank of America Conference in New York. In June, Kristian will attend the Baird Conference in New York, the Wolfe Virtual Conference, and the BMO Virtual Conference. Amit Jain will participate in the Rosenblatt Virtual Conference, and Matt will attend the Mizuho Conference in New York. Kristian and I will host two investor visits. Rob might join us too to our headquarters in Boston. For the May visit, you can reach out to RBC. For the June visit, you can reach out to Stifel. Thank you again for the engagement today. Look forward to speaking to you all soon. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.