Good evening, ladies and gentlemen. Thank you for standing by, and welcome PTC's 2026 first 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, Head of Investor Relations. Please go ahead. Good afternoon. Thank you, operator, and welcome to PTC's first quarter 2026 conference call. On the call today are Neil Barua, Chief Executive Officer, Jen DiRico, 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, February fourth, 2026, 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. I'll begin today by welcoming Jen DiRico to our first PTC earnings call as our new CFO. I'm confident she'll be a great CFO for PTC and a strong partner to our investor community. Turning to our results, we delivered a solid first quarter of fiscal 2026. We grew constant currency ARR 9%, excluding Kepware and ThingWorx, and 8.4%, including them, and we grew free cash flow 13% year-over-year. These results reinforce our confidence in the transformation we are driving and the demand we are capturing. Our divestiture of Kepware and ThingWorx is progressing, and we are on track to close on or before April 1. Before discussing execution in the quarter, I want to take a step back and talk about our transformation and my optimism for the road ahead. Every transformation has an important turning the corner phase, where the end goal is still ahead, but you start to see collective forward momentum across the most important elements of the transformation. This is where PTC sits today. We see it clearly in the following ways: Number 1, accelerating product roadmap releases. 2, record deferred ARR under contract. 3, higher seller productivity. 4, customer commitments that are strategic and increasingly span the full life cycle. And 5, consistent customer feedback that our Intelligent Product Lifecycle vision resonates with what they need. To that end, how our customers develop products is changing significantly. Products are becoming more complex, more software-driven, and more regulated. At the same time, development cycles are compressing, competition is increasing, supply chains are fragmenting, and the workforce is evolving to favor modern, digital-first systems and processes. The traditional product lifecycle, built on disconnected tools, siloed data, and manual processes, simply can't keep up. That is why the Intelligent Product Lifecycle is essential for staying competitive. It is based on three core elements: connected systems of record across the lifecycle, enterprise-wide cloud access to product data, and AI embedded directly into enterprise workflows. Together, these elements turn product data from something that's simply stored and audited into something that actually drives better decisions across engineering, manufacturing, service, and the rest of the enterprise. The companies that will win are the ones that successfully leverage product data in this way and use it as a foundation of AI-driven intelligence and transformation. We believe PTC is uniquely positioned to enable this. Our core products, CAD, PLM, ALM, and SLM, are the systems of record across the lifecycle, defining how product data is created, governed, and used across the enterprise. We support an open ecosystem where this data can be exchanged with other trusted enterprise systems. Our product and AI roadmaps are focused on making the Intelligent Product Lifecycle real for our customers. Deeper product integrations are a high priority. The connection between Creo and Windchill is the gold standard, and we're making good progress with our Windchill connections to Codebeamer, ServiceMax, and Onshape. In December, we released Codebeamer 3.2, which deepens the connection between Codebeamer and Windchill and improves how customers manage complex cross-domain development. In October, we released a new version of Windchill that includes the new Windchill UI for a more modern user experience, and new change management capabilities that make it easier for customers to share relevant product data with suppliers. Our AI roadmaps are progressing well, and we are encouraged by customer feedback. Entering 2026, it became clear that customers don't want AI as another standalone system or workflow. They want AI embedded directly into the systems of record they already trust for their enterprise workflow. That's exactly where PTC is focused, and customers are increasingly recognizing this as a point of differentiation. In Q1, we continued embedding AI across our portfolio to address our customers' high-value use cases and workflows. In December, we introduced Codebeamer AI, focused on improving requirements quality, accelerating test case development, and supporting compliance before products move into production. In January, we released Windchill AI Parts Rationalization, new AI functionality embedded in Windchill to help customers accelerate development and manage costs by identifying duplicate parts, making part data more consistent and reliable, and accelerating part searches. Next month, we will launch a video series called AI In Focus, where we will share our AI strategy in more depth, preview product-specific roadmaps, and show continued acceleration releases. We encourage you to tune in. We are confident in our AI position because our customers tell us universally that structured contextual product data is their top priority. In addition to embedding AI in our products, we are building a common AI infrastructure across our product portfolio. This will enable our users and AI agents to understand and use product data from CAD, PLM, ALM, SLM, and third-party systems in the same way, all backed by data governance and security standards. Our vision keeps our products and AI closely coupled together, thereby encouraging broader adoption of PTC solutions over time. Turning to go-to-market execution, our transformation is progressing well. In Q1, we increased seller capacity, improved quota attainment, and saw ramping reps more than double productivity year-over-year. This reflects territory rebalancing, improved enablement, and greater vertical focus. Most importantly, we are expanding the scope of our customer and partner engagements from focusing on one stage of the lifecycle to discussing the Intelligent Product Lifecycle holistically, centered on product data and AI. As a result, we are achieving stronger and more strategic demand capture. As previously discussed, we exited 2025 with record deferred ARR under contract. We continued this momentum with a record-setting Q1 of large deal volume and strong competitive displacements and deferred ARR. Some of these deals will begin converting to ARR in Q4 of fiscal 2026, and most will ramp in fiscal 2027 and fiscal 2028. Jen will talk more about the positive impact of deferred ARR on our outlook for the remainder of fiscal 2026. We are confident our transformation is helping us build a more durable, multi-year growth engine. An example of our momentum is the expansion deal we struck with Garrett Motion, a leading automotive supplier. We won this on the strength of our Intelligent Product Lifecycle vision and how it resonated with their leadership and across the company. Garrett is modernizing its product development environment on a cloud-first, AI-ready architecture. They were already using Onshape and selected Windchill+ for PLM, displacing a PLM competitor, and Codebeamer+ for ALM, displacing an ALM competitor. Garrett's goal is to unify product development with their connected systems, broaden access to product data beyond engineering, and establish a foundation for AI. This is increasingly representative of how large product companies are engaging with PTC. Overall, Q1 demonstrated PTC's momentum with the Intelligent Product Lifecycle. I credit Team PTC for driving forward with focused execution and purposeful innovation. I'm energized by our progress and optimistic about where we are headed. With that, I'll turn the call over to Jen. Thanks, Neil, and hello, everyone. I'm excited and honored to join the PTC team at this significant time in the company's transformation. Before turning to our Q1 results, I thought I'd share my initial observations and key priorities. I'm impressed by the PTC team and how our Intelligent Product Lifecycle vision is taking hold with customers. As Neil highlighted, product companies want to leverage AI for their high-value use cases and workflows. The companies that succeed will be the ones that connect product data across the entire lifecycle and then leverage that foundation to push AI-driven intelligence. It's an exciting time because PTC is well-positioned to help our customers address this challenge. In terms of my key priorities, I look forward to partnering with Neil and the leadership team to help PTC capture its growth opportunity, maintain strong financial discipline, and create meaningful value for our stakeholders. I'm committed to helping the investor community understand and value our business, and I'm looking forward to engaging with you. Now, let's turn to our fiscal Q1 2026 financial results. At the end of Q1, our constant currency ARR, excluding Kepware and ThingWorx, was $2.341 billion, up 9% year-over-year. Including Kepware and ThingWorx, our constant currency ARR was $2.5 billion, up 8.4% year-over-year.... Our Q1 operating cash flow and free cash flow both grew 13% year-over-year. Q1 free cash flow of $267 million included $10 million of Kepware and ThingWorx divestiture costs. Finally, on the divestiture, we are still targeting a close on or before April 1, and there are no material changes to the figures we provided last quarter. Turning to share repurchases. As previously guided, we repurchased $200 million of common stock in Q1 under our $2 billion share repurchase authorization. In Q2 2026, we intend to repurchase approximately $250 million of common stock. Based on this, we expect to decrease in our fully diluted share count to approximately 119 million shares, compared to 121 million shares one year ago. In Q3 and Q4 this year, we intend to repurchase $150 million-$250 million of common stock per quarter. On top of this, given current valuations, we now intend to return additional capital to shareholders following the close of the Kepware and ThingWorx divestiture. We continue to expect net after-tax proceeds from the transaction of approximately $365 million. Adding this to our original fiscal 2026 plan means that we will buy back approximately $1.1 billion-$1.3 billion of our common stock this year. With that, I'll take you through our guidance. In fiscal 2026, for constant currency ARR, excluding Kepware and ThingWorx, we continue to expect growth of approximately 7.5%-9.5%. Including Kepware and ThingWorx, we still expect growth of approximately 7%-9% in fiscal 2026. In the appendix to our earnings deck, we provide an illustrative ARR model for fiscal 2026, and you can see that our fiscal 2026 ARR guidance midpoint is for $195 million of annual net new ARR in both scenarios. In Q2, for constant currency ARR, excluding Kepware and ThingWorx, we expect growth of approximately 8%-8.5%. Including Kepware and ThingWorx, we expect growth of approximately 7.5%-8%. In the appendix to our earnings deck, we also provide an illustrative ARR model for Q2 2026, and you can see that our Q2 2026 ARR guidance is for $35 million-$50 million of sequential net new ARR in both scenarios. Looking at the second half of the year, our intent is to grow net new ARR in Q3 2026 on a year-over-year basis, and then deliver a step-up in Q4. We are comfortable with that because starting in Q4 2026, the demand capture we've been highlighting will have a positive impact on our ARR growth. We have visibility to a large increase in the amount of deferred ARR that will start in Q4 2026 compared to previous Q4s. For clarity, the higher level of deferred ARR that is contracted to start in Q4 this year is attributable to the solid progress we've made with our go-to-market initiatives as well as our commercial initiatives. Both drivers are contributing. Moving to cash flow, revenue, and EPS. Our guidance for these do not take into account the Kepware and ThingWorx divestiture, except for the divestiture costs already recognized in Q1 2026 and expected in Q2 2026. For Q2 2026, we are guiding free cash flow of $310 million-$315 million, including Kepware and ThingWorx for the full quarter, which absorbs approximately $5 million of divestiture costs. Our business, as currently constituted, remains on track to deliver approximately $1 billion of free cash flow in fiscal 2026. Related to the Kepware and ThingWorx transaction, we still expect approximately $160 million of total cash outflows this year, which are not expected to recur in future years, and we'll continue to provide visibility to these outflows in our reporting and guidance. When the transaction closes, we will update our guidance, and I'll host a call to take you through the changes. In recent years, we've developed a high degree of confidence in our guidance for free cash flow based on the predictability of our cash collections and the disciplined budgeting structure we've established. Continuing to deliver the strong financial discipline you've come to expect from PTC remains a priority. While our focus is on ARR and free cash flow, we're also providing revenue and EPS guidance to help you with your models. We are raising our fiscal 2026 guidance range for revenue to $2.675 billion-$2.940 billion, and raising our non-GAAP EPS guidance range to $6.69-$9.15, in alignment with our Q1 2026 results coming in above the high end of our guidance range. The key driver of our strong Q1 2026 revenue and EPS was similar to last quarter. We did a great job contracting customer commitments. As a result, our revenue growth significantly outpaced our ARR growth for a second consecutive quarter. In Q1 2026, demand capture continued to outpace ARR growth, resulting in additional deferred ARR that will support durable growth in future periods. Importantly, this dynamic reflects the quality, duration, and the structure of customer commitments or contracting, not a change in revenue recognition practices. All in all, our results and guidance show that our focus on the Intelligent Product Life cycle is resonating with customers. We are on the right strategic path with a compelling set of product initiatives, go-to-market initiatives, and commercial initiatives. I want to thank the extended PTC team for their continued efforts and energy. Our people are our driving force, and what I've seen thus far gives me confidence that we will deliver on our opportunity. With that, I'd like to turn the call back to the operator for the Q&A session. At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. 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. Your first question comes from the line of Yun Kim with Loop Capital Markets. Please go ahead. All right, great. Thank you. Congrats on a solid quarter, Neil, and welcome aboard, Jen. Since this is your first time, I'll ask a question to Jen first. Q4 is the first quarter when we can see ARR contribution from those deferred ARR deals. What level of visibility do you have on that, if you can quantify that, if you can? For instance, what are some of the variables behind those ramp or deferred ARR deals getting recognized in Q4? And is the timing of that ramp related to billings, and would it affect cash flow? Thanks. Yun, thanks for the question, and Jen will add to my upfront. But since she's 4 weeks in, let me take the upfront on the dynamics of the demand capture, and then she could talk about some of the technicalities if I don't cover it. So, you know, again, I think you heard, and thank you for the acknowledgment. We feel really good about the progress of our go-to-market transformation, and it's showing up now in 2 quarters of demand capture that is now relating to, you know, the amount of deferred ARR that you spoke about in Q4, that's about triple what we had last Q4 entering, and double the deferred ARR that we're building starting in 2027 that we had coming into this year. So Rob and the go-to-market team is really doing a lot of great work on the demand capture. And the crux of the deferred ARR is due to the fact that we're winning strategic cross-product, and in some cases, and in many cases on some product lines, competitive displacements. And so, you know, we're taking the commitment, which is committed dollars from the customer. I'm cognizant that it's not showing up right now in the in-quarter ARR in Q1, and as we guide around Q2, but we're very positive about how it's starting to build into how it'll impact Q4 in a more meaningful way than it did last year, and also into the following year. And it's all to do with the implementation cycles of our customers, and we feel good about it because the commitment's there, it's contracted, and it's set to come. Jen, anything to add? I think you hit it, Neil. Thanks. All right. Thank you so much. Your next question comes from the line of Joe Vruwink with Baird. Please go ahead. Great, thanks for my question, and, Jen, welcome. At the big event hosted by PTC's user community, about this time last year, there was some, I think, foreshadowing by PTC about AI capabilities that would get added to Windchill and the parts management areas. And at the time, customers were really excited about this. I think that idea as a product is what PTC is now starting to come out with. I think it was released last week. I guess my question related to this, there's obviously been a lot of AI releases from PTC across all the core products over the past year, and not diminishing any of those, but are we maybe starting to see some that could prove more material in nature, and this is gonna start to register in a more noticeable way on demand decisions over the next year? So thanks for the question, Joe, and thanks for acknowledging the really good progress that we're making around our AI strategy in concert with what customers really need. As you noted here, you know, our products are mission-critical enterprise systems of records across the lifecycle. As you heard last year at the PTC User Group, the preponderance of our customers are now really wanting us to embed these AI releases. As you noted, the Windchill AI Parts Rationalization. We also did a Codebeamer AI release as well, and many others that are accelerating over the course of this year, which is really embedding AI capabilities to advise and assist, and over time, automate workflows within these systems of records that we are very well attuned to understand and train the models around it. So we're thrilled about the progress. Our customers are even more thrilled that we have built these, and now there's a rapid iteration of releases to even make these more consumable over time. So, we feel good about where we are around our strategy. We feel very excited about the criticality of PTC to deliver AI to our customers, given the strength and the complexity of our system of records within our customer environment. In terms of the impact of when, you know, Jen could start talking about the P&L impact in terms of when we'll see a lift. I'd say right now it's immaterial in terms of how we think about the economic till coming into the company. As these releases start taking hold, and they move from POCs to scale deployments over the course of the next few years, this should be something we'll be talking to you about and others around a real economic driver of the business. Thank you. Your next question comes from the line of Adam Borg with Stifel. Please go ahead. Awesome, and thanks for taking the question. Maybe just on Creo and Windchill, and as we think about those growth rates, any way to parse out, the mix of growth coming from expansion versus competitive displacement? And given the new go-to-market motions that seem to be having some success, what's the opportunity to drive more on the competitive displacement front? Thanks so much. Yeah, let me start this, and Rob can add, given he's really driving the team in a really disciplined manner, the way he said he was going to when he started about 12 months ago, and we're very proud of the progress that team has made. What I'll say is around Windchill, which we don't break out the exact growth rate of Windchill. It's an aggregated PLM number, as you might know, Adam. We're very enthused about the Windchill capabilities and the acceptance and the growth rates around Windchill as a standalone product. In addition to, by the way, Windchill+, where we're seeing really strong traction. Creo, as you noted, continues to be a strong grower, it's a steady grower, and we feel good about its competitive dynamic in the CAD market. In addition to the fact that we have an amazing Onshape capability that is also starting to be a very strong competitive takeaway off of some of the competitors on their estate, so we feel good about CAD. In terms of PLM, in terms of the mix around expansion versus competitive displacement, I'd still say, Adam, that the significance is still around expansion. And even in expansion, there's competitive displacement that's happening where customers are giving us their entire estate now, to take all the disparate PLM systems and put it on Windchill. So you saw some of the appendix slides. You're starting to see, and we're starting to see that being more of the types of deals we're seeing. Part of it is because the customers are understanding, to get the benefit of AI, you need contextual product data that's put in one place in a system of record like Windchill. And so this advantages customers to expand with Windchill and then build in parallel with some of the AI capabilities. But we are also lastly seeing competitive displacements, as I mentioned, and we're continuing to see more of that happen over the course of this year as we look at the pipeline. Rob? Yeah, the split's correct that we get the majority from expansion, but there is actual growth and accelerated growth in competitive displacements, and so we feel really good about that as a kind of next step grower for us. Great. Thanks again. Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead. Ken? One moment for Ken. Ken Wong- I think we don't have Ken. Your line is open. Hey, Ken. Operator, let's go to the next. Come back to Ken. Your next question comes from Matt Hedberg with RBC Capital Markets. Please go ahead. Great. Thanks for taking my question, guys, and congrats. I know the software environment seems a bit dicey these days, but it's great to see the consistent results out of PTC. I guess, Neil, I wanted to ask... You just talked about Windchill a second ago. I guess I was curious if you could talk a little bit more specifically on Windchill+, Creo+, just kind of the broad SaaS portfolio. You know, are you starting to see increased customer demand for SaaS? And, you know, in those instances, are you seeing customers spend go even higher in those situations? Yeah. So thanks for the question, and we've been very practical and also transparent with all of you around our journey around building our SaaS momentum. I'll take first the born in the cloud solutions that we've got, and in particular, Onshape, Arena, ServiceMax. We feel good about, in some cases, great about the momentum and the adoption of those capabilities, and several competitive displacements that are happening across the three of those strong portfolios, in addition to the AI capabilities we're building on top of it. In terms of your question on Windchill+ and Creo+, we're having a bang-up, and we did have a bang-up last year in terms of the momentum building for Windchill+. We had another strong demand capture quarter for Windchill+, if not record-breaking. We have plenty more to go, and I want to make sure... I think Rob and I are measured about that. We've been saying for a while that the dam has not broken, where the entire market is flipping to our Plus platform overnight. But we have been building momentum. We are working towards making sure we meet the customers where they are. The good news story is the following, and I've been saying this for two years consistently.... SaaS starts working for Windchill+ and Creo+ when there's scaled implementations with a great experience, with a back-end experience that's good, and the customers are happy. We're starting to see that, and we're going to leverage that, and we're going to continue to build on the momentum. And so we feel really strongly about our position on SaaS. We feel like that will continue to be a growth driver. To your last question around lift on pricing, yes, we are seeing the similar sort of lift that we've been saying around the 1.5-2.5 times kind of lift in terms of on-prem to SaaS lift on ARR. Thanks, Neil. Your next question comes from the line of Joshua Tilton with Wolfe Research. Please go ahead. Hey, guys, can you hear me? Yep. Great, thanks for sneaking me in here. I appreciate all the commentary on the improvement in sales productivity. But when we kind of, like, dig a little bit deeper in the numbers, it looks like the channel drove over 80% of net new ARR in the quarter. So I'm just trying to understand, like, are there any one-offs in the direct business that we need to understand? Is this tied to the deferred ARR dynamic? And maybe, you know, when can we start to see the direct business maybe contribute at a similar level to the channel going forward? Thanks. Jen, you want to start, and then Rob could add? Yeah, I can take it. So I think what we're seeing right now is good momentum in both the channel and the direct. What you're seeing actually in the numbers, in particular in this past quarter, you know, one large deal does have an ability to influence this. And oftentimes with a large deal, you have both the channel and the direct, and ultimately it's about customer preference and how they want that fulfilled. And ultimately, that's all that's happening in those numbers just right now. You can add, Rob. Yeah, I mean, as we've mentioned, you know, in prior conversations, we're working very hard to more deeply engage with partners on this. So to create an environment where we can allow that flexibility at the customer and not have a battle that we're, it's direct against the channel, but it's working together to fulfill at the customer's request. So, we think you might see that from time to time. We did have a larger deal this quarter, that fit that picture, but you might see it again in the future, but it's not in any way, you know, of some kind of visibility into weakness in direct. We worked very closely together on that deal. You know, lastly, I want to make sure we're very clear about this. The energy and enthusiasm, the turning the corner is around the actual indication and the contracted commitments that are building predominantly deferred ARR. So we feel really strongly about the go-to-market transformation, actually doing the thing that we need to do, which is capture customer demand. How it's showing up in Q1 and our guidance for Q2 has only got to do with timing. And the good news is this is committed capture. By the way, this is going to show up also in another metric that you can look at. It's not completely indicative of it. It is RPO and cRPO that you'll see in the Q, but all of these metrics are leading us to make sure we all articulate the demand capture is strong. We got to continue that. And as that happens, ARR, over time, becomes durable and multi-year in terms of the sustainability. It makes sense. Maybe just to clarify one thing around that, was there more deferred ARR added to the balance in Q1 than when you exited Q4? Yes, there was. And just, just to reiterate what Neil said before, as we think about where we are, where we sit today versus one year ago, for Q4 2026, there's triple the amount of deferred ARR on the books for Q4 2026. And then in the same, same view for 2027, there is double for 2027 versus where there was last year for 2026. Super helpful. Appreciate the clarity. Thanks so much. Your next question comes from the line of Blair Abernethy with Rosenblatt Securities. Please go ahead. Thanks very much, guys, and, and, welcome, Jen. Just on the go-to-market side again, I just wonder, maybe, maybe Rob can shed some color on this, but, you know, in terms of, new customer adds, what are you seeing out there in terms of, interest in your portfolio? Is it skewed at all more towards the SaaS side, the SaaS products? And also, maybe you could provide a little more color on this, the startup aerospace and defense program. It looks like you've been winning some business there. Yeah. So, for the two questions, as it relates to the new business and new logos, we definitely, as mentioned earlier, have had a nice run and an increase in our competitive displacement. So we're picking up what we would consider to be new logos in kind of the upmarket. As we bring on new customers, we default to cloud. So they're coming in on in a cloud environment, and typically, you know, that's been working very well for us and for the customer who want to enter that way, as they reduce their customizations and the complexity in their own environment, and obviously, try to capture some of the benefits of being in cloud, some of which are pretty obvious, others which will start to manifest in how AI is deployed. So yes, we're seeing good, good traction with customers coming in new, and that is our default setting as we bring on new logos into the cloud. In defense, it's great that you noticed that, you picked up on that. We have an opportunity there. We believe as we serve some of the largest customers in the world, at the top of that stack, we have an opportunity now to incubate at the lower, and we've seen great reception there. Certainly, we always learn and get better every month, every quarter, but the initial response has been really positive there. And we have a, we have a number of ways to service that market as well. So we feel like we're well positioned at both the top and the bottom. Hopefully, we'll be able to report some great success stories that grew through there. Great. Thanks very much. Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead. Hey, can you guys hear me? Yeah. Hello? Okay, perfect. Appreciate the context around deferred ARR and when some of that timing could pop up. You know, when thinking through the unchanged fiscal year ARR guide and coupled with that commentary, that it sounds like more is coming in Q4. Help us think through the seasonality, if you could. I mean, is it basically gonna be even more back-end loaded than you guys were thinking perhaps three months ago? So I think right now, the way we think about it, as you heard me say in my prepared remarks, that we'll have a step up in Q3 and a larger step up in Q4. I would say it's similar to how we've been thinking about the business, Neil, you can correct me if I'm wrong, prior. But overall, the shape of the curve is very similar to what we thought about when we guided for the full year. Okay, perfect. Thanks a lot, Jen. Your next question comes from the line of Daniel Jester with BMO Capital Markets. Please go ahead. Hey, great, good evening. Thank you for taking my question. Maybe, you know, in the slide deck, there was a good story about ServiceMax and an expansion there. You know, last year was maybe a little bit of a tougher year for ServiceMax, and so maybe just an update about what we're seeing there and in terms of the cross-sell opportunity for fiscal 2026. Thank you so much. Yeah, let me start, and Rob could add if I miss anything. Look, as we've mentioned a few times, starting last year, we've been working through very specific churn events in ServiceMax for a number of quarters now. As I mentioned, I think last call that we've got some still residual churn that kind of hit us in Q1, and most of it, we're trying to work through the system by the end of this quarter. That being said, a ray of sunshine in terms of some green shoots we've been talking about, like the cross-sell opportunity you saw, you noted the one in the appendix. We've had some good, strong demand capture, as we're calling it, i.e., contractual commitments of ServiceMax. That was very encouraging as we saw the end of Q4 and throughout the entirety of Q1. We need that replicated over the next number of quarters. We obviously want to ensure that churn is mitigated versus what we've seen in prior quarters. And lastly, the integration of ServiceMax into the Intelligent Product Lifecycle, and in particular, how our AI strategy allows for agents to work across our systems of record, where we have a very differentiated offer in ServiceMax, we believe is a competitive differentiation, in particular with some of these competitive displacements when customers are giving us PLM. Part of it is to do with the fact that we actually do have such a strong system of record at ServiceMax, and ultimately, in that AI world, we're at advantage. So, not out of the woods, but making progress, and you know, we're staying in real focus to make sure we continue on some of the buildup of some of those green shoots that we're seeing. Yeah, and as part of the alignment, as we go vertical and start to look at how we rebalance, just the go-to-market teams, we've made this a very important part of our elevated messaging, and so it's being brought to market more widely. In addition, we, you know, on a tactical level, have really instituted it, as part of the comp plans in a way to make sure that everybody's got some incentive to, bring this in front of the customers. So in addition to the benefit of the customer, there's internal benefits also. So we're trying to make sure the whole company is aligned to get the message out. That's great. Thank you so much. Your next question comes from the line of Jason Celino with KeyBanc Capital Markets. Please go ahead. Hi, thanks for taking my question. Sorry to belabor, you know, another ARR question, but this actually relates to the Q2 ARR guide. I know there's an implied decline in net new dollars added for Q2. Did you see any deals, you know, from the Q2 pipeline closed earlier in Q1, or are you expecting more of the deals in Q2 to also have this bigger deferred component? Thanks. It's a great question, Jason. This is all to do with our assumption as we sit here today around how these deals will come into the in-quarter start affecting ARR for that. This has nothing to do with demand being lesser than the momentum that we're talking about. It has simply to do with the structuring and our assumption of that being the case. Quite frankly, it is another quarter where we believe we will continue to build on the deferred ARR to make this a durable, multi-year sustainable growth engine going forward. Perfect. Thanks. Your next question comes from the line of Siti Panigrahi with Mizuho. Please go ahead. Thanks for taking my question. Congrats, Jen, and look forward to working with you. It's good to see some of the initiative on AI side you are doing and also buyback. Neil, I want to ask you about the macro that you talked about earlier, a little bit, you're conservative there. What kind of trend are you seeing in Q1, and what's assumed in your guidance? Specifically, if you could give some color in terms of vertical, if you are seeing anywhere strength or weakness there? ... Yeah, you know, Rob could add about the vertical piece, but just broadly, we've been in a very difficult macro climate. We've talked about this for many years now, for a long time, and we are still delivering and capturing the types of results that we're talking about, particularly on the demand capture commentary that we gave. That is across regions, across verticals, we're seeing that strength. And, and the reason for it, despite the macro having so much uncertainty and volatility, despite policies being uncertain, is because, you know, as an example, today, we had one of the larger industrial manufacturers in all of Europe join us at the CXC, and while they are dealing with so much change, they need to modernize. They need to make sure prioritization of modernizing and creating a strong product data foundation, in this case, Windchill, and the expanse of Windchill is what they're looking at with the additional Codebeamer, to make sure they take advantage of AI as they think about their multi-year journey and competitiveness. We feel good that even in this environment, our end customers, as you know, Siti, has not modernized as fast as almost every other end market of companies. They are getting the urgency to move. And now with this Intelligent Product Lifecycle, it's a comprehensive holistic story for them to actually be competitive with technology provided by PTC. Yeah, just in terms of the actual strength and within the verticals and the geographies, there's, while there may be, in a particular vertical, a geography that hasn't performed, some other geography has stepped up to outperform. And so if you look across the verticals, they're all, our big 5 are all performing fairly well. And then if you look at any geography, there's no geography that has just been depressed, that if they're down in one, in one industry, they pick up in another. And so, you know, across our 3 or 4 biggest geographies and across the 5 verticals, we have some pretty good numbers, and we feel like every one of those is a place that has some upside. Great. Thank you both. Your next question comes from the line of Nay Soe Naing with Berenberg. Please go ahead. Hello, hi. Thank you for taking my question. Hey, Jen, looking forward to working with you. My question is on the third ARR. I think you attributed to the fact that the booking to ARR conversion will, you know, begin Q4 as a result of implementation of customers. I was wondering if you could share with us, you know, how much visibility or control you have over that implementation timeline of the customer. Is there any potential risk that the implementation process might take longer? Or on the other side, on the flip side, it could be shorter than the Q4 that's coming up. Thank you. Yeah. So I-- sorry, I was a little unclear, but I want to make sure... I mean, I mean, your question was clear, just the audio was a little low. But just in terms of the deferred ARR, this is Rob, this is a contractual commitment. So when we engage and sign these contracts, these are contractually committed amounts of ARR. That's what we hear, and you'll talk about the durability and the predictability of the business. So, you know, they have a great incentive to be on time in their implementation, but if they're not, that ARR comes. So, we believe that, you know, in addition to, obviously, the predictability, the benefit to the customer and the way we've contracted is that it's allowing them time to ensure that they're aligned to the cycle of the contract. And so why we're also excited about how we've had these quarters and what we call demand capture is because in addition to timing them appropriately, we've done them on the proper commercial conditions, not, you know, in any way tried to, you know, strain the deal by pulling it forward just to hit a current quarter that doesn't match the implementation cycle or market conditions in those out years. And so these are contractually obligated. They'll, they'll hit in these quarters. We, we are hoping and we're, we're, you know, planning to be fully aligned with their implementations. And in addition to that, you know, hopefully, as we get to those, you know, those out cycles, there's actually upside even in those. Okay, that's super helpful. Your next question comes from the line of Tyler Radke with Citi. Please go ahead. Hi, thanks for taking the question. So I know you've been asked, you know, almost every question on deferred ARR, but I guess I was just wondering if you could help us understand, you know, I guess the magnitude in which that surprised you in the quarter, and then how that changes for the year. Because clearly you're seeing some good things on the rep productivity side, but you know, you came in a little bit below the high end of the guidance. And then is that something you're just contemplating or risk adjusting more in the outlook? It looked like there was on the net new ARR for Q2. And then, sorry, just to clarify, if you think about the stacking of these ramped ARR deals, I think it implies that your overall ARR growth should re-accelerate in Q4. And if that's the case, would you expect that to be durable, just given the visibility you have? Thank you. Yeah, Tyler, thanks for the question. I just want to take one step back. The work that we've done and undertaken around go-to-market transformation, the hard work that we did up front and the precision and process that we've undertaken for the last 12 months, and we're continuing. You know, going forward, this year and into next, in addition to the product innovation that we're talking about, AI, is around bringing PTC back to a consistent demand capture environment by which we're winning and engaging in strategic cross-product deals across the core priorities that actually build towards this intelligent product life cycle that's so fundamental to our customers. And so that process that Rob and CK and the go-to-market team started off 12 months ago, is showing the fruits of all that process in demand capture that happened in Q4 and in Q1. As we alluded to, we intend to continue that momentum into Q2. That is not showing up yet in net new ARR, and the way we showed you the guidance for Q1 was clearly not a surprise in which we gave you the range, because we know that the whole game is build a durable, accelerating growth company. And the way you do that is by capturing great demand in a quality deal that fills deferred ARR and allows churn to continue to stay low and keeps building new ACV into the quarter that we're playing in. And we believe, in summary, that that inflection, the turning the corner and the turn the corner, starts becoming more apparent in Q4 of this year and substantially into 2027 and 2028. That's what we're playing for, Tyler, and that's the results and the work that we're doing at this current time, just so we're, you know, being transparent with all of you. Thank you. Your next question comes from the line of Jay Vleeschhouwer with Griffin Securities. Please go ahead. Thank you. Good evening. Neil, your references this evening to large transactions coming on top of similar comments back in Q4, where you clearly had a large number of large transactions, leads me to ask the following, and there's quite a bit of déjà vu here for me, which is: if you think about Ansys, you know, 6, 7, 8 years ago, they too had gone through a significant go-to-market change. They too had evolved and broadened their portfolio. So there's some similarities here that lead me to ask if you are anticipating a fundamental change in your deal profile or propensity that you will start seeing more frequently the number of eight-figure transactions as you did in Q4 and as they did over a number of years. And then secondly, I can't help asking about your presence at CES last month, which was quite significant. I think almost the entire C-level team seemed to be there. There was a significant automotive flavor to your presence there, particularly around ALM and Windchill. The question is: do you think that you can broaden your momentum in auto beyond the tip of the spear that ALM has been giving you, plus some Windchill, so that you can, in fact, start seeing a broader, more impactful growth or share contribution in auto, you know, as you've done, for example, at Toyota, Ford, VW, et cetera, et cetera? Yeah, Jay, thanks for the question, and, and let me start with CES. So we, we were more than proud, but more than proud, we were very enthused by the reception we got at the first ever CES that PTC has been involved in. And not only from automotive, but Jay, if you were there, you know, you saw all around our booth was industrial manufacturers around the world that actually came to our booth as executives, asking of us: "How can we deploy more of Windchill?" Most of them being our customers already, Jay, which you're probably familiar with, but really trying to understand, wait a second, now you have something called Codebeamer. Now, what are you doing with AI? How can we supercharge our Windchill base or our Creo base, ServiceMax in some cases? What can we do? That was just a really great puff your chest moment for PTC around, we're in the big stage now, we deserve it, and we're at the fundamental level of transforming these really amazing companies around the world, including automotive, but a lot of industrial manufacturers as well. On automotive, I will say right now, Codebeamer is the tip of the spear, and that tip of the spear is very substantial for us, and there's plenty more to go in terms of Codebeamer displacements, not only manual processes, but also competitive solutions. As you see, that product is really gaining scale. We're adding Codebeamer AI functionality, which the market is really energized by. So, you know, we're happy to get all of automotive onto Codebeamer, and that's. We're marching towards that end, for what it's worth. Same on Windchill with automotive. We are continuing to see an ability for Windchill, while in some accounts in automotive, it is there, as you know, Jay, we're seeing this theme of, like, let's consolidate on Windchill. Let's take all the disparate PLM system and put it all onto Windchill, and we're gonna continue to go down that path. Lastly, ServiceMax. So Lamborghini was a marquee customer at our booth. They're deploying ServiceMax now that's tied back into their Windchill instance, so that they could deploy the right parts and services to their end customers faster. We're gonna go down that path as well. Ultimately, one day we're gonna talk about CAD, but right now we feel really good about in automotive, ALM, PLM, and over time, as we're seeing Servigistics, our ServiceMax product and SLM suite of products there. Rob, anything to add? The only thing I'd say is, in addition, of course, we have to continue to chase down the rest of the automotive industry when it comes to our ALM, but we are seeing it start to go into other industries. It's not. We have not made any- ... and he had the deliberate decision to knock off that. We actually have customers now exploring it and, and actually in places that you wouldn't even imagine. So we're, we're pretty excited about the possibilities there, and there's obviously a huge white space outside. And, and your first question, Jay, around are you seeing this dynamic of cross-product, larger scale deals? And, you know, these large scale deals, they take a lot of effort. Timing, you know, is always a, an art, and we have one of the best artists in the world, and Rob kinda with his team, landing those. But a big part of what has been the up-level messaging that we've been talking about, the going to partners, getting to the GSIs, revealing what you know, Jay, I think, is like the greatness of PTC, the importance of PTC, to be at the same system of record as the big players, you know, worldwide in software, that's beginning to happen. And the more we get there, the more we're starting to construct these larger deals. When they come in is gonna be on Rob, but we're enthused about the fact that they're starting to actually build into the pipeline. And, you know, we're looking at very optimistic ways in which how we could close that over the next number of years. Thank you very much. Your next question comes from the line of Joshua Tilton with Wolfe Research. Please go ahead. Hey, guys. Thanks for sneaking me in again. And I hate to ask one more on deferred ARR, but if I kinda, you know, sum up all the takes of the questions that we're getting tonight on the call, I think some of us have, you know, remembering or PTSD or whatever you wanna call it, from prior communication around deferred ARR that kind of didn't pan out, as we were all hoping for in the year. And I'm just, I guess what I'm asking, is there anything that you can tell us or give us to instill confidence, that this deferred ARR balance will come through, in the fourth quarter? On top of that, is there a way to think about how much of that balance is currently baked into the guidance? Thanks, guys. Yeah, so let me just on the confidence level, and again, I can only speak about what we've been doing since we've been transforming the business across all fronts. And I wanna make one reference back to 12 months ago when we talked about all the levels of what we're doing in go-to-market transition. One of it was far tighter linkage between sales and customer success, and Rob made plenty of organizational decisions, process decisions to align the two. And the reason why that's important, answering your question, is customer success, i.e. that team has the implementation expertise. When a deal is underway, they're the ones that actually advise the customer around, "Here's what we see as the way in which the technology can actually be implemented, in addition to a third party." That linkage is tighter, and because it's tighter, we believe that in the contracting process, it's eyes wide open around when the implementation should occur, when the customer should pay for it, and what's the right thing to do for the process of the actual project itself. And so we feel confident that we've put the right diligence, number one, and there's far tighter linkages now than there was 12 months ago. Number two is, you know, I think Rob alluded to this, I wanna just punctuate it, is we're doing deals to build a durable, multi-year growth, sustainable business. Not telling the customer, "If you let us maximize AR R for this quarter, you know, you'll get these certain attributes." We're doing the deals the way they should be, do the deals. So the risk profile of a customer coming back and saying, "The implementation schedule is different than what you said," is low, lower than I've seen. And at the end of the day, Rob's got a discipline that says, "Since we were transparent with you, it's in contract, you're gonna pay for it." So summary of all that long diatribe is that we feel little risk in that deferred ARR for you to have that PTSD of saying, "That disappeared or moved out. Love it. Thanks for the clarity. Really appreciate it. That concludes our question and answer session. I will now turn the call back over to Neil Barua for closing remarks. Thank you all for joining. We really appreciate the questions and the attention. We're gonna be on the road the next number of weeks, meeting in conferences and investors, and so we look forward to seeing you, and again, thank you for joining the call. Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.