All financial measures in this presentation are non-GAAP financial measures. A reconciliation between the non-GAAP measures and the comparable GAAP measures is located in our Prepared Remarks document on the Investor Relations page of our website at www.ptc.com.

With us this morning, we have Jim Heppelmann, Jeff Glidden and Barry Cohen. With that, I'll turn the call over to Jim.

James E. Heppelmann

Thanks, Tim. Good morning, and thank you, all, for joining us on the call this morning. In line with the comments we've previously made on the April 5 call, we at PTC were disappointed with the overall results from our Q2 of FY '12. But at the same time, we did see many important bright spots that suggest we're making good progress on our longer-term initiatives.

On the revenue front, in Q2, the license shortfall we experienced was confined to the large deal category of license transactions above $1 million. And of course, it was most acute in the category of megadeal license transactions above $5 million, where we failed to close the large forecasted European transaction that we spoke about on the earlier call. Had we secured this deal, we would've posted a decent quarter relative to our guidance range and relative to last year.

But beyond that single transaction, the large deal category in general was weaker than expected in North America, where our performance came in below our forecast. Naturally, we have investigated this situation in some detail and find that the shortfall is not easily attributable to a single factor, but rather, a combination of factors that are hardly characterized with a blanket statement. There was, for example, a defense-oriented deal whose funding was intercepted by another defense program. Several situations where our customer decided to take a more cautious approach and spread a large upfront purchase out over several phases and, thus, placed a smaller initial order than we had forecasted. And there was a sizable expansion order in a commercial customer that was interrupted by acquisition dynamics, in some way similar to the large European deal. So please note that none of these situations directly involved competitors. And in each case, we do expect to ultimately secure all of this revenue.

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