PTC Inc.
PTC · NASDAQ-GS
Sep 2026
Next quarter
Reports Nov 4, 2026, after the close.
Consensus is $1.59 EPS for Sep 2026 across 5 estimates, ranging $1.50 to $1.70.
PTC Jun 2026
- 1.68%
- +2.90%
- $1.19
- $1.17
- —
- $600.05M
Reported results
- $600.05M
- 81.74%
- $166.51M
- 27.75%
- $118.78M
- $1.03
Highlights
- ARR: Continuing-business ARR grew 9.1% in constant currency to $2.448 billion, above PTC’s 8%–9% Q3 range; excluding Kepware and ThingWorx, reported ARR growth was 7%, while total reported ARR was flat year over year at $2.412 billion.
- Cash generation: Operating cash flow rose 7% to $261 million and free cash flow rose 3% to $249 million, both above guidance of $255–$260 million and $240–$245 million, respectively.
- Revenue: Q3 revenue was $600 million, down 7% year over year (8% in constant currency) and 22% sequentially from $774 million; the prior-year comparison included $45 million from the divested businesses.
- Growth drivers: Lower license revenue, partly reflecting the shortened duration of one large renewal and expansion, weighed on sales: license revenue fell 18% to $206 million, while support and cloud services were essentially flat at $371 million.
- Profitability: GAAP operating income fell 21% to $167 million and operating margin declined to 27.7% from 32.6%; non-GAAP operating margin was 41.4%, down 290 basis points.
- EPS: The company reports GAAP diluted EPS of $1.03, down from $1.17 a year ago, and non-GAAP diluted EPS of $1.58, down from $1.64. The supplied consensus comparison instead lists reported EPS of $1.17 versus $1.19 expected, a 1.68% miss, which does not match PTC’s reported Q3 figures.
- Outlook and capital returns: PTC raised FY2026 ARR, revenue and EPS guidance, while reaffirming cash-flow guidance; it repurchased about $525 million of shares in Q3 and expects approximately $1.625 billion of FY2026 repurchases.
Analysis
PTC’s Q3 FY2026 was a stronger recurring-business and cash-flow quarter than headline revenue and GAAP earnings suggest, although license timing remained a drag. Revenue of $600 million was down 7% year over year and 22% sequentially, but the year-ago quarter included $45 million from Kepware and ThingWorx, sold in March. A shortened-duration large renewal and expansion also reduced license revenue. Continuing-business ARR grew 9.1% in constant currency, ahead of the company’s 8%–9% guidance, and operating and free cash flow exceeded their guidance ranges. Against the prior-year quarter, GAAP operating margin fell to 27.7% from 32.6%, and GAAP diluted EPS declined to $1.03 from $1.17; non-GAAP EPS was $1.58 versus $1.64. The supplied consensus line lists EPS of $1.17 against $1.19 expected, but that reported figure conflicts with the $1.03 GAAP diluted EPS in PTC’s release and filing. PTC raised FY2026 ARR, revenue and EPS ranges, leaving cash-flow guidance unchanged at about $880 million operating cash flow and $850 million free cash flow. The print also featured substantial buybacks: approximately $525 million in Q3, with FY2026 repurchases expected to reach about $1.625 billion.
ARR and product momentum
- Overall ARR: At quarter-end, ARR was $2.412 billion, flat year over year as reported. Excluding the divested businesses from the comparison, ARR grew 7% on a reported basis and 9% in constant currency to $2.448 billion at plan exchange rates, above the 8%–9% Q3 outlook.
- PLM: ARR excluding the divested businesses grew 8% reported and 10% in constant currency, led by Windchill and Codebeamer. Including the divested-business comparison effect, PLM ARR was down 4% reported.
- CAD: ARR grew 6% reported and 8% in constant currency, primarily on Creo strength. CAD software revenue was roughly flat at $241 million, while PLM software revenue fell 12% to $336 million, reflecting the divestiture and lower license revenue in Europe.
- AI strategy: Management positioned PTC’s product-data foundation and an intelligence layer across CAD, PLM, ALM and SLM as groundwork for customers’ AI adoption. The quarter’s release describes customer interest and strategy, but does not quantify AI-related revenue or ARR.
Revenue and license timing
- Top line: Revenue was $600.0 million versus $643.9 million a year ago, a 7% reported decline and an 8% constant-currency decline. The prior-year quarter included $45 million of Kepware and ThingWorx revenue; the businesses were divested in Q2 FY2026.
- Revenue mix: License revenue declined 18% to $205.8 million. Support and cloud services were effectively flat at $370.9 million, and professional services rose 3% to $23.3 million. Recurring revenue was $576.0 million, compared with $613.6 million a year earlier.
- Contract effects: PTC attributed additional pressure on Q3 software revenue to the shortened duration of one large contract renewal and expansion. Under ASC 606, license revenue from on-premises subscriptions can be recognized when licenses are delivered, so contract value, mix and timing can move quarterly revenue independently of ARR.
Margins and earnings
- Operating performance: GAAP operating income was $166.5 million, down from $209.8 million, and GAAP operating margin was 27.7% versus 32.6% a year ago. Non-GAAP operating income was $248.5 million, down from $285.2 million; non-GAAP margin declined to 41.4% from 44.3%.
- Earnings: GAAP diluted EPS was $1.03 versus $1.17 a year earlier; non-GAAP diluted EPS was $1.58 versus $1.64. GAAP net income was $118.8 million, down from $141.3 million.
- Comparison caveat: The supplied expectations data lists reported EPS at $1.17 against $1.19 consensus, a 1.68% shortfall. That reported figure matches the prior-year GAAP diluted EPS, not PTC’s Q3 FY2026 GAAP diluted EPS of $1.03 or non-GAAP EPS of $1.58, so the consensus comparison appears to use a different or mismatched measure.
Cash flow and buybacks
- Cash generation: Operating cash flow increased 7% year over year to $260.6 million; free cash flow rose 3% to $249.3 million. Both exceeded Q3 guidance. Capital expenditures were $11.3 million, versus $1.9 million in the year-ago quarter, including spending related to relocating a major R&D center.
- Repurchases: PTC repurchased $525 million of stock in Q3, including 4.3 million shares in open-market transactions; $500 million was paid during the quarter, with $25 million executed but unsettled at quarter-end. The company said Q3 repurchases were more than twice its prior quarterly target.
- Funding and full-year plan: Q3 repurchases were partly funded by $225 million of net borrowing under the credit facility. For FY2026, PTC expects approximately $1.625 billion of repurchases and fully diluted shares of about 116 million, versus 121 million in FY2025.
FY2026 guidance
- Raised ranges: PTC raised constant-currency ARR growth guidance, excluding divested businesses, to 9%–9.5% from 7.5%–9.5%. Revenue guidance is now $2.690–$2.750 billion, versus $2.580–$2.820 billion previously.
- EPS outlook: GAAP EPS guidance increased to $8.46–$9.18 from $7.21–$9.70. This range includes the divestiture gain and related expenses and taxes. Non-GAAP EPS guidance is $7.87–$8.42, versus $6.65–$8.90 previously.
- Cash flow reaffirmed: FY2026 operating cash flow guidance remains approximately $880 million and free cash flow approximately $850 million. The company notes those estimates include divestiture-related costs and cash taxes, as well as a divestiture-related cash-flow contribution, that are not expected to recur.
