PTC (PTC) Q1 2026 earnings summary

Executive summary

• Achieved 13% year-over-year ARR growth to $2.494 billion and 21% revenue growth to $686 million in Q1'26, driven by large deal volume, license renewals, and longer contract durations.

• Free cash flow grew 13% year-over-year to $267 million, with operating cash flow at $270 million; operating margin expanded to 32.2%.

• Embedded AI across the portfolio and advanced Intelligent Product Lifecycle solutions, with strong SaaS adoption and competitive displacements.

• Progressed on the divestiture of Kepware and ThingWorx, with closing expected by April 1, 2026, and proceeds to be used for share repurchases.

• Record deferred ARR and higher seller productivity, with strategic wins in automotive and industrial sectors.

Financial highlights

• Q1'26 ARR as reported: $2.494 billion, up 13% year-over-year; constant currency ARR excluding Kepware and ThingWorx: $2.341 billion, up 9%.

• Q1'26 revenue: $685.8 million, up 21% year-over-year; recurring revenue: $657.3 million, up 25%.

• Q1'26 free cash flow: $267 million, up 13% year-over-year, including $10 million in divestiture costs.

• Q1'26 GAAP diluted EPS: $1.39; non-GAAP diluted EPS: $1.92.

• Repurchased $200 million of common stock in Q1'26; $2 billion total repurchase authorization through FY'27.

Outlook and guidance

• FY'26 constant currency ARR growth expected at 7.5–9.5% (excluding Kepware and ThingWorx) and 7–9% including them.

• FY'26 free cash flow guidance: ~$1 billion; operating cash flow: ~$1.03 billion.

• FY'26 revenue guidance: $2.675–$2.94 billion; non-GAAP EPS: $6.69–$9.15.

• Q2'26 guidance: ARR growth 7.5–8%, free cash flow $310–$315 million, non-GAAP EPS $1.93–$2.54.

• Guidance excludes most effects of the Kepware and ThingWorx divestiture, except for already-incurred and expected Q2'26 costs.