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, including $10 million in divestiture costs; operating cash flow reached $270 million.

• Operating margin expanded to 32.2%, and diluted EPS more than doubled to $1.39; non-GAAP EPS was $1.92.

• Transformation efforts and embedded AI are driving momentum, with record deferred ARR and increased seller productivity.

• Divestiture of Kepware and ThingWorx is progressing, with closing expected by April 1, 2026, and after-tax proceeds of $365 million to be used for share repurchases.

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; operating cash flow: $270 million.

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

• $200 million of common stock repurchased in Q1'26; plan to repurchase $1.115–$1.315 billion in FY'26.

Outlook and guidance

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

• FY'26 revenue guidance: $2.675–$2.94 billion; non-GAAP EPS: $6.69–$9.15; GAAP EPS: $4.42–$6.93.

• FY'26 free cash flow guidance: ~$1,000 million; operating cash flow: ~$1,030 million.

• Q2'26 guidance: ARR growth 7.5%–8.5% (excluding divestitures), 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 recognized costs.