PTC (PTC) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2'26 results with 8.5% constant currency ARR growth and 14% free cash flow growth year-over-year, both at or above guidance, driven by AI momentum and strategic execution.

• Completed divestiture of Kepware and ThingWorx in March 2026, resulting in a $463 million gain and a more focused business.

• Significant share repurchase activity, including $375 million accelerated share repurchase funded by divestiture proceeds and total Q2 repurchases of $625–$626 million.

• AI strategy is resonating with customers, driving modernization demand and product data foundation upgrades.

• Go-to-market transformation is improving rep productivity, renewal rates, and pipeline quality.

Financial highlights

• Q2'26 constant currency ARR (excluding divested businesses) reached $2.37 billion, up 8.5% year-over-year; as reported ARR up 11%.

• Q2'26 revenue grew 22% year-over-year to $774 million; constant currency revenue up 15%.

• Operating and free cash flow both grew 14% year-over-year to $321 million and $318 million, respectively.

• GAAP EPS was $4.98, including a $463 million divestiture gain; non-GAAP EPS was $2.69, up 50% year-over-year.

• Gross margin improved to 85% GAAP and 87% non-GAAP; non-GAAP operating margin expanded to 53%.

Outlook and guidance

• FY'26 constant currency ARR growth expected at 7.5%–9.5%, with $195 million net new ARR at midpoint.

• FY'26 revenue guidance: $2.58–$2.82 billion; non-GAAP EPS: $6.65–$8.90.

• FY'26 free cash flow guidance: ~$850 million, including ~$40 million divestiture costs and ~$110 million divestiture-related cash taxes, not expected to recur.

• Q3'26 guidance: ARR growth of 8%–9%, revenue $580–$640 million, free cash flow $240–$245 million, non-GAAP EPS $1.24–$1.78.

• Board authorized a new $2 billion share repurchase program effective FY'27–FY'28.