PTC (PTC) Q3 2026 earnings summary

Executive summary

• Q3'26 saw strong execution, with constant currency ARR (excluding divested businesses) reaching $2.448 billion, up 9.1% year-over-year, and all key metrics exceeding guidance.

• Intelligent Product Lifecycle and AI-driven solutions drove customer demand and adoption, with the largest AI deal ever signed in Q3.

• Divestiture of Kepware and ThingWorx in Q2'26 impacted year-over-year comparisons and resulted in a $463 million gain.

• Significant share repurchases in Q3'26 totaled $525 million, with FY'26 repurchases expected to reach ~$1.625 billion, reducing diluted shares to ~116 million.

• Raised FY'26 guidance for ARR, revenue, and EPS, reaffirmed cash flow guidance.

Financial highlights

• Q3'26 revenue was $600 million, down 7% year-over-year, mainly due to divestitures; gross margin was $490 million (81.8%).

• Operating cash flow grew 7% year-over-year to $261 million; free cash flow increased 3% to $249 million, both above guidance.

• Non-GAAP operating margin for Q3'26 was 41.4%; GAAP operating margin was 27.7%.

• Net income for Q3'26 was $119 million; diluted EPS was $1.03 (GAAP), $1.58 (non-GAAP).

• Cash and cash equivalents at Q3'26 were $351 million; total debt was $1.43 billion.

Outlook and guidance

• FY'26 constant currency ARR growth guidance raised to 9–9.5% (excluding divested businesses).

• FY'26 revenue guidance: $2.69–$2.75 billion; non-GAAP EPS: $7.87–$8.42; GAAP EPS: $8.46–$9.18 (includes divestiture gain).

• FY'26 free cash flow guidance: ~$850 million; Q4'26 free cash flow expected at ~$15 million due to divestiture-related outflows.

• Q4'26 guidance: ARR growth 9–9.5%, revenue $630–$690 million, non-GAAP EPS $1.63–$2.21.

• FY'26 share repurchases expected to total ~$1.625 billion, with diluted shares decreasing to ~116 million.