PTC (PTC) investor relations material

Executive summary

• Q3'26 saw strong execution, with all key metrics exceeding the high end of guidance and $60 million in net new ARR, driven by Intelligent Product Lifecycle solutions and AI integration, including major wins and the largest AI deal to date.

• AI innovation accelerated adoption, with embedded AI in products like Creo AI, Orbit, and Onshape Labs, and customers modernizing product data foundations.

• Go-to-market transformation improved sales productivity, vertical expertise, and executive engagement.

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

• Divestiture of Kepware and ThingWorx completed in Q2/Q3'26, impacting period comparisons and resulting in a $463 million gain.

Financial highlights

• Constant currency ARR (excluding divested businesses) reached $2.448 billion in Q3'26, up 9.1% year-over-year, above guidance.

• Q3'26 operating cash flow was $261 million (up 7% YoY) and free cash flow was $249 million (up 3% YoY), both exceeding guidance.

• Q3'26 revenue was $600 million, slightly below the midpoint of guidance and down 7% YoY; gross margin was $490 million.

• GAAP net income for Q3'26 was $119 million; diluted EPS $1.03 (GAAP), $1.58 (non-GAAP); non-GAAP operating margin at 41.4%.

• $525 million of common stock was repurchased in Q3'26.

Outlook and guidance

• FY'26 constant currency ARR growth guidance raised to 9–9.5%, with net new ARR for FY'26 guided at $214 million.

• FY'26 revenue guidance: $2.69 billion–$2.75 billion; non-GAAP EPS: $7.87–$8.42; GAAP EPS: $8.46–$9.18 (includes $463 million divestiture gain).

• FY'26 free cash flow guidance: ~$850 million; Q4'26 free cash flow guidance is $15 million, lower YoY due to capital gains outflows from divestitures.

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

• FY'26 guidance includes non-recurring divestiture-related costs and taxes totaling ~$150 million.