PTC (PTC) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2'26 results with 22% revenue growth to $774 million and 14% year-over-year increases in free cash flow and operating cash flow, driven by robust license and recurring revenue and solid execution of the Intelligent Product Lifecycle strategy.

• Completed divestiture of Kepware and ThingWorx in March 2026, resulting in a $463 million gain, $523 million in proceeds, and a more focused business.

• AI strategy and modernization demand are accelerating, with customers recognizing the need for robust product data foundations and new intelligence layers.

• Significant share repurchase activity in Q2'26, including a $375 million accelerated share repurchase and total repurchases of $625–$626 million.

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

Financial highlights

• Q2'26 ARR excluding divested businesses grew 11% year-over-year to $2.37 billion; constant currency ARR up 8.5%.

• Q2'26 operating and free cash flow both rose 14% year-over-year to $321 million and $318 million, respectively.

• Q2'26 GAAP EPS was $4.98, including the 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%.

• Q2'26 revenue and EPS benefited from longer-duration renewals, coming in above guidance.

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% YoY, revenue $580–$640 million, non-GAAP EPS $1.24–$1.78.

• Share repurchases targeted at $1.225–$1.325 billion in FY'26; new $2 billion authorization for FY'27–FY'28.