PTC (PTC) Q3 2026 earnings summary

Executive summary

• Q3'26 saw strong execution, with all key metrics exceeding the high end of guidance and significant share repurchases, driven by Intelligent Product Lifecycle and AI integration.

• ARR excluding divested businesses reached $2.448 billion, up 9.1% year-over-year, with notable customer wins and broad-based strength across financial metrics.

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

• Divestiture of Kepware and ThingWorx completed in Q2'26, impacting year-over-year comparisons and resulting in a $463 million gain.

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

Financial highlights

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

• Q3'26 operating cash flow was $261 million and free cash flow was $249 million, both exceeding guidance.

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

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

• $525 million of shares were repurchased in Q3'26, with FY'26 repurchases expected to reach $1.625 billion.

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–$2.75 billion; non-GAAP EPS: $7.87–$8.42.

• FY'26 free cash flow guidance: ~$850 million; Q4'26 free cash flow guidance is $15 million, lower year-over-year 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 guidance includes non-recurring divestiture-related costs and taxes totaling ~$150 million.