PTC Inc.

02/04/2026 | Press release | Distributed by Public on 02/04/2026 15:13

PTC Announces first fiscal Quarter 2026 Results (Form 8-K)

PTC Announces first fiscal Quarter 2026 Results

Strategic focus on Intelligent Product Lifecycle vision

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Solid execution in Q1'26
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Constant currency ARR growth of 8.4%; 9.0% excluding Kepware and ThingWorx
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Operating and free cash flow growth of 13%
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Embedding AI across portfolio and building common AI infrastructure to drive customer adoption and value
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Executing on our $2 billion share repurchase authorization: $200 million of repurchases in Q1'26; expect to use net after-tax proceeds from the Kepware and ThingWorx divestiture for incremental repurchases; targeting repurchases of ~$1.115 billion to ~$1.315 billion in FY'26

BOSTON, MA, February 4, 2026 - PTC (NASDAQ: PTC) today reported financial results for its first fiscal quarter ended December 31, 2025.

"PTC delivered solid financial results in Q1'26, driven by large deal volume and competitive displacements. The continued progress we're making with our go-to-market transformation is resulting in strong and strategic demand capture. This gives us greater confidence that we are building a more durable, multi-year growth engine," said Neil Barua, President and CEO, PTC.

"More broadly, our Intelligent Product Lifecycle vision is gaining momentum. As the product development landscape evolves, our customers and partners understand the importance of product data as an enterprise-wide asset and its role in powering AI-driven transformation. PTC is uniquely positioned to deliver the Intelligent Product Lifecycle with our core products serving as the trusted systems of record for product data and AI across the full lifecycle," concluded Barua.

First Fiscal Quarter 2026 Key Operating and Financial Metrics1

$ in millions, except per share amounts

Q1'26

Q1'25

YoY Change

Q1'26 Guidance

ARR as reported

$2,494

$2,205

13%

Constant currency ARR (FY'26 Plan FX rates2)

$2,500

$2,307

8.4%

8% to 8.5% growth

Constant currency ARR excluding Kepware and ThingWorx (FY'26 Plan FX rates2)

$2,341

$2,148

9.0%

8.5% to 9% growth

Operating cash flow

$2704

$238

13%

$270 to $275

Free cash flow

$2674

$236

13%

$265 to $270

Revenue3

$686

$565

21%5

$600 to $660

Operating margin3

32%

20%

1,180 bps

Non-GAAP operating margin3

45%

34%

1,130 bps

Earnings per share3

$1.396

$0.687

104%

$0.73 to $1.31

Non-GAAP earnings per share3

$1.926

$1.10

75%

$1.26 to $1.82

1 The definitions of our operating and non-GAAP financial measures and reconciliations of non-GAAP financial measures to comparable GAAP measures are included below and in the reconciliation tables at the end of this press release.

2 On a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.

3 Revenue and, as a result, operating margin and earnings per share are impacted under ASC 606.

4 Q1'26 cash flow included $10 million of outflows related to the Kepware and ThingWorx transaction, which are not expected to recur in future years.

5 In Q1'26, revenue grew 19% year over year on a constant currency basis.

6 Q1'26 GAAP and Non-GAAP EPS included a non-cash tax benefit of $7.1 million or $0.06, due to the receipt of IRS consent to an accounting methodology change requested in FY'24.

7 Q1'25 GAAP EPS included a non-cash tax benefit of $5.4 million, or $0.04, due to the release of a tax reserve related to prior years.

"For a second consecutive quarter, we significantly stepped up the contracting of strategic customer deals. We will start to see our improved demand capture flow into ARR later this year, and are on track with our strategy to drive durable and predictable multi-year growth," said Jen DiRico, CFO.

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"We executed well on key initiatives in Q1'26: our go to market team continued to build momentum; the divestiture of Kepware and ThingWorx progressed; and we meaningfully reduced our share count, with $200 million of share repurchases under our $2 billion share repurchase authorization," DiRico concluded.

Full Fiscal Year 2026 and Second Fiscal Quarter Guidance

$ in millions, except per share amounts

% rounded to the nearest half

Previous FY'26 Guidance

FY'26 Guidance

FY'26 YoY Growth Guidance

Q2'26 Guidance

Constant currency ARR (FY'26 Plan FX rates1)

7% to 9% growth

7% to 9% growth

7% to 9%

7.5% to 8% growth

Constant currency ARR excluding Kepware and ThingWorx (FY'26 Plan FX rates1)

7.5% to 9.5% growth

7.5% to 9.5% growth

7.5% to 9.5%

8% to 8.5% growth

Operating cash flow2

~$1,030

~$1,0303

~19%

$315 to $3203

Free cash flow2

~$1,000

~$1,0003, 5

~17%

$310 to $3153

Revenue2

$2,650 to $2,915

$2,675 to $2,940

-2% to 7%

$710 to $770

Earnings per share2

$4.37 to $6.87

$4.42 to $6.934

-27% to 14%

$1.25 to $1.874

Non-GAAP earnings per share2

$6.49 to $8.95

$6.69 to $9.15

-16% to 15%

$1.93 to $2.54

1 On a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.

2 Guidance for cash flow, revenue, and EPS reflects our business as currently constituted and does not take into account the effect of the Kepware and ThingWorx divestiture, except for costs already incurred in Q1'26 and expected in Q2'26. We still expect approximately $160 million of divestiture-related expense payments and cash taxes in FY'26 in connection with the closing of the transaction, which are not expected to recur in future years. We will update our FY'26 guidance in conjunction with the closing of the transaction.

3 Cash flow guidance includes $10 million of outflows related to the Kepware and ThingWorx transaction already paid in Q1'26 and an additional approximately $5 million of outflows expected in Q2'26, which are not expected to recur in future years.

4 GAAP EPS guidance includes $11 million of expenses related to the Kepware and ThingWorx transaction already recognized in Q1'26 and an additional approximately $10 million of expenses expected in Q2'26, which are not expected to recur in future years.

5 Includes approximately $20 million of capital expenditures which are not expected to recur in future years, related to moving a major R&D center to a new office.

Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance

$ in millions

FY'26 Guidance

Q2'26 Guidance

Operating cash flow

~$1,030

$315 to $320

Capital expenditures

~$30

~$5

Free cash flow

~$1,000

$310 to $315

Reconciliation of EPS Guidance to Non-GAAP EPS Guidance

FY'26 Guidance

Q2'26 Guidance

Earnings per share

$4.42 to $6.93

$1.25 to $1.87

Stock-based compensation

$2.18 to $1.93

$0.66 to $0.59

Amortization of acquired intangible assets

~$0.67

~$0.17

Acquisition and transaction-related charges

~$0.17

~$0.08

Non-operating charges

~$0.01

~$0.00

Income tax adjustments

($0.76) to ($0.56)

($0.23) to ($0.17)

Non-GAAP Earnings per share

$6.69 to $9.15

$1.93 to $2.54

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FY'26 financial guidance includes the following assumptions:

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The guidance assumptions below reflect our business as currently constituted and do not take into account the effect of the Kepware and ThingWorx divestiture, except for costs already incurred in Q1'26 and expected in Q2'26. We still expect approximately $160 million of divestiture-related expense payments and cash taxes in FY'26 in connection with the closing of the transaction, which are not expected to recur in future years. We will update our FY'26 guidance in conjunction with the closing of the transaction.
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We provide ARR guidance on a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.
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We expect churn to remain low.
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For cash flow, due to largely similar invoicing seasonality and timing of expenses, and consistent with the past 5 years, we expect the majority of our collections to occur in the first half of our fiscal year and for fiscal Q4 to be our lowest cash flow generation quarter.
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Compared to FY'25, given our FY'26 ARR guidance range, FY'26 GAAP operating expenses are expected to increase approximately 5%, primarily due to investments to drive future growth and factoring in Kepware and ThingWorx divestiture-related expenses of $11 million in Q1'26 and an additional approximately $10 million in Q2'26. FY'26 non-GAAP operating expenses are expected to increase approximately 4%, primarily due to investments to drive future growth.
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Capital expenditures are expected to be approximately $30 million, with approximately $20 million of capital expenditures in FY'26 that are not expected to recur in future years, related to moving a major R&D center to a new office.
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Cash interest payments are expected to be approximately $50 million to $70 million.
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Cash tax payments are expected to be approximately $130 million to $150 million.
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GAAP and non-GAAP tax rates are expected to be approximately 20% to 25%.
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GAAP P&L results are expected to include the items below, totaling approximately $331 million to $361 million, as well as their related tax effects:
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approximately $230 million to $260 million related to stock-based compensation,
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approximately $80 million related to amortization of acquired intangible assets,
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approximately $20 million related to acquisition and transaction-related charges, of which $11 million was already recognized in Q1'26 and approximately $10 million is expected in Q2'26, and
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approximately $1 million related to non-operating charges.
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In Q2'26, we intend to repurchase approximately $250 million of common stock and expect a decrease in fully diluted shares to approximately 119 million shares, compared to 121 million shares in Q2'25.
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In the second half of FY'26, we intend to repurchase between $150 million and $250 million of common stock per quarter. In addition, we continue to expect net after-tax proceeds of approximately $365 million from the Kepware and ThingWorx transaction, which we expect to use for incremental shares repurchases in FY'26. In total, we expect to repurchase approximately $1.115 billion to $1.315 billion of our shares in FY'26.

PTC's First Fiscal Quarter Results Conference Call

PTC will host a conference call to discuss results at 5:00 pm ET on Wednesday, February 4, 2026. To participate in the live conference call, dial (800) 715-9871 or (646) 307-1963, provide the passcode 91578, and press # or log in to the webcast, available on PTC's Investor Relations website. A replay will also be available.

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Important Information About Our Operating and Non-GAAP Financial Measures

Non-GAAP Financial Measures

We provide supplemental non-GAAP financial measures to our financial results. We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operating performance because they provide a view of our operating results without items that are not, in our view, indicative of our operating results. These non-GAAP financial measures should not be construed as an alternative to GAAP results as the items excluded from the non-GAAP financial measures often have a material impact on our operating results, certain of those items are recurring, and others often recur. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

Non-GAAP operating expense, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income and non-GAAP EPS exclude the effect of the following items: stock-based compensation; amortization of acquired intangible assets; acquisition and transaction-related charges included in general and administrative expenses; impairment and other charges (credits), net; non-operating charges and credits shown in the reconciliation provided; and income tax adjustments. Additional information about the items we exclude from our non-GAAP financial measures and the reasons we exclude them can be found in "Non-GAAP Financial Measures" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

Free Cash Flow: We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return excess cash to shareholders via stock repurchases. Free cash flow is cash provided by (used in) operations net of capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures.

Constant Currency (CC): We present CC information to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency exchange rate fluctuations. To present CC information, FY'26 and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the foreign exchange rate as of September 30, 2025, rather than the actual exchange rates in effect during that period.

Operating Measure

ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, and support contracts as of the end of the reporting period. We calculate ARR as follows:

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We consider a contract to be active when the product or service contractual term commences (the "start date") until the right to use the product or service ends (the "expiration date"). Even if the contract with the customer is executed before the start date, the contract will not count toward ARR until the customer right to receive the benefit of the products or services has commenced.
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For contracts that include annual values that change over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include any future committed increases in the contract value as of the date of the ARR calculation.
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As ARR includes only contracts that are active at the end of the reporting period, ARR does not reflect assumptions or estimates regarding future contract renewals or non-renewals.
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Active contracts are annualized by dividing the total active contract value by the contract duration in days (expiration date minus start date), then multiplying that by 365 days (or 366 days for leap years).

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We believe ARR is a valuable operating measure to assess the health of a subscription business because it is aligned with the amount that we invoice the customer on an annual basis. We generally invoice customers annually for the current year of the contract. A customer with a one-year contract will typically be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year contract will be invoiced for each annual period at the beginning of each year of the contract.

ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period.

As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the total value of the contract is recognized as revenue at a point in time upon the later of when the software is made available, or the subscription term commences.

ARR should be viewed independently of recognized and unearned revenue and is not intended to be combined with, or to replace, either of those items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.

PTC Inc. published this content on February 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 04, 2026 at 21:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]