PTC reported financial results for its third fiscal quarter ended June 30, 2026.
“PTC delivered strong financial execution in Q3’26. Customers increasingly recognize the importance of our Intelligent Product Lifecycle vision. This coincides with the go-to-market and product strategy emphasis the company has undertaken over the past several quarters and results in a more durable business model that positions PTC for long-term success,” said Neil Barua, President and CEO, PTC.
“AI has become a key discussion point in customer conversations, and PTC is uniquely positioned to take advantage of this growing customer interest in AI. The need to modernize product data foundations in order to appropriately leverage AI is becoming clear to organizations, all while PTC establishes an intelligence layer to enable AI capabilities over our trusted solutions across CAD, PLM, ALM and SLM,” concluded Barua.
“Our Q3 results reflect a focused business model, as the company’s execution resulted in improved demand capture and customer adoption. Our strong financial performance in Q3 highlights the consistent commitment to excellence we strive for, resulting in our key metrics landing above the high end of our guidance. This performance to date and the visibility we have into our Q4 pipeline gives us confidence in raising the midpoint of our ARR guidance for the full year,” said Jen DiRico, CFO.
“Further, we remain committed to our capital allocation priorities, reinvesting in the business while identifying tuck-in acquisitions and opportunities to repurchase PTC stock. Specific to Q3, we identified what we viewed as a compressed valuation of our stock and acted accordingly by repurchasing more than two times what we previously targeted for the quarter,” concluded DiRico.
FY’26 financial guidance includes the following assumptions:
- 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.
- We expect churn to remain low.
- Related to free cash flow, we expect three divestiture-related items in FY’26 that are not expected to recur in future years:
- approximately $50 million of divestiture-related costs ($10 million in Q1’26, $5 million in Q2’26, $9 million in Q3’26, and approximately $26 million expected in Q4’26),
- approximately $100 million of divestiture-related cash taxes ($8 million in Q3’26 and approximately $92 million expected in Q4’26), and
- approximately $70 million of divestiture-related net free cash flow contribution due to the timing and structure of the divestiture ($30 million in Q1’26, $30 million in Q2’26, and $10 million in Q3’26).
- Capital expenditures are expected to be approximately $30 million, with $9 million in Q3’26 and approximately $11 million in Q4’26 that is not expected to recur in future years, primarily related to moving a major R&D center to a new office.
- FY’26 GAAP operating expenses are expected to increase approximately 4%, primarily due to the divestiture-related expenses. Apart from the divestiture-related expenses, GAAP and non-GAAP operating expenses are expected to be relatively flat, as investments to drive future growth are offset by net proceeds from the divestiture-related Transition Services Agreement and lower operating expenses due to divested costs.
- Cash interest payments are expected to be approximately $60 million to $65 million.
- Cash tax payments are expected to be approximately $230 million to $240 million, of which approximately $100 million is related to the Kepware and ThingWorx divestiture and not expected to recur in future years.
- Q4’26 GAAP and non-GAAP tax rates are expected to be approximately 20% to 25%.
- GAAP P&L results are expected to include the items below, netting to credits of approximately $80 million to $110 million, as well as their related tax effects:
- approximately $465 million of non-operating credits, primarily related to a gain on the sale of our Kepware and ThingWorx businesses, partially offset by
- approximately $230 million to $260 million related to stock-based compensation,
- approximately $80 million related to amortization of acquired intangible assets,
- approximately $40 million related to acquisition and transaction-related charges, and
- approximately $5 million related to impairment and other charges.
- On March 17, 2026, we entered into an accelerated share repurchase agreement, under which we used $375 million of cash and received 2.7 million shares during Q2’26 and Q3’26.
- In addition to the accelerated share repurchase agreement, during Q3’26 we repurchased 4.3 million additional shares of PTC stock in the open market for $525 million.
- In total, we expect to repurchase approximately $1.625 billion of our shares in FY’26 and expect a decrease in fully diluted shares to approximately 116 million shares for FY’26, compared to 121 million shares in FY’25.
