PTC ANNOUNCES SECOND FISCAL QUARTER 2026 RESULTS

Rhea-AI Summary

PTC (NASDAQ: PTC) reported Q2 fiscal 2026 results for the quarter ended March 31, 2026: ARR excluding divested businesses $2,365M (CC $2,388M, +8.5%), revenue $774M (+22%), operating cash flow $321M (+14%), free cash flow $318M (+14%).

GAAP EPS was $4.98 (includes $463M divestiture gain); non-GAAP EPS was $2.69 (+50%). Company used $625M for repurchases in Q2 and targets ~$1.225B–$1.325B in FY'26; new $2B repurchase authorization for FY'27–FY'28. FY'26 ARR guidance remains 7.5%–9.5% CC growth.

Positive

• ARR (CC) of $2,388M, up 8.5% YoY
• Revenue $774M, up 22% YoY
• Operating cash flow $321M, up 14% YoY
• Non-GAAP operating margin 53%, +600 bps YoY
• Share repurchases: $625M used in Q2; targeting $1.225B–$1.325B in FY'26

Negative

• GAAP EPS of $4.98 includes a one-time $463M gain from the sale of Kepware and ThingWorx
• FY'26 includes approximately $110M of divestiture-related cash taxes that reduce free cash flow this year
• FY'26 revenue guidance range ($2,580M–$2,820M) implies a year-over-year change of roughly -6% to +3%

Key Figures

ARR ex-divestitures: $2,365M (11% YoY) CC ARR growth: $2,388M (8.5% YoY) Revenue: $774M (22% YoY) +5 more

8 metrics

ARR ex-divestitures $2,365M (11% YoY) As reported ARR excluding Kepware and ThingWorx, Q2’26 vs Q2’25

CC ARR growth $2,388M (8.5% YoY) Constant currency ARR ex-divested businesses, Q2’26 vs Q2’25

Revenue $774M (22% YoY) Q2’26 revenue vs Q2’25; 15% YoY on constant currency basis

Operating cash flow $321M (14% YoY) Q2’26 operating cash flow vs Q2’25

Free cash flow $318M (14% YoY) Q2’26 free cash flow vs Q2’25

GAAP EPS $4.98 (270% YoY) Q2’26 EPS vs $1.35 in Q2’25, includes $463M divestiture gain

Non-GAAP EPS $2.69 (50% YoY) Q2’26 non-GAAP EPS vs $1.79 in Q2’25

Share repurchases FY’26 $1.225B–$1.325B Targeted total FY’26 repurchases; ~$625M already used in Q2’26

Market Reality Check

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Technical Price at 137.55 trades below the 200-day MA of 177.31 and sits nearer the 52-week low of 130.89 than the high of 219.69.

Peers on Argus

Peer moves are mixed: ZM up 1.95% and TYL, SSNC modestly positive, while GWRE an...

Peer moves are mixed: ZM up 1.95% and TYL, SSNC modestly positive, while GWRE and HUBS are down, indicating this earnings release is trading against a non-directional sector backdrop.

Historical Context

4 past events · Latest: May 05 (Positive)

Pattern 4 events

Date	Event	Sentiment	Move	Catalyst
May 05	Customer deployment win	Positive	-0.5%	Hamilton Medical adopts PTC Codebeamer to replace legacy ALM system.
Apr 28	Product AI launch	Positive	+0.5%	Launch of Windchill AI Assistant adding generative AI to PLM platform.
Apr 22	Trade show showcase	Positive	+0.5%	Showcase of Bobcat’s Intelligent Product Lifecycle use at Hannover Messe.
Apr 13	Earnings date notice	Neutral	+0.6%	Announcement of scheduled Q2’26 earnings release and conference call.

Pattern Detected

Recent product and partnership news has generated small, sometimes negative, price reactions, suggesting limited short-term sensitivity to operational updates.

Recent Company History

Over the last month, PTC has highlighted its Intelligent Product Lifecycle strategy through customer collaborations and event showcases, including a Bobcat demo at Hannover Messe and a Codebeamer win at Hamilton Medical. It also launched the Windchill AI Assistant to deepen AI integration in PLM. An earlier notice set expectations for the Q2’26 earnings release on May 6. Against this backdrop, the latest Q2’26 results add concrete financial evidence of growth and cash generation supporting that strategic narrative.

Market Pulse Summary

This announcement details solid Q2’26 performance, including revenue of $774M, constant-currency ARR...

Analysis

This announcement details solid Q2’26 performance, including revenue of $774M, constant-currency ARR growth of 8.5% excluding divested businesses, and free cash flow of $318M. It also outlines FY’26 guidance and a sizeable share repurchase framework. Investors may contextualize these results alongside recent AI product launches and portfolio reshaping, while monitoring execution against ARR targets, capital return pacing, and the impact of divestiture-related gains and expenses on reported earnings.

Key Terms

free cash flow, constant currency, arr, non-gaap, +3 more

7 terms

free cash flow financial

"Operating and free cash flow growth of 14%"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

constant currency financial

"Constant currency ARR growth of 8.5% excluding divested businesses"

Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.

arr financial

"As reported ARR excluding divested businesses 2 | $2,365 | $2,136 | 11 %"

ARR, or Annual Recurring Revenue, is the predictable income a business expects to earn each year from ongoing customer subscriptions or contracts. It’s like a steady paycheck that shows the company's ability to generate consistent revenue over time, helping investors assess its stability and growth potential. ARR provides a clear picture of how well a company is performing in building long-term customer relationships.

non-gaap financial

"Non-GAAP operating margin 4 | 53 % | 47 % | 600 bps"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

accelerated share repurchase financial

"we entered into an accelerated share repurchase agreement, under which we used $375 million"

An accelerated share repurchase is a deal where a company hires a bank to buy back a large block of its own stock immediately on the open market, with the bank later settling the exact number of shares over time. For investors it matters because the immediate reduction in shares outstanding can raise per‑share earnings and often supports the stock price, but it also uses company cash or borrowing and can change liquidity and future growth funding.

stock-based compensation financial

"Earnings per share | $7.21 to $9.70 | $0.68 to $1.25 Stock-based compensation | $2.22 to $1.97"

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

asc 606 financial

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

A U.S. accounting standard that sets consistent rules for when and how companies record revenue from contracts with customers, focusing on the transfer of promised goods or services. It matters to investors because it affects the timing and amount of reported sales and profit—like deciding whether a contractor can count payment when a job starts, progresses, or finishes—so it improves comparability and helps assess a company's true economic performance.

AI-generated analysis. Not financial advice.

Strategic focus on Intelligent Product Lifecycle vision

• Solid execution in Q2'26
  • Constant currency ARR growth of 8.5% excluding divested businesses
  • Operating and free cash flow growth of 14%
• ~$625 million of cash used for repurchases in Q2'26; targeting repurchases of ~$1.225 billion to ~$1.325 billion in FY'26; New $2 billion share repurchase authorization effective for FY'27-FY'28.

BOSTON, May 6, 2026 /PRNewswire/ -- PTC (NASDAQ: PTC) today reported financial results for its second fiscal quarter ended March 31, 2026.

"PTC delivered solid financial results in Q2'26. Our go-to-market transformation continues to gain traction and our Intelligent Product Lifecycle vision is resonating with customers. The execution and momentum we've established over the past several quarters give us confidence that we are building a more durable, multi-year growth engine," said Neil Barua, President and CEO, PTC.

"Customer interest in AI is growing, and our discussions reinforce how AI is driving momentum in PTC's business. Customers are modernizing their product data foundations with PTC's systems of record to apply AI. PTC is also establishing AI as a new intelligence layer over our systems to enable enterprise transformation," concluded Barua.

Second Fiscal Quarter 2026 Key Operating and Financial Metrics¹

$ in millions, except per share amounts % rounded to the nearest half	Q2'26	Q2'25	YoY Change		Q2'26 Guidance
As reported ARR excluding divested businesses2	$2,365	$2,136	11 %
Constant currency ARR excluding divested businesses (FY'26 Plan FX rates3)	$2,388	$2,200	8.5 %		8% to 8.5% growth
Operating cash flow	$321	$281	14 %		$315 to $320
Free cash flow	$318	$279	14 %		$310 to $315
Revenue4	$774	$636	22%5		$685 to $745
Operating margin4	38 %	35 %	310 bps
Non-GAAP operating margin4	53 %	47 %	600 bps
Earnings per share4	$4.986	$1.357	270 %		$4.09 to $4.74
Non-GAAP earnings per share4	$2.69	$1.79	50 %		$1.87 to $2.47

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 As reported ARR excluding divested businesses excludes Kepware and ThingWorx ARR from Q2'25 to facilitate period-to-period comparisons following the divestiture of those businesses in Q2'26. ARR grew 3% year over year on an as reported basis in Q2'26, reflecting the divestiture of Kepware and ThingWorx.

3 On a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods. Constant currency ARR excluding divested businesses excludes Kepware and ThingWorx ARR from Q2'25.

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

5 In Q2'26, revenue grew 15% year over year on a constant currency basis.

6 Q2'26 GAAP EPS included a $463 million gain on the sale of our Kepware and ThingWorx business, partially offset by $27 million of divestiture-related expenses and a $102 million tax impact.

7 Q2'25 GAAP EPS included a non-cash tax benefit of $4.2 million or $0.03, due to the release of a tax reserve related to prior years.

"We are pleased to report our first quarter as a more focused company, aligned to accelerate our Intelligent Product Lifecycle vision. Our solid financial results in Q2 demonstrate the discipline and consistency we remain committed to, and we are on track to deliver on our full year guidance. In addition, we are executing on our capital return program: using $625 million for share repurchases in Q2, targeting $1.2 billion to $1.3 billion of repurchases in FY'26, and announcing a new $2 billion program, which will extend through September 30, 2028," said Jen DiRico, CFO.

Full Fiscal Year 2026 and Third Fiscal Quarter Guidance

$ in millions, except per share amounts % rounded to the nearest half	Previous FY'26 Guidance	FY'26 Guidance3	FY'26 YoY Growth Guidance		Q3'26 Guidance5
Constant currency ARR excluding divested businesses (FY'26 Plan FX rates)1	7.5% to 9.5% growth	7.5% to 9.5% growth	7.5% to 9.5%		8% to 9% growth
Operating cash flow	~$880	~$880	~1%4		$255 to $260
Free cash flow2	~$850	~$850	~(1)%4		$240 to $245
Revenue	$2,540 to $2,805	$2,580 to $2,820	(6)% to 3%4		$580 to $640
Earnings per share	$6.94 to $9.66	$7.21 to $9.70	19% to 60%4		$0.68 to $1.25
Non-GAAP earnings per share2	$6.36 to $8.84	$6.65 to $8.90	(16)% to 12%4		$1.24 to $1.78

1 Excludes Kepware and ThingWorx ARR from Q2'25 given the divestiture of those businesses in Q2'26. On a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.

2 Refer to the GAAP to non-GAAP reconciliation tables below.

3 FY'26 cash flow guidance includes approximately $40 million of divestiture-related costs and approximately $110 million of divestiture-related cash taxes, partially offset by approximately $70 million of divestiture-related net free cash flow contribution, all of which are not expected to recur in future years. Also, FY'26 free cash flow guidance 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. FY'26 GAAP EPS guidance includes a $463 million gain on the sale of our Kepware and ThingWorx businesses, partially offset by approximately $140 million of divestiture-related expenses and taxes.

4 FY'26 includes Kepware and ThingWorx only until the divestiture on March 13, 2026; FY'25 includes Kepware and ThingWorx.

5 Q3'26 cash flow guidance includes approximately $5 million of divestiture-related costs and approximately $5 million of divestiture-related cash taxes, offset by approximately $10 million of divestiture-related net free cash flow contribution, all of which are not expected to recur in future years. Also, Q3'26 free cash flow guidance includes approximately $10 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	Q3'26 Guidance
Operating cash flow	~$880	$255 to $260
Capital expenditures	~$30	~$15
Free cash flow	~$850	$240 to $245

Reconciliation of EPS Guidance to Non-GAAP EPS Guidance

	FY'26 Guidance	Q3'26 Guidance
Earnings per share	$7.21 to $9.70	$0.68 to $1.25
Stock-based compensation	$2.22 to $1.97	$0.58 to $0.49
Amortization of acquired intangible assets	~$0.69	~$0.17
Acquisition and transaction-related charges	~$0.32	~$0.00
Non-operating credits, net	~($3.98)	~$0.00
Income tax adjustments	$0.19 to $0.20	($0.19) to ($0.13)
Non-GAAP Earnings per share	$6.65 to $8.90	$1.24 to $1.78

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.
• We expect the majority of our cash generation to occur in the first half of our fiscal year, primarily due to the timing of cash inflows and outflows.
• Related to free cash flow, we expect three divestiture-related items in FY'26 that are not expected to recur in future years:
  • Approximately $40 million of divestiture-related costs ($10 million in Q1'26, $5 million in Q2'26, approximately $5 million expected in Q3'26, and approximately $20 million expected in Q4'26)
  • Approximately $110 million of divestiture-related cash taxes (approximately $5 million expected in Q3'26 and approximately $105 million expected in Q4'26).
  • 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 approximately $10 million expected in Q3'26).
• Capital expenditures are expected to be approximately $30 million, with approximately $10 million per quarter in both Q3'26 and Q4'26 that is not expected to recur in future years, related to moving a major R&D center to a new office.
• FY'26 GAAP operating expenses are expected to increase approximately 3%, 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 $50 million to $70 million.
• Cash tax payments are expected to be approximately $240 million to $260 million, of which approximately $110 million is related to the Kepware and ThingWorx divestiture and not expected to recur in future years.
• 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 $90 million to $120 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, and
  • approximately $35 million related to acquisition and transaction-related charges.
• On March 17, 2026, we entered into an accelerated share repurchase agreement, under which we used $375 million of cash and received 1.9 million shares up front, representing 80% of the initial estimate of shares to be repurchased (based on the closing price of PTC common stock on March 16, 2026); the final calculation of shares repurchased will be based on the volume weighted average price between March 18, 2026 and the final settlement date.
• In total, we expect to repurchase approximately $1.225 billion to $1.325 billion of our shares in FY'26. In Q3'26, we intend to use approximately $250 million of cash to repurchase common stock and expect a decrease in fully diluted shares to approximately 115 million to 116 million shares, compared to 120 million shares in Q3'25.

PTC's Second Fiscal Quarter Results Conference Call

PTC will host a conference call to discuss results at 5:00 pm ET on Wednesday, May 6, 2026. To participate in the live conference call, dial (800) 715-9871 or (646) 307-1963, provide the passcode 24559, and press # or log in to the webcast, available on PTC's Investor Relations website. A replay will also be available.

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 (credits), net 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:

• 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.
• 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.
• 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.
• 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).

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.

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future operating, financial and growth expectations, potential stock repurchases, and the anticipated benefits of the sale of the Kepware and ThingWorx businesses (the "divestiture") are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include: the macroeconomic and/or global manufacturing climates may not improve or may deteriorate due to, among other factors, the effects of import tariffs, threats of additional and reciprocal import tariffs, global trade and geopolitical tensions and uncertainty, including the recent military conflict in Iran, volatile foreign exchange rates, high interest rates or increases in interest rates, inflation, and tightening of credit standards and availability, any of which could cause customers to delay or reduce purchases of new software, adopt competing software solutions, reduce the number of subscriptions they carry, or delay payments to us, which would adversely affect our ARR (Annual Run Rate) and/or financial results and cash flow and growth; our investments in our software solutions, including the integration of artificial intelligence (AI) capabilities into our software solutions, may not drive expansion of those solutions and/or generate the ARR and/or cash flow we expect if those capabilities are not made available when or as we expect, if customers are slower to adopt those solutions than we expect, or if customers adopt competing solutions; customers may not build the product data foundations essential for the AI-driven transformation of their business when or as we expect, which could adversely affect our ARR and/or financial results and cash flow and growth; our go-to-market realignment and related initiatives may not generate the ARR and/or financial results or cash flow when or as we expect; the proceeds we receive under the Transition Services Agreement entered into in connection with the divestiture may be lower than expected and/or may not offset our expenses and/or the cash flow impact of the divestiture to the extent expected; the divestiture and/or performance of the Transition Services Agreement may disrupt our business to a greater extent than we expect; other uses of cash or our credit facility limits could limit or preclude the return of excess cash to shareholders by way of share repurchases, or could change the amount and timing of any share repurchases; and foreign exchange rates may differ materially from those we expect. In addition, our assumptions concerning our future GAAP and non-GAAP effective income tax rates are based on estimates and other factors that could change, including changes to tax laws in the U.S. and other countries and the geographic mix of our revenue, expenses, and profits. Other risks and uncertainties that could cause actual results to differ materially from those projected are described from time to time in reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

About PTC (NASDAQ: PTC)

PTC (NASDAQ: PTC) is a global software company that enables industrial and manufacturing companies to digitally transform how they engineer, manufacture, and service the physical products that the world relies on. Headquartered in Boston, Massachusetts, PTC employs over 7,000 people and supports more than 30,000 customers globally. For more information, please visit www.ptc.com.

PTC.com           @PTC           Blogs

PTC Investor Relations Contact
Matt Shimao
SVP, Investor Relations
mshimao@ptc.com
investor@ptc.com

PTC Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
Revenue:
Recurring revenue	$	743,376			$	601,549			$	1,400,656			$	1,125,860
Perpetual license		6,942				5,836				12,572				15,241
Professional services		23,985				28,981				46,900				60,393
Total revenue (1)		774,303				636,366				1,460,128				1,201,494
Cost of revenue (2)		113,618				106,262				231,364				218,059
Gross margin		660,685				530,104				1,228,764				983,435
Operating expenses:
Sales and marketing (2)		140,093				125,031				280,984				282,563
Research and development (2)		124,132				111,023				244,116				226,539
General and administrative (2)		88,646				54,993				162,647				108,312
Amortization of acquired intangible assets		12,012				11,380				24,084				22,820
Impairment and other charges, net		-				4,213				-				4,213
Total operating expenses		364,883				306,640				711,831				644,447
Operating income		295,802				223,464				516,933				338,988
Other income (expense), net		450,997				(18,215)				432,841				(40,585)
Income before income taxes		746,799				205,249				949,774				298,403
Provision for income taxes		156,076				42,605				192,533				53,527
Net income	$	590,723			$	162,644			$	757,241			$	244,876
Earnings per share:
Basic	$	5.00			$	1.35			$	6.38			$	2.04
Weighted average shares outstanding		118,185				120,177				118,764				120,210
Diluted	$	4.98			$	1.35			$	6.35			$	2.02
Weighted average shares outstanding		118,553				120,854				119,277				121,000

(1) See supplemental financial data for revenue by license, support and cloud services, and professional services.

(2) See supplemental financial data for additional information about stock-based compensation.

PTC Inc.
SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION
(in thousands, except per share data)
Revenue by license, support and services is as follows:
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
License revenue (1)	$	362,732			$	254,395			$	632,386			$	427,149
Support and cloud services revenue		387,586				352,990				780,842				713,952
Professional services revenue		23,985				28,981				46,900				60,393
Total revenue	$	774,303			$	636,366			$	1,460,128			$	1,201,494
(1) License revenue includes the portion of subscription revenue allocated to license.
The amounts in the income statement include stock-based compensation as follows:
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
Cost of revenue		7,139			$	5,507			$	13,133			$	11,420
Sales and marketing		20,032				13,545				35,230				31,613
Research and development		18,157				14,391				34,072				30,546
General and administrative		23,271				18,069				44,031				33,784
Total stock-based compensation	$	68,599			$	51,512			$	126,466			$	107,363

PTC Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands, except per share data)
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
GAAP gross margin	$	660,685			$	530,104			$	1,228,764			$	983,435
Stock-based compensation		7,139				5,507				13,133				11,420
Amortization of acquired intangible assets included in cost of revenue		7,768				8,131				15,668				16,431
Non-GAAP gross margin	$	675,592			$	543,742			$	1,257,565			$	1,011,286
GAAP operating income	$	295,802			$	223,464			$	516,933			$	338,988
Stock-based compensation		68,599				51,512				126,466				107,363
Amortization of acquired intangible assets		19,780				19,511				39,752				39,251
Acquisition and transaction-related charges		26,472				610				37,135				825
Impairment and other charges, net		-				4,213				-				4,213
Non-GAAP operating income (1)	$	410,653			$	299,310			$	720,286			$	490,640
GAAP net income	$	590,723			$	162,644			$	757,241			$	244,876
Stock-based compensation		68,599				51,512				126,466				107,363
Amortization of acquired intangible assets		19,780				19,511				39,752				39,251
Acquisition and transaction-related charges		26,472				610				37,135				825
Impairment and other charges, net		-				4,213				-				4,213
Non-operating credits, net (2)		(464,602)				-				(463,852)				-
Income tax adjustments (3)		78,374				(21,699)				53,277				(46,390)
Non-GAAP net income	$	319,346			$	216,791			$	550,019			$	350,138
GAAP diluted earnings per share	$	4.98			$	1.35			$	6.35			$	2.02
Stock-based compensation		0.58				0.43				1.06				0.89
Amortization of acquired intangibles		0.17				0.16				0.33				0.32
Acquisition and transaction-related charges		0.22				0.01				0.31				0.01
Impairment and other charges, net		-				0.03				-				0.03
Non-operating credits, net (2)		(3.92)				-				(3.89)				-
Income tax adjustments (3)		0.66				(0.18)				0.45				(0.38)
Non-GAAP diluted earnings per share	$	2.69			$	1.79			$	4.61			$	2.89
(1) Operating margin impact of non-GAAP adjustments:
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
GAAP operating margin		38.2	%			35.1	%			35.4	%			28.2	%
Stock-based compensation		8.9	%			8.1	%			8.7	%			8.9	%
Amortization of acquired intangibles		2.6	%			3.1	%			2.7	%			3.3	%
Acquisition and transaction-related charges		3.4	%			0.1	%			2.5	%			0.1	%
Impairment and other charges, net		0.0	%			0.7	%			0.0	%			0.4	%
Non-GAAP operating margin		53.0	%			47.0	%			49.3	%			40.8	%

(2) In Q2'26, we recognized gains of $462.6 million on the sale of our Kepware and ThingWorx businesses and $2.0 million related to the finalization of contingent consideration associated with the FY'22 sale of a portion of our PLM services business. In Q1'26, we recognized a $0.8 million financing charge related to a debt commitment agreement associated with our anticipated divestiture of the Kepware and ThingWorx businesses.

(3) Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above. Additionally, in Q2'25, adjustments exclude a $4.9 million benefit related to the tax impact of tax reserves related to prior years in foreign jurisdictions, of which $4.2 million was a non-cash benefit. In the first six months of FY'25, adjustments exclude a $10.4 million benefit related to the tax impact of tax reserves related to prior years in foreign jurisdictions.

PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
	March 31,				September 30,
	2026				2025
ASSETS
Cash and cash equivalents	$	439,112			$	184,415
Accounts receivable, net		852,643				1,001,085
Property and equipment, net		54,747				60,843
Goodwill and acquired intangible assets, net		4,186,245				4,317,979
Lease assets, net		125,274				114,974
Other assets		879,239				937,876
Total assets	$	6,537,260			$	6,617,172
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue	$	771,050			$	827,065
Debt, net of deferred issuance costs		1,197,972				1,197,434
Lease obligations		183,080				172,433
Other liabilities		525,285				594,011
Stockholders' equity		3,859,873				3,826,229
Total liabilities and stockholders' equity	$	6,537,260			$	6,617,172

PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
Cash flows from operating activities:
Net income	$	590,723			$	162,644			$	757,241			$	244,876
Stock-based compensation		68,599				51,512				126,466				107,363
Depreciation and amortization		24,692				25,440				49,990				51,263
Amortization of right-of-use lease assets		8,898				8,237				17,728				16,165
Gain on divestiture of businesses		(464,602)				-				(464,602)				-
Operating lease liability		1,044				1,254				12,414				(2,596)
Accounts receivable		(56,574)				(3,381)				135,414				127,972
Accounts payable and accruals		6,544				(35,370)				43,809				(50,706)
Deferred revenue		63,742				62,342				(48,648)				34,532
Income taxes		119,925				19,093				108,888				5,565
Other		(42,074)				(10,462)				(148,038)				(14,696)
Net cash provided by operating activities		320,917				281,309				590,662				519,738
Capital expenditures		(2,670)				(2,808)				(5,011)				(5,575)
Divestiture of businesses(1)		523,306			-					523,306				-
Borrowings (payments) on debt, net(2)		-				(155,000)				-				(360,125)
Repurchases of common stock		(626,125)				(75,000)				(826,159)				(150,000)
Net proceeds associated with issuance of common stock		13,162				13,307				13,162				13,307
Payments of withholding taxes in connection with vesting of stock- based awards		(9,783)				(10,082)				(52,816)				(52,871)
Settlement of net investment hedges		13,506				(16,048)				16,706				12,260
Other financing & investing activities		-				-				(1,007)				(1,410)
Foreign exchange impact on cash		(2,937)				3,153				(4,146)				(6,048)
Net change in cash, cash equivalents, and restricted cash		229,376				38,831				254,697				(30,724)
Cash, cash equivalents, and restricted cash, beginning of period		210,309				196,911				184,988				266,466
Cash, cash equivalents, and restricted cash, end of period	$	439,685			$	235,742			$	439,685			$	235,742
Supplemental cash flow information:
Cash paid for interest	$	20,213			$	29,753			$	31,312			$	45,151

(1) In Q2'26, we sold our ThingWorx and Kepware businesses.

(2) In Q2'25, net repayments include borrowings on our credit facility revolver to fund the $500 million bond repayment in February.

PTC Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands)
	Three Months Ended								Six Months Ended
	March 31,				March 31,				March 31,				March 31,
	2026				2025				2026				2025
Cash provided by operating activities	$	320,917			$	281,309			$	590,662			$	519,738
Capital expenditures		(2,670)				(2,808)				(5,011)				(5,575)
Free cash flow	$	318,247			$	278,501			$	585,651			$	514,163

 

View original content:https://www.prnewswire.com/news-releases/ptc-announces-second-fiscal-quarter-2026-results-302764631.html

SOURCE PTC Inc.

FAQ

What were PTC's reported Q2 2026 revenue and ARR (PTC)?

PTC reported $774M in revenue and ARR excluding divested businesses of $2,365M. According to the company, constant currency ARR was $2,388M, an 8.5% increase year over year.

How much cash did PTC use for share repurchases in Q2 2026 and what are FY'26 targets (PTC)?

PTC used $625M for share repurchases in Q2 2026 and expects to repurchase about $1.225B–$1.325B in FY'26. According to the company, it also authorized a new $2B program for FY'27–FY'28.

What drove PTC's Q2 2026 GAAP EPS of $4.98 (PTC)?

GAAP EPS of $4.98 included a $463M gain from selling Kepware and ThingWorx, partially offset by divestiture expenses and tax effects. According to the company, that gain materially increased the GAAP EPS figure.

What is PTC's FY'26 ARR and revenue guidance range (PTC)?

PTC reaffirmed FY'26 constant currency ARR guidance of 7.5%–9.5%. For revenue, the company guided to $2,580M–$2,820M, which implies approximately a -6% to +3% year-over-year change.

How did PTC's operating and free cash flow perform in Q2 2026 (PTC)?

Operating cash flow was $321M and free cash flow was $318M, each up about 14% year over year. According to the company, cash generation strengthened while reflecting divestiture-related items this fiscal year.