Strategic focus on Intelligent Product Lifecycle vision
BOSTON, Nov. 4, 2026 /PRNewswire/ -- PTC (NASDAQ: PTC) today reported financial results for its fourth fiscal quarter and full fiscal year ended September 30, 2026.
Fourth Fiscal Quarter and Full Fiscal Year 2026 Key Operating and Financial Metrics1
$ in millions, except per share amounts
Q4'26
Q4'25
YoY Change
As reported ARR excluding divestedbusinesses2
$2,508
$2,320
8 %
Constant currency ARR excluding divestedbusinesses (FY'26 Plan FX rates3)
$2,545
9.7 %
Operating cash flow
$475
$104
(55 %)
Free cash flow
$385
$100
(63 %)
Revenue4
$673
$894
(25%)6
Operating margin4
32 %
49 %
(1,690 bps)
Non-GAAP operating margin4
46 %
59 %
(1,320 bps)
Earnings per share4
$1.44
$2.88
(50 %)
Non-GAAP earnings per share4
$2.03
$3.41
(40 %)
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 Q4'25 to facilitate period-to-period comparisons following the divestiture of those businesses in Q2'26. ARR increased 1% year over year on an as reported basis in Q4'26.
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 Q4'25.
4
Revenue and, as a result, operating margin and earnings per share are impacted under ASC 606.
5
Q4'26 cash flow included approximately $24 million of divestiture-related costs and approximately $75 million of divestiture-related cash taxes, all of which are not expected to recur in future years. Also, Q4'26 free cash flow included approximately $5 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.
6
In Q4'26, revenue declined 24% year over year on a constant currency basis.
FY'26
FY'25
$8992
$8683
4 %
$8732
$8573
2 %
Revenue1
$2,733
$2,739
(0%)4
Operating margin1
33 %
36 %
(310 bps)
Non-GAAP operating margin1
47 %
48 %
(80 bps)
Earnings per share1
$8.93
$6.08
Non-GAAP earnings per share1
$8.24
$7.94
FY'26 cash flow included approximately $48 million of divestiture-related costs and approximately $83 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 included approximately $14 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'25 cash flow absorbed approximately $20 million of outflows related to our go-to-market realignment.
In FY'26, revenue declined 2% year over year on a constant currency basis.
As previously announced on October 5th, 2026, PTC entered into a definitive agreement to be acquired by Schneider Electric. In light of the proposed transaction, PTC is suspending quarterly earnings conference calls and is no longer providing quarterly or annual guidance.
Important Information About Our Operating and Non-GAAP Financial Measures
Non-GAAP Financial MeasuresWe 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 MeasureARR: 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 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.
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 ContactMichael Maguire, CFAVP, Investor Relationsinvestor@ptc.com
PTC Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended
Twelve Months Ended
September 30,
2026
2025
Revenue:
Recurring revenue
$
645,247
861,071
2,621,914
2,600,514
Perpetual license
3,881
8,371
17,144
31,375
Professional services
24,126
24,353
94,373
107,337
Total revenue(1)
673,254
893,795
2,733,431
2,739,226
Cost of revenue(2)
115,860
116,899
456,808
444,983
Gross margin
557,394
776,896
2,276,623
2,294,243
Operating expenses:
Sales and marketing(2)
144,357
142,197
561,628
566,516
Research and development(2)
120,122
114,507
479,946
457,693
General and administrative(2)
62,155
63,601
284,775
226,058
Amortization of acquired intangible assets
11,976
11,592
48,051
45,948
Impairment and other charges, net
6,161
11,430
15,643
Total operating expenses
344,771
343,327
1,380,561
1,311,858
Operating income
212,623
433,569
896,062
982,385
Other income (expense), net
(17,594)
(5,471)
401,181
(62,208)
Income before income taxes
195,029
428,098
1,297,243
920,177
Provision for income taxes
37,766
80,305
263,959
186,180
Net income
157,263
347,793
1,033,284
733,997
Earnings per share:
Basic
1.45
2.91
8.97
6.12
Weighted average shares outstanding
108,825
119,714
115,240
120,005
Diluted
1.44
2.88
8.93
6.08
109,401
120,674
115,716
120,777
(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.
SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION
Revenue by license, support and services is as follows:
September30,
License revenue(1)
267,028
484,081
1,105,238
1,162,709
Support and cloud services revenue
382,100
385,361
1,533,820
1,469,180
Professional services revenue
Total revenue
(1) License revenue includes the portion of subscription revenue allocated to license.
The amounts in the income statement include stock-based compensation as follows:
Cost of revenue
5,932
5,979
24,668
22,690
Sales and marketing
19,276
15,078
70,649
61,750
Research and development
16,556
16,785
65,671
65,119
General and administrative
24,480
16,968
91,104
66,646
Total stock-based compensation
66,244
54,810
252,092
216,205
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
GAAP gross margin
Stock-based compensation
Amortization of acquired intangible assets included in cost of revenue
7,838
8,219
31,259
32,828
Non-GAAP gross margin
571,164
791,094
2,332,550
2,349,761
GAAP operating income
19,814
19,811
79,310
78,776
Acquisition and transaction-related charges
2,497
6,694
42,519
9,116
Non-GAAP operating income(1)
307,339
526,314
1,276,144
1,302,125
GAAP net income
Non-operating credits, net(2)
(1,298)
(13,100)
(465,150)
Income tax adjustments(3)
(28,460)
(16,183)
5,464
(81,833)
Non-GAAP net income
222,221
411,255
953,680
958,804
GAAP diluted earnings per share
0.61
0.45
2.18
1.79
Amortization of acquired intangibles
0.18
0.16
0.69
0.65
0.02
0.06
0.37
0.08
0.09
0.05
0.13
(0.01)
(0.11)
(4.02)
(0.26)
(0.13)
(0.68)
Non-GAAP diluted earnings per share
2.03
3.41
8.24
7.94
(1) Operating margin impact of non-GAAP adjustments:
GAAP operating margin
31.6
%
48.5
32.8
35.9
9.8
6.1
9.2
7.9
2.9
2.2
0.4
0.7
1.6
0.3
0.9
1.3
0.2
0.6
Non-GAAP operating margin
45.6
58.9
46.7
47.5
(2) In FY'26, we recognized gains of $463.9 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, offset by a $0.8 million financing charge related to a debt commitment agreement associated with the divestiture. In FY'25, we recognized a $13.1 million gain related to contingent consideration earned upon the achievement of performance milestones associated with the FY'22 sale of a portion of our PLM services business.
(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 FY'25, adjustments exclude a $10.4 million benefit related to the tax impact of tax reserves related to prior years in foreign jurisdictions.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
Cash and cash equivalents
232,852
184,415
Accounts receivable, net
1,107,131
1,001,085
Property and equipment, net
66,580
60,843
Goodwill and acquired intangible assets, net
4,139,199
4,317,979
Lease assets, net
125,555
114,974
Other assets
1,041,239
937,876
Total assets
6,712,556
6,617,172
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue
821,091
827,065
Debt, net of deferred issuance costs
1,609,763
1,197,434
Lease obligations
187,068
172,433
Other liabilities
682,452
594,011
Stockholders' equity
3,412,182
3,826,229
Total liabilities and stockholders' equity
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Depreciation and amortization
24,381
25,701
98,561
102,504
Amortization of right-of-use lease assets
8,304
8,453
34,027
32,912
Gain on divestiture of businesses
(465,900)
Operating lease liability
2,348
(5,476)
16,670
(10,345)
Accounts receivable
(285,296)
(294,609)
(127,116)
(121,052)
Accounts payable and accruals
(7,221)
30,219
197,364
19,890
109,480
54,225
4,816
37,753
Income taxes
(66,017)
41,164
50,067
63,573
Other
39,130
(145,150)
(195,256)
(194,641)
Net cash provided by operating activities
47,318
104,030
898,609
867,696
Capital expenditures
(9,657)
(3,546)
(25,948)
(11,008)
Divestiture of businesses(1)
8,176
-
531,482
Borrowings (payments) on debt, net(2)
186,250
(36,250)
411,250
(552,958)
Repurchases of common stock
(298,720)
(75,011)
(1,624,910)
(299,998)
Net proceeds associated with issuance of common stock
12,308
12,755
25,470
26,062
Payments of withholding taxes in connection with vesting of stock-based awards
(5,958)
(8,444)
(73,301)
(80,205)
Settlement of net investment hedges
(8,768)
(6,193)
17,781
(20,753)
Contribution to solar energy equity investment
(50,146)
(100,292)
Other financing & investing activities
(4,580)
(7,942)
Foreign exchange impact on cash
595
(2,247)
(7,124)
(2,372)
Net change in cash, cash equivalents, and restricted cash
(118,602)
(14,906)
48,437
(81,478)
Cash, cash equivalents, and restricted cash, beginning of period
352,027
199,894
184,988
266,466
Cash, cash equivalents, and restricted cash, end of period
233,425
Supplemental cash flow information:
Cash paid for interest
21,693
18,767
62,236
77,828
(1) In Q2'26, we sold our ThingWorx and Kepware businesses.
(2) In FY'25, net repayments include borrowings on our credit facility revolver to fund the $500 million bond repayment in February.
Cash provided by operating activities
37,661
100,484
872,661
856,688
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SOURCE PTC Inc.