It has been about a month since the last earnings report for PTC Inc. (PTC Quick QuotePTC - Free Report) . Shares have added about 16.6% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is PTC Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

PTC's Q3 Earnings Miss Estimates

PTC reported third-quarter fiscal 2026 non-GAAP earnings of $1.58 per share, a 4% decline year over year. It missed the Zacks Consensus Estimate of $1.60. Management had estimated non-GAAP EPS in the range of $1.24-$1.78.

Revenues totaled $600 million, a 7% decline year over year (8% at constant currency or cc). The top line also missed the consensus estimate by 2.9%. Management projected revenues in the $580-$640 million range. According to management, historical financials were not restated after the Kepware and ThingWorx divestiture, as the sale did not qualify as discontinued operations.

Consequently, fiscal 2026 includes their contribution only until March 13, 2026, the date of the divestiture, while fiscal 2025 reflects a full year, affecting year-over-year comparisons for revenue, EPS and cash flow. Quarterly revenue was below the guidance midpoint solely due to the shorter duration of a single large contract expansion, while deal durations across the broader business remained stable.

Nonetheless, its Intelligent Product Lifecycle vision integrates AI across its major product portfolio, including Computer-Aided Design (CAD), Product Lifecycle Management (PLM), Application Lifecycle Management (ALM) and Service Lifecycle Management (SLM). PTC aims to build an intelligence layer across these platforms, allowing organizations to leverage trusted engineering and operational data more effectively. This strategy positions the company well as manufacturers increasingly seek AI-driven automation, predictive analytics and digital engineering capabilities.

Top-Line Details

Recurring revenues of $576 million dipped 6% year over year.

Perpetual licenses decreased 91% to $691,000.

Professional services revenues were $23.3 million, up 3.3% year over year.

Revenues by License, Support and Services

License revenues were $205.8 million, down 18.2% from the year-ago quarter figure.

Support and cloud services revenues of $370.9 million edged up 0.3% year over year.

Revenues by Product Group

In the fiscal third quarter, PLM revenues (59% of net sales) were $357 million, slipping 12% year over year.

CAD revenues (41%) were $243 million, up 1%.

ARR Model Continues to Strengthen

Annualized recurring revenues (ARR) were $2.4 billion, up 7% year over year. At cc, ARR was $2.5 billion, up 9.1%. PTC generated $60 million in net new ARR in the fiscal third quarter, led by solid demand across its go-to-market initiatives and encouraging early traction for its AI offerings. Backed by this momentum, PTC raised the midpoint of its full-year ARR growth guidance to 9.25%.

PTC raised and narrowed its full-year ARR guidance, with the midpoint implying $214 million in net new ARR, reflecting strong go-to-market execution and improved pipeline visibility. The company expects a significant acceleration in the fiscal fourth quarter, supported by healthy demand generation and the conversion of deferred ARR, with net new ARR (excluding Kepware and ThingWorx) projected at $79-$92 million.

In the fiscal third quarter, PLM and CAD ARR were $1,426 million and $986 million, rising 8% and 6% year over year, respectively.

Operating Details

Total operating expenses came in at $324 million, almost on par with the prior-year quarter.

Operating income on a non-GAAP basis was $248.5 million, down from $285.2 million in the prior-year quarter.

Operating margin on a non-GAAP basis crashed 290 bps year over year to 41%.

Balance Sheet & Cash Flow

As of June 30, 2026, cash and cash equivalents were $351.5 million compared with $439 million as of March 31, 2026.

Total debt, net of deferred issuance costs, was $1.4 billion as of June 30, 2026, compared with $1.2 billion as of March 31, 2026.

Cash provided by operating activities was $261 million compared with the prior-year quarter figure of $244 million. The free cash flow was $249 million compared with $242 million reported in the year-ago quarter.

PTC accelerated share repurchases in the fiscal third quarter, reflecting management's view that the stock was undervalued. After completing a $375 million accelerated share repurchase program and an additional $525 million of open-market buybacks, the company now expects to repurchase about $1.625 billion of shares in fiscal 2026. This is expected to reduce fully diluted shares outstanding from roughly 121 million to 116 million, supporting EPS growth and signaling confidence in PTC's long-term outlook.

PTC Elevates Fiscal 2026 Outlook

For the fourth quarter of fiscal 2026, PTC estimates revenues in the $630-$690 million band. Non-GAAP EPS is projected in the range of $1.63 to $2.21. Cash from operations is expected to be around $29 million. Free cash flow is forecasted to be roughly $15 million, with the year-over-year decline primarily reflecting capital gains tax outflows from the Kepware and ThingWorx sale.

Driven by an encouraging fiscal fourth quarter outlook, PTC lifted the midpoint of its fiscal 2026 revenue and non-GAAP EPS guidance to $2.69-$2.75 billion and $7.87-$8.42, respectively. The prior view was $2.58 billion to $2.82 billion and between $6.65 and $8.90 per share.

For fiscal 2026, PTC reiterated cash from operations projections to be around $880 million, indicating a rise of about 1% on a year-over-year basis. The free cash flow is still forecasted to be roughly $850 million, suggesting about a 1% fall.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 12.8% due to these changes.

VGM Scores

Currently, PTC Inc. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PTC Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

PTC Inc. belongs to the Zacks Computer - Software industry. Another stock from the same industry, Cadence Design Systems (CDNS Quick QuoteCDNS - Free Report) , has gained 4.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Cadence reported revenues of $1.58 billion in the last reported quarter, representing a year-over-year change of +24.2%. EPS of $2.11 for the same period compares with $1.65 a year ago.

For the current quarter, Cadence is expected to post earnings of $2.04 per share, indicating a change of +5.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Cadence has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.