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PTC's Q4 earnings of $2.03 per share beat estimates by 1.5%, while revenues topped expectations by 2.4%.
PTC's Q4 revenues declined 25% year over year, while ARR, excluding divested businesses, grew 8% to $2.51B.
PTC suspended financial guidance following its acquisition agreement with Schneider Electric in October 2026.
PTC Inc. (PTC - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate of $2 by 1.5%. However, the bottom line declined 40% year over year from $3.41.
Revenues totaled $673.25 million, surpassing the consensus estimate of $657.6 million by 2.4%, but declining 25% year over year (down 24% at constant currency or cc). Nonetheless, annual run rate (“ARR”), excluding divested businesses, increased 8% year over year, highlighting continued momentum in PTC's recurring business.
On Oct. 5, 2026, PTC entered into a definitive agreement to be acquired by Schneider Electric. In light of the proposed transaction, the company suspended quarterly earnings conference calls and discontinued quarterly and annual financial guidance.
Recurring revenues were $645.25 million, declining 25.1% year over year from $861.1 million.
Perpetual license revenues fell 53.6% to $3.88 million, while professional services revenues dipped 0.9% to $24.1 million.
The year-over-year revenue comparison was affected by the divestiture of the Kepware and ThingWorx businesses in the second quarter of fiscal 2026.
Revenues by License, Support and Services
License revenues were $267 million, declining 44.8% from $484.1 million in the year-ago quarter. The metric includes the portion of subscription revenues allocated to licenses.
Support and cloud services revenues totaled $382.1 million, down 0.8% year over year from $385.4 million.
PTC's ARR Growth Remains Encouraging
As-reported ARR, excluding Kepware and ThingWorx, reached $2.51 billion, increasing 8% year over year from $2.32 billion. At constant currency, ARR excluding the divested businesses rose 9.7% to $2.55 billion.
On an as-reported basis, including the divested businesses in the prior-year comparison, ARR increased 1% year over year.
PTC's ARR represents the annualized value of active subscription software, software-as-a-service, hosting and support contracts. The metric is independent of recognized revenues and is not affected by revenue recognition timing under ASC 606.
PTC Operating Expenses and Margins
Total operating expenses increased marginally to $344.8 million from $343.3 million in the year-ago quarter. Sales and marketing expenses rose 1.5% to $144.4 million, while research and development expenses increased 4.9% to $120.1 million. General and administrative expenses declined 2.3% to $62.2 million.
Non-GAAP operating income declined 41.6% year over year to $307.3 million from $526.3 million. Non-GAAP operating margin contracted to 45.6% from 58.9% in the year-ago quarter. Operating income fell to $212.6 million from $433.6 million.
PTC's Fiscal 2026 Numbers
For fiscal 2026, PTC reported revenues of $2.73 billion, nearly flat compared with fiscal 2025. On a constant-currency basis, revenues declined 2% year over year.
Non-GAAP earnings increased 4% to $8.24 per share from $7.94. GAAP earnings rose 47% to $8.93 per share from $6.08.
Non-GAAP operating margin narrowed 80 basis points to 46.7%.
PTC Cash Flow and Balance Sheet
Cash provided by operating activities was $47.3 million compared with $104 million in the prior-year quarter. Free cash flow declined to $37.7 million from $100.5 million.
Cash flow included approximately $24 million of divestiture-related costs and $75 million of related cash taxes. For fiscal 2026, operating cash flow increased 4% to $898.6 million, while free cash flow rose 2% to $872.7 million.
As of Sept. 30, 2026, cash and cash equivalents totaled $232.9 million compared with $184.4 million a year earlier. Total debt, net of deferred issuance costs, increased to $1.61 billion from $1.197 billion.
PTC repurchased approximately $1.62 billion of common shares during fiscal 2026, including $298.7 million in the fiscal fourth quarter. The buybacks represented a substantial increase from the prior year's repurchase activity.
Cadence Design Systems (CDNS - Free Report) delivered strong third-quarter 2026 results, driven by robust demand for AI-oriented design solutions and hardware-assisted verification products. Non-GAAP EPS of $2.11 beat the Zacks Consensus Estimate by 3.4% and increased 9.3% year over year. Revenues of $1.633 billion surpassed the consensus mark by 1.4% and increased 22% year over year. The figure exceeded management’s guided range of $1.595-$1.625 billion. Record backlog of $8.2 billion, strong recurring revenue growth and accelerating AI adoption prompted Cadence to raise its 2026 revenue and earnings outlook. Shares of Cadence have inched up 1.6% in the past year.
Progress Software Corporation (PRGS - Free Report) reported third-quarter fiscal 2026 results wherein revenues came in at $246 million, down 2% year over year and on a cc basis. ARR of $873 million inched up 1% year over year on a cc basis. Progress Software Corporation reported a 13% year-over-year increase in non-GAAP earnings per share, which stood at $1.69. Shares of Progress Software Corporation have inched up 6.7% in the past year.
Synopsys, Inc (SNPS - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of $3.91 per share, which increased 15.3% year over year and beat the Zacks Consensus Estimate by 6.5%. Broad-based strength, led by EDA and Ansys, supported the earnings outperformance. Revenues for Synopsys rose 42.4% year over year to $2.48 billion, topping the consensus mark by 1.7%. Backlog remained strong at $10.9 billion, while Design IP returned to year-over-year growth. Shares of Synopsys have lost 16.9% in the past year.
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PTC Q4 Earnings & Revenues Beat Estimates, ARR Growth Strong
Key Takeaways
PTC Inc. (PTC - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate of $2 by 1.5%. However, the bottom line declined 40% year over year from $3.41.
Revenues totaled $673.25 million, surpassing the consensus estimate of $657.6 million by 2.4%, but declining 25% year over year (down 24% at constant currency or cc). Nonetheless, annual run rate (“ARR”), excluding divested businesses, increased 8% year over year, highlighting continued momentum in PTC's recurring business.
On Oct. 5, 2026, PTC entered into a definitive agreement to be acquired by Schneider Electric. In light of the proposed transaction, the company suspended quarterly earnings conference calls and discontinued quarterly and annual financial guidance.
PTC Inc. Price, Consensus and EPS Surprise
PTC Inc. price-consensus-eps-surprise-chart | PTC Inc. Quote
PTC's Revenue Breakdown
Recurring revenues were $645.25 million, declining 25.1% year over year from $861.1 million.
Perpetual license revenues fell 53.6% to $3.88 million, while professional services revenues dipped 0.9% to $24.1 million.
The year-over-year revenue comparison was affected by the divestiture of the Kepware and ThingWorx businesses in the second quarter of fiscal 2026.
Revenues by License, Support and Services
License revenues were $267 million, declining 44.8% from $484.1 million in the year-ago quarter. The metric includes the portion of subscription revenues allocated to licenses.
Support and cloud services revenues totaled $382.1 million, down 0.8% year over year from $385.4 million.
PTC's ARR Growth Remains Encouraging
As-reported ARR, excluding Kepware and ThingWorx, reached $2.51 billion, increasing 8% year over year from $2.32 billion. At constant currency, ARR excluding the divested businesses rose 9.7% to $2.55 billion.
On an as-reported basis, including the divested businesses in the prior-year comparison, ARR increased 1% year over year.
PTC's ARR represents the annualized value of active subscription software, software-as-a-service, hosting and support contracts. The metric is independent of recognized revenues and is not affected by revenue recognition timing under ASC 606.
PTC Operating Expenses and Margins
Total operating expenses increased marginally to $344.8 million from $343.3 million in the year-ago quarter. Sales and marketing expenses rose 1.5% to $144.4 million, while research and development expenses increased 4.9% to $120.1 million. General and administrative expenses declined 2.3% to $62.2 million.
Non-GAAP operating income declined 41.6% year over year to $307.3 million from $526.3 million. Non-GAAP operating margin contracted to 45.6% from 58.9% in the year-ago quarter. Operating income fell to $212.6 million from $433.6 million.
PTC's Fiscal 2026 Numbers
For fiscal 2026, PTC reported revenues of $2.73 billion, nearly flat compared with fiscal 2025. On a constant-currency basis, revenues declined 2% year over year.
Non-GAAP earnings increased 4% to $8.24 per share from $7.94. GAAP earnings rose 47% to $8.93 per share from $6.08.
Non-GAAP operating margin narrowed 80 basis points to 46.7%.
PTC Cash Flow and Balance Sheet
Cash provided by operating activities was $47.3 million compared with $104 million in the prior-year quarter. Free cash flow declined to $37.7 million from $100.5 million.
Cash flow included approximately $24 million of divestiture-related costs and $75 million of related cash taxes. For fiscal 2026, operating cash flow increased 4% to $898.6 million, while free cash flow rose 2% to $872.7 million.
As of Sept. 30, 2026, cash and cash equivalents totaled $232.9 million compared with $184.4 million a year earlier. Total debt, net of deferred issuance costs, increased to $1.61 billion from $1.197 billion.
PTC repurchased approximately $1.62 billion of common shares during fiscal 2026, including $298.7 million in the fiscal fourth quarter. The buybacks represented a substantial increase from the prior year's repurchase activity.
PTC’s Zacks Rank
Currently, PTC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances of Peers
Cadence Design Systems (CDNS - Free Report) delivered strong third-quarter 2026 results, driven by robust demand for AI-oriented design solutions and hardware-assisted verification products. Non-GAAP EPS of $2.11 beat the Zacks Consensus Estimate by 3.4% and increased 9.3% year over year. Revenues of $1.633 billion surpassed the consensus mark by 1.4% and increased 22% year over year. The figure exceeded management’s guided range of $1.595-$1.625 billion. Record backlog of $8.2 billion, strong recurring revenue growth and accelerating AI adoption prompted Cadence to raise its 2026 revenue and earnings outlook. Shares of Cadence have inched up 1.6% in the past year.
Progress Software Corporation (PRGS - Free Report) reported third-quarter fiscal 2026 results wherein revenues came in at $246 million, down 2% year over year and on a cc basis. ARR of $873 million inched up 1% year over year on a cc basis. Progress Software Corporation reported a 13% year-over-year increase in non-GAAP earnings per share, which stood at $1.69. Shares of Progress Software Corporation have inched up 6.7% in the past year.
Synopsys, Inc (SNPS - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of $3.91 per share, which increased 15.3% year over year and beat the Zacks Consensus Estimate by 6.5%. Broad-based strength, led by EDA and Ansys, supported the earnings outperformance.
Revenues for Synopsys rose 42.4% year over year to $2.48 billion, topping the consensus mark by 1.7%. Backlog remained strong at $10.9 billion, while Design IP returned to year-over-year growth. Shares of Synopsys have lost 16.9% in the past year.