PTC's Q4 Earnings Top Estimates on 43% Y/Y Sales Growth

PTC Inc (PTC) reported fourth-quarter fiscal 2025 non-GAAP earnings per share (EPS) of $3.47, up 126% year over year. The figure beat the Zacks Consensus Estimate by 63%.

Revenues came in at $894 million, rising 43% year over year (up 39% at constant currency or cc). The top line beat the consensus estimate by 20.2%. Management projected revenues in the $725-$785 million band. For fiscal 2025, PTC’s revenues jumped 19% year over year to $2.7 billion. The most notable move was the divestiture agreement of Kepware and ThingWorx, acting as a pivotal step in sharpening PTC’s focus around its core pillars — Computer-Aided Design (CAD), Product Lifecycle Management (PLM), Application Lifecycle Management (ALM), and Service Lifecycle Management (SLM).

These four areas form the backbone of PTC’s Intelligent Product Lifecycle vision, a strategy aimed at helping companies design, manufacture, operate and service products more intelligently and efficiently. The divestitures are expected to simplify PTC’s portfolio, enabling a more cohesive product strategy and stronger focus on innovation within its core competencies.

Top-Line Details

Recurring revenues of $861 million rose 47.8% year over year.

Perpetual licenses decreased 15.9% to $8.4 million.

Revenues by License, Support and Services

License revenues (54.2% of total revenues) were $484.1 million, up 102.2% from the year-ago quarter figure.

Support and cloud services revenues (43.1%) of $385.4 million increased 9.2% year over year.

Professional services revenues (2.7%) were $24.4 million, down 28.7% year over year.

Revenues by Product Group

PLM and CAD businesses continue to witness healthy momentum.

In the fiscal fourth quarter, PLM revenues were $588 million, rising 44% year over year.

CAD revenues were $306 million, up 40% from a year ago.

ARR Growth Reflects Business Strength

Annualized recurring revenues (ARR) were $2.5 billion, up 10% year over year. At constant currency, ARR was $2.4 billion, up 8.5%. The uptick was driven by strong performance across all divisions and regions.

In the fiscal fourth quarter, PLM and CAD ARR were $1,503 million and $943 million, rising 8% and 9% year over year, respectively.

Operating Details

Total operating expenses were $343.3 million compared with $319.7 million in the prior-year quarter.

Operating income on a non-GAAP basis was $526.3 million, up from $276.6 million in the prior-year quarter.

Operating margin on a non-GAAP basis increased 1,470 basis points year over year to 59%.

Balance Sheet & Cash Flow

As of Sept. 30, 2025, cash and cash equivalents were $184 million compared with $266 million as of Sept. 30, 2024.

Total debt, net of deferred issuance costs, was $1.2 billion as of Sept. 30, 2025, compared with $1.7 billion as of Sept. 30, 2024.

Cash provided by operating activities was $104 million compared with the prior-year quarter figure of $98 million. The free cash flow was $100 million compared with $94 million reported in the year-ago quarter.

The company has a $2 billion share repurchase authorization in place and plans to execute $200 million in share buybacks in the first quarter of fiscal 2026. Over the course of fiscal 2026, PTC expects to repurchase between $150 million and $250 million of common stock per quarter, signaling strong confidence in its long-term growth trajectory.

Guidance

At the midpoint, PTC’s fiscal 2026 outlook suggests sustained double-digit growth in cash flow and strong visibility, supported by the activation of multi-year ramp-up contracts.

Revenues for fiscal 2026 are projected in the range of $2.65-$2.9 billion, indicating a change of (3)-6% year over year. Non-GAAP EPS is estimated in the $6.49-$8.95 band, suggesting a change of (19)-12%. For fiscal 2025, cash from operations is projected at around $1.03 billion, indicating a rise of 19% on a year-over-year basis. The free cash flow is forecasted at around $1 billion band, suggesting a 17% increase.

PTC projects 7.5% to 9.5% growth in ARR on a constant currency basis for fiscal 2026 (excluding Kepware and ThingWorx for the full year).

For the first quarter of fiscal 2026, PTC estimates revenues in the $600-$660 million band. Non-GAAP EPS is projected in the range of $1.26-$1.82. Cash from operations is expected to be $270-$275 million, and free cash flow is forecasted to be $265-$270 million. ARR growth is projected at 8.5-9%.

PTC’s Zacks Rank

Currently, PTC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Flex Ltd. (FLEX) reported second-quarter fiscal 2026 adjusted EPS of 79 cents, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line compared favorably with 64 cents posted in the prior-year quarter. Revenues increased 4% year over year to $6.8 billion. Also, it beat the consensus mark by 2%. The uptick was driven by strong data center growth in both the cloud and power end markets, despite a complex macroeconomic environment.

Fortive Corporation (FTV) reported third-quarter 2025 adjusted EPS of 68 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 58 cents. The bottom line increased 15.3% year over year. Revenues increased 2.3% year over year to $1.03 billion. The top line beat the Zacks Consensus Estimate by 2.1%. Core revenues jumped 1.9%.

CDW Corporation (CDW) reported third-quarter 2025 non-GAAP earnings per share (EPS) of $2.71, surpassing the Zacks Consensus Estimate of $2.53. Also, the bottom line increased 3% year over year. The company’s revenues increased 4% year over year to $5.74 billion. On a constant currency (cc) basis, sales grew 3.8%, showing broad-based demand across product categories, such as notebooks/mobile devices, software, networking (netcomm) products, desktops and services, despite a slowdown in data storage and servers. Quarterly revenues also exceeded the consensus estimate of $5.7 billion.

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