PTC Q1 Earnings & Revenues Top, Rise Y/Y on Large Deal Momentum

PTC Inc PTC reported first-quarter fiscal 2026 non-GAAP earnings per share (EPS) of $1.92, up 75% year over year. The figure beat the Zacks Consensus Estimate of $1.59 as well as management’s guidance of $1.26-$1.82.

Revenues came in at $686 million, up 21% year over year (up 19% at constant currency or cc). The top line beat the consensus estimate by 7.4%. Management projected revenues in the $600-$660 million band. A strong fiscal first quarter underpins the progress of its go-to-market transformation and the growing relevance of its Intelligent Product Lifecycle (IPL) strategy. Driven by large deal momentum, competitive displacements and disciplined capital allocation, PTC’s results reinforce management’s confidence in building a more durable, multi-year growth engine.

As product development becomes more complex and AI-driven, customers increasingly recognize the value of unified, high-quality product data across design, manufacturing, service and operations. PTC’s core offerings — spanning CAD, PLM, ALM and IoT — serve as trusted systems of record, enabling AI-driven insights across the full lifecycle. Customers and partners are actively aligning with the company’s vision, creating a strategic tailwind that extends well beyond a single fiscal year.

In addition, PTC continues to progress toward the divestiture of Kepware and ThingWorx, a move aimed at sharpening its focus on core product lifecycle software.

Q1 Top-Line Details

Recurring revenues of $657.3 million rose 25.4% year over year.

Perpetual licenses decreased 40% to $5.6 million.

Revenues by License, Support and Services

License revenues (39.4% of total revenues) were $269.7 million, up 56% from the year-ago quarter figure.

Support and cloud services revenues (57.3%) of $393.3 million increased 8.9% year over year.

Professional services revenues (3.3%) were $22.9 million, down 27% year over year.

Revenues by Product Group

PLM and CAD businesses continue to experience solid growth momentum.

In the fiscal first quarter, PLM revenues were $432 million, up 22% year over year.

CAD revenues were $254 million, up 20% year over year.

ARR Performance

By the end of the fiscal first quarter, PTC’s constant-currency Annualized recurring revenues (ARR), excluding Kepware and ThingWorx, reached $2.3 billion, reflecting a 9% year-over-year increase. Including Kepware and ThingWorx, constant-currency ARR totaled $2.5 billion, up 8.4% from last year. The uptick was driven by strong performance across all divisions and geographies.

PLM and CAD ARR were $1,533 million and $961 million, respectively, each rising 13% year over year.

Operating Details

Total operating expenses were $346.9 million compared with $337.8 million in the prior-year quarter.

Operating income on a non-GAAP basis was $309.6 million, up from $191.3 million in the prior-year quarter.

Operating margin on a non-GAAP basis increased 1,130 basis points on a year-over-year basis to 45%.

PTC’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, cash and cash equivalents were $209.7 million compared with $184.4 million as of Sept. 30, 2025.

Total debt, net of deferred issuance costs, was $1.2 billion as of Dec. 31, 2025.

Cash provided by operating activities was $270 million compared with the prior-year quarter’s figure of $238 million. The free cash flow was $267 million compared with $236 million reported in the year-ago quarter. Free cash flow in the quarter included $10 million of outflows related to the Kepware and ThingWorx transaction, which management emphasized are not expected to recur in future years. Excluding these items, underlying cash generation remained consistent with PTC’s historical seasonality patterns.

The company repurchased $200 million of common stock under its existing $2 billion authorization during the quarter. Looking ahead, PTC plans to repurchase approximately $250 million of shares in the fiscal second quarter. In the second half of fiscal 2026, repurchases are expected to range between $150 million and $250 million per quarter. Including the incremental repurchases funded by divestiture proceeds, PTC expects total fiscal 2026 share repurchases of approximately $1.115 billion to $1.315 billion, a significant tailwind for EPS and per-share value creation.

Q2 & FY26 Outlook: Durable Growth With Improving Visibility

For the second quarter of fiscal 2026, PTC estimates revenues in the $710-$770 million band. Non-GAAP EPS is projected in the range of $1.93-$2.54. Cash from operations is expected to be $315-$320 million, and free cash flow is forecasted to be $310-$315 million.

Revenues for fiscal 2026 are now projected in the range of $2,675 to $2,940 million, indicating a rise of (2)-7% year over year. The prior view was $2,650 to $2,915 million. Non-GAAP EPS is now estimated in the $6.69-$9.15 band, suggesting a rise of (16)-15%. Earlier, PTC predicted the metric to be $6.49 to $8.95.

For fiscal 2026, 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 the $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).

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

Sonos, Inc. SONO reported first-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 93 cents, topping the Zacks Consensus Estimate of 81 cents. The company reported EPS of 68 cents in the prior-year quarter. Quarterly revenues decreased marginally by 0.9% year over year to $545.7 million. However, the figure came near the high end of the company’s guidance of $510 million to $560 million. The Zacks Consensus Estimate for the top line was pegged at $538.7 million.

Badger Meter, Inc. BMI reported EPS of $1.14 for fourth-quarter 2025, which missed the Zacks Consensus Estimate by 0.9%. However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.04. Quarterly net sales were $220.7 million, up 7.6% from $205.2 million in the year-ago quarter, driven by higher utility water sales. The Zacks Consensus Estimate was pegged at $230.8 million.

Dolby Laboratories, Inc. DLB reported first-quarter fiscal 2026 non-GAAP EPS of $1.06, surpassing the Zacks Consensus Estimate of 90 cents. It reported $1.14 in the prior-year quarter. Total revenues were $346.7 million, down from $357 million in the year-ago quarter but surpassed the Zacks Consensus Estimate by 4.2%. However, the revenues came in above the high end of the previous guidance of $315 million to $345 million, primarily due to deal closures occurring earlier than expected and a favorable $7 million true-up related to fourth-quarter shipments.

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