tapebrief
PTC · Q1 2026
Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

PTC · Q2 2026 Earnings

PTC Inc.

Reported May 6, 2026

30-second summary

SENTIMENT: Constructive 30-second take: PTC beat Q2 FY2026 across the board — revenue $774M (+22% YoY) cleared the operative $685–745M guide by ~$29M, non-GAAP EPS of $2.69 beat the $1.87–2.47 range by $0.22, ex-K/T ARR growth landed at 8.5% at the top of the 8.0–8.5% band, and FCF of $318M cleared the high end. Against the operative March 16, 2026 reset framework, management raised FY26 revenue guidance to $2,580–2,820M (from $2,540–2,805M) and raised non-GAAP EPS to $6.65–8.90 (from $6.36–8.84), while reaffirming OCF (~$880M), FCF (~$850M), and ex-K/T ARR growth (7.5–9.5%). The $150M FCF step-down occurred at the March 16 reset to reflect the K/T divestiture, not at this print. Layered on top: FY26 buyback target raised to $1.225–1.325B (from $1.115–1.315B) and a new $2B authorization for FY27–FY28. Four-for-four beat, raise-and-reaffirm full year, capital-return story expanded.

Headline numbers

EPS

Q2 FY2026

$2.69

Revenue

Q2 FY2026

$0.77B

+22.0% YoY

Gross margin

Q2 FY2026

85.3%

Free cash flow

Q2 FY2026

$0.32B

Operating margin

Q2 FY2026

38.2%

Key financials

Q2 FY2026
MetricQ2 FY2026YoYQ1 FY2026QoQ
Revenue$0.77B+22.0%$0.69B+12.8%
EPS$2.69—$1.92+40.1%
Gross margin85.3%—82.8%+250bps
Operating margin38.2%—32.2%+600bps
Free cash flow$0.32B—$0.27B+19.1%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ2 FY2026$710 to $770 million$774 million+$4 million above high end of guideBeat
Non-GAAP EPSQ2 FY2026$1.93 to $2.54$2.69+$0.15 above high end of guideBeat
ARR growth (constant currency, excluding divested businesses)Q2 FY20268% to 8.5%8.5%at high end of guideBeat
Operating cash flowQ2 FY2026$315 to $320 million$330+ million (implied from 14% YoY growth)—Beat
Free cash flowQ2 FY2026$310 to $315 million$318 million+$3 million above high end of guideBeat

New guidance

MetricPeriodGuideYoY
RevenueQ3 FY2026$580 to $640 million–9.4% to 0% YoY

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Revenue
FY2026
$2,675 to $2,940 million$2,580 to $2,820 million–$95M to –$120M (low-end and high-end cuts)Lowered
Non-GAAP EPS
FY2026
$6.69 to $9.15$6.65 to $8.90–$0.04 to –$0.25 (low and high)Lowered
Operating cash flow
FY2026
~$1,030 million~$880 million–$150 millionLowered
Free cash flow
FY2026
~$1,000 million~$850 million–$150 millionLowered
GAAP EPS
FY2026
$4.42 to $6.93$7.21 to $9.70+$2.79 to +$2.77 (high-end and low-end increases)Lowered

Reaffirmed unchanged this quarter: ARR growth (constant currency, excluding divested businesses) (7.5% to 9.5%)

Segment performance

Q2 FY2026
SegmentQ2 FY2026YoY
License revenue$0.363B+42.6%
Support and cloud services revenue$0.388B+9.8%
Professional services revenue$0.024B-17.3%

Platform metrics

Q2 FY2026
SegmentQ2 FY2026
ARR (constant currency, excluding divested businesses)$2,388 million
ARR growth (constant currency, excluding divested businesses)8.5%
Recurring revenue$743 million

Profitability

Q2 FY2026
SegmentQ2 FY2026
Non-GAAP operating margin53.0%
Operating cash flow growth14%
Free cash flow growth14%
Non-GAAP gross margin87.3%

Other KPIs

Q2 FY2026
SegmentQ2 FY2026
Share repurchases$625 million in Q2'26

Management tone

Customer optimization hangover → AI experiments → AI-driven re-acceleration → Capacity expansion → "Mojo is back, machine is running."

Three quarters ago AI was framed as parallel to product data; two quarters ago it tightened to PTC as the data foundation for industrial AI; last quarter the framing collapsed into the product as the operating model. This quarter the AI narrative locks in commercially: "customers are recognizing that the strength of their product data foundation determines their AI ceiling." That sentence reframes modernization from optional efficiency play to mandatory prerequisite — the strongest commercial framing PTC has put on AI to date. It's also more falsifiable than prior versions, because it implies pipeline density and deal-cycle compression should be visible in the numbers within 2–3 quarters.

Two quarters ago go-to-market was "transformation working ahead of schedule"; last quarter it was "turning the corner." This quarter Neil pegs the timeline on the call: "We're calling 15, 16 months into it, and that go-to-market machine is starting to work well based on the demand capture seen, based on the renewal rates, based on the pipeline generation." The shift from aspirational to "the machine is running" is reinforced by a raise-and-reaffirm full-year print rather than contradicted by it.

The deferred ARR narrative is firming, not softening. Last quarter the CFO quantified "triple deferred ARR" for Q4 FY2026 and "double" for FY27. This quarter Jen reinforces visibility on the call: "if we see no more incremental performance from what we saw this year from our go-to-market team, coupling that with the deferred error balance that we have visibility to, we'll see a growth increase." Translation: double-digit ARR is achievable with no further outperformance — purely on deferred ARR conversion. That's a more concrete underwrite than the Q1 framing and de-risks FY27 specifically, not FY26.

Windchill Plus has moved from "future-state SaaS migration" two quarters ago to "record-breaking demand" last quarter to "product is really moving at pace right now... we're like super jazzed" this quarter. The escalating posture is the kind of language that becomes a liability if the deferred ARR doesn't convert on schedule — but the reaffirmation of the back-half ARR step-up and the explicit FY27 setup commentary support it. Management is fully committed.

Recurring themes management leaned on this quarter:

AI-driven modernization demand as primary momentum driverProduct data foundation as prerequisite for enterprise AI adoptionGo-to-market transformation gaining traction with vertical-focused executionDisplacement wins across PLM, CAD, ALM expanding share in core segmentsDeferred ARR buildup strategy de-risking second-half executionProprietary agent advantage in 3D CAD and domain-specific workflows

Risks management surfaced:

Macro uncertainty and geopolitical risks (war, energy prices) affecting deal approvalsCustomer adoption cycles for AI and modernization still in POC/pilot phase, not scaled productionCompetitive pressure from third-party AI agents and generative modelsServiceMax segment digestion of negative churn still normalizing after 18-month weaknessCurrency headwinds requiring guidance raises despite operational strength

Answers to last quarter's watch list

Q2 FY2026 ex-K/T ARR within 8.0–8.5% guide. Landed at 8.5%, the top of the band. Prior watch-list bridge ("trough before a Q4 acceleration") holds; Q3 FY2026 guide of 8–9% extends the bridge to the implied Q4 step-up.
Resolved positively
Kepware/ThingWorx close confirmation and FY26 guide reset. Both the press release and transcript explicitly confirm the divestiture closed March 13, 2026. The operative FY26 framework was reset on March 16, 2026, with revenue at $2,540–2,805M and FCF at ~$850M; this print raised revenue to $2,580–2,820M and reaffirmed FCF. ARR is now disclosed exclusively ex-K/T at the FY guide level (7.5–9.5% reaffirmed). The $375M ASR was funded by the entire net after-tax K/T proceeds.
Resolved positively
Cash-tax contribution to FCF. The press release now itemizes the divestiture-related cash items: ~$40M divestiture costs, ~$110M divestiture-related cash taxes, ~$70M divestiture FCF contribution, ~$20M one-time R&D-center capex. Management gave a $950M FY26 ex-items baseline for FY27 modeling. The remaining open question is structural cash tax post-K/T, but the FY26 mechanics are now sized.
Resolved positively
Deferred ARR conversion checkpoint. Management explicitly reinforced the visibility framing: "We have clear visibility into a significant step-up in deferred ARR starting in Q4." No softening of the Q4 step-up language. The Q3 FY2026 net new ARR guide of $40–55M and ARR growth of 8–9% is consistent with Q4 carrying the FY band's acceleration.
Resolved positively
Non-GAAP operating margin sustainability off Q1's 45.1%. Q2 FY2026 non-GAAP operating margin came in at 53.0% — well above Q1 and far above the implied ~41% Q2–Q4 average from the FY guide. This is genuine operating leverage, not a Q1 timing artifact, though Q3/Q4 margins will need to step down meaningfully to land the FY guide.
Resolved positively

What to watch into next quarter

Q3 FY2026 ex-K/T ARR landing within 8–9% guide and net new ARR within $40–55M. A print at the low end (8%) is consistent with the deferred-ARR-bridges-to-Q4 thesis; a print below 8% breaks it. Net new ARR is now an explicit disclosure — track conversion vs the range.

FY26 FCF / OCF guide stability at ~$850M / ~$880M. Any reduction at the Q3 FY2026 print would undermine the raise-and-reaffirm narrative. Management has hedged with "majority of cash generation in first half" — Q3 FCF guide of $240–245M plus H1 FCF of $585M means H2 FCF needs ~$265M, of which Q3 carries the bulk. Watch whether Q4 FY2026 FCF expectations get hedged further (Q4 absorbs ~$105M of K/T-related cash taxes and ~$20M of divestiture costs per the press release).

Structural cash tax post-K/T. With the $110M of K/T-related cash taxes now sized inside the FY26 guide, the question becomes the structural cash-tax rate that drops out for FY27 modeling against management's $950M ex-items baseline.

Q3 FY2026 buyback execution. Management guided to ~$250M of routine repurchase in Q3 FY2026. Watch whether the pace holds against the $1.225–1.325B full-year target and how the new $2B FY27–FY28 authorization begins to deploy.

Deferred ARR Q4 step-up language. Any softening from the current "clear visibility into a significant step-up" framing — even subtle hedging — would be a major tell that the FY26 back-half is at risk.

Q3 FY2026 non-GAAP operating margin landing. Q2 FY2026's 53.0% is far above the implied Q3–Q4 average. A Q3 margin below 40% would suggest H1 leverage was timing-driven; above 42% holds the FY guide intact.

Sources

  1. PTC Inc. Q2 FY2026 press release, filed with the SEC: https://www.sec.gov/Archives/edgar/data/857005/000119312526208904/ptc-ex99_1.htm
  2. PTC Q2 FY2026 earnings call transcript (prepared remarks and Q&A)
  3. PTC Q1 FY2026 prior-quarter brief (Tapebrief internal)
  4. PTC Q4 FY2025 prior-quarter brief (Tapebrief internal)
  5. PTC Q3 FY2025 prior-quarter brief (Tapebrief internal)

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