PTC Raises Outlook as Recurring-Revenue Growth Accelerates

The Tip Desk · July 30, 2026 · 2 min read

Constant-currency ARR growth reached 9.1%, exceeding the software maker’s guidance.

PTC Inc. (PTC), the industrial-software maker, reported a 7% decline in fiscal third-quarter revenue to $600 million as lower license sales reversed the growth recorded earlier in the year.

The revenue contraction masked firmer recurring-revenue growth. Constant-currency annual recurring revenue excluding divested businesses increased 9.1%, accelerating from 8.5% in the second quarter and exceeding PTC’s guidance of 8% to 9%.

Revenue had risen 22% in the second quarter and 21% in the first. On a constant-currency basis, growth slowed from 19% in the first quarter to 15% in the second before revenue declined 8% in the third. GAAP earnings fell 12% to $1.03 a share, and adjusted earnings declined 4% to $1.58 a share.

License revenue accounted for most of the pullback, falling to $205.8 million from $251.5 million a year earlier. Support and cloud-services revenue held nearly steady at $370.9 million, and professional-services revenue increased to $23.3 million.

Lower revenue weighed on profitability. GAAP operating margin contracted to 28% from 38% in the second quarter and 33% a year earlier. Adjusted operating margin fell to 41% from 53% sequentially and 44% a year earlier.

Cash generation continued to grow at a slower pace. Operating cash flow rose 7% to $261 million, topping the company’s guidance range, and free cash flow increased 3% to $249 million, also above its forecast.

PTC now expects fiscal 2026 constant-currency ARR growth excluding divested businesses of 9% to 9.5%, compared with its previous range of 7.5% to 9.5%. Revenue guidance is $2.69 billion to $2.75 billion, with GAAP earnings of $8.46 to $9.18 a share and adjusted earnings of $7.87 to $8.42 a share.

The company increased its expected fiscal-year share repurchases to about $1.625 billion after announcing an additional $525 million of open-market purchases. PTC also expects most of the remaining cash taxes and costs tied to the Kepware and ThingWorx divestiture to fall in the fourth quarter.