PTC Inc. Reports Q3 Revenue Decline to $600M, Nine-Month Revenue Growth to $2.06B

PTC Inc. reported its financial results for the third quarter and nine months ended June 30, 2026, revealing a total revenue of $600.0 million for the quarter, a decrease of 7% from $643.9 million in the same period last year. For the nine-month period, revenue increased by 12% to $2.06 billion, compared to $1.85 billion in the prior year. The decline in quarterly revenue was attributed primarily to the divestiture of the Kepware and ThingWorx businesses, which accounted for approximately $46 million in revenue in the prior year. The company’s net income for the quarter was $118.8 million, down from $141.3 million a year earlier, while net income for the nine months rose to $876.0 million from $386.2 million.

In terms of profitability, PTC's operating income for the third quarter was $166.5 million, a decrease of 21% from $209.8 million in the previous year. The operating margin also contracted to 27.7% from 32.6%. However, for the nine-month period, operating income increased by 25% to $683.4 million, with an operating margin of 33.2%, up from 29.7%. The company reported diluted earnings per share of $1.03 for the quarter, down from $1.17, while for the nine months, diluted EPS rose to $7.43 from $3.20.

PTC's strategic developments included the completion of the divestiture of its Kepware and ThingWorx businesses, which generated $530.8 million in total consideration. The company recognized a gain of $462.6 million from this transaction, which significantly impacted its financial results. Additionally, PTC made a strategic investment of $184.7 million in a solar energy project, with $50.1 million contributed as of June 30, 2026. The company also engaged in significant share repurchase activities, repurchasing $525 million of its common stock in the third quarter, funded partially by $225 million in net borrowings under its credit facility.

Operationally, PTC reported a total annual recurring revenue (ARR) of $2.41 billion as of the end of the third quarter, flat compared to the previous year but reflecting a 7% growth when excluding the divested businesses. The company’s customer base remains strong, with over 30,000 customers globally. PTC's total cash and cash equivalents increased to $351.5 million from $184.4 million at the end of the previous fiscal year, reflecting improved cash flow from operations, which totaled $851.3 million for the nine months, up from $763.7 million in the prior year.

Looking ahead, PTC expressed optimism about its growth trajectory, driven by its subscription model, which accounts for approximately 95% of its revenue. The company anticipates continued investment in its software solutions, particularly in integrating artificial intelligence capabilities, to enhance customer engagement and retention. However, PTC also acknowledged potential risks, including macroeconomic conditions and market competition, which could impact future performance. The company remains committed to maintaining a strong financial position while pursuing strategic growth opportunities.