PTC Inc.

PTC reported Q3 revenue of $600 million, which Jen DiRico said was below the midpoint of guidance because of the shortened duration of a single large contract expansion. Constant-currency ARR excluding Kepware and ThingWorx was $2.448 billion, up 9.1% year over year, and net new ARR was $60 million. Operating cash flow was $261 million and free cash flow was $249 million. For FY26, PTC now expects constant-currency ARR growth of approximately 9% to 9.5% excluding Kepware and ThingWorx, free cash flow of approximately $850 million, revenue of $2.69 billion to $2.75 billion, and non-GAAP EPS of $7.87 to $8.42. For Q4, PTC expects net new ARR of $79 million to $92 million and free cash flow of approximately $15 million; the company also said full-year share repurchases are expected to be approximately $1.625 billion.

Neil Barua framed the quarter as evidence that PTC’s intelligent product lifecycle strategy is resonating, with customer demand, AI interest, and go-to-market execution all improving. He emphasized that PTC’s structural advantage is at the data and process layer, where governed systems of record matter for complex, regulated engineering workflows. His tone was confident and increasingly upbeat, saying the company has “turned the corner” on sales execution and believes AI will expand the value of the portfolio over time.

Jennifer DiRico highlighted broad-based financial strength, including $60 million of net new ARR, $2.448 billion of constant-currency ARR, $261 million of operating cash flow, and $249 million of free cash flow, all above guidance. She said the company raised the midpoint of annual ARR growth guidance to 9.25%, lifted the FY26 revenue and non-GAAP EPS ranges, and continues to expect about $850 million of free cash flow for the year. On capital allocation, she noted $525 million of Q3 share repurchases, which brought the fully diluted share count down to 115 million in the quarter, and said full-year repurchases are expected to total about $1.625 billion.

Analysts focused on whether PTC’s AI story is changing customer buying behavior, how much growth runway exists into FY27, and whether the company is seeing more displacement wins. Management said customers increasingly want product data to stay in governed enterprise systems rather than with frontier model providers, and that PTC’s AI wins are starting with pilots and then scaling when ROI is proven. On FY27, DiRico said acceleration would require PTC to repeat its like-for-like net new ARR performance and then benefit from the deferred ARR already on the books; she also said PTC has about 2x the deferred ARR it had at this point last year for FY26. Barua added that displacement is increasing, but expansion with existing customers remains the main growth engine.