PTC INC. Q2 FY2026 earnings call

PTC delivered strong Q2. Grew constant currency ARR 8.5% at high end of guidance and free cash flow 14% YOY. Divestiture completed, focused on intelligent product lifecycle vision. Go-to-market transformation gains traction. AI driving momentum: first, driving product data modernization demands as customers recognize product data foundation strength determines AI ceiling; second, building intelligence layer on systems. For example, Windchill Plus with automotive supplier, Creo and Onshape agents with unique access to product data, scaling AI releases with nearly doubling in 2026 vs 2025 including first AI-native products.

PTC delivered strong Q2. Constant currency ARR grew 8.5% at high end of guidance. Free cash flow grew 14% YOY exceeding guidance range. With divestiture completed, focused on intelligent product lifecycle vision. Go-to-market transformation gains traction, rep productivity and renewal rates improve, large high-quality pipeline built for second half well-balanced across geographies, verticals, and products. Also structured deals to increase deferred ARR for fiscal 27 and beyond.

Fiscal 26 constant currency ARR (excluding Kepware and ThingWorx) expected to grow ~7.5-9.5%. Midpoint net new ARR $195 million. Q3 constant currency ARR expected to grow ~8-9% corresponding to net new ARR range $40-55 million. Expect $850 million free cash flow in fiscal 26, baseline $950 million for fiscal 27 modeling. Q3 26 free cash flow guidance $240-245 million. Raise fiscal 26 revenue guidance to $2.580-$2.820 billion and non-GAAP EPS guidance range to $6.65-$8.90. Board authorized new $2 billion share repurchase program effective Oct 1, 2026 through end of fiscal year 2028.

Questions and answers include Saket Kalia asking about mid-term double-digit ARR growth goal, Jay inquiring about accelerated product releases and customer absorption, Daniel Jester on relative growth of PLM and CAD segments, Adam Borg on European market and verticals, Joe Brewink on AI incremental investment and commercial strategy, Matt Hedberg on RET productivity and long-duration in Q2, Joshua Tilton on Q4 ARR growth confidence, Ken Wong on net new ARR run rate, Nae So Ning on displacement wins reasons and stock repurchase, Tyler Radke on technology space demand increase, C.D. Panagrahi on Creo and data ownership, Blair Abernathy on Windchill Plus demand and deployment, Yan Kim on Windchill Plus and AI products, Andrew Obin on AI proprietary data tension, Alexey Gogolev on pipeline quality and velocity change