PTC ANNOUNCES FOURTH FISCAL QUARTER AND FULL FISCAL YEAR 2025 RESULTS

Posts record annual cash flow; Strategic focus positions company for durable growth

BOSTON, Nov. 5, 2025 /PRNewswire/ -- PTC (NASDAQ: PTC) today reported financial results for its fourth fiscal quarter and full fiscal year ended September 30, 2025.

"Q4 capped a year of solid execution and focus. The divestiture of Kepware and ThingWorx will sharpen our portfolio around CAD, PLM, ALM, and SLM – the foundation of our Intelligent Product Lifecycle vision," said Neil Barua, President and CEO, PTC.

"In FY'26 we will have a simpler portfolio, record deferred ARR, and the financial flexibility to accelerate both innovation and capital returns," concluded Barua.

Fourth Fiscal Quarter and Full Fiscal Year 2025 Key Operating and Financial Metrics 1

$ in millions, except per share amounts

Q4'25

Q4'24

YoY Change

Q4'25

Guidance

ARR as reported

$2,478

$2,255

10 %

Constant currency ARR (FY'25 Plan FX

rates 2)

$2,446

$2,255

8.5 %

8% to 9%

growth

Operating cash flow

$104

$98

6 %

$93 to $98

Free cash flow

$100

$94

7 %

$90 to $95

Revenue 3

$894

$627

43% 4

$725 to $785

Operating margin 3

49 %

31 %

1,750 bps

Non-GAAP operating margin 3

59 %

44 %

1,470 bps

Earnings per share 3

$2.94

$1.04 5

182 %

$1.57 to $2.03

Non-GAAP earnings per share 3

$3.47

$1.54 5

126 %

$2.10 to $2.50

Total cash and cash equivalents

$184

$266

(31 %)

Debt, net of deferred issuance costs

$1,197

$1,749

(32 %)

The definitions of our operating and non-GAAP financial measures and reconciliations of non-GAAP financial measures to comparable GAAP measures are included below and in the reconciliation tables at the end of this press release.

On a constant currency basis, using our FY'25 Plan foreign exchange rates (rates as of September 30, 2024) for all periods.

Revenue and, as a result, operating margin and earnings per share are impacted under ASC 606.

In Q4'25, revenue grew 39% year over year on a constant currency basis.

Q4'24 GAAP EPS and non-GAAP EPS included non-cash tax charges of $9.8 million or $0.08, and $5.3 million or $0.04, respectively, primarily associated with a reduction of a previously recorded tax benefit associated with the effects of IRS procedural guidance issued in May 2024.

$ in millions, except per share amounts

FY'25

FY'24

YoY Change

FY'25

Guidance

Operating cash flow

$868 2

$750

16 %

~$860

Free cash flow

$857 2

$736

16 %

~$850

Revenue 1

$2,739

$2,298

19% 3

$2,570 to

$2,630

Operating margin 1

36 %

26 %

1,030 bps

Non-GAAP operating margin 1

48 %

39 %

860 bps

Earnings per share 1

$6.14

$3.12 4

97 %

$4.77 to $5.23

Non-GAAP earnings per share 1

$8.00

$5.08 4

57 %

$6.63 to $7.03

Revenue and, as a result, operating margin and earnings per share are impacted under ASC 606.

FY'25 cash flow absorbed approximately $20 million of outflows related to our go-to-market realignment.

In FY'25, revenue grew 18% year over year on a constant currency basis.

FY'24 GAAP EPS and non-GAAP EPS included a non-cash tax benefit of $4.4 million or $0.04, primarily associated with the effects of IRS procedural guidance issued in May 2024.

"FY'25 demonstrated the strength of PTC's operating model. We delivered 8.5% ARR growth and 16% cash flow growth while continuing to invest in executing our Intelligent Product Lifecycle vision. Our FY'26 ARR guidance reflects that same balance of growth and discipline, including the expected timing impact from ramp deals and the pending divestiture," said Kristian Talvitie, CFO.

"With leverage below 1x and approximately $1 billion of cash flow expected in FY'26, we have substantial capacity to invest for growth and return capital to shareholders. Our $2 billion authorization and planned $200 million share repurchase in Q1 underscore that confidence," concluded Talvitie.

At the midpoint, FY'26 guidance implies continued double-digit cash flow expansion and solid visibility as multi-year ramp contracts activate

Full Fiscal Year 2026 and First Fiscal Quarter Guidance

$ in millions, except per share amounts

% rounded to the nearest half

FY'25

Actual

FY'26

Guidance

FY'26 YoY

Growth

Guidance

Q1'26

Guidance

Constant currency ARR excluding

Kepware and ThingWorx for the full year

(FY'26 Plan FX rates 1)

$2,319

7.5% to 9.5%

growth

7.5% to 9.5%

8.5% to 9%

growth

Constant currency ARR including

Kepware and ThingWorx for the full year

(FY'26 Plan FX rates 1)

$2,478

7% to 9%

growth

7% to 9%

8% to 8.5%

growth

Operating cash flow

$868 2

~$1,030 3

~19% 3

$270 to $275 3

Free cash flow

$857 2

~$1,000 3

~17% 3

$265 to $270 3

Revenue

$2,739

$2,650 to $2,915 3

(3%) to 6% 3

$600 to $660 3

Earnings per share

$6.14

$4.37 to $6.87 3

(29%) to 12% 3

$0.73 to $1.31 3

Non-GAAP earnings per share

$8.00

$6.49 to $8.95 3

(19%) to 12% 3

$1.26 to $1.82 3

On a constant currency basis, using our FY'26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.

FY'25 cash flow absorbed approximately $20 million of outflows related to our go-to-market realignment.

Guidance for cash flow, revenue, and EPS includes Kepware and ThingWorx for the full year. We will update our FY'26 guidance in conjunction with the closing of the Kepware and ThingWorx transaction.

Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance 1

$ in millions

FY'26

Guidance

Q1'26

Guidance

Operating cash flow

~$1,030

$270 to $275

Capital expenditures

~$30 2

~$5

Free cash flow

~$1,000

$265 to $270

Guidance for cash flow includes Kepware and ThingWorx for the full year. We will update our FY'26 guidance in conjunction with the closing of the Kepware and ThingWorx transaction.

Includes approximately $20 million of one-time capital expenditures related to moving a major R&D center to a new office.

Reconciliation of EPS Guidance to Non-GAAP EPS Guidance 1

FY'26

Guidance

Q1'26

Guidance

Earnings per share

$4.37 to $6.87

$0.73 to $1.31

Stock-based compensation

$2.18 to $1.93

$0.54 to $0.46

Amortization of acquired intangibles

~$0.67

~$0.17

Income tax adjustments

($0.73) to ($0.52)

($0.18) to ($0.12)

Non-GAAP Earnings per share

$6.49 to $8.95

$1.26 to $1.82

Guidance for EPS includes Kepware and ThingWorx for the full year. We will update our FY'26 guidance in conjunction with the closing of the Kepware and ThingWorx transaction.

FY'26 financial guidance includes the following assumptions:

PTC's Fourth Fiscal Quarter Results Conference Call

PTC will host a conference call to discuss results at 5:00 pm ET on Wednesday, November 5, 2025. To participate in the live conference call, dial (888) 596-4144 or (646) 968-2525, provide the passcode 3475783, and press # or log in to the webcast, available on PTC's Investor Relations website. A replay will also be available.

Important Information About Our Operating and Non-GAAP Financial Measures

Non-GAAP Financial Measures

We provide supplemental non-GAAP financial measures to our financial results. We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operating performance because they provide a view of our operating results without items that are not, in our view, indicative of our operating results. These non-GAAP financial measures should not be construed as an alternative to GAAP results as the items excluded from the non-GAAP financial measures often have a material impact on our operating results, certain of those items are recurring, and others often recur. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

Non-GAAP operating expense, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income and non-GAAP EPS exclude the effect of the following items: stock-based compensation; amortization of acquired intangible assets; acquisition and transaction-related charges included in general and administrative expenses; impairment and other charges (credits), net; non-operating charges (credits), net shown in the reconciliation provided; and income tax adjustments. Additional information about the items we exclude from our non-GAAP financial measures and the reasons we exclude them can be found in "Non-GAAP Financial Measures" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

In Q2'25, we changed the income statement caption of Restructuring and other charges (credits), net to Impairment and other charges (credits), net to reflect that the amounts presented are mainly impairment charges rather than restructuring charges. We correspondingly revised the caption with respect to the list of items excluded from our non-GAAP financial measures and, as reflected below, the list of items covered under that caption to reflect the primary charges and credits included in the adjustment. All charges and credits under the captioned line item remain the same.

Impairment and other charges (credits), net are charges associated with disposal or exit activities, including lease impairment and abandonment charges, net charges or income related to impaired or exited facilities, restructuring severance charges resulting from substantial employee reduction actions, and other related costs.

Free Cash Flow: We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return excess cash to shareholders via stock repurchases. Free cash flow is cash provided by (used in) operations net of capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures.

Constant Currency (CC): We present CC information to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency exchange rate fluctuations. To present CC information, FY'25 and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the foreign exchange rate as of September 30, 2024, rather than the actual exchange rates in effect during that period. All discussion of FY'26 and comparative prior period ARR results (including FY'25 baseline amounts) are reflected using the foreign exchange rates as of September 30, 2025.

Operating Measure

ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, and support contracts as of the end of the reporting period. We calculate ARR as follows:

We believe ARR is a valuable operating measure to assess the health of a subscription business because it is aligned with the amount that we invoice the customer on an annual basis. We generally invoice customers annually for the current year of the contract. A customer with a one-year contract will typically be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year contract will be invoiced for each annual period at the beginning of each year of the contract.

ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period.

As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the total value of the contract is recognized as revenue at a point in time upon the later of when the software is made available, or the subscription term commences.

ARR should be viewed independently of recognized and unearned revenue and is not intended to be combined with, or to replace, either of those items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future operating, financial and growth expectations, potential stock repurchases, the expected timing of closing the sale of the Kepware and ThingWorx businesses (the "divestiture"), and the anticipated benefits of the divestiture, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include: the macroeconomic and/or global manufacturing climates may not improve or may deteriorate due to, among other factors, the effects of recently imposed import tariffs, threats of additional and reciprocal import tariffs, global trade tensions and uncertainty, a prolonged U.S. federal government shutdown, volatile foreign exchange rates, high interest rates or increases in interest rates, inflation, tightening of credit standards and availability, geopolitical uncertainty, including the effects of the conflicts between Russia and Ukraine and in the Middle East, and tensions between the U.S. and China, any of which could cause customers to delay or reduce purchases of new software, adopt competing software solutions, reduce the number of subscriptions they carry, or delay payments to us, which would adversely affect our ARR (Annual Run Rate) and/or financial results and cash flow and growth; our investments in our software solutions, including the integration of artificial intelligence (AI) capabilities into our software solutions, may not drive expansion of those solutions and/or generate the ARR and/or cash flow we expect if customers are slower to adopt those solutions than we expect or if they adopt competing solutions; customers may not build the product data foundations essential for the AI-driven transformation of their business when or as we expect, which could adversely affect our ARR and/or financial results and cash flow and growth; our go-to-market realignment and related initiatives may disrupt our business to a greater extent than we expect or may not generate the ARR and/or financial results or cash flow when or as we expect; the divestiture may not be consummated when or as we expect if, among other factors, regulatory approvals under the Hart-Scott-Rodino Act and other applicable laws and regulations are not received when or as we expect, or if other closing conditions are not satisfied when or as we expect or are waived; the future thresholds upon which the additional contingent consideration of up to $125 million related to the divestiture would become payable may not be achieved; the anticipated benefits of the divestiture may not be realized when or as we expect; the divestiture may disrupt our business; other uses of cash or our credit facility limits could limit or preclude the return of excess cash and the net proceeds of the divestiture to shareholders by way of share repurchases, or could change the amount and timing of any share repurchases; and foreign exchange rates may differ materially from those we expect. In addition, our assumptions concerning our future GAAP and non-GAAP effective income tax rates are based on estimates and other factors that could change, including changes to tax laws in the U.S. and other countries and the geographic mix of our revenue, expenses, and profits. Other risks and uncertainties that could cause actual results to differ materially from those projected are described from time to time in reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

About PTC (NASDAQ: PTC)

PTC (NASDAQ: PTC) is a global software company that enables industrial and manufacturing companies to digitally transform how they engineer, manufacture, and service the physical products that the world relies on. Headquartered in Boston, Massachusetts, PTC employs over 7,000 people and supports more than 30,000 customers globally. For more information, please visit www.ptc.com.

PTC.com @PTC Blogs

PTC Investor Relations Contact

Matt Shimao

SVP, Investor Relations

mshimao@ptc.com

investor@ptc.com

PTC Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

Revenue:

Recurring revenue

861,071

582,430

2,600,514

2,134,030

Perpetual license

8,371

9,953

31,375

32,196

Professional services

24,353

34,164

107,337

132,246

Total revenue (1)

893,795

626,547

2,739,226

2,298,472

Cost of revenue (2)

116,899

112,825

444,983

444,816

Gross margin

776,896

513,722

2,294,243

1,853,656

Operating expenses:

Sales and marketing (2)

142,197

147,191

566,516

558,954

Research and development (2)

114,507

110,013

457,693

433,047

General and administrative (2)

63,601

51,986

226,058

232,377

Amortization of acquired intangible assets

11,592

10,559

45,948

42,018

Impairment and other charges (credits), net (3)

11,430

15,643

(802)

Total operating expenses

343,327

319,749

1,311,858

1,265,594

Operating income

433,569

193,973

982,385

588,062

Other income (expense), net

3,854

(23,728)

(52,883)

(119,100)

Income before income taxes

437,423

170,245

929,502

468,962

Provision for income taxes

82,595

43,722

188,470

92,629

Net income

354,828

126,523

741,032

376,333

Earnings per share:

Basic

2.96

1.05

6.18

3.14

Weighted average shares outstanding

119,714

120,113

120,005

119,679

Diluted

2.94

1.04

6.14

3.12

Weighted average shares outstanding

120,674

121,181

120,777

120,742

(1) See supplemental financial data for revenue by license, support and cloud services, and professional services.

(2) See supplemental financial data for additional information about stock-based compensation.

(3) Caption has been changed from "Restructuring and other charges (credits), net" to reflect that impairment is now the primary component of the charge. Additional information about this change can be found in the "Non-GAAP Financial Measures" section of this document.

PTC Inc.

SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION

(in thousands, except per share data)

Revenue by license, support and services is as follows:

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

License revenue (1)

484,081

239,448

1,162,709

806,871

Support and cloud services revenue

385,361

352,935

1,469,180

1,359,355

Professional services revenue

24,353

34,164

107,337

132,246

Total revenue

893,795

626,547

2,739,226

2,298,472

(1) License revenue includes the portion of subscription revenue allocated to license.

The amounts in the income statement include stock-based compensation as follows:

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

Cost of revenue

5,979

5,460

22,690

21,439

Sales and marketing

15,078

22,518

61,750

68,541

Research and development

16,785

18,991

65,119

60,266

General and administrative

16,968

15,250

66,646

73,215

Total stock-based compensation

54,810

62,219

216,205

223,461

PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

GAAP gross margin

776,896

513,722

2,294,243

1,853,656

Stock-based compensation

5,979

5,460

22,690

21,439

Amortization of acquired intangible assets included in

cost of revenue

8,219

9,660

32,828

38,495

Non-GAAP gross margin

791,094

528,842

2,349,761

1,913,590

GAAP operating income

433,569

193,973

982,385

588,062

Stock-based compensation

54,810

62,219

216,205

223,461

Amortization of acquired intangible assets

19,811

20,219

78,776

80,513

Acquisition and transaction-related charges

6,694

144

9,116

3,106

Impairment and other charges (credits), net (2)

11,430

15,643

(802)

Non-GAAP operating income (1)

526,314

276,555

1,302,125

894,340

GAAP net income

354,828

126,523

741,032

376,333

Stock-based compensation

54,810

62,219

216,205

223,461

Amortization of acquired intangible assets

19,811

20,219

78,776

80,513

Acquisition and transaction-related charges

6,694

144

9,116

3,106

Impairment and other charges (credits), net (2)

11,430

15,643

(802)

Non-operating charges (credits), net (3)

(13,100)

2,000

Income tax adjustments (4)

(16,183)

(23,043)

(81,833)

(71,205)

Non-GAAP net income

418,290

186,062

965,839

613,406

GAAP diluted earnings per share

2.94

1.04

6.14

3.12

Stock-based compensation

0.45

0.51

1.79

1.85

Amortization of acquired intangibles

0.16

0.17

0.65

0.67

Acquisition and transaction-related charges

0.06

0.00

0.08

0.03

Impairment and other charges (credits), net (2)

0.09

0.13

(0.01)

Non-operating charges (credits), net (3)

(0.11)

0.02

Income tax adjustments (4)

(0.13)

(0.19)

(0.68)

(0.59)

Non-GAAP diluted earnings per share

3.47

1.54

8.00

5.08

(1) Operating margin impact of non-GAAP adjustments:

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

GAAP operating margin

48.5

31.0

35.9

25.6

Stock-based compensation

6.1

9.9

7.9

9.7

Amortization of acquired intangibles

2.2

3.2

2.9

3.5

Acquisition and transaction-related charges

0.7

0.0

0.3

0.1

Impairment and other charges (credits), net (2)

1.3

0.0

0.6

0.0

Non-GAAP operating margin

58.9

44.1

47.5

38.9

(2) Caption has been changed from "Restructuring and other charges (credits), net" to reflect that impairment is now the primary component of the charge. Additional information about this change can be found in the "Non-GAAP Financial Measures" section of this document.

(3) In FY'25, we recognized a $13.1 million gain related to contingent consideration earned upon the achievement of performance milestones associated with the FY'22 sale of a portion of our PLM services business. In FY'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security.

(4) Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above. Additionally, in FY'25 and FY'24, adjustments exclude a $10.4 million benefit and a $4.4 million charge, respectively, related to the tax impact of tax reserves related to prior years in foreign jurisdictions.

PTC Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30,

2025

2024

ASSETS

Cash and cash equivalents

184,415

265,808

Accounts receivable, net

1,001,085

861,953

Property and equipment, net

60,843

75,187

Goodwill and acquired intangible assets, net

4,317,979

4,359,367

Lease assets, net

114,974

133,317

Other assets

944,911

687,910

Total assets

6,624,207

6,383,542

LIABILITIES AND STOCKHOLDERS' EQUITY

Deferred revenue

827,065

775,274

Debt, net of deferred issuance costs

1,197,434

1,748,572

Lease obligations

172,433

181,754

Other liabilities

594,011

463,544

Stockholders' equity

3,833,264

3,214,398

Total liabilities and stockholders' equity

6,624,207

6,383,542

PTC Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

Cash flows from operating activities:

Net income

354,828

126,523

741,032

376,333

Stock-based compensation

54,810

62,219

216,205

223,461

Depreciation and amortization

25,701

26,847

102,504

108,119

Amortization of right-of-use lease assets

8,453

10,145

32,912

33,288

Operating lease liability

(5,476)

193

(10,345)

(13,245)

Accounts receivable

(294,609)

(166,051)

(121,052)

(34,629)

Accounts payable and accruals

30,219

(15,999)

19,890

(15,964)

Deferred revenue

54,225

73,006

37,753

81,399

Income taxes

43,454

27,761

65,863

25,966

Other

(167,575)

(46,530)

(217,066)

(34,744)

Net cash provided by operating activities

104,030

98,114

867,696

749,984

Capital expenditures

(3,546)

(4,537)

(11,008)

(14,378)

Acquisition of businesses, net of cash acquired (1)

(6,532)

(93,457)

Borrowings (payments) on debt, net (2)

(36,250)

(63,125)

(552,958)

45,924

Repurchases of common stock

(75,011)

(299,998)

Deferred acquisition payment (3)

(620,040)

Net proceeds associated with issuance of common stock

12,755

12,965

26,062

25,674

Payments of withholding taxes in connection with vesting of stock-based awards

(8,444)

(9,412)

(80,205)

(102,001)

Settlement of net investment hedges

(6,193)

(16,904)

(20,753)

(13,078)

Other financing & investing activities

(4,183)

(1,410)

(4,183)

Foreign exchange impact on cash

(2,247)

5,226

(2,372)

3,223

Net change in cash, cash equivalents, and restricted cash

(14,906)

18,144

(81,478)

(22,332)

Cash, cash equivalents, and restricted cash, beginning of period

199,894

248,322

266,466

288,798

Cash, cash equivalents, and restricted cash, end of period

184,988

266,466

184,988

266,466

Supplemental cash flow information:

Cash paid for interest (3)

18,767

24,641

77,828

137,036

(1) In FY'24, we acquired pure-systems for $93 million, net of cash acquired.

(2) In FY'25, net repayments include borrowings on our credit facility revolver to fund the $500 million bond repayment in February. In FY'24, we borrowed $740 million to fund the ServiceMax deferred acquisition payment and the pure-systems acquisition.

(3) In FY'24, we made a payment of $650 million to settle the ServiceMax deferred acquisition payment liability, of which $620 million was a financing outflow and $30 million was an operating outflow and included in cash paid for interest.

PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands)

Three Months Ended

Twelve Months Ended

September 30,

2025

2024

2025

2024

Cash provided by operating activities

104,030

98,114

867,696

749,984

Capital expenditures

(3,546)

(4,537)

(11,008)

(14,378)

Free cash flow

100,484

93,577

856,688

735,606

SOURCE PTC Inc.