BOSTON, MA, USA, Mar 16, 2026 – PTC (NASDAQ: PTC) today announced it has completed the previously announced sale of the company’s Kepware industrial connectivity and ThingWorx Internet of Things (IoT) businesses to TPG, a leading global alternative asset management firm.
“We are pleased to complete the divestiture of our Kepware and ThingWorx businesses as we increase our focus on our Intelligent Product Lifecycle vision,” said Neil Barua, President and CEO, PTC. “We want to thank the teams moving over for their years of service, and we wish them well moving forward.”
Financial Details
PTC received cash proceeds of $523 million upon closing (previously estimated at $525 million), reflecting closing adjustments of $42 million related to working capital and indebtedness (previously estimated at $40 million). Net after-tax transaction proceeds will be approximately $375 million (previously estimated at approximately $365 million), after the payment of divestiture-related costs of approximately $40 million (previously estimated at approximately $35 million) and cash taxes related to the divestiture of approximately $110 million (previously estimated at approximately $125 million).
PTC will use the net after-tax proceeds for share repurchases and intends to enter into a $375 million accelerated share repurchase agreement in Q2’26, with final settlement expected in Q3’26.
As expected, we are updating our guidance for cash flow, revenue, and EPS to account for the divestiture. There are no additional changes to our previous guidance provided on February 4, 2026.
Full Fiscal Year 2026 and Second Fiscal Quarter Guidance
(1) On a constant currency basis, using our FY’26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.
(2) Refer to the GAAP to non-GAAP reconciliation tables on page 2.
(3) Updated guidance for cash flow, revenue, and EPS reflects the effect of the Kepware and ThingWorx divestiture. FY’26 cash flow guidance includes approximately $150 million of divestiture-related outflows, which are not expected to recur in future years. This amount is comprised of approximately $40 million of divestiture-related costs and approximately $110 million of divestiture-related cash taxes. Q2’26 cash flow guidance includes approximately $5 million of divestiture-related costs. FY’26 and Q2’26 GAAP EPS guidance includes approximately $145 million and $135 million, respectively, of divestiture-related expenses and taxes. FY’26 and Q2’26 GAAP EPS guidance also includes a $464 million gain on the sale of our Kepware and ThingWorx businesses.
(4) FY’26 free cash flow guidance includes approximately $20 million of capital expenditures which are not expected to recur in future years, related to moving a major R&D center to a new office.
Reconciliation of FY’26 Operating Cash Flow Guidance Including Kepware and ThingWorx to FY’26 Operating Cash Flow Guidance Excluding Kepware and ThingWorx
Reconciliation of FY’26 Free Cash Flow Guidance Including Kepware and ThingWorx to FY’26 Free Cash Flow Guidance Excluding Kepware and ThingWorx
(1) Refer to the Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance table below.
Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance
Reconciliation of EPS Guidance to Non-GAAP EPS Guidance
FY’26 financial guidance includes the following assumptions:
- We provide ARR guidance on a constant currency basis, using our FY’26 Plan foreign exchange rates (rates as of September 30, 2025) for all periods.
- We expect churn to remain low.
- For cash flow, due to largely similar invoicing seasonality and timing of expenses, and consistent with the past 5 years, we expect the majority of our collections to occur in the first half of our fiscal year and for fiscal Q4 to be our lowest cash flow generation quarter.
- FY’26 GAAP operating expenses are expected to increase approximately 3%, primarily due to the divestiture-related expenses. Apart from the divestiture-related expenses, GAAP and non-GAAP operating expenses are expected to be relatively flat, as investments to drive future growth are offset by net proceeds from the divestiture-related Transition Services Agreement and lower operating expenses due to divested costs.
- We expect the absence of FY’26 Kepware and ThingWorx cash flow post-divestiture to be largely offset by FY’26 net proceeds from the divestiture-related Transition Services Agreement.
- Capital expenditures are expected to be approximately $30 million, with approximately $20 million of capital expenditures in FY’26 that are not expected to recur in future years, related to moving a major R&D center to a new office.
- Cash interest payments are expected to be approximately $50 million to $70 million.
- Cash tax payments are expected to be approximately $240 million to $260 million, of which approximately $110 million is related to the Kepware and ThingWorx transaction and not expected to recur in future years.
- GAAP and non-GAAP tax rates are expected to be approximately 20% to 25%.
- GAAP P&L results are expected to include the items below, netting to a gain of approximately $90 million to $120 million, as well as their related tax effects:
- approximately $465 million of non-operating credits, primarily related to a gain on the sale of our Kepware and ThingWorx businesses, partially offset by
- approximately $230 million to $260 million related to stock-based compensation,
- approximately $80 million related to amortization of acquired intangible assets, and
- approximately $35 million related to acquisition and transaction-related charges, of which approximately $25 million is expected in Q2’26.
- In Q2’26, we intend to repurchase approximately $250 million of common stock. In addition, we will use the net after-tax proceeds from the Kepware and ThingWorx transaction for incremental share repurchases and intend to enter into a $375 million accelerated share repurchase agreement in Q2’26, with final settlement expected in Q3’26. In Q2’26, we expect a decrease in fully diluted shares to approximately 118 million shares, compared to 121 million shares in Q2’25. In addition, in the second half of FY’26, we intend to repurchase between $150 million and $250 million of common stock per quarter. In total, we expect to repurchase approximately $1.125 billion to $1.325 billion of our shares in FY’26.
PTC Investor Update Call
PTC will host a conference call to discuss the divestiture and updated guidance at 5:00 pm ET on Monday, March 16, 2026. To participate in the live conference call, dial (888) 596-4144 or (646) 968-2525, provide the passcode 9277628, and press # or log in to the webcast, available on PTC’s Investor Relations website. A replay will also be available.
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, visit www.ptc.com.
About TPG
TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $286 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation, and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities. For more information, visit https://www.tpg.com.
