PTC has introduced it has accomplished the beforehand introduced sale of the corporate’s Kepware industrial connectivity and ThingWorx Web of Issues (IoT) companies to TPG, a worldwide various asset administration agency.
“We’re happy to finish the divestiture of our Kepware and ThingWorx companies as we improve our concentrate on our Clever Product Lifecycle imaginative and prescient,” stated Neil Barua, the president and CEO of PTC. “We need to thank the groups transferring over for his or her years of service, and we want them properly transferring ahead.”
Monetary particulars
PTC obtained money proceeds of $523 million upon closing (beforehand estimated at $525 million), reflecting closing changes of $42 million associated to working capital and indebtedness (beforehand estimated at $40 million). Internet after-tax transaction proceeds shall be roughly $375 million (beforehand estimated at roughly $365 million), after the fee of divestiture-related prices of roughly $40 million (beforehand estimated at roughly $35 million) and money taxes associated to the divestiture of roughly $110 million (beforehand estimated at roughly $125 million).
PTC will use the web after-tax proceeds for share repurchases and intends to enter right into a $375 million accelerated share repurchase settlement in Q2’26, with closing settlement anticipated in Q3’26.
As anticipated, they’re updating our steerage for money circulation, income and EPS to account for the divestiture. There aren’t any extra adjustments to our earlier steerage supplied on February 4, 2026.
Full fiscal yr 2026 and second fiscal quarter steerage
(1) On a continuing foreign money foundation, utilizing our FY’26 Plan international trade charges (charges as of September 30, 2025) for all intervals.
(2) Discuss with the GAAP to non-GAAP reconciliation tables on web page 2.
(3) Up to date steerage for money circulation, income, and EPS displays the impact of the Kepware and ThingWorx divestiture. FY’26 money circulation steerage contains roughly $150 million of divestiture-related outflows, which aren’t anticipated to recur in future years. This quantity is comprised of roughly $40 million of divestiture-related prices and roughly $110 million of divestiture-related money taxes. Q2’26 money circulation steerage contains roughly $5 million of divestiture-related prices. FY’26 and Q2’26 GAAP EPS steerage contains roughly $145 million and $135 million, respectively, of divestiture-related bills and taxes. FY’26 and Q2’26 GAAP EPS steerage additionally features a $464 million achieve on the sale of our Kepware and ThingWorx companies.
(4) FY’26 free money circulation steerage contains roughly $20 million of capital expenditures which aren’t anticipated to recur in future years, associated to transferring a R&D centre to a brand new workplace.
Reconciliation of FY’26 working money circulation steerage together with Kepware and ThingWorx to FY’26 working money circulation steerage excluding Kepware and ThingWorx
Reconciliation of FY’26 free money circulation steerage together with Kepware and ThingWorx to FY’26 free money circulation steerage excluding Kepware and ThingWorx
(1) Discuss with the Reconciliation of Working Money Stream Steerage to Free Money Stream Steerage desk under.
Reconciliation of working money circulation steerage to free money circulation steerage
Reconciliation of EPS steerage to non-GAAP EPS steerage
FY’26 monetary steerage contains the next assumptions:
- They supply ARR steerage on a continuing foreign money foundation, utilizing our FY’26 Plan international trade charges (charges as of September 30, 2025) for all intervals.
- They anticipate churn to stay low.
- For money circulation, because of largely comparable invoicing seasonality and timing of bills, and according to the previous 5 years, they anticipate the vast majority of their collections to happen within the first half of our fiscal yr and for fiscal This autumn to be our lowest money circulation technology quarter.
- FY’26 GAAP working bills are anticipated to extend roughly 3%, primarily as a result of divestiture-related bills. Other than the divestiture-related bills, GAAP and non-GAAP working bills are anticipated to be comparatively flat, as investments to drive future development are offset by web proceeds from the divestiture-related Transition Providers Settlement and decrease working bills because of divested prices.
- They anticipate the absence of FY’26 Kepware and ThingWorx money circulation post-divestiture to be largely offset by FY’26 web proceeds from the divestiture-related Transition Providers Settlement.
- Capital expenditures are anticipated to be roughly $30 million, with roughly $20 million of capital expenditures in FY’26 that aren’t anticipated to recur in future years, associated to transferring a R&D centre to a brand new workplace.
- Money curiosity funds are anticipated to be roughly $50 million to $70 million.
- Money tax funds are anticipated to be roughly $240 million to $260 million, of which roughly $110 million is said to the Kepware and ThingWorx transaction and never anticipated to recur in future years.
- GAAP and non-GAAP tax charges are anticipated to be roughly 20% to 25%.
- GAAP P&L outcomes are anticipated to incorporate the gadgets under, netting to a achieve of roughly $90 million to $120 million, in addition to their associated tax results:
- roughly $465 million of non-operating credit, primarily associated to a achieve on the sale of our Kepware and ThingWorx companies, partially offset by
- roughly $230 million to $260 million associated to stock-based compensation,
- roughly $80 million associated to amortisation of acquired intangible property, and
- roughly $35 million associated to acquisition and transaction-related expenses, of which roughly $25 million is anticipated in Q2’26.
- In Q2’26, they intend to repurchase roughly $250 million of frequent inventory. As well as, they may use the web after-tax proceeds from the Kepware and ThingWorx transaction for incremental share repurchases and intend to enter right into a $375 million accelerated share repurchase settlement in Q2’26, with closing settlement anticipated in Q3’26. In Q2’26, they anticipate a lower in totally diluted shares to roughly 118 million shares, in comparison with 121 million shares in Q2’25. As well as, within the second half of FY’26, they intend to repurchase between $150 million and $250 million of frequent inventory per quarter. In whole, they anticipate to repurchase roughly $1.125 billion to $1.325 billion of our shares in FY’26.
PTC investor replace name
PTC will host a convention name to debate the divestiture and up to date steerage at 5:00 pm ET on Monday, March 16, 2026. To take part within the reside convention name, dial (888) 596-4144 or (646) 968-2525, present the passcode 9277628, and press # or log in to the webcast, obtainable on PTC’s Investor Relations web site. A replay may even be obtainable.
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