PTC’s fourth quarter results surpassed Wall Street’s expectations, a performance management attributed to strong customer demand for its intelligent product lifecycle solutions and continued momentum in large deal activity. CEO Neil Barua credited the quarter’s growth to the company’s ongoing transformation efforts, particularly in embedding artificial intelligence (AI) across its product portfolio, as well as increased seller productivity and expanded customer engagements. Barua emphasized that customer commitments now span multiple product lines and stages of the product lifecycle, noting that, “the companies that will win are the ones that successfully leverage product data...as a foundation of AI-driven intelligence and transformation.”
Is now the time to buy PTC? Find out in our full research report (it’s free for active Edge members).
PTC (PTC) Q4 CY2025 Highlights:
- Revenue: $685.8 million vs analyst estimates of $633.7 million (21.4% year-on-year growth, 8.2% beat)
- Adjusted EPS: $1.92 vs analyst estimates of $1.56 (22.8% beat)
- Adjusted Operating Income: $309.6 million vs analyst estimates of $259.5 million (45.1% margin, 19.3% beat)
- The company slightly lifted its revenue guidance for the full year to $2.81 billion at the midpoint from $2.78 billion
- Management raised its full-year Adjusted EPS guidance to $7.92 at the midpoint, a 2.6% increase
- Operating Margin: 32.2%, up from 20.4% in the same quarter last year
- Annual Recurring Revenue: $2.49 billion (13.1% year-on-year growth, beat)
- Billings: $573.4 million at quarter end, up 6.7% year on year
- Market Capitalization: $19.36 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PTC’s Q4 Earnings Call
Yun Kim (Loop Capital Market) asked about the visibility and timing of deferred ARR recognition in Q4. CEO Neil Barua explained that these are contractually committed deals, and the timing relates to customer implementation cycles, with most deferred ARR expected to ramp in Q4 and into the following year.
Joseph D. Vruwink (Baird) inquired about the material impact of recent AI releases on demand. Barua responded that while financial impact is currently minimal, AI-driven product enhancements are expected to drive demand and become economically significant as deployments scale.
Adam Charles Borg (Stifel) questioned the balance between expansion and competitive displacement in core products. Barua said most growth still comes from expansion, but competitive wins are increasing, especially as customers consolidate on PTC’s platforms to enable AI.
Joshua Tilton (Wolfe Research) asked about the high proportion of net new ARR from the channel versus direct sales. CFO Jen DeRico and Chief Revenue Officer Robert Dahdah clarified that results can be influenced by large deals involving both channels but emphasized ongoing improvements in both direct and channel productivity.
Jay Vleeschhouwer (Griffin Securities) asked if recent large transactions signal a fundamental change in deal profile and about momentum in automotive. Barua explained that larger, cross-product deals are becoming more common and that automotive sector traction is expanding, especially with ALM and PLM platforms.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will focus on (1) the recognition pace of deferred ARR as customer projects move from contract to implementation, (2) adoption rates and measurable impact of new AI-powered product features across PTC’s portfolio, and (3) continued momentum in SaaS migrations, particularly in strategic industries like automotive, aerospace, and defense. Ongoing improvements in sales productivity and execution of cross-product expansion will also serve as key indicators of sustained growth.
PTC currently trades at $162.71, up from $151.34 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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