PTC Revenue Falls 25% in Fourth Quarter as Schneider Deal Remains Pending

PTC Inc. reported fiscal fourth-quarter and full-year 2026 results on November 4, 2026. Fourth-quarter revenue was $673 million, down 25% from a year earlier. The software company is being acquired by Schneider Electric under an all-cash agreement announced October 5, 2026.

Because of the pending transaction, PTC has suspended its quarterly earnings calls and no longer gives quarterly or annual guidance. PTC says revenue is affected by ASC 606 accounting, while ARR is not affected by variability in the timing of revenue under ASC 606.

Quarterly Revenue Drops While Full-Year Sales Hold Flat

Fourth-quarter revenue was $673 million, down 25% as reported and 24% in constant currency. Fiscal 2026 revenue came to $2,733 million, flat against $2,739 million in fiscal 2025, and down 2% in constant currency.

Fourth-quarter GAAP operating margin was 32%, compared with 49% a year earlier. Non-GAAP operating margin was 46%, against 59%. For the full year, GAAP operating margin was 33%, against 36%.

GAAP diluted earnings per share were $1.44 for the quarter, down from $2.88, and $8.93 for the year, up from $6.08. Non-GAAP diluted EPS was $2.03 for the quarter, against $3.41, and $8.24 for the year, against $7.94. Full-year GAAP results include gains of $463.9 million on the sale of the Kepware and ThingWorx businesses, which were sold in the second quarter of fiscal 2026.

Deal Terms
Schneider Electric will pay $205 per PTC share in cash, valuing PTC’s equity at about $22.6 billion, according to PTC’s October 5, 2026 release. Closing is expected by the third quarter of 2027.

Recurring Revenue Rises as License Revenue Falls

Annual recurring revenue excluding divested businesses reached $2,508 million at the end of the quarter, up 8% from $2,320 million. In constant currency at fiscal 2026 plan exchange rates, the figure was $2,545 million, up 9.7%. On an as-reported basis, ARR rose 1% year over year.

Fourth-quarter license revenue fell to $267.0 million from $484.1 million. Full-year license revenue was $1,105.2 million, compared with $1,162.7 million. PTC notes that revenue, operating margin and earnings per share are impacted under ASC 606. The release says a substantial portion of the total value of on-premises license subscriptions is recognized as revenue at a point in time.

Fourth-quarter free cash flow was $37.7 million, compared with $100.5 million a year earlier; the headline table rounds the current figure to $38 million. Both tables show full-year free cash flow of about $873 million, up from about $857 million.

Fourth-quarter cash flow also included about $24 million of divestiture-related costs and about $75 million of divestiture-related cash taxes. The release says these items are not expected to recur.

Schneider Electric’s $205 Cash Offer and Financing

On October 5, 2026, Schneider Electric agreed to acquire PTC for $205 per share in cash. The offer values PTC’s equity at about $22.6 billion and the implied enterprise value at $23.7 billion. The price is a 42.3% premium to PTC’s last closing price before the deal and 46.1% above its 30-trading-day volume-weighted average price. The enterprise value is about 21 times 2027 estimated adjusted EBITA, or 13 times including full run-rate synergies.

Total cash consideration is about 22 billion. Financing is planned as roughly 5–6 billion of new equity, expected to be issued as an accelerated bookbuild, and roughly 16–17 billion of new debt across several currencies. A fully committed bridge facility from Morgan Stanley and Société Générale backs the deal. Both boards have unanimously approved it.

Schneider Electric chief executive Olivier Blum called the acquisition an ‘important step forward’ in the company’s ambition. PTC president and chief executive Neil Barua said the all-cash transaction is the culmination of the PTC Board’s commitment to maximize shareholder value. According to The Next Web, Schneider expects about €250 million in annual savings by the third year after closing.

PTC is based in Boston and has more than 30,000 customers. According to Bloomberg, as relayed by The Next Web, the deal is Schneider’s largest acquisition to date. According to The Next Web, its previous biggest software deal was the 2023 buyout of UK industrial software firm Aveva, valued at about £9.5 billion. The Financial Times had reported a day earlier that the companies were close to an agreement at about $20 billion, according to The Next Web.

The offer values PTC’s equity at about $22.6 billion.

Closing Conditions and Next Steps as of November 5, 2026

Closing is expected by the third quarter of 2027. Completion requires approval by at least a majority of PTC’s outstanding shares at a special shareholder meeting, along with required regulatory approvals. PTC’s board has approved the deal and will recommend it to shareholders.

Morgan Stanley is lead financial advisor to Schneider Electric, and Goldman Sachs Bank Europe SE is also a financial advisor to Schneider. Evercore is financial advisor to PTC. Debevoise & Plimpton is legal counsel to Schneider, and Paul, Weiss, Rifkind, Wharton & Garrison is legal counsel to PTC.

Schneider Electric said on October 5, 2026 that, as a result of the transaction, it would bring forward the release of its third-quarter 2026 revenues to October 16, 2026. PTC’s November 4, 2026 release says it is suspending quarterly earnings calls and is no longer providing quarterly or annual guidance.