-- Divestiture of Kepware Industrial Connectivity and ThingWorx IoT
businesses enables PTC to increase focus on Intelligent Product Lifecycle
vision
-- Updating post-divestiture financial guidance for FY'26 and Q2'26
-- Net after-tax proceeds from the divestiture will be used for share
repurchases; Announcing $375 million accelerated share repurchase program
BOSTON, March 16, 2026 /PRNewswire/ -- PTC $(PTC)$ today announced it has completed the previously announced sale of the company's Kepware$(R)$ industrial connectivity and ThingWorx(R) 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
$ in millions, Q2'26
except per FY'26 Guidance Guidance
share amounts % FY'26 Excluding Q2'26 Excluding
rounded to the Previous Kepware and Previous Kepware and
nearest half Guidance ThingWorx(3) Guidance ThingWorx(3)
Constant
currency ARR
excluding
Kepware and
ThingWorx
(FY'26 Plan FX 7.5% to 9.5% 7.5% to 9.5% 8% to 8.5% 8% to 8.5%
rates(1) ) growth growth growth growth
--------------- ---------------- ---------------- ------------ ------------
Operating cash
flow $1,030 $880 $315 to $320 $315 to $320
--------------- ---------------- ---------------- ------------ ------------
Free cash
flow(2) $1,000 $850(4) $310 to $315 $310 to $315
--------------- ---------------- ---------------- ------------ ------------
Revenue $2,675 to $2,940 $2,540 to $2,805 $710 to $770 $685 to $745
--------------- ---------------- ---------------- ------------ ------------
Earnings per $4.42 to $6.93 $6.94 to $9.66 $1.25 to $4.09 to
share $1.87 $4.74
--------------- ---------------- ---------------- ------------ ------------
Non-GAAP $6.69 to $9.15 $6.36 to $8.84 $1.93 to $1.87 to
earnings per $2.54 $2.47
share(2)
--------------- ---------------- ---------------- ------------ ------------
(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
FY'26 Operating
Cash Flow
$ in millions Guidance
Previous FY'26 operating cash flow guidance including Kepware
and ThingWorx $1,030
------------------------------------------------------------- ---------------
Estimated operating cash flow impact related to absence of
Kepware and ThingWorx post-divestiture, largely offset by
estimated net proceeds from divestiture-related Transition
Services Agreement $0
------------------------------------------------------------- ---------------
Estimated divestiture-related costs, which are not expected
to recur in future years ($40)
------------------------------------------------------------- ---------------
Estimated divestiture-related cash taxes, which are not
expected to recur in future years ($110)
------------------------------------------------------------- ---------------
Updated FY'26 operating cash flow guidance excluding Kepware
and ThingWorx $880
------------------------------------------------------------- ---------------
Reconciliation of FY'26 Free Cash Flow Guidance Including Kepware and ThingWorx to FY'26 Free Cash Flow Guidance Excluding Kepware and ThingWorx
FY'26 Free Cash
$ in millions Flow Guidance
Previous FY'26 free cash flow guidance including Kepware and
ThingWorx $1,000
------------------------------------------------------------- ---------------
Estimated free cash flow impact related to absence of
Kepware and ThingWorx post-divestiture, largely offset by
estimated net proceeds from divestiture-related Transition
Services Agreement $0
------------------------------------------------------------- ---------------
Estimated divestiture-related costs, which are not expected
to recur in future years ($40)
------------------------------------------------------------- ---------------
Estimated divestiture-related cash taxes, which are not
expected to recur in future years ($110)
------------------------------------------------------------- ---------------
Updated FY'26 free cash flow guidance excluding Kepware and
ThingWorx $850(1)
------------------------------------------------------------- ---------------
(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
FY'26 Q2'26
$ in millions Guidance Guidance
Operating cash flow $880 $315 to $320
---------------------- --------- ------------
Capital expenditures $30 $5
---------------------- --------- ------------
Free cash flow $850 $310 to $315
---------------------- --------- ------------
Reconciliation of EPS Guidance to Non-GAAP EPS Guidance
FY'26 Q2'26
Guidance Guidance
-------------- --------------
Earnings per share $6.94 to $9.66 $4.09 to $4.74
--------------------------------------------- -------------- --------------
Stock-based compensation $2.22 to $1.97 $0.65 to $0.58
--------------------------------------------- -------------- --------------
Amortization of acquired intangible assets $0.68 $0.17
--------------------------------------------- -------------- --------------
Acquisition and transaction-related charges $0.30 $0.21
--------------------------------------------- -------------- --------------
Non-operating charges (credits), net ($3.97) ($3.93)
--------------------------------------------- -------------- --------------
Income tax adjustments $0.19 to $0.20 $0.68 to $0.70
--------------------------------------------- -------------- --------------
Non-GAAP Earnings per share $6.36 to $8.84 $1.87 to $2.47
--------------------------------------------- -------------- --------------
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