Prepared remarks
Good evening, ladies and gentlemen. Thank you for standing by, and welcome to PTC's 2026 Third Quarter Conference Call. I would now like to turn the call over to Mike Maguire, PTC's Head of Investor Relations. Please go ahead.
Thank you, operator. And good afternoon, everyone. Welcome to PTC's Third Quarter 2026 Conference call. On the call today are Neil Barua, Chief Executive Officer; and Jen DiRico, Chief Financial Officer. Today's conference call is being broadcast live through an audio webcast, and a replay of the call will be available later today at www.ptc.com. During this call, PTC will make forward-looking statements, including guidance as to future operating results. Because such statements deal with future events, actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in PTC's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the U.S. Securities and Exchange Commission as well as in today's press release. The forward-looking statements, including guidance provided during this call are valid only as of today's date, July 29, 2026, and PTC assumes no obligation to update these forward-looking statements. During the call, PTC will discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most comparable GAAP measures can be found in today's press release made available on our website. With that, I'd like to turn the call over to PTC's Chief Executive Officer, Neil Barua. Neil?
Thank you, Mike. PTC delivered another strong quarter in Q3. In particular, I'd highlight the $60 million of net new ARR we generated. Year-over-year constant currency ARR and free cash flow growth both exceeded the high end of our guidance range. There are a lot of positives from Q3. Our Intelligent Product Lifecycle solutions continued driving customer demand and business performance across verticals, geographies and products. Our customers face growing pressure to shorten development cycles, improve resilience and compete in an AI-driven world. They understand that their product data is a strategic enterprise asset to help drive better decisions and are turning to our CAD, PLM, ALM and FLM systems of record to build their product data foundations. From an execution standpoint, we have turned the corner with our go-to-market transformation. We are seeing the results of the transformation in our customer wins, including deeper vertical expertise, executive-level engagement and better cross-team collaboration. We had several notable wins this quarter, some of which are referenced in the appendix. But as an example, these results played an important role in a Q3 competitive PLM win with a major defense contractor to help modernize engineering operations for one of its critical business segments. Q3 also reinforced that our product and AI innovation is taking hold with customers. AI will be a tailwind for our business because AI requires our systems of record and the product data stored in them to be effective. Our systems structure product data in the context of engineering and service workflows, whether it's product design, a specific product configuration or a service work order. We then apply AI to the structured, contextualized data so it can complete increasingly complex tasks. We also provide the governance and access controls that are essential for safe and trustworthy AI use. We are encouraged by our AI progress and the potential in front of us. We continue delivering on our roadmap with the recent releases of Creo AI, our AI-native PTC Orbit product and the launch of Onshape Labs. Onshape is strongly positioned for AI. Its cloud-native architecture, highly scalable data model and built-in collaboration make it ideal for AI workflows with humans in the loop. More broadly, our customers tell us our embedded AI capabilities are the fastest path to adoption and value because AI is delivered in the context of trusted systems and governed workflows. In Q3, we won our largest AI deal ever, a near 7-figure ServiceMax AI deal with one of the world's largest industrial automation companies. This is a long-term customer that built a strong product data foundation with ServiceMax. ServiceMax AI uses that foundation to deliver technicians relevant information via a natural language interface, eliminating time spent searching documentation. The customer validated the approach through a pilot with service technicians showing that ServiceMax AI can reduce technician preparation time by 50% and deliver 4% net productivity improvement across the service workforce. As our customers embrace AI, one of their top priorities is protecting their intellectual property: their designs, configurations, bill of material, source code and more. They are hesitant to hand this data to the frontier model providers for security, regulatory and competitive reasons. Instead, they need this data to remain inside governed enterprise environments with appropriate permissions, process context and controls. They increasingly want frontier models to operate as infrastructure, while trusted systems like PTC provide the data and workflow layer where critical product work is performed. From a commercial standpoint, AI is already increasing the strategic importance of our systems of record and the product data foundations they manage. We expect adoption to progress from focused workflows with clear customer ROI through broader deployments as customers connect more product data and teams across the life cycle. That creates value for customers today and over time, and expands our share of customer spend through direct adoption of PTC's AI capabilities. We expect these stand-alone AI capabilities to become a more meaningful contributor to ARR over the next few years. Overall, Q3 was a great start to the second half of the year, and our performance reinforced the major themes and proof points of fiscal '26. We are entering Q4 with stronger execution, growing strategic relevance with customers through our Intelligent Product Lifecycle strategy and increasing confidence that AI will expand the value of our portfolio over time. With that, I'll turn the call over to Jen.
Thanks, Neil, and good afternoon, everyone. Q3 was a quarter of strong and consistent execution, highlighted by $60 million of net new ARR and broad-based strength across our key financial metrics. We continue to see solid demand capture in our go-to-market motions and encouraging early traction across our AI offerings. Given the momentum we have built and the opportunities in front of us, we are entering Q4 from a place of strength and are well positioned for a strong finish to the year. This is why we have chosen to increase the midpoint of our annual ARR growth guidance to 9.25%. At the end of Q3, our constant currency ARR was $2.448 billion, up 9.1% year-over-year, excluding Kepware and ThingWorx, above the high end of our guidance range. In Q3, we generated operating cash flow of $261 million and free cash flow of $249 million, exceeding our guidance range for both metrics. Turning to capital return. In Q3, we repurchased $525 million of common stock, more than double our previously provided target, reflecting opportunistic open market share repurchase and what we viewed as a compressed stock price. This outsized repurchasing decreased fully diluted share count to 115 million shares in Q3. For the full year, we expect common stock repurchases to be approximately $1.625 billion, an increase to our previous guidance of $1.225 billion to $1.325 billion. We expect our fully diluted share count to decrease to approximately 116 million shares for the full year compared to 121 million shares in FY '25. With that, I'll take you through our guidance. In fiscal '26, our constant currency ARR excluding Kepware and ThingWorx, we have raised the low end of our guidance and now expect growth of approximately 9% to 9.5%. At the midpoint, we are guiding for a net new ARR of $214 million. This increase to the midpoint of our guide and the tightening of our guidance range reflects both our go-to-market execution as well as the pipeline visibility the team has prioritized over the past two quarters. Consistent with our commentary in prior quarters, we expect a considerable step-up in net new ARR in Q4 compared to Q3. Our confidence in Q4 stems from the combination of strong demand generation and a meaningful increase in deferred ARR that we expect to convert into ARR during the quarter. In Q4, for constant currency ARR excluding Kepware and ThingWorx, our expectations correspond to a net new ARR range of $79 million to $92 million. Moving to cash flow, revenue and EPS. As a reminder, the Kepware and ThingWorx divestiture did not meet the criteria for discontinued operations, and therefore historical financial statement amounts have not been recast. This impacts the year-over-year growth calculations for revenue, EPS and cash flow as fiscal '26 includes Kepware and ThingWorx up until the divestiture on March 13, 2026, whereas fiscal '25 includes Kepware and ThingWorx for the full year. With that, we continue to expect to generate approximately $850 million in free cash flow in fiscal '26. For Q4 '26, we are guiding for free cash flow of approximately $15 million, lower year-over-year due to the capital gains outflows from the divestiture of Kepware and ThingWorx that are expected to occur in Q4. While the business remains focused on ARR and free cash flow, we're also providing revenue and EPS guidance to help you with your models. In Q3, revenue of $600 million was below the midpoint of our guide, reflecting only the shortened duration of a single large contract expansion. Deal durations across the broader business continue to hold. When coupling our Q3 performance with our current expectations for Q4, we feel comfortable raising the midpoint of our fiscal '26 revenue and non-GAAP EPS guidance. For fiscal '26, we are updating our revenue guidance to $2.69 billion to $2.75 billion, and we are updating our non-GAAP EPS guidance range to $7.87 to $8.42. In closing, I'm proud of Team PTC's execution and the progress we've made across the business. The Intelligent Product Lifecycle remains highly relevant to our customers, and we are increasingly optimistic about the role AI can play in accelerating value creation across our portfolio. I'd like to thank our employees for their continued dedication and focus. With that, I'll turn the call back to the operator for the Q&A session.
Questions and answers
And our first question comes from the line of Joe Vruwink with Baird.
I want to ask, there's been a lot of coverage even since just the last earnings report on how open source models and commercial models are starting to engage more with CAD and PLM systems. I think there's also been a renewed focus on the importance of industrial data and there's been new ventures trying to take a stab at the engineering ecosystem with various data strategies, synthetic data strategies. I guess all of that leads me to ask, what does PTC make of all of this over recent months? And are you noticing any changes out of customers on thinking that maybe warrants changing your own approach?
Joe, thanks for the question. Let me say a few things on this one. So as you know, PTC has been in this space for over 40 years. We've seen new entrants come into this market multiple times over that time. What's really kept us—and you're seeing it in the results this quarter and what we've been talking about the last number of quarters—is that close relationship we have with our customers is resulting in what we're seeing as the value of PTC, and I'll talk about the strength of our products, the critical nature of our products to our customer operations. Quite frankly, you're seeing a level of innovation to make sure we stay at the forefront with our customers. That obviously now includes AI. So if I comment specifically on your question around AI-focused startups, we see a lot of talk about new interfaces, but I want to be crystal clear: the structural advantage here at PTC is at the data and process level. If you think about making airplanes, cars, medical devices, you need strict governed workflows, and with all your product data in context in a manner that can be audited and traced for regulatory reasons, it's super complex and sophisticated work, and that's why PTC systems of record are so valuable. We've been doing that for 40 years, Joe, and have close relations with our customers, and we don't see this suddenly changing in any of our customer conversations. You can see the momentum that we've built here at PTC. That's the result of the innovation, the trust that our customers have in modernizing with us the product data foundation and building AI with that context. We're obviously watching all that's happening in the ecosystem but we're really focused on what we are seeing the energy around and the actual results, which is driving more customer demand, enhancing our products, building new products and making more progress with AI. So we're really energized by the position we're in and the questions you're asking, Joe.
And our next question comes from the line of Matt Hedberg with RBC Capital Markets.
I guess for either of you, given what seems like a stable selling environment, it was really good to see you take the low end of the constant currency ARR guide up this year. Neil, you spent a lot of time talking about new product innovation, and I think we have to be patient with AI, but it seems like it's coming. Jen, you talked about deferred ARR balance growing. I guess I'm wondering, I know it's still early for fiscal '27, but can you outline a path to low double-digit ARR growth? I mean, what has to happen from your perspective? Because it feels like there are increasing tailwinds at your back.
Yes. Thanks for the question. I laid out context on last quarter's call around this. Even with the increase in our guidance from 9% to 9.5%, that context still remains. What I shared last quarter was that for us to accelerate growth, what you need to believe at a minimum is that we can, on a net new ARR basis, perform on a like-for-like basis next year as we did this year. Then you add in the deferred ARR that we already have on our books, and you would see an acceleration. We're doubling down on that statement, even with the fact that the midpoint of our guidance for this year is 9.25% versus 8.5% a quarter ago.
And our next question comes from the line of Daniel Jester with BMO Capital Markets.
Maybe we can just spend a moment hearing the feedback that your customers had on some of the new products that were announced. I know you spent a lot of time in Chicago in June. So I'd love to hear what they were sharing with you about them.
Thanks for the question. The majority of the feedback we're getting is energy and excitement from our customers around the innovation that's super relevant to what the customers need, whether it be the releases we're making for PTC Jetstream or Orbit or all the AI releases that we're doing. It is accelerating our customers' appetite and requirement to use PTC to get the benefits of AI. That's shown up in a number of the examples we gave, but more broadly across what we've been seeing the last number of quarters: an energy and an urgency to modernize their product data foundation because they want to take advantage of this new innovation, and they need to get their digital house in order using PTC in many cases, to displace other tools and to standardize across our products. To get the value of our AI capabilities and the new innovation, they need to modernize with PTC, and that's showing up. I was very enthused by the feedback we got from Chicago and by the way it's shown up over the course of this year. Starting in Q4 of last year, as we're saying, we've turned the corner—customers really understand the value proposition of PTC, how we're approaching them, the messaging and the innovation around it. So we're energized about the feedback we've received since then and during the last several quarters.
Our next question comes from the line of Jason Celino with KeyBanc Capital Markets.
This one is for Neil. We've seen some really cool things with AI and designing stuff with large language models, and it kind of leads to better engineering efficiency. So my question is how this might play in the engineering market. Some industries are growing, some aren't. So how do you see AI affecting underlying engineering headcount growth?
So let me start: we see AI as accelerating the utilization of what PTC has to deliver, first and foremost. I'll give you an example: Onshape is a cloud-native, scalable architecture with built-in collaboration, and it's ideal for AI workflows. We're seeing it being utilized by AI-related startups to complete the design process, to accelerate and enhance design processes that are done either by agents or human beings, using Onshape as the central point to execute that. We see that as a massive lift. API calls to Onshape by AI-related startups are tripling in just a few months, which indicates momentum around using PTC's system of record and product data foundation to get AI value. We're seeing that happen. We gave the example of ServiceMax in the service world, where AI is delivering efficiencies and real hard dollars for customers. Our view is AI will be an accelerant over time. In some cases the examples are already happening, and we believe this will be a mid- to long-term acceleration of AI-driven monetization opportunities, while at the same time, enabling best-in-class AI interfaces to CAD tools. We saw Onshape's largest win ever this quarter with a company called Winnebago; that was inspired by these AI-related capabilities. We're seeing this across Arena, ServiceMax, Windchill, Codebeamer and Creo. We feel good about scaling outcomes for our customers using AI.
And our next question comes from the line of Andrew DeGasperi with BNP Paribas.
I wanted to maybe follow up on your prepared remarks. You discussed this large Q3 Windchill deal that was a competitive win. Just wanted to understand, has something changed in the market that has led you to win that deal? Maybe can you elaborate a little more about what went behind that?
Sure. The number of displacements and the aggregate value of displacements year-over-year has doubled at PTC, which is indicative and shown in some of the customer slides we provided. Across the board, we're starting to win more customer displacement. What's driving that in this example is customers realize that with our vertical expertise, go-to-market transformation, messaging and product alignment, we help them take advantage of AI and address geopolitical risk, supply chain risk, etc. They need to modernize their product data foundation and are choosing PTC. We have advanced products, a strong AI roadmap, and we've proven it across the verticals where we operate. Our sales and marketing are doing a much better job than 18 months ago at demonstrating that consistently. That's why customers are consolidating onto PTC and expanding the portfolio with us. In the specific example I referenced, it was a multi-CAD environment and multi-PLM environment; they ran an RFP and concluded we had the stronger capabilities and a stronger AI roadmap. They've consolidated their CAD and PLM estates on PTC, which is a form of displacement because we're taking share from others in existing accounts.
And our next question comes from the line of Saket Kalia with Barclays.
Nice quarter. Neil, maybe for you, I want to pick up on the thread a little bit because it's super interesting to talk about PLM as a system of record for AI for your customers. Maybe the question is, can you talk about how urgent that conversation is becoming with customers? And as you think about that multiyear opportunity, there's clearly opportunity to displace competitors. Do you think you can also expand the TAM for PLM as well?
Thanks, Saket. That's actually what we're starting to see. Our Intelligent Product Lifecycle strategy is focused on ensuring customers have the strongest product data foundation, on which they can layer intelligence and AI. Part of that strategy is democratizing product data across the enterprise, which effectively increases TAM. For example, PTC Jetstream—announced at PTC Next and live in beta now—takes derived data from design and configuration in Creo and Windchill and propagates it to the supply chain so they can use it for faster design, production and service. We're seeing that as one leverage point. As we expand and modernize PLM and consolidate to Windchill, we can leverage Jetstream and AI modules within Windchill to do more. Arena, our born-in-the-cloud PLM solution, is also advancing AI capabilities and delivering supply chain intelligence that increases the number of users who need PLM, consolidates other systems onto our platform, and expands our capabilities into other parts of the organization. In short, by making PLM the nerve center of the product lifecycle and layering AI, we're expanding use cases, personas and TAM, and we're beginning to see that.
And our next question comes from the line of Ken Wong with Oppenheimer.
With the fiscal Q3 net new ARR at $60 million above prior Q3 levels and the upper half of fiscal Q4 also above historical levels, Neil, when looking at sales operations now, are we where you envisioned when you initially started the go-to-market changes, or are there still more benefits to come?
Ken, thanks for the question. To rewind the tape, we started this transition about 18 months ago. We've talked about progress over that time. It's the sustained execution we've seen over the last four quarters, since Q4 of last year, that gave Jen and me the confidence to say we've turned the corner. We're proud of our Q3 performance because it solidified our go-to-market team reaching a new operating standard. We've watched improvements in rep productivity, renewal rates, pipeline quality and diversity, velocity and displacements, and they've steadily improved. Qualitatively, we now have deeper vertical expertise and executive-level engagement; we're talking to C-level executives at scale, which didn't happen 18 months ago. Cross-team collaboration and deal structuring are better, and our enablement efforts are paying off. These factors are influencing our deals and are showing up in results. We're not stopping: we've established a new operating standard and will continue to improve those metrics with the momentum we have now.
And our next question comes from the line of Blair Abernethy with Rosenblatt Securities.
Neil, I just want to take the question back to AI. You've been adding a lot of product features in the last year or so and obviously more coming. I just wonder how your thoughts are right now around monetizing some of these new features? A lot of it's going to be table stakes with competitors doing similar moves. But where do you see the biggest monetization opportunities for PTC?
Sure, Blair. Two-part answer. First, AI accelerates urgency for customers to modernize their product data foundation with our core systems of record. That tailwind is already evident in results and in customer conversations. Second, embedded AI capability offers monetization. We've doubled the number of AI-embedded releases this year versus last, many are already in the field. We highlighted examples such as a global HVAC company expanding to near seven-figure deals, and ServiceMax AI deals that we've templatized. In the next quarter we won another near seven-figure ServiceMax AI deal, and that pipeline is growing substantially. On Arena, supply chain intelligence has driven expansion opportunities and momentum, which includes AI capabilities. Onshape is driving API usage and monetization tied to AI workflows. That said, customers are methodical: they start with pilots, validate ROI and adoption, then scale. We've seen that with ServiceMax and Arena. Stand-alone AI monetization is a medium- to longer-term economic opportunity, and in parallel AI accelerates displacements and expansion for our product data foundation.
And our next question comes from the line of Jay Vleeschhouwer with Griffin Securities.
Neil, it's been interesting to hear the repeated references to displacement and modernization. It ties back to something else we've been hearing from your principal competitors. At a time when all principal vendors are thinking in terms of engineering software musical chairs, how do you think about pipeline handicapping, pipeline management and not becoming overly dependent on displacement or decommissioning opportunities, and perhaps further distinguishing yourself with multi-solution sales?
Jay, let me be clear: expansion and greater monetization of our customer relationships is the predominant way we're scaling. The acceleration of displacement is happening faster this year than last, and we're pushing on it. Onshape is accelerating against competitors and taking share, and we'll continue to fuel that engine. That doesn't take our eye off building PTC Jetstream, which is incremental TAM expansion for existing customers—delivering more value to current customers. When I came in, the strategy was to not lose sight of customers who have budgets and need trusted advisers to modernize with PTC. While doing that, we're taking share from others. In the example we provided, a customer with a multi-CAD, multi-PLM environment ran an RFP and concluded we had stronger capabilities and a stronger AI roadmap. They consolidated their CAD and PLM on PTC. So yes, displacements are part of the growth story, but we're focused on both expansion within accounts and displacement opportunities across the market.
And our next question comes from the line of Adam Borg with Stifel.
Maybe for Neil or Jen. On capital allocation framework: organic focus and turning over stones is paying dividends. Organic investment continues, and we also see accelerated share buybacks. M&A has been quiet. As your organic flywheel continues and the go-to-market machine matures, how are you thinking about M&A? Anything changed? Why not get back into M&A as everything seems to be firing?
Sure. Jen, you can add, but on M&A: we continue to look at M&A that can accelerate the roadmap. We've done several very small tuck-ins that may not make headlines but accelerate capabilities we need. For example, a recent small acquisition accelerates Windchill extension capabilities to help customers move from on-premise Windchill to Windchill+ arrangements. We'll continue to do small tuck-ins that accelerate our organic roadmap. For larger M&A, our priority remains executing the organic plan where there's a lot to do; if opportunities change, we'll let you know, but right now we're focused on organic growth with selective small acquisitions to accelerate product development.
And our next question comes from the line of Siti Panigrahi with Mizuho.
Most of my questions were asked, but one clarification, Jen, on your cash flow statement: there was a $50 million outflow towards a solar energy equity investment. Could you explain what this is and whether it represents a recurring commitment into 2027?
Thanks for the question. We did make an investment in solar as we think about extending our green footprint, and there will be, over time, tax savings and related benefits from a tax perspective over the medium term.
And our next question comes from the line of Nay Soe Naing with Berenberg.
By all accounts, everything points to the setup going into FY '27 being much better than the setup coming into FY '26. If we look at the deal pipeline, the large deals you've signed, the deferred revenue levels next Q4 being higher than this year and your AI roadmap, is there anything we should be mindful of that could prevent FY '27 from being as good as or better than FY '26?
Let me start. We still have a few months left to close out Q4, and we remain focused on execution. We've been focused on structuring deals that are good for PTC and customers, and that has built deferred ARR across multiple quarters. We've had four straight quarters of demand capture that affect deferred ARR and give us energy as we think about subsequent years. Risk factors would be failure to execute: we have to close this quarter as expected, and then continue to build momentum into next year. We must keep pushing on new innovation, monetize it, expand wallet share, and continue enablement across the organization. Those actions are underway, but they all need to happen to ensure next year builds on the accelerated momentum we're heading into 2027 with.
And our next question comes from the line of Josh Tilton with Wolfe Research.
Can you hear me? I've been bouncing around with a ton of prints tonight, so I apologize if you've already addressed this. I'm trying to understand what changed from last quarter to this quarter that produced such outperformance. Congrats on the ARR figure. What in the environment changed that let you outperform relative to the expectations you set 90 days ago? And as a follow-up, you raised guidance and now imply net new ARR growth in Q4. Can you talk about your confidence level for Q4 net new ARR versus the confidence you had going into this quarter?
I'll start. We're pleased with two elements of Q3 performance: strong demand capture and better-than-anticipated retention rates. Both landed and allowed us to outperform the high end of guidance for Q3. Regarding Q4 confidence, as I said last quarter, our guidance range of 9% to 9.5% (midpoint 9.25%) signals strong confidence. The context I shared last quarter was that if we can perform on net new ARR on a similar basis for the second half as we did this year, plus the deferred ARR, you'd feel comfortable reaching the midpoint. We've now narrowed the guide and raised the low end above the prior midpoint, which points to improved pipeline visibility, continued strength and execution and our overall ability to deliver on the guidance.
I'll add three points on what we've seen. First, we see demand capture and net new ARR coming through as we had anticipated. Second, we've established a new operating standard from our go-to-market transformation with four quarters of visible progress. Third, having the Kepware and ThingWorx divestiture behind us allows us to focus 100% on the Intelligent Product Lifecycle. Lastly, customers are sophisticated and methodical: to get AI value, they need a consistent product data foundation and governed workflows. Customers are choosing trusted advisers who understand their data context. Those themes have strengthened in the last 90 days and are showing up in conversations, pilots and deals.
And our next question comes from the line of Tyler Radke with Citi.
Jen, I appreciate the comments on deferred ARR dynamics. As we look at your net new ARR for Q4, how much are you assuming for deferred ARR contribution there? And as we look at FY '27, what is the expected deferred contribution versus FY '26?
We continue to be pleased with our ability to build deferred ARR both in Q4 and for FY '27 and beyond. I'm not going to give too much detail on the impact for Q4 specifically, but it's a meaningful step up and we feel confident about our visibility there. As we think about 2027, we have approximately two times the amount of deferred ARR at this point this year versus the same point last year for FY '26. So it's meaningful.
And our next question comes from the line of Andrew Obin with Bank of America.
A question on ARR by channel: it's 12.6% year-over-year for channel versus direct 7.8%, and that's been consistent every quarter this year. You're investing in direct, but the channel is still growing faster. When do we see a pickup in direct—does it flip next year? How should I think about this dynamic?
I appreciate the question. Mix between channel and direct often depends on customer preference and how they want to consume. In our largest deals, we often see both direct and channel partners involved. So that's what you're seeing. We continue to see strong growth in our direct team. Neil talked about improved productivity and stronger metrics from our go-to-market transformation. More reps are hitting quota this year versus last, and we're seeing the benefits of that transformation in performance.
And our final question comes from the line of Alexei Gogolev with JPMorgan Chase.
This is Ella for Alexei. As organic product development becomes a greater focus for PTC, are you expecting to venture into completely new greenfield product areas? Or do you expect your new products to be closely connected to existing product lines like PLM, ALM, SLM and CAD?
Thanks for the question. We have a lot to do executing our Intelligent Product Lifecycle strategy, which includes the core systems you're referring to, expansion, displacement, layering AI capabilities and moving product data to other personas such as supply chain and manufacturing. We're experts in those areas, we have vertical expertise and growing executive engagement, and there's plenty to do within that strategy. We're focused on monetizing across those vectors and feel very good about the opportunities. We're proud of Q3 results, but we're just getting started.
And that concludes our question-and-answer session. I will now turn the conference back over to Mr. Neil Barua for closing remarks.
Thank you, everyone, for joining us and for your questions today. In the weeks ahead, we'll be participating in the Oppenheimer Technology Internet & Communications Conference as well as the Citi Global TMT Conference. We look forward to seeing you then. Thank you.
And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.