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Equity Incentive Plans (Tables)

12 Months Ended

Sep. 30, 2021

Share Based Compensation Allocation And Classification In Financial Statements [Abstract]

Schedule of Classification of Compensation Expense

The following table shows total stock-based compensation expense recorded from our stock-based awards as reflected in our Consolidated Statements of Operations:

(in thousands)	Year ended September 30,
	2021		2020		2019
Cost of license revenue	$	100	$	47	$	509
Cost of support and cloud services revenue		9,900		6,910		5,004
Cost of professional services revenue		9,263		7,012		6,426
Sales and marketing		53,712		37,351		32,026
Research and development		34,272		27,005		22,019
General and administrative		70,042		36,824		20,416
Total stock-based compensation expense	$	177,289	$	115,149	$	86,400

Schedule of Restricted Stock Unit Activity

Restricted stock unit activity for the year ended September 30, 2021 (in thousands, except grant date fair value data)	Shares			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Balance of outstanding restricted stock units, October 1, 2020		3,509		$	79.13
Granted⁽¹⁾		1,480		$	111.48
Vested		(1,488	)	$	80.64
Forfeited or not earned		(284	)	$	90.99
Balance of outstanding restricted stock units, September 30, 2021		3,217		$	92.46	$	385,311

(1)

RSUs granted includes 33,000 shares from prior period Total Shareholder Return (TSR) awards that were earned upon achievement of the performance criteria and vested in November 2020.

Schedule of Number of RSU Awards Granted by Award Type

The following table presents the number of RSU awards granted by award type:

(in thousands)	Twelve months ended September 30, 2021
Performance-based RSUs⁽¹⁾		90
Service-based RSUs⁽²⁾		1,267
Total Shareholder Return RSUs⁽³⁾		90

(1)

The performance-based RSUs were granted to our executives and are eligible to vest based upon annual performance measures over a three-year period. To the extent earned, those performance-based RSUs will vest in three substantially equal installments on November 15, 2021, 2022 and 2023, or the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of RSUs can be earned (a maximum aggregate of 179,000 RSUs).

(2)	The service-based RSUs were granted to employees, including our executive officers. Substantially all service-based RSUs will vest in three substantially equal annual installments on or about the anniversary of the date of grant.

(3)

The Total Shareholder Return RSUs (TSR RSUs) were granted to our executives and are eligible to vest based on the performance of PTC stock relative to the stock performance of an index of companies established as of the grant date, as determined at the end of three measurement periods ending on September 30, 2021, 2022 and 2023, respectively. The RSUs earned for each period will vest on November 15, 2021, 2022, and 2023. Up to a maximum of two times the number of TSR RSUs eligible to be earned for the period (up to a maximum aggregate of 179,000 RSUs) may vest. If the return to PTC shareholders is

negative for a period but still meets or exceeds the group indexed return, a maximum of 100% of the eligible TSR RSUs may vest for the measurement period.

Schedule of Valuation Assumptions

The significant assumptions used in the Monte Carlo simulation model were as follows:

Average volatility of peer group	41.5	%
Risk-free interest rate	0.21	%
Dividend yield	—	%

Schedule of Total Fair Value of RSUs Vested

Total fair value of RSUs vested are as follows:

(in thousands)	Year ended September 30,
Value of stock option and stock-based award activity	2021		2020		2019
Total fair value of restricted stock unit awards vested	$	171,316	$	103,265	$	131,659