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Fair Value Measurements | 12 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 15. Fair Value Measurements Money market funds, time deposits and corporate notes/bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. Certificates of deposit, commercial paper and certain U.S. government agency securities are classified within Level 2 of the fair value hierarchy. These instruments are valued based on quoted prices in markets that are not active or based on other observable inputs consisting of market yields, reported trades and broker/dealer quotes. The principal market in which we execute our foreign currency forward contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large financial institutions. Our foreign currency forward contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy. Our significant financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and 2021 were as follows:
(in thousands) |  | September 30, 2022 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents(1) |  | $ | 102,313 |  |  | $ | — |  |  | $ | — |  |  | $ | 102,313 |
Convertible note |  |  | — |  |  |  | — |  |  |  | 2,000 |  |  |  | 2,000 |
Forward contracts |  |  | — |  |  |  | 9,058 |  |  |  | — |  |  |  | 9,058 |
|  | $ | 102,313 |  |  | $ | 9,058 |  |  | $ | 2,000 |  |  | $ | 113,371 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  |  | — |  |  |  | 2,908 |  |  |  | — |  |  |  | 2,908 |
|  | $ | — |  |  | $ | 2,908 |  |  | $ | — |  |  | $ | 2,908 |
(in thousands) |  | September 30, 2021 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents(1) |  | $ | 114,375 |  |  | $ | — |  |  | $ | — |  |  | $ | 114,375 |
Convertible note |  |  | — |  |  |  | — |  |  |  | 2,000 |  |  |  | 2,000 |
Equity securities |  |  | — |  |  |  | — |  |  |  | 77,540 |  |  |  | 77,540 |
Forward contracts |  |  | — |  |  |  | 5,363 |  |  |  | — |  |  |  | 5,363 |
|  | $ | 114,375 |  |  | $ | 5,363 |  |  | $ | 79,540 |  |  | $ | 199,278 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  |  | — |  |  |  | 3,318 |  |  |  | — |  |  |  | 3,318 |
|  | $ | — |  |  | $ | 3,318 |  |  | $ | — |  |  | $ | 3,318 |
(1) Money market funds and time deposits. Level 3 Investments Convertible Note In the fourth quarter of 2021, we invested $2.0 million in a non-marketable convertible note. This debt security is classified as available-for-sale and is included in Other assets on the Consolidated Balance Sheet. There were no changes in the fair value of this level 3 investment in the twelve months ended September 30, 2022. Non-Marketable Equity Investments The carrying value of our non-marketable equity investments is recorded in Other assets on the Consolidated Balance Sheets and totaled $1.0 million as of September 30, 2022 and $2.2 million as of September 30, 2021. In 2022, PTC sold a non-marketable equity investment for $4.2 million, which had been held at a cost of $1.2 million. The $3.0 million gain recognized on the sale is included in Other income, net for the twelve months ended September 30, 2022 Equity Securities As of September 30, 2022, PTC held no remaining shares in Matterport, Inc., a publicly traded company, as we sold all previously held shares during the three months ended March 31, 2022. The shares sold included those held as of September 30, 2021, as well as additional shares which PTC earned during the second quarter of FY'22 based on contingent earn-outs achieved in January 2022. Shares related to the original investment were restricted from sale until January 2022 (six months after Matterport became a public company). At expiration of this lock-out, we sold all shares held from the original investment for $39.1 million at an average price of $9.1 per share. In February 2022, we sold all remaining shares held for $3.6 million at an average share price of $7.6 per share. Due to the decline in the price per share during the first six months of fiscal 2022, we recognized a loss of $34.8 million in Other income, net on the Consolidated Statements of Operations. No additional gains or losses were recognized in 2022 and the aggregate realized gain from the original investment of $8.7 million was $34.0 million. The following table presents changes in fair value of our Level 3 investment in the Matterport, Inc. shares from October 1, 2021 to September 30, 2022:
(in thousands) |  | September 30, 2022 |
|  | Fair Values |
Balance, October 1, 2021 |  | $ | 77,540 |
Realized loss |  |  | (38,468 | )
Sale of investment |  |  | (39,072 | )
Balance, September 30, 2022 |  | $ | — |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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