0000857005 Q3--09-30 false 2024 http://fasb.org/us-gaap/2024#OtherAssetsNoncurrent http://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrent http://fasb.org/us-gaap/2024#OtherAssetsNoncurrent http://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrent http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense http://fasb.org/us-gaap/2024#NonoperatingIncomeExpense P495D 0000857005 ptc:CorinnaLathanMember 2024-06-30 0000857005 us-gaap:SeniorNotesMember ptc:LongTermDebtCurrentMember 2024-06-30 0000857005 us-gaap:TrademarksMember ptc:PureSystemsMember 2023-10-04 0000857005 currency:CAD ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember currency:JPY 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember currency:EUR us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2024-06-30 0000857005 ptc:ServicemaxAcquisitionMember 2022-10-01 2023-06-30 0000857005 us-gaap:OtherNoncurrentAssetsMember us-gaap:LineOfCreditMember 2023-09-30 0000857005 us-gaap:RevolvingCreditFacilityMember us-gaap:LongTermDebtMember 2024-06-30 0000857005 ptc:A3625Seniornotesdue2025Member us-gaap:LongTermDebtMember 2024-06-30 0000857005 srt:MaximumMember 2025-07-01 2024-06-30 0000857005 ptc:PerpetualLicenseMember 2023-04-01 2023-06-30 0000857005 ptc:ServicemaxAcquisitionMember 2023-10-02 0000857005 us-gaap:FairValueInputsLevel2Member 2024-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0000857005 us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0000857005 us-gaap:ForwardContractsMember us-gaap:FairValueInputsLevel1Member 2024-06-30 0000857005 ptc:SoftwareMember 2022-10-01 2023-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2024-04-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-04-01 2023-06-30 0000857005 us-gaap:SeniorNotesMember ptc:A3625Seniornotesdue2025Member 2024-06-30 0000857005 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2024-04-01 2024-06-30 0000857005 us-gaap:SellingAndMarketingExpenseMember 2024-04-01 2024-06-30 0000857005 us-gaap:TechnologyServiceMember 2023-10-01 2024-06-30 0000857005 ptc:RecurringServicesMember 2023-10-01 2024-06-30 0000857005 us-gaap:OtherIntangibleAssetsMember 2023-09-30 0000857005 us-gaap:RetainedEarningsMember 2024-03-31 0000857005 us-gaap:ResearchAndDevelopmentExpenseMember 2023-04-01 2023-06-30 0000857005 us-gaap:OperatingSegmentsMember srt:EuropeMember 2023-10-01 2024-06-30 0000857005 us-gaap:OperatingSegmentsMember 2022-10-01 2023-06-30 0000857005 us-gaap:ComputerSoftwareIntangibleAssetMember 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2022-10-01 2023-06-30 0000857005 ptc:SupportAndCloudServicesMember us-gaap:CostOfSalesMember 2022-10-01 2023-06-30 0000857005 currency:SEK ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 currency:EUR ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 srt:MinimumMember 2025-07-01 2024-06-30 0000857005 us-gaap:NondesignatedMember us-gaap:ForeignExchangeForwardMember 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2022-10-01 2023-06-30 0000857005 us-gaap:OperatingSegmentsMember 2023-04-01 2023-06-30 0000857005 us-gaap:LicenseMember us-gaap:CostOfSalesMember 2023-10-01 2024-06-30 0000857005 ptc:A4000Seniornotesdue2028Member us-gaap:LongTermDebtMember 2023-09-30 0000857005 us-gaap:RetainedEarningsMember 2022-10-01 2023-06-30 0000857005 us-gaap:ComputerSoftwareIntangibleAssetMember ptc:PureSystemsMember 2023-10-04 2023-10-04 0000857005 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0000857005 us-gaap:TechnologyServiceMember us-gaap:CostOfSalesMember 2022-10-01 2023-06-30 0000857005 us-gaap:LicenseMember 2023-04-01 2023-06-30 0000857005 ptc:CorinnaLathanMember 2024-04-01 2024-06-30 0000857005 us-gaap:LineOfCreditMember 2023-10-01 2024-06-30 0000857005 us-gaap:SecuredDebtMember 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-04-01 2024-06-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2023-10-01 2024-06-30 0000857005 currency:SEK ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember currency:JPY 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2023-04-01 2023-06-30 0000857005 ptc:PureSystemsMember us-gaap:CustomerListsMember 2023-10-04 2023-10-04 0000857005 us-gaap:TechnologyServiceMember us-gaap:CostOfSalesMember 2024-04-01 2024-06-30 0000857005 us-gaap:OtherCurrentAssetsMember us-gaap:LineOfCreditMember 2023-09-30 0000857005 us-gaap:RetainedEarningsMember 2023-06-30 0000857005 us-gaap:FairValueInputsLevel1Member 2023-09-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember currency:JPY 2024-06-30 0000857005 us-gaap:OperatingSegmentsMember 2024-04-01 2024-06-30 0000857005 ptc:PerpetualLicenseMember 2023-10-01 2024-06-30 0000857005 us-gaap:ForwardContractsMember 2023-09-30 0000857005 2025-07-01 2024-06-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember currency:GBP us-gaap:NondesignatedMember 2024-06-30 0000857005 ptc:ServicemaxAcquisitionMember 2024-04-01 2024-06-30 0000857005 us-gaap:NondesignatedMember us-gaap:ForeignExchangeForwardMember srt:MaximumMember 2024-06-30 0000857005 us-gaap:LongTermDebtMember 2024-06-30 0000857005 2024-03-31 0000857005 ptc:A3625Seniornotesdue2025Member us-gaap:LongTermDebtMember 2023-09-30 0000857005 us-gaap:LicenseMember 2024-04-01 2024-06-30 0000857005 us-gaap:SecuredDebtMember us-gaap:LongTermDebtMember 2024-06-30 0000857005 us-gaap:OperatingSegmentsMember srt:EuropeMember 2022-10-01 2023-06-30 0000857005 ptc:SupportAndCloudServicesMember us-gaap:CostOfSalesMember 2023-10-01 2024-06-30 0000857005 us-gaap:GeneralAndAdministrativeExpenseMember 2024-04-01 2024-06-30 0000857005 us-gaap:SeniorNotesMember 2024-06-30 0000857005 us-gaap:CommonStockMember 2023-09-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0000857005 us-gaap:TrademarksMember ptc:PureSystemsMember 2023-10-04 2023-10-04 0000857005 2024-04-01 2024-06-30 0000857005 us-gaap:OperatingSegmentsMember 2023-10-01 2024-06-30 0000857005 us-gaap:ForwardContractsMember 2024-06-30 0000857005 us-gaap:SellingAndMarketingExpenseMember 2023-10-01 2024-06-30 0000857005 us-gaap:RetainedEarningsMember 2022-09-30 0000857005 us-gaap:SellingAndMarketingExpenseMember 2022-10-01 2023-06-30 0000857005 us-gaap:GeneralAndAdministrativeExpenseMember 2023-04-01 2023-06-30 0000857005 us-gaap:TrademarksMember 2024-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2022-10-01 2023-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0000857005 us-gaap:FairValueInputsLevel3Member us-gaap:ForwardContractsMember 2023-09-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-06-30 0000857005 us-gaap:OtherIntangibleAssetsMember 2024-06-30 0000857005 currency:DKK ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 us-gaap:LicenseMember us-gaap:CostOfSalesMember 2023-04-01 2023-06-30 0000857005 us-gaap:RetainedEarningsMember 2024-06-30 0000857005 us-gaap:SeniorNotesMember ptc:A4000Seniornotesdue2028Member 2024-06-30 0000857005 currency:CHF ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 2024-07-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember currency:TWD us-gaap:NondesignatedMember 2023-09-30 0000857005 2024-06-30 0000857005 srt:AmericasMember us-gaap:OperatingSegmentsMember 2024-04-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember ptc:InterestandOtherExpenseNetMember 2024-04-01 2024-06-30 0000857005 us-gaap:ResearchAndDevelopmentExpenseMember 2023-10-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel3Member 2024-06-30 0000857005 us-gaap:FairValueInputsLevel1Member 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 ptc:SupportAndCloudServicesMember 2023-10-01 2024-06-30 0000857005 ptc:A4000Seniornotesdue2028Member 2020-02-13 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0000857005 currency:CNY ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 ptc:A4000Seniornotesdue2028Member us-gaap:LongTermDebtMember 2024-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2023-10-01 2024-06-30 0000857005 ptc:ForeignCurrencyForwardsMember 2024-06-30 0000857005 us-gaap:SecuredDebtMember us-gaap:LongTermDebtMember 2023-09-30 0000857005 srt:AmericasMember us-gaap:OperatingSegmentsMember 2023-10-01 2024-06-30 0000857005 ptc:SupportAndCloudServicesMember 2023-04-01 2023-06-30 0000857005 us-gaap:SellingAndMarketingExpenseMember 2023-04-01 2023-06-30 0000857005 currency:CHF ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 currency:ILS ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 ptc:PureSystemsMember 2023-10-01 2024-06-30 0000857005 us-gaap:TechnologyServiceMember us-gaap:CostOfSalesMember 2023-04-01 2023-06-30 0000857005 us-gaap:OtherCurrentAssetsMember us-gaap:LineOfCreditMember 2024-06-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0000857005 us-gaap:RevolvingCreditFacilityMember us-gaap:LongTermDebtMember 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2024-06-30 0000857005 ptc:SupportAndCloudServicesMember us-gaap:CostOfSalesMember 2024-04-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember currency:KRW 2023-09-30 0000857005 us-gaap:RevolvingCreditFacilityMember 2023-01-31 0000857005 us-gaap:CommonStockMember 2023-10-01 2024-06-30 0000857005 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0000857005 currency:CNY ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember ptc:InterestandOtherExpenseNetMember 2023-10-01 2024-06-30 0000857005 us-gaap:CustomerListsMember 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember ptc:InterestandOtherExpenseNetMember 2023-04-01 2023-06-30 0000857005 us-gaap:ResearchAndDevelopmentExpenseMember 2024-04-01 2024-06-30 0000857005 us-gaap:RetainedEarningsMember 2023-09-30 0000857005 us-gaap:CommonStockMember 2023-06-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ForeignExchangeForwardMember 2024-06-30 0000857005 us-gaap:FairValueInputsLevel2Member us-gaap:ForwardContractsMember 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember currency:GBP 2023-09-30 0000857005 currency:EUR ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 us-gaap:CommonStockMember 2024-06-30 0000857005 ptc:SoftwareMember 2023-10-01 2024-06-30 0000857005 us-gaap:TechnologyServiceMember 2022-10-01 2023-06-30 0000857005 us-gaap:FairValueInputsLevel3Member us-gaap:ForwardContractsMember 2024-06-30 0000857005 currency:DKK ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 ptc:ServicemaxAcquisitionMember 2023-10-02 2023-10-02 0000857005 us-gaap:OtherNoncurrentAssetsMember us-gaap:LineOfCreditMember 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember currency:TWD us-gaap:NondesignatedMember 2024-06-30 0000857005 us-gaap:LicenseMember 2022-10-01 2023-06-30 0000857005 us-gaap:LicenseMember us-gaap:CostOfSalesMember 2024-04-01 2024-06-30 0000857005 us-gaap:CommonStockMember 2022-10-01 2023-06-30 0000857005 us-gaap:NondesignatedMember us-gaap:ForeignExchangeForwardMember 2024-06-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-10-01 2024-06-30 0000857005 2022-10-01 2023-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember currency:KRW 2024-06-30 0000857005 us-gaap:CustomerListsMember 2023-09-30 0000857005 ptc:PerpetualLicenseMember 2024-04-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember ptc:InterestandOtherExpenseNetMember 2022-10-01 2023-06-30 0000857005 us-gaap:OperatingSegmentsMember srt:AsiaPacificMember 2024-04-01 2024-06-30 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 us-gaap:TrademarksMember 2023-09-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember 2023-09-30 0000857005 us-gaap:LicenseMember 2023-10-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel2Member 2023-09-30 0000857005 us-gaap:OperatingSegmentsMember srt:AsiaPacificMember 2023-10-01 2024-06-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember srt:MaximumMember 2024-06-30 0000857005 us-gaap:SecuredDebtMember 2023-01-31 0000857005 ptc:SoftwareMember 2023-04-01 2023-06-30 0000857005 us-gaap:ComputerSoftwareIntangibleAssetMember ptc:PureSystemsMember 2023-10-04 0000857005 ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-10-01 2024-06-30 0000857005 ptc:RecurringServicesMember 2024-04-01 2024-06-30 0000857005 ptc:ServicemaxAcquisitionMember 2023-01-03 0000857005 ptc:PerpetualLicenseMember 2022-10-01 2023-06-30 0000857005 us-gaap:OperatingSegmentsMember srt:AsiaPacificMember 2023-04-01 2023-06-30 0000857005 ptc:CapitalizedSoftwareMember 2024-06-30 0000857005 ptc:A3625Seniornotesdue2025Member 2020-02-13 0000857005 us-gaap:GeneralAndAdministrativeExpenseMember 2022-10-01 2023-06-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0000857005 us-gaap:TechnologyServiceMember 2023-04-01 2023-06-30 0000857005 us-gaap:CommonStockMember 2024-04-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel2Member us-gaap:ForwardContractsMember 2023-09-30 0000857005 us-gaap:SecuredDebtMember 2023-09-30 0000857005 us-gaap:TechnologyServiceMember 2024-04-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel3Member 2021-09-30 0000857005 currency:ILS ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 ptc:RecurringServicesMember 2022-10-01 2023-06-30 0000857005 ptc:PureSystemsMember us-gaap:CustomerListsMember 2023-10-04 0000857005 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0000857005 us-gaap:CommonStockMember 2023-03-31 0000857005 us-gaap:OperatingSegmentsMember srt:EuropeMember 2023-04-01 2023-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0000857005 ptc:PureSystemsMember 2023-10-04 2023-10-04 0000857005 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0000857005 ptc:ServicemaxAcquisitionMember 2023-01-03 2023-01-03 0000857005 ptc:CapitalizedSoftwareMember 2023-09-30 0000857005 currency:XXX ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 us-gaap:RetainedEarningsMember 2023-03-31 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ForeignExchangeForwardMember 2023-09-30 0000857005 us-gaap:ComputerSoftwareIntangibleAssetMember 2023-09-30 0000857005 us-gaap:RetainedEarningsMember 2024-04-01 2024-06-30 0000857005 ptc:SupportAndCloudServicesMember 2024-04-01 2024-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0000857005 2022-09-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-04-01 2023-06-30 0000857005 us-gaap:OperatingSegmentsMember srt:EuropeMember 2024-04-01 2024-06-30 0000857005 srt:AmericasMember us-gaap:OperatingSegmentsMember 2022-10-01 2023-06-30 0000857005 2024-07-31 0000857005 ptc:SupportAndCloudServicesMember us-gaap:CostOfSalesMember 2023-04-01 2023-06-30 0000857005 us-gaap:TechnologyServiceMember us-gaap:CostOfSalesMember 2023-10-01 2024-06-30 0000857005 ptc:SupportAndCloudServicesMember 2022-10-01 2023-06-30 0000857005 ptc:UnrecordedMember 2024-06-30 0000857005 2023-03-31 0000857005 us-gaap:CommonStockMember 2024-03-31 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember us-gaap:ForeignExchangeForwardMember currency:JPY 2024-06-30 0000857005 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0000857005 us-gaap:GeneralAndAdministrativeExpenseMember 2023-10-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel3Member 2023-10-01 2024-06-30 0000857005 currency:CAD ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2024-06-30 0000857005 us-gaap:ResearchAndDevelopmentExpenseMember 2022-10-01 2023-06-30 0000857005 ptc:PureSystemsMember 2023-10-04 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-10-01 2023-06-30 0000857005 us-gaap:RetainedEarningsMember 2023-10-01 2024-06-30 0000857005 2023-06-30 0000857005 us-gaap:CommonStockMember 2022-09-30 0000857005 ptc:ServicemaxAcquisitionMember 2023-10-01 2024-06-30 0000857005 srt:AmericasMember us-gaap:OperatingSegmentsMember 2023-04-01 2023-06-30 0000857005 ptc:RecurringServicesMember 2023-04-01 2023-06-30 0000857005 currency:XXX ptc:ForeignExchangeForwardContractAndOptionsMember us-gaap:NondesignatedMember 2023-09-30 0000857005 us-gaap:LicenseMember us-gaap:CostOfSalesMember 2022-10-01 2023-06-30 0000857005 srt:MinimumMember us-gaap:LineOfCreditMember 2023-10-01 2024-06-30 0000857005 ptc:SoftwareMember 2024-04-01 2024-06-30 0000857005 us-gaap:FairValueInputsLevel3Member 2023-09-30 0000857005 srt:MaximumMember us-gaap:LineOfCreditMember 2023-10-01 2024-06-30 0000857005 us-gaap:LineOfCreditMember 2024-06-30 0000857005 2023-04-01 2023-06-30 0000857005 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-04-01 2024-06-30 0000857005 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember currency:EUR us-gaap:ForeignExchangeForwardMember 2023-09-30 0000857005 us-gaap:OperatingSegmentsMember srt:AsiaPacificMember 2022-10-01 2023-06-30 0000857005 2023-10-01 2024-06-30 ptc:Employees xbrli:pure xbrli:shares iso4217:USD xbrli:shares iso4217:USD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_ to_

Commission File Number: 0-18059

PTC Inc.

(Exact name of registrant as specified in its charter)

Massachusetts |  | 04-2866152
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

121 Seaport Boulevard, Boston, MA 02210

(Address of principal executive offices, including zip code)

(781) 370-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol(s) | Name of each exchange on which registered
Common Stock, $.01 par value per share | PTC | NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer | ☑ |  | Accelerated filer | ☐ |  | Non-accelerated filer | ☐ |  | Smaller reporting company | ☐ |
|  |  |  |  |  |  |  |  | Emerging growth company | ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 120,135,231 shares of our common stock outstanding on July 31, 2024.

PTC Inc.

INDEX TO FORM 10-Q

For the Quarter Ended June 30, 2024

|  |  |  | Page Number
Part I—FINANCIAL INFORMATION |  |
Item 1. |  | Unaudited Condensed Consolidated Financial Statements: |  | 1
|  | Consolidated Balance Sheets as of June 30, 2024 and September 30, 2023 |  | 1
|  | Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023 |  | 2
|  | Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2024 and June 30, 2023 |  | 3
|  | Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and June 30, 2023 |  | 4
|  | Consolidated Statements of Stockholders' Equity for the three and nine months ended June 30, 2024 and June 30, 2023 |  | 5
|  | Notes to Condensed Consolidated Financial Statements |  | 7
Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 18
Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk |  | 30
Item 4. |  | Controls and Procedures |  | 30
Part II—OTHER INFORMATION |  |
Item 1A. |  | Risk Factors |  | 31
Item 5. |  | Other Information |  | 31
Item 6. |  | Exhibits |  | 32
Signature |  | 33

Table of Contents

PART I—FINANCI AL INFORMATION

ITEM 1.
UNAUDITED CONDENSED CONS OLIDATED FINANCIAL STATEMENTS

PTC Inc.

CONSOLIDATED B ALANCE SHEETS

(in thousands, except per share data)

(unaudited)

|  | June 30, 2024 |  |  | September 30, 2023 |
ASSETS |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 247,749 |  |  | $ | 288,103 |
Accounts receivable, net of allowance for doubtful accounts of $1,269 and $429 at June 30, 2024 and September 30, 2023, respectively |  |  | 674,959 |  |  |  | 811,398 |
Prepaid expenses |  |  | 109,373 |  |  |  | 96,016 |
Other current assets |  |  | 59,690 |  |  |  | 81,849 |
Total current assets |  |  | 1,091,771 |  |  |  | 1,277,366 |
Property and equipment, net |  |  | 77,535 |  |  |  | 88,391 |
Goodwill |  |  | 3,442,245 |  |  |  | 3,358,511 |
Acquired intangible assets, net |  |  | 910,505 |  |  |  | 941,249 |
Deferred tax assets |  |  | 151,659 |  |  |  | 123,319 |
Operating right-of-use lease assets |  |  | 131,297 |  |  |  | 143,028 |
Other assets |  |  | 323,133 |  |  |  | 356,978 |
Total assets |  | $ | 6,128,145 |  |  | $ | 6,288,842 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Accounts payable |  | $ | 47,153 |  |  | $ | 43,480 |
Accrued expenses and other current liabilities |  |  | 123,090 |  |  |  | 132,841 |
Accrued compensation and benefits |  |  | 161,073 |  |  |  | 160,431 |
Accrued income taxes |  |  | 25,366 |  |  |  | 14,919 |
Current portion of long-term debt |  |  | 518,071 |  |  |  | 9,375 |
Deferred acquisition payments |  |  | — |  |  |  | 620,040 |
Deferred revenue |  |  | 671,209 |  |  |  | 665,362 |
Short-term lease obligations |  |  | 23,287 |  |  |  | 24,737 |
Total current liabilities |  |  | 1,569,249 |  |  |  | 1,671,185 |
Long-term debt |  |  | 1,293,083 |  |  |  | 1,686,410 |
Deferred tax liabilities |  |  | 37,255 |  |  |  | 29,508 |
Long-term deferred revenue |  |  | 16,405 |  |  |  | 16,188 |
Long-term lease obligations |  |  | 156,987 |  |  |  | 168,455 |
Other liabilities |  |  | 40,487 |  |  |  | 39,806 |
Total liabilities |  |  | 3,113,466 |  |  |  | 3,611,552 |
Commitments and contingencies (Note 11) |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued |  |  | — |  |  |  | — |
Common stock, $0.01 par value; 500,000 shares authorized; 120,049 and 118,846 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively |  |  | 1,200 |  |  |  | 1,188 |
Additional paid-in capital |  |  | 1,910,615 |  |  |  | 1,820,905 |
Retained earnings |  |  | 1,223,087 |  |  |  | 973,277 |
Accumulated other comprehensive loss |  |  | (120,223 | ) |  |  | (118,080 | )
Total stockholders’ equity |  |  | 3,014,679 |  |  |  | 2,677,290 |
Total liabilities and stockholders’ equity |  | $ | 6,128,145 |  |  | $ | 6,288,842 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

1

Table of Contents

PTC Inc.

CONSOLIDATED STATEM ENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

|  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
License |  | $ | 149,104 |  |  | $ | 192,940 |  |  | $ | 567,423 |  |  | $ | 562,631 |
Support and cloud services |  |  | 339,505 |  |  |  | 313,721 |  |  |  | 1,006,420 |  |  |  | 875,448 |
Total software revenue |  |  | 488,609 |  |  |  | 506,661 |  |  |  | 1,573,843 |  |  |  | 1,438,079 |
Professional services |  |  | 30,030 |  |  |  | 35,681 |  |  |  | 98,082 |  |  |  | 112,354 |
Total revenue |  |  | 518,639 |  |  |  | 542,342 |  |  |  | 1,671,925 |  |  |  | 1,550,433 |
Cost of revenue: |  |  |  |  |  |  |  |  |  |  |  |
Cost of license revenue |  |  | 12,072 |  |  |  | 11,501 |  |  |  | 33,003 |  |  |  | 41,293 |
Cost of support and cloud services revenue |  |  | 69,968 |  |  |  | 68,264 |  |  |  | 204,405 |  |  |  | 177,626 |
Total cost of software revenue |  |  | 82,040 |  |  |  | 79,765 |  |  |  | 237,408 |  |  |  | 218,919 |
Cost of professional services revenue |  |  | 29,876 |  |  |  | 36,089 |  |  |  | 94,583 |  |  |  | 106,231 |
Total cost of revenue |  |  | 111,916 |  |  |  | 115,854 |  |  |  | 331,991 |  |  |  | 325,150 |
Gross margin |  |  | 406,723 |  |  |  | 426,488 |  |  |  | 1,339,934 |  |  |  | 1,225,283 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 140,318 |  |  |  | 145,083 |  |  |  | 411,763 |  |  |  | 392,673 |
Research and development |  |  | 110,253 |  |  |  | 103,819 |  |  |  | 323,034 |  |  |  | 292,345 |
General and administrative |  |  | 49,659 |  |  |  | 57,055 |  |  |  | 180,391 |  |  |  | 173,949 |
Amortization of acquired intangible assets |  |  | 10,672 |  |  |  | 10,670 |  |  |  | 31,459 |  |  |  | 29,352 |
Restructuring and other credits, net |  |  | — |  |  |  | (39 | ) |  |  | (802 | ) |  |  | (376 | )
Total operating expenses |  |  | 310,902 |  |  |  | 316,588 |  |  |  | 945,845 |  |  |  | 887,943 |
Operating income |  |  | 95,821 |  |  |  | 109,900 |  |  |  | 394,089 |  |  |  | 337,340 |
Interest and debt premium expense |  |  | (27,785 | ) |  |  | (35,836 | ) |  |  | (94,705 | ) |  |  | (93,719 | )
Other income (expense), net |  |  | (663 | ) |  |  | 2,462 |  |  |  | (667 | ) |  |  | 398 |
Income before income taxes |  |  | 67,373 |  |  |  | 76,526 |  |  |  | 298,717 |  |  |  | 244,019 |
Provision (benefit) for income taxes |  |  | (1,605 | ) |  |  | 15,128 |  |  |  | 48,907 |  |  |  | 44,082 |
Net income |  | $ | 68,978 |  |  | $ | 61,398 |  |  | $ | 249,810 |  |  | $ | 199,937 |
Earnings per share—Basic |  | $ | 0.58 |  |  | $ | 0.52 |  |  | $ | 2.09 |  |  | $ | 1.69 |
Earnings per share—Diluted |  | $ | 0.57 |  |  | $ | 0.51 |  |  | $ | 2.07 |  |  | $ | 1.68 |
Weighted-average shares outstanding—Basic |  |  | 119,893 |  |  |  | 118,483 |  |  |  | 119,533 |  |  |  | 118,186 |
Weighted-average shares outstanding—Diluted |  |  | 120,822 |  |  |  | 119,392 |  |  |  | 120,593 |  |  |  | 119,072 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

Table of Contents

PTC Inc.

CONSOLIDATED STATEMENTS OF C OMPREHENSIVE INCOME

(in thousands)

(unaudited)

|  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Net income |  | $ | 68,978 |  |  | $ | 61,398 |  |  | $ | 249,810 |  |  | $ | 199,937 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Hedge gain (loss) arising during the period, net of tax of $(0.8) million and $0.2 million in the third quarter of 2024 and 2023, respectively, and $0.9 million and $4.7 million in the first nine months of 2024 and 2023, respectively |  |  | 2,292 |  |  |  | (521 | ) |  |  | (2,787 | ) |  |  | (14,005 | )
Foreign currency translation adjustment, net of tax of $0 for each period |  |  | (9,344 | ) |  |  | 1,405 |  |  |  | 538 |  |  |  | 70,181 |
Change in pension benefit, net of tax of $0.0 million and $0.0 million in the third quarter of 2024 and 2023, respectively, and $(0.1) million and $0.0 million in the first nine months of 2024 and 2023, respectively |  |  | 112 |  |  |  | (24 | ) |  |  | 106 |  |  |  | (356 | )
Other comprehensive income (loss) |  |  | (6,940 | ) |  |  | 860 |  |  |  | (2,143 | ) |  |  | 55,820 |
Comprehensive income |  | $ | 62,038 |  |  | $ | 62,258 |  |  | $ | 247,667 |  |  | $ | 255,757 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

Table of Contents

PTC Inc.

CONSOLIDATED STATEM ENTS OF CASH FLOWS

(in thousands)

(unaudited)

|  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |
Cash flows from operating activities: |  |  |  |  |  |
Net income |  | $ | 249,810 |  |  | $ | 199,937 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 81,272 |  |  |  | 76,943 |
Amortization of right-of-use lease assets |  |  | 23,143 |  |  |  | 24,705 |
Stock-based compensation |  |  | 161,242 |  |  |  | 147,568 |
Other non-cash items, net |  |  | (297 | ) |  |  | (3,114 | )
Changes in operating assets and liabilities, excluding the effects of acquisitions: |  |  |  |  |  |
Accounts receivable |  |  | 131,422 |  |  |  | 99,521 |
Accounts payable and accrued expenses |  |  | (8,631 | ) |  |  | 5,407 |
Accrued compensation and benefits |  |  | 8,666 |  |  |  | 5,961 |
Deferred revenue |  |  | 8,393 |  |  |  | 18,696 |
Accrued income taxes |  |  | (1,795 | ) |  |  | (9,910 | )
Other current assets and prepaid expenses |  |  | (9,962 | ) |  |  | 8,670 |
Operating lease liabilities |  |  | (13,438 | ) |  |  | (1,360 | )
Other noncurrent assets and liabilities |  |  | 22,045 |  |  |  | (11,932 | )
Net cash provided by operating activities |  |  | 651,870 |  |  |  | 561,092 |
Cash flows from investing activities: |  |  |  |  |  |
Additions to property and equipment |  |  | (9,841 | ) |  |  | (18,035 | )
Acquisitions of businesses, net of cash acquired |  |  | (93,457 | ) |  |  | (828,271 | )
Proceeds from sale of investments |  |  | — |  |  |  | 349 |
Purchases of investments |  |  | — |  |  |  | (5,823 | )
Settlement of net investment hedges |  |  | 3,826 |  |  |  | (14,204 | )
Divestitures of businesses and assets, net |  |  | — |  |  |  | (154 | )
Net cash used in investing activities |  |  | (99,472 | ) |  |  | (866,138 | )
Cash flows from financing activities: |  |  |  |  |  |
Borrowings under credit facility |  |  | 944,845 |  |  |  | 1,130,000 |
Repayments of borrowings under credit facility and acquired debt |  |  | (835,796 | ) |  |  | (744,000 | )
Proceeds from issuance of common stock |  |  | 12,709 |  |  |  | 10,592 |
Payments of withholding taxes in connection with stock-based awards |  |  | (92,589 | ) |  |  | (75,489 | )
Payments of principal for financing leases |  |  | — |  |  |  | (217 | )
Credit facility origination costs |  |  | — |  |  |  | (13,355 | )
Payment of deferred acquisition consideration |  |  | (620,040 | ) |  |  | — |
Net cash provided by (used in) financing activities |  |  | (590,871 | ) |  |  | 307,531 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |  |  | (2,003 | ) |  |  | 6,835 |
Net change in cash, cash equivalents, and restricted cash |  |  | (40,476 | ) |  |  | 9,320 |
Cash, cash equivalents, and restricted cash, beginning of period |  |  | 288,798 |  |  |  | 272,888 |
Cash, cash equivalents, and restricted cash, end of period |  | $ | 248,322 |  |  | $ | 282,208 |
Supplemental disclosure of non-cash financing and investing activities: |  |  |  |  |  |
Withholding taxes in connection with stock-based awards, accrued |  | $ | 7,674 |  |  | $ | 5,705 |
Operating right-of-use assets obtained in exchange for operating lease liabilities |  | $ | 4,941 |  |  | $ | 23,142 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

Table of Contents

PTC Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

|  | Three months ended June 30, 2024 |
|  | Common Stock |  |  |  |  |  |  |  |  | Accumulated |  |  |  |
|  | Shares |  |  | Amount |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Total Stockholders’ Equity |
Balance as of March 31, 2024 |  |  | 119,717 |  |  | $ | 1,197 |  |  | $ | 1,901,109 |  |  | $ | 1,154,109 |  |  | $ | (113,283 | ) |  | $ | 2,943,132 |
Common stock issued for employee stock-based awards |  |  | 486 |  |  |  | 5 |  |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | — |
Shares surrendered by employees to pay taxes related to stock-based awards |  |  | (154 | ) |  |  | (2 | ) |  |  | (28,069 | ) |  |  | — |  |  |  | — |  |  |  | (28,071 | )
Compensation expense from stock-based awards |  |  | — |  |  |  | — |  |  |  | 37,580 |  |  |  | — |  |  |  | — |  |  |  | 37,580 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 68,978 |  |  |  | — |  |  |  | 68,978 |
Gain on net investment hedges, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,292 |  |  |  | 2,292 |
Foreign currency translation adjustment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (9,344 | ) |  |  | (9,344 | )
Change in defined benefit pension items, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 112 |  |  |  | 112 |
Balance as of June 30, 2024 |  |  | 120,049 |  |  | $ | 1,200 |  |  | $ | 1,910,615 |  |  | $ | 1,223,087 |  |  | $ | (120,223 | ) |  | $ | 3,014,679 |

|  | Nine months ended June 30, 2024 |
|  | Common Stock |  |  |  |  |  |  |  |  | Accumulated |  |  |  |
|  | Shares |  |  | Amount |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Total Stockholders’ Equity |
Balance as of September 30, 2023 |  |  | 118,846 |  |  | $ | 1,188 |  |  | $ | 1,820,905 |  |  | $ | 973,277 |  |  | $ | (118,080 | ) |  | $ | 2,677,290 |
Common stock issued for employee stock-based awards |  |  | 1,702 |  |  |  | 18 |  |  |  | (18 | ) |  |  | — |  |  |  | — |  |  |  | — |
Shares surrendered by employees to pay taxes related to stock-based awards |  |  | (601 | ) |  |  | (7 | ) |  |  | (99,938 | ) |  |  | — |  |  |  | — |  |  |  | (99,945 | )
Common stock issued for employee stock purchase plan |  |  | 102 |  |  |  | 1 |  |  |  | 12,708 |  |  |  | — |  |  |  | — |  |  |  | 12,709 |
Compensation expense from stock-based awards |  |  | — |  |  |  | — |  |  |  | 176,958 |  |  |  | — |  |  |  | — |  |  |  | 176,958 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 249,810 |  |  |  | — |  |  |  | 249,810 |
Loss on net investment hedges, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,787 | ) |  |  | (2,787 | )
Foreign currency translation adjustment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 538 |  |  |  | 538 |
Change in defined benefit pension items, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 106 |  |  |  | 106 |
Balance as of June 30, 2024 |  |  | 120,049 |  |  | $ | 1,200 |  |  | $ | 1,910,615 |  |  | $ | 1,223,087 |  |  | $ | (120,223 | ) |  | $ | 3,014,679 |

5

Table of Contents

|  | Three months ended June 30, 2023 |
|  | Common Stock |  |  |  |  |  |  |  |  | Accumulated |  |  |  |
|  | Shares |  |  | Amount |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Total Stockholders’ Equity |
Balance as of March 31, 2023 |  |  | 118,334 |  |  | $ | 1,182 |  |  | $ | 1,749,574 |  |  | $ | 866,276 |  |  | $ | (98,498 | ) |  | $ | 2,518,534 |
Common stock issued for employee stock-based awards |  |  | 582 |  |  |  | 6 |  |  |  | (6 | ) |  |  | — |  |  |  | — |  |  |  | — |
Shares surrendered by employees to pay taxes related to stock-based awards |  |  | (185 | ) |  |  | (2 | ) |  |  | (25,170 | ) |  |  | — |  |  |  | — |  |  |  | (25,172 | )
Compensation expense from stock-based awards |  |  | — |  |  |  | — |  |  |  | 43,044 |  |  |  | — |  |  |  | — |  |  |  | 43,044 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 61,398 |  |  |  | — |  |  |  | 61,398 |
Loss on net investment hedges, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (521 | ) |  |  | (521 | )
Foreign currency translation adjustment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,405 |  |  |  | 1,405 |
Change in defined benefit pension items, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (24 | ) |  |  | (24 | )
Balance as of June 30, 2023 |  |  | 118,731 |  |  | $ | 1,186 |  |  | $ | 1,767,442 |  |  | $ | 927,674 |  |  | $ | (97,638 | ) |  | $ | 2,598,664 |

|  | Nine months ended June 30, 2023 |
|  | Common Stock |  |  |  |  |  |  |  |  | Accumulated |  |  |  |
|  | Shares |  |  | Amount |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Total Stockholders’ Equity |
Balance as of September 30, 2022 |  |  | 117,472 |  |  | $ | 1,175 |  |  | $ | 1,720,580 |  |  | $ | 727,737 |  |  | $ | (153,458 | ) |  | $ | 2,296,034 |
Common stock issued for employee stock-based awards |  |  | 1,766 |  |  |  | 18 |  |  |  | (18 | ) |  |  | — |  |  |  | — |  |  |  | — |
Shares surrendered by employees to pay taxes related to stock-based awards |  |  | (609 | ) |  |  | (7 | ) |  |  | (81,187 | ) |  |  | — |  |  |  | — |  |  |  | (81,194 | )
Common stock issued for employee stock purchase plan |  |  | 102 |  |  |  | — |  |  |  | 10,592 |  |  |  | — |  |  |  | — |  |  |  | 10,592 |
Compensation expense from stock-based awards |  |  | — |  |  |  | — |  |  |  | 117,475 |  |  |  | — |  |  |  | — |  |  |  | 117,475 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 199,937 |  |  |  | — |  |  |  | 199,937 |
Loss on net investment hedges, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (14,005 | ) |  |  | (14,005 | )
Foreign currency translation adjustment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70,181 |  |  |  | 70,181 |
Change in defined benefit pension items, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (356 | ) |  |  | (356 | )
Balance as of June 30, 2023 |  |  | 118,731 |  |  | $ | 1,186 |  |  | $ | 1,767,442 |  |  | $ | 927,674 |  |  | $ | (97,638 | ) |  | $ | 2,598,664 |

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

Table of Contents

PTC Inc.

NOTES TO CON DENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

General

The accompanying unaudited condensed consolidated financial statements include the accounts of PTC Inc. and its wholly owned subsidiaries and have been prepared by management in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and in accordance with the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with our annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary for a fair statement of our financial position, results of operations and cash flows as of the dates and for the periods indicated. The September 30, 2023 Consolidated Balance Sheet included herein is derived from our audited consolidated financial statements.

Unless otherwise indicated, all references to a year mean our fiscal year, which ends on September 30.

Pending Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU will be effective for us in 2026. We expect the adoption to result in disclosure changes only.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU will be effective for us in 2025. We expect the adoption to result in disclosure changes only.

2. Revenue from Contracts with Customers

Receivables, Co ntract Assets and Contract Liabilities

(in thousands) |  | June 30, 2024 |  |  | September 30, 2023 |
Short-term and long-term receivables |  | $ | 840,382 |  |  | $ | 997,490 |
Contract asset |  | $ | 13,443 |  |  | $ | 16,465 |
Deferred revenue |  | $ | 687,614 |  |  | $ | 681,550 |

During the nine months ended June 30, 2024, we recognized $619.2 million of revenue that was included in Deferred revenue as of September 30, 2023. The remainder of the change was driven by additional deferrals, primarily from new billings.

7

Table of Contents

Our multi-year, non-cancellable on-premises subscription contracts provide customers with an annual right to exchange software within the subscription with other software. As of June 30, 2024 and September 30, 2023, our total revenue liability was $27.0 million and $23.7 million, respectively, primarily associated with the annual right to exchange on-premises subscription software.

Remaining Performance Obligations

Our contracts with customers include transaction price amounts allocated to performance obligations that will be satisfied and recognized as revenue at a later date. As of June 30, 2024, the transaction price amounts include performance obligations of $687.6 million recorded in Deferred revenue and $1,382.2 million that are not yet recorded in the Consolidated Balance Sheets. Of the total $2,069.8 million, we expect to recognize app roximately 59% over the next 12 months, 26% over the next 13 to 24 months, and the remaining amount therea fter.

Disaggregation of Revenue

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Recurring revenue(1) |  | $ | 481,559 |  |  | $ | 498,410 |  |  | $ | 1,551,600 |  |  | $ | 1,407,662 |
Perpetual license |  |  | 7,050 |  |  |  | 8,251 |  |  |  | 22,243 |  |  |  | 30,417 |
Professional services |  |  | 30,030 |  |  |  | 35,681 |  |  |  | 98,082 |  |  |  | 112,354 |
Total revenue |  | $ | 518,639 |  |  | $ | 542,342 |  |  | $ | 1,671,925 |  |  | $ | 1,550,433 |

(1)
Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Americas |  | $ | 253,592 |  |  | $ | 278,329 |  |  | $ | 781,480 |  |  | $ | 761,617 |
Europe |  |  | 170,617 |  |  |  | 173,559 |  |  |  | 624,884 |  |  |  | 549,835 |
Asia Pacific |  |  | 94,430 |  |  |  | 90,454 |  |  |  | 265,561 |  |  |  | 238,981 |
Total revenue |  | $ | 518,639 |  |  | $ | 542,342 |  |  | $ | 1,671,925 |  |  | $ | 1,550,433 |

3. Stock-based Compensation

The value of stock issued for vested restricted stock units (RSUs) is as follows:

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Stock issued for vested RSUs |  | $ | 88,803 |  |  | $ | 79,129 |  |  | $ | 283,975 |  |  | $ | 235,430 |

Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Cost of license revenue |  | $ | 49 |  |  | $ | 53 |  |  | $ | 116 |  |  | $ | 141 |
Cost of support and cloud services revenue |  |  | 4,035 |  |  |  | 3,479 |  |  |  | 10,762 |  |  |  | 9,464 |
Cost of professional services revenue |  |  | 1,772 |  |  |  | 2,315 |  |  |  | 5,101 |  |  |  | 6,063 |
Sales and marketing |  |  | 15,167 |  |  |  | 14,513 |  |  |  | 46,023 |  |  |  | 39,554 |
Research and development |  |  | 13,101 |  |  |  | 14,801 |  |  |  | 41,275 |  |  |  | 41,839 |
General and administrative |  |  | 13,914 |  |  |  | 18,657 |  |  |  | 57,965 |  |  |  | 50,507 |
Total stock-based compensation expense |  | $ | 48,038 |  |  | $ | 53,818 |  |  | $ | 161,242 |  |  | $ | 147,568 |

As of June 30, 2024 and September 30, 2023, we had liability-classified awards related to stock-based compensation based on a fixed monetary amount of $29.1 million and $44.9 million, respectively.

8

Table of Contents

4. Earnings per Share (EPS) and Common Stock

EPS

The following table presents the calculation for both basic and diluted EPS:

(in thousands, except per share data) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Net income |  | $ | 68,978 |  |  | $ | 61,398 |  |  | $ | 249,810 |  |  | $ | 199,937 |
Weighted-average shares outstanding—Basic |  |  | 119,893 |  |  |  | 118,483 |  |  |  | 119,533 |  |  |  | 118,186 |
Dilutive effect of restricted stock units |  |  | 929 |  |  |  | 909 |  |  |  | 1,060 |  |  |  | 886 |
Weighted-average shares outstanding—Diluted |  |  | 120,822 |  |  |  | 119,392 |  |  |  | 120,593 |  |  |  | 119,072 |
Earnings per share—Basic |  | $ | 0.58 |  |  | $ | 0.52 |  |  | $ | 2.09 |  |  | $ | 1.69 |
Earnings per share—Diluted |  | $ | 0.57 |  |  | $ | 0.51 |  |  | $ | 2.07 |  |  | $ | 1.68 |

Anti-dilutive shares were immaterial for the three and nine months ended June 30, 2024 and June 30, 2023.

5. Acquisitions

Acquisition and transaction-related costs for the third quarter and first nine months of 2024 totaled $0.2 million and $3.0 million, respectively, compared to $0.8 million and $18.5 million in the third quarter and first nine months of 2023, respectively. These costs are classified in General and administrative expense in the accompanying Consolidated Statements of Operations.

pure-systems

On October 4, 2023, we acquired pure-systems GmbH pursuant to a Share Purchase Agreement. pure-systems is a leading provider of product and software variant management solutions used by manufacturing companies to efficiently manage the different versions of software and systems engineering assets. The purchase price was $93.5 million, net of cash acquired, which we financed primarily with a draw on the revolving line of our credit facility. pure-systems had approximately 50 employees on the close date.

The acquisition of pure-systems has been accounted for as a business combination. Assets and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The fair values of intangible assets were based on valuations using a discounted cash flow model which requires the use of significant estimates and assumptions, including estimating future revenues and costs. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

The following table outlines the purchase price allocation for pure-systems:

(in thousands) |  |
Goodwill | $ | 77,118 |
Customer relationships |  | 17,400 |
Purchased software |  | 10,000 |
Trademarks |  | 800 |
Net tax liability |  | (8,860 | )
Acquired debt |  | (2,475 | )
Other net liabilities |  | (526 | )
Total | $ | 93,457 |

9

Table of Contents

The acquired customer relationships, purchased software, and trademarks are being amortized over useful lives o f 18 years, 10 years, and 10 years, respectively, based on the expected economic benefit pattern of the assets. The acquired goodwill will not be deductible for income tax purposes. The amount of goodwill resulting from the purchase price allocation reflects the expected value that will be created by expanding our application lifecycle management (ALM) offerings, which are included within our PLM product group.

Our results of operations for the reported periods if presented on a pro forma basis would not differ materially from our reported results.

ServiceMax

On January 3, 2023, we acquired ServiceMax, Inc. pursuant to a Share Purchase Agreement dated November 17, 2022 for $1,448.2 million, net of cash acquired. PTC paid the first installment of $828.2 million on the acquisition date. The remaining installment of $650.0 million, of which $620.0 million represented the fair value as of the acquisition date and $30.0 million was imputed interest, was paid in October 2023. The fair value of the deferred acquisition payment was calculated based on our borrowing rate at the time of the acquisition. The purchase price allocation resulted in $974.9 million of Goodwill, $628.6 million of intangible assets, $121.7 million of net tax liabilities, and $33.6 million of other net liabilities.

ServiceMax develops and licenses cloud-native, product-centric field service management (FSM) software, which is included within our PLM product group. ServiceMax had approximately 500 employees on the close date.

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of operations for PTC and ServiceMax for the pro forma nine months ended June 30, 2023. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2022. Since the acquisition took place in fiscal 2023, the unaudited pro forma financial information was prepared as though ServiceMax was acquired at the beginning of fiscal 2022. The unaudited pro forma financial information for all periods presented includes adjustments to reflect certain business combination effects, including: amortization of acquired intangible assets, including the elimination of related ServiceMax expenses; acquisition-related costs incurred by both parties; reversal of certain costs incurred by ServiceMax which would not have been incurred had the acquisition occurred at the beginning of fiscal 2022; interest expense under the new combined capital structure; stock-based compensation charges; and the related tax effects as though ServiceMax was acquired as of the beginning of fiscal 2022.

The unaudited pro forma financial information for t he nine months ended June 30, 2023 presented below combines the historical results of PTC for those periods, the historical results of ServiceMax for the three months ended January 31, 2023, and the effects of the pro forma adjustments listed above.

(in thousands) |  | Pro forma nine months ended |
|  | June 30, 2023 |
Revenue |  | $ | 1,594,118 |
Net income |  | $ | 193,834 |

10

Table of Contents

6. Goodwill and Intangible Assets

During the third fiscal quarter of 2024, we completed our annual impairment test of goodwill, which was based on a qualitative assessment, and concluded that there was no impairment. A qualitative assessment is designed to determine whether we believe it is more likely than not that the fair values of our reporting units exceed their carrying values. A qualitative assessment includes a review of qualitative factors, including company-specific (financial performance and long-range plans), industry, and macroeconomic factors, and a consideration of the fair value of each reporting unit at the last valuation date.

Goodwill and acquired intangible assets consisted of the following:

(in thousands) |  | June 30, 2024 |  |  | September 30, 2023 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Book Value |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Book Value |
Goodwill (not amortized) |  |  |  |  |  |  |  | $ | 3,442,245 |  |  |  |  |  |  |  |  | $ | 3,358,511 |
Intangible assets with finite lives (amortized): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchased software |  | $ | 627,099 |  |  | $ | 424,643 |  |  | $ | 202,456 |  |  | $ | 615,915 |  |  | $ | 395,109 |  |  | $ | 220,806 |
Capitalized software |  |  | 22,877 |  |  |  | 22,877 |  |  |  | — |  |  |  | 22,877 |  |  |  | 22,877 |  |  |  | — |
Customer lists and relationships |  |  | 1,135,067 |  |  |  | 443,644 |  |  |  | 691,423 |  |  |  | 1,116,117 |  |  |  | 413,125 |  |  |  | 702,992 |
Trademarks and trade names |  |  | 37,727 |  |  |  | 21,101 |  |  |  | 16,626 |  |  |  | 36,851 |  |  |  | 19,400 |  |  |  | 17,451 |
Other |  |  | 3,886 |  |  |  | 3,886 |  |  |  | — |  |  |  | 3,867 |  |  |  | 3,867 |  |  |  | — |
Total intangible assets with finite lives |  | $ | 1,826,656 |  |  | $ | 916,151 |  |  | $ | 910,505 |  |  | $ | 1,795,627 |  |  | $ | 854,378 |  |  | $ | 941,249 |
Total goodwill and acquired intangible assets |  |  |  |  |  |  |  | $ | 4,352,750 |  |  |  |  |  |  |  |  | $ | 4,299,760 |

Changes in Goodwill were as follows:

(in thousands) |  |
Balance, October 1, 2023 | $ | 3,358,511 |
Acquisitions |  | 77,118 |
Foreign currency translation adjustment |  | 6,616 |
Balance, June 30, 2024 | $ | 3,442,245 |

The aggregate amortization expense for intangible assets with finite lives is classified in our Consolidated Statements of Operations as follows:

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Amortization of acquired intangible assets |  | $ | 10,672 |  |  | $ | 10,670 |  |  | $ | 31,459 |  |  | $ | 29,352 |
Cost of revenue |  |  | 9,685 |  |  |  | 9,841 |  |  |  | 28,835 |  |  |  | 25,817 |
Total amortization expense |  | $ | 20,357 |  |  | $ | 20,511 |  |  | $ | 60,294 |  |  | $ | 55,169 |

7. Fair Value Measurements

The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:

•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or
•
Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

11

Table of Contents

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.

The principal market in which we execute our foreign currency derivatives is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants are generally large financial institutions. Our foreign currency derivatives’ 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 June 30, 2024 and September 30, 2023 were as follows:

(in thousands) |  | June 30, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents(1) |  | $ | 41,103 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,103 |
Forward contracts |  |  | — |  |  |  | 181 |  |  |  | — |  |  |  | 181 |
|  | $ | 41,103 |  |  | $ | 181 |  |  | $ | — |  |  | $ | 41,284 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  |  | — |  |  |  | 2,103 |  |  |  | — |  |  |  | 2,103 |
|  | $ | — |  |  | $ | 2,103 |  |  | $ | — |  |  | $ | 2,103 |

(in thousands) |  | September 30, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents(1) |  | $ | 72,754 |  |  | $ | — |  |  | $ | — |  |  | $ | 72,754 |
Convertible note |  |  | — |  |  |  | — |  |  |  | 2,000 |  |  |  | 2,000 |
Forward contracts |  |  | — |  |  |  | 7,340 |  |  |  | — |  |  |  | 7,340 |
|  | $ | 72,754 |  |  | $ | 7,340 |  |  | $ | 2,000 |  |  | $ | 82,094 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  |  | — |  |  |  | 3,158 |  |  |  | — |  |  |  | 3,158 |
|  | $ | — |  |  | $ | 3,158 |  |  | $ | — |  |  | $ | 3,158 |

(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 was classified as available-for-sale and included in Other assets on the Consolidated Balance Sheet. During the nine months ended June 30, 2024, we recorded a $2.0 million impairment loss related to this Level 3 investment. The impairment loss is included in Other income (expense), net on the Consolidated Statements of Operations.

12

Table of Contents

8. Derivative Financial Instruments

We enter into foreign currency forward contracts to manage our exposure to foreign currency exchange risk to reduce earnings volatility. We do not enter into derivative transactions for trading or speculative purposes.

The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:

(in thousands) |  | Fair Value of Derivatives Designated As Hedging Instruments |  |  | Fair Value of Derivatives Not Designated As Hedging Instruments |
|  | June 30, 2024 |  |  | September 30, 2023 |  |  | June 30, 2024 |  |  | September 30, 2023 |
Derivative assets(1): |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  | $ | 81 |  |  | $ | 3,770 |  |  | $ | 100 |  |  | $ | 3,570 |
Derivative liabilities(2): |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts |  | $ | 681 |  |  | $ | — |  |  | $ | 1,422 |  |  | $ | 3,158 |

(1)
As of June 30, 2024 and September 30, 2023, current derivative assets are recorded in Other current assets in the Consolidated Balance Sheets.
(2)
As of June 30, 2024 and September 30, 2023, current derivative liabilities are recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

Non-Designated Hedges

We hedge our net foreign currency monetary assets and liabilities primarily resulting from foreign currency denominated receivables and payables with foreign exchange forward contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These contracts have maturities of up to approximately three months. Generally, we do not designate these foreign currency forward contracts as hedges for accounting purposes and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, gains or losses on the underlying foreign-denominated balance are generally offset by the losses or gains on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in Other income (expense), net.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts not designated as hedging instruments with notional amounts equivalent to the following:

Currency Hedged (in thousands) |  | June 30, 2024 |  |  | September 30, 2023 |
Canadian Dollar / U.S. Dollar |  | $ | 5,125 |  |  | $ | 5,135 |
Euro / U.S. Dollar |  |  | 396,345 |  |  |  | 383,227 |
British Pound / U.S. Dollar |  |  | 13,460 |  |  |  | 6,058 |
Israeli Shekel / U.S. Dollar |  |  | 12,091 |  |  |  | 11,852 |
Japanese Yen / U.S. Dollar |  |  | 27,914 |  |  |  | 4,770 |
Swiss Franc / U.S. Dollar |  |  | 16,743 |  |  |  | 32,766 |
Swedish Krona / U.S. Dollar |  |  | 21,841 |  |  |  | 35,085 |
Chinese Renminbi / U.S. Dollar |  |  | 4,209 |  |  |  | 16,660 |
New Taiwan Dollar / U.S. Dollar |  |  | 8,915 |  |  |  | 11,855 |
Korean Won / U.S. Dollar |  |  | — |  |  |  | 6,157 |
Danish Krone / U.S. Dollar |  |  | 3,353 |  |  |  | 6,731 |
All other |  |  | 4,854 |  |  |  | 3,340 |
Total |  | $ | 514,850 |  |  | $ | 523,636 |

13

Table of Contents

The following table shows the effect of our non-designated hedges on the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands) |  |  |  | Three months ended |  |  | Nine months ended |
|  | Location of Gain (Loss) |  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged |  | Other income (expense), net |  | $ | (1,590 | ) |  | $ | (1,006 | ) |  | $ | (6,611 | ) |  | $ | (13,437 | )

In the three months ended June 30, 2024, foreign currency losses, net were $1.7 million. In the three months ended June 30, 2023, foreign currency gains, net were $0.5 million. In the nine months ended June 30, 2024 and June 30, 2023, foreign currency losses, net were $1.8 million and $3.4 million, respectively.

Net Investment Hedges

We translate balance sheet accounts of subsidiaries with foreign functional currencies into the U.S. Dollar using the exchange rate at each balance sheet date. Resulting translation adjustments are reported as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We designate certain foreign exchange forward contracts as net investment hedges against exposure on translation of balance sheet accounts of Euro and Japanese Yen functional subsidiaries. Net investment hedges partially offset the impact of Foreign currency translation adjustment recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. All foreign exchange forward contracts are carried at fair value on the Consolidated Balance Sheets and the maximum duration of net investment hedge foreign exchange forward contracts is approximately three mo nths.

Net investment hedge relationships are designated at inception, and effectiveness is assessed retrospectively on a quarterly basis using the net equity position of Euro and Japanese Yen functional subsidiaries. As the forward contracts are highly effective in offsetting exchange rate exposure, we record changes in these net investment hedges in Accumulated other comprehensive loss and subsequently reclassify them to Foreign currency translation adjustment in Accumulated other comprehensive loss at the time of forward contract maturity. Changes in the fair value of foreign exchange forward contracts due to changes in time value are excluded from the assessment of effectiveness. Our derivatives are not subject to any credit contingent features. We manage credit risk with counterparties by trading among several counterparties and we review our counterparties’ credit at least quarterly.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

Currency Hedged (in thousands) |  | June 30, 2024 |  |  | September 30, 2023 |
Euro / U.S. Dollar |  | $ | 429,516 |  |  | $ | 337,923 |
Japanese Yen / U.S. Dollar |  |  | 9,495 |  |  |  | 10,285 |
Total |  | $ | 439,011 |  |  | $ | 348,208 |

The following table shows the effect of our derivative instruments designated as net investment hedges in the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands) |  |  |  | Three months ended |  |  | Nine months ended |
|  | Location of Gain (Loss) |  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Gain (loss) recognized in OCI |  | OCI |  | $ | 3,047 |  |  | $ | (695 | ) |  | $ | (3,705 | ) |  | $ | (18,663 | )
Gain (loss) reclassified from OCI to earnings |  | n/a |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Gain recognized, excluded portion |  | Other income (expense), net |  | $ | 946 |  |  | $ | 1,124 |  |  | $ | 3,161 |  |  | $ | 3,272 |

14

Table of Contents

As of June 30, 2024, we estimate that all amounts reported in Accumulated other comprehensive loss will be applied against exposed balance sheet accounts upon translation within the next three months.

Offsetting Derivative Assets and Liabilities

We have entered into master netting arrangements for our forward contracts that allow net settlements under certain conditions. Although netting is permitted, it is currently our policy and practice to record all derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets.

The following table sets forth the offsetting of derivative assets as of June 30, 2024:

(in thousands) |  | Gross Amounts Offset in the Consolidated Balance Sheets |  |  |  |  |  | Gross Amounts Not Offset in the Consolidated Balance Sheets |  |  |  |
As of June 30, 2024 |  | Gross Amount of Recognized Assets |  |  | Gross Amounts Offset in the Consolidated Balance Sheets |  |  | Net Amounts of Assets Presented in the Consolidated Balance Sheets |  |  | Financial Instruments |  |  | Cash Collateral Received |  |  | Net Amount |
Forward contracts |  | $ | 181 |  |  | $ | — |  |  | $ | 181 |  |  | $ | (181 | ) |  | $ | — |  |  | $ | — |

The following table sets forth the offsetting of derivative liabilities as of June 30, 2024:

(in thousands) |  | Gross Amounts Offset in the Consolidated Balance Sheets |  |  |  |  |  | Gross Amounts Not Offset in the Consolidated Balance Sheets |  |  |  |
As of June 30, 2024 |  | Gross Amount of Recognized Liabilities |  |  | Gross Amounts Offset in the Consolidated Balance Sheets |  |  | Net Amounts of Liabilities Presented in the Consolidated Balance Sheets |  |  | Financial Instruments |  |  | Cash Collateral Pledged |  |  | Net Amount |
Forward contracts |  | $ | 2,103 |  |  | $ | — |  |  | $ | 2,103 |  |  | $ | (181 | ) |  | $ | — |  |  | $ | 1,922 |

9. Income Taxes

(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
Income before income taxes |  | $ | 67,373 |  |  | $ | 76,526 |  |  | $ | 298,717 |  |  | $ | 244,019 |
Provision (benefit) for income taxes |  | $ | (1,605 | ) |  | $ | 15,128 |  |  | $ | 48,907 |  |  | $ | 44,082 |
Effective income tax rate |  |  | (2 | )% |  |  | 20 | % |  |  | 16 | % |  |  | 18 | %

The effective tax rate for the three and nine months ended June 30, 2024 was lower than the effective tax rate for the corresponding prior-year periods primarily du e to changes in the geographic mix of income before taxes and the effects of IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for the year ended September 30, 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income. The benefit from this IRS procedural guidance change for the three and nine months ended June 30, 2024 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the nine months ended June 30, 2024, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the Internal Revenue Service in the U.S. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. We are currently under audit by tax authorities in several jurisdictions. Audits by tax authorities typically involve examination of the deductibility of certain permanent items, transfer pricing, limitations on net operating losses and tax credits.

15

Table of Contents

10. Debt

As of June 30, 2024 and September 30, 2023, we had the following debt obligations:

(in thousands) |  | June 30, 2024 |  |  | September 30, 2023 |
4.000% Senior notes due 2028 |  | $ | 500,000 |  |  | $ | 500,000 |
3.625% Senior notes due 2025 |  |  | 500,000 |  |  |  | 500,000 |
Credit facility revolver line(1)(2) |  |  | 322,000 |  |  |  | 202,000 |
Credit facility term loan(1)(2) |  |  | 493,750 |  |  |  | 500,000 |
Total debt |  |  | 1,815,750 |  |  |  | 1,702,000 |
Unamortized debt issuance costs for the senior notes(3) |  |  | (4,596 | ) |  |  | (6,215 | )
Total debt, net of issuance costs(4) |  | $ | 1,811,154 |  |  | $ | 1,695,785 |

(1)
Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.8 million included in Other assets on the Consolidated Balance Sheet as of June 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023.
(2)
The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. However, if our outstanding 2025 Senior Notes have not been refinanced to mature on or after April 3, 2028 or redeemed by November 16, 2024, all amounts outstanding under the credit facility will become due and payable on November 16, 2024. The term loan began amortizing in March 2024, with payment s of $3.1 million remaining in 2024, $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028.
(3)
Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt o n the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.
(4)
As of June 30, 2024, $518.1 million of debt was classifie d as short term, including $499.3 million associated with the 2025 senior notes and related debt issuance costs and $18.8 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan w as classified as short term with the remaining balance classified as long term.

Senior Unsecured Notes

In February 2020, we issued $500 million in aggregate principal amount of 4.0% senior, unsecured long-term debt at par value, due in 2028 (the 2028 notes) and $500 million in aggregate principal amount of 3.625% senior, unsecured long-term debt at par value, due in 2025 (the 2025 notes).

As of June 30, 2024, the total estimated fair value of the 2028 and 2025 notes was approximately $471.9 million and $493.6 million, respectively, based on quoted prices for the notes on that date.

We were in compliance with all the covenants for all our senior notes as of June 30, 2024.

Credit Agreement

Our credit facility consists of (i) a $1.25 billion revolving credit facility, (ii) a $500 million term loan credit facility, and (iii) an incremental facility pursuant to which we may incur additional term loan tranches or increase the revolving credit facility. As of June 30, 2024, unused commitments under our credit facility were $928.0 million and amounts available for borrowing were $912.1 million.

As of June 30, 2024, the fair value of our credit facility approximates its book value.

PTC and certain eligible foreign subsidiaries are eligible borrowers under the credit facility. As of June 30, 2024, $123.0 million was borrowed by an eligible foreign subsidiary borrower.

Loans under the credit facility bear interest at variable rates. As of June 30, 2024, the annual rate for borrowings outstanding was 6.9%. A quarterly revolving commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.175% to 0.325% per annum, based upon our total leverage ratio.

As of June 30, 2024, we were in compliance with all financial and operating covenants of the credit facility.

16

Table of Contents

Interest

We incurred interest expense on our debt of $27.8 million and $94.7 million in the third quarter and first nine months of 2024, respectively, and $35.8 million and $93.7 million in the third quarter and first nine months of 2023, respective ly. Interest expense in the third quarter and first nine months of 2023 included $10.0 million and $20.0 million, respectively, of interest associated with the $650.0 million ServiceMax deferred acquisition payment that we settled in the first quarter of 2024. The average interest rate on borrowings outstanding was approximately 5.3% and 5.5% during the third quarter and first nine months of 2024, respectively, and 5.2% and 4.8% during the third quarter and first nine months of 2023, respectively.

11. Commitments and Contingencies

Guarantees and Indemnification Obligations

We enter into standard indemnification agreements with our customers and business partners in the ordinary course of our business. Under such agreements, we typically indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to our products. Indemnification may also cover other types of claims, including claims relating to certain data breaches. These agreements typically limit our liability with respect to indemnification claims other than intellectual property infringement claims. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and, accordingly, we believe the estimated fair value of liabilities under these agreements is immaterial.

We warrant that our software products will perform in all material respects in accordance with our standard published specifications during the term of the license. Additionally, we generally warrant that our consulting services will be performed consistent with generally accepted industry standards and, in the case of fixed price services, the agreed-upon specifications. In most cases, liability for these warranties is capped. If necessary, we would provide for the estimated cost of product and service warranties based on specific warranty claims and claim history; however, we have not incurred significant cost under our product or services warranties. As a result, we believe the estimated fair value of these liabilities is immaterial.

17

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

PTC is a global software company that provides a portfolio of innovative digital solutions that work together to transform how physical products are engineered, manufactured, and serviced.

Our software portfolio includes award-winning offerings that enable companies to author product data (our computer-aided design (CAD) portfolio solutions) and to manage product data and orchestrate processes (our product lifecycle management (PLM) portfolio solutions).

Our software can be delivered on premises, in the cloud, or in a hybrid model. Our customers include some of the world's most innovative companies in the aerospace and defense, automotive, electronics and high tech, industrial machinery and equipment, life sciences, retail and consumer products industries.

We generate revenue through the sale of subscriptions, which include term-based on-premises software licenses and related support, Software-as-a-Service (SaaS), and hosting services; perpetual licenses; support for perpetual licenses; and professional services (consulting, implementation, and training).

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future financial and growth expectations and potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include: the macroeconomic and/or global manufacturing climates may not improve or may deteriorate due to, among other factors, high interest rates or increases in interest rates and inflation, volatile foreign exchange rates and the relative strength of the U.S. dollar, tightening of credit standards and availability, the effects of the conflicts between Russia and Ukraine and in the Middle East, and growing tensions with China, any of which could cause customers to delay or reduce purchases of new software, reduce the number of subscriptions they carry, or delay payments to us, which would adversely affect ARR and/or our financial results, including cash flow; our investments in our solutions may not drive expansion of those solutions and/or generate the ARR and/or cash flow we expect if customers are slower to adopt those solutions than we expect or if they adopt competing solutions; other uses of cash or our credit facility limits could limit or preclude the return of 50% of free cash flow to shareholders via share repurchases; and foreign exchange rates may differ materially from those we expect. In addition, our assumptions concerning our future GAAP and non-GAAP effective income tax rates are based on estimates and other factors that could change, including changes to tax laws in the U.S. and other countries and the geographic mix of our revenue, expenses, and profits. Other risks and uncertainties that could cause actual results to differ materially from those projected are described below throughout or referenced in Part II, Item 1A. Risk Factors of this report.

18

Table of Contents

Operating and Non-GAAP Financial Measures

Our discussion of results includes discussion of our ARR (Annual Run Rate) operating measure, non-GAAP financial measures, and disclosure of our results on a constant currency basis. ARR and our non-GAAP financial measures are described below in Results of Operations - Operating Measure and Results of Operations - Non-GAAP Financial Measures, respectively. The methodology used to calculate constant currency disclosures is described in Results of Operations - Impact of Foreign Currency Exchange on Results of Operations. You should read those sections to understand our operating measure, non-GAAP financial measures, and constant currency disclosures.

Executive Overview

Despite the overall demand environment, which has been sluggish for many quarters now, ARR grew 10% (12% constant currency) to $2.13 billion as of the end of Q3’24 compared to Q3’23.

Cash provided by operating activities grew 26% to $214 million in Q3'24 compared to Q3'23. Free cash flow grew 29% to $212 million in Q3'24 compared to Q3'23.

Revenue decreased 4% (3% constant currency) to $519 million in Q3'24 compared to Q3'23, driven by lower on-premises subscription license revenue due to shorter contract durations and an increase in the proportion of ratably recognized SaaS contracts compared to on-premises subscription contracts. Diluted earnings per share grew 11% to $0.57 in Q3'24 compared to Q3'23, primarily driven by a non-cash tax benefit associated with the effects of IRS procedural guidance issued in May 2024 and a reduction in total expenses, partially offset by lower revenue.

19

Table of Contents

Results of Operations

(Dollar amounts in millions, except per share data) |  | Three months ended |  |  | Percent Change |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency(1) |
ARR |  | $ | 2,126.1 |  |  | $ | 1,928.7 |  |  |  | 10 | % |  |  | 12 | %
Total recurring revenue(2) |  | $ | 481.6 |  |  | $ | 498.4 |  |  |  | (3 | )% |  |  | (2 | )%
Perpetual license |  |  | 7.1 |  |  |  | 8.3 |  |  |  | (15 | )% |  |  | (14 | )%
Professional services |  |  | 30.0 |  |  |  | 35.7 |  |  |  | (16 | )% |  |  | (15 | )%
Total revenue |  |  | 518.6 |  |  |  | 542.3 |  |  |  | (4 | )% |  |  | (3 | )%
Total cost of revenue |  |  | 111.9 |  |  |  | 115.9 |  |  |  | (3 | )% |  |  | (3 | )%
Gross margin |  |  | 406.7 |  |  |  | 426.5 |  |  |  | (5 | )% |  |  | (3 | )%
Operating expenses |  |  | 310.9 |  |  |  | 316.6 |  |  |  | (2 | )% |  |  | (1 | )%
Operating income |  | $ | 95.8 |  |  | $ | 109.9 |  |  |  | (13 | )% |  |  | (10 | )%
Non-GAAP operating income(1) |  | $ | 164.4 |  |  | $ | 185.0 |  |  |  | (11 | )% |  |  | (9 | )%
Operating margin |  |  | 18.5 | % |  |  | 20.3 | % |  |  |  |  |  |
Non-GAAP operating margin(1) |  |  | 31.7 | % |  |  | 34.1 | % |  |  |  |  |  |
Diluted earnings per share |  | $ | 0.57 |  |  | $ | 0.51 |  |  |  |  |  |  |
Non-GAAP diluted earnings per share(1) |  | $ | 0.98 |  |  | $ | 0.99 |  |  |  |  |  |  |
Cash provided by operating activities |  | $ | 213.8 |  |  | $ | 169.2 |  |  |  |  |  |  |
Capital expenditures |  |  | (1.6 | ) |  |  | (5.1 | ) |  |  |  |  |  |
Free cash flow |  | $ | 212.2 |  |  | $ | 164.1 |  |  |  |  |  |  |

(Dollar amounts in millions, except per share data) |  | Nine months ended |  |  | Percent Change |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency(1) |
ARR |  | $ | 2,126.1 |  |  | $ | 1,928.7 |  |  |  | 10 | % |  |  | 12 | %
Total recurring revenue(2) |  | $ | 1,551.6 |  |  | $ | 1,407.7 |  |  |  | 10 | % |  |  | 10 | %
Perpetual license |  |  | 22.2 |  |  |  | 30.4 |  |  |  | (27 | )% |  |  | (27 | )%
Professional services |  |  | 98.1 |  |  |  | 112.4 |  |  |  | (13 | )% |  |  | (13 | )%
Total revenue |  |  | 1,671.9 |  |  |  | 1,550.4 |  |  |  | 8 | % |  |  | 8 | %
Total cost of revenue |  |  | 332.0 |  |  |  | 325.2 |  |  |  | 2 | % |  |  | 2 | %
Gross margin |  |  | 1,339.9 |  |  |  | 1,225.3 |  |  |  | 9 | % |  |  | 9 | %
Operating expenses |  |  | 945.8 |  |  |  | 887.9 |  |  |  | 7 | % |  |  | 7 | %
Operating income |  | $ | 394.1 |  |  | $ | 337.3 |  |  |  | 17 | % |  |  | 15 | %
Non-GAAP operating income(1) |  | $ | 617.8 |  |  | $ | 558.2 |  |  |  | 11 | % |  |  | 10 | %
Operating margin |  |  | 23.6 | % |  |  | 21.8 | % |  |  |  |  |  |
Non-GAAP operating margin(1) |  |  | 37.0 | % |  |  | 36.0 | % |  |  |  |  |  |
Diluted earnings per share |  | $ | 2.07 |  |  | $ | 1.68 |  |  |  |  |  |  |
Non-GAAP diluted earnings per share(1) |  | $ | 3.54 |  |  | $ | 3.14 |  |  |  |  |  |  |
Cash provided by operating activities |  | $ | 651.9 |  |  | $ | 561.1 |  |  |  |  |  |  |
Capital expenditures |  |  | (9.8 | ) |  |  | (18.0 | ) |  |  |  |  |  |
Free cash flow |  | $ | 642.0 |  |  | $ | 543.1 |  |  |  |  |  |  |

(1)
See Non-GAAP Financial Measures below for a reconciliation of our GAAP results to our non-GAAP financial measures and Impact of Foreign Currency Exchange on Results of Operations below for a description of how we calculate our results on a constant currency basis.
(2)
Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Impact of Foreign Currency Exchange on Results of Operations

Approximately 50% of our revenue and 35% of our expenses are transacted in currencies other than the U.S. Dollar. Because we report our results of operations in U.S. Dollars, currency translation, particularly changes in the Euro, Yen, Shekel, and Rupee relative to the U.S. Dollar, affects our reported results. Our constant currency disclosures are calculated by multiplying the results in local currency for the quarterly periods for FY'24 and FY'23 by the exchange rates in effect on September 30, 2023.

20

Table of Contents

Revenue

Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period can have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period over period. We recognize revenue for the license portion of on-premises subscription contracts up front when we deliver the licenses to the customer, typically on the start date, and we recognize revenue on the support portion of on-premises subscription contracts and stand-alone support contracts ratably over the term. We continue to convert existing support contracts to on-premises subscriptions, resulting in a shift to up-front recognition of on-premises subscription license revenue in the period converted compared to ratable recognition for a perpetual support contract. Revenue from our cloud services (primarily SaaS) contracts is recognized ratably. We expect that over time a higher portion of our revenue will be recognized ratably as we expand our SaaS offerings, as we release additional cloud functionality into our products, and as customers migrate from on-premises subscriptions to SaaS. Given the different mix, duration and volume of new and renewing contracts in any period, year-over-year or sequential revenue can vary significantly.

Revenue by Line of Business

(Dollar amounts in millions) |  | Three months ended |  |  | Percent Change |  |  | Nine months ended |  |  | Percent Change |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency |
License |  | $ | 149.1 |  |  | $ | 192.9 |  |  |  | (23 | )% |  |  | (21 | )% |  | $ | 567.4 |  |  | $ | 562.6 |  |  |  | 1 | % |  |  | 0 | %
Support and cloud services |  |  | 339.5 |  |  |  | 313.7 |  |  |  | 8 | % |  |  | 9 | % |  |  | 1,006.4 |  |  |  | 875.4 |  |  |  | 15 | % |  |  | 15 | %
Software revenue |  |  | 488.6 |  |  |  | 506.7 |  |  |  | (4 | )% |  |  | (2 | )% |  |  | 1,573.8 |  |  |  | 1,438.1 |  |  |  | 9 | % |  |  | 9 | %
Professional services |  |  | 30.0 |  |  |  | 35.7 |  |  |  | (16 | )% |  |  | (15 | )% |  |  | 98.1 |  |  |  | 112.4 |  |  |  | (13 | )% |  |  | (13 | )%
Total revenue |  | $ | 518.6 |  |  | $ | 542.3 |  |  |  | (4 | )% |  |  | (3 | )% |  | $ | 1,671.9 |  |  | $ | 1,550.4 |  |  |  | 8 | % |  |  | 8 | %

Software revenue decreased in Q3'24 compared to Q3'23, primarily driven by lower license revenue in Q3'24 due to shorter contract durations and an increase in the proportion of ratably recognized SaaS contracts compared to on-premises subscription contracts. Software revenue growth in the first nine months of FY'24 was driven by PLM, which included the contribution from ServiceMax (acquired in early Q2'23), and CAD.

License revenue growth was relatively flat in the first nine months of FY'24, reflecting CAD and PLM growth in Europe and Asia Pacific, offset by lower license revenue in the Americas, particularly in PLM.

Support and cloud services revenue growth in Q3'24 was mainly driven by PLM growth in the Americas and Europe. Support and cloud services revenue growth in the first nine months of FY'24 was driven by PLM (which included contribution from ServiceMax) in the Americas and Europe.

Professional services revenue decreased in Q3'24 and the first nine months of FY'24 as we continue to execute on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

Software Revenue by Product Group

(Dollar amounts in millions) |  | Three months ended |  |  | Percent Change |  |  | Nine months ended |  |  | Percent Change |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Actual |  |  | Constant Currency |
PLM |  | $ | 300.3 |  |  | $ | 314.4 |  |  |  | (4 | )% |  |  | (4 | )% |  | $ | 958.6 |  |  | $ | 864.4 |  |  |  | 11 | % |  |  | 10 | %
CAD |  |  | 188.3 |  |  |  | 192.3 |  |  |  | (2 | )% |  |  | 0 | % |  |  | 615.2 |  |  |  | 573.7 |  |  |  | 7 | % |  |  | 7 | %
Software revenue |  | $ | 488.6 |  |  | $ | 506.7 |  |  |  | (4 | )% |  |  | (2 | )% |  | $ | 1,573.8 |  |  | $ | 1,438.1 |  |  |  | 9 | % |  |  | 9 | %

21

Table of Contents

PLM software revenue decreased in Q3'24, driven by lower revenue in the Americas. PLM software revenue growth in the first nine months of FY’24 was driven by the contribution from ServiceMax (acquired in early Q2’23) and growth in Europe. Year-over-year PLM software revenue growth for the first nine months of FY'24 excluding Q1'24 ServiceMax revenue would have been 6% (5% constant currency).

PLM ARR grew 12% (13% constant currency) from Q3’23 to Q3'24.

CAD software revenue decreased in Q3'24 compared to Q3'23, primarily due to lower revenue in the Americas. Year-over-year CAD software revenue growth for the first nine months of FY'24 was primarily driven by revenue growth in Europe and Asia Pacific.

CAD ARR grew 8% (10% constant currency) from Q3’23 to Q3’24.

Gross Margin

(Dollar amounts in millions) |  | Three months ended |  |  |  |  |  | Nine months ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |
License gross margin |  | $ | 137.0 |  |  | $ | 181.4 |  |  |  | (24 | )% |  | $ | 534.4 |  |  | $ | 521.3 |  |  |  | 3 | %
License gross margin percentage |  |  | 92 | % |  |  | 94 | % |  |  |  |  |  | 94 | % |  |  | 93 | % |  |  |
Support and cloud services gross margin |  | $ | 269.5 |  |  | $ | 245.5 |  |  |  | 10 | % |  | $ | 802.0 |  |  | $ | 697.8 |  |  |  | 15 | %
Support and cloud services gross margin percentage |  |  | 79 | % |  |  | 78 | % |  |  |  |  |  | 80 | % |  |  | 80 | % |  |  |
Professional services gross margin |  | $ | 0.2 |  |  | $ | (0.4 | ) |  |  | 138 | % |  | $ | 3.5 |  |  | $ | 6.1 |  |  |  | (43 | )%
Professional services gross margin percentage |  |  | 1 | % |  |  | (1 | )% |  |  |  |  |  | 4 | % |  |  | 5 | % |  |  |
Total gross margin |  | $ | 406.7 |  |  | $ | 426.5 |  |  |  | (5 | )% |  | $ | 1,339.9 |  |  | $ | 1,225.3 |  |  |  | 9 | %
Total gross margin percentage |  |  | 78 | % |  |  | 79 | % |  |  |  |  |  | 80 | % |  |  | 79 | % |  |  |
Non-GAAP gross margin(1) |  | $ | 422.3 |  |  | $ | 442.2 |  |  |  | (5 | )% |  | $ | 1,384.7 |  |  | $ | 1,266.8 |  |  |  | 9 | %
Non-GAAP gross margin percentage(1) |  |  | 81 | % |  |  | 82 | % |  |  |  |  |  | 83 | % |  |  | 82 | % |  |  |

(1)
Non-GAAP financial measures are reconciled to GAAP results under Non-GAAP Financial Measures below.

License gross margin changes in Q3'24 and the first nine months of FY'24 compared to the corresponding FY'23 periods were in line with changes in license revenue. License gross margin growth in the first nine months of FY'24 was due mainly to lower intangible amortization expense. Cost of license revenue in Q3'24 remained consistent with Q3'23.

Support and cloud services gross margin growth in Q3'24 and the first nine months of FY'24 compared to the corresponding FY'23 periods was in line with support and cloud services revenue growth. Cost of support and cloud services revenue in the first nine months of FY’24 grew at a similar rate to revenue, driven by higher intangible amortization expense, compensation expense, and royalty expense. Cost of support and cloud services revenue in Q3'24 remained consistent with Q3'23.

Professional services gross margin decreased in first nine months of FY'24 compared to the corresponding FY'23 period, primarily due to lower margins on business subcontracted to partners. Professional services gross margin improved in Q3'24 compared to Q3'23 due to lower outside services and compensation costs. The decreases in professional services revenue and costs are due to our continued execution on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

22

Table of Contents

Operating Expenses

(Dollar amounts in millions) |  | Three months ended |  |  |  |  |  | Nine months ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |
Sales and marketing |  | $ | 140.3 |  |  | $ | 145.1 |  |  |  | (3 | )% |  | $ | 411.8 |  |  | $ | 392.7 |  |  |  | 5 | %
% of total revenue |  |  | 27 | % |  |  | 27 | % |  |  |  |  |  | 25 | % |  |  | 25 | % |  |  |
Research and development |  | $ | 110.3 |  |  | $ | 103.8 |  |  |  | 6 | % |  | $ | 323.0 |  |  | $ | 292.3 |  |  |  | 10 | %
% of total revenue |  |  | 21 | % |  |  | 19 | % |  |  |  |  |  | 19 | % |  |  | 19 | % |  |  |
General and administrative |  | $ | 49.7 |  |  | $ | 57.1 |  |  |  | (13 | )% |  | $ | 180.4 |  |  | $ | 173.9 |  |  |  | 4 | %
% of total revenue |  |  | 10 | % |  |  | 11 | % |  |  |  |  |  | 11 | % |  |  | 11 | % |  |  |
Amortization of acquired intangible assets |  | $ | 10.7 |  |  | $ | 10.7 |  |  |  | 0 | % |  | $ | 31.5 |  |  | $ | 29.4 |  |  |  | 7 | %
% of total revenue |  |  | 2 | % |  |  | 2 | % |  |  |  |  |  | 2 | % |  |  | 2 | % |  |  |
Restructuring and other credits, net |  | $ | — |  |  | $ | (0.0 | ) |  |  | (100 | )% |  | $ | (0.8 | ) |  | $ | (0.4 | ) |  |  | 113 | %
% of total revenue |  |  | 0 | % |  |  | (0 | )% |  |  |  |  |  | (0 | )% |  |  | (0 | )% |  |  |
Total operating expenses |  | $ | 310.9 |  |  | $ | 316.6 |  |  |  | (2 | )% |  | $ | 945.8 |  |  | $ | 887.9 |  |  |  | 7 | %

Total headcount increased 4% between Q3’23 and Q3’24.

Operating expenses in Q3'24 decreased compared to Q3'23, primarily due to the following:

•
a $7 million decrease in marketing expense, primarily due to not holding our LiveWorx event in FY'24; and
•
a $6 million decrease in stock-based compensation, driven by Q3'24 changes in estimated attainment for performance-based grants and less expense for grants related to the ServiceMax acquisition;

partially offset by:

•
a $3 million increase in compensation expense, excluding stock-based compensation; and
•
a $3 million increase in outside services, driven by consulting services related to corporate initiatives.

Operating expenses in the first nine months of FY'24 increased compared to the first nine months of FY'23, due to the following:

•
a $44 million increase in compensation expense driven by our Q2'23 acquisition of ServiceMax, higher headcount, and annual salary increases in Q3'23;
•
a $13 million increase in stock-based compensation expense, driven in part by acceleration of equity grants held by our former CEO upon his separation from service in Q2'24 (which expense is included in General and administrative), as well as the impact of an FY'24 change in eligibility for continued vesting upon retirement for a subset of prospective equity grants; and
•
an $8 million increase in outside services, driven by consulting services related to corporate initiatives;

partially offset by:

•
a $16 million decrease in acquisition and transaction-related costs, largely driven by costs associated with our Q2'23 acquisition of ServiceMax; and
•
a $10 million decrease in marketing expense, primarily due to not holding our LiveWorx event in FY'24.

23

Table of Contents

Interest Expense

(Dollar amounts in millions) |  | Three months ended |  |  |  |  |  | Nine months ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |
Interest and debt premium expense |  | $ | (27.8 | ) |  | $ | (35.8 | ) |  |  | (22 | )% |  | $ | (94.7 | ) |  | $ | (93.7 | ) |  |  | 1 | %

Interest expense in both FY'23 and FY'24 includes interest on our revolving credit facility, term loan, and our senior notes due 2025 and 2028. Interest expense in FY'23 also included interest on a deferred acquisition payment associated with the ServiceMax acquisition. Interest expense decreased in Q3'24 compared to Q3'23 primarily due to lower aggregate debt and deferred acquisition payments. The increase in interest expense in the first nine months of FY'24 compared to the first nine months of FY'23 was driven by higher interest rates, offset by lower aggregate debt and deferred acquisition payments.

Other Income (Expense)

(Dollar amounts in millions) |  | Three months ended |  |  |  |  |  | Nine months ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |
Interest income |  | $ | 1.0 |  |  | $ | 1.4 |  |  |  | (25 | )% |  | $ | 3.4 |  |  | $ | 3.9 |  |  |  | (12 | )%
Other income (expense), net |  |  | (1.7 | ) |  |  | 1.1 |  |  |  | (258 | )% |  |  | (4.1 | ) |  |  | (3.5 | ) |  |  | (18 | )%
Other income (expense), net |  | $ | (0.7 | ) |  | $ | 2.5 |  |  |  | (127 | )% |  | $ | (0.7 | ) |  | $ | 0.4 |  |  |  | (268 | )%

Other income (expense), net was lower in Q3'24 compared to Q3'23, driven by foreign currency exchange losses. Other income (expense), net was lower in the first nine months of FY'24 compared to the first nine months of FY'23 due to a $2.0 million impairment loss related to an available-for-sale debt security classified as a Level 3 investment, offset by lower foreign exchange losses.

Income Taxes

(Dollar amounts in millions) |  | Three months ended |  |  |  |  |  | Nine months ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |  |  | June 30, 2024 |  |  | June 30, 2023 |  |  | Percent Change |
Income before income taxes |  | $ | 67.4 |  |  | $ | 76.5 |  |  |  | (12 | )% |  | $ | 298.7 |  |  | $ | 244.0 |  |  |  | 22 | %
Provision (benefit) for income taxes |  | $ | (1.6 | ) |  | $ | 15.1 |  |  |  | (111 | )% |  | $ | 48.9 |  |  | $ | 44.1 |  |  |  | 11 | %
Effective income tax rate |  |  | (2 | )% |  |  | 20 | % |  |  |  |  |  | 16 | % |  |  | 18 | % |  |  |

The effective tax rate for Q3'24 and the first nine months of FY'24 was lower than the effective tax rate for the corresponding prior-year periods primarily due to changes in the geographic mix of income before taxes and the non-cash effects of IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-taxed Income and Foreign-derived Intangible Income. The benefit from this change for Q3’24 and the first nine months of FY’24 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the first nine months of FY'24, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies and estimates as set forth under the heading Critical Accounting Policies and Estimates in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Annual Report on Form 10-K.

24

Table of Contents

Recent Accounting Pronouncements

In accordance with recently issued accounting pronouncements, we will be required to comply with certain changes in accounting rules and regulations. Refer to Note 1. Basis of Presentation to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for all recently issued accounting pronouncements, none of which are expected to have a material effect.

Liquidity and Capital Resources

(in millions) |  | June 30, 2024 |  |  | September 30, 2023 |
Cash and cash equivalents |  | $ | 247.7 |  |  | $ | 288.1 |
Restricted cash |  |  | 0.6 |  |  |  | 0.7 |
Total |  | $ | 248.3 |  |  | $ | 288.8 |
(in millions) |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |
Net cash provided by operating activities |  | $ | 651.9 |  |  | $ | 561.1 |
Net cash used in investing activities |  | $ | (99.5 | ) |  | $ | (866.1 | )
Net cash provided by (used in) financing activities |  | $ | (590.9 | ) |  | $ | 307.5 |

Cash, Cash Equivalents and Restricted Cash

We invest our cash with highly rated financial institutions. Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

Due to the stability of our subscription model and consistency of annual, up-front billing, we aim to maintain a low cash balance. A significant portion of our cash is generated and held outside the U.S. As of June 30, 2024, we had cash and cash equivalents of $37.1 million in the U.S., $99.5 million in Europe, $88.5 million in Asia Pacific (including India) and $22.6 million in other countries. We have substantial cash requirements in the U.S. but believe that the combination of our existing U.S. cash and cash equivalents, cash available under our revolving credit facility, future U.S. operating cash flows, and our ability to repatriate cash to the U.S. will be sufficient to meet our ongoing U.S. operating expenses and known capital requirements.

Cash Provided by Operating Activities

Cash provided by operating activities increased $90.8 million in the first nine months of FY'24 compared to the same period in FY'23. The increase was driven by higher collections (including contribution from ServiceMax) and lower vendor disbursements, which were partially offset by higher interest and salary-related payments. Interest payments in the first nine months of FY'24 were approximately $60 million higher than in the prior-year period and include the payment of $30.0 million of imputed interest on the ServiceMax deferred acquisition payment.

Cash Used in Investing Activities

Cash used in investing activities in the first nine months of FY'24 was driven by the acquisition of pure-systems for $93.5 million in Q1'24. Cash used in investing activities in the first nine months of FY'23 was driven by a payment of $828.2 million in Q2'23 related to the acquisition of ServiceMax. Capital expenditures in the first nine months of FY'24 were lower than in the prior year period as we invest more in cloud-based rather than on-premises software.

Cash Provided by (Used in) Financing Activities

Cash used in financing activities in the first nine months of FY'24 included $620.0 million paid to settle the ServiceMax deferred acquisition payment, partially offset by net borrowings of $109.0 million ($944.8 million borrowed under the revolving line of our existing credit facility, less payments of $835.8 million) to

25

Table of Contents

fund the ServiceMax deferred acquisition payment and the pure-systems acquisition. In the first nine months of FY'24, payments of withholding taxes in connection with vesting of stock-based awards were higher than in FY'23, primarily driven by vesting of awards held by our former CEO in connection with the CEO succession in Q2'24.

Cash provided by financing activities in the first nine months of FY'23 included net new borrowings of $771.0 million (a $500.0 million term loan and a $271.0 million incremental revolving line) to fund the ServiceMax acquisition, repayments of $385.0 million on the new revolving facility, and payments of $13.4 million related to credit facility origination costs.

Outstanding Debt

(in millions) |  | June 30, 2024 |  |  | September 30, 2023 |
4.000% Senior notes due 2028 |  | $ | 500.0 |  |  | $ | 500.0 |
3.625% Senior notes due 2025 |  |  | 500.0 |  |  |  | 500.0 |
Credit facility revolver line |  |  | 322.0 |  |  |  | 202.0 |
Credit facility term loan |  |  | 493.8 |  |  |  | 500.0 |
Total debt |  | $ | 1,815.8 |  |  | $ | 1,702.0 |
Unamortized debt issuance costs for the senior notes |  |  | (4.6 | ) |  |  | (6.2 | )
Total debt, net of issuance costs |  | $ | 1,811.2 |  |  | $ | 1,695.8 |
Undrawn under credit facility revolver |  | $ | 928.0 |  |  | $ | 1,048.0 |
Undrawn under credit facility revolver available to borrow |  | $ | 912.1 |  |  | $ | 384.6 |

As of June 30, 2024, we were in compliance with all financial and operating covenants of the credit facility and the note indenture. As of June 30, 2024, the annual rate for borrowings outstanding under the credit facility was 6.9%.

Our credit facility and our senior notes are described in Note 10. Debt to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q. As of June 30, 2024, $518.1 million of our debt was classified as current, including $499.3 million associated with the 2025 senior notes and related debt issuance costs which will become due in February 2025.

Future Expectations

We believe that existing cash and cash equivalents, together with cash generated from operations and amounts available under the credit facility, will be sufficient to meet our working capital and capital expenditure requirements through at least the next twelve months and to meet our known long-term capital requirements.

For the remainder of FY'24, we expect to use substantially all our cash generated from operating activities to repay debt outstanding under our revolving credit facility.

Our expected uses and sources of cash could change, our cash position could be reduced, and we could incur additional debt obligations if we retire other debt, engage in strategic transactions, or repurchase shares, any of which could be commenced, suspended, or completed at any time. Any such repurchases or retirement of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any debt retirement or issuance, share repurchases, or strategic transactions may be material.

26

Table of Contents

Operating Measure

ARR

ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, and support contracts as of the end of the reporting period. We calculate ARR as follows:

•
We consider a contract to be active when the product or service contractual term commences (the “start date”) until the right to use the product or service ends (the “expiration date”). Even if the contract with the customer is executed before the start date, the contract will not count toward ARR until the customer right to receive the benefit of the products or services has commenced.
•
For contracts that include annual values that increase over time, which we refer to as ramp contracts, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include any future committed increases in the contract value as of the date of the ARR calculation.
•
As ARR includes only contracts that are active at the end of the reporting period, ARR does not reflect assumptions or estimates regarding future customer renewals or non-renewals.
•
Active contracts are annualized by dividing the total active contract value by the contract duration in days (expiration date minus start date), then multiplying that by 365 days (or 366 days for leap years).

We believe ARR is a valuable operating measure to assess the health of a subscription business because it is aligned with the amount that we invoice the customer on an annual basis. We generally invoice customers annually for the current year of the contract. A customer with a one-year contract will typically be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year contract will be invoiced for each annual period at the beginning of each year of the contract.

ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period.

As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the total value of the contract is recognized as revenue at a point in time upon the later of when the software is made available, or the subscription term commences.

ARR should be viewed independently of recognized and unearned revenue and is not intended to be combined with, or to replace, either of those items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.

27

Table of Contents

Non-GAAP Financial Measures

Our non-GAAP financial measures and the reasons we use them and exclude the items identified below are described in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended September 30, 2023.

The non-GAAP financial measures presented in the discussion of our results of operations and the respective most directly comparable GAAP measures are:

•
free cash flow—cash flow from operations
•
non-GAAP gross margin—GAAP gross margin
•
non-GAAP operating income—GAAP operating income
•
non-GAAP operating margin—GAAP operating margin
•
non-GAAP net income—GAAP net income
•
non-GAAP diluted earnings per share—GAAP diluted earnings per share

The non-GAAP financial measures other than free cash flow exclude, as applicable: stock-based compensation expense; amortization of acquired intangible assets; acquisition and transaction-related charges included in General and administrative expenses; Restructuring and other charges (credits), net; non-operating charges (credits); and income tax adjustments as defined in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and as reflected in the reconciliation tables.

The items excluded from the non-GAAP financial measures often have a material impact on our financial results, certain of those items are recurring, and other such items often recur. Accordingly, the non-GAAP financial measures included in this Quarterly Report on Form 10-Q should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with GAAP. The following tables reconcile each of these non-GAAP financial measures to its most closely comparable GAAP measure on our financial statements.

28

Table of Contents

(in millions, except per share amounts) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
GAAP gross margin |  | $ | 406.7 |  |  | $ | 426.5 |  |  | $ | 1,339.9 |  |  | $ | 1,225.3 |
Stock-based compensation |  |  | 5.9 |  |  |  | 5.8 |  |  |  | 16.0 |  |  |  | 15.7 |
Amortization of acquired intangible assets included in cost of revenue |  |  | 9.7 |  |  |  | 9.8 |  |  |  | 28.8 |  |  |  | 25.8 |
Non-GAAP gross margin |  | $ | 422.3 |  |  | $ | 442.2 |  |  | $ | 1,384.7 |  |  | $ | 1,266.8 |
GAAP operating income |  | $ | 95.8 |  |  | $ | 109.9 |  |  | $ | 394.1 |  |  | $ | 337.3 |
Stock-based compensation |  |  | 48.0 |  |  |  | 53.8 |  |  |  | 161.2 |  |  |  | 147.6 |
Amortization of acquired intangible assets |  |  | 20.4 |  |  |  | 20.5 |  |  |  | 60.3 |  |  |  | 55.2 |
Acquisition and transaction-related charges |  |  | 0.2 |  |  |  | 0.8 |  |  |  | 3.0 |  |  |  | 18.5 |
Restructuring and other credits, net |  |  | — |  |  |  | (0.0 | ) |  |  | (0.8 | ) |  |  | (0.4 | )
Non-GAAP operating income |  | $ | 164.4 |  |  | $ | 185.0 |  |  | $ | 617.8 |  |  | $ | 558.2 |
GAAP net income |  | $ | 69.0 |  |  | $ | 61.4 |  |  | $ | 249.8 |  |  | $ | 199.9 |
Stock-based compensation |  |  | 48.0 |  |  |  | 53.8 |  |  |  | 161.2 |  |  |  | 147.6 |
Amortization of acquired intangible assets |  |  | 20.4 |  |  |  | 20.5 |  |  |  | 60.3 |  |  |  | 55.2 |
Acquisition and transaction-related charges |  |  | 0.2 |  |  |  | 0.8 |  |  |  | 3.0 |  |  |  | 18.5 |
Restructuring and other credits, net |  |  | — |  |  |  | (0.0 | ) |  |  | (0.8 | ) |  |  | (0.4 | )
Non-operating charges(1) |  |  | — |  |  |  | — |  |  |  | 2.0 |  |  |  | 5.1 |
Income tax adjustments(2) |  |  | (19.5 | ) |  |  | (18.8 | ) |  |  | (48.2 | ) |  |  | (52.5 | )
Non-GAAP net income |  | $ | 118.0 |  |  | $ | 117.7 |  |  | $ | 427.3 |  |  | $ | 373.4 |
GAAP diluted earnings per share |  | $ | 0.57 |  |  | $ | 0.51 |  |  | $ | 2.07 |  |  | $ | 1.68 |
Stock-based compensation |  |  | 0.40 |  |  |  | 0.45 |  |  |  | 1.34 |  |  |  | 1.24 |
Amortization of acquired intangible assets |  |  | 0.17 |  |  |  | 0.17 |  |  |  | 0.50 |  |  |  | 0.46 |
Acquisition and transaction-related charges |  |  | 0.00 |  |  |  | 0.01 |  |  |  | 0.02 |  |  |  | 0.16 |
Restructuring and other credits, net |  |  | — |  |  |  | (0.00 | ) |  |  | (0.01 | ) |  |  | (0.00 | )
Non-operating charges(1) |  |  | — |  |  |  | — |  |  |  | 0.02 |  |  |  | 0.04 |
Income tax adjustments(2) |  |  | (0.16 | ) |  |  | (0.16 | ) |  |  | (0.40 | ) |  |  | (0.44 | )
Non-GAAP diluted earnings per share |  | $ | 0.98 |  |  | $ | 0.99 |  |  | $ | 3.54 |  |  | $ | 3.14 |
Cash provided by operating activities |  | $ | 213.8 |  |  | $ | 169.2 |  |  | $ | 651.9 |  |  | $ | 561.1 |
Capital expenditures |  |  | (1.6 | ) |  |  | (5.1 | ) |  |  | (9.8 | ) |  |  | (18.0 | )
Free cash flow |  | $ | 212.2 |  |  | $ | 164.1 |  |  | $ | 642.0 |  |  | $ | 543.1 |

(1)
In the first nine months of FY'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security. In the first nine months of FY'23, we recognized $4.2 million of financing charges for a debt commitment agreement associated with our acquisition of ServiceMax.
(2)
Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above. Additionally, in the first nine months of FY'24, adjustments exclude a tax expense of $3.6 million for a tax reserve related to prior years in a foreign jurisdiction.

Operating margin impact of non-GAAP adjustments:

|  | Three months ended |  |  | Nine months ended |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | June 30, 2024 |  |  | June 30, 2023 |
GAAP operating margin |  |  | 18.5 | % |  |  | 20.3 | % |  |  | 23.6 | % |  |  | 21.8 | %
Stock-based compensation |  |  | 9.3 | % |  |  | 9.9 | % |  |  | 9.6 | % |  |  | 9.5 | %
Amortization of acquired intangible assets |  |  | 3.9 | % |  |  | 3.8 | % |  |  | 3.6 | % |  |  | 3.6 | %
Acquisition and transaction-related charges |  |  | 0.0 | % |  |  | 0.1 | % |  |  | 0.2 | % |  |  | 1.2 | %
Restructuring and other credits, net |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.0 | %
Non-GAAP operating margin |  |  | 31.7 | % |  |  | 34.1 | % |  |  | 37.0 | % |  |  | 36.0 | %

29

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our market risk exposure as described in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our 2023 Annual Report on Form 10-K.

ITEM 4. CONTROLS AN D PROCEDURES

Evaluation of Effectiveness of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2024.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2024, we completed the second phase of the implementation of a new enterprise resource planning (“ERP”) system for our corporate operations, which included customer billing and collection functions. As part of the implementation, we designed new internal controls and modified and/or enhanced existing internal controls to align with the new ERP system and business processes. We do not believe this implementation has had or will have a material adverse effect on our internal control over financial reporting. There were no additional changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the period ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

Table of Contents

PART II—OTHE R INFORMATION

ITEM 1A. RI SK FACTORS

In addition to other information set forth in this report, you should carefully consider the risk factors described in Part I. Item 1A. Risk Factors in our 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

ITEM 5. OTHER INFORMATION

Director and Executive Officer Adoption, Modification or Termination of 10b5-1 Plans in Q3'24

Our section 16 officers and directors may enter into plans or arrangements for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. Such plans and arrangements must comply in all respects with our insider trading policies, including our policy governing entry into and operation of 10b5-1 plans and arrangements.

During the quarter ended June 30, 2024, the below Section 16 officers and directors adopted Rule-10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Securities Exchange Act of 1934, as amended). All plans adopted covered only sales of PTC common stock. No plans were modified or terminated.

Name and Title of Director or Section 16 Officer |  | Date of Adoption, Modification, or Termination |  | Duration of the Plan |  | Aggregate Number of Shares of Common Stock that may be Sold under the Plan
Corinna Lathan Director |  | Adopted May 24, 2024 |  | Ends September 30, 2025 |  | 3,817

31

Table of Contents

ITEM 6. EXH IBITS

|  |  |  |  |  | Incorporated by Reference
Exhibit Number |  | Description |  | Filed Herewith |  | Form |  | Filling Date |  | Exhibit |  | SEC File No.
3.1 |  | Restated Articles of Organization of PTC Inc. |  |  |  | 10-K |  | November 23, 2015 |  | 3.1 |  | 0-18059
3.2 |  | Amended and Restated By-Laws of PTC Inc. |  |  |  | 10-K |  | November 15, 2022 |  | 3.2 |  | 0-18059
4.1 |  | Indenture dated as of February 13, 2020, between PTC Inc. and Wells Fargo Bank, National Association, as trustee |  |  |  | 8-K |  | February 13, 2020 |  | 4.1 |  | 0-18059
4.2 |  | Form of 3.625% senior unsecured notes due 2025 |  |  |  | 8-K |  | February 13, 2020 |  | 4.2 |  | 0-18059
4.3 |  | Form of 4.000% senior unsecured notes due 2028 |  |  |  | 8-K |  | February 13, 2020 |  | 4.3 |  | 0-18059
31.1 |  | Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) |  | X |  |  |  |  |  |  |  |
31.2 |  | Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) |  | X |  |  |  |  |  |  |  |
32* |  | Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350 |  | X |  |  |  |  |  |  |  |
101.INS |  | Inline XBRL Instance Document – the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document |  |  |  |  |  |  |  |  |  |
101.SCH |  | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |  |  |  |  |  |  |  |  |  |
104 |  | The cover page of the Q3 Form 10-Q formatted in Inline XBRL (included in Exhibit 101) |  |  |  |  |  |  |  |  |  |

* Indicates that the exhibit is being furnished, not filed, with this report.

32

Table of Contents

SIGNA TURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

| PTC Inc.
| By: |  | /S/ KRISTIAN TALVITIE
|  |  | Kristian Talvitie Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: August 2, 2024

33