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Acquisitions and Disposition of Businesses | 12 Months Ended
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Sep. 30, 2025
Business Combination [Abstract] |
Acquisitions and Disposition of Businesses | 5. Acquisitions and Disposition of Businesses Acquisition and transaction-related costs were $9.1 million, $3.1 million and $18.7 million in 2025, 2024 and 2023, respectively. Acquisition and transaction-related costs include direct costs of potential and completed acquisitions (e.g., investment banker fees and professional fees, including legal and valuation services) and expenses related to acquisition integration activities (e.g., professional fees and severance). Other transactional charges include third-party costs related to unusual transactions, such as the divestiture of a portion of our business. These costs are classified in General and administrative expenses in the accompanying Consolidated Statements of Operations. Our results of operations include or exclude, as applicable, the results of acquired or sold businesses beginning on their respective acquisition or sale date. The acquisitions described below have been accounted for as business combinations. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the respective acquisition date. The fair values of intangible assets were based on valuations using discounted cash flow models which require the use of significant estimates and assumptions, including estimating future revenues, future costs, and an applicable discount rate. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. pure-systems On October 4, 2023, we acquired pure-systems GmbH pursuant to a Share Purchase Agreement. pure-systems was 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 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 |
The acquired customer relationships, purchased software, and trademarks are being amortized over useful lives of 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 by and among PTC, ServiceMax, Inc., and ServiceMax JV, LP. ServiceMax developed and licensed cloud-native, product-centric field service management (FSM) software, which is included within our PLM product group. The purchase price of $1,448.2 million, net of cash acquired, was payable in two installments. Upon closing of the transaction, we paid the first installment of $828.2 million, as adjusted for working capital, indebtedness, cash, and transaction expenses as set forth in the Share Purchase Agreement. 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. PTC borrowed $630 million under the revolving line of our credit facility and $500 million under the term loan of our credit facility to repay amounts under the prior credit facility and to pay the closing purchase price and transaction expenses related to the acquisition. ServiceMax had approximately 500 employees on the close date. In the year ended September 30, 2023, ServiceMax revenue was $137.6 million and ServiceMax earnings were immaterial. The following table sets forth the purchase price allocation for ServiceMax. The purchase price allocation includes the finalization of measurement period adjustments related to intangibles and deferred tax liabilities that resulted in a $3.5 million increase in customer relationships, a $3.2 million increase in net tax liability, and a $0.3 million decrease in goodwill compared to the balances reported as of March 31, 2023. We also recorded a liability of $620.0 million related to the fair value of the $650.0 million deferred purchase price payment.
(in thousands) |  |  |
Goodwill |  | $ | 974,850 |
Customer relationships |  |  | 512,700 |
Purchased software |  |  | 106,900 |
Accounts receivable |  |  | 58,722 |
Trademarks |  |  | 9,000 |
Other net assets |  |  | 5,540 |
Net tax liability |  |  | (121,656 | )
Deferred revenue |  |  | (97,829 | )
Total |  | $ | 1,448,227 |
The acquired customer relationships, purchased software, and trademarks are being amortized over useful lives of 20 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 expected future growth as ServiceMax expands our closed-loop product lifecycle management (PLM) strategy. 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 year ended September 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 the year ended September 30, 2023 presented below combines the historical results of PTC for the period, 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 year ended September 30, |
|  | 2023 |
Revenue |  | $ | 2,140,738 |
Net income |  | $ | 239,437 |
The impact from acquisitions other than ServiceMax for the reported periods if presented on a pro forma basis would not differ materially from our reported results. Other Acquisitions In the third quarter of 2025, we acquired IncQuery Group GmbH pursuant to a Share Purchase Agreement. The purchase price was $7.9 million, net of cash acquired, of which $6.5 million was paid in the period and $1.4 million is contingent consideration that may be paid in 2027 to the extent earned. PLM Services Business Disposition In 2022, we sold a portion of our PLM services business to ITC Infotech India Limited pursuant to a Strategic Partner Agreement dated as of April 20, 2022 by and between PTC and ITC Infotech. Consideration received from ITC Infotech for the sale was approximately $60.4 million, consisting of $32.5 million cash paid on closing and $28.0 million of services to be provided by ITC Infotech to PTC for no additional charge. Additionally, there was contingent consideration of up to $20 million based on certain performance milestones. We elected to defer the recognition of gains associated with contingent consideration until they became realizable. In the year ended September 30, 2025, we recognized a $13.1 million gain upon the achievement of performance milestones associated with this contingent consideration. This consideration will be received in credits for future services to be provided by ITC Infotech rather than in cash. The gain was recognized in Other income, net in the Consolidated Statements of Operations.

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