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Income Taxes | 9 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | 9. Income Taxes
(in thousands) |  | Three months ended |  |  | Nine months ended |
|  | June 30, 2025 |  |  | June 30, 2024 |  |  | June 30, 2025 |  |  | June 30, 2024 |
Income before income taxes |  | $ | 193,676 |  |  | $ | 67,373 |  |  | $ | 492,079 |  |  | $ | 298,717 |
Provision (benefit) for income taxes |  | $ | 52,348 |  |  | $ | (1,605 | ) |  | $ | 105,875 |  |  | $ | 48,907 |
Effective income tax rate |  |  | 27 | % |  |  | (2 | )% |  |  | 22 | % |  |  | 16 | %
The effective tax rate for the three and nine months ended June 30, 2025 was higher 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 effects of Internal Revenue Service (IRS) procedural guidance issued in April 2024 requiring IRS consent for certain previously automatic changes of accounting method on our estimated taxable income for the year ended September 30, 2024. Additionally, for the nine months ended June 30, 2025 and June 30, 2024, rates were impacted by a benefit of $10.4 million and an expense of $3.6 million, respectively, associated with the impact of changes in tax reserves related to prior years in foreign jurisdictions. In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the IRS 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. As of June 30, 2025 and September 30, 2024, we had unrecognized tax benefits of $45.7 million and $65.0 million, respectively. If all our unrecognized tax benefits as of June 30, 2025 were to become recognizable in the future, we would record a benefit to the income tax provision of $45.7 million, which would be partially offset by an increase in the U.S. valuation allowance of $6.6 million. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in favorable or unfavorable changes in our estimates. We believe it is reasonably possible that within the next 12 months the amount of unrecognized tax benefits related to the resolution of multi-jurisdictional tax positions could be reduced by up to $1 million. On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law. The Act includes changes to U.S. tax law that will be applicable to us beginning in 2026. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures. We are in the process of evaluating the impact of the Act to our consolidated financial statements and cash flow.

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