PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Twelve Months Ended

September 30,

September 30,

September 30,

September 30,

2024

2023

2024

2023

GAAP gross margin

$

513,722

$

430,764

$

1,853,656

$

1,656,047

Stock-based compensation

5,460

5,206

21,439

20,874

Amortization of acquired intangible assets included in cost of revenue

9,660

9,877

38,495

35,694

Non-GAAP gross margin

$

528,842

$

445,847

$

1,913,590

$

1,712,615

GAAP operating income

$

193,973

$

121,134

$

588,062

$

458,474

Stock-based compensation

62,219

58,891

223,461

206,459

Amortization of acquired intangible assets

20,219

20,547

80,513

75,716

Acquisition and transaction-related charges

144

222

3,106

18,706

Restructuring and other credits, net

-

(84)

(802)

(460)

Non-GAAP operating income ⁽¹⁾

$

276,555

$

200,710

$

894,340

$

758,895

GAAP net income

$

126,523

$

45,603

$

376,333

$

245,540

Stock-based compensation

62,219

58,891

223,461

206,459

Amortization of acquired intangible assets

20,219

20,547

80,513

75,716

Acquisition and transaction-related charges

144

222

3,106

18,706

Restructuring and other credits, net

-

(84)

(802)

(460)

Non-operating charges, net ⁽²⁾

-

-

2,000

5,147

Income tax adjustments ⁽³⁾

(23,043)

19,017

(71,205)

(33,489)

Non-GAAP net income

$

186,062

$

144,196

$

613,406

$

517,619

GAAP diluted earnings per share

$

1.04

$

0.38

$

3.12

$

2.06

Stock-based compensation

0.51

0.49

1.85

1.73

Amortization of acquired intangibles

0.17

0.17

0.67

0.63

Acquisition and transaction-related charges

0.00

0.00

0.03

0.16

Restructuring and other credits, net

-

(0.00)

(0.01)

(0.00)

Non-operating charges, net ⁽²⁾

-

-

0.02

0.04

Income tax adjustments ⁽³⁾

(0.19)

0.16

(0.59)

(0.28)

Non-GAAP diluted earnings per share

$

1.54

$

1.20

$

5.08

$

4.34

(1) Operating margin impact of non-GAAP adjustments:

Three Months Ended

Twelve Months Ended

September 30,

September 30,

September 30,

September 30,

2024

2023

2024

2023

GAAP operating margin

31.0

%

22.2

%

25.6

%

21.9

%

Stock-based compensation

9.9

%

10.8

%

9.7

%

9.8

%

Amortization of acquired intangibles

3.2

%

3.8

%

3.5

%

3.6

%

Acquisition and transaction-related charges

0.0

%

0.0

%

0.1

%

0.9

%

Restructuring and other credits, net

0.0

%

0.0

%

0.0

%

0.0

%

Non-GAAP operating margin

44.1

%

36.7

%

38.9

%

36.2

%

(2) In FY'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security. In FY'23, we recognized $4.2 million of financing charges for a debt commitment agreement associated with our acquisition of ServiceMax.

(3) 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 fourth quarter and full year of FY'24, adjustments exclude a tax expense $0.8M and $4.4 million, respectively, for a tax reserve related to prior years in a foreign jurisdiction. In FY'23, non-GAAP expense excludes $21.8 million related to uncertain tax positions in a foreign jurisdiction.