Segment Information

6 Months Ended

Mar. 29, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate within a single industry segment—computer software and related services. Operating segments as defined under GAAP are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. We have two operating and reportable segments: (1) Software Products, which includes license and related support revenue (including updates and technical support) for all our products except training-related products; and (2) Services, which includes consulting, implementation, training, computer-based training products, including support on these products, and other services revenue. We do not allocate sales and marketing or administrative expenses to our operating segments as these activities are managed on a consolidated basis.

The revenue and operating income attributable to our operating segments are summarized as follows:

	Three months ended						Six months ended
	March 29, 2014			March 30, 2013			March 29, 2014			March 30, 2013
	(in thousands)
Revenue:
Total Software Products segment revenue	$	245,423		$	236,580		$	489,677		$	475,869
Total Services segment revenue	83,277			77,369			163,948			157,831
Total revenue	$	328,700		$	313,949		$	653,625		$	633,700
Operating income: (1)
Software Products segment	$	154,859		$	141,536		$	313,099		$	285,127
Services segment	16,427			6,844			29,048			14,094
Sales and marketing expenses	(85,933		)	(92,965		)	(170,644		)	(193,291		)
General and administrative expenses	(34,140		)	(34,171		)	(65,419		)	(70,827		)
Total operating income	51,213			21,244			106,084			35,103
Other income (expense), net	(2,692		)	(1,867		)	(4,446		)	(3,672		)
Income before income taxes	$	48,521		$	19,377		$	101,638		$	31,431

(1) We recorded restructuring charges of $1.1 million in the first six months of 2014. Software Products included $0.1 million; Services included $0.2 million; sales and marketing expenses included $0.5 million; and general and administrative expenses included $0.3 million of these restructuring charges. We recorded restructuring charges of $15.8 million and $31.2 million in the second quarter and first six months of 2013, respectively. Software Products included $6.1 million and $11.6 million, respectively; Services included $4.0 million and $6.3 million, respectively; sales and marketing expenses included $4.9 million and $11.7 million, respectively; and general and administrative expenses included $0.8 million and $1.6 million, respectively, of these restructuring charges.

We report revenue by the following three solution areas:

• CAD - PTC Creo^® and PTC Mathcad^®.

• Extended PLM - our PLM solutions (primarily PTC Windchill^®), our ALM solutions (primarily PTC Integrity^™) and our SCM Solutions (primarily PTC Windchill FlexPLM^®).

• SLM - PTC Arbortext^® , PTC Servigistics^® and PTC ThingWorx^® products.

	Three months ended				Six months ended
	March 29, 2014		March 30, 2013		March 29, 2014		March 30, 2013
	(in thousands)
Revenue:
CAD	$	138,188	$	136,331	$	274,356	$	268,291
Extended PLM	147,485		139,833		291,282		282,242
SLM	43,027		37,785		87,987		83,167
Total revenue	$	328,700	$	313,949	$	653,625	$	633,700

	Three months ended				Six months ended
	March 29, 2014		March 30, 2013		March 29, 2014		March 30, 2013
	(in thousands)
Revenue:
Americas (1)	$	134,375	$	118,150	$	273,253	$	250,809
Europe (2)	128,018		118,841		255,062		238,495
Pacific Rim	36,662		39,289		70,554		77,911
Japan	29,645		37,669		54,756		66,485
Total revenue	$	328,700	$	313,949	$	653,625	$	633,700

_________________

(1) Includes revenue in the United States totaling $126.3 million and $111.7 million for the quarters ended March 29, 2014 and March 30, 2013, respectively, and $255.0 million and $228.6 million for the six months ended March 29, 2014 and March 30, 2013, respectively.

(2) Includes revenue in Germany totaling $47.6 million and $39.6 million for the quarters ended March 29, 2014 and March 30, 2013, respectively, and $90.6 million and $81.7 million for the six months ended March 29, 2014 and March 30, 2013, respectively.