8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 31, 2024

PTC Inc.

(Exact name of Registrant as Specified in Its Charter)

Massachusetts	0-18059	04-2866152
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
121 Seaport Boulevard
Boston, Massachusetts		02210
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (781) 370-5000

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On July 31, 2024, PTC Inc. announced results for its fiscal third quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 PTC Inc. Press Release dated July 31, 2024.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

2

SIGNATURES

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 thereunto duly authorized.

			PTC Inc.
Date:	31 July 2024	By:	/s/ Kristian Talvitie
			Kristian Talvitie Executive Vice President, Chief Financial Officer

EX-99.1

Ex 99.1

PTC Announces Third fiscal Quarter 2024 Results

Solid ARR and Cash Flow in Q3’24

Guiding to 11-12% Constant Currency ARR Growth and Maintaining Free Cash Flow Guidance for FY’24

BOSTON, MA, July 31, 2024 - PTC (NASDAQ: PTC) today reported financial results for its third fiscal quarter ended June 30, 2024.

“In our third fiscal quarter, we again delivered solid ARR and cash flow, with year over year ARR growth in the low double-digits and cash flow growth above 20%. We have a differentiated strategy that leverages our unique product portfolio to help product companies accelerate time to market and manage increasing complexity. It’s an exciting time because our products are at the epicenter of driving business transformation at our customers. We are strengthening our ability to scale our business by continuing to align our resources with our five focus areas,” said Neil Barua, CEO, PTC.

Third Quarter 2024 Highlights

Key operating and financial highlights are set forth below. The definitions of our operating and non-GAAP financial measures and reconciliations of non-GAAP financial measures to comparable GAAP measures are included below and in the reconciliation tables at the end of this press release.

$ in millions	Q3’24	Q3'23	YoY Change	Q3’24 Guidance
ARR as reported	$2,126	$1,929	10%
Constant currency ARR	$2,125	$1,904	12%	$2,115 - $2,130
Operating cash flow	$214	$169	26%	~$225
Free cash flow	$212	$164	29%	~$220
Revenue1	$519	$542	(4%)2	$525 - $540
Operating margin1	18%	20%	(~180 bps)
Non-GAAP operating margin1	32%	34%	(~240 bps)
Earnings per share1	$0.573	$0.51	11%	$0.41 - $0.54
Non-GAAP earnings per share1	$0.984	$0.99	(1%)	$0.90 - $1.00
Total cash and cash equivalents	$248	$282	(12%)
Gross debt5	$1,816	$2,3656	(23%)

1Revenue and, as a result, operating margin, operating profit, and earnings per share are impacted under ASC 606.

2In Q3’24, revenue declined 3% year over year on a constant currency basis.

3In Q3’24, GAAP EPS included a non-cash tax benefit of $14.2 million or $0.12, primarily associated with the effects of IRS procedural guidance issued in May 2024.

4In Q3’24, non-GAAP EPS included a non-cash tax benefit of $9.8 million or $0.08, primarily associated with the effects of IRS procedural guidance issued in May 2024.

5Gross debt excludes unamortized debt issuance costs.

6Q3’23 gross debt included a deferred acquisition payment related to ServiceMax of $620 million, which was paid in October 2023.

1

Fiscal 2024 and Q4’24 Guidance

“In a selling environment that continued to be challenging, our Q3’24 ARR grew 10% year over year, and constant currency ARR grew 12% year over year, driven by our differentiated product portfolio, the resilience of our subscription business model, operational discipline, and the actions we have taken over time to align our investments with market opportunities. Our Q3’24 free cash flow growth of 29% was also solid, although slightly below our guidance due to timing. Reflecting our year-to-date performance and our outlook for the fourth quarter, we are updating our FY’24 constant currency ARR guidance range to 11 to 12 percent growth and maintaining our FY’24 free cash flow guidance. We believe we have set our guidance appropriately,” said Kristian Talvitie, CFO.

$ in millions	FY’24 Previous Guidance	FY’24 Guidance	FY’24 YoY Growth Guidance	Q4’24 Guidance
Constant currency ARR	$2,200 - $2,240	$2,200 - $2,220	11% - 12%	$2,200 - $2,220
Operating cash flow	~$745	~$740	~21%	~$88
Free cash flow	~$725	~$725	~23%	~$83
Revenue	$2,270 - $2,340	$2,270 - $2,320	8% - 11%	$598 - $648
Earnings per share	$2.52 - $3.22	$2.78 - $3.35	35% - 63%	$0.72 - $1.29
Non-GAAP earnings per share	$4.60 - $5.10	$4.85 - $5.21	12% - 20%	$1.30 - $1.66

Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance

In millions	FY’24 Guidance	Q4’24 Guidance
Operating Cash Flow	~$740	~$88
Capital expenditures	(~$15)	(~$5)
Free Cash Flow	~$725	~$83

Reconciliation of EPS Guidance to Non-GAAP EPS Guidance

	FY’24 Guidance	Q4’24 Guidance
Earnings per share	$2.78 - $3.35	$0.72 - $1.29
Stock-based compensation expense	$1.90 - $1.74	$0.56 - $0.40
Intangible asset amortization expense	~$0.67	~$0.17
Acquisition and transaction-related expense	~$0.02	~$0.00
Other non-operating expenses, related to an impairment loss on an available for sale debt security	~$0.02	~$0.00
Income tax adjustments related to the reconciling items	($0.59) – ($0.54)	($0.20) – ($0.15)
Non-GAAP Earnings per share	$4.85 - $5.21	$1.30 - $1.66

2

FY’24 and Q4'24 financial guidance includes the following assumptions:

•We provide ARR guidance on a constant currency basis, using our FY’24 Plan foreign exchange rates (rates as of September 30, 2023) for all periods.

•We expect churn to remain low.

•For cash flow, due to invoicing and payments seasonality, and consistent with the past 3 years, we expect the majority of our collections to occur in the first half of our fiscal year and for fiscal Q4 to be our lowest cash flow generation quarter.

•Compared to FY’23, at the midpoint of FY’24 ARR guidance, FY’24 GAAP operating expenses are expected to increase approximately 6%, and FY’24 non-GAAP operating expenses are expected to increase approximately 8%, primarily due to investments to drive future growth, the acquisition of ServiceMax, and foreign exchange rate fluctuations.

•FY’24 GAAP P&L results are expected to include the items below, totaling approximately $295 million to $315 million, as well as their related tax effects:

•approximately $210 million to $230 million of stock-based compensation expense,

•approximately $81 million of intangible asset amortization expense,

•approximately $2 million, net, related to acquisition and transaction-related expense and a restructuring credit, and

•approximately $2 million of other non-operating expenses, related to an impairment loss on an available-for-sale debt security.

•Our FY’24 GAAP tax rate is expected to be approximately 17% and our non-GAAP tax rate is expected to be approximately 19%.

•Cash tax payments are expected to be approximately $65 million in FY’24.

•Capital expenditures are expected to be approximately $15 million in FY’24.

•Cash interest payments are expected to be approximately $135 million in FY’24.

•Our long-term goal, assuming our Debt/EBITDA ratio is below 3x, is to return approximately 50% of our free cash flow to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic opportunities.

•We expect to prioritize paying down our debt in FY’24.

•We expect gross debt of approximately $1.7 billion at the end of FY’24.

•We expect our fully diluted share count to be approximately 121 million in FY’24.

3

PTC’s Fiscal Third Quarter Conference Call

The Company will host a conference call to discuss results at 5:00 pm ET on Wednesday, July 31, 2024. To participate in the live conference call, dial (888) 330-2508 or (240) 789-2735, provide the passcode 7328695, and press # or log in to the webcast, available on PTC’s Investor Relations website. A replay will also be available.

Important Information About Our Operating and Non-GAAP Financial Measures

Non-GAAP Financial Measures

We provide supplemental non-GAAP financial measures to our financial results. We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operating performance because they provide a view of our operating results without items that are not, in our view, indicative of our operating results. These non-GAAP financial measures should not be construed as an alternative to GAAP results as the items excluded from the non-GAAP financial measures often have a material impact on our operating results, certain of those items are recurring, and others often recur. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

Non-GAAP operating expense, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income and non-GAAP EPS exclude the effect of the following items: stock-based compensation; amortization of acquired intangible assets; acquisition and transaction-related charges included in general and administrative expenses; restructuring and other charges and credits, net; non-operating charges and credits shown in the reconciliation provided; and income tax adjustments. Additional information about the items we exclude from our non-GAAP financial measures and the reasons we exclude them can be found in “Non-GAAP Financial Measures” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Free Cash Flow: We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return approximately 50% of our free cash flow to shareholders via stock repurchases. Free cash flow is cash provided by (used in) operations net of capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures.

Constant Currency (CC): We present CC information to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency exchange rate fluctuations. To present CC information, FY’24 and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the foreign exchange rate as of September 30, 2023, rather than the actual exchange rates in effect during that period.

4

Operating Measure

ARR: ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, cloud, SaaS, 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 as there are additional deliverables in subsequent periods, 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 the 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 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 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.

Organic ARR: We provide an organic ARR measure to help investors understand and assess the performance of our business without the distorting effects of ARR from acquisitions in the comparative period. We do not adjust for acquisitions that have an immaterial impact on our ARR results when providing organic ARR results.

Organic Constant Currency ARR: We provide an organic constant currency ARR measure to help investors understand and assess the performance of our business without the distorting effects of ARR from acquisitions in the comparative period and foreign exchange rate fluctuations. We do not adjust for acquisitions that have an immaterial impact on our ARR results when providing organic constant currency ARR results.

5

Deferred ARR: Deferred ARR is ARR attributable to our portfolio of subscription software, cloud, SaaS and support contracts that are not active as of the end of the reporting period but are contractually committed to commence in a future period.

Because ARR is independent of recognized and unearned revenue, deferred ARR should not be viewed as a measurement of revenue which will be recognized in future periods.

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future financial and growth expectations and targets 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 and cash flow; our investments in our software 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; our strategic initiatives to improve organizational and operational efficiency may not do so when or as we expect; 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, or could change our expectations about the amount and timing of any 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 detailed from time to time in reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

About PTC (NASDAQ: PTC)

PTC (NASDAQ: PTC) is a global software company that enables industrial and manufacturing companies to digitally transform how they engineer, manufacture, and service the physical products that the world relies on. Headquartered in Boston, Massachusetts, PTC employs over 7,000 people and supports more than 25,000 customers globally. For more information, please visit www.ptc.com.

PTC.com@PTCBlogs

PTC Investor Relations Contact

Matt Shimao
SVP, Investor Relations

mshimao@ptc.com

investor@ptc.com

6

PTC Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
Revenue:
Recurring revenue	$	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 (1)		518,639			542,342			1,671,925			1,550,433
Cost of revenue (2)		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 (2)		140,318			145,083			411,763			392,673
Research and development (2)		110,253			103,819			323,034			292,345
General and administrative (2)		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
Other expense, net		(28,448	)		(33,374	)		(95,372	)		(93,321	)
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
Weighted average shares outstanding		119,893			118,483			119,533			118,186
Diluted	$	0.57		$	0.51		$	2.07		$	1.68
Weighted average shares outstanding		120,822			119,392			120,593			119,072
(1) See supplemental financial data for revenue by license, support and cloud services, and professional services.
(2) See supplemental financial data for additional information about stock-based compensation.

7

PTC Inc.
SUPPLEMENTAL FINANCIAL DATA FOR REVENUE AND STOCK-BASED COMPENSATION
(in thousands, except per share data)
Revenue by license, support and services is as follows:
	Three Months Ended				Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
	2024		2023		2024		2023
License revenue (1)	$	149,104	$	192,940	$	567,423	$	562,631
Support and cloud services revenue		339,505		313,721		1,006,420		875,448
Professional services revenue		30,030		35,681		98,082		112,354
Total revenue	$	518,639	$	542,342	$	1,671,925	$	1,550,433
(1) License revenue includes the portion of subscription revenue allocated to license.
The amounts in the income statement include stock-based compensation as follows:
	Three Months Ended				Nine Months Ended
	June 30,		June 30,		June 30,		June 30,
	2024		2023		2024		2023
Cost of revenue	$	5,856	$	5,847	$	15,979	$	15,668
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	$	48,038	$	53,818	$	161,242	$	147,568

8

PTC Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands, except per share data)
	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
GAAP gross margin	$	406,723		$	426,488		$	1,339,934		$	1,225,283
Stock-based compensation		5,856			5,847			15,979			15,668
Amortization of acquired intangible assets included in cost of revenue		9,685			9,841			28,835			25,817
Non-GAAP gross margin	$	422,264		$	442,176		$	1,384,748		$	1,266,768
GAAP operating income	$	95,821		$	109,900		$	394,089		$	337,340
Stock-based compensation		48,038			53,818			161,242			147,568
Amortization of acquired intangible assets		20,357			20,511			60,294			55,169
Acquisition and transaction-related charges		154			795			2,962			18,484
Restructuring and other credits, net		-			(39	)		(802	)		(376	)
Non-GAAP operating income (1)	$	164,370		$	184,985		$	617,785		$	558,185
GAAP net income	$	68,978		$	61,398		$	249,810		$	199,937
Stock-based compensation		48,038			53,818			161,242			147,568
Amortization of acquired intangible assets		20,357			20,511			60,294			55,169
Acquisition and transaction-related charges		154			795			2,962			18,484
Restructuring and other credits, net		-			(39	)		(802	)		(376	)
Non-operating charges, net (2)		-			-			2,000			5,147
Income tax adjustments (3)		(19,538	)		(18,830	)		(48,162	)		(52,506	)
Non-GAAP net income	$	117,989		$	117,653		$	427,344		$	373,423
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 intangibles		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, net (2)		-			-			0.02			0.04
Income tax adjustments (3)		(0.16	)		(0.16	)		(0.40	)		(0.44	)
Non-GAAP diluted earnings per share	$	0.98		$	0.99		$	3.54		$	3.14
(1) Operating margin impact of non-GAAP adjustments:
	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			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 intangibles		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	%
(2) 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.
(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 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.

9

PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
	June 30,		September 30,
	2024		2023
ASSETS
Cash and cash equivalents	$	247,749	$	288,103
Accounts receivable, net		674,959		811,398
Property and equipment, net		77,535		88,391
Goodwill and acquired intangible assets, net		4,352,750		4,299,760
Lease assets, net		131,297		143,028
Other assets		643,855		658,162
Total assets	$	6,128,145	$	6,288,842
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue	$	687,614	$	681,550
Debt, net of deferred issuance costs		1,811,154		1,695,785
Deferred acquisition payments (1)		-		620,040
Lease obligations		180,274		193,192
Other liabilities		434,424		420,985
Stockholders' equity		3,014,679		2,677,290
Total liabilities and stockholders' equity	$	6,128,145	$	6,288,842
(1) FY'23 Deferred acquisition payments represented the fair value of the $650 million payment associated with the ServiceMax, Inc. acquisition, which was paid in Q1'24.

10

PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
Cash flows from operating activities:
Net income	$	68,978		$	61,398		$	249,810		$	199,937
Stock-based compensation		48,038			53,818			161,242			147,568
Depreciation and amortization		27,128			27,906			81,272			76,943
Amortization of right-of-use lease assets		7,684			8,141			23,143			24,705
Operating lease liability		(3,145	)		(6,345	)		(13,438	)		(1,360	)
Accounts receivable		23,915			13,043			131,422			99,521
Accounts payable and accruals		64,831			18,726			35			11,368
Deferred revenue		(32,578	)		(17,396	)		8,393			18,696
Income taxes		(19,882	)		2,259			(1,795	)		(9,910	)
Other		28,830			7,673			11,786			(6,376	)
Net cash provided by operating activities		213,799			169,223			651,870			561,092
Capital expenditures		(1,639	)		(5,085	)		(9,841	)		(18,035	)
Acquisition of businesses, net of cash acquired(1)		-			-			(93,457	)		(828,271	)
Borrowings (payments) on debt, net(2)		(195,125	)		(180,000	)		109,049			386,000
Deferred acquisition payment(3)		-			-			(620,040	)		-
Net proceeds associated with issuance of common stock		-			-			12,709			10,592
Payments of withholding taxes in connection with vesting of stock-based awards		(21,405	)		(19,467	)		(92,589	)		(75,489	)
Settlement of net investment hedges		6,050			(1,660	)		3,826			(14,204	)
Net proceeds from sale (purchases) of investments		-			349			-			(5,474	)
Credit facility origination costs		-			-			-			(13,355	)
Other financing & investing activities		-			-			-			(371	)
Foreign exchange impact on cash		(2,832	)		(2,346	)		(2,003	)		6,835
Net change in cash, cash equivalents, and restricted cash		(1,152	)		(38,986	)		(40,476	)		9,320
Cash, cash equivalents, and restricted cash, beginning of period		249,474			321,194			288,798			272,888
Cash, cash equivalents, and restricted cash, end of period	$	248,322		$	282,208		$	248,322		$	282,208
Supplemental cash flow information:
Cash paid for interest(3)	$	18,375		$	22,576		$	112,394		$	51,946
(1) In Q1'24, we acquired pure-systems for $93 million, net of cash acquired. In Q2'23, we acquired ServiceMax Inc. for $1,448 million, net of cash acquired. We paid $828 million in Q2'23 and the remaining $620 million in Q1'24.
(2) In Q1'24, we borrowed $740 million to fund the ServiceMax deferred acquisition payment and the pure-systems acquisition. Subsequently, we've made net payments of $631 million.
(3) In Q1'24, we made a payment of $650 million to settle the ServiceMax deferred acquisition payment liability, of which $620 million is a financing outflow and $30 million is an operating outflow and included in cash paid for interest.

11

PTC Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands)
	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
Cash provided by operating activities	$	213,799		$	169,223		$	651,870		$	561,092
Capital expenditures		(1,639	)		(5,085	)		(9,841	)		(18,035	)
Free cash flow	$	212,160		$	164,138		$	642,029		$	543,057

12

XML

Document And Entity Information	Jul. 31, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 31, 2024
Entity Registrant Name	PTC Inc.
Entity Central Index Key	0000857005
Entity Emerging Growth Company	false
Entity File Number	0-18059
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2866152
Entity Address, Address Line One	121 Seaport Boulevard
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02210
City Area Code	(781)
Local Phone Number	370-5000
Entity Information, Former Legal or Registered Name
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.01 par value per share
Trading Symbol	PTC
Security Exchange Name	NASDAQ