10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  

For the transition period from_ to_

Commission File Number: 0-18059

PTC Inc.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2866152
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

121 Seaport Boulevard, Boston, MA 02210

(Address of principal executive offices, including zip code)

(781) 370-5000

(Registrant’s telephone number, including area code)

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	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 120,135,231 shares of our common stock outstanding on July 31, 2024.

PTC Inc.

INDEX TO FORM 10-Q

For the Quarter Ended June 30, 2024

		Page Number
Part I—FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements:	1
	Consolidated Balance Sheets as of June 30, 2024 and September 30, 2023	1
	Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023	2
	Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2024 and June 30, 2023	3
	Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and June 30, 2023	4
	Consolidated Statements of Stockholders' Equity for the three and nine months ended June 30, 2024 and June 30, 2023	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	30
Part II—OTHER INFORMATION
Item 1A.	Risk Factors	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
Signature		33

PART I—FINANCIAL INFORMATION

ITEM 1.UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PTC Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	June 30, 2024			September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	247,749		$	288,103
Accounts receivable, net of allowance for doubtful accounts of $1,269 and $429 at June 30, 2024 and September 30, 2023, respectively		674,959			811,398
Prepaid expenses		109,373			96,016
Other current assets		59,690			81,849
Total current assets		1,091,771			1,277,366
Property and equipment, net		77,535			88,391
Goodwill		3,442,245			3,358,511
Acquired intangible assets, net		910,505			941,249
Deferred tax assets		151,659			123,319
Operating right-of-use lease assets		131,297			143,028
Other assets		323,133			356,978
Total assets	$	6,128,145		$	6,288,842
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	47,153		$	43,480
Accrued expenses and other current liabilities		123,090			132,841
Accrued compensation and benefits		161,073			160,431
Accrued income taxes		25,366			14,919
Current portion of long-term debt		518,071			9,375
Deferred acquisition payments		—			620,040
Deferred revenue		671,209			665,362
Short-term lease obligations		23,287			24,737
Total current liabilities		1,569,249			1,671,185
Long-term debt		1,293,083			1,686,410
Deferred tax liabilities		37,255			29,508
Long-term deferred revenue		16,405			16,188
Long-term lease obligations		156,987			168,455
Other liabilities		40,487			39,806
Total liabilities		3,113,466			3,611,552
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued		—			—
Common stock, $0.01 par value; 500,000 shares authorized; 120,049 and 118,846 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively		1,200			1,188
Additional paid-in capital		1,910,615			1,820,905
Retained earnings		1,223,087			973,277
Accumulated other comprehensive loss		(120,223	)		(118,080	)
Total stockholders’ equity		3,014,679			2,677,290
Total liabilities and stockholders’ equity	$	6,128,145		$	6,288,842

The accompanying notes are an integral part of the condensed consolidated financial statements.

1

PTC Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Revenue:
License	$	149,104		$	192,940		$	567,423		$	562,631
Support and cloud services		339,505			313,721			1,006,420			875,448
Total software revenue		488,609			506,661			1,573,843			1,438,079
Professional services		30,030			35,681			98,082			112,354
Total revenue		518,639			542,342			1,671,925			1,550,433
Cost of revenue:
Cost of license revenue		12,072			11,501			33,003			41,293
Cost of support and cloud services revenue		69,968			68,264			204,405			177,626
Total cost of software revenue		82,040			79,765			237,408			218,919
Cost of professional services revenue		29,876			36,089			94,583			106,231
Total cost of revenue		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		140,318			145,083			411,763			392,673
Research and development		110,253			103,819			323,034			292,345
General and administrative		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
Interest and debt premium expense		(27,785	)		(35,836	)		(94,705	)		(93,719	)
Other income (expense), net		(663	)		2,462			(667	)		398
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
Earnings per share—Diluted	$	0.57		$	0.51		$	2.07		$	1.68
Weighted-average shares outstanding—Basic		119,893			118,483			119,533			118,186
Weighted-average shares outstanding—Diluted		120,822			119,392			120,593			119,072

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

PTC Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net income	$	68,978		$	61,398		$	249,810		$	199,937
Other comprehensive income (loss), net of tax:
Hedge gain (loss) arising during the period, net of tax of $(0.8) million and $0.2 million in the third quarter of 2024 and 2023, respectively, and $0.9 million and $4.7 million in the first nine months of 2024 and 2023, respectively		2,292			(521	)		(2,787	)		(14,005	)
Foreign currency translation adjustment, net of tax of $0 for each period		(9,344	)		1,405			538			70,181
Change in pension benefit, net of tax of $0.0 million and $0.0 million in the third quarter of 2024 and 2023, respectively, and $(0.1) million and $0.0 million in the first nine months of 2024 and 2023, respectively		112			(24	)		106			(356	)
Other comprehensive income (loss)		(6,940	)		860			(2,143	)		55,820
Comprehensive income	$	62,038		$	62,258		$	247,667		$	255,757

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

PTC Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine months ended
	June 30, 2024			June 30, 2023
Cash flows from operating activities:
Net income	$	249,810		$	199,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		81,272			76,943
Amortization of right-of-use lease assets		23,143			24,705
Stock-based compensation		161,242			147,568
Other non-cash items, net		(297	)		(3,114	)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable		131,422			99,521
Accounts payable and accrued expenses		(8,631	)		5,407
Accrued compensation and benefits		8,666			5,961
Deferred revenue		8,393			18,696
Accrued income taxes		(1,795	)		(9,910	)
Other current assets and prepaid expenses		(9,962	)		8,670
Operating lease liabilities		(13,438	)		(1,360	)
Other noncurrent assets and liabilities		22,045			(11,932	)
Net cash provided by operating activities		651,870			561,092
Cash flows from investing activities:
Additions to property and equipment		(9,841	)		(18,035	)
Acquisitions of businesses, net of cash acquired		(93,457	)		(828,271	)
Proceeds from sale of investments		—			349
Purchases of investments		—			(5,823	)
Settlement of net investment hedges		3,826			(14,204	)
Divestitures of businesses and assets, net		—			(154	)
Net cash used in investing activities		(99,472	)		(866,138	)
Cash flows from financing activities:
Borrowings under credit facility		944,845			1,130,000
Repayments of borrowings under credit facility and acquired debt		(835,796	)		(744,000	)
Proceeds from issuance of common stock		12,709			10,592
Payments of withholding taxes in connection with stock-based awards		(92,589	)		(75,489	)
Payments of principal for financing leases		—			(217	)
Credit facility origination costs		—			(13,355	)
Payment of deferred acquisition consideration		(620,040	)		—
Net cash provided by (used in) financing activities		(590,871	)		307,531
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(2,003	)		6,835
Net change in cash, cash equivalents, and restricted cash		(40,476	)		9,320
Cash, cash equivalents, and restricted cash, beginning of period		288,798			272,888
Cash, cash equivalents, and restricted cash, end of period	$	248,322		$	282,208
Supplemental disclosure of non-cash financing and investing activities:
Withholding taxes in connection with stock-based awards, accrued	$	7,674		$	5,705
Operating right-of-use assets obtained in exchange for operating lease liabilities	$	4,941		$	23,142

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

PTC Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

	Three months ended June 30, 2024
	Common Stock											Accumulated
	Shares			Amount			Additional Paid-In Capital			Retained Earnings		Other Comprehensive Loss			Total Stockholders’ Equity
Balance as of March 31, 2024		119,717		$	1,197		$	1,901,109		$	1,154,109	$	(113,283	)	$	2,943,132
Common stock issued for employee stock-based awards		486			5			(5	)		—		—			—
Shares surrendered by employees to pay taxes related to stock-based awards		(154	)		(2	)		(28,069	)		—		—			(28,071	)
Compensation expense from stock-based awards		—			—			37,580			—		—			37,580
Net income		—			—			—			68,978		—			68,978
Gain on net investment hedges, net of tax		—			—			—			—		2,292			2,292
Foreign currency translation adjustment		—			—			—			—		(9,344	)		(9,344	)
Change in defined benefit pension items, net of tax		—			—			—			—		112			112
Balance as of June 30, 2024		120,049		$	1,200		$	1,910,615		$	1,223,087	$	(120,223	)	$	3,014,679

	Nine months ended June 30, 2024
	Common Stock											Accumulated
	Shares			Amount			Additional Paid-In Capital			Retained Earnings		Other Comprehensive Loss			Total Stockholders’ Equity
Balance as of September 30, 2023		118,846		$	1,188		$	1,820,905		$	973,277	$	(118,080	)	$	2,677,290
Common stock issued for employee stock-based awards		1,702			18			(18	)		—		—			—
Shares surrendered by employees to pay taxes related to stock-based awards		(601	)		(7	)		(99,938	)		—		—			(99,945	)
Common stock issued for employee stock purchase plan		102			1			12,708			—		—			12,709
Compensation expense from stock-based awards		—			—			176,958			—		—			176,958
Net income		—			—			—			249,810		—			249,810
Loss on net investment hedges, net of tax		—			—			—			—		(2,787	)		(2,787	)
Foreign currency translation adjustment		—			—			—			—		538			538
Change in defined benefit pension items, net of tax		—			—			—			—		106			106
Balance as of June 30, 2024		120,049		$	1,200		$	1,910,615		$	1,223,087	$	(120,223	)	$	3,014,679

5

	Three months ended June 30, 2023
	Common Stock											Accumulated
	Shares			Amount			Additional Paid-In Capital			Retained Earnings		Other Comprehensive Loss			Total Stockholders’ Equity
Balance as of March 31, 2023		118,334		$	1,182		$	1,749,574		$	866,276	$	(98,498	)	$	2,518,534
Common stock issued for employee stock-based awards		582			6			(6	)		—		—			—
Shares surrendered by employees to pay taxes related to stock-based awards		(185	)		(2	)		(25,170	)		—		—			(25,172	)
Compensation expense from stock-based awards		—			—			43,044			—		—			43,044
Net income		—			—			—			61,398		—			61,398
Loss on net investment hedges, net of tax		—			—			—			—		(521	)		(521	)
Foreign currency translation adjustment		—			—			—			—		1,405			1,405
Change in defined benefit pension items, net of tax		—			—			—			—		(24	)		(24	)
Balance as of June 30, 2023		118,731		$	1,186		$	1,767,442		$	927,674	$	(97,638	)	$	2,598,664

	Nine months ended June 30, 2023
	Common Stock											Accumulated
	Shares			Amount			Additional Paid-In Capital			Retained Earnings		Other Comprehensive Loss			Total Stockholders’ Equity
Balance as of September 30, 2022		117,472		$	1,175		$	1,720,580		$	727,737	$	(153,458	)	$	2,296,034
Common stock issued for employee stock-based awards		1,766			18			(18	)		—		—			—
Shares surrendered by employees to pay taxes related to stock-based awards		(609	)		(7	)		(81,187	)		—		—			(81,194	)
Common stock issued for employee stock purchase plan		102			—			10,592			—		—			10,592
Compensation expense from stock-based awards		—			—			117,475			—		—			117,475
Net income		—			—			—			199,937		—			199,937
Loss on net investment hedges, net of tax		—			—			—			—		(14,005	)		(14,005	)
Foreign currency translation adjustment		—			—			—			—		70,181			70,181
Change in defined benefit pension items, net of tax		—			—			—			—		(356	)		(356	)
Balance as of June 30, 2023		118,731		$	1,186		$	1,767,442		$	927,674	$	(97,638	)	$	2,598,664

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

PTC Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

General

The accompanying unaudited condensed consolidated financial statements include the accounts of PTC Inc. and its wholly owned subsidiaries and have been prepared by management in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and in accordance with the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with our annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary for a fair statement of our financial position, results of operations and cash flows as of the dates and for the periods indicated. The September 30, 2023 Consolidated Balance Sheet included herein is derived from our audited consolidated financial statements.

Unless otherwise indicated, all references to a year mean our fiscal year, which ends on September 30.

Pending Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU will be effective for us in 2026. We expect the adoption to result in disclosure changes only.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU will be effective for us in 2025. We expect the adoption to result in disclosure changes only.

2. Revenue from Contracts with Customers

Receivables, Contract Assets and Contract Liabilities

(in thousands)	June 30, 2024		September 30, 2023
Short-term and long-term receivables	$	840,382	$	997,490
Contract asset	$	13,443	$	16,465
Deferred revenue	$	687,614	$	681,550

During the nine months ended June 30, 2024, we recognized $619.2 million of revenue that was included in Deferred revenue as of September 30, 2023. The remainder of the change was driven by additional deferrals, primarily from new billings.

7

Our multi-year, non-cancellable on-premises subscription contracts provide customers with an annual right to exchange software within the subscription with other software. As of June 30, 2024 and September 30, 2023, our total revenue liability was $27.0 million and $23.7 million, respectively, primarily associated with the annual right to exchange on-premises subscription software.

Remaining Performance Obligations

Our contracts with customers include transaction price amounts allocated to performance obligations that will be satisfied and recognized as revenue at a later date. As of June 30, 2024, the transaction price amounts include performance obligations of $687.6 million recorded in Deferred revenue and $1,382.2 million that are not yet recorded in the Consolidated Balance Sheets. Of the total $2,069.8 million, we expect to recognize approximately 59% over the next 12 months, 26% over the next 13 to 24 months, and the remaining amount thereafter.

Disaggregation of Revenue

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Recurring revenue(1)	$	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	$	518,639	$	542,342	$	1,671,925	$	1,550,433

(1)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Americas	$	253,592	$	278,329	$	781,480	$	761,617
Europe		170,617		173,559		624,884		549,835
Asia Pacific		94,430		90,454		265,561		238,981
Total revenue	$	518,639	$	542,342	$	1,671,925	$	1,550,433

3. Stock-based Compensation

The value of stock issued for vested restricted stock units (RSUs) is as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Stock issued for vested RSUs	$	88,803	$	79,129	$	283,975	$	235,430

Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Cost of license revenue	$	49	$	53	$	116	$	141
Cost of support and cloud services revenue		4,035		3,479		10,762		9,464
Cost of professional services revenue		1,772		2,315		5,101		6,063
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 expense	$	48,038	$	53,818	$	161,242	$	147,568

As of June 30, 2024 and September 30, 2023, we had liability-classified awards related to stock-based compensation based on a fixed monetary amount of $29.1 million and $44.9 million, respectively.

8

4. Earnings per Share (EPS) and Common Stock

EPS

The following table presents the calculation for both basic and diluted EPS:

(in thousands, except per share data)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income	$	68,978	$	61,398	$	249,810	$	199,937
Weighted-average shares outstanding—Basic		119,893		118,483		119,533		118,186
Dilutive effect of restricted stock units		929		909		1,060		886
Weighted-average shares outstanding—Diluted		120,822		119,392		120,593		119,072
Earnings per share—Basic	$	0.58	$	0.52	$	2.09	$	1.69
Earnings per share—Diluted	$	0.57	$	0.51	$	2.07	$	1.68

Anti-dilutive shares were immaterial for the three and nine months ended June 30, 2024 and June 30, 2023.

5. Acquisitions

Acquisition and transaction-related costs for the third quarter and first nine months of 2024 totaled $0.2 million and $3.0 million, respectively, compared to $0.8 million and $18.5 million in the third quarter and first nine months of 2023, respectively. These costs are classified in General and administrative expense in the accompanying Consolidated Statements of Operations.

pure-systems

On October 4, 2023, we acquired pure-systems GmbH pursuant to a Share Purchase Agreement. pure-systems is 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 acquisition of pure-systems has been accounted for as a business combination. Assets and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The fair values of intangible assets were based on valuations using a discounted cash flow model which requires the use of significant estimates and assumptions, including estimating future revenues and costs. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

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

9

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 for $1,448.2 million, net of cash acquired. PTC paid the first installment of $828.2 million on the acquisition date. 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. The purchase price allocation resulted in $974.9 million of Goodwill, $628.6 million of intangible assets, $121.7 million of net tax liabilities, and $33.6 million of other net liabilities.

ServiceMax develops and licenses cloud-native, product-centric field service management (FSM) software, which is included within our PLM product group. ServiceMax had approximately 500 employees on the close date.

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 nine months ended June 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 nine months ended June 30, 2023 presented below combines the historical results of PTC for those periods, 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 nine months ended
	June 30, 2023
Revenue	$	1,594,118
Net income	$	193,834

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6. Goodwill and Intangible Assets

During the third fiscal quarter of 2024, we completed our annual impairment test of goodwill, which was based on a qualitative assessment, and concluded that there was no impairment. A qualitative assessment is designed to determine whether we believe it is more likely than not that the fair values of our reporting units exceed their carrying values. A qualitative assessment includes a review of qualitative factors, including company-specific (financial performance and long-range plans), industry, and macroeconomic factors, and a consideration of the fair value of each reporting unit at the last valuation date.

Goodwill and acquired intangible assets consisted of the following:

(in thousands)	June 30, 2024						September 30, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Goodwill (not amortized)					$	3,442,245					$	3,358,511
Intangible assets with finite lives (amortized):
Purchased software	$	627,099	$	424,643	$	202,456	$	615,915	$	395,109	$	220,806
Capitalized software		22,877		22,877		—		22,877		22,877		—
Customer lists and relationships		1,135,067		443,644		691,423		1,116,117		413,125		702,992
Trademarks and trade names		37,727		21,101		16,626		36,851		19,400		17,451
Other		3,886		3,886		—		3,867		3,867		—
Total intangible assets with finite lives	$	1,826,656	$	916,151	$	910,505	$	1,795,627	$	854,378	$	941,249
Total goodwill and acquired intangible assets					$	4,352,750					$	4,299,760

Changes in Goodwill were as follows:

(in thousands)
Balance, October 1, 2023	$	3,358,511
Acquisitions		77,118
Foreign currency translation adjustment		6,616
Balance, June 30, 2024	$	3,442,245

The aggregate amortization expense for intangible assets with finite lives is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Amortization of acquired intangible assets	$	10,672	$	10,670	$	31,459	$	29,352
Cost of revenue		9,685		9,841		28,835		25,817
Total amortization expense	$	20,357	$	20,511	$	60,294	$	55,169

7. Fair Value Measurements

The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:

•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

•Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or

•Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

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Money market funds, time deposits, and corporate notes/bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

The principal market in which we execute our foreign currency derivatives is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants are generally large financial institutions. Our foreign currency derivatives’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.

Our significant financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and September 30, 2023 were as follows:

(in thousands)	June 30, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	41,103	$	—	$	—	$	41,103
Forward contracts		—		181		—		181
	$	41,103	$	181	$	—	$	41,284
Financial liabilities:
Forward contracts		—		2,103		—		2,103
	$	—	$	2,103	$	—	$	2,103

(in thousands)	September 30, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	72,754	$	—	$	—	$	72,754
Convertible note		—		—		2,000		2,000
Forward contracts		—		7,340		—		7,340
	$	72,754	$	7,340	$	2,000	$	82,094
Financial liabilities:
Forward contracts		—		3,158		—		3,158
	$	—	$	3,158	$	—	$	3,158

(1)Money market funds and time deposits.

Level 3 Investments

Convertible Note

In the fourth quarter of 2021, we invested $2.0 million in a non-marketable convertible note. This debt security was classified as available-for-sale and included in Other assets on the Consolidated Balance Sheet. During the nine months ended June 30, 2024, we recorded a $2.0 million impairment loss related to this Level 3 investment. The impairment loss is included in Other income (expense), net on the Consolidated Statements of Operations.

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8. Derivative Financial Instruments

We enter into foreign currency forward contracts to manage our exposure to foreign currency exchange risk to reduce earnings volatility. We do not enter into derivative transactions for trading or speculative purposes.

The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:

(in thousands)	Fair Value of Derivatives Designated As Hedging Instruments				Fair Value of Derivatives Not Designated As Hedging Instruments
	June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
Derivative assets(1):
Forward contracts	$	81	$	3,770	$	100	$	3,570
Derivative liabilities(2):
Forward contracts	$	681	$	—	$	1,422	$	3,158

(1)As of June 30, 2024 and September 30, 2023, current derivative assets are recorded in Other current assets in the Consolidated Balance Sheets.

(2)As of June 30, 2024 and September 30, 2023, current derivative liabilities are recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

Non-Designated Hedges

We hedge our net foreign currency monetary assets and liabilities primarily resulting from foreign currency denominated receivables and payables with foreign exchange forward contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These contracts have maturities of up to approximately three months. Generally, we do not designate these foreign currency forward contracts as hedges for accounting purposes and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, gains or losses on the underlying foreign-denominated balance are generally offset by the losses or gains on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in Other income (expense), net.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts not designated as hedging instruments with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Canadian Dollar / U.S. Dollar	$	5,125	$	5,135
Euro / U.S. Dollar		396,345		383,227
British Pound / U.S. Dollar		13,460		6,058
Israeli Shekel / U.S. Dollar		12,091		11,852
Japanese Yen / U.S. Dollar		27,914		4,770
Swiss Franc / U.S. Dollar		16,743		32,766
Swedish Krona / U.S. Dollar		21,841		35,085
Chinese Renminbi / U.S. Dollar		4,209		16,660
New Taiwan Dollar / U.S. Dollar		8,915		11,855
Korean Won / U.S. Dollar		—		6,157
Danish Krone / U.S. Dollar		3,353		6,731
All other		4,854		3,340
Total	$	514,850	$	523,636

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The following table shows the effect of our non-designated hedges on the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended						Nine months ended
	Location of Gain (Loss)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged	Other income (expense), net	$	(1,590	)	$	(1,006	)	$	(6,611	)	$	(13,437	)

In the three months ended June 30, 2024, foreign currency losses, net were $1.7 million. In the three months ended June 30, 2023, foreign currency gains, net were $0.5 million. In the nine months ended June 30, 2024 and June 30, 2023, foreign currency losses, net were $1.8 million and $3.4 million, respectively.

Net Investment Hedges

We translate balance sheet accounts of subsidiaries with foreign functional currencies into the U.S. Dollar using the exchange rate at each balance sheet date. Resulting translation adjustments are reported as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We designate certain foreign exchange forward contracts as net investment hedges against exposure on translation of balance sheet accounts of Euro and Japanese Yen functional subsidiaries. Net investment hedges partially offset the impact of Foreign currency translation adjustment recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. All foreign exchange forward contracts are carried at fair value on the Consolidated Balance Sheets and the maximum duration of net investment hedge foreign exchange forward contracts is approximately three months.

Net investment hedge relationships are designated at inception, and effectiveness is assessed retrospectively on a quarterly basis using the net equity position of Euro and Japanese Yen functional subsidiaries. As the forward contracts are highly effective in offsetting exchange rate exposure, we record changes in these net investment hedges in Accumulated other comprehensive loss and subsequently reclassify them to Foreign currency translation adjustment in Accumulated other comprehensive loss at the time of forward contract maturity. Changes in the fair value of foreign exchange forward contracts due to changes in time value are excluded from the assessment of effectiveness. Our derivatives are not subject to any credit contingent features. We manage credit risk with counterparties by trading among several counterparties and we review our counterparties’ credit at least quarterly.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Euro / U.S. Dollar	$	429,516	$	337,923
Japanese Yen / U.S. Dollar		9,495		10,285
Total	$	439,011	$	348,208

The following table shows the effect of our derivative instruments designated as net investment hedges in the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended					Nine months ended
	Location of Gain (Loss)	June 30, 2024		June 30, 2023			June 30, 2024			June 30, 2023
Gain (loss) recognized in OCI	OCI	$	3,047	$	(695	)	$	(3,705	)	$	(18,663	)
Gain (loss) reclassified from OCI to earnings	n/a	$	—	$	—		$	—		$	—
Gain recognized, excluded portion	Other income (expense), net	$	946	$	1,124		$	3,161		$	3,272

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As of June 30, 2024, we estimate that all amounts reported in Accumulated other comprehensive loss will be applied against exposed balance sheet accounts upon translation within the next three months.

Offsetting Derivative Assets and Liabilities

We have entered into master netting arrangements for our forward contracts that allow net settlements under certain conditions. Although netting is permitted, it is currently our policy and practice to record all derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets.

The following table sets forth the offsetting of derivative assets as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Received		Net Amount
Forward contracts	$	181	$	—	$	181	$	(181	)	$	—	$	—

The following table sets forth the offsetting of derivative liabilities as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Pledged		Net Amount
Forward contracts	$	2,103	$	—	$	2,103	$	(181	)	$	—	$	1,922

9. Income Taxes

(in thousands)	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
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
Effective income tax rate		(2	)%		20	%		16	%		18	%

The effective tax rate for the three and nine months ended June 30, 2024 was lower 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 IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for the year ended September 30, 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income. The benefit from this IRS procedural guidance change for the three and nine months ended June 30, 2024 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the nine months ended June 30, 2024, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the Internal Revenue Service 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.

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10. Debt

As of June 30, 2024 and September 30, 2023, we had the following debt obligations:

(in thousands)	June 30, 2024			September 30, 2023
4.000% Senior notes due 2028	$	500,000		$	500,000
3.625% Senior notes due 2025		500,000			500,000
Credit facility revolver line(1)(2)		322,000			202,000
Credit facility term loan(1)(2)		493,750			500,000
Total debt		1,815,750			1,702,000
Unamortized debt issuance costs for the senior notes(3)		(4,596	)		(6,215	)
Total debt, net of issuance costs(4)	$	1,811,154		$	1,695,785

(1)Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.8 million included in Other assets on the Consolidated Balance Sheet as of June 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023.

(2)The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. However, if our outstanding 2025 Senior Notes have not been refinanced to mature on or after April 3, 2028 or redeemed by November 16, 2024, all amounts outstanding under the credit facility will become due and payable on November 16, 2024. The term loan began amortizing in March 2024, with payments of $3.1 million remaining in 2024, $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028.

(3)Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt on the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.

(4)As of June 30, 2024, $518.1 million of debt was classified as short term, including $499.3 million associated with the 2025 senior notes and related debt issuance costs and $18.8 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan was classified as short term with the remaining balance classified as long term.

Senior Unsecured Notes

In February 2020, we issued $500 million in aggregate principal amount of 4.0% senior, unsecured long-term debt at par value, due in 2028 (the 2028 notes) and $500 million in aggregate principal amount of 3.625% senior, unsecured long-term debt at par value, due in 2025 (the 2025 notes).

As of June 30, 2024, the total estimated fair value of the 2028 and 2025 notes was approximately $471.9 million and $493.6 million, respectively, based on quoted prices for the notes on that date.

We were in compliance with all the covenants for all our senior notes as of June 30, 2024.

Credit Agreement

Our credit facility consists of (i) a $1.25 billion revolving credit facility, (ii) a $500 million term loan credit facility, and (iii) an incremental facility pursuant to which we may incur additional term loan tranches or increase the revolving credit facility. As of June 30, 2024, unused commitments under our credit facility were $928.0 million and amounts available for borrowing were $912.1 million.

As of June 30, 2024, the fair value of our credit facility approximates its book value.

PTC and certain eligible foreign subsidiaries are eligible borrowers under the credit facility. As of June 30, 2024, $123.0 million was borrowed by an eligible foreign subsidiary borrower.

Loans under the credit facility bear interest at variable rates. As of June 30, 2024, the annual rate for borrowings outstanding was 6.9%. A quarterly revolving commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.175% to 0.325% per annum, based upon our total leverage ratio.

As of June 30, 2024, we were in compliance with all financial and operating covenants of the credit facility.

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Interest

We incurred interest expense on our debt of $27.8 million and $94.7 million in the third quarter and first nine months of 2024, respectively, and $35.8 million and $93.7 million in the third quarter and first nine months of 2023, respectively. Interest expense in the third quarter and first nine months of 2023 included $10.0 million and $20.0 million, respectively, of interest associated with the $650.0 million ServiceMax deferred acquisition payment that we settled in the first quarter of 2024. The average interest rate on borrowings outstanding was approximately 5.3% and 5.5% during the third quarter and first nine months of 2024, respectively, and 5.2% and 4.8% during the third quarter and first nine months of 2023, respectively.

11. Commitments and Contingencies

Guarantees and Indemnification Obligations

We enter into standard indemnification agreements with our customers and business partners in the ordinary course of our business. Under such agreements, we typically indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to our products. Indemnification may also cover other types of claims, including claims relating to certain data breaches. These agreements typically limit our liability with respect to indemnification claims other than intellectual property infringement claims. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and, accordingly, we believe the estimated fair value of liabilities under these agreements is immaterial.

We warrant that our software products will perform in all material respects in accordance with our standard published specifications during the term of the license. Additionally, we generally warrant that our consulting services will be performed consistent with generally accepted industry standards and, in the case of fixed price services, the agreed-upon specifications. In most cases, liability for these warranties is capped. If necessary, we would provide for the estimated cost of product and service warranties based on specific warranty claims and claim history; however, we have not incurred significant cost under our product or services warranties. As a result, we believe the estimated fair value of these liabilities is immaterial.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

PTC is a global software company that provides a portfolio of innovative digital solutions that work together to transform how physical products are engineered, manufactured, and serviced.

Our software portfolio includes award-winning offerings that enable companies to author product data (our computer-aided design (CAD) portfolio solutions) and to manage product data and orchestrate processes (our product lifecycle management (PLM) portfolio solutions).

Our software can be delivered on premises, in the cloud, or in a hybrid model. Our customers include some of the world's most innovative companies in the aerospace and defense, automotive, electronics and high tech, industrial machinery and equipment, life sciences, retail and consumer products industries.

We generate revenue through the sale of subscriptions, which include term-based on-premises software licenses and related support, Software-as-a-Service (SaaS), and hosting services; perpetual licenses; support for perpetual licenses; and professional services (consulting, implementation, and training).

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future financial and growth expectations 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, including cash flow; our investments in our 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; 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; 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 described below throughout or referenced in Part II, Item 1A. Risk Factors of this report.

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Operating and Non-GAAP Financial Measures

Our discussion of results includes discussion of our ARR (Annual Run Rate) operating measure, non-GAAP financial measures, and disclosure of our results on a constant currency basis. ARR and our non-GAAP financial measures are described below in Results of Operations - Operating Measure and Results of Operations - Non-GAAP Financial Measures, respectively. The methodology used to calculate constant currency disclosures is described in Results of Operations - Impact of Foreign Currency Exchange on Results of Operations. You should read those sections to understand our operating measure, non-GAAP financial measures, and constant currency disclosures.

Executive Overview

Despite the overall demand environment, which has been sluggish for many quarters now, ARR grew 10% (12% constant currency) to $2.13 billion as of the end of Q3’24 compared to Q3’23.

Cash provided by operating activities grew 26% to $214 million in Q3'24 compared to Q3'23. Free cash flow grew 29% to $212 million in Q3'24 compared to Q3'23.

Revenue decreased 4% (3% constant currency) to $519 million in Q3'24 compared to Q3'23, driven by lower on-premises subscription license revenue due to shorter contract durations and an increase in the proportion of ratably recognized SaaS contracts compared to on-premises subscription contracts. Diluted earnings per share grew 11% to $0.57 in Q3'24 compared to Q3'23, primarily driven by a non-cash tax benefit associated with the effects of IRS procedural guidance issued in May 2024 and a reduction in total expenses, partially offset by lower revenue.

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Results of Operations

(Dollar amounts in millions, except per share data)	Three months ended						Percent Change
	June 30, 2024			June 30, 2023			Actual			Constant Currency(1)
ARR	$	2,126.1		$	1,928.7			10	%		12	%
Total recurring revenue(2)	$	481.6		$	498.4			(3	)%		(2	)%
Perpetual license		7.1			8.3			(15	)%		(14	)%
Professional services		30.0			35.7			(16	)%		(15	)%
Total revenue		518.6			542.3			(4	)%		(3	)%
Total cost of revenue		111.9			115.9			(3	)%		(3	)%
Gross margin		406.7			426.5			(5	)%		(3	)%
Operating expenses		310.9			316.6			(2	)%		(1	)%
Operating income	$	95.8		$	109.9			(13	)%		(10	)%
Non-GAAP operating income(1)	$	164.4		$	185.0			(11	)%		(9	)%
Operating margin		18.5	%		20.3	%
Non-GAAP operating margin(1)		31.7	%		34.1	%
Diluted earnings per share	$	0.57		$	0.51
Non-GAAP diluted earnings per share(1)	$	0.98		$	0.99
Cash provided by operating activities	$	213.8		$	169.2
Capital expenditures		(1.6	)		(5.1	)
Free cash flow	$	212.2		$	164.1

(Dollar amounts in millions, except per share data)	Nine months ended						Percent Change
	June 30, 2024			June 30, 2023			Actual			Constant Currency(1)
ARR	$	2,126.1		$	1,928.7			10	%		12	%
Total recurring revenue(2)	$	1,551.6		$	1,407.7			10	%		10	%
Perpetual license		22.2			30.4			(27	)%		(27	)%
Professional services		98.1			112.4			(13	)%		(13	)%
Total revenue		1,671.9			1,550.4			8	%		8	%
Total cost of revenue		332.0			325.2			2	%		2	%
Gross margin		1,339.9			1,225.3			9	%		9	%
Operating expenses		945.8			887.9			7	%		7	%
Operating income	$	394.1		$	337.3			17	%		15	%
Non-GAAP operating income(1)	$	617.8		$	558.2			11	%		10	%
Operating margin		23.6	%		21.8	%
Non-GAAP operating margin(1)		37.0	%		36.0	%
Diluted earnings per share	$	2.07		$	1.68
Non-GAAP diluted earnings per share(1)	$	3.54		$	3.14
Cash provided by operating activities	$	651.9		$	561.1
Capital expenditures		(9.8	)		(18.0	)
Free cash flow	$	642.0		$	543.1

(1)See Non-GAAP Financial Measures below for a reconciliation of our GAAP results to our non-GAAP financial measures and Impact of Foreign Currency Exchange on Results of Operations below for a description of how we calculate our results on a constant currency basis.

(2)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Impact of Foreign Currency Exchange on Results of Operations

Approximately 50% of our revenue and 35% of our expenses are transacted in currencies other than the U.S. Dollar. Because we report our results of operations in U.S. Dollars, currency translation, particularly changes in the Euro, Yen, Shekel, and Rupee relative to the U.S. Dollar, affects our reported results. Our constant currency disclosures are calculated by multiplying the results in local currency for the quarterly periods for FY'24 and FY'23 by the exchange rates in effect on September 30, 2023.

20

Revenue

Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period can have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period over period. We recognize revenue for the license portion of on-premises subscription contracts up front when we deliver the licenses to the customer, typically on the start date, and we recognize revenue on the support portion of on-premises subscription contracts and stand-alone support contracts ratably over the term. We continue to convert existing support contracts to on-premises subscriptions, resulting in a shift to up-front recognition of on-premises subscription license revenue in the period converted compared to ratable recognition for a perpetual support contract. Revenue from our cloud services (primarily SaaS) contracts is recognized ratably. We expect that over time a higher portion of our revenue will be recognized ratably as we expand our SaaS offerings, as we release additional cloud functionality into our products, and as customers migrate from on-premises subscriptions to SaaS. Given the different mix, duration and volume of new and renewing contracts in any period, year-over-year or sequential revenue can vary significantly.

Revenue by Line of Business

(Dollar amounts in millions)	Three months ended				Percent Change						Nine months ended				Percent Change
	June 30, 2024		June 30, 2023		Actual			Constant Currency			June 30, 2024		June 30, 2023		Actual			Constant Currency
License	$	149.1	$	192.9		(23	)%		(21	)%	$	567.4	$	562.6		1	%		0	%
Support and cloud services		339.5		313.7		8	%		9	%		1,006.4		875.4		15	%		15	%
Software revenue		488.6		506.7		(4	)%		(2	)%		1,573.8		1,438.1		9	%		9	%
Professional services		30.0		35.7		(16	)%		(15	)%		98.1		112.4		(13	)%		(13	)%
Total revenue	$	518.6	$	542.3		(4	)%		(3	)%	$	1,671.9	$	1,550.4		8	%		8	%

Software revenue decreased in Q3'24 compared to Q3'23, primarily driven by lower license revenue in Q3'24 due to shorter contract durations and an increase in the proportion of ratably recognized SaaS contracts compared to on-premises subscription contracts. Software revenue growth in the first nine months of FY'24 was driven by PLM, which included the contribution from ServiceMax (acquired in early Q2'23), and CAD.

License revenue growth was relatively flat in the first nine months of FY'24, reflecting CAD and PLM growth in Europe and Asia Pacific, offset by lower license revenue in the Americas, particularly in PLM.

Support and cloud services revenue growth in Q3'24 was mainly driven by PLM growth in the Americas and Europe. Support and cloud services revenue growth in the first nine months of FY'24 was driven by PLM (which included contribution from ServiceMax) in the Americas and Europe.

Professional services revenue decreased in Q3'24 and the first nine months of FY'24 as we continue to execute on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

Software Revenue by Product Group

(Dollar amounts in millions)	Three months ended				Percent Change						Nine months ended				Percent Change
	June 30, 2024		June 30, 2023		Actual			Constant Currency			June 30, 2024		June 30, 2023		Actual			Constant Currency
PLM	$	300.3	$	314.4		(4	)%		(4	)%	$	958.6	$	864.4		11	%		10	%
CAD		188.3		192.3		(2	)%		0	%		615.2		573.7		7	%		7	%
Software revenue	$	488.6	$	506.7		(4	)%		(2	)%	$	1,573.8	$	1,438.1		9	%		9	%

21

PLM software revenue decreased in Q3'24, driven by lower revenue in the Americas. PLM software revenue growth in the first nine months of FY’24 was driven by the contribution from ServiceMax (acquired in early Q2’23) and growth in Europe. Year-over-year PLM software revenue growth for the first nine months of FY'24 excluding Q1'24 ServiceMax revenue would have been 6% (5% constant currency).

PLM ARR grew 12% (13% constant currency) from Q3’23 to Q3'24.

CAD software revenue decreased in Q3'24 compared to Q3'23, primarily due to lower revenue in the Americas. Year-over-year CAD software revenue growth for the first nine months of FY'24 was primarily driven by revenue growth in Europe and Asia Pacific.

CAD ARR grew 8% (10% constant currency) from Q3’23 to Q3’24.

Gross Margin

(Dollar amounts in millions)	Three months ended									Nine months ended
	June 30, 2024			June 30, 2023			Percent Change			June 30, 2024			June 30, 2023			Percent Change
License gross margin	$	137.0		$	181.4			(24	)%	$	534.4		$	521.3			3	%
License gross margin percentage		92	%		94	%					94	%		93	%
Support and cloud services gross margin	$	269.5		$	245.5			10	%	$	802.0		$	697.8			15	%
Support and cloud services gross margin percentage		79	%		78	%					80	%		80	%
Professional services gross margin	$	0.2		$	(0.4	)		138	%	$	3.5		$	6.1			(43	)%
Professional services gross margin percentage		1	%		(1	)%					4	%		5	%
Total gross margin	$	406.7		$	426.5			(5	)%	$	1,339.9		$	1,225.3			9	%
Total gross margin percentage		78	%		79	%					80	%		79	%
Non-GAAP gross margin(1)	$	422.3		$	442.2			(5	)%	$	1,384.7		$	1,266.8			9	%
Non-GAAP gross margin percentage(1)		81	%		82	%					83	%		82	%

(1)Non-GAAP financial measures are reconciled to GAAP results under Non-GAAP Financial Measures below.

License gross margin changes in Q3'24 and the first nine months of FY'24 compared to the corresponding FY'23 periods were in line with changes in license revenue. License gross margin growth in the first nine months of FY'24 was due mainly to lower intangible amortization expense. Cost of license revenue in Q3'24 remained consistent with Q3'23.

Support and cloud services gross margin growth in Q3'24 and the first nine months of FY'24 compared to the corresponding FY'23 periods was in line with support and cloud services revenue growth. Cost of support and cloud services revenue in the first nine months of FY’24 grew at a similar rate to revenue, driven by higher intangible amortization expense, compensation expense, and royalty expense. Cost of support and cloud services revenue in Q3'24 remained consistent with Q3'23.

Professional services gross margin decreased in first nine months of FY'24 compared to the corresponding FY'23 period, primarily due to lower margins on business subcontracted to partners. Professional services gross margin improved in Q3'24 compared to Q3'23 due to lower outside services and compensation costs. The decreases in professional services revenue and costs are due to our continued execution on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

22

Operating Expenses

(Dollar amounts in millions)	Three months ended									Nine months ended
	June 30, 2024			June 30, 2023			Percent Change			June 30, 2024			June 30, 2023			Percent Change
Sales and marketing	$	140.3		$	145.1			(3	)%	$	411.8		$	392.7			5	%
% of total revenue		27	%		27	%					25	%		25	%
Research and development	$	110.3		$	103.8			6	%	$	323.0		$	292.3			10	%
% of total revenue		21	%		19	%					19	%		19	%
General and administrative	$	49.7		$	57.1			(13	)%	$	180.4		$	173.9			4	%
% of total revenue		10	%		11	%					11	%		11	%
Amortization of acquired intangible assets	$	10.7		$	10.7			0	%	$	31.5		$	29.4			7	%
% of total revenue		2	%		2	%					2	%		2	%
Restructuring and other credits, net	$	—		$	(0.0	)		(100	)%	$	(0.8	)	$	(0.4	)		113	%
% of total revenue		0	%		(0	)%					(0	)%		(0	)%
Total operating expenses	$	310.9		$	316.6			(2	)%	$	945.8		$	887.9			7	%

Total headcount increased 4% between Q3’23 and Q3’24.

Operating expenses in Q3'24 decreased compared to Q3'23, primarily due to the following:

•a $7 million decrease in marketing expense, primarily due to not holding our LiveWorx event in FY'24; and

•a $6 million decrease in stock-based compensation, driven by Q3'24 changes in estimated attainment for performance-based grants and less expense for grants related to the ServiceMax acquisition;

partially offset by:

•a $3 million increase in compensation expense, excluding stock-based compensation; and

•a $3 million increase in outside services, driven by consulting services related to corporate initiatives.

Operating expenses in the first nine months of FY'24 increased compared to the first nine months of FY'23, due to the following:

•a $44 million increase in compensation expense driven by our Q2'23 acquisition of ServiceMax, higher headcount, and annual salary increases in Q3'23;

•a $13 million increase in stock-based compensation expense, driven in part by acceleration of equity grants held by our former CEO upon his separation from service in Q2'24 (which expense is included in General and administrative), as well as the impact of an FY'24 change in eligibility for continued vesting upon retirement for a subset of prospective equity grants; and

•an $8 million increase in outside services, driven by consulting services related to corporate initiatives;

partially offset by:

•a $16 million decrease in acquisition and transaction-related costs, largely driven by costs associated with our Q2'23 acquisition of ServiceMax; and

•a $10 million decrease in marketing expense, primarily due to not holding our LiveWorx event in FY'24.

23

Interest Expense

(Dollar amounts in millions)	Three months ended									Nine months ended
	June 30, 2024			June 30, 2023			Percent Change			June 30, 2024			June 30, 2023			Percent Change
Interest and debt premium expense	$	(27.8	)	$	(35.8	)		(22	)%	$	(94.7	)	$	(93.7	)		1	%

Interest expense in both FY'23 and FY'24 includes interest on our revolving credit facility, term loan, and our senior notes due 2025 and 2028. Interest expense in FY'23 also included interest on a deferred acquisition payment associated with the ServiceMax acquisition. Interest expense decreased in Q3'24 compared to Q3'23 primarily due to lower aggregate debt and deferred acquisition payments. The increase in interest expense in the first nine months of FY'24 compared to the first nine months of FY'23 was driven by higher interest rates, offset by lower aggregate debt and deferred acquisition payments.

Other Income (Expense)

(Dollar amounts in millions)	Three months ended								Nine months ended
	June 30, 2024			June 30, 2023		Percent Change			June 30, 2024			June 30, 2023			Percent Change
Interest income	$	1.0		$	1.4		(25	)%	$	3.4		$	3.9			(12	)%
Other income (expense), net		(1.7	)		1.1		(258	)%		(4.1	)		(3.5	)		(18	)%
Other income (expense), net	$	(0.7	)	$	2.5		(127	)%	$	(0.7	)	$	0.4			(268	)%

Other income (expense), net was lower in Q3'24 compared to Q3'23, driven by foreign currency exchange losses. Other income (expense), net was lower in the first nine months of FY'24 compared to the first nine months of FY'23 due to a $2.0 million impairment loss related to an available-for-sale debt security classified as a Level 3 investment, offset by lower foreign exchange losses.

Income Taxes

(Dollar amounts in millions)	Three months ended									Nine months ended
	June 30, 2024			June 30, 2023			Percent Change			June 30, 2024			June 30, 2023			Percent Change
Income before income taxes	$	67.4		$	76.5			(12	)%	$	298.7		$	244.0			22	%
Provision (benefit) for income taxes	$	(1.6	)	$	15.1			(111	)%	$	48.9		$	44.1			11	%
Effective income tax rate		(2	)%		20	%					16	%		18	%

The effective tax rate for Q3'24 and the first nine months of FY'24 was lower 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 non-cash effects of IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-taxed Income and Foreign-derived Intangible Income. The benefit from this change for Q3’24 and the first nine months of FY’24 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the first nine months of FY'24, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies and estimates as set forth under the heading Critical Accounting Policies and Estimates in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Annual Report on Form 10-K.

24

Recent Accounting Pronouncements

In accordance with recently issued accounting pronouncements, we will be required to comply with certain changes in accounting rules and regulations. Refer to Note 1. Basis of Presentation to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for all recently issued accounting pronouncements, none of which are expected to have a material effect.

Liquidity and Capital Resources

(in millions)	June 30, 2024			September 30, 2023
Cash and cash equivalents	$	247.7		$	288.1
Restricted cash		0.6			0.7
Total	$	248.3		$	288.8
(in millions)	Nine months ended
	June 30, 2024			June 30, 2023
Net cash provided by operating activities	$	651.9		$	561.1
Net cash used in investing activities	$	(99.5	)	$	(866.1	)
Net cash provided by (used in) financing activities	$	(590.9	)	$	307.5

Cash, Cash Equivalents and Restricted Cash

We invest our cash with highly rated financial institutions. Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

Due to the stability of our subscription model and consistency of annual, up-front billing, we aim to maintain a low cash balance. A significant portion of our cash is generated and held outside the U.S. As of June 30, 2024, we had cash and cash equivalents of $37.1 million in the U.S., $99.5 million in Europe, $88.5 million in Asia Pacific (including India) and $22.6 million in other countries. We have substantial cash requirements in the U.S. but believe that the combination of our existing U.S. cash and cash equivalents, cash available under our revolving credit facility, future U.S. operating cash flows, and our ability to repatriate cash to the U.S. will be sufficient to meet our ongoing U.S. operating expenses and known capital requirements.

Cash Provided by Operating Activities

Cash provided by operating activities increased $90.8 million in the first nine months of FY'24 compared to the same period in FY'23. The increase was driven by higher collections (including contribution from ServiceMax) and lower vendor disbursements, which were partially offset by higher interest and salary-related payments. Interest payments in the first nine months of FY'24 were approximately $60 million higher than in the prior-year period and include the payment of $30.0 million of imputed interest on the ServiceMax deferred acquisition payment.

Cash Used in Investing Activities

Cash used in investing activities in the first nine months of FY'24 was driven by the acquisition of pure-systems for $93.5 million in Q1'24. Cash used in investing activities in the first nine months of FY'23 was driven by a payment of $828.2 million in Q2'23 related to the acquisition of ServiceMax. Capital expenditures in the first nine months of FY'24 were lower than in the prior year period as we invest more in cloud-based rather than on-premises software.

Cash Provided by (Used in) Financing Activities

Cash used in financing activities in the first nine months of FY'24 included $620.0 million paid to settle the ServiceMax deferred acquisition payment, partially offset by net borrowings of $109.0 million ($944.8 million borrowed under the revolving line of our existing credit facility, less payments of $835.8 million) to

25

fund the ServiceMax deferred acquisition payment and the pure-systems acquisition. In the first nine months of FY'24, payments of withholding taxes in connection with vesting of stock-based awards were higher than in FY'23, primarily driven by vesting of awards held by our former CEO in connection with the CEO succession in Q2'24.

Cash provided by financing activities in the first nine months of FY'23 included net new borrowings of $771.0 million (a $500.0 million term loan and a $271.0 million incremental revolving line) to fund the ServiceMax acquisition, repayments of $385.0 million on the new revolving facility, and payments of $13.4 million related to credit facility origination costs.

Outstanding Debt

(in millions)	June 30, 2024			September 30, 2023
4.000% Senior notes due 2028	$	500.0		$	500.0
3.625% Senior notes due 2025		500.0			500.0
Credit facility revolver line		322.0			202.0
Credit facility term loan		493.8			500.0
Total debt	$	1,815.8		$	1,702.0
Unamortized debt issuance costs for the senior notes		(4.6	)		(6.2	)
Total debt, net of issuance costs	$	1,811.2		$	1,695.8
Undrawn under credit facility revolver	$	928.0		$	1,048.0
Undrawn under credit facility revolver available to borrow	$	912.1		$	384.6

As of June 30, 2024, we were in compliance with all financial and operating covenants of the credit facility and the note indenture. As of June 30, 2024, the annual rate for borrowings outstanding under the credit facility was 6.9%.

Our credit facility and our senior notes are described in Note 10. Debt to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q. As of June 30, 2024, $518.1 million of our debt was classified as current, including $499.3 million associated with the 2025 senior notes and related debt issuance costs which will become due in February 2025.

Future Expectations

We believe that existing cash and cash equivalents, together with cash generated from operations and amounts available under the credit facility, will be sufficient to meet our working capital and capital expenditure requirements through at least the next twelve months and to meet our known long-term capital requirements.

For the remainder of FY'24, we expect to use substantially all our cash generated from operating activities to repay debt outstanding under our revolving credit facility.

Our expected uses and sources of cash could change, our cash position could be reduced, and we could incur additional debt obligations if we retire other debt, engage in strategic transactions, or repurchase shares, any of which could be commenced, suspended, or completed at any time. Any such repurchases or retirement of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any debt retirement or issuance, share repurchases, or strategic transactions may be material.

26

Operating Measure

ARR

ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, 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, 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 any 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 generally 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 as revenue 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.

27

Non-GAAP Financial Measures

Our non-GAAP financial measures and the reasons we use them and exclude the items identified below are described in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended September 30, 2023.

The non-GAAP financial measures presented in the discussion of our results of operations and the respective most directly comparable GAAP measures are:

•free cash flow—cash flow from operations

•non-GAAP gross margin—GAAP gross margin

•non-GAAP operating income—GAAP operating income

•non-GAAP operating margin—GAAP operating margin

•non-GAAP net income—GAAP net income

•non-GAAP diluted earnings per share—GAAP diluted earnings per share

The non-GAAP financial measures other than free cash flow exclude, as applicable: stock-based compensation expense; amortization of acquired intangible assets; acquisition and transaction-related charges included in General and administrative expenses; Restructuring and other charges (credits), net; non-operating charges (credits); and income tax adjustments as defined in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and as reflected in the reconciliation tables.

The items excluded from the non-GAAP financial measures often have a material impact on our financial results, certain of those items are recurring, and other such items often recur. Accordingly, the non-GAAP financial measures included in this Quarterly Report on Form 10-Q should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with GAAP. The following tables reconcile each of these non-GAAP financial measures to its most closely comparable GAAP measure on our financial statements.

28

(in millions, except per share amounts)	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
GAAP gross margin	$	406.7		$	426.5		$	1,339.9		$	1,225.3
Stock-based compensation		5.9			5.8			16.0			15.7
Amortization of acquired intangible assets included in cost of revenue		9.7			9.8			28.8			25.8
Non-GAAP gross margin	$	422.3		$	442.2		$	1,384.7		$	1,266.8
GAAP operating income	$	95.8		$	109.9		$	394.1		$	337.3
Stock-based compensation		48.0			53.8			161.2			147.6
Amortization of acquired intangible assets		20.4			20.5			60.3			55.2
Acquisition and transaction-related charges		0.2			0.8			3.0			18.5
Restructuring and other credits, net		—			(0.0	)		(0.8	)		(0.4	)
Non-GAAP operating income	$	164.4		$	185.0		$	617.8		$	558.2
GAAP net income	$	69.0		$	61.4		$	249.8		$	199.9
Stock-based compensation		48.0			53.8			161.2			147.6
Amortization of acquired intangible assets		20.4			20.5			60.3			55.2
Acquisition and transaction-related charges		0.2			0.8			3.0			18.5
Restructuring and other credits, net		—			(0.0	)		(0.8	)		(0.4	)
Non-operating charges(1)		—			—			2.0			5.1
Income tax adjustments(2)		(19.5	)		(18.8	)		(48.2	)		(52.5	)
Non-GAAP net income	$	118.0		$	117.7		$	427.3		$	373.4
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 intangible assets		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(1)		—			—			0.02			0.04
Income tax adjustments(2)		(0.16	)		(0.16	)		(0.40	)		(0.44	)
Non-GAAP diluted earnings per share	$	0.98		$	0.99		$	3.54		$	3.14
Cash provided by operating activities	$	213.8		$	169.2		$	651.9		$	561.1
Capital expenditures		(1.6	)		(5.1	)		(9.8	)		(18.0	)
Free cash flow	$	212.2		$	164.1		$	642.0		$	543.1

(1)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.

(2)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.

Operating margin impact of non-GAAP adjustments:

	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 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 intangible assets		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	%

29

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our market risk exposure as described in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our 2023 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Effectiveness of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2024.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2024, we completed the second phase of the implementation of a new enterprise resource planning (“ERP”) system for our corporate operations, which included customer billing and collection functions. As part of the implementation, we designed new internal controls and modified and/or enhanced existing internal controls to align with the new ERP system and business processes. We do not believe this implementation has had or will have a material adverse effect on our internal control over financial reporting. There were no additional changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the period ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II—OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to other information set forth in this report, you should carefully consider the risk factors described in Part I. Item 1A. Risk Factors in our 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

ITEM 5. OTHER INFORMATION

Director and Executive Officer Adoption, Modification or Termination of 10b5-1 Plans in Q3'24

Our section 16 officers and directors may enter into plans or arrangements for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. Such plans and arrangements must comply in all respects with our insider trading policies, including our policy governing entry into and operation of 10b5-1 plans and arrangements.

During the quarter ended June 30, 2024, the below Section 16 officers and directors adopted Rule-10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Securities Exchange Act of 1934, as amended). All plans adopted covered only sales of PTC common stock. No plans were modified or terminated.

Name and Title of Director or Section 16 Officer	Date of Adoption, Modification, or Termination	Duration of the Plan	Aggregate Number of Shares of Common Stock that may be Sold under the Plan
Corinna Lathan Director	Adopted May 24, 2024	Ends September 30, 2025	3,817

31

ITEM 6. EXHIBITS

			Incorporated by Reference
Exhibit Number	Description	Filed Herewith	Form	Filling Date	Exhibit	SEC File No.
3.1	Restated Articles of Organization of PTC Inc.		10-K	November 23, 2015	3.1	0-18059
3.2	Amended and Restated By-Laws of PTC Inc.		10-K	November 15, 2022	3.2	0-18059
4.1	Indenture dated as of February 13, 2020, between PTC Inc. and Wells Fargo Bank, National Association, as trustee		8-K	February 13, 2020	4.1	0-18059
4.2	Form of 3.625% senior unsecured notes due 2025		8-K	February 13, 2020	4.2	0-18059
4.3	Form of 4.000% senior unsecured notes due 2028		8-K	February 13, 2020	4.3	0-18059
31.1	Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)	X
31.2	Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)	X
32*	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350	X
101.INS	Inline XBRL Instance Document – the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104	The cover page of the Q3 Form 10-Q formatted in Inline XBRL (included in Exhibit 101)

* Indicates that the exhibit is being furnished, not filed, with this report.

32

SIGNATURE

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 hereunto duly authorized.

PTC Inc.
By:	/S/ KRISTIAN TALVITIE
	Kristian Talvitie Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: August 2, 2024

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Neil Barua, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PTC Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2024	/S/ NEIL BARUA
		Neil Barua
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Kristian Talvitie, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PTC Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2024	/S/ KRISTIAN TALVITIE
		Kristian Talvitie
		Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of PTC Inc. (the “Company”) certifies that, to his knowledge, the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 2, 2024	/S/ NEIL BARUA
		Neil Barua Chief Executive Officer
Date:	August 2, 2024	/S/ KRISTIAN TALVITIE
		Kristian Talvitie
		Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2024	Jul. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	0-18059
Entity Registrant Name	PTC Inc.
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
Title of 12(b) Security	Common Stock, $.01 par value per share
Trading Symbol	PTC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		120,135,231
Amendment Flag	false
Entity Central Index Key	0000857005
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
ASSETS
Cash and cash equivalents	$ 247,749	$ 288,103
Accounts receivable, net of allowance for doubtful accounts of $1,269 and $429 at June 30, 2024 and September 30, 2023, respectively	674,959	811,398
Prepaid expenses	109,373	96,016
Other current assets	59,690	81,849
Total current assets	1,091,771	1,277,366
Property and equipment, net	77,535	88,391
Goodwill	3,442,245	3,358,511
Acquired intangible assets, net	910,505	941,249
Deferred tax assets	151,659	123,319
Operating right-of-use lease assets	131,297	143,028
Other assets	323,133	356,978
Total assets	6,128,145	6,288,842
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	47,153	43,480
Accrued expenses and other current liabilities	123,090	132,841
Accrued compensation and benefits	161,073	160,431
Accrued income taxes	25,366	14,919
Current portion of long-term debt	518,071	9,375
Deferred acquisition payments	0	620,040
Deferred revenue	671,209	665,362
Short-term lease obligations	23,287	24,737
Total current liabilities	1,569,249	1,671,185
Long-term debt	1,293,083	1,686,410
Deferred tax liabilities	37,255	29,508
Long-term deferred revenue	16,405	16,188
Long-term lease obligations	156,987	168,455
Other liabilities	40,487	39,806
Total liabilities	3,113,466	3,611,552
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued	0	0
Common stock, $0.01 par value; 500,000 shares authorized; 120,049 and 118,846 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively	1,200	1,188
Additional paid-in capital	1,910,615	1,820,905
Retained earnings	1,223,087	973,277
Accumulated other comprehensive loss	(120,223)	(118,080)
Total stockholders’ equity	3,014,679	2,677,290
Total liabilities and stockholders’ equity	$ 6,128,145	$ 6,288,842

XML

Consolidated Balance Sheets (Parentheticals) (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Current assets:
Allowance for doubtful accounts	$ 1,269	$ 429
Stockholders’ equity:
Preferred stock, par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	120,049,000	118,846,000
Common stock, shares outstanding	120,049,000	118,846,000

XML

Consolidated Statements Of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue:
Total revenue	$ 518,639	$ 542,342	$ 1,671,925	$ 1,550,433
Cost of revenue:
Total cost of revenue	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	140,318	145,083	411,763	392,673
Research and development	110,253	103,819	323,034	292,345
General and administrative	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	0	(39)	(802)	(376)
Total operating expenses	310,902	316,588	945,845	887,943
Operating income	95,821	109,900	394,089	337,340
Interest and debt premium expense	(27,785)	(35,836)	(94,705)	(93,719)
Other income (expense), net	(663)	2,462	(667)	398
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
Earnings per share—Diluted	$ 0.57	$ 0.51	$ 2.07	$ 1.68
Weighted-average shares outstanding—Basic	119,893	118,483	119,533	118,186
Weighted-average shares outstanding—Diluted	120,822	119,392	120,593	119,072
License
Revenue:
License	$ 149,104	$ 192,940	$ 567,423	$ 562,631
Cost of revenue:
Cost of license revenue	12,072	11,501	33,003	41,293
Support and cloud services
Revenue:
Support and cloud services	339,505	313,721	1,006,420	875,448
Cost of revenue:
Cost of support and cloud services revenue	69,968	68,264	204,405	177,626
Software
Revenue:
Total software revenue	488,609	506,661	1,573,843	1,438,079
Cost of revenue:
Total cost of software revenue	82,040	79,765	237,408	218,919
Professional services
Revenue:
Professional services	30,030	35,681	98,082	112,354
Cost of revenue:
Cost of professional services revenue	$ 29,876	$ 36,089	$ 94,583	$ 106,231

XML

Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ 68,978	$ 61,398	$ 249,810	$ 199,937
Other comprehensive income (loss), net of tax:
Hedge gain (loss) arising during the period, net of tax of $0 million and $0 million in the third quarter of 2024 and 2023, respectively, and $0 million and $0 million in the first nine months of 2024 and 2023, respectively	2,292	(521)	(2,787)	(14,005)
Foreign currency translation adjustment, net of tax of $0 for each period	(9,344)	1,405	538	70,181
Change in pension benefit, net of tax of $0.0 million and $0.0 million in the third quarter of 2024 and 2023, respectively, and $(0.1) million and $0.0 million in the first nine months of 2024 and 2023, respectively	112	(24)	106	(356)
Other comprehensive income (loss)	(6,940)	860	(2,143)	55,820
Comprehensive income	$ 62,038	$ 62,258	$ 247,667	$ 255,757

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Hedge gain (loss) arising during the period, tax	$ (0.8)	$ 0.2	$ 0.9	$ 4.7
Foreign currency translation adjustment, tax	0.0	0.0	0.0	0.0
Change in pension benefit, net of tax	$ 0.0	$ 0.0	$ (0.1)	$ 0.0

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net Income (Loss)	$ 249,810	$ 199,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	81,272	76,943
Amortization of right-of-use lease assets	23,143	24,705
Stock-based compensation	161,242	147,568
Other non-cash items, net	(297)	(3,114)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	131,422	99,521
Accounts payable and accrued expenses	(8,631)	5,407
Accrued compensation and benefits	8,666	5,961
Deferred revenue	8,393	18,696
Accrued income taxes	(1,795)	(9,910)
Other current assets and prepaid expenses	(9,962)	8,670
Operating lease liabilities	(13,438)	(1,360)
Other noncurrent assets and liabilities	22,045	(11,932)
Net cash provided by operating activities	651,870	561,092
Cash flows from investing activities:
Additions to property and equipment	(9,841)	(18,035)
Acquisitions of businesses, net of cash acquired	(93,457)	(828,271)
Proceeds from sale of investments	0	349
Purchases of investments	0	(5,823)
Settlement of net investment hedges	3,826	(14,204)
Divestitures of businesses and assets, net	0	(154)
Net cash used in investing activities	(99,472)	(866,138)
Cash flows from financing activities:
Borrowings under credit facility	944,845	1,130,000
Repayments of borrowings under credit facility and acquired debt	(835,796)	(744,000)
Proceeds from issuance of common stock	12,709	10,592
Payments of withholding taxes in connection with stock-based awards	(92,589)	(75,489)
Payments of principal for financing leases	0	(217)
Credit facility origination costs	0	(13,355)
Payment of deferred acquisition consideration	(620,040)	0
Net cash provided by (used in) financing activities	(590,871)	307,531
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(2,003)	6,835
Net change in cash, cash equivalents, and restricted cash	(40,476)	9,320
Cash, cash equivalents, and restricted cash, beginning of period	288,798	272,888
Cash, cash equivalents, and restricted cash, end of period	248,322	282,208
Supplemental disclosure of non-cash financing and investing activities:
Withholding taxes in connection with stock-based awards, accrued	7,674	5,705
Operating right-of-use assets obtained in exchange for operating lease liabilities	$ 4,941	$ 23,142

XML

Consolidated Statements of Stockholder's Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance at Sep. 30, 2022	$ 2,296,034	$ 1,175	$ 1,720,580	$ 727,737	$ (153,458)
Beginning balance (in shares) at Sep. 30, 2022		117,472,000
Common stock issued for employee stock-based awards		$ 18	(18)
Common stock issued for employee stock-based awards (in shares)		1,766,000
Shares surrendered by employees to pay taxes related to stock-based awards	(81,194)	$ (7)	(81,187)
Shares surrendered by employees to pay taxes related to stock-based awards (in shares)		(609,000)
Common stock issued for employee stock purchase plan	10,592		10,592
Common stock issued for employee stock purchase plan (in shares)		102,000
Compensation expense from stock-based awards	117,475		117,475
Net Income (Loss)	199,937			199,937
Gain/Loss on net investment hedges, net of tax	(14,005)				(14,005)
Foreign currency translation adjustment	70,181				70,181
Change in defined benefit pension items, net of tax	(356)				(356)
Ending balance at Jun. 30, 2023	2,598,664	$ 1,186	1,767,442	927,674	(97,638)
Ending balance (in shares) at Jun. 30, 2023		118,731,000
Beginning balance at Mar. 31, 2023	2,518,534	$ 1,182	1,749,574	866,276	(98,498)
Beginning balance (in shares) at Mar. 31, 2023		118,334,000
Common stock issued for employee stock-based awards		$ 6	(6)
Common stock issued for employee stock-based awards (in shares)		582,000
Shares surrendered by employees to pay taxes related to stock-based awards	(25,172)	$ (2)	(25,170)
Shares surrendered by employees to pay taxes related to stock-based awards (in shares)		(185,000)
Compensation expense from stock-based awards	43,044		43,044
Net Income (Loss)	61,398			61,398
Gain/Loss on net investment hedges, net of tax	(521)				(521)
Foreign currency translation adjustment	1,405				1,405
Change in defined benefit pension items, net of tax	(24)				(24)
Ending balance at Jun. 30, 2023	2,598,664	$ 1,186	1,767,442	927,674	(97,638)
Ending balance (in shares) at Jun. 30, 2023		118,731,000
Beginning balance at Sep. 30, 2023	$ 2,677,290	$ 1,188	1,820,905	973,277	(118,080)
Beginning balance (in shares) at Sep. 30, 2023	118,846,000	118,846,000
Common stock issued for employee stock-based awards		$ 18	(18)
Common stock issued for employee stock-based awards (in shares)		1,702,000
Shares surrendered by employees to pay taxes related to stock-based awards	$ (99,945)	$ (7)	(99,938)
Shares surrendered by employees to pay taxes related to stock-based awards (in shares)		(601,000)
Common stock issued for employee stock purchase plan	12,709	$ 1	12,708
Common stock issued for employee stock purchase plan (in shares)		102,000
Compensation expense from stock-based awards	176,958		176,958
Net Income (Loss)	249,810			249,810
Gain/Loss on net investment hedges, net of tax	(2,787)				(2,787)
Foreign currency translation adjustment	538				538
Change in defined benefit pension items, net of tax	106				106
Ending balance at Jun. 30, 2024	$ 3,014,679	$ 1,200	1,910,615	1,223,087	(120,223)
Ending balance (in shares) at Jun. 30, 2024	120,049,000	120,049,000
Beginning balance at Mar. 31, 2024	$ 2,943,132	$ 1,197	1,901,109	1,154,109	(113,283)
Beginning balance (in shares) at Mar. 31, 2024		119,717,000
Common stock issued for employee stock-based awards		$ 5	(5)
Common stock issued for employee stock-based awards (in shares)		486,000
Shares surrendered by employees to pay taxes related to stock-based awards	(28,071)	$ (2)	(28,069)
Shares surrendered by employees to pay taxes related to stock-based awards (in shares)		(154,000)
Compensation expense from stock-based awards	37,580		37,580
Net Income (Loss)	68,978			68,978
Gain/Loss on net investment hedges, net of tax	2,292				2,292
Foreign currency translation adjustment	(9,344)				(9,344)
Change in defined benefit pension items, net of tax	112				112
Ending balance at Jun. 30, 2024	$ 3,014,679	$ 1,200	$ 1,910,615	$ 1,223,087	$ (120,223)
Ending balance (in shares) at Jun. 30, 2024	120,049,000	120,049,000

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 68,978	$ 61,398	$ 249,810	$ 199,937

XML

Insider Trading Arrangements

3 Months Ended

Jun. 30, 2024

shares

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Director and Executive Officer Adoption, Modification or Termination of 10b5-1 Plans in Q3'24

Our section 16 officers and directors may enter into plans or arrangements for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. Such plans and arrangements must comply in all respects with our insider trading policies, including our policy governing entry into and operation of 10b5-1 plans and arrangements.

During the quarter ended June 30, 2024, the below Section 16 officers and directors adopted Rule-10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Securities Exchange Act of 1934, as amended). All plans adopted covered only sales of PTC common stock. No plans were modified or terminated.

Name and Title of Director or Section 16 Officer	Date of Adoption, Modification, or Termination	Duration of the Plan	Aggregate Number of Shares of Common Stock that may be Sold under the Plan
Corinna Lathan Director	Adopted May 24, 2024	Ends September 30, 2025	3,817

Rule 10b5-1 Arrangement Terminated

false

Rule 10b51 Arr Modified Flag

false

Corinna Lathan [Member]

Trading Arrangements, by Individual

Name

Corinna Lathan

Title

Director

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

May 24, 2024

Expiration Date

September 30, 2025

Arrangement Duration

495 days

Aggregate Available

3,817

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Basis of Presentation

9 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

General

The accompanying unaudited condensed consolidated financial statements include the accounts of PTC Inc. and its wholly owned subsidiaries and have been prepared by management in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and in accordance with the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited quarterly financial statements should be read in conjunction with our annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary for a fair statement of our financial position, results of operations and cash flows as of the dates and for the periods indicated. The September 30, 2023 Consolidated Balance Sheet included herein is derived from our audited consolidated financial statements.

Unless otherwise indicated, all references to a year mean our fiscal year, which ends on September 30.

Pending Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU will be effective for us in 2026. We expect the adoption to result in disclosure changes only.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU will be effective for us in 2025. We expect the adoption to result in disclosure changes only.

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Revenue from Contracts with Customers

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

2. Revenue from Contracts with Customers

Receivables, Contract Assets and Contract Liabilities

(in thousands)	June 30, 2024		September 30, 2023
Short-term and long-term receivables	$	840,382	$	997,490
Contract asset	$	13,443	$	16,465
Deferred revenue	$	687,614	$	681,550

During the nine months ended June 30, 2024, we recognized $619.2 million of revenue that was included in Deferred revenue as of September 30, 2023. The remainder of the change was driven by additional deferrals, primarily from new billings.

Our multi-year, non-cancellable on-premises subscription contracts provide customers with an annual right to exchange software within the subscription with other software. As of June 30, 2024 and September 30, 2023, our total revenue liability was $27.0 million and $23.7 million, respectively, primarily associated with the annual right to exchange on-premises subscription software.

Remaining Performance Obligations

Our contracts with customers include transaction price amounts allocated to performance obligations that will be satisfied and recognized as revenue at a later date. As of June 30, 2024, the transaction price amounts include performance obligations of $687.6 million recorded in Deferred revenue and $1,382.2 million that are not yet recorded in the Consolidated Balance Sheets. Of the total $2,069.8 million, we expect to recognize approximately 59% over the next 12 months, 26% over the next 13 to 24 months, and the remaining amount thereafter.

Disaggregation of Revenue

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Recurring revenue(1)	$	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	$	518,639	$	542,342	$	1,671,925	$	1,550,433

(1)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Americas	$	253,592	$	278,329	$	781,480	$	761,617
Europe		170,617		173,559		624,884		549,835
Asia Pacific		94,430		90,454		265,561		238,981
Total revenue	$	518,639	$	542,342	$	1,671,925	$	1,550,433

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Stock-based Compensation

9 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement, Recognized Amount [Abstract]

Stock-Based Compensation

3. Stock-based Compensation

The value of stock issued for vested restricted stock units (RSUs) is as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Stock issued for vested RSUs	$	88,803	$	79,129	$	283,975	$	235,430

Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Cost of license revenue	$	49	$	53	$	116	$	141
Cost of support and cloud services revenue		4,035		3,479		10,762		9,464
Cost of professional services revenue		1,772		2,315		5,101		6,063
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 expense	$	48,038	$	53,818	$	161,242	$	147,568

As of June 30, 2024 and September 30, 2023, we had liability-classified awards related to stock-based compensation based on a fixed monetary amount of $29.1 million and $44.9 million, respectively.

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Earnings per Share (EPS) and Common Stock

9 Months Ended

Jun. 30, 2024

Earnings Per Share And Common Stock [Abstract]

Earnings per Share (EPS) and Common Stock

4. Earnings per Share (EPS) and Common Stock

EPS

The following table presents the calculation for both basic and diluted EPS:

(in thousands, except per share data)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income	$	68,978	$	61,398	$	249,810	$	199,937
Weighted-average shares outstanding—Basic		119,893		118,483		119,533		118,186
Dilutive effect of restricted stock units		929		909		1,060		886
Weighted-average shares outstanding—Diluted		120,822		119,392		120,593		119,072
Earnings per share—Basic	$	0.58	$	0.52	$	2.09	$	1.69
Earnings per share—Diluted	$	0.57	$	0.51	$	2.07	$	1.68

Anti-dilutive shares were immaterial for the three and nine months ended June 30, 2024 and June 30, 2023.

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Acquisitions

9 Months Ended

Jun. 30, 2024

Business Combinations [Abstract]

Acquisitions

5. Acquisitions

Acquisition and transaction-related costs for the third quarter and first nine months of 2024 totaled $0.2 million and $3.0 million, respectively, compared to $0.8 million and $18.5 million in the third quarter and first nine months of 2023, respectively. These costs are classified in General and administrative expense in the accompanying Consolidated Statements of Operations.

pure-systems

On October 4, 2023, we acquired pure-systems GmbH pursuant to a Share Purchase Agreement. pure-systems is 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 acquisition of pure-systems has been accounted for as a business combination. Assets and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The fair values of intangible assets were based on valuations using a discounted cash flow model which requires the use of significant estimates and assumptions, including estimating future revenues and costs. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

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 for $1,448.2 million, net of cash acquired. PTC paid the first installment of $828.2 million on the acquisition date. 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. The purchase price allocation resulted in $974.9 million of Goodwill, $628.6 million of intangible assets, $121.7 million of net tax liabilities, and $33.6 million of other net liabilities.

ServiceMax develops and licenses cloud-native, product-centric field service management (FSM) software, which is included within our PLM product group. ServiceMax had approximately 500 employees on the close date.

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 nine months ended June 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 nine months ended June 30, 2023 presented below combines the historical results of PTC for those periods, 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 nine months ended
	June 30, 2023
Revenue	$	1,594,118
Net income	$	193,834

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Goodwill and Intangible Assets

9 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

During the third fiscal quarter of 2024, we completed our annual impairment test of goodwill, which was based on a qualitative assessment, and concluded that there was no impairment. A qualitative assessment is designed to determine whether we believe it is more likely than not that the fair values of our reporting units exceed their carrying values. A qualitative assessment includes a review of qualitative factors, including company-specific (financial performance and long-range plans), industry, and macroeconomic factors, and a consideration of the fair value of each reporting unit at the last valuation date.

Goodwill and acquired intangible assets consisted of the following:

(in thousands)	June 30, 2024						September 30, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Goodwill (not amortized)					$	3,442,245					$	3,358,511
Intangible assets with finite lives (amortized):
Purchased software	$	627,099	$	424,643	$	202,456	$	615,915	$	395,109	$	220,806
Capitalized software		22,877		22,877		—		22,877		22,877		—
Customer lists and relationships		1,135,067		443,644		691,423		1,116,117		413,125		702,992
Trademarks and trade names		37,727		21,101		16,626		36,851		19,400		17,451
Other		3,886		3,886		—		3,867		3,867		—
Total intangible assets with finite lives	$	1,826,656	$	916,151	$	910,505	$	1,795,627	$	854,378	$	941,249
Total goodwill and acquired intangible assets					$	4,352,750					$	4,299,760

Changes in Goodwill were as follows:

(in thousands)
Balance, October 1, 2023	$	3,358,511
Acquisitions		77,118
Foreign currency translation adjustment		6,616
Balance, June 30, 2024	$	3,442,245

The aggregate amortization expense for intangible assets with finite lives is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Amortization of acquired intangible assets	$	10,672	$	10,670	$	31,459	$	29,352
Cost of revenue		9,685		9,841		28,835		25,817
Total amortization expense	$	20,357	$	20,511	$	60,294	$	55,169

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Fair Value Measurements

9 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:

•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

•Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or

•Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.

A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Money market funds, time deposits, and corporate notes/bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

The principal market in which we execute our foreign currency derivatives is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants are generally large financial institutions. Our foreign currency derivatives’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.

Our significant financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and September 30, 2023 were as follows:

(in thousands)	June 30, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	41,103	$	—	$	—	$	41,103
Forward contracts		—		181		—		181
	$	41,103	$	181	$	—	$	41,284
Financial liabilities:
Forward contracts		—		2,103		—		2,103
	$	—	$	2,103	$	—	$	2,103

(in thousands)	September 30, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	72,754	$	—	$	—	$	72,754
Convertible note		—		—		2,000		2,000
Forward contracts		—		7,340		—		7,340
	$	72,754	$	7,340	$	2,000	$	82,094
Financial liabilities:
Forward contracts		—		3,158		—		3,158
	$	—	$	3,158	$	—	$	3,158

(1)Money market funds and time deposits.

Level 3 Investments

Convertible Note

In the fourth quarter of 2021, we invested $2.0 million in a non-marketable convertible note. This debt security was classified as available-for-sale and included in Other assets on the Consolidated Balance Sheet. During the nine months ended June 30, 2024, we recorded a $2.0 million impairment loss related to this Level 3 investment. The impairment loss is included in Other income (expense), net on the Consolidated Statements of Operations.

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Derivative Financial Instruments

9 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

8. Derivative Financial Instruments

We enter into foreign currency forward contracts to manage our exposure to foreign currency exchange risk to reduce earnings volatility. We do not enter into derivative transactions for trading or speculative purposes.

The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:

(in thousands)	Fair Value of Derivatives Designated As Hedging Instruments				Fair Value of Derivatives Not Designated As Hedging Instruments
	June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
Derivative assets(1):
Forward contracts	$	81	$	3,770	$	100	$	3,570
Derivative liabilities(2):
Forward contracts	$	681	$	—	$	1,422	$	3,158

(1)As of June 30, 2024 and September 30, 2023, current derivative assets are recorded in Other current assets in the Consolidated Balance Sheets.

(2)As of June 30, 2024 and September 30, 2023, current derivative liabilities are recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

Non-Designated Hedges

We hedge our net foreign currency monetary assets and liabilities primarily resulting from foreign currency denominated receivables and payables with foreign exchange forward contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These contracts have maturities of up to approximately three months. Generally, we do not designate these foreign currency forward contracts as hedges for accounting purposes and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, gains or losses on the underlying foreign-denominated balance are generally offset by the losses or gains on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in Other income (expense), net.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts not designated as hedging instruments with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Canadian Dollar / U.S. Dollar	$	5,125	$	5,135
Euro / U.S. Dollar		396,345		383,227
British Pound / U.S. Dollar		13,460		6,058
Israeli Shekel / U.S. Dollar		12,091		11,852
Japanese Yen / U.S. Dollar		27,914		4,770
Swiss Franc / U.S. Dollar		16,743		32,766
Swedish Krona / U.S. Dollar		21,841		35,085
Chinese Renminbi / U.S. Dollar		4,209		16,660
New Taiwan Dollar / U.S. Dollar		8,915		11,855
Korean Won / U.S. Dollar		—		6,157
Danish Krone / U.S. Dollar		3,353		6,731
All other		4,854		3,340
Total	$	514,850	$	523,636

The following table shows the effect of our non-designated hedges on the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended						Nine months ended
	Location of Gain (Loss)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged	Other income (expense), net	$	(1,590	)	$	(1,006	)	$	(6,611	)	$	(13,437	)

In the three months ended June 30, 2024, foreign currency losses, net were $1.7 million. In the three months ended June 30, 2023, foreign currency gains, net were $0.5 million. In the nine months ended June 30, 2024 and June 30, 2023, foreign currency losses, net were $1.8 million and $3.4 million, respectively.

Net Investment Hedges

We translate balance sheet accounts of subsidiaries with foreign functional currencies into the U.S. Dollar using the exchange rate at each balance sheet date. Resulting translation adjustments are reported as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We designate certain foreign exchange forward contracts as net investment hedges against exposure on translation of balance sheet accounts of Euro and Japanese Yen functional subsidiaries. Net investment hedges partially offset the impact of Foreign currency translation adjustment recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. All foreign exchange forward contracts are carried at fair value on the Consolidated Balance Sheets and the maximum duration of net investment hedge foreign exchange forward contracts is approximately three months.

Net investment hedge relationships are designated at inception, and effectiveness is assessed retrospectively on a quarterly basis using the net equity position of Euro and Japanese Yen functional subsidiaries. As the forward contracts are highly effective in offsetting exchange rate exposure, we record changes in these net investment hedges in Accumulated other comprehensive loss and subsequently reclassify them to Foreign currency translation adjustment in Accumulated other comprehensive loss at the time of forward contract maturity. Changes in the fair value of foreign exchange forward contracts due to changes in time value are excluded from the assessment of effectiveness. Our derivatives are not subject to any credit contingent features. We manage credit risk with counterparties by trading among several counterparties and we review our counterparties’ credit at least quarterly.

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Euro / U.S. Dollar	$	429,516	$	337,923
Japanese Yen / U.S. Dollar		9,495		10,285
Total	$	439,011	$	348,208

The following table shows the effect of our derivative instruments designated as net investment hedges in the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended					Nine months ended
	Location of Gain (Loss)	June 30, 2024		June 30, 2023			June 30, 2024			June 30, 2023
Gain (loss) recognized in OCI	OCI	$	3,047	$	(695	)	$	(3,705	)	$	(18,663	)
Gain (loss) reclassified from OCI to earnings	n/a	$	—	$	—		$	—		$	—
Gain recognized, excluded portion	Other income (expense), net	$	946	$	1,124		$	3,161		$	3,272

As of June 30, 2024, we estimate that all amounts reported in Accumulated other comprehensive loss will be applied against exposed balance sheet accounts upon translation within the next three months.

Offsetting Derivative Assets and Liabilities

We have entered into master netting arrangements for our forward contracts that allow net settlements under certain conditions. Although netting is permitted, it is currently our policy and practice to record all derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets.

The following table sets forth the offsetting of derivative assets as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Received		Net Amount
Forward contracts	$	181	$	—	$	181	$	(181	)	$	—	$	—

The following table sets forth the offsetting of derivative liabilities as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Pledged		Net Amount
Forward contracts	$	2,103	$	—	$	2,103	$	(181	)	$	—	$	1,922

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Income Taxes

9 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

(in thousands)	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
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
Effective income tax rate		(2	)%		20	%		16	%		18	%

The effective tax rate for the three and nine months ended June 30, 2024 was lower 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 IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for the year ended September 30, 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income. The benefit from this IRS procedural guidance change for the three and nine months ended June 30, 2024 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the nine months ended June 30, 2024, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the Internal Revenue Service 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.

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Debt

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

10. Debt

As of June 30, 2024 and September 30, 2023, we had the following debt obligations:

(in thousands)	June 30, 2024			September 30, 2023
4.000% Senior notes due 2028	$	500,000		$	500,000
3.625% Senior notes due 2025		500,000			500,000
Credit facility revolver line(1)(2)		322,000			202,000
Credit facility term loan(1)(2)		493,750			500,000
Total debt		1,815,750			1,702,000
Unamortized debt issuance costs for the senior notes(3)		(4,596	)		(6,215	)
Total debt, net of issuance costs(4)	$	1,811,154		$	1,695,785

(1)Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.8 million included in Other assets on the Consolidated Balance Sheet as of June 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023.

(2)The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. However, if our outstanding 2025 Senior Notes have not been refinanced to mature on or after April 3, 2028 or redeemed by November 16, 2024, all amounts outstanding under the credit facility will become due and payable on November 16, 2024. The term loan began amortizing in March 2024, with payments of $3.1 million remaining in 2024, $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028.

(3)Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt on the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.

(4)As of June 30, 2024, $518.1 million of debt was classified as short term, including $499.3 million associated with the 2025 senior notes and related debt issuance costs and $18.8 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan was classified as short term with the remaining balance classified as long term.

Senior Unsecured Notes

In February 2020, we issued $500 million in aggregate principal amount of 4.0% senior, unsecured long-term debt at par value, due in 2028 (the 2028 notes) and $500 million in aggregate principal amount of 3.625% senior, unsecured long-term debt at par value, due in 2025 (the 2025 notes).

As of June 30, 2024, the total estimated fair value of the 2028 and 2025 notes was approximately $471.9 million and $493.6 million, respectively, based on quoted prices for the notes on that date.

We were in compliance with all the covenants for all our senior notes as of June 30, 2024.

Credit Agreement

Our credit facility consists of (i) a $1.25 billion revolving credit facility, (ii) a $500 million term loan credit facility, and (iii) an incremental facility pursuant to which we may incur additional term loan tranches or increase the revolving credit facility. As of June 30, 2024, unused commitments under our credit facility were $928.0 million and amounts available for borrowing were $912.1 million.

As of June 30, 2024, the fair value of our credit facility approximates its book value.

PTC and certain eligible foreign subsidiaries are eligible borrowers under the credit facility. As of June 30, 2024, $123.0 million was borrowed by an eligible foreign subsidiary borrower.

Loans under the credit facility bear interest at variable rates. As of June 30, 2024, the annual rate for borrowings outstanding was 6.9%. A quarterly revolving commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.175% to 0.325% per annum, based upon our total leverage ratio.

As of June 30, 2024, we were in compliance with all financial and operating covenants of the credit facility.

Interest

We incurred interest expense on our debt of $27.8 million and $94.7 million in the third quarter and first nine months of 2024, respectively, and $35.8 million and $93.7 million in the third quarter and first nine months of 2023, respectively. Interest expense in the third quarter and first nine months of 2023 included $10.0 million and $20.0 million, respectively, of interest associated with the $650.0 million ServiceMax deferred acquisition payment that we settled in the first quarter of 2024. The average interest rate on borrowings outstanding was approximately 5.3% and 5.5% during the third quarter and first nine months of 2024, respectively, and 5.2% and 4.8% during the third quarter and first nine months of 2023, respectively.

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Commitments and Contingencies

9 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Guarantees and Indemnification Obligations

We enter into standard indemnification agreements with our customers and business partners in the ordinary course of our business. Under such agreements, we typically indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to our products. Indemnification may also cover other types of claims, including claims relating to certain data breaches. These agreements typically limit our liability with respect to indemnification claims other than intellectual property infringement claims. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and, accordingly, we believe the estimated fair value of liabilities under these agreements is immaterial.

We warrant that our software products will perform in all material respects in accordance with our standard published specifications during the term of the license. Additionally, we generally warrant that our consulting services will be performed consistent with generally accepted industry standards and, in the case of fixed price services, the agreed-upon specifications. In most cases, liability for these warranties is capped. If necessary, we would provide for the estimated cost of product and service warranties based on specific warranty claims and claim history; however, we have not incurred significant cost under our product or services warranties. As a result, we believe the estimated fair value of these liabilities is immaterial.

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Receivables, Contract Assets and Liabilities

Receivables, Contract Assets and Contract Liabilities

(in thousands)	June 30, 2024		September 30, 2023
Short-term and long-term receivables	$	840,382	$	997,490
Contract asset	$	13,443	$	16,465
Deferred revenue	$	687,614	$	681,550

Disaggregation of Revenue

Disaggregation of Revenue

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Recurring revenue(1)	$	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	$	518,639	$	542,342	$	1,671,925	$	1,550,433

(1)Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

Summary of Revenue for Geographic Regions

Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Americas	$	253,592	$	278,329	$	781,480	$	761,617
Europe		170,617		173,559		624,884		549,835
Asia Pacific		94,430		90,454		265,561		238,981
Total revenue	$	518,639	$	542,342	$	1,671,925	$	1,550,433

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Stock-based Compensation (Tables)

9 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement, Recognized Amount [Abstract]

Schedule of Total Fair Value of Vested RSUs

The value of stock issued for vested restricted stock units (RSUs) is as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Stock issued for vested RSUs	$	88,803	$	79,129	$	283,975	$	235,430

Schedule of Classification of Compensation Expense

Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Cost of license revenue	$	49	$	53	$	116	$	141
Cost of support and cloud services revenue		4,035		3,479		10,762		9,464
Cost of professional services revenue		1,772		2,315		5,101		6,063
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 expense	$	48,038	$	53,818	$	161,242	$	147,568

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Earnings per Share (EPS) and Common Stock (Tables)

9 Months Ended

Jun. 30, 2024

Earnings Per Share And Common Stock [Abstract]

Earnings per Share Basic and Diluted

The following table presents the calculation for both basic and diluted EPS:

(in thousands, except per share data)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income	$	68,978	$	61,398	$	249,810	$	199,937
Weighted-average shares outstanding—Basic		119,893		118,483		119,533		118,186
Dilutive effect of restricted stock units		929		909		1,060		886
Weighted-average shares outstanding—Diluted		120,822		119,392		120,593		119,072
Earnings per share—Basic	$	0.58	$	0.52	$	2.09	$	1.69
Earnings per share—Diluted	$	0.57	$	0.51	$	2.07	$	1.68

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Acquisitions (Tables)

9 Months Ended

Jun. 30, 2024

Business Acquisition [Line Items]

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information for the nine months ended June 30, 2023 presented below combines the historical results of PTC for those periods, 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 nine months ended
	June 30, 2023
Revenue	$	1,594,118
Net income	$	193,834

Pure System

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation

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

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Acquired Intangible Assets

Goodwill and acquired intangible assets consisted of the following:

(in thousands)	June 30, 2024						September 30, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Goodwill (not amortized)					$	3,442,245					$	3,358,511
Intangible assets with finite lives (amortized):
Purchased software	$	627,099	$	424,643	$	202,456	$	615,915	$	395,109	$	220,806
Capitalized software		22,877		22,877		—		22,877		22,877		—
Customer lists and relationships		1,135,067		443,644		691,423		1,116,117		413,125		702,992
Trademarks and trade names		37,727		21,101		16,626		36,851		19,400		17,451
Other		3,886		3,886		—		3,867		3,867		—
Total intangible assets with finite lives	$	1,826,656	$	916,151	$	910,505	$	1,795,627	$	854,378	$	941,249
Total goodwill and acquired intangible assets					$	4,352,750					$	4,299,760

Schedule of Changes in Goodwill by Reportable Segments

Changes in Goodwill were as follows:

(in thousands)
Balance, October 1, 2023	$	3,358,511
Acquisitions		77,118
Foreign currency translation adjustment		6,616
Balance, June 30, 2024	$	3,442,245

Schedule of Aggregate Amortization Expense for Intangible Assets with Finite Lives

The aggregate amortization expense for intangible assets with finite lives is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Nine months ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Amortization of acquired intangible assets	$	10,672	$	10,670	$	31,459	$	29,352
Cost of revenue		9,685		9,841		28,835		25,817
Total amortization expense	$	20,357	$	20,511	$	60,294	$	55,169

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Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

Our significant financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and September 30, 2023 were as follows:

(in thousands)	June 30, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	41,103	$	—	$	—	$	41,103
Forward contracts		—		181		—		181
	$	41,103	$	181	$	—	$	41,284
Financial liabilities:
Forward contracts		—		2,103		—		2,103
	$	—	$	2,103	$	—	$	2,103

(in thousands)	September 30, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Cash equivalents(1)	$	72,754	$	—	$	—	$	72,754
Convertible note		—		—		2,000		2,000
Forward contracts		—		7,340		—		7,340
	$	72,754	$	7,340	$	2,000	$	82,094
Financial liabilities:
Forward contracts		—		3,158		—		3,158
	$	—	$	3,158	$	—	$	3,158

(1)Money market funds and time deposits.

Level 3 Investments

Convertible Note

In the fourth quarter of 2021, we invested $2.0 million in a non-marketable convertible note. This debt security was classified as available-for-sale and included in Other assets on the Consolidated Balance Sheet. During the nine months ended June 30, 2024, we recorded a $2.0 million impairment loss related to this Level 3 investment. The impairment loss is included in Other income (expense), net on the Consolidated Statements of Operations.

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Derivative Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:

(in thousands)	Fair Value of Derivatives Designated As Hedging Instruments				Fair Value of Derivatives Not Designated As Hedging Instruments
	June 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023
Derivative assets(1):
Forward contracts	$	81	$	3,770	$	100	$	3,570
Derivative liabilities(2):
Forward contracts	$	681	$	—	$	1,422	$	3,158

(1)As of June 30, 2024 and September 30, 2023, current derivative assets are recorded in Other current assets in the Consolidated Balance Sheets.

(2)As of June 30, 2024 and September 30, 2023, current derivative liabilities are recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

Schedule of Notional Amounts of Outstanding Forward Contracts and Options

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts not designated as hedging instruments with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Canadian Dollar / U.S. Dollar	$	5,125	$	5,135
Euro / U.S. Dollar		396,345		383,227
British Pound / U.S. Dollar		13,460		6,058
Israeli Shekel / U.S. Dollar		12,091		11,852
Japanese Yen / U.S. Dollar		27,914		4,770
Swiss Franc / U.S. Dollar		16,743		32,766
Swedish Krona / U.S. Dollar		21,841		35,085
Chinese Renminbi / U.S. Dollar		4,209		16,660
New Taiwan Dollar / U.S. Dollar		8,915		11,855
Korean Won / U.S. Dollar		—		6,157
Danish Krone / U.S. Dollar		3,353		6,731
All other		4,854		3,340
Total	$	514,850	$	523,636

As of June 30, 2024 and September 30, 2023, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

Currency Hedged (in thousands)	June 30, 2024		September 30, 2023
Euro / U.S. Dollar	$	429,516	$	337,923
Japanese Yen / U.S. Dollar		9,495		10,285
Total	$	439,011	$	348,208

Schedule of Net Gains and Losses on Foreign Currency Exposures

The following table shows the effect of our non-designated hedges on the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended						Nine months ended
	Location of Gain (Loss)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged	Other income (expense), net	$	(1,590	)	$	(1,006	)	$	(6,611	)	$	(13,437	)

The following table shows the effect of our derivative instruments designated as net investment hedges in the Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023:

(in thousands)		Three months ended					Nine months ended
	Location of Gain (Loss)	June 30, 2024		June 30, 2023			June 30, 2024			June 30, 2023
Gain (loss) recognized in OCI	OCI	$	3,047	$	(695	)	$	(3,705	)	$	(18,663	)
Gain (loss) reclassified from OCI to earnings	n/a	$	—	$	—		$	—		$	—
Gain recognized, excluded portion	Other income (expense), net	$	946	$	1,124		$	3,161		$	3,272

Schedule of Offsetting Assets

The following table sets forth the offsetting of derivative assets as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Received		Net Amount
Forward contracts	$	181	$	—	$	181	$	(181	)	$	—	$	—

Schedule of Offsetting Liabilities

The following table sets forth the offsetting of derivative liabilities as of June 30, 2024:

(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of June 30, 2024	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Pledged		Net Amount
Forward contracts	$	2,103	$	—	$	2,103	$	(181	)	$	—	$	1,922

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Income Taxes (Tables)

9 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Summary of Income Taxes

(in thousands)	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
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
Effective income tax rate		(2	)%		20	%		16	%		18	%

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Debt (Tables)

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt Obligations

As of June 30, 2024 and September 30, 2023, we had the following debt obligations:

(in thousands)	June 30, 2024			September 30, 2023
4.000% Senior notes due 2028	$	500,000		$	500,000
3.625% Senior notes due 2025		500,000			500,000
Credit facility revolver line(1)(2)		322,000			202,000
Credit facility term loan(1)(2)		493,750			500,000
Total debt		1,815,750			1,702,000
Unamortized debt issuance costs for the senior notes(3)		(4,596	)		(6,215	)
Total debt, net of issuance costs(4)	$	1,811,154		$	1,695,785

(1)Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.8 million included in Other assets on the Consolidated Balance Sheet as of June 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023.

(2)The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. However, if our outstanding 2025 Senior Notes have not been refinanced to mature on or after April 3, 2028 or redeemed by November 16, 2024, all amounts outstanding under the credit facility will become due and payable on November 16, 2024. The term loan began amortizing in March 2024, with payments of $3.1 million remaining in 2024, $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028.

(3)Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt on the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.

(4)As of June 30, 2024, $518.1 million of debt was classified as short term, including $499.3 million associated with the 2025 senior notes and related debt issuance costs and $18.8 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan was classified as short term with the remaining balance classified as long term.

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Revenue from Contracts with Customers - Schedule of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Short-term and long-term receivables	$ 840,382	$ 997,490
Contract asset	13,443	16,465
Deferred revenue	$ 687,614	$ 681,550

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Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Sep. 30, 2023
Revenue from External Customer [Line Items]
Deferred revenue, revenue recognized	$ 619,200
Deferred revenue	687,614	$ 681,550
Refund liability	27,000	$ 23,700
Revenue, remaining performance obligation, amount	2,069,800
Unrecorded
Revenue from External Customer [Line Items]
Revenue, remaining performance obligation, amount	$ 1,382,200

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Revenue from Contracts with Customers - Remaining Performance Obligations - Additional Information (Details)	Jun. 30, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, percentage	59.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-07-01
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, percentage	26.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-07-01 | Maximum
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, period	24 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-07-01 | Minimum
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, period	13 months

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Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation Of Revenue [Line Items]
Revenue		$ 518,639	$ 542,342	$ 1,671,925	$ 1,550,433
Recurring revenue
Disaggregation Of Revenue [Line Items]
Revenue	[1]	481,559	498,410	1,551,600	1,407,662
Perpetual license
Disaggregation Of Revenue [Line Items]
Revenue		7,050	8,251	22,243	30,417
Professional services
Disaggregation Of Revenue [Line Items]
Professional services		$ 30,030	$ 35,681	$ 98,082	$ 112,354

[1] Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

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Revenue from Contracts with Customers - Revenue By Geographic Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Segment Reporting Revenue Reconciling Item [Line Items]
Total revenue	$ 518,639	$ 542,342	$ 1,671,925	$ 1,550,433
Operating Segments
Segment Reporting Revenue Reconciling Item [Line Items]
Total revenue	518,639	542,342	1,671,925	1,550,433
Americas | Operating Segments
Segment Reporting Revenue Reconciling Item [Line Items]
Total revenue	253,592	278,329	781,480	761,617
Europe | Operating Segments
Segment Reporting Revenue Reconciling Item [Line Items]
Total revenue	170,617	173,559	624,884	549,835
Asia-Pacific | Operating Segments
Segment Reporting Revenue Reconciling Item [Line Items]
Total revenue	$ 94,430	$ 90,454	$ 265,561	$ 238,981

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Stock-based Compensation - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Liability classified awards related to stock-based compensation	$ 29.1	$ 44.9

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Stock-based Compensation - Schedule of Total Fair Value of RSUs Vested (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-Based Payment Arrangement, Recognized Amount [Abstract]
Stock issued for vested RSUs	$ 88,803	$ 79,129	$ 283,975	$ 235,430

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Stock-based Compensation - Schedule of Classification of Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 48,038	$ 53,818	$ 161,242	$ 147,568
Sales and marketing
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	15,167	14,513	46,023	39,554
Research and development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	13,101	14,801	41,275	41,839
General and administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	13,914	18,657	57,965	50,507
License | Cost of Sales
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	49	53	116	141
Support and cloud services | Cost of Sales
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	4,035	3,479	10,762	9,464
Professional services | Cost of Sales
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 1,772	$ 2,315	$ 5,101	$ 6,063

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Earnings per Share (EPS) and Common Stock - Earnings per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share And Common Stock [Abstract]
Net Income (Loss)	$ 68,978	$ 61,398	$ 249,810	$ 199,937
Weighted-average shares outstanding—Basic	119,893	118,483	119,533	118,186
Dilutive effect of restricted stock units	929	909	1,060	886
Weighted-average shares outstanding—Diluted	120,822	119,392	120,593	119,072
Earnings per share—Basic	$ 0.58	$ 0.52	$ 2.09	$ 1.69
Earnings per share—Diluted	$ 0.57	$ 0.51	$ 2.07	$ 1.68

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Acquisitions - Additional Information (Details) $ in Thousands				3 Months Ended		9 Months Ended
	Oct. 04, 2023 USD ($) Employees	Oct. 02, 2023 USD ($)	Jan. 03, 2023 USD ($) Employees	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Business Acquisition [Line Items]
Business combination, acquisition related costs				$ 200	$ 800	$ 3,000	$ 18,500
Goodwill				$ 3,442,245		3,442,245		$ 3,358,511
Servicemax acquisition
Business Acquisition [Line Items]
Preliminary purchase price			$ 828,200
Payments to acquire business, net of cash			$ 1,448,200
Deferred acquisition payments		$ 650,000				$ 650,000
Payments to acquire business		620,000
Imputed interest payable		$ 30,000
Number Of Employees | Employees			500
Goodwill			$ 974,900
Intangible assets			628,600
Net tax liabilities			121,700
Other net liabilities			$ 33,600
Pure System
Business Acquisition [Line Items]
Payments to acquire business, net of cash	$ 93,500
Number Of Employees | Employees	50
Goodwill	$ 77,118
Other net liabilities	$ 526
Pure System | Customer relationships
Business Acquisition [Line Items]
Acquired finite-lived intangible asset, weighted average useful life	18 years
Intangible assets	$ 17,400
Pure System | Purchased Software
Business Acquisition [Line Items]
Acquired finite-lived intangible asset, weighted average useful life	10 years
Intangible assets	$ 10,000
Pure System | Trademarks
Business Acquisition [Line Items]
Acquired finite-lived intangible asset, weighted average useful life	10 years
Intangible assets	$ 800

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Acquisitions - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Oct. 04, 2023	Sep. 30, 2023
Business Acquisition [Line Items]
Goodwill	$ 3,442,245		$ 3,358,511
Pure System
Business Acquisition [Line Items]
Goodwill		$ 77,118
Net tax liability		(8,860)
Acquired debt		(2,475)
Other net liabilities		(526)
Total		93,457
Customer relationships | Pure System
Business Acquisition [Line Items]
Intangible assets		17,400
Purchased Software | Pure System
Business Acquisition [Line Items]
Intangible assets		10,000
Trademarks | Pure System
Business Acquisition [Line Items]
Intangible assets		$ 800

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Acquisitions - Schedule of Unaudited Pro Forma Financial Information (Details ) - Servicemax acquisition $ in Thousands	9 Months Ended
	Jun. 30, 2023 USD ($)
Business Acquisition [Line Items]
Revenue	$ 1,594,118
Net income	$ 193,834

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Goodwill and Intangible Assets - Additional Information (Details)	3 Months Ended
	Jun. 30, 2024 USD ($)
Asset Impairment Charges [Abstract]
Goodwill impairment	$ 0

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Goodwill and Intangible Assets - Schedule of Goodwill and Acquired Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Goodwill (not amortized)	$ 3,442,245	$ 3,358,511
Intangible assets with finite lives (amortized), Gross Carrying Amount	1,826,656	1,795,627
Intangible assets with finite lives (amortized), Accumulated Amortization	916,151	854,378
Intangible assets with finite lives (amortized), Net Book Value	910,505	941,249
Intangible Assets, Net (Including Goodwill)	4,352,750	4,299,760
Purchased Software
Intangible assets with finite lives (amortized), Gross Carrying Amount	627,099	615,915
Intangible assets with finite lives (amortized), Accumulated Amortization	424,643	395,109
Intangible assets with finite lives (amortized), Net Book Value	202,456	220,806
Capitalized Software
Intangible assets with finite lives (amortized), Gross Carrying Amount	22,877	22,877
Intangible assets with finite lives (amortized), Accumulated Amortization	22,877	22,877
Intangible assets with finite lives (amortized), Net Book Value	0	0
Customer Lists and Relationships
Intangible assets with finite lives (amortized), Gross Carrying Amount	1,135,067	1,116,117
Intangible assets with finite lives (amortized), Accumulated Amortization	443,644	413,125
Intangible assets with finite lives (amortized), Net Book Value	691,423	702,992
Trademarks and Trade Names
Intangible assets with finite lives (amortized), Gross Carrying Amount	37,727	36,851
Intangible assets with finite lives (amortized), Accumulated Amortization	21,101	19,400
Intangible assets with finite lives (amortized), Net Book Value	16,626	17,451
Other
Intangible assets with finite lives (amortized), Gross Carrying Amount	3,886	3,867
Intangible assets with finite lives (amortized), Accumulated Amortization	3,886	3,867
Intangible assets with finite lives (amortized), Net Book Value	$ 0	$ 0

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Goodwill and Intangible Assets - Schedule of Changes in Goodwill by Reportable Segments (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($)
Goodwill [Line Items]
Balance, October 1, 2023	$ 3,358,511
Foreign currency translation adjustment	6,616
Balance, June 30, 2024	3,442,245
Pure System
Goodwill [Line Items]
Goodwill, acquired	$ 77,118

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Goodwill and Intangible Assets - Schedule of Aggregate Amortization Expense for Intangible Assets with Finite Lives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of acquired intangible assets	$ 10,672	$ 10,670	$ 31,459	$ 29,352
Cost of revenue	9,685	9,841	28,835	25,817
Total amortization expense	$ 20,357	$ 20,511	$ 60,294	$ 55,169

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Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Financial assets:
Cash equivalents	$ 41,103	$ 72,754
Convertible note		$ 2,000
Derivative Asset Statement of Financial Position Extensible Enumeration	Other assets	Other assets
Financial assets, fair value	$ 41,284	$ 82,094
Financial liabilities:
Derivative Liability Statement Of Financial Position Extensible Enumeration	Other liabilities	Other liabilities
Financial liabilities, fair value	$ 2,103	$ 3,158
Forward Contracts
Financial assets:
Foreign currency contract, asset	181	7,340
Financial liabilities:
Foreign currency contracts, liability	2,103	3,158
Level 1
Financial assets:
Cash equivalents	41,103	72,754
Convertible note		0
Financial assets, fair value	41,103	72,754
Financial liabilities:
Financial liabilities, fair value	0	0
Level 1 | Forward Contracts
Financial assets:
Foreign currency contract, asset	0	0
Financial liabilities:
Foreign currency contracts, liability	0	0
Level 2
Financial assets:
Cash equivalents	0	0
Convertible note		0
Financial assets, fair value	181	7,340
Financial liabilities:
Financial liabilities, fair value	2,103	3,158
Level 2 | Forward Contracts
Financial assets:
Foreign currency contract, asset	181	7,340
Financial liabilities:
Foreign currency contracts, liability	2,103	3,158
Level 3
Financial assets:
Cash equivalents	0	0
Convertible note		2,000
Financial assets, fair value	0	2,000
Financial liabilities:
Financial liabilities, fair value	0	0
Level 3 | Forward Contracts
Financial assets:
Foreign currency contract, asset	0	0
Financial liabilities:
Foreign currency contracts, liability	$ 0	$ 0

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Fair Value Measurements - Additional Information (Details) - Level 3 - USD ($) $ in Millions	9 Months Ended
	Jun. 30, 2024	Sep. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amount invested in non-marketabel convertible note		$ 2.0
Impairment loss related to investments	$ 2.0

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Derivative Financial Instruments - Schedule of Derivative Financial Instruments at Gross Fair Value (Details) - Forward contracts - USD ($) $ in Thousands		Jun. 30, 2024	Sep. 30, 2023
Designated as Hedging Instrument
Derivative [Line Items]
Gross Amount of Recognized Assets	[1]	$ 81	$ 3,770
Gross Amount of Recognized Liabilities	[2]	681	0
Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value of Derivatives Not Designated As Hedging Instruments	[1]	100	3,570
Fair Value of Derivatives Not Designated As Hedging Instruments	[2]	$ 1,422	$ 3,158

[1] As of June 30, 2024 and September 30, 2023, current derivative assets are recorded in Other current assets in the Consolidated Balance Sheets.

[2] As of June 30, 2024 and September 30, 2023, current derivative liabilities are recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

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Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Derivative [Line Items]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ 1.7	$ 0.5	$ 1.8	$ 3.4
Maximum | Forward contracts | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, remaining maturity	3 months		3 months
Maximum | Forward contracts | Designated as Hedging Instrument | Net Investment Hedging
Derivative [Line Items]
Derivative, remaining maturity	3 months		3 months

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Derivative Financial Instruments - Schedule of Notional Amounts of Outstanding Forward Contracts and Options (Details) - Not Designated as Hedging Instrument - Foreign Exchange Forward Contract and Options - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Derivative [Line Items]
Notional amount	$ 514,850	$ 523,636
Canadian / U.S. Dollar
Derivative [Line Items]
Notional amount	5,125	5,135
Euro / U.S. Dollar
Derivative [Line Items]
Notional amount	396,345	383,227
British Pound / U.S. Dollar
Derivative [Line Items]
Notional amount	13,460	6,058
Israeli Shekel / U.S. Dollar
Derivative [Line Items]
Notional amount	12,091	11,852
Japanese Yen / U.S. Dollar
Derivative [Line Items]
Notional amount	27,914	4,770
Swiss Franc / U.S. Dollar
Derivative [Line Items]
Notional amount	16,743	32,766
Swedish Krona / U.S. Dollar
Derivative [Line Items]
Notional amount	21,841	35,085
Chinese Renminbi / U.S. Dollar
Derivative [Line Items]
Notional amount	4,209	16,660
New Taiwan Dollar / U.S. Dollar
Derivative [Line Items]
Notional amount	8,915	11,855
Korean Won / U.S. Dollar
Derivative [Line Items]
Notional amount	0	6,157
Danish Krone / U.S. Dollar
Derivative [Line Items]
Notional amount	3,353	6,731
All other
Derivative [Line Items]
Notional amount	$ 4,854	$ 3,340

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Derivative Financial Instruments - Schedule of Derivative Instruments and Hedging Activities Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Derivative Instruments Gain Loss [Line Items]
Gain (loss) recognized in OCI	$ 2,292	$ (521)	$ (2,787)	$ (14,005)
Derivative, Excluded Component, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Nonoperating Income (Expense)	Nonoperating Income (Expense)	Nonoperating Income (Expense)	Nonoperating Income (Expense)
Foreign Exchange Forward Contract and Options | Not Designated as Hedging Instrument
Derivative Instruments Gain Loss [Line Items]
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Nonoperating Income (Expense)	Nonoperating Income (Expense)	Nonoperating Income (Expense)	Nonoperating Income (Expense)
Foreign Exchange Forward Contract and Options | Not Designated as Hedging Instrument | Other income (expense), net
Derivative Instruments Gain Loss [Line Items]
Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged	$ (1,590)	$ (1,006)	$ (6,611)	$ (13,437)
Forward Contracts | Designated as Hedging Instrument | Net Investment Hedging
Derivative Instruments Gain Loss [Line Items]
Gain (loss) recognized in OCI	3,047	(695)	(3,705)	(18,663)
Gain (loss) reclassified from OCI to earnings	0	0	0	0
Gain recognized, excluded portion	$ 946	$ 1,124	$ 3,161	$ 3,272

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Derivative Financial Instruments - Schedule of Notional Amounts of Outstanding Forward Contracts (Details) - Forward Contracts - Designated as Hedging Instrument - Net Investment Hedging - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Derivative [Line Items]
Notional amount	$ 439,011	$ 348,208
Euro / U.S. Dollar
Derivative [Line Items]
Notional amount	429,516	337,923
Japanese Yen / U.S. Dollar
Derivative [Line Items]
Notional amount	$ 9,495	$ 10,285

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Derivative Financial Instruments - Schedule of Offsetting Assets (Details) - Foreign Currency Forwards $ in Thousands	Jun. 30, 2024 USD ($)
Derivative [Line Items]
Gross Amount of Recognized Assets	$ 181
Gross Amounts Offset in the Consolidated Balance Sheets	0
Net Amounts of Assets Presented in the Consolidated Balance Sheets	181
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments	(181)
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received	0
Net Amount	$ 0

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Derivative Financial Instruments - Schedule of Offsetting Liabilities (Details) - Foreign Currency Forwards $ in Thousands	Jun. 30, 2024 USD ($)
Derivative [Line Items]
Gross Amount of Recognized Liabilities	$ 2,103
Gross Amounts Offset in the Consolidated Balance Sheets	0
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets	2,103
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments	(181)
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Pledged	0
Net Amount	$ 1,922

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Income Taxes - Summary of Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
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
Effective income tax rate	(2.00%)	20.00%	16.00%	18.00%

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Income Taxes - Additional Information (Details) $ in Millions	9 Months Ended
	Jun. 30, 2024 USD ($)
Income Tax Disclosure [Line Items]
Non-cash tax expense related to the excess tax benefits	$ 3.6

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Debt - Schedule of Long-term Debt Obligations (Details) - USD ($) $ in Thousands		Jun. 30, 2024	Sep. 30, 2023	Feb. 13, 2020
Debt Instrument [Line Items]
Total debt		$ 1,815,750	$ 1,702,000
Unamortized debt issuance costs for the senior notes	[1]	(4,596)	(6,215)
Total debt, net of issuance costs	[2]	1,811,154	1,695,785
4.000% Senior Notes Due 2028
Debt Instrument [Line Items]
Senior Notes				$ 500,000
3.625% Senior Notes Due 2025
Debt Instrument [Line Items]
Senior Notes				$ 500,000
Long-term Debt | Revolver Credit Facility
Debt Instrument [Line Items]
Payment to credit facility revolver	[3],[4]	322,000	202,000
Long-term Debt | Secured Debt
Debt Instrument [Line Items]
Payment to credit facility revolver	[3],[4]	493,750	500,000
Long-term Debt | 4.000% Senior Notes Due 2028
Debt Instrument [Line Items]
Senior Notes		500,000	500,000
Long-term Debt | 3.625% Senior Notes Due 2025
Debt Instrument [Line Items]
Senior Notes		$ 500,000	$ 500,000

[1] Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt on the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.

[2] As of June 30, 2024, $518.1 million of debt was classified as short term, including $499.3 million associated with the 2025 senior notes and related debt issuance costs and $18.8 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan was classified as short term with the remaining balance classified as long term.

[3] The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. However, if our outstanding 2025 Senior Notes have not been refinanced to mature on or after April 3, 2028 or redeemed by November 16, 2024, all amounts outstanding under the credit facility will become due and payable on November 16, 2024. The term loan began amortizing in March 2024, with payments of $3.1 million remaining in 2024, $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028.

[4] Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.8 million included in Other assets on the Consolidated Balance Sheet as of June 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023.

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Debt - Schedule of Long-term Debt Obligations (Parenthetical) (Details) - USD ($) $ in Thousands		9 Months Ended
		Jun. 30, 2024	Sep. 30, 2023
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense	[1]	$ 4,596	$ 6,215
Long term debt		518,071	9,375
Senior Notes
Debt Instrument [Line Items]
Long term debt		$ 499,300
Line of Credit
Debt Instrument [Line Items]
Credit facility maturity date		Jan. 03, 2028
Secured Debt
Debt Instrument [Line Items]
Long term debt maturity repayments year one		$ 100
Long term debt maturity repayments year two		21,900
Long term debt maturity repayments year three		25,000
Long term debt maturity repayments year four		25,000
Long term debt maturity repayments year five		418,700
Long term debt		18,800	9,400
Other Current Assets | Line of Credit
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense		2,300	2,300
Other Noncurrent Assets | Line of Credit
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense		5,800	$ 7,500
Current portion of long-term debt | Senior Notes
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense		700
Long-term Debt
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense		$ 900

[1] Of the unamortized debt issuance costs for the senior notes, $0.7 million was included in Current portion of long-term debt and $3.9 million was included in Long-term debt on the Consolidated Balance Sheet as of June 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet.

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Debt - Senior Notes - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2024	Feb. 13, 2020
4.000% Senior Notes Due 2028
Debt Instrument [Line Items]
Senior Notes		$ 500.0
Interest rate		4.00%
4.000% Senior Notes Due 2028 | Senior Notes
Debt Instrument [Line Items]
Fair value amount	$ 471.9
3.625% Senior Notes Due 2025
Debt Instrument [Line Items]
Senior Notes		$ 500.0
Interest rate		3.625%
3.625% Senior Notes Due 2025 | Senior Notes
Debt Instrument [Line Items]
Fair value amount	$ 493.6

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Debt - Credit Agreement - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Oct. 02, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Jan. 31, 2023
Debt Instrument [Line Items]
Amount borrowed from credit facility foreign subsidiary		$ 123.0		$ 123.0
Interest rate during period		5.30%	5.20%	5.50%	4.80%
Interest expense		$ 27.8	$ 35.8	$ 94.7	$ 93.7
Servicemax acquisition
Debt Instrument [Line Items]
Interest related to the deferred acquisition payment		10.0		20.0
Deferred acquisition payments	$ 650.0			650.0
Line of Credit
Debt Instrument [Line Items]
Unused commitments under credit facility		928.0		928.0
Amounts available for borrowing		$ 912.1		$ 912.1
Line of Credit | Minimum
Debt Instrument [Line Items]
Credit facility commitment fees percentage				0.175%
Line of Credit | Maximum
Debt Instrument [Line Items]
Credit facility commitment fees percentage				0.325%
Secured Debt
Debt Instrument [Line Items]
Credit facility amount						$ 500.0
Annual rate for borrowings outstanding		6.90%		6.90%
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility amount						$ 1,250.0