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Stock-based Compensation (Tables)

3 Months Ended

Dec. 31, 2021

Share Based Compensation Allocation And Classification In Financial Statements [Abstract]

The following table shows RSU activity for the three months ended December 31, 2021:

(in thousands, except grant date fair value data)	Number of RSUs			Weighted-Average Grant Date Fair Value Per RSU
Balance of outstanding restricted stock units, October 1, 2021		3,216		$	92.83
Granted⁽¹⁾		899		$	117.10
Vested		(1,119	)	$	91.64
Forfeited or not earned		(126	)	$	93.80
Balance of outstanding restricted stock units, December 31, 2021		2,869		$	100.85

(1)	Restricted stock units granted includes 37,000 shares from prior period TSR awards that were earned upon achievement of the performance criteria and vested in November 2021.

Schedule of Number of RSU Awards Granted by Award Type

(in thousands)	Three months ended December 31, 2021
Performance-based RSUs⁽¹⁾		163
Service-based RSUs⁽²⁾		623
Total Shareholder Return RSUs⁽³⁾		76

(1)

The performance-based RSUs were granted to our executives and are eligible to vest based upon annual increasing performance measures over a three-year period. To the extent earned, those performance-based RSUs will vest in three substantially equal installments on November 15, 2022, November 15, 2023 and November 15, 2024, or the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of RSUs can be earned (a maximum aggregate of 152 thousand RSUs).

(2)	The service-based RSUs were granted to employees, including our executive officers. Substantially all service-based RSUs will vest in three substantially equal annual installments on or about the anniversary of the date of grant.

(3)

The Total Shareholder Return RSUs (TSR RSUs) were granted to our executives and are eligible to vest based on the performance of PTC stock relative to the stock performance of an index of PTC peer companies established as of the grant date, as determined at the end of the measurement period ending on September 30, 2024. The RSUs earned will vest on November 15, 2024. Up to a maximum of two times the number of TSR RSUs eligible to be earned for the period (up to a maximum aggregate of 152 thousand RSUs) may vest. If the return to PTC shareholders is negative for the period but still meets or exceeds the peer group indexed return, a maximum of 100% of the TSR RSUs may vest.

Schedule of Valuation Assumptions

The significant assumptions used in the Monte Carlo simulation model were as follows:

Average volatility of peer group	34.67	%
Risk free interest rate	0.81	%
Dividend yield	—	%

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
	December 31, 2021		December 31, 2020
Cost of license revenue	$	38	$	20
Cost of support and cloud services revenue		3,478		2,302
Cost of professional services revenue		2,456		2,112
Sales and marketing		13,081		14,999
Research and development		10,176		8,443
General and administrative		16,713		18,212
Total stock-based compensation expense	$	45,942	$	46,088