(3) In Q1’18 our effective tax rate was lower than the 24.5% statutory federal income tax rate due, in large part, to our corporate structure in which our foreign taxes are at an effective tax rate lower than the U.S. Additionally, our rate includes a benefit of $7.0M relating to the enactment of the Tax Cuts and Jobs Act.
| PTC Inc. | |||||||||||||
| NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three Months Ended | |||||||||||||
| December 30, | December 31, | ||||||||||||
| 2017 | 2016 | ||||||||||||
| GAAP revenue | $ | 306,644 | $ | 286,327 | |||||||||
| Fair value adjustment of acquired deferred subscription revenue | 117 | 646 | |||||||||||
| Fair value adjustment of acquired deferred services revenue | 246 | 268 | |||||||||||
| Non-GAAP revenue | $ | 307,007 | $ | 287,241 | |||||||||
| GAAP gross margin | $ | 223,686 | $ | 204,212 | |||||||||
| Fair value adjustment of acquired deferred revenue | 363 | 914 | |||||||||||
| Fair value adjustment to deferred services cost | (104 | ) | (113 | ) | |||||||||
| Stock-based compensation | 2,927 | 2,894 | |||||||||||
| Amortization of acquired intangible assets included in cost of revenue | 6,675 | 6,388 | |||||||||||
| Non-GAAP gross margin | $ | 233,547 | $ | 214,295 | |||||||||
| GAAP operating income | $ | 17,472 | $ | 4,561 | |||||||||
| Fair value adjustment of acquired deferred revenue | 363 | 914 | |||||||||||
| Fair value adjustment to deferred services cost | (104 | ) | (113 | ) | |||||||||
| Stock-based compensation | 18,331 | 17,988 | |||||||||||
| Amortization of acquired intangible assets included in cost of revenue | 6,675 | 6,388 | |||||||||||
| Amortization of acquired intangible assets | 7,821 | 8,067 | |||||||||||
| Acquisition-related charges included in general and administrative costs | 7 | 169 | |||||||||||
| Restructuring charges, net | 105 | 6,285 | |||||||||||
| Non-GAAP operating income (1) | $ | 50,670 | $ | 44,259 | |||||||||
| GAAP net income (loss) | $ | 13,877 | $ | (9,141 | ) | ||||||||
| Fair value adjustment of acquired deferred revenue | 363 | 914 | |||||||||||
| Fair value adjustment to deferred services cost | (104 | ) | (113 | ) | |||||||||
| Stock-based compensation | 18,331 | 17,988 | |||||||||||
| Amortization of acquired intangible assets included in cost of revenue | 6,675 | 6,388 | |||||||||||
| Amortization of acquired intangible assets | 7,821 | 8,067 | |||||||||||
| Acquisition-related charges included in general and administrative costs | 7 | 169 | |||||||||||
| Restructuring charges, net | 105 | 6,285 | |||||||||||
| Income tax adjustments (2) | (11,000 | ) | 148 | ||||||||||
| Non-GAAP net income | $ | 36,075 | $ | 30,705 | |||||||||
| GAAP diluted earnings (loss) per share | $ | 0.12 | $ | (0.08 | ) | ||||||||
| Fair value adjustment of acquired deferred revenue | - | 0.01 | |||||||||||
| Stock-based compensation | 0.16 | 0.15 | |||||||||||
| Amortization of acquired intangibles | 0.12 | 0.12 | |||||||||||
| Acquisition-related charges | - | - | |||||||||||
| Restructuring charges, net | - | 0.05 | |||||||||||
| Income tax adjustments | (0.09 | ) | - | ||||||||||
| Non-GAAP diluted earnings per share | $ | 0.31 | $ | 0.26 | |||||||||
| GAAP diluted weighted average shares outstanding | 117,656 | 115,290 | |||||||||||
| Dilutive effect of stock-based compensation plans | - | 1,735 | |||||||||||
| Non-GAAP diluted weighted average shares outstanding | 117,656 | 117,025 | |||||||||||
| (1) | Operating margin impact of non-GAAP adjustments: | ||||||||||||
| Three Months Ended | |||||||||||||
| December 30, | December 31, | ||||||||||||
| 2017 | 2016 | ||||||||||||
| GAAP operating margin | 5.7 | % | 1.6 | % | |||||||||
| Fair value of acquired deferred revenue | 0.1 | % | 0.3 | % | |||||||||
| Fair value adjustment to deferred services cost | 0.0 | % | 0.0 | % | |||||||||
| Stock-based compensation | 6.0 | % | 6.3 | % | |||||||||
| Amortization of acquired intangibles | 4.7 | % | 5.0 | % | |||||||||
| Acquisition-related charges | 0.0 | % | 0.1 | % | |||||||||
| Restructuring charges, net | 0.0 | % | 2.2 | % | |||||||||
| Non-GAAP operating margin | 16.5 | % | 15.4 | % | |||||||||
