PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Six Months Ended

March 31,

March 31,

March 31,

March 31,

2024

2023

2024

2023

GAAP gross margin

$

493,017

$

428,675

$

933,211

$

798,795

Stock-based compensation

5,034

5,746

10,123

9,821

Amortization of acquired intangible assets included in cost of
revenue

9,584

9,834

19,150

15,976

Non-GAAP gross margin

$

507,635

$

444,255

$

962,484

$

824,592

GAAP operating income

$

179,555

$

122,539

$

298,268

$

227,440

Stock-based compensation

54,191

52,246

113,204

93,750

Amortization of acquired intangible assets

20,008

20,490

39,937

34,658

Acquisition and transaction-related charges

302

11,883

2,808

17,689

Restructuring and other charges (credits), net

(7)

1

(802)

(337)

Non-GAAP operating income ⁽¹⁾

$

254,049

$

207,159

$

453,415

$

373,200

GAAP net income

$

114,445

$

63,504

$

180,832

$

138,539

Stock-based compensation

54,191

52,246

113,204

93,750

Amortization of acquired intangible assets

20,008

20,490

39,937

34,658

Acquisition and transaction-related charges

302

11,883

2,808

17,689

Restructuring and other charges (credits), net

(7)

1

(802)

(337)

Non-operating charges, net ⁽²⁾

2,000

4,622

2,000

5,147

Income tax adjustments ⁽³⁾

(14,586)

(14,943)

(28,624)

(33,676)

Non-GAAP net income

$

176,353

$

137,803

$

309,355

$

255,770

GAAP diluted earnings per share

$

0.95

$

0.53

$

1.50

$

1.17

Stock-based compensation

0.45

0.44

0.94

0.79

Amortization of acquired intangibles

0.17

0.17

0.33

0.29

Acquisition and transaction-related charges

0.00

0.10

0.02

0.15

Restructuring and other charges (credits), net

(0.00)

0.00

(0.01)

(0.00)

Non-operating charges, net ⁽²⁾

0.02

0.04

0.02

0.04

Income tax adjustments ⁽³⁾

(0.12)

(0.13)

(0.24)

(0.28)

Non-GAAP diluted earnings per share

$

1.46

$

1.16

$

2.57

$

2.15

(1) Operating margin impact of non-GAAP adjustments:

Three Months Ended

Six Months Ended

March 31,

March 31,

March 31,

March 31,

2024

2023

2024

2023

GAAP operating margin

29.8

%

22.6

%

25.9

%

22.6

%

Stock-based compensation

9.0

%

9.6

%

9.8

%

9.3

%

Amortization of acquired intangibles

3.3

%

3.8

%

3.5

%

3.4

%

Acquisition and transaction-related charges

0.1

%

2.2

%

0.2

%

1.8

%

Restructuring and other charges (credits), net

0.0

%

0.0

%

(0.1)

%

0.0

%

Non-GAAP operating margin

42.1

%

38.2

%

39.3

%

37.0

%

(2) In Q2'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security. In Q2'23, we recognized
$3.7 million of financing charges for a debt commitment agreement associated with our acquisition of ServiceMax.

(3) Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable
tax rate by jurisdiction to the non-GAAP adjustments listed above. Additionally, in the first six months of FY'24, adjustments
exclude a non-cash tax expense of $3.6 million for a tax reserve related to prior years in a foreign jurisdiction.