PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

June 30,

June 30,

June 30,

June 30,

2024

2023

2024

2023

GAAP gross margin

$

406,723

$

426,488

$

1,339,934

$

1,225,283

Stock-based compensation

5,856

5,847

15,979

15,668

Amortization of acquired intangible assets included in cost of
revenue

9,685

9,841

28,835

25,817

Non-GAAP gross margin

$

422,264

$

442,176

$

1,384,748

$

1,266,768

GAAP operating income

$

95,821

$

109,900

$

394,089

$

337,340

Stock-based compensation

48,038

53,818

161,242

147,568

Amortization of acquired intangible assets

20,357

20,511

60,294

55,169

Acquisition and transaction-related charges

154

795

2,962

18,484

Restructuring and other credits, net

-

(39)

(802)

(376)

Non-GAAP operating income ⁽¹⁾

$

164,370

$

184,985

$

617,785

$

558,185

GAAP net income

$

68,978

$

61,398

$

249,810

$

199,937

Stock-based compensation

48,038

53,818

161,242

147,568

Amortization of acquired intangible assets

20,357

20,511

60,294

55,169

Acquisition and transaction-related charges

154

795

2,962

18,484

Restructuring and other credits, net

-

(39)

(802)

(376)

Non-operating charges, net ⁽²⁾

-

-

2,000

5,147

Income tax adjustments ⁽³⁾

(19,538)

(18,830)

(48,162)

(52,506)

Non-GAAP net income

$

117,989

$

117,653

$

427,344

$

373,423

GAAP diluted earnings per share

$

0.57

$

0.51

$

2.07

$

1.68

Stock-based compensation

0.40

0.45

1.34

1.24

Amortization of acquired intangibles

0.17

0.17

0.50

0.46

Acquisition and transaction-related charges

0.00

0.01

0.02

0.16

Restructuring and other credits, net

-

(0.00)

(0.01)

(0.00)

Non-operating charges, net ⁽²⁾

-

-

0.02

0.04

Income tax adjustments ⁽³⁾

(0.16)

(0.16)

(0.40)

(0.44)

Non-GAAP diluted earnings per share

$

0.98

$

0.99

$

3.54

$

3.14

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

Three Months Ended

Nine Months Ended

June 30,

June 30,

June 30,

June 30,

2024

2023

2024

2023

GAAP operating margin

18.5

%

20.3

%

23.6

%

21.8

%

Stock-based compensation

9.3

%

9.9

%

9.6

%

9.5

%

Amortization of acquired intangibles

3.9

%

3.8

%

3.6

%

3.6

%

Acquisition and transaction-related charges

0.0

%

0.1

%

0.2

%

1.2

%

Restructuring and other credits, net

0.0

%

0.0

%

0.0

%

0.0

%

Non-GAAP operating margin

31.7

%

34.1

%

37.0

%

36.0

%

(2) In the first nine months of FY'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security. In the first nine months of FY'23, we recognized $4.2 million of financing charges for a debt commitment agreement associated with our acquisition of ServiceMax.

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