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,

2023

2022

2023

2022

GAAP operating income

$

122,539

$

159,190

$

227,440

$

221,368

Stock-based compensation

52,246

37,921

93,750

83,863

Amortization of acquired intangible assets

20,490

14,371

34,658

29,348

Acquisition and transaction-related charges

11,883

3,903

17,689

4,953

Restructuring and other charges (credits), net

1

(1,562)

(337)

32,429

Non-GAAP operating income ⁽¹⁾

$

207,159

$

213,823

$

373,200

$

371,961

GAAP net income

$

63,504

$

89,679

$

138,539

$

135,768

Stock-based compensation

52,246

37,921

93,750

83,863

Amortization of acquired intangible assets

20,490

14,371

34,658

29,348

Acquisition and transaction-related charges

11,883

3,903

17,689

4,953

Restructuring and other charges (credits), net

1

(1,562)

(337)

32,429

Non-operating charges ⁽²⁾

4,622

44,613

5,147

34,847

Income tax adjustments ⁽³⁾

(14,943)

(25,444)

(33,676)

(44,669)

Non-GAAP net income

$

137,803

$

163,481

$

255,770

$

276,539

GAAP diluted earnings per share

$

0.53

$

0.76

$

1.17

$

1.15

Stock-based compensation

0.44

0.32

0.79

0.71

Amortization of acquired intangibles

0.17

0.12

0.29

0.25

Acquisition and transaction-related charges

0.10

0.03

0.15

0.04

Restructuring and other charges (credits), net

0.00

(0.01)

(0.00)

0.27

Non-operating charges ⁽²⁾

0.04

0.38

0.04

0.29

Income tax adjustments ⁽³⁾

(0.13)

(0.22)

(0.28)

(0.38)

Non-GAAP diluted earnings per share

$

1.16

$

1.39

$

2.15

$

2.34

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

Three Months Ended

Six Months Ended

March 31,

March 31,

March 31,

March 31,

2023

2022

2023

2022

GAAP operating margin

22.6

%

31.5

%

22.6

%

23.0

%

Stock-based compensation

9.6

%

7.5

%

9.3

%

8.7

%

Amortization of acquired intangibles

3.8

%

2.8

%

3.4

%

3.0

%

Acquisition and transaction-related charges

2.2

%

0.8

%

1.8

%

0.5

%

Restructuring and other charges (credits), net

0.0

%

(0.3)

%

0.0

%

3.4

%

Non-GAAP operating margin

38.2

%

42.3

%

37.0

%

38.6

%

(2) In the three and six months ended March 31, 2023, we recognized $3.7 million and $4.2 million of financing charges for a
debt commitment agreement associated with our acquisition of ServiceMax, respectively.  In the three and six months ended
March 31, 2022, we recognized non-operating expenses of $44.6 million and $34.9 million due to the reduction in value of an
equity investment in a publicly-traded company, respectively.

(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.