PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Twelve Months Ended

September
30,

September
30,

September
30,

September
30,

2023

2022

2023

2022

GAAP gross margin

$

430,764

$

412,395

$

1,656,047

$

1,547,367

Stock-based compensation

5,206

4,110

20,874

22,775

Amortization of acquired intangible assets included in cost of
revenue

9,877

6,568

35,694

25,578

Non-GAAP gross margin

$

445,847

$

423,073

$

1,712,615

$

1,595,720

GAAP operating income

$

121,134

$

146,017

$

458,474

$

447,362

Stock-based compensation

58,891

41,580

206,459

174,863

Amortization of acquired intangible assets

20,547

15,673

75,716

60,548

Acquisition and transaction-related charges

222

1,877

18,706

13,185

Restructuring and other charges (credits), net

(84)

(653)

(460)

36,234

Non-GAAP operating income ⁽¹⁾

$

200,710

$

204,494

$

758,895

$

732,192

GAAP net income

$

45,603

$

106,837

$

245,540

$

313,081

Stock-based compensation

58,891

41,580

206,459

174,863

Amortization of acquired intangible assets

20,547

15,673

75,716

60,548

Acquisition and transaction-related charges

222

1,877

18,706

13,185

Restructuring and other charges (credits), net

(84)

(653)

(460)

36,234

Non-operating charges (credits), net ⁽²⁾

-

(3,408)

5,147

(1,362)

Income tax adjustments ⁽³⁾

19,017

(11,448)

(33,489)

(55,065)

Non-GAAP net income

$

144,196

$

150,458

$

517,619

$

541,484

GAAP diluted earnings per share

$

0.38

$

0.90

$

2.06

$

2.65

Stock-based compensation

0.49

0.35

1.73

1.48

Amortization of acquired intangibles

0.17

0.13

0.63

0.51

Acquisition and transaction-related charges

0.00

0.02

0.16

0.11

Restructuring and other charges (credits), net

(0.00)

(0.01)

(0.00)

0.31

Non-operating charges (credits), net ⁽²⁾

-

(0.03)

0.04

(0.01)

Income tax adjustments ⁽³⁾

0.16

(0.10)

(0.28)

(0.47)

Non-GAAP diluted earnings per share

$

1.20

$

1.27

$

4.34

$

4.58

(2) In FY23, we recognized $4.2 million of financing charges for a debt commitment agreement associated with our acquisition
of ServiceMax. Net credits for FY22 include a $29.8 million gain on the sale of a portion of our PLM services business, a $3.4
million gain on the sale of an asset, and a $3.0 million gain on the sale of an investment, offset by a $34.8 million charge from
the reduction in value of an equity investment in a publicly-traded company.

(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. In FY23, non-GAAP expense excludes $21.8 million related to
a non-cash tax charge .