PTC Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

December 31,

December 31,

2022

2021

GAAP gross margin

$

370,120

$

362,603

Stock-based compensation

4,075

5,972

Amortization of acquired intangible assets included in cost of revenue

6,142

6,493

Non-GAAP gross margin

$

380,337

$

375,068

GAAP operating income

$

104,901

$

62,178

Stock-based compensation

41,504

45,942

Amortization of acquired intangible assets

14,168

14,977

Acquisition and transaction-related charges

5,806

1,050

Restructuring and other charges (credits), net

(338)

33,991

Non-GAAP operating income ⁽¹⁾

$

166,041

$

158,138

GAAP net income

$

75,035

$

46,089

Stock-based compensation

41,504

45,942

Amortization of acquired intangible assets

14,168

14,977

Acquisition and transaction-related charges

5,806

1,050

Restructuring and other charges (credits), net

(338)

33,991

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

525

(9,766)

Income tax adjustments ⁽³⁾

(18,733)

(19,225)

Non-GAAP net income

$

117,967

$

113,058

GAAP diluted earnings per share

$

0.63

$

0.39

Stock-based compensation

0.35

0.39

Amortization of acquired intangibles

0.12

0.13

Acquisition and transaction-related charges

0.05

0.01

Restructuring and other charges (credits), net

(0.00)

0.29

Non-operating charges (credits)

0.00

(0.08)

Income tax adjustments

(0.16)

(0.16)

Non-GAAP diluted earnings per share

$

0.99

$

0.95

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

Three Months Ended

December 31,

December 31,

2022

2021

GAAP operating margin

22.5

%

13.6

%

Stock-based compensation

8.9

%

10.0

%

Amortization of acquired intangibles

3.0

%

3.3

%

Acquisition and transaction-related charges

1.2

%

0.2

%

Restructuring and other charges (credits), net

(0.1)

%

7.4

%

Non-GAAP operating margin

35.6

%

34.5

%

(2) In Q1'23, we recognized a $0.5M financing charge for a debt commitment agreement associated with our
anticipated acquisition of ServiceMax. In Q1'22, we recorded a $9.8 million gain on an 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.