UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the Fiscal Year Ended: September 30, 2025
 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from_ to_
 Commission File Number: 0-18059

 (Exact name of registrant as specified in its charter)

 Massachusetts

 04-2866152

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification Number)

 121 Seaport Boulevard, Boston, MA 02210
 (Address of principal executive offices, including zip code)
 ( 781) 370-5000
 (Registrant's telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading
 Symbol

 Name of each exchange on which registered

 Common Stock, $.01 par value per share

 PTC

 NASDAQ Global Select Market

 Securities registered pursuant
 to Section 12(g) of the Act: None

 Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
 Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No
 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 Large Accelerated Filer

 Accelerated Filer

 Non-accelerated Filer

 Smaller Reporting Company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
 The aggregate market value of our voting stock held by non-affiliates was approximately $ 18,551,172,440 on March 31, 2025 based on the last reported sale price of our common stock on the Nasdaq Global Select Market on that date. There were 119,925,951 shares of our common stock outstanding on that day and 119,448,261 shares of our common stock outstanding on November 19, 2025.
 DOCUMENTS INCORPORATED BY REFERENCE
 Portions of the definitive Proxy Statement in connection with the 2026 Annual Meeting of Shareholders (2026 Proxy Statement) are incorporated by reference into Part III.

 ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR 2025

 Page

 PART I.

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 PART II.

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

 PART III.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 PART IV.

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Exhibit Index

 Signatures

 APPENDIX A

 Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP, Boston, MA, PCAOB ID: 238)

 Consolidated Financial Statements

 Notes to Consolidated Financial Statements

 Cautionary Note About Forward-Looking Statements
 This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In particular, statements that are not historical facts, including but not limited to, statements about our anticipated financial results, capital development and growth, stock repurchases, our artificial intelligence initiatives, our environmental sustainability initiatives, and the development of our products, markets and workforce, are forward-looking statements. These forward-looking statements are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions, whether in the negative or affirmative. Forward-looking statements are based on our current plans, expectations and assumptions and are not guarantees of future performance. Factors that may cause our actual results to differ materially from these statements include, but are not limited to, the risks and uncertainties discussed in Item 1A. "Risk Factors" and elsewhere throughout this Annual Report. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
 Unless otherwise indicated, all references to a year reflect our fiscal year that ends on September 30.
 Website References
 References to our PTC.com website in this Annual Report and to our 2025 Impact Report, expected to be published in December 2025, are provided for convenience. The content on PTC.com and in our 2025 Impact Report is not incorporated by reference into this Annual Report.
 ITEM 1. Business
 Our Business
 PTC is a global software company headquartered in Boston, Massachusetts. We employ over 7,000 people and support more than 30,000 customers globally.
 We primarily serve customers in the following industry verticals:
 • Industrials

 • Federal, Aerospace and Defense

 • Electronics and High Tech

 • Automotive

 • Medical Technology and Life Sciences

 Our customers are focused on improving their competitiveness in the face of global competition and increasing product complexity, and our suite of software offerings is a strategic enabler of this and their digital transformation initiatives. Given the breadth and openness of our portfolio, we enable the Intelligent Product Lifecycle: establishing a strong product data foundation in the engineering department and democratizing the access and use of that data across the enterprise to drive cross-functional collaboration, accelerate new product introduction timelines, and deliver higher product quality. By embracing the Intelligent Product Lifecycle, our customers establish the quality, consistency, and traceability of product data, ensuring the data is up-to-date, accessible, reliable, and actionable. Our customers can then go on to use this data to break down silos, streamline workflows, and achieve interoperability across departments, functions, and systems. This includes the growing emphasis on AI-driven transformation across our customers' teams, operations, and processes. A product data foundation is the backbone of AI-driven transformation.
 Our business is based on a subscription model and 95% of our 2025 revenue is recurring in nature. Compared to a perpetual license model, our subscription model naturally drives higher customer engagement and retention and provides better business predictability. This, in turn, enables us to make steady and sustained investments to support our customers and pursue mid-to-long-term growth opportunities.
 Our Principal Products and Services
 PLM software products for product data management and process orchestration
 Our Windchill PLM application suite manages all aspects of the product development lifecycle—from concept through service and end-of-life. Windchill provides real-time information sharing, dynamic data visualization, and the ability to collaborate across geographically distributed teams, enabling manufacturers to elevate their product development, manufacturing, field service, and end-of-life processes.
 Our Codebeamer and pure::variantsTM application lifecycle management (ALM) solutions enable companies to accelerate the development of products that contain software, including software-defined products that require multiple software variants to be created and updated over the life of the product.
 Our ServiceMax service lifecycle management (SLM) solution enables companies to improve asset uptime with optimized in-person and remote service, boost technician productivity with the latest mobile tools, and deliver metrics for confident decision making.
 Our Servigistics service parts management solution enables companies to effectively manage their service parts inventory, enabling them to optimize equipment availability and uptime, and increase customer satisfaction.
 Our Arena Software as a Service (SaaS) PLM solution enables product teams to collaborate virtually anytime and anywhere, making it easier to share the latest product and quality information with internal teams and supply chain partners and deliver innovative products to customers faster. Our Arena quality management system software connects quality and product designs into a single system to simplify regulatory compliance.
 CAD software products for product data authoring
 Our Creo 3D CAD technology enables the digital design, testing, and modification of product models. With its design simulation, additive manufacturing, and generative design innovations, we enable our customers to be first to market with differentiated products. From initial concept to design, simulation, and analysis, Creo provides designers with innovative tools to efficiently create better products, faster.

 Our Onshape SaaS product development platform unites computer-aided design with data management, collaboration tools, and real-time analytics. A cloud-native multi-tenant solution that can be instantly deployed on virtually any computer or mobile device, Onshape enables teams to work together from just about anywhere. Real-time design reviews, commenting, and simultaneous editing enable a collaborative workflow where multiple design iterations can be completed in parallel and merged into the final design.
 Our Markets and How We Address Them
 We aim to create value for our customers, increase our Annual Run Rate (ARR) and cash flow, and deliver long-term value for shareholders. We focus our resources and attention on the solutions described above, where we believe we can create the greatest customer value.
 Our growth is primarily driven by existing customers that continue to upgrade and expand their PTC footprint, multi-product adoption by customers, our commercial optimization initiatives, and new customers.
 Approximately 75% of our sales are from products and services sold directly by our sales force to end-user customers. The rest of our sales of products and services are through third-party resellers. In general, our sales force focuses on large accounts, while our reseller channel provides a cost-effective means of covering the small- and medium-size business markets. Our strategic reseller and software partners enable us to increase our market reach, offer broader solutions, and add compelling technology to our offerings. Our strategic services partners provide service offerings to help customers implement our product offerings and transition to SaaS.
 Additional financial information about our international and domestic operations may be found in Note 3. Revenue from Contracts with Customers of Notes to Consolidated Financial Statements in this Annual Report, which information is incorporated herein by reference.
 Competition
 We compete with a number of companies whose offerings address one or more specific functional areas covered by our solutions. For enterprise CAD and PLM solutions, we compete with large established companies including Autodesk, Dassault Syst mes SA, and Siemens AG. For our ALM products, we compete with IBM, Jama Software, Inc. and Siemens AG. For our SLM products, we compete with enterprise software companies such as Oracle, SAP, IFS AB, Microsoft, and Salesforce, and with companies that offer point solutions.
 Proprietary Rights
 Our software products and related technical know-how, along with our trademarks, including our company names, product names and logos, are proprietary. We protect our intellectual property rights in these items by relying on copyrights, trademarks, patents and common law safeguards, including trade secret protection. The nature and extent of such legal protection depends in part on the type of intellectual property right and the relevant jurisdiction. In the U.S., we are generally able to maintain our trademark registrations for as long as the trademarks are in use and to maintain our patents for up to 20 years from the earliest effective filing date. We also use license management and other anti-piracy technology measures, as well as contractual restrictions, to curtail the unauthorized use and distribution of our products.
 Our proprietary rights are subject to the risks and uncertainties described under Item 1A. Risk Factors, II. Risks Related to Our Intellectual Property below, which is incorporated into this section by reference.

 Environmental Sustainability
 At PTC, we're working to contribute to the decarbonization and circularity of global manufacturing. While we have a climate action plan committed to reducing our company's "footprint," we believe far larger benefits will flow from our "handprint" stemming from our software offerings, which enable manufacturers to design, build, and service their products more sustainably.
 Footprint
 Our emission reduction plan is validated by the Science Based Targets initiative (SBTi). Our near-term commitment is to reduce by 2030 combined Scope 1 (direct emissions from owned/controlled operations) and Scope 2 (indirect energy use) emissions by 50% and reduce Scope 3 - Category 1 (Purchased Goods and Services) by 25% compared to our 2022 baseline. Our long-term net-zero commitment is to reach net-zero across all scope emissions by 2050, with absolute reductions of over 90% across Scopes 1-3, with accredited carbon removal offsets for the remaining 10% (or less) as needed.
 We have already begun to implement programs and pursue initiatives to reduce our emissions and carbon footprint, including:
 • entering into a Virtual Power Purchase Agreement (VPPA);

 • prioritizing energy efficiency and accessibility to public transportation when selecting office space; and

 • providing a subsidy for employees' public transportation commute costs.

 Handprint
 Environmental sustainability is integral to our product offerings. With our software, manufacturers can support their sustainability and compliance initiatives, including by designing with less material, enhancing product repairability and circularity, improving factory efficiency, and enabling remote service.
 In preparation for our sustainability reporting obligations, we conducted an enterprise-wide double materiality assessment to assess our sustainability risks and opportunities. As part of our assessment, we identified financially material opportunities related to consumer demand for software solutions that enable the mitigation of climate change and support the transition to a circular economy. While these opportunities cannot yet be quantified to a reasonable degree of certainty, additional qualitative information about these opportunities can be found in our 2025 Impact Report, which we expect to release in December 2025 in compliance with California's Climate-Related Financial Risk Act.

 People and Culture
 Within our work environment, we seek to create an inclusive culture in which all employees can thrive. This is a key aspect of our talent strategy. Our approach is focused on promoting an agile culture, an increased sense of belonging, engaged work environments, and high-performing teams.

 PTC at-a-Glance
 As of September 30, 2025, PTC had 7,642 full-time employees. Our employee population is geographically diverse and serves a geographically diverse customer and partner network.

 Compensation and Benefits
 PTC provides a comprehensive and competitive compensation and benefits package designed to attract, retain, motivate, and engage talent around the world, including base salaries, and, for eligible roles, incentive and equity compensation. Employees also have the opportunity to purchase PTC stock at a discount through our Employee Stock Purchase Plan in eligible jurisdictions.
 Our benefit offerings are designed to meet the needs of our employees and their families around the world. Specific offerings differ country by country due to cultural norms, market dynamics, and legal requirements, but we provide a wide variety of core health and financial programs such as healthcare, life and disability insurance, employee assistance plans, retirement savings and pension benefit plans, and generous paid family leave and vacation time.
 Talent Development & Employee Engagement
 As we focus on enhancing the employee experience, we are increasing our efforts to invest in our people and create meaningful opportunities to learn, grow, develop, and advance their careers. We have development programs and coaching programs, as well as numerous other self-led learning paths. The variety of options means that employees have the ability to focus on the development path most meaningful to them.
 Our Culture
 We are committed to building a strong and inclusive workforce. We review and revise our practices and processes based on feedback and engagement scores from employee pulse surveys. We also integrate inclusive and thoughtful practices into the planning and execution of how we attract, select, develop, and retain talent.
 Additional Information About Our Employee Initiatives
 You can find more information about our employee initiatives in our 2025 Impact Report, which we expect to release in December 2025.
 Available Information
 We make available free of charge on our website at www.ptc.com the following reports as soon as reasonably practicable after electronically filing them with, or furnishing them to, the SEC: our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our Current Reports on Form 8-K; and amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934. Our Proxy Statements for our Annual Meetings and Section 16 trading reports on SEC Forms 3, 4 and 5 also are available on our website.
 Corporate Information
 PTC was incorporated in Massachusetts in 1985 and is headquartered in Boston, Massachusetts.

 ITEM 1A. Risk Factors
 The following are important factors we have identified that could affect an investment in our securities. You should consider them carefully when evaluating an investment in PTC securities, because these factors could cause actual results to differ materially from historical results or any forward-looking statements. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, operating results, and prospects.
 I. Risks Related to Our Business Operations and Industry
 We face significant competition, which could adversely affect our business, financial condition, operating results, and prospects if we are unable to successfully compete.
 The markets for our products and solutions are rapidly changing and characterized by intense competition, disruptive technology developments, evolving distribution models and increasingly lower barriers to entry. If we are unable to provide products and solutions that address customers' needs as well as our competitors' products and solutions do, or to align our pricing, licensing and delivery models with customer preferences, we could lose customers and/or fail to attract new customers, which could adversely affect our business, financial condition, operating results, and prospects.
 For example, customer demand for SaaS solutions is increasing. While our Arena, ServiceMax, and Onshape solutions are cloud-native SaaS solutions, and we have introduced our Windchill+ and Creo+ SaaS solutions, customers may not adopt them as we expect. If we are unable to compete successfully with competitors offering SaaS solutions, we could lose customers and/or fail to attract new customers, which could adversely affect our business, financial condition, operating results, and prospects.
 Our current and potential competitors range from large and well-established companies to emerging start-ups. Some of our competitors and potential competitors have greater name recognition in the markets we serve and more financial, technical, sales and marketing, and other resources, which could limit our ability to gain customer recognition and confidence in our products and solutions and successfully sell our products and solutions, which could adversely affect our ability to grow our business.
 A breach of security in our products or computer systems, or those of our third-party service providers, could compromise the integrity of our products, cause loss of data, harm our reputation, create additional liability and adversely affect our business, financial condition, operating results, and prospects.
 We have implemented and continue to implement measures intended to maintain the security and integrity of our products, source code and IT systems. The potential for a security breach or system disruption has significantly increased over time as the scope, number, intensity and sophistication of attempted cyberattacks and cyber intrusions have increased – particularly cyberattacks and intrusions designed to access and exfiltrate information and to disrupt and lock up access to systems for the purpose of demanding a ransom payment. It is impossible for us to eliminate the risk of a successful cyberattack or intrusion, and, in fact, we regularly deal with security issues and have experienced security incidents from time to time. Accordingly, there is a risk that a cyberattack or intrusion will be successful and that such event will be material.
 In addition, we offer cloud services to our customers and some of our products, including our SaaS products, are hosted by third-party service providers, which expose us to additional risks as those repositories of our customers' proprietary data may be targeted and a cyberattack or intrusion may be successful and material. Interception of data transmission, misappropriation or modification of data, corruption of data and attacks against our service providers may adversely affect our products or product and service delivery. Malicious code, viruses or vulnerabilities that are undetected by us or our service providers may disrupt our business operations generally and may have a disproportionate effect on our products that are developed and delivered in the cloud environment.

 While we devote resources to maintaining the security and integrity of our products and systems, as well as performing due diligence of our third-party service providers, security breaches that have not had a material effect on our business or that of our customers have occurred, and we will continue to face cybersecurity threats and exposure. A significant breach of the security and/or integrity of our products or systems, or those of our third-party service providers, whether intentional or by human error by our employees or others, could disrupt our business operations or those of our customers, could prevent our products from functioning properly, could enable access to our sensitive, proprietary or confidential information or that of our customers. This could require us to incur significant costs of investigation, remediation and/or payment of a ransom; harm our reputation; cause customers to stop buying our products; and cause us to face lawsuits and potential liability, any of which could have a material adverse effect on our business, financial condition, operating results, and prospects.
 We have a large ecosystem of strategic, technology, and software partners and system integrators that enable us to enhance our products and offerings, expand our market reach, and accelerate our customers' digital transformation journeys. Failures by those partners or termination of those relationships could adversely affect our business, financial condition, operating results, and prospects.
 We have many strategic, technology, and software partner and system integrator relationships with other companies that provide technologies and software that we embed in our solutions, that provide implementation services to our customers, that we work with to offer complementary solutions and services, and that market and sell our solutions. If these companies fail to perform as we expect, or if a company terminates or substantially alters the terms of the relationship, we could experience delays in product development, reduced or delayed sales, customer dissatisfaction, incur additional expenses, and our business, financial condition, results of operations, and prospects could be materially adversely affected.
 We increasingly rely on third-party providers of cloud infrastructure services to deliver our offerings to users on our platform, and any disruption of or interference with our use of these services could adversely affect our business, financial condition, operating results, and prospects.
 Our continued growth depends in part on the ability of our existing and potential customers to use and access our cloud services or our website in order to download our software or encrypted access keys for our software within an acceptable amount of time. We use a number of third-party service providers that we do not control for key components of our infrastructure, particularly with respect to development and delivery of our cloud-based products. The use of these service providers gives us greater flexibility in efficiently delivering a more tailored, scalable customer experience, but also exposes us to additional risks and vulnerabilities. Third-party service providers operate their own platforms that we access, and we are, therefore, vulnerable to their service interruptions. We may experience interruptions, delays and outages in service and availability from time to time as a result of problems with our third-party service providers' infrastructure. Lack of availability of this infrastructure could be due to a number of potential causes including technical failures, natural disasters, fraud, and/or security attacks that we cannot predict or prevent. Such outages could adversely impact our business, financial condition, results of operations, and prospects.
 If we are unable to renew our agreements with our cloud service providers on commercially reasonable terms, or any of our agreements are prematurely terminated, or we need to add new cloud services providers to increase capacity and uptime, we could experience interruptions, downtime, delays, and additional expenses related to transferring to and providing support for these new platforms. Any of the above circumstances or events may harm our reputation and brand, reduce the availability or usage of our platforms and impair our ability to attract new users, any of which could adversely affect our business, financial condition, results of operations, and prospects.

 We may be unable to hire or retain employees with the necessary skills to operate and grow our business, which could adversely affect our ability to compete and adversely affect our business, financial condition, results of operations, and prospects.
 Our success depends upon our ability to attract and retain highly skilled employees to develop and sell our products and solutions and to operate and grow our business. Competition for such employees in our industry is intense worldwide.
 If we are unable to attract and retain employees with the requisite skills to develop and sell our products and solutions, or to guide, operate and support our business, we may be unable to compete successfully, which would adversely affect our business, financial condition, results of operations, and prospects.
 We depend on sales within the discrete manufacturing sector and our business could be adversely affected if manufacturing activity does not grow or if it contracts, or if manufacturers are adversely affected by other macroeconomic factors.
 A large amount of our sales are to customers in the discrete manufacturing sector. Manufacturers worldwide continue to face uncertainty about the global macroeconomic environment due to, among other factors, the effects of recently imposed import tariffs and threats of additional import tariffs, the effects of earlier and ongoing supply chain disruptions, high interest rates and inflation, volatile foreign exchange rates and the current relative strength of the U.S. Dollar, and the U.S. government's focus on technology transactions with non-U.S. entities. Customers may delay, reduce, or forego purchases of our solutions due to these challenges and concerns, which could adversely affect our business, financial condition, results of operations, and prospects.
 If we fail to successfully develop competitive SaaS solutions and to transform our operations to support the sale of SaaS solutions, our business and prospects could be adversely affected.
 Transforming our business to offer and support SaaS solutions requires considerable additional investment in our organization. Whether we will be successful and will accomplish our business and financial objectives is subject to risks and uncertainties, including but not limited to: our ability to include functionality and usability in such offerings that address customer requirements, our ability to further develop and scale infrastructure, our ability and the ability of our partners to transition existing customer implementations to SaaS, customer demand, attach and renewal rates, channel adoption, and our costs. If we are unable to successfully establish these new offerings and navigate our business transition, our business, financial condition, results of operations, and prospects could be adversely affected.
 Because our sales and operations are globally dispersed, we face additional compliance risks, and any compliance failure could adversely affect our business and prospects.
 We sell and deliver software and services and maintain support operations in many countries whose laws and practices differ from one another and are subject to unexpected changes. Managing these geographically dispersed operations requires significant attention and resources to ensure compliance with laws of those countries and those of the U.S. governing our activities in non-U.S. countries.
 Those laws include, but are not limited to, anti-corruption laws and regulations (including the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act 2010), data privacy laws and regulations (including the European Union's General Data Privacy Regulation), and trade and economic sanctions laws and regulations (including laws administered by the U.S. Department of the Treasury's Office of Foreign Assets Control, the U.S. State Department, the U.S. Department of Commerce, the United Nations Security Council and other sanctions authorities). Our compliance risks are heightened due to the go-to-market approach for our business that relies heavily on a partner ecosystem, the fact that some of the countries we operate in have a higher incidence of corruption and fraudulent business practices, the fact that we sell to governments and state-owned business enterprises, and the fact that global enforcement of laws has significantly increased.

 Accordingly, while we strive to maintain a comprehensive compliance program, an employee, agent or business partner may violate our policies or U.S. or other applicable laws, as has occurred in the past, or we may inadvertently violate such laws. Investigations of alleged violations of those laws can be expensive and disruptive. Violations of such laws can lead to civil and/or criminal prosecutions, substantial fines and other sanctions, including the revocation of our rights to continue certain operations, and also cause business loss and reputational harm, which could adversely affect our business, financial condition, results of operations, and prospects.
 We and our customers are subject to an increasing number of laws and regulations enacted by multiple countries and jurisdictions that require new and extensive disclosures on sustainability topics, and, in some cases, remediation of adverse effects. This evolving regulatory environment will increase our compliance costs and expose us to risks associated with regulatory compliance.
 The regulatory landscape for sustainability disclosures continues to evolve and expand and impose greater disclosure obligations on us. These laws and regulations include the European Union's Corporate Sustainability Reporting Directive ("CSRD") and Corporate Sustainability Due Diligence Directive ("CSDDD"), and California's Climate Corporate Data Accountability Act and Climate-Related Financial Risk Disclosure Act. These frameworks require extensive disclosures related to sustainability risks and opportunities. Additionally, the CSDDD will require us to conduct due diligence to identify, prevent, mitigate, and account for actual and potential adverse impacts on human rights and the environment arising from our operations and those of our customers and suppliers, and to remediate such impacts. Compliance with these laws and regulations requires significant investment in resources, including the implementation of new reporting systems, enhanced data collection processes, and robust due diligence procedures.
 Many of our customers and potential customers are also subject to these laws and directives. As a result, those companies will be required to assess our sustainability efforts and impacts. If we are unable to satisfactorily address their requests for information or other sustainability-related requirements or expectations, customers may reduce or terminate their contracts with us and customers and potential customers may choose alternative software solutions, which could adversely affect our business, financial condition, results of operations, and prospects.
 The regulatory landscape for sustainability disclosures and obligations continues to evolve and expand, and additional laws or regulatory requirements may impose further compliance burdens on us and further increase our compliance and operating costs.
 We are subject to increasing, evolving, and conflicting expectations and scrutiny with respect to our sustainability disclosures and initiatives. Failure to meet stakeholder expectations or actual or perceived inconsistencies or inaccuracies in our sustainability disclosures could result in reputational harm, regulatory investigations, or litigation.
 Expectations around environmental, social, governance and other sustainability matters continue to evolve rapidly, and stakeholders – including investors, customers, employees, and regulators – are increasingly focused on our sustainability disclosures and performance against targets. If we fail, or are perceived to have failed, to make progress on our stated sustainability targets or initiatives, or if our sustainability initiatives or disclosures are or are perceived to be inadequate, inaccurate, misleading, or unlawful, our reputation could be harmed, and we could face regulatory investigations, enforcement actions, fines, penalties, and litigation, any of which could adversely affect our business, financial condition, results of operations, and prospects. Additionally, differing stakeholder views on sustainability priorities may create tension or conflict, which could adversely affect our reputation, employee morale, or investor relations.

 Our use of artificial intelligence ("AI") technology and the incorporation of AI technology into our products carries risks and challenges that could adversely affect our business, financial condition, results of operations, and prospects.
 We are increasingly incorporating AI capabilities into many of our products to enable our customers to become more agile and productive. The integration of AI into our products presents risks and challenges, including that we may be unable to integrate AI technologies into our products when or as we expect, that our customers do not appreciate or realize the anticipated benefits of such technologies, that competitors may incorporate AI into their products more quickly or effectively, that our AI-based solutions could produce inaccurate results or have other unintended consequences, or that our AI-based solutions may expose us to lawsuits, regulatory investigations, or other proceedings, and subject us to legal liability as well as brand and reputational harm, all of which could negatively affect our business, financial condition, results of operations, and prospects.
 We also use AI tools internally to make certain business processes more efficient. While these technologies offer significant benefits, they also create risks and challenges. Although we implement measures to address the accuracy and appropriate use of AI tools, including internal AI policies and training, these efforts may not always be successful. Inadvertent selection of AI tools that introduce bias, errors, or hallucinations, as well as any failure by our employees, contractors, or partners to adhere to our AI policies, or inappropriate use of AI, could result in violations of confidentiality obligations, laws, or regulations, jeopardize our intellectual property rights, or expose our products or business systems to defects and malware, any of which could adversely affect our business, financial condition, results of operations, and prospects.
 II. Risks Related to Our Intellectual Property
 We may be unable to adequately protect our proprietary rights, which could adversely affect our competitive position, business and prospects.
 Our software products are proprietary. We protect our intellectual property rights in these items by relying on copyrights, trademarks, patents, and common law safeguards, including trade secret protection, as well as restrictions on disclosures and transferability contained in our agreements with other parties. Despite these measures, the laws of all relevant jurisdictions may not afford adequate protection to our software products and other intellectual property. In addition, we frequently encounter attempts by individuals and companies to pirate our software. If our measures to protect our intellectual property rights fail, others may be able to use those rights, which could reduce our competitiveness and adversely affect our business, financial condition, operating results, and prospects.
 Any legal action to protect our intellectual property rights that we may bring or be engaged in could be expensive, divert management's attention from regular operations, and lead to additional claims against us, and we may not prevail, any of which could adversely affect our business, financial condition, operating results, and prospects.
 Many of our products and services incorporate or depend on open source software components, which are governed by various open source licenses. Some of these licenses may require, as a condition of use, modification, or distribution, that we make available the source code of our proprietary software or derivative works. While we maintain policies and procedures designed to monitor and control the use of open source software in our products and in any third-party software that is incorporated into our products, and ensure compliance with applicable licenses, these controls may not be effective in all cases. If we inadvertently use open source software in a manner that triggers such disclosure obligations, we could be required to publicly disclose portions of our proprietary code, which could result in a loss of competitive advantage and intellectual property rights, which could adversely affect our business, financial condition, operating results, and prospects.

 Intellectual property infringement claims could be asserted against us, which could be expensive to defend, could result in limitations on our use of the claimed intellectual property, and could adversely affect our business and prospects.
 The software industry is characterized by frequent litigation regarding copyright, patent and other intellectual property rights. We have faced such lawsuits from time to time. Any such claim could result in significant expense to us and divert the efforts of our technical and management personnel. We cannot be sure that we would prevail against any such asserted claims. If we did not prevail, we could be prevented from using the claimed intellectual property or be required to enter into royalty or licensing agreements, which might not be available on terms acceptable to us. In addition to possible claims with respect to our proprietary products, some of our products contain technology developed by and licensed from third parties and we may likewise be susceptible to infringement claims with respect to these third-party technologies.
 III. Risks Related to Acquisitions and Divestitures
 Businesses we acquire may not generate the sales and earnings we anticipate and may otherwise adversely affect our business and prospects.
 We have acquired, and intend to continue to acquire, new businesses and technologies. If we fail to successfully integrate and manage the businesses and technologies we acquire, if an acquisition does not further our business strategy or return a level of sales as we expect, or if a business we acquire has unexpected legal or financial liabilities, our business, financial condition, results of operations, and prospects could be adversely affected.
 The types of issues that we may face in integrating and operating the acquired business include:
 • difficulties managing an acquired company's technologies or lines of business or entering new markets where we have limited or no prior experience or where competitors may have stronger market positions;

 • unanticipated operating difficulties in connection with the acquired entities, including potential declines in sales of the acquired entity;

 • complications relating to the assumption of pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business;

 • litigation arising from the transaction, including potential intellectual property claims or disputes following an acquisition;

 • diversion of management and employee attention;

 • challenges with implementing adequate and appropriate controls, procedures and policies in an acquired business;

 • potential loss of key personnel in connection with an acquisition; and

 • potential incompatibility of business cultures.

 Further, if we do not achieve the expected return on our investments, it could impair the intangible assets and goodwill that we recorded as part of an acquisition, which could require us to record a reduction in the value of those assets.

 Divestitures of businesses or assets may not achieve the intended strategic or financial benefits and may otherwise adversely affect our business and prospects.
 We have divested, and may in the future divest, businesses, product lines, or other assets as part of our ongoing business strategy. If we fail to successfully execute and manage these divestitures, if a divestiture does not yield the anticipated financial or operational benefits, or if the businesses or assets we divest have unexpected legal, financial, or operational liabilities, our business, financial condition, results of operations, and prospects could be adversely affected.
 The types of issues that we may face in connection with divestitures include:
 • difficulties separating the operations, technologies, or personnel of the business to be divested from our ongoing operations;

 • disruption to our remaining business, including loss of revenue or customers associated with the divested business or asset;

 • unanticipated costs or liabilities, including indemnification obligations, retained liabilities, or disputes with purchasers;

 • diversion of management and employee attention from ongoing operations;

 • challenges in reallocating resources and personnel following the divestiture;

 • potential loss of key personnel who may leave as a result of the transaction;

 • adverse impacts on our relationships with customers, partners, or suppliers;

 • potential incompatibility of business cultures or systems during transition; and

 • litigation arising from the transaction, including disputes over purchase price adjustments, indemnities, or other contractual terms.

 Further, if investors or analysts do not like or understand the divestiture or if they believe we did not receive a fair price for the business or assets, they may sell their shares or alter their view of our prospects, which could cause our share price to decline.
 We may incur significant debt or issue a material amount of debt or equity securities to finance an acquisition, which could adversely affect our operating flexibility, business and prospects.
 If we were to incur a significant amount of debt—whether by borrowing funds under our credit facility or otherwise or issuing new debt securities—to finance an acquisition, our interest expense, debt service requirements and leverage would increase significantly. The increases in these expenses and in our leverage could constrain our ability to operate as we might otherwise or to borrow additional amounts and could adversely affect our business, financial condition, results of operations, and prospects.
 If we were to issue a significant amount of equity securities in connection with an acquisition, existing shareholders would be diluted and our stock price could decline.

 IV. Risks Related to Our Indebtedness
 Our substantial indebtedness could adversely affect our business, financial condition, results of operations, and prospects, as well as our ability to meet our payment obligations under our debt.
 We have a substantial amount of indebtedness. As of November 21, 2025, our total debt outstanding was approximately $1,270 million, $500 million of which was associated with the 4.000% senior notes issued in February 2020, which mature in February 2028 and are unsecured ("2028 Notes"); $301 million of which was borrowed under our credit facility revolving line, which matures in January 2028; and $469 million of which was borrowed under our credit facility term loan (which began amortizing in March 2024). All amounts outstanding under the credit facility and the 2028 Notes will be due and payable in full on their respective maturity dates. As of November 21, 2025, we had unused commitments under our credit facility of approximately $949 million. PTC Inc. and one of our foreign subsidiaries are eligible borrowers under the credit facility and certain other foreign subsidiaries may become borrowers under our credit facility in the future, subject to certain conditions.
 Specifically, our level of debt could:
 • make it more difficult for us to satisfy our debt obligations and other ongoing business obligations, which may result in defaults;

 • result in an event of default if we fail to comply with the financial and other covenants contained in the agreements governing our debt instruments, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses;

 • limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

 • reduce the availability of our cash to fund working capital, capital expenditures, acquisitions and other general corporate purposes and limit our ability to obtain additional financing for these purposes;

 • increase our vulnerability to adverse economic and industry conditions;

 • amplify the risk of increased interest rates as certain of our borrowings, including borrowings under our credit facility, are at variable rates of interest;

 • limit our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industries in which we operate, and the overall economy; and

 • place us at a competitive disadvantage compared to other, less leveraged competitors.

 Any of the above-listed factors could have an adverse effect on our business, financial condition, results of operations, and prospects, and our ability to meet our payment obligations under our debt agreements.

 Despite our current level of indebtedness, we and our subsidiaries might incur substantially more debt and other obligations. This could further exacerbate the risks to our business, financial condition, and prospects described above.
 We and our subsidiaries might incur significant additional indebtedness and other obligations in the future, including secured debt. Although the credit agreement governing our credit facility contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions. The additional indebtedness incurred in compliance with these restrictions could be substantial. In addition, the credit agreement and the indenture governing our senior notes due 2028, will not prevent us from incurring obligations that do not constitute indebtedness. If new debt is added to our current debt levels, or we incur other obligations, the related risks that we now face could increase.
 We may not be able to generate enough cash to service all our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful, and could harm our business and prospects.
 Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors, some of which are beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
 If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Our debt agreements restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
 Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our ability to satisfy our debt obligations.
 If we cannot make scheduled payments on our debt, we will be in default and the lenders under our credit facility could terminate their commitments to loan money, the lenders could foreclose against the assets securing their borrowings, the holders of our 2028 Notes could declare all outstanding principal, premium, if any, and interest to be due and payable, and we could be forced into bankruptcy or liquidation. These events could result in a loss of your investment.

 We are required to comply with certain financial and operating covenants under our debt agreements. Any failure to comply with those covenants could cause amounts borrowed to become immediately due and payable and/or prevent us from borrowing under the credit facility.
 We are required to comply with specified financial and operating covenants under our debt agreements and to make payments under our debt, which limit our ability to operate our business as we otherwise might operate it. Our failure to comply with any of these covenants or to meet any debt payment obligations could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and/or unpaid fees, becoming immediately due and payable. We might not have enough working capital or liquidity to satisfy any repayment obligations if those obligations were accelerated. In addition, if we are not in compliance with the financial and operating covenants under the credit facility when we wish to borrow funds, we will be unable to borrow funds to pursue certain corporate initiatives, including strategic acquisitions, which could adversely affect our business and prospects.
 V. Risks Related to Our Common Stock
 Our stock price has been volatile, which may make it harder to resell shares at a favorable time and price.
 Market prices for securities of software companies are generally volatile and are subject to significant fluctuations that may be unrelated or disproportionate to the operating performance of these companies. Accordingly, the trading prices and valuations of software companies' stocks, and of ours, may not be predictable. Negative changes in the public's perception of the prospects of software companies, or of PTC or the markets we serve, could depress our stock price regardless of our operating results.
 Also, a large percentage of our common stock is held by institutional investors. Purchases and sales of our common stock by these investors could have a significant impact on the market price of our stock.
 If our results of operations do not meet market or analysts' expectations, our stock price could decline.
 Our quarterly operating results fluctuate depending on many factors, including the effect of ASC 606 on revenue recognition for the on-premises software subscriptions we offer, variability in the timing of start dates for our subscription offerings, length of contracts, and renewals, and significant unexpected expenses in a quarter. Accordingly, our quarterly results are difficult to predict and we may be unable to confirm or adjust expectations with respect to our operating results for a quarter until that quarter has closed. If our quarterly operating results do not meet market or analysts' expectations, our stock price could decline.
 VI. General Risk Factors
 Our international businesses present economic and operating risks, which could adversely affect our business and prospects.
 We expect that our international operations will continue to expand and to account for a significant portion of our total revenue. Because we transact business in various foreign currencies, the volatility of foreign exchange rates has had and may in the future have a material adverse effect on our revenue, expenses, cash flows and operating results.
 Other risks inherent in our international operations include, but are not limited to, the following:
 • difficulties in staffing and managing foreign sales and development operations;

 • exposure of our operations and employees to political instability and armed conflict in the countries and regions in which we operate, including Israel;

 • increased financial accounting and reporting burdens and complexities;

 • increased regulatory and compliance risks;

 • inadequate local infrastructure; and

 • greater difficulty in protecting our intellectual property.

 We may have exposure to additional tax liabilities and our effective tax rate may increase or fluctuate, which could increase our income tax expense, reduce our net income, and increase our tax payment obligations.
 As a multinational organization, we are subject to income taxes as well as non-income based taxes in the U.S. and in various foreign jurisdictions. Significant judgment is required in determining our worldwide income tax provision and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. Our tax returns are subject to review by various taxing authorities. Although we believe that our tax estimates are reasonable, the final determination of tax audits or tax disputes could be different from what is reflected in our reported income tax provisions and accruals.
 Our effective tax rate and tax payment obligations can be adversely affected by several factors, many of which are outside of our control, including:
 • changes in tax laws regulations, and interpretations in multiple jurisdictions in which we operate;

 • assessments, and any related tax interest or penalties, by taxing authorities;

 • changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

 • changes to the financial accounting rules for income taxes;

 • unanticipated changes in tax rates; and

 • changes to a valuation allowance on net deferred tax assets, if any.

 ITEM 1B. Unresolved Staff Comments
 None.
 Item 1C. Cybersecurity
 We are subject to various cybersecurity risks in connection with our business. For more information on our cybersecurity related risks, see Item 1A. Risk Factors, I. Risks Related to Our Business Operations and Industry of this Annual Report.
 Our Approach
 We take a holistic, multi-layered approach to cybersecurity and privacy that combines traditional Defense-in-Depth methods with next-generation Zero Trust principles. In developing our cybersecurity risk management program, we are informed by industry benchmarks and standards, including the cybersecurity framework created by the National Institute of Standards and Technology ("NIST") and the Software Assurance Maturity Model developed by the OWASP (the "OWASP SAMM"). We also have various security-related certifications and authorizations, including ISO 27001, SOC 2 Type II and FedRAMP, for certain of our products and services.
 People. Recognizing that technology alone cannot mitigate all security threats, we focus on developing our most critical resource: our people. Our corporate cybersecurity awareness activities are combined with enterprise-wide and department-specific tools and mandatory employee training, providing our employees with knowledge and resources to support our efforts to mitigate security threats.

 Process. We maintain processes and policies to try to anticipate security risks and facilitate compliance with applicable contractual obligations, regulations, and standards, as well as address any incidents or violations. We focus on continuous improvement and constantly mature our processes to keep pace with the rapidly evolving cybersecurity threat landscape.
 Technology. We seek to automate processes and remove the potential for human error to the extent feasible by implementing technology solutions. From fundamental IT security to development of our software products and keeping our customers' data safe, we aim to maintain a secure infrastructure that is appropriately monitored for possible threats.
 These three key elements of people, process, and technology are tightly interwoven to support our aim to secure our environments and the data for which we are a custodian.
 Governance
 Cybersecurity is a risk area with oversight at the highest levels of the organization, including the Executive and Board Level. The overall operational program is led by the Cybersecurity Strategy Council, a cross-functional team of executives and subject matter experts, led by our Chief Product Security Officer, Chief Information Security Officer and Chief Compliance Officer. The Cybersecurity Strategy Council oversees a "Three Lines Model" of Operations, Risk Monitoring and Oversight, and Audit, to effectively address cybersecurity, risk management, and control. All Cybersecurity, Risk, and Internal Audit functions report to the PTC Executive Leadership Team.
 We provide regular updates on our cybersecurity strategic plans, programs, and initiatives to the Cybersecurity Committee of the Board of Directors at its four regularly scheduled meetings per year. Our Incident Response Plans provide for notice, and continued updates, to the Cybersecurity Committee of applicable incidents on a timely basis.

 Risk Assessment
 We conduct an annual cybersecurity maturity assessment. Periodically, we engage a third-party security consulting firm to conduct an Enterprise Security Maturity Assessment. This independent assessment provides a mechanism to benchmark our current risk profile and enables us to measure progress as we make program improvements. Identified cybersecurity risks are reviewed by the Cybersecurity Strategy Council, which ensures that risk tolerances are established and used to appropriately manage risks and address the risks identified.
 Third-Party Vendor Risk Management
 Our Vendor Risk Management (VRM) program is designed to meet cybersecurity, privacy, regulatory and compliance obligations, by managing risk associated with third-party vendors who have access to PTC IT systems and data. Prior to outsourcing or allowing third-party access to PTC or customer systems, IP, or data; risks associated with such activity are identified and documented. The process of selecting a third-party vendor includes due diligence of the vendor service or product in question. Third-party companies using PTC facilities or accessing PTC's IT Systems are subject to PTC's VRM review and must demonstrate that proper security measures are in place before they have access to any PTC IT systems or data. All such vendors are to be approved by PTC's VRM process and contractually bound to maintain appropriate cybersecurity technical and organization measures and to protect PTC's data to which they may have access.

 Incident Response
 We maintain an Enterprise Cybersecurity Incident Response Policy to address cybersecurity incidents. The Policy is tested on a periodic basis, including an ongoing improvement program involving periodic tabletop exercises. Cybersecurity incident handling is managed by individual organizations with cybersecurity responsibility and monitored/guided by applicable corporate functions. All Cybersecurity Incident Response Plans under the Policy are based on industry standards, such as the NIST Computer Security Incident Handling Guide – Special Publication 800-61.
 Management's Role in Assessing and Managing Our Risks from Cybersecurity Threats
 Our Cybersecurity Program is overseen by executives on our Executive Leadership Team and managed by our Cybersecurity Strategy Council, including our Senior Vice President, Chief Information Security Officer (CISO), who reports to our Executive Vice President, Chief Digital and Information Officer (CDO). Our CISO is responsible for day-to-day risk management activities, including staying informed about and monitoring prevention, detection, mitigation, and remediation efforts through regular communication and reporting from professionals in the information security team, and the use of technological tools and software. Our CDO is responsible for our broader IT program, which includes our ability to remediate and recover from a cybersecurity incident while reducing impacts to the business and operations. Our CDO and CISO regularly report directly to the Cybersecurity Committee of the Board of Directors on our Cybersecurity Program and efforts to prevent, detect, mitigate, and remediate issues. In addition, we have an escalation process in place to inform senior management and the Cybersecurity Committee and the Board of Directors of material issues.

 Management Experience
 Our CDO and CISO have extensive experience assessing and managing cybersecurity programs and cybersecurity risk. Our CDO joined PTC as Chief Digital and Information Officer in January 2022 and is responsible for PTC's global information technology (IT) team, overseeing PTC's digital infrastructure and working with business leaders to guide PTC's digital process optimization strategy. He has more than two decades of IT and operations leadership. Before joining PTC, he served as Global Vice President and Chief Information Officer for Avaya, where he led a globally-dispersed team of 1,200 IT professionals to support the entire global Avaya enterprise. Prior to Avaya, he held technology leadership roles at Arise Virtual Solutions Inc., Oracle, and Colorado College.
 Our CISO joined PTC as Cyber Information Security Officer in April 2022 and, before joining PTC, was the Vice President, Information Technology, North America and Europe for Alorica, where he led Alorica's transformation to a secure endpoint architecture for 90,000 global remote and hybrid employees.

 ITEM 2. Properties
 We currently have 61 office locations used in operations in the United States and internationally, predominately as sales and/or support offices and for research and development work. Of our total of approximately 897,000 square feet of leased facilities used in operations, approximately 281,000 square feet are located in the U.S., including approximately 169,000 square feet at our headquarters facility located in Boston, Massachusetts, and approximately 267,000 square feet are located in India, where a significant amount of our research and development is conducted.
 ITEM 3. Legal Proceedings
 None.
 ITEM 4. Mine Safety Disclosures
 Not applicable.

 ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 Our common stock is traded on the Nasdaq Global Select Market under the symbol "PTC."
 On September 30, 2025, the close of our fiscal year, and on November 19, 2025, our common stock was held by 821 and 815 shareholders of record, respectively.
 The table below shows the shares of our common stock we repurchased in the fourth quarter of 2025.

 Period

 Total Number of Shares (or Units) Purchased

 Average Price Paid per Share (or Unit)

 Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs

 Approximate Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)

 July 1, 2025 - July 31, 2025

 —

 $

 —

 —

 $

 1,775,012,684

 August 1, 2025 - August 31, 2025

 236,795

 $

 211.14

 236,795

 $

 1,725,015,150

 September 1, 2025 - September 30, 2025

 119,627

 $

 209.00

 119,627

 $

 1,700,012,666

 Total

 356,422

 $

 210.42

 356,422

 $

 1,700,012,666

 (1) As announced on November 6, 2024, our Board of Directors has authorized us to repurchase up to $2 billion of our common stock in the period October 1, 2024 through September 30, 2027.

 ITEM 6. [Reserved]

 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
 Our Operating and Non-GAAP Financial Measures
 Our discussion of results includes discussion of our ARR (Annual Run Rate) operating measure, non-GAAP financial measures, and disclosure of our results on a constant currency basis. ARR and our non-GAAP financial measures, including the reasons we use those measures, are described below in Operating and Non-GAAP Financial Measures. The methodology used to calculate constant currency disclosures is described in Results of Operations - Impact of Foreign Currency Exchange on Results of Operations. You should read those sections to understand our operating measure, non-GAAP financial measures, and constant currency disclosures.
 Executive Overview
 ARR grew 10% (8.5% constant currency) to $2.48 billion as of the end of FY'25 compared to FY'24.
 Cash provided by operating activities grew 16% to $868 million in FY'25 compared to FY'24. Free cash flow grew 16% to $857 million in FY'25 compared to FY'24. Our cash flow growth is attributable to resilient top-line growth due to our subscription business model and operational discipline. In FY'25, we made net debt repayments of $553 million and repurchased $300 million of our outstanding shares. We ended FY'25 with cash and cash equivalents of $184 million and gross debt of $1.20 billion, which debt carried an aggregate weighted average interest rate of 4.9%.
 Revenue grew 19% (18% constant currency) in FY'25 compared to FY'24. Under ASC 606, the timing of revenue recognition for on-premises subscription revenue can vary significantly, impacting reported revenue, operating margin, and earnings per share. FY'25 revenue growth reflects the higher total value and longer average duration of contracts that commenced in the current year. Operating margin grew by approximately 1030 basis points in FY'25 compared to FY'24, reflecting higher revenue as well as continued operating discipline. Diluted earnings per share grew 95% to $6.08 in FY'25 compared to FY'24, driven by revenue growth.
 On November 5, 2025, we entered into a definitive agreement with an affiliate of TPG, under which we agreed to sell our Kepware and ThingWorx businesses for total consideration of up to $725 million, if certain targets are achieved. We may receive up to $600 million upon closing of the transaction, which may be reduced by $35 million if certain growth targets are not achieved for a period between signing and closing, and further adjusted as set forth in the purchase agreement. We may receive up to $125 million of contingent consideration upon the sale of the business by TPG. The transaction is expected to close in the first half of calendar 2026. Our expected use of the net after-tax proceeds will follow our overall capital allocation strategy of returning excess cash to shareholders via share repurchases, while allowing for potential tuck-in acquisitions.
 Results of Operations
 The following table shows the measures that we consider the most significant indicators of our business performance. In addition to providing operating income, operating margin, diluted earnings per share and cash from operations as calculated under GAAP, we provide our ARR operating measure and non-GAAP operating income, non-GAAP operating margin, non-GAAP diluted earnings per share, and free cash flow for the reported periods. We also provide a view of our actual results on a constant currency basis. Our non-GAAP financial measures exclude the items described in Non-GAAP Financial Measures below. Investors should use our non-GAAP financial measures only in conjunction with our GAAP results.

 For discussion of our FY'24 results and comparison to our FY'23 results, refer to Management's Discussion and Analysis of Financial Conditions and Results of Operations in our Annual Report on Form 10-K for the year ended September 30, 2024.

 (Dollar amounts in millions, except per share data)

 2025

 2024

 Actual

 Constant Currency(1)

 ARR

 $

 2,478.5

 $

 2,254.7

 %

 %

 Total recurring revenue(2)

 $

 2,600.5

 $

 2,134.0

 %

 %

 Perpetual license

 31.4

 32.2

 (3

)%

 (3

)%

 107.3

 132.2

 (19

)%

 (19

)%

 2,739.2

 2,298.5

 %

 %

 Total cost of revenue

 445.0

 444.8

 %

 %

 Gross margin

 2,294.2

 1,853.7

 %

 %

 Operating expenses

 1,311.9

 1,265.6

 %

 %

 Operating income

 $

 982.4

 $

 588.1

 %

 %

 Non-GAAP operating income(1)

 $

 1,302.1

 $

 894.3

 %

 %

 Operating margin

 %

 %

 Non-GAAP operating margin(1)

 %

 %

 Diluted earnings per share(3)

 $

 6.08

 $

 3.12

 Non-GAAP diluted earnings per share(1)(3)

 $

 7.94

 $

 5.08

 Cash provided by operating activities

 $

 867.7

 $

 750.0

 Capital expenditures

 (11.0

)

 (14.4

)

 Free cash flow

 $

 856.7

 $

 735.6

 (1) See Operating and Non-GAAP Financial Measures below for a reconciliation of our GAAP results to our non-GAAP financial measures and Impact of Foreign Currency Exchange on Results of Operations below for a description of how we calculate our results on a constant currency basis.

 (2) Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

 (3) This amount differs from our Q4'25 earnings release due to an immaterial adjustment related to foreign currency option contracts entered into in Q4'25 resulting in a $7.0 million decrease in Net income and a $0.06 decrease in GAAP and non-GAAP Diluted earnings per share.

 Impact of Foreign Currency Exchange on Results of Operations
 Approximately 50% of our revenue and 35% of our expenses are transacted in currencies other than the U.S. Dollar. Because we report our results of operations in U.S. Dollars, currency translation, particularly changes in the Euro, Yen, Shekel, and Rupee relative to the U.S. Dollar, affects our reported results. Changes in foreign currency exchange rates were a slight tailwind to reported income statement results compared to constant currency results in FY'25. ARR was positively impacted by more favorable currency exchange rates, particularly the Euro to U.S. Dollar exchange rate, as of September 30, 2025 compared to September 30, 2024.
 The results of operations in the table above, and the tables and discussions below about revenue by line of business and product group present both actual percentage changes year over year and percentage changes on a constant currency basis. Our constant currency disclosures are calculated by multiplying the results in local currency for FY'25 and FY'24 by the exchange rates in effect on September 30, 2024. If FY'25 reported results were converted into U.S. Dollars using the rates in effect as of September 30, 2024, ARR would have been lower by $33 million, revenue would have been higher by $21 million, and expenses would have been higher by $9 million. If FY'24 reported results were converted into U.S. Dollars using the rates in effect as of September 30, 2024, ARR would have been the same, revenue would have been higher by $34 million, and expenses would have been higher by $14 million.

 Revenue
 Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period can have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period over period. We recognize revenue for the license portion of on-premises subscription contracts up front when we deliver the licenses to the customer, typically on the start date, and we recognize revenue on the support portion of on-premises subscription contracts and stand-alone support contracts ratably over the term. We continue to convert existing support contracts to on-premises subscriptions, resulting in a shift to up-front recognition of on-premises subscription license revenue in the period converted compared to ratable recognition for a perpetual support contract. Revenue from our cloud services (primarily SaaS) contracts is recognized ratably. We expect that over time a higher portion of our revenue will be recognized ratably as we expand our SaaS offerings, release additional cloud functionality into our products, and migrate customers from on-premises subscriptions to SaaS. Given the different mix, duration and volume of new and renewing contracts in any period, year-over-year or sequential revenue can vary significantly.
 Revenue by Line of Business

 2025

 2024

 Actual

 Constant Currency

 License(1)

 $

 1,162.7

 $

 806.9

 %

 %

 Support and cloud services(2)

 1,469.2

 1,359.4

 %

 %

 Software revenue

 2,631.9

 2,166.2

 %

 %

 107.3

 132.2

 (19

)%

 (19

)%

 $

 2,739.2

 $

 2,298.5

 %

 %

 (1) Includes perpetual licenses and the license portion of on-premises subscription sales.

 (2) Includes support on perpetual licenses, the support portion of on-premises subscription sales, SaaS, and hosting services.

 Software revenue growth in FY'25 was driven by license revenue growth, which reflects the higher total value and notably longer average duration of contracts commencing in the current year. These large contracts with longer durations additionally drove a $179 million (89%) year-over-year increase in long-term receivables and a $601 million (27%) year-over-year increase in Remaining Performance Obligations (RPO).
 Support and cloud services revenue growth in FY'25 was mainly driven by growth in PLM.
 Professional services revenue decreased in FY'25 as we continue to execute on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

 Software Revenue by Product Group

 2025

 2024

 Actual

 Constant Currency

 PLM

 $

 1,639.0

 $

 1,333.4

 %

 %

 CAD

 992.9

 832.8

 %

 %

 Software revenue

 $

 2,631.9

 $

 2,166.2

 %

 %

 PLM software revenue growth in FY'25 was driven by the higher total value and longer average duration of contracts commencing in the period. PLM software revenue grew across all geographic regions, primarily driven by Windchill.
 PLM ARR grew 10% (8% constant currency) from September 30, 2024 to September 30, 2025, primarily driven by Windchill and Codebeamer.
 CAD software revenue growth in FY'25 was driven by the higher total value and longer average duration of contracts commencing in the period. CAD software revenue grew across all geographic regions, primarily driven by Creo.
 CAD ARR grew 10% (9% constant currency) from September 30, 2024 to September 30, 2025, primarily driven by Creo.
 Gross Margin

 2025

 2024

 License gross margin

 $

 1,115.8

 $

 760.0

 %

 License gross margin percentage

 %

 %

 Support and cloud services gross margin

 $

 1,177.4

 $

 1,084.8

 %

 Support and cloud services gross margin percentage

 %

 %

 Professional services gross margin

 $

 1.1

 $

 8.9

 (88

)%

 Professional services gross margin percentage

 %

 %

 Total gross margin

 $

 2,294.2

 $

 1,853.7

 %

 Total gross margin percentage

 %

 %

 Non-GAAP gross margin(1)

 $

 2,349.8

 $

 1,913.6

 %

 Non-GAAP gross margin percentage(1)

 %

 %

 (1) Non-GAAP financial measures are reconciled to GAAP results under Non-GAAP Financial Measures below.

 License gross margin grew at a higher rate than license revenue in FY'25 due mainly to license revenue growth. Total cost of license revenue in FY'25 remained consistent with FY'24, with lower intangible amortization expense offsetting growth in other areas.
 Support and cloud services gross margin growth in FY'25 was in line with support and cloud services revenue growth. Cost of support and cloud services grew 6% in FY'25, primarily due to increasing compensation-related costs and cloud and software subscription-related costs as the business grows.
 Professional services gross margin decreased in FY'25 compared to FY'24, primarily driven by a sharper decrease in professional services revenue than in professional services expense. The decreases in professional services revenue and costs are due to our continued execution on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves.

 Operating Expenses

 2025

 2024

 Sales and marketing

 $

 566.5

 $

 559.0

 %

 %

 %

 Research and development

 457.7

 433.0

 %

 %

 %

 General and administrative

 226.1

 232.4

 (3

)%

 %

 %

 45.9

 42.0

 %

 %

 %

 15.6

 (0.8

)

 2,050

 %

 %

 %

 Total operating expenses

 $

 1,311.9

 $

 1,265.6

 %

 Total headcount increased by 2% between September 30, 2024 and September 30, 2025.
 Operating expenses in FY'25 compared to FY'24 increased primarily due to the following:
 • a $19 million (2%) increase in total compensation expense (including stock-based compensation), driven by a $17 million increase in severance costs primarily related to our go-to-market realignment (which is mainly included in Sales and marketing) and headcount growth, offset by lower compensation charges in General and administrative due to our FY'24 chief executive officer succession;

 • $16 million impairment charges recognized in Q2'25 and Q4'25 related to the lease assets associated with the subleased portion of our Boston office; and

 • a $6 million increase in acquisition and transaction-related costs.

 Interest Expense

 2025

 2024

 Interest expense

 $

 (77.0

)

 $

 (119.7

)

 (36

)%

 Interest expense includes interest on our revolving credit facility, term loan, senior notes that were redeemed in Q2'25, and senior notes due in 2028. The decrease in interest expense was driven by lower debt balances and lower interest rates.
 Other Income

 2025

 2024

 Interest income

 $

 3.4

 $

 4.4

 (22

)%

 Other income (expense), net

 11.4

 (3.8

)

 %

 Other income, net

 $

 14.8

 $

 0.6

 2,578

 %

 Other income, net increased in FY'25 compared to FY'24, primarily driven by a $13 million contingent consideration earnout recognized in Q4'25 related to the sale of a portion of our PLM services business in FY'22. An immaterial adjustment related to foreign currency option contracts entered into in Q4'25 resulted in a $9.3 million decrease in Other income, net compared to amounts from our Q4'25 earnings release.

 Income Taxes

 2025

 2024

 Income before income taxes

 $

 920.2

 $

 469.0

 %

 Provision for income taxes

 $

 186.2

 $

 92.6

 %

 Effective income tax rate

 %

 %

 An immaterial adjustment related to foreign currency option contracts entered into in Q4'25 resulted in a $2.3 million decrease to Provision for income taxes compared to amounts from our Q4'25 earnings release.
 Our effective tax rates for FY'25 and FY'24 were impacted by a number of offsetting items as outlined below, as well as by the year-over-year increase in Income before income taxes, which was primarily domestic; however, there was ultimately no net change in the effective tax rate year-over-year. In FY'25 and FY'24, our income tax rate included the effects of Internal Revenue Service (IRS) procedural guidance requiring consent for previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income in FY'24, with a lesser impact to taxable income in FY'25. In FY'25, we recorded tax expense of $11 million primarily related to accrued interest stemming from the effects of the procedural guidance. In FY'24, we recorded a benefit of $4 million primarily related to an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income ("GILTI") and Foreign-Derived Intangible Income ("FDII").
 Additionally, in FY'25, we recorded tax benefits of $11 million related to tax reserves in foreign jurisdictions.
 In FY'24, the rate was impacted by a U.S. Tax Court ruling in Varian Medical Systems, Inc. v. Commissioner, issued on August 26, 2024. The ruling related to the U.S. taxation of deemed foreign dividends in the transition year of the Tax Act (our fiscal 2018). As a result, we recorded a $14 million benefit for additional foreign tax credits that became available to us. These benefits were offset by a tax expense of $5 million related to a tax reserve in a foreign jurisdiction.
 In FY'24, we requested consent from the IRS to change the accounting method for the treatment of certain deductions. In accordance with GAAP, our financial statements reflect the fact that as of September 30, 2025 we had not received the consent. Accordingly, we have included an unrecognized tax benefit of $109 million within Other liabilities on the Consolidated Balance Sheets. We received this consent in October 2025. Consequently, in Q1'26 we will release the reserve, primarily resulting in a decrease to Deferred tax assets.
 In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the IRS in the U.S. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. We are currently under audit by tax authorities in several jurisdictions. Audits by tax authorities typically involve examination of the deductibility of certain permanent items, transfer pricing, limitations on net operating losses, and tax credits.
 On July 4, 2025, the "One Big Beautiful Bill Act" (the "Act") was enacted into law. The Act includes changes to U.S. tax law that will be applicable to us beginning in FY'26. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures. There is no material impact to our financial statements for FY'25. We are in the process of evaluating the prospective impact of the Act to our consolidated financial statements and cash flow, but currently expect such changes will have a material positive cash impact in FY'26 and FY'27, which is reflected in our guidance. As our review is not yet complete, our expectations could change.

 Liquidity and Capital Resources

 (in millions)

 2025

 2024

 Cash and cash equivalents

 $

 184.4

 $

 265.8

 Restricted cash

 0.6

 0.7

 Total

 $

 185.0

 $

 266.5

 (in millions)

 2025

 2024

 Net cash provided by operating activities

 $

 867.7

 $

 750.0

 Net cash used in investing activities

 $

 (38.3

)

 $

 (124.8

)

 Net cash used in financing activities

 $

 (908.5

)

 $

 (650.7

)

 Cash, Cash Equivalents and Restricted Cash
 We invest our cash with highly rated financial institutions. Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
 Due to the stability of our subscription model and consistency of annual, up-front billing, we aim to maintain a low cash balance. A significant portion of our cash is generated and held outside the U.S. As of September 30, 2025, we had cash and cash equivalents of $18 million in the U.S., $87 million in Europe, $63 million in Asia Pacific (including India), and $16 million in other countries. We have substantial cash requirements in the U.S. but believe that the combination of our existing U.S. cash and cash equivalents, cash available under our revolving credit facility, future U.S. operating cash inflows, and our ability to repatriate cash to the U.S. will be sufficient to meet our ongoing U.S. operating expenses and known capital requirements.
 Cash Provided by Operating Activities
 Cash provided by operating activities increased by $118 million in FY'25 compared to FY'24. This increase was driven by higher collections, lower interest payments, and lower vendor disbursements, partially offset by higher tax payments and higher severance payments. Interest payments were $59 million lower in FY'25 than in FY'24, driven by the Q1'24 payment of $30 million of imputed interest on a deferred acquisition payment associated with our FY'23 acquisition of ServiceMax, as well as lower interest payments in FY'25 due mainly to lower debt balances.
 Cash Used in Investing Activities
 Cash used in investing activities in FY'25 was driven by outflows from the settlement of net investment hedges. Cash used in investing activities in FY'24 was driven by the acquisition of pure-systems for $93 million.
 Cash Used in Financing Activities

 Cash used in financing activities in FY'25 included net payments of $553 million on our outstanding debt, including the redemption of our 2025 senior notes primarily using a draw on our credit facility, and the repurchase of $300 million of our common stock. Cash used in financing activities in FY'24 included $620 million paid to settle the ServiceMax deferred acquisition payment, partially offset by net borrowings of $46 million to fund that payment and the pure-systems acquisition. Payments of withholding taxes in connection with vesting of stock-based awards were lower in FY'25 compared to FY'24, primarily driven by the vesting of certain awards in connection with the chief executive officer succession in Q2'24.

 Outstanding Debt

 (in millions)

 2025

 2024

 4.000% Senior notes due 2028

 $

 500.0

 $

 500.0

 3.625% Senior notes due 2025

 —

 500.0

 Credit facility revolver line

 231.3

 262.0

 Credit facility term loan

 468.8

 490.6

 Total debt

 1,200.0

 1,752.6

 Unamortized debt issuance costs for the senior notes

 (2.6

)

 (4.1

)

 Total debt, net of issuance costs

 $

 1,197.4

 $

 1,748.6

 Undrawn under credit facility revolver

 $

 1,018.8

 $

 988.0

 Undrawn under credit facility revolver available to borrow

 $

 1,001.7

 $

 972.1

 As of September 30, 2025, we were in compliance with all financial and operating covenants of the credit facility and the senior note indenture. As of September 30, 2025, the annual rate for borrowings outstanding under the credit facility was 5.6%.
 Our credit facility and our senior notes, including the financial and operating covenants and limitations on the payment of dividends, are described in Note 8. Debt of Notes to the Consolidated Financial Statements in this Annual Report. As of September 30, 2025, $25 million of our debt associated with the credit facility term loan was classified as current. In Q2'25, we redeemed the 2025 senior notes using a draw on our revolving credit facility and cash on hand.
 Share Repurchase Authorization
 Our Articles of Organization authorize us to issue up to 500 million shares of our common stock. Our Board of Directors has authorized us to repurchase up to $2 billion of our common stock in the period October 1, 2024 through September 30, 2027. We may use cash from operations and borrowings under our credit facility to make any such repurchases. All shares of our common stock repurchased are automatically restored to the status of authorized and unissued.
 In FY'25, we repurchased 1.65 million shares for $300 million. We did not repurchase any shares in FY'24.
 Our long-term goal is to return excess cash to shareholders via share repurchases, while also taking into consideration the interest rate environment and strategic initiatives and acquisitions, which could cause us to reduce, suspend, or cease repurchases. We expect to repurchase approximately $150 to $250 million of our common stock per quarter in FY'26.
 Expectations for 2026
 We believe that existing cash and cash equivalents, together with cash inflows from operations and amounts available under the credit facility, will be sufficient to meet our working capital and capital expenditure requirements through at least the next twelve months and to meet our known long-term capital requirements.
 We expect to use the net after-tax proceeds of the Kepware and ThingWorx divestiture to repurchase shares, in line with our long-term goal of returning excess cash to shareholders.
 Our expected uses and sources of cash could change, our cash position could be reduced, and we could incur additional debt obligations if we retire other debt, engage in strategic transactions, or repurchase shares, any of which could be commenced, suspended, or completed at any time. Any such repurchases or retirement of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any debt retirement or issuance, share repurchases, or strategic transactions may be material.

 Contractual Obligations
 At September 30, 2025, our future contractual obligations were related to debt, leases, pension liabilities, unrecognized tax benefits, and purchase obligations. See Note 8. Debt, Note 16. Leases, Note 13. Pension Plans, and Note 7. Income Taxes of Notes to Consolidated Financial Statements in this Annual Report for information about those obligations, which Notes are incorporated by reference into this section. Our purchase obligations were approximately $188.8 million, with $91.9 million expected to be paid in FY'26 and $96.9 million thereafter. Purchase obligations represent minimum commitments due to third parties, including royalty contracts, research and development contracts, telecommunication contracts, information technology maintenance contracts in support of internal-use software and hardware, financing leases, operating leases with original terms of less than 12 months, and other marketing and consulting contracts. Contracts for which our commitment is variable or based on volumes with no fixed minimum quantities and contracts that can be canceled without payment penalties are not included in the purchase obligation amounts above. The purchase obligations included above are in addition to amounts included in Current liabilities and Prepaid expenses recorded on our September 30, 2025 Consolidated Balance Sheet.
 As of September 30, 2025, we had letters of credit and bank guarantees outstanding of approximately $15.6 million (of which $0.6 million was collateralized).
 Operating and Non-GAAP Financial Measures
 Operating Measure
 ARR
 ARR (Annual Run Rate) represents the annualized value of our portfolio of active subscription software, SaaS, hosting, and support contracts as of the end of the reporting period. We calculate ARR as follows:
 • We consider a contract to be active when the product or service contractual term commences (the "start date") until the right to use the product or service ends (the "expiration date"). Even if the contract with the customer is executed before the start date, the contract will not count toward ARR until the customer right to receive the benefit of the products or services has commenced.

 • For contracts that include annual values that change over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include any future committed increases in the contract value as of the date of the ARR calculation.

 • As ARR includes only contracts that are active at the end of the reporting period, ARR does not reflect assumptions or estimates regarding future contract renewals or non-renewals.

 • Active contracts are annualized by dividing the total active contract value by the contract duration in days (expiration date minus start date), then multiplying that by 365 days (or 366 days for leap years).

 We believe ARR is a valuable operating measure to assess the health of a subscription business because it is aligned with the amount that we invoice the customer on an annual basis. We generally invoice customers annually for the current year of the contract. A customer with a one-year contract will typically be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year contract will be invoiced for each annual period at the beginning of each year of the contract.
 ARR increases by the annualized value of active contracts that commence in a reporting period and decreases by the annualized value of contracts that expire in the reporting period.

 As ARR is not annualized recurring revenue, it is not calculated based on recognized or unearned revenue and is not affected by variability in the timing of revenue under ASC 606, particularly for on-premises license subscriptions where a substantial portion of the total value of the contract is recognized as revenue at a point in time upon the later of when the software is made available, or the subscription term commences.
 ARR should be viewed independently of recognized and unearned revenue and is not intended to be combined with, or to replace, either of those items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.
 Non-GAAP Financial Measures
 The non-GAAP financial measures presented in the discussion of our results of operations and the respective most directly comparable GAAP measures are:
 • non-GAAP gross margin—GAAP gross margin

 • non-GAAP operating income—GAAP operating income

 • non-GAAP operating margin—GAAP operating margin

 • non-GAAP net income—GAAP net income

 • non-GAAP diluted earnings per share—GAAP diluted earnings per share

 • free cash flow—cash flow from operations

 The non-GAAP financial measures other than free cash flow exclude, as applicable: stock-based compensation expense; amortization of acquired intangible assets; acquisition and transaction-related charges included in General and administrative expenses; Impairment and other charges (credits), net; non-operating charges (credits), net; and income tax adjustments.
 Stock-based compensation is a non-cash expense relating to stock-based awards issued to executive officers, employees and outside directors, consisting of restricted stock units. We exclude this expense as it is a non-cash expense and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies in our industry.
 Amortization of acquired intangible assets is a non-cash expense that is impacted by the timing and magnitude of our acquisitions. We believe the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of other companies in our industry.
 Acquisition and transaction-related charges included in General and administrative expenses are direct costs of potential and completed acquisitions and expenses related to acquisition integration activities, including transaction fees, due diligence costs, severance and professional fees. Subsequent adjustments to our initial estimated amount of contingent consideration associated with specific acquisitions are also included within acquisition and transaction-related charges. Other transactional charges include third-party costs related to structuring merger and acquisition transactions outside of ordinary business operations. We do not include these costs when reviewing our operating results internally. The occurrence and amount of these costs varies depending on the timing and size of acquisitions and transactions.
 In Q2'25, we changed the income statement caption of Restructuring and other charges (credits), net to Impairment and other charges (credits), net to reflect that the amounts presented are mainly impairment charges rather than restructuring charges. We correspondingly revised the caption with respect to the list of items excluded from our non-GAAP financial measures and, as reflected below, the list of items covered under that caption to reflect the primary charges and credits included in the adjustment. All charges and credits under the captioned line item remain the same.

 Impairment and other charges (credits), net are charges associated with disposal or exit activities, including lease impairment and abandonment charges, net charges or income related to impaired or exited facilities, restructuring severance charges resulting from substantial employee reduction actions, and other related costs.
 Non-operating charges (credits), net are gains or losses associated with sales or changes in value of assets or liabilities that are generally investing or financing in nature and are not indicative of our ongoing ordinary operating activities. In FY'25, we recognized a gain related to contingent consideration earned upon the achievement of performance milestones associated with the FY'22 sale of a portion of our PLM services business. In FY'24, we recognized a non-operating impairment charge related to an available-for-sale debt security.
 Income tax adjustments include the tax impact of the items above. Additionally, we exclude other material tax items that we do not include when reviewing our operating results internally. For example, in FY'25, adjustments include a benefit for a tax reserve related to prior years in a foreign jurisdiction. Adjustments in FY'24 include a charge for a tax reserve related to prior years in a foreign jurisdiction.
 Free cash flow is cash flow from operations net of capital expenditures, which are expenditures for property and equipment and consist primarily of facility improvements, office equipment, computer equipment, and software. We believe that free cash flow, in conjunction with cash from operations, is a useful measure of liquidity since capital expenditures are a necessary component of ongoing operations. Free cash flow is not a measure of cash available for discretionary expenditures.
 We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operational performance because they provide a view of our operating results without items that are not, in our view, indicative of our core operating results. We believe that these non-GAAP financial measures help illustrate underlying trends in our business, and we use the measures to establish budgets and operational goals (communicated internally and externally) for managing our business and evaluating our performance. We believe that providing non-GAAP financial measures also affords investors a view of our operating results that may be more easily compared to the results of other companies in our industry that use similar financial measures to supplement their GAAP results.
 The items excluded from the non-GAAP financial measures often have a material impact on our financial results, certain of those items are recurring, and other items often recur. Accordingly, the non-GAAP financial measures included in this Annual Report should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with GAAP. The following tables reconcile each of these non-GAAP financial measures to its most closely comparable GAAP measure on our financial statements.

 (in millions, except per share amounts)

 2025

 2024

 GAAP gross margin

 $

 2,294.2

 $

 1,853.7

 22.7

 21.4

 Amortization of acquired intangible assets included in cost of revenue

 32.8

 38.5

 Non-GAAP gross margin

 $

 2,349.8

 $

 1,913.6

 GAAP operating income

 $

 982.4

 $

 588.1

 216.2

 223.5

 78.8

 80.5

 Acquisition and transaction-related charges

 9.1

 3.1

 15.6

 (0.8

)

 Non-GAAP operating income

 $

 1,302.1

 $

 894.3

 GAAP net income

 $

 734.0

 $

 376.3

 216.2

 223.5

 78.8

 80.5

 Acquisition and transaction-related charges

 9.1

 3.1

 15.6

 (0.8

)

 Non-operating charges (credits), net(1)

 (13.1

)

 2.0

 Income tax adjustments(2)

 (81.8

)

 (71.2

)

 Non-GAAP net income

 $

 958.8

 $

 613.4

 GAAP diluted earnings per share

 $

 6.08

 $

 3.12

 1.79

 1.85

 0.65

 0.67

 Acquisition and transaction-related charges

 0.08

 0.03

 0.13

 (0.01

)

 Non-operating charges (credits), net(1)

 (0.11

)

 0.02

 Income tax adjustments(2)

 (0.68

)

 (0.59

)

 Non-GAAP diluted earnings per share

 $

 7.94

 $

 5.08

 Cash provided by operating activities

 $

 867.7

 $

 750.0

 Capital expenditures

 (11.0

)

 (14.4

)

 Free cash flow

 $

 856.7

 $

 735.6

 (1) In FY'25, we recognized a $13.1 million gain related to contingent consideration earned upon the achievement of performance milestones associated with the FY'22 sale of a portion of our PLM services business. In FY'24, we recognized an impairment loss of $2.0 million on an available-for-sale debt security.

 (2) 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 FY'25, adjustments exclude a $10.4 million tax benefit or $0.09 per share for a tax reserve related to prior years in a foreign jurisdiction. In FY'24, adjustments exclude a tax expense of $4.4 million or $0.04 per share for a tax reserve related to prior years in a foreign jurisdiction.

 Operating margin impact of non-GAAP adjustments:

 2025

 2024

 GAAP operating margin

 35.9

 %

 25.6

 %

 7.9

 %

 9.7

 %

 2.9

 %

 3.5

 %

 Acquisition and transaction-related charges

 0.3

 %

 0.1

 %

 0.6

 %

 (—

)%

 Non-GAAP operating margin

 47.5

 %

 38.9

 %

 Critical Accounting Policies and Estimates
 We have prepared our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on our reported revenues, results of operations, and net income, as well as on the value of certain assets and liabilities on our balance sheet. These estimates, assumptions and judgments are made based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time.
 The accounting policies, methods and estimates used to prepare our financial statements are described generally in Note 2. Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements in this Annual Report. The most important accounting judgments and estimates that we made in preparing the financial statements involved:
 • revenue recognition;

 • accounting for income taxes; and

 • valuation of assets and liabilities acquired in business combinations.

 A critical accounting policy is one that is both material to the presentation of our financial statements and requires us to make subjective or complex judgments that could have a material effect on our financial condition and results of operations. Critical accounting policies require us to make assumptions about matters that are uncertain at the time of the estimate, and different estimates that we could have used, or changes in the estimates that are reasonably likely to occur, may have a material impact on our financial condition or results of operations. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.
 Accounting policies, guidelines and interpretations related to our critical accounting policies and estimates are generally subject to numerous sources of authoritative guidance and are often reexamined by accounting standards rule makers and regulators. These rule makers and/or regulators may promulgate interpretations, guidance or regulations that may result in changes to our accounting policies, which could have a material impact on our financial position and results of operations.
 Revenue Recognition
 We record revenues in accordance with the guidance provided by ASC 606, Revenue from Contracts with Customers. For a full description of our revenue accounting policy, refer to Note 2. Summary of Significant Accounting Policies, included in the Notes to Consolidated Financial Statements in this Annual Report.
 Our sources of revenue include: (1) subscriptions, (2) perpetual licenses, (3) support for perpetual licenses, and (4) professional services. Subscriptions include term-based on-premises licenses and related support, Software-as-a-Service (SaaS), and hosting services.

 Judgments and Estimates
 Determination of performance obligations. Our subscriptions are frequently sold as a bundle of products and services, typically pairing on-premises term software licenses with support and, for certain offerings, cloud services over the same term. Significant judgment is used in determining the performance obligations related to these bundled products and services. On-premises software is typically determined to be a distinct performance obligation and is thus recognized separately from the support and cloud components. On-premises software revenue is generally recognized at the point in time that the software is made available to the customer, while the support and cloud software revenue components are recognized ratably over the term of the contract. In cases where subscriptions include cloud functionality and on-premises software, an assessment has been performed to determine whether the cloud services are distinct from the on-premises software. In the substantial majority of instances, cloud services provide incremental functionality to customers and have been considered distinct and recognized separately from the on-premises software. This assessment could have a significant impact on the timing of revenue recognition and may change as our product offerings evolve.
 Allocation of transaction price. We estimate the standalone selling price of each identified performance obligation and use that estimate to allocate the transaction price among the performance obligations. The estimated standalone selling price is determined using all information reasonably available to us, including market conditions and other observable inputs. Significant judgment is used in determining the standalone selling prices of the on-premises license, support, and cloud components of our subscription products. These estimates are subject to change as our product offerings change and could have a significant impact due to the difference in the timing of revenue recognition for on-premises licenses versus support and cloud.
 Right to exchange. Our multi-year, non-cancellable subscription contracts provide customers with an annual right to exchange software within the original subscription with other software. When it applies to on-premises licenses, we account for this right as a liability. For most contracts, we use the expected value method to determine the liability associated with this right across a portfolio of contracts. Where contracts are outside of the standard portfolio of contracts due to contract size, longer contract duration, or other unique contractual terms, we use the most likely amount method to determine the liability for each individual contract. In both circumstances, the transaction price is constrained based on our estimates, which impacts the amount of revenue recognized. Changes in these estimates could significantly impact revenue for any given period.
 Accounting for Income Taxes
 As part of the process of preparing our consolidated financial statements, we are required to calculate our income tax expense based on taxable income by jurisdiction. There are many transactions and calculations about which the ultimate tax outcome is uncertain; as a result, our calculations involve estimates by management. Some of these uncertainties arise as a consequence of revenue-sharing, cost-reimbursement and transfer pricing arrangements among related entities and the differing tax treatment of revenue and cost items across various jurisdictions. If tax authorities compelled us to revise or to account differently for our arrangements, that revision could affect our recorded tax liabilities.
 The income tax accounting process also involves estimating our actual current tax liability, together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not that all or a portion of our deferred tax assets will not be realized, we must establish a valuation allowance as a charge to income tax expense.

 We have unrecognized tax benefits as of September 30, 2025 of $157.7 million. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in favorable or unfavorable changes in our estimates. As described in Note 7. Income Taxes, within the next 12 months the amount of unrecognized tax benefits related to the IRS consent will be reduced by $109.2 million. Apart from that, we do not believe it is reasonably possible that there could be additional reductions to the amount of unrecognized tax benefits within the next 12 months.
 As of September 30, 2025, we have a valuation allowance of $3.4 million against net deferred tax assets in the U.S. and a valuation allowance of $5.1 million against net deferred tax assets in certain foreign jurisdictions. The valuation allowance recorded in the U.S. relates to Massachusetts tax credit carryforwards that we do not expect to realize a benefit from prior to expiration.
 The valuation allowance recorded against net deferred tax assets of certain foreign jurisdictions is established primarily for our capital loss carryforwards, the majority of which do not expire. However, there are limitations imposed on the utilization of such capital losses that could further restrict the recognition of any tax benefits. We will continue to reassess our valuation allowance requirements each financial reporting period.
 Prior to the passage of the U.S. Tax Act, we asserted that substantially all of the undistributed earnings of our foreign subsidiaries were considered indefinitely invested and accordingly, no deferred taxes were provided. Pursuant to the provisions of the U.S. Tax Act, these earnings were subjected to a one-time transition tax and there is therefore no longer a material cumulative basis difference associated with the undistributed earnings. We maintain our assertion to permanently reinvest these earnings outside the U.S. unless repatriation can be done substantially tax-free, with the exception of our Taiwan subsidiary. If we decide to repatriate any additional non-U.S. earnings in the future, we may be required to establish a deferred tax liability on such earnings. The amount of unrecognized deferred tax liability on the undistributed earnings would not be material.
 In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the IRS in the U.S. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. We are currently under audit by tax authorities in several jurisdictions. Audits by tax authorities typically involve examination of the deductibility of certain permanent items, transfer pricing, limitations on net operating losses and tax credits. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in material changes in our estimates.
 Valuation of Assets and Liabilities Acquired in Business Combinations
 In accordance with business combination accounting, we allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.
 Our identifiable intangible assets acquired consist of purchased software, trademarks, customer lists and contracts, and software support agreements and related relationships. Purchased software consists of products that have reached technological feasibility and the combination of processes, inventions and trade secrets related to the design and development of acquired products. Customer lists and contracts and software support agreements and related relationships represent the underlying relationships and agreements with customers of the acquired company's installed base. We have generally valued intangible assets using discounted cash flow models. Critical estimates in valuing certain of the intangible assets include but are not limited to:
 • future expected revenues and costs related to software license sales, customer support agreements, customer contracts and related customer relationships and acquired developed technologies and trademarks and trade names; and

 • discount rates used to determine the present value of estimated future cash flows.

 In addition, we estimate the useful lives of our intangible assets based upon the expected period over which we anticipate generating economic benefits from the related intangible asset.
 Net tangible assets consist of the fair values of tangible assets less the fair values of assumed liabilities and obligations. Except for deferred revenues, net tangible assets were generally valued by us at the respective carrying amounts recorded by the acquired company, if we believed that their carrying values approximated their fair values at the acquisition date. Deferred revenue for acquisitions reflect the amounts that would have been deferred as of the acquisition date in accordance with ASC 606.
 In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly with any adjustments to our preliminary estimates being recorded to goodwill provided that we are within the measurement period (up to one year from the acquisition date) and we continue to collect information in order to determine their estimated values. Subsequent to the measurement period or our final determination of the estimated value of uncertain tax positions or tax-related valuation allowances, whichever comes first, changes to these uncertain tax positions and tax-related valuation allowances will affect our provision for income taxes in our Consolidated Statements of Operations.
 Our estimates of fair value are based upon assumptions believed to be reasonable at that time, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results.
 When events or changes in circumstances indicate that the carrying value of a finite-lived intangible asset may not be recoverable, we perform an assessment of the asset for potential impairment. This assessment is based on projected undiscounted future cash flows over the asset's remaining life. If the carrying value of the asset exceeds its undiscounted cash flows, we record an impairment loss equal to the excess of the carrying value over the fair value of the asset, determined using projected discounted future cash flows of the asset.
 Recent Accounting Pronouncements
 In accordance with recently issued accounting pronouncements, we will be required to comply with certain changes in accounting rules and regulations. Refer to Note 2. Summary of Significant Accounting Policies, included in the Notes to Consolidated Financial Statements of this Annual Report, which is incorporated herein by reference, for all recently issued accounting pronouncements. We are evaluating the impact of ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software and ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets and have not yet determined whether they will have a material impact.
 Off-Balance Sheet Arrangements
 We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated (to the extent of our ownership interest therein) into our financial statements. We have not entered into any transactions with unconsolidated entities whereby we have subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us.

 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
 We face exposure to financial market risks, including adverse movements in foreign currency exchange rates and changes in interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial results.
 Foreign currency exchange risk
 Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our most significant foreign currency exposures relate to Eurozone countries, Japan, Sweden, Switzerland, China and India. We enter into derivative transactions to manage our exposure to fluctuations in foreign exchange rates, specifically foreign currency forward contracts to manage our exposure related to monetary assets and liabilities denominated in foreign currencies and foreign exchange option contracts to manage our exposure related to forecasted cash flows. We do not enter into or hold foreign currency derivative financial instruments for trading or speculative purposes.
 Our non-U.S. revenues are generally transacted through our non-U.S. subsidiaries and typically are denominated in their local currency. In addition, expenses that are incurred by our non-U.S. subsidiaries typically are denominated in their local currency. Approximately 50% of our revenue and 35% of our expenses were transacted in currencies other than the U.S. Dollar. Currency translation affects our reported results because we report our results of operations in U.S. Dollars. Historically, our most significant currency risk has been changes in the Euro and Japanese Yen relative to the U.S. Dollar. Based on current revenue and expense levels (excluding stock-based compensation), a $0.10 change in the USD to EUR exchange rate and a 10 Yen change in the Yen to USD exchange rate would impact operating income by approximately $44 million and $10 million, respectively.
 Our exposure to foreign currency exchange rate fluctuations arises in part from intercompany transactions, with most intercompany transactions occurring between a U.S. Dollar functional currency entity and a foreign currency denominated entity. Intercompany transactions typically are denominated in the local currency of the non-U.S. Dollar functional currency subsidiary in order to centralize foreign currency risk. Also, both PTC (the parent company) and our non-U.S. subsidiaries may transact business with our customers and vendors in a currency other than their functional currency (transaction risk). In addition, we are exposed to foreign exchange rate fluctuations as the financial results and balances of our non-U.S. subsidiaries are translated into U.S. Dollars (translation risk). If sales to customers outside the United States increase, our exposure to fluctuations in foreign currency exchange rates will increase.
 Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the U.S. Dollar value of balances denominated in foreign currency, resulting from changes in foreign currency exchange rates. Our foreign currency hedging program uses forward contracts to manage the foreign currency exposures that exist as part of our ongoing business operations. Foreign currency forward contracts are primarily denominated in the Euro, Japanese Yen, and Indian Rupee currencies, and have maturities of less than four months.
 Additionally, we use foreign currency option contracts to reduce the risk that forecast U.S. Dollar cash flows will be adversely affected by changes in Euro or Japanese Yen exchange rates. Foreign currency option contracts are denominated in the Euro and Japanese Yen currencies, and have maturities of less than fourteen months.
 The majority of our foreign currency forward and option contracts are not designated as hedges for accounting purposes, and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into these derivative contracts only as an economic hedge, gains or losses on the underlying foreign-denominated balance are generally offset by the losses or gains on the forward contracts and currency impacts on the Euro or Japanese Yen-denominated operations may be partially offset by gains on the option contracts. Gains and losses on these derivatives and foreign currency denominated monetary assets and liabilities are included in Other income, net.

 As of September 30, 2025 and 2024, we had outstanding forward and option contracts not designated as hedging instruments with notional amounts equivalent to the following:

 Currency Hedged (in thousands)

 2025

 2024

 Euro / U.S. Dollar(1)

 $

 1,202,830

 $

 781,398

 British Pound / U.S. Dollar

 22,974

 24,810

 Israeli Shekel / U.S. Dollar

 20,094

 12,535

 Indian Rupee / U.S. Dollar

 53,465

 —

 Japanese Yen / U.S. Dollar(2)

 131,284

 42,340

 Swiss Franc / U.S. Dollar

 8,960

 74,939

 Swedish Krona / U.S. Dollar

 21,568

 48,596

 Chinese Renminbi / U.S. Dollar

 7,134

 32,124

 New Taiwan Dollar / U.S. Dollar

 23,098

 16,368

 All other

 26,679

 25,368

 Total

 $

 1,518,086

 $

 1,058,478

 (1) As of September 30, 2025, $835.4 million of the Euro to U.S. Dollar outstanding notional amount relates to forward contracts and $367.4 million relates to option contracts. As of September 30, 2024, all the Euro to U.S. Dollar outstanding notional amount relates to forward contracts.

 (2) As of September 30, 2025, $41.9 million of the Japanese Yen to U.S. Dollar outstanding notional amount relates to forward contracts and $89.4 million relates to option contracts. As of September 30, 2024, all the Japanese Yen to U.S. Dollar outstanding notional amount relates to forward contracts.

 Debt
 In addition to the $500 million due under our 2028 Notes, as of September 30, 2025, we had $700 million outstanding under our credit facility. Loans under the credit facility bear interest at variable rates which reset every 30 to 180 days depending on the rate and period selected by us. These loans are subject to interest rate risk as interest rates will be adjusted at each rollover date to the extent such amounts are not repaid. As of September 30, 2025, the weighted average annual rate on the credit facility loans was 5.6%. Based on the borrowings outstanding and interest rates in effect as of September 30, 2025, a 100 basis point per annum change in interest rate applied over a one-year period would have a $7 million impact on annual earnings and cash flows.
 Cash and cash equivalents
 As of September 30, 2025, cash equivalents were invested in highly liquid investments with maturities of three months or less when purchased. We invest our cash with highly rated financial institutions in North America, Europe and Asia Pacific and in diversified domestic and international money market mutual funds. As of September 30, 2025, we had cash and cash equivalents of $18 million in the United States, $87 million in Europe, $63 million in Asia Pacific (including India), and $16 million in other countries. Given the short maturities and investment grade quality of the portfolio holdings at September 30, 2025, a hypothetical 10% change in interest rates would not materially affect the fair value of our cash and cash equivalents.
 Our invested cash is subject to interest rate fluctuations and, for non-U.S. operations, foreign currency exchange rate risk. In a declining interest rate environment, we would experience a decrease in interest income. The opposite holds true in a rising interest rate environment. Over the past several years, the U.S. Federal Reserve Board, European Central Bank and Bank of England have changed certain benchmark interest rates, which has led to declines and increases in market interest rates. These changes in market interest rates have resulted in fluctuations in interest income earned on our cash and cash equivalents. Interest income will continue to fluctuate based on changes in market interest rates and levels of cash available for investment. Changes in foreign currencies relative to the U.S. Dollar had an unfavorable impact of $2.4 million and a favorable impact of $3.2 million on our consolidated cash balances in FY'25 and FY'24, respectively. The impact in FY'25 was due in particular to changes in the Japanese Yen, Indian Rupee, and Swedish Krona.

 ITEM 8. Financial Statements and Supplementary Data
 The consolidated financial statements and notes to the consolidated financial statements are attached as APPENDIX A.
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 None.
 ITEM 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.
 We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on this evaluation, we concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025.
 Management's Annual Report on Internal Control over Financial Reporting
 Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
 • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

 • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

 • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 Our management assessed the effectiveness of our internal control over financial reporting as of September 30, 2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this assessment and those criteria, our management concluded that, as of September 30, 2025, our internal control over financial reporting was effective.
 The effectiveness of our internal control over financial reporting as of September 30, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears under Item 8.
 Changes in Internal Control over Financial Reporting
 There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 ITEM 9B. Other Information
 Director and Executive Officer Adoption, Modification or Termination of 10b5-1 Plans in Q4'25
 Our Section 16 officers and directors may enter into plans or arrangements for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. Such plans and arrangements must comply in all respects with our insider trading policies, including our policy governing entry into and operation of 10b5-1 plans and arrangements.

 During the quarter ended September 30, 2025, the following Section 16 officers adopted Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Exchange Act). All plans adopted covered only sales of PTC common stock. No plans were modified or terminated.

 Name and Title of Director or Section 16 Officer

 Date of Adoption, Modification, or Termination

 Duration of the Plan

 Aggregate Number of Shares of Common Stock that may be Sold under the Plan

 Kristian Talvitie
 Executive Vice President, Chief Financial Officer

 Adopted
 August 6, 2025

 Ends
 February 6, 2026

 4,658

 Aaron von Staats
 Executive Vice President, General Counsel

 Adopted
 September 5, 2025

 Ends
 August 15, 2026

 967, plus all net vested shares issued for the FY2025 Corporate Incentive Plan, plus 10% of total shares that vest on November 15, 2025 under performance-based RSU awards granted on November 16, 2022, November 15, 2023, and November 13, 2024, plus 80% of net vested shares after selling 10% of total shares that vest on November 15, 2025 under time-based and performance-based RSU awards granted on November 16, 2022, November 15, 2023, and November 13, 2024 (1)(2)(3)

 (1) The total number of shares that would be issued for the FY2025 Corporate Incentive Plan could not be known when the plan was adopted as the FY2025 performance period had not yet ended and attainment of the performance measure was not known.

 (2) The total number of shares that would be earned and vested under the performance-based RSU awards for the FY2025 performance period could not be known when the plan was adopted as the FY2025 performance period had not yet ended and attainment of the performance measures was not known.

 (3) The total number of net vested shares could not be known when the plan was adopted as the amount of shares to be withheld for taxes was not known.

 Amendment No. 2 to Credit Agreement
 On November 18, 2025, PTC Inc. ("PTC") and PTC (IFSC) Limited, a subsidiary of PTC, entered into Amendment No. 2 (the "Amendment") to the Fourth Amended and Restated Credit Agreement dated January 3, 2023 (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders named therein.
 The Amendment amends the asset sale restrictions to eliminate the restriction entirely for the divestiture of PTC's Kepware and ThingWorx businesses pursuant to that certain Asset Purchase Agreement dated November 5, 2025, between PTC and Parrot US Buyer, L.P., and to permit sales of assets up to an aggregate of $ 250 million in book value in any fiscal year as long as no Default or Event of Default exists or would exist after consummation of the sale.
 All capitalized terms used herein without definition have the meanings assigned in the Credit Agreement.
 The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 2 to the Credit Agreement, which is filed as Exhibit 10.18 hereto and incorporated herein by reference.
 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
 Not applicable.

 ITEM 10. Directors, Executive Officers and Corporate Governance
 The information required by this item not set forth below may be found under the headings "Corporate Governance and the Board of Directors," "Insider Trading Policies and Procedures," "Our Executive Officers," "Delinquent Section 16(a) Reports," and "Transactions with Related Persons" appearing in our 2026 Proxy Statement. Such information is incorporated herein by reference.
 Code of Ethics for Senior Executive Officers
 We have adopted a Code of Ethics for Senior Executive Officers that applies to our President and Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, as well as others. The Code is embedded in our Code of Business Conduct and Ethics applicable to all employees. A copy of the Code of Business Conduct and Ethics is publicly available on our website at www.ptc.com. If we make any substantive amendments to, or grant any waiver from, including any implicit waiver, the Code of Ethics for Senior Executive Officers to or for our President and Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer, we will disclose the nature of such amendment or waiver in a current report on Form 8-K.
 ITEM 11. Executive Compensation
 Information with respect to director and executive compensation may be found under the headings "Director Compensation," "Compensation Discussion and Analysis," "Compensation Tables," "Compensation Committee Report," and "Pay Ratio Disclosure" appearing in our 2026 Proxy Statement. Such information is incorporated herein by reference.
 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 Information about our common stock ownership may be found under the heading "Information about PTC Common Stock Ownership" appearing in our 2026 Proxy Statement. Such information is incorporated herein by reference.
 EQUITY COMPENSATION PLAN INFORMATION
 as of September 30, 2025

 Plan Category

 Number of securities to be issued upon exercise of outstanding options, warrants and rights

 Weighted-average exercise price of outstanding options, warrants and rights

 Number of securities remaining available for future issuance under equity compensation plans

 Equity compensation plans approved by security holders:

 2000 Equity Incentive Plan(1)

 1,895,958

 —

 4,875,216

 2016 Employee Stock Purchase Plan(2)

 —

 —

 1,869,559

 Total

 1,895,958

 —

 6,744,775

 (1) All of the shares issuable upon vesting are restricted stock units, which have no exercise price.

 (2) This amount represents the total number of shares remaining available under the 2016 Employee Stock Purchase Plan, of which 76,622 shares are subject to purchase during the current offering period.

 ITEM 13. Certain Relationships and Related Transactions, and Director Independence
 Information with respect to this item may be found under the headings "Independence of Our Directors," "Review of Transactions with Related Persons" and "Transactions with Related Persons" appearing in our 2026 Proxy Statement. Such information is incorporated herein by reference.
 ITEM 14. Principal Accounting Fees and Services
 Information with respect to this item may be found under the headings "Engagement of Independent Auditor and Approval of Professional Services and Fees" and "PricewaterhouseCoopers LLP Services and Fees" in our 2026 Proxy Statement. Such information is incorporated herein by reference.

 ITEM 15. Exhibits and Financial Statement Schedules
 (a) Documents Filed as Part of Form 10-K

 1.

 Financial Statements

 Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP, Boston, MA, PCAOB ID: 238)

 Consolidated Balance Sheets as of September 30, 2025 and 2024

 Consolidated Statements of Operations for the years ended September 30, 2025, 2024 and 2023

 Consolidated Statements of Comprehensive Income for the years ended September 30, 2025, 2024 and 2023

 Consolidated Statements of Cash Flows for the years ended September 30, 2025, 2024 and 2023

 Consolidated Statements of Stockholders' Equity for the years ended September 30, 2025, 2024 and 2023

 Notes to Consolidated Financial Statements

 2.

 Financial Statement Schedules

 Schedules have been omitted since they are either not required, not applicable, or the information is otherwise included in the Financial Statements per Item 15(a)1 above.

 3.

 Exhibits

 The list of exhibits in the Exhibit Index is incorporated herein by reference.

 (b) Exhibits
 We hereby file the exhibits listed in the attached Exhibit Index.
 (c) Financial Statement Schedules
 None.
 ITEM 16. Form 10-K Summary
 None.

 EXHIBIT INDEX

 Incorporated by Reference

 Exhibit
 Number

 Description

 Filed Herewith

 Form

 Filing Date

 Exhibit

 SEC File No.

 2.1

 Asset Purchase Agreement dated November 5, 2025 by and between PTC Inc. and Parrot US Buyer, L.P.

 November 5, 2025

 10.1

 3.1

 Restated Articles of Organization of PTC Inc.

 November 23, 2015

 3.1

 3.2

 Amended and Restated By-Laws of PTC Inc.

 3.2

 4.1

 Indenture, dated as of February 13, 2020, between PTC Inc. and Wells Fargo Bank, National Association, as trustee

 February 13, 2020

 4.1

 4.2

 Form of 4.000% senior unsecured notes due 2028

 February 13, 2020

 4.3

 4.3

 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934

 November 18, 2019

 4.4

 10.1*

 2000 Equity Incentive Plan

 February 21, 2023

 10.1

 10.1-1*

 Form of Restricted Stock Unit Certificate (Non-Employee Director)

 10.1-1

 10.1-2*

 Form of Restricted Stock Unit Certificate (U.S.)

 November 18, 2016

 10.1.11

 10.1-3*

 Form of Restricted Stock Unit Certificate (U.S. EVP)

 10.1-3

 10.1-4*

 Form of Restricted Stock Unit Certificate (U.S. Section 16)

 10.1-4

 10.1-5*

 Form of Restricted Stock Unit Certificate (U.S.)

 November 20, 2023

 10.1.12

 10.1-6*

 Form of Restricted Stock Unit Certificate (U.S. Section 16 and U.S. EVP)

 November 20, 2023

 10.1.13

 10.1-8*

 Form of Restricted Stock Unit Certificate (Non-U.S.)

 10.1-8

 10.1-9*

 Form of Restricted Stock Unit Certificate (Israel)

 10.1-9

 10.2*

 2016 Employee Stock Purchase Plan

 February 21, 2023

 10.2

 10.4-1*

 Offer Letter dated July 24, 2023 by and between the Company and Neil Barua

 July 26, 2023

 10.1

 10.4-2*

 Executive Agreement between the Company and Neil Barua dated July 24, 2023

 July 26, 2023

 10.2

 10.5*

 Form of Executive Agreement dated November 16, 2023 by and between PTC Inc. and each of Kristian Talvitie and Aaron von Staats

 November 20, 2023

 10.5

 10.6*

 Executive Agreement dated February 6, 2025 by and between Robert Dahdah and PTC Inc.

 February 6, 2025

 10.1

 10.10

 Office Lease Agreement dated as of September 7, 2017 by and between PTC Inc. and SCD L2 Seaport Square LLC

 September 7, 2017

 10.11

 First Amendment to Lease dated as of October 5, 2017 by and between PTC Inc. and SCD L2 Seaport Square LLC

 November 29, 2017

 10.23

 10.16

 Fourth Amended and Restated Credit Agreement dated January 3, 2023 by and among PTC, PTC (IFSC) Limited, JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders named therein

 January 3, 2023

 4.4

 10.17

 Amendment No. 1 dated October 1, 2024 to the Fourth Amended and Restated Credit Agreement dated January 3, 2023 by and among PTC, PTC (IFSC) Limited, JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders named therein

 October 7, 2024

 10.1

 10.18

 Amendment No. 2 dated November 18, 2025 to the Fourth Amended and Restated Credit Agreement dated January 3, 2023 by and among PTC, PTC (IFSC) Limited, JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders named therein

 X

 19.1

 Trading in Company Securities Policy

 19.1

 19.2

 Rule 10b5-1 Plan Policy

 19.2

 21.1

 Subsidiaries of PTC Inc.

 X

 23.1

 Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm

 X

 31.1

 Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13(a)-14(a) and 15d-14(a)

 X

 31.2

 Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13(a)-14(a) and 15d-14(a)

 X

 32**

 Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350

 X

 97.1

 Executive Compensation Recoupment Policy

 97.1

 101.INS

 101.SCH

 * Identifies a management contract or compensatory plan or arrangement in which an executive officer or director of PTC participates.
 ** Indicates that the exhibit is being furnished with this report and is not filed as a part of it.

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Date: November 21, 2025

 By:

 /s/ NEIL BARUA

 Neil Barua
 President and Chief Executive Officer

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 (i) Principal Executive Officer:

 /s/ NEIL BARUA

 President, Chief Executive Officer, and Director

 Neil Barua

 (ii) Principal Financial Officer:

 /s/ KRISTIAN TALVITIE

 Executive Vice President and Chief Financial Officer

 Kristian Talvitie

 (iii) Principal Accounting Officer:

 /s/ ALICE CHRISTENSON

 Chief Accounting Officer

 Alice Christenson

 (iv) Board of Directors:

 /s/ JANICE CHAFFIN

 Chair of the Board

 Janice Chaffin

 /s/ MARK BENJAMIN

 Mark Benjamin

 /s/ ROB BERNSHTEYN

 Rob Bernshteyn

 /s/ AMAR HANSPAL

 Amar Hanspal

 /s/ MICHAL KATZ

 Michal Katz

 /s/ PAUL LACY

 Paul Lacy

 /s/ CORINNA LATHAN

 Corinna Lathan

 /s/ JAMES LICO

 James Lico

 /s/ TRAC PHAM

 Trac Pham

 APPENDIX A
 Report of Independent Registered Public Accounting Firm
 To the Board of Directors and Stockholders of PTC Inc.
 Opinions on the Financial Statements and Internal Control over Financial Reporting
 We have audited the accompanying consolidated balance sheets of PTC Inc. and its subsidiaries (the "Company") as of September 30, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended September 30, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

 Basis for Opinions
 The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
 Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

 Definition and Limitations of Internal Control over Financial Reporting
 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 Critical Audit Matters
 The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
 Revenue Recognition - Identification of Distinct Performance Obligations
 As described in Note 2 to the consolidated financial statements, the Company's sources of revenue include: (1) subscriptions, (2) perpetual licenses, (3) support for perpetual licenses and (4) professional services. Revenue is derived from the licensing of computer software products, cloud-based offerings, and related support and professional services contracts. During the year ended September 30, 2025, the Company recognized revenue from contracts with customers of $2,739 million. The Company's contracts with customers for subscriptions typically include commitments to transfer term-based, on-premises software licenses bundled with support and/or cloud services. On-premises software is determined to be a distinct performance obligation from support. As disclosed by management, significant judgment is used in determining the performance obligations related to these bundled products and services. The corresponding revenues are recognized as the related performance obligations are satisfied.
 The principal considerations for our determination that performing procedures relating to revenue recognition - identification of distinct performance obligations, is a critical audit matter are the (i) significant judgment by management when identifying the distinct performance obligations, and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management's identification of distinct performance obligations within contracts with customers.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the identification of distinct performance obligations. These procedures also included, among others (i) evaluating the Company's revenue recognition accounting policy and (ii) testing management's identification of distinct performance obligations in its contracts with customers by examining revenue contracts on a sample basis and evaluating whether these performance obligations are satisfied at a point in time or satisfied over time.
 /s/ PricewaterhouseCoopers LLP
 Boston, Massachusetts
 We have served as the Company's auditor since 1992.

 CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share data)

 2025

 2024

 ASSETS

 Current assets:

 Cash and cash equivalents

 $

 184,415

 $

 265,808

 Accounts receivable, net of allowance for doubtful accounts of $ 1,487 and $ 1,180 at September 30, 2025 and September 30, 2024, respectively

 1,001,085

 861,953

 Prepaid expenses

 119,107

 102,931

 Other current assets

 78,760

 68,013

 Total current assets

 1,383,367

 1,298,705

 Property and equipment, net

 60,843

 75,187

 Goodwill

 3,493,316

 3,461,891

 Acquired intangible assets, net

 824,663

 897,476

 Deferred tax assets

 194,070

 159,404

 Operating right-of-use lease assets

 114,974

 133,317

 Other assets

 545,939

 357,562

 Total assets

 $

 6,617,172

 $

 6,383,542

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $

 11,504

 $

 24,198

 Accrued expenses and other current liabilities

 136,140

 129,528

 Accrued compensation and benefits

 199,561

 173,797

 Accrued income taxes

 28,749

 39,978

 Current portion of long-term debt

 25,000

 521,467

 812,271

 754,039

 Short-term lease obligations

 24,179

 24,186

 Total current liabilities

 1,237,404

 1,667,193

 Long-term debt

 1,172,434

 1,227,105

 Deferred tax liabilities

 30,151

 32,216

 Long-term deferred revenue

 14,794

 21,235

 Long-term lease obligations

 148,254

 157,568

 Other liabilities

 187,906

 63,827

 Total liabilities

 2,790,943

 3,169,144

 Commitments and contingencies (Note 9)

 Stockholders' equity:

 Preferred stock, $ 0.01 par value; 5,000 shares authorized; none issued

 —

 —

 Common stock, $ 0.01 par value; 500,000 shares authorized; 119,536 and 120,155 shares issued and outstanding at September 30, 2025 and September 30, 2024, respectively

 1,195

 1,202

 Additional paid-in capital

 1,822,590

 1,965,307

 Retained earnings

 2,083,607

 1,349,610

 Accumulated other comprehensive loss

 ( 81,163

)

 ( 101,721

)

 Total stockholders' equity

 3,826,229

 3,214,398

 Total liabilities and stockholders' equity

 $

 6,617,172

 $

 6,383,542

 The accompanying notes are an integral part of these consolidated financial statements.

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)

 2025

 2024

 2023

 Revenue:

 License

 $

 1,162,709

 $

 806,871

 $

 747,022

 Support and cloud services

 1,469,180

 1,359,355

 1,199,536

 Total software revenue

 2,631,889

 2,166,226

 1,946,558

 107,337

 132,246

 150,495

 Cost of revenue:

 Cost of license revenue

 46,913

 46,850

 53,200

 Cost of support and cloud services revenue

 291,812

 274,599

 245,027

 Total cost of software revenue

 338,725

 321,449

 298,227

 Cost of professional services revenue

 106,258

 123,367

 142,779

 Total cost of revenue

 444,983

 444,816

 441,006

 Gross margin

 2,294,243

 1,853,656

 1,656,047

 Operating expenses:

 Sales and marketing

 566,516

 558,954

 530,125

 Research and development

 457,693

 433,047

 394,370

 General and administrative

 226,058

 232,377

 233,516

 45,948

 42,018

 40,022

 15,643

 ( 802

)

 ( 460

)

 Total operating expenses

 1,311,858

 1,265,594

 1,197,573

 Operating income

 982,385

 588,062

 458,474

 Interest expense

 ( 77,019

)

 ( 119,653

)

 ( 129,417

)

 Other income, net

 14,811

 3,509

 Income before income taxes

 920,177

 468,962

 332,566

 Provision for income taxes

 186,180

 92,629

 87,026

 $

 $

 $

 Earnings per share—Basic

 $

 6.12

 $

 3.14

 $

 2.07

 Earnings per share—Diluted

 $

 6.08

 $

 3.12

 $

 2.06

 Weighted-average shares outstanding—Basic

 120,005

 119,679

 118,341

 Weighted-average shares outstanding—Diluted

 120,777

 120,742

 119,334

 The accompanying notes are an integral part of these consolidated financial statements.

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 2025

 2024

 2023

 $

 $

 $

 Other comprehensive income, net of tax:

 Hedge loss arising during the period, net of tax of $ 5.8 million, $ 5.3 million, and $ 2.5 million in 2025, 2024, and 2023, respectively

 ( 17,863

)

 ( 16,315

)

 ( 7,516

)

 Foreign currency translation adjustment, net of tax of $ 0 for each period

 37,334

 36,465

 45,692

 Change in pension benefit, net of tax of $( 0.8) million, $ 1.7 million, and $ 1.3 million in 2025, 2024, and 2023, respectively

 1,087

 ( 3,791

)

 ( 2,798

)

 Other comprehensive income

 20,558

 16,359

 35,378

 Comprehensive income

 $

 754,555

 $

 392,692

 $

 280,918

 The accompanying notes are an integral part of these consolidated financial statements.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2025

 2024

 2023

 Cash flows from operating activities:

 $

 $

 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Depreciation and amortization

 102,504

 108,119

 104,760

 Amortization of right-of-use lease assets

 32,912

 33,288

 32,402

 216,205

 223,461

 206,459

 Other non-cash items, net

 ( 3,516

)

 ( 1,625

)

 ( 4,065

)

 Provision (benefit) from deferred income taxes

 ( 26,283

)

 ( 39,040

)

 16,676

 Changes in operating assets and liabilities, excluding the effects of acquisitions:

 Accounts receivable

 ( 121,052

)

 ( 34,629

)

 ( 98,607

)

 Accounts payable and accrued expenses

 ( 636

)

 ( 24,368

)

 15,918

 Accrued compensation and benefits

 20,526

 8,404

 7,845

 37,753

 81,399

 56,572

 Accrued income taxes

 89,856

 65,006

 4,639

 Other current assets and prepaid expenses

 ( 8,458

)

 ( 16,137

)

 6,974

 Operating lease liabilities

 ( 10,345

)

 ( 13,245

)

 ( 1,929

)

 Other noncurrent assets and liabilities

 ( 195,767

)

 ( 16,982

)

 17,677

 Net cash provided by operating activities

 867,696

 749,984

 610,861

 Cash flows from investing activities:

 Additions to property and equipment

 ( 11,008

)

 ( 14,378

)

 ( 23,814

)

 Acquisitions of businesses, net of cash acquired

 ( 6,532

)

 ( 93,457

)

 ( 828,271

)

 Settlement of net investment hedges

 ( 20,753

)

 ( 13,078

)

 ( 7,602

)

 Other investing activities

 —

 ( 3,901

)

 ( 6,428

)

 Net cash used in investing activities

 ( 38,293

)

 ( 124,814

)

 ( 866,115

)

 Cash flows from financing activities:

 Borrowings under credit facility

 860,000

 1,084,845

 1,540,000

 Repayments of senior notes

 ( 500,000

)

 —

 —

 Repayments of borrowings under credit facility and acquired debt

 ( 912,958

)

 ( 1,038,921

)

 ( 1,197,000

)

 Repurchases of common stock

 ( 299,998

)

 —

 —

 Proceeds from issuance of common stock

 26,062

 25,674

 21,652

 Payments of withholding taxes in connection with stock-based awards

 ( 80,205

)

 ( 102,001

)

 ( 82,448

)

 Credit facility origination costs

 ( 1,171

)

 —

 ( 13,355

)

 Payment of deferred acquisition consideration

 —

 ( 620,040

)

 —

 Other financing activity

 ( 239

)

 ( 282

)

 ( 536

)

 Net cash provided by (used in) financing activities

 ( 908,509

)

 ( 650,725

)

 268,313

 Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 ( 2,372

)

 3,223

 2,851

 Net change in cash, cash equivalents, and restricted cash

 ( 81,478

)

 ( 22,332

)

 15,910

 Cash, cash equivalents, and restricted cash, beginning of period

 266,466

 288,798

 272,888

 Cash, cash equivalents, and restricted cash, end of period

 $

 184,988

 $

 266,466

 $

 288,798

 The accompanying notes are an integral part of these consolidated financial statements.

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 Common Stock

 Additional

 Accumulated Other

 Total

 Shares

 Amount

 Paid-In
Capital

 Retained Earnings

 Comprehensive
Loss

 Stockholders'
Equity

 Balance as of September 30, 2022

 117,472

 $

 1,175

 $

 1,720,580

 $

 727,737

 $

 ( 153,458

)

 $

 2,296,034

 Common stock issued for employee stock-based awards

 1,798

 ( 18

)

 —

 —

 —

 Shares surrendered by employees to pay taxes related to stock-based awards

 ( 620

)

 ( 7

)

 ( 82,761

)

 —

 —

 ( 82,768

)

 Common stock issued for employee stock purchase plan

 21,650

 —

 —

 21,652

 Compensation expense from stock-based awards

 —

 —

 161,454

 —

 —

 161,454

 —

 —

 —

 —

 Loss on net investment hedges, net of tax

 —

 —

 —

 —

 ( 7,516

)

 ( 7,516

)

 Foreign currency translation adjustment

 —

 —

 —

 —

 45,692

 45,692

 Change in defined benefit pension items, net of tax

 —

 —

 —

 —

 ( 2,798

)

 ( 2,798

)

 Balance as of September 30, 2023

 118,846

 $

 1,188

 $

 1,820,905

 $

 973,277

 $

 ( 118,080

)

 $

 2,677,290

 Common stock issued for employee stock-based awards

 1,733

 ( 18

)

 —

 —

 —

 Shares surrendered by employees to pay taxes related to stock-based awards

 ( 612

)

 ( 6

)

 ( 101,918

)

 —

 —

 ( 101,924

)

 Common stock issued for employee stock purchase plan

 25,672

 —

 —

 25,674

 Compensation expense from stock-based awards

 —

 —

 220,666

 —

 —

 220,666

 —

 —

 —

 —

 Loss on net investment hedges, net of tax

 —

 —

 —

 —

 ( 16,315

)

 ( 16,315

)

 Foreign currency translation adjustment

 —

 —

 —

 —

 36,465

 36,465

 Change in defined benefit pension items, net of tax

 —

 —

 —

 —

 ( 3,791

)

 ( 3,791

)

 Balance as of September 30, 2024

 120,155

 $

 1,202

 $

 1,965,307

 $

 1,349,610

 $

 ( 101,721

)

 $

 3,214,398

 Common stock issued for employee stock-based awards

 1,300

 ( 13

)

 —

 —

 —

 Shares surrendered by employees to pay taxes related to stock-based awards

 ( 439

)

 ( 5

)

 ( 80,350

)

 —

 —

 ( 80,355

)

 Common stock issued for employee stock purchase plan

 26,060

 —

 —

 26,062

 Compensation expense from stock-based awards

 —

 —

 212,659

 —

 —

 212,659

 Repurchases of common stock, including excise tax

 ( 1,646

)

 ( 17

)

 ( 301,073

)

 —

 —

 ( 301,090

)

 —

 —

 —

 —

 Loss on net investment hedges, net of tax

 —

 —

 —

 —

 ( 17,863

)

 ( 17,863

)

 Foreign currency translation adjustment

 —

 —

 —

 —

 37,334

 37,334

 Change in defined benefit pension items, net of tax

 —

 —

 —

 —

 1,087

 1,087

 Balance as of September 30, 2025

 119,536

 $

 1,195

 $

 1,822,590

 $

 2,083,607

 $

 ( 81,163

)

 $

 3,826,229

 The accompanying notes are an integral part of these consolidated financial statements.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Description of Business and Basis of Presentation
 Business
 PTC Inc. was incorporated in 1985 and is headquartered in Boston, Massachusetts. PTC is a global software company that provides a portfolio of innovative digital solutions that work together to transform how physical products are engineered, manufactured, and serviced.
 Basis of Presentation
 Our fiscal year-end is September 30. The consolidated financial statements include PTC Inc. (the parent company) and its wholly-owned subsidiaries, including those operating outside the United States. All intercompany balances and transactions have been eliminated in the consolidated financial statements.
 We prepare our financial statements under generally accepted accounting principles in the United States that require management to make estimates and assumptions that affect the amounts reported and the related disclosures. Actual results could differ from these estimates.

 2. Summary of Significant Accounting Policies
 Foreign Currency Translation
 For our non-U.S. operations where the functional currency is the local currency, we translate assets and liabilities at exchange rates in effect at the balance sheet date and record translation adjustments in stockholders' equity. For our non-U.S. operations where the U.S. Dollar is the functional currency, we remeasure monetary assets and liabilities using exchange rates in effect at the balance sheet date and non-monetary assets and liabilities at historical rates and record resulting exchange gains or losses in Other income, net in the Consolidated Statements of Operations. We translate income statement amounts at average rates for the period. Transaction gains and losses are recorded in Other income, net in the Consolidated Statements of Operations.

 Revenue Recognition
 Nature of Products and Services
 Our sources of revenue include: (1) subscriptions, (2) perpetual licenses, (3) support for perpetual licenses and (4) professional services. Subscriptions include term-based on-premises licenses and related support, Software-as-a-Service (SaaS), and hosting services. Revenue is derived from the licensing of computer software products, cloud-based offerings, and related support and professional services contracts. In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these products or services. To achieve the core principle of this standard, we apply the following five steps:
 (1) identify the contract with the customer,

 (2) identify the performance obligations in the contract,

 (3) determine the transaction price,

 (4) allocate the transaction price to performance obligations in the contract, and

 (5) recognize revenue when or as we satisfy a performance obligation.

 We enter into contracts that include combinations of licenses, support, cloud-based offerings, and professional services, each of which are accounted for as separate performance obligations with differing revenue recognition patterns referenced below.

 Performance Obligation

 When Performance Obligation is Typically Satisfied

 Term-based subscriptions

 On-premises software licenses

 Point in Time: Upon the later of when the software is made available or the subscription term commences

 Support and cloud-based offerings (including SaaS)

 Over Time: Ratably over the contractual term; commencing upon the later of when the software is made available or the subscription term commences

 Perpetual software licenses

 Point in Time: When the software is made available

 Support for perpetual software licenses

 Over Time: Ratably over the contractual term

 Over Time: As services are provided

 Judgments and Estimates
 Our contracts with customers for subscriptions typically include commitments to transfer term-based, on-premises software licenses bundled with support and/or cloud services. Significant judgment is used in determining the performance obligations related to these bundled products and services. On-premises software is determined to be a distinct performance obligation from support which is sold for the same term of the subscription. For subscription arrangements which include cloud services and on-premises licenses, we assess whether the cloud component is highly interrelated with the on-premises term-based software licenses. Other than a limited population of subscriptions, the cloud component is not currently deemed to be interrelated with the on-premises term software and, as a result, cloud services are accounted for as a distinct performance obligation from the software and support components of the subscription.
 Judgment is required to allocate the transaction price to each performance obligation. We use the estimated standalone selling price method to allocate the transaction price for items that are not sold separately. The estimated standalone selling price is determined using all information reasonably available to us, including market conditions and other observable inputs. The corresponding revenues are recognized as the related performance obligations are satisfied. Where subscriptions include on-premises software and support only, we determined that approximately 55 % of the estimated standalone selling price for subscriptions is attributable to software licenses and approximately 45 % is attributable to support for those licenses. Some of our subscription offerings include a combination of on-premises and cloud-based technology. In such cases, the cloud-based technology is generally considered distinct and receives an allocation of approximately 5 % to 50 % of the estimated standalone selling price of the subscription. The amounts allocated to cloud are based on assessment of the relative value of the cloud functionality in the subscription, with the remaining amounts allocated between software and support.
 Our multi-year, non-cancellable subscription contracts provide customers with an annual right to exchange software within the subscription with other software. Although the exchange right is limited to software products within a similar product grouping, the exchange right is not limited to products with substantially similar features and functionality as those originally delivered. We determined that, for on-premises licenses, this right to exchange previously delivered software for different software represents variable consideration to be accounted for as a liability. We have identified a standard portfolio of contracts with common characteristics and applied the expected value method of determining variable consideration associated with this right. Additionally, in isolated situations that are outside of the standard portfolio of contracts due to contract size, longer contract duration, or other unique contractual terms, we use the most likely amount method to determine the amount of variable consideration. In both circumstances, the variable consideration included in the transaction price is constrained to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. As of September 30, 2025 and 2024, the total liability was $ 39.7 million and $ 26.0 million, respectively, primarily associated with the annual right to exchange on-premises subscription software.

 Practical Expedients
 We have elected certain practical expedients associated with our revenue recognition policy. We do not account for significant financing components if the period between revenue recognition and when the customer pays for the products or services is one year or less. Additionally, we recognize revenue equal to the amount we have a right to invoice when the amount corresponds directly with the value to the customer of our performance to date. Finally, revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities.

 Cash Equivalents
 Our cash equivalents are invested in money market accounts and time deposits of financial institutions. We have established guidelines relative to credit ratings, diversification and maturities that are intended to maintain safety and liquidity. Cash equivalents include highly liquid investments with original maturity periods of three months or less when purchased.

 Concentration of Credit Risk and Fair Value of Financial Instruments
 The amounts reflected in the Consolidated Balance Sheets for Cash and cash equivalents, Accounts receivable and Accounts payable approximate their fair value due to their short maturities. Financial instruments that potentially subject us to concentration of credit risk consist primarily of investments, trade accounts receivable and foreign currency derivative instruments. Our cash, cash equivalents, and foreign currency derivatives are placed with financial institutions with high credit standings. Our credit risk for derivatives is also mitigated due to the short-term nature of the contracts. Our customer base consists of many geographically diverse customers dispersed across many industries. No individual customer comprised more than 10% of our trade accounts receivable as of September 30, 2025 or 2024 or more than 10% of our revenue for the years ended September 30, 2025, 2024 or 2023.

 Fair Value Measurements
 Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
 The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:
 • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

 • Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or

 • Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 Allowance for Doubtful Accounts
 We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In determining the adequacy of the allowance for doubtful accounts, we analyze specific individual accounts receivable, historical bad debts, customer concentrations, customer credit-worthiness, current economic conditions, and accounts receivable aging trends.

 Derivatives
 Generally accepted accounting principles require all derivatives, whether designated in a hedging relationship or not, to be recorded on the balance sheet at fair value. Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our most significant foreign currency exposures relate to Eurozone countries, Japan, Sweden, Switzerland, China and India. Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the U.S. Dollar value of anticipated transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. We enter into derivative transactions, specifically foreign currency forward contracts and foreign currency option contracts, to manage our exposure to foreign currency exchange risk to reduce earnings volatility. We do not enter into derivative transactions for trading or speculative purposes. For a description of our non-designated hedge and net investment hedge activity see Note 15. Derivative Financial Instruments.
 Non-Designated Hedges
 We hedge our net foreign currency monetary assets and liabilities with foreign exchange forward contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These contracts have maturities of up to approximately four months. Generally, we do not designate these foreign currency forward contracts as hedges for accounting purposes and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, any gains or losses on the underlying foreign-denominated balance are generally offset by the losses or gains on the forward contract. Gains and losses on forward contracts and foreign currency monetary assets and liabilities are included in Other income, net.
 We hedge our forecasted U.S. Dollar cash flows with foreign exchange option contracts to reduce the risk that they will be adversely affected by changes in Euro or Japanese Yen exchange rates. These options have maturities of up to approximately fourteen months. We do not designate these foreign currency option contracts as hedges for accounting purposes and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into option contracts as an economic hedge, currency impacts on the Euro or Japanese Yen-denominated operations may be partially offset by gains on the option contracts. Gains and losses on foreign exchange option contracts are included in Other income, net.
 Net Investment Hedges
 We translate balance sheet accounts of subsidiaries with foreign functional currencies into the U.S. Dollar using the exchange rate at each balance sheet date. Resulting translation adjustments are reported as a component of Accumulated other comprehensive loss on the Consolidated Balance Sheets. We designate certain foreign exchange forward contracts as net investment hedges against exposure on translation of balance sheet accounts of Euro and Japanese Yen functional subsidiaries. Net investment hedges partially offset the impact of Foreign currency translation adjustment recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets. All foreign exchange forward contracts are carried at fair value on the Consolidated Balance Sheets and the maximum duration of net investment hedge foreign exchange forward contracts is approximately three months.

 Net investment hedge relationships are designated at inception, and effectiveness is assessed retrospectively on a quarterly basis using the net equity position of Euro and Japanese Yen functional subsidiaries. As the forward contracts are highly effective in offsetting exchange rate exposure, we record changes in these net investment hedges in Accumulated other comprehensive loss. Changes in the fair value of foreign exchange forward contracts due to changes in time value are excluded from the assessment of effectiveness. Our derivatives are not subject to any credit contingent features. We manage credit risk with counterparties by trading among several counterparties, and we review our counterparties' credit at least quarterly.

 Leases
 We determine if an arrangement is a lease at inception. Operating leases are included in Operating right-of-use lease assets, Short-term lease obligations, and Long-term lease obligations on our Consolidated Balance Sheets. Our operating leases are primarily for office space, automobiles, servers, and office equipment. We made an election not to separate lease components from non-lease components for office space, servers and office equipment. We combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the amount of our lease assets and liabilities. Finance leases are included in Property and equipment, Accrued expenses and other current liabilities, and Other liabilities on our Consolidated Balance Sheets.
 Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term as that of the lease payments at the commencement date. The right-of-use assets include any lease payments made and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term, unless the right-of-use asset has been impaired.
 Our lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We generally use the base non-cancellable lease term when determining the lease assets and liabilities.
 Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These variable payments include insurance, taxes, index-based payment adjustments, and payments for maintenance and utilities.
 Our operating leases expire at various dates through 2037.

 Property and Equipment
 Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Computer hardware and software are typically amortized over three to five years, and furniture and fixtures over three to twelve years. Leasehold improvements are amortized over the shorter of their useful lives or the remaining terms of the related leases. Maintenance and repairs are charged to expense when incurred; additions and improvements are capitalized. When an item is sold or retired, the cost and related accumulated depreciation is relieved, and the resulting gain or loss, if any, is recognized in income.

 Software Development Costs
 We incur costs to develop computer software to be licensed or otherwise marketed to customers. Our research and development expenses consist principally of salaries and benefits, costs of computer software and equipment, and facility expenses. Research and development costs are expensed as incurred, except for costs of internally developed or externally purchased software that qualify for capitalization. Development costs for software to be sold externally incurred subsequent to the establishment of technological feasibility, but prior to the general release of the product, are capitalized and, upon general release, are amortized using the greater of either the straight-line method over the expected life of the related products or based upon the pattern in which economic benefits related to such assets are realized. The straight-line method is used if it approximates the same amount of expense as that calculated using the ratio that current period gross product revenues bear to total anticipated gross product revenues. No internal development costs for software to be sold externally were capitalized in 2025, 2024 or 2023. We did no t purchase any software in 2025. We purchased software of $ 4.1 million and $ 1.0 million in 2024 and 2023, respectively. Additionally, we acquired capitalized software through business combinations (for further detail, see Note 5. Acquisitions and Disposition of Businesses). These assets are included in Acquired intangible assets, net in the accompanying Consolidated Balance Sheets.

 Business Combinations
 We allocate the purchase price of acquisitions to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value. Goodwill is measured as the excess of the purchase price over the value of net identifiable assets acquired. While best estimates and assumptions are used to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. Any adjustments to estimated fair value are recorded to goodwill, provided that we are within the measurement period (up to one year from the acquisition date) and that we continue to collect information to determine estimated fair value. Subsequent to the measurement period or our final determination of estimated fair value, whichever comes first, adjustments are recorded in the Consolidated Statements of Operations.

 Goodwill, Acquired Intangible Assets and Long-lived Assets
 Goodwill is the amount by which the purchase price in a business acquisition exceeds the fair value of net identifiable assets on the date of purchase.
 Goodwill is evaluated for impairment annually as of the end of the third quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Factors we consider important, on an overall company basis that could trigger an impairment review include significant under-performance relative to historical or projected future operating results, significant changes in our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, a significant decline in our stock price for a sustained period and a reduction of our market capitalization relative to net book value.
 Our annual goodwill impairment test is based on either a quantitative or qualitative assessment. A quantitative assessment compares the fair value of the reporting unit to its carrying value. If the reporting unit's carrying value exceeds its fair value, we record an impairment loss equal to the difference between the carrying value of goodwill and its estimated fair value. We estimate the fair values of our reporting unit using discounted cash flow valuation models. Those models require estimates of future revenues, profits, capital expenditures, working capital, terminal values based on revenue multiples, and discount rates for the reporting unit. We estimate these amounts by evaluating historical trends; current budgets and operating plans; and industry data. A qualitative assessment is designed to determine whether we believe it is more likely than not that the fair value of our reporting unit exceeds its carrying value. A qualitative assessment includes a review of qualitative factors, including company-specific (financial performance and long-range plans), industry, and macroeconomic factors, and a consideration of the fair value of the reporting unit at the last valuation date.

 During the third fiscal quarter of 2025, we completed our annual impairment test of goodwill, which was based on a qualitative assessment, and concluded that there was no impairment. Through September 30, 2025, there were no events or changes in circumstances that indicated that the carrying values of goodwill or acquired intangible assets may not be recoverable.
 Long-lived assets primarily include property and equipment, right-of-use lease assets, and acquired intangible assets with finite lives (including purchased software, customer lists and trademarks). Purchased software is amortized over periods up to 16 years, customer lists are amortized over periods up to 20 years and trademarks are amortized over periods up to 15 years. We review long-lived assets for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of those assets are no longer appropriate. An impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset or asset group. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis.
 In 2025, we recorded an impairment charge of $ 15.6 million, of which $ 12.8 million related to lease right-of-use assets and $ 2.8 million related to fixed assets. This impairment was triggered by the sublease of certain portions of our Seaport headquarters, which resulted in both reassessment of the asset grouping and identification of potential impairment. After determining the appropriate asset group, we performed a recoverability test by comparing the undiscounted cash flows for each asset group with its carrying value, in each case concluding that impairment was indicated. The fair value of each asset group was then estimated using a discounted cash flow model. This fair value assessment involved assumptions and estimates, including the sublease term, variable lease payments, the market discount rate, expected construction and broker costs, and estimates of future sublease cash flows for the period after the present sublease ends (when applicable). The impairment charge was recorded to Impairment and other charges (credits), net in the Consolidated Statements of Operations.

 Advertising Expenses
 Advertising costs are expensed as incurred. Total advertising expenses incurred were $ 11.7 million, $ 15.0 million and $ 11.7 million in 2025, 2024 and 2023, respectively, and are included in Sales and marketing expenses in the accompanying Consolidated Statements of Operations.

 Income Taxes
 Our income tax expense includes U.S. and international income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effects of these differences are reported as deferred tax assets and liabilities. Deferred tax assets are recognized for the estimated future tax effects of deductible temporary differences and tax operating loss and credit carryforwards. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not that all or a portion of deferred tax assets will not be realized, we establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we include an expense within Provision for income taxes in the Consolidated Statements of Operations.

 Comprehensive Income
 Comprehensive income consists of Net income and Other comprehensive income, which includes foreign currency translation adjustments, changes in unrecognized actuarial gains and losses (net of tax) related to pension benefits, unrealized gains and losses on hedging instruments and unrealized gains and losses on marketable securities. We do not record tax provisions or benefits for the net changes in the foreign currency translation adjustment, as we intend to reinvest permanently undistributed earnings of our foreign subsidiaries. Accumulated other comprehensive loss is reported as a component of Stockholders' equity and comprised the following as of September 30, 2025: cumulative translation adjustment losses of $ 40.8 million, unrecognized actuarial losses related to pension benefits of $ 13.6 million ($ 9.4 million net of tax), and accumulated net losses from net investment hedges of $ 38.5 million ($ 31.0 million net of tax). As of September 30, 2024, Accumulated other comprehensive loss comprised the following: cumulative translation adjustment losses of $ 78.1 million, unrecognized actuarial losses related to pension benefits of $ 15.2 million ($ 10.5 million net of tax), and accumulated net losses from net investment hedges of $ 14.8 million ($ 13.1 million net of tax).

 Earnings per Share (EPS)
 Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options, unrecognized compensation expense and any tax benefits as additional proceeds. Anti-dilutive shares excluded from the calculations of diluted EPS were immaterial in the years ended September 30, 2025, 2024, and 2023.
 The following table presents the calculation for both basic and diluted EPS:

 (in thousands, except per share data)

 2025

 2024

 2023

 $

 $

 $

 Weighted average shares outstanding

 120,005

 119,679

 118,341

 Dilutive effect of employee stock options, restricted shares and restricted stock units

 1,063

 Diluted weighted average shares outstanding

 120,777

 120,742

 119,334

 Earnings per share—Basic

 $

 6.12

 $

 3.14

 $

 2.07

 Earnings per share—Diluted

 $

 6.08

 $

 3.12

 $

 2.06

 Stock-Based Compensation
 We measure the compensation cost of employee services received in exchange for an award of equity based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. See Note 11. Equity Incentive Plans for a description of the types of equity awards granted, the compensation expense related to such awards and detail of such awards outstanding. See Note 7. Income Taxes for detail of the tax benefit related to stock-based compensation recognized in the Consolidated Statements of Operations.

 Recently Adopted Accounting Pronouncements
 Improvements to Reportable Segment Disclosures
 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU became effective for us in 2025 and resulted in disclosure changes only (see Note 17. Segments).
 Pending Accounting Pronouncements
 Targeted Improvements to the Accounting for Internal-Use Software
 In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software by eliminating project stage-based capitalization and clarifying the probable-to-complete threshold to commence the capitalization of software costs. The ASU will be effective for us in the first quarter of 2029, with early adoption permitted. The standard may be applied prospectively, retrospectively, or via a modified prospective transition method. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.
 Measurements of Credit Losses for Accounts Receivable and Contract Assets
 In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses on accounts receivable and contract assets. The ASU will be effective for us in the first quarter of 2027, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.
 Disaggregation of Income Statement Expenses
 In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. As clarified by ASU 2025-01, ASU 2024-03 will be effective for us in the fourth quarter of 2028. We expect the adoption to result in disclosure changes only.
 Improvements to Income Tax Disclosures
 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU will be effective for us in the fourth quarter of 2026. We expect the adoption to result in disclosure changes only.

 3. Revenue from Contracts with Customers
 Receivables, Contract Assets, and Contract Liabilities

 2025

 2024

 Short-term receivables

 $

 1,001,085

 $

 861,953

 Long-term receivables

 $

 378,941

 $

 200,099

 Contract asset

 $

 11,044

 $

 14,410

 $

 827,065

 $

 775,274

 As of September 30, 2025, all our contract assets are expected to be transferred to receivables within the next 12 months and therefore are included in Other current assets. As of September 30, 2024, all our contract assets were included in Other current assets.

 Approximately $ 10.9 million of the September 30, 2024 contract asset balance was transferred to receivables during the year ended September 30, 2025 as a result of the right to payment becoming unconditional. Additions to contract asset of approximately $ 7.5 million primarily related to revenue recognized in the period, net of billings. There were no impairments of contract assets in the year ended September 30, 2025.
 During the year ended September 30, 2025, we recognized $ 748.8 million of revenue that was included in deferred revenue as of September 30, 2024. The remainder of the change in the Deferred revenue balance was driven by additional deferrals of $ 800.6 million, primarily from new billings, as well as an increase in the balance resulting from changes in foreign currency exchange rates. For subscription contracts, we generally invoice customers annually.
 Costs to Obtain or Fulfill a Contract
 We recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred costs (primarily commissions) are amortized proportionately related to revenue over 5 years, which is generally longer than the term of the initial contract because of anticipated renewals as commissions for renewals are not commensurate with commissions related to our initial contracts. As of September 30, 2025 and September 30, 2024, deferred costs of $ 45.1 million and $ 42.5 million, respectively, were included in Other current assets and $ 78.2 million and $ 76.4 million, respectively, were included in Other assets. Amortization expense related to costs to obtain a contract with a customer was $ 54.0 million, $ 52.0 million, and $ 53.4 million in the years ended September 30, 2025, 2024, and 2023, respectively. There were no substantial impairments of the contract cost asset in the years ended September 30, 2025 and 2024.
 Remaining Performance Obligations (RPO)
 Our contracts with customers include transaction price amounts allocated to performance obligations that will be satisfied and recognized as revenue at a later date. The value of RPO and timing of recognition may be impacted by several factors, including the performance obligation type, duration and timing of commencement, as well as foreign currency exchange rate fluctuations. As of September 30, 2025, RPO totaled $ 2,870.7 million, of which $ 827.1 million is recorded in Deferred revenue and $ 2,043.6 million is not yet recorded in the Consolidated Balance Sheets. Of the total, we expect to recognize approximately 55 % over the next 12 months, 24 % over the next 13 to 24 months, and the remaining amount thereafter.
 Disaggregation of Revenue

 2025

 2024

 2023

 Recurring revenue(1)

 $

 2,600,514

 $

 2,134,030

 $

 1,907,918

 Perpetual license

 31,375

 32,196

 38,640

 107,337

 132,246

 150,495

 $

 $

 $

 (1) Recurring revenue is comprised of on-premises subscription, perpetual support, SaaS, and hosting services revenue.

 We report revenue by the following two product groups:

 2025

 2024

 2023

 Product lifecycle management (PLM)

 $

 1,741,310

 $

 1,459,078

 $

 1,330,316

 Computer-aided design (CAD)

 997,916

 839,394

 766,737

 $

 $

 $

 We license products to customers worldwide. Our sales and marketing operations outside the United States are conducted principally through our international sales subsidiaries throughout Europe and the Asia Pacific region. Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.

 2025

 2024

 2023

 Americas(1)

 $

 1,327,229

 $

 1,087,929

 $

 1,023,273

 Europe(2)

 995,094

 859,387

 753,796

 Asia Pacific

 416,903

 351,156

 319,984

 $

 $

 $

 (1) Includes revenue in the United States totaling $ 1,287.5 million, $ 1,057.3 million, and $ 993.8 million for 2025, 2024 and 2023, respectively.

 (2) Includes revenue in Germany totaling $ 368.8 million, $ 330.5 million, and $ 292.0 million for 2025, 2024 and 2023, respectively.

 4. Property and Equipment
 Property and equipment consisted of the following:

 2025

 2024

 Computer hardware and software

 $

 253,382

 $

 262,085

 Furniture and fixtures

 18,341

 20,177

 Leasehold improvements

 72,657

 79,802

 Gross property and equipment

 344,380

 362,064

 Accumulated depreciation and amortization

 ( 283,537

)

 ( 286,877

)

 Net property and equipment

 $

 60,843

 $

 75,187

 Depreciation expense was $ 23.7 million, $ 27.6 million and $ 29.0 million in 2025, 2024 and 2023, respectively. In 2025, we recognized an impairment charge of $ 2.8 million on leasehold improvements and furniture and fixtures related to subleased facilities. For additional information on this impairment charge, see Note 2. Summary of Significant Accounting Policies.
 Our material long-lived assets primarily resided in the United States in 2025, 2024 and 2023.

 5. Acquisitions and Disposition of Businesses
 Acquisition and transaction-related costs were $ 9.1 million, $ 3.1 million and $ 18.7 million in 2025, 2024 and 2023, respectively. Acquisition and transaction-related costs include direct costs of potential and completed acquisitions (e.g., investment banker fees and professional fees, including legal and valuation services) and expenses related to acquisition integration activities (e.g., professional fees and severance). Other transactional charges include third-party costs related to unusual transactions, such as the divestiture of a portion of our business. These costs are classified in General and administrative expenses in the accompanying Consolidated Statements of Operations.
 Our results of operations include or exclude, as applicable, the results of acquired or sold businesses beginning on their respective acquisition or sale date.
 The acquisitions described below have been accounted for as business combinations. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the respective acquisition date. The fair values of intangible assets were based on valuations using discounted cash flow models which require the use of significant estimates and assumptions, including estimating future revenues, future costs, and an applicable discount rate. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

 pure-systems
 On October 4, 2023, we acquired pure-systems GmbH pursuant to a Share Purchase Agreement. pure-systems was a leading provider of product and software variant management solutions used by manufacturing companies to efficiently manage the different versions of software and systems engineering assets. The purchase price was $ 93.5 million, net of cash acquired, which we financed primarily with a draw on the revolving line of our credit facility. pure-systems had approximately 50 employees on the close date.
 The following table outlines the purchase price allocation for pure-systems:

 Goodwill

 $

 77,118

 Customer relationships

 17,400

 Purchased software

 10,000

 Trademarks

 Net tax liability

 ( 8,860

)

 Acquired debt

 ( 2,475

)

 Other net liabilities

 ( 526

)

 Total

 $

 93,457

 The acquired customer relationships, purchased software, and trademarks are being amortized over useful lives of 18 years, 10 years, and 10 years, respectively, based on the expected economic benefit pattern of the assets. The acquired goodwill will not be deductible for income tax purposes. The amount of goodwill resulting from the purchase price allocation reflects the expected value that will be created by expanding our application lifecycle management (ALM) offerings, which are included within our PLM product group.
 Our results of operations for the reported periods if presented on a pro forma basis would not differ materially from our reported results.
 ServiceMax
 On January 3, 2023, we acquired ServiceMax, Inc. pursuant to a Share Purchase Agreement dated November 17, 2022 by and among PTC, ServiceMax, Inc., and ServiceMax JV, LP. ServiceMax developed and licensed cloud-native, product-centric field service management (FSM) software, which is included within our PLM product group. The purchase price of $ 1,448.2 million, net of cash acquired, was payable in two installments. Upon closing of the transaction, we paid the first installment of $ 828.2 million, as adjusted for working capital, indebtedness, cash, and transaction expenses as set forth in the Share Purchase Agreement. The remaining installment of $ 650.0 million, of which $ 620.0 million represented the fair value as of the acquisition date and $ 30.0 million was imputed interest, was paid in October 2023. The fair value of the deferred acquisition payment was calculated based on our borrowing rate at the time of the acquisition.
 PTC borrowed $ 630 million under the revolving line of our credit facility and $ 500 million under the term loan of our credit facility to repay amounts under the prior credit facility and to pay the closing purchase price and transaction expenses related to the acquisition. ServiceMax had approximately 500 employees on the close date. In the year ended September 30, 2023, ServiceMax revenue was $ 137.6 million and ServiceMax earnings were immaterial.

 The following table sets forth the purchase price allocation for ServiceMax. The purchase price allocation includes the finalization of measurement period adjustments related to intangibles and deferred tax liabilities that resulted in a $ 3.5 million increase in customer relationships, a $ 3.2 million increase in net tax liability, and a $ 0.3 million decrease in goodwill compared to the balances reported as of March 31, 2023. We also recorded a liability of $ 620.0 million related to the fair value of the $ 650.0 million deferred purchase price payment.

 Goodwill

 $

 974,850

 Customer relationships

 512,700

 Purchased software

 106,900

 Accounts receivable

 58,722

 Trademarks

 9,000

 Other net assets

 5,540

 Net tax liability

 ( 121,656

)

 ( 97,829

)

 Total

 $

 1,448,227

 The acquired customer relationships, purchased software, and trademarks are being amortized over useful lives of 20 years, 10 years, and 10 years, respectively, based on the expected economic benefit pattern of the assets. The acquired goodwill will not be deductible for income tax purposes. The amount of goodwill resulting from the purchase price allocation reflects expected future growth as ServiceMax expands our closed-loop product lifecycle management (PLM) strategy.
 Unaudited Pro Forma Financial Information
 The unaudited pro forma financial information in the table below summarizes the combined results of operations for PTC and ServiceMax for the pro forma year ended September 30, 2023. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2022. Since the acquisition took place in fiscal 2023, the unaudited pro forma financial information was prepared as though ServiceMax was acquired at the beginning of fiscal 2022. The unaudited pro forma financial information for all periods presented includes adjustments to reflect certain business combination effects, including: amortization of acquired intangible assets, including the elimination of related ServiceMax expenses; acquisition-related costs incurred by both parties; reversal of certain costs incurred by ServiceMax which would not have been incurred had the acquisition occurred at the beginning of fiscal 2022; interest expense under the new combined capital structure; stock-based compensation charges; and the related tax effects as though ServiceMax was acquired as of the beginning of fiscal 2022.
 The unaudited pro forma financial information for the year ended September 30, 2023 presented below combines the historical results of PTC for the period, the historical results of ServiceMax for the three months ended January 31, 2023, and the effects of the pro forma adjustments listed above.

 Pro forma year ended

 2023

 Revenue

 $

 2,140,738

 $

 239,437

 The impact from acquisitions other than ServiceMax for the reported periods if presented on a pro forma basis would not differ materially from our reported results.
 Other Acquisitions
 In the third quarter of 2025, we acquired IncQuery Group GmbH pursuant to a Share Purchase Agreement. The purchase price was $ 7.9 million, net of cash acquired, of which $ 6.5 million was paid in the period and $ 1.4 million is contingent consideration that may be paid in 2027 to the extent earned.

 PLM Services Business Disposition
 In 2022, we sold a portion of our PLM services business to ITC Infotech India Limited pursuant to a Strategic Partner Agreement dated as of April 20, 2022 by and between PTC and ITC Infotech. Consideration received from ITC Infotech for the sale was approximately $ 60.4 million, consisting of $ 32.5 million cash paid on closing and $ 28.0 million of services to be provided by ITC Infotech to PTC for no additional charge. Additionally, there was contingent consideration of up to $ 20 million based on certain performance milestones. We elected to defer the recognition of gains associated with contingent consideration until they became realizable.
 In the year ended September 30, 2025, we recognized a $ 13.1 million gain upon the achievement of performance milestones associated with this contingent consideration. This consideration will be received in credits for future services to be provided by ITC Infotech rather than in cash. The gain was recognized in Other income, net in the Consolidated Statements of Operations.

 6. Goodwill and Acquired Intangible Assets
 Goodwill and acquired intangible assets consisted of the following:

 September 30, 2025

 September 30, 2024

 Gross
Carrying
Amount

 Accumulated
Amortization

 Net Book
Value

 Gross
Carrying
Amount

 Accumulated
Amortization

 Net Book
Value

 Goodwill (not amortized)

 $

 3,493,316

 $

 3,461,891

 Intangible assets with finite lives (amortized)(1):

 Purchased software

 $

 639,104

 $

 472,357

 $

 166,747

 $

 634,439

 $

 436,471

 $

 197,968

 Capitalized software

 22,877

 22,877

 —

 22,877

 22,877

 —

 Customer lists and relationships

 1,149,262

 505,202

 644,060

 1,141,086

 457,718

 683,368

 Trademarks and trade names

 38,179

 24,323

 13,856

 37,961

 21,821

 16,140

 Other

 4,019

 4,019

 —

 3,941

 3,941

 —

 $

 1,853,441

 $

 1,028,778

 $

 824,663

 $

 1,840,304

 $

 942,828

 $

 897,476

 Total goodwill and acquired intangible assets

 $

 4,317,979

 $

 4,359,367

 (1) The weighted-average useful lives of purchased software, customer lists and relationships, and trademarks and trade names with a remaining net book value are 11 years, 17 years, and 11 years, respectively. The weighted-average useful life for all intangible assets with remaining net book value is 16 years.

 The changes in the carrying amounts of Goodwill from September 30, 2024 to September 30, 2025 are due to the impact of acquisitions and to foreign currency translation adjustments related to those asset balances that are recorded in non-U.S. currencies.
 Changes in Goodwill were as follows:

 Balance, September 30, 2023

 $

 3,358,511

 pure-systems acquisition

 77,118

 Foreign currency translation adjustments

 26,262

 Balance, September 30, 2024

 $

 3,461,891

 Other acquisitions

 5,977

 Foreign currency translation adjustments

 25,448

 Balance, September 30, 2025

 $

 3,493,316

 The aggregate amortization expense for intangible assets with finite lives recorded for the years ended September 30, 2025, 2024 and 2023 was reflected in our Consolidated Statements of Operations as follows:

 2025

 2024

 2023

 $

 45,948

 $

 42,018

 $

 40,022

 Cost of revenue

 32,828

 38,495

 35,694

 Total amortization expense

 $

 78,776

 $

 80,513

 $

 75,716

 The estimated aggregate future amortization expense for intangible assets with finite lives remaining as of September 30, 2025 is $ 79.6 million for 2026, $ 79.7 million for 2027, $ 76.9 million for 2028, $ 73.8 million for 2029, $ 66.2 million for 2030 and $ 448.5 million thereafter.

 7. Income Taxes
 Our Income before income taxes consisted of the following:

 2025

 2024

 2023

 Domestic

 $

 418,265

 $

 43,504

 $

 ( 49,193

)

 Foreign

 501,912

 425,458

 381,759

 Total income before income taxes

 $

 920,177

 $

 468,962

 $

 332,566

 Our Provision for income taxes consisted of the following:

 2025

 2024

 2023

 Current:

 Federal

 $

 128,230

 $

 44,642

 $

 7,311

 State

 21,754

 25,359

 10,020

 Foreign

 62,479

 61,668

 53,019

 212,463

 131,669

 70,350

 Deferred:

 Federal

 ( 43,333

)

 ( 60,378

)

 ( 11,821

)

 State

 ( 15,630

)

 ( 7,387

)

 ( 10,028

)

 Foreign

 32,680

 28,725

 38,525

 ( 26,283

)

 ( 39,040

)

 16,676

 Provision for income taxes

 $

 186,180

 $

 92,629

 $

 87,026

 Taxes computed at the statutory federal income tax rates are reconciled to the Provision for income taxes as follows:

 2025

 2024

 2023

 Statutory federal income tax rate

 $

 193,237

 %

 $

 98,482

 %

 $

 69,839

 %

 State income taxes, net of federal tax benefit

 6,124

 %

 4,631

 %

 %

 Federal research and development credits

 ( 8,552

)

 ( 1

)%

 ( 11,203

)

 ( 2

)%

 ( 7,751

)

 ( 2

)%

 Uncertain tax positions

 ( 1,904

)

 —

 7,268

 %

 23,302

 %

 Foreign tax credit

 ( 14,410

)

 ( 2

)%

 ( 30,119

)

 ( 7

)%

 ( 11,415

)

 ( 3

)%

 Foreign rate differences

 ( 12,135

)

 ( 1

)%

 ( 15,368

)

 ( 3

)%

 ( 20,829

)

 ( 6

)%

 Foreign tax on U.S. provision

 14,452

 %

 15,120

 %

 11,415

 %

 Excess tax benefits from restricted stock

 ( 8,534

)

 ( 1

)%

 ( 9,225

)

 ( 2

)%

 ( 6,963

)

 ( 2

)%

 U.S. permanent items

 ( 920

)

 —

 2,711

 %

 5,341

 %

 Non-deductible compensation

 9,096

 %

 10,157

 %

 8,344

 %

 Base Erosion Anti-Abuse Tax (BEAT)

 2,653

 —

 3,264

 %

 —

 —

 GILTI, net of foreign tax credits

 27,008

 %

 31,388

 %

 17,861

 %

 Foreign-Derived Intangible Income (FDII)

 ( 20,162

)

 ( 2

)%

 ( 15,148

)

 ( 3

)%

 ( 8,987

)

 ( 3

)%

 Non-deductible imputed interest

 —

 —

 —

 —

 6,292

 %

 Other, net

 ( 1

)%

 %

 —

 ( 1

)%

 Provision for income taxes

 $

 186,180

 %

 $

 92,629

 %

 $

 87,026

 %

 In 2025, 2024, and 2023, our effective tax rate was impacted by our corporate structure in which our foreign taxes are at a net effective tax rate lower than the U.S. rate. A significant amount of our foreign earnings is generated by our subsidiaries organized in Ireland and the Cayman Islands. In 2025, 2024, and 2023, the foreign rate differential predominantly relates to these earnings. In addition to the foreign rate differential, our tax rate differed from the U.S. statutory federal income tax due to the net effects of the GILTI and FDII regimes (together referred to as U.S. Tax reform), and the excess tax benefit related to stock-based compensation.

 Our effective tax rates for 2025 and 2024 were impacted by a number of offsetting items as outlined below, as well as by the year-over-year increase in Income before income taxes, which was primarily domestic; however, there was ultimately no net change in the effective tax rate year-over-year. In 2025 and 2024, our rate included the effects of IRS procedural guidance requiring consent for previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income in 2024, with a lesser impact to taxable income in 2025. In 2025, we recorded tax expense of $ 10.9 million primarily related to accrued interest stemming from the effects of the procedural guidance. In 2024, we recorded a benefit of $ 4.4 million primarily related to an increase to the estimated tax benefit for the deductions associated with GILTI and FDII.
 Additionally, in 2025, we recorded tax benefits of $ 10.8 million related to tax reserves in foreign jurisdictions.
 In 2024, the rate was impacted by a U.S. Tax Court ruling in Varian Medical Systems, Inc. v. Commissioner, issued on August 26, 2024. The ruling related to the U.S. taxation of deemed foreign dividends in the transition year of the Tax Act (our fiscal 2018). As a result, we recorded a $ 14.4 million benefit for additional foreign tax credits that became available to us. These benefits were offset by a tax expense of $ 4.6 million related to a tax reserve in a foreign jurisdiction.
 Additionally in 2023, our results include tax expense of $ 21.8 million relating to an uncertain tax position regarding transfer pricing in a foreign jurisdiction. Our rate was also impacted by non-deductible imputed interest related to the deferred payment on the acquisition of ServiceMax, Inc.
 As of September 30, 2025 and 2024, income taxes payable and income tax accruals recorded on the accompanying Consolidated Balance Sheets were $ 179.1 million ($ 28.7 million in Accrued income taxes and $ 150.4 million in Other liabilities) and $ 75.3 million ($ 40.0 million in Accrued income taxes, $ 6.2 million in Accrued expenses and other current liabilities and $ 29.1 million in Other liabilities), respectively. As of September 30, 2025 and 2024, prepaid taxes recorded in Prepaid expenses on the accompanying Consolidated Balance Sheets were $ 20.4 million and $ 14.0 million, respectively. We made net income tax payments of $ 121.7 million, $ 68.6 million and $ 65.9 million in 2025, 2024 and 2023, respectively.

 The significant temporary differences that created deferred tax assets and liabilities are shown below:

 2025

 2024

 Deferred tax assets:

 Net operating loss carryforwards

 $

 12,074

 $

 14,141

 Foreign tax credits

 5,996

 2,028

 Capitalized research and development

 176,610

 136,001

 Pension benefits

 6,868

 7,629

 Prepaid expenses

 22,391

 18,551

 2,970

 2,607

 23,514

 22,231

 Other reserves not currently deductible

 39,888

 34,422

 Amortization of intangible assets

 36,560

 60,527

 Research and development and other tax credits

 8,984

 25,706

 Lease liabilities

 43,650

 46,460

 Fixed assets

 114,109

 106,741

 Capital loss carryforward

 4,517

 3,875

 Other

 5,608

 3,528

 Gross deferred tax assets

 503,739

 484,447

 Valuation allowance

 ( 8,529

)

 ( 21,755

)

 Total deferred tax assets

 495,210

 462,692

 Deferred tax liabilities:

 Acquired intangible assets not deductible

 ( 246,107

)

 ( 257,731

)

 Lease assets

 ( 29,298

)

 ( 34,160

)

 Pension prepayments

 ( 4,279

)

 ( 3,283

)

 ( 10,212

)

 ( 1,243

)

 Depreciation

 ( 3,277

)

 ( 4,683

)

 Deferred income

 ( 14,518

)

 ( 11,636

)

 Prepaid commissions

 ( 14,479

)

 ( 13,738

)

 Other

 ( 9,120

)

 ( 9,030

)

 Total deferred tax liabilities

 ( 331,290

)

 ( 335,504

)

 Net deferred tax assets

 $

 163,920

 $

 127,188

 We reassess our valuation allowance requirements each financial reporting period. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to use our existing deferred tax assets.
 For U.S. tax return purposes, net operating loss (NOL) carryforwards and tax credits are generally available to be carried forward to future years, subject to certain limitations. At September 30, 2025, we had U.S. federal tax effected NOL carryforwards from acquisitions of $ 0.4 million which expire in 2026 to 2033. The use of these NOL carryforwards is limited as a result of the change in ownership rules under Internal Revenue Code Section 382. Additionally, we have tax effected state NOL carryforwards, net of federal benefit, of $ 4.9 million, which expire beginning in 2027 and ending in 2042.
 As of September 30, 2025, we had federal R&D credit carryforwards of $ 2.2 million, which expire beginning in 2026 and ending in 2035, and Massachusetts R&D credit carryforwards of $ 16.8 million, which expire beginning in 2026 and ending in 2040. We also had foreign tax credits of $ 6.0 million, which expire beginning in 2032 and ending in 2035.
 We also have tax effected NOL carryforwards in non-U.S. jurisdictions totaling $ 6.7 million, the majority of which do not expire, and non-U.S. tax credit carryforwards of $ 1.2 million that expire beginning in 2031 and ending in 2037. Additionally, we have tax effected amortization carryforwards of $ 18.0 million in a foreign jurisdiction. There are limitations imposed on the use of such attributes that could restrict the recognition of any tax benefits.

 As of September 30, 2025, we have a valuation allowance of $ 3.4 million against net deferred tax assets in the United States and a valuation allowance of $ 5.1 million against net deferred tax assets in certain foreign jurisdictions. The $ 3.4 million U.S. valuation allowance relates to Massachusetts tax credit carryforwards which we do not expect to realize a benefit from prior to expiration. The valuation allowance recorded against net deferred tax assets of certain foreign jurisdictions is established primarily for our capital loss carryforwards, the majority of which do not expire. However, there are limitations imposed on the utilization of such capital losses that could restrict the recognition of any tax benefits.
 The changes to the valuation allowance were primarily due to the following:

 2025

 2024

 2023

 Valuation allowance, beginning of year

 $

 21,755

 $

 21,695

 $

 22,283

 Net increase (decrease) in deferred tax assets with a full valuation allowance

 ( 13,226

)

 ( 588

)

 Valuation allowance, end of year

 $

 8,529

 $

 21,755

 $

 21,695

 Our policy is to record estimated interest and penalties related to the underpayment of income taxes as a component of our income tax provision. In 2025, 2024 and 2023 we recorded net interest expense of $ 10.0 million, $ 3.3 million and $ 0.5 million, respectively. In 2025, 2024 and 2023 we had no penalty expenses in our income tax provision. As of September 30, 2025 and 2024, we had accrued $ 13.6 million and $ 3.1 million of estimated interest expense, respectively. We had no accrued tax penalties as of September 30, 2025, 2024 or 2023.

 Unrecognized tax benefits (in thousands)

 2025

 2024

 2023

 Unrecognized tax benefit, beginning of year

 $

 65,035

 $

 50,742

 $

 23,923

 Tax positions related to current year:

 Additions

 14,736

 7,570

 7,075

 Tax positions related to prior years:

 Additions

 104,375

 10,705

 20,855

 Reductions

 ( 9,669

)

 ( 452

)

 —

 Settlements

 ( 16,753

)

 ( 3,530

)

 —

 Statute expirations

 —

 —

 ( 1,111

)

 Unrecognized tax benefit, end of year

 $

 157,724

 $

 65,035

 $

 50,742

 In 2024, we requested consent from the IRS to change our tax accounting method for the treatment of certain deductions. In accordance with GAAP, our financial statements have not reflected the effects of this accounting method change as we had not received IRS consent as of September 30, 2025. Accordingly, since we reflected the benefits associated with this position in our U.S. federal tax return for the year ended September 30, 2024, which was filed during the fourth quarter of 2025, we have included an unrecognized tax benefit of $ 109.2 million within Other liabilities on the Consolidated Balance Sheets. We subsequently received formal consent from the IRS in October 2025. Consequently, we will release the reserve in the first quarter of 2026, primarily resulting in corresponding decreases to Deferred tax assets and the reserve for unrecognized tax benefits within Other liabilities. Additionally, this will result in a net income tax benefit of $ 6.5 million for the reversal of the associated accrued interest and indirect effects on GILTI and FDII as discussed above.
 If all of our unrecognized tax benefits as of September 30, 2025 were to become recognizable in the future, we would record a benefit to the income tax provision of $ 32.1 million (which would be partially offset by an increase in the U.S. valuation allowance of $ 6.0 million). Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in favorable or unfavorable changes in our estimates. As described above, within the next 12 months the amount of unrecognized tax benefits related to the IRS consent will be reduced by $ 109.2 million. Apart from that, we do not believe it is reasonably possible that there could be additional reductions to the amount of unrecognized tax benefits within the next 12 months.

 In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the IRS in the United States. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. We are currently under audit by tax authorities in several jurisdictions. Audits by tax authorities typically involve examination of the deductibility of certain permanent items, transfer pricing, limitations on net operating losses and tax credits. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in material changes in our estimates. As of September 30, 2025, we remained subject to examination in the following major tax jurisdictions for the tax years indicated:

 Major Tax Jurisdiction

 Open Years

 United States

 2022 through 2025

 Germany

 2019 through 2025

 France

 2023 through 2025

 Japan

 2020 through 2025

 Ireland

 2019 through 2025

 Additionally, net operating loss and tax credit carryforwards from certain earlier periods in these jurisdictions may be subject to examination to the extent they are used in later periods.
 We incurred expenses related to stock-based compensation in 2025, 2024 and 2023 of $ 216.2 million, $ 223.5 million and $ 206.5 million, respectively. Accounting for the tax effects of stock-based awards requires that we establish a deferred tax asset as the compensation is recognized for financial reporting prior to recognizing the tax deductions. The tax benefit recognized in the Consolidated Statements of Operations related to stock-based compensation totaled $ 42.5 million, $ 27.5 million and $ 33.4 million in 2025, 2024 and 2023, respectively. Upon vesting of the stock-based awards, the actual tax deduction is compared with the cumulative financial reporting compensation cost and any excess tax deduction is considered a windfall tax benefit and is recorded to the tax provision. In 2025, 2024 and 2023, net windfall tax benefits of $ 7.4 million, $ 10.2 million and $ 7.8 million were recorded to the tax provision.
 Prior to the passage of the U.S. Tax Cuts and Jobs Act in December of 2017 (the Tax Act), we asserted that substantially all of the undistributed earnings of our foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Pursuant to the provisions of the U.S. Tax Act, these earnings were subjected to U.S. federal taxation via a one-time transition tax, and there is therefore no longer a material cumulative basis difference associated with the undistributed earnings. We maintain our assertion of our intention to permanently reinvest these earnings outside the United States unless repatriation can be done substantially tax-free, with the exception of our Taiwan subsidiary. If we decide to repatriate any additional non-U.S. earnings in the future, we may be required to establish a deferred tax liability on such earnings. The amount of unrecognized deferred tax liability on the undistributed earnings would not be material.
 On July 4, 2025, the "One Big Beautiful Bill Act" (the "Act") was enacted into law. The Act includes changes to U.S. tax law that will be applicable to us beginning in 2026. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures. While there is no material impact on our financial statements for the year ended September 30, 2025, we are in the process of evaluating the prospective impact of the Act to our consolidated financial statements and cash flow.

 8. Debt
 As of September 30, 2025 and 2024, we had the following short- and long-term debt obligations:

 2025

 2024

 4.000% Senior notes due 2028

 $

 500,000

 $

 500,000

 3.625% Senior notes due 2025

 —

 500,000

 Credit facility revolver line(1)(2)

 231,250

 262,000

 Credit facility term loan(1)(2)

 468,750

 490,625

 Total debt

 1,200,000

 1,752,625

 Unamortized debt issuance costs for the senior notes(3)

 ( 2,566

)

 ( 4,053

)

 Total debt, net of issuance costs(4)

 $

 1,197,434

 $

 1,748,572

 (1) Unamortized debt issuance costs related to the credit facility were $ 2.7 million included in Other current assets and $ 3.3 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2025 and $ 2.3 million included in Other current assets and $ 5.2 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2024.

 (2) The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. The term loan began amortizing in March 2024, with payments remaining of $ 25.0 million in 2026 and 2027, and $ 418.7 million in 2028.

 (3) As of September 30, 2025, all unamortized debt issuance costs for the senior notes were included in Long-term debt on the Consolidated Balance Sheet. As of September 30, 2024, $ 0.4 million of unamortized debt issuance costs for the senior notes was included in Current portion of long-term debt and $ 3.6 million was included in Long-term debt on the Consolidated Balance Sheet.

 (4) As of September 30, 2025, $ 25.0 million of debt associated with the credit facility term loan was classified as short term. As of September 30, 2024, $ 521.5 million of debt was classified as short term, including $ 499.6 million associated with the 2025 senior notes and related debt issuance costs and $ 21.9 million associated with the credit facility term loan.

 Senior Unsecured Notes
 In February 2020, we issued $ 500 million in aggregate principal amount of 4.0 % senior, unsecured long-term debt at par value, due in 2028 (the 2028 Notes) and $ 500 million in aggregate principal amount of 3.625 % senior, unsecured long-term debt at par value, due in February 2025 (the 2025 Notes). In the second quarter of 2025, we redeemed the 2025 Notes using a draw on our revolving credit facility and cash on hand.
 As of September 30, 2025, the total estimated fair value of the 2028 Notes was approximately $ 490.0 million based on quoted prices for the notes on that date.
 We were in compliance with all the covenants for the 2028 Notes as of September 30, 2025.
 Terms of the 2028 Notes
 Interest on the 2028 Notes is payable semi-annually on February 15 and August 15. The debt indenture for the 2028 Notes includes covenants that limit our ability to, among other things, incur additional debt, grant liens on our properties or capital stock, enter into sale and leaseback transactions or asset sales, and make capital distributions.
 We may, on one or more occasions, redeem the 2028 Notes in whole or in part at specified redemption prices. In certain circumstances constituting a change of control, we will be required to make an offer to repurchase the notes at a purchase price equal to 101 % of the aggregate principal amount of the notes, plus accrued and unpaid interest. Our ability to repurchase the notes upon such event may be limited by law, by the indenture associated with the notes, by our then-available financial resources or by the terms of other agreements to which we may be party at such time. If we fail to repurchase the notes as required by the indenture, it would constitute an event of default under the indenture which, in turn, may also constitute an event of default under other obligations.

 Credit Agreement
 In January 2023, we entered into an amended and restated credit agreement for a secured multi-currency bank credit facility with a syndicate of banks. Our credit facility consists of (i) a $ 1.25 billion revolving credit facility, (ii) a $ 500 million term loan credit facility, and (iii) an incremental facility pursuant to which we may incur additional term loan tranches or increase the revolving credit facility.
 As of September 30, 2025, unused commitments under our credit facility were approximately $ 1,018.8 million and amounts available for borrowing were $ 1,001.7 million.
 As of September 30, 2025, the fair value of our credit facility approximates its book value.
 PTC Inc. and certain foreign subsidiaries are eligible borrowers under the credit facility. Any borrowings by PTC Inc. under the credit facility would be guaranteed by PTC Inc.'s material domestic subsidiaries that become parties to the subsidiary guaranty, if any. Any borrowings by eligible foreign subsidiary borrowers would be guaranteed by PTC Inc. and any subsidiary guarantors and secured, subject to exceptions, by a first priority perfected security interest in substantially all existing and after-acquired personal property owned by PTC Inc. and its material domestic subsidiaries (except for certain indirect material domestic subsidiaries). As of the filing of this Form 10-K, there are no subsidiary guarantors of the obligations under the credit facility. As of September 30, 2025, $ 96.3 million was borrowed by an eligible foreign subsidiary borrower.
 Loans under the credit facility bear interest at variable rates that reset every 30 to 180 days depending on the base rate (for USD borrowings, either the adjusted Daily Simple RFR or adjusted Term SOFR) and period selected by us. The spread over the base rate depends on our total leverage ratio. As of September 30, 2025, the annual rate for borrowings outstanding was 5.6 %. A quarterly revolving commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.175 % to 0.325 % per annum, based upon our total leverage ratio.
 The credit facility limits our ability to, among other things: incur additional indebtedness; incur liens or guarantee obligations; pay dividends and make other distributions; make investments and enter into joint ventures; dispose of assets; and engage in transactions with affiliates, except on an arms-length basis. Under the credit facility, PTC Inc. and its material domestic subsidiaries may not invest cash or property in, or loan amounts to, PTC Inc.'s foreign subsidiaries in aggregate amounts exceeding $ 100 million for purposes other than acquisitions of businesses. The credit facility also requires that we maintain certain financial ratios. As of September 30, 2025, we were in compliance with all financial and operating covenants of the credit facility.
 In 2025, we incurred $ 1.2 million in financing costs in connection with the October 2024 amendment to our credit agreement, all of which was recorded as deferred debt issuance costs and included in Other assets and Other current assets on the Consolidated Balance Sheet. In 2023, we incurred $ 13.4 million in financing costs in connection with the January 2023 credit facility and related arrangements, of which $ 4.2 million (related to a since-extinguished bridge loan) was expensed in the period and $ 9.2 million was recorded as deferred debt issuance costs and included in Other assets and Other current assets on the Consolidated Balance Sheet. Deferred debt issuance costs are expensed over the term of the obligations.
 Interest
 In 2025, 2024 and 2023, we incurred interest expense of $ 77.0 million, $ 119.7 million, and $ 129.4 million, respectively, and paid $ 77.8 million, $ 137.0 million and $ 89.8 million, respectively, of interest on our debt. Interest expense in 2023 included $ 30.0 million of interest imputed on the $ 650.0 million deferred acquisition payment related to the ServiceMax acquisition. The average interest rate on borrowings outstanding during 2025, 2024 and 2023 was approximately 4.9 %, 5.4 % and 4.9 %, respectively.

 9. Commitments and Contingencies
 As of September 30, 2025 and 2024, we had letters of credit and bank guarantees outstanding of $ 15.6 million (of which $ 0.6 million was collateralized) and $ 15.6 million (of which $ 0.6 million was collateralized), respectively, primarily related to our corporate headquarters lease.
 Legal and Regulatory Matters
 With respect to legal proceedings and claims, we record an accrual for a contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
 We are subject to legal proceedings and claims against us in the ordinary course of business. As of September 30, 2025, we estimate that the range of possible outcomes for such matters is immaterial and we do not believe that resolving them will have a material adverse impact on our financial condition, results of operations or cash flows. However, the results of legal proceedings cannot be predicted with certainty. Should any of these legal proceedings and claims be resolved against us, the operating results for a reporting period could be adversely affected.
 Guarantees and Indemnification Obligations
 We enter into standard indemnification agreements with our customers and business partners in the ordinary course of our business. Under such agreements, we typically indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to our products. Indemnification may also cover other types of claims, including claims relating to certain data breaches. These agreements typically limit our liability with respect to indemnification claims other than intellectual property infringement claims. Historically, our costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal and, accordingly, we believe the estimated fair value of liabilities under these agreements is immaterial.
 We warrant that our software products will perform in all material respects in accordance with our standard published specifications during the term of the license. Additionally, we generally warrant that our consulting services will be performed consistent with generally accepted industry standards and, in the case of fixed price services, the agreed-upon specifications. In most cases, liability for these warranties is capped. If necessary, we would provide for the estimated cost of product and service warranties based on specific warranty claims and claim history; however, we have not incurred significant cost under our product or services warranties. As a result, we believe the estimated fair value of these liabilities is immaterial.

 10. Stockholders' Equity
 Preferred Stock
 We may issue up to 5.0 million shares of our preferred stock in one or more series. Of these shares, 0.5 million are designated as Series A Junior Participating Preferred Stock. Our Board of Directors is authorized to fix the rights and terms for any series of preferred stock without additional shareholder approval.
 Common Stock
 Our Articles of Organization authorize us to issue up to 500 million shares of our common stock. Our Board of Directors has authorized us to repurchase up to $ 2 billion of our common stock in the period October 1, 2024 through September 30, 2027. We use cash from operations and borrowings under our credit facility to make such repurchases. All shares of our common stock repurchased are automatically restored to the status of authorized and unissued.
 In 2025, we repurchased 1.65 million shares for $ 300.0 million. We did no t repurchase any shares in 2024 or 2023.

 11. Equity Incentive Plans
 We have two equity incentive plans, our 2000 Equity Incentive Plan and our 2016 Employee Stock Purchase Plan (ESPP).
 Our 2000 Equity Incentive Plan provides for grants of nonqualified and incentive stock options, common stock, restricted stock, restricted stock units and stock appreciation rights to employees, directors, officers, and consultants. We award restricted stock units (RSUs) as the principal equity incentive awards, including certain performance-based awards that are earned based on achieving performance criteria established by the Compensation and People Committee of our Board of Directors on or prior to the grant date. Each RSU represents the contingent right to receive one share of our common stock.
 Our ESPP allows eligible employees to contribute up to 10 % of their base salary, up to a maximum of $ 25,000 per year and subject to any other plan limitations, toward the purchase of our common stock at a discounted price. The purchase price of the shares on each purchase date is equal to 85 % of the lower of the fair market value of our common stock on the first and last trading days of each offering period. The ESPP is qualified under Section 423 of the Internal Revenue Code. We estimate the fair value of each purchase right under the ESPP on the date of grant using the Black-Scholes option valuation model and use the straight-line attribution approach to record the expense over the six-month offering period.
 The following table shows total stock-based compensation expense recorded in our Consolidated Statements of Operations:

 2025

 2024

 2023

 Cost of license revenue

 $

 $

 $

 Cost of support and cloud services revenue

 16,435

 14,479

 12,801

 Cost of professional services revenue

 5,846

 6,827

 7,928

 Sales and marketing

 61,750

 68,541

 56,394

 Research and development

 65,119

 60,266

 58,931

 General and administrative

 66,646

 73,215

 70,260

 Total stock-based compensation expense

 $

 216,205

 $

 223,461

 $

 206,459

 Stock-based compensation expense in 2025, 2024 and 2023 includes $ 7.1 million, $ 6.8 million, and $ 6.8 million respectively, related to our ESPP.
 2000 Equity Incentive Plan Accounting and Stock-Based Compensation Expense
 The fair value of RSUs granted in 2025, 2024 and 2023 was based on the fair market value of our stock on the date of grant for service- and certain performance- based RSUs and based on a Monte Carlo simulation model for relative total shareholder return (rTSR) performance RSUs. The weighted average fair value per share of RSUs granted in 2025, 2024 and 2023 was $ 186.37, $ 164.73 and $ 130.64, respectively.
 We account for forfeitures as they occur, rather than estimate expected forfeitures.
 As of September 30, 2025, total unrecognized compensation cost related to unvested RSUs expected to vest was approximately $ 201.5 million and the weighted average remaining recognition period for unvested RSUs was 18 months. As of September 30, 2025, the weighted average remaining vesting term for outstanding awards was 1.1 years.
 As of September 30, 2025, 4.9 million shares of common stock were available for grant under the equity incentive plan and 1.9 million shares of common stock were reserved for issuance upon vesting of RSUs granted and outstanding.

 The following table sets forth the restricted stock unit activity for the year ended September 30, 2025.

 (in thousands, except grant date fair value data)

 Shares

 Weighted
Average
Grant Date
Fair Value

 Aggregate
Intrinsic Value

 Balance of outstanding RSUs at October 1, 2024

 2,064

 $

 147.92

 Granted(1)

 1,232

 $

 186.37

 Vested

 ( 1,300

)

 $

 148.03

 Forfeited or not earned

 ( 100

)

 $

 152.65

 Balance of outstanding RSUs at September 30, 2025

 1,896

 $

 173.53

 $

 384,917

 (1) RSUs granted include 17 shares from prior period rTSR awards that were earned upon achievement of the performance criteria and vested in November 2024 and 10 shares from prior period performance-based awards that were earned upon achievement of the performance criteria and vested in November 2024.

 The following table presents the number of RSU awards granted by award type:

 Year ended September 30, 2025

 Performance-based RSUs(1)

 Service-based RSUs(2)

 1,045

 Relative Total Shareholder Return RSUs(3)

 (1) The performance-based RSUs are primarily made up of RSUs granted to our executives and are eligible to vest based upon annual performance measures over a three-year period. To the extent earned, those performance-based RSUs will vest in three substantially equal installments on November 15, 2025, November 15, 2026, and November 15, 2027, or the date the Compensation and People Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of RSUs can be earned.

 (2) The service-based RSUs were granted to employees, including our executive officers. Substantially all service-based RSUs will vest in three substantially equal annual installments on or about the anniversary of the date of grant.

 (3) The rTSR RSUs were granted to our executives and are eligible to vest based on the performance of PTC stock relative to the stock performance of an index of PTC peer companies established as of the grant date, as determined at the end of the measurement period ending on September 30, 2027. The RSUs earned will vest on November 15, 2027, or the date the Compensation and People Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of rTSR RSUs eligible to be earned for the period may vest. If the stock price as of the beginning of the period is below the stock price at the end of the period, a maximum of 100 % of the rTSR RSUs may vest.

 The weighted-average fair value of the rTSR RSUs was $ 243.47 per target RSU on the grant date. The fair value of the rTSR RSUs was determined using a Monte Carlo simulation model, a generally accepted statistical technique used to simulate a range of possible future stock prices for PTC and the peer group. The significant assumptions used in the Monte Carlo simulation model were as follows:

 2025

 2024

 2023

 Average volatility of peer group

 50.64

 %

 49.30

 %

 41.54

 %

 Risk-free interest rate

 4.21

 %

 4.65

 %

 4.12

 %

 Dividend yield

 —

 %

 —

 %

 —

 %

 Expected term (in years)

 2.88

 2.87

 2.87

 The value of stock issued for vested RSUs is as follows:

 2025

 2024

 2023

 Stock issued for vested RSUs

 $

 236,697

 $

 289,333

 $

 240,066

 In 2025, shares issued upon vesting of restricted stock units were net of 0.4 million shares retained by us to cover employee tax withholdings of $ 80.4 million. In 2024, shares issued upon vesting of restricted stock units were net of 0.6 million shares retained by us to cover employee tax withholdings of $ 101.9 million. In 2023, shares issued upon vesting of restricted stock and restricted stock units were net of 0.6 million shares retained by us to cover employee tax withholdings of $ 82.8 million.
 As of September 30, 2025 and September 30, 2024, we had liability-classified awards related to stock-based compensation based on a fixed monetary amount of $ 51.3 million and $ 47.7 million, respectively. The liability as of September 30, 2024 was settled via the issuance of shares in the first quarter of 2025.

 12. Employee Benefit Plan
 We offer a savings plan to eligible U.S. employees. The plan is qualified under Section 401(k) of the Internal Revenue Code. Participating employees may defer a portion of their pre-tax compensation, as defined, but not more than statutory limits. We contribute 50 % of the amount contributed by the employee, up to a maximum of 3 % of the employee's earnings. Our matching contributions vest immediately. We made matching contributions of $ 9.3 million, $ 9.2 million and $ 8.6 million in 2025, 2024 and 2023, respectively.

 13. Pension Plans
 We maintain several international defined benefit pension plans primarily covering certain employees of Computervision, which we acquired in 1998, and CoCreate, which we acquired in 2008, and covering employees in Japan. Benefits are based upon length of service and average compensation with vesting after one to five years of service. The pension cost was actuarially computed using assumptions applicable to each subsidiary plan and economic environment. We adjust our pension liability related to our plans due to changes in actuarial assumptions and performance of plan investments, as shown below. The vested benefit obligation is determined as the actuarial present value of the vested benefits to which the employee is currently entitled to but based on the employee's expected date of separation or retirement. Effective in 1998, benefits under one of the international plans were frozen indefinitely.
 The following table presents the actuarial assumptions used in accounting for the pension plans:

 2025

 2024

 2023

 Weighted average assumptions used to determine benefit obligations at September 30 measurement date:

 Discount rate

 3.8

 %

 3.3

 %

 4.2

 %

 Rate of increase in future compensation

 3.0

 %

 3.0

 %

 3.0

 %

 Weighted average assumptions used to determine net periodic pension cost for fiscal years ended September 30:

 Discount rate

 3.3

 %

 4.2

 %

 3.7

 %

 Rate of increase in future compensation

 3.0

 %

 3.0

 %

 3.6

 %

 Rate of return on plan assets

 4.8

 %

 4.8

 %

 4.8

 %

 In selecting the expected long-term rate of return on assets, we considered the current investment portfolio, and the investment return goals in the plans' investment policy statements. We, with input from the plans' professional investment managers and actuaries, also considered the average rate of earnings expected on the funds invested or to be invested to provide plan benefits. This process included determining expected returns for the various asset classes that comprise the plans' target asset allocation. This basis for selecting the long-term asset return assumptions is consistent with the prior year. Using generally accepted diversification techniques, the plans' assets, in aggregate and at the individual portfolio level, are invested so that the total portfolio risk exposure and risk-adjusted returns best meet the plans' long-term liabilities to employees. Plan asset allocations are reviewed periodically and rebalanced to achieve target allocation among the asset categories when necessary. The discount rate is based on yield curves for highly rated corporate fixed income securities matched against cash flows for each future year.
 The weighted long-term rate of return assumption, together with the assumptions used to determine the benefit obligations as of September 30, 2025 in the table above, will be used to determine our 2026 net periodic pension income, which we expect to be approximately $ 0.7 million.
 As of September 30, 2025, the weighted average interest credit rate used in our two cash balance pension plans is 4.7 %.

 All non-service net periodic pension costs are presented in Other income, net on the Consolidated Statement of Operations. The actuarially computed components of net periodic pension cost recognized in our Consolidated Statements of Operations for each year are shown below:

 2025

 2024

 2023

 Interest cost of projected benefit obligation

 $

 2,121

 $

 2,368

 $

 2,126

 Service cost

 Expected return on plan assets

 ( 3,700

)

 ( 3,361

)

 ( 3,541

)

 Amortization of prior service cost

 —

 —

 —

 Recognized actuarial loss

 Settlement gain

 ( 65

)

 ( 19

)

 —

 Net periodic pension (benefit) cost

 $

 ( 369

)

 $

 $

 ( 484

)

 The following tables display the change in benefit obligation and the change in the plan assets and funded status of the plans as well as the amounts recognized in our Consolidated Balance Sheets:

 2025

 2024

 Change in benefit obligation:

 Projected benefit obligation, beginning of year

 $

 70,242

 $

 60,433

 Service cost

 Interest cost

 2,121

 2,368

 Actuarial loss (gain)

 ( 2,818

)

 7,128

 Foreign exchange impact

 2,896

 3,319

 Participant contributions

 Benefits paid

 ( 2,711

)

 ( 3,162

)

 Settlements

 ( 941

)

 ( 618

)

 Projected benefit obligation, end of year

 $

 69,460

 $

 70,242

 Change in plan assets and funded status:

 Plan assets at fair value, beginning of year

 $

 77,757

 $

 68,875

 Actual return on plan assets

 2,563

 5,120

 Employer contributions

 3,238

 3,697

 Participant contributions

 Foreign exchange impact

 3,775

 3,745

 Settlements

 ( 941

)

 ( 618

)

 Benefits paid

 ( 2,711

)

 ( 3,162

)

 Plan assets at fair value, end of year

 83,774

 77,757

 Projected benefit obligation, end of year

 69,460

 70,242

 Underfunded status

 $

 ( 11,367

)

 $

 ( 12,438

)

 Overfunded status

 $

 25,681

 $

 19,953

 Accumulated benefit obligation, end of year

 $

 68,996

 $

 69,580

 Amounts recognized in the balance sheet:

 Non-current asset

 $

 25,681

 $

 19,953

 Non-current liability

 $

 ( 10,979

)

 $

 ( 12,083

)

 Current liability

 $

 ( 388

)

 $

 ( 355

)

 Amounts in accumulated other comprehensive loss:

 Unrecognized actuarial loss

 $

 13,620

 $

 15,230

 As of September 30, 2025 and 2024, two of our pension plans had projected benefit obligations and accumulated benefit obligations in excess of plan assets. Three international plans were overfunded.
 The following table shows the change in Accumulated other comprehensive loss:

 2025

 2024

 Accumulated other comprehensive loss, beginning of year

 $

 15,230

 $

 9,573

 Recognized during year - amortization of net actuarial losses

 ( 697

)

 ( 398

)

 Occurring during year - effect of settlement

 Occurring during year - net actuarial losses (gains)

 ( 1,681

)

 5,369

 Foreign exchange impact

 Accumulated other comprehensive loss, end of year

 $

 13,620

 $

 15,230

 In 2025, our actuarial gains were impacted by the increase in discount rate from 3.3 % in 2024 to 3.8 % in 2025. In 2024, our actuarial losses were impacted by the decrease in discount rate from 4.2 % in 2023 to 3.3 % in 2024.
 The following table shows the percentage of total plan assets for each major category of plan assets:

 Asset category

 2025

 2024

 Equity securities

 %

 %

 Fixed income securities

 %

 %

 Commodities

 %

 %

 Insurance company funds

 %

 %

 Cash

 %

 %

 %

 %

 We periodically review the pension plans' investments in the various asset classes. For the CoCreate plans in Germany, assets are actively allocated between equity and fixed income securities to achieve target return. For the other international plans, assets are allocated 100 % to fixed income securities. The fixed income securities for the other international plans primarily include investments held with insurance companies with fixed returns. The plans' investment managers are provided specific guidelines under which they are to invest the assets assigned to them. In general, investment managers are expected to remain fully invested in their asset class with further limitations on risk as related to investments in a single security, portfolio turnover and credit quality.
 The German CoCreate plan's investment policy prohibits the use of derivatives associated with leverage and speculation or investments in securities issued by PTC, except through index-related strategies and/or commingled funds. An investment committee oversees management of the pension plans' assets. Plan assets consist primarily of investments in equity and fixed income securities.
 In 2025, 2024 and 2023, our actual return (loss) on plan assets was $ 2.6 million, $ 5.1 million and $( 1.9) million, respectively.
 Based on actuarial valuations and additional voluntary contributions, we contributed $ 3.2 million, $ 3.7 million and $ 1.3 million in 2025, 2024 and 2023, respectively, to the plans. In 2026, we expect to contribute $ 0.6 million to the plans and to directly pay $ 3.6 million in benefits.
 As of September 30, 2025, benefit payments expected to be paid over the next ten years are as follows:

 Future Benefit Payments

 2026

 $

 4,402

 2027

 $

 5,072

 2028

 $

 5,061

 2029

 $

 5,164

 2030

 $

 5,209

 2031 to 2035

 $

 27,064

 Fair Value of Plan Assets
 The international plan assets are comprised primarily of investments in a trust and an insurance company. The underlying investments in the trust are primarily governmental fixed income securities and equities in funds and exchange-traded funds (ETFs). They are classified as Level 1 because the underlying units of the trust are traded in open public markets. The fair value of the underlying investments in equity securities and fixed income are based upon publicly-traded exchange prices.

 September 30, 2025

 Level 1

 Level 2

 Level 3

 Total

 Fixed income securities:

 Government

 $

 47,554

 $

 —

 $

 —

 $

 47,554

 Equities in funds

 15,709

 —

 —

 15,709

 Commodities

 5,077

 —

 —

 5,077

 Insurance company funds(1)

 —

 6,867

 —

 6,867

 Cash

 8,538

 —

 —

 8,538

 Options

 —

 —

 Total plan assets

 $

 76,907

 $

 6,867

 $

 —

 $

 83,774

 September 30, 2024

 Level 1

 Level 2

 Level 3

 Total

 Fixed income securities:

 Government

 $

 48,146

 $

 —

 $

 —

 $

 48,146

 Equities in funds

 9,550

 —

 —

 9,550

 Commodities

 4,309

 —

 —

 4,309

 Insurance company funds(1)

 —

 7,385

 —

 7,385

 Cash

 8,277

 —

 —

 8,277

 Options

 —

 —

 Total plan assets

 $

 70,372

 $

 7,385

 $

 —

 $

 77,757

 (1) These investments are comprised primarily of funds invested with an insurance company in Japan with a guaranteed rate of return. The insurance company invests these assets primarily in government and corporate bonds.

 14. Fair Value Measurements
 Money market funds, time deposits and corporate notes/bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.
 The principal market in which we execute our foreign currency derivatives is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants are generally large financial institutions. Our foreign currency derivatives' valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.
 Our significant financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and 2024 were as follows:

 September 30, 2025

 Level 1

 Level 2

 Level 3

 Total

 Financial assets:

 Cash equivalents(1)

 $

 38,031

 $

 —

 $

 —

 $

 38,031

 —

 6,007

 —

 6,007

 Option contracts

 —

 6,228

 —

 6,228

 $

 38,031

 $

 12,235

 $

 —

 $

 50,266

 Financial liabilities:

 —

 4,773

 —

 4,773

 $

 —

 $

 4,773

 $

 —

 $

 4,773

 September 30, 2024

 Level 1

 Level 2

 Level 3

 Total

 Financial assets:

 Cash equivalents(1)

 $

 48,509

 $

 —

 $

 —

 $

 48,509

 —

 1,202

 —

 1,202

 $

 48,509

 $

 1,202

 $

 —

 $

 49,711

 Financial liabilities:

 —

 4,166

 —

 4,166

 $

 —

 $

 4,166

 $

 —

 $

 4,166

 (1) Money market funds and time deposits.

 15. Derivative Financial Instruments
 The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:

 Fair Value of Derivatives
Designated As Hedging
Instruments

 Fair Value of Derivatives
Not Designated As
Hedging Instruments

 2025

 2024

 2025

 2024

 Derivative assets:(1)

 $

 2,871

 $

 $

 3,136

 $

 1,021

 Option contracts

 $

 —

 $

 —

 $

 6,228

 $

 —

 Derivative liabilities:(2)

 $

 —

 $

 $

 4,773

 $

 3,536

 (1) As of September 30, 2025 and 2024, current derivative assets are recorded in Other current assets on the Consolidated Balance Sheets.

 (2) As of September 30, 2025 and 2024, current derivative liabilities are recorded in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

 Non-Designated Hedges
 As of September 30, 2025 and 2024, we had outstanding forward and option contracts not designated as hedging instruments with notional amounts equivalent to the following:

 Currency Hedged (in thousands)

 2025

 2024

 Euro / U.S. Dollar(1)

 $

 1,202,830

 $

 781,398

 British Pound / U.S. Dollar

 22,974

 24,810

 Israeli Shekel / U.S. Dollar

 20,094

 12,535

 Indian Rupee / U.S. Dollar

 53,465

 —

 Japanese Yen / U.S. Dollar(2)

 131,284

 42,340

 Swiss Franc / U.S. Dollar

 8,960

 74,939

 Swedish Krona / U.S. Dollar

 21,568

 48,596

 Chinese Renminbi / U.S. Dollar

 7,134

 32,124

 New Taiwan Dollar / U.S. Dollar

 23,098

 16,368

 All other

 26,679

 25,368

 Total

 $

 1,518,086

 $

 1,058,478

 (1) As of September 30, 2025, $ 835.4 million of the Euro to U.S. Dollar outstanding notional amount relates to forward contracts and $ 367.4 million relates to option contracts. As of September 30, 2024, all the Euro to U.S. Dollar outstanding notional amount relates to forward contracts.

 (2) As of September 30, 2025, $ 41.9 million of the Japanese Yen to U.S. Dollar outstanding notional amount relates to forward contracts and $ 89.4 million relates to option contracts. As of September 30, 2024, all the Japanese Yen to U.S. Dollar outstanding notional amount relates to forward contracts.

 The following table shows the effect of our non-designated hedges on the Consolidated Statements of Operations for the years ended September 30, 2025, 2024 and 2023:

 Location of Gain (Loss)

 2025

 2024

 2023

 Net realized and unrealized loss, excluding the underlying foreign currency exposure being hedged

 Other income, net

 $

 ( 5,204

)

 $

 ( 6,238

)

 $

 ( 11,757

)

 In 2025, 2024, and 2023, foreign currency losses, net were $ 2.5 million, $ 1.8 million, and $ 2.1 million, respectively.
 Net Investment Hedges
 As of September 30, 2025 and 2024, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

 Currency Hedged (in thousands)

 2025

 2024

 Euro / U.S. Dollar

 $

 480,198

 $

 462,894

 Japanese Yen / U.S. Dollar

 10,260

 10,739

 Total

 $

 490,458

 $

 473,633

 The following table shows the effect of our derivative instruments designated as net investment hedges on the Consolidated Statements of Operations for the years ended September 30, 2025, 2024, and 2023:

 Location of Gain (Loss)

 2025

 2024

 2023

 Loss recognized in Other comprehensive income ("OCI")

 OCI

 $

 ( 23,684

)

 $

 ( 21,643

)

 $

 ( 10,033

)

 Gain (loss) reclassified from OCI to earnings

 n/a

 $

 —

 $

 —

 $

 —

 Gain recognized, excluded portion

 Other income, net

 $

 6,251

 $

 4,346

 $

 4,241

 Offsetting Derivative Assets and Liabilities
 We have entered into master netting arrangements for our foreign exchange contracts that allow net settlements under certain conditions. Although netting is permitted, it is currently our policy and practice to record all derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets.

 The following table sets forth the offsetting of derivative assets as of September 30, 2025:

 Gross Amounts Offset in the Consolidated Balance Sheets

 Gross Amounts Not Offset in the Consolidated Balance Sheets

 As of September 30, 2025

 Gross Amount of Recognized Assets

 Gross Amounts Offset in the Consolidated Balance Sheets

 Net Amounts of Assets Presented in the Consolidated Balance Sheets

 Financial Instruments

 Cash Collateral Received

 Net Amount

 Foreign exchange contracts

 $

 12,235

 $

 —

 $

 12,235

 $

 ( 4,773

)

 $

 —

 $

 7,462

 The following table sets forth the offsetting of derivative liabilities as of September 30, 2025:

 Gross Amounts Offset in the Consolidated Balance Sheets

 Gross Amounts Not Offset in the Consolidated Balance Sheets

 As of September 30, 2025

 Gross Amount of Recognized Liabilities

 Gross Amounts Offset in the Consolidated Balance Sheets

 Net Amounts of Liabilities Presented in the Consolidated Balance Sheets

 Financial Instruments

 Cash Collateral Pledged

 Net Amount

 Foreign exchange contracts

 $

 4,773

 $

 —

 $

 4,773

 $

 ( 4,773

)

 $

 —

 $

 —

 16. Leases
 Our headquarters are located at 121 Seaport Boulevard, Boston, Massachusetts, encompassing approximately 250,000 square feet under a lease agreement that runs through June 2037. Base rent for the first year of the lease was $ 11.0 million and increases by $ 1 per square foot per year thereafter ($ 0.3 million per year). Base rent first became payable on July 1, 2020. In addition to the base rent, we are required to pay our pro rata portions of building operating costs and real estate taxes (together, "Additional Rent"). Annual Additional Rent is estimated to be approximately $ 8.2 million.
 In 2025, we subleased certain portions of our Seaport headquarters for lease terms ending May 2031 and June 2037. We recognized an impairment charge of $ 12.8 million on right-of-use assets related to subleased facilities. For additional information on this impairment charge, see Note 2. Summary of Significant Accounting Policies.
 The components of lease cost reflected in the Consolidated Statements of Operations for the years ended September 30, 2025, 2024, and 2023 were as follows:

 2025

 2024

 2023

 Operating lease cost

 $

 32,912

 $

 33,288

 $

 32,402

 Short-term lease cost

 1,453

 3,691

 5,411

 Variable lease cost

 10,572

 9,919

 10,945

 Sublease income

 ( 958

)

 ( 1,436

)

 ( 4,749

)

 Total lease cost

 $

 43,979

 $

 45,462

 $

 44,009

 Supplemental cash flow information for the years ended September 30, 2025, 2024, and 2023 was as follows:

 2025

 2024

 2023

 Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases

 $

 36,303

 $

 35,498

 $

 36,038

 Right-of-use assets obtained in exchange for new lease obligations:

 Operating leases(1)

 $

 16,664

 $

 11,079

 $

 28,257

 (1) In the year ended September 30, 2023, operating lease additions included $ 4.0 million related to the ServiceMax acquisition.

 Supplemental balance sheet information related to the leases as of September 30, 2025 and 2024 was as follows:

 2025

 2024

 Weighted-average remaining lease term - operating leases

 9.4 years

 10.3 years

 Weighted-average discount rate - operating leases

 5.3

 %

 5.4

 %

 Maturities of lease liabilities as of September 30, 2025 are as follows:

 Operating Leases

 2026

 $

 31,829

 2027

 26,987

 2028

 22,214

 2029

 18,674

 2030

 17,460

 Thereafter

 104,477

 Total future lease payments

 221,641

 Less: imputed interest

 ( 49,208

)

 Total lease liability

 $

 172,433

 As of September 30, 2025, we had an operating lease that had not yet commenced. The lease will commence in 2026 with a lease term of 5 years and we will make future lease payments of approximately $ 7.4 million.

 17. Segments
 We operate as a single operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. The CODM evaluates financial performance and allocates resources based on consolidated results, including consolidated net income. The total assets of the segment are reported on the Consolidated Balance Sheets.
 See Note 3. Revenue from Contracts with Customers for additional information about our revenue by geographic region and Note 4. Property and Equipment for additional information about our long-lived assets by geographic region.

 The following table presents revenue, significant expenses, and consolidated net income for our reportable segment:

 2025

 2024

 2023

 Revenue

 $

 $

 $

 Costs and expenses:

 Cost of revenue, adjusted(1)

 389,465

 384,882

 384,438

 Operating expenses, adjusted(2)

 1,047,636

 1,019,250

 953,720

 Other segment items(3)

 568,128

 518,007

 513,355

 Consolidated net income

 $

 $

 $

 (1) Cost of revenue, adjusted excludes stock-based compensation and amortization of acquired intangible assets.

 (2) Operating expenses, adjusted excludes stock-based compensation, amortization of acquired intangible assets, acquisition and transaction-related charges, and Impairment and other charges (credits), net.

 (3) Other segment items include stock-based compensation; amortization of acquired intangible assets; acquisition and transaction-related charges; Impairment and other charges (credits), net; Other income (expense), net; and Provision for income taxes.

 18. Subsequent Events
 Kepware and ThingWorx Divestiture
 On November 5, 2025, we entered into an Asset Purchase Agreement with Parrot US Buyer, L.P., a Delaware limited partnership ("Purchaser"), an entity controlled by investment funds affiliated with TPG Global, LLC. Pursuant to the Asset Purchase Agreement, on the terms and subject to the conditions therein, PTC has agreed to sell, and Purchaser has agreed to acquire, PTC's Kepware and ThingWorx businesses (collectively, the "Business"), in exchange for total consideration consisting of $ 600 million in cash (the "Purchase Price") payable at the closing of the transactions contemplated by the Asset Purchase Agreement, subject to certain adjustments, plus the assumption by Purchaser of certain liabilities of the Business specified in the Asset Purchase Agreement, as well as the right to contingent consideration in an amount not to exceed $ 125 million in certain circumstances following a sale of the Business by Purchaser. The transaction is expected to close in the first half of calendar year 2026.
 As described in greater detail in the Asset Purchase Agreement, the Purchase Price will be (i) increased or decreased to the extent the Working Capital (as defined in the Asset Purchase Agreement) of the Business as of the Closing is higher or lower than a specified target amount, (ii) decreased by the amount of any Indebtedness (as defined in the Asset Purchase Agreement) of the Business as of the Closing, (iii) decreased by $ 35 million to the extent the Business does not achieve certain financial performance metrics in the month ending prior to Closing, and (iv) decreased by a specified amount reflecting the average billed accounts receivable of the Business as of the four-quarter period ending June 30, 2025.
 Credit Facility
 On November 18, 2025, we entered into an amendment to our credit agreement. The amendment amends the asset sale restrictions to eliminate the restriction entirely for the divestiture of PTC's Kepware and ThingWorx businesses pursuant to that certain Asset Purchase Agreement dated November 5, 2025, between PTC and Purchaser and to permit sales of assets up to an aggregate of $ 250 million in book value in any fiscal year as long as no Default or Event of Default exists or would exist after consummation of the sale.
 On November 20, 2025, we borrowed $ 70 million under our revolving credit facility to fund working capital requirements.
 Share Repurchases

 In the first quarter of 2026, we continued our share repurchase program. Through November 20, 2025, we have repurchased $ 71 million of our common stock.