PTC (PTC) 10-K risk factor changes: FY2022 vs FY2021

The following are important factors we have identified that could affect [removed: our future results and your] [added: an] investment in our securities.

You should consider them carefully when evaluating an investment in PTC [removed: securities or any forward-looking statements made by us, including those contained in this Annual Report,] [added: securities,] because these factors could cause actual results to differ materially from historical results or [removed: the performance projected in] [added: any] forward-looking statements.

[removed: I.Risks] [added: Risks] Related to Our Business Operations and [removed: Industry][added: Industry]

[removed: We] [added: We] face significant competition, which may reduce our profitability and limit or reduce our market [removed: share.][added: share.]

For example, the COVID-19 pandemic [removed: has] caused companies worldwide to close their offices and their employees to have to work remotely from their homes, [added: and there remains uncertainty about the extent to] which [removed: has focused companies on] [added: employees will return to] the [removed: need for solutions that empower and support remote work by employees.][added: office in the long term.]

[removed: Finally, our] [added: Our] current and potential competitors range from large and well-established companies to emerging start-ups.

[removed: A] [added: 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 impact our financial [removed: results.][added: results.]

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 [removed: increased.][added: 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.]

[removed: Despite efforts to create security barriers to such threats, it] [added: It] is impossible for us to eliminate the risk of a successful cyberattack or intrusion, and, in fact, we deal with security issues on a regular basis and have experienced security incidents from time to time.

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 [added: successful and material.]

[removed: 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, a] [added: A] significant breach of the security and/or integrity of our products or systems, or those of our third-party service providers, [added: whether or intentional or by human error by our employees or others,] could [added: disrupt our business operations or those of our customers, could] prevent our products from functioning properly, could enable access to sensitive, proprietary or confidential [removed: information, including that] [added: information] of our customers, or could [removed: disrupt] [added: enable access to] our [removed: business operations] [added: sensitive, proprietary] or [removed: those of our customers.][added: confidential information.]

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, [added: any of] which could have a material adverse effect on our [added: business,] financial condition and results of operations.

[removed: We] [added: 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 [removed: business.][added: business.]

We use a number of third-party service [removed: providers, which] [added: providers that] we do not [removed: control,] [added: control] for key components of our infrastructure, particularly with respect to development and delivery of our cloud-based products.

Such outages could [removed: lead to the triggering of] [added: trigger] our service level agreements [added: with customers] and [added: require us to issue] the issuance of credits to our cloud-based product customers, which [removed: may] [added: could adversely] impact our [removed: business and consolidated] [added: business,] financial [removed: statements.][added: condition and results of operations.]

If we are unable to renew our agreements with our cloud service providers on commercially reasonable terms, or [added: any of] our [removed: agreement is] [added: 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.

[removed: We] [added: We] may be unable to hire or retain personnel with the necessary skills to operate and grow our business, which could adversely affect our ability to [removed: compete.][added: compete.]

The technical personnel required to develop our products and solutions are in high [removed: demand, particularly technical personnel with augmented and virtual reality and analytics expertise as there are comparatively fewer persons with those skills.][added: demand.]

The managerial, sales and marketing, financial and administrative personnel necessary to guide our operations, market and sell our solutions and support our business operations are also in high demand due to [removed: the] intense competition in our industry.

If we are unable to attract and retain the personnel we need to develop compelling products and solutions, and guide, operate and support our business, we may be unable to successfully [removed: compete in the marketplace,] [added: compete,] which would adversely affect our [removed: revenues] [added: business, financial condition] and [removed: profitability.][added: results of operations.]

[removed: We] [added: 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 [removed: economic factors.][added: macroeconomic factors.]

In light of these [added: challenges and] concerns, customers may delay, [removed: reduce] [added: reduce,] or forego purchases of our solutions, which would adversely affect our business and financial results.

If we fail to successfully manage our transition to [removed: a SaaS company,] [added: a SaaS company,] our business and financial results could be adversely affected.

[removed: Because] [added: Because] our sales and operations are globally dispersed, we face additional compliance risks and any compliance failure could adversely affect our business and financial [removed: results.][added: results.]

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 we operate [removed: in, and are expanding into,] [added: in] countries with a higher incidence of corruption and fraudulent business practices than others, the fact that we deal with 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, [removed: we cannot guarantee that] an employee, agent or business partner [removed: will not act in violation of] [added: may violate] our policies or U.S. or other applicable laws or [removed: that] we may inadvertently violate such laws.

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 [added: loss] and [removed: reputation loss,] [added: reputational harm,] which could adversely affect our financial results and/or stock price.

[removed: II.Risks] [added: Risks] Related to Acquisitions and Strategic [removed: Relationships][added: Relationships]

[removed: Businesses] [added: Businesses] we acquire may not generate the revenue and earnings we anticipate and may otherwise adversely affect our [removed: business.][added: business.]

[removed: | | • |] 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; [removed: |]

[removed: | | • |] unanticipated operating difficulties in connection with the acquired entities, including potential declines in revenue of the acquired entity; [removed: |]

[removed: | | • |] diversion of management and employee attention; [removed: |]

[removed: | | • |] [added: potential] loss of key [removed: personnel;] [added: personnel in connection with an acquisition;] and [removed: |]

[removed: | | • |] potential incompatibility of business cultures. [removed: |]

Further, if we do not achieve the expected return on our [removed: investments] [added: 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 to the value of those assets.

[removed: We] [added: 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 and financial [removed: statements.][added: statements.]

If we were to incur a significant amount of debt—whether by borrowing funds [added: under our credit facility] or [added: 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 [removed: adversely impact] [added: constrain] our ability to operate [removed: the company] as we might otherwise [removed: and] [added: or] to borrow additional amounts.

[removed: Our] [added: Our] inability to maintain or develop our strategic and technology relationships could adversely affect our [removed: business.][added: business.]

We have many strategic and technology relationships with other companies with which we work to offer complementary solutions and services, that market and sell our [removed: solutions,] [added: solutions] and that provide technologies that we embed in our solutions.

I.

This has focused companies on the need for solutions that empower and support remote work by employees.

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.

Manufacturers worldwide continue to face uncertainty about the global macroeconomic environment due to, among other factors, the effects of earlier and ongoing supply chain disruptions, rising interest rates and inflation, volatile foreign exchange rates and the current relative strength of the U.S. dollar, the effects of the Russia—Ukraine conflict, including on the supply of energy resources in Europe, and the U.S. Government’s focus on technology transactions with non-U.S. entities.

II.

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;

issuing equity awards to, or assuming existing equity awards of, acquired employees, which may more rapidly deplete share reserves available under our shareholder-approved equity incentive plans;

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

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

III.

IV.

V.

the rate at which our existing contracts renew or churn;

VI.

increased regulatory and compliance risks;

| --- | --- |

We face 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.

successful and material.

The extent to which the COVID-19 pandemic may impact our business is uncertain and it could materially adversely affect our financial condition and results of operations.

The COVID-19 pandemic continues to impact global economic activity and create macroeconomic uncertainty.

Public and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of travel restrictions, temporary closures of businesses, and the adoption of remote working, have significantly changed the way we and our customers work.

The effects and duration of this disruption remain uncertain.

While PTC was able to transition to remote working without significant disruption to our day-to-day operations, disruption to our customers’ and our prospects’ operations and the way we work with them have adversely affected our business.

Demand for our solutions declined and could decline further due to challenges associated with conducting in-person sales meetings and project scoping and implementation activities while social distancing measures are in place, which has deterred or prevented, and could further deter or prevent, customers from proceeding with new software purchases and deployments.

Likewise, temporary plant closures, layoffs and furloughs at our customers and the challenges they face forecasting business needs in this time of global economic uncertainty have caused, and could continue to cause, our customers to delay or reduce new license purchases.

Longer term plant closures and layoffs among our customer base could cause existing subscription customers to renew fewer existing licenses when their subscriptions come up for renewal and could cause existing support customers to discontinue support at the time of renewal.

If churn increases in the future, our ARR and financial results and condition could be negatively impacted.

Reductions in new subscription sales and/or renewals and in professional services delivered could reduce our ARR growth or cause our ARR to decline, and would reduce our professional services revenue, all of which would adversely affect our revenue, earnings and cash flow.

Further prolonged disruption could continue to negatively impact the businesses of our customers and prospective customers and, therefore, our business and financial condition.

If our business declines due to the factors above, we could be required to reduce our expenses, which could result in material restructuring charges and/or reduce or delay investments in our business, including hiring.

Reductions in our workforce and/or investments in our business could hamper our ability to recover and compete successfully, which could adversely affect our business and results of operations.

Manufacturers worldwide are facing increasing uncertainty about the global economic climate due to, among other factors, the COVID-19 pandemic and the geopolitical environment.

In addition, within the technology industry the U.S. Administration’s focus on technology transactions with non-U.S. entities and potential expanded prohibitions has created additional uncertainty.

| --- | --- | --- |

| | • | increase our cost of borrowing. |

credit facility to establish an alternate interest rate to LIBOR that includes consideration of the then-prevailing market convention for determining interest rates for syndicated loans in the United States at that time.

| | • | a high percentage of our orders historically have been generated in the third month of each fiscal quarter and any failure to receive, complete or process orders at the end of any quarter could cause us to fall short of our financial targets; |

For more information about those investors, please see our proxy statement with respect to our most recent annual meeting of stockholders and Schedules 13D and 13G filed with the SEC with respect to our common stock.

From time to time, we may acquire common stock in publicly traded companies as strategic investments.

Owning such stock exposes us to the volatility, liquidity and other risks inherent in holding that stock.

From time to time, we may own common stock of publicly traded companies.

We are required to present the value of such stock on our Consolidated Balance Sheet at their fair value at the end of each reporting period.

The fair value of those shares may fluctuate due to the volatility of the stock market, changes in general economic conditions, and the performance of these publicly traded companies.

We recognize all changes in the fair value of the owned shares (whether realized or unrealized) as gains or losses in our Consolidated Statement of Operations.

Accordingly, changes in the fair value of the owned shares can materially impact the earnings we report, which introduces volatility in our earnings that is not associated with the results of our business operations.

In particular, significant declines in the fair value of the owned shares would produce significant declines in our reported earnings.

The reported value of the owned shares does not necessarily reflect their lowest current market price.

If we were forced to sell some or all of the owned shares in the market, there can be no assurance that we would be able to sell them at prices equivalent to the value that we have reported on our Consolidated Balance Sheet, and we may be forced to sell them at significantly lower prices.

VI.Risks Related to Our Senior Notes

Our Senior Notes are unsecured and do not limit our ability to incur indebtedness, which could reduce any payments to holders of the Senior Notes in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of PTC.

Unlike the credit facility, which is secured, the Senior Notes are not secured.

Although the indenture governing the Senior Notes limits our ability to incur secured debt, the covenant is subject to significant exceptions, and we may incur additional secured debt in the future.

The effect of this subordination is that upon a default in payment on, or the acceleration of, any of our secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution or reorganization of our company (collectively, “Adverse Events”), the proceeds from the sale of assets securing our secured indebtedness will be available to pay obligations on the Senior Notes only after all indebtedness under the credit facility and any other secured debt has been paid in full.

As a result, the holders of the Senior Notes may receive less, ratably, than the holders of secured debt if an Adverse Event occurs.

In addition, the indenture governing the Senior Notes does not limit our ability to incur unsecured indebtedness.

[removed: Forward-Looking Statements][added: Forward-Looking Statements]

[removed: Statements] [added: *Statements] in this Annual Report about anticipated financial results, capital developments and growth, as well as about the development of our products, markets and workforce, are forward-looking statements that are based on our current plans and assumptions.

“Risk Factors” of this Annual [removed: Report.][added: Report.*]

[removed: Unless] [added: *Unless] otherwise indicated, all references to a year reflect our fiscal year that ends on September [removed: 30.][added: 30.*]

[removed: Operating] [added: Operating] and Non-GAAP Financial [removed: Measures][added: Measures]

[removed: Executive Overview][added: Executive Overview]

ARR increased [removed: 16% (actual and] [added: 7% (16%] constant currency) to [removed: $1,475] [added: $1,572] million in [removed: FY’21] [added: FY’22] compared to the end of [removed: FY’20.][added: FY’21.]

Excluding the impact of [removed: Arena,] [added: Codebeamer,] which [removed: was] [added: we] acquired in the [removed: second] [added: third] quarter of [removed: FY’21, our] [added: FY’22,] organic [removed: constant currency] ARR growth was [removed: 12%] [added: 6% (15% constant currency)] in [removed: FY’21] [added: FY’22] compared to [removed: FY’20.][added: FY’21.]

[removed: FY’21] [added: FY’22] revenue of [removed: $1.81] [added: $1.93] billion increased [removed: 24%] [added: 7%] over [removed: FY’20 (20%] [added: FY’21 (11%] in constant currency).

[removed: FY’21] [added: FY’22] operating cash flow of [removed: $369] [added: $435] million grew [removed: 58%] [added: 18%] over [removed: FY’20; FY’21] [added: FY’21; FY’22] free cash flow of [removed: $344] [added: $416] million grew [removed: 61%] [added: 21%] over [removed: FY’20.][added: FY’21.]

[removed: Operating] [added: FY'22 operating] cash flow and free cash flow included an [removed: $18] [added: $11.8] million outflow related to [removed: a foreign tax dispute, $15 million of acquisition-related costs,] [added: acquisition] and [removed: $15] [added: transaction-related costs and $40.8] million of restructuring payments.

We ended [removed: FY’21] [added: FY’22] with [added: cash and cash equivalents of $272 million and] gross debt of [removed: $1.45] [added: $1.36] billion, with an aggregate interest rate of [removed: 3.2%.][added: 3.9%.]

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

The following table shows the [removed: financial] 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 [added: 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.

[removed: These] [added: Our] non-GAAP financial measures exclude the items described in *Non-GAAP Financial Measures* below.

Investors should use [removed: these] [added: our] non-GAAP financial measures only in conjunction with our GAAP results.

For discussion of [removed: FY’20] [added: our FY'21] results and comparison [removed: with FY’19] [added: to our FY'20] 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 fiscal year ended September 30, [removed: 2020.][added: 2021.]

| [removed: (Dollar] [added: *(Dollar] amounts in millions, except per share [removed: data)] [added: data)*] | | [removed: Year] [added: Year] ended September [removed: 30,] [added: 30,] | | | | | | | | [removed: Percent Change] [added: Percent Change] | | | | | | |

| | | [removed: 2021] [added: 2022] | | | | [removed: 2020] [added: 2021] | | | | [removed: Actual] [added: Actual] | | | | [removed: Constant Currency(1)] [added: Constant Currency(1)] | | |

| Total recurring [removed: revenue] [added: revenue(3)] | | $ | [removed: 1,616.3] [added: 1,736.2] | | | $ | [removed: 1,281.9] [added: 1,616.3] | | | | [removed: 26] [added: 7] | % | | | [removed: 22] [added: 12] | % |

| Perpetual license | | | [removed: 33.0] [added: 34.1] | | | | [removed: 32.7] [added: 33.0] | | | | [removed: 1] [added: 3] | % | | | [removed: (1] [added: 6] | [removed: )%] [added: %] |

| Professional services | | | [removed: 157.8] [added: 163.1] | | | | [removed: 143.8] [added: 157.8] | | | | [removed: 10] [added: 3] | % | | | [removed: 5] [added: 9] | % |

| Total revenue | | | [removed: 1,807.2] [added: 1,933.3] | | | | [removed: 1,458.4] [added: 1,807.2] | | | | [removed: 24] [added: 7] | % | | | [removed: 20] [added: 11] | % |

| Total cost of revenue | | | [removed: 371.1] [added: 386.0] | | | | [removed: 334.3] [added: 371.1] | | | | [removed: 11] [added: 4] | % | | | [removed: 9] [added: 7] | % |

| Gross margin | | | [removed: 1,436.1] [added: 1,547.4] | | | | [removed: 1,124.1] [added: 1,436.1] | | | | [removed: 28] [added: 8] | % | | | [removed: 23] [added: 12] | % |

| Operating expenses | | | [removed: 1,055.3] [added: 1,100.0] | | | | [removed: 913.2] [added: 1,055.3] | | | | [removed: 16] [added: 4] | % | | | [removed: 14] [added: 6] | % |

| Operating income | | $ | [removed: 380.7] [added: 447.4] | | | $ | [removed: 210.9] [added: 380.7] | | | | [removed: 81] [added: 17] | % | | | [removed: 63] [added: 30] | % |

| Non-GAAP operating income(1) | | $ | [removed: 634.4] [added: 732.2] | | | $ | [removed: 423.4] [added: 634.4] | | | | [removed: 50] [added: 15] | % | | | [removed: 42] [added: 23] | % |

| Operating margin | | | [removed: 21.1] [added: 23.1] | % | | | [removed: 14.5] [added: 21.1] | % | | | | | | | | |

| Non-GAAP operating margin(1) | | | [removed: 35.1] [added: 37.9] | % | | | [removed: 29.0] [added: 35.1] | % | | | | | | | | |

| Diluted earnings per share | | $ | [removed: 4.03] [added: 2.65] | | | $ | [removed: 1.12] [added: 4.03] | | | | | | | | | |

| Non-GAAP diluted earnings per [removed: share(1)(2)] [added: share(1)] | | $ | [removed: 3.97] [added: 4.58] | | | $ | [removed: 2.57] [added: 3.97] | | | | | | | | | |

| Cash flow from [removed: operations(3)] [added: operations(4)] | | $ | [removed: 368.8] [added: 435.3] | | | $ | [removed: 233.8] [added: 368.8] | | | | | | | | | |

| Free cash [removed: flow(4)] [added: flow] | | $ | [removed: 344.1] [added: 415.8] | | | $ | [removed: 213.6] [added: 344.1] | | | | | | | | | |

[removed: | (1) |] See *Non-GAAP Financial Measures* below for a reconciliation of our GAAP results to our non-GAAP 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. [removed: |]

[removed: | (3) |] Cash [removed: flow] from operations for [removed: FY’21 and FY’20 includes $14.5 million and $42 million of restructuring payments, respectively. Cash from operations for FY’21 and FY’20 includes $15.0 million and $9.6 million of acquisition-related payments, respectively. Cash from operations for FY’21] [added: FY'21] includes $17.9 million in un-forecasted payments related to the prior period tax exposure from a non-U.S. tax dispute. [removed: |]

[removed: Impact] [added: Impact] of Foreign Currency Exchange on Results of [removed: Operations][added: Operations]

Approximately [removed: 60%] [added: 55%] of our revenue and 40% of our expenses are transacted in currencies other than the U.S. [removed: dollar.][added: Dollar.]

Our constant currency disclosures are calculated by multiplying the results in local currency for [removed: FY’21] [added: FY'22] and [removed: FY’20] [added: FY'21] by the exchange rates in effect on September 30, [removed: 2020, excluding the effect of any hedging.][added: 2021.]

FY’22 operating margin of 23% increased approximately 200 basis points over FY’21 and non-GAAP operating margin of 38% increased approximately 300 basis points.

Operating margin improvements are due to higher revenue and continued operating expense discipline.

FY’22 diluted EPS was $2.65 compared to $4.03 in FY'21.

Diluted EPS in FY'22 included a $35 million non-operating charge associated with the decrease in value of an equity investment in a publicly-traded company, offset by a non-operating $30 million credit associated with the sale of a portion of our PLM services business.

Diluted EPS in FY'21 benefited from gains associated with an equity investment in a publicly-traded company, and income tax credits related to a release of a previously held valuation allowance.

FY'22 non-GAAP diluted EPS was $4.58, representing a 15% increase over non-GAAP diluted EPS of $3.97 in FY'21.

| ARR as of September 30(2) | | $ | 1,572.0 | | | $ | 1,468.5 | | | | 7 | % | | | 16 | % |

| | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | |

| Capital expenditure | | | (19.5 | ) | | | (24.7 | ) | | | | | | | | |

(1)

(2)

For the September 30, 2021 period, to facilitate comparability, we removed $6.2 million of ARR associated with a Vuforia AR product that we ceased selling as of September 30, 2021 from our ARR operating measure.

(3)

Recurring revenue is comprised of on-premises subscription, perpetual support, and SaaS, and cloud revenue.

(4)

Cash flow from operations for FY’22 and FY’21 includes $40.8 million and $14.5 million of restructuring payments, respectively.

Cash from operations for FY’22 and FY’21 includes $11.8 million and $15.0 million of acquisition and transaction-related payments, respectively.

Changes in foreign currency exchange rates have been a headwind to reported results in FY’22.

If FY'22 reported results were converted into U.S. dollars using the rates in effect as of September 30, 2021, ARR as of September 30, 2022 would have been higher by $134 million and operating income in FY'22 would have been $27 million higher.

Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period may 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 element 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.

As we continue to expand our SaaS offerings and release additional cloud functionality into our products, and customers begin to migrate from on-premises subscriptions to SaaS products, we expect that over time a higher portion of our revenue will be recognized ratably.

Given the different mix, duration and volume of new and renewing contracts in any period, year-over-year or sequential revenue comparisons can vary significantly.

| | | | | | | | | | | | | | | | | |

| Professional services | | | 163.1 | | | | 157.8 | | | | 3 | % | | | 9 | % |

(1)

(2)

The strengthening of the U.S. dollar compared to foreign currencies had a substantial impact on our revenue growth in FY'22.

On an actual currency basis, FY'22 revenue increased $126 million (7%), compared to an increase of $202 million (11%) on a constant currency basis.

Software revenue increased in FY’22 compared to FY’21 due to growth of Windchill and Arena revenue in the Americas and contribution from the recently acquired Codebeamer business in Europe, offset by a decline in Creo revenue primarily driven by foreign currency fluctuations in Europe and changes in contract durations.

In FY'22, our average durations for on-premises subscriptions starting in the year decreased slightly, resulting in a reduced revenue benefit compared to FY'21, which benefited from significant increases in average contractual durations due to business rule changes.

Professional services revenue in FY’22 compared to FY'21 reflects an increase in revenue associated with large PLM consulting engagements, particularly with automotive, aerospace and defense and consumer electronics customers.

As described in Part I, Item 1.

Business above, in the second half of FY'22, we accelerated this strategy through the sale of a portion of our PLM services business to ITC Infotech.

| | | | | | | | | | | | | | | | | |

| *(Dollar amounts in millions)* | | Year ended September 30, | | | | | | | | Percent Change | | | | | | |

| | | 2022 | | | | 2021 | | | | Actual | | | | Constant Currency | | |

| --- | --- |

Organic churn improved approximately 130 basis points year over year, primarily driven by strong execution in CAD, PLM, FSG and modest continued improvement in IoT and AR.

Our FY’21 revenue was positively impacted by ASC 606 as longer contract durations and support to subscription conversions increased the amount of upfront subscription license revenue recognized in the year.

FY’21 operating margin of 21% increased approximately 700 basis points over FY’20 due to strong revenue performance as strong product differentiation improved sales and renewals, while maintaining good discipline on our operating expense structure.

FY’21 diluted EPS more than doubled year over year to $4.03, due in part to a gain of $69 million related to common stock we own in a publicly-traded company, the release of a $137 million valuation allowance related to our deferred tax assets in the U.S., and a non-cash tax benefit of $42 million related to our Arena acquisition.

We ended FY’21 with cash and cash equivalents of $327 million.

In addition, we held a $78 million equity investment in Matterport, Inc., currently subject to trading restrictions.

| ARR | | $ | 1,474.7 | | | $ | 1,270.0 | | | | 16 | % | | | 16 | % |

| (2) | In FY’21 and FY’20 our GAAP results included tax benefits of $179.7 million and $21.2 million, respectively. The FY’21 results include a $137.4 million benefit related to the release of the valuation allowance on the majority of our U.S. deferred tax assets and a $42.3 million benefit related to the release of a valuation allowance resulting from the Arena acquisition. The FY’20 results include a $21.2 million benefit related to the release of a valuation allowance resulting from the Onshape acquisition. As the non-GAAP tax provision is calculated assuming that there is no valuation allowance, these benefits have been excluded. 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, our non-GAAP results for FY'21 exclude tax expense of $34.8 million related to a non-U.S. prior period tax exposure, primarily related to foreign withholding taxes. |

| (4) | Free cash flow is cash from operations net of capital expenditures of $24.7 million and $20.2 million in FY’21 and FY’20, respectively. |

If FY'21 reported results were converted into U.S. dollars based on this methodology, FY'21 revenue would have been lower by $20 million and expenses would have been lower by $8 million.

The net impact on year-over-year results would have been a decrease in operating income of $12 million in FY'21.

Our revenue results period to period are impacted by contract terms, including the duration and start dates of our subscription contracts, due to up-front recognition of subscription license revenue.

We are expanding our SaaS offerings and are releasing additional cloud functionality into our products.

As a

result, our revenue will be impacted over time as a higher portion of our sales will be from cloud services, which are recognized ratably.

Software revenue increased in FY’21 compared to FY’20 due to subscription revenue growth of 42% (38% constant currency), offset by an 18% decline in perpetual support revenue (21% constant currency) due to conversions of perpetual support contracts to subscriptions.

Arena; acquired in the second quarter, contributed approximately $29 million in FY’21.

In FY’21, license revenue growth was primarily driven by contracts with longer durations.

Professional services engagements typically result from sales of new licenses and software upgrades; revenue is recognized over the term of the engagement.

| Core (CAD and PLM) | | $ | 1,161.7 | | | $ | 947.1 | | | | 23 | % | | | 19 | % |

| Growth (IoT, AR, Onshape, Arena) | | | 277.4 | | | | 183.8 | | | | 51 | % | | | 48 | % |

| FSG (Focused Solutions Group) | | | 210.2 | | | | 183.7 | | | | 14 | % | | | 11 | % |

Core product software revenue growth in FY’21 compared to FY’20 was driven by subscription revenue growth of 39% (34% constant currency), offset by expected declines in perpetual support revenue of 20% (23% constant currency) due in part to ongoing perpetual support contract conversions to subscription.

ARR increased 11% (12% constant currency) for FY’21 compared to FY’20, reflecting solid ARR growth for both PLM (13% actual,14% constant currency) and CAD (10% actual and constant currency) as customers pursue their digital transformation initiatives.

Growth product software revenue growth in FY’21 was driven by subscription revenue growth of 67% (63% constant currency) compared to the year-ago period, driven primarily by IoT and contribution from Arena.

Growth product ARR increased 50% (actual and constant currency) for FY’21 compared to FY’20, due in part to a $59 million contribution from Arena.

Excluding Arena, organic ARR growth was 17% (18%

constant currency), reflecting 15% (16% constant currency) growth in IoT and 16% (actual and constant currency) growth in AR.

FSG product software revenue growth in FY’21 compared to FY’20 was primarily driven by subscription revenue growth of 34% (31% constant currency), offset by a decline in perpetual support revenue of 15% (17% constant currency) due to conversions of perpetual support contracts to subscriptions.

Americas software revenue growth in FY’21 was driven by growth in subscription revenue of 34% (actual and constant currency) as compared to FY’20, partially offset by a decline of 26% (actual and constant currency) in perpetual support revenue, due to conversions of perpetual support contracts to subscriptions, resulting in recurring revenue growth of 21% (actual and constant currency).

Americas ARR was up 19%, led by double-digit growth in Core products and Arena.

Europe software revenue growth in FY’21 was driven by growth in subscription revenue of 56% (46% constant currency) as compared to FY’20, partially offset by a decline of 16% (21% constant currency) in perpetual support revenue, resulting in recurring revenue growth of 35% (26% constant currency).

ARR in Europe was up 13% constant currency, led by high-single digit growth in Core products, low-40s growth in Growth products, and double-digit growth in FSG.

Asia Pacific software revenue growth in FY’21 was driven by subscription revenue growth of 36% (32% constant currency) as compared to FY’20, partially offset by a decline of 9% (12% constant currency) in perpetual support revenue, resulting in recurring revenue growth of 22% (18% constant currency).

ARR in Asia Pacific was up 17% constant currency, led by mid-teens growth in Core products and low-30s growth in Growth products.

License gross margin increased in FY’21 compared to FY’20 due to subscription license revenue increasing significantly as a result of longer subscription term durations, offset by increased royalty expense due to the mix of products sold and higher intangible amortization due to the Arena acquisition.

Support and cloud services gross margin percentage is flat in FY’21 compared to FY’20, while gross margin contribution increased from FY’20 to FY’21 reflecting an increase in subscription support and cloud revenue, offset by a decrease in perpetual support revenue, higher compensation costs, and an increase in costs associated with our cloud services business due to greater demand for those services.

Professional services gross margin increased in FY’21 compared to FY’20 primarily due to the impact of the COVID-19 pandemic on FY’20 resulting in a year-over-year increase in revenue and lower travel costs in FY’21, partially offset by higher compensation and outside services costs.

Headcount at the end of FY’21 includes approximately 180 people from Arena and other smaller acquisitions.

[removed: Foreign] [added: *Foreign] currency exchange [removed: risk][added: risk*]

Approximately [removed: 60%] [added: 55%] of our revenue and 40% of our expenses were transacted in currencies other than the U.S. dollar.

Based on current revenue and expense levels (excluding restructuring charges and 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 [removed: $28] [added: $32] million and [removed: $10] [added: $12] million, respectively.

If sales to customers outside [removed: of] the United States increase, our exposure to fluctuations in foreign currency exchange rates will increase.

The contracts are primarily denominated in Japanese Yen and European currencies, and have maturities of less than [removed: three] [added: four] months.

[removed: Generally, we do not designate] [added: The majority of our] foreign currency forward contracts [added: are not designated] as hedges for accounting purposes, and changes in the fair value of these instruments are recognized immediately in earnings.

As of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we had outstanding forward contracts for derivatives not designated as hedging instruments with notional amounts equivalent to the following:

| | | [removed: September 30,] [added: September 30,] | | | | | | |

| [removed: Currency Hedged] [added: Currency Hedged] *(in thousands)* | | [removed: 2021] [added: 2022] | | | | [removed: 2020] [added: 2021] | | |

| Canadian / U.S. Dollar | | $ | [removed: 4,894] [added: 2,731] | | | $ | [removed: 6,847] [added: 4,894] | |

| Euro / U.S. Dollar | | | [removed: 387,466] [added: 316,869] | | | | [removed: 390,673] [added: 387,466] | |

| British Pound / U.S. Dollar | | | [removed: 23,141] [added: 7,368] | | | | [removed: 6,328] [added: 23,141] | |

| Israeli Shekel / U.S. Dollar | | | [removed: 10,475] [added: 12,052] | | | | [removed: 9,503] [added: 10,475] | |

| Japanese Yen / U.S. Dollar | | | [removed: 46,450] [added: 25,566] | | | | [removed: 50,379] [added: 46,450] | |

| Swiss Franc / U.S. Dollar | | | [removed: 18,039] [added: 25,559] | | | | [removed: 12,874] [added: 18,039] | |

| Swedish Krona / U.S. Dollar | | | [removed: 34,196] [added: 35,713] | | | | [removed: 18,871] [added: 34,196] | |

| Singapore Dollar / U.S. Dollar | | | [removed: 3,498] [added: 3,637] | | | | [removed: 3,281] [added: 3,498] | |

| Chinese Renminbi / U.S. Dollar | | | [removed: 23,297] [added: 23,965] | | | | [removed: 5,415] [added: 23,297] | |

| New Taiwan Dollar / U.S. Dollar | | | [removed: 3,369] [added: 13,906] | | | | [removed: 1,483] [added: 3,369] | |

| Russian Ruble/ U.S. Dollar | | | [removed: 2,614] [added: —] | | | | [removed: 309] [added: 2,614] | |

| Total | | $ | [removed: 563,921] [added: 483,178] | | | $ | [removed: 512,462] [added: 563,921] | |

[removed: Debt][added: *Debt*]

In addition to the $1 billion due under our 2025 and 2028 Senior Notes, as of September 30, [removed: 2021,] [added: 2022,] we had [removed: $450] [added: $359] million outstanding under our credit facility.

As of September 30, [removed: 2021,] [added: 2022,] the annual rate on the credit facility loans was [removed: 1.69%.][added: 4.14%.]

If there were a [removed: hypothetical] 100 basis point change in interest rates, the annual net impact to earnings and cash flows would be [removed: $4.5] [added: $3.6] million.

This [removed: hypothetical] change in cash flows and earnings has been calculated based on the borrowings outstanding at September 30, [removed: 2021] [added: 2022] and a 100 basis point per annum change in interest rate applied over a one-year period.

[removed: Cash] [added: *Cash] and cash [removed: equivalents][added: equivalents*]

As of September 30, [removed: 2021,] [added: 2022,] cash equivalents were invested in highly liquid investments with maturities of three months or less when purchased.

At September 30, [removed: 2021,] [added: 2022,] we had cash and cash equivalents of [removed: $37] [added: $11] million in the United States, [removed: $111] [added: $105] million in Europe, [removed: $145] [added: $128] million in Asia Pacific (including India), and [removed: $34] [added: $28] million in other non-U.S. countries.

Given the short maturities and investment grade quality of the portfolio holdings at September 30, [removed: 2021,] [added: 2022,] 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 [added: exchange rate] risk.

Changes in foreign currencies relative to the U.S. dollar had an unfavorable impact of [removed: $0.1] [added: $24.2] million and [removed: $2.6] [added: $0.1] million on our consolidated cash balances in [removed: 2021] [added: 2022] and [removed: 2019,] [added: 2021,] respectively, in particular due to changes in the Euro and the Japanese [removed: Yen, and an immaterial impact in 2020.][added: Yen.]

| | | | | | | | | |

| Korean Won/ U.S. Dollar | | | 4,919 | | | | — | |

| Danish Krone/ U.S. Dollar | | | 3,192 | | | | 2,380 | |

| Australian Dollar/ U.S. Dollar | | | 3,269 | | | | 2,086 | |

| All other | | | 4,432 | | | | 2,016 | |

| --- | --- |

| All other | | | 6,482 | | | | 6,499 | |

PTC is a global software [removed: and services] company that [removed: enables industrial companies to improve growth and profitability with] [added: provides] a portfolio of innovative digital solutions that work together to transform how physical products are engineered, manufactured, and serviced.

Our [removed: award-winning technology] [added: software] portfolio [removed: spans] [added: includes award-winning offerings in] the computer-aided design [removed: (CAD),] [added: (CAD) and] product lifecycle management [removed: (PLM), Industrial Internet of Things (IIoT), and Augmented Reality (AR)] [added: (PLM)] markets.

Our [removed: technology] [added: software] can be delivered on premises, in the cloud, or in a hybrid model.

Our customer base includes some of the [removed: world’s] [added: world's] most innovative manufacturers in the aerospace and defense, automotive, electronics and high tech, industrial machinery and equipment, life sciences, [removed: oil and gas,] retail and consumer products industries.

We generate revenue through the sale of software subscriptions, which include license access and support (technical support and software updates); support for [removed: existing] perpetual licenses; [removed: professional services (consulting, implementation, and training); and] cloud services (hosting for our software and [removed: SaaS).][added: software-as-a-service (SaaS)); perpetual licenses; and professional services (consulting, implementation, and training).]

[removed: Our Strategy][added: Our Strategy]

[removed: Our] [added: Our] Principal Products and [removed: Services][added: Services]

In [removed: order to drive clear focus,] [added: 2022,] we [removed: have divided] [added: reported] our business [removed: into] [added: in] two [removed: key] product groups: Digital Thread and Velocity.

[removed: The] Digital Thread [removed: business is] [added: included products] focused on customers that are embracing [added: enterprise-wide] digital transformation and [removed: the] Velocity [removed: business is] [added: included products] focused on customers that prioritize agile product development.

[added: Accelerate] Digital Thread [removed: – Core][added: Solutions]

[removed: Our] [added: Our] Markets and How We Address [removed: Them][added: Them]

Approximately [removed: 30%] [added: 25%] to [removed: 35%] [added: 30%] of our sales of products and services are through third-party resellers.

Our strategic services partners provide service offerings to help customers implement our product [removed: offerings.][added: offerings and transition to SaaS.]

Segment and Geographic Information* of Notes to Consolidated Financial Statements in this [removed: Form 10-K,] [added: Annual Report,] which information is incorporated herein by reference.

[removed: Competition][added: Competition]

For enterprise [removed: CAD] [added: Creo] and [removed: PLM] [added: Windchill] solutions, we compete with large established companies including Autodesk, Dassault Systèmes SA, and Siemens AG.

For our AR products, our primary competitors include [added: Microsoft,] TeamViewer, [removed: ScopeAR] and [removed: Re’Flekt.][added: ScopeAR.]

[removed: Proprietary Rights][added: Proprietary Rights]

We also use license management and other anti-piracy [added: technology measures, as well as contractual restrictions, to curtail the unauthorized use and distribution of our products.]

Our proprietary rights are subject to [added: the] risks and uncertainties described under Item 1A.

[removed: People] [added: People] and [removed: Culture][added: Culture]

PTC’s commitment to building a diverse, equitable, and inclusive culture is fundamental to our purpose – the Power to [removed: Create,] [added: Create –] and critical to every aspect of our talent strategy.

[removed: ][added: ]

[removed: PTC at-a-Glance][added: PTC at-a-Glance]

As of September 30, [removed: 2021,] [added: 2022,] PTC had [removed: 6,709] [added: 6,503 full-time] employees.

Our [added: employee] population is geographically diverse and serves a geographically diverse customer and partner network.

[removed: ][added: ]

[removed: ][added: ]

[removed: ][added: ]

[removed: Commitment] [added: Commitment] to [removed: Diversity] [added: Diversity, Equity,] and Inclusion [added: (DEI)]

We [removed: have been] [added: are] improving our systems and processes to enable us to better track, manage and develop our employees.

Key milestones include [removed: establishing a global employee DEI Champion network,] launching leadership development experiences for [removed: our] underrepresented minority and underrepresented group populations, [removed: designing training] [added: offering learning] programs in psychological safety, [removed: inclusive leadership, and conscious inclusion,] [added: requiring unconscious bias training for hiring managers,] and enhancing our Employee Resource Group [removed: program.][added: (ERG) program and Global DEI Champions Network.]

[removed: Corporate Information][added: Corporate Information]

Our Business

CAD is utilized for product data authoring and PLM is for product data management and process orchestration.

With our solutions, we enable companies to adopt a “digital thread” strategy to drive innovation and productivity.

A digital thread manages product data and makes it accessible and useful to the right people, at the right time, and in the right context.

This is particularly relevant for larger businesses pursuing a vertically integrated manufacturing strategy in which the reuse and repurposing of earlier innovations drives next generation product offerings.

Accelerate Product Innovation

We enable companies to upend the product development process with solutions that apply agile concepts, originally focused on software development, to the entire product innovation process, from software to hardware and electronics.

By applying agile product development processes across all three disciplines, companies can increase innovation velocity and bring new products to market faster to meet rapidly changing market demand.

This is particularly relevant for start-up and upstart businesses focused on technology-centered innovations that commonly leverage contract manufacturers for production of their designs.

Accelerate SaaS Transformation

Manufacturers today face a myriad of business challenges.

Macroeconomic forces, such as an ever-evolving workforce, supply chain disruptions, the rise of smart, connected products, and the need to prove sustainability, are all driving the need for change.

We enable companies to respond to these challenges with technology that leverages the cloud to transform how, where, and when work gets done.

Software-as-a-service (SaaS), which has already reshaped nearly all aspects of business, is poised to transform management of the entire product lifecycle.

Anticipating this need, PTC acquired the Onshape and Arena cloud-native product development solutions.

In parallel, we are heavily investing to transform our technology portfolio to SaaS.

Strategic Transactions

During FY'22, we completed two strategic transactions.

In Q3'22, we acquired the CodebeamerTM application lifecycle management business to broaden and deepen our ALM footprint across safety-critical and regulated industries.

In Q3'22, we also sold a portion of our PLM services business to ITC Infotech.

The transaction is designed to accelerate customer digital transformation initiatives and adoption of our Windchill+ SaaS solution.

Refer to *Note 6.

Acquisitions and Disposition of Business* of Notes to Consolidated Financial Statements in this Annual Report for additional discussion regarding these transactions.

Beginning in fiscal year 2023, we are reporting our businesses in two new product groups: CAD (Computer-Aided Design) and PLM (Product Lifecycle Management).

Products designated as CAD refer to software used for product data authoring.

Products designated as PLM refer to software used for product data management and process orchestration.

The new reporting structure aligns better to our strategy, product offerings and industry segments.

| | | |

| Our Windchill® PLM application suite manages all aspects of the product development lifecycle - from concept through service and retirement - by enabling a digital thread of product parts, materials, and configuration information. 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 process. With its open architecture that integrates with other enterprise systems, Windchill provides a solid foundation for a product-driven digital thread. Our Arena® 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 help 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. Our ThingWorx® platform is flexible and purpose-built for Industrial Internet of Things (IIoT). It offers a rich set of capabilities that enable enterprises to digitally transform every aspect of their business with innovative solutions that are simple to create, easy to implement, scalable to meet future needs, and designed to enable customers to accelerate time to value. Our ThingWorx Digital Performance Management solution enables manufacturers to identify, prioritize, and overcome their most significant production bottlenecks. Our CodebeamerTM and IntegrityTM application lifecycle management (ALM) and model-based systems engineering capabilities enable users to accelerate the development of software-intensive products through system modeling, software configuration, and requirements, risk, and test management. Our Servigistics® service parts management solution enables customers to effectively manage their service parts inventory, enabling them to optimize equipment availability and uptime, and increase customer satisfaction. Our FlexPLM® solution provides retailers with a single platform for merchandising and line planning, materials management, sampling, and more. | | 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 Vuforia® augmented reality (AR) technology enables the visualization of digital information in a physical context and the creation of AR and mixed reality experiences to deliver workforce productivity and business results in manufacturing, service, engineering, and operations. Vuforia solutions equip frontline workers with focused and effective step-by-step instructions, procedural guidance, skill development and remote assistance that enable enterprises to reduce errors, increase asset utilization and drive higher profitability. Our Arbortext® dynamic publishing solution streamlines how organizations create, manage, and publish technical documentation. |

To meet the increasing demand for SaaS delivered solutions, we expect to introduce a number of new SaaS offerings over time.

These service offerings will provide an alternative to our traditional on-premises software products and provide our customers with the benefits of SaaS including accelerated time to value, reduced complexity, lower costs to implement, upgrade and administer, improved user collaboration and mobility, and scalability.

We are giving this new generation of offerings a “plus” brand.

We launched Windchill+ in the second quarter of 2022.

We see opportunity for further market growth for all our solutions with a new generation of SaaS solutions we are developing to bring to market over the next few years.

For our ALM products, we compete with IBM and Siemens AG.

For our SLM products, we compete with companies that offer point solutions and with customers’ homegrown solutions.

Worldwide Employee Representation

United States Employee Representation

Compensation and Benefits

PTC provides a comprehensive and competitive compensation and benefits package designed to attract, retain, motivate, and engage talent around the world that will drive success and innovation in meeting the goals of our business.

| --- | --- |

Our solutions enable industrial companies to create a closed loop of information shared across their organization’s entire value chain.

This “digital thread” can drive excellence in engineering, efficiency in manufacturing operations and service delivery, and innovation across product offerings and business models.

With our solutions, digital transforms physical.

As a purpose-driven company, we don’t just imagine a better world, we help create it.

Our purpose statement - Power To Create – is a commitment to our customers to help them solve difficult challenges; a commitment to our employees to build a culture that supports diversity, equity, and inclusion so they can achieve their greatest potential; and a commitment to support the communities our employees live and work in globally.

Align with market demand to deliver technology solutions aligned with secular market trends, including digital transformation, SaaS, remote collaboration and AI.

We believe demand for solutions such as ours that enable work from home and/or office, global team and supply chain collaboration, remote asset management, and remote frontline worker training and support is strong.

In addition, there is growing customer demand for SaaS offerings; we intend to increase our investment in SaaS initiatives, while better aligning with SaaS best practices in order to meet the needs of the market.

Drive sustainable top line ARR growth by expanding our footprint with existing customers, cross-selling complementary solutions in our customer base, adding new customers and by maintaining strong customer retention rates through our global field organization and partner ecosystem.

FY’21 marked the fourth consecutive year of double-digit ARR growth, despite the manufacturing and macroeconomic environments over that period.

In FY’22, we are evolving our organizational structure to align better with a traditional SaaS model and create a much-improved customer experience.

Grow operating cash flow through continued operating discipline within a recurring business model.

Our organizational changes are designed to grow ARR, increase customer retention, and improve operating efficiency, we expect to grow our operating cash flow.

| 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 Windchill® PLM application suite manages all aspects of the product development lifecycle - from concept through service and retirement - by enabling a digital thread of product parts, materials, and configuration information. 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 process. With its open architecture that integrates with other enterprise systems, Windchill provides a solid foundation for a product-driven digital thread. |

| --- | --- | --- |

Digital Thread – Growth

| Flexible and purpose-built for Industrial IoT, our ThingWorx® platform offers a rich set of capabilities that enable enterprises to digitally transform every aspect of their business with innovative solutions that are simple to create, easy to implement, scalable to meet future needs, and designed to enable customers to accelerate time to value. | | Our Vuforia® augmented reality technology enables the visualization of digital information in a physical context and the creation of AR experiences to deliver workforce productivity and business results in manufacturing, service, engineering, and operations. Vuforia enables augmented reality and mixed reality experiences for the industrial enterprise. Vuforia solutions equip frontline workers with focused and effective step-by-step instructions, procedural guidance, skill development and remote assistance that enable enterprises to reduce errors, increase asset utilization and drive higher profitability. |

Digital Thread – Focused Solutions Group (FSG)

Our IntegrityTM application lifecycle management (ALM) and model-based systems engineering capabilities enable users to manage system models, software configurations, and test plans and defects.

Our Servigistics® service parts management solution enables customers to effectively manage service parts, improve their products and services, and increase customer satisfaction.

Velocity

| Our Onshape® Software-as-a-Service (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 Arena® 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 help 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. |

We compete in the CAD, PLM, IIoT and AR markets.

We see greater opportunity for market growth for our IIoT and AR solutions for the enterprise and our SaaS solutions, followed by more moderate market growth for our on-premise CAD and PLM solutions, both of which have been growing faster than their respective market growth rates.

For our PLM solutions, we also compete with Oracle and SAP, but we believe our products are more specifically targeted toward the business process challenges of manufacturing companies and offer broader and deeper functionality for those processes than ERP-based solutions.

Although Microsoft is a partner (especially in IoT), it is a competitor in AR; the competing products are Microsoft Dynamics 365 Remote Assist and Dynamics 365 Guides.

technology measures, as well as contractual restrictions, to curtail the unauthorized use and distribution of our products.

With these improvements, we aim to better understand our demographic population and to develop demographic goals we can share.

They include a focus on increasing under-represented minority and gender representation in global leadership as a first and essential step to diversifying our employee population.

In addition to hiring our first Chief Diversity & CSR Officer in 2020, we are building an extended team to support our diversity and inclusion initiatives.

Employee Health & Safety | COVID-19 Response

Throughout the COVID-19 crisis, PTC focused on protecting the safety and well-being of our employees and supported our local communities.

PTC moved to fully remote work in March 2020.

Employees may continue to work remotely until 2022.

PTC will then move to a hybrid flex model with a blend of in-office and remote work.

Workforce Planning & Long-Range Plan

We believe that the transition of industrial software to SaaS is inevitable and is accelerating.

To better position us to be a leader in this SaaS evolution by aligning our internal processes and resources with SaaS operating best practices, in November 2021, we committed to a plan to reorganize our workforce and consolidate select facilities.

While this restructuring will result in a number of employee reductions to create operating efficiencies, it will enable us to invest in roles that will further our journey to SaaS.

Commitments and Contingencies* [added: *\-- Legal Proceedings*] of Notes to Consolidated Financial Statements in this [removed: Form 10-K,] [added: Annual Report,] which information is incorporated herein by reference.

| --- | --- |

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

| ☑ | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

For the Fiscal Year Ended: September 30, [removed: 2021][added: 2022]

| ☐ | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from_ [removed: to_][added: to_]

[removed: PTC Inc.][added: PTC Inc.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: Massachusetts] [added: Massachusetts] | | [removed: 04-2866152] [added: 04-2866152] |

| [removed: (State] [added: (State] or other jurisdiction [removed: of incorporation] [added: of incorporation] or [removed: organization)] [added: organization)] | | [removed: (I.R.S. Employer Identification Number)] [added: (I.R.S. Employer Identification Number)] |

[removed: 121] [added: 121] Seaport [removed: Boulevard, Boston, MA 02210][added: Boulevard, Boston, MA 02210]

[removed: (Address] [added: (Address] of principal executive offices, including zip [removed: code)][added: code)]

[removed: (781) 370-5000][added: (781) 370-5000]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Trading Symbol] [added: Trading Symbol] | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

| [removed: Common] [added: Common] Stock, $.01 par value per [removed: share] [added: share] | [removed: PTC] [added: PTC] | [removed: NASDAQ] [added: NASDAQ] Global Select [removed: Market] [added: Market] |

[removed: Securities] [added: Securities] registered [removed: pursuant][added: pursuant]

[removed: to] [added: to] Section 12(g) of the Act: [removed: None][added: None]

The aggregate market value of our voting stock held by non-affiliates was approximately [removed: $14,486,748,642] [added: $11,336,087,091] on March 31, [removed: 2021] [added: 2022] based on the last reported sale price of our common stock on the Nasdaq Global Select Market on that date.

There were [removed: 116,854,806] [added: 116,975,644] shares of our common stock outstanding on that day and [removed: 117,871,872] [added: 117,471,969] shares of our common stock outstanding on November [removed: 17, 2021.][added: 14, 2022.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the definitive Proxy Statement in connection with the [removed: 2022] [added: 2023] Annual Meeting of Stockholders [removed: (2022] [added: (2023] Proxy Statement) are incorporated by reference into Part III.

[removed: ANNUAL] [added: ANNUAL] REPORT ON FORM 10-K FOR FISCAL YEAR [removed: 2021][added: 2022]

[removed: Table of Contents][added: Table of Contents]

| | | [removed: Page] [added: Page] |

| [removed: [PART I.](#PART_I_)] [added: [PART I.](#part_i_)] | | |

| Item 1A. | [Risk [removed: Factors](#ITEM_1A_RISK_FACTORS)] [added: Factors](#item_1a_risk_factors)] | [removed: [7](#ITEM_1A_RISK_FACTORS)] [added: [10](#item_1a_risk_factors)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#UNRESOLVED_STAFF_COMMENTS)] [added: Comments](#unresolved_staff_comments)] | [removed: [17](#UNRESOLVED_STAFF_COMMENTS)] [added: [19](#unresolved_staff_comments)] |

| Item 2. | [removed: [Properties](#PROPERTIES)] [added: [Properties](#properties)] | [removed: [17](#PROPERTIES)] [added: [19](#properties)] |

| Item 3. | [Legal [removed: Proceedings](#LEGAL_PROCEEDINGS)] [added: Proceedings](#legal_proceedings)] | [removed: [17](#LEGAL_PROCEEDINGS)] [added: [19](#legal_proceedings)] |

| Item 4. | [Mine Safety [removed: Disclosures](#MINE_SAFETY_DISCLOSURES)] [added: Disclosures](#mine_safety_disclosures)] | [removed: [17](#MINE_SAFETY_DISCLOSURES)] [added: [19](#mine_safety_disclosures)] |

| [removed: [PART II.](#PART_II)] [added: [PART II.](#part_ii)] | | |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#MARKET_FOR_REGISTRANTS_COMMON_EQUITY_REL)] [added: Securities](#market_for_registrants_common_equity_rel)] | [removed: [17](#MARKET_FOR_REGISTRANTS_COMMON_EQUITY_REL)] [added: [19](#market_for_registrants_common_equity_rel)] |

| Item 6. | [removed: [Reserved](#Reserved)] [added: [Reserved](#reserved)] | [removed: [17](#Reserved)] [added: [19](#reserved)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#MANAGEMENTS_DISCUSSION_ANALYSIS_FINANCIA)] [added: Operations](#managements_discussion_analysis_financia)] | [removed: [18](#MANAGEMENTS_DISCUSSION_ANALYSIS_FINANCIA)] [added: [20](#managements_discussion_analysis_financia)] |

| Item 7A. | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#Item_7A__Quantitative_and_Qualitative_Di)] [added: Risk](#item_7a__quantitative_and_qualitative_di)] | [removed: [33](#Item_7A__Quantitative_and_Qualitative_Di)] [added: [37](#item_7a__quantitative_and_qualitative_di)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#Item_8__Financial_Statements_and_Supplem)] [added: Data](#item_8__financial_statements_and_supplem)] | [removed: [35](#Item_8__Financial_Statements_and_Supplem)] [added: [39](#item_8__financial_statements_and_supplem)] |

OR

| | | |

*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.

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.

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.*

OR

| --- | --- |

We currently have [removed: 86] [added: 98] 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 [removed: 1,270,000] [added: 1,209,000] square feet of leased facilities used in operations, approximately [removed: 527,000] [added: 484,000] square feet are located in the U.S., including 250,000 square feet at our headquarters facility located in Boston, Massachusetts, and approximately [removed: 260,000] [added: 250,000] square feet are located in India, where a significant amount of our research and development is conducted.

| --- | --- |

In addition, approximately 210,000 feet are associated with facilities that have been restructured, primarily our previous headquarters facility in Needham, Massachusetts.

We believe that our facilities are adequate for our present and foreseeable needs.

[removed: PART II][added: PART II]

| --- | --- |

On September 30, [removed: 2021,] [added: 2022,] the close of our fiscal year, and on November [removed: 17, 2021,] [added: 14, 2022,] our common stock was held by [removed: 1,023] [added: 1,003] and [removed: 1,020] [added: 1,000] shareholders of record, respectively.

| --- | --- |

The table below shows the shares of our common stock we repurchased in the fourth quarter of 2021.

| 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 2021 | | — | | | | $ | — | | | | — | | | $ | 1,000,000,000 | |

| August 2021 | | | 225,909 | | | | 132.80 | | | | 225,909 | | | | 970,000,047 | |

| September 2021 | | | — | | | | — | | | | — | | | | 970,000,047 | |

| Total | | | 225,909 | | | $ | 132.80 | | | | 225,909 | | | $ | 970,000,047 | |

| (1) | On November 13, 2020, the Board of Directors authorized us to repurchase up to $1 billion of our common stock in the period November 13, 2020 through September 30, 2023. |

| --- | --- |

| --- | --- |

| --- | --- |

[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

Based on this evaluation, we concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, [removed: 2021.][added: 2022.]

[removed: Management’s] [added: Management’s] Annual Report on Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: | | • |] Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; [removed: |]

[removed: | | • |] 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 [removed: |]

[removed: | | • |] 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. [removed: |]

Our management assessed the effectiveness of our internal control over financial reporting as of September 30, [removed: 2021] [added: 2022] using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control-Integrated Framework (2013)*.

[added: Based on this assessment] and those criteria, our management concluded that, as of September 30, [removed: 2021,] [added: 2022,] our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of September 30, [removed: 2021] [added: 2022] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears under Item 8.

[removed: Change] [added: Change] in Internal Control over Financial [removed: Reporting][added: Reporting]

There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, [removed: 2021] [added: 2022] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

| --- | --- |

| --- | --- | --- |

Based on this assessment

Management excluded Arena from our assessment of internal control over financial reporting as of September 30, 2021 because the Company acquired it in a business combination in 2021.

Arena’s total assets and total revenues represent approximately 1% and 2%, respectively, of the Company’s total assets and total revenues, as of and for the year ended September 30, 2021.

| --- | --- |

[removed: PART III][added: PART III]

| --- | --- |

The information required by this item with respect to our directors and executive officers may be found [removed: in] [added: under] the [removed: sections captioned] [added: headings] “Proposal 1: Election of Directors,” “Corporate Governance,” [removed: "Our] [added: "Information About Our] Executive Officers," and “Transactions with Related Persons” appearing in our [removed: 2022] [added: 2023] Proxy Statement.

Such information is incorporated [removed: into this Item 10] [added: herein] by reference.

[removed: Code] [added: *Code] of Ethics for Senior Executive [removed: Officers][added: Officers*]

| --- | --- |

Information with respect to director and executive compensation may be found under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation,” and “Compensation Committee Report” appearing in our [removed: 2022] [added: 2023] Proxy Statement.

| --- | --- |

[removed: Information] [added: The information] required by this item may be found under the [removed: heading] [added: headings “Proposal 2: Approve an Increase in the Number of Shares Available under the 2000 Equity Incentive Plan,” ”Equity Compensation Plan Information,” and] “Information about PTC Common Stock Ownership” [added: appearing] in our [removed: 2022] [added: 2023] Proxy Statement.

| --- | --- |

EQUITY COMPENSATION PLAN INFORMATION

as of September 30, 2021

| 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) | | | 3,215,849 | | | | — | | (1) | | 4,074,497 | | |

| 2016 Employee Stock Purchase Plan(2) | | | — | | | | — | | | | 634,855 | | (2) |

| Total | | | 3,215,849 | | | | — | | | | 4,709,352 | | |

| (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 110,363 shares are subject to purchase during the current offering period. |

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” [added: appearing] in our [removed: 2022] [added: 2023] Proxy Statement.

| --- | --- |

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 Professional Services and Fees” in our [removed: 2022] [added: 2023] Proxy Statement.

[removed: PART IV][added: PART IV]

ITEM15.

Exhibits and Financial Statement Schedules

*(a) Documents Filed as Part of Form 10-K*

| | | |

| --- | --- | --- |

| 1. | Financial Statements | |

| | [Report of Independent Registered Public Accounting Firm](#report_of_independent_registered) (PricewaterhouseCoopers LLP, Boston, MA, PCAOB ID: 238) | [F-1](#report_of_independent_registered) |

| | [Consolidated Balance Sheets as of September 30, 2022 and 2021](#consolidated_balance_sheets) | [F-4](#consolidated_balance_sheets) |

| | [Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020](#consolidated_statements_operations) | [F-5](#consolidated_statements_operations) |

| | [Consolidated Statements of Comprehensive Income for the years ended September 30, 2022, 2021 and 2020](#consolidated_statements_comprehensive_in) | [F-6](#consolidated_statements_of_comprehensive) |

| | [Consolidated Statements of Cash Flows for the years ended September 30, 2022, 2021 and 2020](#consolidated_statements_cash_flows) | [F-7](#consolidated_statements_cash_flows) |

| | [Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2022, 2021 and 2020](#consolidated_statements_stockholders_equ) | [F-8](#consolidated_statements_stockholders_equ) |

| | [Notes to Consolidated Financial Statements](#notes_to_consolidated_financial_statemen) | [F-9](#notes_to_consolidated_financial_statemen) |

| 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.

ITEM16.

Form 10-K Summary

None.

EXHIBIT INDEX

| | | |

| --- | --- | --- |

| Exhibit Number | | Exhibit |

| | | |

| 2.1 | — | [Share Sale and Purchase Agreement dated as of April 19, 2022, by and among PTC (SSI), Intland Software GmbH, Eger Invest GmbH, Janos Rezso Koppány, Zsolt Koppány, Szabolcs Koppány and Eger Software Holding UG (haftungsbeschränkt) & Co. KG. (filed as Exhibit 1.1 to our Current Report on Form 8-K filed on April 20, 2022 (File No. 0-18059) and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/857005/000156459022014784/ptc-8k_20220419.htm) |

| | | |

| 3.1 | — | [Restated Articles of Organization of PTC Inc. adopted August 4, 2015 (filed as Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2015 (File No. 0-18059) and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/857005/000085700515000042/ptc9302015ex31.htm) |

| | | |

| 3.2 | — | [Amended and Restated By-Laws of PTC Inc., as amended through June 24, 2021.](https://www.sec.gov/Archives/edgar/data/857005/000095017022025211/ptc-ex3_2.htm) |

| | | |

| 4.1 | — | [Indenture, dated as of February 13, 2020, between PTC Inc. and Wells Fargo Bank, National Association, as trustee (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on February 13, 2020 (File No. 0-18059) and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0000857005/000119312520035604/d882560dex41.htm) |

| | | |

| 4.2 | — | [Form of 3.625% senior unsecured notes due 2025 (filed as Exhibit 4.2 to our Current Report on Form 8-K filed on February 13, 2020 (File No. 0-18059) and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0000857005/000119312520035604/d882560dex41.htm) |

| | | |

| --- | --- |

| --- | --- |

(a) Documents Filed as Part of Form 10-K

| | | |

| --- | --- | --- |

| 1. | Financial Statements | |

| | [Report of Independent Registered Public Accounting Firm](#Report_of_Independent_Registered_Public_) | [F-1](#Report_of_Independent_Registered_Public_) |

| | [Consolidated Balance Sheets as of September 30, 2021 and 2020](#CONSOLIDATED_BALANCE_SHEETS) | [F-4](#CONSOLIDATED_BALANCE_SHEETS) |

| | [Consolidated Statements of Operations for the years ended September 30, 2021, 2020 and 2019](#CONSOLIDATED_STATEMENTS_OPERATIONS) | [F-5](#CONSOLIDATED_STATEMENTS_OPERATIONS) |

| | [Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2021, 2020 and 2019](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN) | [F-6](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN) |

| | [Consolidated Statements of Cash Flows for the years ended September 30, 2021, 2020 and 2019](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) | [F-7](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) |

| | [Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2021, 2020 and 2019](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU) | [F-8](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU) |

| | [Notes to Consolidated Financial Statements](#Notes_to_Consolidated_Financial_Statemen) | [F-9](#Notes_to_Consolidated_Financial_Statemen) |

| 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.

| --- | --- |

None.

EXHIBIT INDEX

| Exhibit Number | | Exhibit |

| --- | --- | --- |

| | | |

| 3.1 | — | [Restated Articles of Organization of PTC Inc. adopted August 4, 2015 (filed as Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2015 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700515000042/ptc9302015ex31.htm) |

| | | |

| 3.2 | — | [By-Laws, as amended and restated, of PTC Inc. (filed as Exhibit 3.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2014 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700514000010/ptc3292014by-lawsex32.htm) |

| | | |

| 3.3 | — | [Amendment to PTC By-Laws dated June 24, 2021 (filed as Exhibit 3.1 to our Current Report on Form 8-K filed on June 25, 2021 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000156459021034598/ptc-ex31_6.htm) |

| | | |

| 4.1 | — | [Indenture, dated as of February 13, 2020, between PTC Inc. and Wells Fargo Bank, National Association, as trustee (filed as Exhibit 4.1 to our Current Report on Form 8-K filed on February 13, 2020 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/0000857005/000119312520035604/d882560dex41.htm) |

| | | |

| 4.2 | — | [Form of 3.625% senior unsecured notes due 2025 (filed as Exhibit 4.2 to our Current Report on Form 8-K filed on February 13, 2020 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/0000857005/000119312520035604/d882560dex41.htm) |

| | | |

| 4.3 | — | [Form of 4.000% senior unsecured notes due 2028 (filed as Exhibit 4.3 to our Current Report on Form 8-K filed on February 13, 2020 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/0000857005/000119312520035604/d882560dex41.htm) |

| | | |

| 4.4 | — | [Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.4 to our Annual Report on Form 10-K for the year ended September 30, 2019 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700519000040/ptc93019ex44.htm) |

| | | |

| 10.1.1* | — | [2000 Equity Incentive Plan (filed as Exhibit 10 to our Current Report on Form 8-K filed on March 8, 2019 (File No. 0-18059) and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/857005/000165495419002484/exhibit10-2000eipplanamen.htm) |

| | | |

| 10.1.2 | — | [Form of Restricted Stock Unit Certificate (Non-U.S.) (filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000119312505165325/dex104.htm) |

| | | |

| 10.1.3* | — | [Form of Restricted Stock Unit Certificate (Non-Employee Director) (filed as Exhibit 10.1.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700513000018/exhibit1011formofrsucertif.htm) |

| | | |

| 10.1.4 | — | [Form of Restricted Stock Unit Certificate (U.S.) (filed as Exhibit 10.1.9 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex1019.htm) |

| | | |

| 10.1.5 | — | [Form of Restricted Stock Unit Certificate (U.S.) (filed as Exhibit 10.1.10 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10110.htm) |

| | | |

| 10.1.6 | — | [Form of Restricted Stock Unit Certificate (U.S.) (filed as Exhibit 10.1.11 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10111.htm) |

| | | |

| 10.1.7 | — | [Form of Restricted Stock Unit Certificate (U.S. EVP) (filed as Exhibit 10.1.12 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10112.htm) |

| | | |

| 10.1.8* | — | [Form of Restricted Stock Unit Certificate (U.S. Section 16) (filed as Exhibit 10.1.13 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10113.htm) |

| | | |

| 10.1.9 | — | [Form of Restricted Stock Unit Certificate (U.S. EVP) (filed as Exhibit 10.1.14 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10114.htm) |

| | | |

| 10.1.10 | — | [Form of Restricted Stock Unit Certificate (U.S.) (filed as Exhibit 10.1.15 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2016(File No. 0-18059) and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/857005/000085700516000071/ptc93016ex10115.htm) |

| | | |