Company: PTC
Filing Date: 2025-11-21
Form Type: 10-K
Source: 0001193125-25-291326
Chunk: 71

Company: PTC INC.
Filing Date: 2025-11-21
Form: 10-K
Item: Item 6
Chunk 71
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 that the carrying values of goodwill or acquired intangible assets may not be recoverable.Long-lived assets primarily include property and equipment, right-of-use lease assets, and acquired intangible assets with finite lives (including purchased software, customer lists and trademarks). Purchased software is amortized over periods up to 16 years, customer lists are amortized over periods up to 20 years and trademarks are amortized over periods up to 15 years. We review long-lived assets for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of those assets are no longer appropriate. An impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset or asset group. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis.In 2025, we recorded an impairment charge of $15.6 million, of which $12.8 million related to lease right-of-use assets and $2.8 million related to fixed assets. This impairment was triggered by the sublease of certain portions of our Seaport headquarters, which resulted in both reassessment of the asset grouping and identification of potential impairment. After determining the appropriate asset group, we performed a recoverability test by comparing the undiscounted cash flows for each asset group with its carrying value, in each case concluding that impairment was indicated. The fair value of each asset group was then estimated using a discounted cash flow model. This fair value assessment involved assumptions and estimates, including the sublease term, variable lease payments, the market discount rate, expected construction and broker costs, and estimates of future sublease cash flows for the period after the present sublease ends (when applicable). The impairment charge was recorded to Impairment and other charges (credits), net in the Consolidated Statements of Operations. Advertising ExpensesAdvertising costs are expensed as incurred. Total advertising expenses incurred were $11.7 million, $15.0 million and $11.7 million in 2025, 2024 and 2023, respectively, and are included in Sales and marketing expenses in the accompanying Consolidated Statements of Operations.Income TaxesOur income tax expense includes U.S. and international income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effects of these differences are reported as deferred tax assets and liabilities. Deferred tax assets are recognized for the estimated future tax effects of deductible temporary