Company: PTC
Filing Date: 2025-11-21
Form Type: 10-K
Source: 0001193125-25-291326
Chunk: 28

Company: PTC INC.
Filing Date: 2025-11-21
Form: 10-K
Item: Item 6
Chunk 28
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, net compared to amounts from our Q4'25 earnings release.

25

Income Taxes 

     (Dollar amounts in millions)
      
     Year ended September 30,

     2025

     2024

     Percent Change

     Income before income taxes
      
     $
     920.2

     $
     469.0

     96
     %

     Provision for income taxes
      
     $
     186.2

     $
     92.6

     101
     %

     Effective income tax rate

     20
     %

     20
     %

   An immaterial adjustment related to foreign currency option contracts entered into in Q4'25 resulted in a $2.3 million decrease to Provision for income taxes compared to amounts from our Q4’25 earnings release.Our effective tax rates for FY'25 and FY'24 were impacted by a number of offsetting items as outlined below, as well as by the year-over-year increase in Income before income taxes, which was primarily domestic; however, there was ultimately no net change in the effective tax rate year-over-year. In FY'25 and FY'24, our income tax rate included the effects of Internal Revenue Service (IRS) procedural guidance requiring consent for previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income in FY'24, with a lesser impact to taxable income in FY'25. In FY'25, we recorded tax expense of $11 million primarily related to accrued interest stemming from the effects of the procedural guidance. In FY'24, we recorded a benefit of $4 million primarily related to an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income ("GILTI") and Foreign-Derived Intangible Income ("FDII"). Additionally, in FY'25, we recorded tax benefits of $11 million related to tax reserves in foreign jurisdictions. In FY'24, the rate was impacted by a U.S. Tax Court ruling in Varian Medical Systems, Inc. v. Commissioner, issued on August 26, 2024. The ruling related to the U.S. taxation of deemed foreign dividends in the transition year of the Tax Act (our fiscal 2018). As a result, we recorded a $14 million benefit for additional foreign tax credits that became available to us. These benefits were offset by a tax expense of $5 million related to a tax reserve in a foreign jurisdiction.In FY'