Company: PTC
Filing Date: 2025-11-21
Form Type: 10-K
Source: 0001193125-25-291326
Chunk: 84

Company: PTC INC.
Filing Date: 2025-11-21
Form: 10-K
Item: Item 6
Chunk 84
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         Year ended September 30,

         Unrecognized tax benefits (in thousands)
          
         2025

         2024

         2023

         Unrecognized tax benefit, beginning of year
          
         $
         65,035

         $
         50,742

         $
         23,923

         Tax positions related to current year:

         Additions

         14,736

         7,570

         7,075

         Tax positions related to prior years:

         Additions

         104,375

         10,705

         20,855

         Reductions

         (9,669
         )

         (452
         )

         —

         Settlements

         (16,753
         )

         (3,530
         )

         —

         Statute expirations

         —

         —

         (1,111
         )

         Unrecognized tax benefit, end of year
          
         $
         157,724

         $
         65,035

         $
         50,742

        In 2024, we requested consent from the IRS to change our tax accounting method for the treatment of certain deductions. In accordance with GAAP, our financial statements have not reflected the effects of this accounting method change as we had not received IRS consent as of September 30, 2025. Accordingly, since we reflected the benefits associated with this position in our U.S. federal tax return for the year ended September 30, 2024, which was filed during the fourth quarter of 2025, we have included an unrecognized tax benefit of $109.2 million within Other liabilities on the Consolidated Balance Sheets. We subsequently received formal consent from the IRS in October 2025. Consequently, we will release the reserve in the first quarter of 2026, primarily resulting in corresponding decreases to Deferred tax assets and the reserve for unrecognized tax benefits within Other liabilities. Additionally, this will result in a net income tax benefit of $6.5 million for the reversal of the associated accrued interest and indirect effects on GILTI and FDII as discussed above. If all of our unrecognized tax benefits as of September 30, 2025 were to become recognizable in the future, we would record a benefit to the income tax provision of $32.1 million (which would be partially offset by an increase in the U.S. valuation allowance of $6.0 million). Although we believe our