Segment Information

12 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate within a single industry segment—computer software and related services. Operating segments as defined under GAAP are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. We have two operating andreportable segments: (1) Software Products, which includes license and related support revenue (including updates and technical support) for all our products except training-related products; and (2) Services, which includes consulting, implementation, training, cloud services, computer-based training products, including support on these products, and other services revenue. We do not allocate sales and marketing or administrative expenses to our operating segments as these activities are managed on a consolidated basis.

The revenue and operating income attributable to these operating segments are summarized as follows:

	Year ended September 30,
	2015			2014			2013
	(in thousands)
Software Products segment revenue	$	973,312		$	1,032,230		$	977,523
Services segment revenue	281,930			324,737			316,018
Total revenue	$	1,255,242		$	1,356,967		$	1,293,541
Operating income: (1) (2)
Software Products segment	$	591,845		$	663,593		$	605,963
Services segment	43,029			48,378			37,131
Sales and marketing expenses	(355,070		)	(371,392		)	(378,771		)
General and administrative expenses	(238,188		)	(144,003		)	(136,999		)
Total operating income	$	41,616		$	196,576		$	127,324
Other expense, net	(15,091		)	(10,464		)	(1,090		)
Income before income taxes	$	26,525		$	186,112		$	126,234

(1) We recorded restructuring charges of $43.4 million in 2015. Software Products included $11.6 million; Services included $10.4 million; sales and marketing expenses included $16.3 million; and general and administrative expenses included $5.1 million of the restructuring charges recorded in 2015.We recorded restructuring charges of $28.4 million in 2014. Software Products included $2.8 million; Services included $9.8 million; sales and marketing expenses included $13.9 million; and general and administrative expenses included $1.8 million of the total restructuring charges recorded in 2014. We recorded restructuring charges of $52.2 million in 2013. Software Products included $17.7 million; Services included $11.3 million; sales and marketing expenses included $18.1 million; and general and administrative expenses included $5.1 million of the total restructuring charges recorded in 2013.

(2) The Software Products segment operating income includes depreciation and amortization of $60.7 million, $55.0 million, and $52.6 million in 2015, 2014, and 2013, respectively. The Services segment operating income includes depreciation and amortization of $8.1 million, $7.4 million, and $6.1 million in 2015, 2014, and 2013, respectively.

We report revenue by the following four product areas:

• CAD: PTC Creo^® and PTC Mathcad^®.

• ePLM: PLM solutions (primarily PTC Windchill^®) and ALM solutions (primarily PTC Integrity^™)and Atego^®.

• SLM: PTC Arbortext^® and PTC Servigistics^®.

• IoT: ThingWorx^®, Axeda^® and ThingWorx Machine Learning™products.

	Year ended September 30,
	2015		2014		2013
	(in thousands)
CAD	$	511,582	$	581,508	$	552,442
ePLM	524,741		599,312		571,058
SLM	166,060		170,980		170,041
IoT	52,859		5,167		—
Total revenue	$	1,255,242	$	1,356,967	$	1,293,541

Data for the geographic regions in which we operate is presented below.
	Year ended September 30,
	2015		2014		2013
	(in thousands)
Revenue:
Americas (1)	$	530,311	$	558,671	$	522,788
Europe (2)	467,805		528,090		479,877
Pacific Rim	139,165		148,151		161,587
Japan	117,961		122,055		129,289
Total revenue	$	1,255,242	$	1,356,967	$	1,293,541

	September 30,
	2015		2014		2013
	(in thousands)
Long-lived tangible assets:
Americas (3)	$	47,509	$	51,027	$	49,788
Europe	7,424		7,020		5,557
Asia-Pacific	10,229		9,736		9,307
Total long-lived tangible assets	$	65,162	$	67,783	$	64,652

(1) Includes revenue in the United States totaling $500.6 million, $518.7 million and $485.2 million for 2015, 2014 and 2013, respectively.

(2) Includes revenue in Germany totaling $177.1 million, $200.3 million and $167.2 million for 2015, 2014 and 2013, respectively.

(3) Substantially all of the Americas long-lived tangible assets are located in the United States.

Our international revenue is presented based on the location of our customer. We license products to customers worldwide. Our sales and marketing operations outside the United States are conducted principally through our international sales subsidiaries throughout Europe and the Asia-Pacific regions. Intercompany sales and transfers between geographic areas are accounted for at prices that are designed to be representative of unaffiliated party transactions.