Income Taxes

9 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

(in thousands)	Three months ended						Nine months ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Income before income taxes	$	67,373		$	76,526		$	298,717		$	244,019
Provision (benefit) for income taxes	$	(1,605	)	$	15,128		$	48,907		$	44,082
Effective income tax rate		(2	)%		20	%		16	%		18	%

The effective tax rate for the three and nine months ended June 30, 2024 was lower than the effective tax rate for the corresponding prior-year periods primarily due to changes in the geographic mix of income before taxes and the effects of IRS procedural guidance requiring IRS consent for certain previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income for the year ended September 30, 2024, resulting in an increase to the estimated tax benefit for the deductions associated with Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income. The benefit from this IRS procedural guidance change for the three and nine months ended June 30, 2024 will reverse in a future fiscal period if we receive IRS consent for a change in the treatment of these deductions. For the nine months ended June 30, 2024, this was offset by a tax expense of $3.6 million related to a tax reserve in a foreign jurisdiction.

In the normal course of business, PTC and its subsidiaries are examined by various taxing authorities, including the Internal Revenue Service in the U.S. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. We are currently under audit by tax authorities in several jurisdictions. Audits by tax authorities typically involve examination of the deductibility of certain permanent items, transfer pricing, limitations on net operating losses and tax credits.