Synopsys Posts Financial Results for First Quarter Fiscal Year 2022

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available on Synopsys' corporate website at www.synopsys.com. A recording of the call will be available by calling +1-866-207-1041 (+1-402-970-0847 for international callers), access code 6376313, beginning at 5:45 p.m. Pacific Time today, until 11:59 p.m. Pacific Time on February 23, 2022. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the second quarter of fiscal year 2022 in May 2022.  Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and co-chief executive officer, and Trac Pham, chief financial officer, on its website following today's call. In addition, Synopsys makes additional information available in a financial supplement and corporate overview presentation, also posted on the corporate website.

Effectiveness of Information

The targets included in this press release, the statements made during the earnings conference call and the information contained in the financial supplement and corporate overview presentation (available in the Investor Relations section of Synopsys' corporate website at www.synopsys.com) represent Synopsys' expectations and beliefs as of the date of this release only. Although this press release, copies of the prepared remarks of the co-chief executive officer and chief financial officer made during the call, the financial supplement, and the corporate overview presentation will remain available on Synopsys' website through the date of the second quarter of fiscal year 2022 earnings call in May 2022, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys does not currently intend to report on its progress during the second quarter of fiscal year 2022 or comment to analysts or investors on, or otherwise update, the targets given in this release.

Availability of Final Financial Statements

Synopsys will include final financial statements for the first quarter fiscal year 2022 in its quarterly report on Form 10-Q to be filed by March 10, 2022.

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the Silicon to Software™ partner for innovative companies developing the electronic products and software applications we rely on every day. As an S&P 500 company, Synopsys has a long history of being a global leader in electronic design automation (EDA) and semiconductor IP and offers the industry's broadest portfolio of application security testing tools and services. Whether you're a system-on-chip (SoC) designer creating advanced semiconductors, or a software developer writing more secure, high-quality code, Synopsys has the solutions needed to deliver innovative products. Learn more at  www.synopsys.com.      

GAAP to Non-GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP, but acknowledges evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, superior to, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP financial measures that include: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) restructuring charges, (v) the effects of certain settlements, final judgments and loss contingencies related to legal proceedings, and (vi) the income tax effect of non-GAAP pre-tax adjustments; and the non-GAAP financial measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods.

Synopsys adopted a three-year normalized non-GAAP tax rate of 16% for fiscal year 2019 through 2021 in calculating non-GAAP financial measures to provide better consistency across interim reporting periods by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency and not necessarily reflect our normal operations, and to more clearly align our tax rate with our expected geographic earnings mix.
Given the uncertainty surrounding corporate tax reform, Synopsys adopted an annual non-GAAP tax rate of 18% for fiscal year 2022 rather than a three-year normalized non-GAAP tax rate in calculating its non-GAAP financial measures. This annual non-GAAP tax rate is based on an evaluation of its historical and projected mix of U.S. and international profit before tax, taking into account the impact of non-GAAP adjustments, as well as other factors such as its current tax structure, existing tax positions and expected recurring tax incentives. Synopsys re-evaluates this rate on an annual basis for any significant events that could materially affect its projections, such as significant changes in its geographic earnings mix or significant tax law changes in major jurisdictions where Synopsys operates, and further consider the appropriateness of adopting a multi-year normalized non-GAAP tax rate.

Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below, as well as Item 2.02 of the Current Report on Form 8-K filed on February 16, 2022 for additional information about the measures Synopsys uses to evaluate its core business operations.

Reconciliation of First Quarter Fiscal Year 2022 Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income and earnings per diluted share for the periods indicated below.

GAAP to Non-GAAP Reconciliation of First Quarter Fiscal Year 2022 Results (1)

(unaudited and in thousands, except per share amounts)



Three Months Ended


January 31,


2022


2021

GAAP net income

$              313,687


$              162,345

Adjustments:




Amortization of intangible assets

22,360


20,276

Stock compensation

95,771


83,782

Acquisition-related costs

2,077


3,548

Restructuring charges

11,746


-

Tax adjustments

(68,753)


(30,478)

Non-GAAP net income

$              376,888


$              239,473














Three Months Ended


January 31,


2022


2021

GAAP diluted net income per share

$                    1.99


$                    1.03

Adjustments:




Amortization of intangible assets

0.14


0.13

Stock compensation

0.61


0.53

Acquisition-related costs

0.01


0.02

Restructuring charges

0.08


-

Tax adjustments

(0.43)


(0.19)

Non-GAAP diluted net income per share

$                    2.40


$                    1.52





Shares used in computing diluted net income per share amounts:

157,273


157,277





(1) Synopsys' first quarter of fiscal year 2022 and 2021 ended on January 29, 2022 and January 30, 2021, respectively. For presentation purposes, we refer to the closest calendar month end.

Reconciliation of 2022 Targets

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the periods indicated below.

 

GAAP to Non-GAAP Reconciliation of Second Quarter Fiscal Year 2022 Targets (1)

(in thousands, except per share amounts)




 Range for Three Months



April 30, 2022



Low


High

Target GAAP expenses


$           931,000


$           951,000

Adjustments:





      Amortization of intangible assets


(20,000)


(23,000)

      Stock compensation


(111,000)


(118,000)

Target non-GAAP expenses


$           800,000


$           810,000
















Range for Three Months



April 30, 2022



Low


High

Target GAAP earnings per diluted share


$                 1.67


$                 1.78

Adjustments:





      Amortization of intangible assets


0.15


0.13

      Stock compensation


0.75


0.70

      Tax adjustments


(0.22)


(0.21)

Target non-GAAP earnings per diluted share


$                 2.35


$                 2.40






Shares used in non-GAAP calculation (midpoint of target range)


157,500


157,500

 

GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2022 Targets (1)

(in thousands, except per share amounts)




Range for Fiscal Year



October 31, 2022



Low


High

Target GAAP expenses


$        3,808,823


$        3,855,823

Adjustments:





      Amortization of intangible assets


(80,000)


(85,000)

      Stock compensation


(460,000)


(472,000)

      Acquisition-related costs


(2,077)


(2,077)

      Restructuring charges


(11,746)


(11,746)

Target non-GAAP expenses


$        3,255,000


$        3,285,000
















Range for Fiscal Year



October 31, 2022



Low


High

Target GAAP earnings per diluted share


$                 5.53


$                 5.72

Adjustments:





      Amortization of intangible assets


0.54


0.50

      Stock compensation


2.98


2.90

      Acquisition-related costs


0.01


0.01

      Restructuring charges


0.07


0.07

      Tax adjustments


(1.28)


(1.28)

Target non-GAAP earnings per diluted share


$                 7.85


$                 7.92






Shares used in non-GAAP calculation (midpoint of target range)


158,500


158,500






(1) Synopsys' second fiscal quarter and fiscal year will end on April 30, 2022 and October 29, 2022, respectively. For presentation purposes, we refer to the closest calendar month end.

Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to, statements regarding Synopsys' short-term and long-term financial targets, expectations and objectives; business outlook, opportunities and strategies; customer demand and market expansion; strategies related to our products and technology; our planned product releases and capabilities; industry growth rates; software trends; planned acquisitions and buybacks; our expected tax rate; the expected impact of U.S. and foreign government action on our financial results; and the continued impact and duration of the COVID-19 pandemic. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in our forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: risks from the continued impact of the COVID-19 pandemic on the global economy and on our business, operations and financial condition; macroeconomic conditions and uncertainty in the global economy; uncertainty in the growth of the semiconductor and electronics industries; the highly competitive industry we operate in; consolidation among our customers and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of our operations as well as actions by the U.S. or foreign governments, such as the imposition of additional tariffs or export restrictions; and more. Additional information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings it makes with the Securities and Exchange Commission from time to time, including in the sections entitled "Risk Factors" in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021 and in its latest Quarterly Report on Form 10-Q. The information provided herein is as of February 16, 2022 . Synopsys undertakes no duty, and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law.

SYNOPSYS, INC.

Unaudited Condensed Consolidated Statements of Income (1)

(in thousands, except per share amounts)



Three Months Ended


January 31,


2022


2021

Revenue:




  Time-based products

$                   707,483


$                  631,290

  Upfront products

368,274


174,381

  Maintenance and service

194,498


164,650

      Total revenue

1,270,255


970,321

Cost of revenue:




  Products

165,399


127,347

  Maintenance and service

78,225


68,766

  Amortization of intangible assets

13,360


11,886

     Total cost of revenue

256,984


207,999

Gross margin

1,013,271


762,322

Operating expenses:




  Research and development

383,971


357,468

  Sales and marketing

180,510


170,628

  General and administrative

81,008


77,488

  Amortization of intangible assets

9,000


8,390

  Restructuring charges

11,746


-

     Total operating expenses

666,235


613,974

Operating income

347,036


148,348

Other income (expense), net

(19,793)


28,756

Income before income taxes

327,243


177,104

Provision for income taxes

13,902


15,076

Net income

313,341


162,028

Net income (loss) attributed to non-controlling interest

(346)


(317)

Net income attributed to Synopsys

$                   313,687


$                  162,345





Net income per share:




  Basic

$                        2.05


$                       1.06

  Diluted

$                        1.99


$                       1.03





Shares used in computing per share amounts:




  Basic

153,218


152,498

  Diluted

157,273


157,277





(1) Synopsys' first quarter of fiscal year 2022 and 2021 ended on January 29, 2022 and January 30, 2021, respectively. For presentation purposes, we refer to the closest calendar month end.

 

SYNOPSYS, INC.

Unaudited Condensed Consolidated Balance Sheets (1)

(in thousands, except par value amounts)












January 31, 2022


October 31, 2021

ASSETS:







Current assets:







  Cash and cash equivalents




$                    1,124,299


$                    1,432,840

  Short-term investments




147,748


147,949

          Total cash, cash equivalents & short-term investments




1,272,047


1,580,789

  Accounts receivable, net




1,038,749


568,501

  Inventories, net




212,919


229,023

  Prepaid and other current assets




423,782


430,028

          Total current assets




2,947,497


2,808,341

Property and equipment, net




477,521


472,398

Operating lease right-of-use assets, net




481,526


493,251

Goodwill




3,592,788


3,575,785

Intangible assets, net




260,810


279,132

Deferred income taxes




628,879


612,655

Other long-term assets




512,325


510,698

           Total assets




$                    8,901,346


$                    8,752,260








LIABILITIES AND STOCKHOLDERS' EQUITY:







Current liabilities:







  Accounts payable and accrued liabilities




$                       540,733


$                       741,191

  Operating lease liabilities, current




78,748


79,678

  Deferred revenue




1,852,175


1,517,623

  Short-term debt




-


74,992

           Total current liabilities




2,471,656


2,413,484

Operating lease liabilities, non-current




477,487


487,003

Long-term deferred revenue




157,465


136,303

Long-term debt




24,370


25,094

Other long-term liabilities




380,135


391,433

           Total liabilities




3,511,113


3,453,317

Stockholders' equity:







  Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding

-


-

  Common stock, $0.01 par value: 400,000 shares authorized; 153,256 and





  153,062 shares outstanding, respectively




1,533


1,531

  Capital in excess of par value




1,430,226


1,576,363

  Retained earnings




4,863,400


4,549,713

  Treasury stock, at cost: 4,005 and 4,198 shares, respectively




(856,929)


(782,866)

  Accumulated other comprehensive income (loss) 




(51,457)


(49,604)

           Total Synopsys stockholders' equity




5,386,773


5,295,137

  Non-controlling interest




3,460


3,806

           Total stockholders' equity




5,390,233


5,298,943

           Total liabilities and stockholders' equity




$                    8,901,346


$                    8,752,260








(1) Synopsys' first quarter of fiscal year 2022 ended on January 29, 2022 and its fiscal year 2021 ended on October 30, 2021, respectively. For presentation purposes, we refer to the closest calendar month end.

 

SYNOPSYS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows (1)

(in thousands)






Three Months Ended


January 31,


2022


2021

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income attributed to Synopsys

$            313,687


$            162,345

Adjustments to reconcile net income to net cash provided by




operating activities:




Amortization and depreciation

61,685


50,628

Reduction of operating lease right-of-use assets

21,010


20,974

Amortization of capitalized costs to obtain revenue contracts

16,737


15,008

Stock-based compensation

95,771


83,782

Allowance for credit losses

5,278


7,477

Deferred income taxes

(11,952)


(20,222)

Other non-cash

4,486


(3,359)

Net changes in operating assets and liabilities, net of




acquired assets and liabilities:




Accounts receivable

(466,684)


(14,910)

Inventories

9,155


(37,764)

Prepaid and other current assets

(303)


(12,289)

Other long-term assets

(11,969)


(50,385)

Accounts payable and accrued liabilities

(223,223)


(171,137)

Operating lease liabilities

(19,477)


(20,707)

Income taxes

6,555


12,226

Deferred revenue

354,988


152,291

Net cash provided by operating activities

155,744


173,958





CASH FLOWS FROM INVESTING ACTIVITIES:




Proceeds from sales and maturities of short-term investments

16,437


-

Purchases of short-term investments

(17,210)


-

Proceeds from sales of long-term investments

582


-

Purchases of long-term investments

(5,000)


-

Purchases of property and equipment

(41,751)


(27,779)

Cash paid for acquisitions, net of cash acquired

(19,989)


(74,670)

Capitalization of software development costs

(494)


(1,011)

Other 

(600)


-

Net cash used in investing activities

(68,025)


(103,460)





CASH FLOWS FROM FINANCING ACTIVITIES:




Repayment of debt

(75,938)


(5,694)

Issuances of common stock

30,835


15,092

Payments for taxes related to net share settlement of equity awards

(96,785)


(49,591)

Purchase of equity forward contract

(40,000)


(50,000)

Purchases of treasury stock

(210,000)


(202,871)

Other

(2,709)


-

Net cash used in financing activities

(394,597)


(293,064)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,720)


10,001

Net change in cash, cash equivalents and restricted cash

(308,598)


(212,565)

Cash, cash equivalents and restricted cash, beginning of year

1,435,183


1,237,970

Cash, cash equivalents and restricted cash, end of period

$         1,126,585


$         1,025,405









(1) Synopsys' first quarter of fiscal year 2022 and 2021 ended on January 29, 2022 and January 30, 2021, respectively. For presentation purposes, we refer to the closest calendar month end.

 

SYNOPSYS, INC.

Business Segment Reporting (1)

(in millions)







Three Months


Three Months



Ended


Ended



January 31, 2022 (3)


January 31, 2021 (3)


Revenue by segment





- Semiconductor & System Design

$                           1,162.7


$                              878.3


% of Total

91.5%


90.5%


- Software Integrity

$                              107.6


$                                92.0


% of Total

8.5%


9.5%


Total segment revenue

$                           1,270.3


$                              970.3







Adjusted operating income by segment





- Semiconductor & System Design

$                              447.4


$                              278.9


- Software Integrity

$                                12.0


$                                  7.9


Total adjusted segment operating income

$                              459.4


$                              286.8







Adjusted operating margin by segment





- Semiconductor & System Design

38.5%


31.8%


- Software Integrity

11.2%


8.6%


Total adjusted segment operating margin

36.2%


29.6%







Total Adjusted Segment Operating Income Reconciliation (1)(2)

(in millions)







Three Months


Three Months



Ended


Ended



January 31, 2022 (3)


January 31, 2021 (3)


GAAP total operating income – as reported

$                              347.0


$                              148.3


Other expenses managed at consolidated level





-Amortization of intangible assets

22.4


20.3


-Stock compensation

95.8


83.8


-Non-qualified deferred compensation plan

(19.6)


30.9


-Acquisition-related costs

2.1


3.5


-Restructuring charges

11.7


-


Total adjusted segment operating income

$                              459.4


$                              286.8







(1) Synopsys manages the business on a long-term, annual basis, and considers quarterly fluctuations of revenue and profitability as normal elements of our business. Amounts may not foot due to rounding.

(2) These segment results are consistent with the information required by ASC 280, Segment Reporting . They are presented to reflect the information that is considered by Synopsys' chief operating decision makers (CODMs) to evaluate the operating performance of its segments. The CODMs do not allocate certain operating expenses managed at a consolidated level to our reportable segments, and as a result, the reported operating income and operating margin do not include these unallocated expenses as shown in the table above. Amounts may not foot due to rounding.

(3) Synopsys' first quarter of fiscal year 2022 and 2021 ended on January 29, 2022 and January 30, 2021, respectively. For presentation purposes, we refer to the closest calendar month end.

INVESTOR CONTACT :
Lisa L. Ewbank
Synopsys, Inc.
650-584-1901
Synopsys-ir@synopsys.com  

EDITORIAL CONTACT :
Simone Souza
Synopsys, Inc.
650-584-6454
simone@synopsys.com

Cision View original content: https://www.prnewswire.com/news-releases/synopsys-posts-financial-results-for-first-quarter-fiscal-year-2022-301483982.html

SOURCE Synopsys, Inc.

Contact:
Company Name: Synopsys, Inc.
Financial data for Synopsys, Inc.



« Previous Page 1 | 2             



© 2024 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us
ShareCG™ is a trademark of Internet Business Systems, Inc.

Report a Bug Report Abuse Make a Suggestion About Privacy Policy Contact Us User Agreement Advertise