"In our 37 years as a company, Synopsys has driven a roughly 10 million-fold increase in chip design productivity. This not only enabled the exponential ambition of the semiconductor industry, it, in turn, radically impacted the world," said Aart de Geus, chair and CEO of Synopsys. "Our momentum continued in 2023 as we substantially expanded our AI-driven design differentiation, our semiconductor IP portfolio, and our multi-die system solutions. We also visibly strengthened our customers' differentiation through unique and deep collaborations. Looking ahead, I have great confidence, expectations, and enthusiasm for our future as Sassine Ghazi becomes Synopsys' CEO."
"Despite global macroeconomic uncertainty, 2023 was a year of record revenue and profitability for Synopsys as silicon R&D and design-starts remain robust. I want to extend my deepest thanks to our team for their stellar execution and to our partners and customers for their commitment," said Sassine Ghazi, president and COO of Synopsys. "We start 2024 with tremendous forward momentum driven by a resilient business model, technology trends – chief among them AI – that create a rising tide for our business, and customers who continue to prioritize investments in the chips and systems that position them for the future. I am profoundly grateful for the opportunity to propel Synopsys to the next wave of growth as its CEO."
"We had strong execution and outperformed our guidance in the fourth quarter, which capped a record financial year for Synopsys. In 2023, on a non-GAAP basis, record earnings per share were up 26% year-over-year, we achieved record operating margins, and expanded our backlog to $8.6 billion," said Synopsys CFO, Shelagh Glaser. "We are confident in our outlook for continued, double-digit revenue growth in the year ahead based on our technology leadership, strong customer momentum and the resiliency of our time-based business model."
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal year 2023 was $349.2 million, or $2.26 per diluted share, compared to $153.5 million, or $0.99 per diluted share, for the fourth quarter of fiscal year 2022. GAAP net income for fiscal year 2023 was $1.230 billion, or $7.92 per diluted share, compared to $984.6 million, or $6.29 per diluted share, for fiscal year 2022.
Non-GAAP Results
On a non-GAAP basis, net income for the fourth quarter of fiscal year 2023 was $490.9 million, or $3.17 per diluted share, compared to non-GAAP net income of $297.7 million, or $1.91 per diluted share, for the fourth quarter of fiscal year 2022. Non-GAAP net income for fiscal year 2023 was $1.737 billion, or $11.19 per diluted share, compared to non-GAAP net income of $1.393 billion, or $8.90 per diluted share, for fiscal year 2022.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Business Segments
Synopsys reports revenue and operating income in three segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; (2) Design IP, which includes our Design IP products; and (3) Software Integrity, which includes solutions that test software code for security vulnerabilities and quality defects, as well as professional and managed services. Further information regarding these segments is provided at the end of this press release.
Financial Targets
Synopsys also provided its consolidated financial targets for the first quarter and full fiscal year 2024. The fiscal year targets include the impact of an extra week in fiscal year 2024, which will be included in the first quarter of fiscal year 2024. These financial targets assume no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.
First Quarter and Full Fiscal Year 2024 Financial Targets (1) | |||||
(in millions except per share amounts) | |||||
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| Range for Three Months Ending |
| Range for Fiscal Year Ending | ||
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| January 31, 2024 |
| October 31, 2024 | ||
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| Low | High |
| Low | High |
| Revenue | $ 1,630 | $ 1,660 |
| $ 6,570 | $ 6,630 |
| GAAP Expenses | $ 1,217 | $ 1,237 |
| $ 4,995 | $ 5,052 |
| Non-GAAP Expenses | $ 1,017 | $ 1,027 |
| $ 4,140 | $ 4,180 |
| Non-GAAP Other Income (Expense) | $ - | $ 2 |
| $ 4 | $ 8 |
| Non-GAAP Tax Rate | 15 % | 15 % |
| 15 % | 15 % |
| Outstanding Shares (fully diluted) | 155 | 157 |
| 155 | 157 |
| GAAP EPS | $ 2.40 | $ 2.50 |
| $ 9.07 | $ 9.25 |
| Non-GAAP EPS | $ 3.40 | $ 3.45 |
| $ 13.33 | $ 13.41 |
| Operating Cash Flow |
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| ~ $1,400 | |
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| (1) Synopsys' first quarter of fiscal year 2024 has one extra week and will end on February 3, 2024. Fiscal year 2024 will end on
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