Synopsys Posts Financial Results for First Quarter Fiscal Year

Synopsys Posts Financial Results for First Quarter Fiscal Year 2024

Synopsys provides segment information, namely revenue, adjusted segment operating income and adjusted segment operating margin, in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Synopsys' chief operating decision maker (CODM) is our Chief Executive Officer. In evaluating our business segments, the CODM considers the income and expenses that the CODM believes are directly related to those segments. The CODM does not allocate certain operating expenses managed at a consolidated level to our business segments and, as a result, the reported operating income and operating margin do not include these unallocated expenses as shown in the table below. These unallocated expenses are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income:

SYNOPSYS, INC.
Business Segment Reporting ⁽¹⁾⁽²⁾
(in millions)

	Three Months Ended January 31, 2024	Three Months Ended January 31, 2023
	Three Months Ended January 31, 2024	Three Months Ended January 31, 2023
Revenue by segment
- Design Automation	$ 985.3	$ 889.8
% of Total	59.7 %	65.4 %
- Design IP	$ 525.7	$ 343.7
% of Total	31.9 %	25.2 %
- Software Integrity	$ 138.2	$ 127.8
% of Total	8.4 %	9.4 %

Adjusted operating income by segment
- Design Automation	$ 364.9	$ 346.0
- Design IP	$ 249.5	$ 117.6
- Software Integrity	$ 24.0	$ 15.5

Adjusted operating margin by segment
- Design Automation	37.0 %	38.9 %
- Design IP	47.5 %	34.2 %
- Software Integrity	17.3 %	12.1 %

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

	Three Months Ended January 31, 2024	Three Months Ended January 31, 2023
	Three Months Ended January 31, 2024	Three Months Ended January 31, 2023
GAAP total operating income – as reported	$ 359.6	$ 255.9
Other expenses managed at consolidated level
-Amortization of acquired intangible assets ⁽³⁾	27.1	25.4
-Stock-based compensation ⁽³⁾	180.7	134.2
-Non-qualified deferred compensation plan	40.1	20.2
-Acquisition/divestiture related items ⁽⁴⁾	30.9	2.6
-Restructuring charges	-	40.9
Total adjusted segment operating income	$ 638.4	$ 479.2

(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) Synopsys' first quarter of fiscal year 2024 and 2023 ended on February 3, 2024 and January 28, 2023, respectively. For presentation purposes, we refer to the closest calendar month end. The first quarter of fiscal year 2024 included one extra week.
(3) The adjustment includes non-GAAP expenses attributable to non-controlling interest and redeemable non- controlling interest.
(4) The adjustment excludes the amortization of bridge financing costs entered into in connection with the pending acquisition of Ansys, that was recorded in interest and other income (expense), net in our unaudited condensed consolidated statements of income.

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