01—Abstract
Summary
Summary of the 10-K filed December 18, 2009. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. (SNPS) reported fiscal year 2009 revenues of $1.36 billiona, a slight 2% increase from the previous year, demonstrating resilience despite the global economic downturn.
The company's strong recurring revenue model, comprising over 90% of total revenue through time-based licenses and maintenance, provided stability. Net income for the year was $167.7 millionb, a decrease from fiscal 2008 primarily due to a one-time tax settlement benefit in the prior year and lower interest income. The company maintained a healthy cash position and continued to invest in research and development to maintain its leadership in electronic design automation (EDA) software and services.
Despite economic headwinds, Synopsys managed its costs effectively, with sales and marketing expenses decreasing year-over-year. The company's strategy focuses on integrated platforms, manufacturing solutions, and intellectual property to help customers accelerate product development and time-to-market.
While backlog decreased by 15%c year-over-year, this was attributed to the timing of large contract renewals and customer bankruptcies, and the company highlighted that backlog fluctuations are not necessarily indicators of future sales. Synopsys remains a key player in the EDA market, navigating economic challenges with a focus on technological advancement and customer support.
02—Key points
Key Highlights
- Revenue grew 2% to $1.36 billion in fiscal 2009, driven by time-based license and maintenance revenue, showing resilience during an economic downturn.
- Net income was $167.7 million, a decrease from the prior year, mainly due to a one-time tax benefit recorded in fiscal 2008 and reduced interest income.
- The company maintained a recurring revenue model, with over 90% of revenue coming from time-based licenses and maintenance, providing financial stability.
- Sales and marketing expenses decreased by 3% year-over-year, reflecting effective cost management.
- R&D expenses increased by 6% to $419.9 million, underscoring Synopsys' commitment to innovation and product development.
- Backlog decreased by 15% to $2.2 billion, attributed to the timing of contract renewals and customer bankruptcies.
- The company ended the fiscal year with a strong cash and cash equivalents balance of $701.6 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Synopsys kept $0.12.
- Revenue$1.36B100.0%
- Cost of revenue−$273.6M20.1%
- Gross profit$1.09B79.9%
- Operating costs−$878.1M64.6%
- Operating income$208.3M15.3%
- Interest, other & tax−$40.6M3.0%
- Net income$167.7M12.3%
Where FY2009 revenue went
$1.36B- Other operating costs: $458.2M, 34% of revenue
- R&D: $419.9M, 31% of revenue
- Cost of revenue: $273.6M, 20% of revenue
- Net income: $167.7M, 12% of revenue
- Interest, other & tax: $40.6M, 3.0% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed December 18, 2009Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $1.36B$1.34B | +1.7% |
| Cost of Revenue | $273.65M$258.90M | +5.7% |
| Gross Profit | $1.09B$1.08B | +0.8% |
| R&D Expenses | $419.91M$394.75M | +6.4% |
| Operating Expenses | $878.14M$858.94M | +2.2% |
| Operating Income | $208.25M$219.11M | −5.0% |
| Net Income | $167.68M$189.98M | −11.7% |
| EPS (Basic) | $1.17$1.33 | −12.0% |
| EPS (Diluted) | $1.15$1.29 | −10.9% |
| Shares Outstanding (Basic) | 143.75M143.26M | +0.3% |
| Shares Outstanding (Diluted) | 145.86M147.67M | −1.2% |
05—Questions
Frequently Asked Questions
What was Synopsys' overall financial performance in fiscal year 2009?
In fiscal year 2009, Synopsys reported total revenue of $1.36 billion, a slight 2% increase from the prior year, demonstrating stability despite economic challenges. Net income was $167.7 million. The company's recurring revenue model, which accounts for over 90% of its total revenue, provided a strong foundation.
How did the economic downturn affect Synopsys' business and financials?
The global economic recession impacted Synopsys' customers, leading to some postponements in decision-making, decreased spending, and delayed payments. However, the company's recurring revenue model and cost management efforts helped to mitigate some of these effects, allowing for revenue growth and continued profitability. The company also noted customer bankruptcies as a factor affecting backlog.
What is Synopsys' strategy for growth and maintaining market leadership?
Synopsys' strategy involves continuous investment in research and development to stay at the leading edge of EDA technology. They focus on integrating design and verification platforms, expanding manufacturing solutions, and offering a broad portfolio of high-quality IP. The company also emphasizes providing excellent customer support globally and may pursue targeted acquisitions to augment its R&D efforts.
What is the significance of the company's recurring revenue model?
The company's business model relies heavily on recurring revenue, with over 90% generated from time-based licenses (like TSLs) and maintenance. This model provides stability and predictability in revenue recognition, as a substantial portion of revenue in any given period is typically from contracts signed in prior periods, smoothing out the impact of short-term fluctuations in customer orders.
06—Continue