01—Abstract
Summary
Summary of the 10-K filed December 17, 2010. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. (SNPS) reported strong financial performance for the fiscal year ended October 31, 2010.
The company experienced a revenue increase of 2% year-over-year, reaching $1.38 billiona, driven by growth in both upfront and time-based license revenues. Net income saw a significant increase of 41% to $237.1 million, largely attributable to a one-time tax benefit from an IRS settlement. The company maintained its recurring revenue business model, with over 90% of its revenue derived from time-based licenses, maintenance, and services, providing stability and predictability.
Synopsys continued its strategy of growth through acquisitions, completing eight acquisitions in fiscal 2010 to expand its technology portfolio, particularly in IP and system-level solutions. The company ended the fiscal year with a robust cash position of $938.6 millionb and no outstanding borrowings under its credit facility.
The report also highlights Synopsys's continued investment in research and development, essential for maintaining its competitive edge in the dynamic EDA market. Overall, the filing paints a picture of a financially sound company strategically investing in growth while navigating a competitive landscape.
02—Key points
Key Highlights
- Total revenue increased by 2% to $1.38 billion in fiscal 2010, up from $1.36 billion in fiscal 2009.
- Net income rose by 41% to $237.1 million in fiscal 2010, primarily due to a $94.3 million tax benefit from an IRS settlement.
- The company successfully executed its acquisition strategy, completing eight acquisitions in fiscal 2010 to enhance its product offerings and market reach.
- Synopsys maintained a strong recurring revenue model, with over 90% of revenue coming from time-based licenses, maintenance, and services.
- Research and Development expenses increased by 7% to $449.2 million, reflecting continued investment in innovation.
- The company ended the fiscal year with a healthy cash and short-term investments balance of $938.6 million.
- Synopsys repurchased $184.7 million of its common stock during fiscal year 2010.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Synopsys kept $0.17.
- Revenue$1.38B100.0%
- Cost of revenue−$281.1M20.4%
- Gross profit$1.10B79.6%
- Operating costs−$915.5M66.3%
- Operating income$184.1M13.3%
- Interest, other & tax$53.0M3.8%
- Net income$237.1M17.2%
Where FY2010 revenue went
$1.38B- Other operating costs: $466.2M, 34% of revenue
- R&D: $449.2M, 33% of revenue
- Cost of revenue: $281.1M, 20% of revenue
- Operating income: $184.1M, 13% of revenue
Kept 13% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed December 17, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $1.38B$1.36B | +1.5% |
| Cost of Revenue | $281.09M$273.65M | +2.7% |
| Gross Profit | $1.10B$1.09B | +1.2% |
| R&D Expenses | $449.23M$419.91M | +7.0% |
| Operating Expenses | $915.46M$878.14M | +4.2% |
| Operating Income | $184.11M$208.25M | −11.6% |
| Interest Expense | $251K— | — |
| Net Income | $237.06M$167.68M | +41.4% |
| EPS (Basic) | $1.60$1.17 | +36.8% |
| EPS (Diluted) | $1.56$1.15 | +35.7% |
| Shares Outstanding (Basic) | 148.01M143.75M | +3.0% |
| Shares Outstanding (Diluted) | 151.91M145.86M | +4.2% |
05—Questions
Frequently Asked Questions
What was Synopsys's revenue performance in fiscal year 2010?
Synopsys reported total revenue of $1.38 billion for the fiscal year ended October 31, 2010, representing a 2% increase from $1.36 billion in fiscal 2009. This growth was primarily driven by increases in upfront license revenue and time-based license revenue.
How did the company's profitability change in fiscal year 2010?
Synopsys's net income increased significantly by 41% to $237.1 million in fiscal 2010, compared to $167.7 million in fiscal 2009. This substantial increase was largely due to a one-time tax benefit of $94.3 million recognized from an IRS settlement.
What is Synopsys's strategy regarding acquisitions?
Acquisitions are a key component of Synopsys's growth strategy. In fiscal year 2010, the company completed eight acquisitions, investing approximately $500.8 million to enhance its technology, expand its product portfolio, particularly in IP and system-level solutions, and grow its total addressable market.
What is the company's approach to research and development (R&D)?
Synopsys views R&D as critical for future performance. R&D expenses increased by 7% to $449.2 million in fiscal 2010. This investment is aimed at enhancing and integrating design and verification platforms, and expanding product offerings, often augmented by targeted acquisitions.
06—Continue