10-KPeriod: FY2010

SYNOPSYS INC Annual Report, Year Ended Oct 31, 2010

Filed December 17, 2010For Securities:SNPS

Summary

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 billion, 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 million 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.

Financial Highlights

54 data points
Beta

Revenue

$1.38B

79.6% Gross Margin

Net Income

$237.06M

17.2% Net Margin

EPS (Diluted)

$1.56

Total Assets

$3.29B

Cash & Equivalents

$775.41M

Free Cash Flow

$301.81M

Financial Statements
Beta
Revenue$1.38B
Cost of Revenue$281.09M
Gross Profit$1.10B
R&D Expenses$449.23M
Operating Expenses$915.46M
Operating Income$184.11M
Interest Expense$251K
Net Income$237.06M
EPS (Basic)$1.60
EPS (Diluted)$1.56
Shares Outstanding (Basic)148.01M
Shares Outstanding (Diluted)151.91M

Key Highlights

  • 1Total revenue increased by 2% to $1.38 billion in fiscal 2010, up from $1.36 billion in fiscal 2009.
  • 2Net income rose by 41% to $237.1 million in fiscal 2010, primarily due to a $94.3 million tax benefit from an IRS settlement.
  • 3The company successfully executed its acquisition strategy, completing eight acquisitions in fiscal 2010 to enhance its product offerings and market reach.
  • 4Synopsys maintained a strong recurring revenue model, with over 90% of revenue coming from time-based licenses, maintenance, and services.
  • 5Research and Development expenses increased by 7% to $449.2 million, reflecting continued investment in innovation.
  • 6The company ended the fiscal year with a healthy cash and short-term investments balance of $938.6 million.
  • 7Synopsys repurchased $184.7 million of its common stock during fiscal year 2010.

Frequently Asked Questions

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.

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.

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.

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.