10-K/APeriod: FY2010

SYNOPSYS INC Annual Report (Amendment), Year Ended Oct 31, 2010

Filed February 9, 2011For Securities:SNPS

Summary

Synopsys, Inc. (SNPS) reported its fiscal year results for the period ending October 31, 2010. The company demonstrated robust revenue growth, a significant increase in net income, and a strong improvement in diluted earnings per share compared to the previous year. This growth was primarily driven by strong performance in time-based license revenue and solid contributions from maintenance and service revenue. The company also saw a substantial increase in goodwill and intangible assets, indicating strategic acquisitions and investments to expand its technological capabilities and market reach. Financially, Synopsys maintained a healthy liquidity position with a significant increase in cash and cash equivalents. The company's balance sheet reflects substantial investments in intangible assets and goodwill, reflecting its strategy of growth through acquisition. Despite these investments, the company managed its operations effectively, leading to improved profitability and a stronger financial footing. Investors should note the company's ongoing commitment to shareholder value through its stock repurchase program and the management's continued focus on strategic growth initiatives in the electronic design automation sector.

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 to $1.38 billion in fiscal year 2010, up from $1.36 billion in fiscal year 2009.
  • 2Net income significantly increased to $237.1 million in fiscal year 2010, a substantial rise from $167.7 million in fiscal year 2009.
  • 3Diluted earnings per share (EPS) grew to $1.56 in fiscal year 2010, compared to $1.15 in fiscal year 2009.
  • 4Goodwill increased significantly from $932.7 million to $1.27 billion, reflecting strategic acquisitions.
  • 5Intangible assets, net, also saw a substantial increase from $96.8 million to $249.7 million, indicating continued investment in acquired technology and IP.
  • 6Cash and cash equivalents increased to $775.4 million from $701.6 million, demonstrating strong cash generation.
  • 7The company repurchased $184.7 million of its common stock in fiscal year 2010 as part of its ongoing stock repurchase program.

Frequently Asked Questions

Synopsys is a world leader in providing technology solutions for developing electronics and electronic systems. Their core business involves supplying electronic design automation (EDA) software used by engineers to design, prototype, and test integrated circuits (chips). They also provide software and hardware for system development and offer pre-designed circuit blocks (IP products) to complement their offerings, along with technical services.

In fiscal year 2010, Synopsys reported total revenue of $1.38 billion, a modest increase from $1.36 billion in fiscal year 2009. More significantly, net income saw a substantial jump to $237.1 million, up from $167.7 million in fiscal year 2009. This resulted in a notable improvement in diluted earnings per share, which rose to $1.56 from $1.15.

The substantial increase in goodwill and intangible assets is primarily due to Synopsys' active acquisition strategy. The company made several acquisitions during fiscal year 2010, notably Virage Logic Corporation and other smaller entities, which are accounted for as business combinations. These acquisitions aim to expand Synopsys' technology portfolio, market reach, and product offerings, leading to increased goodwill and identifiable intangible assets on the balance sheet.

Synopsys maintains a strong liquidity position, as evidenced by the increase in cash and cash equivalents. The company actively engages in stock repurchases to offset dilution from equity awards, support its stock repurchase program, and return value to shareholders. In fiscal year 2010, they repurchased $184.7 million of their common stock. Additionally, the company offers an Employee Stock Purchase Plan (ESPP) and various equity incentive plans to its employees.