10-KPeriod: FY2019

SYNOPSYS INC Annual Report, Year Ended Oct 31, 2019

Filed December 20, 2019For Securities:SNPS

Summary

Synopsys, Inc. (SNPS) reported strong revenue growth of 8% for fiscal year 2019, reaching $3.4 billion, driven by its Semiconductor & System Design segment. The company's strategic restructuring and adoption of ASC 606 revenue recognition standards contributed to a significant increase in operating income. Synopsys continues to lead in Electronic Design Automation (EDA) software and semiconductor intellectual property (IP), while also expanding its Software Integrity segment focused on code security and quality. Despite ongoing global economic uncertainties and competitive pressures, Synopsys demonstrated resilience. The company's robust financial performance was supported by consistent revenue growth and effective expense management. Investors can find confidence in Synopsys' market leadership, its diversified product portfolio spanning silicon to software, and its strategic investments in innovation and expansion. The company's commitment to returning value to shareholders is evident through its active stock repurchase program. Overall, the filing indicates a financially sound company with a strong market position and a clear strategy for continued growth.

Financial Highlights

56 data points
Beta

Revenue

$3.36B

77.6% Gross Margin

Net Income

$532.37M

15.8% Net Margin

EPS (Diluted)

$3.45

Total Assets

$6.41B

Cash & Equivalents

$730.53M

Free Cash Flow

$602.38M

Financial Statements
Beta
Revenue$3.36B
Cost of Revenue$752.95M
Gross Profit$2.61B
R&D Expenses$1.14B
Operating Expenses$2.09B
Operating Income$520.23M
Interest Expense$11.66M
Net Income$532.37M
EPS (Basic)$3.55
EPS (Diluted)$3.45
Shares Outstanding (Basic)149.87M
Shares Outstanding (Diluted)154.19M

Key Highlights

  • 1Synopsys reported an 8% increase in revenue, reaching $3.4 billion for fiscal year 2019.
  • 2The Semiconductor & System Design segment remains the primary revenue driver, while the Software Integrity segment showed substantial growth (19%).
  • 3Operating income saw a significant increase of 44% year-over-year, indicating improved profitability.
  • 4The company adopted new revenue recognition standards (ASC 606), which impacted revenue reporting but did not affect cash generated.
  • 5Synopsys continued to invest heavily in Research and Development, a key factor in maintaining its technology leadership.
  • 6A substantial stock repurchase program of $500 million was in place, with $400 million remaining availability at the end of the fiscal year.
  • 7The company maintained effective internal controls and reported an unqualified opinion from its independent registered public accounting firm.

Frequently Asked Questions

Synopsys operates in two main segments: Semiconductor & System Design, which includes Electronic Design Automation (EDA) software, semiconductor intellectual property (IP), and system integration solutions; and Software Integrity, which offers tools and services to improve software code security, quality, and compliance.

In fiscal year 2019, Synopsys generated $3.4 billion in revenue, an 8% increase from the previous year. Operating income grew significantly by 44%, demonstrating improved profitability. The company also managed its expenses effectively while continuing to invest in R&D.

The adoption of ASC 606, a new revenue recognition standard, impacted how Synopsys recognizes revenue from contracts with customers. While it led to changes in reporting for certain contracts, the company stated it did not affect the cash generated from its business and aimed to provide better disclosures on revenue and cash flows.

Yes, Synopsys stated that Intel Corporation and its subsidiaries accounted for 12.8% of its total revenue in fiscal year 2019. No other customer accounted for more than 10% of its revenue during the reported periods.