01—Abstract
Summary
Summary of the 10-K filed December 15, 2020. Cited figures are marked; the original filing is the authoritative source.
Synopsys Inc. (SNPS) reported robust performance for the fiscal year ending October 31, 2020, with revenues reaching $3.7 billiona, a 10% increase year-over-year, driven by strong organic growth in its Semiconductor & System Design segment.
The company maintained healthy operating income growth of 19%, reaching $620.1 millionb. Synopsys operates across the entire Silicon to Software spectrum, providing Electronic Design Automation (EDA) tools, semiconductor Intellectual Property (IP), and software integrity solutions. The company's strategic focus on innovation and expansion into key growth markets like AI, 5G, and automotive continues to drive demand for its products.
Synopsys also highlighted its commitment to employee well-being and talent development amidst the COVID-19 pandemic, with a significant portion of its workforce successfully transitioning to remote work. The company ended the fiscal year with a strong liquidity position, increasing its cash and cash equivalents significantly, and continued its stock repurchase program, reflecting confidence in its financial health and future prospects.
02—Key points
Key Highlights
- Revenue increased by 10% to $3.7 billion in fiscal year 2020.
- Operating income grew by 19% to $620.1 million, demonstrating strong profitability.
- The Semiconductor & System Design segment remains the primary revenue driver, with Software Integrity showing steady growth.
- Synopsys maintained a strong liquidity position with a significant increase in cash and cash equivalents.
- The company continued its stock repurchase program, indicating a commitment to returning value to shareholders.
- Investment in research and development increased by 12%, reflecting a focus on innovation.
- The company successfully managed operations through the COVID-19 pandemic with minimal disruption.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Synopsys kept $0.18.
- Revenue$3.69B100.0%
- Cost of revenue−$794.7M21.6%
- Gross profit$2.89B78.4%
- Operating costs−$2.27B61.6%
- Operating income$620.1M16.8%
- Interest, other & tax$44.2M1.2%
- Net income$664.3M18.0%
Where FY2020 revenue went
$3.69B- R&D: $1.28B, 35% of revenue
- Other operating costs: $991.4M, 27% of revenue
- Cost of revenue: $794.7M, 22% of revenue
- Operating income: $620.1M, 17% of revenue
Kept 17% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed December 15, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $3.69B$3.36B | +9.7% |
| Cost of Revenue | $794.69M$752.95M | +5.5% |
| Gross Profit | $2.89B$2.61B | +10.8% |
| R&D Expenses | $1.28B$1.14B | +12.5% |
| Operating Expenses | $2.27B$2.09B | +8.8% |
| Operating Income | $620.14M$520.23M | +19.2% |
| Interest Expense | $5.14M$11.66M | −55.9% |
| Net Income | $664.35M$532.37M | +24.8% |
| EPS (Basic) | $4.40$3.55 | +23.9% |
| EPS (Diluted) | $4.27$3.45 | +23.8% |
| Shares Outstanding (Basic) | 151.13M149.87M | +0.8% |
| Shares Outstanding (Diluted) | 155.71M154.19M | +1.0% |
05—Questions
Frequently Asked Questions
What are Synopsys' primary business segments?
Synopsys operates in two main segments: Semiconductor & System Design, which includes EDA software, IP products, and system integration services, and Software Integrity, which provides tools and services for software security, quality, and compliance testing.
How did the COVID-19 pandemic impact Synopsys' business in fiscal year 2020?
While the pandemic required a significant transition to remote work for most employees, Synopsys reported only minor disruptions to its business operations and limited impact on its operating results. The company noted a slowdown in customer commitments in its Software Integrity segment and minor disruptions in its hardware supply chain, but overall managed the situation effectively.
What is Synopsys' strategy for future growth?
Synopsys' growth strategy focuses on maintaining leadership in EDA products, expanding its IP offerings, driving growth in the software security and quality market, and continuing to broaden its product portfolio and total addressable market through both organic growth and strategic acquisitions.
How did Synopsys manage its financial resources and shareholder returns in fiscal year 2020?
Synopsys demonstrated strong financial management, increasing its revenue and operating income. The company also enhanced its liquidity, with cash and cash equivalents rising significantly. Furthermore, Synopsys continued its stock repurchase program, repurchasing shares to offset dilution and return value to shareholders, indicating confidence in its financial health.
06—Continue