01—Abstract
Summary
Summary of the 10-K filed December 13, 2021. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. (SNPS) reported robust performance in its fiscal year ending October 30, 2021.
The company, a leader in electronic design automation (EDA) software and semiconductor intellectual property (IP), saw its total revenue increase by 14% year-over-year to $4.2 billiona. This growth was driven by strong performance in its Semiconductor & System Design segment, which increased revenue by 15%, and a 10% increase in its Software Integrity segment. The company's strategic focus on innovation and customer relationships appears to be yielding positive results, as reflected in the double-digit revenue growth and increased operating income.
Synopsys also demonstrated its commitment to shareholder value through significant stock repurchases, authorizing a new $1.0 billionb program in December 2021. While the company navigated the ongoing impacts of the COVID-19 pandemic with only minor disruptions, it remains focused on long-term growth strategies, including expanding its IP offerings and growing its share in the software security market.
The company's financial health appears solid, with substantial cash reserves and a strong operating cash flow. Investors can anticipate continued investment in research and development to maintain technological leadership in its competitive markets.
02—Key points
Key Highlights
- Total revenue increased by 14% to $4.2 billion for the fiscal year ended October 30, 2021.
- Semiconductor & System Design segment revenue grew 15%, demonstrating strength in core EDA and IP offerings.
- Software Integrity segment revenue increased by 10%, indicating progress in the security and quality software market.
- Operating income saw a healthy increase of 18%, outpacing revenue growth.
- The company repurchased $753.1 million of its common stock in fiscal 2021 and authorized a new $1.0 billion repurchase program.
- Synopsys continues to invest heavily in Research and Development, with expenses increasing by 18% to support product innovation.
- The company reported strong operating cash flow of $1.49 billion.
- Despite global economic uncertainties and the COVID-19 pandemic, Synopsys experienced only minor operational disruptions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Synopsys kept $0.18.
- Revenue$4.20B100.0%
- Cost of revenue−$861.8M20.5%
- Gross profit$3.34B79.5%
- Operating costs−$2.61B62.0%
- Operating income$734.8M17.5%
- Interest, other & tax$22.7M0.5%
- Net income$757.5M18.0%
Where FY2021 revenue went
$4.20B- R&D: $1.50B, 36% of revenue
- Other operating costs: $1.10B, 26% of revenue
- Cost of revenue: $861.8M, 20% of revenue
- Operating income: $734.8M, 17% of revenue
Kept 17% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed December 13, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $4.20B$3.69B | +14.1% |
| Cost of Revenue | $861.78M$794.69M | +8.4% |
| Gross Profit | $3.34B$2.89B | +15.6% |
| R&D Expenses | $1.50B$1.28B | +17.7% |
| Operating Expenses | $2.61B$2.27B | +14.9% |
| Operating Income | $734.79M$620.14M | +18.5% |
| Interest Expense | $3.37M$5.14M | −34.5% |
| Net Income | $757.52M$664.35M | +14.0% |
| EPS (Basic) | $4.96$4.40 | +12.7% |
| EPS (Diluted) | $4.81$4.27 | +12.6% |
| Shares Outstanding (Basic) | 152.70M151.13M | +1.0% |
| Shares Outstanding (Diluted) | 157.34M155.71M | +1.0% |
05—Questions
Frequently Asked Questions
What are Synopsys' primary business segments and how did they perform in FY 2021?
Synopsys operates in two primary segments: Semiconductor & System Design (EDA tools, IP, and system integration) and Software Integrity (software security and quality testing). In FY 2021, the Semiconductor & System Design segment revenue grew by 15%, while the Software Integrity segment saw a 10% increase, contributing to a consolidated revenue growth of 14% to $4.2 billion.
How did Synopsys manage its expenses and profitability in FY 2021?
Synopsys effectively managed its expenses, with total costs and operating expenses increasing by 13% which was less than the 14% revenue growth. This resulted in an 18% increase in operating income to $734.8 million, demonstrating improved profitability and operational efficiency.
What is Synopsys' strategy regarding shareholder returns and investments?
Synopsys actively returned capital to shareholders through stock repurchases, buying back $753.1 million in FY 2021 and subsequently authorizing a new $1.0 billion repurchase program. The company also continues to make significant investments in research and development, increasing R&D spending by 18% to $1.5 billion, underscoring its commitment to innovation and maintaining a competitive edge in its markets.
What impact did the COVID-19 pandemic have on Synopsys' operations and financial results?
Synopsys reported that the COVID-19 pandemic caused only minor disruptions to its business operations and financial results to date. While there were some minor hardware supply chain and logistical challenges and a slowdown in customer commitments within the Software Integrity segment, the overall impact was limited, and the company's revenue recognition model (time-based subscriptions) helped to buffer immediate impacts.
06—Continue