10-KPeriod: FY2021

SYNOPSYS INC Annual Report, Year Ended Oct 31, 2021

Filed December 13, 2021For Securities:SNPS

Summary

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 billion. 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 billion 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.

Financial Highlights

57 data points
Beta

Revenue

$4.20B

79.5% Gross Margin

Net Income

$757.52M

18.0% Net Margin

EPS (Diluted)

$4.81

Total Assets

$8.75B

Cash & Equivalents

$1.44B

Free Cash Flow

$1.40B

Financial Statements
Beta
Revenue$4.20B
Cost of Revenue$861.78M
Gross Profit$3.34B
R&D Expenses$1.50B
Operating Expenses$2.61B
Operating Income$734.79M
Interest Expense$3.37M
Net Income$757.52M
EPS (Basic)$4.96
EPS (Diluted)$4.81
Shares Outstanding (Basic)152.70M
Shares Outstanding (Diluted)157.34M

Key Highlights

  • 1Total revenue increased by 14% to $4.2 billion for the fiscal year ended October 30, 2021.
  • 2Semiconductor & System Design segment revenue grew 15%, demonstrating strength in core EDA and IP offerings.
  • 3Software Integrity segment revenue increased by 10%, indicating progress in the security and quality software market.
  • 4Operating income saw a healthy increase of 18%, outpacing revenue growth.
  • 5The company repurchased $753.1 million of its common stock in fiscal 2021 and authorized a new $1.0 billion repurchase program.
  • 6Synopsys continues to invest heavily in Research and Development, with expenses increasing by 18% to support product innovation.
  • 7The company reported strong operating cash flow of $1.49 billion.
  • 8Despite global economic uncertainties and the COVID-19 pandemic, Synopsys experienced only minor operational disruptions.

Frequently Asked Questions

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.

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.

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.

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.