01—Abstract
Summary
Summary of the 10-K filed December 12, 2022. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. (SNPS) demonstrated strong revenue growth of 21% in fiscal year 2022, reaching $5.1 billiona, primarily driven by its Semiconductor & System Design segment.
The company's operating income also saw a significant increase of 58% to $1.2 billionb, indicating efficient management of expenses relative to revenue growth. This performance reflects the continued demand for advanced chip and system design tools, as well as Synopsys's strategic positioning as a "Silicon to Software" partner. Despite global economic uncertainties and supply chain challenges, Synopsys has shown resilience, partly due to its time-based revenue model which provides stability.
The company continues to invest in research and development, with a 12%c increase in R&D expenses, underscoring its commitment to innovation in areas like AI, 5G, and automotive. Synopsys also actively manages its capital through a substantial stock repurchase program.
While facing competition and macroeconomic headwinds, the company's diversified product portfolio and strong customer relationships position it for continued growth. Investors should monitor evolving export control regulations and macroeconomic conditions, but the company's robust financial performance and strategic focus on key technology trends are positive indicators.
02—Key points
Key Highlights
- Synopsys reported a 21% increase in total revenue for fiscal year 2022, reaching $5.1 billion.
- Operating income grew by 58% to $1.2 billion, demonstrating strong profitability.
- The Semiconductor & System Design segment continues to be the primary revenue driver, growing 21% year-over-year.
- The company repurchased $1.1 billion of its common stock during fiscal year 2022, highlighting a commitment to shareholder returns.
- Research and Development expenses increased by 12%, reflecting continued investment in innovation.
- The company maintains a strong financial position with $1.6 billion in cash, cash equivalents, and short-term investments as of October 31, 2022.
- Synopsys operates with a time-based revenue model, providing stability against short-term market fluctuations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Synopsys kept $0.21.
- Revenue$4.62B100.0%
- Cost of revenue−$898.0M19.5%
- Gross profit$3.72B80.5%
- Operating costs−$2.57B55.7%
- Operating income$1.15B24.9%
- Interest, other & tax−$164.1M3.6%
- Net income$984.6M21.3%
Where FY2022 revenue went
$4.62B- R&D: $1.59B, 34% of revenue
- Net income: $984.6M, 21% of revenue
- Other operating costs: $979.1M, 21% of revenue
- Cost of revenue: $898.0M, 19% of revenue
- Interest, other & tax: $164.1M, 3.6% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed December 12, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $4.62B$4.20B | +9.8% |
| Cost of Revenue | $898.01M$861.78M | +4.2% |
| Gross Profit | $3.72B$3.34B | +11.2% |
| R&D Expenses | $1.59B$1.50B | +5.7% |
| Operating Expenses | $2.57B$2.61B | −1.5% |
| Operating Income | $1.15B$734.79M | +56.3% |
| Interest Expense | $1.70M$3.37M | −49.5% |
| Net Income | $984.59M$757.52M | +30.0% |
| EPS (Basic) | $6.44$4.96 | +29.8% |
| EPS (Diluted) | $6.29$4.81 | +30.8% |
| Shares Outstanding (Basic) | 153.00M152.70M | +0.2% |
| Shares Outstanding (Diluted) | 156.49M157.34M | −0.5% |
05—Questions
Frequently Asked Questions
What is Synopsys's core business and market position?
Synopsys is a global leader in providing Electronic Design Automation (EDA) software and semiconductor Intellectual Property (IP) crucial for designing and testing integrated circuits (ICs). They also offer software tools and services to enhance software security and quality across various industries, positioning themselves as a "Silicon to Software" partner.
How did Synopsys perform financially in fiscal year 2022?
In fiscal year 2022, Synopsys achieved a 21% increase in revenue, reaching $5.1 billion, and a 58% increase in operating income, totaling $1.2 billion. This growth was driven by its Semiconductor & System Design segment and reflected strong demand for its products and services.
What are the key risks facing Synopsys, as highlighted in the filing?
Key risks include global economic uncertainty affecting customer spending, intense competition in the EDA and software integrity markets, potential disruptions from government export and import regulations (particularly concerning China), cybersecurity threats, and the company's reliance on a relatively small number of large customers. Additionally, the inherent complexity and rapid evolution of technology in their sectors require continuous innovation.
How is Synopsys returning value to shareholders?
Synopsys has an active stock repurchase program, repurchasing $1.1 billion of its common stock in fiscal year 2022. The company has also increased its authorization for future repurchases. Synopsys does not currently pay cash dividends.
06—Continue