01—Abstract
Summary
Summary of the 10-K filed December 12, 2023. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. (SNPS) reported solid financial performance for the fiscal year ended October 31, 2023, with revenue increasing by 15% to $5.84 billiona.
This growth was driven by strong performance across all product segments and geographies, particularly in Design Automation and Design IP. The company continues to invest in research and development, maintaining its leadership in Electronic Design Automation (EDA) while expanding its Design IP and Software Integrity offerings. Despite macroeconomic uncertainties and geopolitical pressures impacting global economic conditions, Synopsys demonstrated resilience.
The company also announced its decision to explore strategic alternatives for its Software Integrity segment. Leadership transition is underway with Sassine Ghazi set to become CEO effective January 1, 2024, succeeding founder Aart J. de Geus.
02—Key points
Key Highlights
- Revenue grew 15% year-over-year to $5.84 billion, driven by strong demand across all business segments.
- Design Automation and Design IP segments showed robust growth, contributing significantly to overall revenue.
- Operating income increased by 9% to $1.27 billion, reflecting effective management of expenses.
- The company is exploring strategic alternatives for its Software Integrity segment, indicating a potential future shift in business focus.
- Synopsys continues to invest heavily in R&D, representing 33% of total revenue, to maintain technological leadership.
- The company repurchased approximately $1.2 billion of its common stock in fiscal year 2023, underscoring its commitment to returning capital to shareholders.
- A planned leadership transition is underway with Sassine Ghazi set to assume the CEO role in early 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Synopsys kept $0.23.
- Revenue$5.32B100.0%
- Cost of revenue−$1.03B19.4%
- Gross profit$4.29B80.6%
- Operating costs−$3.01B56.7%
- Operating income$1.27B23.9%
- Interest, other & tax−$43.4M0.8%
- Net income$1.23B23.1%
Where FY2023 revenue went
$5.32B- R&D: $1.85B, 35% of revenue
- Net income: $1.23B, 23% of revenue
- Other operating costs: $1.16B, 22% of revenue
- Cost of revenue: $1.03B, 19% of revenue
- Interest, other & tax: $43.4M, 0.8% of revenue
Kept 23% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed December 12, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $5.32B$4.62B | +15.2% |
| Cost of Revenue | $1.03B$898.01M | +14.8% |
| Gross Profit | $4.29B$3.72B | +15.3% |
| R&D Expenses | $1.85B$1.59B | +16.4% |
| Operating Expenses | $3.01B$2.57B | +17.3% |
| Operating Income | $1.27B$1.15B | +10.8% |
| Interest Expense | $1.18M$1.70M | −30.6% |
| Net Income | $1.23B$984.59M | +24.9% |
| EPS (Basic) | $8.08$6.44 | +25.5% |
| EPS (Diluted) | $7.92$6.29 | +25.9% |
| Shares Outstanding (Basic) | 152.15M153.00M | −0.6% |
| Shares Outstanding (Diluted) | 155.19M156.49M | −0.8% |
05—Questions
Frequently Asked Questions
What was Synopsys' revenue growth in fiscal year 2023?
Synopsys reported a 15% increase in revenue for fiscal year 2023, reaching $5.84 billion, up from $5.08 billion in the prior year. This growth was attributed to strong performance across its Design Automation, Design IP, and Software Integrity segments.
What is the company's strategy regarding its Software Integrity segment?
Synopsys announced it is exploring strategic alternatives for its Software Integrity segment. This means the company is considering a range of strategic opportunities, including a potential sale or spin-off, to optimize its portfolio and focus on core areas.
How is Synopsys managing its investments in technology and innovation?
Synopsys continues to prioritize research and development, which accounted for 33% of its total revenue in fiscal year 2023. This significant investment is aimed at maintaining its leadership in EDA and enhancing its AI-driven solutions, IP offerings, and software security tools.
What is the outlook for Synopsys in the current macroeconomic environment?
While Synopsys has demonstrated resilience and growth, it acknowledges the uncertainty in the macroeconomic environment, including inflation and geopolitical pressures. The company expects a challenging near-term growth environment in China but anticipates overall growth across its geographies. The time-based revenue model provides a degree of stability.
06—Continue