10-QPeriod: Q3 FY2010

SYNOPSYS INC Quarterly Report for Q3 Ended Jul 31, 2010

Filed September 8, 2010For Securities:SNPS

Summary

Synopsys, Inc. (SNPS) reported its third-quarter results for the period ending July 30, 2010. The company demonstrated robust financial health with total assets reaching $3.11 billion and total stockholders' equity at $2.05 billion. Revenue for the quarter slightly decreased year-over-year, totaling $336.9 million, primarily due to a dip in maintenance and service revenues. However, net income saw a significant increase, rising to $39.3 million from $47.4 million in the prior year's comparable quarter, driven by a favorable tax provision. The company maintained a strong liquidity position, with cash and cash equivalents and short-term investments totaling $1.21 billion. Synopsys also highlighted continued investment in research and development and strategic acquisitions, including the recent purchase of Virage Logic Corporation.

Financial Highlights

51 data points
Beta

Revenue

$336.93M

80.2% Gross Margin

Net Income

$39.33M

11.7% Net Margin

EPS (Diluted)

$0.26

Total Assets

$3.11B

Cash & Equivalents

$883.44M

Free Cash Flow

$194.12M

Financial Statements
Beta
Revenue$336.93M
Cost of Revenue$66.74M
Gross Profit$270.19M
R&D Expenses$105.65M
Operating Expenses$219.39M
Operating Income$50.79M
Net Income$39.33M
EPS (Basic)$0.27
EPS (Diluted)$0.26
Shares Outstanding (Basic)148.01M
Shares Outstanding (Diluted)151.11M

Key Highlights

  • 1Total assets grew to $3.11 billion as of July 31, 2010, an increase from $2.94 billion at fiscal year-end 2009.
  • 2Stockholders' equity significantly increased to $2.05 billion from $1.84 billion in the prior fiscal year-end.
  • 3For the third quarter, total revenue was $336.9 million, a slight decrease from $345.2 million in the same period of 2009.
  • 4Net income for the quarter was $39.3 million, compared to $47.4 million in the prior year's quarter, with a significant positive impact from a lower tax provision.
  • 5The company held a strong cash position with $883.4 million in cash and cash equivalents and $326.4 million in short-term investments, totaling $1.21 billion.
  • 6Operating cash flow for the nine months ended July 31, 2010, was $244.1 million, a substantial increase from $175.2 million in the prior year period.
  • 7Synopsys completed several acquisitions during the nine months ended July 31, 2010, totaling $146.9 million in purchase consideration, and announced the acquisition of Virage Logic Corporation for approximately $312 million on September 2, 2010.

Frequently Asked Questions

Synopsys reported total revenue of $336.9 million for the three months ended July 31, 2010, a slight decrease of 2% compared to $345.2 million in the same period of fiscal year 2009. This decrease was primarily attributed to lower maintenance and service revenues.

Net income for the third quarter of fiscal year 2010 was $39.3 million, or $0.26 per diluted share, compared to $47.4 million, or $0.32 per diluted share, in the same period of fiscal year 2009. Despite a slight decrease in net income, the effective tax rate significantly improved, contributing positively to profitability.

As of July 31, 2010, Synopsys maintained a strong liquidity position with $883.4 million in cash and cash equivalents and $326.4 million in short-term investments, totaling $1.21 billion. The company also reported positive cash flow from operations of $244.1 million for the nine months ended July 31, 2010.

Synopsys continued its acquisition strategy, completing several acquisitions totaling $146.9 million in the first nine months of fiscal 2010. Notably, the company announced the acquisition of Virage Logic Corporation for approximately $312 million on September 2, 2010, subsequent to the reporting period, demonstrating ongoing efforts to expand its technology portfolio and market position.