10-QPeriod: Q3 FY2013

SYNOPSYS INC Quarterly Report for Q3 Ended Jul 31, 2013

Filed August 30, 2013For Securities:SNPS

Summary

Synopsys, Inc. reported its third-quarter fiscal year 2013 financial results, showing a revenue increase of 9% year-over-year to $482.9 million, driven primarily by time-based license revenue and contributions from recent acquisitions. Despite revenue growth, net income saw a significant decrease of 31% to $52.3 million, largely due to a favorable tax settlement in the prior year that boosted net income in fiscal 2012. The company's balance sheet strengthened, with cash and cash equivalents increasing by approximately 27% to $892.4 million, indicating robust cash generation from operations, which provided $305.4 million for the nine months ended July 31, 2013. While operating expenses, particularly R&D and sales & marketing, increased due to headcount growth from acquisitions and personnel-related costs, the company maintained a strong financial position. Intangible assets and goodwill remained substantial, reflecting past strategic acquisitions. Synopsys continues to repurchase its stock, with $202.4 million remaining available under its authorized repurchase program, signaling confidence in its financial health and commitment to shareholder returns.

Financial Highlights

55 data points
Beta

Revenue

$482.94M

76.1% Gross Margin

Net Income

$52.30M

10.8% Net Margin

EPS (Diluted)

$0.33

Total Assets

$4.29B

Cash & Equivalents

$892.37M

Free Cash Flow

$244.88M

Financial Statements
Beta
Revenue$482.94M
Cost of Revenue$115.65M
Gross Profit$367.30M
R&D Expenses$166.67M
Operating Expenses$312.30M
Operating Income$54.99M
Interest Expense$404K
Net Income$52.30M
EPS (Basic)$0.34
EPS (Diluted)$0.33
Shares Outstanding (Basic)153.91M
Shares Outstanding (Diluted)157.06M

Key Highlights

  • 1Total revenue increased by 9% to $482.9 million for the three months ended July 31, 2013, compared to the prior year period.
  • 2Net income decreased by 31% to $52.3 million for the three months ended July 31, 2013, largely due to a favorable tax settlement in the prior year.
  • 3Cash and cash equivalents increased by approximately 27% to $892.4 million as of July 31, 2013, indicating strong operational cash flow generation.
  • 4Operating expenses, particularly Research & Development and Sales & Marketing, increased by 16% and 5% respectively for the three-month period, driven by acquisitions and personnel costs.
  • 5Goodwill remains a significant asset at $1.98 billion, with minor adjustments noted.
  • 6The company had $202.4 million remaining under its stock repurchase program as of July 31, 2013.
  • 7Time-based license revenue continued to be the largest contributor to total revenue, representing 80% of revenue for the quarter.

Frequently Asked Questions

Synopsys reported a 9% increase in total revenue to $482.9 million for the three months ended July 31, 2013, compared to the same period in the previous year. This growth was primarily driven by time-based license revenue and contributions from acquired companies.

Net income decreased by 31% to $52.3 million for the three months ended July 31, 2013. This decline was significantly influenced by a favorable tax settlement recorded in the prior fiscal year (2012), which had boosted net income in that period. Other factors included increased operating expenses.

Synopsys' cash and cash equivalents increased by approximately 27% to $892.4 million as of July 31, 2013. The company generated strong cash flow from operations, with $305.4 million provided for the nine months ended July 31, 2013. This indicates healthy operational performance and efficient cash management.

Acquisitions are noted as an important part of Synopsys' growth strategy, with recent acquisitions contributing to revenue. The company also has an active stock repurchase program, with $202.4 million remaining available for repurchases as of July 31, 2013, suggesting management's confidence in the company's financial position and commitment to shareholder value.