Summary
Synopsys Inc. reported its first quarter fiscal year 2018 results, showcasing a robust 18% increase in total revenue to $769.4 million, driven by strong performance in time-based product licenses and the inclusion of an extra week in the quarter. Despite this revenue growth, the company experienced a net loss of $3.7 million for the quarter, a significant shift from the $86.6 million net income in the prior year's comparable period. This swing is primarily attributable to a substantial increase in income tax expenses, largely due to the recent enactment of the Tax Cuts and Jobs Act of 2017, which resulted in provisional charges of $119 million. The company also significantly increased its investment in acquisitions, spending $595.9 million in the quarter, notably including the acquisition of Black Duck Software for $565.1 million, which contributed to a considerable increase in goodwill and intangible assets. Despite the reported net loss, the company's core business operations appear healthy, with a strong revenue increase. Investors should note the significant impact of the new tax legislation on the current quarter's profitability. The substantial investments in acquisitions signal a strategy for future growth and expansion, particularly in software security and quality. The company maintained compliance with its debt covenants and has sufficient liquidity to meet its obligations.
Financial Highlights
55 data points| Revenue | $769.43M |
| Cost of Revenue | $181.16M |
| Gross Profit | $588.27M |
| R&D Expenses | $264.41M |
| Operating Expenses | $480.55M |
| Operating Income | $107.72M |
| Interest Expense | $2.84M |
| Net Income | -$3.69M |
| EPS (Basic) | $-0.02 |
| EPS (Diluted) | $-0.02 |
| Shares Outstanding (Basic) | 149.44M |
| Shares Outstanding (Diluted) | 149.44M |
Key Highlights
- 1Total revenue increased by 18% year-over-year to $769.4 million.
- 2The company reported a net loss of $3.7 million for the quarter, compared to a net income of $86.6 million in the prior year.
- 3Income tax expense significantly increased to $123.8 million, largely due to provisional charges from the Tax Cuts and Jobs Act of 2017.
- 4Acquisitions totaled $595.9 million, including the significant purchase of Black Duck Software for $565.1 million.
- 5Goodwill increased by $423.6 million, and intangible assets increased by $180.7 million due to acquisitions.
- 6Operating expenses rose by 19% to $661.7 million, driven by increased headcount (including from acquisitions) and the extra week in the quarter.
- 7Cash used in operating activities was $59.4 million, a decrease from cash provided by operating activities of $46.9 million in the prior year.