10-QPeriod: Q1 FY2021

SYNOPSYS INC Quarterly Report for Q1 Ended Jan 31, 2021

Filed February 19, 2021For Securities:SNPS

Summary

Synopsys Inc. (SNPS) reported strong financial results for the quarter ended January 31, 2021, with total revenue increasing by 16% year-over-year to $970.3 million. This growth was driven by both the Semiconductor & System Design segment, which saw a 17% increase in revenue, and the Software Integrity segment, which grew by 7%. The company demonstrated robust profitability, with operating income rising significantly by 70% to $148.3 million, and net income attributed to Synopsys increasing to $162.3 million from $104.1 million in the prior year period. Diluted earnings per share improved to $1.03. The company's balance sheet remains solid, with total assets of $8.01 billion and total liabilities of $3.13 billion. Cash and cash equivalents stood at $1.02 billion, although this represents a decrease from the previous quarter, primarily due to significant share repurchase activities. The company also executed an accelerated share repurchase agreement for $250.0 million during the quarter. Synopsys continues to invest in research and development, which increased by 14% year-over-year, underscoring its commitment to innovation in the dynamic semiconductor and software security markets.

Financial Highlights

57 data points
Beta

Revenue

$970.32M

78.6% Gross Margin

Net Income

$162.34M

16.7% Net Margin

EPS (Diluted)

$1.03

Total Assets

$8.01B

Cash & Equivalents

$1.03B

Free Cash Flow

$146.18M

Financial Statements
Beta
Revenue$970.32M
Cost of Revenue$208.00M
Gross Profit$762.32M
R&D Expenses$357.47M
Operating Expenses$613.97M
Operating Income$148.35M
Interest Expense$739K
Net Income$162.34M
EPS (Basic)$1.06
EPS (Diluted)$1.03
Shares Outstanding (Basic)152.50M
Shares Outstanding (Diluted)157.28M

Key Highlights

  • 1Total revenue increased by 16% year-over-year to $970.3 million.
  • 2Operating income surged by 70% to $148.3 million, indicating strong operational leverage.
  • 3Net income attributed to Synopsys grew substantially to $162.3 million, up from $104.1 million in the prior year.
  • 4Diluted earnings per share improved to $1.03 from $0.67 in the same period last year.
  • 5The Semiconductor & System Design segment revenue grew by 17%, driven by ongoing organic growth.
  • 6Despite a planned decrease in cash due to share repurchases, the company maintains a healthy cash position of $1.02 billion.
  • 7Research and Development expenses increased by 14% to $357.5 million, reflecting continued investment in innovation.

Frequently Asked Questions

Synopsys experienced a 16% year-over-year increase in total revenue, reaching $970.3 million. This growth was primarily driven by the continued organic growth across all product categories and geographic regions, particularly within the Semiconductor & System Design segment. The increase in time-based products revenue, attributed to TSL license revenue from prior period bookings, and upfront products revenue, driven by higher demand for IP products, were key contributors.

Profitability saw a substantial improvement. Operating income increased by 70% to $148.3 million, and net income attributed to Synopsys rose to $162.3 million, compared to $104.1 million in the same period last year. This significant increase in profitability is a testament to the company's operational efficiency and revenue growth.

As of January 31, 2021, Synopsys held $1.02 billion in cash and cash equivalents. This represents a decrease from the prior quarter, largely due to significant share repurchase activities, including an accelerated share repurchase agreement initiated during the quarter. The company also made substantial investments in property and equipment. Despite these uses of cash, the company believes its current liquidity is sufficient for its ongoing operations.

Synopsys continues to invest heavily in its future growth through research and development, which increased by 14% year-over-year to $357.5 million. This investment reflects the company's commitment to innovation in its core Semiconductor & System Design business and its expanding Software Integrity segment, crucial for staying competitive in the rapidly evolving technology landscape.