10-QPeriod: Q2 FY2021

SYNOPSYS INC Quarterly Report for Q2 Ended Apr 30, 2021

Filed May 21, 2021For Securities:SNPS

Summary

Synopsys Inc. (SNPS) reported strong financial results for the quarter and six months ended April 30, 2021. Total revenue increased by 19% year-over-year for the quarter to $1.024 billion and by 18% for the six-month period to $1.995 billion. This growth was primarily driven by the Semiconductor & System Design segment, which saw a 20% increase in quarterly revenue, reflecting continued demand for their EDA and IP products. The Software Integrity segment also showed growth, albeit at a slower pace. The company demonstrated robust profitability, with operating income increasing by 54% year-over-year for the quarter to $194.2 million. Net income also saw a significant jump. Cash flow from operations remained strong, indicating healthy underlying business performance. Synopsys continues to execute its growth strategy, investing in R&D and also actively engaging in share repurchases.

Financial Highlights

57 data points
Beta

Revenue

$1.02B

79.1% Gross Margin

Net Income

$195.08M

19.0% Net Margin

EPS (Diluted)

$1.24

Total Assets

$8.34B

Cash & Equivalents

$1.46B

Free Cash Flow

$510.06M

Financial Statements
Beta
Revenue$1.02B
Cost of Revenue$213.99M
Gross Profit$810.34M
R&D Expenses$362.35M
Operating Expenses$616.11M
Operating Income$194.23M
Interest Expense$807K
Net Income$195.08M
EPS (Basic)$1.28
EPS (Diluted)$1.24
Shares Outstanding (Basic)152.72M
Shares Outstanding (Diluted)157.08M

Key Highlights

  • 1Total revenue for the three months ended April 30, 2021, was $1.024 billion, an increase of 19% compared to the prior year's quarter.
  • 2For the six months ended April 30, 2021, total revenue reached $1.995 billion, an 18% increase year-over-year.
  • 3The Semiconductor & System Design segment continues to be the primary growth driver, with revenue up 20% for the quarter.
  • 4Operating income increased significantly by 54% to $194.2 million for the three months ended April 30, 2021.
  • 5Net income attributed to Synopsys for the quarter was $195.1 million, a substantial increase from $109.9 million in the prior year.
  • 6Cash provided by operating activities for the six months ended April 30, 2021, was $700.3 million, demonstrating strong cash generation.
  • 7The company repurchased approximately 0.4 million shares of common stock for $100 million in April 2021 as part of its ongoing share repurchase program.

Frequently Asked Questions

The primary driver of Synopsys' revenue growth was the Semiconductor & System Design segment, which includes EDA tools and IP products. This segment experienced strong demand, leading to a 20% increase in quarterly revenue.

Synopsys generated strong cash flow from operations ($700.3 million for the six months ended April 30, 2021) and maintained a healthy cash balance ($1.46 billion at April 30, 2021). The company believes its existing cash and cash equivalents, along with operating cash flows, are sufficient to meet its liquidity needs.

While the Semiconductor & System Design segment saw significant revenue growth (20% year-over-year for the quarter), the Software Integrity segment also grew, albeit at a slower pace (6% year-over-year for the quarter). The Semiconductor & System Design segment remains the larger contributor to overall revenue.

Synopsys continues to actively repurchase its common stock. In April 2021, the company entered into an accelerated share repurchase agreement to buy back $100 million of its stock. As of April 30, 2021, approximately $59.8 million remained available for future repurchases under its program.