10-QPeriod: Q2 FY2023

SYNOPSYS INC Quarterly Report for Q2 Ended Apr 30, 2023

Filed May 19, 2023For Securities:SNPS

Summary

Synopsys Inc. (SNPS) reported its fiscal second-quarter 2023 results, demonstrating solid revenue growth and a healthy financial position. Total revenue for the quarter reached $1.395 billion, an increase of 9% year-over-year, driven primarily by strength in the Design Automation segment. The company reported a net income of $272.9 million, or $1.76 per diluted share, reflecting robust profitability. Synopsys maintained a strong balance sheet with $1.7 billion in cash, cash equivalents, and short-term investments, and continued to return capital to shareholders through its stock repurchase program. The company highlighted positive momentum across its business segments, particularly Design Automation and Software Integrity, while Design IP experienced a slight revenue dip. Management expressed confidence in their strategy and ability to navigate the current macroeconomic environment, emphasizing the stability provided by their time-based revenue model. The outlook remains positive, with continued investment in R&D and strategic growth initiatives.

Financial Highlights

57 data points
Beta

Revenue

$1.26B

80.3% Gross Margin

Net Income

$272.91M

21.6% Net Margin

EPS (Diluted)

$1.76

Total Assets

$9.79B

Cash & Equivalents

$1.54B

Free Cash Flow

$655.07M

Financial Statements
Beta
Revenue$1.26B
Cost of Revenue$248.24M
Gross Profit$1.01B
R&D Expenses$460.46M
Operating Expenses$722.13M
Operating Income$292.38M
Interest Expense$312K
Net Income$272.91M
EPS (Basic)$1.79
EPS (Diluted)$1.76
Shares Outstanding (Basic)152.19M
Shares Outstanding (Diluted)154.73M

Key Highlights

  • 1Total revenue increased by 9% year-over-year to $1.395 billion for the second quarter of fiscal 2023.
  • 2Net income attributed to Synopsys was $272.9 million, or $1.76 per diluted share.
  • 3The Design Automation segment showed strong performance with revenue up 13% year-over-year.
  • 4Software Integrity segment revenue grew by 17% year-over-year.
  • 5The company ended the quarter with $1.7 billion in cash, cash equivalents, and short-term investments.
  • 6Synopsys maintained a $1.5 billion stock repurchase program, with $794.3 million remaining available as of April 30, 2023.
  • 7Restructuring charges of $4.1 million were recorded in the quarter as part of a business reorganization.

Frequently Asked Questions

Synopsys reported a total revenue of $1.395 billion for the second quarter of fiscal 2023, representing a 9% increase compared to $1.279 billion in the same period of fiscal 2022. This growth was driven by strong performance in the Design Automation and Software Integrity segments.

For the second quarter of fiscal 2023, Synopsys reported a net income attributed to Synopsys of $272.9 million, which translated to a diluted earnings per share of $1.76. This compares to a net income of $294.8 million, or $1.89 per diluted share, in the prior year's second quarter.

Synopsys operates in three reportable segments: Design Automation, Design IP, and Software Integrity. In the second quarter of fiscal 2023, Design Automation revenue grew 13% year-over-year to $927.6 million. Design IP revenue decreased by 4% to $335.2 million. Software Integrity revenue increased by 17% to $132.1 million.

Synopsys maintained a strong liquidity position, ending the quarter with $1.7 billion in cash, cash equivalents, and short-term investments. Management believes these resources, along with operating cash flows, are sufficient to meet its cash requirements over the next 12 months and beyond.