10-QPeriod: Q3 FY2023

SYNOPSYS INC Quarterly Report for Q3 Ended Jul 31, 2023

Filed August 18, 2023For Securities:SNPS

Summary

Synopsys, Inc. (SNPS) reported strong financial results for the quarter and nine months ended July 31, 2023. Total revenue increased by 19% year-over-year for the quarter, reaching $1.49 billion, and by 12% for the nine-month period to $4.24 billion. This growth was primarily driven by the Design Automation segment, which saw a 23% increase in quarterly revenue. Net income attributable to Synopsys also showed significant improvement, with diluted EPS rising to $2.17 for the quarter, up from $1.43 in the prior year. The company's balance sheet remains robust, with total assets growing to $9.92 billion. Cash and cash equivalents, along with short-term investments, stood at $1.83 billion as of July 31, 2023, providing ample liquidity. Despite a restructuring charge of $33.4 million in the current quarter, the company's operating income and net income demonstrated healthy year-over-year increases, reflecting strong operational execution and demand for its silicon-to-software solutions. Synopsys also continued its capital return program, with $494.3 million available for future stock repurchases under its board-approved program.

Financial Highlights

57 data points
Beta

Revenue

$1.35B

80.8% Gross Margin

Net Income

$336.25M

24.8% Net Margin

EPS (Diluted)

$2.17

Total Assets

$9.92B

Cash & Equivalents

$1.68B

Free Cash Flow

$514.37M

Financial Statements
Beta
Revenue$1.35B
Cost of Revenue$260.43M
Gross Profit$1.09B
R&D Expenses$484.47M
Operating Expenses$793.88M
Operating Income$300.08M
Interest Expense$342K
Net Income$336.25M
EPS (Basic)$2.21
EPS (Diluted)$2.17
Shares Outstanding (Basic)152.02M
Shares Outstanding (Diluted)154.95M

Key Highlights

  • 1Revenue increased by 19% year-over-year to $1.49 billion for the three months ended July 31, 2023.
  • 2Net income attributed to Synopsys was $336.3 million for the quarter, a significant increase from $222.6 million in the prior year.
  • 3Diluted earnings per share (EPS) for the quarter rose to $2.17, compared to $1.43 in the same period last year.
  • 4The Design Automation segment showed robust growth, with revenue up 23% year-over-year to $1.00 billion for the quarter.
  • 5Cash, cash equivalents, and short-term investments totaled $1.83 billion as of July 31, 2023, indicating strong liquidity.
  • 6The company recorded a restructuring charge of $33.4 million in the current quarter, primarily related to employee terminations.
  • 7$494.3 million remained available for future stock repurchases under the company's authorized program as of July 31, 2023.

Frequently Asked Questions

Synopsys reported a 19% increase in total revenue for the three months ended July 31, 2023, reaching $1.49 billion, compared to $1.25 billion in the same period of the prior year. This growth was largely driven by its Design Automation segment.

For the quarter ended July 31, 2023, net income attributed to Synopsys was $336.3 million, resulting in diluted earnings per share (EPS) of $2.17. This represents a substantial increase from $222.6 million in net income and $1.43 in diluted EPS for the same quarter in the prior year.

Synopsys maintains a strong liquidity position, with $1.83 billion in cash, cash equivalents, and short-term investments as of July 31, 2023. The company also has $494.3 million available under its stock repurchase program, indicating a commitment to returning capital to shareholders while maintaining operational flexibility.

Yes, Synopsys recorded a restructuring charge of $33.4 million during the three months ended July 31, 2023, primarily related to involuntary employee terminations as part of a business reorganization. Despite this, the company's overall profitability remained strong.