What are non-GAAP financial measures, and why does Synopsys use them?

Non-GAAP financial measures are financial metrics that exclude certain items from GAAP (Generally Accepted Accounting Principles) calculations. Synopsys uses them to provide what it believes is a more meaningful view of its operational performance and liquidity by excluding items such as amortization of acquired intangibles, stock compensation, and acquisition-related costs. Management uses these measures for internal analysis, budgeting, and strategic decisions.

Are the non-GAAP results presented in this filing official financial results?

The filing states that the information, including non-GAAP measures, is furnished and not considered 'filed' for purposes of Section 18 of the Securities Exchange Act. Synopsys presents non-GAAP measures as supplementary to GAAP measures, believing they offer valuable insights when viewed in conjunction with the official GAAP financial statements.

What specific items are excluded from Synopsys's non-GAAP calculations?

Synopsys typically excludes the amortization of acquired intangible assets, the impact of stock compensation, acquisition-related costs (including restructuring and inventory fair value adjustments), and certain other significant or infrequent items such as facility restructuring charges. They also adjust for the income tax effect of these non-GAAP pre-tax adjustments and any unusual or infrequent tax adjustments.

SNPS 8-K: Earnings & Results

Q: What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to announce Synopsys, Inc.'s financial results for its second fiscal quarter ended May 4, 2013, by incorporating a press release containing these results.

Summary

This 8-K filing from Synopsys, Inc. (SNPS) on May 22, 2013, primarily serves to announce the company's financial results for its second fiscal quarter ended May 4, 2013. The filing incorporates by reference a press release that details these results. Investors should note that the press release includes non-GAAP financial measures, which are presented alongside GAAP measures. Synopsys explains its rationale for using these non-GAAP figures, which exclude items such as amortization of acquired intangible assets, stock compensation, acquisition-related costs, and other significant infrequent items, asserting they provide a more meaningful view of operational performance and liquidity. The company's management utilizes these non-GAAP measures for internal decision-making, budgeting, and comparison with historical results and competitors. While acknowledging the limitations of non-GAAP measures, Synopsys believes they offer valuable insights into the company's ongoing operational performance and its ability to invest in research and development and strategic initiatives. The filing emphasizes that these non-GAAP figures are supplementary and should be viewed in conjunction with the comparable GAAP measures.

Key Highlights

1Synopsys, Inc. reported its financial results for the second fiscal quarter ended May 4, 2013, via an 8-K filing on May 22, 2013.
2The filing incorporates a press release (Exhibit 99.1) containing the detailed financial results.
3The company utilized non-GAAP financial measures in its earnings announcement.
4Non-GAAP measures exclude specific items including amortization of acquired intangible assets, stock compensation, and acquisition-related costs.
5Synopsys management uses non-GAAP figures to analyze operational performance, liquidity, and for budgeting and strategic investment decisions.
6The company believes these non-GAAP measures offer valuable insights when viewed alongside GAAP results.
7The filing explicitly states that the information provided is not deemed 'filed' for Section 18 purposes and is supplementary to GAAP measures.

SYNOPSYS INC 8-K Report, Financial Results (May 22, 2013)

Summary

Key Highlights

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