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

The primary purpose of this 8-K filing is to formally submit and incorporate by reference a press release issued by Synopsys, Inc. on August 18, 2021, which contains the company's financial results for its third fiscal quarter ended July 31, 2021.

Why does Synopsys present non-GAAP financial measures?

Synopsys presents non-GAAP financial measures because management believes they provide a more meaningful representation of the company's core operational performance and liquidity. These measures exclude certain expenses and gains/losses that management deems not reflective of ongoing business operations, such as amortization of acquired intangibles, stock-based compensation, and acquisition-related costs.

What specific items are excluded from Synopsys' non-GAAP financial measures?

Synopsys excludes several items from its non-GAAP measures, including: (i) amortization of acquired intangible assets, (ii) the impact of stock-based compensation, (iii) acquisition-related costs, (iv) restructuring charges, (v) effects of certain legal matters (settlements, judgments, loss contingencies), and (vi) the income tax effect of these non-GAAP pre-tax adjustments. They also use a normalized annual non-GAAP tax rate.

Are the non-GAAP measures presented in this filing considered by investors?

Yes, while these measures are not prepared in accordance with Generally Accepted Accounting Principles (GAAP) and have limitations, Synopsys believes they are valuable for investors and management to analyze core operations, financial and business trends, and make comparisons to historical results and competitors. However, investors should always review these non-GAAP measures in conjunction with the corresponding GAAP measures.

SNPS 8-K: Earnings & Results

Summary

Synopsys, Inc. (SNPS) filed an 8-K on August 18, 2021, primarily to furnish a press release detailing its third fiscal quarter results ended July 31, 2021. The report highlights the company's use of non-GAAP financial measures to provide insights into its core operational performance, excluding items such as amortization of acquired intangibles, stock-based compensation, acquisition-related costs, restructuring charges, and legal matters. Management believes these non-GAAP measures offer a clearer view of operational trends and facilitate comparisons with historical results and competitors. The furnished press release, which is incorporated by reference, contains specific financial results for the quarter. Investors should note that these non-GAAP measures are not prepared in accordance with GAAP and may differ from those of other companies. While GAAP measures are also provided, Synopsys emphasizes the value of its non-GAAP reporting in understanding core business profitability and strategic investment decisions, particularly in areas like research and development.

Key Highlights

1The 8-K filing primarily serves to incorporate by reference a press release announcing Synopsys' third fiscal quarter 2021 financial results.
2Synopsys utilizes and emphasizes non-GAAP financial measures for reporting, which exclude items like amortization of acquired intangibles, stock compensation, acquisition-related costs, restructuring charges, and legal matters.
3Management uses these non-GAAP measures to assess core operational performance, liquidity, and to aid in investment decisions regarding R&D, infrastructure, and market strategies.
4The company believes non-GAAP measures facilitate internal comparisons to historical results, forecasted targets, and competitors' performance.
5Synopsys also provides segment information using adjusted segment operating income and adjusted segment operating margin, reflecting management's evaluation of segment performance.
6A normalized annual non-GAAP tax rate of 16% is maintained for fiscal 2021 to provide consistency across reporting periods.
7The filing includes Exhibit 99.1, the press release dated August 18, 2021, and Exhibit 104, the Cover Page Interactive Data File.

SYNOPSYS INC 8-K Report, Financial Results (Aug 18, 2021)

Summary

Key Highlights

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