MOUNTAIN VIEW, Calif.,
May 20, 2020 /PRNewswire/ --
Synopsys, Inc. (Nasdaq: SNPS) today reported results for its second
quarter fiscal year 2020. Revenue for the second quarter was
$861.3 million, compared to
$836.2 million for the second quarter
of fiscal 2019.
"Synopsys continues to execute well. We delivered excellent
second quarter results, including revenue, non-GAAP earnings per
share and operating cash flow that exceeded our targets. Our
innovation continues at a rapid pace, as we introduced several
exciting new products in the quarter," said Aart de Geus, chairman and co-CEO of Synopsys.
"Even as the world grapples with unprecedented challenges, chip and
system design activity remain robust. With a resilient business
model and strong balance sheet, Synopsys is well-positioned to
reaffirm our 2020 revenue and non-GAAP operating margin guidance
and raise our non-GAAP earnings-per-share and operating cash flow
targets."
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net
income for the second quarter of fiscal 2020 was $109.9 million, or $0.71 per share, compared to $118.2 million, or $0.77 per share, for the second quarter of fiscal
2019.
Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal
2020 was $188.3 million, or
$1.22 per share, compared to non-GAAP
net income of $178.1 million, or
$1.16 per share, for the second
quarter of fiscal 2019.
For a reconciliation between GAAP and non-GAAP results, see
"GAAP to Non-GAAP Reconciliation" and the accompanying tables
below.
Business Segments
Synopsys reports revenue and operating income in two segments:
(1) Semiconductor & System Design, which includes EDA tools, IP
products, system integration solutions and associated services, and
(2) Software Integrity, which includes security and quality
solutions for software development across many industries. Further
information regarding these segments is provided at the end of this
press release.
Financial Targets
Synopsys also provided its consolidated financial targets for
the third quarter and full fiscal year 2020. These financial
targets assume that the current U. S. government "Entity List"
restrictions remain in place for the rest of the fiscal year. These
targets constitute forward-looking statements and are based on
current expectations. For a discussion of factors that could cause
actual results to differ materially from these targets, see
"Forward-Looking Statements" below.
Third Quarter and
Fiscal Year 2020 Financial Targets
|
(in millions
except per share amounts)
|
|
|
|
|
|
|
|
Q3
FY2020
|
|
FY
2020
|
|
Low
|
High
|
|
Low
|
High
|
Revenue
|
$
875
|
$
905
|
|
$
3,600
|
$
3,650
|
GAAP
Expenses
|
$
721
|
$
737
|
|
$
2,991
|
$
3,031
|
Non-GAAP
Expenses
|
$
640
|
$
650
|
|
$
2,630
|
$
2,660
|
Other Income
(Expense)
|
$
(5)
|
$
(3)
|
|
$
(11)
|
$
(7)
|
Normalized Annual Tax
Rate (1)
|
16%
|
16%
|
|
16%
|
16%
|
Outstanding Shares
(fully diluted)
|
153
|
156
|
|
153
|
156
|
GAAP EPS
|
$
1.12
|
$
1.22
|
|
$
3.74
|
$
3.90
|
Non-GAAP
EPS
|
$
1.33
|
$
1.38
|
|
$
5.21
|
$
5.28
|
Operating Cash
Flow
|
|
|
|
$
815
|
$
840
|
|
(1) Applied in
non-GAAP net income calculations
|
Earnings Call Open to Investors
Synopsys will hold a conference call for financial analysts and
investors today at 2:00 p.m. Pacific Time. A live webcast of
the call will be available on Synopsys' corporate website at
www.synopsys.com. A recording of the call will be available by
calling +1-866-207-1041 (+1-402-970-0847 for international
callers), access code 7617542, beginning at 5:00 p.m. Pacific Time today, until 11:59 p.m. Pacific Time on May 27, 2020. A webcast replay will also be
available on the website from approximately 5:30 p.m. Pacific Time today through the time
Synopsys announces its results for the third quarter of fiscal year
2020 in August 2020. Synopsys will post copies of the
prepared remarks of Aart de Geus,
chairman and co-chief executive officer, and Trac Pham, chief financial officer, on its
website following today's call. In addition, Synopsys makes
additional information available in a financial supplement and
corporate overview presentation, also posted on the corporate
website.
Effectiveness of Information
The targets included in this press release, the statements made
during the earnings conference call and the information contained
in the financial supplement and corporate overview presentation
(available in the Investor Relations section of Synopsys' corporate
website at www.synopsys.com) represent Synopsys' expectations and
beliefs as of the date of this release only. Although this press
release, copies of the prepared remarks of the co-chief executive
officer and chief financial officer made during the call, the
financial supplement, and the corporate overview presentation will
remain available on Synopsys' website through the date of the third
quarter fiscal year 2020 earnings call in August 2020, their continued availability through
such date does not mean that Synopsys is reaffirming or confirming
their continued validity. Synopsys does not currently intend to
report on its progress during the third quarter of fiscal year 2020
or comment to analysts or investors on, or otherwise update, the
targets given in this release.
Availability of Final Financial Statements
Synopsys will include final financial statements for the second
quarter of fiscal year 2020 in its quarterly report on Form 10-Q to
be filed by June 11, 2020.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the Silicon to Softwareâ„¢
partner for innovative companies developing the electronic products
and software applications we rely on every day. As the world's 15th
largest software company, Synopsys has a long history of being a
global leader in electronic design automation (EDA) and
semiconductor IP and is also growing its leadership in software
security and quality solutions. Whether you're a system-on-chip
(SoC) designer creating advanced semiconductors, or a software
developer writing applications that require the highest security
and quality, Synopsys has the solutions needed to deliver
innovative, high-quality, secure products. Learn more at
www.synopsys.com.
GAAP to Non-GAAP Reconciliation
Synopsys continues to provide all information required in
accordance with GAAP but believes evaluating its ongoing operating
results may not be as useful if an investor is limited to reviewing
only GAAP financial measures. Accordingly, Synopsys presents
non-GAAP financial measures in reporting its financial results to
provide investors with an additional tool to evaluate Synopsys'
operating results in a manner that focuses on what Synopsys
believes to be its core business operations and what Synopsys uses
to evaluate its business operations and for internal planning and
forecasting purposes. Synopsys' management does not itself, nor
does it suggest that investors should, consider such non-GAAP
financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. Synopsys'
management believes it is useful for itself and investors to
review, as applicable, both GAAP information that includes: (i) the
amortization of acquired intangible assets, (ii) the impact of
stock compensation, (iii) acquisition-related costs, (iv)
restructuring charges, (v) the effects of certain settlements,
final judgments and loss contingencies related to legal
proceedings, and (vi) the income tax effect of non-GAAP pre-tax
adjustments; and the non-GAAP measures that exclude such
information in order to assess the performance of Synopsys'
business and for planning and forecasting in subsequent
periods.
Synopsys utilizes a normalized annual non-GAAP tax rate in the
calculation of its non-GAAP measures to provide better consistency
across interim reporting periods by eliminating the effects of
non-recurring and period-specific items such as tax audit
settlements, which can vary in size and frequency and not
necessarily reflect our normal operations, and to more clearly
align our tax rate with our expected geographic earnings mix.
In projecting this rate, we evaluate our historical and projected
mix of U.S. and international profit before tax, excluding the
non-GAAP adjustments described above. We also consider other
factors including our current tax structure, our existing tax
positions, and expected recurring tax incentives, such as the U.S.
federal research and development tax credit. On an annual basis, we
re-evaluate this rate for significant events that may materially
affect our projections. Based upon our review, our projected
normalized annual non-GAAP tax rate remains 16% through fiscal year
2021. We will re-evaluate this rate on an annual basis, but further
regulatory guidance regarding specific parts of recent U.S. Tax
reform legislation could materially change our projections.
Whenever Synopsys uses a non-GAAP financial measure, it provides
a reconciliation of the non-GAAP financial measure to the most
closely applicable GAAP financial measure. Investors are encouraged
to review the related GAAP financial measures and the
reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measure as detailed below, as
well as Item 2.02 of the Current Report on Form 8-K filed on
May 20, 2020 for additional
information about the measures Synopsys uses to evaluate its core
business operations.
Reconciliation of Second Quarter Fiscal Year 2020 Results
The following tables reconcile the specific items excluded from
GAAP in the calculation of non-GAAP net income and earnings per
share for the periods indicated below.
GAAP to Non-GAAP
Reconciliation of Second Quarter Fiscal Year 2020 Results
(1)
|
(unaudited and in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
April
30,
|
|
April
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net
income
|
$
109,920
|
|
$
118,210
|
|
$
213,981
|
|
$
271,724
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
24,095
|
|
25,197
|
|
46,628
|
|
53,424
|
Stock
compensation
|
56,435
|
|
36,914
|
|
108,318
|
|
75,374
|
Acquisition-related
costs
|
3,767
|
|
1,555
|
|
7,544
|
|
2,152
|
Restructuring
charges
|
29,672
|
|
14,443
|
|
38,423
|
|
14,408
|
Legal
matters
|
-
|
|
-
|
|
-
|
|
(18,000)
|
Tax
settlement
|
-
|
|
17,418
|
|
-
|
|
17,418
|
Tax
adjustments
|
(35,616)
|
|
(35,635)
|
|
(69,947)
|
|
(73,503)
|
Non-GAAP net
income
|
$
188,273
|
|
$
178,102
|
|
$
344,947
|
|
$
342,997
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
April
30,
|
|
April
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP diluted net
income per share
|
$
0.71
|
|
$
0.77
|
|
$
1.39
|
|
$
1.77
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
0.16
|
|
0.16
|
|
0.30
|
|
0.35
|
Stock
compensation
|
0.37
|
|
0.24
|
|
0.70
|
|
0.49
|
Acquisition-related
costs
|
0.02
|
|
0.01
|
|
0.05
|
|
0.01
|
Restructuring
charges
|
0.19
|
|
0.09
|
|
0.25
|
|
0.09
|
Legal
matters
|
-
|
|
-
|
|
-
|
|
(0.12)
|
Tax
settlement
|
-
|
|
0.11
|
|
-
|
|
0.11
|
Tax
adjustments
|
(0.23)
|
|
(0.22)
|
|
(0.46)
|
|
(0.46)
|
Non-GAAP diluted net
income per share
|
$
1.22
|
|
$
1.16
|
|
$
2.23
|
|
$
2.24
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income per share amounts:
|
154,379
|
|
153,904
|
|
154,471
|
|
153,383
|
|
(1) Synopsys' second
quarter of fiscal year 2020 and 2019 ended on May 2, 2020 and May
4, 2019, respectively. For presentation purposes, we refer to the
closest calendar month end.
|
Reconciliation of 2020 Targets
The following tables reconcile the specific items excluded from
GAAP in the calculation of non-GAAP targets for the periods
indicated below.
GAAP to Non-GAAP
Reconciliation of Third Quarter Fiscal Year 2020 Targets
(1)
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
Range for
Three Months
|
|
|
Ending July 31,
2020
|
|
|
Low
|
|
High
|
Target GAAP
expenses
|
|
$
721,000
|
|
$
737,000
|
Adjustments:
|
|
|
|
|
Estimated impact of
amortization of intangible assets
|
|
(23,000)
|
|
(26,000)
|
Estimated impact of
stock compensation
|
|
(58,000)
|
|
(61,000)
|
Target non-GAAP
expenses
|
|
$
640,000
|
|
$
650,000
|
|
|
|
|
|
|
|
|
|
|
Range for Three
Months
|
|
|
Ending July 31,
2020
|
|
|
Low
|
|
High
|
Target GAAP earnings
per share
|
|
$
1.12
|
|
$
1.22
|
Adjustments:
|
|
|
|
|
Estimated impact of
amortization of intangible assets
|
|
0.17
|
|
0.15
|
Estimated impact of
stock compensation
|
|
0.39
|
|
0.38
|
Estimated impact of
tax adjustments
|
|
(0.35)
|
|
(0.37)
|
Target non-GAAP
earnings per share
|
|
$
1.33
|
|
$
1.38
|
|
|
|
|
|
Shares used in
non-GAAP calculation (midpoint of target range)
|
|
154,500
|
|
154,500
|
GAAP to Non-GAAP
Reconciliation of Full Fiscal Year 2020
Targets(1)
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
Range for Fiscal
Year
|
|
|
October 31,
2020
|
|
|
Low
|
|
High
|
Target GAAP
expenses
|
|
$
2,990,968
|
|
$
3,030,968
|
Adjustments:
|
|
|
|
|
Estimated impact of
amortization of intangible assets
|
|
(89,000)
|
|
(94,000)
|
Estimated impact of
stock compensation
|
|
(226,000)
|
|
(231,000)
|
Acquisition-related
costs
|
|
(7,545)
|
|
(7,545)
|
Estimated impact of
restructuring charges
|
|
(38,423)
|
|
(38,423)
|
Target non-GAAP
expenses
|
|
$
2,630,000
|
|
$
2,660,000
|
|
|
|
|
|
|
|
|
|
|
Range for Fiscal
Year
|
|
|
October 31,
2020
|
|
|
Low
|
|
High
|
Target GAAP earnings
per share
|
|
$
3.74
|
|
$
3.90
|
Adjustments:
|
|
|
|
|
Estimated impact of
amortization of intangible assets
|
|
0.61
|
|
0.58
|
Estimated impact of stock
compensation
|
|
1.50
|
|
1.46
|
Acquisition-related
costs
|
|
0.05
|
|
0.05
|
Estimated impact of
restructuring charges
|
|
0.25
|
|
0.25
|
Impact of tax
adjustments
|
|
(0.94)
|
|
(0.96)
|
Target non-GAAP
earnings per share
|
|
$
5.21
|
|
$
5.28
|
|
|
|
|
|
Shares used in
non-GAAP calculation (midpoint of target range)
|
|
154,500
|
|
154,500
|
(1) Synopsys' third
fiscal quarter and fiscal year will end on August 1, 2020 and
October 31, 2020, respectively. For presentation purposes, we refer
to the closest calendar month end.
|
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
including, but not limited to, financial targets for the third
quarter and full fiscal year 2020, as well as statements related to
our long-term revenue, non-GAAP EPS and non-GAAP operating margin
objectives, the expected impact of U.S. and foreign government
action on our results, and the expected impact of the COVID-19
pandemic. These statements involve known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in our
forward-looking statements. Accordingly, we caution stockholders
and prospective investors not to place undue reliance on these
statements. Such risks, uncertainties and factors include, but are
not limited to: risks from the effect of the COVID-19 pandemic and
the associated economic downturn on our business, operations and
financial condition, including the ability to secure timely payment
from customers, the ability to accurately estimate customer demand,
reduced willingness of current and potential customers to purchase
our products and services due to their own business and market
uncertainties, the ability of our business partners and third-party
providers to fulfill their responsibilities and commitments, the
ability to secure adequate and timely supply of equipment and
materials from suppliers for our hardware products, and the ability
to develop and deliver our products; the anticipated timing and
customer adoption of our new product offerings; action by the U.S.
or foreign governments, such as measures in response to the
COVID-19 pandemic or the imposition of additional tariffs or export
restrictions, which could interfere with our business operations or
our ability to provide products and services in certain countries;
uncertainty in the growth of the semiconductor and electronics
industries; consolidation among our customers and our dependence on
a relatively small number of large customers; risks and compliance
obligations relating to the global nature of our operations;
macroeconomic conditions and uncertainty in the global economy;
fluctuation of our operating results; increased variability in our
revenue due to the adoption of ASC 606, including the resulting
increase in recognizing upfront revenue as a percentage of total
revenue; our highly competitive industries and our ability to meet
our customers' demand for innovative technology at lower costs;
cybersecurity threats or other security breaches; our ability to
protect our proprietary technology; our ability to realize the
potential financial or strategic benefits of acquisitions we
complete; our ability to carry out our new product and technology
initiatives; investment of more resources in research and
development than anticipated; product errors or defects; increased
risks resulting from an increase in sales of our hardware products,
including increased variability in upfront revenue; changes in
accounting principles or standards; changes in our effective tax
rate; liquidity requirements in our U.S. operations; claims that
our products infringe on third-party intellectual property rights;
litigation; the ability to obtain licenses to third-party software
and intellectual property on reasonable terms or at all; the
ability to timely recruit and retain senior management and key
employees; the inherent limitations on the effectiveness of our
controls and compliance programs; the impairment of our investment
portfolio by the deterioration of capital markets; the accuracy of
certain assumptions, judgments and estimates that affect amounts
reported in our financial statements; and the impact of
catastrophic events. More information on potential risks,
uncertainties and other factors that could affect Synopsys' results
is included in filings it makes with the Securities and Exchange
Commission from time to time, including in the sections entitled
"Risk Factors" in its Annual Report on Form 10-K for the fiscal
year ended October 31, 2019 and its
latest Quarterly Report on Form 10-Q. The information provided
herein is as of May 20, 2020.
Synopsys undertakes no duty, and does not intend, to update any
forward-looking statement, whether as a result of new information,
future events or otherwise, unless required by law.
SYNOPSYS,
INC.
|
Unaudited
Consolidated Statements of Operations(1)
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
April
30,
|
|
April
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
Time-based
products
|
$
590,097
|
|
$
558,305
|
|
$
1,146,536
|
|
$
1,112,021
|
Upfront
products
|
129,765
|
|
143,401
|
|
280,486
|
|
273,914
|
Maintenance
and service
|
141,465
|
|
134,536
|
|
268,686
|
|
270,708
|
Total
revenue
|
861,327
|
|
836,242
|
|
1,695,708
|
|
1,656,643
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Products
|
108,207
|
|
116,010
|
|
225,991
|
|
232,630
|
Maintenance
and service
|
62,213
|
|
59,788
|
|
124,128
|
|
118,617
|
Amortization
of intangible assets
|
13,845
|
|
14,881
|
|
27,014
|
|
32,324
|
Total cost of
revenue
|
184,265
|
|
190,679
|
|
377,133
|
|
383,571
|
Gross
margin
|
677,062
|
|
645,563
|
|
1,318,575
|
|
1,273,072
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
302,571
|
|
290,299
|
|
616,854
|
|
561,625
|
Sales and
marketing
|
146,200
|
|
158,652
|
|
299,055
|
|
314,611
|
General and
administrative
|
62,474
|
|
56,351
|
|
131,218
|
|
98,412
|
Amortization
of intangible assets
|
10,250
|
|
10,316
|
|
19,614
|
|
21,100
|
Restructuring
charges
|
29,672
|
|
14,443
|
|
38,423
|
|
14,408
|
Total operating
expenses
|
551,167
|
|
530,061
|
|
1,105,164
|
|
1,010,156
|
Operating
income
|
125,895
|
|
115,502
|
|
213,411
|
|
262,916
|
Other income
(expense), net
|
(15,729)
|
|
18,415
|
|
(3,672)
|
|
18,056
|
Income before income
taxes
|
110,166
|
|
133,917
|
|
209,739
|
|
280,972
|
Provision (benefit)
for income taxes
|
246
|
|
15,707
|
|
(4,242)
|
|
9,248
|
Net income
|
$
109,920
|
|
$
118,210
|
|
$
213,981
|
|
$
271,724
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.73
|
|
$
0.79
|
|
$
1.42
|
|
$
1.82
|
Diluted
|
$
0.71
|
|
$
0.77
|
|
$
1.39
|
|
$
1.77
|
|
|
|
|
|
|
|
|
Shares used in
computing per share amounts:
|
|
|
|
|
|
|
|
Basic
|
150,597
|
|
149,712
|
|
150,421
|
|
149,500
|
Diluted
|
154,379
|
|
153,904
|
|
154,471
|
|
153,383
|
|
(1) Synopsys' second
quarter of fiscal year 2020 and 2019 ended on May 2, 2020 and May
4, 2019, respectively. For presentation purposes, we refer to the
closest calendar month end.
|
SYNOPSYS,
INC.
|
Unaudited
Consolidated Balance Sheets (1)
|
(in thousands,
except par value amounts)
|
|
|
|
|
|
April 30,
2020
|
|
October 31,
2019
|
ASSETS:
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
856,424
|
|
$
728,597
|
Accounts
receivable, net
|
634,807
|
|
553,895
|
Inventories
|
166,437
|
|
141,518
|
Income taxes
receivable and prepaid taxes
|
18,809
|
|
24,855
|
Prepaid and
other current assets
|
284,278
|
|
290,052
|
Total current assets
|
1,960,755
|
|
1,738,917
|
Property and
equipment, net
|
470,412
|
|
429,532
|
Operating lease
right-of-use assets, net
|
462,778
|
|
-
|
Goodwill
|
3,311,243
|
|
3,171,179
|
Intangible assets,
net
|
279,311
|
|
279,374
|
Long-term prepaid
taxes
|
15,068
|
|
15,503
|
Deferred income
taxes
|
430,105
|
|
390,129
|
Other long-term
assets
|
392,794
|
|
380,526
|
Total assets
|
$
7,322,466
|
|
$
6,405,160
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY:
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable and accrued liabilities
|
$
447,055
|
|
$
506,459
|
Operating
lease liabilities, current
|
72,465
|
|
-
|
Accrued income
taxes
|
16,754
|
|
15,904
|
Deferred
revenue
|
1,396,511
|
|
1,212,476
|
Short-term
debt
|
121,412
|
|
17,614
|
Total current liabilities
|
2,054,197
|
|
1,752,453
|
Operating lease
liabilities, non-current
|
462,094
|
|
-
|
Long-term accrued
income taxes
|
24,589
|
|
29,911
|
Long-term deferred
revenue
|
125,153
|
|
90,102
|
Long-term
debt
|
114,370
|
|
120,093
|
Other long-term
liabilities
|
261,114
|
|
323,725
|
Total liabilities
|
3,041,517
|
|
2,316,284
|
Stockholders'
equity:
|
|
|
|
Preferred
stock, $0.01 par value: 2,000 shares authorized; none
outstanding
|
-
|
|
-
|
Common stock,
$0.01 par value: 400,000 shares authorized; 150,908 and 150,331
shares outstanding, respectively
|
1,509
|
|
1,503
|
Capital in
excess of par value
|
1,655,787
|
|
1,635,455
|
Retained
earnings
|
3,356,489
|
|
3,164,144
|
Treasury
stock, at cost: 6,353 and 6,930 shares, respectively
|
(634,669)
|
|
(625,642)
|
Accumulated
other comprehensive income (loss)
|
(104,030)
|
|
(92,447)
|
Total Synopsys stockholders' equity
|
4,275,086
|
|
4,083,013
|
Non-controlling
interest
|
5,863
|
|
5,863
|
Total stockholders' equity
|
4,280,949
|
|
4,088,876
|
Total liabilities and stockholders' equity
|
$
7,322,466
|
|
$
6,405,160
|
|
(1) Synopsys' second
quarter of fiscal year 2020 ended on May 2, 2020, and its fiscal
year 2019 ended on November 2, 2019. For presentation purposes, we
refer to the closest calendar month end.
|
SYNOPSYS,
INC.
|
Unaudited
Consolidated Statements of Cash Flows (1)
|
(in
thousands)
|
|
|
|
|
|
Six Months
Ended
|
|
April
30,
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
213,981
|
|
$
271,724
|
Adjustments to
reconcile net income to net cash provided by
|
|
|
|
operating
activities:
|
|
|
|
Amortization and
depreciation
|
105,078
|
|
102,841
|
Reduction of
operating lease right-of-use assets
|
39,513
|
|
-
|
Amortization of
capitalized costs to obtain revenue contracts
|
28,279
|
|
28,425
|
Stock
compensation
|
108,318
|
|
75,374
|
Allowance for
doubtful accounts
|
9,982
|
|
3,950
|
(Gain) loss on sale
of property and investments
|
-
|
|
(3,744)
|
Deferred income
taxes
|
(37,681)
|
|
(23,486)
|
Net changes in
operating assets and liabilities, net of
|
|
|
|
acquired assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(84,533)
|
|
23,478
|
Inventories
|
(24,096)
|
|
(50,358)
|
Prepaid and other
current assets
|
(5,889)
|
|
(18,547)
|
Other long-term
assets
|
(39,422)
|
|
(91,271)
|
Accounts payable and
accrued liabilities
|
(78,989)
|
|
(160,492)
|
Operating lease
liabilities
|
(32,432)
|
|
-
|
Income
taxes
|
1,270
|
|
(32,059)
|
Deferred
revenue
|
186,360
|
|
82,966
|
Net cash provided by
operating activities
|
389,739
|
|
208,801
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Proceeds from sales
of long-term investments
|
-
|
|
4,176
|
Purchases of
long-term investments
|
(2,762)
|
|
-
|
Purchases of property
and equipment
|
(80,663)
|
|
(68,962)
|
Cash paid for
acquisitions and intangible assets, net of cash acquired
|
(151,178)
|
|
-
|
Capitalization of
software development costs
|
(2,130)
|
|
(1,491)
|
Net cash used in
investing activities
|
(236,733)
|
|
(66,277)
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from credit
facilities
|
276,490
|
|
188,760
|
Repayment of
debt
|
(178,437)
|
|
(366,562)
|
Issuances of common
stock
|
98,361
|
|
83,352
|
Payments for taxes
related to net share settlement of equity awards
|
(17,105)
|
|
(13,173)
|
Purchase of equity
forward contract
|
(20,000)
|
|
(20,000)
|
Purchases of treasury
stock
|
(180,000)
|
|
(109,185)
|
Other
|
-
|
|
(762)
|
Net cash used in
financing activities
|
(20,691)
|
|
(237,570)
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(4,424)
|
|
3,093
|
Net change in cash,
cash equivalents and restricted cash
|
127,891
|
|
(91,953)
|
Cash, cash
equivalents and restricted cash, beginning of year
|
730,527
|
|
725,001
|
Cash, cash
equivalents and restricted cash, end of period
|
$
858,418
|
|
$
633,048
|
(1) Synopsys' second
quarter of fiscal year 2020 and 2019 ended on May 2, 2020 and May
4, 2019, respectively. For presentation purposes, we refer to the
closest calendar month end.
|
SYNOPSYS,
INC.
|
Business Segment
Reporting (1)
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
Q2'20
|
|
Q2'19
|
|
YTD
Q2'20
|
|
YTD
Q2'19
|
Revenue by
segment
|
|
|
|
|
|
|
|
- Semiconductor &
System Design
|
$
773.0
|
|
$
753.0
|
|
$
1,521.8
|
|
$
1,490.9
|
% of
Total
|
89.7%
|
|
90.1%
|
|
89.7%
|
|
90.0%
|
- Software
Integrity
|
$
88.3
|
|
$
83.2
|
|
$
173.9
|
|
$
165.7
|
% of
Total
|
10.3%
|
|
9.9%
|
|
10.3%
|
|
10.0%
|
Total segment
revenue
|
$
861.3
|
|
$
836.2
|
|
$
1,695.7
|
|
$
1,656.6
|
|
|
|
|
|
|
|
|
Adjusted operating
income by segment
|
|
|
|
|
|
|
|
- Semiconductor &
System Design
|
$
209.7
|
|
$
201.4
|
|
$
388.5
|
|
$
396.7
|
- Software
Integrity
|
$
11.7
|
|
$
8.4
|
|
$
19.8
|
|
$
14.1
|
Total adjusted
segment operating income
|
$
221.4
|
|
$
209.8
|
|
$
408.3
|
|
$
410.8
|
|
|
|
|
|
|
|
|
Adjusted operating
margin by segment
|
|
|
|
|
|
|
|
- Semiconductor &
System Design
|
27.1%
|
|
26.8%
|
|
25.5%
|
|
26.6%
|
- Software
Integrity
|
13.3%
|
|
10.1%
|
|
11.4%
|
|
8.5%
|
Total adjusted
segment operating margin
|
25.7%
|
|
25.1%
|
|
24.1%
|
|
24.8%
|
Total Adjusted
Segment Operating Income Reconciliation
(1)(2)
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
April 30, 2020
(3)
|
|
April 30, 2019
(3)
|
|
April 30, 2020
(3)
|
|
April 30, 2019
(3)
|
GAAP total operating
income – as reported
|
$
125.9
|
|
$
115.5
|
|
$
213.4
|
|
$
262.9
|
Other expenses
managed at consolidated level
|
|
|
|
|
|
|
|
-Amortization of
intangible assets
|
24.1
|
|
25.2
|
|
46.6
|
|
53.4
|
-Stock
compensation
|
56.4
|
|
36.9
|
|
108.3
|
|
75.4
|
-Fair value changes
in executive deferred compensation plan
|
(18.5)
|
|
16.2
|
|
(6.0)
|
|
20.5
|
-Acquisition-related
costs
|
3.8
|
|
1.6
|
|
7.5
|
|
2.2
|
-Restructuring
|
29.7
|
|
14.4
|
|
38.4
|
|
14.4
|
-Legal
matters
|
-
|
|
-
|
|
-
|
|
(18.0)
|
Total adjusted
segment operating income
|
$
221.4
|
|
$
209.8
|
|
$
408.3
|
|
$
410.8
|
|
(1) Synopsys
manages the business on a long-term, annual basis, and considers
quarterly fluctuations of revenue and profitability as normal
elements of our business. Quarterly variability, which increases as
a result of ASC 606, should be expected.
|
|
(2) These
segment results are consistent with the information required by ASC
280, Segment Reporting. They are presented to reflect the
information that is considered by Synopsys' chief operating
decision makers (CODMs) to evaluate the operating performance of
its segments. The CODMs do not allocate certain operating expenses
managed at a consolidated level to our reportable segments, and as
a result, the reported operating income and operating margin do not
include these unallocated expenses as shown in the table above.
Amounts may not foot due to rounding.
|
|
(3) Synopsys' second
quarter of fiscal year 2020 and 2019 ended on May 2, 2020 and May
4, 2019, respectively. For presentation purposes, we refer to the
closest calendar month end.
|
INVESTOR CONTACT:
Lisa L.
Ewbank
Synopsys, Inc.
650-584-1901
Synopsys-ir@synopsys.com
EDITORIAL CONTACT:
Simone
Souza
Synopsys, Inc.
650-584-6454
simone@synopsys.com
View original
content:http://www.prnewswire.com/news-releases/synopsys-posts-financial-results-for-second-quarter-fiscal-year-2020-301062899.html
SOURCE Synopsys, Inc.