SYNOPSYS INC. FINANCIAL SUPPLEMENT Q2 FY2021
May 19, 2021
CONTENTS
- Financial Targets
- Revenue by Product Group
III. Revenue by Geographic Region
IV. | Selected Financial and Operating Metrics |
- Reconciliations and Adjustments VI. Notice to Investors
- FISCAL YEAR 2021 SELECTED FINANCIAL TARGETS (1) (2)
USEFUL LINKS
Press Release
Webcast
Form 10-K FY2020
Form 10-Q Q1 FY2021
CONTACT
Synopsys, Inc.
Investor Relations
Phone: (650) 584-4257
Email:invest-info@synopsys.com
Q3 FY2021 | FY2021 | |
Revenue (million) | $1,030 - $1,060 | $4,035 - $4,085 |
GAAP Expenses (million) | $807 - $825 | $3,241 - $3,286 |
Non-GAAP Expenses (million) | $707 - $717 | $2,835 - $2,865 |
Other Income and Expense Net (million) | ($3) - ($1) | ($9) - ($5) |
Annual Non-GAAP Tax Rate | 16% | 16% |
Fully Diluted Outstanding Shares (million) | 156 - 159 | 156 - 159 |
GAAP Operating Margin | ~20% | |
Non-GAAP Operating Margin | 29.5% - 30% | |
GAAP Earnings Per Share | $1.30 - $1.41 | $4.55 - $4.72 |
Non-GAAP Earnings Per Share | $1.75 - $1.80 | $6.38 - $6.45 |
Cash Flow from Operations (million) | $1,250 - $1,300 | |
Capital Expenditures (million) | ~$100 | |
Average Renewable License Duration | 2.5 - 3 years | |
- These targets were provided by Synopsys as of May 19, 2021.
- These targets assume there are no further changes to the current U.S. government "Entity List" restrictions for fiscal 2021.
RECENT ACQUISITIONS
MorethanIP | Moortec |
• Closed May 2021. | • Closed November 2020. |
• Terms not disclosed; not material. | • Terms not disclosed; not material. |
• Expands Synopsys' DesignWare® Ethernet | • Enhances Synopsys' industry-first Silicon |
Controller IP portfolio with the addition of MAC and | Lifecycle Management (SLM) platform. |
PCS for 200G/400G and 800G Ethernet, providing | • Moortec's sensors feed data into data analytics |
customers with a complete low-latency, high- | engines, providing visibility into a chip's |
performance Ethernet IP solution for networking, AI, | performance and allowing for optimization at each |
and cloud computing SoCs. | stage of the semiconductor lifecycle, from design |
• Complements Synopsys' existing 112G Ethernet | to in-field operation. |
PHY IP solution. | |
The information provided herein should be reviewed in conjunction with Synopsys earnings results | |
as disclosed on May 19, 2021. | P a g e | 1 |
II. REVENUE BY PRODUCT GROUP (Unaudited)
($ millions) | FY19 | Q120 | Q220 | Q320 | Q420 | FY20 | Q121 | Q221 |
EDA | 1,964.3 | 492.6 | 511.4 | 531.8 | 580.5 | 2,116.3 | 536.2 | 587.6 |
% of Revenue | 58% | 59% | 59% | 55% | 57% | 57% | 55% | 57% |
IP & System Integration | 1,056.6 | 255.1 | 260.0 | 335.7 | 351.9 | 1,202.6 | 339.6 | 339.3 |
% of Revenue | 31% | 31% | 30% | 35% | 34% | 33% | 35% | 33% |
Software Integrity | 334.6 | 85.6 | 88.3 | 93.4 | 90.8 | 358.1 | 92.0 | 93.9 |
% of Revenue | 10% | 10% | 10% | 10% | 9% | 10% | 9% | 9% |
Other | 5.2 | 1.1 | 1.7 | 3.2 | 2.3 | 8.3 | 2.6 | 3.5 |
% of Revenue | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
Total | 3,360.7 | 834.4 | 861.3 | 964.1 | 1,025.4 | 3,685.3 | 970.3 | 1,024.3 |
Revenue from our products and services is categorized into four groups:
- EDA, which includes digital and custom integrated circuit (IC) design software, verification products, manufacturing-related products, and field-programmable gate array (FPGA) design software;
- IP & System Integration, which includes our DesignWare® IP portfolio, system-level design products, prototyping products, and general professional services;
- Software Integrity, which includes solutions that test software code for security vulnerabilities and quality defects, as well as professional and managed services; and
- Other, which includes university programs and the impact of gains and losses from foreign currency hedges.
Note: Amounts included in the table above may not foot due to rounding. Product revenue data for multi-product transactions reflect internal allocations based upon certain assumptions and management's methodology. In addition, we allocate maintenance revenue to the products to which those maintenance services relate.
III. REVENUE BY GEOGRAPHIC REGION (Unaudited)
($ millions) | FY19 | Q120 | Q220 | Q320 | Q420 | FY20 | Q121 | Q221 |
North America | 1,712.5 | 415.4 | 405.8 | 443.7 | 536.9 | 1,801.9 | 474.2 | 479.2 |
% of Revenue | 51% | 50% | 47% | 46% | 52% | 49% | 49% | 47% |
Europe | 349.0 | 94.4 | 89.3 | 94.3 | 107.3 | 385.3 | 105.2 | 106.2 |
% of Revenue | 10% | 11% | 10% | 10% | 10% | 10% | 11% | 10% |
Korea | 353.4 | 89.5 | 105.3 | 96.3 | 97.8 | 389.0 | 98.3 | 105.4 |
% of Revenue | 11% | 11% | 12% | 10% | 10% | 11% | 10% | 10% |
China* | 321.8 | 67.3 | 81.1 | 420.8 | 115.8 | 125.5 | ||
% of Revenue | 10% | 8% | 9% | 11% | 12% | 12% | ||
Other* | 624.1 | 167.8 | 179.8 | 688.3 | 176.9 | 208.1 | ||
% of Revenue | 19% | 20% | 21% | 19% | 18% | 20% | ||
Total | 3,360.7 | 834.4 | 861.3 | 964.1 | 1,025.4 | 3,685.3 | 970.3 | 1,024.3 |
- Beginning in the first quarter of fiscal 2021, we updated our disclosure of revenue by geographic regions. Revenue in these geographic regions is reported for the first and second quarters of fiscal 2020 for comparative purposes.
Note: Amounts included in the table above may not foot due to rounding. Geographic revenue data for multi-regional,multi-product transactions reflect internal allocations and are based upon certain assumptions and management's methodology.
The information provided herein should be reviewed in conjunction with our earnings results | |
as disclosed on May 19, 2021. | P a g e | 2 |
IV. SELECTED FINANCIAL AND OPERATING METRICS
FY19 | Q120 | Q220 | Q320 | Q420 | FY20 | Q121 | Q221 | ||||||||||
Revenue License Type (millions) | (1) | ||||||||||||||||
- Time-based Products | $2,198.0 | $556.4 | $590.1 | $612.1 | $606.6 | $2,365.2 | $631.3 | $648.8 | |||||||||
- Upfront Products | $619.8 | $150.7 | $129.8 | $210.9 | $244.2 | $735.6 | $174.4 | $209.1 | |||||||||
- Maintenance and Service | (2) | $542.9 | $127.2 | $141.5 | $141.1 | $174.7 | $584.5 | $164.7 | $166.4 | ||||||||
Recurring Revenue (% of Total Revenue) | (3) | 89% | 87% | 90% | 87% | 79% | 86% | 87% | 86% | ||||||||
Avg Renewable License Duration (yrs) | (4) | ~2.7 | ~2.5 | ~3.2 | ~2.4 | ~2.6 | ~2.7 | ~2.3 | ~2.6 | ||||||||
Non-GAAP Operating Margin | (5) | 25.0% | 22.4% | 25.7% | 33.6% | 29.2% | 28.0% | 29.6% | 31.0% | ||||||||
Cash, Cash Equivalents & Short-term | $700 | $856 | $1,050 | $1,236 | $1,023 | $1,458 | |||||||||||
Investments (millions) | |||||||||||||||||
- % held in U.S. | 31% | 36% | 37% | 48% | 40% | 54% | |||||||||||
Outstanding Debt | $331 | $236 | $131 | $128 | $123 | $116 | |||||||||||
Operating Cash Flow | (1),(6) | $801 | $10 | $380 | $399 | $202 | $991 | $174 | $526 | ||||||||
Capital Expenditures | (1) | $198 | $55 | $26 | $40 | $34 | $155 | $28 | $16 | ||||||||
Share Repurchases (millions) | (1) | ||||||||||||||||
- Number of Shares | 2.7 | 0.6 | 0.8 | - | 0.2 | 1.6 | 0.8 | 0.8 | |||||||||
- Gross Share Repurchases | ($329) | ($100) | ($100) | - | ($42) | ($242) | ($253) | ($145) | |||||||||
- Remaining Repurchase Authorization | $400 | $300 | $200 | $500 | $458 | $458 | $205 | $60 | |||||||||
DSO | 87 | 67 | 59 | 69 | 74 | 54 | |||||||||||
Employee Headcount | ~14,280 | ~14,500 | ~14,800 | ~15,040 | ~15,355 | ~15,500 | |||||||||||
Revenue by Segment (millions) | (7)(8) | ||||||||||||||||
- Semiconductor & System Design | $3,026.1 | $748.8 | $773.0 | $870.7 | $934.6 | $3,327.2 | $878.3 | $930.4 | |||||||||
% of Total | 90% | 90% | 90% | 90% | 91% | 90% | 91% | 91% | |||||||||
- Software Integrity | $334.6 | $85.6 | $88.3 | $93.4 | $90.8 | $358.1 | $92.0 | $93.9 | |||||||||
% of Total | 10% | 10% | 10% | 10% | 9% | 10% | 9% | 9% | |||||||||
Adjusted Op Income by Segment (millions) | (7)(8) | ||||||||||||||||
- Semiconductor & System Design | $806.6 | $178.9 | $209.7 | $308.7 | $293.5 | $990.8 | $278.9 | $308.8 | |||||||||
- Software Integrity | $32.2 | $8.1 | $11.7 | $14.8 | $6.2 | $40.8 | $7.9 | $8.4 | |||||||||
Adjusted Operating Margin by Segment | (7)(8) | ||||||||||||||||
- Semiconductor & System Design | 26.7% | 23.9% | 27.1% | 35.4% | 31.4% | 29.8% | 31.8% | 33.2% | |||||||||
- Software Integrity | 9.6% | 9.4% | 13.3% | 15.8% | 6.8% | 11.4% | 8.6% | 9.0% | |||||||||
- Amounts may not foot due to rounding.
- Includes maintenance on term and perpetual licenses.
- We define recurring revenue as revenue generated from time-based products, multi-period IP contracts, and maintenance and services, for which revenue is recognized over time.
- Weighted average duration of the license arrangements closed in the period reported.
- Should be read in conjunction with our Form 8-K filed with the SEC on May 19, 2021 and the reconciliations of the non-GAAP financial measures to their comparable GAAP measures found in this Financial Supplement.
- Typically tracks earnings before interest, taxes, depreciation and amortization (EBITDA) over time (less cash taxes). It is important to look at multi-year averages, as operating cash flow is inherently lumpy.
- We manage the business on a long-term, annual basis, and consider quarterly fluctuations of revenue and profitability as a normal element of our business.
- These segment results are consistent with the information required by ASC 280. 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. Such unallocated expenses consist of stock-based compensation expense, amortization of intangible assets, restructuring, litigation and acquisition-related costs. Management excludes these same expenses to arrive at non-GAAP measures used to evaluate and make decisions about Synopsys as a whole.
The information provided herein should be reviewed in conjunction with our earnings results | |
as disclosed on May 19, 2021. | P a g e | 3 |
V. RECONCILIATIONS AND ADJUSTMENTS
SUPPLEMENTAL GAAP TO NON-GAAP INFORMATION (1)
(Unaudited and in thousands, except per share amounts)
Three Months Ended April 30, 2021 | ||||||
GAAP | Adjustments (2) | Non-GAAP | ||||
Cost of revenue: | ||||||
Products | $ | 134,738 | $ | (10,923) | $ | 123,815 |
M aintenance and service | 67,840 | (3,865) | 63,975 | |||
Amortization of intangible assets | 11,408 | (11,408) | - | |||
Operating expenses: | ||||||
Research and development | $ | 362,345 | $ | (53,484) | $ | 308,861 |
Sales and marketing | 172,754 | (19,113) | 153,641 | |||
General and administrative | 72,694 | (15,903) | 56,791 | |||
Amortization of intangible assets | 8,313 | (8,313) | - | |||
Operating income | $ | 194,231 | $ | 123,009 | $ | 317,240 |
Other income (expense), net | $ | 21,764 | $ | (21,358) | $ | 406 |
Provision (benefit) for income taxes | $ | 21,193 | $ | 29,630 | $ | 50,823 |
Net income (loss) attributed to non-controlling interest | $ | (276) | $ | - | $ | (276) |
Net income attributed to Synopsys | $ | 195,078 | $ | 72,021 | $ | 267,099 |
Net income per share (Diluted) | $ | 1.24 | $ | 0.46 | $ | 1.70 |
Shares used in computing per share amounts: | ||||||
Diluted | 157,077 | 157,077 |
- Synopsys' second quarter of fiscal year 2021 ended on M ay 1, 2021. For presentation purposes, we refer to the closest calendar month end.
- The adjustments to the various line items resulted from excluding the following from non-GAAP measures: stock compensation of $79.6 million, amortization of intangible assets of $19.7 million, acquisition-related costs of $2.3 million, changes in the fair value of the non-qualified deferred compensation plan of $21.4 million, and tax effect of non-GAAP adjustments of ($29.6) million.
GAAP TO NON-GAAP OPERATING MARGIN RECONCILIATION (1)
(Unaudited)
Three Months Ended | |
April 30, 2021 | |
GAAP operating margin | 19.0% |
Amortization of intangible assets | 1.9% |
Stock compensation | 7.8% |
Acquisition-related costs | 0.2% |
Change in value of non-qualified deferred compensation | 2.1% |
Non-GAAP operating margin | 31.0% |
- Synopsys' second quarter of fiscal year 2021 ended on May 1, 2021. For presentation purposes, we refer to the closest calendar month end.
The information provided herein should be reviewed in conjunction with our earnings results | |
as disclosed on May 19, 2021. | P a g e | 4 |
NOTICE TO INVESTORS
TOTAL ADJUSTED SEGMENT OPERATING INCOME RECONCILIATION (1) (2)
(in millions)
Three Months Ended | ||
April 30, 2021 (3) | ||
GAAP total operating income - as reported | $ | 194.2 |
Other expenses managed at consolidated level | ||
-Amortization of intangible assets | 19.7 | |
-Stock compensation | 79.6 | |
-Fair value changes in executive deferred compensation plan | 21.4 | |
-Acquisition-related costs | 2.3 | |
Total adjusted segment operating income | $ | 317.2 |
- Synopsys manages the business on a long-term, annual basis, and considers quarterly fluctuations of revenue and profitability as normal elements of our business. Amounts may not foot due to rounding.
- T hese segment results are consistent with the information required by ASC 280, Segment Reporting . T hey are presented to reflect the information that is considered by
Synopsys' chief operating decision makers (CODMs) to evaluate the operating performance of its segments. T he 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. - Synopsys' second quarter of fiscal year 2021 ended on May 1, 2021. For presentation purposes, we refer to the closest calendar month end.
The information provided herein should be reviewed in conjunction with Synopsys earnings results | |
as disclosed on May 19, 2021. | P a g e | 5 |
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Synopsys Inc. published this content on 19 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 May 2021 20:23:06 UTC.
