Synopsys Posts Financial Results for Second Quarter Fiscal Year 2020


(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



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