Q1 2012 Financial Highlights

(PRNewswire) — Synopsys, Inc. (Nasdaq: SNPS), a world leader in software and IP used in the design, verification and manufacture of electronic components and systems, today reported results for its first quarter of fiscal year 2012.

For the first quarter of fiscal year 2012, Synopsys reported revenue of $425.5 million, compared to $364.6 million for the first quarter of fiscal 2011, an increase of 16.7 percent.  

"Business in fiscal Q1 was strong and broad based. Combined with a solid outlook for the rest of the year, our results allow us to raise our outlook for fiscal 2012, independent of any impact from the Magma Design Automation acquisition," said Aart de Geus, chairman and CEO of Synopsys. "Customers are aggressively moving to develop advanced new products, and demand for our technology and support is high. We expect the acquisition of Magma, which closed today, will enable us to accelerate delivery of state-of-the art technology to our customers."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal 2012 was $56.69 million, or $0.39 per share, compared to $48.2 million, or $0.31 per share, for the first quarter of fiscal 2011. Due to our fiscal calendar, the first quarter of fiscal year 2012 included an extra week.

Non-GAAP Results

On a non-GAAP basis, net income for the first quarter of fiscal 2012 was $82.3 million, or $0.56 per share, compared to non-GAAP net income of $68.3 million, or $0.44 per share, for the first quarter of fiscal 2011.  Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.  Due to our fiscal calendar, the first quarter of fiscal year 2012 included an extra week.

Financial Targets

Synopsys also provided its financial targets for the second quarter and full fiscal year 2012.  These targets do not include any impact of the acquisition of Magma Design Automation or future acquisition-related expenses that may be incurred in fiscal 2012.  These targets constitute forward-looking information 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.  

Second Quarter of Fiscal Year 2012 Targets:

• Revenue: $412 million - $420 million
• GAAP expenses: $332 million - $348 million
• Non-GAAP expenses: $303 million - $313 million
• Other income and expense: $0 - $2 million
• Tax rate applied in non-GAAP net income calculations: approximately 25 percent
• Fully diluted outstanding shares: 146 million - 150 million
• GAAP earnings per share: $0.37 - $0.43
• Non-GAAP earnings per share: $0.54 - $0.56
• Revenue from backlog: greater than 90 percent

Full Fiscal Year 2012 Targets:

• Revenue: $1.655 billion - $1.675 billion
• Other income and expense: $0 - $4 million
• Tax rate applied in non-GAAP net income calculations: approximately 25 percent
• Fully diluted outstanding shares: 146 million - 150 million
• GAAP earnings per share: $1.33 - $1.48
• Non-GAAP earnings per share: $1.97 - $2.03
• Cash flow from operations: approximately $300 million

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 ongoing business operations and what Synopsys uses to evaluate its ongoing 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) other significant items, including the effect of tax benefits from settlements with the Internal Revenue Service, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent 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.  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.

Reconciliation of First Quarter Fiscal Year 2012 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.