Q2 2013 Financial Highlights

MOUNTAIN VIEW, Calif., May 22, 2013 — (PRNewswire) — Synopsys, Inc. (Nasdaq: SNPS), a global leader providing software, IP and services used to accelerate innovation in chips and electronic systems, today reported results for its second quarter of fiscal year 2013.

For the second quarter of fiscal year 2013, Synopsys reported revenue of $499.3 million, compared to $432.6 million for the second quarter of fiscal 2012, an increase of 15 percent.  

"Synopsys again delivered strong results in Q2, and as a result we are raising our operating cash flow and non-GAAP earnings per share targets for the year," said Aart de Geus, chairman and co-CEO of Synopsys. "The latest silicon technologies offer high value but also great technical challenges. Because of this, more and more customer executives are sharing with us where they are heading and how Synopsys can help them succeed, leading to robust demand and market momentum."

GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal 2013 was $68.7 million, or $0.44 per share, compared to $21.0 million, or $0.14 per share, for the second quarter of fiscal 2012. Net income for the second quarter of fiscal 2012 included $30.2 million of costs associated with the acquisition of Magma Design Automation.

Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal 2013 was $103.7 million, or $0.66 per share, compared to non-GAAP net income of $78.5 million, or $0.53 per share, for the second quarter of fiscal 2012. 

Financial Targets
Synopsys also provided its financial targets for the third quarter and full fiscal year 2013.  These targets do not include any future acquisition-related expenses that may be incurred in fiscal 2013.  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. 

Third Quarter of Fiscal Year 2013 Targets:

• Revenue: $475 million - $485 million
• GAAP expenses: $411 million - $428 million
• Non-GAAP expenses: $365 million - $375 million
• Other income and expense: ($1) million - $1 million
• Tax rate applied in non-GAAP net income calculations: 24-25 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $0.28 - $0.34
• Non-GAAP earnings per share: $0.53 - $0.55
• Revenue from backlog: approximately 90 percent

Full Fiscal Year 2013 Targets:

• Revenue: $1.955 billion - $1.975 billion
• Other income and expense: $5 - $9 million
• Tax rate applied in non-GAAP net income calculations: approximately 23 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $1.48 - $1.56
• Non-GAAP earnings per share: $2.37 - $2.42
• Cash flow from operations: $375 million - $400 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, including inventory fair value adjustments, (iv) other significant items, including facilities restructuring, 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 Second Quarter Fiscal Year 2013 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.

 

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