Q3 2013 Financial Highlights

MOUNTAIN VIEW, Calif., Aug. 21, 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 third quarter of fiscal year 2013.

For the third quarter of fiscal year 2013, Synopsys reported revenue of $482.9 million, compared to $443.7 million for the third quarter of fiscal year 2012, an increase of 8.8 percent.  

"Synopsys continues to demonstrate broad strength and innovation in technology and customer relationships, as well as excellent execution and financial results," said Aart de Geus, chairman and co-CEO of Synopsys.  "While our customers are dealing with yet another quarter of a relatively weak global economy, many have a sharp focus on new technology and continue to aggressively drive design activity.  The result is high demand for advanced tools and IP, areas in which we continue to lead and have a track record of excellence."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2013 was $52.3 million, or $0.33 per share, compared to $75.7 million, or $0.50 per share, for the third quarter of fiscal year 2012.

Non-GAAP Results

On a non-GAAP basis, net income for the third quarter of fiscal year 2013 was $86.5 million, or $0.55 per share, compared to non-GAAP net income of $82.3 million, or $0.55 per share, for the third quarter of fiscal year 2012. 

Financial Targets

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

Fourth Quarter of Fiscal Year 2013 Targets:

• Revenue: $500 million - $510 million
• GAAP expenses: $432 million - $449 million
• Non-GAAP expenses: $386 million - $396 million
• Other income and expense: ($1) million - $1 million
• Tax rate applied in non-GAAP net income calculations: 23 percent - 24 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $0.29 - $0.35
• Non-GAAP earnings per share: $0.54 - $0.56

Full Fiscal Year 2013 Targets:

• Revenue: $1.957 billion - $1.967 billion
• Other income and expense: $8 million - $10 million
• Tax rate applied in non-GAAP net income calculations: approximately 22 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $1.51- $1.57
• Non-GAAP earnings per share: $2.42 - $2.44
• Cash flow from operations: approximately $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 the effect of benefits from tax settlements with tax authorities, 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 Third 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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