"Synopsys generated excellent financial results and operational execution in the second quarter. We exceeded all our guidance targets, while reaching another quarterly revenue record," said Aart de Geus, Chair and CEO of Synopsys. "Our financial performance is the product of a relentless drive for technology innovation and years of building trust in our customer base. Our industry-leading AI-driven design platform, Synopsys.ai, unleashes our next wave of impact as our customers drive a groundswell of 'smart, secure, and safe' new products."
"Exceptional execution across the company drove strong quarterly financial performance," said Shelagh Glaser, CFO of Synopsys. "We have a resilient business model uncommon in software companies and remain confident in our business. We are raising our full year guidance and expect revenue growth of 14-15%, non-GAAP operating margin accretion of 150 basis points to 34.5%, and non-GAAP earnings per share growth of 21-22%."
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal year 2023 was $272.9 million, or $1.76 per diluted share, compared to $294.8 million, or $1.89 per diluted share, for the second quarter of fiscal year 2022.
Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal year 2023 was $393.3 million, or $2.54 per diluted share, compared to non-GAAP net income of $390.8 million, or $2.50 per diluted share, for the second quarter of fiscal year 2022.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Business Segments
Synopsys reports revenue and operating income in three segments: (1) Design Automation, which includes digital and custom integrated circuit (IC) design software, verification hardware and software products, manufacturing-related design products, field-programmable gate array (FPGA) design software, optical products, professional services, and other; (2) Design IP, which includes our Synopsys IP portfolio; and (3) Software Integrity, which includes solutions that test software code for security vulnerabilities and quality defects, as well as professional and managed services. Further information regarding these segments is provided at the end of this press release.
Financial Targets
Synopsys also provided its consolidated financial targets for the third quarter and full fiscal year 2023. These financial targets assume no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements 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 and Fiscal Year 2023 Financial Targets (1) | |||||
(in millions except per share amounts) | |||||
|
|
|
|
|
|
|
|
| Range for Three Months Ending |
| Range for Fiscal Year Ending | ||
|
| July 31, 2023 |
| October 31, 2023 | ||
|
| Low | High |
| Low | High |
Revenue | $ 1,465 | $ 1,495 |
| $ 5,790 | $ 5,830 |
GAAP Expenses | $ 1,143 | $ 1,163 |
| $ 4,520 | $ 4,565 |
Non-GAAP Expenses | $ 970 | $ 980 |
| $ 3,790 | $ 3,820 |
| Non-GAAP Other Income (Expense) | $ - | $ 2 |
| $ 4 | $ 8 |
| Non-GAAP Tax Rate | 16 % | 16 % |
| 16 % | 16 % |
| Outstanding Shares (fully diluted) | 155 | 158 |
| 155 | 158 |
| GAAP EPS | $ 1.88 | $ 1.99 |
| $ 7.44 | $ 7.60 |
| Non-GAAP EPS | $ 2.70 | $ 2.75 |
| $ 10.77 | $ 10.84 |
| Operating Cash Flow |
|
|
| ~ $1,650 | |
|
|
|
|
|
|
|
| (1) Synopsys' third quarter of fiscal year 2023 and fiscal year 2023 will end on July 29, 2023 and October 28, 2023, respectively.
| |||||
